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Pensions: NHS

Volume 689: debated on Tuesday 27 February 2007

asked Her Majesty’s Government:

When the 2005-06 accounts for the National Health Service pension scheme will be published.

My Lords, the accounts were made available on the NHS pension website on 26 February 2007 and in printed format on 27 February 2007. I declare an interest as a preserved member of the NHS pension scheme.

My Lords, I thank the Minister for his reply and for his open acknowledgement that the accounts were made available only late last night. I am not surprised, especially given that the noble Lord has an interest in this matter, that the Government were not keen to make these accounts available to the public as early as they might have done; they indicate that the liabilities of the National Health Service pension scheme have increased over the past year by some 26 per cent to £165.4 billion and that the net deficit to be funded by the taxpayer in the current year has increased by no less than 45 per cent to some £9.3 billion. Is the Minister aware that public sector resource accounts are required by law to be published by 31 January and that these accounts, bearing the date 26 February, are therefore nearly four weeks beyond the statutory publication date and 11 months out of date? Further—

My Lords, further, is the Minister aware that the Treasury’s faster closing initiative requires that public sector resource accounts be made available by the Summer Recess? Can he—

My Lords, can he give the House an assurance that the next set of accounts will be made available by the Summer Recess?

My Lords, NHS pensions are a source of endless fascination for some of us. The statutory deadline for laying the scheme accounts is 31 January, and the accounts were laid before Parliament on 30 January. I said in my Answer that the accounts that I referred to were made available on the website and in printed form in February. We met the deadline. It is worth making the point that the liability is equal to the amount of money that would be needed on 31 March 2006 to set up a reserve to meet, on the assumptions used, all the benefit payments up to the death of the last surviving beneficiary. That is why, at first reading, the figure seems so large. But I should have thought that all noble Lords would want NHS staff to receive a decent pension.

My Lords, I, too, declare an interest as a National Health Service pensioner following my 35 years of dentistry. Can the Minister assure all NHS pensioners that their pensions are safe? That is what everyone worries about today.

My Lords, I am delighted to pay tribute to the dedication of the noble Baroness in her service to the NHS not only as a dentist but as chair of an NHS trust. If I may say so, the NHS pension scheme is a very good scheme and one in which I have confidence.

My Lords, is not the real problem the fact that the Government completely lost control of the doctors' pay bill? They have had increases of between 30 per cent and 60 per cent in the past three years. An average GP is now earning more than £100,000 a year. That means that, retiring today, they are on a pension pot which would cost £1.25 million to buy in the private sector. Is not the real problem that, for many years to come, that will gobble up all the increase in national health spending?

No, my Lords, that is a rather bleak picture. The noble Lord will know that in fact the Government have been criticised by the general practice committee of the BMA for recent decisions taken over the dynamisation of the value of the GP pension fund. Yes, there have been issues about the cost of the contracts, but they are about incentivising doctors—consultants and GPs—to enhance the services that they give patients. Encouraging signs are emerging on that basis.

My Lords, given that the private sector final salary pension schemes have all but been closed because of the Chancellor’s raid on them by changes in taxation—among other things—how can the Minister possibly pretend that it is sustainable to continue with final salary pension schemes in the public sector with a retirement age of 60? Surely it is a fraud on pensioners to pretend that that is sustainable; it is not.

My Lords, the noble Lord will know that the Government reached agreement on changes for the Civil Service, teachers and NHS pension schemes, which are subject to negotiation—certainly for the NHS. Some provisions are for new employees not to receive pension from the age of 60 but to continue to the age of 65. That is not out of line with what some private sector schemes have done.

Anatole Kaletsky, writing in the Times on 19 October 2006, stated:

“Anybody with a thorough understanding of pensions knows that Mr Brown’s ‘tax raid’ was not the root cause of the industry’s demise. Occupational pensions and life assurance were destroyed by foolish court judgments and well-meaning but misconceived regulations under the Thatcher and Major governments”.