Older workers face tax hikes to boost NHS funding

THE NHS is set to receive billions of pounds in extra funding later this year with ministers considering possible tax rises for older workers to cover the cost.

Theresa May will today tell Conservatives they must prove to voters that they “care enough” about the NHS if they are to beat Labour on the key battleground of public services.

It is understood there is now broad agreement within the Cabinet that extra money must be provided for the health service.

Some ministers have privately suggested an across-the-board rise in National Insurance to provide new ring-fenced funding for the NHS.

However, The Daily Telegraph understands that officials are drawing up plans for a more targeted tax rise on older workers as part of a new 10-year funding plan for the NHS championed by Jeremy Hunt.

One idea under discussion is to make the 1.2 million pensioners who keep working past 65 pay NI contributions. The move would raise £2billion per year, which could be spent on the health service. Scrapping universal free prescriptions for the over-60s is also under discussion.

Philip Hammond, the Chancellor, opposes the idea, believing extra money for the NHS should come from the proceeds of economic growth, while Brexiteers in the Cabinet argue that the so-called “Brexit dividend” must be used to increase NHS spending when Britain stops paying money to Brussels.

The question of how to put the NHS on a sustainable economic footing – and convince voters that its future is safest in the hands of the Tories, not

Labour – is one of the most pressing domestic issues facing the Conservatives.

Today, Mrs May will use a speech to the party’s spring conference to emphasise the need to “face up to the political fact” that the public has “doubts” about the Tories’ commitment to public services.

In an echo of her 2002 conference speech, in which she famously said that “some people call us the nasty party”, Mrs May will say: “Some people question our motives. They wonder whether we care enough about the NHS and schools.

“Whether we truly respect the people who work in them and understand that people rely on them.”

She will cite her own “eternal” gratitude to the NHS for diagnosing and treating her diabetes, as she says public doubts about the Tories’ record on public services are “unfair”.

“We need to accept that our public services today do face real challenges, and we must be clear about the action we are taking to help them,” the Prime Minister will add. “And we also need to do something else – to win the argument that says it is only a strong economy that can provide the resources our public services need and it is only by continuing to reform our public services that we can achieve the improved results which we all want.”

Mr Hammond signalled in his spring statement this week that an improved forecast for economic growth would give him extra cash to spend on public services in the budget in November, but Mr Hunt is urging him to consider more radical, permanent changes to health care funding.

One government source told The Telegraph there was “merit” in forcing the over-65s to continue to pay NI if the cash is used to fund the NHS, rather than the state pension, as is the case with younger workers.

The source said: “From an intergenerational fairness point of view… people who benefit from health care spending are the over-60s.

“A logical starting point would be if you are over 65 and earning you can afford National Insurance better than someone under 65 and earning.”

Mr Hammond and Mrs May have rejected an even more radical plan to increase the standard rate of NI by a penny for all taxpayers, which would have raised £4.9billion.

A source close to Mr Hunt said: “Every health secretary wants more money for the NHS. Jeremy is relaxed about the mechanism, that’s for the Chancellor.

“It’s not for him to pronounce on this, whether it’s tax or a Brexit dividend or it’s about making efficiencies.”

Rob Halfon MP, a former deputy chairman of the Tory party, cautioned against the plans. He said: “I am not in favour of penalising the elderly. They pay for [the NHS] all through their lives, as younger people do. Most pensioners in my constituency are not wealthy.”