Ministers act to end NHS pensions row amid waiting list rise

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The government has come up with new proposals for England and Wales to end the row with doctors over pensions.

Doctors had started refusing to do overtime shifts because they were being landed with bills after changes to the amount that can be accrued tax-free.

Just weeks after ruling out reviewing the rules, ministers now say they will.

A consultation launched by Theresa May’s government offering to introduce more pension flexibility is also being replaced by more radical solutions.

The previous consultation was only published on 22 July.

But it was reassessed following the appointment as prime minister of Boris Johnson, who had promised to address the issue during the Tory leadership contest.

The pensions row has been linked to a rise in waiting times for routine surgery caused by medics refusing to work beyond their planned hours.

What is being proposed?

The government said it would now be putting forward a plan to allow doctors complete flexibility when it comes to scaling down their pension contributions to avoid breaching the annual tax-free allowance.

The allowance has been reduced from £255,000 a year in 2010-11 to £40,000 – and drops still further for the highest earners.

This tends to affect those earning more than £110,000, around a third of senior doctors and GPs

Previously the government had said it favoured a 50:50 option whereby public sector staff could forsake half the amount paid into their pension.

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But now ministers have said they will publish a consultation in the coming weeks which favours giving public sector staff the ability to reduce contributions to zero.

It will also allow doctors to be given the contributions the employer would have made, meaning their pay packets could be boosted by thousands of pounds a year.

Meanwhile, the Treasury has agreed to look at how public sector workers are taxed on their pensions to see if the rules can be relaxed.

Some doctors have reported being landed with huge unexpected tax bills.

What happens next?

The plans will be set out in a consultation published during the summer with a view to introducing them from April.

But to help relieve the problems immediately, the government is also promising to allow doctors to opt out from the pension scheme for this financial year.

Again, guidance will be published in the coming weeks.

The government hopes this will relieve the pressure on hospitals, which have reported waiting lists are lengthening because doctors are refusing extra shifts.

It will be up to Scotland and Northern Ireland to decide whether to make similar changes, although the way pensions work in those parts of the UK is slightly different anyway.

Health Secretary Matt Hancock said: “NHS doctors do extraordinary life-saving work every day – they should not have to worry about the tax impacts if they choose to go the extra mile by taking on additional work to help patients.”

Dr Chaand Nagpaul, of the British Medical Association, said: “We acknowledge this step forward by the government.”

“After tireless lobbying on the damaging effect that perverse and ill-thought out tax legislation is having on our NHS, its doctors and patients, it is good to see the government finally sitting up and taking notice and proposing action.”

But Sara Gorton from the union Unison said: “Introducing measures to help only a small proportion of the millions of active NHS scheme members looks alarmingly like the beginning of a ‘clinicians-first’ approach to pension strategy.”

Shadow health secretary Jonathan Ashworth said the pension changes had undermined the ability of the NHS to provide care to patients but ministers still need to do more to address existing staff shortages.

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