CAB129-37 — Page 478

SECRET

Page 478

Printed for the Cabinet. November 1949

246

Copy No.

31

C.P. (49) 220

1st November, 1949

CABINET

STABILISATION OF SALARIES AND WAGES IN THE NATIONAL HEALTH SERVICE

MEMORANDUM BY THE SECRETARY OF STATE FOR SCOTLAND AND THE MINISTER OF HEALTH

We have been considering the application to the National Health Service of the statements about the stabilisation of personal incomes which the Chancellor of the Exchequer made in the House of Commons on 27th September. An extract from his speech is reproduced as an Appendix to this memorandum. In advance of any general statement by the Government on wages policy, the Minister of Health proposes that the Health Ministers should bring this extract to the special attention of the Whitley Councils for the Health Services (on the Management Side of which they are represented), and should impress on them that all dis- cussions about salaries and wages must be conducted in accordance with the principles it sets out. The Secretary of State for Scotland considers that this might be open to objection as bordering on interference with wage-negotiating machinery, and that it would be no less effective if the Chancellor's statement were introduced into the discussions on the Whitley Councils by the official members of the Management Sides in the usual way.

2. Such action will, we hope, lead to claims which are pending being in general either deferred or rejected. With regard to the claims at present under consideration, there will in some cases be special difficulties in applying the broad principle of income stabilisation to the particular case. We set out below the sort of cases that we have in mind and the lines that we should like to follow in dealing with them.

3. The difficult cases fall into six broad groups :-

(i) There are a number in which an agreement has already been reached but has not yet been published. An example is the basic nursing grades in tuberculosis and fever hospitals. Here new salaries have been agreed as part of the general settlement covering the basic hospital grades (the other parts of which have already been published), but they are not yet being paid. Our proposal would be to honour agreements of this sort and to proceed with publication.

(ii) In at least one instance, an offer has been made by the Management Side but has not so far been accepted by the Staff Side. Here again our proposal would be not to withdraw an offer already made.

(iii) In another case, an impossible anomaly would be created if the situation were left entirely as at present. This has arisen with nurses' salaries because we have dealt with the basic grades of hospital nurses but have not touched the higher grades. In accordance with the Chancellor's statement it would not be our intention to carry upwards the amount of the revision which has been made at the bottom, but at the moment a Ward Sister who is promoted to certain higher posts (e.g., Depart- mental Sister) actually loses money, and such an anomaly clearly cannot be allowed to continue.

Page 478

37Page 478 of 1097

2