Sometime in 1989, I had the idea of writing what, for me, would be a new kind of play. The plan was to go off to uncover a subject in the manner of a reporter or a documentary film-maker. But then when I sat down at the typewriter I would put all my research in the far back of my mind to invent an entirely fictional story that, with luck, would be enriched by immersive weeks of nosing around in the real world. Richard Eyre had just taken over as director of the National Theatre and was keen on this approach. He intended an energising shift of emphasis in the National’s repertory, away from the classical towards the modern, and this was one way to do it. In fact, even while he was rehearsing the outcome, Racing Demon, about the conscience of the Church of England in the inner cities, Richard was proposing the idea of a trilogy. All three plays would be about British institutions and all, eventually, would be presented in the course of a single day.

A massive cultural change, brought about by economics, but not just economic in its impact, was taking place David Hare

Because the acting company of Racing Demon was close-knit and highly intelligent, they took pleasure in lobbying for their future subject matter. I was never safe from someone saying “Why don’t you write about – ?” But somehow the rickety British legal system had always been a given for the second play. The law’s highly stratified class structure – barristers at the top, prison officers at the bottom, police stuck in between and the accused universally ignored – was dramatically far too delicious to forego. So all the contention came to be centred on the third piece, which would have to bear the burden of being some sort of climax to the venture. Richard was keen to have a play about the military, which, with the ending of the cold war, was having to rethink its purposes. At the same time doctors and nurses, hearing what the theatre was up to, were sending letters begging me to write about the National Health Service. What was being done to it was a scandal, they said. A play could expose it. But by then there had already been far too many dramas that relied emotionally on the idea that everything had been wonderful in 1945, and that in the late 1980s everything was terrible. It might be true, but, like the myth of the second world war itself, it was becoming too romantic and lazy a narrative. The familiarity of the lament seemed to inhibit thought, not to stimulate it. I had no wish to march an audience defiantly back into the past. My preference was for something much knottier and more intractable, something that might reflect on the confused lives of the audience as well as on the protagonists. So it was good luck that in 1992 John Major was forced finally to call an election.

In those days the Labour party was interesting precisely because it was in the same mess as the rest of us. It was pedalling hard to work out how best it could respond to capitalism’s new-found ability to free up trade, disempower workers and regenerate its inequities from within. Margaret Thatcher’s ideological spite towards a working class that she loathed for their solidarity had robbed huge swaths of the country of their sense of identity. A massive cultural change, brought about by economics, but not just economic in its impact, was taking place. The very people who had created the Labour movement and who had given it a voice and unarguable moral force throughout the 20th century were watching the dismantling of the communities that had shaped them. After all the years of oppositional splits and bitter disunity through the 1980s, the Labour party leadership in 1992 was faced with an almost impossible dilemma. Either they had to accept that the world had indeed changed for good and that politicians had become little more than functionaries whose job was to get out of the way and facilitate the ruthless workings of the market, or they had to find new language, appropriate to a new age, in which to argue that there might be something called the common good. They had to reassert that there was more to a society than the money it made. But after a decade in which a triumphant ruling party had spoken of nothing but money, how were its opponents to reframe the argument to the electorate in a way that didn’t seem either disdainful or unrealistic?

Facebook Twitter Pinterest Neil Kinnock at the Sheffield rally, April 1992, a week before the general election, which Labour lost. Photograph: Alamy

It was another stroke of good luck, from my point of view, that the leader of the party, Neil Kinnock, was a theatregoer. In this he was unusual for a politician. When I asked him whether I might be allowed to attend Labour’s strategy meetings to get the feeling of what a campaign was like from within, he agreed enthusiastically – perhaps too enthusiastically in the view of some of his colleagues, who seemed all too ready to jump on him for being naive. It quickly became clear that, in politics, most leaders are surrounded by a close support team who regard their boss with a mixture of love, protectiveness, exasperation and contempt. (It’s not so different in the theatre.) Indeed, the complicated eddies of warmth, fury and hate between a leader and his fearful colleagues, intensified under the pressure of an election, provided the fun of my eventual play. The shifts of loyalty among the pilot fish were just as revealing as the behaviour of the big tuna. But when I started turning up at strategy meetings at 6.45am each day in Millbank Tower, key planners such as Robin Cook and Patricia Hewitt took to going into corridors and lowering their voices, making it obvious that they disapproved of my presence, which they regarded as proof of Kinnock’s fatal susceptibility to flattery. Only the other day, Sue Nye, the leader’s tour coordinator, could still remember how annoyed she was to be asked to find a seat on the bus for a playwright. What possible benefit could there be for the Labour party? How could he be trusted? It was an irony that Cook relished that 10 years later he was one of the few politicians encouraging me to write Stuff Happens, an insider’s account of the diplomatic process leading up to the invasion of Iraq.

In fact, I had not needed to flatter Kinnock. By the time the election was over, he was even more admirable than he was at the beginning, not least for a resilience and humour in the face of disappointment that neither Thatcher nor Edward Heath ever displayed. It requires special resources of character to admit that you have lost an election you were expected to win for no other reason than that more than 32 million voters finally do not see you as their prime minister. In 1987, Labour, under Kinnock, had fought an unexpectedly creditable campaign that had gone some way to shaking the opposition. But it had been masterminded by Peter Mandelson, who was now absent, himself standing for parliament in Hartlepool. This time, the ramshackle morning meetings, whose tone was set by the amiable psephologist Philip Gould, were remarkable chiefly for the way their firmest decisions were comprehensively ignored. If this was the new discipline, goodness knows what the old one was like. Everyone watching in 1992 can still remember the image of a delirious Kinnock several times shouting out “Well, a’ right” at a Sheffield rally a week before the poll and thereby alienating his television audience, some said definitively. But that very morning, everybody had sat together at a table in London and agreed that with Labour in the lead in the opinion polls any tone of triumphalism must, at all costs, be assiduously avoided at the rally. “No triumphalism,” they had all repeated, only to watch Roy Hattersley, the deputy leader, walk out before Kinnock to greet cheering crowds with the excited claim that the election was in the bag.

Labour strategists were, in private, hilariously paranoid and jumpy, like dogs cowering at a firework display David Hare

It was this kind of human weakness and fallibility that, up close, made the Labour party 20-odd years ago so sympathetic. Politicians, it turned out, were no different from the rest of us. They boasted a great deal and pretended to have some control over events, but they had little. Labour strategists were, in private, hilariously paranoid and jumpy, like dogs cowering at a firework display. But with the majority of the British press in the hands of extreme rightwing proprietors determined to throw mud at anyone who dared to stray an inch to the left of Enoch Powell, they did indeed have plenty to be jumpy about. The party carried real scars, and by the end of the election, would carry more. Further, at the time I was happy to accept the argument, later articulated on stage by George Jones, the Labour leader in my play The Absence of War, that the Labour party was “the only practical instrument that exists in this country for changing people’s lives for the good”. For Kinnock, the election would turn out a disaster, with the Conservatives gaining what remains their last outright electoral victory in the UK. Kinnock would go in as pig but come out as sausage.

