For the Record

by David Cameron

  Where Europe did arise was with Obama. Having talked to him a lot about the election in the run-up, it was always clear that he’d thought I’d make it back, one way or another. But after the initial ‘Way to go’s, his tone changed. ‘I hope you’ve got a plan to keep Britain in Europe,’ he warned. ‘We want you to stay in the EU.’

  The European referendum was at the top of my mind. It was a manifesto promise, people had voted for it, and I would deliver it. It would be my biggest task. But it was also one of many policies from the manifesto – and beyond it – that I planned to deliver in this radical second term.

  I couldn’t do it alone. I needed the support of parliamentarians to turn these policies into law. It was a small majority. Every vote would count. The first Monday morning back in the House of Commons, I went to address the 22 in Committee Room 14, just as I had in 2010. Often the desk-banging in these meetings is fake – organised by the whips so the press outside can hear. This time it was for real.

  There was also the matter of a fully Conservative cabinet to deliver those policies across Whitehall. Before anything else, I talked with Michael Gove about his role. He confirmed that he wanted to move to a department, somewhere he could get his teeth into reform again. Overhauling the prison system would be a big part of my agenda, and he leapt at the possibility of being justice secretary. That would depend on the shuffling I could do elsewhere, so I asked him to sit tight until I sorted it.

  In the rest of the reshuffle there were aspects of continuity. George Osborne, Theresa May and Philip Hammond all remained in the great offices of state. But there would be one change for George. When I came to reappoint him as chancellor he asked if my offer to make him first secretary still stood – it was something I’d put to him around the time William had said he was standing down. I was happy to confirm that it did.

  There was a case for swapping May and Hammond. But as he hadn’t been in the job long enough for that to be fair, I thought I’d wait.

  There were the obvious moves, a happy necessity of not needing to leave space for the Lib Dems. David Mundell had shadowed the Scottish secretary job throughout my entire time as opposition leader, and had been the number two in the Scotland Office throughout the whole coalition. It was a very long apprenticeship, and I was delighted finally to give him the top job.

  There were the sensible rotations. Chris Grayling seemed a good fit for leader of the House of Commons (he hadn’t excelled at Justice, but getting rid of him would anger the right). With his strong business career, Sajid Javid slotted straight into the job of business secretary.

  There was some innovation. John Whittingdale, who had once worked for Margaret Thatcher as her political secretary in No. 10, was the chairman of the DCMS Select Committee, and would now lead the department. He knew the brief, reassured the right, and would be a highly capable minister.

  There were also some curveballs. No one in my team could see why I wanted to promote Dominic Raab to the Ministry of Justice, after his amendment on human rights legislation had provoked a rebellion of eighty-six Tory MPs in 2014. Yet I knew we’d be better off taking advantage of his ability than suffering because of it. He was clear: ‘You have put your trust in me and I will not let you down.’

  What to do with Boris? He had re-entered Parliament as the MP for Uxbridge, and his term as mayor of London would end in May 2016. I got him into my office to talk about the options. I wanted him firmly inside the tent from the start. But it became clear that he couldn’t sit in cabinet while still being mayor, so we came up with the idea that he could belong to the political cabinet, which would continue to meet every week before the main event.

  It was time to harvest the crop of talent from the seeds sown over the past decade or more. Amber Rudd, who had excelled as a junior minister at Energy and Climate Change, would lead that department. Royal Naval reservist Penny Mordaunt became minister for the armed forces (the first woman to hold that position) and Anne Milton became deputy chief whip (another first). Both Anna Soubry and Priti Patel became senior ministers who would attend cabinet, taking the tally of women ministers up to a third. We were steadily ending the idea that the Tories weren’t open to talent, to women, to minorities, while at the same time slaying the myth that outright positive discrimination was needed to get to the top.

  It was the right time for Eric Pickles and Francis Maude to step down, and they did so graciously. It was also the right time for IDS to go. I was getting increasingly frustrated with the costs of Universal Credit and his failure to come up with plans to reform and reduce spending. But what dissuaded me was – again – the potential backlash from the right. As we’ll see, that was a big mistake.

  The first policy speech I made in the new government was on health. The Lansley reforms had been too much of a solution in search of a problem. Now we would focus on more tangible, understandable changes that would make the health service friendlier and more flexible. Our headline manifesto promise of a ‘seven-day NHS’ was a big part of this. Of course, in a literal sense the NHS already operated on a seven-day basis: accident and emergency departments and most hospitals were open twenty-four hours a day, seven days a week, for 365 days a year.

  But the NHS was not offering a genuine seven-day-a-week service. GP appointments and most non-urgent operations were restricted to weekdays. Out-of-hours service was patchy and often of poor quality. With GP surgeries often shut at the weekend, A&E departments came under huge pressure. People don’t just get ill during office hours, yet the staffing rotas in hospitals often meant that patients on wards had less access to the most highly trained doctors. There was compelling evidence that mortality rates went up at the weekend.

  I knew from my own experience with Ivan that patients and their families got a less good service as the week came to an end. This included the all-important ‘magic moment’ when you are well enough to go home. If you didn’t get discharged on a Friday, you would likely have to wait till Monday to get out of hospital, blocking up beds and putting the NHS under ever more pressure. It was a vicious circle.

