Saturday 14 April 2018

Can a ring-fenced NHS tax rise work?


 In his Blog former Liberal Democrat AM Peter Black, writes..
As far as I aware the Liberal Democrats are the only party who are proposing to ring-fence a tax rise to provide additional funding for the health service. It has been our policy for some time to try and save the NHS by putting a penny in the pound on income tax to give the NHS and social care services the cash they need.
Now it appears that this idea may be gaining some traction with the public, though it does not look as if we are getting credit for it at present. The Guardian reports that a large face-to-face survey carried out before the winter crisis struck the health service in November has recorded the biggest-ever shift of opinion on the issue.

They say that voters are now ready by nearly two to one to pay more tax to bolster the NHS:

He may well be right and it could well play well with the electorate but is it really workable?

After all if a ring fenced "NHS Tax" rise was to exist then it would have to be clear and surely would not be part of a budget that saw a equivalent  in the reduction  in Taxes in general.

Under the current system whether the NHS in England where spending comes under Westminster or Wales where it comes under the Assembly, any increase in NHS spending will lead to cuts in other areas.

We could easily  see a party campaigning on a Ring Fenced NHS Tax, whilst promising to cut taxes elsewhere .

There will be no mention that this means cuts in education or reducing the Welfare State.

Or we could see a Party running on a platform that argues to take the Health service tax down by privatising the service.

Last year the Tories won the General Election with 42.2% vote but in 2015 they had an even bigger majority with  36.9 % of the vote.

The Tories do not need a majority of votes, just s minoroty seats.

If they cam convince their natural supporters  that they will pay less taxes including any "NHS Tax " then they can win  a majority under First Past the Post system.

 So whilst a  a ring fenced "NHS Tax" seems a good idea on paper and play well with much of the electorate  it could lead , a very different outcome to what is intended.

1 comment:

Gav said...

Similarly, as a general observation, ring-fenced money has some tendency to drive out unhypothecated money, so another unintended consequence might well be a net reduction in the funds available for the particular service that is meant to benefit from the ring fencing.