The threat of industrial action appears to have been averted yesterday as Health Secretary Alan Johnson offered nurses and other NHS workers  an 8% pay deal.

Under the deal nurses will get an immediate salary increase of 2.75% - the highest in the public sector pay round - boosting minimum pay for a qualified nurse to £20,000.

Johnson’s proposals would give over a million staff an increase of 2.75% from April, followed by further increases of 2.4% in 2009/10 and 2.25% in 2010/11.

Commenting on the deal Prime Minister Gordon Brown said: "It shows that we can deal with the challenges ahead and deal with them in a long term way that is to the benefit of the nurses, who deserve proper settlements and proper pay for the work that they do, and in the interests of the whole economy, which needs the stability that such a deal will give."

The Royal College of Nursing welcomed the offer, which includes a commitment to re-open pay talks should inflation rise sharply, or there are significant changes to the labour market.

But the Royal College of Midwives and trade union Unite were more cautious, warning that the inflation safeguard was not watertight and could lead to an effective pay cut by 2011.
Unions will ballot members before making a final decision on the pay deal.