Cameron puts his privatisation plan on hold

The PM’s pledge to open up almost all of the public sector to private providers is in danger.

Earlier this year, David Cameron made a pledge of quite startling radicalism. In an article for the Daily Telegraph, the Prime Minister vowed to open up almost all of the public sector – bar national defence and the judiciary – to private and voluntary providers.

"The state," Cameron wrote, "will have to justify why it should ever operate as a monopoly." Through the creation of a "new presumption" in favour of a range of providers, the PM would go further and faster than Margaret Thatcher or Tony Blair ever did.

A white paper on open services, we were told, would soon follow. As Cameron wrote: "We will soon publish a white paper setting out our approach to public service reform. It will put in place principles that will signal the decisive end of the old-fashioned, top-down, take-what-you're-given model of public services."

But since the article was published on 20 February, we've heard almost nothing, with no sign of a white paper. Now, in the face of opposition from the Liberal Democrats, Cameron has retreated even further. Today's Financial Times reports that the white paper is unlikely to be published until mid-July, while Paul Waugh suggests that it may never see the light of day at all.

However, it's not hard to see why Cameron has rediscovered the virtues of caution. The pledge to open up the NHS to "any qualified provider" has toxified Andrew Lansley's reforms, while the near-collapse of Southern Cross, the company responsible for 750 care homes, is a timely reminder of the limits of the market.

The Lib Dems, to their credit, have declared that enough is enough. Nick Clegg is determined to resist anything that paves the way for the wholesale privatisation of services.

But many in Cameron's party will see this as further evidence of the PM's diminished ambition. The government's free schools agenda, they warn, will be stillborn unless schools are allowed to make a profit. The tuition fees plan, they complain, was robbed of its coherence by implacable Lib Dems. The same fate, they fear, will now befall the government's NHS reforms.

Cameron's latest reversal will only encourage the view that he is a Heath, not a Thatcher.

George Eaton is political editor of the New Statesman.

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How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

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