NHS Pensions

Debate between James Gray and Robert Syms

Wednesday 26th June 2019 Westminster Hall

[Sir Robert Syms (Poole) (Con)]

I beg to move,

That this House has considered NHS pensions, annual and lifetime allowances.

I begin by declaring an interest, because anybody who has been in the parliamentary pension scheme is affected by annual allowance and lifetime allowance. Therefore, some of the things I say may reflect on me and maybe other hon. Members, so I suggest they make a declaration as well—

[James Gray (in the Chair)]

Order. The hon. Gentleman may be right to say that all hon. Members may be affected by that matter, but for each individual to have to make that declaration would, I think, be otiose.

[Sir Robert Syms]

Thank you, Mr Gray. This is an important subject, and the more I learn about it, the more I realise its implications for the national health service. I had originally been told that the Treasury would respond to the debate, but I understand that the Department of Health and Social Care has manfully stepped up to the plate—the first example I have seen of a hospital pass to a Department.

The subject has devastating implications for the NHS, dental services and many other services in this country unless it is addressed by the Government. When the coalition Government came into office in 2010-11, they were quite right to reduce the amount of money that could be put into pension funds. At that time, someone could put £255,000 into a pension fund tax free; clearly, if they had such resources, it was unfair on the lower paid. The Government moved to reduce the tax leakage by reducing a number of the allowances.

The problem today is that the Government have drawn the allowances too tight, and in 2015-16 they also introduced a taper to the annual allowance. All that is having a pernicious effect on the NHS and creating what the British Medical Association has called a “perfect storm”. The lifetime allowance, which is just over £1,055,000, is such that most senior doctors and general practitioners get pulled into additional tax, paid at 55%. That raises the question whether they should continue working or retire early; there is a lot of evidence that members of the medical profession are deliberately retiring early because of the implications of working longer.

The annual allowance of £40,000 is creating problems of supplementary tax bills, which are falling at the doors of consultants, doctors and senior nurses. That £40,000 is made up of the increase in the fund and contributions, in a slightly convoluted formula, but the introduction of the taper and the way that it operates cause particular havoc. For higher earners, a strict regime applies to annual contributions, which is known as tapered annual allowance. It applies to people who have both adjusted income over £150,000 per year, which is total taxable income plus the real growth in value of pension rights over the year, and threshold income above £110,000 per year, which is essentially total taxable income, but net the value of any employee pension contributions.

Where an individual ticks both boxes, for every £2 of adjusted income that they receive above the £150,000 level, their annual allowance is reduced by £1. This means that those with an adjusted income of £210,000 have their annual allowance tapered down from £40,000 to £10,000, the lowest level to which tapering can reduce the annual allowance. That tapered allowance was introduced in 2016-17. The ability to carry forward unused allowances for years before the taper was enforced has so far helped to dampen down its impact, but in 2019-20, carry-forward will be from no earlier than 2016-17, when the taper came into force. That will reduce the number of people with significant amounts of underused annual allowance available, and as a result the taper will bite rather more than in earlier years.

If we look at the figures, we see the number of people who exceed annual allowance or hit the taper multiplying each year, pulling many more people into the system. Many senior doctors earn enough money from their core hours plus additional shifts to be potentially affected by the tapered annual allowance. In addition, because of the relative generosity of the NHS pension scheme, pension rights can be built up quite quickly, especially for those who have experienced a step-up in pension rights because of a promotion. Paradoxically, in most cases overtime shifts are not pensionable. That means that a doctor can find that, by working more, he or she has built up no extra pension but, because of the operation of the tapered annual allowance, has reduced the amount of pension that he or she can build up within the tax relief limits.

All that leads to more complexity within the system. It is extremely difficult for someone to work out whether they have an annual allowance issue; that is true for any high earner, but may be particularly true for those in the NHS, because they have rights under different sections of NHS pension schemes—for example, a final salary pension and a career average pension. Those rights are tested against annual allowance, but a negative accrual in one scheme cannot be set against a positive accrual in another scheme.

Business of the House

Debate between James Gray and Robert Syms

Wednesday 14th December 2011 Commons Chamber

[Mr James Gray (North Wiltshire) (Con)]

Will the right hon. Gentleman give way?

[Mr Robert Syms (Poole) (Con)]

Will the right hon. Gentleman give way?

[Sir Alan Beith]

I have a choice. I will give way first to the hon. Member for North Wiltshire (Mr Gray), then to his hon. Friend.

Ministerial Statements

Debate between James Gray and Robert Syms

Monday 5th December 2011 Commons Chamber

[Mr Robert Syms (Poole) (Con)]

I welcome the chance to debate this issue today because it is important sometimes to debate first principles about what we are for and what we ought to get up to in the House. My hon. Friend the Member for Kettering (Mr Hollobone) criticised the Government for behaving in the same old, bad old ways, but of course this debate would not have occurred under the previous Government or in any of the previous 13 years I have been here. The Government have made reforms and have been rather more open-minded about how the House has proceeded than their predecessors.

