Pensions Tax Relief: Employment and Retention

Lord Sikka Excerpts

Tuesday 1st November 2022 Lords Chamber

[Viscount Younger of Leckie (Con)]

Indeed, it is very important that we look after those at the senior end of the NHS; much has been made of that in the previous Question and this one. As the noble Lord has alluded to, tax relief offered on pension contributions is expensive, costing the Exchequer £67.3 billion in 2020-21, with around 58% relieved at the higher and additional rates. As I mentioned earlier, there are a number of other aspects on which we have taken action, and perhaps there is more to do to be sure that we can retain our very best doctors and senior clinicians.

[Lord Sikka (Lab)]

My Lords, as the Minister just said, the pension tax relief is about £67.3 billion, the majority of which goes to higher and additional rate taxpayers. Could he explain the steps that the Government have taken to eliminate the regressive effects of the tax breaks for the richest?

[Viscount Younger of Leckie (Con)]

This is a familiar angle from the noble Lord, and I have already mentioned a number of the steps we have taken. He will know that individuals can be subject to different tax treatments depending on the type of income they are receiving and whether they are employed, self-employed or working through a company structure. I reassure him that it is very important that we find the best way to reward those at the very top, particularly our senior clinicians, otherwise they might move abroad. We must also look at those at the other end of the scale, particularly at this very difficult time.