Miliband considers health tax for manifesto
Ed Miliband is to put the NHS at the centre of Labour’s election campaign and is considering an earmarked "health tax" or exempting the health service from deficit reduction to prove that he can deliver a better service. Mr Miliband believes the NHS is rising up the list of voters’ concerns but wants to offer a single big policy to prove to voters that Labour will be a better custodian of its future than the Conservatives. The Labour leader is looking at excluding the NHS from Labour’s planned deficit cuts by earmarking borrowing specifically for the health service, although this may look similar to an expected promise from Tories and Lib Dems to ringfence the NHS from post-2015 cuts. Labour insiders say Mr Miliband is considering options to go further, including earmarking a specific tax to prove he is serious about boosting health funding. The opposition party, which is a few points ahead of the Tories in the polls, is looking for a way to take the political initiative and capture the public’s imagination without reinforcing its reputation for over-spending taxpayers’ money. Officials have also discussed proposing only small increases in the NHS budget in 2016 and 2017 while promising bigger investment towards the end of the parliament as the economy grows. Some of these options are certain to create tension with Ed Balls, shadow chancellor, who wants to avoid the charge that Labour would increase taxes or not tackle the deficit seriously. The fiscally conservative – but less eyecatching – option being considered by Labour would be to match Tory spending levels on the NHS while highlighting plans to scrap many of the coalition’s health reforms. Mr Balls this month denied that Labour would put a penny on national insurance to fund the NHS – an idea floated by former minister Frank Field. That proposal, backed by Jon Cruddas, head of Labour’s policy review, would echo Gordon Brown’s raising of NI by 1 per cent in 2002 to fund Labour’s last expansion of the NHS. But Mr Balls has argued that increasing taxes is not compatible with the "cost of living" agenda. Yet Britain’s ageing population is putting increasing pressure on the NHS which – according to a recent select committee report – faces a £4bn annual funding black hole as it struggles to cope with a growing number of people suffering from long-term conditions. Reconciling Mr Miliband’s desire for an eyecatching promise on the NHS and Mr Balls’s quest for fiscal credibility is expected to be the defining Labour argument ahead of this year’s conference in Manchester. Senior Labour figures expect to finalise the decision early in September ahead of Mr Miliband’s setpiece speech. Andy Burnham, shadow health secretary, has proposed merging social care with the NHS. He has claimed this would save taxpayers huge amounts of money because elderly people would no longer end up in hospital for minor incidents such as falls. But that reorganisation is not – by itself – seen by Mr Miliband as sufficiently totemic to capture the imagination of the voters. Nor may it be enough to ease the growing financial pressures on the health service. However Mr Miliband is also conscious that a pledge to boost spending on the NHS could leave Labour open to the Tory charge that it is more interested in flooding the health sector with money than seeking reforms. Labour has sought for months to divert the national political argument on to the NHS, for example by criticising the increasing use of private companies and the costly shake-up of bureaucracy early in this parliament. In opinion polls Labour tends to score much higher than the Tories on the health service – and lower on immigration, Europe and welfare. Mr Miliband has frequently raised questions over waiting lists at the weekly prime minister’s questions in the Commons. But these have usually failed to cut through into the public arena, instead descending into a fog of selective claim and counter-claim between Tories and Labour.