Nurses' Pay

HC Deb 06 November 2002 vol 392 cc97-117WH

11 am

Mr. Andrew Lansley (South Cambridgeshire)

I am grateful for the opportunity to discuss the important issue of nurses' pay. Although I have wanted such a debate for a long time, owing to the happy way in which parliamentary affairs are conducted, I have secured the debate in the week when the Royal College of Nursing published the results of its 2002 membership survey.

My starting point is in my constituency, as hon. Members customarily expect. Addenbrooke's hospital is in my constituency, and last Friday I had the privilege of attending the annual lecture there at which David Lomas, a consultant physician, was explaining the ground-breaking work being done there on emphysema and genetic predisposition. During the lecture, he illustrated how nurse practitioners work with emphysema patients to facilitate a quick return home and reduce demands on the hospital while providing a service that patients find more acceptable and that enables them to live at home independently.

Addenbrooke's is right at the front rank of this country's hospitals. Ground-breaking research that is of the highest quality in the world—the hospital leads an international network of researchers on the subject—is combined with the finest nursing practice. However, the hospital faces severe difficulties. The turnover of trained nurses and midwives is 12 per cent. and the vacancy level for nursing staff is 9.5 per cent. Many vacancies exist for surgery and gynaecology nurses. There is a 22 per cent. vacancy level for midwives, which shows the difficulty of replacing staff who leave.

The consequences of a lack of suitable nursing staff are only too clear. Beds are being closed, and a Select Committee heard a couple of weeks ago that the rate was the equivalent of closing a 30-bed ward in Addenbrooke's every day. Bed use rates in the hospital are driven even higher: they are currently about 98 per cent. The Minister and hon. Members will know that the Department of Health wants rates that are nearer 82 per cent. The Audit Commission report published the other day made recommendations about the rates of bed occupancy in hospitals that would allow accident and emergency facilities to work most effectively and allow onward referrals from them without long waits. High bed occupancy rates cause not only long waits but the cancellation of elective surgery. That is a serious problem at Addenbrooke's from time to time and it is an issue in summer as well as winter.

That all causes nurses' work load to increase. High occupancy levels cause an additional work load, and I suspect that we all know that nurses' work loads are much higher now. In the past, convalescent patients would have been present on wards and patients would spend more time in hospital before being discharged. There is now every pressure to work intensively to discharge patients and release beds as quickly as possible. The vacancy levels that I have discussed are compared with the funded establishment level. They are not necessarily sufficient for today, given the intensity with which beds are being used and the extended role of nurses.

Addenbrooke's is in a high-cost area, one of the highest outside central London. It is an exciting hospital to work in. It aspires to, and reaches, the highest standards of clinical care, and has some of the best family-friendly policies in the country. However, the nursing staff are increasingly hard pressed and increasingly hard to recruit and retain.

How can we break that cycle of problems and deliver NHS growth? An issue that is currently being considered at the local level is key worker housing. I acknowledge the benefit that that can provide—we have seen the benefit of housing association provision alongside the Addenbrooke's site—but the numbers are limited. I do not want us to return to the situation in which most NHS staff must live in what is in effect tied housing, because we pay them substantially below the market rates for people working in that location.

The purpose of the debate, from my point of view, is to decide the question of nurses' pay and the contribution that it could and should make to the resolution of these problems. The last debate on nurses' pay in the House was held in January 1999. Much has changed, and it is highly desirable that the Minister and hon. Members have an opportunity to debate the issue. I support the concept of an independent pay review for nurses, so why debate it here? We should debate it for several reasons.

First, the Government's evidence to the pay review body, and the view that they and their Departments take on recruitment, retention and affordability, is a substantial aspect of the process of pay review. Secondly, the agenda for change negotiations, which should now be reaching a conclusion, should represent a substantial long-term development in extending the role of nursing staff in the provision of care, and should be accompanied by a restructuring of pay to reflect the additional responsibilities. That is, of course, a direct Government negotiation. It is not being negotiated through the independent pay review body but will be referred to it after the conclusion of the overall negotiations. I hope that the Minister will tell us something about that.

Thirdly, a great deal of taxpayers' money—one sixth of Addenbrooke's budget—is spent on nurses' salaries. The Government are accountable for their advice on that aspect to the pay review body, and for the value that they attach to the contribution of nurses to the NHS as reflected in pay. It is equally incumbent on us in Parliament to have the opportunity to reflect on that value and on how the Government represent the public sector's and the taxpayers' view.

Mrs. Anne Campbell (Cambridge)

I congratulate the hon. Gentleman on securing the debate, which I agree is extremely important for Cambridge and especially Addenbrooke's hospital, but does he agree that the long-term solution to the very high costs in and around Cambridge is to release more land for building? Will he consider the fact that his objections to the county council's structure plan, if I understood them correctly, would be likely to result in the release of less land for building, so continuing the upward spiral of house prices and making the situation much worse?

Mr. Lansley

I am grateful to the hon. Lady for her remarks about the desirability of the debate. She was present at a previous debate in the Chamber on the Cambridge green belt, and will know that on, I believe, 13 November, at the examination in public on the Cambridge structure plan, I will make my argument about the desirability of limiting building on the green belt around Cambridge because of its incompatibility with the purposes of the green belt. That does not mean that there should be a limitation on the number of houses to be built. There is no argument at the examination in public about the fact that the Cambridge sub-region should build at the rate of 200,800 additional homes a year, only about where those houses should go. I am afraid that her point is irrelevant to the debate, because the houses could as readily be at Waterbeach, for example, with a shuttle-train access from there to the Addenbrooke's site that would take 13 minutes, as in Cherry Hinton or the airfield site, where people would have to use buses, which would take 25 minutes. We may argue about where the housing should be, but I will not take a lecture on the Cambridge green belt.

Nurse recruitment from overseas is a valuable, and possibly essential, part of our response to nurse recruitment difficulties in the short term, but it is a risky long-term strategy. To increase recruitment to nursing to the required extent in a tight labour market will require an increase, not a decline, in pay for nurses relative to the labour market as a whole.

Changes in responsibility and extending the role of nurses are desirable, and will necessitate changes in pay structures and levels, but such changes are complementary to the issue of nurses' general pay level, not a substitute for tackling it. In our previous employment, if we were told that there was to be a restructuring that would lead to new responsibilities, we would all probably have expected additional pay. However, for those who do not expect that, that is no reason for them not to receive pay that reflects the genuine labour market in their professional area.

