Liberal Vannin criticises proposed healthcare tax as ‘half-baked’

Party raises fairness concerns and calls for tax system reform instead of a new levy

Political party Liberal Vannin has criticised Treasury’s proposal to introduce a dedicated healthcare tax levy, branding the idea “half-baked” and warning it risks placing further financial strain on low-income earners.

In its formal response to the government consultation on the proposals, the party acknowledges the need for increased funding for health and social care but raises doubts over whether a separate, hypothecated tax is the right approach.

The party argues the current model for delivering health services should undergo a full review to assess its effectiveness, with the option of returning operational responsibility to the Department of Health and Social Care if deemed necessary.

While Liberal Vannin welcomed last year’s rise in the higher income tax rate, it criticised the decision to reduce it this year from 22 to 21 percent, questioning the consistency of government policy amid ongoing financial pressure on health services.

Party members express concern that the levy could disproportionately impact those on lower incomes, while offering what they describe as “unwarranted advantages” to high earners through the inclusion of a contribution cap. 

They believe a fairer system would exempt those below the 20 percent tax threshold and avoid setting upper payment limits.

Liberal Vannin also called on Treasury to explore broader reforms to the Island’s tax system, including the possible introduction of property or wealth-based contributions, and suggested an Island-wide Health and Social Care Rate based on rateable property value could be more equitable.

The party says government should learn from UK NHS reforms, including more community-based care models that relieve pressure on hospital services. 

It also called for improved public sector productivity, tighter contract management, and more decisive leadership from ministers and senior civil servants.

Party leader Lawrie Hooper MHK recently submitted a Freedom of Information request on the proposed levy, revealing it would apply to those earning above the 10 percent tax threshold, with a maximum contribution of £5,000 per individual or £10,000 per couple.

The link to the consultation NHS Levy Consultation is here.

You can listen to the full interview with Liberal Vannin Chair Paul Weatherall here: