NHS reform is a never-ending nightmare for Cameron

The Prime Minister could end up with a reputation as the man who broke the NHS.

The NHS bill cleared a legislative hurdle in the Lords this week . But that doesn't really solve any of the political problems facing the government's reforms. Of those problems, one of the biggest is that the coalition doesn't seem to have a clear grasp of why Andrew Lansley's plans are causing so much difficulty.

The one thing everyone can agree on is that the plans have been appallingly presented. Lansley cooked them up in the Department of Health without much input or scrutiny from Downing Street. (So blindsided was the prime minister that the episode triggered a whole re-organisation of the Number 10 policy operation earlier this year.) According to one senior civil servant at the heart of the operation, when Cameron was first presented with Lansley's plan he skimmed the introduction and then turned to his aides in shock and disbelief and said "have you read this stuff?!" He had, until then, had no idea of the scale of what was being planned.

There was a moment, towards the end of January, when a u-turn was still an option. But Cameron feared looking weak by abandoning such a huge public sector policy drive - and, reasonably enough, worried that dropping the reforms would implicitly confirm voters' suspicions that the Tories had some hidden agenda on health. A u-turn would make it look as if they had been rumbled. The way senior figures in government tell the story, Cameron's foot hovered between the brake and the accelerator, finally choosing the latter. That now looks like a huge mistake.

The essential miscalculation was the PM's assumption that if he personally threw some weight behind the cause - deploying the powers of persuasion in which he has considerable confidence - the public mood might shift. Of course, the Conservatives did not count on a Lib Dem backlash, sanctioned from the top of the party as a device to "differentiate" the junior coalition partner (fearful of losing its identity) over an issue of famous toxicity to the Tories. Some of the Lib Dem turbulence around the NHS earlier this year was principled objection to the reforms but some is retaliation for the Tories' personal attacks on Nick Clegg during the referendum campaign on the alternative vote. The compromise package that ended up before the Lords this week was therefore a mangled monster consisting of the original Lansley plan with heaps of ad hoc Lib Dem caveats, brakes, disruptions and supposed safeguards.

And there lies the government's problem. The reform it is now trying to sell is the expression of Westminster political choreography and not a coherent response to the needs of the health service. Everyone in the NHS knows it and voters can sense it.

Cameron and Lansley have tried to sell the need for reform on the grounds that the health service cannot cope with rising levels of demand without major structural change (especially when there is no more money to fund the existing system). My own impression is that they haven't got that message across too well. One thing, however, is certain and that is their failure to persuade people of the follow-up assertion that the only solution lies in much more private sector involvement using much more vigorous competition to provide services. The Lib Dems and Labour are just as queasy about bald expressions of that view - it is, essentially, the Blairite model of public sector reform and has advocates in all three main Westminster parties.

But opponents of Lansley's plans don't need to rebut the theoretical premise on which it rests because (a) they can just accuse the government of unleashing needless revolutionary chaos in the NHS, which is plainly true and (b) they can accuse the prime minister of reneging on a pledge not to do (a), which is also true. Plus, (c) voters' mistrust of the Tories over the health service is visceral. Whatever it is the Tories are doing will raise suspicions of an ulterior motive; Cameron and Lansley have done everything possible to confirm that view by failing to sell the reforms on their own terms. You can't credibly insist that there will be no privatization of the health service when the core concept of the reforms is to promote more competition and more private sector involvement. OK, so it's not privatization in way that BT and BA were sold off in the Eighties, but it's hardly reinforcing the "national" in National Health Service.

The only way to actually persuade people that the Lansley plan is any good would be to sell the first principle of increased marketisation in health care but, implicitly, the Tories have accepted that such an approach is toxic to their political reputation. Besides, changes demanded by the Lib Dems have corrupted Lansley's vision enough that - even if it were the best way forward (which I doubt) - it can't be implemented as the health secretary envisaged. Meanwhile, there are £20bn of "efficiency savings" to be found, which will feel like cuts and inflation at around 5 per cent, which will have an impact on health budgets that will also feel like cuts. Every doctor and nurse in the country will have motive and cause to blame the government for every refused treatment and every bad outcome.

David Cameron needs to wake up to the fact that he has allowed a process to get underway whose long term outcome could easily be an historic reputation for him as the man who broke the NHS.

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.