No other organisation boasts such a hotch-potch of unco-ordinated salary systems as the NHS. Several secretaries of state must shoulder responsibility. Bevan cobbled together the consultants' remuneration system - which combines moonlighting with a cloak and dagger performance appraisal - so as not to create 'an unfair worsening of a doctor's material livelihood'. Half now earn six-figure incomes.
Sir Keith Joseph, while at the Department of Health, espoused the concept of the cycle of deprivation. A latter-day convert to free-market economics, he persuaded the then prime minister, Margaret Thatcher, to buy it. The legacy of greed from that era still pervades national life. For example, the wholesale sell-off of the public utilities spawned a cadre of millionaires whose windfalls derived from low-risk insider trading. The directors of these organisations now use the spurious argument that they compete in an international marketplace to justify their fat cat salaries.
New Labour seems disinclined to narrow the ever widening gap between the top and bottom wage-earners. No one acknowledges that when the highest tax rate was slashed to 40 per cent, those at the top of the heap became hugely wealthier overnight. The pay review bodies ignore this, and appear not to know whether they should or should not be reflecting free market forces. As Royal College of Nursing general secretary Christine Hancock put it, recruiting a nurse is infinitely more difficult than recruiting a cabinet minister.
In contrast to doctors and nurses, executive directors' pay is supposed to be determined in an equitable manner through remuneration committees. These have opted for performance-related pay, despite growing evidence that it is divisive. But how can you possibly justify chief executives' pay increases being significantly greater than those who have contributed to achieving the performance targets? Trusts and health authorities have accepted infantile advice from pay research consultants to ratchet salaries up to the median, which is patently inflationary.
Unprofessional piecework payments to GPs and unsocial hours payments to nurses, conceived to circumvent income policies, muddy the waters further. The present health secretary has the opportunity to leave as his legacy a more integrated and less divisive pay system, which rewards competence while responding to supply and demand.