Health Secretary Jeremy Hunt has signalled he would back a ring-fenced tax solely for the NHS and social care.
He said Britain’s ageing population meant more cash was needed for health, adding it was “vital to be open to innovative models of taxation” to provide the funding.
His move is seen as the prelimary shots in a Cabinet battle with Chancellor Philip Hammond over future funding of the health service.
Hunt said in a newspaper interview: “The British people say, ‘I don’t mind more money going to the NHS but I want to know it is for the NHS and won’t be wasted.'”
A multi-billion pound funding increase could be announced to coincide with the health service’s 70th anniversary in July, but Hunt said it was “premature” to speculate the NHS was set for a short-term funding increase, stressing a structured approach was needed.
A full departmental spending review will happen next year and Hunt wants a longer-than-usual 10-year settlement put in place. Hunt said: “Given that it takes seven years to train a doctor and three years to train a nurse, you need to have something that gives you the ability to look ahead”.
Hunt also indicated the tax could avoid another social care funding fiasco, after the Conservatives were forced to perform a U-turn on reforms to the system that were dubbed a “dementia tax” by opponents.
He added: “It is beyond dispute that with a million more over-75s in 10 years’ time, the NHS and social care system are going to need more money. The public are very clear that for that specific issue they are willing to pay more tax but want to know that every penny is going to be spent wisely.”
When asked if the attraction of such a tax was that it would guarantee money for the elderly and infirm, Hunt said: “Absolutely. That is the attraction.”
Raising income tax by 1p could generate around £5bn to help fund health and social care.