Comparability is not the primary basis on which to assess pay—although it should not be ignored—since pay is rarely the reason why nurses find their job rewarding, but poor pay in nursing, as in any other walk of life, is a substantial demotivating factor, and will cause lack of retention. A significant part of nurses' perception of whether their pay is good or poor is the comparisons that they make with the rest of the public sector.

The serious recruitment and retention problems in some NHS trusts often reflect the relationship between high labour cost areas and the adherence to national pay scales. If trusts are to be free to pay in excess of national pay scales, as they are in theory, or if foundation hospitals enjoy such a freedom in due course, those foundation hospitals must be assured that they will have the resources to back that up. That is a matter for the contracting bodies—the primary care trusts—whose resources reflect the relative costs of providing a service in that area. Addenbrooke's is, of course, one of the hospitals that is most likely to apply for and receive foundation status, having achieved a three-star rating on two successive occasions.

The determination of nurses' pay must be a matter for independent review and recommendation. No reasonable level of pay increase is likely to be recommended that could not be funded from the prospective 10 per cent. per annum increases in NHS funding overall. The consequences of failing to act now on pay may be to place in jeopardy the achievement of reform and service enhancement in the future. If we do not demonstrate that we value the work that nurses do, the loss of trained nursing staff will accelerate, and no amount of target setting by Ministers will stop the beds and theatres lying idle while patients wait.

The evidence this year to the pay review body from the staff side sets out many of those factors. In the past five years, the number of registered nurses in England has increased by 20,000 on a whole-time equivalent basis. In Scotland, Wales and Northern Ireland, the number decreased between 1996 and 2000. However, given that over the same period there have been 35,000 overseas registrations, and even allowing for the limited length of time of some of those registrations, it is reasonable to say that the increase that has occurred in the nursing work force has been through overseas recruitment. That can also be seen at Addenbrooke's, where some very successful recruitment operations have been undertaken, and Filipino nurses, for example, do an excellent job. However, we must work harder to continue to recruit from the pool of talent overseas. We constantly have to replenish our resources from it, and the evidence suggested by the staff side to the pay review body is that international competition for good nurses is increasing.

The work force—the national work force as a whole—is expected to grow over the next 20 years, but at a rate estimated at only 0.5 per cent. per annum. Matching the Government's objectives for the nursing work force, however, would require 1.5 per cent. growth per annum. We thus need not only to sustain the nursing work force in a tight labour market but to increase the share of the work force taken by the nursing profession.

Serious divergences remain between the statistically based view of Departments and the evidence of individual trusts and managers that recruitment and retention problems have worsened and are serious enough to justify action by the pay review body. NHS proposals for the consultants' contract and for GPs have offered substantial—about 20 per cent.—increases in remuneration in return for reform. At the same time, the role for non-medical staff is growing, through more nurse prescribing or, as at Addenbrooke's, through innovative proposals for emergency nurse practitioners in casualty departments.

If nurses embrace reform and responsibility, they should expect significant benefits, but not every nurse will be able to do so and we risk demotivating nurses who continue in their existing role if we do not change basic pay levels as well as providing enhancements for extended roles.

On comparability, according to staff side evidence, nurses' earnings have declined from 89.1 per cent. of non-manual average earnings in 1995 to 87.8 per cent. in 2001. After three years in post, a nurse at the top of grade D will earn £17,760 in comparison with £22,992 for a police constable. I may be reaching back into the dim and distant past, but I recall that nurses and police officers were previously viewed as highly comparable. They used to spend some time together, sitting around waiting for patients, victims or offenders to be discharged from hospital. I know about that because my brother married a nurse who was trained at Addenbrooke's hospital. We have come full circle and pay has now diverged. Expenditure on agency staff in the NHS was £570 million last year, nearly four times the amount spent in 1997.

Those examples are taken from the staff side evidence previously submitted. The Royal College of Nursing membership survey was published earlier this week and offers additional significant evidence. Nearly two thirds of NHS nurses felt that their nursing establishment was insufficient to meet patient needs. One third working in hospitals reported that the problem was serious enough to compromise patient care. More and more nurses work in excess of contracted hours, averaging an extra seven hours per week, a quarter of which are unpaid. About 29 per cent. of nurses—the number is increasing—now take additional jobs. Only a quarter of NHS nurses believe that they are well paid for the work that they do. Nine out of 10 regard themselves as not well paid in comparison with other professional groups.

Reductions in grade levels, inappropriate grading and the lack of pay recognition for additional responsibilities are further problems reported in the RCN survey. Such problems undermine the confidence of the nursing profession in the prospect of a pay for responsibilities approach as articulated recently by the Secretary of State in response to the RCN survey. Whereas 72 per cent. of nurses regarded nursing as a rewarding career in the 2001 survey, only 56 per cent. said the same this year.

As the RCN makes clear, the survey results continually come back to two issues: work load and the value that nurses feel that we, by which I mean the public, place on their work. If we do not act, we will end up with a demotivated profession with more and more nurses retiring in future years. A demotivated profession would mean a substantial number of nurses leaving, through both retirement and the attraction of other jobs in a tight labour market. A third of NHS nurses would leave nursing if they could. If that happens, work load pressures will worsen, and the desire to leave will grow, leading to a vicious spiral. Overseas nurse recruitment will not necessarily be sustained, leaving capacity in the NHS unable to grow.

Independent sector health capacity is equally dependent on the supply of trained nurses. The work load pressures in that sector are less great, but I submit that we could not comfortably look to the independent sector to be able to recruit and retain anything like the substantial number of nurses who might leave the NHS.

Agency nursing can help. Agency and bank nursing systems provide a way of filling short-term vacancies, and valuable flexibility in acute care, but they do so at a price. With the hon. Member for Oxford, West and Abingdon (Dr. Harris) present, I confess that I recently saw posts for agency nurses in his constituency advertised at £22.85 per hour. By my reckoning, that is about twice the level of pay per hour that would be available to a nurse on a full-time contract in the same hospital. Demotivation certainly results from such comparisons.

