Blair Signals Tax Increase Over NHS

by Jason Gorringe, Tax-News.com, London

22 February 2002

During a televised debate on the National Health Service on Wednesday, UK Prime Minister Tony Blair gave the clearest signal yet that in order to finance greater investment in the NHS, taxes will have to be increased.

Mr Blair ruled out an increase in social insurance contributions, but warned that there will be tough times ahead for politicians and taxpayers alike.

'We will find it out of general taxation because the alternatives, which are social insurance - which is a tax on wages - and private healthcare - which you pay out of your pocket - are worse,' he explained to the BBC, adding that: 'I hope that in the coming months we will be able to show that we are able to make that commitment.'

The Prime Minister's view was supported by the Health Secretary, Alan Milburn, who commented during a radio phone-in on the state of the NHS on Wednesday that: 'I think people know if they want a better health service they have to pay for it.'

However, the Prime Minister's candour is likely to have come as something of a shock to the Treasury Department, which is currently reeling following new figures which suggest that Government finances have fallen £4 billion compared to last January.

This deterioration in what is usually a bumper month for corporate and self-assessment tax collection has come as a shock to economists, who are predicting that tax increases in the Chancellor's April 17 budget are now almost inevitable.

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