High-earning GPs will be forced to increase their pension contributions by more than £3,000 a year under Government plans revealed today.
The proposals, which will form the starting point for negotiations on an NHS-wide pension settlement between Department of Health officials and health unions, including the BMA, set out the precise hike in pension contributions that GPs can expect to pay from April 2012.
The plans - attacked by the BMA as a ‘tax on health professionals' - show that GPs could pay almost a third more in pension contributions next year, despite the NHS pension scheme being in surplus. GPs earning £150,000 will pay an extra £3,600 a year more for their pensions before tax, with contributions increasing from 8.5% to 10.9%.
Those earning around £100,000 a year will pay £2,300 extra, while in the £50,000 earnings bracket, NHS employees are being hit harder than their public sector counterparts. NHS staff will pay £768 a year extra – a higher increase than teachers (£696) and civil servants (£684).
Further hikes which have yet to be disclosed will be staggered over three years until 2015.
BMA chair Dr Hamish Meldrum attacked the Government for introducing a ‘tax on health professionals' and using ‘megaphone diplomacy' rather than negotiating with doctors. Dr Meldrum said the NHS scheme will generate 'over £10bn surplus over the next five years. However, Treasury sources told Pulse that forecasts from the Office of Budget Responsibility predict that the NHS pension scheme surplus will be reduced to £150m by 2015-16.
Speaking on the BBC's Today Programme, Dr Meldrum said:‘This is not about the affordability of pensions. This is simply a tax on pensions and the money is going straight back to the Treasury to plug a hole in the Government's spending deficit.'
‘The NHS pension scheme is going to generate over £10bn surplus over the next five years. The NHS scheme went through a major reform three years ago, meaning NHS staff are already paying more than they were and they are contributing higher levels than other public sector workers…This announcement is not the way to negotiate. It is simply megaphone diplomacy from the Treasury and it is not helpful.'
The move comes a week after a Cabinet rift over NHS pensions was exposed, with the health secretary attacking his own Government's pensions shake-up. In a leaked letter to the Treasury, Andrew Lansley criticised the controversial reforms as ‘inappropriate' and warned that it could see GPs desert the NHS pension scheme in droves.
Today, Mr Lansley backed the pension plans and said: 'The NHS pension will remain one of the very best available, providing a guaranteed pension level for all employees – something that very few private sector employers still offer. We will also completely protect the pensions people have already earned. None of the rights people have accrued will be affected.'
'However, Lord Hutton made it absolutely clear that there needs to be a fairer balance between what employees and taxpayers contribute to public sector pensions. With people living longer and healthier lives, the status quo is untenable and unfair. It is entirely reasonable that people pay more to receive the benefit for longer.'