National Insurance could rise by a penny in the pound to fund a major boost in health spending.

The radical plan is being examined by senior Tories looking for ways to prevent a repeat of this winter’s NHS crisis.

While officially still saying there are ‘no plans’ for tax rises, Downing Street is thought to be ‘increasingly keen’ on the proposal, which would raise about £5billion a year.

Tory sources say the Cabinet has accepted the need to ‘make an intervention’ on the NHS in the coming months, which will involve releasing billions in extra cash.

National Insurance could rise by a penny in the pound to fund a major boost in health spending

Debate is now raging over how to raise the money.

One proposal is to increase National Insurance by 1p, taking the rate paid by most workers from 12 to 13 per cent.

Chancellor Philip Hammond repeated the Tories’ election pledge to ‘keep taxes low’ this week when he delivered his spring statement on the economy.

But supporters of the scheme believe it would win public support if ministers guaranteed the extra money would be reserved for the NHS.

Downing Street initially played down the idea yesterday, saying there were ‘no plans’ for new tax rises at present – and pointing out that the Government has already put an extra £11billion into the NHS since Theresa May came to power.

But one senior Tory acknowledged the idea enjoyed support within the Cabinet.

‘Health service funding is a live debate,’ the source said. ‘We are looking at making an intervention in the health service at some point, and part of that will include a funding element.

‘Once you have decided that, you are into a discussion about different ways to fund it. But we are a long way from a decision yet.’

Another source said there was an acceptance within the Cabinet that the Tories could not fight an election with a ‘gaping wound’ on health.

Chancellor Philip Hammond, pictured, is not in favour of increasing national insurance

Former Tory minister Robert Halfon last night welcomed the idea, saying it was ‘essential’ the Government responded to public concerns about health funding.

‘I am very supportive of an NHS tax,’ he said.

‘I think people are willing to pay more for the NHS as long as they are consulted on it and they know what they are getting in return.

‘But there has to be a guarantee that every penny of the money would go to the NHS and that it could not be siphoned off by the Treasury the next time it’s short of money.’

Mr Halfon suggested the public should be consulted on the exact level of health spending via referendums every ten years, with taxes set accordingly. But he said ministers should also look at finding extra NHS cash from elsewhere, including the £13billion foreign aid budget.

Health Secretary Jeremy Hunt has publicly acknowledged that the NHS will need ‘significantly more funding’ in the coming decade to cope with Britain’s ageing population and medical advances.

Boris Johnson and Michael Gove are also pushing for a big increase in health spending to coincide with Britain’s departure from the European Union – having pledged during the referendum that the NHS would benefit from a ‘Brexit dividend’ of up to £350million a week.

The Treasury has historically opposed so-called hypothecated taxes, where revenues are earmarked for a specific cause.

The Chancellor ducked questions about whether he would consider a new tax this week. But, in an interview with the BBC, he said the evidence was ‘clearly there’ that the NHS would need more funds in future.

Mr Hammond told MPs that a stronger than expected economic performances had given him £15billion of ‘headroom’, some of which he would consider spending on public services in the autumn Budget.

But, with the Government facing demands to increase resources for defence and local government while meeting election pledges to cut taxes, some ministers believe an additional tax may be needed.

An increase in National Insurance would be a direct echo of Gordon Brown’s 2002 gambit to put a penny on the same tax to help fund what was then the biggest ever increase in NHS funding.

At the time it was seen as a major political gamble, but eventually proved to be popular with the public.