Not sorry, but capability seems to be the hardest word to say.
12 year, 4 bills and many more billions in, the PM cancels HS2 - based on his own transport planning spreadsheet.
This screams institutional failure, yet the usual response is swap this PM and policy for that and that. This is a fundamental mistake.
Post-Brexit - the list of things we can’t do is growing: an EU border, quality checkmarks, chemical regulation and now trains. This is systemic.
Why can’t the state do things? is the question of the hour.
The job of the political centre is to set up up the institutional framework for transport specialists to do the job. This means appointing the right people, checking the right stakeholders are represented on it, and laying out the guiding principles: econ dev, connectivity clustering, liquid aggregated labour markets, carbon emission reduction.
And then buggering off. Did a US President adjudicate between Teller’s fission bomb and Oppenheimer’s fusion one with his own spreadsheet? Did he hell.
Decide ‘it’, tell us what powers you need to deliver ‘it’, then away and do ‘it’.
This collapse of capability has many fathers. One is belief in magic markets, we have had 40 years of left/right rubbing a bit of market on it. Regulated markets are amazingly self-organising - unregulated markets are thieves nests.
A market is a place where you can go and buy a product for a price from a range of suppliers. Cans of coke for example, or seats in the House of Lords.
There is no marketplace where you can buy a rehabilitated prisoner, nor a clearing price.
A capitalist company deploys capital to create markets and profit.
(Ask me how I know? ※)
Water companies are tax farmers. The state sells them the power to levy a tax, they take a cut - then the state asks them to provide a service using the remainder as payment. This is dressed in capitalism (shareholders and dividends) but it isn’t.
There is no marketplace and clearing price - and no self-policing. In a real regulated market the regulation is about cheating, and lying and trading standards.
These fake markets have fake regulation - central planning and delivery targets. The only real market moment is the contract renewal every 5, 10, 15 years.
In the setting of targets the tax farmers have all the information and expertise and the government has all the political risk. Its a familiar story that we have seen in other centrally planned economies.
The tax farmers have a clear incentive to work to contract, do as little as possible and extract as much as possible, including by debt leverage against assets. In theory the magic market would have them do the strategic planning. But in theory, theory and practice are the same, in practice, not so much.
The early stages of privatisation were genuine capitalist firms swallowed by central planning. The latter ones were the creation of tax farms, and the loss of strategic planning capability.
This erosion was matched by another, the erosion of time by centralisation. How in the name of the wee man could a PM find time to run his own transport planning strategy?
In 1983 Mrs Thatcher got 60% of the seats on 40% of the vote and the imagined legitimacy to trash, in a fit of pique, a layer of regional government that her opponents mostly controlled. In doing so she stripped government of time. Central government started doing 2 jobs badly at the same time.
This was finally fixed for London alone in England, but also for Scotland and Wales.
Digital is also not thought about as capability - with some notable exceptions. Francis Maude enabled GDS (the Government Digital Service) to be created under his personal political umbrella and its obvious superiority to the tax farm programmes that preceded it ensured it survival.
Generally digital is something the political class and the centre must do the civil service and the peripheries - and not something the civil service and local government must be.
My research focus has been on defining digital capability for the state - a mixture of process change (programme for government, parliamentary process, bill handbooks, and common legislative and software solutions), legal and para-constitutional change (a digital ‘audit’ capability for the parliament and a digital ‘law reform’ body in the civil service) built around the notion that data (and its representation in software, services and organisational structures) is strategic infrastructure.
Abby Innes, author of Late Soviet Britain, is one of the foremost critic of the impact of pseudo-market, pretend-capitalist tax farming on the erosion of state capability and state capture.
In the evening of Tuesday 7th November Abby and I will be speaking about these issues at a free event in NewSpeak House in London. We’d love to have you join us.
Registration: Everything Seems Broken - Capability And The State
※ I tried to start my own bank