NHS Pensions

Karin Smyth Excerpts

Tuesday 1st April 2025 Commons Chamber

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

(Urgent Question): To ask the Secretary of State for Health and Social Care if he will make a statement on NHS pensions in the light of the statutory deadline for both remediable service statements and remediable pension savings statements being missed.

[The Minister for Secondary Care (Karin Smyth)]

I thank the hon. Member for Hinckley and Bosworth (Dr Evans) for asking this question, which gives me the opportunity to provide further information following the written parliamentary statement that I issued yesterday to update the House on the delivery of remediable service statements to affected members.

I have extended the deadlines for the NHS Business Services Authority to issue statements to ensure that members have enough time to make informed decisions. Once members have received statements, they will be able to use a tool provided by His Majesty’s Revenue and Customs to retrospectively adjust their annual allowance between 2015-16 and 2022-23.

Separately, the original deadline to issue the 137,000 remediable pension savings statements was 6 October. The NHS Business Services Authority issued statements to 57,000 members by this deadline, of which 23,000 were found to contain incorrect information; these have since been recalculated and reissued. The NHS Business Services Authority is working to issue outstanding statements as quickly as possible.

A revised delivery timetable has been developed and shared with trade unions and employer representatives. By the end of March, 106,000 statements had been issued. Statements for 11,000 members will be produced once further information has been received from their employers. The remaining 20,000 statements require additional manual input from the NHS Business Services Authority before they can be produced, and will be issued in July. There have been delays on all sides, which we have been aware of since last July. In fact, the Department had escalated issues of design with the previous Government, as I am sure the hon. Gentleman understands.

We know that this matter is really important and that there are high numbers of high earners in the NHS, which is why we have taken the decision to be open and transparent about the timeline that we can now commit to, having worked tirelessly to reduce the delays. Although these delays will cause inconvenience to some members, I have been crystal clear that no one will face any financial detriment as a consequence. Compensation arrangements are in place for direct financial losses, certain HMRC interest charges, and the costs of financial and accountancy advice.

The Government do acknowledge the impact of the delays on affected members. We are working hard to issue outstanding statements and to protect members from any financial detriment the delays may cause.

[Dr Evans]

What is going on with NHS pensions administration under this Government? I declare an interest as someone with an NHS pension. Today, the Government have missed the statutory deadline for issuing remediable service statements to doctors, and they are now pushing the deadlines back to December 2026. In mid-March, the Government confirmed that just 21 statements had been issued out of 380,000; as of yesterday’s written statement, there are still more than 370,000 outstanding. This creates huge tax liability uncertainties.

We and the British Medical Association have been raising concerns for months. Why has it taken the Government so long to act? Ministers have announced a revised delivery plan, but how will it work in practice? Will there be more staff to help with the backlog? What changes are being put in place to ensure that the deadline is not missed again?

What was most concerning, however, was the complete absence of any mention of the remediable pension savings statements in the written statement. This issue really matters, as doctors who are taking on overtime or who work privately rely on these statements to be able to track their contributions and avoid excessive tax bills. According to Dr Sharma from the BMA,

“There’s no doubt that without up-to-date information, doctors will be pre-emptively reducing or turning down extra work to avoid additional pension…bills that they might not even be due.”

The statutory deadline for the 137,000 statements was, as we heard, 6 October 2024. In February, Ministers confirmed that 60,000 were outstanding and that the majority would be issued by the end of February; by March, however, the backlog had actually grown to 70,000. Can the Minister explain how two legal deadlines have been missed? Will the Government be following up with the regulator to ensure that this does not happen again? Do the Government have confidence in the NHS Business Services Authority? With the Secretary of State abolishing NHS England, what does this mean for the future of this vital organisation?

We all want to see waiting lists fall, but as one newspaper put it today,

“Labour’s pledge to slash NHS waiting lists is being sabotaged by a litany of administrative errors, pension delays and punitive tax rules.”

I urge the Government to take swift action.

[Karin Smyth]

As I outlined in my response and in the written ministerial statement, we have taken action. We were made aware of some of these problems when we came into office in July, and we have pushed the NHS Business Services Authority to move faster than it would have done under the hon. Gentleman’s Government, so that action is happening quicker than it would have done before. We do have faith in the NHS Business Services Authority to get on with this and ensure that there is no financial detriment, in line with the timetable outlined yesterday, and as I have further made clear today.

