The fundamental challenge for Starmer – and Britain

But now it appears that in 2009 – via Epstein – Mandelson advised Jamie Dimon, chief executive of JP Morgan, to “mildly threaten” his own cabinet colleague, the chancellor Alistair Darling, over the government’s proposed tax on bankers’ bonuses. This is as apt as it is appalling. The crash of 2008 was the last time the world was shaken this badly by revelations of elite impunity; we are still living with the consequences. 

To his immense credit, Darling faced down a subsequent call from Dimon, threatening to abandon a planned new JP Morgan headquarters in London. Today’s Labour government chose to bring back a man whose attitude to power could hardly be more different. That decision may cost Starmer his chief of staff, the Gorton and Denton by-election and perhaps much more. 

If the prime minister survives, it is now more urgent than ever that his administration delivers the change it promised in opposition. And that requires identifying and tackling unhelpful concentrations and dispersals of power, however uncomfortable that makes certain people. At a time like this, it is more vital than ever to show that the state, and the politicians we elect to run it, will represent the interests of the disempowered.

To his credit, Starmer has alluded to this, and not only by apologising to Epstein’s victims. Inaudible as it may have been over the roar of scandal, his speech announcing an expansion of the government’s Pride in Place scheme, argued that it is vital to re-empower so-called ordinary people.

And since it won office, the government has made a series of reforms that go some way to tackling this immense power imbalance, albeit in a piecemeal, un-co-ordinated fashion. 

It has taken steps to re-empower people who have long had the rough end of a political settlement that was built in the 1980s. It has embraced industrial strategy and has passed legislation bolstering the rights of workers – pushing back at the new anti-union norm built under Margaret Thatcher. 

Likewise, it has strengthened the rights of tenants. The £5bn Pride in Place funding for local communities is designed to empower people to have a real say over how their areas – some of the most deprived in the country – are renewed. 

It has also taken some steps to tackle businesses’ abuse of their power, signalling crackdowns on “rip-off price hikes”, and “the illicit businesses that blight our high streets and undercut legitimate firms”, and is moving to crack down on “subscription traps”. It is taking tougher action against tax avoidance and evasion, and has set a “Covid corruption commissioner” to work on the grounds, as Rachel Reeves put it, that “we want our money back”.

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Where power is unhelpfully dispersed across a messy hybrid of public and private sectors, it has legislated to set up a publicly-owned renewable energy investment body, scrapped the ban on councils owning bus companies, and is bringing the railways into public ownership. And it is striving to make it less impossible to build houses. The revised National Planning Policy Framework, for example, radically strengthens presumptions in favour of new development, particularly near transport stops, and it is channelling funding to metro mayors to drive development in their regions. 

But in this post-Epstein era, it must put these changes together into a coherent story about changing the distribution of power. 

Because if it doesn’t, Reform UK will keep telling fed-up, disempowered voters that it’s all the fault of mainstream politicians, and immigrants, and of “woke” ideology. And if they win power, instead of making the state work properly they may hobble it, while leaving other powerful forces untouched.

To prevent this, the government needs to liberate itself from the outdated fears which demonise democratic government and disempower the state – and show that democratic politics can make people’s lives better. So here are three steps it could take, to try to make that happen:

Step 1: Reject the claim that government is the public’s enemy 

The notion that government is inherently profligate and that public servants are in it for themselves is a relic of 1970s New Right propaganda. The justification for letting powerful companies ignore their impact on everyone else stems from another concern that sprung up in the 1970s – the plight of the shareholder – and from the mid-twentieth century fear of the state turning totalitarian.

Over the last 40 years, this spectre – of a spendthrift, self-serving, would-be tyrannical state – has driven a paradoxical shift. Power has both become concentrated in elements of central government, and been dispersed across a wide array of public bodies, private firms, and the courts, held in place by a vast tangle of rules. 

This has now created deep structural problems for democratic politics. It splits the state’s power across public and private sectors in ways that are difficult for non-specialists to understand. It confuses the question of accountability, and erodes public confidence and trust. 

This is not to excuse the state’s many serious failures, for which it must always be held to account. But criticism of state failure must be done with a clear, constructive goal in mind. Many of the state’s critics lambast it not because they hope to improve it, but because it is in their interests to weaken it – or simply because they believe it is irreducibly useless, if not actively malign. 

This mentality is destroying trust in democracy. If politicians won’t make the case for why it is worth having a democratically run state, for its virtues, merits and hard-earned nobility, in the face of relentless attacks from its enemies, who are they expecting to do it for them? 

Step 2: Reassert democratic political power

Having rejected those old fears, the next step is to end the excessive emphasis on rules and quantification. Numerical projections such as cost-benefit analyses, and the assumptions that underpin systems of rules, are attempts to foresee the future. This is driven by the fear of uncertainty. But the hope that uncertainty can be dispelled is a delusion, and so cannot be a viable basis on which to lead a government. 

It has only taken on such a central role since the 2008 Crash because it is a substitute for having clear goals, and a clear theory of power with which to achieve them – both of which we have lacked for far too long. 

