National Health Service: Pensions Tax

Debate between Lord Balfe and Baroness Blackwood of North Oxford

Wednesday 30th October 2019 Lords Chamber

[Lord Balfe]

To ask Her Majesty's Government what assessment they have made of the impact on patients of doctors having to curtail their hours because of the rates of tax they would incur due to the pensions regime in the National Health Service.

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Blackwood of North Oxford) (Con)]

My Lords, the Government recognise that pension tax may contribute to decisions by doctors to limit their NHS commitments. The NHS continues to work tirelessly to ensure that patients receive timely and appropriate care, so we are consulting on proposals to make the NHS pension scheme more flexible, so that doctors can continue to conduct vital NHS work while tailoring their pensions growth. The Treasury is also reviewing how the tapered annual allowance supports the delivery of public services such as the NHS.

[Lord Balfe (Con)]

I thank the Minister for her reply and draw attention to my interests in the register. This problem goes back to 2016 but, as of this week, the BMA, the doctors trade union, revealed that a recent survey showed that 42% of GPs have already reduced their hours spent caring for patients and 30% of hospital consultants have already reduced their hours. There have been similar figures from the Royal College of Physicians. Doctors are attracting massive tax bills as a result of working harder to care for their patients; indeed, half are now retiring younger. I am afraid that the appearance is of a dilatory Government where infighting between HM Treasury and the Department of Health is taking precedence over urgent action to deal with this problem. Will the Minister encourage the Government to get a move on and get this sorted out before even more patient time is lost?

[Baroness Blackwood of North Oxford]

I thank my noble friend for that very direct question. Our estimate is slightly different—that around one-third of GPs and consultants have earnings high enough to potentially be affected by the tapering of the annual allowance for tax-free pension savings. Not all clinicians are affected—it depends on the personal circumstances—but we accept that there is a need for urgent action in this area. That is why NHS employers have published guidance for short-term approaches that could have a mitigating effect on pension tax for the workforce this year and throughout the winter. We have also opened our consultation, which will close this Friday. We have already had 750 responses to it, and stakeholders are broadly supportive of the additional flexibility that has been proposed. We intend that flexibility to be available by April.