Dobson talks tough on pay

The Government's fight to keep public spending under control began in earnest yesterday when the new Secretary of State for Health warned doctors and nurses that the Government would be "very tough" on pay.

As Frank Dobson made clear that the Labour government should not be regarded as a soft touch, unions in the private sector began to flex their industrial muscles.

Leaders of the Transport and General Workers' Union (TGWU) called a ballot on a pay strike among 8,500 British Airways cabin crew, and the Amalgamated Engineering and Electrical Union announced a vote on industrial action over the withdrawal of union bargaining rights at United Utilities.

Elsewhere, Bill Morris, general secretary of the TGWU, indicated considerable misgivings over the possible appointment of Peter Jarvis, Whitbread chief executive, as chairman of the Low Pay Commission to advise the Government on a national minimum wage. Without naming Mr Jarvis, Mr Morris said the Government should avoid "putting Dracula in charge of a blood bank". Mr Jarvis is known to favour a minimum struck at about 80p less than the pounds 4-an-hour sought by Mr Morris. There are indications that the TGWU leader's fears may not be fulfilled and that plans to give Mr Jarvis the job has not met with the approval of the Prime Minister.

Potentially the most explosive industrial relations problem for the Government, however, concerns the public sector, especially the health service.

Yesterday, Mr Dobson sent out a hardline message on pay, adopting the "tough guy" role given to him by Tony Blair. It is understood that Mr Dobson was made Health Secretary because Tony Blair thought Chris Smith, who had been Labour's health spokesman, might not be tough enough on spending.

Mr Dobson insisted there was a "good mood" in the NHS in anticipation of the reforms planned by the Government. In a statement which provoked wry responses from health workers' leaders, he told the BBC that he did not expect staff to be pressing for "huge" salary increases.

"There is no secret we will be tough on public sector pay. We've said it for the last four or five years. We will have to have tough negotiations. Very large numbers of people in the health service, will obviously be concerned about their pay, but will be satisfied, at least to some extent, with the knowledge that the health service is going to be run in the way it used to be, offering the best care for everybody," he said.

He reiterated Labour's policy of scrapping the internal market in the NHS and saving pounds 100m by cutting red tape. No longer would one group of GPs be enjoying greater privileges than any other, he said.

The first big test of goodwill will come next week at the annual conference of the Royal College of Nursing in Harrogate. Tom Bolger, assistant general secretary of the RCN, said there was considerable concern about the new government's commitment to honour the award next year of the official pay review body for nurses. He said the Labour Party had criticised the previous Government for refusing to implement pay increases in full and hoped the new administration would not adopt the same policy.

In a notably moderate response to the Health Secretary's strictures, Rodney Bickerstaffe, leader of Unison, the public service union, said he hoped a better way forward could be found in future. His members deserved a "reasonable reward" for their contribution to society.

Sandy Macara, chairman of the British Medical Association Council declared: "I would regret it if Mr Dobson mistakes our wish to assist him in dismantling the internal market for acquiescence on the pay situation which he has inherited."