Labour likes to believe it is a force for radical change, challenging vested interests and overturning established hierarchies. But too often it is trapped by its innate caution and progressive orthodoxies. It is with good reason, therefore, that Labour is seen as the party of big government and the overweening bureaucratic state.

Sir Keir Starmer wants to confront that perception head-on. In a speech on Thursday, in which he announced the abolition of NHS England, he said he wanted to create a lean and more agile state and for his government to emerge from its “defensive crouch”. He said the government would take back full democratic control of the health service in England and end duplication of roles. As many as 10,000 civil service jobs will be cut.

This is not yet the “bonfire of the quangos” long demanded by the right. But the kindling is in place.

Civil service and NHS reform will be simultaneous with deep cuts to the welfare budget. Non-protected departments are facing real-terms spending cuts of between 5 per cent and 11 per cent during the next three years — but Starmer wants us to believe this is not Austerity Labour but Radical Labour in action.

The bloated, sclerotic bureaucratic state will be streamlined, what Dominic Cummings calls the “permanent bureaucracy” of the civil service reduced in size and quangos abolished. That, at least, is the ambition. Resistance from Labour MPs and senior ministers is hardening. It will be respected but ignored. The economic outlook remains dire (the economy contracted in January) and Starmer and Rachel Reeves, the chancellor, believe there is no alternative.

They are emboldened by Labour’s 150-plus Commons majority. And Chris Curtis, co-chairman of the 110-strong Labour Growth Group of MPs, believes the government has “to go further and faster. A decisive change in risk appetite has to happen in Whitehall now — the price of standing still is simply too high for anything else.”

In a 1999 speech, Tony Blair denounced what he considered were the “forces of conservatism” mobilising against him. He was not addressing the Conservative Party but the left-wing public sector establishment he believed opposed fundamental reform.

In his speech on Thursday, Starmer’s tone was similarly one of restless frustration. It would be wrong to think he is striking an anti-state posture — he believes the state binds society together — but he despairs of a government machine one senior adviser describes as being “consumed by its own processes”.

President Trump’s return to the White House and the crisis in Ukraine have galvanised Starmer’s government. The prime minister and Morgan McSweeney, his chief of staff, know that with Reform UK, whose rapid rise had spooked Labour MPs, helpfully if inevitably embroiled in civil war, they are enjoying the best period of his premiership. They are determined not to waste it.

The return of Blair-era stalwarts such as Jonathan Powell as national security adviser (he was with Starmer in the Oval Office for the meeting with Trump) and Liz Lloyd as policy director has added experience and authority to what was a floundering operation.

Pat McFadden, the Cabinet Office minister, is approaching civil service reform with pragmatism and vigour. He has consulted widely, including with Pamela Dow, who, during her three years at the Cabinet Office, led Michael Gove’s focus on serious vocational training, and digital and data skills.

Wes Streeting too has been canvassing opinions. In 2023, before he became health secretary, he visited a succession of GPs including Dr Phil Whitaker, author of What Is a Doctor?, who told him NHS England had “presided over the decimation of the GP workforce” and that the continuity of care and the role of the family doctor should be restored. Since 2010, not long before Health England was set up, the number of over-65s (the highest users of the NHS) has risen by 30 per cent, the number of hospital doctors has increased by 48 per cent, while the number of GPs has fallen by 12 per cent. By the time he took office, Whitaker said, Streeting “understood more than any other health secretary in my lifetime the role GPs can play in creating a cost-efficient health service”.

The politics of this new era are comparable, I think, to the breakdown of the postwar settlement at the end of the 1970s, when the free market New Right rose and then consolidated its hold on power through Margaret Thatcher’s transformation of the Conservative Party. The left in Britain did not understand what was happening until it was too late because it was committed to old ways of thinking.

Starmer does not want to make the same mistake again. He wants to use this moment of extraordinary political turmoil and flux to reform the state — or at least attempt to. Labour knows the alternative is continued dismal productivity and economic stagnation. Public sector productivity is 8.6 per cent lower than it was before the pandemic, and civil service salary costs rose from £11.4 billion in 2013 to £16.6 billion in 2022, according to data from the Office for National Statistics.

Yet what might once have seemed impossible to a Labour leader is now thrillingly possible because we are in a transition to a new era. As the cultural theorist Stuart Hall wrote at the end of the 1980s: “The question should always be, where is the leading edge [of change] and in what direction is it pointing?”

Today the leading edge of change points towards artificial intelligence and its revolutionary potential. Encouraged by Blair, Starmer and senior ministers such as Streeting and Peter Kyle, the technology secretary, believe AI can help create the leaner and more active state they seek. Technology makes the new future possible.

Is this wishful thinking? Does Starmer have the stamina to take on the vested interests of the bureaucratic state and the resistance of his MPs, particularly those enraged by the coming cuts to the welfare budget? The rhetoric is bold but one is reminded of some of the crowd-pleasing announcements made by Gordon Brown early in his premiership, such as the plan to abolish super-casinos. They didn’t amount to much as his government drifted and then crashed.

Another problem for Starmer is that, unlike the Thatcherites at the end of the 1970s, Labour lacks a political and intellectual infrastructure, an ecosystem of well-funded think tanks, journals and ideological production. The Thatcherites were able to remake the state because the groundwork had been done and the ideas tested. They had the writings of Milton Friedman and Friedrich Hayek and their intellectual outriders at Westminster, such as Sir Keith Joseph, to lead by “thinking the unthinkable”.

There is no comparable ideological movement or ecosystem on the left today. McSweeney complains that “we are having to invent ourselves in power”. Labour Together, the informal network that became a think tank under Josh Simons, now a fast-rising MP, was instrumental in helping Labour win the general election. Its head is Jonathan Ashworth, who lost his Leicester Southseat to an independent pro-Gaza candidate. He is more of a player in the Westminster game than an ideologue or thinker. Labour Together has lost support from donors and is losing influence. Nothing has emerged to replace it.

What matters in politics, even more than technology, is power and personnel: how power is used and by whom. If you talk to Starmer’s close advisers the message is the same: “We can’t get anything done, everything is broken.” Government moves too slowly, there are too many blockages, communication across departments is terrible, there is too much internal resistance. HR regulations and DEI (diversity, equity and inclusion) initiatives have a stultifying effect.

That is one side of the story. “Most civil servants are desperate to please their ministers, but clear and consistent instruction, of what to do and why, is often absent,” Pamela Dow said. “Ministers and their advisers have to give precise and relentless leadership and direction, to ‘recode’ their departments. Put the new algorithm in, to govern all the hundreds of decisions and assessments that officials make every day, every choice they make. That’s the only thing that results in lasting change.”

Starmer, McSweeney and McFadden believe the runaway state is out of control. Can their rhetoric be matched by concerted action and lasting reform? Or is “radical” Labour destined to be defeated again by inertia and the forces of conservatism?