NHS Pensions

Paul Sweeney Excerpts

Wednesday 26th June 2019 Westminster Hall

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Thank you, Mr Gray, for your kindness in letting me participate in the debate. It is, as always, a pleasure to serve under your chairmanship. I apologise for my late arrival.

I congratulate the hon. Member for Poole (Sir Robert Syms) on securing the debate, and the hon. Member for East Renfrewshire (Paul Masterton) on also trying to press the Government on this matter. I have come to the debate because two consultants in my constituency came to me about this issue and I thought it important to communicate their views directly to the Minister. I hope that actions can be taken, because this is clearly a classic case of the law of unintended consequences.

One of those constituents, Dr Urquhart—the other was Dr Hepburn—wrote to me. Dr Urquhart has been a consultant in the NHS Greater Glasgow and Clyde area for nine years and is employed on a 48-hours-per-week, full-time contract, which includes being on call. He says that, following this change,

“I will have to drop the number of hours per week I work and also not take on any extra shifts which are paid…to cover rota gaps and waiting list initiatives which reduce the penalty to NHS GGC for waiting list breaches.”

In a sense, the change is penalising the efficiency of the NHS and introducing further costs to the health service that could be avoided. The consultant continues:

“Due to reduction in annual allowance for pension growth, the introduction of the tapering of the annual allowance coupled with the introduction of the 2015 NHS pension scheme, a growing number of doctors are facing four, five and six figure tax bills on top of their income tax and national insurance contributions. In my case this means that in the next year I expect a huge tax bill as in October 2018 I received a 10 year pay rise and will receive a large tax bill.”

He believes that it will impact on all consultants in NHS Greater Glasgow and Clyde and beyond.

It appears that the only way in which Dr Urquhart can avoid these large regular tax charges, which may amount to tens of thousands of pounds a year in addition to his income tax payments, is to reduce the hours that he works for the national health service. He fears that many of his colleagues will be forced to accept the same conclusion. He and his colleagues often go above and beyond to ensure that services can continue running safely and effectively, but there are limits to what can be reasonably expected of even the most dedicated doctors.

As a result of the current pension and tax regime, Dr Urquhart is effectively paying to provide additional services to the national health service. He hopes that these separate changes to tax and pension arrangements were an unintended consequence that was not appreciated when they were first introduced, that the resultant negative effects on the NHS workforce were unintended, and that the Treasury will undertake to correct them. Like many services, his department relies on consultants working regular overtime through additional programmed activities.

Unless the Government take action, many doctors like Dr Urquhart will be left with no option but to reduce their working hours significantly. Other consultants in the national health service in Glasgow are being advised to take early retirement to avoid these taxes. That will exacerbate an already acute workforce crisis in NHS Greater Glasgow and Clyde and seriously jeopardise the sustainability of the national health service. The impact on Glasgow’s Queen Elizabeth University Hospital —the largest medical facility in Europe—alone must not be understated. The topic is frequently discussed by his colleagues, many of whom feel the same.

I hope that the Minister will take cognisance of the issues raised by many consultants and the British Medical Association. Fundamental reform of the tax issue, particularly by scrapping the tapered annual allowance, is urgently required to prevent a workforce crisis. I hope that he will recognise the scale and immediacy of the risk to the national health service and that he will undertake to take our representations back to the Government and ensure that the problem is rectified as a matter of urgency.

--- Later in debate ---

[The Minister for Health (Stephen Hammond)]

As ever, Mr Gray, it is a pleasure to see you in the Chair for this important debate, and I congratulate my hon. Friend the Member for Poole (Sir Robert Syms) on securing it. It is a topic that the House has previously considered, when my hon. Friend the Member for East Renfrewshire (Paul Masterton) introduced a debate on the matter.

Colleagues should be reassured that the Government have been listening carefully to senior doctors and their employers. We recognise the actions clinicians are taking in response to their concerns about, and experience of, the annual allowance tax charges and how they are affecting frontline services. My hon. Friend the Member for Poole is right: although we are talking about tax changes for consultants, clinicians and GPs, the reason why this is so serious is that ultimately, if we do not get it right, it impacts on the quality of patient care. We all share that ambition to get it right.

[Mr Sweeney]

The Minister says that the tax changes are likely to have an impact on patient care. They are already having an impact; my constituent has said that he is seeing anaesthetic cancellations on theatre lists at his hospital in Glasgow, which have never been seen before in the NHS. He has had to resign as a foundation programme director, supervising junior doctors, to reduce the number of paid hours he does.

[Stephen Hammond]

Let me make it clear that not only are the changes having an impact, they are likely to continue to have an impact. I recognise that; the hon. Gentleman will hear later in my remarks that we recognise that point.

My hon. Friend the Member for Poole was right to talk about the long-term plan and the cash settlement that goes with it. He was also right, though, to mention that any plan will work only if it works: if we make sure the people delivering it can do so with the numbers and experience required. The hon. Member for Newport West (Ruth Jones), although she said she was not expecting to speak this morning, made a thoughtful speech and raised a number of issues from her direct experience that informed the debate.

My hon. Friend the Member for Winchester (Steve Brine) represents the place where I was born and spent my childhood, so for that and other reasons, I always listen carefully to what he says. He was right to stress at the start of his speech that this is not about tax breaks for particular people, although that is the headline; the reality is that perverse disincentives are being created against providing the care that we need. I listened carefully to the hon. Member for Glasgow North East (Mr Sweeney), who has just intervened on me to reiterate the point he made in his speech about the experiences of some consultants, and I recognise that those experiences are not unique to Glasgow North East.

The hon. Member for Central Ayrshire (Dr Whitford) always makes many informed remarks, given her experience. She made a point that perhaps has not been picked up, but is important in informing the debate: this is not just about losing a number of potential outpatient appointments and clinicians to service them, but about the impact on training. In many of the places that I have had the honour to visit as Health Minister, it is clear that the mentoring and support provided by senior staff to more junior staff is an important contribution, not only to the wellbeing of those junior staff, but to their education and, therefore, to the benefit of patients. That is undoubtedly one of the consequences of what we are talking about today.