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Promoting Participation: Law or Politics?

CP Cavendish Publishing Limited

London • Sydney

Promoting Participation: Law or Politics? Edited by Professor N Douglas Lewis, FRSA Director of the Centre for Socio-Legal Studies Faculty of Law, University of Sheffield Professor David Campbell, BSc (Econ), LLM, PhD, FCI (Arb) Cardiff Law School

CP Cavendish Publishing Limited

London • Sydney

First published in 1999 by Cavendish Publishing Limited, The Glass House, Wharton Street, London WC1X 9PX, United Kingdom. Telephone: + 44 (0) 171 278 8000 Facsimile: + 44 (0) 171 278 8080 E-mail: [email protected] Visit our Home Page on http://www.cavendishpublishing.com

© Lewis, N Douglas

1999

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except under the terms of the Copyright Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1P 9HE, UK, without the permission in writing of the publisher.

Promoting participation: law or politics 1. Law and politics I. Campbell, David II. Lewis, N Douglas 340.1’1

ISBN 1 85941 483 4

Printed and bound in Great Britain

PREFACE Over almost 40 years of distinguished scholarship, Douglas Lewis has argued for constitutional reform which would facilitate British citizens’ effective participation in the making of the decisions that set the basic pattern of their collective life. That what now passes for the British constitution signally fails to do this is a position which he has done much to publicise through the most authoritative contributions to public law’s account of the British polity. He has argued that this failure of the British constitution is unacceptable at a compelling level of philosophic sophistication by applying transcendental moral philosophy derived from Gewirth to the central concepts of public law, such as citizenship, democracy, and rights. That the very strength of Lewis’ arguments (and other arguments to similar effect) meant that they were very far from the practices and policies of the moribund succession of British governments between 1987 and 1997 was a paradox which tells one much about those governments. The election of the New Labour Government committed to, and actually beginning to implement, radical constitutional reform is a strong endorsement of the position which Lewis has set out. One aspect of Lewis’ work – almost a hallmark of anything of real interest in contemporary legal scholarship – has been its insistence on going beyond the boundaries of the ‘black letter’ approach to public law. He has revised the methods of public law scholarship in the light of awareness of contributions from other disciplines, such as administrative studies, political science and social policy, not to mention philosophy. Following the publication of Choice and the Legal Order: Rising Above Politics, Lewis conceived of a conference on ‘The Constitutional Implications of Participation’ to explore the issues which pursuit of greater participation raises for public law and other disciplines. This conference was held at the University of Sheffield in September 1997. Four days of intensive discussion yielded papers of such a quality that the decision was taken to publish those papers as this book. The major work of organisation of the conference was carried out by Ms Di Longley of the Faculty of Law, University of Sheffield. The following colleagues were good enough to chair the various sessions of the conference: Professor Philip Jones, Faculty of Law, University of Sheffield; Professor Mike Purdue, Department of Law, City University; Ms Lorna Woods, Faculty of Law, University of Sheffield; Professor Gary Edles, American University, Washington DC, USA; Professor John Birds, Faculty of Law, University of Sheffield; Professor Alan Walker, Department of Sociological Studies, University of Sheffield; Professor Keith Ewing, Faculty of Law, Kings College London; and Professor Cosmo Graham, Law School, University of Leicester. The conference received the financial support of Cavendish Publishing, the Faculty of Law, University of Sheffield; and the School of Financial Studies and Law, Sheffield Hallam University. David Campbell’s work on the Conference and on this book was supported by ESRC grant R000236416.

v

Promoting Participation Douglas Lewis and I are grateful to the contributors to this book, Ms Longley, the chairs of conference sessions, the other participants at the conference, the financial supporters of the conference, the ESRC and Cavendish Publishing for their contributions to the publication of this book. David Campbell East Morton, West Yorkshire April 1999

vi

CONTRIBUTORS Patrick Birkinshaw has been Director of the Institute of European Public Law at Hull University since 1992 and has been a Professor in the Law School at that university since 1990. He is the author of many books and articles including Grievances, Remedies and the State (2nd edn, 1995); Freedom of Information: The Law, the Practice and the Ideal (2nd edn, 1996); and Government and Information: The Law Relating to Access, Disclosure and Regulation (2nd edn, 2001). He became Director of the Law School at Hull University in the summer of 1997. David Campbell is Professor of Law in the Cardiff Law School. His research interests are in the law and economics of commercial transactions, the law and economics of corporate governance and in philosophical and social scientific approaches to law. His most recent publications include articles on the methodology of law and economics and applications of that methodology to the law of contract and to company law. Nicholas Deakin is currently Visiting Professor at the Local Government Centre, Warwick Business School and at the LSE. Before that, he taught social policy for 20 years at Birmingham University. His most recent project has been A study on the Treasury and social policy unit as part of the ESRC’s Whitehall programme. In 1995–96, he was chair of the Independent Commission on the Future of the Voluntary Sector in England. Kevin Dowd is Professor of Economics at the University of Sheffield. His main research interests are in financial regulation, risk management and political economy. Much of this work was summarised in his book Competition and Finance: A New Interpretation of Financial and Monetary Economics (1996), which attempted to provide a restatement of the case for financial laissez-faire and the abolition of central banking. Kevin Featherstone is Professor of European Politics and Jean Monnet Professor of European Integration Studies at the University of Bradford. He has published widely in European Union politics and on politics in modern Greece. His most recent book is The Road to Maastricht: Negotiating Economic and Monetary Union (1999). Lucy Gaster is Senior Lecturer at the Institute of Local Government Studies, University of Birmingham. She has been involved in ‘public participation’ for 20 years, as a community activist and service user, and more recently as a local government officer and then as an academic. Her main interests are around the relationship of government and people at the local and

vii

Promoting Participation neighbourhood level, looking in particular at service quality, local democracy, decentralisation and holistic working. She is the author of Quality in Public Services: Managers’ Choices (1995). Geraint Howells is Reader in Law at the Institute for Commercial Law Studies, Sheffield University. He has written widely on consumer law issues (his books include Comparative Product Liability (1991); Consumer Product Safety (1998); Consumer Protection Law (1995); and EC Consumer Law (1997)) and is editor of the Consumer Law Journal. Barry Knight is Secretary to the Foundation for Civil Society. He is a social scientist who has previously worked at the Home Office and Cambridge University. He is at present conducting research on international aspects of civil society. N Douglas Lewis (formerly writing as Norman) is Professor of Public Law and Director of the Centre for Socio-Legal Studies at the University of Sheffield. He has written widely in the field of public law and administration. His current research concentrates on ‘law and governance’ and social and economic rights. JE Parkinson is a Professor of Law at the University of Bristol and an Honorary Research Fellow of the Political Economy Research Centre at the University of Sheffield. His main publications are in company law and corporate theory and include Corporate Power and Responsibility: Issues in the Theory of Company Law (1993). Tony Prosser is John Millar Professor of Law at the University of Glasgow. He has written extensively about utility regulation, most recently in Law and the Regulators (1997). He has also undertaken work on media regulation and has published Regulating the Changing Media: A Comparative Study (1998). Tony Rees is Senior Lecturer in Social Policy at the University of Southampton. He is the author of the fifth edition of TH Marshall’s Social Policy (1985) and was co-editor of Citizenship Today (1996). He has also published several recent articles on citizenship and voluntarism. He is a

viii

Contributors member of the Council of National Association of Citizens Advice Bureaux (NACAB). Mary Seneviratne is Professor of Law in the Centre for Legal Research, Nottingham Law School. Her subject areas are administrative law and criminal law. Her research interests include civil justice, ombudsmen, alternative dispute resolution mechanisms and the regulation of the legal profession. She is the author of Ombudsmen in the Public Sector (1994), and her new book The Legal Profession: Regulation and the Consumer is to be published later this year. She qualified as a solicitor in 1977, and has worked in local government. Perri 6 is a Senior Research Fellow in the Department of Government at the University of Strathclyde; Senior Research Fellow (and formerly Director of Policy and Research) at the independent, cross-party think-tank, Demos; and a Visiting Research Fellow in the Centre for Environmental Strategy at the University of Surrey. He is the author, co-author or editor of over 20 books, including On the Right Lines (1998); The Future of Privacy (1998); Holistic Government (1997); Escaping Poverty (1997); The Contract Culture in Public Services (1997); and Liberty, Charity and Politics (1995). He is currently working on major studies on integration and holistic working in government, on the politics of moral character, and on the nature of the radical centre. John Wadham is a solicitor and the Director of Liberty (the National Council for Civil Liberties). He has acted for large numbers of applicants in cases before the European Commission and the Court of Human Rights. He is the editor of Your Rights: The Liberty Guide; the civil rights section of the Penguin Guide to the Law; the case law reports for the European Human Rights Review; and is the author of Blackstone’s Guide to the Human Rights Act 1998. He has also contributed to many other publications and written many articles on human rights and civil liberties. He is a member of the Government’s Human Rights Act Task Force. He also appears as a spokesperson on human rights issues in the media and is a regular speaker at conferences and on training courses. Ian Ward is Professor of Law at the University of Newcastle upon Tyne. His research interests are concentrated in the related areas of public law, European law and legal theory. He is the author of A Critical Introduction to European Law

ix

Promoting Participation (1996) and The Margins of European Law (1996). He is currently completing a book on the history of English constitutional thought from the 16th to 19th centuries. Stuart Weir is Director of the Democratic Audit and a joint author of The Three Pillars of Liberty (1996) and Political Power and Democratic Control in Britain (1998), its two benchmark reports on political freedom and democracy in the UK, as well as being author of its research reports on elections, quangos and task forces. He is a Senior Research fellow at the Human Rights Centre, University of Essex, and Associate Consultant to the British Council. His contribution, however, draws also on community activities in Hackney and his period as a councillor there.

x

CONTENTS Preface Contributors Table of Cases Table of Legislation

v vii xv xix

1 THE CONSTITUTIONAL IMPLICATIONS OF PARTICIPATION

1

N Douglas Lewis

2 PARTICIPATION IN CIVIL SOCIETY

31

Kevin Dowd

3 THE ‘HYBRID CONTRACT’ AND THE MERGING OF THE PUBLIC AND PRIVATE LAW OF THE ALLOCATION OF ECONOMIC GOODS

45

David Campbell

4 A CONSTITUTIONAL CULTURE FOR MORE PARTICIPATION: WHAT WOULD IT LOOK LIKE?

75

Perri 6

5 PARTICIPATION AND PASSIVITY: NO ROOM AT THE TOP

101

Stuart Weir

6 PARTICIPATION AND LOCAL GOVERNMENT

113

Lucy Gaster

7 CONSTITUTIONALISM, DEMOCRACY AND PARTICIPATION IN THE EUROPEAN UNION 137 Ian Ward

xi

Promoting Participation 8 CITIZENSHIP, PARTICIPATION AND LEGITIMACY IN THE EUROPEAN UNION

157

Kevin Featherstone

9 COMMUNITY POLITICS

175

Barry Knight

10 CHARITY AND PHILANTHROPY: TOWARDS A NEW PERSPECTIVE

183

Nicholas Deakin

11 PARTICIPATION AND VOLUNTEERING

193

Tony Rees

12 PARTICIPATION AND LEGAL AUTONOMY

213

N Douglas Lewis

13 THE SEPARATION OF POWERS IN THE CHANGING ENVIRONMENT

229

Patrick Birkinshaw

14 THE HUMAN RIGHTS ACT: AN ASSESSMENT OF THE ACT DESIGNED TO INCORPORATE THE EUROPEAN CONVENTION ON HUMAN RIGHTS INTO DOMESTIC LAW

251

John Wadham

15 THE CASE FOR SOCIAL AND ECONOMIC RIGHTS Mary Seneviratne

xii

267

Contents 16 CONSUMERS AND PARTICIPATION

291

Geraint Howells

17 PARTICIPATION AND CORPORATE GOVERNANCE

319

JE Parkinson

18 PARTICIPATION AND THE REGULATORY ORDER

349

Tony Prosser Bibliography

363

Index

405

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TABLE OF CASES Abdi v Secretary of State for the Home Department [1996] 1 All ER 641 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .247 Attorney General v Blake [1998] 1 All ER 833 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .232 Breckland Group Holdings Ltd v London and Suffolk Properties [1989] BCLC 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .322 Brind v Secretary of State for the Home Department [1991] 1 All ER 720 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .242 Bromley Borough Council v Greater London Council [1983] 1 AC 768 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .219 Bushell v Secretary of State [1980] 2 All ER 608 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . .248 Case C-382-3/92 [1994] ECR I-2435 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .155 Chalal v United Kingdom (1997) 23 EHRR 413 . . . . . . . . . . . . . . . . . . . . . . . . . . . .240, 252 Council of Civil Service Union v Minister for the Civil Service [1984] 3 All ER 935 (HL) . . . . . . . . . . . . . . . . . . . . . .230 Daar v Yellow Cab Co [1967] 433 P 2d 732 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .305 Davies v Eli Lilley and Co [1987] 1 WLR 1136 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .303 Grogan [1991] ECR I-4685 (CJEC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240 Hamble v MAFF [1995] 2 All ER 714 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .242 Horrocks v Ford Motor Company (1990) The Times, 15 February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .303 Hsu v Commissioner of Police for the Metropolis [1997] All ER 762 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263 Johnstone v Chief Constable of the RUC [1986] 3 All ER 135 (CJEC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240 Kremzow v Republik Osterreich (1997) The Times, 11 August . . . . . . . . . . . . . . . . . . .240 M v Home Office [1993] 3 All ER 537 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .230 McCann v UK (1995) The Times, 9 October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240 Marbury v Madison (1803) 1 Cranch 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .231 Netherlands v EU Council [1996] ECR I-2169 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .241

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Promoting Participation Pepper v Hart [1993] 1 All ER 42 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .249 R v Cambridgeshire Health Authority ex parte B [1955] 2 All ER 129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225 R v Cambridgeshire Health Authority ex parte B [1995] 1 WLR 898 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .282 R v Chief Constable of Sussex ex parte International Trader’s Ferry Ltd [1997] 2 All ER 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .282 R v Commissioner for Local Administration ex parte Croydon LBC [1989] 1 All ER 1033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .244 R v HM Inspectorate on Pollution ex parte Greenpeace (No 2) [1994] 4 All ER 329 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .261 R v Independent Television Commission ex parte TSW Broadcasting Ltd [1996] EMLR 291 . . . . . . . . . . . . . . . . . . . . . . . . . . . .360 R v Independent Television Commission ex parte Virgin Television Ltd [1996] EMLR 318 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .360 R v IRC ex parte Unilever [1996] COD 421 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .242 R v Legal Aid Board ex parte Donn and Co [1996] 3 All ER 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .245 R v Parliamentary Commissioner for Administration ex parte Balchin (1996) unreported, 25 October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .244 R v Parliamentary Commissioner for Standards ex parte Fayed [1988] 1 All ER 93 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .230 R v Secretary of State for Employment ex parte Equal Opportunities Commission [1994] 2 WLR 409 . . . . . . . . . . . . . . . . . .261 R v Secretary of State for the Environment ex parte O’Keefe (1997), The Times, 5 August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .248 R v Secretary of State for Foreign Affairs ex parte WDM Ltd [1995] 1 All ER 611 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .248 R v Secretary of State for Foreign and Commonweath Affairs ex parte World Development Movement [1995] 1 WLR 386 . . . . . . . . . . . . . . . . . . .261 R v Secretary of State for the Home Department ex parte Fayed [1997] 1 All ER 228 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .248 R v Secretary of State for the Home Department ex parte Fire Brigades Union [1995] 2 All ER 244 (HL) . . . . . . . . . . . . . . . . . . . . . . . .230 R v Secretary of State for the Home Department ex parte Hargreaves [1997] 1 All ER 379 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .242 R v Secretary of State for the Home Department ex parte Pierson [1977] 3 All ER 577, HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .231 R v Secretary of State for the Home Department ex parte Simms [1998] 2 All ER 491 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .247

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Table of Cases R v Secretary of State for the Home Department ex parte Thompson [1997] 1 All ER 327 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .248 R v Secretary of State for the Home Department ex parte USTII [1992] 1 All ER 212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .248 R v Secretary of State for the Home Department ex parte Venables [1997] 3 All ER 97 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .231, 248 R v Secretary of State for the Home Department ex parte WDM Ltd [1995] 1 All ER 611 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .245 R v Secretary of State for Social Services ex parte CPAG [1990] 2 QB 540 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .261 R v Secretary of State for Transport ex parte Factorame [1991] AC 603 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .214 R v Secretary of State for Transport ex parte Richmond LBC [1996] 4 All ER 903 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248 R v Secretary of State for Wales ex parte Emery [1996] 4 All ER 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .248 Saunders v UK (1997) 23 EHRR 313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .242 Simmonds v Heffer [1983] BCLC 298 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .347 Stanley Johnson, (1997) unreported, 24 October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .263 Stovin v Wise (Norfolk County Council: third party) [1996] 3 WLR 388 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .284 Sunday Times v UK (1979) 2 EHRR 245 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240 Svenska Journalist Forbundet v EU Council [1998] All ER (EC) 620 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240 Thompson v Commissioner of Police for the Metropolis [1997] 2 All ER 762 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .263 Van Gend en Loos [1963] ECR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240 West Mercia Safetywear Ltd v Dodd [1988] BCLC 250, 322 Wheeler v Leicester City Council [1985] AC 1054 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .219

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TABLE OF LEGISLATION Amsterdam Treaty

Control of Misleading Advertisements Regulations 1988, SI 1988/915 . . . . . . . . . . . . . . . . . . . . . . . . . 312

See Treaties: Amsterdam 1997, draft

Council of Europe Charter on Self-government 1999 . . . . . . . . . . . . . . . . 3

Beijing Statement on Judicial Independence 1995 . . . . . . . . . . . . . . . . . . . 213

Council Regulation 2407/92, 23 July 1992 . . . . . . . . . . . . . . . . . . . . . . . . . 360

Bill of Rights (Canada) . . . . . . . . . . . . . . . . . 215 Bill of Rights (India) . . . . . . . . . . . . . . . . . . . . 25

Courts and Legal Services Act 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230

Bill of Rights (United Kingdom) . . . . . . . . . . . . . . . 222, 223,

Criminal Justice and Public Order Act 1994 . . . . . . . . . . . . . . . . . . 257, 258

224, 241, 250 Art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230

Earth Summit, Rio Canadian Charter of Rights and Freedoms . . . . . . . . . . . . . . . 280, 283, 287

See Rio Declaration on Environment and Development

Case of Proclamations 1611 . . . . . . . . . . . . . 214

ECHR (European Convention on Human Rights)— Art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264

Charity Act 1990 . . . . . . . . . . . . . . . . . . . . . . . 208 Charity Act 1992 . . . . . . . . . . . . . . . . . . 184, 208

Art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253

Charity Act 1993 . . . . . . . . . . . . . . . . . . 184, 208

Art 5(1)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 254

Charter for Fundamental Social Rights of Workers 1989 . . . . . . . . . . . . . . 26, 151, 153,

Art 5(1)(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 Art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263

154, 160

Art 8 . . . . . . . . . . . . . . . . . . . 252, 254, 257, 262

Citizen’s Charter 1996–97 . . . . . . . . 3–4, 8, 105,

Art 8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254

119, 235,

Art 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256

244, 277

Art 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254

Commission White Paper 1994 . . . . . . . . . . 154

Art 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263

Companies Act 1985— s 303 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

Art 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253

Companies Act 1985— Pt VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

Art 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260

Companies Act 1985— Pt X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

Protocol 4 . . . . . . . . . . . . . . . . . . . . . . . 252, 264

Art 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 Art 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262 Protocol 7 . . . . . . . . . . . . . . . . . . . . . . . 252, 264

Companies (Tables A to F) Regulations 1985— Art 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

Protocol 11 . . . . . . . . . . . . . . . . . . . . . . . . . . 262

Competition Bill 1999 . . . . . . . . . . . . . . . . . . . . 8

Electricity Act 1989— s 2, Sched 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 358

Consumer Credit Act 1974 . . . . . . . . . . . . . . 291

ss 11–14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351

Consumer Protection Act 1961 . . . . . . . . . . 291

s 46, Sched 2 . . . . . . . . . . . . . . . . . . . . . . . . . 358

Consumer Protection Act 1987— Pt I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291

s 51, Sched 2 . . . . . . . . . . . . . . . . . . . . . . . . . 358

Pt II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291

European Communities Act 1972 . . . . . . . . . . . . . . . . . . . . . . . . 256, 292

s 53, Sched 2 . . . . . . . . . . . . . . . . . . . . . . . . . 358

Pt III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291

European Communities Act 1973— s 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233

s 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313 s 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313

xix

Promoting Participation European Community

Maastricht Treaty

Agreement in Social Policy . . . . . . . . 151, 154

See Treaties: European Union 1992

Art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

Multilateral Agreement on Investment (MAI) . . . . . . . . . . . . . . . . . . . 7

Art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 See, also, Treaties, European Union 1992

Official Secrets Act 1989 . . . . . . . . . . . . . 256–57

European Union, Business Transfer Directive 1977 . . . . . . . . . . . . . . . . 21

Paris Treaty Fair Trading Act 1973 . . . . . . . . . . . . . . . . . . 291

See Treaties: Paris 1951

s 124(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314

Police and Criminal Evidence Act 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263

Fifth Company Law, draft . . . . . . . . . . . . . 153 Food Safety Act 1990 . . . . . . . . . . . . . . . . . . . 291

Railway (Fires) Act 1905 . . . . . . . . . . . . . . . . . 54 Gas Act 1986— s 2, Sched 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 357

Railways Act 1993— ss 12–15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351

ss 23–27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351

Redundancies Directive 95/56 . . . . . . . . . . 156

s 32, Sched 2 . . . . . . . . . . . . . . . . . . . . . . . . . 357

Rio Declaration on Environment and Development 1992— Agenda 21 . . . . . . . . . . . . . . . . . . . . . . . . . 15, 81

s 40, Sched 2 . . . . . . . . . . . . . . . . . . . . . . . . . 357 General Product Safety Regulations 1994, SI 1994/2328 . . . . . . . . . . . . . . . . . . . . . . . . 292

Principle 10 . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Rome Treaty See Treaties: Rome 1957Rules of the Supreme Court— Ord 15, r 12 . . . . . . . . . . . . . . . . . . . . . . . . . . 302

Housing Finance Act 1972 . . . . . . . . . . . . . . 109 Human Rights Act 1998 . . . . . . . 230, 233, 241,

Ord 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259

242, 243, 247, 251, 255–56, 264–66

Sale of Goods Act 1979 . . . . . . . . . . . . . . . . . 291

Art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 Art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242

Sale and Supply of Goods Act 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292

s 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259

Sex Discrimination Act 1975 . . . . . . . . . . . . 261

s 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258

Single European Act 1985 . . . . . . . . . . . 24, 139,

s 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258

153, 159, 168

s 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264

Art 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 Art 118B . . . . . . . . . . . . . . . . . . . . . . . . 153, 154

ICCPR (UN International Covenant on Civil and Political Rights)— Art 14(3)(g) . . . . . . . . . . . . . . . . . . . . . . . . . . 253

Social Action Programme 1974 . . . . . . 151, 153 Social Chapter See Treaties: European Union 1992: Protocol on Social Policy

Industrial Democracy White Paper 1978 . . . . . . . . . . . . . . . . . . . . 153

Social Charter 1989 . . . . . . . . . . . . . . . . 160, 220, Social Charter, European . . . . . . 221, 223, 288

International Convention on Economic, Social and Cultural Rights . . . . . . . . . . . . . . 213, 284

Telecommunications Act 1984— ss 12–15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 Title on Employment 1999 . . . . . . . . . . . . . . 154

xx

Table of Legislation Title VI . . . . . . . . . . . . . . . . . . . . . . . . . 160, 169

TEU (Treaty on European Union)

Paris 1951 . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 157

See Treaties, European Union 1992

Rome 1957. . . . . . . . . . . . . . . . . . . . . . . . 139, 157,

Trade Descriptions Act 1968 . . . . . . . . 291, 312

159, 167, 168

Transfer of Undertakings Directive 77/187 . . . . . . . . . . . . . . . . . . . . . 156

Art 117 . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 24

Treaties:

Unfair Competition Act 1909 . . . . . . . . . . . 306

Amsterdam 1997, draft . . . . . . . . 140, 142, 152,

United Nations Charter . . . . . . . . . . . . . . . . 268

154, 161, 168, 170, 238

Universal Declaration of Human Rights 1948 . . . . . . . . . . . 268, 276,

Art 118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

279, 284

Art F.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

Arts 22–25 . . . . . . . . . . . . . . . . . . . . . . . . . . . 268

European Union 1992 . . . . . . . . . . . . . . 140, 151, 158, 160, 165

Vredeling Directives . . . . . . . . . . . . . . . . . . . 153

Art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Art 3B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

Water Industry Act 1991— ss 13–16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351

Art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 151, 157, 160

ss 32–35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355

Art A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

Working Time Directive . . . . . . . . . . . . . . . . 24

Art F (Title I) . . . . . . . . . . . . . . . . . . . . . . . . 160

Works Council Directive 94/45/EC 22 September, 1994 . . . . . . . . . . . . . . 154, 155,

Protocol on Social Policy . . . . . . . . 21, 151, 154, 160, 169, 223

156, 332

xxi

CHAPTER 1

THE CONSTITUTIONAL IMPLICATIONS OF PARTICIPATION

N Douglas Lewis Although it can vary in its specific forms, the whole general social and economic system of the maintenance of law and order, education and the production of goods and services is so virtually inescapable if the needs of human agency are to be fulfilled that participation in it, or its results, is also rationally inescapable.1

INTRODUCTION I want to make out the case for participation by citizens in a wide range of fundamental political, social and economic affairs; to argue that that case is embedded in the notion of citizenship (as an aspect of treating all human beings as being of the same intrinsic worth); and that, correspondingly, acceptance of this case should be reflected in the constitution itself. If the case is made out, then the constitutional implications are wide-ranging and present a challenge to almost every aspect of legal scholarship. The force of this argument is, perhaps, reflected in the contemporary political infatuation with ‘choice’. In the recent past, choice has been associated with the political right, but at a deeper level it is about according respect to each human being on account of their status as such. It will be argued that a government committed to choice would produce extensive, pluralistic institutions which encourage rational discourse rather than assume that a dominant executive knows best.2 That a strong and diverse civil society is necessary for both national stability and social cohesion follows from this thinking.3 In fact, choice and participation as linked aspects of human agency are also intimately related to autonomy (which, as I shall claim, has important implications for social and economic rights) and, of course, to an equality which is not limited to sex, religion or nationality.4 This philosophic argument will not be developed here, but is best explored by Alan Gewirth in his

1 2 3 4

Gewirth, The Community of Rights, p 84. This argument is developed in greater length by the author in Choice and the Legal Order: Rising Above Politics. Eg, Drucker, Post-capitalist Society. For the view that this reflects the core of EU law, see Judge Andrew Geddes, Protection of Individual Rights Under EC Law, p 109.

