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GPs hit by further rise in pensions contributions under new ‘Robin Hood-style’ deal

GPs will be hit with a further rise in pensions contributions to offset a new Government pledge to protect lower-earning NHS staff from contribution hikes, under a new pensions offer tabled by the Department of Health.

The new pensions offer will see 700,000 higher-paid staff, including GPs, pay hundreds of pounds extra in pensions contributions. The ‘Robin Hood-style’ deal will raid high earner’s pensions to fund a new DH commitment to spare NHS staff earning under £26,500 from paying any increase in pensions contributions next year.

The move means GPs are faced with a further erosion to their pensions just a week after a Pulse poll revealed that 70% of GPs planned to reject the Government’s pensions offer. The BMA Council has committed to giving its members a vote on the Government’s final pensions deal, with a ‘no vote’ triggering a ballot on industrial action.

The DH said that the change will ‘protect the lower paid in the NHS’ by distributing the cost ‘among higher earners’. It will impact doctors earning between £69,000 and £110,000 who will see their contribution rate rise by a further 0.1% next year. With the average GP earning £105,000, most family doctors will  face a 9.9% contribution rate in 2012/13 – a worse deal than the previous DH offer of a 9.8% increase.

The DH said it hoped to ‘offset’ most of the impact via tax relief. But even after tax relief has been taken into account, GPs earning over £60,000 will pay £144 in extra pensions costs each year, doctors earning £80,000 will pay an extra £36 a year and doctors earning £130,000 a year will pay an extra £48 a year.  

Announcing the offer, which follows the DH’s consultation on pensions contributions, health secretary Andrew Lansley said:‘Having listened to staff and stakeholders, we have improved our proposals so that an extra 530,000 NHS staff will not pay any more into their pensions next year.’

‘These changes alone will not be enough to ensure that NHS pensions are affordable in the long term. We are continuing to discuss wider changes to pensions with trades unions and hope to reach an agreement by the end of the year.’

The emphasis on raiding high earners’ pensions to pay for concessions for low earners will be seen in some circles as an attempt by the Government to force a split in the NHS-wide coalition of health unions that has joined forces to negotiate pensions.  But today unions rallied round to attack the DH’s offer with the new deal receiving a furious response from union leaders.

The BMA said it would oppose further contributions hikes for doctors while other unions attacked the Government offer as a ‘swindle’ and accused the Government of ‘bypassing the agreed negotiating channels’ by trying to cut deals via the media.

BMA chair Dr Hamish Meldrum said: ‘It is inconceivable that the Government can claim to have come up with this idea “having listened to staff”.’

‘Thousands of doctors and medical students, along with other NHS workers, responded to consultation urging the Government against further contribution increases. The announcement of an even steeper hike will intensify the anger they are already feeling.’

‘There is already a system of tiered contributions in the NHS pension scheme, with the highest paid staff paying  most. Doctors contribute up to 8.5% of their pay for their pensions – among the highest in the public sector.  That figure could be as high as 14.5% by 2014.’

‘There is no justification for this, particularly when the final salary pension is to be replaced with a career average scheme.’

Gail Cartmail, assistant general secretary of Unite, said: ‘In its haste to sell this as good news, Government is also failing to state what it plans for years two and three. They will press on as before so this is a swindle – and a short-lived one at that. This Government must stop bypassing the agreed negotiating channels. The correct place to discuss proposals is around thetable, not via the airwaves.’

Christina McAnea, Unison’s Head of Health, said:‘I am beginning to question if Government ministers are serious about reaching a deal. We are in the middle of tricky negotiations where the goalposts keep moving and where the timetable looks increasingly unrealistic.  We will not walk away from talks but we need assurances thatthe desire for a deal is not one sided.’