By Rachel Williams Leader of the Opposition William Hague has criticised the Government for sticking...
By Rachel Williams
Leader of the Opposition William Hague has criticised the Government for sticking with a tax system that penalises those taking out private medical insurance.
Speaking in the wake of the latest NHS crisis, Hague called on MPs to consider the benefits of a partnership between the public and the independent health sectors.
He said: "All political parties should end their ideological objections to an independent health sector and we should agree to end the punishment meted out by our taxation system to those individuals who seek to make their own healthcare provision for their families, their employees and themselves."
The fiscal penalising of PMI policyholders has most recently been illustrated in the Social Security Bill, currently before Parliament, which will affect employers offering group PMI schemes by extending employer's NI contributions to benefits in kind.
This will result in companies paying an additional 12.2% of the cost of providing the benefit in tax. Similarly, Gordon Brown's decision to raise insurance premium tax in the last Budget will hit the pockets of individual policyholders. Hague has already expressed his feelings on this particular tax through his support of the National Campaign Against Insurance Premium Tax.
Robin Payne, business development manager at Exeter Friendly Society, said that these moves are further illustrations of illogical thinking from the Government.
He says: "The abolition of tax relief on the over-60s has resulted in at least a 100,000 people giving up their PMI and becoming dependent on the NHS again - all this at a time when the Government is trying to cut waiting lists."
Although it is unlikely that companies will withdraw from offering PMI solely on the back of the Government's decision to increase NI contributions, if they did it would result in heavier reliance on the already strained NHS.
"If 10% of employers gave up their corporate PMI for example, an additional 350,000 would have no alternative but to use the NHS," said Payne.
Philip Fowles, sales and marketing director at BCWA said: "Everybody pays tax pays for the NHS, so there should be some form of recognition from the Government for people who choose not to use the NHS and pay for their own private cover."
"Since the NHS started, PMI products have been there to help reduce the pinch of the NHS. If there is a dialogue between the public and private sector we can help out in times of crisis."
He said this has already been happening as during the flu crisis in January three independent hospitals in Bristol admitted NHS patients.
Payne added: "Most reasonable thinking now recognises that to successfully fund healthcare for the population a public-private partnership will have to happen. All countries which have a greater proportion of GDP spent on healthcare and deliver it in a more timely fashion depend on a public-private partnership - it is illogical to think that the NHS can buck this trend."
