THE Scottish Government has said repeatedly that the UK Government must take swift action to mitigate the impact of pension-tax policies that are wreaking havoc on staffing levels across the NHS.
Just last month health secretary Jeane Freeman wrote to then-Chancellor Sajid Javid urging him to act.
“It is incumbent upon you to take the opportunity of the March Budget to fully and finally remedy the situation and allow our NHS staff to get on with delivering care without fear of the consequences,” she said.
What she and the Government have never said, though, is what they would like the Chancellor to do. While politicians like former East Renfrewshire MP Paul Masterton – a Conservative member who was a pensions lawyer before entering Parliament – called repeatedly for the tapered annual allowance to be scrapped, the Scottish Government has said only that a solution has to be found.
One potential reason for the Scottish Government’s reticence to name the most obvious solution to a problem that is entirely of Westminster’s making is that scrapping the taper would work in First Minister Nicola Sturgeon’s favour.
Though, like all MSPs, Ms Sturgeon’s salary remains frozen at 2008-09 levels, at £135,605 it is still well above the £110,000 threshold at which the taper kicks in, meaning the tax-free amount she can save into her pension will have reduced from £40,000 a year to just over £30,000. As the Government contributes 20.2% of members’ salary to the Scottish Parliamentary Pension Scheme and members contribute either 6% or 11%, when pensions growth is factored in Ms Sturgeon’s annual contributions will far exceed that limit. She will undoubtedly be liable for annual allowance charges.
Figures released by the Scottish Public Pensions Agency under Freedom of Information legislation show that two members of the parliamentary scheme paid an annual allowance charge in each of the two years after the legislation was introduced, with the scheme paying £43,566 and £36,263 on members’ behalf in 2016/17 and 2017/18 respectively.
If the taper or the annual allowance were scrapped, such charges would either be less likely or would no longer be incurred.
The Scottish Government did not respond when asked if this was the reason it has not been lobbying for the change senior doctors say is required to keep them in post. It did, however, continue to frame the problem as an NHS-specific one rather than something that is affecting the public sector as a whole.
“A permanent solution is only within the gift of the Chancellor,” a spokesperson said. “We have been consistently clear with this Chancellor and his predecessor that he must use the UK Budget on 11th March to offer this and that this is all the more pressing in light of the current Covid-19 challenge we all face.”
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