We must consider substantial change to secure an enhanced role for nurses and enhanced pay. In addition, in April 2003, before the agenda for change negotiations can have a substantial effect, we need a general recognition of the need to respond to recruitment and retention pressures for the profession as a whole, to demonstrate the value that we place on nurses, who are instrumental to quality care for patients. Expanding the nursing work force would enable progress to be made towards managing better the work load pressures on the service as it attempts to meet the growing demands for ever more intensive and sophisticated health care.

A few months ago, I participated in a conference led by Papworth hospital, which is in my constituency, on extending the role of non-medical staff as a result of the extensive and important role that nurses will increasingly be taking up in delivering care. In some cases, one might almost characterise the consultant physician as overseeing the role not of other doctors but of nurses providing care. Nurses will work substantially within the protocols and parameters set by medical staff, but with a great deal of independence.

Within the leading NHS trusts, those freedoms must be real if we are to provide the quality and volume of care that is increasingly demanded of us. Those hospitals must be resourced to reflect their activity levels and their costs. They must be able to use that freedom to meet the extra pay or accommodation costs involved in recruitment and retention in a high-cost area.

The Government's evidence to the pay review body must not discount the concerns of nurses, talk up the prospects for more recruitment or retention when the front line appears to know better, or trade off service improvements against nurses' pay. That could prejudice the trained staff whose contribution to the NHS is essential. If service improvements and growth in capacity are to be realised, we cannot put nurses in the invidious position of believing that fair pay for nurses is somehow inconsistent with service improvements for patients.

I should like to know that the Minister understands and accepts those propositions. When—the "when" is quite important to Addenbrooke's—and how will foundation trust status be better defined? I would like Addenbrooke's hospital, which for this purpose is my principal concern, and other hospitals throughout the country to have the freedom to reflect not only fair pay in the labour market in their area but any need that they may have in respect of extending nurse responsibilities. Generally, I want hospitals to be resourced to meet those responsibilities and the costs of recruitment and retention in their area.

When I next meet nursing staff representatives at Addenbrooke's hospital, I want to be able to say that when politicians say that we value the work that they do we will actually have done something about it. That is the purpose of this debate.

11.24 am

Dr. Richard Taylor (Wyre Forest)

I should declare an interest, as I am approaching the age when one might need to rely on one's family: one of my daughters is an NHS nurse.

I congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on the impeccable timing of this debate, which is absolutely staggering. I want to paint a brief picture of the work of an NHS nurse, thinking of a ward sister. She gets into work and finds the chaos of the night. The ward is understaffed, especially in respect of trained staff. She has the stress of achieving acceptable levels of care and of supporting other stressed staff. She has to support the nurses who are doing the jobs of junior doctors under the absolutely appropriate extension of nursing duties. She also has to cope with directives from nurse managers who in some cases appear to be more interested in targets than in staff morale. She gets home late.

In my constituency, because of the tremendous overspending, especially on agency nursing, budget holders have had a two-page letter about improving financial control, particularly with regard to agency nursing. First, there is a set of guidelines; secondly, there are four more detailed steps that the nurse, sister or charge nurse in my example has to go through before being able to consider the use of agency nurses. Compare that with the usually protected existence in the private sector where there is adequate staffing, little if any stress from an unexpected emergency load and working hours that staff can keep to. Compare it, too, with the life of agency nurses who can choose exactly when they want to work. They go in and do their nursing duties and they do not have the responsibility of running a ward. Some agency nurses who are very well motivated may help, but it is not part of their job. They have nursing duties only.

I am extremely concerned about the expenditure on agency nurses to which the hon. Gentleman referred. The Department of Health is not yet able to tell us exactly how much was spent on agency nurses last year, but the estimate of the general secretary of the Royal College of Nursing is about £800 million. In Worcestershire, the acute trust spent £3.3 million on agency nurses in 2000–01 and £4.3 million in 2001–02. In the first five months of this year, the figure is already £4.3 million.

There is a better answer than the use of agency nurses, better even than the proposed use of the Government's own agency: to pay NHS nurses realistically to take into account the stress and responsibility of the job as well as their productivity, thus reducing spending on agencies.

The Minister will recall that in a letter to me in July last year, he said: The key principle is something for something. Rewarding people for what they do, and the roles and responsibilities taken on. Our NHS nurses are extremely productive. They have taken on enhanced roles and responsibilities, which must be respected and recognised.

11.29 am

Ann Keen (Brentford and Isleworth)

I, too, congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on securing the debate, particularly in the week when the Royal College of Nursing is rightly making headlines on this issue. First, I should declare an interest. To my knowledge, I am the only nurse here in the Chamber, and I also still have an association with the Community and District Nursing Association.

I feel very passionately about nursing and nursing care. It is often said that people remember nurses. Well, nurses remember Governments. Nurses have excellent memories. Without wanting to take up hon. Members' time today, I cannot resist the opportunity to point out that I took up my first post as a staff nurse on a busy medical ward on a late afternoon shift on the day when the newly elected Conservative Government took office in 1979. I spent much of my clinical nursing practice under that Government's stewardship of the NHS. I know about stress. I know about difficult working conditions. I know about trying to gain credibility and financial recognition for my profession and my skills. I had many skills, and I am pleased that there are now diplomas and degrees in nursing and that nurses' vast knowledge is recognised and accredited in an academic sense.

Nursing is a science and an art. Bringing the two together is very complex at times. As my hon. Friend the Member for Cambridge (Mrs. Campbell) pointed out, nurses have few convalescent patients in hospital or in the community. Nurses have high-dependency patients for whom advanced technical and pharmaceutical knowledge is required to deliver complex health care. How do we ensure that those noble and able people who are the mainstay of the NHS remain? One cannot talk about health without talking about nursing. The recognition that the current Government are giving is very welcome, but much more must take place. I would be the first to recognise and encourage that.

Along with agency nursing and pay comes the issue of flexible working. When I was a ward sister I could not offer flexible working to many of my staff and auxiliary nurses. It was a rigid system. Flexibility and child care were not on the agenda, but they are now on the agenda in many walks of life, and that is to be encouraged. The money that has been invested by the Government in child care facilities for hospital workers allows nurses to he seen as people who belong not just to the NHS but to their family. Nurses need to be able to balance work and family life if they are to stay in a profession that is demanding both mentally and physically. I had to leave clinical nursing to go into teaching because of a serious back injury that I suffered as a district nurse. We must recognise the physical commitment that nursing demands.

