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NHS pension proposals: the war of words as it happened

A war of words has broken out between the BMA and the Department of Health following the former’s survey of members’ opinion on the latter’s NHS pension proposals.

Eighty four per cent of BMA members who responded to the survey said the latest proposals should be rejected. Nearly two-thirds said they would personally be prepared to take industrial action to pursue changes to the proposals.

But the health secretary is not for turning. Far from being intimidated at the prospect of industrial action, he has dismissed the prospect of further negotiation of the proposals out of hand.

Following the rebuff, the BMA is organising a summit this week to discuss shared concerns and priorities on the Health Bill with all the medical royal colleges, and is exploring the potential for a ballot on industrial action.

Here’s the full correspondence:

18 January 2012

Dear Secretary of State

NHS Pension Scheme

Following an overwhelming call from doctors to reject the government’s proposed changes to the NHS Pension Scheme and a willingness to undertake some form of industrial action, I am writing to ask you urgently to reconsider your plans.

BMA Council met today to discuss the results of our survey of 130,000 working doctors and medical students and agreed that, given the demonstrable scale and strength of feeling across the profession, the proposals must be rejected. The survey results are enclosed.

Council agreed that all efforts must now be made to engage government to agree fairer changes, in partnership with other organisations representing NHS staff. There was an appreciation that any form of industrial action by doctors would be an absolute last resort.

As you know, NHS staff are at the forefront of attempts to achieve the government’s £20 billion efficiency savings target, while trying to protect patient care; they are in the midst of huge system reform in England; and many are now about to enter the fourth year of a pay freeze. To have wholesale changes to their pension, particularly for those who will have to work until they are 68 before they can draw their full pension, is for many, the final straw. This is compounded by the fact that the NHS Pension Scheme was overhauled to achieve long term sustainability only four years ago.

BMA Council will meet again on 25 February to decide on the options for balloting for industrial action.

Doctors do not take the possibility of industrial action lightly. There has been no industrial action by doctors for almost 40 years. We want to do all we can to avoid action now. Therefore, I urge you again to work with us – and other NHS trade unions – to find a fairer way forward.

My office will be in touch to arrange an urgent meeting.

Yours sincerely

Dr Hamish Meldrum

18 January, 2012

Dear Hamish,

Thank you for your letter earlier today and for your telephone call. As I told you, I am happy to meet.

I should also reiterate that, as we discussed, the Heads of Agreement, which you and the other trade unions signed before Christmas, was the best possible deal available.

I have the interests of the NHS at heart. I want NHS staff to be supported and properly rewarded. The major enhancements to the pensions scheme on offer during our discussions, which enabled us to reach the Heads of Agreement, reflected this – and I was glad to be able to participate personally in discussions with the NHS trade unions.

The NHS pension scheme will be amongst the best available anywhere. Doctors within 10 years of their expected retirement will get the same pension they expected, when they expected it.

I know you are concerned about young doctors. A consultant aged 40, under the new scheme, could expect to retire at the state pension age with a pension of over £61,000 a year and a lump sum of around £171,000. A junior doctor, aged 24, could expect to receive a pension of around £68,000 a year at the normal pensionable age of 68, or a pension of over £53,000 at age 65 if he/she chose to retire early.

With tax relief, a consultant earning over £100,000 per year from April 2012 will be paying a contribution rate of 6.54%; a similar rate to that of a nurse earning £30,000 (6.4%).

This means that doctors can typically expect to receive around £4 in benefits for every £1 of contributions.

You will understand why I believe this is an excellent deal, which your membership should accept. Of course, we can meet and there are issues we can discuss when we meet, but you know that I will not re-open the Heads of Agreement which you signed.

I should also and particularly emphasise again the point I made to you on the telephone. There is no justification for industrial action. It would harm patients. No concessions on the issues you raised in your letter or on any other issues will be won through the threat or use of industrial action. Nor will the public accept, nor understand, how you can sign up to an excellent deal and walk away from it on the strength of an informal survey to which less than 36% of all your members responded.

Yours,

Andrew Lansley

19 January 2012

Dear Secretary of State

NHS Pension Scheme

Thank you for your swift response to my letter yesterday. I am concerned, though, by both the unconstructive tone of your reply and by the inaccurate portrayal of the situation.

As you know, the BMA did not sign up to the government’s proposed changes to the NHS pension scheme. Along with the other unions, we agreed to take the offer back to our members, and that is what we did.

Doctors have now said, very clearly, that they do not accept the proposed changes. They have also said that, for the first time in a generation, they would be prepared to take industrial action. This is something that they find extremely hard to contemplate and reflects the strength of feeling in the profession.

Industrial action would be a last resort, taken only if we are unable to find an acceptable way forward.

The reason that so many doctors have rejected the proposals is not because they want bigger pensions, as you imply. The example you give of a 40-year old consultant avoids the real issues. A doctor in that situation would have to work seven years longer to draw their full pension – until they are 67 – and would have to pay twice as much into the scheme, and would then receive five per cent less over the course of their retirement.

Such a doctor would also have agreed to the major overhaul of the NHS pension scheme as recently as 2008 to make it sustainable for the future and which included a significant hike in employee contributions. He or she would also know that the NHS Pension Scheme is currently providing an annual surplus of £2billion to the Treasury and that employees, not employers, have taken on the responsibility for keeping the scheme sufficiently funded into the future.

NHS staff have legitimate and strongly felt reasons for feeling let down by the government’s actions on their pensions. I really urge you to work with the BMA and the other health sector unions to agree a fairer way forward and I am happy to take up your offer of a meeting to discuss these issues.

Yours sincerely

Dr Hamish Meldrum

Chairman of Council, BMA

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