1

Promoting Participation

various writings on categorical moral philosophy, not least in the book from which the introductory quotation is taken.

THE LOGIC OF PARTICIPATION Participation is taken for granted in a number of central spheres of social organisation without its justification being analysed at deeper levels. Thus, for instance, participation in political structures is assumed in all advanced democracies, but the concept of ‘democracy’ does not receive close analytical attention. Participation is honourably mentioned in cultural exchanges, in political rhetoric and in any number of international treaties, treatises and compacts. Its origin and justification are sometimes sought in the inalienable rights of humankind, in the identification of those traits which mark out the free, unstained, human personality. This justification is more than attractive; it is compelling. But, whatever position one takes on this, it must be allowed that the standard claims made in ‘standard’ democracies, if examined immanently, always point in the same direction. If we judge most self-styled democracies by their own standards, we will arrive at roughly the same justification for the adoption of human rights. If human beings must be free to make their own choices in their own ways, then their choice of political organisation is crucial. However, for that choice to be real, it must be exercised at the lowest or most immediate level that makes organisational sense. To put it another way, participation in the political sphere is a right at all levels of government and not merely at the central level. This is a belief that is beginning to assume the status of a dominant ideology. The arrangement and delivery of public services will vary across time and place and so will, therefore, the balance between direct and representational democracy. It is improbable that we, in the advanced democracies, have struck the right balance between the two at this time, as witness the growing clamour for some version of ‘community’ politics which is examined in this book by Stuart Weir. Moreover, representative government is, to some extent, a regrettable necessity and not something to be preferred a priori. Self-expression, self-help, self-government and relative autonomy are all preferable. Representative government (in the form the context demands) is merely necessary to allow individual self-expression, though, as will be argued, that self-expression ultimately can occur only in the context of others and otherness. The point was well made by GDH Cole in 1920: ... the elector is called upon to choose one man to represent him in relation to every conceivable question that may come before Parliament, whereas, if he is a rational being, he always certainly agrees with one man about one thing and

2

The Constitutional Implications of Participation

with another about another, or at any rate would do so as soon as the economic basis of present class divisions was removed.5

Before developing the general theme, a word needs to be said about the centralised British State which is, in too many respects, the enemy of genuine political participation. The erosion of the powers of local government in the relatively recent past is well documented and is, hopefully, about to be reversed, so that a genuine commitment to subsidiarity in the best sense may be about to be made. We shall see. There are, however, dimensions of political participation, other than its strengthening of territorial politics, which merit some consideration, although the recent Labour Government’s acceptance of the Council of Europe’s charter of local self-government is to be welcomed. The Charter includes a declaration that local authorities should manage a substantial share of public affairs and have adequate financial resources of their own. It is also worth noting that the Council of Europe has endorsed directives which encourage the establishment of voluntary associations. It will be interesting to see what linkages emerge between greater autonomy for local government and encouragement for intermediary bodies representing a wide range of citizen interests. This aside, there are other aspects to citizen participation which could be pursued. Over the past 20 to 30 years, attempts have been made to increase central government’s control over capital expenditure at local level, not least through the discretionary allocation of funds via the Single Regeneration Budget and the diversion of funds to quangos such as the Housing Corporation. However, research indicates that resources tend to be spent on schemes with a low local priority simply because money was available for them. Councils have been forced to take a segmented rather than a comprehensive view of capital expenditures. Constitutional regulation has, in my view, an important and innovative part to play in encouraging genuine local partnerships between government, voluntary organisations, the private sector and an active citizenry. A number of models which might be encouraged come to mind. In recent years, we seem to have been presented with a choice between untrammelled market forces and inefficient or unresponsive public services. Yet there are experimental forms of partnership which seem genuinely capable of combining private sector efficiency with public service responsibility. Profit sharing, the community use of premises off peak, and local government’s holding of golden shares to ensure the democratic accountability of certain organisations are examples which come to mind.6 The Citizen’s Charter is capable of being reformed to offer a more genuine form of participation to service users. Note the attitude of the Labour Party when in opposition: 5 6

Cole, Guild Socialism Re-stated, p 32. Eg, Serviceteam, a Lambeth based private sector company with a public service ethos. 3


Under Labour, the design and delivery of public services will be far more user focused. Here the Citizen’s Charter has a contribution to make. Labour will remodel the Charter to have far more user involvement. Users will be consulted in the design of targets. Feedback from users will assist in continuous improvement in quality and delivery. Complaints procedures will be used as a spur to continuous improvement.7

At the time of writing, the now Chancellor of the Duchy of Lancaster seems determined to deliver on these promises. In any event, involvement of citizens in the socio-political project clearly is capable of being much more widely developed than traditionally is assumed. Such development does not detract in any way from the legitimacy of genuine markets.

PLAYING THE MARKET A detailed argument for markets will not be made here, but assumed as an ideal typical form of human choice.8 Of course, market choice is frequently distorted in contemporary organisation, as may be seen from, for example, Professor Mirrlees’ work on asymmetric information, but this is another matter, though one which requires remedial action when practice deviates too far from the ideal typical form. The overblown claims of the State to plan the nation’s affairs, even if morally permissible, have become increasingly threadbare. The resultant scepticism about the State is powerfully expressed in Kevin Dowd’s libertarian contribution to this book. We are only just beginning to understand the limits of the possible in terms of collective action, and there is likely to be a long, slow, learning curve before confidence in the State returns. In these circumstances, the market was bound to come back into fashion, even if there are markets and markets, with some merely serving to dignify extant, non-governmental, power configurations. However, most will agree that one basic human capacity is to choose lifestyles among alternatives, and the market, at its best, is one of the most effective ways of liberating that choosing process. This is quite apart from the fact that the competition inherent in market forces lends added spice to the drive fully to express our talents. The market is, then, a device through which, as a community, we can channel our energies in the direction of autonomy. Insofar as it offers the individual a range of meaningful and worthwhile options, then the market succeeds. If it does not offer such options, then the prevalent economic arrangements deserve further scrutiny and should be redesigned as appropriate. On one thing most are agreed – that one of the 7 8

Derek Foster, Shadow Chancellor of the Duchy of Lancaster, speech at the IPMS Conference. The author has developed these arguments in several other works, nb, Choice and the Legal Order. 4


primary responsibilities of government is to ensure that markets are and remain highly competitive.9 It is widely accepted that sustained economic success depends on the establishment of a competitive market economy. What is less frequently noted is that this can normally be achieved only by social cooperation.10 Such co-operation, at the political level at least, probably requires the building of ‘defensive alliances’ which can make effective regulatory interventions. To exclude individuals from being effective market players is to devalue their citizenship. The argument for a night-watchman (or at least a nonintrusive) State is, after all, premised on the ability of individuals to choose how to manage their own lives by ‘voting’ for their preferences as consumers, as self-providers, as cultural and artistic beings, and so on. The teasing question seems, however, to be this. If as citizens we are entitled to choose our political structures, to engage in the shaping and delivery of public services, and to play the world’s markets, then it is unclear why the right to participate equally (whether through representatives or more directly) in other dominant socio-economic formations should be denied. For example, the link between being a consumer and exercising anything resembling control over large ‘private’ corporations is so tenuous as to be meaningless. There are, in other words, more or less private fiefdoms, exemplified by the large corporations, which are controlled by the few in a way which deeply touches the lives of the many, without the latter having any real powers of participation. This is true even if we take into account the role of the many as investors through institutional arrangements. Being a market player is one thing, but being a victim of the random needs of power configurations is another. Gewirth reminds us that ‘human beings are the ends for which society, including the productive process exists’. He adds: None of this is meant to deny that government should be concerned to invest in human capital for the sake of economic growth. But, such growth is valuable, in the final analysis, because of the contribution it can make to the well being of individuals and, especially ... of those individuals who cannot maintain their basic well being by their own efforts.11

Rousseau graphically made a similar point when saying that ‘no citizen shall ever be wealthy enough to buy another, and none poor enough to be forced to sell himself’.12 The reality is that each phase of industrial development has involved a modification or restriction of market relations. Although none of 9

For a highly persuasive account of the strengths and failures of traditional markets, see Stiglitz, Whither Socialism?. 10 But see, eg, Olson, ‘Big bills left on the sidewalk: why some nations are rich and others poor’. 11 Gewirth, The Community of Rights, pp 138, 141. 12 Rousseau, The Social Contract, p 50. 5


this has been root and branch, there is an implicit acceptance that, just as it is unacceptable to allow political choice to remain in the hands of a few, so production and investment decisions need to bow to the same logic. This being the case, the legal order can scarcely remain indifferent to control of the large corporation. What I have called private fiefdoms were labelled by James Madison in Federalist13 as ‘factions’, the special interests of which the Republic had to curb. The Republic’s goal was to create a system that would ‘emphasise deliberation’ rather than allowing the passion or power of a particular cause to take hold. In like vein, Cole remarked that vast inequalities of wealth and status, resulting in unacceptable inequalities of education, power and control of the environment: ‘are necessarily fatal to any real democracy, whether in politics or any other sphere.’14 The Romans had an expression for it: ‘what affects all should be approved by all.’15 Things can be done about these inequalities by the legal order. The potential, as well as the present limitations, can be seen in the judgment of a French court which in the Spring of 1997 ordered Renault to consult its European works council before making any further move to close down its Vilvoorde car plant in Brussels. Under the present legal regime, that court could not, of course, challenge the closure itself. Participative experiments have been conducted closer to home. Last year, for example, the Training and Enterprise Councils (TECs) recommended the creation of local economic partnerships between the private and public sectors. The TECs spoke of a ‘shared vision’ of local authorities, trades unions and the voluntary sector informing efforts to promote ‘not just competitive businesses but a competitive society – one which achieves a dynamic equilibrium between wealth creation and social cohesion’.16 At both the theoretical and empirical levels, there is a considerable amount of information to be mined and best practice to be absorbed. However, there is clearly a link between participation in the working of such structures and the familiar literature on discourse and ‘ideal speech’. Furthermore, there is increasing evidence that, even in the global marketplace, the factions or fiefdoms might need the nation state (and, therefore, the rest of us) as much as the other way around. Will Hutton, for example, has said: New technologies, markets and companies are constantly throwing up new challenges: even the mighty IBM lost its dominant position within a decade and the same forces may now be at work on McDonald’s. In this climate, even

13 14 15 16

Quoted in Howard, The Death of Common Sense, p 166. Cole, Guild Socialism Re-stated, p 14. See the history of the maxim in Gewirth, The Community of Rights, n 37. This aim was set out in a Consultation Paper sent by the TEC National Council to its 81 local bodies in England and Wales. 6


the biggest multinational needs allies and partners. Among the most reliable is the Nation State.17

The creation of participatory institutions at this highest level is hugely complex, but it is a challenge which will have to be met, with regional groupings and alliances almost certainly playing a central role. The issue of stakeholding arises, of course, and also the problem of the global market’s potential for obstructing political solutions. If participation is right and if the will to bring it about is there, then at least part of the answer seems to be to form ‘regional defensive alliances’ such as the European Union (EU) and the North American Free Trade Association. The World Trade Organisation (WTO) (formerly the General Agreement on Tariffs and Trade) may also assume a larger, positive role. The possible contribution of the EU is extensively examined in this book by Kevin Featherstone and Ian Ward. In any event, we need to be reminded that, in terms of moral imperatives, ‘ought’ implies ‘can’. The proposition which I adopt is that we need to work on the ‘ought’ first and then feed in the practical ‘cans’ as the context allows. At the moment, the most important agencies seem to be pointing in opposite directions. For example, the Organisation for Economic Co-operation and Development has strongly, if for the moment unsuccessfully, promoted the Multilateral Agreement on Investment (MAI) which appeared to be set on outlawing: ‘all restrictions and controls that national governments might wish to impose on foreign investment.’ ‘We are,’ one of its leading negotiators boasted: ‘writing the constitution of a single global economy’.18 If its critics’ worst fears had been realised, MAI would have allowed multinationals to sue national governments for any profits lost through laws which discriminate against them. It might even have put at risk international treaties on climatic change, over-fishing and workplace and environmental legislation. On the other hand, the World Bank seems recently to have abandoned its longrunning support for minimal government in favour of a new model based on a strong and vigorous State. It lists the key tasks of government as including investment in basic social services and infrastructure, providing a welfare safety net, protecting the environment and establishing a foundation of law. Markets and government are seen to be ‘complementary’.19 A brief word on regulatory regimes as an instrument for advancing participation must be given here, though I shall return to this topic. The criticism has been levelled at the privatised utilities that their regulators operate in too secret a fashion and that they should perhaps be answerable to new, non-executive boards, including consumers. Numerous suggestions for

17 Hutton, The State We’re In, p 31. 18 Monbiot, ‘A charter to let loose the multinationals’. 19 World Bank, World Development Report 1991: The State in a Changing World. 7


reform are in the air,20 and are examined in Tony Prosser’s contribution to this book.

CLUSTERS OF EXPECTATIONS Participation has been chosen as the guiding theme of this book because of its historic political associations which are resonant with sentiments about citizenship. However, on closer examination, participation is something of an umbrella concept, and embraces a number of other cherished values. These constituent values are clearly distinguished by Perri 6 in his analysis of the cultural prerequisites of increased participation in Chapter 4. I will here focus on ‘natural justice’ and ‘equality’, both of which values have long pedigrees. Natural justice was originally limited to the courtroom, and originally to lifechallenging situations, but it has come to represent the right to be heard and to present an individual case in a wide range of administrative and political, as well as judicial, situations. Because of its close identification with the judicial arena, judicial review has not normally been expanded to bear upon private power structures, even though – in the shape of the right to be consulted – it has periodically conferred rights of a ‘participative’ sort in a range of political and administrative settings. The doctrine of fairness occasionally has been expanded into a weak doctrine of participation. All of this raises the question of the optimal role of the judiciary, not least in the context of rule making procedures. This issue is taken up by Patrick Birkinshaw in the context of the separation of powers in Chapter 13 of this book, and I turn to it in Chapter 12. The issue of participation has been raised in relation to consumer representation. It has been proposed that when decisions which concern them are about to be made, consumers should be consulted and allowed to express their views, in particular through consumer organisations.21 These proposals are all reviewed in this book by Geraint Howells. A more pointed example of consumer representation, albeit at second hand, can be seen in recent proposals for a food hygiene monitoring service which enables consumers to make their own choices and their own decisions. It also appears, at first blush, that the new Blair Government’s approach to competition policy is more consumer minded than that of its predecessors. In this respect, the focus of the new Competition Bill on regulatory issues seems to indicate an acceptance of

20 See the author’s evidence to the House of Commons Public Service Select Committee, published as The Citizen’s Charter, 3rd Report, Vol 11, Minutes of Evidence, Session 1996–97, HC78–11, pp 55–60 and the literature cited therein. 21 Geddes, Protection of Individual Rights under EC Law, p 7. 8


the idea that consumer participation is advanced by open regulatory structures.22 The limitations of natural justice in a UK setting are the products of history. Natural justice was developed in a context of relatively narrow State activities long before the industrial revolution had produced forms of civic, social or private power which began to impinge on individual citizens in a way which previously was practically the monopoly of the State. Over the course of centuries, there have been legislative interventions in the field of commercial and company law, social welfare and the like, which have usually been reactive responses to felt injustice rather than deductions from first principles. Constitutional first principles have, of course, never been the staple diet of the British polity. Yet it is by no means self-evident that the implications for participation of natural justice’s insistence upon a right to represent one’s own side of the story (as an instantiation of freedom of speech) should not be drawn out over a larger canvass. Analysis of natural justice’s implications might suggest that it is a constituent feature of a larger notion of participation which ought to be clearly stated as a constitutional principle guiding the recognition of an individual’s rights even against a complex swathe of social and economic counter-claims.23 The idea of equality has done important constitutional work elsewhere, for example, in the Constitution of India. To quote from Choice and the Legal Order: Rising Above Politics: Similarly with the right to equality before the law. The Indian Cellular Telephones case affords a valuable illustration of how such a basic claim can generate such unexpected results. The right not to be discriminated against in a tendering process is merely one example of the potential sweep of such a consensual commitment, but the possibilities are many and dramatic and would absorb race, gender, sexual inclination, age, disability, religious and political persuasion and so on. The right would imply equality in the face of State activity whether as an employee or mere citizen, it would embrace the prohibition of discrimination on the basis of life style (often so important in the past in areas such as social security entitlement) and comprises what is in fact ‘irrelevant considerations’ writ large but capable also of grinding exceedingly small. Irrelevant considerations is a well established ground of judicial review at common law, but it has never developed the broader sweep of which it is capable. As a clearly enunciated constitutional principle it could make a substantial contribution towards the liberation of human capacity.24

22 Wagstyl, ‘Beckett’s monopoly game’. 23 But see Gewirth, The Community of Rights, passim. 24 Lewis, Choice and the Legal Order: Rising Above Politics, pp 195–96. Incidentally, the Norwegians have a Discrimination Commissioner whose remit is not restricted by reference to race, gender, etc. Any irrelevant consideration may be regarded as discrimination. Note that the British Parliamentary Ombudsman has now extended his definition of ‘maladministration’ to include ‘showing bias whether because of colour, sex or any other grounds’. 9


The potential of equality is recognised by Bercusson who rightly sees the concept as much wider than its traditional understanding in terms of race and gender. It is capable of embracing ‘qualities’ more than equality, such as the quality of family and working life, and the quality of human resources.25 Choice, a concept which unites the political left and right, assumes the ability to act, and natural justice allows individuals to represent their own interests, their version of events, their notion of freedom, and their notion of well being to those who would have an impact on them. Even granted that citizens concede, through a procedure for moderating collective freedom and well being, decisions on the merits to the political/administrative process, they do not forfeit the right to participate, either vicariously or, depending on the nature of the impact, in personam. If given some measure of constitutional prominence, these ideas are capable of contributing extensively to the development of human rights thinking. A larger issue needs to be addressed at this point. It is that the boundary between the public and the private needs to be re-examined. This is undertaken in this book by David Campbell. The view which I tend to adopt is that the State (the constitution) has a general duty to allow the individual in society to flourish. This requires us to respect the sanctity of the private sphere, including making accessible goods such as housing, the right to family life and a basic floor of social and economic rights.26 These are matters which are extremely challenging at both the intellectual and political levels, for they pose serious questions about the autonomy of most socio-economic configurations. Such entities would have to satisfy constitutional expectations concerning participation in order to be legitimate. Although, from one point of view, the minimal State enhances individual freedom, non-State power configurations cannot expect to be uncluttered by constitutional obligations. There is no real conflict here.

PARTICIPATION AND COMMUNITY Recent years have seen a renewed interest in concepts of community, not least because of a previous generation’s excessive concentration on atomic individualism. At root, this interest turns on little more than recognition of the fact that human beings need to live in and through others. If that basic need is not satisfied, then the full development of personality becomes impossible. Correspondingly, we must give expression to this need, not only in terms of

25 Bercusson, European Labour Law, p 210. 26 Property is normally considered crucial in drawing up such a list, but it needs close confinement and definition, lest, in the hands of the powerful, it becomes an impediment to genuine participation. Gewirth, The Community of Rights, ch 5. 10


local political processes but by facilitating association in a variety of ways. Gewirth again: ... just as human rights, through mutuality, entail community, so community, in order to be morally justified, requires human rights. The relation of rights and community, then, is one of mutual support.27

Many of the great Victorian mutual institutions were responses to untrammelled industrialisation, which frequently tore apart human rights as they are now understood. Building societies, housing associations, cooperative enterprises, trades unions, credit unions, and such organisations as the Open Space Society and the National Trust all emerged through collective, non-governmental, effort. These developments were motivated by a notion of a common, public benefit which was to be gained from general rather than private ownership. There is, therefore, an argument to be made that the State has an obligation to assist, encourage and support voluntary organisations which seek to improve the quality of life, to encourage comradeship and the like. Even earlier, the need for collegiate activity was expressed through membership of the mediaeval guilds, which were essentially local associations of independent producers. As Cole points out, guilds were regulatory rather than managerial.28 The State’s duty to encourage society to flourish can be performed through any number of mechanisms, but the community group delivery mechanism is particularly important. The potential of voluntary groups is explored in this book by Nicholas Deakin and Tony Rees. These groups might undertake more than the mere delivery of services if they were given, in proper recognition of their role in fulfilling vital functions, a special standing in relation to the State as a new form of para-State force. In fact, the relative autonomy of voluntary and community bodies has diminished over recent times for reasons quite distinct from the fact that the rights of organised labour, although retaining a powerful universal appeal, have yet to find an acceptable form in today’s global markets. Nevertheless, voluntary associative conduct is an elemental form of civil participation, and the resurgence of the voluntary or not-forprofit sector is beginning to raise issues of their overall responsibility and accountability to the nation at large, and these issues are receiving attention right across the industrialised world.29 It is for this reason that the Commission on the Future of the Voluntary Sector was set up. Its report, Meeting the Challenge of Change: Voluntary Action into the 21st Century, was published by the National Council of Voluntary Organisations (NCVO) in 1996. The Commission suggested that a concordat, in the form of a Code of Good Practice, be drawn up between central

27 Gewirth, The Community of Rights, p 87. 28 Cole, Guild Socialism Re-stated, p 43 29 Eg, the Industry Commission’s Report on Charitable Organisations in Australia. 11


government and the voluntary ‘third force’ or ‘third sector’, and that a Parliamentary Select Committee be established to monitor all aspects of the relationship between government and the voluntary sector and the general impact of government policy on voluntary organisations. The Commission also recognised that fostering participation through accountability and user involvement are crucial. In particular, it said that voluntary organisations should identify all their key stakeholders and the way in which they are accountable to and communicate with those stakeholders. The Commission also suggested that funders should move towards the involvement of users not only in the delivery of services, but also in their planning. So vital is the third sector that the British government is currently supporting projects investigating how to develop a new, independent, voluntary sector in the former Iron Curtain countries. This sector is seen both as a countervailing force to the power of the centralised State and a means of establishing a free civil society,30 and the Commission’s call for a code of conduct governing the third sector’s relationship with the State is meant to ensure that that sector does not ‘become a kind of bendy toy for government to play with’. Voluntary action can marshal crucial social capital for the development of resources that are intangible but fundamental to the future of civil society. When addressing all these issues, the Commission has also pointed up certain problems and dilemmas facing the third sector31 which ought to be of considerable interest to public lawyers, although, with honourable exceptions, those lawyers have paid little attention to that sector in the past. It is clear that new organisational and, not least, legal forms of participative relationships are possible and desirable if the talents of broad swathes of the population are to be harnessed. For example, in mid-1997, the UK’s first private regeneration fund was launched with the intention of fund raising for small businesses and social organisations such as housing associations. Clearly, bodies which aim to invest in the social fabric and economy to help liberate expectations do not have to be confined to the private sector. Local employment pacts involving joint action by private companies and the voluntary sector have been called for by the EU’s Social Affairs Commissioner. As I have argued elsewhere: There has been a resurgence of original thinking about community forms of emancipation in recent times with which many will be familiar. For present purposes, the details matter less than the principle. This is where traditional concepts of subsidiarity meet community. A more autonomous local government would have both the resources and the obligation to engage in

30 Deakin, ‘Future prospects for voluntary action’, p 63. 31 Commission on the Future of the Voluntary Sector, Meeting the Challenge of Change: Voluntary Action into the 21st Century. 12


acts of self-expression. Not everyone will wish to take advantage of these opportunities, but where they do they should have the right to do so.32

Proposals also exist to develop community action in order to confront the issues of social and economic exclusion. For example, the London Voluntary Service Council has proposed the establishment of a Civic Forum to shadow the new Greater London Authority recently proposed by the Blair Government. This would be comprised of representatives from the voluntary sector, trade unions, the private sector, faith communities and local interest groups, so that those representatives could feed into the Authority’s thinking at a systemic level. There inevitably is some tension between a bottom-up view of community organisations and their top-down encouragement, especially since the latter might be selective and non-pluralistic or competitive. Most would naturally favour bottom-up emergence, albeit with resource-assistance offered by traditional politics when necessary. However, this is almost certainly to counsel perfection, and thought will need to be given to reinvigorating the system of local government community development officers and departments. Such thought can build on some successful experiments in the 1970s. Experience with tenants associations, housing management schemes, and even neighbourhood watches testifies to the utility of partnerships between central and local government and community organisations. This experience is thoroughly reviewed in this book by Lucy Gaster. Though the problem of social exclusion will not, of course, easily be solved even if local forms of participation are encouraged successfully, transparency is at least part of the solution, and it is to be hoped that freedom of information and open competitive politics will go a little way to changing the overall culture of politics and participation. One further point. It is managerially inefficient to misunderstand the needs of the community, so that prudence as well as democracy points up the need for better channels of participation. Even so, a belief in pluralism and experiment would lead to the encouragement of competitive politics at local level, something that local government might find difficult, but something with which it needs to learn to live. In other words, the encouragement of grass-roots organisations should produce a spectrum of local activity, a rainbow though not necessarily an alliance. Community bodies will serve different purposes. Some will be oriented to service, some will be ginger groups, some active campaigners, some engaged in constructive partnerships, and yet others will wish to contest conventional wisdoms. This range of groups, and their potential for enhancing participation, are described by Barry Knight in Chapter 9.