Flexibility, time off and rewards are important. I am so pleased that in the Budget earlier this year the Chancellor announced the new tax credits that will come into effect in April next year. For the first time, student nurses will be able to claim tax credits for children. I hope that all hon. Members present today will encourage student nurses to take up their entitlement, which can mean up to £38 a week. Student nurses were not able to claim income support before because they were not classified as workers. They have never been able to claim the working families tax credit for that reason. They fall between the two categories: they are neither proper students nor proper workers. I hope that all hon. Members, but particularly the hon. Member for South Cambridgeshire, will see to it that the issue is taken up. Not only student nurses but all nurses will benefit from the new child tax credit and working tax credit, and I hope that people in all parties will take up the campaign before next April.

It is important that we get modernisation and the agenda for change right. In the past, the pay review bodies have recommended increases for nurses, and I am pleased that they have been paid in full in many instances. That did not always happen under previous Governments, and once, when we did get a pay increase, we were asked to donate it to the hospital to fund its desperate bid to buy new equipment. One might expect that to have happened a century ago, but it also happened in the 1990s.

It is encouraging to hear hon. Members talk about the value of nursing. If we are really to value it, however, we must ensure that hospitals implement a family-friendly policy. They must encourage the take-up of the current credits, to which some working people are entitled, and of those to which many more people will be entitled from next April.

We must ensure that we have a team of equals. The medical profession has its problems at the moment, as do consultants, but I ask them to reflect on the way in which members of the nursing profession support the team, and in many instances use their knowledge to lead it. As a former nurse, I am grateful to have had the opportunity to address Parliament on behalf of nurses.

11.36 am

Mrs. Anne Campbell (Cambridge)

This is an important debate, and I am pleased to have the opportunity to contribute, although I do so only because I am sorry that there are so few people in the Chamber.

Nurses' pay is a huge issue in Cambridge because of the high cost of living, which affects not only nurses but many other low-paid workers. Indeed, I am sure that the hon. Member for South Cambridgeshire (Mr. Lansley) has come across further education lecturers, university lecturers and others who have had incredible difficulty finding somewhere affordable to live, although one would not imagine that they would.

About a year ago, a staff nurse at Addenbrooke's came to see me. She was not a low-paid worker, but was earning just over £20,000 a year. The problem, however, is that the local authority is unlikely to consider people who earn that amount for social housing, so she was unable to get a council house or to get on a housing association list and she had to rely on the private rented sector in Cambridge, which is very expensive.

That woman had a son of 11 or 12, whose schooling had been disrupted by her housing difficulties. Throughout his primary school career, she had to move from one private rented sector property to another, which inevitably meant that he had to change primary schools several times. The difficulties are not purely financial, and people's lives are disrupted and are sometimes of a low quality. I have not heard from that woman for a good 12 months, and I hope that she is still at Addenbrooke's, but I fear that many people in that situation give up and decide to work somewhere where accommodation is cheaper.

To return to planning issues, Cambridge will not survive in the long term unless it can accommodate low-paid and even medium-paid workers. As the hon. Member for South Cambridgeshire said, house prices have spiralled upwards. Over the past year, they have risen by more than 20 per cent., and people are finding it increasingly difficult to find affordable accommodation. However, I disagree with him about the use of the green belt. The green belt around Cambridge is tightly drawn, which leaves only a small amount of building land in the city centre. That inevitably means that people have either to pay high prices for accommodation in the centre of Cambridge or live outside the green belt and travel into the city every day. He said that Waterbeach was a convenient settlement, and I believe that the county council should consider it again, as the rail link to Cambridge makes it an attractive option, not least because the journey takes only 13 minutes. He was quite right to say that an extension of the rail link to Addenbrooke's would make a big difference.

Mr. Lansley

Many of the nurses who have left Addenbrooke's are continuing their nursing work at Papworth hospital, because they can live in cheaper accommodation in Huntingdon or beyond Papworth. We have to solve that problem before we can contemplate moving Papworth hospital to the Addenbrooke's site. That move has many clinical reasons to commend it, but at the moment it would cause all sorts of difficulties with recruiting and retaining the nursing staff.

Mrs. Campbell

There is a great deal of agreement between us on that. However, although the hon. Gentleman is opposing the extension of housing into the green belt, Clay farm in Trumpington would provide an attractive location for staff working at Addenbrooke's. It would provide housing sufficiently near the hospital for people to be able to walk or cycle to work. That seems an extremely attractive option.

It is fair to say that the Government have taken many actions over the past few years to try to ease the situation for nurses and low-paid workers. One of the issues that concerns me is the cost of living supplement paid to nurses in the Cambridge area, which gives them an extra £600 a year. It does not go a long way towards meeting their accommodation costs, but it is better than nothing. However, it applies to nurses and therapists but not to cleaners, porters or catering, engineering or laboratory staff. That is of great concern to those other lower-paid workers, who are essential to the running of a large hospital.

About 18 months ago, I attended a rally at Addenbrooke's, when those staff were starting their campaign for recognition. I understand that the cost of living supplement is paid only to those grades covered by the pay review body, but we need to look even more closely at those who are paid on an even lower scale than nurses, because their work is essential. I hope that the Minister will consider carefully the Unison campaign to allow those workers the cost of living supplement. He and I have communicated about the matter before, but this may be the time to take a fresh look at the situation.

Mr. Simon Burns (West Chelmsford)

Will the hon. Lady also include auxiliary nurses in the list of nursing staff and health service workers who should be included? I have a constituent who has worked as an auxiliary nurse for more than 27 years. Her job has expanded and so have her responsibilities, but she has been excluded from the supplement, as have others at her level. I find that incomprehensible.

Mrs. Campbell

The hon. Gentleman makes a good point. It is easy for us to say that all low-paid workers should get extra money. I have made it clear that in the short term this is a huge issue, but I hope that in the longer term it will be resolved by planning and not by the payment of supplements. Although they are badly needed now, they are not the answer.

I should like to mention the starter home initiative. A successful joint application by the health authority, the county council and the police authority in Cambridgeshire realised some £6 million, enabling low-interest loans to be paid to key workers who live within five miles of their workplace. That has made a huge difference to many low-paid workers who are defined as key workers. However, many are excluded in the process of defining. An unfortunate aspect of the scheme is that further education lecturers are excluded—they are low paid, so the distinction is rather absurd. It is up to local authorities to define key workers, and I am sorry that mine did not include further education lecturers.

My hon. Friend the Member for Brentford and Isleworth (Ann Keen) has mentioned the forthcoming children's tax credit. Many low-paid workers in my constituency have already benefited from the working families tax credit and the child care tax credit. They have made an enormous difference: many lone parents, who would not otherwise have been able to afford to do so, have returned to the workplace. Many extra child care places have been provided in the city, but there is still a desperate shortage because there are so many parents in the workplace these days that all the provision has been soaked up. She made an important point about the forthcoming children's tax credit and the working tax credit. They will be available to student nurses and others who now find it difficult to survive.

I hope that, in her capacity as the Chancellor's Parliamentary Private Secretary, my hon. Friend will convey the point that because of high accommodation costs in the city of Cambridge, people have to have very high incomes in order to have the same residual income as those who are paid much less in another part of the country. The problem is that the lower-paid in another area will be entitled to the working families tax credit, whereas many of my constituents who have very low residual incomes because of the high accommodation costs are not eligible. We must address that issue. I shall make the point in my own way to the Chancellor, but I shall be grateful for my hon. Friend's support.

The Government have taken a number of extremely helpful short-term measures. Longer-term measures that are in the pipeline will obviate the need for this kind of supplement and extra pay for specific workers because accommodation costs will stabilise. I congratulate the hon. Member for South Cambridgeshire on having raised the issue at this important and sensitive time.

11.49 am

Dr. Evan Harris (Oxford, West and Abingdon)

It is a pleasure, as an Oxford Member, to thank a Cambridge Member, the hon. Member for South Cambridgeshire (Mr. Lansley), for giving us the opportunity to discuss the matter. I also thank him for presenting the parameters of the debate so clearly. Oxford shares many of the problems of high living costs mentioned by the hon. Gentleman and by the hon. Member for Cambridge (Mrs. Campbell).

The Government are in trouble over their policy on the NHS work force. That is a problem for all of us and for our constituents, because of all the areas in which it is important for the Government to have a grip of policy, the emergency services in general and the NHS in particular are the most important. We must be sensitive to the difficulties that the Government are experiencing, some of which are not of their making, but it is also important to challenge them to answer all the criticisms of previous policy in this area.

The Government may say that they are not responsible for nurses' pay and that it is a matter for the pay review body. However, as the hon. Member for South Cambridgeshire clearly explained, the matter should engage us all, because we are responsible for the appropriate spending of Government money, and the Government have clear, although indirect, abilities to influence the matter through the evidence that they give and the climate that they create. I hope that in answering the points that have been raised, the Government will not hide behind the pay review body.

The Minister may say, especially to Conservative Members, that it is no good talking about the need for better pay for nurses without being willing to vote in favour of allocating more money to it. That is a fair point and one that is often made by Ministers in response to such attacks from the Conservative party, but it does not solve the problem of what to do when it is necessary to spend more resources in this area. I supported the announcement of more resources in the last Budget and voted for the tax increase that went along with it. In fact, I stood on a platform of calling for the tax increases that would have made the money available some years ago. More funding is needed to benefit patients, nurses and the economy. The Minister must address that point, rather than simply asking us to will the means as well as the end, because I very much will the means.

In the Government's defence, the Minister can also point to the failure of the Conservative Government to invest in the nursing work force, although that is not especially constructive because it does not help us with the problems that we face today. That defence is much stronger in relation to the problem of the shortage in the medical work force, where the trail time is greater, because it takes so much longer to train medical staff. We are still suffering problems as a result of underinvestment and under-recruitment in the 1990s.

On nursing recruitment, I wish that the Government had acted sooner when they came to power in 1997. There was much talk about hitting the ground running, but there was no real change in the early years of the current Administration and no immediate expansion of training opportunities for nurses to deal with the work force shortage. We are paying the price of the failure by this Government to invest in expanding training opportunities.

I was surprised to hear the hon. Member for Brentford and Isleworth (Ann Keen), for whom I have great respect, and who brings a great deal of experience to the debate, raise the question of the staging of pay awards. It is a matter of record that pay awards were staged by the Conservative Government in the 1990s. I thought that that was bad at the time, and Labour spokesmen agreed, but the Labour Government did the same thing in 1997.

The Library note on the subject is clear, stating that nurses were awarded 3.3 per cent. in 1997—the last example of Conservative staging—and that all awards were to be staged, with a 2 per cent. increase in April 1997 and the balance of the recommended increases in December 1997". Traditionally, there has been a Government explanation and a highly critical response from the official Opposition, and that was the case in 1997. Lo and behold, nurses were awarded 3.8 per cent. in 1998, and all awards were staged with an increase of 2 per cent. in April 1998 and full implementation in December 1998". Hypocrisy is an unpleasant word, and one that I suspect you would not want us to use, Mr. Hancock, but to criticise something and then to do it is not a practice of which people should be proud. It is best if Labour Members do not have selective amnesia about the staging of pay awards.

Nurses' pay is not the be-all and end-all of ensuring good recruitment and retention, as has been accepted by all hon. Members who have contributed to the debate. We can point to the shambles that was the consultant contract for clear evidence of that. In my correspondence, there was nothing but recognition that pay was not the problem. The pay rise—12 per cent., 19 per cent., or whatever it was—was more than adequate for those people, but the Government were unable to meet their concerns on non-pay issues.

The need for a realistic settlement on pay can be broken down into various matters. Are nurses given fair treatment with their current level of pay? Gender is relevant to that. If men traditionally made up the same proportion of the nursing work force as of the police force, we would not have arrived at such a discrepancy between the pay for this professional group of workers and others that have been more male-dominated.

Have the pay awards been fair in terms of parity with other professionals?

Mr. Lansley

Does the hon. Gentleman agree that part of the problem is that, for gender reasons and so on, nurses were historically often regarded as providing the second income for a household? However, in the RCN survey, two-thirds of respondents said that nurses' earnings accounted for half or more of their household income.

Dr. Harris

I agree. I know that the Minister wants time to respond, so I shall condense my comments and go through them more quickly.

Mr. Mike Hancock (in the Chair)

I do not think that that is necessary, Dr. Harris. You can make your own speech in your own time.

Dr. Harris

I am grateful to you for defending my honour, Mr. Hancock, but I know that others want to speak.

