Cameron slows down the NHS revolution

PM prepares to water down Andrew Lansley’s reforms after a political backlash.

David Cameron's political survival instincts finally appear to be asserting themselves. The PM, who was surprised by the level of opposition to the coalition's NHS reforms, is planning to put the brake on Andrew Lansley's revolution.Today's Times (£) reports that, instead of transferring 80 per cent of the NHS budget to GPs within two years, Downing Street now favours a slower pace of change, with 2013 "a goal rather than a deadline".

It's not hard to see why. Cameron worked hard in opposition to convince the public that the Tories could be trusted with the NHS. But the coalition's reckless reforms (likened by the Conservative MP Sarah Wollaston to tossing a "grenade" into the health service) have had the reverse effect.

Lansley is reportedly insisting that there should be no change to the scale and speed of the reforms. But he has already performed a U-turn on price competition and that weakens his hand. If the reforms can be amended once, they can be amended twice.

The "mad" decision (in the words of the British Medical Journal) to introduce the biggest upheaval in the service's history, just when the NHS is required to make unprecedented savings of between £15bn and £20bn, was never likely to bear scrutiny. I'd wager that the coalition will look again at the "any willing provider" rule and at the decision to place the NHS under EU competition law for the first time (something Cameron seemed only dimly aware of at a recent PMQs).

Cameron will reportedly sit down with Nick Clegg, George Osborne and Danny Alexander – "the quad" – to thrash out a solution in the next two weeks.

The PM is clearly determined to blunt Labour's sharp attack on his handling of the NHS. As I noted yesterday, he moved at PMQs to insist that the coalition will not break its pledge to increase NHS spending in real terms. But this expensive promise on its own won't be enough to win back goodwill.

George Eaton is political editor of the New Statesman.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.