The dismembered state

David Walker, Polly Toynbee

It has been undermined by ideology and eroded by cuts. Yet, Polly Toynbee and David Walker argue, only the state can protect and provide for the common good

More than ever, Labour needs to reclaim the state. For too long we have shied away from the very word. Now, with a cabinet set on its dismemberment, Labour should celebrate the state as protector, provider, regulator, encourager of wellbeing, distributor of fairness, taxing and spending for the collective good. Blindingly obvious, positively banal to say so – yet something has uncoupled Labour from its historical advocacy of public power mobilised through government. The disconnect is as apparent on the party’s left as on the right; both mumble the ‘S-word’ as if it were an embarrassing old relative, somehow not quite 21st century enough. It’s time to proclaim renewed pride in the state as the great symbol of our collective and patriotic identity.

Discussions about power and government have lately rung a despairing note. Social democracy, they say, ran into the sands in the 1970s, a victim of its own postwar success. Thatcherism pushed the doctrine of the individual and the small state, which only resulted in social turmoil but no upwards shift in UK economic capacity. New Labour promoted a hybrid version, but the ‘third way’ worked only until the crash – when the state had to intervene monumentally to rescue the very interests that had most kicked against state regulation. Reframed Thatcherism as delivered by Cameron and May serves only to emphasise disjunctions and dysfunctions in the UK economy and society, as they set their course towards downsizing the state to 36 per cent of GDP, far smaller than Thatcher herself dared contemplate.

For our new book, we travelled the country reporting on a threadbare public realm: disappearing rural buses, rationed podiatry services, bursting A&E departments, sidelined and demoralised planners and understaffed and demoralised HMRC offices. The spring budget spelled out worse to come. Yet the battering goes back three decades; the state was undermined as much by New Labour’s loss of intellectual confidence in it as by recent cuts and contracting. The centre-left equivocated. New Labour’s state did great good, but hid beneath sheaves of ‘reforms’, creating competing marketised hospitals, academised schools and individualised budgets, as if collective and necessarily rationed services could pretend to be consumerised into shopping — a category error.

Cameron’s “there is such a thing as society, it’s just not the same thing as the state”, was a clever ruse, his Big Society a sham. The voluntary sector is a necessary partner for the activist state, never a substitute.

Go local, say some on left and right. Yes, local government is the state’s most visible arm. It sweeps the streets, empties the bins, inspects kebab shops, looks after children and erects speed bumps. But localists have sometimes indulged themselves by allying with the political right in suggesting that locality can supplant strong central government. In a recent think piece in the New Statesman, Chuka Umunna caught the vital symbiosis between the state’s two halves: only the authority of central government can reform the taxation and ownership of land, on which the capacity of local authorities to become active housebuilders depends. But looking at its own increasingly well-led city powerbases, Labour may forget that in England the local is majority Tory, tax-averse, mean and parochial. Devolving resource-gathering weakens the mechanism for evening the out regional inequalities. Taking power in 2010, the Tories, naively backed by localist Liberal Democrats, devolved the axe; by shifting blame for cuts, they weakened trust in councils too.

Our case for the state is both practical and political: there is no alternative engine for social and economic repair. There are always difficult trade-offs – between security and freedom, consumption and the social wage or choice and standardisation. But shake off fear of the right’s ‘Soviet’ jibes and you would see public opinion meet us half way, as they experience crumbling services and lose whatever faith they had in the benignity of markets.

Look around. The UK economic model – based on low productivity, low wages and excessive reliance on finance – leaves too many staff and firms struggling amid general underperformance. Markets are not interested in training or infrastructure investment, as they rarely enhance company balance sheets. Nor are they investing their considerable assets, preferring to buy back their own shares. Certain technologies – nuclear power generation, AI or gentech – have grown too big and complex to be left to private equity.

Since the Thatcher privatisations, the country has been subject to a giant experiment in the ability of firms and markets to sustain the common interest. They failed and her light-touch regulatory regime has been found wanting. Markets dashed for gas, paying no heed to security of supply; they ditched nuclear and only turned to wind and solar with hefty state incentives. However faltering, only the state can confront climate change – which is precisely why the right denies it.

Britain is ageing. Like the nurture of children, it is a shared experience in which only government can spread risk and cost across the life cycle, between those who can afford care and those who never earned enough to be able to provide for it. The state alone stands custodian of intergenerational justice. With vocational skills, obesity, lifestyle diseases, transport, housing or broadband, no invisible hand aligning private and public interest steps in to ensure provision – only government.

Yet many on the left resist this truth about our well-being: they say it’s old hat, Clement Attlee in his homburg. But forgetting the past is to guarantee screwing up the future. The Labour party was created by trade unions and working class societies to secure parliamentary power and use the state to rectify injustice, at work, in taxation and social policy, with the Fabian Society providing intellectual muscle. The 1945 government realised the founders’ ambition: the state mobilised for the common good, notably in the shape of the NHS but also in town and country planning, housing, education and the nationalised industries.

Its contours have since shifted and the balance between transfers and services, authority and accountability adjusted. Faults have been found. For example, Alison McGovern, in her Fabian pamphlet The Real Life State, rightly worries about its unfriendly face in benefits offices, police stations or GP surgeries, where some jobsworth shrugs with takeit-or-leave-it indifference. Our argument for the state is undermined, she says, if the public don’t like the attitude of the official who greets them. She’s right: improvement must be Labour’s perpetual mission. But she might have pondered why Labour in the noughties was so unsuccessful in impressing and embedding the success of its spending increases in the public consciousness.

Doing good by stealth left worryingly large numbers open after 2010 to Osborne’s mendacious argument that the money had been wasted and austerity was justified.

Our new book is called Dismembered because the public sector has fragmented and much of what government does has become unintelligible – a mystery that’s taken for granted until it is not there. People think councils run the ambulance service; they’ve no idea (who does?) why civil servants are labelled differently from other public servants or, to take one example from many, why the Government Digital Service is separate from NHS Digital. No overarching brand makes sense of the plethora of agencies; ‘HM Government’ is an abstraction; spending the money is divorced from how it is raised in taxation. It hasn’t helped that in recent times some public servants became true believers in the New Public Management doctrine that services should be split, competing and contracted out.

That’s not to say Veolia shouldn’t collect our household waste – the French company enjoys a good reputation – but public bodies need to work hard at emphasising their inalienable responsibility. The good society means both sides understanding the symbiosis between state and markets, regulator and enterprise. A smart state can use the information from contracting and may choose to retain public provision in railways or energy. Smart is a word Tony Blair and Gordon Brown often used yet they never seemed as comfortable exercising state power as Nicola Sturgeon and Carwyn Jones do – or, remarkably, the now sacked Michael Heseltine did, intervening ‘at breakfast, lunch and tea’. How hard Brown tried to disguise his reluctant renationalisation of Network Rail.

Everyone – inside Labour included – will perennially argue about tax and spend ratios. There will never be a perfect answer but it’s increasingly obvious to most that the Osborne/Hammond plan falls alarmingly short. That should give Labour new confidence in reasserting the plain truth with renewed vigour: only the state can tax, plan, redistribute and remedy social weaknesses. Post Brexit, whichever path the UK and its constituent parts take, we are going to need more not less public intervention and provision.

Labour, said Harold Wilson, had become the natural party of government. It needs once again to be the natural party of the state.

Dismembered: How the attack on the state harms us all, will be published by Faber in May

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This article originally appeared in the Spring 2017 issue of the Fabian Review.