Changes to pension tax rules that have created a staffing crisis in the NHS, with medical staff reducing their hours or retiring early, are being promised by the Government.
A move by former chancellor George Osborne in his 2015 summer Budget to strip higher earners of tax relief on pension contributions has led to NHS consultants turning down overtime.
And with family doctors taking early retirement because they cannot save any more in their pension, the result has been longer waiting lists, backlogs for operations and delays in cancer treatment.
One hospital trust told Sky News its waiting list for operations increased by 50% in a few weeks, entirely due to staff like anaesthetists who had been working every other weekend saying it was costing them money to come to work.
During the Tory leadership campaign, Boris Johnson vowed to fix the NHS pension cap chaos, claiming he had repeatedly asked Mr Osborne’s successor, Philip Hammond, to address the problem.
And now Mr Johnson’s ally Matt Hancock, the Health Secretary, is pledging to overhaul the rules to allow senior doctors to work extra shifts, treat more patients and help reduce waiting times without losing out financially.
“NHS doctors do extraordinary, life-saving work every day, and 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,” said Mr Hancock.
“These comprehensive proposals will give doctors the pension flexibilities they have called for, and need, to make sure they are rewarded for extra work.
“We are taking immediate action and I hope these flexibilities will encourage our top NHS staff to fulfil the dedication of their mission: to care for their fellow citizens in time of need.”
But Labour’s Shadow Health Secretary Jonathan Ashworth claims the staffing crisis in the NHS is the result of cuts and ministerial incompetence, which have caused growing waiting lists and cancelled operations.
Mr Osborne’s policy was part of a wider assault on the ability of workers to save for their old age. In 2011 he cut the amount that could be saved in a pension over a lifetime without triggering extra taxes and then cut it again in 2015.
But following a row in parliament this summer and demands from MPs for urgent action, the new Chancellor Sajid Javid – an Osborne protégé – now says the government has listened to concerns.
“This government is committed to ensuring that British people see a real difference in public services, including getting quicker GP appointments, and a reduction in waiting times,” Mr Javid said.
“Critical to that is introducing flexibility into the system so that our hospitals have the staff they need to deliver high-quality patient care, which is why we’ve listened to concerns and will be reviewing the operation of the tapered annual allowance. This will help to support the delivery of our vital public services.”
Welcoming the move, Dr Chaand Nagpaul, who chairs the British Medical Association’s council, said: “We acknowledge this step forward by the Government.
“After a year’s tireless lobbying by the BMA on the damaging and perverse effect that this 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 Mr Ashworth said: “The NHS is facing a workforce crisis. Despite Tory ministers promising to boost the number of GPs, we’ve actually seen the first sustained drop in GP numbers in fifty years.
“Doctors have long been warning that George Osborne’s pension changes have undermined their ability to provide the care patients deserve.
“The truth is cuts and ministerial incompetence have left the NHS struggling to cope with 100,000 staff shortages.
“It is patients who are suffering the consequences with growing waiting lists and cancelled operations. Ministers need to do significantly more to provide the NHS with the staff it needs now and for the future.”
From the unions, Unison’s head of health, Sara Gorton 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.
“At the other end of the pay scale, thousands of low-paid staff leave the scheme because they struggle to afford the payments.
“The Government should also be paying similar attention to this problem and introducing flexibility to give staff on far lower earnings a more comfortable retirement.”