32 Lewis, ‘Participation, citizenship and the constitution’, p 117. 13


PARTICIPATION AND THE ENVIRONMENT As a coda to these thoughts on community, a word needs to be said about the environment. At the time of writing, it is estimated that some 300 measures have been adopted by the EU relating to the environment. By no means all of them create rights for individuals, but that is not really the thrust of my argument for participation. Many environmental directives are concerned simply to instruct Member States to draw up rehabilitation programmes, take measurements, designate areas for environmental protection or establish modern technologies to promote a reduction in pollution. Others designate environmentally desirable objectives, leaving it to the Member States to decide how best to achieve them.33 As a World Bank study has recently shown,34 citizen activism has been at the root of the modern environmental movements in both the industrialised and the developing countries. Some of the major actors in this process include local authorities, citizen and environmental groups, the academic and scientific communities, business and industrial sectors, etc. Particularly since the Earth Summit in Rio in 1992, the promotion of widespread public involvement in environmental decision making has been looked at as a major instrument in the quest for sustainable development and reform. Environmental Impact Assessments (EIAs), which are required by legislation to evaluate, mitigate and plan for the various environmental and social consequences of development projects, are amongst the initiatives fostering community participation in many countries. The idea of making public involvement a core element of an overall strategy for sustainable development was elucidated, inter alia, in Principle 10 of the Rio Declaration on Environment and Development.35 Importantly, since the early days of the European Economic Community, there has been a strong commitment within what is now the EU to what has been termed ‘a citizen’s Europe’.36 However, commentators have not always been charitable about the UK’s commitment to environmental participation: In some cases, such as Britain, a tradition of official secrecy and ‘insider consultation’ appears to be limiting widespread citizen participation ... while in countries such as Norway (and other Scandinavian countries) political traditions of widespread participation and consensus-building among various stakeholders and interest groups have facilitated the effective incorporation of

33 Geddes, Protection of Individual Rights under EC Law, p 12. 34 Davis, Public Involvement in Environmental Decision Making. 35 Though see, also, UNECE, Guidelines on Access to Environmental Information and Public Participation in Environmental Decision Making, as endorsed in the Third Ministerial Conference, ‘Environment for Europe’. 36 Holland, European Community Integration, pp 64–65. 14


citizens, environmental associations and local governments into the environmental policy and decision making processes.37

There is evidence of limited access to both environmental information and decision making, not least over the industrial and water pollution control systems. This domination of decision making by insiders contrasts starkly with the Norwegian capacity ‘to integrate all sectors of the population into the policy making process without significant social upheavals, conflicts or disruptions’.38 The situation, however, is not one of unrelieved gloom. Local authorities, under the encouragement of the Local Government Management Board, has recently been active in promoting Agenda 21, the Rio Summit’s strategy for sustainable development. What is significant is that the agenda is not seen as being limited to ‘narrow’ environmental issues, but embraces the social, economic, cultural and political life of localities. The agenda covers the issues which arise when a local authority negotiates its relationship with citizens in general, so that new forms of local democracy are not an option when implementing Agenda 21, rather: ‘they are central and unavoidable.’ They will, in turn, require action by national governments and the EU.

PARTICIPATION IN SOCIAL AND INDUSTRIAL LIFE Let the right to form associations and groups and to engage in social action as part of interactive nature be ceded. The State then has a duty to encourage action in and rights within voluntary organisations, but there is a need to go further and to argue for the right to participate in civil, social and industrial organisation. Choice, action and participation are generic rights and can be limited only by special justification. Isolation is not a natural condition, and there are clear existential linkages between being human and engaging in associative conduct. No unreasonable – that is, non-mutual – impediment should impair the right to choose in concert with others whose aims are shared. Not only must the State not inhibit such associative conduct, but it has a duty to create or nurture the conditions for associative possibility. The present situation with respect to industrial participation is one too greatly characterised by compulsion for dignity and ‘signal to signal’ bargaining in genuinely free markets. If the constitution were to speak of the right to participate, buttressed, in this respect, by the right to associate and accompanied by the State’s duty to encourage participation, we should be

37 Davis, Public Involvement in Environmental Decision Making, p xi. 38 Ibid, p 47. 15


moving in the right direction. Under such circumstances, an ombudsman or court could find that, in any given situation, not enough progress had been made, and might recommend the kinds of remedies used by, for example, the Indian courts. These have been shown to be much more flexible than those to which we in the West are accustomed. For example, fact-finding commissions have been established which report back to the court, government itself has been required to issue detailed progress reports, and the like.39 This is to envisage a role for the court/ombudsman as, inter alia, a social auditor. We should not be deflected by anti-court sentiments which satirise the legal order as being simply about the brutal business of imposing simple-minded sanctions. It is gratifying that there is some evidence from unexpected quarters that these unfashionable ideas about the potential of the legal order are being picked up. Rights to fair treatment in health and social care are at last being developed by radical thinkers who have begun to argue for the monitoring of such rights through the Social Services Inspectorate, Audit Commission and/or ombudsman systems.40 By all common and standard measures of human rights and choice, individual citizens must be able to demand not only dignity (the unpacking of the implications of which is assisted by examination of various International Labour Organisation standards), but also the right to have one’s personal choice feed into the collective (that is, the firm’s) decision making. It is inescapably the case that the untrammelled capitalism does not operate through true consent. Even if there is tacit consent to ‘pure’ market forces, then, since capitalism is never pure in that way, it must follow that regulating so that the rights of labour have substance must be legitimate. This is an area which is bound to be controversial, and yet the underlying human rights are easy enough to stake out and suggest no obvious limitations imposed by other than human rights needs. No consistent philosophy can presently be detected in the position over the rights of labour. There has been no attempt to work through the logic of respect for mutual choice in capitalist relations, and, of course, no deeper inquiry into the preconditions for choice to reign in the workplace or market-place. All of this makes it the more necessary for the constitution to provide the opportunity for ensuring that, as a nation, the implications of choice and human rights in all aspects of life are worked through.

39 Lewis, Choice and the Legal Order: Rising Above Politics, pp 135–36. 40 Bynoe, Rights to Fair Treatment: A Practical Study to Develop New Rights for People Seeking Health or Social Care. 16


STAKEHOLDING, COMPANY LAW AND EMPLOYEE PROTECTION The foregoing argument poses important questions for the now fashionable concept of ‘stakeholding’, for the reform of British company law and for a reexamination of employee protection. These are all issues which are extensively dealt with elsewhere in this book by John Parkinson. The way my overall argument embraces those issues needs briefly to be outlined. First, it is important to remind ourselves about the larger concerns which give rise to speculation about these areas of our ‘social’ life. Cole again provides the continuity. Although status meant, for very long periods of English history, marked inequalities, nevertheless, the privileged aspired to a loose, political enfranchisement reflected in distinctly ‘political’ arrangements buttressed by degrees of autonomy within a number of distinct ‘social’ spheres. But times change: There was a time, away back in the Middle Ages, when the State was only one of a number of social institutions and associations, all of which exercised, within their more or less clearly defined spheres of operation, a recognised social power and authority. During the period which followed the close of the Middle Ages, these other bodies were for the most part either swept away or reduced to impotence; but the effect of their disappearance was not, except to a limited extent for a time in the 16th and 17th centuries, the assumption of their powers by the State, but the passing of the social purposes which they had regulated outside the sphere of communal regulation altogether. Thus, the ground was cleared for the unguided operation of the Industrial Revolution in the 18th and 19th centuries, and the vast structure of modern industrialism grew up without any attempt by Society, as an organised system, to direct it to the common advantage.41

In other words, there was a long-standing assumption of participation in the social enterprise, represented for some little time by the guilds which were not confined to the economic sphere but were ‘the common form of popular association’. 42 Industrialisation saw the relative decline of genuine participation in social organisation. There was a democratic commitment to ‘grand’ politics, whose forms and institutions, were, unfortunately, not updated to honour the sentiments underlying that commitment.43 The market came to be regarded as the economic equivalent of the democratic political process. Although, at its best, the market can make a genuine commitment to personal liberation, it is often not at its best. It can become dominated by

41 Cole, Guild Socialism Re-stated, p 29. 42 Ibid, p 42. 43 Lewis and Harden, The Noble Lie: The British Constitution and the Rule of Law. 17


private fiefdoms which have little pretension to anything other than profit maximisation. To quote Cole for the last time: ... such democracy as is recognised is conceived in a narrowly ‘political sense’, as applying to a quite peculiar sphere known as politics, and not in a broader and more comprehensive sense, as applying to all the acts which men do in association or conjunction ... They [‘democrats’] ignore the fact that vast inequalities of wealth and status ... are necessarily fatal to any real democracy, whether in politics or in any other sphere.44

Quite aside from the force of this argument in itself, it needs to be observed that socio-industrial organisations are often State-dependent, workerdependent and, indeed, dependent on a raft of institutions of civil society to which they often pay scant democratic respect, pleading instead the legitimacy of the market. Hence, the resurgence of the ‘stakeholder’ concept. For example, it is widely accepted that governments increasingly provide ‘public goods’, such as education and training, in which industry is often too short-sighted to invest. Not only are such goods increasingly important in the new technological revolution, but an insight into our proper priorities is afforded when skills and education are often described as ‘human capital’, for this makes it clear that it is human needs which must be respected, rather than man-made institutions which are the product of history and accident as well as of genuine desiderata.45 It is also by no means clear that the imperatives of private fiefdoms coincide with those of the governments which host their activities. For instance, investment is often thought by politicians to be inadequate given the longer term needs of national economies. To take one instance, the ratio of dividends to R and D spending in the UK is three and a half times higher than in the USA, 10 times higher than in Germany, and 13 times higher than in Japan.46 Furthermore, in the global free market economy, the ownership of industries once thought to be strategic is passing to those whose interests are very different from those of the previous owner. It is difficult to believe that this state of affairs can continue for long without draining the very lifeblood of democracy. It is important to restate some of these larger ideas in the face of those who believe that life is too fast-moving for governments to seek to intervene in order to reassert principle. Such people clearly are wrong, but it is important to stress that there is no simple progression between professed goals and current, shifting, power configurations. Experimentation and flexibility are crucial; but this was ever so, as witness JS Mill’s plea for ‘experiments in living’. In such shifting circumstances, it is important for the law, and

44 Cole, Guild Socialism Re-stated, p 14. 45 Thurrow, The Future of Capitalism. 46 TUC, Your Stake at Work, p 10. 18


constitutions in particular, to restate ancient truths and beliefs and instruct those with temporary influence over our affairs to do their utmost to put the empirical world back in touch with those truths. Reason, autonomy, and context-dependency should be in a constant state of dialectical discourse. It is important to note just how contemporary Mill sounds when placed in the middle of debates about rationality crises and New Public Management (NPM). Experiment, self-discovery and transparency (what Mill simply called ‘free speech’) are suddenly the buzz words of NPM. New Zealand is perhaps the leading example of the positive potential of NPM. In New Zealand, it is understood that not only is maximum transparency necessary for efficient and effective policy choice and performance, and that involvement of the public will increase the range of information available, but that public management techniques need to take account of the difficulties of long term, central planning. The distinguishing features of the new policy strategies are known as ‘SRAs’ and ‘KRAs’: The distinguishing features of SRAs and KRAs are their selectivity and flexibility. For all of the reasons that doom long term central planning, particularly the complexity and the uncertainty of the future, it is not possible to come up with a complete set of higher level strategic objectives, finely specified. The best we can do is pick out a few objectives, which given our understanding of the systems in which they are embedded, are most likely to exert the desired leverage on those systems.47

Attention must be paid to a number of thought provoking experiments in stakeholding. Unipart is an interesting example of a firm – the result of a management buy-out – which believes in long term partnerships with suppliers and employees. Unipart is moving forward without traditional trades unions while others, most notably the Trades Union Congress (TUC), see the latter as being an essential conduit for channelling collective concerns into the wider stakeholder debate. In opposition, the Labour Party seemed to be in touch with these ideas, arguing that trades unions should embrace change ‘and shape it for the benefit of all’.48 The Commission on the Future of the Voluntary Sector has argued that funders of voluntary sector projects should respect the diversity of the voluntary movement and actively seek to support experiment. Furthermore, schemes should be piloted to allow voluntary sector leaders to be placed on business boards as non-executive directors and, in their pursuit of the ‘greatest value’, companies should develop long term relationships with the voluntary sector based on commonly identified goals.

47 State Services Commission, Strategic Management in Government: Extending the Reform Model in New Zealand, p 5. 48 Derek Foster, Shadow Chancellor of the Duchy of Lancaster, speech at the IPMS Conference. 19


At the time of writing, the Chancellor of the Exchequer has announced an inquiry into how business can introduce democracy into the workplace and give staff the chance to influence company strategy. There is some evidence, he believes, to indicate that employee stakeholding results in more jobs, productivity, pay and profits. Much more radical suggestions exist. For example, Peter Drucker, a well known supporter of ‘pension fund socialism’, has promoted the search for a simple compulsory scheme in which every adult pays into a portable pension fund which could be drawn on for house purchase as well as pensions. The huge sums of money made available would boost markets, with contributions not being counted as taxable since they would go directly into personal accounts. Other ideas for a substantial reorganisation of the regulatory regime include the American ‘R-Corps’ and ‘RFunds’ aimed at producing responsible corporate and financial behaviour, ‘personal career funds’, formal reviews of management performance by nonexecutive directors as an alternative to the hostile takeover as a means of ensuring managerial accountability, and the like. Though there is no doubt that experimentation must be encouraged, in every context we are confronted by problems of contingency, newness and seeming impotence. The only response is to hold on to primary principles, to work at the empirical level and to encourage experiment. In the UK, much of the experimentation at local level is being encouraged by the Local Government Management Board through the Local Agenda 21 planning already mentioned. This initiative is already showing promising returns, with partnerships emerging in several local authorities. Davis is clear: While not all practitioners consciously view themselves as doing EIA, there is a great deal of experimentation throughout Western Europe in this area which has implications for the development of ‘best practice’ in terms of EIA theory and practice.49

COMPANY LAW AND EMPLOYEE PROTECTION This leads us ineluctably to the twinned issues of company law and employee protection. Although stakeholding is about more than industrial and financial life, there is no need to restate the larger issues of autonomy at this point. Rather, it is useful to ask the a middle range question: ‘what are companies for?’ Leaving aside the fact that most would accept that prosperity is better than poverty, and assuming that current forms of industrial organisation are best placed to achieve prosperity, we still must recognise that prosperity is merely a means of fulfilling individual autonomy. Individual autonomy is still the

49 Davis, Public Involvement in Environmental Decision Making, pp xii, 34–35, 60. 20


main concern, although commitment to autonomy in itself tells us little about what constitutes a legitimate distribution of prosperity’s spoils. One determinant of distribution, linked to autonomy, is consent to the decisions about distribution which are made, and this can be established only through some form of participation in those decisions. The claim that moral principles should be regarded as intruders in the industrial sphere cannot be allowed. That established, let us mark out some of the present features of companies and, in particular, British company law, which relate to participation. Others have developed these issues with more finesse, but it is as well to fit a few of them into the general picture. The legal position of employees, for the moment at least, 50 is not compatible with personal dignity or autonomy. Their participation in the industrial enterprise, directly or indirectly, makes them entirely subordinate. For many years, redundancy has been a constant threat, against which employees have been more or less powerless. Recognising this, the EU has sought to protect employees during a take-over. Hence, the Business Transfer Directive adopted in 1977. Its existence, for all its weaknesses (and it is important to note that it does not apply where a company changes hands through a purchase of shares, although this is the way in which almost all take-overs occur in the UK), is a tribute to arguments of the sort being made here. It is useful to note the protective laws requiring the negotiation of social plans to mitigate the effects of redundancies in several European countries.51 The harshness of UK company law in failing to protect employees is legendary, while the sound without real fury about corporate governance in recent years testifies to the fact that companies are not, in any very direct sense at least, promoting the Commonweal. Too few directors face regular reelection, institutional shareholders are inert, and individual shareholders face expense and difficulty in proposing resolutions at annual meetings. It is trite to remark that company law elsewhere is, to a greater or lesser extent, aware of its wider obligations. The German Constitution’s concern for employees is well known, while the Maastricht Social Chapter, for all its manifest weaknesses thus far, has been the cause of considerable controversy. Moves on a EU company statute are currently stalled over worker rights. Whatever the eventual outcome, it seems clear that change is in the air, as witness the establishment of the Centre for Tomorrow’s Company, set up by the Royal Society of Arts to further the recommendations of the 1996 Tomorrow’s Company Report. These included company boards of directors’

50 Changing technology may ultimately mean that labour becomes a relatively unimportant commodity in industrial production. If and when that occurs, the State will have to address itself to means of providing material disbursements to assist the development of personal autonomy. The ‘ownership’ of capital, I believe, could not then continue in its present form. 51 TUC, Your Stake at Work, p 37. 21


adoption of explicit values, the monitoring of key relationships, and the duty to pay regard to the interests of the company as a whole, rather than simply to shareholders. That being said, however, the recent Hampel Committee report on corporate governance appears to swim against the tide by arguing for more concern with shareholders and less with ‘accountability’. However, a number of commentators believe that many of the corporate clashes and scandals of the last decade have seen shareholders ‘kept in the dark’. 52 Hampel has not been well received by critics of the status quo and it remains to be seen how influential it will prove to be in light of the present Government’s plans for a fundamental review of company law. It is worth mentioning too that the current system of corporate governance reflects an earlier stage of capitalism, when finance for setting up and investing in companies was raised primarily from individuals who were dependent upon other people to undertake day to day management. The present law merely encourages take-overs, which independent research has shown to have little or no beneficial impact on performance.53 In order to come to terms with reality, and to encourage the recognition of wider responsibilities, company law will have to be reformed. In my view, the centrality of the corporation requires that the basic moral framework of corporate governance should be set out in the constitution itself. Whether the EU can work significant change in this respect depends on whose hunches we back. The EU starts from the International Labour Organisation’s proposition that ‘labour should not be regarded merely as a commodity or article of commerce’ and Art 117 of the Treaty of Rome is clear that Member States should ‘promote improved living conditions and standards of living for workers’. It is important to say a word about the legitimacy of State intervention in the affairs of ‘private companies’ in order to head off anticipated criticism: [Companies’] actions are made possible by a combination of legal protections and other facultative devices which make it abundantly clear that the State facilitates their conduct. They are not simply players in a market place but frequently are favoured players in a constructed market place. If this is correct, then the State has the right to remake the terms and conditions of operations in the market to reflect the human rights which the State is established to protect … Both the rights of citizens and the needs of the economy require that the system of corporate governance reflects codes of duty as well as of rights. This is demanded of citizens: no less … should be expected of collectivities.54

It cannot be right to grant autonomy and more than autonomy to configurations of capital with the power to destroy careers and communities

52 Jackson, ‘FT com.guide to: corporate governance’. 53 TUC, Your Stake at Work, p 11. 54 Lewis, Choice and the Legal Order: Rising Above Politics, p 194. 22


and to pretend that all citizens are equally invested with a real measure of choice. A benign system of company law would respect those concerns, whether that respect be required by primary legislation or, as I have suggested would be better, entrenched. It may be thought that special status ought to be given to the rules which govern finance and industry and it made clear that they are distinctly constitutional concerns.

THE CITIZEN AS EMPLOYEE No attempt will be made here to analyse the general state of employee rights, but rather I will confine myself to fitting the position of employees into my general argument. The right to associate seems a useful place to start. Leaving aside the fact that it is recognised as fundamental in so many constitutional texts, the right to associate is one of the most self-evident propositions following from social co-existence. It is an elemental form of participation. People need to express themselves collectively as well as individually in order to make common cause and a common case, to pool their resources, and freely to associate in a common endeavour. The case was put in 1948 by Lord Beveridge: In a totalitarian State or in a field made into a State monopoly, those dissatisfied with the institutions that they find can seek a remedy only by seeking to change the Government of the country. In a free society ... they have a different remedy; discontented individuals with new ideas can make a new institution to meet their needs. The field is open to experiment or failure.55

This argument is not limited to the industrial or provident sector, but also extends to the voluntary sector. The 1996 NCVO Report is clear that the freedom of citizens to engage in voluntary action ‘is crucial to the health of democracy’.56 Any abridgement of this fundamental right needs to be cogently argued from first principles. This is patently not what has happened in recent years. Constitutional entrenchment therefore is a necessary corrective to the abridgement which nevertheless has occurred. The right to associate and to form associations is common currency in the constitutions and treaties of the world. Genuine participation also requires a degree of spiritual and material freedom. Given the continuing centrality of work, core labour standards need equally to be observed. To this extent trades unions are fully entitled to campaign for the universal acceptance of those standards by countries and

55 Beveridge, Voluntary Action, p 60. 56 Commission on the Future of the Voluntary Sector, Meeting the Challenge of Change: Voluntary Action into the 21st Century, para 5.5.2. 23


global corporations, something to which even the WTO now pays lip service. The TUC is also fully entitled in the court of morals to argue at least for workers to be afforded the legal right to consultation before decisions affecting them are taken.57 Beyond these basic measures, the nature and extent of participation is bound to be experimental. For instance, the American Federation of LabourConfederation of Industrial Organisations is harnessing workers’ pension money in order to make corporations more responsible to workers, to create jobs and security; the EU is experimenting with territorial employment pacts to give maximum added value to the structural funds; and the TUC is actively promoting employee representation committees with a wide range of responsibilities, for example, for disciplinary procedures and training and production methods. Proposals also exist for ‘employment impact’ statements, analogous to EIAs, which would be required whenever plans were afoot to relocate, change employment practices, or down-size. Once more, the EU is potentially the most active player. The ‘social partners’ are a fact of Community life, with their roles potentially far reaching. Currently, of course, those partners must be consulted by the Commission when proposing labour and social policy initiatives which take their impetus from Art 118 of the Treaty of Rome as amended by the Single European Act. There are fashions in social policy, and some see the Working Time Directive as a sign of the resurgence of the radical version of worker rights set out in the Paris Treaty which established the European Coal and Steel Community (ECSC).58 It may perhaps be the case that this sign points ultimately to a ‘social constitution’ for the EU. There are clearly prime movers who envisage an active, combined, labour/social policy, as was suggested by the Green Paper on the future of labour policy of November 1993. This Green Paper speaks the language of participation in decision making processes and, most notably, the language of ‘reconciliation’ between work and home life. This is a concept with dramatic potential,59 not just for work but for the whole spirit of community, a spirit entirely in keeping with the philosophy of this chapter. As with company law, new labour legislation promoting active rights to participate in the workplace are required, but again such legislation will need the additional protection of constitutional status. Before examining the nature of that status, I will first say a little about what, for the sake of argument, I will call the social market economy.

