DOCTORS AND DENTISTS (PAY) (Hansard, 9 January 1978)

§ The Prime Minister

I received a letter from Sir Ernest Woodroofe on 7th December, the text of which is below. I am very grateful to Sir Ernest and his colleagues for their careful consideration of the issues raised with them.

The text of the letter is as follows: We have been approached by the Joint Evidence Committee of the British Medical 669W Association and by the British Dental Association on behalf of the medical and dental professions with a request that we should carry out an interim review. This approach has been made in the light of a resolution at the BMA's Annual Representative Meeting on 22 July 1977, which called for urgent preparation of evidence for the Review Body to ask for a "statement of intent and recommendations which would rectify anomalies and lead to the restoration of the professions' proper economic status". We set out our views on this approach in this letter, and we ask that its contents should be made known to the professions formally. We received written evidence from the professions at the beginning of November. We have since been provided with written comment by the Health Departments on behalf of the Government, and we have also received a further submission from the professions in the light of that comment. The professions referred in their evidence to the shortfall in doctors' and dentists' earnings in relation to earnings in comparable income groups that has occurred since 1975, and to the many anomalies and injustices within the pay structure created since the introduction of the restraint measures in July 1975. We identified the extent of the shortfall in our Seventh Report in April of this year we also identified the anomalies and injustices, and we judged them to be more numerous and more severe than in most other pay structures. The professions have described to us their growing feeling of hopelessness and disillusionment at the ever-increasing deterioration in their position; all this comes on top of the sense of frustraion and the militancy that we observed in the course of the review that led to our Seventh Report. They drew attention in particular to the view expressed by the Royal Commission in 1960 (the Pilkington Commission) that "doctors and dentists in the public service should not be used as a regulator of the national economy" and that "their earnings should not be prevented from rising because of a fear that others might follow". In the professions' opinion, if the present decline in morale is not reversed, serious and lasting damage will be caused to the National Health Service. They accepted in principle that twelve months must elapse between pay settlements and therefore did not ask us to conduct a major review before 1 April 1978. However, they drew our attention to the fact that self-financing productivity schemes are now allowed exceptionally within the 12 months period, and asked us to recommend such compensation as would recognise that professional standards in the National Health Service are already at the best international levels. They also asked us to make a statement of intention "to ensure that doctors and dentists working in the Health Service will be restored to their rightful position in terms of remuneration 1 April 1978" and "to specify the period over which a restoration of the position must be achieved if it cannot be achieved immediately". 670W The Health Departments welcomed the professions' decision not to ask for a change in remuneration before 1 April 1978, and emphasised the importance that the Government attaches to observance of the 12 months' rule to prevent a wages explosion that would result in a high rate of inflation. The professions indicated in their further submission that this did not reflect their evidence correctly, and referred us again to their views on the productivity provisions. The Health Departments had some reservations about the comparison made in our Seventh Report of the movement in doctors' and dentists' earnings with earnings at comparable levels in salaried incomes between April 1975 and April 1976, and therefore on the shortfall figure both on this basis and taking April 1972 as the base date. They asked us not to indicate what we might recommend in our main 1978 Report until we have had an opportunity to consider the detailed evidence that is in the course of preparation for submission to us early next year. We note that the technical considerations which are at the root of their reservations on the shortfall figure were among the considerations that were put to us in the course of the main 1977 review; we shall return to these aspects but, in any event, the differences are a matter of degree and they do not affect the principles involved in the issues that the professions have asked us to consider at this time. Meanwhile, we take this opportunity to draw attention to the fact that, in our Fifth Report in 1975, we said specifically that the overall levels of pay which we recommend now with effect from 1 April 1975 are those which we judge to be right' at that time: this means that April 1975 has replaced April 1972 as the baseline for our comparisons. We trust that the evidence for the forthcoming review will have regard to this. We have not considered it necessary to discuss the written evidence with either party, nor do we think that an interim review is appropriate at this time: but we shall want to pursue a number of points that arise from the evidence with each of them in the course of the main review, on which we have already begun work. Nevertheless, we have come to the conclusion that it is essential to make a general statement to you at this stage. If confidence is to be restored in the effectiveness of the present review system for securing just treatment for the medical and dental professions, then it is important that the professions should know how we intend to proceed in the forthcoming review. We share—and have always shared—the view of the Pilkington Commission quoted to us in the professions' evidence and we see a statement of our in tentions as consistent with that view. We intend to make a start on the restoraation of order to the pay structure. We see the elimination of the injustices that have been created within that structure by the first two rounds of restraint measures as the first requirement and we are satisfied that this can be achieved within the guidelines announced by the Government on 15 July last. 671W But this will do nothing to halt the continuing deterioration in the medical and dental professions' position in the pay structure generally—an objective which we consider to be very important indeed. Our judgment now, on the basis of information from the April 1977 New Earnings Survey, is that the overall average shortfall for doctors and dentists as a group since April 1975, when we last brought their remuneration into a proper relationship with the pay of other professional groups, had increased to some 15 per cent. in April 1977—but of course as we indicated in our Seventh Report, there is a wide variation between individual groups of doctors and dentists. The professions have drawn attention to the danger that their position is likely to deteriorate still further by April 1978 and, clearly, the more it is allowed to deteriorate the greater will be the problem of recovery. We are very conscious that we make this approach to you against a difficult background and at a stage when it is generally accepted that success in tackling inflation is of paramount importance—in the interests of the community at large and thus of doctors and dentists themselves. But we believe it right to put on record that, in our next review, we intend to assess and make known to you the levels of remuneration that would bring the medical and dental professions into the relationship with other professional groups that we judge to be appropriate at 1 April 1978. It will be possible then to consider how quickly fully up-to-date rates can be put into effect.