Will Hutton is a very readable writer. His latest book is an easy and enjoyable read for such a wide-ranging subject. He makes many good and sensible points and recommendations. But it is also irritatingly negative. So much has gone wrong – often just as he predicted – and everyone is to blame. The Thatcher government sowed the seeds of the 2007/8 global financial crisis with Big Bang in 1986, likewise her disempowering of the trade unions led to the current wage inequality and downgrading of workers’ terms and conditions, while the pay of the ‘bosses’ has spiralled. Society is still 30/30/40 – 30% disadvantaged, 30% marginalised and insecure and only 40% advantaged. He coined this term twenty years ago. Now arguably the situation is even worse, especially for the young.

We know that the author is no fan of the Conservatives, so the Thatcher critique is to be expected. But he also lambasts New Labour – despite being credited for providing its prospectus in his earlier book, The State We’re In. He describes New Labour as, “A lost party and a lost movement.” He criticises the Blair government for its insistence on light-touch regulation – which of course also fuelled the global crisis – as well as for the private finance initiative, the legacy of which is unaffordable fixed costs for many hospitals, while the development of public-private partnership financing for London Underground was wastefully costly.

Even Gordon Brown does not escape Hutton’s disapproval. He calls Brown ‘craven’ in his opposition to corporate reform and the building of progressive business institutions for fear the policy would be tarred as being anti-business. He also reminds us of Brown’s 2007 Mansion House speech in which the then-Chancellor exhorted companies to learn from the City’s ‘dynamism and innovativeness’. The fallacy of this was exposed just three months later when Northern Rock failed. In sum, New Labour embodied a ‘vapid Third Way’ (a lovely phrase).

Hutton’s tirade against industrial short-termism – which constrains investment – is well made. In 1991, over half UK quoted shares were held by British pension funds and investment institutions. Today, that proportion is just 19%, while over 40% of shares are held overseas. More and more of our venerable companies are being sold to overseas owners, shrinking the UK’s tax base and leaving the country more vulnerable to shifts in sentiment. Mispriced privatisations, such as Royal Mail most recently, are also a scandal. RBS and HBOS’s folly is briefly explored, but their challenges are seen as being worsened by the wider business culture: business needs a ‘remoralisation’ – probably true. It also needs a new Companies Act that privileges long term, engaged investment – also probably true. And state ownership need not be bad – Singapore’s Temasek is a state-owned strategic long term investor and may be a model to emulate.

His argument against the sell-off of public assets is passionate – public interest means that certain services are fundamental to society and therefore should be provided by the state to ensure that they are available to all, are fair to all and accountable to all. These areas are health, education, policing, trains, buses and the utilities. Arguably the provision of news is also a public good. Neither must local public institutions be lost.  For instance, public libraries are an important public service that could be energised by becoming, say, a youth club at some times. This could help create value while retaining the function in the public sector – and many local authorities are now exploring such models.

Hutton’s ire, though, is most intense against the current coalition. He argues that the crisis over Scottish independence was precipitated by the well of discontent against austerity policies that have marginalised the country outside London and the South East. Of course, he is right that there is too much centralisation – but it is by no means a new phenomenon; rather it has been happening for decades. Ironically, it appears that now a new regional policy is emerging: the coalition has introduced long term economic plans for each region.

To limit the centralisation, he advocates making central government more regionally focussed. In particular, he recommends splitting the Treasury into an English section, a Scottish, Welsh and Northern Irish section, and a section dealing with budgetary analysis, forecasting and management – the latter, of course, surely having disproportionate influence (though the task of forecasting is done by the independent Office for Budget Responsibility). He also suggests that reform of the House of Lords could cement a new federal structure: representatives from each region would populate the House, which would be an elected Senate (or perhaps another House of Commons with fewer members representing larger areas?). This all struck me as unrealistic.

More topically, he regards the rise of UKIP as a reflection of distrust and discontent against the Tories: he does not mention any threat they may pose to Labour. He accuses the Tories of exploiting the legacy of the banking crisis to impose spending cuts on such an unprecedented scale that the state’s capacity to deliver services has been put at risk. He savages the strategy of placing the burden of the cuts on lower spending rather than higher taxes, and points to the injustice of ring fencing health, education and development spending, so that the rest of government suffers even deeper cuts. Instead he advocates taxing property, inherited wealth, business and the rich to bridge the deficit – not mentioning the potential impact on incentives, growth and investment, though he does call for more innovation and R&D. This is a highly partisan approach. Rightly, he also attacks the injustice of zero hours contracts, insecure employment that neglects training, and the breakdown of the implicit social contract that welfare – collective insurance – confers on a society. Tax avoidance and the unreformed council tax valuation bands need to be better controlled and managed. None of this is new.

I did like his Ministry for Book-keeping (aka the Treasury) analogy, saying that it is governing Britain – at the expense of essentials like flood prevention, a valid critique. He says the Treasury initially wanted the M25 to just have two lanes – clearly inadequate – and opposed Crossrail and the M1. But that is where the greater good and the long-term needs of the country have to be balanced, and why the civil service has to be apolitical. And also why the government could now be borrowing to upgrade the nation’s infrastructure in order to make the most of current negligible borrowing costs.

Hutton emphasises the fallacy of the Tories’ assertion that there is a public debt crisis. Public debt has been higher in the past and there are now no problems in financing it. (To what extent that ease is just a reflection of the confidence the markets attach to credible policies is not mentioned.) Hence his view that to reduce the debt stock at the cost of “Britain’s public fabric and social settlement … being torn up at a rate that cannot be sustained” is indefensible. Instead, fiscal policy should be reorganised so that the burden of balancing the books is more evenly shared – i.e. the rich should pay more. So far, so familiar, and again disappointingly partisan.

While systematically taking apart the current state of the Conservative party  (“The party has lost its head. Its right wing has become more of a messianic cult than the wing of a political party”) he turns also to the shortcomings of the press – inevitable perhaps after the recent scandals and given his background. He accuses the media of being complicit in Conservative ideology, by manipulating information and reporting unfairly, contributing to the breakdown of trust in the idea that “we live in a society founded on respect”. Grand words indeed.

But most disappointingly, his interpretation of why this decades-long accumulation of policy mistakes could be an opportunity is weak. For sure, none of the problems analysed are inevitable. There are many success stories around the country. The solution is certainly not to leave the EU, or just to stay out of the euro. While the influence of UKIP is moving the political balance more to the right, simply to advocate countering the swing by holding the centre as he suggests is not saying much. He calls on Labour, the Greens and social liberals in the LibDems to band together to forge a new centre ground and develop a one-nation, broad political church – the Best of British, a reformist coalition – presumably as opposed to the current coalition.

What is perhaps most encouraging about this notion of a stronger centre as the way forward is that it also implies that Labour should avoid moving to the left just as the Conservatives should stop their rightward shift. It remains to be seen whether either will listen. It seems a message is a triumph of hope over reality.