The Tory right declares war on Whitehall

A new report argues that the civil service is blocking radical public service reform.

When storm clouds are gathering over the world economy - when the BBC can run a survey of experts under the headline "has Western capitalism failed?" - it is expecting a lot for people to pay much heed to a parliamentary select committee report on civil service reform.

Nonetheless, this particular intervention by the public administration select committee is worth noticing, even if just in a short break between cold sweats about the imminent financial apocalypse.

The gist of the report is that the coalition's plans to reform public services are running up against a civil service culture of inertia and that they risk being smothered to death by bureaucracy. At the top of the list of ideas whose implementation is jeopardised, according to committee chair, Conservative MP Bernard Jenkin, is "the big society" - the prime minister's pet project. If there weren't so many scarier things going on this would surely have turned into a load of "MPs say Big Society won't work (again)" headlines.

Jenkin is on the right of the party and, from what I have seen, likes to think of himself as a provocateur but not a trouble-maker; an independent character but not an awkward-squaddie. This report is surely being packaged up and presented as a cache of ammunition to assist those inside Downing Street who argue that the government needs to press ahead much more boldly with the break-up of what they see as failed public sector monopolies. That faction sees Whitehall mandarins as the praetorian guard of outmoded statism.

Back in February, David Cameron was marching to that drum, promising to bring private or voluntary sector competition to every aspect of what the state does, sparing only the military and courts. But the anti-state maximalists (whose high priest is chief Cameron advisor Steve Hilton) were held back by an informal alliance of Lib Dems and sceptical Tory tacticians. They feared that a fanfare of noisy public sector radicalism would raise voter alarm, feed into an opposition narrative of slash-and-burn privatising fanaticism and generally cause more trouble than it would be worth. The whole NHS debacle seriously killed the mood for big public sector changes - not least by putting George Osborne, the most powerful figure in government after the PM, off the idea.

This division inside government produced, after much wrangling and delay, the white paper on Open Public Services. (It was launched in the middle of the phone-hacking furore in July, so no-one noticed.) The white paper promises lots of consultation and consideration of radical reforms, but few cast iron commitments. The whole process of getting even that far exhausted ministers. One very senior member of the cabinet described it to me as "the biggest coalition arm-wrestle" behind the scenes so far. Then there were riots, Libya to think about ... the whole thing just went off the boil.

But the Thatcherite purist end of the Conservative party hasn't forgotten and my guess is that this report is being framed as a way to get things boiling again. Jenkin has a piece plugging the report on ConservativeHome today. He also made a speech launching the report, which ended thus: "We are proposing a special inquiry into the role and functions of the Head of the Civil Service. What does that title mean? What should it mean? So watch this space!"

In the staid language of select committees that is a quiet declaration of war on Whitehall.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Brexit is teaching the UK that it needs immigrants

Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past.

Why did the UK vote to leave the EU? For conservatives, Brexit was about regaining parliamentary sovereignty. For socialists it was about escaping the single market. For still more it was a chance to punish David Cameron and George Osborne. But supreme among the causes was the desire to reduce immigration.

For years, as the government repeatedly missed its target to limit net migration to "tens of thousands", the EU provided a convenient scapegoat. The free movement of people allegedly made this ambition unachievable (even as non-European migration oustripped that from the continent). When Cameron, the author of the target, was later forced to argue that the price of leaving the EU was nevertheless too great, voters were unsurprisingly unconvinced.

But though the Leave campaign vowed to gain "control" of immigration, it was careful never to set a formal target. As many of its senior figures knew, reducing net migration to "tens of thousands" a year would come at an economic price (immigrants make a net fiscal contribution of £7bn a year). An OBR study found that with zero net migration, public sector debt would rise to 145 per cent of GDP by 2062-63, while with high net migration it would fall to 73 per cent. For the UK, with its poor productivity and sub-par infrastructure, immigration has long been an economic boon. 

When Theresa May became Prime Minister, some cabinet members hoped that she would abolish the net migration target in a "Nixon goes to China" moment. But rather than retreating, the former Home Secretary doubled down. She regards the target as essential on both political and policy grounds (and has rejected pleas to exempt foreign students). But though the same goal endures, Brexit is forcing ministers to reveal a rarely spoken truth: Britain needs immigrants.

Those who boasted during the referendum of their desire to reduce the number of newcomers have been forced to qualify their remarks. On last night's Question Time, Brexit secretary David Davis conceded that immigration woud not invariably fall following Brexit. "I cannot imagine that the policy will be anything other than that which is in the national interest, which means that from time to time we’ll need more, from time to time we’ll need less migrants."

Though Davis insisted that the government would eventually meet its "tens of thousands" target (while sounding rather unconvinced), he added: "The simple truth is that we have to manage this problem. You’ve got industry dependent on migrants. You’ve got social welfare, the national health service. You have to make sure they continue to work."

As my colleague Julia Rampen has charted, Davis's colleagues have inserted similar caveats. Andrea Leadsom, the Environment Secretary, who warned during the referendum that EU immigration could “overwhelm” Britain, has told farmers that she recognises “how important seasonal labour from the EU is to the everyday running of your businesses”. Others, such as the Health Secretary, Jeremy Hunt, the Business Secretary, Greg Clark, and the Communities Secretary, Sajid Javid, have issued similar guarantees to employers. Brexit is fuelling immigration nimbyism: “Fewer migrants, please, but not in my sector.”

The UK’s vote to leave the EU – and May’s decision to pursue a "hard Brexit" – has deprived the government of a convenient alibi for high immigration. Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past. Brexit may have been caused by the supposed costs of immigration but it is becoming an education in its benefits.

George Eaton is political editor of the New Statesman.