IN HIS speech to the Labour Party conference in Brighton last year, Jeremy Corbyn argued that British politics was moving inexorably leftward. With the neoliberal orthodoxy that had held for decades blown up by the financial crisis, Britons were demanding a more active role for government, in the name not just of fairness but also of efficiency. “It is often said that elections can only be won from the centre ground,” he told his adoring audience. “And in a way that’s not wrong—so long as it’s clear that the political centre of gravity isn’t fixed or unmovable, nor is it where the establishment pundits like to think it is.”

Jeremy Corbyn has done a dismal job of redefining the centre ground—dramatically worse than Margaret Thatcher did during a similar period of upheaval in the 1970s. Thatcher devoted her years as opposition leader to moving the boundaries of the possible. Mr Corbyn, an intellectually lazy man with little interest in domestic policy, is devoting his to fighting fires lit by his long-standing habit of palling around with terrorists. Labour’s summer has been consumed by a debate over whether he laid a wreath for members of the Black September group, who slaughtered 11 Israelis at the Munich Olympics in 1972. Yet the consensus is being redefined, regardless of Mr Corbyn’s incompetence.

Thatcher dreamed of “rolling back the frontiers of the state”, in a self-reinforcing programme of privatisation and cost-cutting. Today the frontiers of the state are rolling forward. This week the Ministry of Justice took back control of Birmingham prison from G4S, a private contractor, following revelations that the jail was plagued by violence and drugs. In January Carillion, another giant contractor, collapsed, costing the taxpayer £148m ($191m). In June the government renationalised the East Coast Mainline.

Britain’s leftward drift can be seen in one opinion poll after another. A survey published by Legatum in 2017 found that 83% of Britons favoured public ownership of water, 77% of electricity and gas, and 76% of railways. The British Social Attitudes Survey shows that the public is keener on raising taxes and public spending than at any time since 2006. It can also be seen in the changing dynamics of the Brexit debate. Leaving the European Union, a fantasy of Thatcherites who wanted to turn Britain into a European version of Singapore, has been redefined as a way of boosting spending on health and limiting immigration—“taking back control” rather than letting the market rip.

Privatisation is increasingly regarded as a problem rather than a solution. Train fares have increased by a third since 2010, while services remain overcrowded. The private utilities are fat monopolists or quasi-monopolists. Public dissatisfaction is partly because of the passage of time—harried commuters forget how bad nationalised British Rail was—but it is also because of administrative incompetence. The utility privatisations were driven by a desire to raise money, rather than improve services. Private companies have proved adept at milking their most loyal customers. Private-sector bureaucrats have taken on the customer-be-damned role once performed by public-sector bureaucrats.

At the same time the public is turning against austerity. The Conservative Party’s enthusiasm for balancing the books has driven public sector net borrowing to its lowest in 11 years. But the costs of the policy are also becoming painfully visible. Rough sleeping is on the rise. Getting a doctor’s appointment is becoming an art form. Northamptonshire County Council—once a Tory flagship—has declared bankruptcy and another 15 councils may follow suit.

Austerity and privatisation often combine to create a toxic mixture: the government privatises things in order to save money, but tight budgets then discredit privatisation. The debacle in Birmingham prison was partly the result of a 30% reduction in the Ministry of Justice’s budget since 2010, a cut that has strained public prisons as much as private ones.

Exhaustion with privatisation and austerity coincides with a growing feeling that British capitalism is rigged in favour of insiders. The country’s chief executives are masters of boosting their own pay by packing their boards with yes-men and awarding themselves generous share options. A new report by the High Pay Centre shows that the compensation of the average boss of a FTSE 100 company increased by 11% in 2017, to £3.9m, while the pay of the average worker failed to keep up with inflation. Banking in Britain is a game played by insiders who enjoy a large implicit subsidy from taxpayers, who have to bail them out if they get into trouble. The same banks have little connection with the real economy: only about 10% of their lending is to businesses outside commercial property. Global companies such as Amazon and Google get away with paying little tax by the ruthless use of tax havens and transfer pricing.

A fork in the road

The Conservative Party has repeatedly shown that it recognises the need to tackle rent-seeking and insiderism, only to back down under pressure from its friends. Look at the way the Department of Business’s green paper on corporate governance, which included measures like shareholder votes on remuneration, was turned into a damp squib of a white paper by business lobbying.

The question at the heart of British politics is not whether it moves to the left, but what sort of left it moves to. Will it be a one nation Conservatism, committed to fixing capitalism from within, or the Venezuela-loving leftism long promoted by Mr Corbyn? To secure the first option, the Conservative Party needs to do more than take failing prisons into public control or increase spending on strained social services. It needs to demonstrate that it can reform capitalism even in the teeth of opposition from big business and Tory donors. Fluff that test and no amount of revelations about palling around with terrorists will keep Mr Corbyn out of Downing Street.