22% pay rise for Junior doctors

Rachel Reeves is within her rights to feel somewhat aggrieved. It was always clear and obvious that the spending plans she inherited were incompatible with Labour’s ambitions for public services, and that more cash would be required eventually. But the extent of the in-year funding pressures does genuinely appear to be greater than could be discerned from the outside, which only adds to the scale of the problem.

But not all of what we heard should have come as a terrible surprise. At a time when private sector earnings are growing by between 5 and 6 per cent a year, public sector pay awards were always going to come in higher than the 2 per cent budgeted by departments. That is a pressure that was known. The NHS budget for this year always looked tight, and a winter funding injection for the health service is at this point an annual tradition. The disconnect between the generosity of departmental budgets and what they are being asked to deliver has been clear for some time, even if it was roundly ignored during the election campaign.

Nonetheless, some of the specifics are indeed shocking, and raise some difficult questions for the last government. If the scale of these overspends and spending pressures was apparent in the spring – and in lots of cases, there’s no reason to suppose otherwise – then it is hard to understand why they weren’t made clear or dealt with in the Spring Budget. Jeremy Hunt’s £10 billion cut to national insurance looks ever less defensible. On asylum costs, the decision to effectively stop processing claimants, and to budget virtually nothing for the resultant costs of housing them, looks like very poor policy making. The new Chancellor is right to be cross.