The Liberal Democrats have pledged to increase income tax by a penny for every earner to fund a £6bn-a-year cash injection for the NHS and social care.
In what was described as their “flagship” spending commitment of the general election campaign, the party’s leader, Tim Farron, said voters recognised the need to “chip in a little more” to address the “chronic underfunding” of healthcare.
Under the Lib Dem plan, 1p would be added to the basic, higher and additional rates of income tax and the rate of dividend tax from the next financial year, with the £6bn raised being ring-fenced for the NHS, social care and public health.
The proposal – which echoes the Lib Dems’ pledge from the 1990s to put a penny on income tax for education – will be seen as a clear attempt to capitalise on public concerns about the state of healthcare.
Theresa May has insisted the Conservatives have no plans for tax rises while appearing to back away from a previous pledge not to put up income tax or national insurance.
Farron said: “Theresa May doesn’t care about the NHS or social care. People are lying on trolleys in hospital corridors and she has done nothing.
“The Liberal Democrats will rescue the NHS and social care. We are prepared to be honest with people and say that we will all need to chip in a little more.”
The party’s health spokesman, Norman Lamb, said: “The NHS was once the envy of the world and this pledge is the first step in restoring it to where it should be. A penny on the pound to save the NHS is money well spent in our view.”
The Lib Dems pointed to an opinion poll finding from last year, which suggested 70% of voters would back a 1p rise in income tax if the money was guaranteed to go to the NHS.
According to figures released by the party, the rise would mean an increase of £33 a year – or less than £1 a week – for someone earning £15,000 a year, rising to £133 a year – or less than £3 a week – for someone earning £25,000.
At the top end, someone earning £150,000 would pay an extra £1,500 a year – or £29 a week – while someone on £250,000 would pay £2,500 a year, or £48 a week extra.
In the longer term, the Lib Dems said they would introduce a health and care tax to bring spending on both services together in a collective budget, and make clear on people’s payslips what was being spent on those services.
The party said it would seek to establish a cross-party health and care convention to review longer term sustainability of the health and care finances while setting up an office of health and care funding, similar to the Office for Budget Responsibility.
Income tax should be increased by 1p to deliver a £4.6bn boost to the struggling NHS while a long-term funding solution is found, the former Liberal Democrat health minister Norman Lamb has said.
As the Lib Dems seek to woo traditional Labour voters and win back public trust, after being reduced to just nine MPs, Lamb will urge his party’s spring forum this weekend to back higher taxes to pay for health and social care.
“You have to be straight with the public about what you say you will raise and then do it,” he told the Guardian, in the wake of a government U-turn over the national insurance contributions rise that was proposed by Philip Hammond in last week’s budget.
He would like to see income tax increased by 1p immediately while a new system is phased in. Lamb has asked a committee of health experts to make recommendations, but he suggests rebranding national insurance and earmarking it for health and social care is likely to be his preferred solution.
“You can have a mature discussion about why this is necessary,” Lamb said. “The bottom line is: it comes down to our loved ones. That hour of need when there is that real anxiety that there may be a cancer and you are not sure if you will get treated on time – that is something most people will find intolerable. That stake we all have in a system that works properly is very powerful.”
Lamb leads a cross-party group of Lib Dem, Labour and Conservative MPs, including the chair of the health select committee, Sarah Wollaston, who recently met the prime minister and pressed her to put the funding of the NHS and social care on a more sustainable footing.
Theresa May has agreed the group can consult her health adviser, Dr James Kent – a former medical doctor turned management consultant. Lamb said he will make the case for a cross-party investigation, lasting roughly a year, into long-term reforms.
Though Lamb said he ultimately believed the solution to the health crisis would be found in cross-party collaboration, he said his party had to be “audacious” with their own policy proposals, “because if we don’t, we’re nothing, there’s no point to us”.
He said Labour had failed to say where it would find the money to fund the NHS more generously, despite its leader, Jeremy Corbyn, regularly making the issue a key theme at prime minister’s questions.
“They are crushed by caution because this is difficult and they are worried about saying people will pay more tax under Labour,” Lamb said. “That is everybody’s fear about Labour, that they will expect everyone to pay loads more tax. So they, the leadership, resort to shouting.”
Norman Lamb MP, a former health minister. Photograph: Linda Nylind for the Guardian
Though he stressed his support for the NHS as a tax-funded health system, Lamb said it was an “uncomfortable truth” that European social insurance models had kept better pace with demand.
