National Health Service Pension Schemes (Member Contributions etc.) (Amendment) (No. 3) Regulations 2022

Baroness Altmann Excerpts

Wednesday 11th January 2023 Lords Chamber

We have a real problem here for getting the NHS back on track. We need to retain senior staff, and, unless the Government accede particularly on the need to have an effective and efficient system for dealing with the index mismatch—and, especially, on taking into account negative pensions growth—we will continue to have those difficulties.

[Baroness Altmann (Con)]

My Lords, I congratulate the noble Lord, Lord Davies, on highlighting a really serious issue in terms of the workforce situation within the National Health Service. I commend him on his clarity and ability to explain an incredibly complicated situation. I also congratulate my noble friend and welcome him to his position. I know that he is in listening mode and that the Government really want to sort out the problem; it has been hanging over the National Health Service for a number of years.

Small changes have been made to try to address different parts of the problem, but we are left with a situation where, partly because of the legacy of unexpected tax bills that hit senior staff and lowered morale at points over the past three or four years, we currently face a new problem that did not exist before and which has added to the difficulties faced by NHS staff: inflation. The NHS Pension Scheme, as with other public sector pension schemes, is an excellent scheme; the benefits provided for the majority of members are generous and of extremely high value relative to the salaries of most of the workforce. More than 1 million members are in that scheme, and the Government, in their new regulations, have commendably sought to widen the membership of the NHS Pension Scheme. Again, I commend the recent consultation measures that have been put forward; for example, bringing in more primary care network staff so that they do not have to keep opting in but can be automatically included.

I also welcome the attempts to attract back some of the people who have retired early from the NHS or left it for a number of reasons over the past few years. Were they to come back under the old rules, they would face extra penalties; however, those penalties are being removed. I again offer my noble friend and the Government my full support on trying to get people to come back flexibly, take partial pensions and make new contributions and to remove the limits on the number of hours worked—all of which is to be welcomed in allowing retired staff to rejoin the pension scheme.

There is also an attempt to address the inflation calculation problem, whereby the base for calculating the end-of-year inflation is being moved to 6 April so that it will take a base at a similar level of inflation to the previous year. However, that is a one-year fix, so it is not going to solve the long-term issue.

Given the cost to taxpayers of unfunded public sector pensions and, in my view, the right of public servants to expect good pensions, we need to recognise that there is a real problem for some groups of members for whom something which is supposed to be a brilliant workplace benefit has turned into a workplace penalty because of illogical tax rules. More senior and long-serving earners—and now even middle earners, not just the highest earners—are finding that their supposedly tax-free pension contributions are causing them to receive huge tax demands that can even exceed the extra earnings that they may make from taking on an extra shift or doing some overtime, so they are effectively paying to work for the NHS. That is not intentional; the rules in theory are having unintended consequences in practice. The tax system rules that the Treasury has devised are intended to limit the extra tax-exempt pensions so that taxpayers do not have uncapped, extra-large bills going forward, but, in practice, there is complexity, a lack of transparency and perhaps inappropriateness in applying rules that might work for defined contribution pension schemes to defined benefit pension schemes—as well as in trying to limit not only the amount of money going into the scheme each year but the amount built up over the long run. Surely, if you limit the amount that goes in on an annual basis, you should not need to punish people if they have a big pension at the end—is that not the point of building up pensions? I urge my noble friend perhaps to meet a group of interested Peers and representatives from the Treasury to try to work through how we can fix some of the illogical tax rules.

I have identified four elements of the pension scheme that are not working: the annual allowance itself; the tapered annual allowance, on which the Government have gone quite a long way to try to ensure that the increased level at which that bites in the NHS has taken some of the sting out of what was a problem lower down the scale before; the lifetime allowance; and the 20-times pension calculation, regardless of whether you take early retirement. The latter means that it will be advisable for many people to retire in their 50s—as soon as they can—if they are just coming up to the lifetime allowance, because the 20-times calculation will be applied to the pension at that stage, rather than to stay on, work longer, wait until they have a bigger pension and slip over the limit.