  So we would attempt this latest reform of the NHS: creating a seven-day health service. This would inevitably involve reforming the pay of junior doctors, a term that covers everyone from newly qualified medics to senior registrars, and who make up about half of NHS hospital doctors.

  At that point, ‘normal working hours’, for which doctors received their usual rate of pay, were 7 a.m. to 7 p.m. on weekdays. Anything outside those hours was paid extra. If we were to guarantee proper cover at other times, we would not be able to afford the existing generous overtime rates. A sensible change would be to extend ‘normal working hours’ to 7 a.m. until 10 p.m., and to include Saturdays from 7 a.m. to 7 p.m. This was hardly outrageous. Plenty of professionals work shifts that extend late into the evening, and Saturdays, and are paid the same rate for those times as for weekdays. There would still be overtime pay for really antisocial hours – nights and Sundays. What’s more, doctors had already had a 48 per cent pay rise in the decade before we took office. And, crucially, we would increase their basic pay by 13.5 per cent to compensate for the loss of this overtime.

  And yet I knew it wouldn’t be easy. As I knew all too well, the doctors’ union, the BMA, was a fearsome opponent. I knew the NHS was surrounded by wild myths, for example that the Tories wanted to privatise it. I knew that, while we’d drawn neck and neck with Labour on the NHS in opposition, the Conservative Party had baggage on the issue, and was now some way behind.

  I charged Jeremy Hunt with delivering the change. I knew he would be unwavering, and when the heat on him increased – which, the following year, it did – I would stand by him all the way, including during the first strikes by junior doctors in forty years. (The eventual contract would give a lower pay rise, but created a more complex system of compensated overtime.)

  The second policy speech I made was on immigration. This was one of the areas
where we’d been held back by being in coalition – specifically on delivering our 2010 manifesto target to get the number of net new arrivals under 100,000 a year.

  I believe that people coming from other countries to live and work in Britain are vital to our success as a nation. But you can only maintain consent if those arrivals happen at a rate that allows for integration. Indeed, if you simply say ‘Let everyone in,’ you’re actually harming the cause you claim to champion. I wanted to control immigration because I am pro-immigration. That’s why we reiterated the 100,000 target in our 2015 manifesto – and now we could pursue it with renewed vigour.

  Net migration fell for the first two years after 2010, as some of the measures to control migration from outside the EU took effect, particularly the cap on economic migration. But from late 2012 it had started a seemingly inexorable rise, first with increases in EU migration, and then even bigger numbers in terms of non-EU migration. The first Bill of the new government would be packed with measures to try to bring this under better control.

  Policies to counter extremism that would simply have been vetoed by the Quad were back on the table too, as was a permanent commitment to maintaining defence spending above 2 per cent of GDP.

  And yet to truly become one nation we would have to end the financial hardship and blocked opportunity I’d talked about on the steps of No. 10.

  There was a particularly perverse set of circumstances for low-paid people that I was keen to address. Over the years, an absurd system had grown up whereby workers on the minimum wage were having their pay taxed by the government and then given back to them – plus more money – in benefits. It was essentially a money-go-round. The result was a welfare budget that was unaffordable, and that gave out the message, in many cases, that work didn’t pay. That was both unfair and unsustain­able. We needed to transform Britain from a low-wage, high-tax, high-welfare society into a higher-wage, lower-tax, lower-welfare society.

  On top of that, we needed to take action on the problems that prevented people getting good jobs and living a good life in the first place. Problems like family breakdown, poor schooling, debt, addiction, crime, a broken care system and a lack of training.

  Our proposals contained things the Lib Dems would have jumped at – like tackling mental illness – and things they would’ve baulked at – like promoting marriage. They tied together everything we were doing, from cutting the deficit to reforming adoption.

  To have any chance of implementing this ‘life chances’ agenda, we would need to lay the financial foundations in our opening Budget. Immediately this raised a major question about the deficit and public-spending reductions. The manifesto had promised £30 billion more savings over the next two years, and that £12 billion of these cuts would come from the welfare budget. We had to decide whether we should stick to this or slow the pace, pushing our already-postponed deadline for a budget surplus back to 2019.

  George just wanted to get on with the welfare changes – to do what we said we’d do within the timeline we’d set out. But I believed that, having earned a reputation for fiscal responsibility, nobody was going to think us feeble for pushing it back a short while. The reputation I badly wanted us to secure was for centre-ground, compassionate, sensible One Nation politics. Going too hard and fast on welfare cuts would risk that. When the crunch meeting came, I put the case for making the welfare cuts over the length of the Parliament. George eventually agreed. But even with this scaled-back programme we were still storing up future troubles with IDS.

  The next reform to push through was higher pay, starting with an increase in the minimum wage. At a dinner a few months before, the veteran businessman Sir John Hall, former owner of Newcastle United Football Club, put it bluntly in his strong Geordie accent: ‘David, the working people of this country have earned a pay rise, but they’re not getting it. Why don’t you give it to them, man?’

