Government action on senior doctors’ pensions must include proper tax reform, BMA says

BMAAug 6 2019

Any attempt by the Government to address the pensions crisis leading senior doctors to reduce their hours must include proper tax reform if it is to avert this “grave threat” to staff and patients, the BMA says.

The BMA’s comments are in response to an article in the Sunday Times by Prime Minister Boris Johnson, who writes:

It cannot be right, for instance, that people are waiting so long to see their GP; and it cannot be right that so many GPs and consultants are leaving the service, or cutting their hours, for fear of whopping tax bills. It is clear that something has gone badly wrong in the taxation of doctors’ pensions. So this government is listening. We are fixing it. We are changing the rules so that doctors no longer face a perverse incentive to reduce hours.”

However, the newspaper also reports that “the NHS pension scheme will be remodeled so that senior doctors can be more flexible about their pension saving”, rather than tax rules changed.

The BMA, which has led the campaigning on the issue, says it is positive that the Government is beginning to recognise the problem, but that the real solution must be in overhauling the damaging tax legislation – including the annual allowance and tapered annual allowance2 – that leaves senior doctors facing significant and unexpected tax bills.

A major survey by the BMA1 last week revealed that 42 per cent of GPs and 30 per cent of consultants had already reduced their working hours over actual or potential pension charges. Of those who hadn’t reduced their hours already, 34 per cent of GPs and 40 per cent of consultants said they were planning to for the same reason.

Responding to the Prime Minister’s comments, BMA council chair Dr Chaand Nagpaul said:

“If the Prime Minister is serious about improving care and tackling waiting times he must give patients reassurance that senior hospital doctors and GPs will be able to continue to provide care, and not be forced out by absurd taxes on their pensions that mean all too often they are paying to go to work.

“The BMA has led the campaign on this issue, and while it is good that the Prime Minister appears to be beginning to recognise the scale of the problem, flexibility alone is not the solution –  especially without employers’ full pension contributions being recycled back into doctors’ salaries.

“While flexibilities may help in the short-term, what is needed is a drastic overhaul of pension tax regulations, including the damaging annual allowance and tapered annual allowance, to stop this absurd situation and avert this grave threat to our NHS workforce and patients – and we will continue to push the Government for this crucial change.”

The Prime Minister today also announces £1.8bn investment for the NHS, which includes money for 20 hospital upgrades and capital funding.

Responding to the funding announcement3, Dr Nagpaul added:

“For the NHS to provide high quality services fit for the 21st Century and meet the needs of patients, it is vital that we have adequate facilities which are up-to-date and in good working order.

“Yet for too long, capital budgets – meant for investment in premises and facilities – have been diverted to prop up the day-to-day running of the health service.

“This has led to recent warnings about the perilous state of hospital buildings – from crumbling walls and ceilings to serious plumbing problems – with estimates putting the bill for current unfinished maintenance work at £6bn. There is also an urgent requirement for funding for additional hospital capacity to avoid the near constant use of emergency ‘escalation’ beds which so impair normal hospital productivity.

“Furthermore, GP practice buildings are increasingly unfit for purpose, frequently unable to accommodate enough patients or health professionals to meet the needs of their local area. A recent BMA survey found that only half of practices felt their premises were suitable for present needs, while less than a quarter would meet the future needs of a growing population.

“The announcement of 20 hospital upgrades and £1.8bn, including money for capital budgets, is a step forward, providing a vital injection of cash to spend improving hospitals – and we await details from the Prime Minister on where the money will go.  However, it is equally vital that new investment must be directed to address the impoverished state of general practice buildings so that there is increased capacity for GP staff and services, without which the Prime Minister’s ambition to reduce waiting times will not be achievable.

“To reverse years of underfunding, it is critical for this money to mark the beginning of sustained levels of investment to ensure NHS estates are of the highest standard for delivering the care patients need.”