Britain's government has long boasted about its election wins, promising to roll up their sleeves and make changes. Yet, time and again, ministers are shocked to find that nothing happens. The reason for this lies not in the politicians themselves, but in the size and inefficiency of the British state.
At both local and central levels, the capacity for government intervention has been eroded over the years. Council services have been outsourced, leaving professional expertise in short supply. What's left to do is alleviate the consequences of failure, which are becoming increasingly pressing.
The problem runs deeper than this. A decades-long aversion to state intervention has taken root, driven by the misguided idea that governments should get out of the way of the private sector. Instead of picking winners and losers, Britain has adopted a cult-like devotion to market forces. This mindset is not unique to Britain; other countries have also been wary of government interference.
However, this approach may be misguided. East Asian nations like South Korea and China have shown that conscious decision-making can lead to success. These countries identified key sectors for growth, invested heavily in them, and forced through change when necessary. The UK has had similar opportunities, but has failed to seize them.
China's dominance in the solar panel market is a notable example of this. By identifying clean energy as a global growth opportunity and investing heavily in it, Beijing was able to create a sector that would have been impossible without government support. Meanwhile, Britain's talk about a new industrial strategy built around a net-zero future has so far yielded little concrete action.
Even the US, supposed bastion of free market ideology, has found ways to deliver an industrial strategy through targeted investment and interventionism. The federal government pumps millions into universities and defence companies, creating links between the state and industry that drive growth.
Britain's problem is not a lack of ideas or resources; it's a lack of willpower and a failure to bring together disparate parts of government to achieve common goals. The 1945 Labour government was able to make significant changes because it inherited a fully functioning planned economy, which allowed it to direct labour effectively towards key industries.
In the 1960s, Britain flirted with indicative planning – setting broad targets and working out how to achieve them through cooperation with private companies and trade unions. This approach showed promise, but ultimately failed. The lesson is that the state needs to be more effective at driving growth and change, rather than just reacting to market forces.
To do this, the British state needs a fundamental overhaul. The power of the Treasury must be broken by creating alternative economic power bases within Whitehall. A standalone ministry with real clout is needed, or a revamped National Economic Development Council that can identify and nurture potential growth sectors.
Investment is crucial, but it will only work if the state is willing to experiment and accept failure as part of the process. Other countries have shown the benefits of a pragmatic approach, and Britain needs to follow suit.
Failure to reform the state will only entrench public cynicism about politics. Voters will tune out when faced with empty promises, and their experience of everyday life – from potholed roads to inadequate healthcare – will become increasingly negative.
Britain's government must wake up to its own limitations and stop relying on hot air. It needs a bold new approach that harnesses the power of the state to drive growth and change, rather than just reacting to market forces. Anything less risks leaving Britain in the dust as other countries continue to thrive.
At both local and central levels, the capacity for government intervention has been eroded over the years. Council services have been outsourced, leaving professional expertise in short supply. What's left to do is alleviate the consequences of failure, which are becoming increasingly pressing.
The problem runs deeper than this. A decades-long aversion to state intervention has taken root, driven by the misguided idea that governments should get out of the way of the private sector. Instead of picking winners and losers, Britain has adopted a cult-like devotion to market forces. This mindset is not unique to Britain; other countries have also been wary of government interference.
However, this approach may be misguided. East Asian nations like South Korea and China have shown that conscious decision-making can lead to success. These countries identified key sectors for growth, invested heavily in them, and forced through change when necessary. The UK has had similar opportunities, but has failed to seize them.
China's dominance in the solar panel market is a notable example of this. By identifying clean energy as a global growth opportunity and investing heavily in it, Beijing was able to create a sector that would have been impossible without government support. Meanwhile, Britain's talk about a new industrial strategy built around a net-zero future has so far yielded little concrete action.
Even the US, supposed bastion of free market ideology, has found ways to deliver an industrial strategy through targeted investment and interventionism. The federal government pumps millions into universities and defence companies, creating links between the state and industry that drive growth.
Britain's problem is not a lack of ideas or resources; it's a lack of willpower and a failure to bring together disparate parts of government to achieve common goals. The 1945 Labour government was able to make significant changes because it inherited a fully functioning planned economy, which allowed it to direct labour effectively towards key industries.
In the 1960s, Britain flirted with indicative planning – setting broad targets and working out how to achieve them through cooperation with private companies and trade unions. This approach showed promise, but ultimately failed. The lesson is that the state needs to be more effective at driving growth and change, rather than just reacting to market forces.
To do this, the British state needs a fundamental overhaul. The power of the Treasury must be broken by creating alternative economic power bases within Whitehall. A standalone ministry with real clout is needed, or a revamped National Economic Development Council that can identify and nurture potential growth sectors.
Investment is crucial, but it will only work if the state is willing to experiment and accept failure as part of the process. Other countries have shown the benefits of a pragmatic approach, and Britain needs to follow suit.
Failure to reform the state will only entrench public cynicism about politics. Voters will tune out when faced with empty promises, and their experience of everyday life – from potholed roads to inadequate healthcare – will become increasingly negative.
Britain's government must wake up to its own limitations and stop relying on hot air. It needs a bold new approach that harnesses the power of the state to drive growth and change, rather than just reacting to market forces. Anything less risks leaving Britain in the dust as other countries continue to thrive.