NHS Pensions

Debate between Steve Brine and Anneliese Dodds

Wednesday 26th June 2019 Westminster Hall

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I congratulate the hon. Member for Poole (Sir Robert Syms) on securing this important debate, and I underline the fact that I am a shadow Treasury Minister responding on behalf of the Opposition.

We are here today to discuss the impact of changes to allowances on tax relief on pensions specifically in regard to NHS pensions. As people in this Chamber will know, in 2016-17, an estimated £38.6 billion in tax relief was provided on contributions to approved pension schemes; obviously that is the overall figure and does not cover just those who work for the NHS. It is a very substantial amount of relief.

As I am sure Members will also know, the last Labour Government introduced the annual allowance and lifetime allowance back in 2006. The annual allowance was initially set at £215,000 and the lifetime allowance at £1.5 million. Since then, as other Members have discussed, we have seen gradual reductions. Under the coalition Government and the Conservative Government, the lifetime allowance was reduced from £1.8 million to £1.5 million in April 2012, then to £1.25 million in 2014, and to £1 million in April 2016. It has actually floated up a little bit with inflation up to 2019-20, when it will be—as has been mentioned—£1,055,000. There has been a similar trend with the annual allowance, which was reduced from £255,000 to £50,000 in April 2011 and it then went right down to £40,000 in 2014.

Of course, the particular changes that we have focused on today are around the interaction of all of these measures with the taper, which George Osborne introduced in the summer Budget of 2015. From April 2016, the annual allowance would be tapered at a rate of £1 for every £2 of taxable income, including pension benefits and not subtracting employee pension contributions, received over £150,000 in adjusted income, going right down to £10,000 for those with an income of more than £210,000. As has also been mentioned, that final change affects those people whose pay is more than £110,000 a year, excluding pension benefits and employee pension contributions, and who see an increase in their pension benefits of more than £40,000 in a given year.

As my hon. Friend the Member for Newport West (Ruth Jones) said, and the hon. Member for Central Ayrshire (Dr Whitford) underlined, all that obviously amounts to a considerable number of changes in a very short time. So we have seen the tax treatment of pensions for all high-paid workers changing very substantially, indeed in a way that they probably could not have envisaged when they first joined their pension scheme. The hon. Member for Central Ayrshire was right to indicate the parallels between this situation and what has happened to several other groups of taxpayers.

I see that the Minister is kindly scribbling things down at the moment. I hope that he will pass on to his Treasury colleagues that it is simply unacceptable if, at the very least, these taxpayers do not receive adequate information about what their liabilities will be. I was deeply concerned to hear from the hon. Member for Central Ayrshire that, for example, people are not receiving their pension statements. Surely that is the very minimum that is required.

On principle, it is surely necessary for the pension allowance to decline gradually for those people who earn very high incomes. It is fair, and consistent with other core principles of our tax system, that tax charge exemptions should be reduced for people who have very high incomes. However, there is of course the issue about the interaction of that system with other pension schemes, especially the NHS pension scheme, and given the fact that we have a very tight labour market for those in the NHS with substantial expertise. As has been mentioned, about 30% of doctors earn £110,000 or more, and nearly 10% earn more than £150,000. Clearly, this group of staff are the people who have the necessary expertise, as has also been mentioned a number of times.

I am aware of course that official representations have been made on this issue. We have heard what has been stated by the British Medical Association and the British Dental Association, and I think that the polling to which the hon. Member for Winchester (Steve Brine) referred was very interesting in that regard. It was also helpful to hear from my hon. Friend the Member for Glasgow North East (Mr Sweeney) about the impression that he received from his local NHS trust about what is going on.

When we consider this issue, it is very important that we do not just talk about tax treatment; we must also consider how it inter-relates with what is a very complex NHS pension scheme, one that, as I understand it, was not fully consulted on with representative organisations when it was introduced.

As has been mentioned, we now have three different schemes, and my hon. Friend the Member for Newport West indicated how working out how these schemes relate to each other and how that will impact on tax outcomes is very difficult for individuals. As the hon. Member for Poole rightly said, the impact of these changes—related to this combined test of both the threshold and the annual income, plus the taper—makes it very difficult for individuals to work out what their liability is without any kind of professional help. Of course, that professional help is also expensive.

We need to look at NHS pensions, and I hope that it will be possible for the Minister to take that issue away and discuss it with his Treasury colleagues. However, I will just say to those in this Chamber that, as well as talking about the problems for high-paid NHS staff, we of course also need to look at the issues for low-paid NHS staff. The pension situation is quite concerning for them. The annual report on retirement by Scottish Widows indicated that overall one in five young people are saving nothing for their later life, and many of those people who are working in our NHS on low pay have opted out of pension schemes, because they feel that they need the cash now to make sure that they can make ends meet.

A freedom of information inquiry in 2018 found that more than 245,000 workers from across the NHS in England had opted out of the NHS pension scheme in the previous three years. A lot of those were low-paid workers, so that is enormously concerning. Although I agreed with much of what the hon. Member for Winchester said, I do not agree with him that the levels of resource currently being considered by his Government will be adequate in the future.

