The private health companies, that are circling the NHS and salivating at the prospect of making billions of pounds profit out of the sick under a fully privatised health service, are rubbing their hands in glee at a new proposal that they should pay no corporation tax on the money they make.
Reports surfaced yesterday that, after intense lobbying by the privateers, the government’s NHS economic regulator, Monitor, will be recommending to Tory health minister, Jeremy Hunt, that in future private companies providing NHS services will not have to pay tax on their profits, they will also be exempt from paying VAT on medical supplies – all of which adds up to a huge increase in their profits.
Monitor was established by the coalition precisely to drive through the complete destruction of the NHS and smooth the way for private companies to move in and take control of the huge health budget.
According to Monitor the justification for exempting companies from paying VAT on supplies and any tax on their profits is to provide a ‘level playing field’ within the health service, they argue that as NHS hospitals do not have to pay VAT or corporation tax then these private companies shouldn’t have to as well.
The sheer dishonesty of this argument is breathtaking – these are private companies that have been set up and are bidding to take over the NHS for the sole purpose of making a profit – for them to now claim that they should not have to pay any tax on this profit is nothing more than corporate tax avoidance on a grand scale.
The reason that the NHS pays no corporation tax on its profits is that as a publicly owned service it was not set up as a profit making organisation, it does not and should not make profits but exists to provide a health service free at the point of delivery and paid for out of general taxation.
As to not paying VAT on supplies it buys in, this is just a blatant untruth.
While NHS hospitals can claim back VAT on services they are not allowed to claim it back for supplies – hence one of the largest bills facing the NHS comes from un-reclaimable VAT paid on drugs for example.|
Last week it was made public that over 100 private companies are being paid by the NHS for patient treatment and this is just the tip of the iceberg as the coalition drives forward to destroy the NHS and turn it over in its entirety to privatisation.
In every mass privatisation of a public service the cry has gone up for a ‘level playing field’– both from the government and from the privateers themselves as a means of creating maximum profit at the expense of those using the service.
What is clear is that far from being able to run the NHS more efficiently and provide the very best service and make a profit at the same time, these private companies can only make their profits by cutting staff and wages and by demanding that the taxpayer subsidises them through tax avoidance schemes like this.
The Labour Party shadow health minister, Jamie Reed, condemned the government for letting the ‘tax avoiders’ into the NHS; given that it was under Labour that the process of throwing the NHS open to private speculators to make huge profits out of PFI was brought in, his condemnation is sheer hypocrisy and his promise to stop it, should Labour be elected in 2015, is just worthless.
The only way to defend the most important gain of the working class is to organise a general strike to bring down this government and go forward to a workers government that will kick the privateers out of the NHS for ever.