57 TUC, Your Stake at Work, p 41. 58 Bercusson, European Labour Law, pp 346–47. 59 Ibid, ch 15. 24


THE SOCIAL MARKET ECONOMY As I will argue more fully in Chapter 12, some of the post-Second World War constitutions, including the German, the Indian, and those of the former Iron Curtain countries, display a degree of suppleness and subtlety lacking in earlier times. Germany boasts a social market constitution, while India has its celebrated ‘directive principles’ of the Constitution which nestle just below the Bill of Rights and yet enjoy a status higher than ‘ordinary laws’. Article 38(1), for example, reads: The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of national life.

Not only do the constitutions of the former Eastern bloc countries seek to underwrite social protection through declarations about a ‘social State’, albeit committed to market principles, but references to dignity, freedom and democratic entitlements abound. Nearly all these constitutions have been drafted in close consultation with the Council of Europe, and there now is a body of distinguished opinion emerging that a modern constitution owes deeper obligations to the human condition than those considered at earlier periods in the free world’s history.60 Whilst first generation civil and political rights remain, of course, of the highest importance, and recent UK legislative proposals to enhance these are examined in this book by John Wadham, determining the potential of constitutionally providing of second generation social and political rights to foster participation is, perhaps, the most crucial issue in current debate about participation. It is examined in this book by Mary Seneviratne, and by myself in Chapter 12. Perhaps the ‘social market economy’ can be traced back to the West German Constitution after the Second World War. 61 This Constitution includes the rights of property and inheritance, freedom of choice in the exercise of a trade or profession, freedom to form or join economic or trade associations, freedom of economy and commerce flowing from the general right to personality, and the principle of the social Welfare State. The former ECSC espouses similar values by not only proclaiming a commitment to democracy as the only system of government, but also a commitment to economic liberty and free market economics. The new constitution of South Africa also refers not only to basic civil and political rights, but to socioeconomic rights such as the right to education, housing and language. One commentator has remarked that: ‘notions of democracy, transparency,

60 On the dilemmas involved in invoking ‘positive’ rights, see Sunstein, ‘Against positive rights’, pp 35–38. 61 Kommers, Politics and Commerce in the Federal Republic of Germany: Basic Documents. 25


participation, accountability and intelligibility have been at the forefront of the minds of the constitution makers’.62 All this chimes well with the increasing recognition around the world that changing circumstances call for changing responses, to which witness the former US Secretary for Labour’s determination to ‘take up arms against sweatshops’, both in the US itself and in the territories of its suppliers, a response that needs greater formalisation if the global economy is not to continue to leave ‘millions of disaffected workers in its train’.63 The principle is, of course, what matters, although recent surveys indicate that, at least in the United States, access to cheap labour is a rapidly decreasing priority for manufacturing companies investing abroad.64 This coincides with signs that the UK is beginning to shift on EU social policy, with a number of blue chip companies having already begun to comply with aspects of the Social Chapter even before the election of a Labour Government. In other words, we have the arguments and the pressure is mounting. What now is needed is an institutional and preferably constitutional response. This is not to downgrade individual responsibility. On the contrary, as Gewirth argues, while the State must seek to enable persons to be productive agents on their own behalf: ‘it is a serious error to confuse the desirability of this aim with the belief that it is already fully within the powers or abilities of the persons or groups in question.’ He is in no doubt that this entails positive legal rights.65 It is worth noting that, leaving aside the former communist countries, social and economic rights are now established in the constitutions of Spain, Portugal, Greece and the Netherlands, which have all influenced the EU’s Community Charter of Fundamental Social Rights of Workers in 1989.66 A commitment to broad participative rights could well be reflected in the ‘directive principles’ of constitutions, their preambles, and perhaps, to some extent in Bills of Rights, which would leave it to successive governments to work out, with judicial assistance, the most appropriate way to secure those rights.67 In any event, my argument is that participative concerns, some of which will need at any given time to be ranked, are genuinely constitutional concerns. Protecting the rights of human beings within a social setting of their own or their predecessors’ creation is pre-eminently a task for the constitution. All this suggests that, at a time when the sense of personal and national 62 63 64 65 66

Sacks, ‘Due process in making a constitution’, pp 1237–38. Wolf, ‘The dilemma of inequality’. de Jonquieres, ‘Cheap labour loses its allure’. Gewirth, The Community of Rights, pp 5, 59. For an extensive treatment of this topic, see Bercusson, ‘Fundamental social and economic rights in the European Community’. 67 There may be some mileage in considering the former US practice of ‘public interest litigation’, which would advance participation at the level of the courtroom. More seminally the argument seems to be for a constitutional principle of equality as citizens, and not just equality before the law. 26


identity is not as secure as it once was, a restoration of national instincts and sentiments is called for in circumstances where raw politics must learn to accept second place. In the interests of clarity, it should be said that participation does not avoid the problem of scarce resources. Human rights, including the right to participate, is one thing. The staking out of ‘wants’ is another. Whereas participation in the ‘wants’ argument must not be circumscribed, in some circumstances it may ultimately only be expressible through ‘voting procedures’. These matters require further attention and there is no advantage in being dogmatic at this juncture.

REGULATION Regulation of private fiefdoms is a worldwide phenomenon. It has, of course, been especially important in relation to the utilities since the early 1980s. In the UK, regulation has often been criticised as constituting a private bargain between the ‘expert’ regulator and the regulated industry, as Tony Prosser points out in this book. The arrangements for public participation in the regulatory process have been pragmatic and piecemeal, sometimes involving intermediary, though non-elected, bodies representing a supposed public interest, and, less frequently, by direct intervention by interested publics. It is early in the life of the new British Government, but proposals for reform already abound. The most radical moves have undoubtedly been made through the discretionary activities of the Director General of OFTEL, most recently through the development of regulatory proceedings modelled on those in the US which positively encourage participation by interested groups and the appointment of an advisory body on fair trading in telecommunications.68 I have argued elsewhere that statutory rights of intervention in decision making by the utilities ought to be introduced in order to enfranchise interested citizens and groups.69 Backed by a more general constitutional right to participate, the opportunity to fashion flexible but effective methods for public intervention would be greatly enhanced in this way.

68 OFTEL, Improving Accountability. 69 Lewis, ‘Participation, citizenship and the community’. 27


THE LEGAL AND CONSTITUTIONAL ORDER In the days of the socialist thinkers such as Tawney and Cole, there was much discussion of the ‘extra-constitutionality’ of capitalist organisations. We do not have to accept their analysis of where these organisations fit into the larger commonweal (for example, they represented the same class as holds social and economic authority in the community and political authority in the State), to observe that this discussion was, in many senses, extremely acute. Starting, as I have, with a claim for autonomy, I soon moved towards the position where participation is seen as an essential expression of that autonomy. I pointed out that this meant not only participation in the political process (broadly conceived) and as (reformed) market player, but in all other salient aspects of interpersonal expression: community and social life, the relations between labour and capital, and so on. To a very real extent then, leaving salient aspects of ‘collective’ life free-standing, without direct respect for individual autonomy, is unacceptable and a matter for constitutional redress. This is why reworked fundamental human rights lie at the heart of constitutions. What is needed is a redefinition of social, industrial and financial institutions and patterns in order to identify potential methodologies for advancing participation, either directly or through representative institutions. However, at the apex of the constitution we ought to be able to work at a new level of generality, working in the belief that fundamental principles can be translated, through exhortation, experiment, research and novelty, into the whole range of publicly approved and/or facilitated activities. This obviously involves an expanded role for the legal order. To paraphrase Nonet and Selznick, the actions of political and other elites are not self-legitimating. The question whether those elites are acting in the larger public interest requires a separate assessment.70 That assessment must, ultimately, be for the courts. Personal autonomy presently requires, as it always did, a high degree of legal autonomy manifested in the separation of the guardians of the constitution from the supposed authority of those who presume to act under it. Courts should not, of course, be the bread and butter of our constitutional diet, but there is no doubt that they should be the icing on the cake: The case being made … is that a new constitutional settlement should be comprised of both a Preamble stating our beliefs about ourselves in very general terms, primary constitutional rights (albeit a more extensive list than normally envisaged, embracing, for example, equality, natural justice, participation, etc) and a layer of ‘directive principles’ to borrow the Indian phrase. The social and economic rights should probably be straddled between the primary rights and the directive principles. Over a period of time these 70 Nonet and Selznick, Law and Society in Transition: Towards Responsive Law; and Lewis, ‘Participation, citizenship and the constitution’, p 117. 28


latter could be expected to play a crucial role, elaborating upon the primary rights under changing conditions and in the context of the needs of the times, the pace of social movements and expectations and so on. Furthermore, if we abandon our beliefs that courts or other legal institutions are only suitable for defining simple rights/duties/entitlements then we can see how our constitutional expectations could unfold gently and, hopefully, consensually.71

For a while now, such talk has been unfashionable. Minimal government and minimal State have been elided as a necessary response to global technology. The worm, however, is beginning to turn.

CONCLUSIONS There is a good deal of both theoretical and empirical work to be done to put flesh on these conceptual bones. In particular individual branches of the law need to be re-examined to see how far they can be redesigned to give force to the rights of citizens to a greater degree of participation in all forms of social organisation.72 Apart from an irreducible private sphere (which itself needs to be guaranteed by an assertion of social and economic rights), participation needs to be reasserted across the whole of the social organisation. Discrete work needs to be done, not only in the field of public law, politics and public administration, but in the field of social welfare (which has perhaps been underplayed in this chapter),73 education and health, company and competition law, the law of voluntary organisations, labour, the cooperative movements, charity and community law, labour, the environment and more besides. An assessment will also need to be made of the operation of the constitutions of the former Iron Curtain countries, perhaps through a contribution from the Council of Europe or the Venice Commission on Human Rights. Each of these areas needs to be examined to look for methods of improving participation by individuals and groups and for offering insights into just how specific constitutional principles can afford to be in this area. It is hoped that the contributions to this book will explore the implications of these issues in most of the areas in which it is most pressing that those implications assessed.

71 Lewis, ‘Participation, citizenship and the constitution’, pp 117–18. 72 The discourse would be greatly enhanced by lawyers specialising in individual disciplines taking the new constitutional claims on board. 73 Though see, now, Bynoe, Rights to Fair Treatment: A Practical Study to Develop New Rights for People Seeking Health or Social Care, who argues for fair treatment in the process by which individuals seek fair treatment. This, significantly, argues for customer views being taken into account in deciding about access or planning provision to meet their needs. The objective is ‘to promote individual autonomy and choice’. 29


It does not seem logically possible to deny arguments in favour of autonomy and, therefore, of participation. They lie at the core of human personality and, as such, lay special claim to constitutional status. That making the world a better place is difficult is not an argument for denying that the attempt to do so should be made. Accepting the limits of the possible, the legal order is nevertheless capable, through flexible analysis, effective remedies, and reformed procedures, of making a crucial contribution. At present, in the absence of an appropriate institutional impetus, we do not even understand the limits of the possible.

30

CHAPTER 2

PARTICIPATION IN CIVIL SOCIETY

Kevin Dowd

PROFESSOR DOUGLAS LEWIS ON PARTICIPATION In the previous chapter, Douglas Lewis has grappled bravely with many of the key constitutional, social and political questions of our time, and manages to bring them together in a uniquely thought provoking and provocative way. I find myself agreeing with him on a number of points, the most important of which is that we both start with the absolute primacy and inalienability of individual human rights, and following from this premise, on the corresponding need to ensure that all economic, social and political institutions are, at the very least, compatible with those rights. We also agree on the superiority of decentralised over centralised institutional arrangements, and we both share serious concerns about the tendency over the last two decades to centralise power in this country in a secretive and often unaccountable central government. Movements to break Whitehall’s grip and devolve powers back towards the people are therefore to be welcomed. So, too, is recent talk of community politics, stakeholding, and so forth – provided it does actually lead to worthwhile reforms and is not just more hot air or, worse, would lead to yet further violations of the individual human rights. Nonetheless, whilst we agree on the primacy of human rights, we disagree on what those rights actually are. Because of this, we also disagree on what they imply and, most particularly, on what they imply for the relationship between the individual and the State. However, before proceeding further, I should emphasise that my disagreements are not so much with Douglas in particular, as with the general philosophy of which he is such a prominent exponent. I should also add that I have no illusions about which philosophy would currently win out in a popularity contest. Douglas articulates, and develops, much of the leading edge thinking on constitutional issues, and most constitutional (and many other) scholars would largely agree with him. By contrast, I support a radically different philosophy and, therefore, when engaging in a discussion of constitutional issues, find myself cast somewhat in the role of the ghost at the banquet. To make matters worse, this particular ghost has no expertise in those issues, and the expertise he does have, such as it is, is in the black arts of the dismal science.

31


The root of the difference between Douglas and myself is the old issue of positive rights. Whilst we both believe in the classic negative rights (that is the rights to life, liberty and property), he believes in a variety of additional, positive, rights (for example, the right to be provided with adequate housing), and I do not. My main objection to such ‘rights’ is that they imply that someone else must be liable for the means to satisfy them, so my right to a house implies that someone else must provide the house for me. Unfortunately, the obligation of that other person to provide me with a house does not square with their freedom to life and property (that is, their freedom not to provide a house for me). My positive freedoms would undermine other people’s negative ones. The idea that we can have both positive and negative rights is therefore an illusion. We must choose one or the other, and I choose the latter. There are also other problems with positive rights. Most obviously, how are such rights determined and how are they different from the merely desirable? Also, how do we ensure that these rights – whatever they are – are satisfiable, and what mechanisms ensure that individuals’ positive rights are actually satisfied? This difference over positive rights leads, in turn, to differences over the role and, indeed, legitimacy of the State. Given his belief in positive rights, Douglas quite naturally sees a role for the State in ensuring that people’s positive rights are satisfied. This implies a certain view of the constitution as an enabling institution, or set of institutions. In that view, the task of the constitutional scholar is to clarify these rights and spell out the mechanisms on which their satisfaction depends – to put flesh on the constitutional bones, as it were. However, I have no sympathy with this view of the constitution because it violates true (that is, negative) rights, and I believe that no constitution that violates these rights is worth having. Be this as it may, I also believe that the constitutional project that Douglas and other scholars are working on will inevitably collapse under the weight of its own internal contradictions. It is doomed to fail because there is no way of identifying rights or, more precisely, separating out rights, on the one hand, from desires, demands, or whatever, on the other. What will happen – what is happening – is that over time more and more demands become elevated into ‘rights’ and the constitution – the supposed guarantor of our rights – becomes increasingly unable to cope. Conflicts between different ‘rights’ grow and are never resolved; mechanisms to enforce ‘rights’ become more complex and contradictory and lose whatever effectiveness they might once have had; and the danger is that we effectively lose the rights we had in the first place. True – and very limited – notions of rights are replaced with an ever-growing wish list of trendy pseudo-rights, and the constitutional ship – which was never particularly seaworthy at the best of times – slowly sinks under the deadweight of its cargo. ‘Rights’ multiply like medieval religious relics and, in the process, lose all value and meaning. A constitutional Martin Luther will

32

Participation in Civil Society

then appear and sweep these useless rights away, and the danger is that he will sweep away the good ones as well.

CIVIL SOCIETY: AN INDIVIDUALIST VIEW The only alternative is to abandon positive rights entirely and work on the basis of negative rights alone. So what are our negative rights? The answer is the classic libertarian one: that each individual or group of individuals is free to do as he or they wish, regardless of race, gender, religion or any other distinguishing characteristics, subject only to the constraint of not violating the equal rights of other individuals or groups of individuals.1 This right to be free is also inalienable and can, I believe, be grounded in a theory of natural rights.2 This position has some far-reaching implications. If no individual or group has any justification for violating the equal rights of others, then the State too has no such right. In the words of Murray Rothbard: ... the libertarian refuses to give the State the moral sanction to commit acts that almost everyone agrees would be immoral, illegal, and criminal if committed by any person or group in society. The libertarian … insists on applying the general moral law to everyone, and makes no special exemptions for any person or group.3

No group – the State included – therefore has any legitimacy, other than that rooted firmly in, and consistent with, the rights of individuals. Consequently, the libertarian has no time for theories of state sovereignty or state legitimacy based on gobbledegook like the divine rights of kings, nonsense about fictional social contracts, or the equally indefensible modern day belief that State legitimacy derives from some mysterious ‘mandate’ from the people (for example, via popular votes), as if the ‘people’ (or, more properly, some subset of them) are free to give away the rights of others: no group, however big, has any right to infringe the rights of others, or delegate others to do so on their behalf. The fact that some bandits 1,500 years ago murdered their way to political power gives neither them nor their successors nor their successor institutions – kings or parliaments – a right to rule the rest of us, and never did. There is no divine right of kings, there never was any social contract, and the fact that modern parliaments are democratically elected is irrelevant. Again, to quote Rothbard:

1 2 3

Boaz, Libertarianism: A Primer; Friedman, The Machinery of Freedom: A Guide to a Radical Capitalism; and Rothbard, For a New Liberty: The Libertarian Manifesto. Eg, Miller and Steinbauer, ‘A new defence of natural rights’. Rothbard, For a New Liberty: The Libertarian Manifesto, p 24. 33


The State habitually commits mass murder, which it calls ‘war’, or sometimes ‘suppression of subversion’; the State engages in enslavement into its military forces, which it calls ‘conscription’; and it lives and has its being in the practice of forcible theft, which it calls ‘taxation’. The libertarian insists that whether or not such practices are supported by the majority of the population is not germane to their nature: that, regardless of popular sanction, War is Mass Murder, Conscription is Slavery, and Taxation is Robbery.4 The libertarian, in short, is almost completely the child in the fable, pointing out insistently that the emperor has no clothes.5

Economic defence of anarchy This individualist position can be justified in a variety of ways,6 which are by no means necessarily the ways most often associated with that position.7 One of the more compelling justifications is in terms of economic theory. In economic analysis, the key criterion that determines whether any policy or institution is justified is that of ‘Pareto optimality’, or ‘efficiency’. A policy (or institution) is efficient (and so justified) if it is not possible to make anyone better off without making someone else worse off. Policies and institutions are therefore justified in economic terms if they lead to efficiency, and not justified otherwise. If I wish to establish that a particular institution is justified, I therefore need to show that an economic outcome without that particular 4

5 6

7

Some statists have attempted to defend taxation on the grounds that it is somehow ‘voluntary’. Rothbard’s response is typically to the point: ‘Anyone who truly believes in the “voluntary” nature of taxation is invited to refuse to pay taxes and to see what then happens.’ (Rothbard, For a New Liberty: The Libertarian Manifesto, p 26.) The fact that some politicians pass a law compelling me to pay taxes does not make my payment of taxes a voluntary act on my part, and the fact that a group of other individuals might have voted them in to pass such a law still does not make it voluntary. To say that taxation is ‘voluntary’ is an abuse of the language. Rothbard, For a New Liberty: The Libertarian Manifesto, pp 24–25. Ethically, the libertarian position can be defended on the grounds that people can only behave ethically if they are free to choose: the freedom of the individual is, therefore, indispensable to any morally good society (Johnson, ‘Freedom: the moral foundation’). Machan summarises the argument very elegantly: ‘A central feature of an objective moral value judgment and conduct is that a person must be able to choose … Bona fide moral theorists have all understood that one cannot force others to behave morally – moral conduct must be the agent’s own choosing ... So a central feature of morally relevant conduct is that it is chosen and if imposed or regimented, its moral significance vanishes … If one behaved as a good citizen or a charitable person simply because one is dreadfully scared of the State placing one in jail, one would not be a good citizen or person, but barely more than a circus animal. So it is wrong to confuse conduct one should have engaged in of one’s own free will with regimented behavior imposed by some planning authority, politburo or regulatory agency. There is, in short, no such thing as coerced moral conduct.’ (Machan, ‘Two kinds of individualism: a critique of ethical subjectivism’, p 3.) The strength of the anarchist position is also apparent from the devastating critiques made by anarchists of Nozick’s attempts to justify the State in his Anarchy, State, and Utopia. Eg, Barnett, ‘Whither anarchy? Has Robert Nozick justified the State?’; Childs, ‘The invisible hand strikes back’; and Rothbard, ‘Robert Nozick and the immaculate conception of the State’. 34


institution is Pareto dominated by an outcome with that particular institution. This usually comes down to an issue of whether or not one can demonstrate ‘market failure,’ with the justification for any given policy or institution that it corrects for (that is, represents a Pareto improvement over) some ‘failure’ (for example, such as the generation of inefficient externalities) that would otherwise occur in the absence of the institution being considered.8 However, whilst economists are generally agreed that this is the correct way to think about whether State institutions are justified, nonetheless most economists also regard the justification of the State as obvious (that is, they have actually given very little thought to the issue). Yet this position, like many other ‘obvious’ ones (for example, such as the flatness of the earth), fails to withstand close scrutiny. The weakness of conventional economic thinking on this issue is best highlighted by examining those instances where the case for State involvement is usually considered to be strongest – in the provision of public goods, law and order, and money and banking.9

Public goods The provision of public goods10 was long regarded as a classic area where market failure justified government intervention.11 The argument was that the non-rivalrous nature of public good consumption and/or the inability to exclude others from consuming public goods made it impossible for private producers to make a sufficient return from producing those goods to induce those producers to provide such goods (to the optimal level). However, this 8

If one is to demonstrate Pareto superiority (or the lack of it), it is very important to avoid loose thinking over the meanings of the terms ‘market failure’ or ‘externality’. A ‘market failure’ must imply some form of inefficiency (that is Pareto inferiority) and (although many writers seem to forget this) is not to be confused with an outcome (eg, large scale inequality of wealth) that a particular writer might not like. The fact that I do not like a particular outcome does not make it a market failure in the proper sense of the term. Similarly, if we are trying to justify particular institutions or policies, the only relevant ‘externalities’ are Pareto relevant ones, and these are much more specific than mere external effects (eg, the owner of a petrol station who is economically harmed by the opening up of a competitor across the street faces an external effect, but, not a Pareto relevant externality). Again, loose discussion will undermine whatever validity the exercise might have had. 9 Note, too, that the argument put forward in the text understates the case for anarchy because it does not consider the direct operating costs of the State itself, nor the deadweight, disincentive and other costs associated with raising revenue for the State via taxation, and both these costs are very large. When one takes these costs into account, the economic case for anarchy is therefore even stronger than the text suggests. 10 A public good is a good with one or more of two characteristics: non-excludability, referring to the impossibility of preventing non-paying individuals from enjoying whatever services the good provides; and non-rivalness in consumption, meaning that consumption by one person does not diminish the consumption available to others. See Cowen, ‘Public goods and externalities: old and new perspectives’. 11 Samuelson, ‘The pure theory of public expenditure’; and Bator, ‘The anatomy of market failure’. 35


argument overlooks the large number of ingenious ways in which the private sector is able to overcome these obstacles and provide public goods.12 The argument that the private sector would not produce public goods is also refuted by abundant empirical evidence that the private sector has been able to provide them, a famous case being the private provision of lighthouses in the UK before the mid-19th century.13

Law and order The provision of law and order is often cited as another textbook case of the necessity of government involvement. However, when examined more closely, it turns out that the private sector has both the incentive and the means of evolving its own legal codes, and the means to enforce compliance with them.14 Once again, there are also many historical cases of such private systems of law and order, and they appear to have functioned well.15

