Prime minister David Cameron was accused of breaking the coalition’s pledge to increase funding for the National Health Service as soaring inflation threatened to undermine the government’s spending plans.
The Institute for Fiscal Studies said the government was now “sailing extremely close to the wind” over its promise to raise NHS spending in real terms every year of the current parliament.
In its analysis of the Budget, it said the worsening economic outlook meant there was now a 30 per cent chance chancellor George Osborne would have to put up taxes or find further spending cuts if he was to meet his deficit reduction plans.
Labour argued further that Mr Osborne would have to find another £1.8bn over the course of the next four years if the government was to honour its commitments on the NHS.
Health secretary Andrew Lansley, however, insisted that the government would meet its pledge and accused the opposition of spreading “scare stories”.
Labour meanwhile published figures commissioned from the independent House of Commons Library which showed a real terms cut of around 1 per cent in NHS spending over the next four years.
Shadow health secretary John Healey said that if the “double counting” of social care budgets as NHS spending was taken into account, the NHS in England was facing a cut of £1.8bn - a 1.8 per cent real terms reduction.
“Real terms spending will fall next year and again the year after, and this will in fact be the first time since records began that the NHS in England has seen a real terms fall in spending for two years running,” he said.
“If you add in his trick of double counting social care budgets, David Cameron is cutting the NHS by a massive £1.8bn.”
However, Mr Lansley responded by insisting that the government was investing £11.5bn in the NHS, a move Labour had opposed.
“John Healey continues to use the NHS as a political football to spread scare stories that do not hold up to scrutiny,” he said.
“We will increase the NHS budget in real terms every year - and the independent experts have already confirmed that this is happening.”