We MUST bring in a dedicated NHS tax

AS A nation with a growing elderly population, we have some urgent decisions to make about who is going to pay for social care and how.

The Resolution Foundation, a think tank, published a report this week suggesting we look to Japan for answers. Faced with similar problems to our own 20 years ago, they settled on a long-term insurance scheme, with compulsory payments from the age of 40.

In fact, Britain pioneered this model 70 years ago. The effect of the 1946 NHS Act and the 1948 National Assistance Act was to provide a universal system of healthcare, ‘free’ at the point of access, while local authorities were responsible for those in need of ‘personal care’.

But the reality was that this provision was not ‘free’ but was funded largely by our National Insurance (NI) contributions. It was a levy you could feel good about paying because you were investing in your own future.

Over the years, however, NI contributions have been subsumed into general government expenditure, so that now it’s just another form of tax.

But isn’t now the perfect time to resurrect that original ethos? We need a ring-fenced NHS tax and a specific social care contribution — not least to rid us of the idea that the NHS is ‘free’.

I hear this f-word all the time and it infuriates me. If people do not see a link between what they pay into a system (via their taxes) and what they take out (healthcare from cradle to grave) then it has no value to them.

Ring-fenced taxes help people understand that healthcare costs money. They would encourage more responsible use of the NHS — fewer people not bothering to turn up for appointments, for example — and inform the candid debate we need to have about what the State should and shouldn’t fund.

If we are going to save the welfare state, then we need politicians to grasp the nettle and initiate a national conversation.