Liz Truss has pledged to halt the exodus of doctors from the NHS to tackle the Covid backlog and surging waiting lists.
The frontrunner in the Conservative leadership race is planning to unveil a series of radical reforms that will stop doctors from retiring early and entice retirees to return.
One in 10 consultants and GPs is expected to retire in the next 18 months because of pension rules that mean they are “paying to work”.
It comes amid concerns that the NHS backlog after lockdown is causing more than 1,000 excess deaths per week – more than the figure now killed each week by coronavirus.
The Telegraph has learnt that the backlog would be one of Ms Truss’s top three priorities in Downing Street, alongside measures to broaden the UK’s energy supply and cut taxes.
A source close to her said she would deal with it by “cutting red tape and dealing with issues in the pension and tax system that currently act as barriers for people wanting to return”.
Under draft plans being considered by Ms Truss, doctors will be able to continue working after reaching their lifetime pension cap, without paying taxes that mean thousands choose early retirement.
Higher-earning medics at the end of their careers have been hit with tax bills that have forced them to reduce their hours. Nearly seven in 10 surgeons said in a recent poll that they had reduced their NHS workload as a result.
The lifetime pension cap, which Rishi Sunak froze last year at just over £1 million until 2026, is the amount you can save into a pension tax-free.
A second cap applies to the amount that can be saved in a pension each year without incurring tax bills.
Doctors cannot opt out of paying into their NHS pensions, even if they have already reached the cap – which can result in costly bills if they continue working full-time.
Ms Truss’s campaign is also considering plans to introduce a national “retire and return” scheme that would replace a smattering of ad hoc programmes in individual NHS trusts, where staff have returned to work part-time on low-paid, short-term contracts.
Retired doctors could have pension rules that limit their part-time earnings relaxed, while lengthy retraining courses would be reduced.
Red tape forcing retirees to complete unnecessary training courses on their return will also be cut, after a drive to hire back retired staff to administer vaccines during the pandemic stalled when recruits were required to provide 21 pieces of evidence – including of training in the Government’s Prevent Radicalisation programme.
Ms Truss’s plans to solve the backlog come as:
- Sir John Redwood, who is expected to be appointed as a Treasury minister if she wins, called on her to rip up fiscal rules and take inspiration from Margaret Thatcher
- Arlene Foster, the former first minister of Northern Ireland, backed Ms Truss for the leadership and claimed the Foreign Secretary is the best candidate to counter threats to the Union
- Rishi Sunak pledged to wage war on Left-wing lawyers and branded himself the campaign’s “underdog”.
Ms Truss is understood to be examining plans by Parliament’s health and social care committee, which last month recommended that the NHS pension scheme be remodelled to “prevent the haemorrhage of senior staff”.
The scheme is structured so that the highest earners, such as senior consultants and GPs, automatically pay up to 14.5 per cent of their earnings into their pension pot. Lower earners pay less.
But medics who have reached the lifetime pension allowance, which is currently set at £1,073,100, or their annual allowance are then taxed on their contributions.
Doctors could be allowed to voluntarily stop paying into their pensions once they have reached the cap.
A recent poll by the Royal College of Surgeons of England found that 69 per cent of respondents had reduced the amount of time they spent working in the NHS as a result of changes to pension taxation rules. The British Medical Association has estimated that 10 per cent of Britain’s consultant and GP workforce will retire in the next 18 months if action is not taken to avoid the “pension trap”.
Pensions would also be reformed for retirees returning to the health service.
Ms Truss is understood to be considering scrapping a rule that bans returning staff from earning more from their pension and pay combined than they would earn working full-time.
A source close to her said: “The Covid pandemic put unprecedented strain on our NHS, and the resulting backlog is seeing people struggling to get appointments and treatments. We must act to tackle it, and we will.
“We will make it easier for doctors and nurses who have recently left or are planning to leave the NHS but want to return or stay to do so.”
The latest figures show a record 6.73 million people are now waiting for NHS treatment, compared with 4.2 million before the pandemic.
The number of patients waiting more than a year for treatment has risen to 355,000 – seven times the same figure in June 2020.
Dr Brian Guttridge, chairman of the BMA’s retired members committee, said: “It is absolutely within the gift of the next prime minister to stem the exodus of senior, highly experienced doctors from the NHS.
“We have long called for the end of punitive pension taxation rules that mean for far too many it simply doesn’t pay to stay. Putting this right would be an important step forward.”
Dr Guttridge called for “decent working conditions and flexibility” for doctors returning to work and warned that staff rejoining the NHS during the pandemic were faced with “excessive hoops through which many had to jump”.
In an interview on Saturday, Ms Truss also said she would reform IR35 rules to make the UK’s tax regime more generous for the self-employed.
“The fact is, if you’re self-employed, you don’t get the same benefits as being in a big company,” she told The Sun on Sunday. “You don’t get paid holidays, you didn’t get those benefits. So the tax system should reflect that more.”
Sources in both campaigns told The Telegraph they believed the turnout in the election was likely to be lower than in 2019, when 87 per cent of Tory members voted.
It is thought many are frustrated about Mr Johnson’s resignation and will refuse to vote or spoil their ballots in protest.