My criticism of my hon. Friend is that he is harping back to a mythical golden age when all decisions were made in this House and everyone outside waited for the House to hear a statement. The reality, certainly in my time in the House, is that that has never been the case. It was not the case under Mrs Thatcher or in the 1950s when many Governments—Macmillan’s and others—had Information Ministers in their Cabinets. It certainly was not the case when Winston Churchill, one of our greatest Prime Ministers and a great parliamentarian, was running a Government in very difficult circumstances. He had a lot of mates in the press and things were leaked to them. Neither was it the case when Neville Chamberlain arrived at the airport with his piece of paper. He did not say, “I’ve got to nip back to the Commons and make a statement.” He said, “Peace in our time.” So let us be clear about this—nothing much has changed in the way that Governments have done business ever since the emergence of the popular press.

[Mr Gray]

I am disappointed that my hon. Friend has become some kind of apologist for Ministers who leak things. He might be right to say that it has always happened, although I think the pace has accelerated very sharply in recent years. The purpose of this debate is to discuss not whether this has happened but whether it should happen. Surely what we are saying is, “No, it should not happen. Things should be announced in this House first and Ministers should not go to the media and announce things there first.”

[Mr Syms]

I think we have to live in the real world—a world with 24-hour news. We know that when Governments consult on policies, some of those who do not like those policies decide deliberately to leak information, and Government Ministers are then sometimes called into studios to defend or explain their position. If we have a protocol within the House that makes it difficult for Ministers to explain what the Government’s position is, a lot of our constituents will be worried unnecessarily because, to coin a phrase, a lie can be halfway around the world before the truth gets its boots on. That quite often happens with people maliciously trying to misrepresent Government policy.

--- Later in debate ---

[Mr Syms]

Certainly, I found that shocking. I have sat in the House since 1997 and I have to say that the present Government leak a lot less than previous Governments in that time, but it does happen. We have to understand that.

Ministers should make more effort. My right hon. Friend the Member for East Yorkshire (Mr Knight), the Chairman of the Procedure Committee, said that we want the Government to make a special effort to come to the House when they can. My point is that in the modern world, with 24-hour news, it is not always possible for them to do that.

[Mr Gray]

I am extremely puzzled by my hon. Friend’s speech. He said a moment ago that Ministers should come here when they can. His position is a great deal more extreme than that of the Government. The Government have said that Ministers will always come here and will always make important statements here. My hon. Friend seems to be suggesting that they should sometimes decide not to do so. I am afraid he is probably on his own in the House today.

[Mr Syms]

My view is perfectly clear. It is not always possible for Ministers to get here. If something happened today in the markets, I would expect Treasury Ministers to make their best efforts to come here, as we are sitting, and talk to us, but that is not always possible.

The Army and RAF Lyneham

Debate between James Gray and Robert Syms

Wednesday 26th January 2011 Westminster Hall

[Mr Robert Syms (Poole) (Con)]

I rise to support my hon. Friend the Member for North Wiltshire (Mr Gray), who has campaigned assiduously for Lyneham and for investment in his constituency. I was born in Chippenham and, like my hon. Friend the Member for Salisbury (John Glen), I grew up in north Wiltshire. I therefore feel that I should make a brief contribution to support my hon. Friend and say that the key factor about RAF Lyneham is how much support it has had from local communities.

Lyneham, with its Hercules fleet, generates a lot of noise but precious few complaints. I lived in the area during the Falklands war, when lots of Chinook helicopters were ferrying supplies at all times of the day. Local people show great support for the RAF, and the RAF has been a good neighbour. Indeed, some of the biggest arguments that I have seen at local parish councils concern whose turn it is to go to the open day at Lyneham and perhaps get a trip in an aircraft. People value the connection with Lyneham, which is an important point for the future.

[Mr Gray]

I thank my hon. Friend for being here to speak in support of this debate. He is absolutely right. In my 14 years as a Member of Parliament for Lyneham, I do not remember a single letter of complaint from any constituent. There was one exception when a clay pigeon shoot was being held too near the wire—we had it moved—but with regard to military activity, I cannot remember a single complaint.

[Mr Syms]

That certainly reinforces my point that north Wiltshire and the military have had a close relationship. As my hon. Friend has said, Lyneham is a tremendous asset, given its sporting facilities and existing housing. I do not know what condition it is in—the hon. Member for Dunfermline and West Fife (Thomas Docherty) made a good point about the state of the defence estate; we must ensure that our armed service personnel have good-quality homes—but it is a material factor.

Lyneham is not only a good base for deploying units from Germany on military grounds, because we should pay attention to what is good for armed service personnel’s families. There are homes near the base, but there are also a wide range of homes in the community for those who wish to buy. It is an RAF tradition for people to live in all the communities around the base including not only Swindon, but Chippenham, Calne, Wootton Bassett and Malmesbury—a lot of personnel have become part of local communities. North Wiltshire is an incredibly good place to live. It is conveniently located for the training grounds on Salisbury plain and in south Wales. I consider it a no-brainer to use Lyneham for a good military purpose.

My hon. Friend the Member for Chippenham (Duncan Hames) made the good point that, with the RAF going, a swift decision is sensible, so that we can make use of this tremendous asset and locate the military somewhere that they can train and base their families, with good-quality schools and education and a supportive community. That would be a good decision for the MOD, serving personnel and their families and the people of north Wiltshire, who have done a lot to support the military and will continue to do so.