Former Labour leader Lord Kinnock 'urges Reeves to charge VAT on private healthcare'
Former Labour leader Lord Kinnock has urged Rachel Reeves to impose VAT on private healthcare to raise funds for the NHS in her autumn Budget.
Listen to this article
The party grandee has urged the Chancellor to repeat her policy which removed the VAT exemption on private school fees for those opting to pay for non-NHS medical care, according to the I newspaper.
The proposed policy would reportedly raise more than £2bn for the health service, even when accounting for exemptions for NHS work done by private hospitals.
The upcoming Budget is proving to be a headache for the Chancellor, after expensive U-turns on cost-cutting measures such as the winter fuel payment and welfare cuts were coupled with weaker than expected economic growth.
The difficulty has been compounded by a Labour manifesto promise not to “increase taxes on working people”, defined as not increasing “National Insurance, the basic, higher, or additional rate of income tax, or VAT”.
Kinnock's intervention, supported by the Good Growth Foundation think-tank, read: “Introducing VAT on private health provision could provide vital funding for the NHS and social care.
“After 14 years of underinvestment, many people are turning to private healthcare not out of choice, but because they cannot afford to wait. This has increasingly led to unequal access to care.
“Ending the VAT exemption to generate much-needed revenue is a reasonable and widely supported step.”
This is the second time Kinnock has weighed into public policy debates after calling for Reeves to consider a wealth tax last month.
Polling carried out by the Good Growth Foundation claims that 55 per cent of the public supported a “windfall tax” on private healthcare firms, with 17 per cent opposed to the idea.