Cameron at 10

by Anthony Seldon

  When Cameron and Clegg decide to push the protection of financial services as the important safeguard, the signals back from Berlin are not promising. By Friday 2 December, it is clear British demands will not be met. The team meeting in Whitehall to discuss the response decide not to compromise in their demands. Some on the British side believe an opportunity to cut a deal is lost at that point. Merkel has concluded that it would be more trouble than it is worth to take up British concerns. So she switches her primary allegiance to Sarkozy. The EU Council opens in six days, and she must get the treaty through: she will press ahead without the British.

  On Monday 5 December, Merkel and Sarkozy meet in Paris and finalise details of the treaty. Sarkozy may have been Cameron’s best friend recently over Libya, but he is indignant at what the British are asking and at their refusal to ameliorate the eurozone crisis: he will not allow Britain its concessions on financial services. He and Merkel agree that Britain is asking for too much in wanting special privileges for the City of London. Together, they finalise the terms on what becomes known as the ‘Merkozy’ Treaty.10 Britain’s ambassador to the EU, Kim Darroch, picks up a whiff from French counterparts of what is being planned. He dispatches an immediate email to Llewellyn: ‘An ambush is being prepared here in Brussels. Merkel and Sarko will not give in to us. They will go down the separate treaty route.’ Darroch suggests Cameron goes ahead and demands that the remaining EU powers sign a separate treaty outside the formal membership of the twenty-seven national leaders, as unanimity is required for all treaty changes. Whitehall dismisses the idea of a separate treaty as unlikely. Llewellyn nevertheless shows the email to Cameron.

  The mood in Cameron’s team that Monday is bleak. The separate-treaty route would give away leverage. The Foreign Office remain cautiously optimistic: it reckons there is a 60% chance of the PM coming back from the meeting with a deal, although Hague’s closest aides are more doubtful. Most optimistic of all is Clegg. ‘The DPM never thought we would be isolated, and so didn’t properly weigh up how it would play and what he’d do about it.’ ‘The possibility that we’d be alone was never envisaged or talked about. That had to be a mistake,’ said an official. ‘We frankly underestimated the emotional commitment that the European countries have to the EU and each other,’ admitted another.

  On Tuesday, Cameron phones Merkel: ‘I’ll have to block. I’ll have to veto,’ he tells her in a state of some agitation. ‘In that case, I’ll have to do it without you,’ she tells him emphatically. He takes a breath. ‘You’ll have to use the European Union institutions and they belong to all of us and we won’t let you,’ he says. ‘Well, we’ll go to the European Court of Justice,’ she replies. Everywhere she turns, she tells him, he is standing in her way. Her tone at this point is more jovial than threatening. But underneath, her exasperation at the British is palpable.

  On Wednesday and Thursday, the EPP group, from which Cameron has resigned, meet in Marseilles. The German chancellor and the French president attend: the latter pleads on Thursday morning for members to support the Franco-German proposals that will be discussed in just a few hours in Brussels. EPP members are supportive. The British believe that Sarkozy and Merkel have got to Van Rompuy, in the chair for Thursday evening’s Council, so as to deny Cameron a fair hearing for his financial services request.

  Before Cameron leaves London on Thursday afternoon, he speaks to Clegg. The DPM believes that Cameron will push for the best deal possible, recognising there will be huge downsides if Britain is seen as the only member state preventing the treaty within the formal EU process. Cameron is in a sombre mood when he arrives in a grey, wintry Brussels. He and Hague have a private meeting at 4 p.m. with Merkel and Sarkozy in the French delegation office. ‘You’ve got your politics,’ Cameron tells them, ‘well, I’ve got my politics too!’ He pleads for them to agree to the British concessions. ‘No, we can’t, it won’t work,’ they reply. ‘Everyone will end up asking for something.’ There is going to be no compromise, and the British text on safeguards for financial services is dead. It comes as a real blow to them. They return to the British delegation. ‘They say their answer is no,’ Cameron tells them, looking ‘pale and concerned’. ‘We’ll have to make a pitch to the northern states,’ he tells them, before going off to speak to the Dutch. He also sees Van Rompuy, who to his frustration says he will deal with the treaty change first before moving on to British concerns. The British recognise their text will be considered only after the main business, when leaders will be tired and ready to go home.

