Only the Tories would be brazen enough to use the NHS as another source of tax avoidance. But that’s exactly what they are doing, with a report going to Hunt later this month recommending that private companies which have always paid corporation tax and VAT on supplies to the NHS should now be exempted from doing so.
Monitor, the economic regulator set up by the Lansley privatisation measures to introduce competition into the NHS and with a chair chosen by the Tories to give preference to business opportunities over health, has decided it is an “unfair playing field” because public sector hospitals don’t pay corporation tax or VAT on supplies. You couldn’t make it up: here are private companies busting a gut to get into NHS markets at any price to open up a big profit stream, and then they demand they shouldn’t have to pay tax at all on their profits!
This is not so much the private sector capturing the regulator as the Tory government fixing the regulator structure and the personnel in order to maximise profitability. But that of course is the last motivation they would admit to – it’s all about giving patients a choice in healthcare, as though someone who’s ill wants to make a selection between different healthcare products. If however private companies are so anxious to avoid tax on their profits, there’s always a simple answer for them – they can become charities.
It’s crucial that Labour responds vigorously to this latest provocation aimed at making the NHS just another marketable commodity. Monitor, as an instrument to maximise competition, has no place in the NHS and it should be made clear now that it will be disbanded by an incoming Labour government. Equally Labour should make clear that PFI contracts, which milk the NHS (as well as other public institutions) by top-slicing public expenditure to give priority to payment of interest charges and which have already for this reason crippled several NHS hospitals, will be wound down as rapidly as is legally possible. In addition, warning should be given that all privatisation contracts and outsourcing arrangements within the NHS will be immediately reviewed, with a presumption that most will be terminated as soon as alternative structures can be put in place.
Privatisation, outsourcing, market competition and PFI all undermine (as of course they are intended to do) the core public ethic at the heart of the NHS. The will over time open up a two-tier or multi-tier health service in which poorer patients always get inferior second-class service, as in the US. Business needs to be told now that health is not an area where market dogma will be allowed to predominate so that it should be under no illusion that any investment has long-term prospects.