There is the inflation calculation, as the noble Lord, Lord Davies, has mentioned, the index mismatch and the failure to have any offset for negative growth. Again, if we were to be able to change Sections 234 and 235 of the Finance Act 2004 to better allow the total pension calculation that accrues above inflation, that would at least address some of this issue.

A final element that I would like to highlight is that there is the possibility for members who face tax charges to have those charges paid by the pension scheme. It is called “scheme pays”, and effectively it means that you get a lower pension later on because the pension scheme has paid your tax bill today. But what we need to do is to take away the punitive interest rate charged for the calculation made for the “scheme pays” amount. Right now a member is charged CPI plus 2.4%, effectively 12.5% to borrow money from their pension scheme, meaning that they get a lower pension later on.

Children in Care: CAMHS Waiting Times

Baroness Altmann Excerpts

Monday 5th December 2022 Lords Chamber

[Lord Markham (Con)]

I agree. Arguably, if you are being home schooled, you probably need a lot of help. As the noble Lord will be aware, a lot of the services are related to social prescribing, where often people with mental disorders can be helped by involving them more in community activities. Clearly, those who are home schooled are much more likely to be isolated.

[Baroness Altmann (Con)]

My Lords, I congratulate my noble friend on his previous answer about triaging so that those in care can get urgent mental health support. Does he have any targets in mind as to the proportion of children in care with mental health needs who could be seen within, let us say, six months rather than the current waiting time of up to two years?

[Lord Markham (Con)]

I thank my noble friend. The NHS has recently set out a national framework for the practical pathways that it expects ICBs to follow in terms of getting diagnoses. To be very open with my noble friend, given demand, setting targets in this space is probably not the wisest thing to do, but we understand that we need to get on top of this.

Adult Social Care

Baroness Altmann Excerpts

Thursday 24th November 2022 Lords Chamber

[Lord Markham (Con)]

Believe me, I am no fan of complexity. At the same time, I want to make sure, as I am sure we all do, that the funding goes to the places of most need and is really being spent on the areas that it is being spent on. Having said that, I will take away those comments at face value and will look into the complexity because, clearly, that is in no one’s interest.

[Baroness Altmann (Con)]

My Lords, the crisis in social care has been worsening since I was advising the Dilnot commission in 2011. What plans do the Government have to improve the situation rather than watch it deteriorate? Age UK estimates that there are about 2 million elderly people needing care who are not receiving it, so 200,000 care packages are hardly going to make enough difference.

[Lord Markham (Con)]

I thank my noble friend. As the population grows older, we must look at how to cater for these areas. We have been having real-term increases year after year of 2.5%, and 22% by 2024-25 is a substantial increase by any measure. At the same time, satisfaction levels are high. Do we need to do more? Clearly, we need to keep up in this space.

Social Care Sector: Staff Shortages

Baroness Altmann Excerpts

Monday 21st November 2022 Lords Chamber

[Lord Markham (Con)]

The noble Viscount mentioned funding. Clearly, it was a difficult choice, but our priority was to make sure that the funding went into the supply of places over the next two years, because of the impact that has across the system. Noble Lords will have heard me mention many times how that affects the whole flow, which backs up into ambulance wait times and everything else. That is why I am delighted to say that we have secured £2.8 billion of extra funding in 2023-24 and £4.7 billion in 2024-25. That will obviously flow through the whole system, including into staff wages and recruitment.

[Baroness Altmann (Con)]

My Lords, I welcome the announcement of the health and social care visa, but the Government have no separate figures for the number of workers who have come here under the new health and care special visa rules, separately for health staff and social care staff. So can my noble friend tell the House what are the median and top quartile pay rates for social care staff? I am happy for him to write to me if he does not have those figures. Do the new visa’s minimum salary requirements mean there is little hope of immigration filling the 165,000 or more vacancies, leaving 2.6 million older people without the care they need, as estimated by Age UK?

