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.”
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.”
Lib Dems call for 1p income tax rise to provide NHS funding boost
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