Sales of company private medical insurance policies could boom under a Tory government after shadow health secretary Liam Fox announced the policies would attract tax relief.

Currently PMI policies are classed as ‘benefits in kind' and the combination of both employees and employers contributions totals nearly £500m a year.

Fox has announced plans that include the abolition of the charge for employers and cutting the tax on employees by a half.

The Tories predict there will be a 20% increase in the number of people covered if their plans go ahead.

Labour have been quick to attack the Tory plan, claiming that it proves the Conservatives aim to privatise the health service.

Meanwhile, research by Standard Life Healthcare has found that nearly two thirds of people they questioned would pay for medical treatment from their own funds if necessary.