Does nurses' pay create distortions? Although many nurses are no doubt inappropriately under-graded, some hospitals inflate grades in order to recruit. That may solve the problem of insufficient grading for staff who deserve a certain grade, but there will be distortion. People with identical skills and responsibilities will find themselves on different grades.

There is clearly a problem with insufficient and insufficiently sensitive living allowances for nurses. I agree with what the hon. Member for Cambridge said about £600 not going very far in Cambridge: it does not go far in Oxford, either. There should he much more flexibility. If we want to keep to a national pay scale but deal with problems of regional shortages, there must be higher amounts for living allowances and much more flexibility within them so that they are sensitive to regional and sub-regional living costs.

The main issue is recruitment and retention, however, regardless of whether the Government accept my case that nurses suffer from unfairness and insufficient pay. It is a serious problem, which causes serious staff shortages and impacts on patient care, as we have heard from the survey. It also has an unfair impact on our treatment of economies in the developing world, from which we are sucking some of the best trained professionals. We are not taking advantage of nursing skills in refugee and asylum seeker populations, and we spend over the odds—from £500 million to £800 million—to buy back people who have left. That is bad enough from an economic point of view, but it also has an impact on the quality of care, and it is demotivating, as the hon. Member for South Cambridgeshire said.

We have to recognise that nurses have skills that are transferable in the labour market and that we are simply unable to compete, on current levels, with other potential employers. If for no other reason than that, labour market forces must put pressure on the Government to give evidence to the nursing review body to encourage the body to recognise the real problems. All the advantages of the complex tax credits that the Government have introduced are available to nurses in whatever jobs they do, not only to nurses in the NHS. Some of those jobs have greater flexibility in terms of hours.

We must pay attention to the housing shortage. The Government have recently woken up to that problem, although they are five years too late. I question whether there is a joined-up system in respect of housing, because many brownfield sites lie within NHS trusts, which are not acute trusts but community trusts and want the biggest return on land sales. That return may not come from the provision of affordable housing, which other parts of the health economy would want. The NHS has a real problem in responding to housing need.

I finish with a quote from the Secretary of State, who told the Royal College of Nursing at its congress in April 2000: We are putting nurses at the centre of the whole modernisation of the NHS, and said that because the health service is patient centred, it is nurse-centred too. Those may be just meaningless words, or they could show a real commitment to doing something about the terrible plight of hospitals that are without sufficient nurses, as in my area, and about the unfairness that nurses have to deal with. I hope that they are more than words and that nurses will receive the rewards that they deserve, with the funding that the Government have finally put into the health service.

12.2 pm

Mr. Simon Burns (West Chelmsford)

1, too, congratulate my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) on securing this timely and important debate. I also pay tribute to the nursing staff in the NHS, because as the hon. Member for Brentford and Isleworth (Ann Keen) said, they are the backbone of the health service. Without them, the health service could not function. All too often, their dedication and the commitment that they give to their vocation are overlooked and forgotten, although many hon. Members and our constituents have personal experience of how they look after people at vulnerable times in our lives.

As the Royal College of Nursing survey said, 63 per cent. of nurses are working in excess of their contracted hours by about seven hours a week, and 25 per cent. of that overtime is not repaid, either in time off in lieu or in money. That is a contributory factor to the nurse shortage in England of about 15,000.

The Minister will say that since September 1999 an extra 20,740 nurses have been employed. The fact remains that, regardless of that achievement, about 15,000 further nurses are needed to meet the increasing health care demands. I suspect that there are problems with filling vacancies for nursing staff in the constituencies of many hon. Members in the Chamber and elsewhere.

The Mid Essex Hospital Services NHS trust covers my constituency. The latest parliamentary answer that I received from the junior Health Minister, the hon. Member for Tottenham (Mr. Lammy), was about the number of three-month vacancies there to March 2002, which are the latest figures that the Department of Health has. He said that the shortage in terms of all nurses was 20, and equally, the shortage in terms of all qualified nurses was 20. As many hon. Members have said today, nurse vacancies and nurse retention are at the heart of the problem, especially in areas with high living costs.

I suspect that the problem will be further exacerbated if the survey in The Observer last Sunday proves accurate. It showed that the percentage of nurses under the age of 40 who intended to leave the profession in the next five years had risen from 26 per cent. to 29 per cent. Equally worrying is the fact that the average age of those seeking to take up a career in nursing has risen to between 26 and 28 years old. Twenty or 25 years ago, when nursing was seen as a vocation that people would take up on leaving school, that average age was between 16 and 18. The difference is probably due to changes in society, with people wishing to start a family before embarking on a committed career. That is placing a strain on the system.

Pay has a major role to play in the equation of morale, retention, filling vacancies and recruitment. My hon. Friend the Member for South Cambridgeshire said that the Royal College of Nursing had submitted a paper to the independent pay review body, as other interested parties undoubtedly have, including the Government. As he said, the Government's submission to that body is the most important, because they will set the trend and try to point the body in their preferred direction, so far as they can. In drawing up their submission, the Government should understand exactly what is happening in the nursing profession, particularly because of the changes and the broadening of the skills and duties expected of nurses.

The introduction of the cost of living supplement has been a small step forward in helping nurses and other important workers on low pay. London has for many years had a weighting allowance to take into account the accepted fact that the costs of housing and living are higher in the capital city. In the home counties and sometimes further afield, living costs, especially of housing, have risen so dramatically that the difference between London and the rest of the country has been minimised. That was true over the last decade in particular, but the trend has been building up gradually over the past two decades. In areas such as Essex, Cambridgeshire and others from which it is possible to commute, the cost of living is significantly higher than in parts of the country that are far from the large metropolitan cities.

If my memory is correct, the cost of living supplement was introduced two years ago. What I found puzzling at the time—and I suspect that the Government did too, as they have remedied it this year—was that Essex was not included, despite the fact that it adjoins London and our house prices, house price inflation and other living costs are extremely high. Hertfordshire received the supplement and I believe that Cambridgeshire did too. Wiltshire and Dorset received it. Essex did not, which seemed a very odd decision. As I say, that decision has been rectified, which is welcome. However, as I said during my intervention on the hon. Member for Cambridge (Mrs. Campbell), the rules on the boundaries between who qualifies and who does not are too tight and seem unfair. I referred to a constituent who had been an auxiliary nurse for 27 years. Her working life has been dedicated to the national health service but she will not qualify as she does not have the necessary national vocational qualifications.

