Politics - Euro 2

Britain will be forced to scrap the National Health Service if it joins the euro. The European Central Bank, which manages the single currency, gave warning that free health care would have to be restricted to emergency services only, otherwise the cost would overwhelm European economies and lead to soaring inflation. Britain has one of the biggest tax-funded health services in the EU, with only a tiny proportion of treatments paid for privately. The report, in the Frankfurt-based ECB’s monthly bulletin, said that Britain’s ageing population would make state pensions, tax-funded health services and long-term care unaffordable in the future.

Tax rises to meet the extra demands would soon become politically unacceptable and the sums in question would be too large to borrow, the ECB said. The article, which is published under the ECB’s authority rather than being just a working paper by researchers, recommends swift reforms with patients paying for more private operations. Governments should distinguish between “essential, privately non-insurable and non-affordable services”, such as emergency treatment, and those where “private financing might be more efficient. Greater private involvement in health care financing can be achieved, in particular, through patient co-payments, as already implemented in a number of countries.”

British taxpayers and employers have just been hit by higher national insurance contributions introduced by the Chancellor to pay for more spending on the NHS. Although the extra cash is accompanied by reforms, these do not include any measures requiring private contributions by patients towards their care. The ECB’s report will be used by the campaign against euro membership as evidence that the single currency would dramatically reduce national sovereignty. Alan Milburn, the Health Secretary, who is in favour of Britain joining the euro, said the Government would never let the NHS be put at risk. “For as long as there is a Labour government the NHS will be funded from general taxation and health care available according to need and not the ability to pay,” his spokesman said.

Treasury officials said they were surprised by the report. “Taxation and public spending are matters for individual member states. While deficits are constrained by the requirements of the stability and growth pact, public finances in the UK are widely seen as being on a sustainable path, certainly when compared to most other European countries,” a spokesman said. He added that Mr Brown made a speech last year in which he concluded a tax-funded system was not only the fairest form of health care, but the most economically efficient. A spokesman for the anti-euro No campaign, said, “It has always been clear that joining the euro would put at risk the Government's spending commitments, but this endangers the entire NHS.”

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