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Mr. Gunnell: Does the Secretary of State agree that the number of people who undertake nursing training has decreased dramatically? For example, between 1992 and 1995, it decreased from 21,000 to 13,000.

Mr. Dorrell: The figure for next year's commissions is 17,000. The Government have improved nurse training, resulting in a decrease in the fall-out rate of 35 per cent. to 20 per cent. We may therefore need to take in fewer nurses at the beginning of the training. That was the purpose of the improvement, as recommended in the Judge report. The Government accepted that recommendation in the context of Project 2000, to ensure that the professional staff of the NHS receive the high-quality training needed if we are to deliver high-quality health care.

Mr. Fabricant: Is my right hon. Friend aware that a hostile reporter from a local newspaper contacted senior nurses at the Victoria hospital in Lichfield? A senior nurse said that, because of the health care reforms, for the first time she is able fully to use the valuable training that she has received. She said that this is because money is following the patient, because of general practitioner fundholding and because of greater integration between GPs and the hospital. She is now able to be a real nurse, whereas she said that, in the 1970s, all she could do was think where to send the next day's sheets to be laundered.

Mr. Dorrell: My hon. Friend has put his finger precisely on the point: nurses receive a better qualityof training as a result of the changes that the Government have introduced in the health service. The Government have invested an extra £60 million to improve the quality of nurse training. Professional development for nurses allows a more rewarding practice and a better use of those higher-quality skills that we pay to provide through the training programme. The national health service is investing in the training of its nurses.

Mr. Simon Hughes (Southwark and Bermondsey): I do not question the improvements in the training and qualifications of nurses. However, there are still severe shortages of staff, and senior nurses report that they regularly cannot recruit or retain staff. Recently, a senior nurse at Guy's told me that Guy's and St. Thomas's NHS trust is down by 40 intensive care nurses. What do the Government propose to meet the severe current shortfall in qualified nurses, which is not being met from agency and overseas sources?

Mr. Dorrell: The hon. Gentleman makes a number of points. What has happened with respect to intensive care nurses employed in the national health service during the last five years? In 1989, there were 32,500 intensive care nurses, whereas this year there are 40,500--an increase of 24 per cent. The Government will continue to ensure that we have a nursing work force that is able to meet the intensive care needs of the health service.

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The hon. Gentleman also referred to the shortage of nurses in the health service. In the past week, independent advice has been published on this issue. The review body examined precisely the point that the hon. Gentleman raised. Its report stated:

"We have carefully weighed all the evidence presented to us and we are not persuaded that there is a general nationwide shortage of nursing staff at the moment."

There are clearly local difficulties and problems with particular specialties, and we believe that local pay may be part of the solution to these problems."

So the review body examined the hon. Gentleman's point and recognised, as the Government have by accepting the report, that there are some local shortages. Furthermore, the review body recommended a way of dealing with them which the Government have accepted. I hope that that satisfies the hon. Gentleman.

Mr. Simon Hughes: I know what the review body recommended, but the Secretary of State must accept the consequences. If the Government have stipulated that there should be a 2 per cent. national increase, and that additional increases should be funded by local hospital trusts, depending on the circumstances, how can the right hon. Gentleman assure us that there is enough money in the kitty for the trust to be able to pay for the increases that it will need to adopt in order to recruit all the nurses it needs?

Mr. Dorrell: The hon. Gentleman has asked another question that the review body has already examined: whether there are enough resources to provide for a decent deal for nurses. Once again, I quote the review body's report:

"The allocation of resources to the NHS for 1996-97 means that most providers should be able to reward staff for improvements in efficiency and effectiveness while delivering increased volumeand quality of care to patients. This 'win-win' outcome can, however, be achieved only if purchasers and providers work constructively together."

I agree. I want local staff groups and local managers to address the issues of each health provider locally--precisely to meet the concerns that the hon. Member for Southwark and Bermondsey has expressed.

Pay is clearly at the heart of much of the issue that the hon. Member for Peckham raised this afternoon. The key thing about pay--nurses understand it, but the hon. Lady did not refer to it at all--is the fact that average earnings of nurses have increased by £125 a week in today's values compared with the figures that we inherited in 1979.

Nurses should look at what the Government have done for them over the past 16 years, and in the shorter period since 1990--since when they have enjoyed a 10 per cent. real-terms increase. As for the future, nurses must also bear in mind the improved living standards with which the Government have provided them; and they should recognise that no nurse in the NHS has yet received a pay offer for next year. The Government have accepted the recommendation of the review body. Furthermore, the Government are working within the terms of the agreement that we signed with the nursing unions four months ago. Both arrangements provide for local pay in a national context.

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This is not, contrary to what is sometimes suggested, a low-pay agenda. The proposition that local pay equals low pay was examined by the review body and explicitly rejected:

"The experience of other industries, and our reading of the limited evidence so far available about Trust contracts, suggest that local terms and conditions as a whole are unlikely to be less favourable than those embodied in national agreements, and may in some respects be more favourable. Local pay can be expected to lead to new pay structures and working arrangements but we do not see it as a 'low pay' agenda".

That is also the position of the Government.

The hon. Member for Peckham said that she was hostile to local pay and local flexibility. She is going to have real difficulty squaring that with the first proposition in her five-point plan for the Government--the idea that we should listen to health professionals and allow them a say. It defeats me how we can allow them a say at local level and insist at the same time on national structures--contrary to our agreements with the nursing unions and with the review body. I will happily give way to thehon. Lady if she can enlighten me.

Ms Harman: Does the right hon. Gentleman think it fair that chief executives should get twice the pay increase of nurses?

Mr. Dorrell: I gave way to the hon. Lady to allow her to reconcile the two propositions--that we should listen to local staff groups, and that we should have national pay determination. How can she reconcile that with her five-point plan--or with the words of the leader of her party? Speaking about the British political system only last week, the right hon. Member for Sedgefield(Mr. Blair) said:

"In part . . . the disaffection is because people feel no ownership, no stake"--

that wonderful word--

"in much of the political process. The citizen feels remote from power, because he or she is remote from power. Britain is THE most centralised government of any large state in the western world."

This afternoon, the hon. Member for Peckham has come here to argue for further centralisation: a national formula for dealing with nurses' pay that would prevent health service employers from listening to local staff groups and bring more power to the centre. In short, this would prevent local solutions being found for local problems. It is impossible for the hon. Lady to reconcile her support for centralising national bargaining with her speech today or with the words of her leader in his much-trumpeted constitutional lecture of last week.

As for managers' pay, the answer is straightforward. As the hon. Lady well knows, I have imposed an 8 per cent. real-terms cut on the budget out of which chief executives' and administrators' pay in the health service comes. I have provided growth money, on the other hand, for the payment of doctors and nurses. As the review body found, that will provide for a proper balance of growing demand and growing service provision, as well as fair terms for nurses and all other clinical staff in the health service.

Ms Harman: Will the right hon. Gentleman answer one simple question? Does he think it fair that chief executives last year had double the percentage pay increases the nurses had?

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