Ideologies and Implementation of Change

Ideologies, Interests and Implementation of Change

There is clearly a close correspondence between Labour Party ideology and the collectivist position and between the libertarian wing of the Conservative Party and the 'minimalist' position. This correspondence is not, however, reflected in the composition and structure of the welfare services within the periods when both parties have held office for more than one full term. There is a striking contrast between the 'build-up' of the welfare state in the immediate post-war period during the Labour period of office, and the failure to 'prune' the welfare state during the ten years of Conservative government from 1979. Indeed, as Dilnot (Dilnot et al., 1984) has calculated, in 1978-1988 more than 25 million out of 56 million persons in the UK at any one time were receiving one or more social security benefits. The numbers, in descending order, were 12 million recipients of child benefit, 9.6 million pensioners, 7 million recipients of means-tested housing benefit, and 3 million recipients of unemployment benefit or supplementary benefit. It is interesting to speculate on this contrast.

One obvious source of explanation must lie in the firmness of commitment to ideology, following the familiar adage of Keynes that ideas and not vested interests are the mainspring of political change. There could be something in this argument. Ideological dispute on the broad dimensions of the welfare state within the Labour Party has been minimal. The most effective challenge from within the party in Labour's political heyday came from Crosland's Future of Socialism (1956), which questioned the necessity for perpetuation of benefits in kind, such as food subsidies, but certainly did not call for major changes in the provision of health and education services. In contrast, prominent Conservative ideologists have expressed strong doubts about the privatization of education and health services and the destruction of an income-related pension scheme23 as steps towards the perceived improvements associated with the 'Thatcherite' position. However, this division of opinion is not reflected in the range of proposals discussed at Cabinet level and which have reached at least the Green Paper stage, and even in government measures which have reached the statute book. The difference in commitment seems, therefore, to offer at best a small part of the explanation.

The influence of ideology on political events has been strongly challenged in recent years by public choice theorists as at most a necessary but not a sufficient condition for political change.24 Put very briefly, and inevitably superficially, public choice analysts emphasize the constraints governing the implementation of policy, which are reflected in the way different interest groups view the effect of policy changes on their economic position. When these changes conflict with the interests of a particular group, they will use alternative instruments of political participation - voting strength, lobbying, negotiation with officials and so on - to protect their position. The 'easy way out' for governments is to buy off political opposition by expansion of government services which improve the welfare of organized interest groups and to rely on some form of 'tax illusion' effect to diminish the perceived costs of expansion. This expansion will itself increase the immunity of relevant interest groups from the rigours of the market. When expansion of public services meets increasing taxpayer resistance, expressed in avoidance and evasion, then a government may still be able to retain interest group support by recourse to exemptions from the application of the law or by some comparable form of legal privilege.

The public choice explanation accordingly would emphasize that a post-war Labour government would face little resistance from trade union, consumer and professional interest groups to a social policy which appeared to offer prizes for practically everyone. The atmosphere of a positive-sum game was also maintained by exploiting the prevalent under-consumptionist, left-wing, Keynesian view of economic prospects which claimed that expansion of government expenditure through provision of social services was a particularly appropriate way of maintaining the economy on a full employment growth path. The social opportunity cost of the growth of the public sector could be presented as zero. By the time the welfare costs of expansion of the public sector became apparent, professional groups such as doctors, nurses, teachers and administrators had been able to unionize and to obtain recognition of their bargaining rights with government. Therefore, any government trying to reduce the relative size as well as alter the composition and funding of welfare services is in a 'game' probably perceived by the players as 'zero-sum' rather than 'positive-sum'. In such a game each interest group will try, either individually or by forming coalitions, to throw the costs of change onto others.

It may also be a game of considerable uncertainty if, as is the case with health and education services, the benefits may be broadly assignable, but the financing of them is a quite separate operation. Thus if it is decided to charge for health and education services and to offset charging by a reduction in taxes, individuals' welfare loss from having to pay for the services can be clearly perceived by them, but the benefits from tax reduction may be widely diffused and hardly perceptible. In short, 'players' enjoined to enter a game of this kind perceived as zero-sum (possibly negative-sum), non-co-operative and beset by uncertain outcomes, will have a strong incentive to use political action designed to destroy the game itself.