Just over 18 months after Labour’s defeat, The Absence of War was premiered in the Olivier theatre. However, because the events that had inspired the play were so close, and every journalist knew its author had been invited into the heart of the 1992 Labour campaign, it was needlessly difficult for the public to make sense of what they saw. This was entirely my fault. Racing Demon and Murmuring Judges, the play about the law, were driven by narratives that were unfamiliar. But this time the drama was just a sufficient distance from a well-known reality to thoroughly confuse everybody. By telling the story of a Labour leader robbed of vitality by having to work under the impossibly dull new disciplines of remaining on message 24 hours a day, it was reasonable for the audience to assume they were simply watching a veiled documentary about Kinnock. Just as early audiences of Citizen Kane tended to ask “Is this meant to be Hearst?” – the now otherwise forgotten newspaper magnate by whom the film was inspired – so I despaired at so often being asked why John Thaw, playing George Jones, didn’t have red hair and speak in a Welsh accent. In reply I would bad-temperedly point out that my story was a fiction. The plot revolved crucially around the idea that in a desperate last throw, Jones is invited by his comrades to abandon discipline altogether and to rediscover his genius by speaking, as he did in his youth, from his heart. No such request had ever been made to Kinnock. But the more I protested that mine was a parallel story, and that my character – a South London bachelor, blessed with a quiet, cultured melancholy that has made him one of nature’s solitaries – resembled other political leaders rather more than it did Kinnock, the more determined certain people were to believe that they were watching only a thinly disguised version of real life.

Facebook Twitter Pinterest John Thaw as Labour leader George Jones in the 1995 BBC adaptation of The Absence of War. Photograph: Tristram Kenton/Guardian

It was because of my own misjudgment that the themes of the play were more apparent to some than others. A few thuggish Labour loyalists, mistakenly thinking they were doing their master’s bidding, came to give it a dutiful kicking. Kinnock himself was far more magnanimous, describing the play as “the three most uncomfortable hours of my life”, and then adding: “There’s only one thing more painful than losing a general election, and that’s seeing the play about you losing an election.” But another early visitor was Tony Blair, at that point not yet leader. He later confided that sitting through the play confirmed his resolution that he would never allow what he watched happening to George Jones to happen to him. It had long been evident that in any democratic society, whatever the current flux of ideology, there will always be two major parties, one protecting Money and the other representing Justice. One side will say that nothing can be achieved without promiscuous licence being given to the creators of wealth; the other will say that wealth’s distribution is equally important. If a society isn’t just, it can’t be happy. It was Blair and Gordon Brown’s intention to see whether the claims of Money and Justice could be reconciled, and whether you could create a party, New Labour, that was committed to both. But the messianic flaws of character that led to Blair’s epochal mishandling of the Iraq invasion left the jury out on whether his domestic experiment could ever succeed. It has not been attempted since.

Surely, they asked, I couldn’t possibly have written such speeches and scenes 10 and 20 years ago? David Hare

By the time the play was part of a revival of the trilogy in Birmingham in 2003, it had become happily unhitched from historical memory – few were able to check the fiction against the template in any detail – and it was moving to find how many people thought that, with the passage of time, The Absence of War had become the strongest of the three works. Ten years on, it was at last being seen for what it was, the posing of an urgent question: what on earth, in modern radicals, could replace the sense of conviction bred by the working-class culture that, from below, had once given Labourism its organic heft and authority? Time had needed to pass before the true subject could be understood. Indeed, last year when two old plays of mine were revived in succession in London, it was interesting to find so many people at each remarking on how topical both plays now seemed. Skylight gives voice to private enterprise’s self-righteous hostility towards those who work in the public services. The Vertical Hour portrays the agonies of those liberals who had supported what they expected to be western missions of mercy in lethal foreign wars. Surely, they asked, I couldn’t possibly have written such speeches and scenes 10 and 20 years ago? Had I redrafted them specially for these new productions?

Such eerie parallels may well be found during the nationwide tour of The Absence of War, staged by Headlong and directed by Jeremy Herrin. After all, the play is about an election that is too close to call. It features a Labour leader, this time played by Reece Dinsdale, who, everyone agrees, is an entirely decent and well-liked human being, but who is hopeless at conveying those qualities to the world at large. And it portrays a Labour party that will pay any price necessary in order to appear responsible and respectable, and that is rhetorically paralysed by knowing how little it is trusted on the economy. (Its strategy, therefore, is always to talk about health.) It even charts the rise of those professional types who have taken over the party, but who lack steel because their cultural roots are shallow. With such glaring similarities, it may be tempting to look at the play and remark that little has changed. But the problems facing Labour in 2015 not only run deeper than in 1992. They are also subtly different.

