Labour's manifesto plans will include a proposal to increase the rate of insurance premium tax to 20 per cent for private medical insurance, in order to scrap hospital car parking charges.
Insurance premium tax is currently set at 10 per cent, though this is set to rise to 12 per cent in June.
If elected, Labour would use the money raised by increasing the IPT to 20 per cent to finance free parking at NHS England hospitals, replacing the £162m England’s hospitals currently raise from car parking charges.
Announcing the policy, Jeremy Corbyn, leader of the Labour Party, said: “Labour will end hospital parking charges, which place an unfair and unnecessary burden on families, patients and NHS staff. Hospital parking charges are a tax on serious illnesses.
A spokesperson from the Association of British Insurers criticised the move.
“Private medical insurance and cash plans cover around four million people in the UK from all walks of life. People who are treated privately through medical insurance free up room for others to access treatment earlier, helping to cut waiting times and reduce pressures on the NHS.
"Recent changes to the discount rate have cost the NHS over a billion pounds a year, roughly ten times the revenue raised through hospital car parking charges. Tackling this would be a better way to help the NHS save money.”
Mark Loydall, financial adviser at Loughborough-based Cambourne Financial Planning, said: "Whilst the abolition of car park charges at hospitals is to be welcome as they are often perceived as a "rip off charge" by hospital visitors(including me) this is not the only charge associated with travelling to hospital; for example in my location the shuttle bus from the park and ride sites is no longer free but now makes a charge of £1 per journey.
"That said whilst the intent to abolish charges is honourable sure a decision to add tax to PMI is arbitrary and a punishment on those who want to take care of themselves and who actually lessen the burden on the NHS. Not everyone who has PMI is rich and wealthy as some employers provide PMI as a benefit to all their employees including the lowest paid workers."