Money and banking The provision of a sound currency and a safe financial system is another area where the need for State intervention has often been taken for granted. However, recent work on private monetary and financial systems has established that both of these can be provided – and provided well – in a laissez faire environment without any government involvement. 16 These claims are also confirmed by recent research on the relatively unregulated systems of the past, which, by and large, provided both sounder currency and stronger banks than we have had since the widespread adoption of central banking systems in the early 20th century.17

12 Cowen (ed), The Theory of Market Failure: A Critical Examination. 13 This particular example was brilliantly discussed in Coase, ‘The lighthouse in economics’. Some other examples are the interdependence of beekeeping and orchards (Cheung, ‘The fable of the bees: an economic investigation’) and the provision of fire protection and public leisure and recreational services (Poole, Cutting Back City Hall). 14 These claims are amply justified in, eg, Benson, The Enterprise of Law: Justice without the State; Friedman, The Machinery of Freedom: A Guide to a Radical Capitalism; Osterfeld, ‘Anarchism and the public goods issue: law, courts and the police’; Rothbard, For a New Liberty: The Libertarian Manifesto; and Wooldridge, Uncle Sam, Monopoly Man. 15 These cases are further discussed below. 16 Dowd, The State and the Monetary System; Dowd, Competition and Finance: A New Interpretation of Financial and Monetary Economics; and Selgin, The Theory of Free Banking: Money Supply Under Competitive Note Issue. 17 These cases include, among others, the early banking systems of Australia, Canada, Ireland, Scotland, Switzerland, and many of the state banking systems in the antebellum US (Dowd (ed), The Experience of Free Banking). 36


Historical examples The individualist position is also borne out by a number of cases of societies that appeared to function well in the absence of any recognisable State involvement. Some examples are the medieval law merchant,18 which governed mercantile trade for centuries; the legal systems of Anglo-Saxon England;19 saga Iceland;20 medieval Ireland;21 and even those of the frontier areas of the 19th century US, that is, the not so Wild West.22 These and other cases of stateless (or nearly stateless) social order confirm that anarchy is not chaos, and that private agencies will provide for the preservation of social order, and, in so doing, develop and/or use their own systems of legal rules. These cases also indicate that stateless social orders are relatively peaceful, because most parties to disputes have incentives to seek less costly (that is, peaceful) rather than expensive (that is violent) means of resolving disputes. This applies even to the so called ‘Wild West’, which, notwithstanding all the cowboy movies, actually turns out to have been very orderly and peaceful, and far more so than the US today. Another prominent feature of these peaceful spontaneous orders was that they evolved their own, private, institutions to provide for major social needs – most prominently, institutions to provide for the support of those unable to look after themselves (for example, such as the unemployed, the disabled, and the very young and very old), educational institutions, and institutions to look after the sick. These institutions were funded and run on a voluntary, and often charitable, basis, and did not depend on State handouts. They were often also very successful in achieving their ends.23 For example, their effectiveness in the educational field is well illustrated by the fact that widespread literacy was first achieved in both America and Britain by privately funded education systems, well before State education systems were set up.24 Society is, thus, quite capable of developing institutions to handle all major social needs, without any ‘assistance’ from the State, and the idea that only the government is capable of providing social assistance, education and other services is another 20th century myth. 18 Benson, ‘The spontaneous evolution of commercial law’; Benson, The Enterprise of Law: Justice without the State; and Trakman, The Law Merchant: The Evolution of Commercial Law. 19 Benson, ‘The spontaneous evolution of commercial law’; Benson, The Enterprise of Law: Justice without the State, pp 21–30. 20 Miller, Blood Taking and Peacemaking: Feud Laws and Society in Saga Iceland. 21 Peden, ‘Property rights under Irish celtic law’. 22 Hollon, Frontier Justice: Another Look; and Anderson and Hill, ‘An American experiment in anarcho-capitalism: the not so wild, Wild West’. 23 Watner, ‘The most generous nation on earth: voluntaryism and American philanthropy’. 24 Watner, ‘An octopus would sooner release its prey: voluntaryism versus educational statism’. 37


THE UNDERMINING OF CIVIL SOCIETY BY STATE INSTITUTIONS Unfortunately, the growth of the State also leads to the undermining and, indeed, destruction, of many of the institutions on which civil society depends. These institutions deteriorate as the State establishes rival institutions of its own, and these new institutions undermine the mechanisms on which the older ones depend. A classic example is the undermining of charitable institutions by state supported welfare systems.25 Without State support, altruistic individuals have a strong incentive to support charities they consider worthwhile – charities to support the unemployed, unwed mothers, and so on. The delivery of this charitable support also tends to be efficient because the donors have strong incentives to vet those who ask for support and discourage bogus requests for assistance, and also to ensure that those who receive charity are weaned off it as soon as possible. However, at some point the State intervenes to establish some social assistance system – welfare, social security, unemployment insurance, or whatever. Those who were formerly recipients of charity are then told that they can now receive State support as a matter of right, and therefore have much less need of charity than they used to have. At the same time, donors no longer have the same incentive to provide. After all, they are now providing anyway through the tax system, and the earlier moral imperative – the concern that if they do not give, other people would go wanting – no longer applies. They therefore cut back on their giving, and charity gives way to taxpayer-funded support programmes. Similar stories can also be told of the displacement of private institutions that cater to education,26 health27 and other social needs,28 and of their replacement by newer public sector rivals. This displacement of private institutions has other insidious (and all too apparent) effects. The creation of State entitlements leads the recipient to think that he somehow has a right to live off other people, as if they owe him a living and he has no responsibility to look after himself.29 For his part, the taxpayer is now forced to contribute whether he wants to or not, and regardless of his views on the uses to which his funds are put (so, for example, those who oppose abortion are forced to subsidise abortions, and the like). 25 26 27 28 29

Tanner, The End of Welfare: Fighting Poverty in the Civil Society, pp 131–49. Goldberg, Why Schools Fail. Ibid, Tanner, pp 169–72. Ibid, Tanner, pp 95–125. The creation of these entitlements is also morally bankrupt: ‘under the pretense of morality, politicians and advocacy groups have made the “right to welfare” the accepted dogma of a new State religion, in which politicians are the high priests and self-proclaimed ‘benefactors’ of humanity ... Politicians put on their moral garb, but there is really nothing there. Government benevolence, in reality, is a naked taking.’ Dorn, ‘The rise of government and the decline of morality’, p 9. 38


The earlier monitoring of charitable activities by donors has now gone, and the government bureaucrats who administer the new programmes do not have the same incentives as their private sector predecessors to return their ‘clients’ to productive life. Indeed, their incentives are often to keep recipients on their books, and so perpetuate the social problems they are supposed to ameliorate. In effect, government now pays people to be behave anti-socially – to be indigent, and so forth – and the supply of anti-social behaviour naturally rises to meet the demand for it. It is not surprising, then, that huge amounts are spent on these programmes and yet the programmes themselves seem to have little success in reducing the problems they are ostensibly meant to alleviate. The proponents of these programmes are then left wondering why the underclass grows despite the vast amounts of money spent on programmes to assist these people. The reality is simply that the underclass grows precisely because so much money is thrown at it.30

IMPLICATIONS FOR PARTICIPATION Participation and the political process So what does this individualist position imply about participation issues? One obvious implication is that participation in the activities of any institutions – social, political, or whatever – should be voluntary. If each individual is free, then he is free not to participate, and the decision whether or not to participate is for him alone. Forced participation violates that freedom, and is therefore indefensible. In concrete terms, this means that there should be no forced voting, no compulsory union membership, no conscription, no compulsory savings plans, no legal tender laws, no laws against smoking pot and so on. Logically, although many writers, even libertarian ones, are reluctant to acknowledge the point, it also means no compulsory payments to the government (that is, no taxation), an implication which, if implemented, would deprive the State of the financial resources it needs to survive. Taken to its logical conclusions, the principle of voluntary participation is, thus, extremely destructive (and, I believe, rightly so) of existing State institutions. Granted that individuals have the right not to participate in the activities of State institutions, the next question is whether or not they should participate in them. Obviously, this is an issue for each person to decide as they see it. Does one participate in dealings with State institutions, even though one might regard them as illegitimate, in the hope of making the best of a bad situation? Alternatively, does one refuse point blank to participate, so as to emphasise one’s freedom and deny State institutions any excuse of 30 Murray, Losing Ground: American Social Policy 1950–80; and Tanner, The End of Welfare: Fighting Poverty in the Civil Society. 39


legitimacy? This is a difficult and highly controversial issue, and different libertarians have given different answers to it.31 Some, therefore, participate in State institutions (albeit reluctantly, and perhaps under duress) whilst others do not. The argument for participation is the pragmatic (and not in itself unreasonable) one of making the best of it (for example, by voting for the least anti-libertarian of two political candidates). Most of us also participate under duress by paying our taxes (although some heroic anarchists, such as Thoreau, have steadfastly refused to pay taxes and been persecuted for it). However, participation also has its dangers. One danger is that participation strengthens the State institutions to which one is opposed, but there is also the associated danger that participation can corrupt the person who participates: The main tragedy of political government is that few people realise it is an immoral and impractical institution … They have been conditioned to accept government as a natural part of their environment. After being raised in a culture in which ‘politics’ is the norm, and after attending years of public school and being taught that political government is a necessary component of society, most people place government in the same category as the weather – something they complain about but can’t change ... Most people are capable of high values and responsible behaviour, but once they enter the seductive garden of politics, they no longer notice that its wonders cannot be reconciled with individual responsibility and their own personal moral values of honesty and hard work ... The main tragedy of political government is not only that the voters are the ones pointing the gun, but, most importantly, that the indecency of this act is veiled from them by the political process ... The secret ballot and the use of majority vote obscure the fact that it is the struggling family next door or the bachelor down the street who are being threatened at gunpoint if they do not fill the government’s coffers or follow its mandatest ... but the structure of politics permits this to be done anonymously, and allows the supporters and perpetrators to conceal – even from themselves – the evil nature of what they are doing.32

If one accepts this point of view, it follows that fostering participation in the political process is misguided because it gives that process a legitimacy it does not deserve: Participation is an instrument of conquest because it encourages people to give their consent to being governed ... Deeply embedded in people’s sense of fair play is the principle that those who play the game must accept the outcome. 31 The issue of whether or not to vote has long been a major bone of contention in libertarian anarchist circles. There was a particularly fierce debate on the issue in the pages of Benjamin Tucker’s periodical Liberty in the 1890s. Interestingly, the dominant view – including that of Tucker himself and prominent contemporaries such as Lysander Spooner – was against voting: ‘Individualist anarchism [in this period] was overwhelmingly anti-political … If libertarianism of the late 19th century stood for any one principle it was opposition to the political solution to social problems.’ McElroy, ‘The culture of individualist anarchism in late 19th century America’, p 301. 32 Watner, ‘The tragedy of political government’, p 5. 40


Those who participate in politics are similarly committed, even if they are consistently on the losing side. Why do politicians plead with everyone to get out and vote? Because voting is the simplest and easiest form of participation by masses of people. Even though it is minimal participation, it is sufficient to commit all voters to being governed, regardless of who wins.33

Participation a means to an end A second implication of libertarianism for participation is that there is no particular merit or demerit to participation as such, taken in the abstract. We should not reify participation or think of it as good (or bad) in itself, independently of the circumstances and interests involved. Participation is not some kind of public good that should be promoted for the sake of it. Participation (or non-participation, as the case may be) is merely a means to one or more ends, and the only valid ends are those of the individuals concerned. Participation is therefore good in so far as it furthers individuals’ (legitimate) interests, and bad in so far as it detracts from them. And, again, the judgment of whether participation in any particular instance furthers or detracts from their interests is to be made by them alone. It is not for me (or anyone else) to tell others to vote, go to church, buy in certain shops, or do anything else in particular. Nor should taxpayer funds be used to subsidise participation decisions one way or the other, especially as regards voting: if other people feel that participation in any activity is good, they should put their message across at their own expense, and not at the forced expense of others.

Re-inventing civil society A third implication relates back to the earlier discussion of the relative merits of private and State institutions. I believe that there is a strong case that private institutions are better suited to meeting social needs than the public institutions that have largely displaced them. If any politicians genuinely wish to do something useful, the best thing they can do is get out of the way and undo past measures that have undermined the social institutions on which we previously relied. The policy implications are then very obvious – abolish the Welfare State, and privatise education, social security, pensions, and so on. Naturally, these implications will be anathema to socialists and their fellow travellers, but they are actually not much different from a return to the traditions of mutualism and self-reliance that were so commonplace a century or so ago. Moreover, these traditions were actually a major part of the ideological milieu from which the Labour Party originally sprang, and for 33 Lowi, Incomplete Conquest: Governing America, pp 25–26. 41


which the early Labour Party stood. Unfortunately, these traditions were then gradually pushed into the background as socialist influences grew and beliefs in individual responsibility were correspondingly eroded. However, now that the Labour Party has thrown socialism onto the scrapheap, the time is surely right for Labour to rediscover its own roots and start putting right the damage governments of all parties have done over the last century or so.

The erosion of the State Finally, we should not forget that the world is changing very rapidly, and one of the key trends is the erosion of the power of the individual State. One factor behind this erosion is the increasing integration of the world economy, a process which also undermines the ability of each State to control economic activities within its own borders. Governments have less and less influence over capital flows and interest rates, for example, and attempts to impose direct controls over capital flows (for example, such as foreign exchange controls) are increasingly futile and, indeed, counter-productive. Another major factor behind the erosion of State power is the astonishing progress in IT, which not only undermines State attempts to control information, but also makes business more mobile and, therefore, increasingly able to move away from hostile jurisdictions. A third factor, related to the other two, is the increasing globalisation of international business. Ian Angell summed this up nicely: Individuals and companies are setting up large transnational networks that pay absolutely no heed to national boundaries and barriers. The commercial enterprise of the future will be truly global, it will relocate (physically or electronically) to where the profit is greatest and the regulation least. The umbilical cords have been cut; the global company no longer feels the need to support the national aspirations of the country of its birth. Recently, this new business paradigm was expressed most forcibly by Akio Morita, causing uproar in Japan, when he announced that Sony was a global company and not Japanese!34

States that are particularly abusive of individuals or corporations working within their jurisdictions are therefore finding that they lose them. Thus, for instance, a State with particularly onerous taxation will find that business flees and it will gradually lose its ability to collect tax revenue. Similarly, States with more enlightened policies find that they can attract mobile business from abroad, and can thereby increase tax revenues even as they cut tax rates back. States are, therefore, forced more and more to compete with each other, with the shots being called by the ability of individuals and corporations to move their business elsewhere. Increasingly, and potentially much more so in the

34 Angell, ‘The information revolution and the death of the Nation State’, p 2. 42


future, it will matter less and less what State individuals ‘belong’ to, but what networks, economic alliances, local communities and other voluntary associations they choose to deal with. In sum, individual choice is growing just as state power is declining. At the same time, the State is also facing an escalating legitimation crisis: Everywhere the Nation State is in retreat. All the while citizens are losing their faith in the Nation State ... For the State is failing to deliver its side of the Faustian pact, where the individual submits to the legitimate violence of the State in return for protection and security. Globalisation has shown the James Bond myth, that the State is good and global corporations (Spectre) are bad, to be blatant propaganda on behalf of the Nation State. James Bond, the patron saint of the Nation State, is now just another dirty old man.35

The withering away of the State might, just, be one prediction that Karl Marx got right.

35 Angell, ‘The information revolution and the death of the Nation State’, p 3. 43

CHAPTER 3

THE ‘HYBRID CONTRACT’ AND THE MERGING OF THE PUBLIC AND PRIVATE LAW OF THE ALLOCATION OF ECONOMIC GOODS David Campbell1

‘HYBRIDITY’ AND THE MERGER OF THE PRIVATE AND THE PUBLIC The concept of ‘hybridity’ currently is being given sustained attention in any other than an obdurately traditional discussion of the law of contract. The private law of contract is recognised to, indeed, not be private, in the sense that the individualism of the ‘will’ theory now is accepted to be an explanatorily and ethically inadequate juristic foundation for contracting, and as such always open to criticism and modification from the communalist perspective of ‘welfarist’ or ‘relational’ theories.2 On the other hand, with the extensive reorganisation of formerly bureaucratically organised State functions along ‘contractual’ lines, public contracting has been elevated from the specialist, apparently marginal, topic of public procurement3 to the key feature of what now is properly described as ‘the contracting State’.4 The result, it appears, has been the emergence in both the private and public sectors of contracts which are hybrid in that they contain a mixture, in differing proportions, of formerly distinct private and public organisational characteristics.5 Such is the significance of the public aspects of what formerly was regarded as private and the private aspects of what formerly was regarded as public that the principal task facing the law of contract appears to be to account for the ‘disappearance’ of the division between private and public or, to put it the other way, the ‘merging’ of the private and public spheres.6

1 2 3 4 5 6

I should like to thank Peter Vincent-Jones for his comments on this chapter. My work on this chapter was supported by ESRC grant R000236416. Collins, The Law of Contract, ch 2. Turpin, Government Procurement and Contracts. A very early and remarkably prescient analysis of the shift in the nature of public contracting I wish to describe is given in Daintith, ‘Regulation by contract: the new prerogative’. Harden, The Contracting State. Williamson, The Mechanisms of Governance, ch 4. Oliver, ‘The underlying values of private and public law’; and Oliver, ‘Common values in public and private law and the public/private divide’. On the same process viewed, as it were, from the opposite side, cf, Dalton, ‘An essay in the deconstruction of contract doctrine’, pp 1010–11. 45


In this chapter, I want to stress that, in identifying the ‘hybrid,’ advanced scholarship in the law of contract is, indeed, pointing to a significant development in economic policy. It is my opinion that the merger of the private and public along contractual lines is a most positive response to the failures of such policy in the past. But, I do wish to stress that the new institutions of contract have been produced as a response to the history of such failures, and cannot be understood apart from that history. Most accounts of hybridity deny this. Often of a ‘post-modern’ character that revels in a claimed break with the past, these accounts depict the hybrid not merely as novel, which of course in a sense it is, but as sui generis. Attempts to explain the emergence of the hybrid conceived in terms of this spurious radical novelty are bound to be mistaken, and have led to some very poor economic policy suggestions indeed. In order to stress the point that the significance of the new institutions of contract lies in their relationship to previous forms of economic policy, I will argue that the hybrid as such be dropped from discussion of those institutions.

THE HYBRID FORM OF CONTRACT Two things seem to be being said about the forms of contract in which the merger of private and public is given institutional shape. The first is that they are novel. If one takes economic organisation in the private sphere to be by market exchange and economic organisation in the public sphere to be by hierarchy, the new forms of contract are ‘neither market nor hierarchy’ and as such a new form of organisation. The new form of organisation has been described in a number of ways, such as a ‘clan’7 or a ‘network’, but its core feature is its novelty: … the familiar market-hierarchy continuum does not do justice to the notion of network forms of organisation … In network modes of resource allocation, transactions occur neither through discrete exchanges nor by administrative fiat.8

The second point that is made about this form of contract, however, sits rather uneasily with this first. It is that this form itself appears directly to embody the merger of private and public because it continues to display both of what formerly were regarded as private and public characteristics. The new form is ‘hybrid’ in that it stands between9 and is composed of a mixture of both of the old organisational forms:

7 8 9

Ouchi, ‘Markets, bureaucracies and clans’. Powell, ‘Neither market nor hierarchy: network forms of organisation’, p 306. Thorelli, ‘Networks: between markets and hierarchies’. 46

The ‘Hybrid Contract’

Markets and hierarchies are polar modes … The hybrid mode displays intermediate values … the hybrid mode is located between market and hierarchy with respect to incentives, adaptability and bureaucratic costs. As compared with the market, the hybrid sacrifices incentives in favour of superior co-ordination among the parts. As compared with the hierarchy, the hybrid sacrifices co-operativeness in favour of greater incentive intensity.10

THE CONTRADICTORY STRUCTURE OF THE CONCEPT OF THE HYBRID This description of the new form of contract as a hybrid is poor. The concept of the hybrid is both contradictory and, as I will argue relatedly, turns on a mistaken belief in its own novelty. It is contradictory in that it attempts to establish the novelty of the new forms of contract, but can do so through the concept of hybridity only by retaining intact the old forms of market and hierarchy. The point has been made by Bradach and Eccles: A thread weaving its way through the discussions of these complex organisational forms is that they fall between markets and hierarchies defined as ideal types. However, the presumption that a continuum runs from market to hierarchy – with relationships between technologically separable units arraying themselves along it – is misleading, as are the three-fold typologies which simply add a category to the market and hierarchy dichotomy. These approaches rest on the premise that market and hierarchy are mutually exclusive means to govern transactions. There are … major problems with this premise … elements of the ideal types (or the poles of the continuum) are often found mixed together empirically: for instance, features of markets and hierarchies are often combined.11

The hybrid is a combination of market and hierarchy. It emerges as a third organisational form only if it can be distinguished from the other two, which therefore must be maintained as such in order that the hybrid can be distinguished from them. But, of course, by existing, the hybrid expresses an effective critique of the original conceptions of both the private market and the public hierarchy. It combines both forms, but in combining them, must change them, for they were originally understood in opposition to each other. To recognise this would, however, be to place the history of the opposition of the private and the public at the heart of the supposedly novel hybrid contract, which therefore would disappear as a sui generis form. It is as well to set out the nature of this opposition in detail, for it has changed radically in the last 25 years, with a former emphasis on the superiority of public allocation over private being reversed, and this change is the key to understanding recent developments in contract. 10 Williamson, The Mechanisms of Governance, pp 104, 106. 11 Bradach and Eccles, ‘Price, authority and trust: from ideal types to plural forms’, p 99. 47


WELFARE ECONOMICS AND THE PUBLIC CRITIQUE OF THE PRIVATE The pure concept of the private market embodies, at its heart, as the constitution of its private character, its distinction from public regulation through hierarchical intervention. The first or basic claim of welfare economics12 is that a market which conforms to the assumptions established by neo-classical micro-economics for general competitive equilibrium13 is a perfectly efficient mechanism for the allocation of goods.14 Under general competition, goods will be exchanged up to the point where the increase in one person’s utilities achieved by further exchange would be more than offset by the diminution in the sum of another person’s. At this point of ‘Pareto optimality’,15 the market is in equilibrium because there are no further mutually beneficial exchange opportunities and, vitally importantly, it has been brought there by the uncoordinated working out of voluntary exchanges which automatically identify the point of Pareto optimality by reaching equilibrium. The beautiful symmetry of the model lies in its being driven by voluntary exchange and working only because it is so driven. Any distinction between the means and ends of the economy is redundant. Legitimate ends are secured only when they are the product of legitimate means.16 This is the source of the power of the rejection of ‘patterned principles’ of distribution17 in favour of the ‘pure procedure’ of the market18 in liberal political philosophy, for any State imposition of a ‘fair’ distribution of goods must prevent the perfectly efficient distribution which would be voluntarily reached at general competitive equilibrium.19 In contract doctrine, this stress on pure procedure is expressed in the refusal to inquire into the substantive adequacy of any contract which meets the formal requirement of sufficiency of consideration.

