The stakeholder state, not inadequate politicians, is the problem

He cites three possible explanations: “it doesn’t know what it wants to do; it does know what it wants to do but finds it too difficult; or is it precisely this flim-flam that it wants to occupy itself with.” Quite a tough set of options coming from a Downing Street insider.

Ovenden then goes on to argue that the problem is a Stakeholder State, “a coalition of campaign groups, regulators, litigators, trade bodies and organisations.” He sees them as a barrier to getting things done and a diversion away from real political priorities. His analysis chimes with the observation of successive waves of ministers, Conservative and Labour, who report that it is just getting harder for governments to do things.

His frustration has some striking parallels with the critique from radicals such as Dominic Cummings. But unlike Cummings, he does not put civil servants in the firing line; he instead sees them as victims on the receiving end of these pressures. And he does not think that just blowing the whole thing up is a solution. Indeed, he has a surprisingly optimistic view that the strength of the stakeholder coalition “has been gifted to it by politicians and it can be taken back.”

Ovenden’s argument is an alternative to the superficially attractive account that the problem is that politicians just aren’t good enough. That explanation always appeals to parties in Opposition. One reason why Starmer does not appear to have prepared properly for government is that Labour thought the Britain’s problem was simply that Tories were bad and incompetent and as soon as decent well-intentioned Labour ministers took over problems would be solved. Now Nigel Farage is taking a similar tack.

I find his account very plausible. When Britain was going through a similar period of government failure and stagflation in the 1970s the great political economist Mancur Olson came up with a similar explanation: a modern liberal democracy has a strong civil society, thick with social ties and local and group identities, which in many ways is a good thing; but these groups can also organise to protect their position and block economic change.

Abundance by Ezra Klein and Derek Thompson is a vivid up-dated account of these arguments. They say the Left have become used to deploying law and regulation as an obstacle to the power of big business but now those tools are standing in the way of their own objectives of growth and prosperity. Breakneck by Dan Wang contrasts Chinese growth and America’s difficulty in developing infrastructure such as a fast speed rail route on the West Coast by arguing China is run by engineers whereas the US is run by lawyers.

Reforms with wide benefits but narrow well-defined groups of potential losers get harder and harder – it is the political economy of NIMBYism. It took a leader like Margaret Thatcher to overcome them. A government with such a large majority ought to be able to overcome them again.

Ironically this Prime Minister, with his background as a human rights lawyer, could be the ideal candidate to do a “Nixon goes to China” and tackle the problem because creeping judicial activism is part of it.

Ovenden’s so-called “stakeholder coalition” has been empowered by the courts. Every decision is justiciable. Judges struck down the last Conservative government’s attempt to cut the growth of disability benefits by judging that the consultation process had not been properly conducted. This government learned the lesson that the courts could strike down their proposals on such grounds and instead went straight for primary legislation as it is not subject to the same judicial review of process – but that rush to legislate brought its own political problems. It is all very unsatisfactory.

There are always temptations for pppositions to back measures which make it harder for governments to do things. Yet such tactics must be treated with great care.

Britain is short of reservoirs (our first for forty years is now being constructed in my former constituency of Havant). But Conservatives allied with Greens to try to amend the planning and Infrastructure Act to add an extra stage of consultation if a village is to be submerged in a planned new reservoir. Conservatives in government and opposition have tried to put restrictions on solar panels covering agricultural land.

As Emma Revell of the Centre for Policy Studies warned in her excellent column last month, Conservatives are in danger of opposing changes to the national planning framework and backing Nimbys, even though leaving power on development with local councils has led to the current mess in which we have failed to get houses built and extent property ownership to the next generation.

Kemi Badenoch’s New Year message was that Britain is not destined to decline. That is a good optimistic message. But it is important that it is backed up with tough measures to get Britain investing and growing. There is an opportunity here for the major parties; if it is not taken then Farage will be the only beneficiary of this rising frustration with how government works – or doesn’t.