To be blunt, the word was that fee paying students were being given priority over UK students.
May I just clarify how medical student numbers are set? I know this kind of rumour goes around but there is no way it can actually happen.
Up to 2017 entry, it worked as follows. The Department of Health set the number of medical graduates it wanted 5-6 years in the future. The Higher Education Funding Council for England (HEFCE) and counterparts in the devolved administrations allocated a certain number of entrants to each medical school to match the required number of graduates as closely as possible, accounting for a certain proportion of students failing to complete the course and considering the costs of training each student. Bear in mind that each medical student is funded by HEFCE and the NHS as well as by her/his tuition fees: the student actually pays only about a quarter of the costs. Of the number of places allocated, medical schools were allowed to recruit up to 7.5% of the total as international students, whose tuition fees were/are not capped at £9,000 pa and would usually be closer to £30,000 pa. So a medical school allocated 200 places by HEFCE could recruit a maximum of 200 students in total, of whom a maximum of 15 could be international. Recruiting more than 200 in total, or more than 15 international students, would result in signicant financial penalties; doing either of these things two years running would result in extremely severe financial penalties and to the number of allocated places for subsequent years being cut.
For 2018 entry, with the first wave of 500 extra places, most medical schools had their total number of places increased but the maximum number of international students remained the same as for 2017, i.e. if the hypothetical medical school above had its total number of places increased to 225 for 2018 it is still only allowed to recruit a maximum of 15 international students. If it can't fill its 15 international places it is no longer allowed to take on additional home students to fill them.
So, to summarize: medical schools are not allowed to give priority to international ("fee-paying") students over UK/EEA students; nor are they allowed deliberately to over-recruit to year 1 in order to perform a cull before year 2. All year-1 entrants have to be within the number of places allocated: the census date is in December of year 1 and any students leaving or failing after the census date may not be replaced. If a large number of students fail year 1, the medical school has lost their tuition fees for the remaining 4 years. They therefore only exclude students because they do not have the required academic ability or because they have demonstrated behaviours that make them unfit to be doctors, i.e. to protect patients, to maintain the medical school's reputation and to avoid sanctioning by the GMC (which has the power to revoke the accreditation of their degree if academically or professionally unfit students are being allowed to graduate). I have been around enough medical schools in enough capacities to know that patient safety, rather than money or expediency, is the absolute number 1 priority.