NHS: Private Companies

Lord Winston Excerpts

Monday 11th February 2013 Lords Chamber

Asked by

[Lord Winston]

To ask Her Majesty’s Government whether they have plans to exempt private companies providing services to the NHS from corporation tax.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, the Government will not be exempting private sector providers of NHS services from corporation tax. The purpose of Monitor’s fair playing-field review is to ensure that any providers, be they NHS, for-profit, community or voluntary sector organisations, that are able to improve the services offered to patients are given a fair opportunity to do so.

[Lord Winston]

I am grateful to the noble Earl for that reply and deeply reassured that corporation tax will not be in the equation. Given that the NHS is not good at costing out its treatments, how can he be sure that the private sector will not charge what it thinks the market will bear rather than the actual cost of the treatment it is delivering?

[Earl Howe]

My Lords, the Government’s policy is that competition should never be deployed for competition’s sake but only in the interests of patients. Furthermore, competition should be on the basis of quality and not price. The answer to the noble Lord’s question is that we need to arrive progressively at a system of tariffs that fairly reflect the value and cost of the work that providers do, and that all providers should compete equally on that basis.