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Thursday, 11 April, 2002, 12:06 GMT 13:06 UK
Q&A: Funding health care
Q&A

Conservative health spokesman Dr Liam Fox has hit the headlines after saying that the NHS is not working and that new ways of funding health care must be found.

He has defended his comments - saying an open debate is needed on the issue. But he has come under vigorous attack from Labour.

BBC News Online explains why the issue is set to be one of the key battles at the next election.

Do Dr Fox's comments about the NHS not working represent a new departure for the Tories?

No. Dr Fox made his view that the health service needs fundamental reform clear in his conference speech at the Conservative spring conference last month.

What is interesting about the latest comments is that they provide indications of possible options for future funding of health services under a Tory government.

So are the Tories proposing privatising the health service?

What the party is saying is that the NHS is an institution which needs modernisation.

The Tories believe it is a structure still operating as though we live in the 1940s. They say it cannot effectively address the problems of the 21st century.

They argue that Labour is emotionally attached to the NHS, seeing it as the great triumph of the post-war Attlee government.

The government, the Conservatives argue, is psychologically unable to break its links with the NHS because it means so much to the party's history.

Labour accuses the Conservatives of wanting to privatise the service. The Tories deny this, saying they are looking at alternative ways of funding services in addition to the state's provision.

They say there must be an "open minded" debate about health care.

What sort of other funding models are being considered?

The Tories stress that they are in the middle of a policy review over the health service.

Party leaders have been taking part in fact-finding trips around Europe and the rest of the world to see how health systems work in other countries.

One option is social insurance, which is used in many countries, where people pay a premium for health care.

Another is that people would be given tax breaks in order to pay for more operations themselves.

Dr Fox says it cannot be right that 250,000 people pay for their own operations, while others travel abroad.

What is the government's view?

Chancellor Gordon Brown says the NHS should continue to be funded from general taxation. He is likely to raise taxes in next week's Budget in order to provide more funding for health care.

One idea that has been suggested by some Labour MPs and by the Liberal Democrats is for a "hypothecated" health tax, whereby part of general taxation is ring-fenced to pay specifically for health services.

Those who support this idea believe people would be willing to pay more tax if they know how the money will be spent.

But Mr Brown is said to be opposed to this idea.

Dr Fox's comments indicate that the Tories believe the health service can no longer be funded solely by general taxation. He believes that to provide improvements in health care, other ideas need to be examined.

Do the Conservatives have a specific set of proposals?

No. The party's review of its policy is expected to last for another year. But it is clearly moving to the view that health can no longer be funded from a single stream, that there has to be some kind of mix.

Dr Fox said: "We will take our time in deciding on the way forward, and will not be making premature decisions; patients and those working in healthcare deserve nothing less."

What is the challenge for the Tories?

Whenever the Conservatives make any comments on health funding, Labour is quick to accuse the party of wanting to privatise the NHS.

And there will be suspicions about their intentions from the public.

Moreover, at the last election, the Conservatives said they would match Labour funding on health.

There are now suggestions that the party may abandon that pledge, fearing that such a commitment would tie the hands of an incoming Tory government as it examines its priorities for public spending.

The challenge for the Conservatives is to persuade the public of the merits of any alternative policies while also countering Labour's accusations over privatisation.

They must convince the public that the present system of funding through general taxation is not sustainable.

That will be a very difficult argument to win, and Labour will continue to attack any Tory plan vigorously.

It will be a key battleground in the run up to the next election.

See also:

11 Apr 02 | UK Politics
Tories reignite health funds row
28 Mar 02 | UK Politics
NHS getting better, insists Blair
22 Mar 02 | UK Politics
Tories signal NHS rethink
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