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Following my recent blog – A 'perfect storm' for doctors, outlining details of the growing pension taxation crisis facing senior doctors across the NHS and armed forces – I want to offer an update on some of the activity we and the wider BMA have been doing to keep this firmly on the Government’s radar. Please also see our recent slide presentations to keep you informed about annual allowance taxation.
The BMA has been briefing MPs and peers extensively to inform them about the impact of the annual tapered allowance and the lifetime allowance, but also to highlight potential solutions and to ask them urgently to raise this with the Treasury.
You have also played a key role in raising awareness among MPs through our online tool, enabling members to write to their own MP detailing the local effect of these policies and calling for them to raise the issue with the Treasury. So far, 1,800 emails have been sent to hundreds of MPs – thank you to all of you who have taken the time, and to those of you who haven’t yet, there is still time and every contact counts.
The combined effect of our briefing and your efforts has resulted in a significant amount of parliamentary activity including a parliamentary debate, questions raised directly to the prime minister on two separate occasions, a number of questions to the health secretary and health ministers, and the issue being raised directly with the chancellor by the Treasury select committee. We’ve written to the health secretary, the chancellor, two defence secretaries and most recently the health select committee calling for an inquiry.
Our most recent parliamentary briefing saw five MPs from across the political parties challenge the chancellor about what he intends to do to mitigate and protect against the risk posed by his policies.
While the chancellor was quick to reference the BMA’s ‘vocal’ stance on this issue, his own rebuttal came in a much more muted semi-declaration that he expected an announcement from health secretary Matt Hancock soon.
The solution, the chancellor claims, is more ‘flexibility’ in the NHS pension scheme.
The world of Westminster has had no choice but to wake up to the impact of pension taxation policies on doctors and the NHS.
While greater flexibility within the NHS pension scheme is to be welcomed and may enable doctors to better navigate the current tax regime, we believe it is unlikely to be the solution. We will also continue to be ‘vocal’ (as the chancellor said) until we reach a solution which will stop doctors being forced out of the NHS and encourage retention rather than reluctant retirement.
Enhanced shared parental leave entitlement withheld from senior NHS doctors
Another issue we have been raising in Parliament is that of consultant and SAS doctor access to enhanced shared parental leave. This is being denied to us but made available to all other NHS employees including our junior doctor colleagues. We have made sure the Department of Health and NHS Employers are well aware of our view and we’re briefing MPs and getting this raised with a view to overturning their decision. The Government’s decision will not only perpetuate existing gender inequality in the NHS workforce, but also introduce a new inequality between those who do and do not receive the new workplace right.
Rob Harwood is chair of the BMA consultants committee
I spent four years on a 1:2 and another four on a 1:3, being paid UMTs at 35% of basic pay (thank you Barbara Castle), and another four on a 1:4, being paid ADHs at 50% of basic pay (thank you Maggie Thatcher). When I complained, I was told that I would get a good pension, and then once I became a cnsultant Gordon Brown introduced the LTA, further reduced by the millionaire George Osborne. I stopped paying into my pension three years ago, and on reaching 60, having logged nearly 11,000 operations as first or supervising surgeon, I retired from NHS practice. Apparently my skills are no longer required and my past contribution no longer valued. Is it any wonder that the NHS is haemorrhaging staff? I have encouraged my juniors to head towards the Antipodes for several years now (consultant post at Rockhampton, Queensland advertised on a salary of $AUS412,000!).
This is the email I received from Heidi Allen, our former conservative MP:
Thank you for your email.
The issues that you raised were recently debated in the House. Although I was unable to attend the debate as a result of existing meetings at Westminster, I have been able to review the outcome of the debate, details of which are here: hansard.parliament.uk/.../NHSPensionSchemeTaperedAnnualAllowance
As the Minister indicated, this is not a straightforward issue. On the one hand, the Government wishes to ensure that the pension arrangements for all public sector employees are fair and on the other, it recognises that there can sometimes be unintended consequences when tax policy is framed.
The Minister has indicated that the arrangements will be kept under review. It is clear from the Minister’s comments during the debate that the Government is alert to the concerns about staff retention and the possible relationship between the pension arrangements and its ability to maintain a highly skilled NHS workforce. It needs to strike a balance. As a result, Paul Masterton’s debate has served to raise the profile of this issue with the Department for Health. Earlier this month, there was a further question in Parliament and it is clear from the Minister’s response that the Government is looking at this issue. Details of the response are here: www.parliament.uk/.../240516
As you will know, having recently left the Conservative Party to join the Independent Group of MPs, we will, over the coming months, be working hard as a group to develop clear policies on a range of issues, including taxation and pension policy. When the Government has made progress on issues, we should be open in saying so and when it gets things wrong or could be doing more, we will challenge it, look at the evidence and argue for improvement. Last week, we registered as a political party - Change UK - The Independent Group - and our policy formation work will commence very soon. I hope when advertised, you will contribute to that. (Please register at www.theindependent.group for updates.)
I will actively monitor developments on the issue and contact you again when there is more news about the Department’s intentions.
Member of Parliament for South Cambridgeshire
Constituency office: Broadway House, 149-151 St Neots Road, Hardwick, Cambridge CB23 7QJ
Tel: 01223 830037
Westminster office: House of Commons, London, SW1A 0AA
Tel: 0207 219 5091
In addition the pension uplift is now linked to CPI not RPI. This means that if CPI is 2% and RPI 3% that, over twenty years ,a doctor with a pension of £50,000 on retirement will loose somewhere in the region of £100,000. The NHS pension scheme has had a surplus each year since 1948 and this is currently somewhere in the region of £2 billion pounds per year. I feel that the BMA should ask the Government to explain what they have done with this money. This must be the biggest robbery in British history. The whole thing stinks.
Put simply, reducing the pension entitlement to avoid the tax intended for the super rich isn’t a solution. A solution preserving pension is needed, as otherwise consultants and senior GPs will retire on pensions of a small fraction of their final pay, not the approx 50% the scheme is intended to deliver.
I agree with below anonymous.
I was told the same thing when being a junior doctor working for£ 3.50 an hour before tax being on call at night,weekend and bank holidays . They have completely forgot that time
We all read in the recent BMA news review of a consultant who got landed with a £13,000 tax bill because he was £3 over the £110,000 threshold. That's a 413,000% tax rate! If he had taken half a day unpaid leave on the last day of the Tax Year, he would have saved himself £13,000. Unfortunately, he was not aware of this until AFTER he had filed his Tax Return 9 months later. It's alright for politicians to talk about 'fairness' in the pensions system, but with a 413,000% tax rate, surely there is something seriously wrong with this current system. Imagine you have a cleaner who does 3 hours cleaning in your house and at the end, YOU give HER a bill for £500 !!
All doctors should try to work out their total income in advance of the Tax Year and then take unpaid leave towards the end of the Tax Year so to avoid these crazy and punitive tax rates.
Maybe then, the Government will start to listen ....