“In Germany they just put the premium up and it doesn’t feel the same as increasing tax,” he said. “I think a dedicated health and social care tax, independently assessed, would work as a hybrid, a tax-funded health system which you see going into the care system.”
Lamb, who has devised the new proposals with a panel of health advisers including David Nicholson, the former chief executive of NHS England, will also propose an “OBR for mental health” to make independent assessments either once a year or the start of a parliament, of the funding the health service needs.
That approach would echo George Osborne’s creation of the Office for Budget Responsibility, which checks the Treasury’s economic forecasts and tax and spending plans.
The MP admitted that any new system would take several years to implement and that tax rises would be necessary in the interim. “My view is that we as a party should make the case for a 1p increase in income tax, raising about £4.6bn,” he said. “That would make a massive difference.”
Lamb said the extra funds raised should be ringfenced for health and social care, with an emphasis on investment on prevention, particularly in digitisation of systems. “It’s unbelievable we still have faxes flying around the NHS,” he said.
Other priorities should be improving general practice and investing in social care – giving people better treatment at home rather than deterioration, which results in hospital admissions, he said.
The Treasury has traditionally been sceptical about hypothecation – the practice of earmarking the revenue from particular taxes for one purpose. But former permanent secretary Nick Macpherson recently advocated five-year budgets for healthcare, paid for by a dedicated tax.
The Lib Dem vote collapsed in the 2015 general election, after the party joined the Conservatives in coalition and broke a manifesto pledge not to increase tuition fees.
The leader, Tim Farron, hopes his party can make a comeback as the champion of pro-remain voters, but believes it must be upfront about the need to raise taxes.
Lamb, who has been a vigorous campaigner for mental health during his time in politics and as a health minister during the coalition, has spoken out about his family’s struggles to get swift treatment for his son’s mental illness.
Archie Lamb, who subsequently founded a music label that launched the careers of stars including rapper Tinchy Stryder, had obsessive compulsive disorder and the family paid for private treatment after being told the waiting list for the NHS would be too long.
“If you can pay, you’re not going to watch your child deteriorate, but there are families who can’t pay and I can’t tolerate that,” he said. “That’s what makes me very driven. I came across so many cases as a minister where families are desperate and being completely let down by the system, with teenage girls with eating disorders told their BMI wasn’t low enough, so basically go away and get sicker.
“It is morally wrong and economically stupid but this is happening in our country and we have to confront it.”
Tim Farron will tell the Liberal Democrat conference that the party would rebrand the NHS to include a fully taxpayer-funded care service, warning that governments must be honest about raising taxes to ease the healthcare crisis.
In his leader’s speech in Brighton on Tuesday, Farron will say the party needs to be honest about the costs of making social care fully government-funded.
“If the only way to fund a health service that meets the needs of everyone is to raise taxes, Liberal Democrats will raise taxes,” he will say, promising to campaign to transform the NHS into the National Health and Care Service.
“For years, politicians have chosen to paper over the cracks rather than come clean about what it will really take – what it will really cost – not just to keep the NHS afloat but to give people the care and the treatment that they deserve.
“If the great Liberal William Beveridge [1879-1963] had written his blueprint today, when people are living to the ages they are now, there is no doubt he would have proposed a National Health and Care Service.”
The party insists it believes there is enough affection for the NHS for British people to feel positive about paying more taxes, not normally seen as an election-winning strategy.
The Lib Dem leader will talk about his own grandfather’s Alzheimer’s disease, saying the first home he was put in was “despicable”.
“I’ve seen enough terrible old people’s homes,” he will say. “It’s not civilised to let people slip through the net. It’s not civilised towards the people who love those people, who go out of their way to try and make their lives easier when everything else is making their lives harder. It’s not civilised and it’s not good enough.”
Earlier in the week Lib Dem health spokesman Norman Lamb told the conference the government should consider moulding national insurance into a ringfenced NHS and social care tax, to make it easier to increase the amount paid with public support.
An expert panel – which the party will call its Beveridge commission – will report back to the party in six months on the costs, but Lamb suggested the tax could mean an increase of a “an extra penny in the pound”.
Farron will say the Lib Dems “will not join the ranks of those politicians who are too scared of losing votes to face up to what really needs to be done”.
“We will go to the British people with the results of our Beveridge commission and we will offer a new deal for health and social care, honest about the cost, bold about the solution.”
