Cameron at 10

by Anthony Seldon

  Two vital moments are lost when the plans could have been sidelined: the first is at a rare meeting of the coalition committee. Some Lib Dems are disturbed by Lansley’s intentions. When the programme for government is being negotiated, the former Lib Dem spokesman for health, Norman Lamb, learns the full extent of Lansley’s plan. He texts Polly Mackenzie: ‘Holy Crap, Andrew Lansley is announcing that we are going to go ahead with this NHS quango thing.’ Lansley is concerned he is excluded from the crucial coalition discussions, when the lead is taken by Letwin and Danny Alexander, neither of whom have a background in health. His objections are ‘studiously ignored’ by Number 10.8

  Letwin, a key figure in this story, picks up the phone to Lansley: ‘Stop announcing stuff. We haven’t finalised with the Lib Dems yet what we are doing with the NHS.’ Lansley replies, ‘I am Secretary of State, I am going ahead.’ He brushes aside the objections from Lamb. Lansley believes he is being misunderstood; others think that he is being inflexible. By the time the coalition committee meets in July to discuss his White Paper, Equity and Excellence: Liberating the NHS, alarm bells are ringing in some quarters. The document is well written by Lansley’s civil servants, who had been enthusiasts for Labour Health Secretary Alan Milburn’s earlier reforms, which bear similarities. When it comes to Number 10, Cameron’s team conclude that Lansley’s officials have done a good job and see no problems with it being published, even if ‘people didn’t totally understand what Lansley is talking about’. The Lib Dems are too preoccupied to give the proposals the detailed attention they merit. But Jeremy Heywood and Gus O’Donnell become increasingly alarmed: they are seriously concerned that the plans are unworkable. Lansley himself is partly responsible for the speed: he had formed the view in Opposition that the Department of Health was going to be full of socialists, so said the White Paper should be published at once, with no preparatory Green Paper or lobbying to bring the medical professions onside. ‘He had a clear view that he was going to be up against the health establishment or “blob” and we would have to tough it out.’ Like Gove with his own educational ‘blob’, he decides to take it on directly, though later admitting that aspects of his communication strategy were not ideal.

  Letwin, who is sympathetic to Lansley’s aims, wants a meeting to discuss the White Paper before publication and to bring the Lib Dems onside. William Hague and Osborne raise objections: ‘I’ve read the papers for this meeting and we are doing what to the NHS? What the hell are we doing here? This is completely insane.’ ‘No, no, no. We’re just agreeing the details,’ Letwin responds, trying to reassure them. ‘This is totally stupid. Surely we’ll have to go back to first principles,’ Hague and Osborne respond. The Lib Dems add their own protests. ‘Lansley’s plans are totally stupid. We could have made 90% of the changes without any legislation, as Blair did – genius!’ says one Lib Dem. ‘Andrew’s fantasy was that we all knew what he was planning, and that it was a done deal. Bollocks!’ says another. ‘Cameron could have killed it off there and then’. The debate is getting nasty: Lansley hotly denies there was any secrecy about his proposals, and insists they need legislation. Cameron and Clegg critically are again reassured, and decide to let it pass. ‘We know what we are doing, this is going to go through,’ Cameron insists. The White Paper is duly published on 12 July. But do they really understand what they have endorsed?

  Concerns mount over the summer. After the party conferences, Letwin and Danny Alexander conduct a review into the plans and give their approval. This does not stop Lansley and officials being asked to come to Number 10 to further explain their plans. Cameron and Osborne listen, but later claim that they are still in the dark over what the Secretary of State is telling them. When Lansley is questioned, he goes off into a long spiel, speaking in specialist jargon. ‘They felt that they couldn’t challenge or contradict him,’ says one observer. His defence of his policy is described as ‘impenetrable’: Osborne says, ‘I didn’t understand a word that he said.’ The chancellor is furious at the problems that the NHS reform proposals are causing the government: ‘Nobody told me this was coming,’ he says. ‘Nobody.’ Matthew d’Ancona, who first chronicled the history of the coalition, says it is the first time Osborne has truly lost his temper since becoming chancellor.9 Osborne is worried about the political effect of creating NHS England: ‘the Health Secretary will always be seen to be running Health because that’s what the public expects, even if it is hived off to a quango, and the Treasury will always have to bail it out.’ Ultimately, Osborne’s primary concern is not just financial, but also political: that waiting times do not increase, and he tells Lansley he does not really care what is in the bill. The meeting polarises opinion: those who are in favour of the reforms become more passionate; those who are scared become more scared. Letwin is tasked by Cameron and Osborne with going away and looking at it in more detail. His recommendation is they should hold tight and back Lansley. Osborne later regarded his failure to stop it dead in the tracks at that moment as a major mistake.

