The Tories, tax breaks and Thatcher

By Kerry McCarthy MP / @KerryMP

David Cameron once claimed, rather audaciously, that the Tories were “the party of the NHS”. We’ve all heard the empty promises he’s made about the NHS being safe in his hands, and seen him posing for the cameras in a hospital – shirtsleeves, of course, rolled up.

The Prime Minister, though, has failed even to convince his own MPs, who are instead taking their inspiration from Margaret Thatcher.

Three of David Cameron’s MPs are today proposing amendments to the Finance Bill, to reinstate tax relief on private medical insurance for the over 65s. In 2009 a poll of 150 Tory MPs found that two thirds of them supported tax relief for private medical insurance. It’s clear that they haven’t given up on the idea.

It was Margaret Thatcher’s Government that introduced this, and it was one of the first acts of the new Labour Government in 1997 to scrap it, using the money instead to fund our cut to VAT on fuel, which had been hiked up to 8% from 5% by Ken Clarke during his stint as Chancellor. (Labour of course thwarted Clarke’s attempt to raise it to 17.5% after a public and parliamentary campaign, culminating in a Government defeat in the Commons).

We made our priorities clear: rather than giving a tax break to older people who could already afford private health insurance, we went for a tax cut that benefited everyone, but would make the most significant difference to older people on lower incomes who were struggling to heat their homes.

The tax breaks were not only unfair, but they failed to achieve one of the Tories’ stated aims of reducing the burden on the NHS, simply putting more money into the pockets of people who could already afford private healthcare.

So what do the proposed four new clauses say about the priorities of today’s Conservatives, ten years after the Conservative manifesto promised to reinstate tax relief because “choice for patients extends to private healthcare”?

The clauses say they do not care that subsidised private healthcare is not a priority for the 426,800 people who have signed the Save our NHS petition; or that the “choice” of private healthcare is not an option for the hundreds of constituents who have contacted me, horrified by this Conservative-led government’s determination to erode the NHS as a national service and ensure our publicly funded hospitals can challenged under competition laws by private providers.

At a time when David Cameron is wasting £2bn on a chaotic reorganisation and breaking his promise to increase real terms spending on the NHS each year, which staff and patients know all too well are affecting frontline services, and waiting lists are on the up, how can tax breaks for those who can already afford private healthcare be a priority?

I don’t know how the Tory MPs will respond to those questions in the debate later today, but I do know that for the pensioners who are struggling disproportionately with George Osborne’s VAT increase – because the government made a political choice to cut too far and too fast – and who will receive a much reduced Winter Fuel Payment, the fact that their better-off contemporaries could benefit from state subsidised private health care will be of little comfort.

Instead of unfair tax cuts for a few, we need a temporary emergency VAT cut for everyone until the economy starts growing strongly again. This would be a much-needed boost to all people on low and middle incomes, not just a few. It would boost confidence and get the stalled economy moving again and so help get the deficit down for the long-term.