Is Private Healthcare Privatising the British NHS by Stealth?

In recent months, a false narrative has emerged suggesting that the British National Health Service (NHS) is being privatised by stealth, based on the case of one private healthcare company not paying corporation tax on its two billion pound turnover. This article aims to address the fallacy in this claim and provide a comprehensive analysis of the issues surrounding private healthcare in the NHS.

Is Corporation Tax the Real Issue?

The argument is often made that a company, despite generating a two billion pound turnover, has paid zero in corporation tax. However, this is a misleading representation of the situation. Corporations pay taxes on their profits, not their turnover. The company in question has managed to report zero profits for a decade, thus avoiding corporation tax. This is a legitimate and legal tax strategy, often employed through depreciation methods and other accounting practices. Additionally, the company does pay value-added tax (VAT), business rates, and other taxes related to its operations.

The False Narrative and Its Consequences

The claim that this non-payment of corporation tax is proof of the NHS being privatised by stealth is a fallacious leap. Tax is based on income, not turnover, which is why it is called income tax. The company in question has, in fact, paid various taxes. The misleading narrative not only distracts from the actual issues but also gives a false impression of the financial health and operations of the company.

The Underlying Issues

The case in question hints at several underlying problems. One of the concerns is the moral and social implications of a company amassing such a large financial footprint without fully contributing to its tax liabilities. There is a genuine concern that private healthcare entities have been making inroads into the NHS and, in some instances, not behaving in a manner that upholds public trust and accountability.

Examples of Concern

Virgin Healthcare: For instance, Virgin Healthcare, which is set to take over outstanding GP practices, has faced criticism for closures and funding cuts. A Chelmsford GP surgery was placed in special measures following a damning report, which suggested that the practices were under significant stress due to funding cuts.

In my observation, it seems these closures and funding cuts were used as a pretext to force GPs out of their practices and set up privatized entities. The lack of transparent communication and the subsequent financial strain on these practices raise serious ethical questions. It seems that private healthcare providers are using underfunded practices as a means to exploit the system.

The Broader Context: A Global Concern

The issue of privatisation is not unique to the UK. Private healthcare systems, including those in Medicare, Medicaid, VA/Tri-Care, and Canada, share similar concerns. These systems are counting on the fact that people are not paying close attention. It is like the classic story of the frogs in the boiling water; by the time we realize the system is being radically transformed, it may be too late to reverse the changes.

The British NHS, which has been a cornerstone of public healthcare for decades, is facing a significant test. The challenge is whether we can maintain the integrity of public healthcare while still leveraging private sector efficiencies. The critical issue is not about payment of corporation tax, but about the management and accountability of private healthcare providers within the framework of public healthcare.

Conclusion

In summary, the claim that the NHS is being privatised by stealth through non-payment of corporation tax is a misleading and unfounded narrative. The company in question has paid various taxes and the non-payment of corporation tax is a result of legitimate financial strategies, not an indication of tax avoidance. The underlying issues, however, point to the need for greater scrutiny and transparency in the relationship between private healthcare providers and the NHS.