Oral Answers to Questions

David Linden Excerpts

Tuesday 21st May 2019 Commons Chamber

[Ruth Jones (Newport West) (Lab)]

5. What assessment the Government have made of the effect of the annual tapered allowance on the (a) recruitment and (b) retention of doctors in (i) hospitals, (ii) primary care and (iii) the armed forces.

[David Linden (Glasgow East) (SNP)]

6. What recent discussions he has had with Cabinet colleagues on the NHS pension scheme tapered annual allowance.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

The NHS pension scheme and other public service schemes are among the most generous pension schemes available in this country today. The tapered annual allowance is focused on the highest-earning pension savers to ensure that the tax relief that they receive is not disproportionate to that of other savers. However, I do accept that there is some evidence that the annual allowance charge is having an impact on the retention of high-earning clinicians in the NHS. I am in discussion with my right hon. Friend the Health Secretary about how to provide additional pension flexibility for NHS doctors affected by the annual allowance tax charge, and he will make an announcement as soon as possible.

--- Later in debate ---

[Mr Hammond]

I think I have answered that question, but it is good to hear Labour MPs focusing on the disincentive effect of high taxation, particularly on professionals in our public services. Someone has to be earning £150,000 a year before the tapered annual allowance affects them. I would suggest that perhaps Labour Members who do understand the detrimental effect of very high marginal tax rates on professionals in our public services make those representations to their right hon. Friend the shadow Chancellor, who is intending to raise tax for everybody earning more than £80,000 a year.

[David Linden]

One of the constituents I have in Barrachnie is a consultant who has told me that there are concerns about recruitment and retention. Given that a recent survey shows that 40% of doctors have retired early as a result of pension tax changes, I would urge the Chancellor to look again at this and make as strong a case as possible to the Health Secretary so that he can make sure that we have the staff in the NHS to serve our communities.

[Mr Hammond]

As I have already said, both the Treasury and the Health Department wish to address this problem. We have to find a mechanism that does it in a way that is fair and appropriate. The right way to do it is through increasing flexibilities within the NHS and, potentially, other public sector schemes. My right hon. Friend the Health Secretary will make an announcement as soon as possible.