Nurses' leaders accused the government last night of imposing "a massive pay cut" on all NHS staff when it emerged that ministers want to peg next year's pay rise to 1.5%. Unions believe that the chancellor, Gordon Brown, intervened to reduce the offer that the health secretary, Patricia Hewitt, thought hospitals should be able to afford.
The chancellor insisted that doctors, dentists, nurses, midwives and other health workers should be held to 1.5% in the annual settlement for 2007/8 - well below the inflation rate of 3.6% in the most recent retail price index.
Ms Hewitt is understood to have fought for more, but eventually accepted Mr Brown's ruling. Yesterday she recommended the 1.5% in a submission to the independent review bodies which set the pay for professions that are unable to strike for higher earnings without compromising their patients' safety.
In an unusually stern warning, she said a more generous settlement could force NHS trusts to shed staff, reduce overtime, or cut services. An extra 0.5% would cost £107m - equivalent to the salaries of 3,300 qualified nurses, 1,200 doctors or 51,000 operations, she added.
A Whitehall source confirmed that the submission to the review bodies had been delayed by a disagreement with the Treasury, but would not disclose the size of the offer Ms Hewitt would have preferred.
The health unions were already at odds with the government over its plans to "privatise" parts of the NHS and promote competition between state-run hospitals and independent clinics. Although they have done well in recent annual settlements, their leaders consider the latest offer to be derisory. Beverly Malone, general secretary of the Royal College of Nursing, said: "This is a massive pay cut for nurses living in the real world where prices rise and inflation bites. It is a slap in the face for nurses whose commitment and dedication have helped to bring down waiting times and improved patient care."
Karen Jennings, head of health at the public service union Unison, said: "A 1.5% pay increase works out at less than 2p an hour extra for newly qualified nurses and paramedics.
"I don't like the threatening tone of the Department of Health's evidence. It is outrageous to suggest that unless staff take what is effectively a pay cut, jobs will go and patients will suffer. This is completely unnecessary when the Treasury has pledged an 8% increase in the NHS budget next year," Ms Jennings said.
James Johnson, the BMA chairman, said: "This is an attempt to claw back the pay increases resulting from the contracts introduced for consultants and GPs in the last few years. We don't negotiate contracts in good faith for them to be whittled away over the succeeding years. Doctors ... deserve a pay rise that reflects their hard work, not one that erodes the value of contracts the government agreed to."
The department said nurses and other healthcare staff get annual increments on top of any rise in basic rates of pay. As a result, average earnings across the NHS would rise by 4% next year, in line with the rest of the economy.
A spokeswoman said: "The NHS is facing a challenging financial period with the need to change a £512m deficit in 2005/06 into lasting financial balance. A period of pay restraint is necessary to support the NHS in achieving that lasting balance."
