Rachel Reeves has been urged to slap VAT on private healthcare to raise billions for the NHS. Former Labour leader, Lord Kinnock, wants the Chancellor to remove a VAT exemption on healthcare provision outside the NHS in her autumn Budget.
The Labour peer insisted such a move could provide “vital” funding for the NHS and social care. He said: “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.”
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During last year’s general election campaign, Labour pledged not to raise income tax, National Insurance or VAT on “working” people.
However, the Government could remove the VAT exemption on private healthcare. Analysis from think tank, The Good Growth Foundation, shows doing so could raise over £2billion, according to the Daily Mail.
Praful Nargrund, the foundation’s director, said Britain has sleepwalked into a two-tier healthcare system.
He called for a windfall tax on private healthcare, saying it would be a bold, fair first step to fund an NHS the British public deserve.