Will the Lib Dems halt Hunt's backdoor NHS privatisation?

Health secretary promises to address "concerns" over Section 75 of the NHS bill after pressure from Lib Dems and Labour.

When the government's Health and Social Care Bill was finally passed by Parliament last year it was on the condition that GPs would not be forced to open up NHS services to private competition.

Andrew Lansley, the-then Health Secretary, told the Commons: "There is absolutely nothing in the Bill that promotes or permits the transfer of NHS activities to the private sector". In a letter to Clinical Commissioning Groups, he wrote:

I know many of you have read that you will be forced to fragment services, or put them out to tender. This is absolutely not the case. It is a fundamental principle of the Bill that you as commissioners, not the Secretary of State and not regulators – should decide when and how competition should be used to serve your patients interests. 

Having accepted Lansley's assurances, the Lib Dems granted the bill their support. But new regulations published under Section 75 of the act flatly contradict the government's promises. The guidelines state that commissioners may only award a contract without competition if they are "satisfied that the services to which the contract relates are capable of being provided only by that provider". In practice, then, GPs will be forced to open up all NHS services to private companies, regardless of the wishes of local people, with the healthcare regulator Monitor granted the power to block any "unnecessary" restriction of competition. 

Secondary legislation like this is normally nodded through parliament without debate but Labour, smelling a rat, warned that the regulations amounted to an attempt at backdoor privatisation. Jeremy Hunt, Lansley's replacment as health secretary, initially sought to dismiss the opposition's concerns. In response to a question from Jamie Reed, the shadow health minister, he declared: "Who exactly are the section-75 bogeymen [he] hates: Whizz-Kidz, who are supplying services to disabled children in Tower Hamlets? Or Mind, which is supplying psychological therapy to people in Middlesbrough?"

But after the Lib Dems joined Labour in raising concerns, Hunt has been forced to think again. Norman Lamb, the Lib Dem health minister, told his party colleague Andrew George, one of those opposed to the regulations, "We are looking at this extremely seriously. Clear assurances were given in the other place during the passage of the legislation, and it is important that they are complied with in the regulations."

In reponse, as today's Guardian reports, Hunt has made it clear that he is prepared to rewrite the new guidelines. A source tells the paper: "We are aware that there are concerns over the wording and the way it may be interpreted. We are speaking to the Lib Dem peers to make sure they are happy. We want to make sure everyone is happy."

The shadow health secretary, Andy Burnham, said in response: "The government has been caught out trying to force through privatisation of the NHS by the back door.

"This is another humiliating U-turn to add to the government list, but we believe ministers will stop at nothing to drive through their plans to put the NHS up for sale to the highest bidder."

But will this be anything other than a comestic rewrite? Ahead of the Lib Dems' spring conference next month, this is a key test of the party's nerve. 

Health Secretary Jeremy Hunt speaks at the Conservative conference in Manchester last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Labour tensions boil over at fractious MPs' meeting

Corbyn supporters and critics clash over fiscal charter U-turn and new group Momentum. 

"A total fucking shambles". That was the verdict of the usually emollient Ben Bradshaw as he left tonight's Parliamentary Labour Party meeting. His words were echoed by MPs from all wings of the party. "I've never seen anything like it," one shadow minister told me. In commitee room 14 of the House of Commons, tensions within the party - over the U-turn on George Osborne's fiscal charter and new Corbynite group Momentum - erupted. 

After a short speech by Jeremy Corbyn, shadow chancellor John McDonnell sought to explain his decision to oppose Osborne's fiscal charter (having supported it just two weeks ago). He cited the change in global economic conditions and the refusal to allow Labour to table an amendment. McDonnell also vowed to assist colleagues in Scotland in challenging the SNP anti-austerity claims. But MPs were left unimpressed. "I don't think I've ever heard a weaker round of applause at the PLP than the one John McDonnell just got," one told me. MPs believe that McDonnell's U-turn was due to his failure to realise that the fiscal charter mandated an absolute budget surplus (leaving no room to borrow to invest), rather than merely a current budget surplus. "A huge joke" was how a furious John Mann described it. He and others were outraged by the lack of consultation over the move. "At 1:45pm he [McDonnell] said he was considering our position and would consult with the PLP and the shadow cabinet," one MP told me. "Then he announces it before 6pm PLP and tomorow's shadow cabinet." 

When former shadow cabinet minister Mary Creagh asked Corbyn about the new group Momentum, which some fear could be used as a vehicle to deselect critical MPs (receiving what was described as a weak response), Richard Burgon, one of the body's directors, offered a lengthy defence and was, one MP said, "just humiliated". He added: "It looked at one point like they weren't even going to let him finish. As the fractious exchanges were overheard by journalists outside, Emily Thornberry appealed to colleagues to stop texting hacks and keep their voices down (within earshot of all). 

After a calmer conference than most expected, tonight's meeting was evidence of how great the tensions within Labour remain. Veteran MPs described it as the worst PLP gathering for 30 years. The fear for all MPs is that they have the potential to get even worse. 

George Eaton is political editor of the New Statesman.