HC Deb 13 November 2003 vol 413 cc400-1
3. Mr. Jim Cunningham (Coventry, South)

To ask the Chancellor of the Exchequer what recent discussions he has had on tax incentives for private health care. [138325]

The Chancellor of the Exchequer (Mr. Gordon Brown)

I have met BUPA and others. We estimate the cost of tax relief for private medical insurance at a billion pounds, almost all of which will go to those who are already on private medical insurance.

Mr. Cunningham

I thank my right hon. Friend for that answer and add my congratulations to those of others in the Chamber. What is my right hon. Friend doing to provide resources to ensure that the national health service remains free at the point of need?

Mr. Brown

When we came to power, we had to take difficult decisions on the uses of public expenditure. One of the decisions that we made was to abolish tax relief on private medical insurance for over-60s. That was a difficult decision. but all the evidence showed that in the nine years in which private medical insurance existed, a billion pounds had been spent and there had been no appreciable growth in the numbers of people on private medical insurance, but that the state was subsiding people who already had such insurance in the first place.

I cannot see how we can continue to finance both the development of the national health service and build the capacity in hospitals, with doctors and nurses being employed, and at the same time finance with a billion pounds of deadweight cost private medical insurance tax relief for people who already have such insurance. I suggest that the country has a choice—we can have a health service that is free at the point of need, where we invest in capacity, or we can spend money on private medical insurance. We will, at the same time as investing in the national health service, keep to the policy that puts the national health service, and not private medicine, first in this respect.

Mr. Tim Boswell (Daventry)

Since the Chancellor announced the decision in 1997 to withdraw tax relief for older people in respect of private health insurance, can he tell the House how many older people have come off such insurance and what the costs to the NHS in current and capital terms have been in providing for those people in the public sector?

Mr. Brown

I will write to the hon. Gentleman with the figures. There was no appreciable growth in the numbers of people who took out private medical insurance when the tax relief was in place. I may say that the former Chancellor, Lord Lawson, said that the relief was not good value for money and merely meant health service inflation. He was opposed to it all along, as those on the Conservative Front Bench should be.