Reform Finance Act to fix GP pensions ‘crisis’, BMA urges Chancellor

The BMA has urged the new chancellor to fix the GP pensions “crisis” ahead of an emergency “mini-budget” to be announced on Friday.

In a letter to Chancellor Kwasi Kwarteng today, the BMA said the government needed to go beyond previously announced measures and make urgent reforms to the finance law.

BMA Council Chair Professor Philip Banfield said: “Pension taxation rules mean that older NHS workers on the same income are taxed more than once and then, when inflation is high, more tax is levied on non-existent pseudo-growth simply because of anomalies in the Finance Act.

“The result is that they are often better off reducing hours or, in some cases, even leaving the NHS altogether.”

He called on the Chancellor to “ensure these issues are addressed under the emergency declaration” and said it was “important” that he takes “urgent action” to resolve the “persistent pension tax trap that is keeping doctors out of the NHS.” forces”.

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The letter read: “While we have been heartened by the PM’s pledge to ‘solve’ the problems with NHS pensions during the leadership campaign, the Government needs to do more than fiddle with existing guidelines.

“Proposals such as suspending ‘retirement and return’ restrictions, suspending mitigation rules or proposing flexibilities have now been rejected twice in consultations because they will not solve the problem. These approaches will have minimal impact on the overall number of doctors leaving the NHS and will not address the broader problems of huge unfair tax bills facing senior doctors.’

The BMA’s proposals included:

The letter said: “In primary care, high inflation and higher-than-expected wage costs have put extreme pressure on GP practices, which are struggling with retention and hiring while meeting high demand.

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‘For many GP practices, the energy crisis is becoming a question of financial viability.’

Professor Banfield added that the NHS was “under unprecedented pressure” and that staff morale was “at rock bottom” with GPs remaining “under significant and growing pressure”.

Doctors who have made “great personal sacrifices” during the Covid pandemic “now feel taken for granted by the same government that encouraged the nation to gossip for us but presided over the continued erosion of our pay and default.” had to solve long-standing problems with the taxation of the NHS pension,” he said.

He added: “Doctors’ workloads are already increasing as their colleagues leave, and those who remain are becoming increasingly undervalued and underpaid.

“They will find that their pension will either become a tax liability or depreciate to such an extent that they will leave the job they once loved for better paying work, or retire at the earliest possible date. This is happening now and the exodus must be stopped.

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“The Prime Minister’s new government now has the opportunity to rectify this.”

The letter was also sent to Health Minister Dr. Thérèse Coffey, who is due to make a statement tomorrow on her plans for the NHS.

The chairman of the BMA pension committee, Dr. Vishal Sharma, said: “Without urgent action to deal with punitive taxation rules on pensions, the NHS faces an exodus of its most senior staff this year, a loss from which it may never recover.

“It is important that the government delivers the right solutions, not fudges and vague promises.”

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