NHS Pensions: Taxation

Debate between Baroness Altmann and Baroness Blackwood of North Oxford

Tuesday 9th July 2019 Lords Chamber

[Baroness Blackwood of North Oxford]

I can confirm that it has been made absolutely clear that NHS clinicians have been impacted by these reforms, and front-line care has been impacted. This is unacceptable and that is why we are bringing forward the review to find a solution as quickly as possible. The noble Baroness is right to raise the issue and we are determined to resolve it.

[Baroness Altmann (Con)]

My Lords, I am sure the Minister agrees that this was an unintended consequence of changes to the tax system. The reality is that the cliff edge of the taper is forcing consultants to pay tens of thousands of pounds for doing one small extra shift, sometimes voluntarily. Could she look at offering financial advice to each individual consultant who may be affected? They will not all face this tax charge, but they are all frightened that they might, so they are not undertaking the extra shifts we need them to undertake. Can she also note to her departmental colleagues that high-paid people potentially affected by the taper in other areas of the public sector received some assistance and mitigating measures from their departments, whereas it has been almost impossible for consultants to plan ahead? We are now seeing the problems occurring belatedly.

[Baroness Blackwood of North Oxford]

My noble friend speaks with particular expertise on this issue. As the whole House will appreciate, NHS consultants are often asked to take on additional shifts at short notice and they face peculiar challenges when calculating the consequences for their pensions. This is one of the reasons why the BMA has put up its calculator. However, the pension rules we are discussing today mean that some who take on extra work may find they have inadvertently incurred a substantial tax charge in moving into the taper. This is why we have brought in the consultation. It is obviously important that those facing pension charges should seek advice. NHS England is considering this issue closely at its most senior levels and working with the department to better understand the impact on clinicians, but also on NHS performance, and we are determined to resolve the situation to get it right.