  The chancellor senses that this is an approaching car crash. How then was it allowed to happen? Deference to Lansley, odd though that might sound, explains in part why Cameron and Osborne have not challenged him earlier. Lansley is older than them, his command of the NHS, and the psychological effect of his being their former boss, all play their part. Cameron and Osborne ascribe difficuties to his being a poor communicator, but assume he knows what he is talking about and decide to give him the benefit of the doubt. Both men also have an instinctive trust of Letwin’s judgement on this sort of issue.

  Letwin is not Lansley’s only supporter in the inner circle. Aspects of the reforms strongly chime with Steve Hilton’s advocacy of opening up the NHS and devolving responsibility, for all Osborne’s suspicions of localism. Hilton too is primarily responsible for the feeling that ‘we will only have one chance in government’, and the belief in those heady first months that ‘everything is possible and we must forge ahead doing the big things now’. ‘There was a premium for every Cabinet minister to have a major reformist agenda,’ says an insider. ‘For some time, Lansley was promoted by Number 10 with the same aura as Gove at Education.’ The fervour and radicalism of the early months powerfully explain why more detailed examination is not given.

  Lansley’s almost superhuman self-belief in the face of the mounting criticism powers the policy forward. ‘I know what I’m doing. You can trust me. This is my baby. By the time of the next election, people will feel the benefits. It will be worth it,’ he tells them. His strapline is, ‘You don’t need to sell these reforms: the reforms will sell themselves.’ He has imbibed the lessons of Thatcher’s favourite Secretary of State, Norman Tebbit, who told him to ‘steamroll change through the civil servants and press them very hard. They’ll block you, but some will be on your side. Don’t waste time having lengthy consultations. Get all the change through quickly and before long, you will win advocates over to your side.’

  Secretaries of State have been told by Number 10 to find creative solutions to address the financial realities the coalition government face. The NHS is in dire financial need. The Gordon Brown solution, initially as chancellor and then PM, had been to throw more money at the problem. The Conservatives have promised to increase levels of spending, but the Treasury tells Osborne that economies still have to be found. Lansley says his reforms will help by delivering £20 billion of savings. This is another reason why his proposals get through. Cameron could have made a speech explaining the financial pressures the NHS is under. But the opportunity is not taken. Had he more regularly explained that the Lansley proposals are designed in part to ensure better value for money, the reforms might have carried the professions with them. Ultimately he made only one such speech, in January 2011, which, indicatively, is soon forgotten.

  The proposals are not as foolish as the sceptics allege: indeed, they have much to recommend them. By giving budgets to GP-led groups, more procedures can take place at primary-care level, which saves mo
ney, increases the choice of NHS providers, and creates competitive pressure on cost increases. Number 10 deliberately decide not to present Lansley’s reforms as a continuation of Blair’s health innovations: ‘The Number 10 psyche is that we have to up the rhetoric, talk about paradigm shifts,’ says one insider. This strategy is in stark contrast to education policy, where Michael Gove says he is deliberately building on the work of Blair and Andrew Adonis, which helps him gain support from the Lib Dems and makes the reforms appear more organic. The reality, as Simon Stevens (the future CEO of NHS England) writes in the Financial Times, is that ‘what makes the proposals so radical is not that they tear up [Blair’s plan]. It is that they move decisively towards fulfilling it.’10 NHS patients would choose when and where they are treated. Foundation hospitals would be rapidly expanded, accountable to an independent regulator. Properly handled, Lansley’s proposals could transform the face of the NHS for a generation.