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Commentators write glibly about the public’s increasing contempt for politicians, and yet what goes unremarked, and is equally damaging, is politicians’ growing contempt for us. To the degree that we hate them, so they hate us back. Why wouldn’t they? Speak to any Labour politician and you will find them furious and disbelieving that the Scottish people have had the nerve to relocate the site of radicalism to the SNP and away from the traditional vessel. Since the expenses scandal, politicians of all stripes are sick of being told that they are only in it for themselves; that there is no such thing as public service; and that anyone who chooses to work at Westminster must necessarily be doing it for the opportunities of lifestyle and cash, or as a stepping stone to a more lucrative career in private business. And yet this deep anger at the way they are perceived is largely the fallout of a crisis politicians have brought on themselves. It is their own fault that they are seen as just one more self-interested cartel, a professional trade union no more or less significant than any other.

Facebook Twitter Pinterest Ed Miliband. Photograph: Russell Cheyne/Reuters

At a time when foreign policy has been effectively outsourced to Washington, when wars have been dishonestly pursued without democratic support, when banks have been permitted to carry on exactly as they did before they destroyed the British economy, and when international corporations that flout tax regulations have become far too powerful to be challenged or brought into any national legal framework, politicians have conspired in their own diminishment by no longer bothering to make it clear what on earth it is they exist to do. They have gaily delegated and privatised so many of their own functions that nobody any longer knows what they are there for. The plot of The Absence of War centres on a failure of eloquence. At the last moment, George Jones cannot make a killer speech. And the question you most often hear asked of Miliband, in tones of increasing frustration, is: “Why, at a time when the public most needs it, can Ed not speak in a way that reaches the public?” Why can he not shoot at Cameron’s open goal? Why can he not, in the words of one veteran Labour MP in the play, “get up and take the whole rotten thing on?” But to ask that question is to misunderstand what rhetoric is. Rhetoric is not an add-on, an extra. It’s not a trick, a facility or a gift. The sober truth is that you can only make a great speech if you have a great analysis.

The genius of 21st-century capitalism has been its ability to create a sense of the inevitable at the very moment when it has been at its most vulnerable. The ability of the banks to blackmail their way back into their old pomp has left the entire electorate feeling bewildered and disenfranchised. Everyone knows it’s wrong, but nobody does anything about it – just as they know that British complicity in torture and rendition from 2001 onwards was also wrong, but will again be endorsed by a boneless establishment, which believes that institutional law-breaking is an oxymoron. The welfare state and the NHS, perfectly affordable when the country was desperately poor after the war are, we are told, mysteriously unaffordable now that the country is infinitely richer. Workers cannot expect proper wages, or indeed wages at all, or proper conditions of tenure, or pensions, or employment rights, because, again it is said, there are millions more workers waiting to do their jobs more cheaply. The state, which has for years done an invaluable job of providing a much-needed safety net for the poor, is again for reasons never once explained going to be healthier when it is starved to a point when it can no longer help anyone. Public broadcasting and public art, which have done so much to enrich tens of millions of lives, will apparently be so much more purposeful when they are slimmed down so they can reach none. Underlying the decline of Labour is a comprehensive failure, far deeper than in 1992, to provide a competing narrative, one that makes the public feel that inequity is not the natural condition of man, and that the mid-century experiment of investing in a benign state that is proud to take responsibility for its own citizens has not been abandoned for no other reason but that it was going so well.

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In 1993, The Absence of War arrived as the dustcart after the lord mayor’s show. A belated reflection, it followed the election. It was an afterthought, a postscript. This year, for better or worse, it is preceding it. Yes, as everyone keeps telling me, this is indeed a timely moment to revive a play about a floundering Labour leader who can’t find the public pulse. And no, since you ask, I haven’t changed a word.

• The Absence of War runs at the Sheffield Crucible theatre from Friday until 21 February, then tours until 9 May.