The Labour Party is proposing to increase the Insurance Premium Tax (IPT) on private healthcare to 20% to finance free parking at hospitals in England.
The political group wants to end car parking charges for patients, visitors and staff at NHS England hospitals by hiking the IPT rate on holders of private medical insurance (PMI), media reports say.
According to Sky News, the Labour Party believes that its proposed IPT hike would raise at least £220 million and up to £377 million.
The proposed increase in IPT rate – already set to rise from 10% to 12% in June – was criticised by trade organisations in the industry. Stuart Scullion, chairman of the Association of Medical Insurers and Intermediaries (AMII), said the Labour Party’s proposal “just goes to show how far removed from reality they are.”
“PMI is not some executive perk for the wealthy.” Scullion said in a statement. “It is purchased by almost four million working and middle class people who want to take a responsibility for their own health and wellbeing. Increasing IPT will simply force those who are willing and able to buy PMI back into an already overstretched NHS.”
“There are just under one million consumer purchasers of PMI, including many older citizens, who are going to be forced back into using NHS services if the cost of their PMI becomes unsustainable. How does that benefit the NHS?”
“I would be keen to see how the Labour Party has costed its plans whereby they can be confident of a net benefit to the NHS and its users through the removal of hospital parking charges,” Scullion went on saying.
Scullion said AMII will relaunch its petition against IPT after the re-opening of Parliament and the General Election.
“We are not going to stand back and watch any political party wreak havoc with the healthcare industry by the unreasonable increase in IPT in the interests of the consumer,” he said. “Healthcare spend should be tax exempt as it is across much of Europe.”
Meanwhile, the Association of British Insurers told the Financial Times: “Private medical insurance and cash plans cover around four million people in the UK from all walks of life. People who are treated privately through medical insurance free up room for others to access treatment earlier, helping to cut waiting times and reduce pressures on the NHS.”
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