The Association of British Insurers (ABI) and the Independent Healthcare Providers Network (IHPN) have raised concerns about a proposal put forward by Lord Kinnock for a tax hike on private healthcare.
The former Labour Party leader called for the government to remove the exemption on VAT on private healthcare earlier this week, while calls have also been made to introduce a windfall tax on these services.
The peer issued his call earlier this week alongside research from the Good Growth Foundation which showed majority public support for a windfall tax on private healthcare.
In response the ABI issued a statement in which it said that the insurance sector and independent health services have a “vital” role to play in supporting a healthy and productive workforce as well as helping to reduce pressure on the NHS.
“Many people have access to preventative services through their workplace that help them stay well and in work, or treatments that can help them return to work sooner after illness,” the ABI added.
“At a time when the government is looking to promote the role of health prevention and reduce economic inactivity, we would be concerned about the introduction of any measures that might create a barrier to health support,” it concluded.
The IHPN echoed the ABI’s sentiments in a statement.
It said: “With record demand for both NHS and privately funded treatment, along with increasing numbers of employers providing medical insurance to keep their staff healthy, we would strongly warn against any changes to the tax system which may disincentivise people from accessing the healthcare that they need to live full and productive lives.”
Advisers also told Health & Protection that it would be “madness” to remove the VAT exemption on private healthcare and feared it would hit employers and individuals hard.