Coughing up for the NHS: The danger of the tax Labour is considering is that it would stand in for urgently needed reforms to the health service

We are becoming an older nation at a faster rate than ever before, and that increases the burden on GPs, hospitals and care homes

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How to pay for the National Health Service? Since its inception, the question has been evaded by most governments, for two very good reasons. First, as is often remarked, the NHS has become the nearest thing the British have to a national religion. Second, the British have always begrudged paying for their “envy of the world”. Thus, any remotely grown-up ideas about sustaining the health service are to be welcomed.

The latest is Labour's apparent conversion to the notion of a special NHS tax. There is something to be said for it. For an electorate that is so distrustful of the political class, it gives reassurance that any increase in tax or national insurance - for that is all the NHS tax amounts to - will go in the intended direction, and not be siphoned off for, say, some Blair-esque foreign military adventure. As old disciples of Gordon Brown, Ed Balls and Ed Miliband may be thinking of the successful pitch that New Labour made at the 2001 general election - a stated rise in national insurance specifically to pay for investment in the NHS. This was dreamed up by their old boss, Chancellor Brown, as about the closest thing to socialism they could pull off in the days when New Labour was still terrified of its tax-and-spend image. It worked electorally, and it led to a marked increase in real-terms spending. As a rebranded version of that exercise for more cynical times, the Balls-Miliband NHS tax has its merits.

Yet earmarked taxes carry dangers. They make it difficult for governments to cut spending without reducing taxes, for example to fix a deficit, and they invite the public to pick and choose between public services, thereby undermining the case for general taxation. Why, for example, should the childless pay for education, or pacifists contribute to the cost of an aircraft carrier? And, as in this case, they are often the product of simple cowardice; politicians and public alike refusing to face up to the real problem of funding decent public services.

As a substitute for a proper debate about the demands the NHS and social care are about to make on taxpayers, a small NHS tax would do more harm than good, and would not in any case stay small for long. We are becoming an older nation at a faster rate than ever before, and that increases the burden on GPs, hospitals and care homes. Fresh restrictions on immigration - promised now by every party - will make matters worse by reducing the population of working-age people to pay for all that, as well as choking off the supply of skilled medics and support staff to work in the NHS. New drugs, new treatments and new, higher, public expectations add to the pressures, as they always have.

The brutal truth is that the British economy is unlikely to grow fast enough to keep up with those demands, and raising more taxes is always going to be politically difficult - though some tax hikes are inevitable.

So the health service has to become radically more efficient and concentrate on what is most important.

That, in turn, means improving productivity within the NHS, with voters being less silly about the closure of some smaller, inefficient units. It means taking a fresh look at the way we pay for GP surgeries, and the relationship between private providers and the NHS, ensuring that they pay a fair share for the use of NHS facilities and staff trained at public expense. It means being harder on failing trusts. It means investing in earlier screening. It means being tough on NHS pay, painful as that is: Andy Burnham, we may ask, are you up for that?

In its seventh decade, the NHS is in surprisingly fine fettle, but things are going to get tougher for it, and it will need to adapt to the fact that it may not be able to do everything in the same way as it did when it was younger.

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