Taxes will rise to boost the National Health Service, Chancellor Gordon Brown has announced.

National Insurance payments will rise by 1% on all earnings above £4,600, the chancellor told a packed House of Commons.

He said the extra money for the NHS would come hand-in-hand with more scrutiny of how it was spent.

Mr Brown said: "It is right that everyone who benefits from the insurance provided by the NHS... should make a fair contribution."

Mr Brown said the UK faced a "fundamental choice" over the NHS. Pledging whether to continue with free access to health services "will define the character of the country" in the years to come, he said.

The chancellor ruled out a ring-fenced "hypothecated" tax for health services, but said there was "no free way" of increasing spending.

He said paying for the NHS through general taxation was the fairest way to boost funding.

He said Health Secretary Alan Milburn would be setting out new financial incentives for hospital performance, more freedom for staff, the reform of social services care for elderly and more choice for patients.

But he said extra cash would come hand-in-hand with more scrutiny of how cash was spent, with independent audits of health services.