  But they have not been properly handled. Whitehall is worried, especially the Treasury. Neither O’Donnell nor Heywood is convinced the government fully knows what it is taking on. They ask Letwin and Alexander to hold discussions with Treasury officials to ensure that they have thought through all dimensions. They regularly ask Cameron: ‘Are you really sure that you know what it is about?’ They continue to worry that the Treasury is ceding financial control to GPs in the front line. Officials point out, ‘We can’t yield control to GPs who have never managed budgets.’ Within the Department of Health, apart from a few enthusiasts, officials are beginning to block the reforms, much as Tebbit had predicted. ‘They didn’t like it because the White Paper envisaged a reduced role for them, and thus their mates would lose their jobs,’ is the view of a special adviser.

  The professional medical bodies, widely respected by the country and the media, are equally becoming agitated, with the Royal College of General Practitioners and the British Medical Association (BMA) the most vociferous. Lansley and his team are cynical about them, believing they are trying to protect their vested interests. He appeals to the prime minister to lead the crusade from the front. The message comes back from Number 10 that the PM wants front-line ministers – Lansley, Gove, Iain Duncan Smith and Francis Maude – to front up their own reforms. The trade unions Unite and Unison are having increasing success in mobilising their members against the reforms. As Lansley feared, the medical ‘blob’ is uniting and will fight hard. He believes his reforms are being deliberately misrepresented by them to whip up opposition.

  By January 2011, the reforms are running into serious problems. Coulson becomes increasingly agitated. ‘Nobody can give me a chunky paragraph, let alone two or three sentences, explaining the policy,’ he says. He shares his concerns with Letwin, but days later Coulson leaves Number 10 for good. Lansley tells Number 10 to stop obsessing about opinion polls. Governments always see their position on the NHS erode over time, he says.

  On 19 January, his Health and Social Care Bill has its first reading in the House of Commons, its second reading on 31 January, and on 8 February its first sitting in committee. Opposition is mounting all the time. On 7 March, Andrew Cooper arrives in Number 10 as director of strategy. He joins forces with the newly appointed Craig Oliver and with Stephen Gilbert, another figure who is alarmed by the damage in the polls, which had been so positive in the months after the general election. Opinion in Number 10 is strongly divided. Hilton is circulating a poll which shows that 80% of people are in favour of more choice and competition in the NHS: opposition from professional bodies and trade unions, he says, will pass. He is tasked to spend time helping Lansley communicate his case better. The sense around the prime minister is to persevere. The U-turn over the sale of Forestry Commission land in February, following a concerted campaign of opposition, has wounded the government. As one aide puts it, ‘the great fear is that the PM will be portrayed as somebody who goes in for U-turns’. Stopping the reform process now will also risk losing Lansley, which would entail a reshuffle that no one wants. The working assumption remains: they must ‘tough it out’.

  Oliver and Cooper disagree, and decide that they must write a memo to the PM. It doesn’t mince its words; both later regret their tone. They argue that the NHS reforms are a train crash waiting to happen, and that no one understands what the hell the reforms are all about, and that the entire medical profession are against them. Following the bust-up over AV, they can no longer rely on the support of the Lib Dems. The party will suffer badly in the May elections without a change. Finally, they ask the question increasingly being asked: why is a major bill, a focal point for resistance, necessary? They say that they could have introduced the reforms by stealth, as Blair had done. Cameron’s immediate response to the memo is to continue to support Lansley.11 ‘This is Andrew’s project,’ he tells them.

  On 11–13 March 2011, the Lib Dems meet in Sheffield for their spring conference. The hot topic is the NHS reforms. Members vote almost unanimously to give local councillors a central role in GP commissioning and in scrutinising foundation trusts, and call for a ban on private companies offering treatment services. Clegg tells Cameron, ‘I don’t understand this reform fully but my MPs are very cross.’ Another Cabinet is held to look at the issue. Lansley says that ‘By the end of this parliament, the country will see so much improvement that the doctors who are now so angry will be on our side.’ Clegg says that communication needs to be much better, and Lansley is instructed to present a much stronger case. Cameron and Osborne concur that Lansley’s performance delivering the bill is not reflecting well on the government: he is not putting the case across with the clarity and force it needs.

