A tax cut for wealthy pensioners will bring down NHS waiting lists, Rishi Sunak has insisted – but he did not say how many doctors would stay in their jobs because of it.
Criticism has mounted over the move to scrap the lifetime allowance in the spring budget, which Labour has branded a “tax giveaway to the wealthiest 1%”.
Under the plans, people will be allowed to put aside as much as they can in their private pension scheme without being taxed – removing the £1.07m limit.
Ministers have insisted that it will encourage senior doctors to stay in the workforce for longer – but the government’s own data suggests only 105 of them left the NHS due to early retirement last year.
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When this was put to Mr Sunak, he told BBC Breakfast: “It’s not just about whether they leave or stay; it’s about whether they’re doing the extra shifts, because that’s what’s going to help us get the backlog down.”
Mr Sunak said “thousands of doctors” leave the NHS every year, and “about two-thirds to three-quarters of them have said that they don’t provide extra hours” due to the pension rules.
“The key thing is I want to get the waiting lists down. I think everyone watching who has a family member waiting on NHS waiting lists will want that person – grandmother, grandparent, aunt, uncle – to get that treatment as quickly as possible. Because of this change we’re going to be able to do that.”
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In response to a written question from Labour last November, health minister Will Quince provided statistics showing 105 doctors left the NHS due to early retirement in 2021/2022.
While Mr Sunak would not say how many doctors removing the £1m tax-free threshold could entice back, he said “overall we think about 12,000 people will be working more in the workforce”.
The measure was welcomed by the British Medical Association, who called current rules a “pension trap” for the majority of doctors.
Committee chair Vish Sharma said: “The scrapping of the lifetime allowance will be potentially transformative for the NHS as [the majority of] senior doctors will no longer be forced to retire early and can continue to work within the NHS, providing vital patient care.”
He added that the changes will also “reduce the perverse incentive to reduce hours due to pension tax”.
How will the NHS pay offer be funded?
During his interview, Mr Sunak was also unable to say how the revised NHS pay offer announced last week will be funded.
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The government has put forward a revised 5% pay offer to NHS staff
Unions reached the deal with the government in a major breakthrough that saw NHS staff offered a one-off payment of 2% of their salary plus a COVID recovery bonus of 4% for the current financial year 2022/23, and a 5% pay increase for 2023/24.
Asked if this is new money, Mr Sunak said: “The NHS does have new money, yes.”
Pressed further, he said: “We’re just about to start the financial year and the NHS and social care will have £14bn more over the next couple of years.”
Mr Sunak was then quizzed on whether the money would come out of that existing budget.
He replied: “People want to know the NHS is well-funded, but what’s also important is how we use that money.”
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The deal with health unions came after months of ministers saying there was no cash to meet their demands, arguing the money would have to come out of frontline services.
Downing Street has insisted the offer – which will require the government to find £4bn in spare cash – will not impact frontline services, saying “areas of underspend” had been identified.
Rwanda deportations ‘will begin once court proceedings have concluded’
Mr Sunak was also grilled on targets for his “stop the boats” plan.
He said “no illegal immigration is acceptable” and his new bill – to ban people claiming asylum if they come to the UK through unauthorised means – “is about fairness”.
Asked whether that means stopping all boats, he said: “That’s what we’re trying to do. I don’t think anyone would sit here and say to you that they tolerate any illegal migration.”
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The home secretary toured Rwanda at the weekend
On whether he could get the number of Channel crossings to zero, he said: “People will be able to judge me by my actions at the next election – I’m perfectly confident about that.”
The prime minister said deporting migrants to Rwanda will begin once court proceedings have concluded.
When it was put to him that Home Secretary Suella Braverman has suggested flights will start this summer, Mr Sunak said: “No, that’s not what she said, and what she said actually was that when the court process has concluded, then we’ll be able to start flights as quickly as we can.
“But ultimately we have to go through the court process, policies being challenged. We won the first battle of those and we’ll continue to defend the policy.”