Unions say tinkering just won’t work

Hospital Consultants and Specialists Association pensions spokesman Dr John West said doctors emerged from talks with Treasury and health ministers last month believing there was little evidence of an effective way forward.

He added: ‘While pre-Budget leaks suggest the Treasury is considering raising the income threshold to £150,000, this would still act as an arbitrary ceiling and a huge disincentive to consultant staff taking on greater responsibilities such as waiting list initiatives, teaching or research.’

The cleanest and simplest way of sorting the problem was to scrap the annual allowance taper on 11 March and move on to a review of allowances including an evidence-based probe into the impact on NHS workforces.

Dr West warned that ill-thought-out quick fixes or tinkering round the edges would not end the crisis: ‘Only two things are currently certain: the Govern­ment has wasted a year through Treasury inaction and it will require serious steps to reverse the huge behavioural impact of annual allowance thresholds and the taper on hospital doctors.’

BMA pensions committee chairman Dr Vishal Sharma said the Government pledged to ‘address the taper problem’, but its £150,000 proposal would do no such thing. 

The annual allowance was completely unsuitable for defined-benefit schemes and simply raising the threshold income would not remove any of the complexity of the taper, nor the threat of doctors facing a ‘tax cliff’ when their income increases through promotion or taking on additional work. 

He added: ‘And due to the complexity of the way pension growth is calculated, with a final figure only known at the end of the tax year, even those who earn well below this increased threshold would still likely limit their work to ensure they’re not hit with unexpected charges.

‘We’ve had a year of inaction. Doctors and our patients desperately need an immediate solution that is simple and solves the problem completely; the NHS cannot cope with further half-measures.

‘The BMA firmly believes that scrapping the annual allowance and tapered annual allowance in defined-benefit schemes – as suggested by the Government’s own advisers, the Office of Tax Simplification – is the only viable solution.’