Funding better public services

Economic stability and sound public finances provide the best basis for long-term funding of public services. To put the NHS on a sustainable footing while maintaining fiscal discipline and meeting Budget priorities:

there will be one per cent extra on national insurance contributions (NICs) by employers, employees and the self-employed on all earnings above the NICs threshold from April 2003; and

back to top

the income tax personal allowance and NICs threshold will be frozen in 2003-04, except for the pensioners' allowances which will rise by more than inflation.

The Government believes that a taxpayer funded NHS is the best way of ensuring that costs are spread widely and fairly and that access to health care is based on need, not ability to pay. As a result of these changes, in April 2003:

a person on median earnings of £21,400 will pay £3.70 extra a week;

a person on 50 per cent of median earnings (£10,700) will pay an additional £1.65 a week;

a person on 150 per cent of median earnings (£32,100) will pay an additional £5.75 a week; and

no pensioner aged 65 or over will pay tax on income of less than £127 a week, as well as paying no national insurance contributions.

back to top