12 Arrow, ‘Pareto optimality with costly transfers’, p 290. 13 Arrow and Debreu, ‘Existence of an equilibrium for a competitive economy’. 14 Gossen, The Laws of Human Relations, ch 7; Jevons, The Theory of Political Economy, ch 4; Menger, Principles of Economics, ch 5, section 3; and Walras, Elements of Pure Economics, lesson 12. 15 Pareto, Manual of Political Economy, ch 6, section 33. 16 Nutter, ‘Moralism, morality and trade’, p 261. 17 Nozick, Anarchy, State and Utopia, pp 155–60. 18 Rawls, A Theory of Justice, pp 83–90. 19 Hayek, Law, Legislation and Liberty, ch 9. Simon Deakin has recently emphasised an aspect of Hayek’s later work of which I was aware, but the significance of which, it seems, I did not fully appreciate. Deakin, ‘Private law, economic rationality and the state’. Hayek’s appreciation in this work of the role of public law in constituting the market would appear somewhat to undermine the criticism I will make of the position I am attributing to Hayek in this paper. I will state the criticism as a criticism of the position, which indubitably has been important, and leave the question of the accuracy of attributing that position to the later Hayek. 48


In sum, the acceptance of revealed preferences as perfectly legitimate expressions of the wills of the parties to the market (and, therefore, the ability to alienate private property on the terms one chooses) is essential to the fundamental efficiency claim for the market. The market as conceived in neoclassical economics is based as a means of allocation20 on privacy: It would … seem that wherever a Great Society has arisen, it has been made possible by a system of rules of just conduct which included what David Hume called ‘the three fundamental laws of nature, that of stability of possession, of its transference by consent, and of the performance of promises’, or … the essential content of all contemporary systems of private law.21

The welfare claim made for the spontaneous order22 of the invisible hand23 of the market is, as we have known since at least24 Mandeville, 25 that it incomparably efficiently transforms private vices into public benefits. It is crucial for our purposes to recognise that this transformation may work in the way claimed only by eschewing the conscious public pursuit of benefit by alteration of the private vice. (To prevent confusion arising later in this chapter, let me anticipate my later argument by saying that I do not believe this claim is entirely correct.) Though the first theorem of welfare economics entails the policy recommendation that markets should, where possible, be encouraged, those economics have largely been concerned to identify circumstances where there is such a divergence between, as AC Pigou has it in Part 2 of The Economics of Welfare, the private and the social marginal net product of an investment,26 that State intervention might increase the welfare function: Certain optimistic followers of the classical economists have suggested that the ‘free play of self-interest’, if only Government refrains from interference, will automatically … yield … more economic welfare than could be attained by any arrangement other than that which comes about ‘naturally’ … if private and social net products everywhere coincide, the free play of self-interest … will tend to bring … the sum of economic welfare to a maximum … when marginal 20 I am trying to describe a claim for the necessity of private property internal to the functioning of the market as a form of allocation, as distinct from other, broadly Lockean, arguments for the, as it were, substantial necessity of such property for freedom. Locke, Two Treatises of Government, Vol II, ch 5. The argument of this chapter does, however, have implications for this argument of Locke’s which I will not pursue. This argument about allocation is addressed to the voluntariness of private exchange and not directly to the claim that rational economic calculation requires private property. See von Mises, Socialism, chs 5–6; and Weber, Economy and Society, ch 11. These claims cannot, however, ultimately be distinguished. 21 Hayek, Law, Legislation and Liberty, p 65 (original emphasis omitted). Cf, Hume, A Treatise of Human Nature, p 526. 22 Ibid, Hayek, Vol 1. 23 Smith, The Wealth of Nations, p 456. 24 Keynes, The General Theory of Employment, Interest and Money, pp 359–62. 25 Mandeville, The Fable of the Bees. 26 Pigou, The Economics of Welfare, Pt 2, ch 2, section 5. 49


private net products and marginal social net products coincide, any obstacles that obstruct the free play of self-interest will, in general, damage the national dividend. In real life, of course, marginal private and marginal social net products frequently do not coincide … When there is a divergence between these two sets of marginal net product, self-interest will not … tend to make the national dividend a maximum; and, consequently, certain specific acts of interference with normal economic processes may be expected, not to diminish, but to increase the dividend.27

Welfare economics has tended to identify State governance as ‘intervention’ or ‘interference’ in the economy in circumstances of ‘market failure,’ that failure occurring when an assessment of the welfare function reached by a hierarchy diverges from, and is taken to be superior to, the private one produced by the market. It is not, in the first example Pigou gives in The Economics of Welfare, of a steam train emitting sparks that cause damage to property near the track,28 that the market does not assess that damage. It is that, unless the railway company owes a duty to the nearby landowners not to damage their property, the market assesses that damage as zero, which, from the private perspective under these conditions, it is. However, upon public acknowledgement that the damage has a cost, following, say, the landowners’ successful application to a commission of inquiry, that cost is identified as pertinent to the social welfare function though it is ‘external’ to the private. The natural conclusion is State intervention, such as – my examples29 – the redistributive imposition of a tax on the railway company out of which the nearby landowners can be compensated, or the provision of a ‘public good’ such as State funded research into railway engines which do not emit sparks which the railway company (for sensible reasons given private accounting horizons) is reluctant to undertake. It was this general cast of mind that characterised the broad, postwar consensus on economic policy. With the authority earned by his distinguished academic career and public service as a formulator and implementer of Keynesian economic policy, JE Meade described this consensus as the position of ‘the intelligent radical’: … the intelligent radical … recognises the need for controls and interventions in order to cope with important cases in which the market mechanism will otherwise neglect to take into account important items of social, as opposed to private, costs and benefits. Problems of environmental control … will on these grounds be recognised as raising issues which call for governmental action.30

The concept of ‘contract’ has been radically altered in the light of this recognition of market failures and acceptance of public goods. The main

27 Pigou, The Economics of Welfare, pp 127, 143, 172. 28 Ibid, Pigou, p 134. 29 Though based on Coase’s speculations about the similar problem of smoke nuisance. Coase, ‘The problem of social cost’, pp 151–53. 30 Meade, The Intelligent Radical’s Guide to Economic Policy, pp 15–16. 50


alteration has been a massive growth in statutory intervention in contract and a concomitant shrinkage of the scope of private contract, to the point where it is only at the cost of the most violent abstraction that the advanced capitalist economies can continue to be described as market economies. Topics such as ‘consumer contracts’ and ‘sales of goods’ which, one might fairly have thought, belong at the core of the subject typically are treated as statutory ‘exceptions’ to the general common law.31 Obviously, if these exceptions were brought into the core of the subject, as they should be in order to give an account of it as positive law, contract would be changed completely. However, as even this relegation of such vital issues to the status of exceptions cannot ultimately alter the fact that exchanges actually governed by negotiations between parties unregulated by the State which easily fit within the will theory are a tiny residual category, if, indeed, they exist at all, it is clear that it is ‘contract’ that is the exception now.32 Even more tellingly, the common law itself is now shot through with welfarist reasoning33 which can be reconciled with the will theory only by the most unscrupulous and tortuous perversions of the classical doctrines of contract.34 ‘The death of contract’35 is now generally acknowledged in advanced contract scholarship, though, of course, as we still lack a clear general alternative to the will theory,36 ‘the pathetic contrast between the law of contract as it is taught in most textbooks and modern contract as it functions in society’ continues to obtain almost as much now as it did when Friedmann first identified it in 1959.37 Further development of our understanding of the concept of contract requires the removal of this contrast, but this is a task which must, after 20 years of vigorous neo-liberalism, now be undertaken not in the spirit of further diminution of the private, but in the spirit of its restoration.38 Before we enquire what restoration now can mean, let us look at the resurgence in the fortunes of the private that make any sort of restoration plausible and, indeed, necessary. 31 32 33 34 35 36 37 38

Collins, The Law of Contract, ch 12. I am grateful to John Gava for this striking way of putting this point. Atiyah, The Rise and Fall of Freedom of Contract. Campbell, ‘The undeath of contract: a study in the degeneration of a research programme’. Gilmore, The Death of Contract. Campbell, ‘Socio-legal analysis of the law of contract’. Friedmann, Law in a Changing Society, p 90. The basic argument, if not this actual phrase, was present in Friedmann’s treatment of contract in Law and Social Change in Contemporary Britain, ch 4, published in 1951. Atiyah, An Introduction to the Law of Contract, pp 27–34. In the UK, Atiyah has been to the forefront of stressing the changed circumstances in which the critique of the classical law of contract must now be conducted. His way of doing this, however, seems to be a simple return to the classical values he previously had so effectively criticised. He even seems now to accept many of those values. Atiyah, ‘Freedom of contract and the New Right’. This seems to me to be literally reactionary and, as such, quite contradictory, for nothing has been learned from the success of the earlier criticisms. Campbell, ‘The undeath of contract: a study in the degeneration of a research programme’, pp 41–47. 51


NEO-LIBERALISM AND THE PRIVATE CRITIQUE OF THE PUBLIC I have above used a statement of Meade’s intelligent radical to express the broad attitude to State intervention as a remedy to public perceptions of private market failure. Meade wrote The Intelligent Radical’s Guide in 1975. Of course, since then the intelligent radical has been neo-liberal.39 The poor performance of the centralised command economies of the formerly communist countries40 and the unsustainability of the ‘golden age’ of Keynesian aggregate demand management in the social democratic countries41 has meant that the last quarter of this century has been dominated by ‘conservative capitalism’.42 Central to this capitalism has been a successful attack on the extent of State intervention in the economy and a consequent attempt both to reduce that extent and to refashion the residual public sector. However, one must be careful what one means when one says this. Judging at a time when the energy of the introduction of conservative capitalism now appears to be spent, the extent to which monetarist economic policy has been able significantly to reduce the macro-economic role of the public sector (and hence produce the ‘supply side revolution’), and public choice theory to reconstruct what remain non-economic State activities along market mimicking lines, seems limited. Whatever one’s opinion of these aspects of conservative capitalism, however, the general legitimacy of the State’s direct provision of economic goods has been destroyed and the recognition of a public economic good now is accepted (in intellectual circles at least) as almost a last resort of economic policy. Goods provided in this way are to be provided along market mimicking lines when possible. It is in these two senses, of shrinking direct provision through privatisation 43 and marketisation of residual public good provision, 44 that the State is ‘contracting’. For whatever my opinion is worth, this is highly positive and must be regarded as the lasting contribution of conservative capitalism to the formulation of economic policy. The basic stated economic policy of the 39 I will argue that Coase’s criticism of welfare economic proposals for State intervention have been a part of neo-liberalism of lasting value. The principal target of this criticism has been some of Pigou’s quite erroneous identifications of market failures. But, as editor of Journal of Law and Economics, Coase published two articles which made the same point in relation to an example that Meade, it appears, wholly inaccurately gave of market failure: that of bees pollinating orchards. Coase, ‘The firm, the market and the law’, p 29. 40 Kornai, The Socialist System. 41 Armstrong et al, Capitalism Since 1945. 42 Hoover and Plant, Conservative Capitalism in Britain and the United States. 43 Moore, ‘The success of privatisation’. 44 Osborne and Gaebler, Reinventing Government. 52


communist countries was to reduce the number of capitalist ‘survivals’ in their economies ultimately to the zero which would mark the achievement of ‘full communism’.45 This often was expressed in messianic terms which appear ridiculous now, but which it should never be forgotten inspired an utterly despicable totalitarian belief. Far from respecting revealed preferences,46 economic policy during the dictatorship of the proletariat was ultimately directed towards the construction of a new ‘socialist psychology’.47 There is a pale but clearly discernible imitation of this policy in the pursuit of State ownership as a general good in itself which had a certain place in the ‘improving’ economic policies of the social democratic countries.48 The principal achievement of conservative capitalism has been to establish that the main problem with such a policy is not that it is unrealisable (as its proponents always feared) but that it would be dreadful to realise it,49 and in so doing has restored the fundamental plausibility of liberalism.50 I take it (as I personally always have) that any socialism other than one which sought to ‘preserve and even enlarge the atmosphere of liberalism’51 is now untenable. The intellectual success of neo-liberalism in the area where I wish to stress it is successful has been a withering attack on the Pigouvian case for public goods. In RH Coase’s ‘The problem of social cost’, Pigou’s railway sparks example is shown to be very badly argued indeed. There is a theoretical part to this argument which I regard it as unproductive to discuss other than with specialists. 52 Coase also makes the following historical argument. He plausibly assumes that Pigou can be taken to have had in mind the situation

45 Althusser, ‘Contradiction and overdetermination’, p 114. 46 Eg, Bukharin and Preobrazhensky, The ABC of Communism, p 32. Of course, The critique of the ‘subjectivism’ of neo-classical economics which is allied to this moral or moralistic position – and indeed the moralism itself – is not without merit. Cf, Bukharin, The Economic Theory of the Leisure Class. 47 Trotsky, ‘Results and prospects’, pp 229–31. 48 Cole, The British Co-operative Movement, pp 73–74. Again, there is very considerable merit in the critique of consumerism which lies behind this position. Cf, Galbraith, The Affluent Society, ch 11 49 Berger, The Capitalist Revolution. An extreme aspect of the unpleasantness of social democratic improvement, one which it is in a sense unfair now to mention, but which nevertheless certainly existed, is the room Fabianism had for eugenic social engineering, not only in a number of Shaw’s plays such as Man and Superman, but in concrete social policy proposals. 50 Brittan, A Restatement of Economic Liberalism. 51 Orwell, ‘Inside the whale’, p 48. 52 This theoretical part is the vexed and baneful ‘Coase theorem’, which I have argued is so unproductive that it should be ignored. Campbell, ‘On what is valuable in law and economics’, pp 498–505; and Campbell and Picciotto, ‘Exploring the interaction between law and economics: the limits of formalism’, p 60. I have tried to account for Coase’s somewhat equivocatory public attitude to this theorem, of which I am of the very confident opinion he himself privately disapproved, in Campbell, ‘Ronald Coase’s political views at the time of writing “The nature of the firm”’, unpublished (copy available from the author at Cardiff Law School, University of Wales College of Cardiff, PO Box 427, Cardiff CF10 3XJ). 53


obtaining in Britain after the passage of the Railway (Fires) Act 1905.53 Having claimed that the common law of nuisance would impose a liability on the railway company causing the damage,54 Coase argued that it was only because the State extended protection against the common law to the railway companies that they were able to proceed in the way they did. The 1905 Act allowed claims of up to £100 against the railways, other claims being in effect barred by previous statute. (The general point is that the building of the railways was, in essence, accomplished by expropriation on the basis of compulsory purchase under a succession of Private Acts.)55 Of course, in the light of this, Pigou’s proposed tax solution may well be supererogatory. Rather than Pigou’s example being a case where it was necessary for ‘State action to improve on natural tendencies’, it might well have been a case in which a reversion to common law property rights through what we would now call deregulation was plausible, for: ‘the situation in which sparks form a railway locomotive could start fires which burnt woods on land adjoining the railway without the railway having to pay compensation to the owners of the woods … had come about not because of a lack of governmental action but because of it.’56 If the landowner were able to sue in common law, the railway would have to decide either to obtain a permission to damage nearby property (by buying the freehold or an easement, etc) from the landowner (financed from revenues of operating the trains) or not to build (if those revenues would not cover the cost of the permission), and the market would produce a solution without necessity of State intervention.57 In the light of the subsequent development of law and economics, which has been characterised by the advocacy of ‘market solutions’ in the most ridiculous circumstances, it is as well to stress that Coase did not advocate a property rights solution to the sparks problem in ‘The problem of social cost’.58 (To the extent that that article makes any concrete policy suggestions, it is that the State is best equipped to handle the related problem of smoke

53 Most modern references to Pigou are to the 4th edn, 1932 (subsequently reprinted). However, Pigou’s treatment of the railway example had remained substantially unchanged from the 1st edn, 1920, which itself was largely based on his Wealth and Welfare, 1912. 54 Coase, ‘The problem of social cost’, pp 137, n 43. Coase’s reading of nuisance cases in ‘The problem of social cost’ has been called into serious question by the distinguished legal historian AWB Simpson in ‘Coase v Pigou re-examined’. Coase came rather badly out of an ensuing exchange with Simpson, when his usual balance and wit appear quite to have deserted him. Coase, ‘Law and economics and AW Brian Simpson’; and Simpson, ‘An addendum’. However, this does not affect the basic argument made here. 55 Dobbin, Forging Industrial Policy, pp 167–75. 56 Coase, ‘The firm, the market and the law’, p 23. 57 Coase, ‘The problem of social cost’, pp 133–49. 58 Campbell, ‘On what is valuable in law and economics’, pp 498–503; and Campbell and Picciotto, ‘Exploring the interaction between law and economics: the limits of formalism’, pp 259–60. 54


nuisance.)59 He wishes to merely draw it to our attention that the Pigouvian argument is not made out. A market driven solution may have been inferior to the one produced by the State. But, Pigou is not even aware of the possibility of a market in relationship to the sparks example, and this flatly is a mistake.60 No doubt the main reason why Pigou did not give the market solution any real thought is that he took it that intervention was such a solution, but he gives no argument that this would be the case. He advocates intervention without any inquiry whether it would work. The sparks problem is, in fairness, briefly treated by Pigou. But though not related to the sparks problem, one example he gives of a good regulatory body in all editions of Economics of Welfare (itself taken from Wealth and Welfare) is ‘the Interstate Railway Commission of the United States’.61 Of this example, Coase says: In all editions, the Interstate Commerce Commission is referred to as the Interstate Railway Commission, and this body, created in 1887, is always described as ‘recently developed’, which does not suggest any real interest in the subject.

And further: ‘Pigou never seems to have thought it necessary to enquire whether his optimistic opinion about [this commission] was justified by events’ because he was of a cast of mind that assumed ‘the existence of (almost) perfectly functioning public bodies’.62 It is this aspect of the (lack of) thinking about the proper limits of the public sphere that has led to grandiose and wasteful schemes of State intervention that we now must reject. The point it now is essential to take from Coase is that our earlier perceptions of ‘market failure’ must be complemented by perceptions of ‘government failure’ when making choices between alternative governance structures for the allocation of economic goods. 63 Furthermore, whilst reasonable improvement is, of course, analytically a goal of legitimate economic policy, we must be somewhat circumspect in our ambitions, for the inevitable existence of market and government failure makes it clear that: ‘Until we realise that we are choosing between social arrangements which are all more or less failures, we will not make much headway.’64

59 Coase, ‘The problem of social cost’, pp 115–18. 60 Coase’s even more telling criticism of this is of the use of the lighthouse in a great many economics textbooks, including The Economics of Welfare, pp 183–84, as an axiomatic example of a public good. Coase not only shows that the theoretical argument is weak, but – the Coase touch – that the actual example which the textbook authors must have had in mind, the 19th century British lighthouse system, was largely private until bought out by the State for (in current values) tens of millions of pounds. Coase, ‘The lighthouse in economics’, p 201. 61 Pigou, The Economics of Welfare, p 334. 62 Coase, ‘The problem of social cost’, p 22. 63 Coase, ‘Discussion of RE Caves, Direct Regulation and Market Performance in the American Economy and RC Cramton, The Effectiveness of Economic Regulation: A Legal View’, p 195. 64 Ibid, p 195. 55


THE SPURIOUS NOVELTY OF THE HYBRID It is the commitment to both the market based on private ownership as the natural state of the economy and the role of the State as intervention in instances of market failure that has produced the separation of private contract and public hierarchy which it appears the hybrid calls into question. The two original conceptions are, I hope it is now clear, quite antithetical as allocative structures. The former is based on a belief in complete privacy and the other is based on the public rejection of the former’s results in particular (though now, of course, with the State expending around 40% of the gross domestic product of each of the major industrialised countries, very many indeed) cases. Their purported combination in a hybrid is, as I have said, a contradiction. To be combined, they both must be changed, and indeed this is exactly what has happened. Let me look at this combination again in more detail. It is conceiving of the hybrid as a combination of two old allocative structures that gives it its novelty. The hybrid is a third form which arises, sui generis, from that combination: Two major outcomes of the search for new competitive approaches are already apparent. First, the search is producing a new organisational form – a unique combination of strategy, structure, and management processes that we refer to as the dynamic network … Second, as is always the case, the new organisational form is forcing the development of new concepts and language to explain its features and functions.65

The implication of this conception of novelty is that the hybrid must be explained in terms of its own internal logic, the logic that allows it to be distinguished from the market and hierarchy which it combines. Though this implication is followed through in the range of works on hybrids, it emerges particularly clearly from such works which are committed to systems theory after Luhmann.66 The identification of the claimed novel logic of the hybrid fits particularly well in with the cataloguing of self-referential social systems, each identified by a specific system principle, which seems to be central to works of system theory: It seems that ‘hybrids’ are fundamentally distinguished from market contract and from hierarchical organisation by different co-ordination and control mechanisms. Is it their incentive structure … risk structure … or is it something else that makes them so different that they cannot be adequately explained within the logic of exchange or corporate hierarchy? What makes them institutions that are ‘neither market nor hierarchy?’67

65 Miles and Snow, ‘Network organisations: new concepts for new forms’. 66 Luhmann, Social Systems. 67 Hutter and Teubner, ‘The parasitic role of hybrids’, p 116. 56


The problem this conception of novelty leaves is, of course, one of explaining the genesis of the novel structure. Unless the explanation is very unusual – in the ‘neo-evolutionary’ article from which the previous quotation is taken it is based on far fetched biological analogies to mutation and parasitism – it is expressed in terms of the shortcomings of markets and hierarchies which have produced the hybrid. In the case of the franchise agreement: … the hybrid mode is located between market and hierarchy with respect to incentives, adaptability and bureaucratic costs. As compared with the market, the hybrid sacrifices incentives in favour of superior co-ordination among the parts. As compared with the hierarchy, they hybrid sacrifices co-operativeness in favour of greater incentive intensity. The distribution of branded products from retail outlets by market, hierarchy and hybrid, where franchising is an example of this last, illustrates the argument. Forward integration out of manufacturing into distribution would be implied by hierarchy. That would sacrifice incentive intensity, but would (better) assure that the parts do not operate at cross-purposes with one another. The market solution would be to sell the good or service outright. Incentive intensity is thereby harnessed, but suboptimisation (free riding on promotional efforts, dissipation of the brand name, etc) may result. Franchising awards greater autonomy than hierarchy but places franchisees under added rules and surveillance as compared with markets. Costs control and local adaptations are stronger under franchising than hierarchy, and suboptimisation is reduced under franchising as compared with the market.68

But, of course, if this sort of origin is acknowledged, it means that the hybrid is not a structure sui generis (and, of course, there are no such forms), but rather a structure the history of which is to be found in the development of the strong distinction between market and hierarchy, or, rather, in the decay of that distinction. The hybrid, I want to argue, is in fact is a stage in the development of the relationship of private and public spheres, that stage when the public critique of the private has now been complemented by the private critique of the public, and the merging of the private and the public, in which their mutually constitutive opposition disappears, is posited. As such, far from representing novelty, the hybrid represents the latest stage in the attempt to come to terms with the failure of the enlightenment project69 of the critique of civil society from the perspective of the State70 – that is to say, the failure of what so far has passed as socialism. The hybrid is, I believe, a positive response to that failure which allows us to distinguish ‘regulation’ from ‘intervention’ in future socialism.

