POLITICS

Tim Farron Wants To Raise Taxes To Fund The NHS: Do We Actually Need To?

20/09/2016 15:45 | Updated 20 September 2016
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Putting up taxes is not normally seen as an election-winning strategy. But in a speech today Tim Farron is making a bold move: arguing it is the only way to save the NHS. 

At the Lib Dem party conference Farron will call for a “dedicated NHS and care tax”, saying that the NHS needs “more money - a lot more money” to survive, and “if the only way... is to raise taxes, Liberal Democrats will raise taxes.” 

But is it the only way?

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Does the NHS actually need more cash?

Most health think-tanks agree it does. In 2015 the NHS was given a promise of £8bn a year and until 2020 to find £22bn “in efficiency savings”. But since then its deficit has ballooned. There is a crisis among GPs and A&E departments, and now NHS bosses have warned winter is coming and they will be short of staff and beds. It is certainly not on track to find £22bn in four years time.

The exception to the rule is Reform - Andrew Hallendby thinks extra funding might actually hamper the process of making the NHS more efficient.

“In the heath debate there tends to be two positions: change the way the thing operates, and give the old system more money. The Lib Dems seem to be on the latter”, he says.

The KingsFund, on the other hand, has explicitly called on parties to “face up” to the NHS crisis. 

“As the party conference season begins, it is essential that all the parties face up to the need for an honest debate about how to provide adequate funding to meet future needs for health and social care”, it has said.

What are the options?

1. Raising income tax

This is what the Lib Dems propose. But only about 40% of the population would support it, according to the latest Social Attitudes survey. 

2.  Raising national insurance

Back in 2002 Labour put national insurance up by 1p to fund the NHS, and the public largely supported it. But things were different back then. Blair had just won two landslides, and public finances were in a strong position. 

It wasn’t properly ring-fenced either, and just over half ended up in NHS coffers. Since then various Labour MPs have suggested bringing it back, properly protected this time.

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3. Raising other taxes

Labour’s current idea: tackling tax avoidance by hedgefunds and large firms. But the government says it is already doing this, and health think-tanks don’t reckon this kind of thing can ever raise enough money.

4. “Dedicated” NHS taxes

Experts think there is little difference between a “dedicated NHS tax”, as the Lib Dems are suggesting, and the taxes we already have, from which tightly ring-fenced NHS funding is drawn. “We already pay the money in tax and it already goes to the NHS”, says Haldenby. “This idea of some sort of stronger link is not a game changer”.

5. Extra charges here and there

Various direct money-spinners have been proposed over the years, such as paying £10 every time you visit the GP, paying for food and laundry in hospital, and getting rid of exemptions (students, pensioners) for prescriptions. These are not popular, as they chip away at the hallowed “free at the point of use” concept.

The KingsFund thinks it wouldn’t raise much either, although charging to visit the GP might encourage people not to miss appointments, which costs £300 million each year.

6.  Social insurance

Used in many European countries - people (and their employers) pay an insurance, and this goes to their health system. Not likely to appear in Britain - it would mean a massive and expensive overhaul of the entire system.

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