Politicians – and the officials they lead – must replace their fear of uncertainty with confidence in their principles, and the belief that these will guide them, no matter what shocks may come. Accepting that the future is unpredictable would also be more honest; the public has had enough of airy number-laden promises. And it would liberate governments from risk aversion masquerading as objective projection. 

The more confidence a government has in the future it is building, the more it will make the case for its own legitimacy. The clearer its vision, the more effective it can be, because officials will have a working understanding of the government’s aims, and the confidence that ministers will back them. 

Sometimes, a polity reaches a point of paralysis where simply smashing through the old to something new has a revitalising effect in itself, triggering unanticipated positive side effects. When President Roosevelt declared in 1933 that Americans had “nothing to fear but fear itself”, it was not an accurate analysis: it was a galvanising act of will. 

A shift to a steadier, more principled, more confident approach on the part of the state would raise business confidence, by showing that government will stick to its plans. And it could address the skewed incentives that confront civil servants, where obedient failure is tolerated, and risk-taking creativity discouraged. 

This speaks to the broader need to restore the role of trust as an organising principle, in place of excessive use of quantification and rules. Too many of our institutions – the BBC and universities are two glaring examples – have deprived experienced professionals of autonomy. 

Instead there is a prescriptive, centralised, risk-averse approach to administration which saps morale and initiative, sours employee-management relations and drives away talent. This approach now causes more problems than it solves, and should be replaced by a bias towards trusting professionals far more. 

This should be balanced by the principle that they will be held personally responsible for any serious failings, with strict adherence to the rules no longer considered an adequate defence. 

There is a final reason why reawakening confidence in the idea of a democratically run state is vital. To achieve their goals and re-empower the public, democratically elected politicians must face down the inevitable self-interest of powerful unelected people. 

This is another reason for pushing back the excessive reliance on rules and quantification: doing so will make it more difficult for vested interests to persuade the government it can’t do things. 

Step 3: Side with the public against its powerful enemies 

The 1970s claim that the state is inherently useless has combined with politicians’ relatively high visibility in such a way that they now take the blame for far more than they should. Meanwhile, private power is allowed to undermine public power without consequence. 

Liz Truss richly deserved her fate – but 
what about the role played in the Truss “Mini-Budget” disaster by the blundering pension fund industry? The head of P&O Ferries told MPs he had broken the law by summarily firing 800 workers – and faced no legal action. Right-wing commentators continue to invoke the state failure of the IMF crisis in 1976 – but somehow allow the financial sector to insist that the far worse crisis it caused in 2008 belongs to the distant past. 

As the Labour MP Jake Richards has argued recently in the New Statesman: 

“Fundamental change also inevitably means making enemies… The government will need to make clear who will lose from their agenda, only to emphasise the wider benefits.” 

There is scope for more aggressive attacks on the vulture capitalist class – the Covid-fraud billionaires, those making their fortunes from desperate asylum hotels and accommodation in the children and adult social care system, and the multi-national corporates that thrive on illegal working. Why is it that foreign states are often profiteering from our basic domestic public services?

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Steve Akehurst of the not-for-profit research initiative Persuasion UK has tested messaging on this theme with Reform-curious Labour voters, and reports the effectiveness of suggesting that Nigel Farage fights for “the rich, the powerful, his mates in big business”. Messages pointing to donations from “fossil fuel lobbyists, polluters, and climate change deniers” and suggesting that Farage wants to hand “even more power to the elites he pretends to oppose” also resonate with voters. 

Akehurst argues that one reason why such messaging is potentially effective is that, broadly, economic themes unite Labour’s support. 

Akehurst contends that public attitudes to big business have fundamentally shifted over the last 30 years. Voters are more open to these arguments than political strategists: here again, outdated fears are needlessly constraining a decisive assertion of power. However, he cautions that such messaging needs to make intuitive sense to voters. 

Calling out the damage done by the concentrated power of certain firms is not “anti-business”. To think so is to make the same mistake as the extremist who cannot distinguish between, say, Labour politicians and hard-line communists. 

Most businesses are a great benefit to society; it is more damaging to their reputation not to call out the few among them that exploit and extract, especially as the victims of such practices often include other businesses. Here, New Labour showed the way. It introduced a windfall tax on the excess profits of the privatised utility companies. It also pitched the national minimum wage as a means to stop unscrupulous businesses undercutting decent ones, while facing down incorrect predictions that it would destroy two million jobs. 

It is time for the government to rebuild the state’s capacity and its self-confidence. Perhaps then it can earn back the trust of the public, and dispel the dangerously widespread sense that politicians are useless, uncaring or corrupt, that the real levers of power are hidden – that everything is a scam. 

The government needs to decide whether or not it wants to do this. If it opts instead to patch up a dying status quo, it will waste a precious, once-in-a-generation opportunity to shift power in ways that improve people’s lives. And it risks opening the door to those who see the modern state as their enemy, and who seek to abuse and destroy it. 

Phil Tinline is the author of  Power Failure: a new theory of power, a new report for the Future Governance Forum think tank. The above article is based on that report. 

His books are The Death of Consensus: 100 Years of British Political Nightmares and Ghosts of Iron Mountain: The Hoax That Duped America and Its Sinister Legacy