Expert health panel calls for ringfenced health & care tax to replace National Insurance

Reported on the Liberal Democrats' website (5 February 2018): A new tax earmarked solely for the NHS and social care is among the recommendations from a panel of 10 experts in a report on healthcare reform commissioned by the Liberal Democrats.

This heavyweight report, Health and Social Care: Delivering a Secure Funding Future, will form the blueprint of the Lib Dems’ ongoing healthcare policy.

The panel, which includes former chief executives of NHS England, the Royal College of Nursing, and the Patients Association, concluded that the NHS in England needs a real terms funding increase of £4bn in 2018-19 and further real terms increases of £2.5bn in each of the following two years.

In the short-term, the NHS funding gap could be bridged by an income tax increase. The Lib Dems have been calling for a penny on the pound in income tax to help fund the NHS. Longer-term, health and care funding should be brought together in a single ring-fenced tax to replace National Insurance, the report argues. The Lib Dems have previously campaigned for a dedicated health and care tax and a related review of National Insurance.

Other recommendations include:

• Creating an Office for Budget Responsibility for Health
• Introducing incentives to encourage people to save more towards adult social care
• Additional revenue for local authorities to invest in public health
• Reinstating the cap on the costs of adult social care
• The panel also argued that consideration should be given to scrapping the total exemption from National Insurance Contributions for people who work beyond the age of 65. Liberal Democrat leader Vince Cable is considering this proposal for higher earners.