Yahoo Finance New NHS tax 'should replace National Insurance'
National Insurance should be scrapped and replaced with a new ‘health tax’ to fund the ailing NHS, a panel of experts has proposed.
The health service in England should be given an immediate £4bn injection on top of inflation and a cap should be reinstated on how much people should pay for social care later in life.
The panel, set up by the Liberal Democrats, argues the new tax should be “ring-fenced” specifically to pay for the NHS and social care.
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Lib Dem leader Sir Vince Cable said: “This specialist report provides some convincing answers on arguably the greatest domestic crisis facing the country – how to deal with the severe pressures on health and social care services,” he said.
“The health and care budget should be financed by an earmarked tax, which could replace national insurance.
“Many of those previously strongly opposed now accept that, in the case of the NHS, there is a strong argument for a form of ring-fenced tax.”
He added that it was unacceptable that the constraints on funding had seen 50,000 operations postponed over the course of a single month.
The funding crisis was laid bare this monthr when NHS England issued an edict to all hospitals to cancel non-urgent surgeries, such as hip replacements and cataract operations, in order to avoid a major meltdown in the service.
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And there have been regular stories this winter of patients having to spend hours on trolleys in corridors as they wait for a bed to become available.
The 10-member panel which drew up the report included former NHS England chief executive Sir David Nicholson, Dr Peter Carter, former chief executive of the Royal College of Nursing, and Professor Clare Gerada, former chairwoman of the Royal College of GPs.
It concluded that the NHS in England needs a real-terms increase of £4 billion in 2018-19 with a further £2.5 billion in each of the two following years.
While in the short-term, the shortfall could be met by raising income tax, it said that in the longer term health and care funding should be brought together in a single ring-fenced tax to replace national insurance.
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On social care, the government announced in December that plans to cap contributions in England at £72,500 would not go ahead.
Prime minister Theresa May found herself at the centre of a major policy mess over social care during last year’s general election campaign as she was accused of planning to introduce a “dementia tax”.
A Department of Health and Social Care spokesperson said NHS funding “is at a record high”.
