Dorrell set for a climbdown over NHS Bill

A retreat on the NHS Primary Care Bill is expected to be signalled today by Stephen Dorrell, the Secretary of State for Health, to avoid a row with family doctors over "supermarket surgeries" spoiling the Tories' general election campaign.

Mr Dorrell privately has assured the doctors' leaders that an amendment will be made to the Bill during the committee stage to make it clear that supermarket chains will not be able to hire GPs, although pilots may be allowed for supermarkets to open surgeries with GPs as their tenants.

Labour will reinforce its opposition to the "supermarket clause" by forcing a vote tonight against the second reading of the Bill. The Labour motion says the proposal to allow private companies to hire GPs would undermine the doctor-patient relationship and "pave the way for privatisation of the NHS".

Mr Dorrell agreed to revise the clause after the British Medical Association warned that it would ask GPs to make the proposal for "supermarket surgeries" an election issue. Among stores which have expressed an interest are Asda, and Unichem, the chemist chain.

The move by Mr Dorrell to silence the criticism comes as the Government is gearing up for the election with a series of economic statistics - including the labour market figures tomorrow and the retail price index on Thursday - which are expected to show continued economic recovery.

Downing Street said a "belting set of industry pricing figures" showed record lows demonstrated the "very low inflation pressures in the economy", a clear sign that John Major is supporting the Chancellor, Kenneth Clarke, in resisting the pressure by Eddie George, the Governor of the Bank of England, for an increase in interest rates.

Mr Clarke caused a renewed flurry of speculation about the election date when he told a conference of newspaper editors in London: "We're bound to get one called in the next few weeks."

The Prime Minister must call an election by 22 May and although he is known to favour hanging on until 1 May - the date of the local elections - there was speculation that next week, he might cancel the Wirral South by-election on 27 February to hold an election on 20 March or 10 April.

Defending Britain's rejection of the European social chapter, William Waldegrave, Chief Secretary to the Treasury, said an extra 33 million Europeans could be in work if the Continent matched the job-creating record of the United States.

In a keynote speech to the Social Market Foundation in London, Mr Waldegrave urged Europe to adopt an American-style flexible labour market.

He rounded on Britain's European Union partners for creating the European social chapter on workers' rights, and for burdening employers with high levels of protection for staff.

Mr Major is expected to give a boost to the Tories' election campaign on education at a press conference in London today. Government sources said the Prime Minister would be highlighting nursery education - one of the key battlegrounds for the election.

The Government is to expand nationally from 1 April the offer of pounds 1,100 voucher for every four-year-old to pay for nursery care in the public, private or voluntary sector.