MPs from opposition parties have urged the Government to ‘rethink’ the Autumn Budget tax hikes due to concerns that these will threaten the viability of thousands of GP practices.
The ‘deeply damaging’ impact of the hikes was debated in the House of Commons this week as several Conservative and Liberal Democrat MPs pointed out that the tax changes will force more practices to close their doors, let go of staff or face bankruptcy.
It comes after GPs raised serious concerns that following the announcement of the rate of employer National Insurance Contributions (NICs) increasing to 15%, as well as the National Living Wage (NLW) rising to £12.21 an hour, practices will have to pay thousands more from April next year.
The BMA said that seeing this issue debated in Parliament means that political pressure is ‘mounting’ as a result of GP collective action, and urged practices to continue to write to their MP so they ‘can keep pushing the Government to address the NI contributions problem head on’.
MPs also pointed out that if GPs are ‘not adequately reimbursed’ for the hikes, the Government will ‘erode’ the value of the investment that they ‘claim to be making’ in general practice.
During Prime Ministers’ Questions yesterday, Lib Dem MP Martin Wrigley told the House that GP practices in his constituency of Newton Abbot have written to him ‘detailing their precarious finances’.
Mr Wrigley said: ‘They are considering their options as they plan for the year ahead, including redundancies, handing back their contracts or bankruptcy, and they have stopped recruiting GPs, resulting in fewer patient appointments.
‘The health secretary has promised an increased funding allocation but has yet to say when we will know how much it will be.’
The Prime Minister responded that MPs were ‘right to raise this’, and added: ‘We do obviously value the vital work of GPs and we consult every year with the sector about the services they provide and the money they are entitled to in return, and we will set that out in the usual way.’
During a different debate specifically on the National Insurance Contributions Bill, Conservative shadow health minister Dr Luke Evans pointed out that MPs had already heard the Prime Minister say this ‘a number of times’, but that GPs need reassurance now about funding allocations for next year.
Dr Evans, who is a GP, said: ‘We are six weeks on from the Budget and health services are trying to decide what to do now. They cannot wait.’
And Conservative MP for East Hampshire Damian Hinds said he also heard from many GPs who see the Government ‘giving with one hand and taking away with the other’.
‘The Government will take care of this in the settlement for GPs, which is fine, but it should have come on top of what they should have been doing for GPs anyway,’ he added.
The Budget fallout in brief
Since the chancellor’s announcement during the Budget at the end of October, the Treasury confirmed that funding has been set aside to protect the spending power of the public sector, including the NHS, from the direct impacts of these changes.
But GPs have been excluded from this, as the funding to offset the increased NICs costs does not include support for the private sector, including ‘private sector firms contracted out’ – with GPs generally operating as independent businesses for this purpose according to the Treasury.
The BMA have demanded the Government reimburse practices for increased NICs and asked GP partners to write to their MP demanding a U-turn from the Government.
The DHSC confirmed to Pulse that further detail on NICs for GPs will be confirmed in due course, and that it is working with the Treasury to ensure appropriate compensation for the public sector.
More recently, in a letter sent to GPC England chair Dr Katie Bramall-Stainer, health secretary Wes Streeting said the Government was looking at finalising the GP funding envelope for 2025/26 over the ‘coming weeks’.
His comments came after Prime Minister Sir Keir Starmer said that funding decisions to allay concerns about increased national insurance contributions for GP practices would be made before the end of the year.
For Pulse’s analysis of the budget, read: A Budget seemingly designed to punish GPs
Ben Obese-Jecty, Conservative MP for Huntingdon, urged the Government to ‘rethink’ and ‘have the moral courage to take ownership of their mistake’.
He paid tribute to Cambridgeshire LMC for raising the fact that the average GP surgery in their area will face increased costs of approximately £48,000 because of the hikes.
Mr Obese-Jecty added: ‘That money is equivalent to the salary for three and a half sessions of a newly qualified GP, one full-time equivalent nurse, and almost two full-time healthcare assistants.
‘Added to that, a GP who has served Huntingdon for 30 years told me that the increased costs might see many practitioners hand back their contracts.’
He said that local GPs told him that told him that an ‘estimated black hole’ of £37,000 is causing ‘great concern’ not only about their future plans, but because it ‘risks more young professionals leaving the NHS’.
He added: ‘The impact that the measure will have on NHS provision is deeply damaging and must be reviewed.
‘If they go ahead with this policy, we will see people lose their jobs, businesses be unable to expand, care provision stretched even further, and working people suffering.’
Lib Dem spokesperson for primary care Jessica Brown-Fuller said that the added costs will ‘exacerbate strain in the system’, because ‘overstretched and under-resourced’ GPs will lead to an increase in hospital admissions, ‘overwhelming NHS capacity at a time when it already cannot cope’.
‘The health secretary talked of moving the health model in this country from treatment to prevention and from hospital to community, but the increase in NICs directly undermines the ability to do that, if GPs have to reduce their services,’ she added.
Daisy Cooper, Lib Dem MP for St Albans, said GPs are having to make decisions now ‘on freezing recruitment’ and not providing wage increases, so there is ‘real urgency’ to rethink this measure.
She said: ‘They are all incredibly worried. None of them has been given a guarantee that the money being taken away with one hand through the rise in employer’s national insurance contributions will be given back through the renewed contracts with the NHS.
‘We oppose this tax, but if the Government will not reverse it, we urge them at the very least to exempt health and care providers.’
The BMA has also published a parliamentary briefing for MPs on the impact of the tax hikes pointing out that it is ‘completely inappropriate’ for Government to introduce these ‘unfair’ charges when practices have to plan their spending at least 12 to 18 months ahead to ensure they remain viable.
It said: ‘We are calling upon the Treasury, alongside the Department for Health and Social Care, to provide absolute certainty, at the earliest opportunity, that GPs, as designated public authorities, will be exempt from the NICs employer contribution rises and or funded in full for this additional financial burden.
‘We cannot afford a delay in this announcement as practices are considering all their options
right now.’
Last month, LMC leaders declared that the Autumn Budget tax hikes will make NHS general practice unsustainable as a business model.
In response to the serious concerns, GP leaders have determined that a ‘special conference’ will be required ‘to discuss and determine what escalatory steps will be needed to ensure the survival of what still remains of English general practice’.
Employment taxes and minimum wage harm businesses, who knew?