  For too long businesses had got away with paying low wages because they could rely on government topping them up with tax credits. We had been wrong to oppose Labour’s introduction of the minimum wage in 1999 – claims that it would increase unemployment had turned out to be incorrect, and businesses were actively supporting it. Now, if we were going to break the cycle of the low-pay, high-benefits economy that was helping to push up welfare bills, we needed that minimum wage to increase.

  Labour had promised an £8 minimum wage by 2020. Thanks to the difficult decisions of the past five years, we were the ones that could actually deliver it. Indeed, because the economy was strengthening, the labour market was operating effectively and businesses, with lower corporation taxes, were doing well, we could go further. A compulsory £9 an hour living wage for over-twenty-fives by 2020 – starting at £7.20 the following year – would be the centrepiece of the Budget. When George announced it from the despatch box, it was an electric moment for the Conservative Party. We were finally ending that money-go-round, promoting a greater sense of fairness in our society and faith in our economic system – the actions of a true One Nation government.

  If 2010–12 was about finding my feet on the world stage and 2013–14 pushing the agendas I cared about, then 2015 onwards could be the period to enhance Britain’s place in the world still further.

  Yet my first overseas trip, to the G7 in Bavaria, was overshadowed by a huge row with our greatest ally.

  George had been both creative and aggressive in looking for ways to make our relationship with China more meaningful. We agreed – against the advice of the Foreign Office and without the agreement of our traditional allies – that Britain should join the new Asian Investment Infrastructure Bank (AIIB) which the Chinese wanted to establish, based in Beijing. The Japanese objected – vigorously – because there was already an Asia Development Bank, and they feared China’s rise. The Americans disliked the plan because they felt it would enhance China’s power in the region.

  Our view was different. We believed that it was unrealistic to argue that China should take full part in the global rules-based order – joining and paying into institutions we had set up after the war – while at the same time saying that it could never add to these institutions with ideas of its own. More to the point, by joining the new institution at the start, we believed that we could help ensure that it would have proper rules and governance. So we became the first major Western nation to endorse the fund.

  It was only when I was sitting around the G7 table with Obama, Merkel and Hollande that I realised Obama’s officials hadn’t told him about our move. He reacted sharply. ‘David, I think you’re wrong and naïve, and I can’t believe you’ve broken with Western allies in doing this,’ he said.

  We had been doing this Treasury to Treasury, with our US counterparts fully informed – it wasn’t my fault his officials hadn’t told him. For the American president to criticise Britain in front of the French and German leaders in this way was unprecedented, and deeply embarrassing.

  Events have proven we were right to join the AIIB. Today it is well established, with rules, governance and personnel befitting a genuine multilateral organisation. Its investments in Asian infrastructure are good for the region and the world economy. Germany, France, Italy and others have followed our lead and joined in. And our decision to join early was transformational in building a better relationship with China.

  The decision showed how keen we were to look beyond Europe, and the same was true of trade. That is why I chose south-east Asia for a mammoth trade mission at the beginning of the summer break in 2015. Indonesia, Singapore and Malaysia were return visits. My visit to Vietnam, though, was the first ever by a British prime minister.

  I thought the story of our two countries was one to shout about. We had nurtured the relationship through aid, and as that was slowly withdrawn, the flow of trade continued to increase. As Vietnam embraced market economics, it had grown almost exponentially. From being one of the poorest countries to a vibrant middle-income c
ountry. From 58 per cent of people in poverty in 1992 to less than 14 per cent in 2010.

  As our convoy drove from the airport to the presidential palace, I looked across the paddy fields towards the skyscrapers of Hanoi, remembering how few cars there had been on that road the last time I had been in the country, as a tourist in the 1990s. After inspecting the honour guard in the rain, I sat down to talk with President Truong Tán Sang. The memories of so many of these types of conversation blend into one another. Bromides about the importance of good relations. Talking points about trade deals, visa processes and the like. But this stands out. Truong started by explaining ‘the two principles of Vietnam’s governance’, which turned out to be ‘One: complete adherence to the principles of Marxism/Leninism’ and ‘Two: complete introduction of a market-based economy’. He said this with a wry smile, and I replied jokingly that he was my kind of communist. As we walked to meet the rest of our delegations he insisted on holding hands, and throughout the visit I would find his hand reaching out for mine at every opportunity.

  Back in Britain, I wondered who I’d be facing at the despatch box as Labour started to consider who would replace Ed Miliband. The front-runner was shadow home secretary Yvette Cooper: effective in the Commons, a formidable intellect, experienced as a minister. The trade unions’ pick, Andy Burnham, was less quick on his feet, but equally experienced in cabinet and shadow cabinet. The outsider, Liz Kendall, was the self-styled moderniser, in some ways trying to do to Labour what I had done to the Conservatives, post-2005.

  Then there was the wildcard, written off by almost everybody: Jeremy Corbyn.

  The far-left Islington North MP said he had only thrown his hat into the ring to promote the hard-left faction of the Labour Party to which he belonged, and that, at sixty-six, he wasn’t a long-term contender. He only managed to get the requisite number of backers to appear on the ballot paper because some MPs lent him their votes to broaden the range of candidates. Many later said that if they had thought he had any chance of winning they would never have done so.