Mr. Lansley

May I draw my hon. Friend's attention to Addenbrooke's hospital? As the hon. Member for Cambridge said, the fact that the cost of living supplement is not available for grades A and B has resulted in a vacancy level for health care assistants of 18 per cent. That is a substantial figure.

Mr. Burns

My hon. Friend is right. I hope that the Minister will reflect carefully on his points and those of the hon. Member for Cambridge. It is not only nurses who contribute to the quality of care in the NHS. The NHS also needs all the people who do other jobs and those people may be living in areas where the cost of living is high.

The Government have introduced the starter home initiative to support key workers. The Minister will note that the initiative applies not only to nurses but to teachers, police, firefighters and some other groups. Although those who qualify will warmly welcome the initiative, I suspect that it will only scratch the surface of the problem. In areas such as London, Chelmsford and Cambridgeshire—where house prices are high, where those prices continue to increase at a rate that is way above the rate of inflation, and where renting private accommodation is equally expensive—the initiative will not help as much as the Government would wish, because of the low number of those who will benefit.

For example, in Essex, five areas will come under the initiative—Basildon, Braintree, Chelmsford, Harlow and Maldon—but only 76 nurses in those areas, out of a total of just under 6,000, will be able to take part. The Minister would be right to say that some nurses will not wish or need to qualify because they may be married or may be more mature members of the work force who already have a home or an affordable rented property. However, a significant number of people will desperately wish to be part of the initiative and would benefit from it.

Will the Minister consider one other slightly baffling problem? The Royal College of Nursing, nurses themselves and others will say that they need higher levels of pay in recognition of the work that they do and the extended opportunities that are being offered to them.

Nurses are perplexed about the level of funding for agency nurses. Many agency nurses were originally NHS nurses who saw that if they became agency nurses they could work more flexible hours, or even fewer hours, with consider ably more pay. It seems crazy that if we pay on average just over £500 million a year for agency nurses, we could not invest more of that money in NHS nurses as part of the programme to encourage recruitment and retention.

12.15 pm

The Minister of State, Department of Health (Mr. John Hutton)

I warmly congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on securing the debate. I pay tribute to the balanced way in which he presented his case. He refrained from making any party political points, and I shall try hard to do the same. All hon. Members who spoke in the debate made important, helpful and useful contributions.

I will deal with several points raised by the hon. Gentleman. Any neutral observer listening to him would probably have formed the impression that we were falling down in terms of nurse recruitment at Addenbrooke's—that there were fewer nurses and the vacancy rates were increasing—but the opposite is the case. The figures from 1997 to 2001 show that more than 300 additional nurses were employed by the Addenbrooke's NHS trust and that the vacancy rate fell from just over 16 per cent. to 9 per cent. That rate is far too high and I am certainly not going to say that all the recruitment and retention problems relating to nurses in the NHS have been solved. Quite palpably, those problems have not been solved. I would, however, argue that we are at least heading in the right direction, and it would be wrong to give the opposite impression. He asked in particular about foundation trusts and expressed an interest on behalf of Addenbrooke's in foundation trust status. More details about that status will be available in the near future.

The hon. Member for Wyre Forest (Dr. Taylor) helpfully and kindly, as always, drew attention to some ancient correspondence that I had entered into with him. I have no recollection of that, but the point that he made about the reform of nurses' pay is valid, and I will return to that.

My hon. Friend the Member for Brentford and Isleworth (Ann Keen) made a good contribution, particularly in drawing attention to the further help for student nurses that we are providing for child care costs—nearly £38 a week—which will go a long way. She made several good points and, overall, presented a balanced score card of what has been done and what still needs to be done.

My hon. Friend the Member for Cambridge (Mrs. Campbell) drew attention to what she regards as problems that still need to be addressed in her constituency. I will come to that later.

The hon. Member for Oxford, West and Abingdon (Dr. Harris) started well, but I am afraid that he succumbed to his typically curmudgeonly approach. He simply would not recognise any progress in the NHS if it were tattooed on his forehead, but there we are—we live in hope.

Several hon. Members spoke about the high cost of agency nurses and the problems that that poses for the NHS. Those problems are real, and we are spending far too much on commercial nursing agencies, but costs are coming down. We are making good progress, though not everywhere, and in Oxfordshire, for example, the hon. Member for Oxford, West and Abingdon will know that progress has been made recently in developing and implementing NHS professionals and significant savings have been produced. That, too, is progress. I am advised that Addenbrooke's is reducing the amount that it spends on commercial agencies, and I hope that that trend continues.

There are two things that we can do to make a difference, in addition to wider points about improving the terms and conditions of NHS nursing staff, to which I shall return shortly. First, NHS professionals should be developed as an alternative to using commercial nursing agencies. That has enormous potential. Secondly, as a parallel development, we need to extend more actively throughout the NHS in England the benefits that we have already obtained in London from the London agency project. That is a better form of procurement for when we have to use commercial agencies. That certainly has benefits for the NHS. I think that, overall, those two initiatives will help in the long and medium term.

A number of key themes have emerged in the debate. We certainly need to get more nurses working in the NHS—that is common ground among all of us—and we are making progress with that. There have been many references to the figures. Since 1997, an extra 39,500 nurses have been recruited to the NHS. That figure takes into account those who have left, so that is a net increase of 39,500. However, we need to go further still. That is why the Budget settlement—a very good one for the NHS—will allow us to recruit 35,000 more nurses by 2008 than were working in the NHS in 2001.

As well as increasing the number of staff working in the NHS, we are also increasing the number of training places for students. Meeting those targets will be key to delivering longer-term sustained growth in the nursing profession. The NHS plan target is for 5,500 more nurses and midwives to enter training each year by 2004 than there were in 1999. We have already increased numbers by more than 3,000, and we are on course to deliver the target.

It is encouraging to note that applications for nurse diploma courses have nearly doubled in recent years, and nursing degrees are now the second most popular university course in the country. Those are both positive developments, which show that we are at least moving in the right direction. Nursing is seen as an increasingly attractive career for young people, and that is important. We need to encourage that development at every turn.

Those increases in training mean that, by 2008, 60 per cent. more nurses will qualify each year than qualified this year, for example. However, we also need to encourage nurses who are already qualified to return to the NHS, because those nurses represent an extremely valuable resource and have experience. Since February 1999, more than 11,900 nurses, midwives and health visitors have returned to the NHS, and we need to continue promoting the ways in which qualified staff can return.