Earlier on Monday, Lamb announced cross-party support for a commission into the NHS funding crisis, backed by Labour MP and former leadership contender Liz Kendall, and Tory MP Dan Poulter, a former gynaecologist.
Speaking to the Lib Dem conference in Brighton, Kendall said it would be politically difficult to dedicate a new tax to the NHS. “It’s very tough for anybody in any party to say any tax should go up,” she said.
“That’s the reality, however passionately we might think this is the right solution, but certainly when Labour was in government and we did the penny on NI [national insurance] for the NHS, it was a semi-hypothecation to say it’s going to go on this specifically. It’s an important option.”
The Liberal Democrats are poised to become the first major political party to back a dedicated new tax to help rescue the NHS from its deep financial problems.
The party is about to start examining the wisdom and practicalities of introducing a ringfenced tax which would involve a one pence increase in either income tax or National Insurance.
The party has recruited a panel of senior doctors and NHS experts to advise it on how what it calls “a dedicated NHS and care tax” would help ease the health service’s decade-long financial squeeze.
Norman Lamb, the Lib Dem health spokesman, will on Saturday tell party activists gathered at its annual conference in Brighton that there is a very strong case for embracing the move, despite the political risk inherent in a tax rise.
“The uncomfortable truth is that we are falling further behind other European countries in how much we spend on health and care. So let’s look at the case for a dedicated health and care tax, shown on your pay packet,” Lamb will say.
“We must be honest with the British people. If we believe that more money is needed, if we conclude that we all need to pay perhaps an extra penny in the pound, then we must be prepared to say it. We must give this [idea] proper consideration,” he will add.
The Treasury has estimated that a 1p rise in income tax would raise £3.9bn this year, rising to £4.5bn next year and then £4.6bn in 2018-19. Without major reforms to how care is provided, the NHS in England is facing a £22bn gap in its finances by 2020-21.
The party’s “new Beveridge group” of advisers will include Dr Clare Gerada, the outspoken ex-chair of the Royal College of GPs, who recently defected to the Lib Dems from Labour; Prof Dinesh Bhugra, an ex-president of the Royal College of Psychiatrists; and Prof Nick Bosanquet, an expert in health economics at Imperial College London who has also worked with Reform, the right-of-centre thinktank that works on public sector reform.
Prof Chris Ham, chief executive of the King’s Fund thinktank, welcomed the Lib Dems’ consideration of the move as a sign of realism at Westminster that the NHS in England cannot survive intact without receiving more money than the £10bn extra it is due by 2020-21.
“It is not possible for the NHS to continue to meet rising demand for services and maintain current standards of care without additional funding,” said Ham. “Increasing funding for health and social care is affordable if hard choices are made about how to find the additional resources needed.
“As the party conference season begins, it is essential that all the parties face up to the need for an honest debate about how to provide adequate funding to meet future needs for health and social care,” he added.
Lamb will tell delegates that health and social care need special treatment in government spending because, unlike other public services, the costs involved are rising relentlessly by about 4% a year, due to the ageing and growing population and rise of lifestyle-related conditions such as obesity and lung diseases.
Government sources indicated that ministers were unlikely to embrace an NHS-specific tax rise any time soon.
A spokesperson for the Department of Health said: “On the back of a strong economy, we are giving the NHS the £10bn it asked for to fund its own plan for the future, including almost £4bn this year to transform services and improve standards of care.
“We know the NHS is under pressure because of our ageing population, but we rightly expect hospitals to have a grip on their finances and continue to ensure patients get treated quickly.”
The Liberal Democrat manifesto in 2015 will consist of a guarantee to introduce a new annual “carer’s bonus”, at first worth £125 per yr and rising to £250 per yr by 2020.
Mr Clegg stated the cash would be for individuals who make fantastic sacrifices for their relations. “Many have had to give up function totally to give round-the-clock care for an individual else. They are conserving our overall health and care companies tremendous sums at a time when every penny counts.
“Yet they themselves regularly struggle to make ends meet – a issue intensified by the financial crisis. A lot of contend every day with their personal depression and pressure.”
The bonus would be paid in income to carers, who would be cost-free to spend it as they wished.
Mr Clegg suggested that most would want to use the income to organize different care, making it possible for them to take a break from their household responsibilities. “Our carers reside lives the rest of us would locate nearly unattainable to imagine and respite indicates distinct items to distinct men and women. Some carers may possibly use the money to retain the services of a care assistant to assist them out for a week. Others may well place it in the direction of obtaining away themselves, or shell out for a cleaner to come to their residence.
