The United Kingdom should consider charging rich people for access to their National Health Service to help balance public financessaid the International Monetary Fund.
“It will be necessary to make difficult fiscal decisions” During the next two decades as the expenditure pressures accumulate due to population agingwarned the fund in the final publication of its annual control of article IV on the economy.
He also said that the United Kingdom may need to restrict their growing state pension costs. “Unless the authorities review their commitment not to increase taxes to workers, it will be necessary to prioritize spending even more,” he said. “Triple blocking could be replaced by an indexing policy of the state pension at the cost of life. Access to public services could also depend more on each person’s ability to pay, with positions that apply to users with higher income, such as co -provisions of health services.”
The so -called Triple blockade of the United Kingdom guarantees that state pensions increase according to the highest percentage between inflation and average income of 2.5%. He has received criticism for the fiscal burden imposed on the public treasury, but remains popular enough to be protected by successive conservative and labor administrations. To a greater extent, free medical care at the point of use is a solid political principle in the United Kingdom.
The IMF analysis comes shortly after the United Kingdom’s budget responsibility office made a similar warning on the unsustainable long -term trajectory of public finances. The expenditure pressure increases, but the government has difficulties to raise taxes, which are already at its highest level from the postwar period, or cut social benefits.
The report praised the United Kingdom government for its attempt to reform social assistance payments, but these plans, originally destined to cut US $ 6.7 billion of costswere discarded earlier this month after a rebellion of the Labor Members of Parliament.
The bill on health and disability benefits is expected to reach US $ 128,000 million at the end of the decade, and triple block will cost US $ 19,840 million a yeartriple the original estimate, according to the government’s budget control agency.
The Minister of Finance, Rachel Reeves, will have to address these “difficult decisions” and already faces a “limited fiscal space”, according to the IMF. It is under immediate pressure to find new savings before this year’s autumn budget, since the increase in financing costs, the rebellion against well -being and a possible reduction of growth endangers its fiscal regulations.
The task is complicated by the weak growth, and the IMF warns of “significant challenges” for the government’s growth and investment agenda to the growing global commercial tensions. The IMF supported the budget of Reeves last October, stating that it promoted growth and praising the “bold reforms” of the ministers. However, it maintained its growth forecast without changes in 1.2% for this year and 1.4% by 2026.
Reeves could relieve part of the fiscal pressure by increasing its reserves mattress from its historically low level of US $ 12,672 million, the IMF suggested. As an alternative, it could adopt a system in which the Budget Responsibility Office evaluates compliance with its rules only once a year, while two annual forecasts continue to be prepared.
The Institute of Fiscal Studies rejected at the beginning of this week the second proposal, arguing that the Government should, instead, present existing plans to allow the standards to breach at 0.5% of GDP from the spring of 2027. Specific fiscal objectives should remain binding on the annual autumn budget. This would end the current “bad balance”, which generates volatility in policies and undermines efforts to accelerate growth.
The risks for growth are inclined downward, since financial restrictions and increased household savings rates could hinder the rebound in private consumption and slow down the recovery, he warned. The persistent uncertainty about world trade could also include the growth of the United Kingdom.
He added that, after weakening in the second semester of 2024, growth is expected to recover moderately over 2025 and collect impulse in 2026. Estimated the underlying growth rate at 1.4%.
Reeves welcomed the report with satisfaction, which, he said, “confirms that the decisions we have made have assured that the economic recovery of Great Britain is underway and that our plans will address the deep economic challenges we inherit. Our fiscal norms allow us to face these challenges investing in the renewal of Great Britain. “