68 Williamson, The Mechanisms of Governance, p 107. 69 MacIntyre, After Virtue, ch 6. 70 Hegel, Philosophy of Right, Pt 2, sub-section 3. 57


DISTINGUISHING REGULATION FROM INTERVENTION In the light of the what we have seen of Coase’s discussion of Pigou in ‘The problem of social cost’, the way in which he begins that discussion is unusual. He registers an agreement. Coase is careful to distinguish his criticisms of Pigou’s arguments for intervention, of which we have seen he is profoundly critical, from an argument of Pigou’s with which he agrees. The argument for intervention in Part 2 of Economics of Welfare is prefaced with a four page introduction in which Pigou quotes the distinguished economist Edwin Cannan to the following effect: … the working of self-interest is generally beneficent, not because of some natural coincidence between the self-interest of each and the good of all, but because human institutions are arranged so as to compel self-interest to work in directions in which it will be beneficent.71

This argument, Coase, says, ‘seems to me to be essentially correct’.72 This is a most significant argument with which to agree, for it is, of course, a rejection of the invisible hand.73 It is as well to quote the most substantial description Adam Smith gives of the invisible hand: … every individual necessarily labours to render the annual revenue as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it … he intends only his own gain and he is … led by an invisible hand to promote an end which was no part of his intention.74

I also quote Smith’s most famous illustration of the operation of the invisible hand: It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.75

However, it is not to either of these passages that Pigou directs his criticism of the invisible hand, but to the following:

71 Pigou, The Economics of Welfare, pp 128–29, quoting a 1913 paper by EA Cannan which I have so far been unable to trace. 72 Coase, ‘The problem of social cost’, p 134. 73 In ‘The problem of social cost’, n 38, Coase seems to wish to imply that Pigou thought Cannan’s argument effected only ‘followers’ of Smith and not Smith himself. On the basis of my own reading of this part of The Economics of Welfare, I cannot agree that Pigou was at all hesitant about attacking Smith, and I shall treat him as doing so. 74 Smith, The Wealth of Nations, p 456. Smith’s text has to be very substantially abridged to make it easily illustrate what is now understood as the basic point of the invisible hand, and I have followed the editors of the Glasgow edition of Smith in making my abridgement. Smith, Theory of Moral Sentiments, p 184, n 7. 75 Smith, The Wealth of Nations, pp 26–27. 58


… every system which endeavours, either, by extraordinary encouragements, to draw towards a particular species of industry a greater share of the capital of the society than what would naturally go to it; or, by extraordinary restraints, to force from a particular species of industry some share of the capital which would otherwise be employed in it; is in reality subversive of the great purpose which it means to promote. It retards, instead of increasing, the progress of the society towards real wealth and greatness; and diminishes, instead of increasing, the real value of the annual produce of its land and labour.76

Pigou evidently thinks that Cannan’s criticism of the invisible hand disposes of this basic argument against intervention and proceeds, in the remaining 284 pages of Part 2 of The Economics of Welfare, to set out the apparatus for distinguishing between private and social net products that has since grounded intervention. But Coase’s criticism of Pigou allows us to see that Pigou has missed his mark in Smith, and that Pigou’s choice of quotation from Smith is ample evidence of this. In this quotation, Smith is setting out an argument against intervention in functioning markets which, of course, so tells against the ‘industrial policy’ which has been adopted in the UK since 194577 that it could (with stylistic alterations) easily be passed off as a general conclusion about that policy. Pigou obviously is disinclined to accept this argument and, were he to set out a case for intervention which showed awareness not merely of market failures but of the difficulties of improving on the position produced by the market, one would be compelled to consider it at length. But, to take only his most important general case, Pigou is prepared to consider ‘permanent bounties’ to shift the entire industrial system away from equilibrium based on a particular distribution of goods to an equilibrium based on another distribution (in which less of a good disliked for moral and political reasons or more of a good favoured for such reasons would be produced), even though: ‘[t]he conditions in which bounties are likely to have this effect’, he fairly says: ‘are somewhat special.’ He concludes, however, that: ‘it can be proved that, in certain states of demand and supply, some rates of bounty must have this effect,’ and, the clinching point, those states ‘can readily be depicted in a diagram.’78 There could be no clearer example of what Coase calls ‘blackboard economics’: … many propositions of modern welfare economics [are more] concerned with diagrams on a blackboard than with the real effects of such policies on the working of the economic system. I have referred to this type of economics as ‘blackboard economics’ because … the whole process takes place on a

76 Pigou, The Economics of Welfare, pp 127–28, quoting (with indicated omissions) Smith, The Wealth of Nations, p 687. 77 Crosland, ‘Government and industry’. 78 Ibid, Pigou, p 141. 59


blackboard. This is not the way one operates with a social system. All that can be done is set up a new agency, or change the rules under which an old agency operates, or take some other similar action. All that is possible is to operate on social institutions and to discuss social policy in a sensible way; it is necessary to consider the effect of changing the social institutions with which we work.79

If one now is very sceptical of intervention, it is essential to see that there is another part of Pigou’s argument against the invisible hand that is much stronger. Its strength is hidden because Pigou thought it part of the argument for intervention. It is not. Having quoted the passage from Smith we have seen, Pigou goes on: It would, of course, be unreasonable to interpret this passage in any abstract or universal sense. Adam Smith had in mind the actual world as he knew it, with an organised system of civilised government and contract law.80

Pigou certainly is here drawing attention to a major equivocation at the heart of neo-classical economics. The invisible hand typically is represented as a system of natural liberty, with economic action conforming to the assumptions of rational individual utility maximisation being traced to an essential, ahistorical human nature. One is often rather amused to see human beings as such when described by neo-classical economists look very much like the stereotype of the average citizens of the society in which those economists wrote,81 and this is particularly so in one respect. The exclusive concern with private self-interest that is analytically developed as rational individual utility maximisation has, as we have seen, very strong legitimacy in so far as it grounds a Pareto optimal allocation of resources through the market. As we also have seen, it has been the line of those arguing for a public role in economic allocations to argue that the private market does not always lead to optimal outcomes by pointing to instances of market failure and to then call for intervention by the State. But, in fact, this is an almost trivial argument quite beside the main point, which is that whilst intervention may or may not be a sensible policy in specific cases, regulation is the indispensable condition for the existence of any economic governance structure, including not only or even principally State governance, but any market, whether interventions are made in it or not.82

79 Coase, ‘The theory of public utility pricing and its application’, p 119. 80 Pigou, The Economics of Welfare, p 128. 81 These noble savages with a suspiciously contemporaneous cast to their character used to be described as Robinson Crusoes. I do not suppose a better joke about such figures will ever be made than Marx’s at Ricardo’s expense when Marx perfectly accurately described Ricardo’s own Robinsons calculating the value of their tools and labours as if ‘in accordance with the annuity tables in use on the London Stock Exchange in 1817’. Marx, Capital, Vol 1, p 169, n 31. 82 Sunstein, Free Markets and Social Justice, p 384. This general point has been applied powerfully to the regulation of privatised utilities in Prosser, ‘Regulation, markets and legitimacy’, p 237. 60


Let us return to Pigou’s treatment of Smith. Quoting Vilfredo Pareto, Pigou observes that: ‘the efforts of man are utilised in two different ways: they are directed to the production or transformation of economic goods, or else to the appropriation of goods produced by others.’83 In the light of this, Pigou observes that: Activities devoted to appropriation obviously do not promote production, and production would be promoted if they were diverted into the channels of industry. We must, therefore, understand [Smith] to assume laws designed, and, in the main, competent, to prevent acts of mere appropriation, such as those perpetrated by highwaymen and card-sharpers … More generally, when one man obtains goods from another man, he is conceived to obtain them by the process, not of seizure, but of exchange in an open market, where the bargainers on both sides are reasonably competent and reasonably cognisant of the conditions. There is ground, however, for believing that even Adam Smith had not realised fully the extent to which the System of Natural Liberty needs to be qualified and guarded by special laws, before it will promote the most productive employment of a country’s resources.84

For the markets conceived to be at the heart of neo-classical economics to exist at all, economic action oriented to rational individual utility maximisation must be, as Pigou puts it by quoting from another work of Cannan’s: ‘confined to certain directions by our general social institutions, especially Family, Property and the territorial State.’85 This is to say that, at root, the private market is a publicly endorsed institution, and takes its shape from public law. Let me try to be perfectly clear about what this means. Recognising that the impulse to accumulate can lead to aggressively exploitative rather than productive action,86 it is clear that, if the neo-classical concept of economic action is to yield spontaneous economic order, the claim that economic action is solely motivated by rational individual utility maximisation should actually be understood to be a claim that it is such maximisation constrained within the bounds of ‘peacefulness’: Economic action demands stable conditions. The extensive and lengthy process of production is the more successful the greater the periods of time to which it is adapted. It demands continuity, and this continuity cannot be disturbed without the most serious disadvantages. This means that economic action requires peace, the exclusion of violence.87

83 84 85 86 87

Pigou, The Economics of Welfare, p 128, quoting Pareto, Manual of Political Economy, p 341. Ibid, Pigou, p 128. Ibid, Pigou, p 128, quoting Cannan, The History of Local Rates in England, p 176. Hobbes, Leviathan, ch 13. On the role of the law of contract specifically, see p 196. von Mises, Socialism, p 36. 61


This solution of the ‘Hobbesian problem of order’88 theoretically precedes the argument for the order of the invisible hand, but whilst the concept of spontaneous order very valuably stresses the individual freedom inherent in competitive equilibrium, this stress appears to work against the appreciation that such order can emerge only when the antecedent problem of order is solved. This simply amounts to a denial that legitimate self-interest in the private market must be complemented by a public commitment to the municipal order underwriting the market, and, therefore, that economic action has both a private and a public dimension in any country with a basically legitimate economy and polity.89 This denial flatly runs counter not merely to the consensus positions in all social science other than neo-classical economics but to the common sense of the citizens of the social democracies,90 and accounts for the marginality of harshly ‘economic’ attitudes towards concrete policy formulation in those countries.91 Coase’s attitude to this is entirely contradictory.92 As I have repeatedly argued this elsewhere,93 I will merely assert the contradiction and then turn my attention to that side of it which I think it productive to examine. A great many of Coase’s explicit statements of a philosophy of economics are of a positivist cast which is so extreme one had not thought one would ever encounter it again in respectable social science. This involves a crude philosophic anthropology in which economic action – and specifically the inclination peacefully to exchange in regular and consistent proportions

88 Parsons, The Structure of Social Action, pp 89–94. 89 MacCormick, ‘Legal right and social democracy’. MacCormick’s argument is, of course, a specific application of the argument for an internal aspect to legitimate legal obligation derived from Hart. The ‘minimum content of natural law’ which Hart regards as indispensable in a legitimate legal system is, as he himself stresses (Hart, The Concept of Law, p 303 (note to p 193)) based on Hobbes’ (and Hume’s) solution to the problem of order. Hart, The Concept of Law, ch 9, section 2. 90 Campbell and Picciotto, ‘Exploring the interaction between law and economics: the limits of formalism’, p 276. 91 Campbell, ‘Review of OE Williamson, The Mechanisms of Governance’. 92 Smith himself is, of course, the source of this contradiction. The Smith attacked by Pigou does trace the nature of the commercial societies to certain purportedly universal qualities of human nature. But, equally or, indeed, predominantly, Smith’s account of that human nature is one in which self-interest is balanced by sympathy and social selfconsciousness more generally, and incorporates a developed awareness of the then leading accounts of social development, principally Turgot’s ‘four stages’ theory. The so called ‘Adam Smith problem’ of a claimed difference between a stress on self-interest of The Wealth of Nations and a stress on sympathy in The Theory of Moral Sentiments (Buckle, A History of Civilisation in England, Vol 2, p 437) is far too crude a way of registering our continuing difficulties in arriving at a philosophic anthropology which properly situates the acquisitive impulse. Coase has given a sophisticated but, to my mind, still tendentious account of ‘Adam Smith’s view of man’. 93 Campbell, ‘On what is valuable in law and economics’, pp 505–07; Campbell and Harris, ‘Flexibility in long-term contractual relationships: the role of co-operation’, pp 177–80; and Campbell and Picciotto, ‘Exploring the interaction between law and economics: the limits of formalism’, pp 252–53. 62


denominated in money – is not itself subject to explanation but is represented as human nature as such. Given this philosophic anthropology, of course, the invisible hand may very well turn private vice into public virtue, because the vice actually contains the virtue at the outset. But, this philosophic anthropology has no place in Coase’s substantive work, which is characterised by its immense carefulness about the institutional context of rational economic action. It has been Coase’s basic insight to clarify why ‘market failure’ occurs by drawing attention to the existence of what have come to be known as ‘transaction costs’, the costs of producing an allocative outcome: In order to carry out a market transaction, it is necessary to discover who it is that one wishes to deal with, to inform people that one wishes to deal and on what terms, to conduct negotiations leading up to a bargain, to draw up a contract, to undertake the inspection needed to make sure that the terms of the contract are being observed, and so on.94

After Coase we can properly appreciate that fully contingent markets are markets at zero transaction costs, that is to say with information gathering, communication and enforcement costless. But, information gathering, communication and enforcement costs will always be positive, so that the existence of such markets is a ‘very unrealistic assumption’.95 The thrust of Coase’s work is to reject the view of ‘the economic system as it is normally treated by the economist’96 and demonstrate that ‘there is a cost of using the price mechanism’97 in order to draw attention to the existence of transaction costs in empirical markets and therefore to call for the explanation of particular markets as specific social institutions. Even an economic policy committed to the allocation of goods by markets whenever reasonably possible must pursue not the absence of regulation but the regulatory constitution of markets.98 Neo-classical economic analysis can be used as a guide to economic policy formulation only when balanced by an appreciation that action (for all practical purposes) conforming to its assumptions can take place only within facilitative institutions, markets, established for this purpose. (And as empirical markets have positive transaction costs, these must be weighed against alternatives – which boil down to the firm or the State and their hybrids – with the firm and the State themselves being (from this perspective) explained as structures which minimise transaction costs under certain conditions.)

94 95 96 97 98

Coase, ‘The problem of social cost’, p 114. Ibid, p 114. Coase, ‘The nature of the firm’, p 34. Ibid, p 38. Campbell, ‘The relational constitution of contract and the limits of “economics”: Kenneth Arrow on the social background of markets’. 63


This is the foundation of productive law and economics because, of course, the principal such institution to which one turns to explain the form of markets, firms and regulation is the law: If we move from a regime of zero transaction costs to one of positive transaction costs, what becomes immediately clear is the importance of the legal system in the new world … what are traded on the market are not, as is often supposed by economists, physical entities, but the rights to perform certain actions, and the rights which individuals possess are established by the legal system … the legal system will have a profound effect on the working of the economic system and may in certain respects be said to control it.99

This insight should be applied to all structures for the governance of transactions, including particular markets, even that modern talisman, the securities market: … commodity exchanges and stock exchanges … are normally organised by a group of traders (the members of the exchange) which owns (or rents) the physical facility within which transactions take place. All exchanges regulate in great detail the activities of those who trade in these markets (the times at which transactions can be made, what can be traded, the responsibilities of the parties, the terms of settlement, etc), and they all provide machinery for the settlement of disputes and impose sanctions against those who infringe the rules of the exchange. It is not without significance that these exchanges, often used by economists as examples of a perfect market and perfect competition, are markets in which transactions are highly regulated (and this quite apart from any government regulation that there may be). It suggests, I think correctly, that for anything approaching perfect competition to exist, an intricate system of rules and regulations would normally be needed.100

Coase’s criticism of blackboard economics does not merely or even principally work against cases for intervention based on welfare economics, but against the passing off of pure economic reasoning as sensible economic policy: Contemplation of an optimal system may suggest ways of improving the system, it may provide techniques of analysis that would otherwise have been missed, and, in certain special cases, it may go far to providing a solution. But, in general, its influence has been pernicious. It has directed economists’ attention away from the main question, which is how alternative arrangements will actually work in practice. It has led economists to derive conclusions for economic policy from a study of an abstract model of a market situation.101

99 Coase, ‘The institutional structure of production’, p 11. 100 Coase, ‘The firm, the market and the law’, pp 9–10. Cf, Coase, ‘The institutional structure of production’, p 12. 101 Coase, ‘Discussion of RE Caves, Direct Regulation and Market Performance in the American Economy and RC Cramton, The Effectiveness of Economic Regulation: A Legal View’, p 195. 64


As much of the theory guiding conservative capitalist policy has been precisely of this nature, its utopian goal of complete private marketisation is just as indefensible as many of the worst projections of welfare economics, and should be replaced with realistic institutional assumptions, and therefore perhaps defensibly relevant policy recommendations. Coase’s criticism of Pigou’s ideally functioning public institutions works just as well against ideally functioning private ones: … the whole discussion is largely irrelevant for questions of economic policy since, whatever we may have in mind as our ideal world, we have not yet discovered how to get to it from where we are. A better approach would seem to be to start our analysis with a situation approximating that which actually exists, to examine the effects of a proposed policy change, and to attempt to decide whether the new situation would be, in total, better or worse than the original one. In this way, conclusions for policy would have some relevance to the actual situation.102

It is in pursuit of this sort of policy analysis that Coase readily could agree with Cannan that: ‘the working of self-interest is generally beneficent … because human institutions are arranged so as to compel self-interest to work in directions in which it will be beneficent.’ The ‘mechanism design’103 of a governance structure for the allocation of economic goods, even if that structure be a market, should be work of conscious, public arrangement based on law, though when the purpose of that arrangement is the allocation of economic goods, the arrangement typically should facilitate privately motivated action within itself.104 The question can never be whether to regulate a market, for without the regulation it cannot exist.

102 Coase, ‘The problem of social cost’, p 154. 103 Hurwicz, ‘The design of mechanisms for resource allocation’. 104 I stress that this applies only to the allocation of economic goods, the sole concern of this paper. It would appear that there are enormously significant spheres of social life which should not be run on market lines because the orientation of appropriate action within them should not be towards self-interest expressed as rational individual utility maximisation. Walzer, Spheres of Justice. Of course, where the boundaries of the noneconomic spheres should be drawn is essentially contestable, and neo-liberalism has usefully widened our imagination of what might usefully be regarded as economic. Duxbury, ‘Do markets degrade?’. Nevertheless, perhaps the most objectionable aspect of law and economics is the way it has, following Becker, very crudely thrust ‘economic’ reasoning into non-economic spheres, certainly creating more heat than light by so doing. Campbell, ‘On what is valuable in law and economics’, pp 492–96; and Campbell and Picciotto, ‘Exploring the interaction between law and economics: the limits of formalism’, pp 253–56. 65


Furthermore, as the pursuit of general equilibrium is impossible, and therefore very likely indeed to be a harmful goal,105 pursuit of realistic, second-best goals106 is a matter of institutional choice which cannot be avoided. When deciding that economic goods should be allocated through markets, it is incumbent to pay a great deal of attention to the institutional structure of those markets to see that, so far as reasonably possible, action within them conforms to the assumptions of neo-classical economics which will allow the resulting distributions to be defensible as the outcomes of a voluntary market. One thinks immediately of ensuring that consumers are reasonably knowledgeable, that supply is contestable, etc.107 This is a matter of law and the cultural values guiding the interpretation and enforcement of law, but it is, of course, a matter to which, typically, very little attention has been paid at all in a law of contract which believes that contracts proper are (almost entirely) private. The result of creating markets in ignorance of the necessity of setting these institutional parameters will be, as Ian Macneil has put it, ‘a very poor joke’ at the expense of the consumer,108 as the asymmetries of information and bargaining power that characterise the advanced capitalist economies manifest themselves109 in obviously sub-optimal allocations.

105 This has been nowhere more tragically shown to be the case than in the former COMECON economies. In the absurd belief that a general market would somehow spontaneously arise, the most thoroughgoing deregulation of the former baneful command economies has been pursued for over a decade. In the absence of the legal and cultural framework which actually constitutes the invisible hand, the resulting vacuum has, especially in Russia, been filled up by the most despicable gangsterism. I have reviewed these developments in an attempt to draw from them their lesson about the necessity of providing a regulatory, institutional structure for markets in ‘What is meant by “the rule of law” in Asian company law reform?’. Coase has, to my mind to his immense credit, has made similar points in passing. Eg, Coase, ‘The institutional structure of production’, pp 6, 12. 106 Lipsey and Lancaster, ‘The general theory of second best’. 107 The most sustained general statement of the necessity of constructing an institutional structure for welfare optimising markets, including the claim that (in Sunstein’s terms) ‘there is no opposition between “markets” and “government intervention” [because] markets are … a particular form of government intervention’ (p 384), of which I am aware is Sunstein, Free Markets and Social Justice. I intend my basic argument to be wholly consistent with the Joerges’ argument that the creation of a proper ‘institutional framework of markets’ (p 147) in the EU is a matter of public ‘constitutionalisation’ (though I am very sceptical about many EU measures). Joerges, ‘European challenges to private law: on false dichotomies, true conflicts and the need for a constitutional perspective’. On the specific steps to create a framework for markets being taken in consumer law, see Howells, ch 16, in this volume. On such steps taken in regard of the privatised utilities, see Prosser, ch 18, in this volume. 108 Macneil, ‘Bureaucracy and contracts of adhesion’, p 6. 109 I ignore that aspect of neo-liberalism which simply denies the persisting unpleasant qualities of the capitalist economy. I have criticised one of Posner’s breathtaking sets of denials in ‘Ayres versus Coase: an attempt to recover the issue of equality in law and economics’, pp 445–49, but this is not really the stuff of productive intellectual debate. At the core of any such debate would be the way that the excellent neo-liberal and libertarian economists do not deny capitalism’s shortcomings but doubt the superiority of the proposed alternatives. Eg, Nutter, ‘Economic aspects of freedom’, p 21.

66


Having set out one or two ways in which the law of contract has ‘arranged’ the play of self-interest, Pigou says: ‘This adjustment of institutions to the end of directing self-interest into beneficial channels has been carried out in considerable detail.’110 In regard of the law of contract, in one sense Pigou is even more right now than he was when he drafted this. The law of contract and its related doctrines now constitute a massive apparatus. But, as I hope we can now see, in another, less obvious but perhaps more important sense, he is wrong. The massive apparatus of contract has not at its heart tried to: ‘[direct] self-interest into beneficial channels.’ Instead, it has accepted allocations produced by oligopolistic corporations as products of ‘the market’ and, having seen that these often are markedly sub-optimal, has attempted to intervene in them on ‘welfarist’ grounds.111 These massive interventions have so undermined the will theory of contract that even the best attempts to revive112 are hopelessly implausible.113 But, as these interventions are ad hoc, they have not grounded a satisfactory alternative theory of contract.114 As opposed to the well worked out (if inadequate) claims for market efficiency, the claims for paternalism and fairness115 in welfarist contract seem indefensibly patchy. It is, however, their ex post character that makes them appear such. Once it is appreciated that there is inevitable public involvement in the construction of all markets, then the, to the extent appropriate, regulation which now is put forward in the names of fairness and paternalism can be seen to be a necessary part of securing efficiency in some contracts characterised by a lack of real bargaining.116 On the other hand, there will be contracts – very conceivably the great majority – in which competition should play a major part. But no contract will ever be reached on a wholly competitive basis and the proper bounds between co-operation and competition in specific contracts will, of course, be the principal question to be determined when establishing, or ‘arranging’, that particular governance structure. 117 We must allocate economic goods through markets, but the establishment of private markets which optimise welfare is a matter of publicly endorsed institutional arrangement.118

110 Pigou, The Economics of Welfare, p 129. 111 Brownsword, ‘The philosophy of welfarism and its emergence in the modern English law of contract’. 112 Fried, Contract as Promise and Trebilcock, The Limits of Freedom of Contract. 113 Campbell, ‘The undeath of contract: a study in the degeneration of a research programme’. 114 Campbell, ‘Socio-legal analysis of the law of contract’. 115 Collins, The Law of Contract, 1986, chs 8–9. 116 Campbell, ‘The relational constitution of the discrete contract’. 117 Ibid. 118 Lewis, Choice and the Legal Order. 67


THE DISAPPEARANCE OF THE PRIVATE AFTER THE MERGER OF PRIVATE AND PUBLIC In this most important sense, then, spontaneous social order is not spontaneous and the invisible hand is not invisible.119 Nozick rather concedes this, I feel, by allowing that it is necessary to have a minimal or ultraminimal State within which the market can allocate goods.120 For this concession, Nozick has been excoriated by outright libertarians, who perceived that it cuts against their fundamental anarchism.121 In this they are right. One may wish to keep the State as small as possible, and in the light of the attitude to intervention taken here, ceteris paribus one could have no disagreement with this. But once one recognises the vital public role in constituting all social institutions, including the regulatory basis even of markets in which one does not then intervene, then, on pain of contradiction if one does otherwise, one must accept the primacy of the public dimension of all social institutions. The liberal conception of the ‘nightwatchman’ State,122 the strong distinction between negative and positive rights, 123 and private property 124 are indefensible as statements of ‘natural liberties’.125 These are social institutions the form of which is (even when this is denied) and should be (though often it is not in any open way) publicly determined. The private, as a category in itself, does not exist, for the private is a public construction, the limits of which are then a matter for public debate. It is in this sense that we should understand the disappearance of the private or the merger of the private and the public. In Gewirth, the creation of publicly recognised rights 126 within a community of rights127 is placed on the single footing of argument from ‘the principle of generic consistency’.128 In Habermas, the properties of properly

119 I am not trying to drive at the attempts, through empirical studies of specific price formation processes, to give the metaphors for the operation of the market, particularly Walrasian tâtonnements (Walras, Elements of Pure Economics, p 170), some concrete sense. 120 Nozick, Anarchy, State and Utopia, pp 26–28. 121 Barnett, ‘Whither anarchy? Has Robert Nozick justified the State?’; Childs, ‘The invisible hand strikes back’; and Sanders, ‘The free market model versus government: a reply to Nozick’. 122 Mill, ‘On liberty’, ch 4. 123 Berlin, ‘Two concepts of liberty’. 124 Locke, Two Treatises of Government, Vol II, ch 5. 125 Macpherson, The Life and Times of Liberal Democracy; Macpherson, ‘Berlin’s division of liberty’; and Macpherson, ‘A political theory of property’. On positive rights, see Lewis, chs 1 and 12, in this volume; and Seneviratne, ch 15, in this volume. 126 Gewirth, Human Rights. 127 Gewith, The Community of Rights. 128 Gewirth, Reason and Morality. 68


functioning democracy129 are derived from analysis of the conditions of ideal speech.130 I do not put these examples forward to guide concrete policy formulation, for, indeed, when one does identify such concrete proposals in either author, one often finds them to be typical overstatements of the beneficent powers of state intervention.131 But the point is that they have placed the creation of social institutions on a common ground of public debate, and democracy132 can be nothing other than the actualisation of such debate.133 This brings us to the concrete issue of participation in economic policy formulation, which can be dealt with in some concluding remarks on the hybrid.

