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Department of Health to consider appeal over pensions ruling

By Steve Nowottny

Government lawyers are this week considering whether to appeal against a High Court ruling that the cap on GP pensions was unlawful.

The BMA last week won a landmark victory in its judicial review which - if upheld - could see some GP pensions boosted by up to £15,000 a year.

The Department of Health, which was granted leave to appeal, said it was ‘very disappointed' by the decision, but promised to abide by the court's final decision.

GP leaders hailed the morale-boosting decision of the judicial review as a ‘landmark judgment' – but warned it was unlikely to prevent future contract impositions.

BMA chair Dr Hamish Meldrum said: ‘We are delighted that the BMA has been vindicated in its decision to challenge the Government.

‘We now look to the Government to give GPs the pensions they have worked and paid for and to honour the agreement reached with the BMA.'

But GPC deputy chair Dr Richard Vautrey warned the case was unlikely to set any precedent regarding the Government's threat this year to unilaterally impose contract terms. ‘It's quite different from our current difficulties,' he said. ‘The issues here were specific to how the pension was calculated and the retrospective attempts to change that.'

The BMA's case followed the Department of Health's announcement in 2006 that it was to cap the GP pensions dynamising factor – a way of bringing contributions to current values – to 48% over five years.

Recently-retired GPs look set to be the biggest winners if the judgment is not overturned.

Dr Andrew Dearden, chair of the BMA Pensions Committee and a GP in Cardiff, said preliminary calculations showed the actual dynamising factor over the five-year period should have been around 58%. ‘This has proved the Government to be incompetent and willing to act illegally to cover that,' he said.

During the hearing, Roger Gordon QC, representing the BMA, told the court the capping unlawfully reversed a previous decision setting out how the dynamising factor would be calculated. ‘To say there was no decision is Alice in Wonderland – everybody thought there was a set of rules in place,' he said. ‘There is an abuse of power in saying "we're 100% committed, this is what we're going to do" – then pulling the rug at the last minute.'

But Elisabeth Laing, acting on behalf of the Department of Health, denied that a final agreement on the dynamising factor had ever been reached.

‘This is very far from being an abuse of power,' she argued. ‘What the evidence shows is that the Department of Health didn't know what profits GPs would make under the new contract.'

Who wins what

- recently-retired GPs, in particular those who retired since April 2006, will benefit most. GPC estimates some GPs could receive an increase of up to 10-15% in their pensions, equivalent to between £5,000 and £15,000, plus a lump sum increase.

- still-practising GPs will see a more modest but ‘significant' increase – final amount depends very much on future earnings and when they retire, but likely to see a 10% increase in dynamising factor over five year period

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