National Health Service

Lord Taverne Excerpts

Thursday 14th January 2016 Lords Chamber

[Lord Taverne (LD)]

My Lords, the National Health Service is facing its most serious financial crisis since its birth. The Health Foundation estimates that there will be a £6 billion funding gap by 2020, which I suspect is likely to be an underestimate, given the growing number of hospitals unable to stay within their budget.

I very much support the proposal of the noble Lord, Lord Fowler, supported by others, too, for a royal commission, but if there is no royal commission there should be strong support for Norman Lamb’s proposal, supported by two former Secretaries of State for Health, Conservative and Labour, for a powerful independent commission. One of its recommendations should be to fund health and social care through a specially earmarked, hypothecated tax. The Treasury hates hypothecated taxes. I believe that I am the only former Treasury Minister speaking in this debate, although that was a long time ago, when Roy Jenkins was Chancellor. But the health service is a very special case; its need for funds is greater and grows faster than almost any other public service, and much faster than GDP. At the same time, it is Britain’s most cherished institution. People would be prepared much more readily to pay for its needs than through general taxation if there were a special tax for the health service. The obvious special tax would be a reformed, progressive system of national insurance contributions, which in their present form have neither rhyme nor reason and should either become part of income tax or, much better, finance a special NHS fund.

I have one final, more general point. The needs of the National Health Service are, perhaps, one of the clearest illustrations of why we should reject the Government’s strategy on making us a low-tax, low-spending country, with public spending reduced to 36% of GDP, the lowest in the major countries of the European Union. Health and social spending are already the lowest. Low tax and low public spending societies are the most unequal and dysfunctional; they lower the quality of life of their citizens in numerous ways, as convincingly argued in that seminal book, The Spirit Level, and in Joseph Stiglitz’s splendid volume, The Price of Inequality. One of the main tasks of opposition parties in this Parliament should be to expose the dire consequences for our society of the Government’s declared central aim to shrink the state. One of its most notable casualties would be the National Health Service.