Madam Deputy Speaker, the hon. Gentleman could have asked me more about waiting lists, which have fallen for the last five months in a row. He could have asked me about the 2 million more appointments that have been provided to deliver for patients seven months early. He could have asked me about the hundreds more GPs who are now working in the health service, or the impact of cancelling the strikes on services for people, or the record funding. In fact, last week in the Chamber he spoke on behalf of the National Pharmacy Association; this week, he could have congratulated the Minister for Care, who is sitting next to me, on the agreement to produce more pharmacy services.

We are making improvements to the NHS every day. The Darzi report reported not only the breadth but the depth of the decline that we inherited. We are resolving that, and fixing the fundamentals of the NHS.

[Chris Vince (Harlow) (Lab/Co-op)]

I thank the Minister for coming to the House and giving her response. We all know the issues she is talking about when she mentions the state of the NHS that we inherited, and I echo that with the issues I hear about from patients and staff at Princess Alexandra hospital in Harlow. On pensions, can she outline what the Government have done to mitigate the delays in the process?

[Karin Smyth]

It is important that people have confidence in the pension system. That is why we took action in July on coming into office to understand the depth of the problems that occurred under the previous Government. This is a complicated issue, which is why we want to be clear with people that there will be no financial detriment to them. We will continue to work with employers and trade unions to ensure that the issue is resolved as quickly as possible, in line with the timelines I have outlined.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Helen Morgan (North Shropshire) (LD)]

The delays will be deeply worrying and will make financial planning very difficult for those affected, all of whom are people who have dedicated their working lives to supporting the NHS and tirelessly saving lives. NHS workers and their families are being left in the dark by Government delays and may as a result miss out on using their full allowances, which is unacceptable—they deserve better.

The revised delivery plan prioritises members based on their likelihood of facing financial detriment, so clearly some financial detriment is expected for those who are impacted. Can the Minister estimate what the likely financial detriment is of missing the statutory deadline, or how much compensation, as she just mentioned, is likely to be paid? Can she tell us why the NHS Business Services Authority has failed to meet the deadlines? In response to a written question from my hon. Friend the Member for St Albans (Daisy Cooper), the Minister said that there are 112 people working on it. Will she confirm whether that is likely to be sufficient to ensure that future deadlines are met?

[Karin Smyth]

I thank the hon. Lady for her question. I do not have to hand the exact number of people working on this, but I will make sure that I respond to her on that point in writing. We are ensuring that individuals do not face detriment as a result of these delays. The NHS cost claim back compensation scheme provides resources for direct financial losses incurred by the NHS pension scheme members impacted by the McCloud remedy, including professional service fees and certain HMRC interest charges that may arise, as I outlined in my statement. HMRC has also confirmed that self-assessment late filing penalties will be waived on appeal in certain circumstances where a member receives a delayed pension savings statement as a consequence of the implementation of the McCloud remedy.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Does the Minister agree that it is important that the affected members receive those statements to allow informed decision making? The Government have worked to minimise financial detriment to those affected, but this issue is part of the mess we have been clearing up. We have had record investments into pharmacies and more GPs, and we have cut waiting lists and stopped the junior doctors’ strikes. We are on the road to recovery.

[Karin Smyth]

My hon. Friend is absolutely right that we are on the road to recovery—and that, of course, is what the Opposition cannot stand. This is a complicated issue, as they well know. As I said, we inherited this complication in July, when we were made well aware of it. The Conservatives could have done more about it while they were in government, but it is yet another issue on which they have let people down—this time, it is staff.

We will ensure that we remedy that. The timelines are available in the written ministerial statement that I issued yesterday. We will continue to work with trade unions and employers to ensure that people understand. As my hon. Friend said, it is important that people do understand their own personal positions.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Chair of the Health and Social Care Committee.

[Layla Moran (Oxford West and Abingdon) (LD)]

I have to say that I am none the wiser about what exactly has happened. If we are to ensure that this will not happen again—that these deadlines will be met—we need to know how we got into this position. It may well be the fault of the previous Government. Will this Government commit to a full review of exactly how we got here, so that we can ensure that the published deadlines are met this time?

[Karin Smyth]

The Chair of the Health and Social Care Committee makes a good point, as she so often does, about what went on previously. This is an issue from the McCloud judgment that runs across many Departments. It was a problem under previous Governments, starting with the coalition Government. I know that the Public Accounts Committee, on which I served, and the Treasury Committee have looked at the matter over time. The Department will certainly co-operate with any inquiry and investigate what happened across Government. I am happy to get back to the hon. Lady on that point.

[Josh Fenton-Glynn (Calder Valley) (Lab)]

This issue appears to be yet another example of the hangover left by the previous Conservative Government. Does the Minister agree that part of getting the NHS back on its feet includes cleaning up this mess and cutting waiting lists, which have already dropped for five months in a row?

