Sunday Times article, 16th March 2008.

The next election is up for grabs. Gordon Brown is down but not out and there are signs of a recovery. Meanwhile David Cameron, having tickled voters’ interest, has hit a glass ceiling. Both sides engage in trench warfare but neither breaks through. Politics is in a no-man’s land.

This is not 1945, 1979 or 1997 when the sound of public support marching from government to opposition was deafening. Critics inside both parties pinpoint a common problem facing Brown and Cameron: lack of clear narrative. But the problem is more fundamental than presentational. The seismic political change of those three elections was a response to profound social and economic change. Victory went to the winner in the battle of ideas. In each case a body of new ideas replaced the prevailing orthodoxy. Today politics is struggling to come to terms with even greater changes: more assertive citizens, more diverse societies and more globalised economies. Together they call for new ideas, particularly a new relationship between the state and the citizen. As yet that call goes unheeded.

All three main parties toy with the notion but without coherence. Nick Clegg wants a “people’s NHS” to realign his party as less big state and more individual citizen, but many Liberal Democrats oppose such talk. Conservatives talk of “shifting power from the state” but a raft of uncosted spending commitments point to more central control not less.

Similar inconsistencies are at play within the Labour government. Gordon Brown embraces “a new politics that places power in the hands of people themselves.” While NHS patients controlling their own budgets and local people running their own services are on the agenda, Whitehall extends its grip by regulating children’s play and banning light bulbs.

This half-in, half-out approach won’t work. Uncertainty has to make way for clarity if what the state does and what it doesn't do is to be redefined. From the mid-19th century, state power grew - rightly - to guarantee clean water, safe streets and legal rights. It culminated in the Attlee government’s nationalisation programme and the welfare state.

By the last quarter of the 20th century, however, it was clear that too much state could be as bad as too little. Governments had a poor record of picking industrial winners but losers had developed a consistent habit of picking governments. Thatcherite reforms moved power from state to market. Blairite reforms have again shifted power from the state to new institutions, such as NHS Foundation hospitals and city academies.

But neither Thatcherism nor Blairism moved power from the state to the individual. This post-Blair agenda is the bridge now needed to close the growing gap between politics and public. Membership of UK political parties has halved in just 25 years but we are not alone in witnessing record levels of cynicism about politics. Across the OECD, average election turnout has fallen by 10%. And yet with half of Britons now volunteering, public involvement in civil society is increasing not diminishing. It seems people aren’t so much turned off by politics, as the way politics is done. Public disengagement is a symptom of disempowerment. Too often we shut people out when we should be letting them in.

Such a shift is in keeping with the spirit of the times. Faced with forces that feel beyond control, people are taking refuge in what they know: their families, communities, local identities. Ordinary consumers a getting a taste for greater power. But while people may have become more empowered as consumers, they feel disempowered as citizens.

Ours remains a ‘them and us’ political system, framed in an era of elitism. Rulers ruled – and the ruled were grateful. Economic advance and universal education – and now the internet – are sweeping aside deference and ignorance. Representative democracy from the last century can evolve to a more participatory democracy in this.

Modern challenges, like the environment, cannot be solved by government alone any more than a solitary state can bring about better health or lower crime. They require the citizen as well as the state. Governments that nationalise responsibility – and make competence their yardstick – risk finding they lack the levers to put right the things that are wrong. Progress in the future depends on sharing responsibility and power.

Equity demands empowerment. Despite rising living standards and falling poverty under Labour, a deep inequality gap still scars Britain. Over many decades social mobility has slowed down. The growing gap between those with skills and those without is partly to blame but addressing inequality is not just about money. As the Nobel Prize winner Amartya Sen notes, people suffer social, educational and cultural - as well as economic - disadvantage. Breaking this cycle means moving beyond the traditional welfare state solution of retrospectively correcting the symptoms of inequality, like low wages and family poverty, towards a pro-active assault on the roots of disadvantage. Real equality of opportunity means giving people real control over their lives and a fairer share in power.

None of this suggests the state has no role. Global warming and global terror, economic uncertainty and mass migration make for insecure times. People want to know they are not alone. But they want also to control their own destiny. So the modern state has to step forward where citizens individually are weak – providing collective security and opportunity – but step back where citizens individually are strong – exercising personal choice and responsibility.

The modern state should not just enable. It should empower so that more people can realise their own individual aspirations to progress. The right wrongly rejects the state. The trick is to transform it so that the state controls less and empowers more. It is time to complete the post-war journey - from Attleeism through Thatcherism to Blairism – from the state being in charge to the state empowering the citizen to be in charge – from “they control” to “we control”.

This narrative should run through government policy like a stick of rock. So in economic policy the siren voices of protectionism and interventionism would be ignored. Tax policy should help create more wealth not penalise, particularly when it comes to those on low or middle incomes. And wealth should be democratised by extending employee share ownership and home ownership far beyond current modest government proposals.

Next, the choice agenda in public services – most desired by the most disadvantaged - would be universalised. With record numbers of parents seething because they cannot get their child into their preferred school they need more than sympathy. They need power. So the government should give parents - starting with the poorest who are usually stuck with the worst schools - their own budgets to make school choice real not rhetorical. In old age, health, childcare or training individuals should be able to control budgets to make the choices that are right for them.

The same applies to communities. Minimum standards would be set nationally which local services could exceed locally. Councils – and their funding - should be freed from much central government control. Local police and health services would be directly elected. Local communities would have a bigger say in local courts and could run local parks and childcare centres.

Of course, no-one ever willingly gave away power so Whitehall should be capped. Civil servant numbers have been reduced but still total almost 500,000. My ministerial experience taught me that the bigger the machine is the more it will do. So the civil service should be reduced by one quarter. This change would symbolise the state running less not more and place a new principle at the heart of our governance: one of subsidiarity where power is relocated to the lowest possible level.

This is the new political territory. Neither right nor left has yet come to terms with it. Whoever does so first can win both ideologically and electorally. For Labour adopting this agenda would kill stone dead the charge that we are the party of Whitehall knows best, of the central state not the individual citizen. With both David Cameron and Nick Clegg inching towards a smaller state Gordon Brown could find himself, by default, defending a big state. He is too wise for that to happen. If he summons up the necessary courage and conviction he can champion an empowering state that puts the individual in charge. And if he drives that narrative across government policy he can win the battle of ideas and make the next election – like those of 1945, 1979 and 1997 – a moment when politics is redrawn and renewed. It is there for the taking.