Increasing recruitment is only part of the solution. We also need to take action to retain those experienced nurses who are already working in the NHS. Obviously, pay forms an important part of getting that right, but as the hon. Member for Oxford, West and Abingdon said, other issues matter to nurses too. Such issues include, for example, better resources going into the front line to help them to do the job more effectively. We are trying to do that. Help with child care, more opportunities to develop skills, a better career structure, and measures to tackle violence against staff are important, and I am glad to say that we are taking action on all those subjects.

The Government are also committed to making the NHS a more attractive place in which to work. We can do that by offering better working conditions and improving lifelong learning opportunities—and offering improved child care support in order to help our employees balance work with their family commitments. The hon. Member for South Cambridgeshire is almost certainly aware, because he rightly takes a close interest in the work of the NHS locally, that Addenbrooke's hospital operates one of the largest child care facilities in the NHS, with 240 on-site nursery places.

Our campaign to improve the working lives of NHS staff lies at the heart of the drive to ensure that there are enough well qualified and motivated people in place to deliver the quality of health care envisaged in the NHS plan. Improving working lives places expectations on employers to support staff, promote their welfare and development, and respect their desire to have a healthy balance between work and life outside work.

I want to make it clear that the Government are committed to modernising the NHS pay system. As a number of hon. Members referred to the subject, it would be only right to draw attention to what the minimum starting salary for a grade D nurse was in 1997, and what it is in 2002. On 31 March 1997, a newly qualified grade D nurse starting work in the NHS earned just under £12,000 a year. On 1 April 2002, she would be earning £16,005 a year. That is a cash increase of 35 per cent. and a real terms increase of 16 per cent. I do not want to break my self-imposed discipline of not being party political, but that is nearly three times the rate of growth for the salary of newly qualified nurses that was experienced under the previous Conservative Administration. By any reasonable yardstick, our commitment to NHS pay, and especially nurses' pay, stands credible comparison.

As many hon. Members have said, however, we should go further. An independent pay review body has recommended the pay of nurses, midwives and health visitors since 1984. It makes its recommendations after considering evidence submitted from the Government, staff and professional organisations, and NHS employer organisations. For the past four years, the Government have implemented in full the recommendations of the pay review body and avoided the need to stage pay awards, which is an important objective.

Since 1997, real progress has been made in improving nurses' pay. Pay has increased across the board for all nurses and midwives by at least 26 per cent. in cash terms. Some grades of staff have been targeted for larger increases: I have already drawn attention to the starting salary of newly qualified nurses, which has risen by 35 per cent. over the same period. We also introduced the new post of nurse consultant to provide opportunities for staff at the top of the profession to continue to be involved in clinical work rather than moving into management. Nurse consultants can earn more than £46,000: a huge extension to the nursing career structure.

In response to the recommendations of the review body, this year nurses were once again awarded pay increases well ahead of inflation—an increase of 3.6 per cent. was implemented in April when the headline rate of inflation was only 1.5 per cent. We have taken additional action to support clinical leaders who are taking on more responsibilities. The starting pay of nurse consultants was increased by 15 per cent. and staff who took on modern matron roles—who have an important role to play in the NHS—had access to additional pay points worth at least 6.5 per cent.

We also took action to boost the pay of approximately 40,000 unregistered nursing support staff—a theme of the contribution of the hon. Member for West Chelmsford (Mr. Burns)—by guaranteeing a minimum cash increase of £400 a year. The increase can be up to 4.3 per cent. We have taken further action to encourage the culture of learning and development among non-registered staff. For example, we introduced an additional increment at the top of the pay scale for staff who have recently achieved national vocational qualifications. That increased by approximately 7 per cent. this year the pay of some nursing support staff who, as the hon. Gentleman said, do an important job in the NHS.

Those increases are all concrete and positive signs of the Government's commitment to improving nurses' pay. However, the Government recognise the particular problems of recruiting and retaining nurses and other staff in London and high-cost areas in the south of England, where, clearly, accommodation costs are high and where there are conditions of nearly full employment. Both my hon. Friend the Member for Cambridge and the hon. Member for South Cambridgeshire have rightly drawn attention to those issues, which are a problem throughout the public sector in London and the south-east. The Government are carefully considering what further action can be taken. For example, we have introduced new cost of living supplements for qualified nurses. The hon. Member for West Chelmsford was highly critical of that initiative for not reaching enough staff. It focused on helping to solve some of the recruitment difficulties that are particularly associated with professionally qualified staff.

Mr. Burns

I am sorry if the Minister thought that I was being highly critical—I was simply trying to add weight to the point made by the hon. Member for Cambridge. The Government should reconsider widening the initiative to include other nursing staff and workers in the NHS on low pay. I was not trying to be highly critical.

Mr. Hutton

I stand corrected. However, in future the issue will be dealt with as part of the agenda for change negotiations.

Clearly, the Government can help with some problems in the NHS and not with others. The high cost of housing is a difficult problem and although we have done good work in the past two years in improving the number of low-cost additional units available for nursing and other NHS staff in London and across the south-east, I would be the first to accept that more needs to be done. We have had some progress, especially in Cambridgeshire, where 17 two-bedroom self-contained flats and six homes have been made available for local staff.

I have not had time to mention everything this morning, but I wish to say something about agenda for change, because many hon. Members have referred to it and it is important for the future. Nurses and other NHS staff clearly deserve to be paid fairly. Investment in pay, like every other area of future NHS spending, must pass a fundamental acid test: it must contribute to expansion in NHS capacity, bring about increases in NHS productivity and deliver improved NHS performance. We are working closely with the trade unions, professional organisations, the other UK Health Departments and NHS employer representatives to agree a new pay system for the NHS based on our agenda for change proposals.

The new pay system that is under discussion will have clear benefits for nurses and other NHS staff. Pay modernisation should ensure that nurses are rewarded fairly for the job that they do and for the skills and knowledge that their work requires. It will lead to an NHS in which staff are paid according to the work that they do, rather than, as at present, the job title that they hold. The nurse who takes on more responsibility or an extended role will get more pay. It will also support a better system of career progression by removing the artificial career ceilings associated with some parts of the current nurse clinical grading system.