[Karin Smyth]

My hon. Friend makes absolutely the right point. As I have said, Lord Darzi has helpfully outlined the breadth of the mess that we inherited back in July, and it makes for stark reading. We have still not had an apology from the Conservative party, so I am happy to take an intervention now if anybody decides to provide one. In these issues, we are seeing the depth of the destruction that the Conservatives have caused widely across Government. We will continue to fix that on behalf of the British people.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I declare my interest as a practising doctor and a public sector pensioner who has been through the McCloud process. Does the Minister understand that we will not improve productivity in the NHS as far as doctors are concerned if they continue to retire routinely in their mid-50s—in their prime? They do so because their accountants tell them that they would be foolish not to, given the fiscal environment and the structure of the NHS pension scheme.

[Karin Smyth]

I understand that point. Obviously, it is a source of much discussion. The change came about during the pandemic to encourage people to return to work, and it is a complex issue. We want to continue to use the skills of doctors at all stages of their careers, and we shall continue to work with them, the British Medical Association and others to make sure that there is no detriment to their returning to service in the NHS.

[Lewis Atkinson (Sunderland Central) (Lab)]

I declare an interest as a member of the NHS pension scheme. Can the Minister confirm that this issue arose only because the previous Government carried out their NHS pension reforms in a way that was found to be age discriminatory? More widely, does she agree that giving NHS staff the terms and conditions and the reward and recognition that they deserve also requires prompt action each year on agreeing the NHS pay award, which the Conservative party routinely failed to do when in Government?

[Karin Smyth]

My hon. Friend makes an excellent point on our commitment to staff to be clear on their terms and conditions, and our commitment to honouring that reward. That is why we acted promptly when we came into office. We have issued statements and provided answers to parliamentary questions to make sure that people are clear about the system and that we are transparent.

[Bob Blackman (Harrow East) (Con)]

It takes rather a long time to train a doctor—up to six years—so it is a good job that the previous Government had the opportunity to train more doctors. Will the Minister look at one aspect of concern, which is that if doctors start reducing their overtime hours because of fiscal aspects, it will hamper the opportunity to get more patients treated and to shorten the length of waiting lists?

[Karin Smyth]

As I said in response to the right hon. Member for South West Wiltshire (Dr Murrison), we understand that, and we will continue to work with all staff in the NHS to make sure that we deliver on our commitment to reduce waiting lists, which were left at a shocking level by the previous Government.

[Daisy Cooper (St Albans) (LD)]

I have a constituent who is suffering both financial and emotional distress as a result of these circumstances. I wrote to the NHS Business Services Authority, and it took four months to get a response. In written questions to the Government, I have asked how I might make representations about my constituent being affected by financial distress. The response that I received from Ministers simply said that NHSBSA has all the evidence that it needs, and there is no need for anyone to provide extra evidence. There is a very real risk that some people who are affected by this are suffering financial distress but have not been identified by NHSBSA. For those people, can the Minister please outline what mechanism we as Members can use to make those people known to NHSBSA, so that they can access their pension choice earlier?

[Karin Smyth]

I am sorry to hear about the emotional and financial distress of the hon. Lady’s constituent. If there is a gap, I am happy to go back to the NHSBSA on her behalf and make sure that I update the House.

[Lincoln Jopp (Spelthorne) (Con)]

Does the Minister have full confidence in the chair of the NHS Business Services Authority?

[Karin Smyth]

As I said in my statement, we have confidence in the business authority to undertake the actions that I have outlined.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for her answers to the questions. Waiting lists are clearly beyond the pale. If the Government were able to address the remedial pension savings statement, we might be in better position to entice our doctors to take on additional hours. Will the Minister confirm that this is a Government priority, and that there is an understanding that a functioning NHS requires straightforward paths to working overtime, and payment at every level?

[Karin Smyth]

One of our major priorities is ensuring that the entire NHS workforce are doing the work that they are trained and committed to do, so that they can get down those waiting lists and deliver an NHS that is fit for the future. The staff, as Lord Darzi has outlined, have felt very severely the detriment caused by the previous Government. They are working under really difficult conditions, and we want to make sure that, through the 10-year plan and the NHS Long Term Workforce Plan, we offer them hope, so that they are ready to deliver the services that they have been trained to deliver.

[Madam Deputy Speaker (Caroline Nokes)]

I thank the Minister for her responses this afternoon. I will allow a moment for the Front Benchers to swap over.