Health secretary Wes Streeting will say that Reform UK’s policy of tax relief on private health insurance could cost the country £1.7bn, describing it as a “tax cut for the wealthiest”. He is expected to make the claim at a Fabian Society conference in London on Saturday.
Before the general election, Reform pledged a 20% tax relief on all private healthcare policies, arguing it would reduce pressure on the NHS. Party leader Nigel Farage reinforced the commitment last summer, saying: “Perhaps if we gave people a bit of tax relief on paying for private health care, we might just relieve the pressure off the National Health Service.”
Civil servants at the Department of Health and Social Care calculated the potential cost using data from healthcare consultancy LaingBuisson, which values the UK private healthcare market at about £8.6bn. The estimate assumes the tax relief would apply equally to company and individual plans.
Streeting will tell delegates: “Farage says he wants an insurance-based system of healthcare… Reform is committed to spending £1.7bn, not on staff, buildings, or technology, but on tax relief for customers of private healthcare. This tax cut for the wealthiest would be the first step on the road to Farage’s insurance system.”
The majority of private healthcare plans are company-sponsored, worth about £5bn, with individual insurance at £3.6bn. Staff with company plans pay income tax on the benefit, typically at the basic rate of 20%. Those with individual cover have already paid income tax on premiums but face an additional 12% insurance premium tax.
