Sir Vince Cable: Why we need a clear and honest tax to fund the NHS

Sir Vince Cable is leader of the Liberal Democrats.
Sir Vince Cable is leader of the Liberal Democrats.
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THE acute pressure on the NHS this winter is clearly in evidence here in Yorkshire. Hospitals in Wakefield and Leeds have seen sharp rises in the number of people waiting four hours or more to be admitted to a ward, having attended A&E. And, nationally, A&E waiting time figures were the worst this January since targets were introduced.

The Government appears to be in denial, claiming that the NHS is “better prepared than ever before” despite all evidence to the contrary. Such assertions are of little comfort to patients left for hours on hospital trolleys, or the doctors and nurses working under incredible pressures.

With an ageing population, and huge advances in medical science enabling us all to live longer lives, healthcare costs 
are so much more significant than when the service was established. This essential understanding has to guide what we now do.

I am therefore determined on two points. First, that in the short term we need urgently to give the NHS and social care a substantial cash injection. We can achieve this by asking everyone to pay an extra penny in the pound on their income, which will produce £6bn a year. We would put £4bn into frontline health services, as recommended by the chief executive of NHS England, Simon Stevens. The remaining £2bn would go to local authorities to revive our ailing social care system, relieving pressure on NHS wards by freeing up space for those really in need of acute hospital treatment.

Secondly, we need to establish a broad-based, cross-party consensus on the future of the service. This month a group of 10 eminent experts – including Sir David Nicholson, former chief executive of NHS England – published an independent report for the Liberal Democrats, urging us to consider the introduction of a ring-fenced tax whose exclusive purpose would be to fund health and care services.

The principle of ‘hypothecating’ tax is gaining traction among prominent economists, who accept that the NHS is in desperate need of additional funding and that this may be the way to deliver it. Doing so would require a big reform of the tax system and, I envisage, would mean reforming National Insurance and transforming it into the dedicated health and care tax. The Treasury would have to agree to offset annual fluctuations in the revenue within a five year cycle, meaning guaranteed income over the short- and long-term.

Our independently produced report also recommends a move away from the ‘tariff’ system introduced by the Labour government a decade ago, which encourages hospitals to provide outpatient care rather than have services delivered through GPs and in the community. It is far better for the patient and for the public purse to see minor procedures delivered outside the hospital setting. In addition, we want to see better use of NHS funds through integration of mental and physical health services (putting them on an equal footing), and through investment in preventative care, and medical technology.

Meanwhile, at Prime Minister’s Questions last week, I challenged Theresa May to give an absolute guarantee that in any trade deal she strikes with President Donald Trump, she would not permit US companies to cherry-pick parts of the NHS presently operated in the public sector into private hands. When I was Cabinet Minister responsible for trade, I secured an explicit commitment through the EU Commission that the NHS would be protected from plundering by US firms in any EU trade deal with them. Now that we are negotiating as the UK alone, the Prime Minister told me we would have to see what American “requirements” were this time. This post-Brexit future for the NHS is a far cry from the promises made by the Leave campaign in 2016.

Across the political spectrum – Conservative, Labour and Lib Dem voters alike; Leave and Remain voters alike – are committed to the NHS, and the civilised principle, established in 1948, which lies behind it. Your ability to receive medical treatment should not depend on your ability to pay, or to jump queues by paying. Liberal Democrats are determined to sustain that principle into the rest of this century, with an honest approach to funding the service, through a dedicated, transparent tax which we can all see on our payslips. We challenge the other parties to reflect their voters’ commitment to the NHS by joining our campaign.

Sir Vince Cable is leader of the Liberal Democrats. He was born in York.