GP surgeries could be “tipped over the edge” by Labour’s new Budget, according to a union representative.
Chancellor Rachel Reeves has chosen to hike up Employers’ National Insurance contributions in her efforts to raise £40bn of funds and plug the “black hole” left by the Tories in the public purse.
The NHS – which has just received a £22.6bn cash injection in the Budget – is exempt from that tax rise, along with other public sectors.
But GP surgeries, care homes and hospices are not exempt, even though they provide NHS services, because they are privately owned partnerships.
Speaking to Times Radio today, the chair of the BMA Council Phil Banfield warned: “For some GPs, this will tip them over the edge. And we’ve seen over 1,000 practices close in the last 10 years.”
He added that he believes “the government was unaware of how much this would catch out GPs” and so he is hoping for further discussions with the health department.
Banfield said for GPs – who have a contract with the government – “the only way to absorb costs is to reduce the number of staff and at a point at which you’re trying to increase the number of appointments and increase access have more GPs and nurses”.
He added: “This achieves the complete opposite. So I don’t think it will take too long for the government to realise that they need to do something urgently about this.”
Chief secretary to the Treasury, Darren Jones, told Times Radio this morning: “Yes, [GPs] will have to pay national insurance contributions as employers, but how much they pay will depend on their size.
“And you know, many GP practices are small organisations, and so they will pay less than some of the bigger businesses that we’re asking to contribute more at this Budget.”
Smaller GP surgeries may be shielded from paying more tax because of the changes to thresholds for Employment Allowance.
However, there are worries that some public bodies doing more than half their work in the public sector will not eligible for that allowance, as stated by government guidance.
Health secretary Wes Streeting also pointed to the £600m extra put aside for social care and suggested more discussions about the employer tax hike for GPs were on the table.
But care groups think that will not be enough due to increased staffing costs.
Dr David Wrigley, GP and deputy chair at the British Medical Association, said the impact would be “monumental” on X, especially since so many of those institutions are already “on a financial tight rope”.
Liberal Democrat Treasury spokesperson Daisy Cooper MP said: “The government must scrap this GP penalty immediately.
“After years of the Conservatives disgraceful neglect, our primary care services are in crisis and this could push many to reduce the number of staff they employ or just decide to shut up shop.
“Instead of investing in our GPs and their staff, the government has put more pressure on them in a move that will make it even harder for patients to see a GP when they need to.”
This row comes as nearly 100 progressive politicians, including independent MPs like Jeremy Corbyn and MPs from the Green Party and Plaid Cymru, banded together to declare that Labour’s Budget punishes the “working people” they claim to support.
“This budget is austerity in another name,” their open letter to Starmer says.
It adds that the investment in schools and hospital buildings have been “undermined by a swathe of public sector cuts, cruel attacks on the worst-off, and a dogmatic refusal to redistribute wealth and power”.
“These are not ‘tough choices’ for government ministers, but for ordinary people who are forced to choose between heating their home and putting food on the table.”
