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Libs Dems call for ring-fenced tax to fund NHS

Sir Vince Cable says new levy could replace national insurance.

Liberal Democrat leader Sir Vince Cable has called for a new “ring-fenced” tax specifically to pay for the NHS and social care.

The new levy – which could replace national insurance – forms the central recommendation of an expert report commissioned by the Lib Dems on future healthcare funding in England.

Launching the document, Sir Vince – who has faced criticism for a lack of policy initiatives since becoming leader last year – said there was growing recognition that healthcare needed a protected funding stream.

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Sir Vince Cable with chief executive of Kingston Hospital Ann Radmore

“This specialist report provides some convincing answers on arguably the greatest domestic crisis facing the country – how to deal with the severe pressures on health and social care services,” he said.

“We must never again be in a position whereby funding is so short that more than 50,000 operations have had to be postponed over the course of a single month.

“The health and care budget should be financed by an earmarked tax, which could replace national insurance.

“Many of those previously strongly opposed now accept that, in the case of the NHS, there is a strong argument for a form of ring-fenced tax.”

The 10-member panel which drew up the report included former NHS England chief executive Sir David Nicholson, Dr Peter Carter, former chief executive of the Royal College of Nursing, and Professor Clare Gerada, former chairwoman of the Royal College of GPs.

It concluded that the NHS in England needs a real-terms increase of £4 billion in 2018-19 with a further £2.5 billion in each of the two following years.

While in the short-term, the shortfall could be met by raising income tax, it said that in the longer term health and care funding should be brought together in a single ring-fenced tax to replace national insurance.

In other measures the report calls for the creation of an office for budget responsibility for health, new incentives to encourage people to save more towards adult social care, and the reinstatement of the cap on care costs.

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