Who said this?

“On this question of ‘principle’ of a free health service, it is nonsense… This is not a question of principle, but to the contrary, it is a practical matter”.

I think it would surprise many Labour supporters to know that this was the verdict of Tony Benn, writing in his diaries after Hugh Gaitskill’s 1951 budget that introduced a limited range of NHS charges. Benn, in contrast to the intransigent Nye Bevan, had it right about the principles of the NHS. The NHS is a tremendous symbol of our shared values. The health service rightly puts fairness at the heart of what it does. But fairness doesn’t have to mean free.

The crisis in public finances will hit health services hard. Whether or not health budgets are protected in real terms, the move from the large increases of recent years to a more modest funding settlement presents a real challenge to the NHS. The NHS chief executive has said that the health service must save some £20bn over three years.

There are three possible approaches to deal with the impact of the downturn i) raise more money ii) become more efficient and iii) manage demand for healthcare. Unfortunately the first of these is not a realistic option. More money for the NHS is unlikely to be forthcoming given limited appetite for tax rises and the rising rate of government borrowing.

Our report, “From feast to famine: reforming the NHS for an age of austerity” argues that there is substantial scope for the NHS to become more efficient. For this to happen, more responsibility should be given to autonomous local commissioners to drive the change that is needed to secure high quality healthcare in the long term. A single regulator should be established to assess commissioner quality, and new democratic mechanisms should be introduced to help local communities hold commissioners to account.

While the NHS can and will become more efficient, it is doubtful that this alone will be enough to plug the financial gap. So, managing demand for care must also be discussed. One of the most powerful mechanisms to manage demand is through charging. That is why we have recommended that the entire system of NHS charges should be overhauled. Poorer people, means tested through the tax credit system, should be offered genuinely free care. Rather than exempting pensioners and pregnant women even if they are well able to pay (think of Sir Fred Goodwin’s pension pot!), the system of NHS charges should be entirely based on income.

As well as this move towards means testing for existing charges, a £20 charge should be introduced for wealthier patients to visit the GP, with those on low incomes completely exempt. We know that for the vast majority of patients reducing their use of healthcare has no adverse effect on their health. A £20 charge would encourage wealthier people to consider how best to use the health service – perhaps visiting pharmacies or using NHS Direct rather than visiting the doctor as a first port of call. But it would not be sufficient to stop people from seeking care when it’s needed, and those who cannot afford it would not have to pay. This limited form of charging is an opportunity to curb the inexorable and unsustainable growth in demand for healthcare.

As Tony Benn reminds us, charging is a pragmatic issue, not one of principle. To make sure we have a fair health service in the future it is right to make sure that poorer people have a genuinely free service. But charging must be discussed now if we are not to return to the bad old days of long waiting lists, crumbling hospitals and a poor quality of care.