POLITICS: What to make of failure
Let’s get the ratchet effect working for us
One of the most powerful metaphors for the post-war political consensus was that Keith Joseph coined of a ratchet effect working in favour of the left. Labour would introduce policies to further socialism, the Conservatives would come to power and consolidate this, leading Labour to propose and implement further socialist policies. As a way of illustrating how the centre-ground of political debate had shifted so far leftwards, it was an analysis backed up by recent history. As an argument for a radical change in Conservative policy, it was particularly formidable. After all, it exposed to many on the right the extent to which they had been suckered into a debate that worked strongly against them before it even began. If one party is ideologically determined and the other driven only by the hope of consensus, then what one gets is not consensus but appeasement. The left benefited from the ratchet effect for decades, and it ensured the very debate of politics was defined in terms that were centred around left-wing premises: between total equality of outcome and approximate equality of outcome, between tolerating high inflation for the sake of short term employment and preserving jobs at all costs.
It matters little that the Tories were in power more often, because they did not fight elections in order to reverse anything significant that the left had put in place. When in power they only kept the government benches warm before the next surge of socialism.
It proved to be intellectual timidity that allowed the socialist ratchet effect to prevail for so long. As soon as the Conservatives elected a leader willing to challenge it, its failures became a part of the history books.
Now all of this is important to the extent that Conservatives should be looking to mimic what worked so well for the Left during the decades immediately following the Second World War. The downside of the post-socialist era may be that we win elections less often, simply because the alternative to a Conservative government is no longer so ghastly. But if we can ensure a ratchet effect that works in our interests whoever is in government, this will not matter nearly as much.
What I propose is different to the extent that I believe it will work in our interests not just through the cowardice of our opponents, but through its success.
First, it is worth examining what it is that makes a policy introduced to bitter opposition eventually become acceptable to the opposing party. I suggest it is some or all of three factors:
success — once implemented, the policy is seen to work;
popularity — the policy is too highly-regarded by the general public for the opposition to be willing to fight an election in opposition to it; and,
symbolism — reversing this policy would say too much about the opposition party and for whom and what it stands.
A clear recent example would be the minimum wage, which to a degree fits into all three categories. In terms of success, it managed to reduce low pay without (yet) having a grave effect on employment. It was very popular even before its introduction, widely viewed as just and sensible. Symbolically, for the Conservatives to oppose it would be for the party to be seen to side against the low paid and with every Ebeneezer Scrooge employer in the country. Little wonder that after much was said against the policy by all wings of the Conservative Party, it was accepted by the opposition within two years of its introduction.
More important from a ‘ratcheting’ point of view, a minimum wage can be increased quite easily, while reducing it would scarcely be more acceptable than abolishing it. So Labour can leave it in place when they are out of office, knowing it will not be reversed, then increase it as they see fit upon their return to power.
Other such policies include all manner of permissive social legislation and constitutional changes such as the introduction of the Scottish Parliament.
Seen in this light, policies are not to be judged only on their own merits, or in terms of the votes they can gain a party, but also in terms of the policy's capacity to continue unchallenged under rival regimes, and the extent to which it can be expanded and extended under future governments by one's own party. What ratchet politics means is a new approach to policy-making, one aimed not only at winning votes and ensuring improvements to our economy and country, but also at policies that will survive under Labour governments and keep the political pressure rightwards, presenting us with more opportunities each time we come to power.
Take over-regulation of businesses, especially small businesses. The traditional Conservative approach to this issue would be to appoint a number of bureaucrats (like a Deregulation Task Force) to find ways to ease regulation, find exemptions for as many people as possible and gradually to loosen the regulatory corset. This neither wins the hearts and minds of the voter nor gives a serious problem an adequate solution. More importantly, all these measures can be reversed without political difficulty as soon as we next lose power.
A ratchet policy would be quite different. In this case it could mean tackling the problem from a bottom-up perspective. Perhaps, in this instance, the best way would be the introduction of what in Italy are called artisanos. These are businesses of fewer than 20 employees which, because of their size, are granted exemption from the government's business regulations. To try such a scheme here would not only do immense good to our economy in terms of competitiveness and employment, but it would be a long-standing sign of the Conservative commitment to the little guy — the corner shop with a handful of helpers, the family farm whose incomes have already been jeopardised by BSE and foot and mouth.
To squeeze the maximum political capital from the introduction of artisanos, we could give them not their Italian name, but encourage a nickname based on the minister responsible for them, in the same way as school days in which staff but not pupils turn up are known as Baker Days.
The ratcheting effect of this policy is obvious. Once it was put into effect, how would Labour realistically get up and demand that all the burdens and harm of regulation be re-imposed on some of the most vulnerable and popular sectors of our economy? The very enterprises that most lend themselves to the pitiful, tear-jerking vox-pops mass media most prefers to report suffering and discontent in.
