Is it time for a dedicated tax to fund the NHS?

Yes—Richard Layard

Taxpayers finance the National Health Service. But how much are they willing to pay for it? No one has any idea. The service is financed from general taxation and there is thus no real way in which the public can express its wish for a better (or worse) funded service. If instead there were a specific funding stream dedicated to health, there could be a real public debate about how much people were willing to pay. And this debate would be particularly intense at the time of general elections, ensuring that our healthcare system in some way reflected the wishes of the population.1

Moving to a hypothecated tax would involve a major upheaval, but it would be worth it. Britain currently spends less on health as a share of gross domestic product (GDP) than other countries at the same income level.2 Nearly half of Britons say they are willing to pay for a better service and almost none want it cut.3 But Whitehall is resistant to the idea that health spending should grow faster than income, even though this has been a worldwide tendency.4 If, as in Germany, there were a dedicated source of funding for the healthcare sector, it would be much easier for public demand to be translated into action.