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ABI urges Cameron to rethink PMI tax relief

The Association of British Insurers is calling on Tory leader David Cameron to recognise the value of tax incentives in private medical insurance after he described the approach as “flawed”.

In his first speech on the NHS, Cameron firmly ruled out the patient passport policy of subsidising private care and ex-Prime Minister Margaret Thatcher’s idea of PMI tax relief for practical and philosophical reasons.

He told the King’s Fund health thinktank in London that neither policy was about improving the NHS and both approaches misunderstood its basic values.

Cameron said: “The NHS should be neither a state monopoly, as the left have sometimes believed, nor is it something charitable or demeaning, so we should not use taxpayers’ money to encourage the better-off to opt out.”

But ABI director general Stephen Haddrill believes that Cameron needs to rethink the role that the tax system can play in improving the health of the working population.

Haddrill says Cameron rightly recognises that private healthcare helps the NHS deliver its goals, not least in reducing waiting lists, and should not dismiss the idea of offering tax relief out of hand.

Haddrill says: “We believe in particular that the tax system should be changed to incentivise the provision of PMI and rehabilitation services for the workforce, with 4.8 million people benefiting from such protection at present. This would grow rapidly with a fair tax system.”

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