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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.