Rishi Sunak: Pension tax breaks will cut NHS waiting lists, says PM

Rishi Sunak has defended his pension tax cuts for high earners, saying they will help the NHS by keeping doctors in work.

In an interview with BBC Breakfast, the prime minister said the changes, introduced at last week's Budget, would help lower waiting lists.

He added that current pensions rules were preventing doctors from taking extra hours.

But Labour has branded the cuts an unfair tax break for "the richest 1%".

It has vowed to reverse the changes if it wins power at the next election, and instead put in place new rules targeted specifically at doctors.

The party will vote against them later when Budget measures are put to a Commons vote - although they are still expected to pass.

Under the Budget plans, the £1.07m limit on how much individuals can put into their pension pot before having to pay extra tax will be scrapped.

The annual tax-free allowance on pensions will also increase from £40,000 to £60,000.

Mr Sunak told the BBC that the changes were required because the current allowances were pushing doctors into declining overtime shifts or into early retirement.

"This is about cutting waiting lists," he said. "We need our best doctors, our experienced doctors, we need them working".

"Because of the pension regime, they were stopped from doing that. It was preventing them from doing that.

"I want to get the waiting lists down, and that's why we've made the change that we've made, and it's going to benefit everyone to get healthcare quicker."

However, he could not put a specific estimate on how many would choose not to retire as a result of the changes.

Government financial watchdog the Office for Budget Responsibility says the changes will cost £1.1bn a year by 2027/8 and boost overall employment by 15,000 workers.

However, Labour has argued the changes are the "wrong priority" amid pressure on lower earners from rising living costs, calling them a "billion pound pensions bung" for the wealthy.

It says a tailor-made solution for doctors would be fairer, although it is yet to offer details of its alternative approach.

The party has suggested it could be modelled on an existing pension scheme for judges, under which the tax-free allowances are disapplied.

Chancellor Jeremy Hunt has also pitched the pensions tax cuts as part of a wider drive to reverse a post-pandemic rise in the number of wealthy workers opting for early retirement.

Mr Hunt has also said changing the overall allowances would help the NHS quicker than designing a bespoke scheme for doctors.

John Glen, his deputy at the Treasury, has also previously suggested other highly-paid public sector workers, such as senior civil servants, could take legal action if tax breaks were only offered to doctors.