Eight million families face £2bn hit Putting VAT on private healthcare could raise £2billion for the Treasury, but would hit up to eight million middle-class families. We have already seen that with VAT on private school fees – you could now see it with private medical insurance and some of the other items that are exempt." Manifesto tax lock under threat In last year's manifesto, Labour pledged not to raise VAT, income tax or National Insurance as part of a "tax lock" pledge designed to protect "working people". Kinnock backs private health insurance raid Former Labour leader Neil Kinnock has called for VAT to be levied on private medical insurance for the first time, saying it could provide "vital funding" for public services. But the move would hit millions of people who have taken out private medical insurance because of concerns about the state of the NHS.