  Dinner begins at 8.30 p.m. on the Thursday. It drags on past 10 p.m., 11 p.m., midnight, 1 a.m. … The British text is not discussed until 3 a.m. As part of the Franco-German stitch-up with Van Rompuy, the Italian prime minister Mario Monti is called to speak on it first. ‘I’d hoped, knowing the British, that they would want to strengthen the single market. But their plan will weaken it,’ he says. ‘If you won’t give me the text we need, I will have to say “no” to the treaty,’ Cameron responds emphatically. The British veto is duly exercised. On a pre-programmed pattern, Merkel, then Sarkozy, then a succession of other leaders, line up saying, ‘In that case, we will go for a separate treaty.’ Debate ensues on the legality of bypassing the treaty outside the formal process. Hague tells the PM emphatically: ‘David, if you concede on this issue, it will split the Conservative Party.’

  The meeting breaks up amidst general exhaustion at 4 a.m. on the Friday. Cameron returns to the British delegation looking ‘very green about the gills and physically shattered’. ‘I don’t want to do that too often,’ he tells them. He has found the confrontation with his fellow leaders very draining. ‘We had been all waiting anxiously. He knew it had been a disaster,’ said an official. Two immediate concerns in his mind are the press conference and handling the coalition. The journalists are all still up and baying for the story. The team spend an hour debating what to tell them. They decide his strongest line is to say, ‘I did what I promised I would do – what it said on the tin.’ They agree that he must be very careful with his language and categorically avoid saying whether it was a victory or not. At 5 a.m., a sprightly-looking Cameron goes before the British press corps.

  Llewellyn had spoken to Jonny Oates, Clegg’s chief of staff, at 8 p.m. the previous day, just after the Sarkozy/Merkel meeting, to say it was very unlikely that Cameron could now pull off a deal. Cameron had spoken that evening to Clegg, who was in Sheffield, and again just after 4 a.m., waking him up. Clegg’s reaction on both calls, Cameron reports to his team, is fairly measured. At the time, he appears not unduly concerned, beyond being in a minority of two (the Czechs are the only other country not to sign).

  At 6 a.m., Cameron’s party return to Kim Darroch’s official Brussels residence for a rest, before heading back to London. Cameron is a strikingly resilient man and does not get down easily; but he is quiet and reflective on the way to the airport, with ‘absolutely no sense that his stance had been a triumph’, as one of his team recalls.

  Shortly after his plane touches down in London, Cameron’s party become aware of very strong concerns among Lib Dems at the way the media is portraying the events. ‘What he did forced the rest of the EU to go it alone for the purpose of renewing the treaty, which sets an incredibly bad precedent,’ is the view of Clegg’s senior adviser Tim Colbourne. ‘We understood that the PM felt he had to come back with his “pound of flesh”, but we didn’t expect to him to demand the whole pound of flesh in exchange for his agreement. We expected him to reach some sort of deal.’11

  Former Liberal Democrat leader Paddy Ashdown is furious: Cameron’s team suspect that he has fired up Clegg. It explains to them why Clegg is so dismissive on Marr’s BBC show that Sunday: ‘I am bitterly disappointed by the outcome of last week’s summit … there’s nothing bulldog about Britain hovering somewhere in the mid-Atlantic and not standing tall on Europe and not being taken seriously in Washington.’12 A silver lining for the Lib Dems is that, from now on, they can portray the Co
nservatives, as well as UKIP, in the same rejectionist political corner, while they are the one unequivocal pro-EU party.13

  Cameron gives his statement on the summit the next day, Monday 12 December. He acknowledges that the eurozone crisis is having a chilling effect, not only in Europe but spilling over to the British economy too. Yet he says the safeguards he sought for Britain were ‘modest, reasonable and relevant’ to protect British interests, given London’s position as the world’s leading centre for financial services. He maintains adamantly that he is right to have stood aside from a treaty which ‘would have changed the nature of the EU – strengthening the eurozone without balancing measures to strengthen the single market’.14 Memories of his bruising climbdown over a referendum on Lisbon are still in his mind.

