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Health Bill

My Lords, I notice that the Conservative Front Bench did not rise to support this amendment. I can reassure the noble Lord, Lord Palmer, that the Civil Service did not have to write any speech for me on this issue. This is clearly not the Government’s policy. Such a subsidy for private medical insurance would be ineffective, inequitable and inefficient. The Government abolished tax relief on private medical insurance for the over-60s in 1997. The Institute for Fiscal Studies found that the tax relief introduced in the 1990s failed to generate increased demand for private health insurance. Other industry commentators have supported this conclusion. Introducing some form of tax relief or other subsidy for those who use the private sector would definitely conflict with the Government’s belief that the best way to use resources and provide healthcare is through a tax-funded health service which is free at the point of use. This is where the Government will continue to focus their healthcare spending. Furthermore—this is absolutely critical and the noble Lord needs to reflect on it—tax relief for private medical insurance would be inefficient as it would cost £1 billion in tax relief just for those who already have private health insurance. It is a dead weight cost. That is the equivalent of losing 15,000 GPs, 35,000 nurses or eight hospitals. In the unlikely event that it generated extra demand for private health insurance, it would also risk drawing skilled doctors and nurses away from the NHS to the private sector. I think I have said enough to convince the House that the Government are wildly unenthusiastic about this amendment. I was rather hoping that we could have more sport through noble Lords on the Conservative Front Bench standing up and supporting this way of spending £1 billion.