Let us consider the current situation. We obviously have the cumulative impact of the pay cap over many years. The Government finally saw sense on that, but it took them a long time to do so. There are also groaning waiting lists, extended waits for accident and emergency, and the rationing of NHS services, with many procedures no longer being offered by the NHS. Until we see a change in that situation, it will be difficult for many of us to argue that the NHS is heading in the right direction resource-wise.

I know that the Government have made a commitment to improve funding in the future, but the Opposition continue to believe that that commitment is not sufficient.

[Steve Brine]

My point was that the NHS long-term plan has been significantly funded, with record funding, which, for the record—seeing as the hon. Lady has gone there—is significantly more than was promised by the Opposition. Yes, other resources will be required, around public health for instance, and around the people plan, but perhaps the hon. Lady can tell us what Labour’s fiscal promise is to the NHS, and how it will be paid for.

[Anneliese Dodds]

Absolutely. I am grateful to the—

NHS Staff: Oxfordshire

Debate between Steve Brine and Anneliese Dodds

Tuesday 20th February 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Health (Steve Brine)]

It is a pleasure to see you in the Chair, Mr Evans. I congratulate the hon. Member for Oxford West and Abingdon (Layla Moran) on securing the debate. We have met a number of times and I have responded to a number of her written questions, so I know that she is working hard on this subject.

It is always great to hear Members speak personally about their experiences—maybe none more so that my hon. Friend the Member for Banbury (Victoria Prentis)—and how passionately they speak about the national health service. Members from the county of Oxfordshire have spoken well; I do not know how they play in private, but in public they seem like a very good team. That may not be the case in Hampshire; maybe there are too many of us on the Front Bench. We are only a two-party state in Hampshire; perhaps that is why.

The debate is not only important but timely. I had the pleasure of visiting the Churchill Hospital, which is part of the Oxford University Hospitals NHS Foundation Trust, last Tuesday during our half-term recess. I saw the superb and innovative cancer care provided by the dedicated staff—I obviously echo all the praise for the staff—and had the opportunity to discuss workforce issues for a little time with the chief executive, Dr Bruno Holthof, who is a very nice man, and his senior team. I therefore hope I can provide some well-informed replies to the hon. Member for Oxford West and Abingdon and Members from across the county. The NHS in Oxford is working hard to ensure it has the doctors and nurses to continue to provide excellent care to Members’ constituents.

We met in Maggie’s Oxford cancer centre. As Members will know, I am the cancer Minister—it is the thing that gets me out of bed in the morning—and I was blown away by Maggie’s cancer centre. I know there are a lot of them across the country, but this was in a beautiful building, was brilliantly designed and had incredible, passionate staff. I met a number of patients who described Maggie’s as a haven for them while they are going through their cancer treatment. It was great, as always, to talk to patients.

My hon. Friend the Member for Banbury spoke about the recent story in The Times—the front-page splash on changes to patient cancer treatment plans at the Churchill—which a number of hon. Members mentioned and which I suppose was the spur for the debate, although it seems to have broadened out into everything, covering about four different Government Departments. I, too, was obviously concerned when I saw the story. I called the chief executive of the trust, and he was very clear that, although it would have been a great story, there was only one small problem: it was not true.

The leaked emails—whoever leaked them can examine their own conscience and motives—set out hypothetical challenges and invited suggestions from clinical staff, ahead of a meeting taking place this month. There has been no change to formal policy on chemotherapy treatment at the trust, and any such decision would be a matter requiring clearance at board level anyway. As we discussed, the chief executive’s first consideration was, rightly, the obvious and needless worry caused to cancer patients across Oxford and the wider area. I am pleased, although obviously disappointed it was necessary, that he quickly put in place plans to communicate to his patients that there were absolutely no changes, as the hon. Member for Oxford East (Anneliese Dodds) said, to chemotherapy treatment.

The trust continues to meet two of the three main cancer waiting time standards and is working hard to meet the third. We discussed that last week, too, and the trust should be very proud of it. I was able to congratulate some of the team personally last week. The trust is considering how best to deliver chemotherapy services going forward, and I am confident that it will do that in the correct way, through the correct channels, and of course in compliance with NICE guidance.

When I was on site at the Churchill, I was able to pop in to the ACE wave 2 pilot. ACE stands for accelerate, co-ordinate and evaluate—I know that my right hon. Friend the Member for Wantage (Mr Vaizey) enjoys these acronyms. I met Fergus Gleeson, Sara Bainbridge, Shelley Hayles, a local GP in Oxford who leads on cancer, and Julie-Ann Phillips, who is the navigator—a great title—and seems to make it all happen there. I, as a cancer Minister, and we as a Government are very excited about ACE. It is about taking patients with suspected cancer from the GP and into the accelerated diagnostic centre and getting them a diagnosis or clearance quickly. I met patients and saw how much it means to them.