  And yet, overnight, Cameron becomes a hero to the Conservative Party. His personal ratings and those of the party soar in opinion polls: ‘The more the BBC stress how isolated Britain was and how it was 25 in the EU against Britain, the better it played for us. Our focus groups liked Cameron standing up for his country and saying “no” to the EU’, recalls Andrew Cooper.15 On Wednesday 14 December, Cameron addresses the 1922 Committee, and is greeted with a full-on orgy of ‘desk-banging and hysteria’.16 Bernard Jenkin says, ‘It is a watershed. The beginning of a long process.’ Bill Cash declares, ‘The fact that we’re now vetoing this treaty means that we are set on a path which involves fundamental renegotiation. Make no mistake about it.’17

  Cameron’s status as darling of the Conservative right is never going to last for long. It whets their appetite for their leader to be this pugilistic all the time. They refuse to understand why he cannot be. Turmoil in the party returns in 2012, more rabid than ever. Internationally, however, the pyrotechnics soon die down. ‘Both parties got what they wanted. Merkel got her Fiscal Compact Treaty, and Cameron got a good press,’ says one jaded EU official. Merkel is determined not to let this issue become a major problem between them. Steve Field, the PM’s official spokesman, is soon out telling reporters that the government is looking to ‘engage constructively’ with other EU nations to help them progress without the UK.18 Guido Westerwelle, the German foreign minister, comes to London on a peace mission that Monday, and ‘very soon again it was all sweetness and light’. Sarkozy had been fiery at the Council: he’d brushed past Cameron without acknowledging him, leading to photographs and headline stories across the world.19 But he and Cameron reach a private understanding that they will not make a big deal of it. The president accepts the British will spin it as a veto of treaty change, while the EU will spin it as saying ‘no’ to Britain and a refusal to allow an à la carte Europe. Sarkozy is wily enough to see it will be easier to ratify with just twenty-five signatories, so he is far from unhappy with the outcome of his very late night in Brussels.

  The damage from the veto, such as it is, is felt in two quarters. The Lib Dems remain angry that they were given very little warning that a deal would not be forthcoming. ‘I had to be in the negotiating room. I couldn’t simply slip out and make a phone call. I had to make my views clear there and then. There was no opportunity to tell you. Sorry Nick,’ is how Cameron later explains it to Clegg.20 Lib Dems are perturbed that the 4 a.m. call had been taken as tacit support for the line that there was no alternative. In any future coalition, the Lib Dems say they will insist on an operating manual where their leader will not be excluded from key decisions and then presented with a fait accompli. Even some Conservatives agree it would have been prudent to have taken a senior Lib Dem with them. But no enduring damage is done to the relationship with the Lib Dems.

  Harm is done, however, to Cameron’s vision of a consistent policy towards Europe. As his team take stock in the months following the veto, they realise that they had boxed themselves into a corner with their ‘Berlin or bust’ strategy. If he is to use it again, he will have to ensure that he has a far stronger relationship with Merkel: he has yet to learn fully how to play her. The episode throws into sharp relief his lack of a coherent strategy towards the EU. He had not wanted Europe to dominate his premiership. This experience shows him that it will, and that the sooner he defines what he wants to achieve in Europe, the better.