[Lord Markham (Con)]

I will need to write on the detail of the median and upper quartiles, as mentioned. What I can say right now, though, is that the national living wage increase will put them over the current visa levels required, which I think will be a big boost, allowing us to increase our recruitment from overseas. We have already seen month-on-month increases and the national living wage increase will help grow that further.

GPs: Anti-depressants and Alcohol

Baroness Altmann Excerpts

Wednesday 16th November 2022 Lords Chamber

[Lord Markham (Con)]

I agree that we have to make sure that GPs are equipped with the full range of tools for the job and the full range of knowledge. We are probably all aware of some instances of GPs who are very aware and progressive in this space, and others where they do not have that same level of information. We are putting a £2.3 billion increase in 2023-24 into the mental health space to treat an extra 2 million people. We need to make sure that we have a range of help that we can put in place for these people.

[Baroness Altmann (Con)]

My Lords, I echo the words of my noble friend that GPs are absolutely critical to sorting out these issues, and the Dame Carol Black review on overprescribing presumably will look into that too. Does he agree that one of the problems that urgently needs to be sorted is the pension issues that are driving our GPs to retire early? Might we look forward to some early resolution of that problem?

[Lord Markham (Con)]

I am very aware of the issue. Funnily enough, just today I had a meeting on this with the noble Baroness, Lady Finlay. It is something on which we are working closely with Treasury and other officials.

Care Homes: Energy Costs

Baroness Altmann Excerpts

Thursday 8th September 2022 Lords Chamber

[Lord Kamall (Con)]

That is a really important angle that I had not considered, to be honest. We recognise that, across government, many Ministers in many departments will be waiting at the moment with bated breath for the Prime Minister’s announcement to work out the impact on those stakeholders who have been contacting Ministers and others about the impact of energy costs. Clearly, something has to be done. The Prime Minister will announce it and then we will have to work through its impact. If I am still in post, I can come back to say how that will impact the health and care sector.

[Baroness Altmann (Con)]

My Lords, will my noble friend look into the situation of care homes, whether they are in the private sector or not, that have not currently participated in the government handouts to help with energy costs? Second home owners have had discounts on their bills, but there has been no per-bed contribution from the Government to help care homes which are already struggling and for which many families are paying enormous sums.

[Lord Kamall (Con)]

My noble friend makes a point that I was not aware of, so I am afraid I will have to take it back to the department. However, it appears a very reasonable point.

Integrated Care Boards

Baroness Altmann Excerpts

Monday 5th September 2022 Lords Chamber

[Lord Kamall (Con)]

The noble Baroness makes the point about general practice. One thing that we are looking at, which will probably come up in the debate later in the week on the future of primary care, is the whole issue of what GPs do. There are many things they do that they do not have to do—these could be done by local partners, practice nurses, physiotherapists or social prescribing, and so on. In addition, Ministers and the NHS have been in conversation with GPs’ representatives, looking at these particular issues.

[Baroness Altmann (Con)]

My Lords, could my noble friend update the House on the scheme for bringing in overseas workers to fill the gaps in social care that have opened up so seriously over the last year or two? There have been suggestions that the salary level—which currently does not allow sufficient numbers of care workers to come into the UK, when they are desperately needed—might be lowered. Is there any update for the House on that?

[Lord Kamall (Con)]

I thank my noble friend for the question. The last I was aware of—and I shall look at it and write to my noble friend—was that, under the visa scheme, we were looking to bring in people from overseas to fill those vacancies. We have historically done that; as I said, after the war we looked to people from the Commonwealth, who came and saved our public services. Clearly, when we are unable to recruit enough people locally, we have to look at those issues and at whether it is something to do with the education system, and whether we can encourage them to come forward. But where there are gaps we will have to look more widely to our partners around the world.

Coronavirus: New Cases

Baroness Altmann Excerpts

Monday 11th July 2022 Lords Chamber

[Lord Kamall (Con)]

I am sure the noble Lord will have been in meetings with the devolved Administrations; sometimes they want to go their own way. For example, when we reduced some of the measures in England, the devolved Administrations were sceptical of what we had done. When the data showed that the measures left in place in Scotland were no more effective than us removing some of those restrictions, it demonstrated exactly why, although we talk to the devolved Administrations all the time, we also respect the devolved settlements. We have to agree to disagree at times.

