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23 September 2014updated 23 Jul 2021 11:22am

Ed Miliband announces £2.5bn of funding to save the NHS

It will be funded by a mansion tax, cracking down on tax avoidance and fees for tobacco firms.

By Anoosh Chakelian

Ed Miliband’s headline announcement to the Labour party conference this year is that the next Labour government will create a £2.5bn NHS Time to Care Fund, to rescue the beleaguered health service.

The money will go towards 20,000 more nurses, 8,000 more GPs, 5,000 new homecare workers and 3,000 midwives. The NHS Time to Care Fund investment not only aims to provide better care by ensuring safe staffing levels, but also to help save hundreds of millions of pounds each year.

The money for this will be raised by:
 

Mansion tax

Those living in houses worth over £2m will pay more tax.

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The £2m threshold will rise in line with property prices, to stop more properties being drawn into the tax.

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There will be protections in place for people who don’t have high income but happen to live in an expensive property – something Labour’s London MPs will have been concerned about.

It will be progressive tax, so that properties worth tens of millions make a bigger contribution than those just over the limit.

Crackdown on tax avoidance

Miliband says a Labour government would raise £1.1bn by ensuring that hedge funds and other tax avoiders play by the rules, and asking those at the top to pay more.

This will involve:

 – Stopping hedge funds avoiding hundreds of millions in tax on shares, so that they pay the same amount as individual investors and pension funds.

 – Closing the “Eurobonds” loophole that is being exploited by some large firms to move profits out of the UK and avoid corporation tax.

 – Preventing “umbrella companies” being used to avoid tax and National Insurance by exploiting expenses rules.

Fees for tobacco firms

This is a policy based on fees introduced by Barack Obama in 2009, ensuring tobacco firms make a larger contribution towards the costs of tackling illnesses related to smoking.

As in the US model, this fee for individual firms will be based on their market share. It aims to raise at least £150m.
 

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Here are some extracts from Miliband’s speech introducing these proposals:

It is time to care about our NHS. So that doctors, nurses, care workers, midwives are able to spend proper time with us – not to be rushed off their feet. . .

And we won’t borrow a penny to do it. And we won’t do it by raising taxes on everyday working people. . .

The stakes are incredibly high in this election. But nowhere more than on the NHS.

The NHS is sliding backwards under this government. They are privatising and fragmenting it. Just think what it would look like after five more years of this government. It is not safe in their hands.

We built the NHS. We saved the NHS. We will repeal their Health and Social Care Bill and we will transform the NHS for the future.