“Books, music, garments, a day out with loved ones. Carers should be capable to spend the income nonetheless they see match. What matters to me is that we do whatever we can to display our thanks and ease the stress the nation’s carers face.”
The bonus would be obtainable to anybody who has been acquiring Carer’s Allowance for at least a yr – about one particular million individuals in all. The most current census showed that ten per cent of the population – or six.5 million men and women – offer standard unpaid care, with more than a third dedicating twenty or much more hours a week.
Last 12 months, NHS investigation identified that developing numbers of carers are obtaining to put their lives on hold to support disabled or elderly loved ones.
Practically five million individuals in Britain feel they are dropping manage of their lives due to the fact of unpaid caring responsibilities, in accordance to an NHS survey.
An emergency bailout of £2bn is needed to plug a black hole in NHS funding, Liberal Democrat sources claim, as a leading doctor named the Government’s plans for extended seven-day care as “just bonkers”.
Senior Lib Dem figures are preparing to strategy get together leader Nick Clegg to demand the extra funding for the well being services ahead of the Government’s autumn statement, the Instances reported.
There are widespread fears amid senior medical professionals that the NHS will struggle to cope with growing demand without more income after four many years of efficiency financial savings in which it has been making an attempt to shave £20bn from its charges.
But Dr Mark Porter, chairman of council at medical doctors union the British Health-related Association (BMA), mentioned it was “economic illiteracy” to consider to boost the health support without having more assets.
Medical doctors will reportedly call for automated increases in the NHS price range to cope with demand, growing by about four% a year, at the BMA’s annual representative meeting which gets below way in Harrogate on Monday.
Porter said it was no longer attainable to argue that the NHS is a “wasteful organisation, in spite of examples of “tiny-scale waste”, telling the newspaper: “The NHS does perform really effectively but you can not carry on undertaking almost everything with less sources. That is the fundamental basic contradiction in this. The Nationwide Well being Services is by objective measurement the most effective wellness service on the planet.”
And he mentioned it was “impossibly ambitious” for the NHS to offer schedule companies at the weekend without far more income. Medical professionals will debate at the meeting no matter whether 7-day schedule care is unfeasible without closing hospitals or cuts for the duration of the week.
Porter informed The Instances: “Where we object is in which the Government says the entire thing can be carried out with no further investment, that we can lengthen our opening hours by forty% without any far more personnel. That is just bonkers.”
He said there was no fantastic contact for more handy opening hrs, and accused the Government of deliberately complicated emergency and regimen care.
“There is that absolute difference between whether or not we serve individuals individuals who have demands all around the clock and whether or not we determine to serve individuals about the clock since they want some thing,” he said.
“What we ought to be carrying out is making the care of urgent, emergency and acute inpatients far better inside of the resources we have, just before we begin attempting to perform out whether or not we can be like a supermarket and open on Sunday afternoon.”
Budgets in between the NHS and social companies should be pooled so that elderly people are no longer “abandoned” in wrangles about who should fund what, the Liberal Democrats have stated.
Norman Lamb, the Care Minister, said he needs to see the policy at the heart of the Lib Dem election manifesto, in a bid to to stop the frail and vulnerable “falling by means of gaps in the system” of overall health and social care.
He informed The Day-to-day Telegraph that he will propose the notion in a bid to tackle “a fragmented system of care” for the elderly.
Mr Lamb mentioned too usually, those in require of help had to argue their situation repeatedly with distinct authorities, or were left languishing in hospital simply because social services could not offer them with house care.
He said: “As well usually at the minute we have frail and eldelry individuals currently being abandoned by a fragmented technique – just at the point they want aid most, due to the fact no 1 organisation takes responsibility. Time and yet again I hear of patients forced to have a single assessment after one more, to get the care they need to have. This requirements to modify.”
Labour have also named for pooled budgets for overall health and social care.
Mr Lamb stated his proposals have been various, due to the fact the Liberal Democrats would give regional NHS providers and councils far more flexibilty about how funds are used.
He said: “I would like to see the Liberal Democrats commit in our manifesto to integration currently being at the heart of our strategies for the long term of the NHS. I am proposing to my get together that there must be a legal duty to pool the total of health and care budgets in every single appropriate area. I believe this is an essential component of how we can sustain our NHS for the future and provide much better care, closer to house.”
Mr Lamb explained far a lot more needed to be accomplished to “take away the dead hand of Whitehall” from local organizing and permit companies to respond greater to individuals.