[Baroness Altmann (Con)]

My Lords, does my noble friend agree that we have lived with flu all our lives? I completely agree with his assertion that if this illness is not proving more deadly than illnesses we have lived with for a long time, what would be the purpose of upsetting the economic recovery and causing so much extra cost to the public purse—unless, as he rightly says, serious hospitalisation cases and deaths were to increase suddenly?

[Lord Kamall (Con)]

My noble friend makes a very important point. You always have to look at these things in the round and you have to look at the trade-offs. Many noble Lords will recognise that, when we went into lockdown, there were build-ups in many parts of the NHS backlog and an increase in people suffering from mental health issues—the numbers were even larger than they were before—so clearly, we have to look at this as a trade-off. We have a living with Covid strategy. We constantly get updated by the UKHSA, which is looking at all this data. We are ready to stand up should we need to.

Social Care: Adults

Baroness Altmann Excerpts

Wednesday 22nd June 2022 Lords Chamber

[Lord Kamall (Con)]

Many noble Lords recognise the challenges faced by not just this sector but all sectors, during Covid. One issue we have been looking at for many years, over subsequent Governments—we discussed this during the Health and Care Bill—is that social care was seen as a Cinderella service for many years. For the first time, thanks to noble Lords’ support, we managed to get the Health and Care Bill through to have a properly integrated health and care system. We are also looking at how we can make sure that we properly understand the health and care landscape, with the register and the hub, and that it is a vocation that more people find attractive.

[Baroness Altmann (Con)]

My Lords, I urge my noble friend, in light of the extraordinary number of vacancies in the social care sector—more and more staff are leaving to join other sectors—to urge the Government to revisit the Immigration Rules that do not allow overseas care workers, who could fill those gaps, to come in. We have a special system for agricultural workers; surely my noble friend agrees that we must not put picking fruit and vegetables above the needs of the most vulnerable in our society.

[Lord Kamall (Con)]

I thank my noble friend for the question, but make the point that it is important that we look not only to our domestic workforce but to recruit people from far and wide to fill those gaps. We have always done that. As I often say from this place, we must remember that public services in this country were saved by people from the Commonwealth after the war. They played a very important role in making sure that this country and its public services recovered after the war. On recruitment from overseas, on 15 February, we added care workers to the health and care visa and shortage occupation list, allowing these roles to be recruited from overseas. We hope that will enable us to fill thousands of eligible vacancies.

GP Access

Baroness Altmann Excerpts

Tuesday 7th June 2022 Lords Chamber

[Lord Kamall (Con)]

I thank the noble and gallant Lord for the question. The important point is that sometimes the assessment is done at a local level, sometimes it is done at an overall level and sometimes the department gathers the statistics. As we modernise and digitise the system, a lot more of that information will be able to be processed centrally, so that we can understand where we need to have better planning and to redeploy resources to meet the needs in certain areas.

[Baroness Altmann (Con)]

My Lords, my noble friend mentioned pensions. I urge him to speak to his colleagues in the Treasury about the own goal being created by the pension rules. Doctors are being hit with an annual allowance, but the lifetime allowance is then driving early retirement, with a simple 20-times multiple making it worth while for them to retire in their 50s, as soon as they can, rather than wait for a penal tax charge on a higher pension later.

[Lord Kamall (Con)]

I thank my noble friend for the question. A request I have often had at this Dispatch Box is to go and speak to my colleagues in the Treasury. We understand that early retirements are a key factor impacting GP retention. If you look at the demographics of the workforce, there are people close to retirement age who are saying, “I’m burnt out after Covid, and therefore I want an easier life.” Clearly, the other issue we are looking at is the lifetime allowance. There are some instances where the GPs may be better off staying in, but we have to make that quite clear. There has not yet been communication. We continue to engage with the Treasury on a variety of issues, and I hope to continue doing so.