Key topics:Labour’s leadership crisis reflects a deeper lack of ideas and purposeCase for reviving Edwardian liberalism and active, reforming stateEnd of Thatcher-Blair consensus amid defence, tech, and social strains.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Adrian Wooldridge.The resignation of Keir Starmer’s chief of staff, Morgan McSweeney, on Sunday brings the Starmer era in British politics to an end. The precise timing and mechanism of the prime minister’s defenestration is unclear. But his authority is shot to pieces, and his government has lost what purpose it had.There is only one subject on the Labour Party’s mind: Who should replace him? The pros and cons of the two main candidates are endlessly debated. Wes Streeting, the health secretary, is a deft media performer. But is that a strength rather than a weakness in the post-Peter Mandelson era, with the party’s former spinmeister now in disgrace? Angela Rayner, the ex-deputy leader, is a charismatic champion of the left. But what about her tax affairs? Al Carns, the armed-services minister and former special-services officer, has made a well-publicized visit to NATO’s northernmost border on Norway’s Russia border. At least this relative unknown is free of political baggage.But Labour needs more than a new leader. It needs a new sense of direction. The problem with Starmer’s leadership is not simply that he isn’t very good at politics. It is that he has never known what he wanted to do with power. He occasionally flirted with silly ideas — “mission-driven government” one day and reviving the spirit of Harold Wilson the next — only to abandon them. He never had an answer to the basic question: What am I here for?Ideas are essential to politics because they give you both a sense of direction and purpose. Margaret Thatcher and Tony Blair were successful prime ministers because they knew where they were headed and were willing to make sacrifices to get there. Starmer made up for his absence of ideas by over-relying on political operatives, most notably McSweeney, and their standard tools of spin, manipulation and “out of the box thinking,” culminating in the appointment of Jeffrey Epstein’s “best pal” Mandelson as British ambassador to the US..Where can the Labour government get new ideas from at this late stage? Not from the Blairite right. The Mandelson affair has reminded us of everything that was wrong with the clique of insiders who ran the country during the Blair era. Not from think tanks such as the Resolution Foundation. Clever policies cannot deliver unless they are linked by a guiding philosophy. And not from the big-spending left, whatever Rayner’s political talents. Liz Truss’s disastrous Tory premiership has limited the slack the bond markets will grant the country.I would argue that the future of Labour — or indeed of any other mainstream UK political party — lies in rediscovering the spirit of the 1906 Liberal government.This might sound quixotic. But one man in Westminster is already headed in this direction. A few weeks ago, the Spectator’s political editor Tim Shipman spotted Danny Kruger, the Reform UK party’s leading policy thinker, carrying a well-thumbed copy of John Campbell’s biography of Richard Haldane. He was one of the key figures in the Liberal government, who drove the creation of the Imperial Defence Committee, the Admiralty, the Royal Air Force, the intelligence agencies and the Territorial Army.That this is coming from Nigel Farage’s hitherto hard-right party is not disqualifying. Kruger is an astute former Conservative and he’s onto something with his reading matter. The parallels between our own age and the Edwardian era are extraordinary: Not only did the the early 20th century see the disintegration of a one-party structure with the rise of Labour, it also saw the disintegration of an intellectual order. The Victorians had worshipped at the altar of the night-watchman state of minimal government intervention. But this philosophy was visibly failing to cope with the problems of a massifying industrial society. New cities demanded water and sewerage. Organized workers demanded education and social welfare. Germany was pulling ahead of Britain by investing more in technical education and industrial capacity.A group of Liberal intellectuals (T.H. Green, Graham Wallas, L.T. Hobhouse) grasped that a new age needed a new philosophy and rethought some of the basic tenets of the liberal creed. They recognized that freedom meant empowering individuals rather than just limiting the state. They understood that Germany’s rise required more investment in weaponry. The great liberal salons of the day were slick with the blood of sacred cows being slaughtered.This new philosophy regalvanized a party that looked as if it was atrophying. The 1906 Liberal government included such extraordinary talents as Winston Churchill, Lloyd George and Haldane, who rapidly transformed the philosophical shift into a set of concrete policies: free school meals for needy children in 1906, medical inspection of state-school children in 1907, old-age pensions in 1908, a “budget against poverty” in 1909, the stripping of the House of Lords of its veto power, and steady investment in the armed services..Admittedly, the liberal revival was interrupted by World War I, which shattered the Liberal Party’s hegemony along with the long peace. But liberal ideas survived the war intact, even if the party didn’t, strongly influencing both Labour and the Conservatives. They laid the foundations for the 1945 Labour government (both William Beveridge and John Maynard Keynes, the architects of the welfare state, were Liberals), and shaped US President Lyndon Johnson’s policy (the phrase New Society was foreshadowed by Wallas).Even before the Mandelson scandal it was clear that the intellectual orthodoxy that has dominated UK policy making for the past four decades — a mixture of free-market ideals, permissive morality and underinvestment in national defense — had failed. At the same time, pro-business orthodoxy has allowed technology giants to peddle addiction, distraction and lies to everyone, including children. Pro-immigration policies have strained the patience of the public. High welfare spending, often necessitated by social breakdown, has entrenched disadvantage and starved the military of funds.The Liberal government’s formula of state activism combined with a solid defense of liberal principles provides Labour with exactly the new formula it needs. The government gives the impression that it sees the state as little more than welfare provider. It needs to champion an active role for itself in regulating bad corporate citizens such as the tech companies, and in preparing for the possibility of conflict with authoritarian powers, perhaps through conscription. It has been fashionable in the Thatcher-Blair era to decry “the nanny state.” Instead, the government should no longer ignore what big business is up to, nor the petty offenses — the fare dodging, littering and casual smoking of marijuana — that blight our cities. Better a nanny than social breakdown.The government also needs to be willing to address public worries about immigration and societal change. Why has the inquiry into the grooming gangs been so slow? Why are many communities isolated from the mainstream? The government needs to answer these questions not just because failure to deal with them will empower Farage, but for more fundamental reasons: We are a liberal country that wants liberal values to prevail in every corner of the land.Kruger’s example shows Labour’s rivals are already trying to adapt themselves to the collapse of the Thatcher-Blair consensus. Labour cannot afford to be left behind. Britain has had four failed prime ministers since the Brexit referendum in 2016 not counting Starmer; indeed, the last leader to serve a full term in office was David Cameron in 2010-2015. Merely getting rid of the latest disappointment and replacing him with another will not be enough to restore good political order. Creating a new governing philosophy when you are in power is even harder than it is when you are in opposition. But the Edwardians not only provide us with a template, they also demonstrate that, once you have one, seemingly exhausted parties can rediscover their dynamism and recharge their talent bank with remarkable speed..© 2026 Bloomberg L.P.