I asked patients about stories on the front pages of national newspapers, which of course are trying to sell national newspapers. I noted, in relation to the story, which was gleefully run by the BBC that morning once it had read The Times, that by the end of the day the coverage had slightly changed as it realised that it had been reporting fake news all day. I asked patients what they thought about seeing that sort of thing on the front page of The Times while they were receiving world-class cancer treatment in Oxford, and I will not repeat the exact words that they used, but they were very clear about how disappointed they were to see that, and that they did not feel that it represented the professionalism that constituents of hon. Members across this Chamber see. I think that hon. Members can get a sense of what I thought about that story, and I do not take The Times anyway.

Let me start with the global picture, and then I will localise. The dedicated men and women who work in our NHS are of course its greatest asset. The Government have backed the NHS. We have made significant investments in frontline services and are now taking bold steps to plan for future generations. We do, however, recognise the workforce challenges that the NHS faces in its 70th year. That is why the entire system embarked on a national conversation, with the publication by Health Education England in December of “Facing the Facts, Shaping the Future: A draft health and care workforce strategy for England to 2027”, which is designed to stimulate debates such as the one that we are having today. I know that HEE will read the record of this debate.

The strategy sets out the current workforce supply and retention, and the challenges that we face, but also the significant achievements made from work already under way. It is the first step towards a proper plan that stretches beyond any electoral cycle—we must get away from working in that way—and secures the supply of staff for future generations in our health service. The strategy posed a number of questions that will inform a comprehensive strategy for the workforce over the next decade, to be published in July this year. We need to think innovatively about how we can make the NHS workforce fit for the future, and as always in debates about our NHS, we have heard a number of excellent suggestions today. I encourage hon. Members to engage with the consultation, and from what I have heard today, I do not doubt that they will.

We have heard a lot today about recruitment. Of course, that is not the only way to ensure that the NHS has the workforce that it needs to deliver the safe and high-quality care in which I, the Secretary of State and all hon. Members are so interested. We need to ensure that our excellent doctors and nurses want, and are supported, to stay in the national health service, and we have a clear plan to ensure that the NHS remains a rewarding and attractive place to work.

Let me list a few of the things that the plan covers. It includes arrangements for more flexible working—we know that many health professionals are married to other health professionals, and quality of life matters as much as quality of pay—and a system of staff banks for flexible workers across the NHS, increasing opportunities for staff to work on NHS terms and to reduce agency costs for employers. Something else that we discussed last week is a scheme to offer the right of first refusal to NHS employees on any affordable housing built on NHS land, to increase NHS workers’ access to affordable housing, with an ambition of benefiting up to 3,000 families. When I got lost while trying to find Maggie’s cancer centre on the Churchill site, I noticed that there is a lot of surplus NHS land on that site, and I know that it is looking at that. In addition, since September 2014, more than 2,700 nurses have successfully completed the nursing return to practice programme and are ready for employment.

Let me localise to the recruitment and retention of NHS staff in Oxford, which I also discussed last week. It is important to note from the outset that although there are workforce challenges, Oxford University Hospitals NHS Foundation Trust has 388 more hospital doctors and 591 more nurses than it did eight years ago. It is also successfully seeing 11,500 more patients—a 120% increase—with suspected cancers than it was in 2010. One of the key challenges that we discussed is that Oxford, much like London, is a very expensive area to live and work in, as hon. Members have mentioned, and unemployment is very low. Those conditions present a recruitment challenge that other, less affluent areas do not have.

The hon. Member for Oxford West and Abingdon mentioned continuous professional development, and I promised to mention that. It is a matter for employers; any agreements, such as for protected study time, would need to be negotiated between employer and employees. However, it is always in the best interests of employers to encourage and support the learning and development of their employees. HEE provides national funding to support development of the NHS workforce and invests up to £300 million every year in supporting NHS employees to achieve registered qualifications, and that will continue.

We are increasing the number of nurse training places by 25%. That means 5,000 additional nurse training places every year from September 2018. It is one of the biggest increases in NHS history, and I was glad that the hon. Lady welcomed that in her opening remarks. She also mentioned Brexit, as my right hon. Friend the Member for Wantage did. The Secretary of State and the Prime Minister could not have been clearer: the Government hugely value the contribution of EU staff working in our NHS and understand the need to give them certainty. The Secretary of State has made it clear that after Brexit, we will have an immigration system that means that the NHS is able to get the staff that it needs, not just from the EU but from all over the world.

The hon. Lady asked about career progression; I think that she was referring to scale points earned in the NHS and whether they would transfer. I will get back to her on that; I will get a note to her and copy it to other hon Members in the debate, as I know they will be interested.

Pretty much everyone mentioned the idea of pay weighting for Oxford, as with London, given the proximity of the county. There are a number of mechanisms in the NHS funding and pay system to compensate for higher costs in particular areas. It is open to the independent NHS Pay Review Body to make recommendations on the future geographical coverage and value of such supplements. Additionally, there is flexibility for local NHS employers to award recruitment and retention premiums where recruitment is difficult at standard rates of pay, so when they are having their team get-together—

[Anneliese Dodds]

Will the Minister give way?