  FIFTEEN

  The NHS Debacle

  November 2009–September 2012

  If a prize were to be awarded for the biggest cock-up of Cameron’s premiership, there would be only one contender: Andrew Lansley’s NHS reforms. But is the condemnation totally fair? In no single area had the Conservatives been so emphatic about their commitments: ‘I make this commitment to the NHS … no more pointless reorganisations,’ said Cameron in October 2006 in his first party conference speech as leader.1 ‘The NHS needs no more pointless organisational upheaval,’ echoed shadow Health Secretary Andrew Lansley in July 2007.2 ‘There’ll be no more of those pointless reorganisations that aim for change but instead bring chaos,’ Cameron told the Royal College of Nursing in May 2009.3 If that wasn’t all sufficiently clear, he told the Royal College of Pathologists that November, ‘There will be no more of the tiresome, meddlesome, top-down restructures that have dominated the last decade of the NHS.’4 The key word here, often overlooked, is ‘pointless’. This operative word was omitted, crucially, in one seminal document, however: the Coalition Agreement: ‘We will stop the top-down reorganisations of the NHS that have got in the way of patient care.’5 If Cameron and George Osborne had learnt only one thing in Opposition, it is that not being trusted with the NHS will lose them the general election. ‘We love the NHS,’ Osborne repeatedly said in meetings to anybody who would listen: ‘We love the NHS!’

  Yet a reorganisation ‘so big you could see it from outer space’, as one insider describes it, is exactly what the government tries to introduce the moment it comes to power.6 Lansley’s appointment as Health Secretary goes through on the nod: he’d done the job in Opposition, both Cameron and Osborne had worked for him in the Conservative Research Department, and they both consider him a reassuring figure on the NHS who knows the subject backwards. Once in office, he starts saying, ‘I am the Secretary of State for Health. I’ve decided what I want to do. I’ve thought about it. My ideas have all been written down. I know what I am doing.’ Cameron’s and Osborne’s teams say they are shocked when they hear exactly what Lansley has in mind, which they think has come out of the blue. ‘Andrew Lansley may think we talked about these reforms in the manifesto, but not in any way that we recognised,’ says one.

  But Lansley is right and they are wrong. He has been very clear and open about his plans. In the build-up to the election, health plans were not highlighted in the overall message that the leadership gave, and collective amnesia seems to have come over them. Among other documents, Lansley had written a paper in 2007, later rewritten by Oliver Letwin for the Conservative’s Spring Forum in 2008. In the foreword, Cameron wrote: ‘we will free our NHS professionals and allow them to fulfil the vocation they were trained to do. We will give GPs real control over their budgets so they can reinvest savings and negotiate contracts with service providers to get the best deal for their patients’.7 In place of ‘top-down’ reform, which the Conservatives associated with Labour’s muddled reforms of years gone by, they propose a ‘bottom-up reform model, allowing those closest to the patients themselves, not bureaucrats, to run the system’.

  Lansley’s reform package has two key elements: to allow GPs at a local level, through Care Commissioning Groups (CCGs), to make decisions that had hitherto been taken at a top level by strategic health authorities; second, within Whitehall, day-to-day management of the NHS is to be taken away from the Secretary of State and placed in the hands of a new post – the ‘chief executive of the NHS Commissioning Board’ (which becomes known as ‘NHS England’). Once a year, government is to set the mandate for what the NHS will deliver and the new body will be responsible for commissioning services. The aim is to depoliticise the NHS. What is envisaged is for government no longer to be directly responsible for the most highl
y sensitive of public services and the one most visible to the media. Not until as late as the autumn of 2013, when he becomes concerned about a crisis in accident and emergency departments, does the PM fully realise that he no longer has the levers of power to control the NHS. Only then does he admit that he fully ‘got’ the reforms. He may have understood them in his head on one level, but doesn’t understand the full significance until then.

  The critical question is how on earth do two figures as savvy as Cameron and Osborne miss this laser-illuminated spaceship landing before their eyes outside the front doors of Number 10 and Number 11? Andy Coulson puts it down to a collective failure to be candid about the considerable difficulties the NHS is facing – an ageing population, the rising cost of treatment, and a struggling economy – to meet the electorate’s ever-increasing expectations. They simply don’t want to engage with reform of the NHS when they have so much else to think about, so they put it out of their mind. ‘We’re reforming welfare, education and the public sector. Do we really need to do health now too?’ Cameron asks forlornly early on.