  By late March, Cameron and Osborne decide that they cannot carry on as they are. The logic of the Cooper/Oliver memo is inescapable. Heywood too is a strong advocate of a ‘pause’. Criticism in the country is rising to a cacophony, suggesting that the NHS is not safe in Tory hands and that the leadership have lied in promising there will be no reorganisation. Conservative backbenchers have hardened in their opposition to the bill, which leads to worries that it might not pass through the House of Commons. They worry too that if they do not give the Lib Dems some of what they demanded at their spring conference, then Lib Dem support for the bill will come into jeopardy. They speak to Clegg, who is at the UN seeing Joe Biden, and collectively decide that Lansley must be told that there has to be a pause for reflection.

  Thursday 31 March is the day chosen, coinciding with Clegg’s overnight flight back from the US. So important is the meeting that he is given his first ever ‘blue light’ police escort from the airport to Number 10.12 Cameron summons Clegg into his room along with Lansley, telling officials and advisers outside that they will be only ten minutes. They take almost an hour. What happens behind the closed doors is hotly disputed. One account has Cameron and Clegg raising their concerns, and Lansley himself proposing a pause to reforms, and time for the NHS Future Forum to deliberate. Another account has it that Lansley is told that they are taking control from now on, with him arguing that a pause will lead to a delay in the benefits which wouldn’t be felt until after the general election, and he believes that they should bash their way through all the opponents. He is visibly upset. When the officials are called in, Cameron reads out some words about the pause. Lansley starts arguing again with him: ‘You can’t just stop everything.’ The PM slaps him down and Clegg explains what will happen. ‘Andrew, the reason why we are here is because you have put the ideological cart before the political horse,’ Clegg forcibly tells him.13

  The pause is announced on Wednesday 6 April, following robust briefing to the Sunday papers, for which Cameron and Clegg apologise to Lansley. Cameron says that the government will be holding a ‘listening exercise’ on the NHS to ‘pause, listen, reflect, and improve’ the proposals.14 A month earlier, Paul Bate, a civil servant who had worked with Michael Barber in the Delivery Unit under Blair, had been brought into Number 10 by Cameron and Clegg to offer a fresh perspective on health policy. Usin
g his considerable experience of health care at the national level, Bate quickly grips the process, his task being to come up with the minimum concessions to get the bill through. ‘I want you to sort this out so the bill goes through Parliament, and if you see a need for major changes, you must tell us,’ he is told.

  The pause lasts for May and June. Bate, who knows many of the key players in the health world, talks to concerned parties, while Clegg and Cameron, working closely together, target leading sceptics to bring them onside. The priority is to make the medical establishment feel it is being listened to, and gain support for agreed changes.

  Cameron and Clegg ask for regular reports from Bate, and they see him at least weekly during the process. Rarely again will Cameron be so intimately involved in an aspect of domestic policy. Three Quads take place during these weeks focusing on choice, on competition, and on GP commissioning. All four members know what is at stake, and they are joined by Letwin, Llewellyn, Hilton, Heywood, Bate, and Lansley and his advisers. Osborne’s principal focus is the politics, though he retains profound reservations about the substance and its financial implications. Heywood works hard to ensure that the reforms will be workable and fully consistent with government aims: he regularly suggests changes to Bate’s weekly notes. Hilton intervenes strongly: ‘I don’t really care about any of the commissioning stuff,’ he says, ‘but I want to drive a massive wedge through the profession and dramatically enhance patient power and competition.’ The Quad cannot assent to anything so controversial, much to Hilton’s chagrin. Clegg and Alexander argue tenaciously for changes to reflect the views of their spring conference, which made thirteen recommendations for change.15 It is important, after all the reversals of the previous months, for Clegg to show his party that he is listening to them and that they can influence policy, and indeed agreement is reached that the requirement for all trusts to take on foundation status by 2014 is removed and a commitment is made to keep waiting time targets. The date of implementation is also pushed back a year to April 2013.