Of all the public concerns about free market capitalism, the one that it eradicates small businesses and local firms perhaps resonates best. Just consider the effect of a Conservative government freeing up the economy so radically but also in a way that answers this criticism so well. Shortly after the policy was implemented, it is perfectly plausible that many would be spurred on and encouraged to start that little business they always wanted. Freed from all the paper-work and bureaucracy and job-destroying regulation, a great many such people would give it a go. Imagine their reaction to a Labour proposal to abolish the artisanos and re-impose every regulation they had become used to ignoring. Imagine what many of their customers and all of their employees would think. It could only happen as part of a Kinnockite retreat to the political wilderness.
So a Labour government would have to tolerate the artisanos after their introduction. When we next returned to power, their inevitable success would logically lead us to ensure that their benefits could be spread even further — to businesses with fewer than 35 employees and so on. So step by step, slowly but surely, the people of this country would come to see that the regulations that once choked small businesses so much were of no benefit. By common sense observation of the success of the artisanos, they could confirm the conclusion Nobel Prize winning economist Ronald Coase reached after so many studies: that there scarcely if at all exists a government regulation that produces a good outcome. By ratcheting the policy rightwards, the regulatory burden could be lifted and red tape cut.
Or take typical Conservative solutions to rising crime. Gradual, moderate and complex, their effects can go unnoticed and leave people feeling the policies have had little impact on their lives. An ideal ratchet policy would be the introduction of elections for judges, granting people indirect but real control over the levels of sentencing.
The days are long gone when Old Etonian liberals with no experience of the unprovoked hostility and psychotic selfishness of a large chunk of the British underclass are best fit to determine prison sentences. The other side of catching the criminals is sentencing them, and no matter how many bobbies we have on the beat, crime will not fall significantly until the courts give sentences remotely proportionate to the crime. Mandatory sentencing to prevent six year sentences for murder and rape and community service for burglary are too low-key and easily reversed. Elected judges will solve the problem far better, and by contrast will show the wisdom of conservative principles. Certainly, there may be some places which will elect the most out of touch, soft-hearted liberals to decide sentencing in their area of the country. But as muggers take the tube from Chingford to Islington every night to go looking for victims in an area where sentencing is at its most liberal, what a symbol the varying crime rates will be of the effectiveness of the conservative approach.
Once we have given people the power to choose their own judges, it will work wonders in cutting crime across the country and be exactly the sort of democratic power (like the Scottish Parliament) that would reduce any opposition willing to propose its abolition to authoritarian ‘we know best’ rhetoric.
Other such ideas could be a ceiling on corporation tax contributions — aimed at attracting many foreign companies and their jobs and profits to Britain — which could ensure that no company paid more than say £5 million in corporation tax, however much money it made. We could deal with the unions by loosening restrictions on their right to strike while giving the innocent bystanders who suffer when they stop work the right to demand compensation from them. The specifics of the policies matter less than the way in which they work to create a right-of-centre environment and political outlook that cannot be reversed by any one government without great difficulty.
Now these policies are clearly radical, and some will already be thinking that, desirable as they may be , they are far too extreme (gasp!) to be taken seriously. But as Tony Blair has said of his own party, we are at our best when we are at our boldest. ‘Extreme’' policies are often only those taken to the logical conclusion of the underlying principle. They are an honest acknowledgement that the present situation needs radical changes. In terms of winning the political argument, it is far easier and more effective to stick to an ideal and defend it, even against the accusation of extremism, then it is to find some midway point between a policy that you hold to be right and one you are sure is wrong.
In practice, the case for boldness and radicalism is stronger still. Ask yourself what was different about the right to buy and assisted places scheme. Both were genuinely progressive, enlightened policies, granting more freedom to some of the people most in need of it. But while acceptance of the right to buy was a cornerstone of Labour's return to electability, the party's rejection of the assisted places scheme was never widely seen as symbolic. The big difference is of course that the right to buy benefited millions of people while the assisted places scheme helped only a few thousand. The bold, ‘extreme’ break from the political consensus improved the lives of huge numbers of key voters to the extent that reversing it was untenable, while the moderate little trial scheme was abolished without a fuss as soon as Labour came to power.
Are we so overcome with self-doubt and the urge to be at ease with modern Britain, warts and all, that we dare not try to make a real difference? I hope not. To the party’s credit, the proposals for education and health vouchers made by Damian Green and Liam Fox are truly radical and will certainly be popular and effective, creating a ratchet effect of their own. For as long as we promise the sort of choice in public service provision that we now offer the electorate, Labour is placed in Israel’s unfortunate position in relation to the Arab world. While their opponents can lose one battle and return to fight another day, the first time they lose will be the moment of destruction for all that they stand for. Once we give people the sort of choice and opportunities guaranteed by education and health vouchers, it will be equally impossible for Labour to attempt to take them away again. This can be as true in other areas as in health and education.
Ratchet policy-making can spare this country some of the worst excesses of Labour governments, and ensure the sort of policies that do great and lasting good. As an electoral tactic as much as a way of making Britain a better place, it has much to offer. The Conservatives should now be bold enough to put it into practice.
Peter Cuthbertson, though young, offers much Conservative Commentary
Peter Cuthbertson, February 20, 2003 11:46 PM