THE HYBRID AND PARTICIPATION One of the principal achievements of the use of the hybrid in the literature emerging from systems theory has been to show that regulation as intervention may be of limited effectiveness and/or have unintended and unwelcome side effects. In the former case, the intervention into ‘a social area of life’ fails to produce the hoped for results, and in the latter may have bad side effects which outweigh any useful effects. When implicated in these failures, the law itself is degraded. In the case of such intervention, Teubner argues: … either law, politics and/or the social area of life will be mutually indifferent, or juridification will have disintegrating effects on the politics and/or social sectors concerned, or, finally, law itself will be exposed to the disintegrating pressures to conform of politics and/or social sectors.134

129 Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy. 130 Habermas, ‘What is universal pragmatics?’. 131 Establishing the content of the social contract which allows for the generation of the pure procedure of the market is the central task of Rawls’ liberalism. Rawls, A Theory of Justice, ch 3. Appearing in 1971, A Theory of Justice summed up work published since 1958. It is very instructive to see how much less ambitious Rawls’ claims for his constitutional architecture had become when he revisited these issues in Philosophic Liberalism published in 1993. 132 Accepting something like the implications of democracy for economic policy formulation I am setting out, it has been a natural turn of that strand of libertarian thought which places private property before all else in political analysis (Rothbard, For a New Liberty, ch 2) to be extremely sceptical or dismissive of democracy. Eg, de Jouvenal, On Power, ch 14. I will not argue the basic point here, but do wish to point out that, given the manifest shortcomings of democracy, even if one rejects this social philosophy as a philosophy, it is not without its appeal as a guide to constitutional innovation. The limits it would, if ever followed, certainly place on the possible scope of state intervention is one part of that appeal. Cf, Dowd, ch 2, in this volume. 133 Campbell, ‘Rationality, democracy and freedom in Marxist critiques of Hegel’s philosophy of right’, pp 68–69. 134 Teubner, ‘Juridification: concepts, aspects, limits, solutions’, p 27. 69


The solution is to effect proper ‘structural coupling’ between the law and the social area of life, and the key to doing this is ‘reflexivity’. A reflexive law respects the inner principles of the social area of life to be regulated and seeks to work with those principles. It does not seek to make direct substantive interventions which run counter to the inner logic of the social area of life but to make largely procedural changes which develop the positive features of that area: Instead of the comprehensive regulation of substantive legal rationality, reflexive law restricts legal performance to more indirect, more abstract forms of social control.135

The clear theme is to move away from bureaucratic imposition of outcomes through intervention to the development of reflexive dialogue with actors in an area which respects those actors’ autonomy: What makes this roundabout way of looking at [the problems of regulation] an attractive solution, by contrast with ‘command and control’ regulation – is that it opens up access – albeit indirect access – to the central mechanisms of selfregulation. Politics gains access to the central control mechanisms of firms, trade unions, and interest groups … The role of law in such processes of adjustment is rather limited … It is limited to providing forms of organisation, procedures and competences … the development of this type of ‘reflexive’ legislative policy … would be the new ‘magic formula’ of modern law: ‘Find a form of law which leaves the autonomy of social discourses undisturbed, but which simultaneously encourages them reciprocally to take heed of the basic assumptions on which each is based.’136

The hybrid contract emerges as the paradigmatic mechanism for this dialogue as its structure is given by the ‘double attribution’ of the hybrid to both market and hierarchy: Hybrids work with a new device: double attribution. It is the dual constitution of the institutional arrangement that constitutes hybrids as an emergent phenomenon … A ‘hybrid operation’ emerges from the twofold social attribution to one of the autonomous parties to the contract and, simultaneously, to the organisation as a whole … ‘Hybrid operations’ are, thus, emergent phenomena by comparison with mere ‘contractual acts’ on the one hand and mere ‘organisational decisions’ on the other. They refer to contract and organisation simultaneously. They cannot be reduced to either market transactions or to organisational decisions. When the dual attribution of action entered into the economic reconstruction of the social arrangement and was operationally used there, hybrids were constituted as autonomous actors.137

135 Teubner, ‘Substantive and reflexive elements in modern law’, p 274. 136 Teubner, Law as an Autopoetic System, pp 96–97, the last sentence quoting Blanke, ‘Verrechtlichung von Wirtschaft, Arbeit und socialer Solidarität’, p 200. 137 Hutter and Teubner, ‘The parasitic role of hybrids’, p 122. 70


These points have been made from other theoretical standpoints clustered around the notion of ‘responsive regulation’ particularly associated with the work of John Braithwaite.138 I choose to take them up in Teubner in order to conclude by restating a point made earlier. Teubner clearly is driving at a core feature of the type of non-interventionist regulation of markets for which I am arguing, with his general concept of reflexive law respecting the autonomy of markets by assisting them to clarify the way in which they are to establish their own goals. But there are quite unacceptable features of Teubner’s account. By this I do not mean the absurd language in which that account is expressed so much as a theoretical confusion which the language obscures. The ultimately senseless description of social systems he gives, which borders on charlatanry, relieves Teubner of the necessity of giving an explanation of the development he is describing. The peculiar abstraction of the formal systems described and the incomprehensibility of the claimed independence and yet relatedness of their ‘autopoetic’ development allows Teubner to claim a novelty for the hybrid and for reflexive law as such. Instead of the novel hybrid form, I suggest we see current developments in the concept of contract as a continuation of the enlightenment project of the public critique of private interest in the light of the failure of the communist and social democratic versions of that critique. The centralised command and control economy of the former communist countries obviously are now utterly discredited139 and, though the case of social democracy is more complicated, its strain of anti-market interventionism, which opposes liberalism not as necessity but as a positive choice, is equally discredited. What is needed is, of course, is an economic governance structure which can respond to these failures in a positive way. It seems clear that contract will be the main institutional component of that structure, but, as I have said elsewhere, it will be a reformed, socialist contract.140 The institution of contract is predicated on individual choice, and so works against the unacceptable state imposition of goals through intervention. But contract has betrayed individual choice – and so sanctioned intervention until that turned out to have its own unacceptable costs – because of a lack of awareness of the necessity of public regulation of that institution which makes it true to its own goals. The hybrid has registered the necessity of changing the form of contract, but understands itself as terribly novel. This is unhelpful when the key to designing the new form of contract is to

138 Eg, Ayres and Braithwaite, Responsive Regulation. 139 Except for purposes of total war, and, of course, its superiority as the economic governance structure in support of war waged in this way is another argument against it. 140 ‘The socialist contract: fairness and efficiency in markets’, Inaugural Lecture on appointment to the Chair of Law, Sheffield Hallam University, October 1997 (available from the author at Cardiff Law School, University of Wales College of Cardiff, PO Box 427, Cardiff CF10 3XJ). 71


understand the history of the concept of contract. The claimed novelty of the hybrid has produced a number of debilitating paradoxes in current economic policy proposals of which I will mention just three particularly instructive ones. First, in the communitarian political theory 141 linked to ‘moral’ economics,142 the critique of intervention has led to an elaboration of the virtues of ‘civil society’. This civil society seems mysteriously to display a social self-consciousness, and hence a conscious acceptance of the moral bounds of selfish action, which it was the very purpose of socialism to provide by the critique of civil society by State. No attempt to address the political shortcomings which were central to the very identification of civil society as the modern form of social structure143 is made in this wholly reactionary communitarianism. This civil society works because, like Smith’s rather civilised competitive behaviour, it actually contains the public dimension which it explicitly denies. Secondly, the ‘social market’ on which much left-wing economic analysis is focused often makes more or less the opposite error. Aware both of the limits (of effectiveness) of hierarchical allocations and of the importance of setting the institutional parameters of markets, such pains are taken in many accounts of the social market to rule out certain allocations considered ethically undesirable that no real choice figures in those markets. It is merely a question of trying to use rigged markets to establish what an improving elite have already decided were the proper allocative outcomes.144 This is a failure to see that the appeal of the ‘economic efficiency’ that drives the success of neo-liberalism is not some technical efficiency in pursuit of collectively agreed goals but efficiency in allowing citizens to voluntarily determine their own goals by a collectively agreed pure procedure. The hard case arises when an elite in a hierarchical position disagrees with a voluntary choice.145 Given the position taken in this chapter, the voluntary choice must trump, so long as one can reasonably be assured it was voluntary. This assurance is, of course, typically what one lacks in the outcomes of many of the administered, oligopolistic consumer ‘markets’ of advanced capitalism. Thirdly, the New Labour government is at great pains to renounce its socialist patrimony and insist that it is attempting to steer a ‘third way’ between State socialism and free markets.146 One can see the appeal of this as propaganda, but, of course, it is wholly abstract. The power of the third way

141 142 143 144 145 146

Etzioni, The Spirit of Community: Rights, Responsibilities and the Communitarian Agenda. Etzioni, The Moral Dimension: Towards a New Economics. Ferguson, An Essay on the History of Civil Society, Pts 5–6. Le Grand and Estrin (eds), Market Socialism. Eg, Lewis, Choice and the Legal Order, p 35. Giddens, The Third Way: The Renewal of Social Democracy. 72


seems to lie precisely in its being third, and as such a new type of economic governance. But that this seems already to have decayed into meaninglessness as a political programme is only to be expected. If one wishes to know in concrete terms why capitalist markets and intervention have both proved inadequate and to improve on them, one must create a governance structure the very form of which is given by an awareness of the shortcomings of both. The new structure cannot be novel but must have history at its heart, 147 otherwise it is a merely abstract ‘thirdness’. It is a rather good joke that New Labour’s desperate attempt to be novel has led it to rest its economic policy on an abstract synthesis (anything rather than a development of socialism) which is, of course, an example of the dialectic reduced to an ‘empty’,148 ‘lifeless schema’149 which made dialectical materialism a laughing stock. It would appear that the denied history of socialism is rather having its revenge upon Mr Blair. The form of socialist contract we must now devise will have a dialogue with past failures at its heart. Rejecting intervention but building on our awareness of the necessity of the social regulation of the institution of the market, we may approach the problem of institutional design in a publicly endorsed way. The old privileges of private property cannot stand against this social self-consciousness, but such self-consciousness, chastened by the knowledge of the past excesses and outrages committed in the name of the public, will have a liberal respect for private choices at its heart.150

147 Any socialism developed against the beneficent background of liberalism has, of course, dealt with just the issues New Labour tries to pretend are novel. Take, for example, the following from Beveridge’s informatively entitled lecture ‘Between Cobden and Lenin’: ‘The practical issue does not lie, and is never likely to lie, between planning under completed socialism and a free pricing process under capitalism’. Beveridge, ‘Between Cobden and Lenin: the dilemmas of planning in the 1930s’, p 25. 148 Hegel, Science of Logic, p 837. 149 Hegel, Phenomenology of Spirit, p 30. 150 In ‘Conceptions of property in common law discourse’, Rotherham puts forward an acute argument about the public foundation of private property rights, but then seems immediately to move to seeing this as license for wider public expropriation, even without compensation. Whilst I do not at all rule out the measures Rotherham puts forward in specific cases, social self-consciousness of the public foundation of property rights should in general lead to an awareness of duties towards property owners. 73

CHAPTER 4

A CONSTITUTIONAL CULTURE FOR MORE PARTICIPATION: WHAT WOULD IT LOOK LIKE?1

Perri 6

THE EVERYDAY LIFE OF CONSTITUTIONS One could be forgiven for thinking, the way the chatterati are talking, that constitutions live in capital cities. The British constitution, it seems, is probably going to be devolved from Westminster to Edinburgh, Cardiff and somewhere else in London. All the talk is about the distribution of seats, the comparative merits of different voting systems, and what titles the new élites in these capital cities will take for themselves. But, it is wholly misleading to talk about the constitutional geography as though it were a metropolitan gallery of old masters. Worse than that, it is actually dangerous. In fact, constitutions lead everyday humdrum lives in back streets, lowly sub-offices and schools. When those lives change, the constitutional culture of Britain can change in ways that do not get thought through clearly when everyone is obsessed with the ceremonial places in SW1 and its equivalents in Wales and Scotland. Perhaps it is easier to recognise this at first in the US than in the UK. There, the constitution is a part of what children learn about in schools, not so much when they do ‘civics’ lessons, as when they acquire certain expectations about how their lives can be lived; specifically about how they can complain; about the confidence with which they can assert certain rights; about the things that bind them together; and about what, if anything, politicians and government officials can be trusted to do, and why. The litigiousness of Americans has some of its foundations in a culture of recourse to law that the constitution affords and sanctifies. The politics of every local pressure group meeting in

1

A shorter version of this paper was given at the Public Administration Conference at Sunningdale on 2 September 1997, commissioned by Gerry Stoker. I should to thank those attending that Conference and those attending the conference on The Constitutional Implications of Participation for useful comments and questions. I am grateful to Ian Christie, Ben Jupp, Kristen Lasky, Steve Ney and Gerry Stoker for comments and suggestions on earlier drafts. The first section of this paper was published as 6, ‘How will we feel the morning after?’. It is a part of a longer programme of research being conducted jointly with Kristen Lasky which will examine and compare British and US cultures of constitutionalism using secondary analysis of a wide variety of quantitative data sources. 75


every dusty church hall in small town America is shaped by the prospect that its demand could one day be entrenched, or constitutionalised. As children Americans learn the constitutional virtues and vices, learn that pressure group gridlock (in the sense of a stand-off between opposing groups leading to paralysis in decision making) is the product of irresponsibility and lack of restraint in the use of the constitution, and learn that courage, integrity and honesty are virtues on which the working of the constitution depends. And this is learned, not from Madison, but from the newspapers and the television. Constitutions live in the topics about which people gossip. In the US, gun law, abortion and prayer in schools are daily constitutional conversation. When the British start to look for their own constitutional culture, they tend, self-deprecatingly, to say that they do not have one because their constitution is scattered across dozens of basic documents rather than a single one. In fact, some very distinctive aspects of a constitutional culture can be identified in the common expectations of the British people. As befits the culture of a people whom Lady Thatcher once allegedly called ‘rough’, British constitutional culture is a rough-and-ready, coarsely hewn, unfinished affair. Moreover, that culture has changed quite a lot during the 18 years of Conservative rule, and not always in the ways the Conservative governments intended. Through the 1980s and early 1990s, as public lack of esteem for and distrust of politicians and civil servants rose, the Conservatives responded with formal and explicit codes of ethics for ministers, civil servants and MPs, and multiplied the tribe of ombudsfolk. A special Speaker’s Commission on citizenship recommended constitutional education in every school. The British public’s willingness to use the constitutional remedies of judicial review and other tribunals grew through the same period. New terms were added to the language for new constitutional vices – ‘sleaze’, ‘quangocrat’, or even Professor John Stewart’s ‘new magistracy’, and our constitutional gossip changed. All these may seem small and surreptitious changes to the constitution and the culture by comparison with moving around the furniture in the capital cities, but they are often much more important in shaping the expectations, confidence, perceptions of the relevance and irrelevance of different institutions and opportunities for participation, and even the querulousness of a people. The Labour Government is undertaking its grand rehanging of the constitutional collection of old masters in our capital cities. But, the Government, and, indeed, academic political scientists, would do well to think more about what effect its constitutional changes will have on the gossip in the bus queue, on the willingness of citizens to complain, on public understanding of what taxes are spent upon, on the demand for Legal Aid and the services of the courts, and on people’s expectations of how the risks they face in their lives might be met. These things are much harder to establish than formal systems of powers, accountability and jurisdiction. But not

76

A Constitutional Culture for more Participation: What Would it Look Like?

attending to the barometer of constitutional gossip brings grave risks not merely of unpopularity, but of deeper distrust of public life and ever more conflict-oriented uses of the constitution by discontented litigants and social movements. There is no point in changing the constitution unless one also changes the constitutional geography of Britain’s cultures, and perhaps unless it enables more participation and trust in the institutions of democratic participation. In this chapter, I explore what we know or hypothesise about the character of Britain’s cultures of constitutionalism. The chapter is concerned with what would sustain higher levels of participation, looked at through the lenses of a number of bodies of theory about cultures in general and political cultures in particular. The first two thirds of the chapter are theoretical and analytical. The chapter begins by sharpening up and clarifying the question to be explored: ‘what are the cultural conditions for enhanced participation?’ In particular, it explores the meaning of the assumption that participation should be sustainable, given that it is known that levels of participation describe historical cycles, and that participation should be benign, although much participation is stimulated not so much by constitutional opportunities as by disappointment. The chapter then uses one of the most powerful contemporary anthropological theories of culture to consider some of the principal cultural biases through which we each see political participation, and that we can expect to find distributed across the population of any complex society. A classification of some of the principal dimensions of different cultures of constitutionalism will be advanced. This classification will focus on cultures of trust in those individuals and organisations that have constitutional authority to make decisions, because varying the level of such trust is an important response to culturally filtered perceptions of the opportunities for and the costs and benefits of participation. In particular, some hypotheses will be formulated about presumptions about how trust will differ by cultural bias. Some conclusions about the cultural conditions for enhanced sustainable and benign participation will then be drawn, but it can be observed now that those conditions will not be easy to satisfy. In the final third of the chapter, after a brief description of changes in the British culture of constitutionalism, some of the cultural questions, risks and opportunities that the current proposals of the British Government for constitutional change will be identified. The conclusion will consider some of the implications of the argument for the future direction of democratic theory and its relationship with social capital theory.

77


CULTURES, CONSTITUTIONS AND PARTICIPATION When considering increasing the level of democratic participation in political decision making it is important to identify what I have called a culture of constitutionalism, because bringing about such an increase is not just – indeed, it is not even principally – a question for the legal designers of formal constitutional rules. It is also, and arguably crucially, a question about culture.2 Constitutionalism is not just a tradition of a special kind of law making, but something with a cultural life.3 The ways in which people will make use of a set of constitutional rules are at the very least influenced by their cultures. The idea of the lobby in Britain and of the demonstration in France reflect fundamentally culturally different uses of constitutional opportunities. The cultures that enable and sustain participation are plural in number, change relatively quickly, and are susceptible to influence but not always in straightforward ways. A complex society is a mélange of sub-cultures that differ by region, by age group, by political attitude, by rituals and dress, and by levels of aspiration. 1990s Britain, for example, exhibits a wide variety of small, fragmented youth sub-cultures of relatively limited political expressivity.4 In comparison, in the Britain of the 1970s, punks, rude boys and new wave hybrids coalesced into a brief, but broadly radical, political culture.5 The contemporary political culture of 30 somethings, which are influenced by the emergence of less class-centric cultures, differ sharply from those observed during the polarisations of the 1980s. The interaction of different cultures determines not only the uses people make of the constitutional structure of opportunities for participation, but also the legitimacy of those opportunities and the acceptability of the participation practices of many interest groups. In the US, for example, cultural attitudes towards class action litigation make legitimate certain forms of participation by interest groups that some continental European countries, which have been much less willing to grant power over policy making to judges and lawyers, would have difficulty in entertaining. Cultures can either sustain or

2 3

4 5

There is a large literature on political cultures, but often not directly relevant for the present purpose (eg, Almond and Verba (eds), The Civic Culture Revisited). Constitutionalism is usually defined either as a strategy of entrenching (liberal) values, or a moral theory about why entrenchment is needed, or a justification for giving power to judges over politicians (Greenberg et al (eds), Constitutionalism and Democracy: Transitions in the Contemporary World; and Elster and Slagstad (eds), Constitutionalism and Democracy). 6 et al, The Substance of Youth: The Place of Drugs in Young People’s Lives Today. Hebdige, Sub-culture: The Meaning of Style. 78


undermine a constitutional order. On the other hand, changing the constitutional rules can be met with adaptation and resistance by cultures. So, too, does abstention from change. Thus, for example, the availability since the 1940s of legal aid steadily made enormous changes in the cultures of litigation and expectation about the role of law in participation in Britain, while constitutional innovations such as the early 20th century exemption of certain categories of the property of the monarch from tax so grated against changing cultures that they proved to be unsustainable by the 1990s. Moreover, understanding the cultural conditions in which constitutional rules are received is of great importance when evaluating a constitutional order. Some constitutional innovations fail because they run up against deepseated cultural limits on what is acceptable. Thus, for example, by the 1650s the Cromwellian Commonwealth ran up against a number of culturally heavily ingrained expectations and commitments in England, as did the Vichy regime led by Pétain in France in the 1940s. Under the Labour administration elected in 1997, Britain is entering a period of relatively drastic formal and explicit constitutional change (there was plenty of less formal but nevertheless significant constitutional change under the Conservatives between 1979 and 1997).6 There will be a devolved Scottish parliament with tax varying and domestic law making powers, a Welsh assembly, the incorporation of the European Convention on Human Rights into British law, legislation to remove from hereditary peers in the House of Lords their rights to vote on primary legislation, the creation in London of a new strategic authority and a directly elected mayor, and the substitution of ‘no win, no fee’ financing options for the availability of legal aid in certain types of case.6a The Government has argued that at least some of these changes will enhance the opportunities for certain kinds of participation, thereby cutting with the grain of Britain’s political culture. For example, some of these changes have been designed to align institutions of political representation with national or city feeling and identity, and others have been justified as changing and perhaps expanding the opportunity for participation by way of redress in administrative and human rights litigation. At such a time, then, it is essential to explore the cultural conditions of the viability of constitutional change in general, and to develop ways of gauging the likelihood of current constitutional reform proposals to create, stimulate, or enhance cultures of political participation in Britain. The next section more carefully defines those valuable properties of participation for which we need to identify the cultural conditions.

6

Mount, The British Constitution Now; and Hennessy, The Hidden Wiring: Unearthing the British Constitution. 6a Hazell (ed), Constitutional Futures: A History of the Next Ten Years. 79


CULTURES OF SUSTAINABLE PARTICIPATION The question set by the editors of this book to the authors was whether anything can be done, and if so what, to increase levels of democratic participation, and this chapter will explore the cultural conditions under which this might be possible. This question must be amended to emphasise that any such increase must be both sustainable and benign. For there are, in fact, undesirable ways to increase levels of participation, at least in the short term. For example, if social conditions are allowed to deteriorate sharply and people become frustrated, they may well participate angrily. Indeed, popular dissatisfaction and frustration with the quality and quantity of the services they receive is probably the most common reason for rising levels of participation. As Hirschman pointed out,7 an increase in the decibel levels of ‘voice’ usually occurs in response to disappointment. Furthermore, again to follow Hirschman,8 people are often prepared to participate for short periods, but burn out having become disappointed with the balance between the costs and benefits of participation, and tend to do this as part of larger social cycles of activism and civic privatism. Activists become disillusioned with their own goals, with the institutions of participation, and with their own organisations. This process can be observed, for example, in the decay of many of the leading dissident movements and early democratic parties in Poland, the Czech Republic and Hungary after the fall of communism. Similarly, after protracted periods of civic privatism, people become disappointed with the achievements of private exit alone, and try to find a more public voice again. It was this aspect of the rise of participation leading up to the unrest of 1968 that Hirschman originally tried to explain, after Olson’s theory of collective action seemed to leave it inexplicable. Of course, there are also wider influences on the depth, duration and distribution of the peaks and troughs of Hirschman cycles of participation. These include the condition of the economy, the labour market trends affecting the use of time, family and household structure, and also the media strategies influencing the ‘issue attention cycle’. Now while those who want to raise levels of participation can hardly advocate making matters worse in order to annoy people into exercising voice, democrats take differing views of Hirschman cycles. Some argue that they are a fact of social and cultural life, very difficult effectively to overcome, that they are perhaps no bad thing, that the right not to participate is important in a democracy, and indeed that it is offensive to liberty to want to encourage everyone or even many people to become continuously active participants in social decision making for longer than they would otherwise 7 8

Hirschman, Exit, Voice and Loyalty: Responses to Decline in Firms, Organisations and States. Hirschman, Shifting Involvements: Private Interest and Public Action. 80


prefer. Some would go further and argue that some balance between activism and passivity is essential for political stability.9 Others – let us call them activist democrats – take the view that very low levels of participation punctuated only by brief bursts of frustrated expression reflect an impoverishment of the democratic culture, in which the effective exercise of liberty has been dampened and dulled by low expectations and cynicism, and that in such situations unscrupulous politicians can readily manipulate democratic institutions for undemocratic ends. Therefore, they argue that if Hirschman cycles cannot be replaced by a continuously high level of participation based on enjoyment of being part of the decision making processes, then at least the level of activity, and the number engaging in that activity in the troughs of civic privatism, should be increased.10 While the vision offered by the activist democrats is clearly not to everyone’s taste, it has proven so attractive to many thinkers, politicians and leaders of social movements concerned with constitutional reform that it is important to identify the cultural conditions in which it would be possible to realise that vision. Yet the principal writers in the activist democracy tradition have rarely addressed this question, or when they have, their arguments have generally boiled down to the implausible claim that increasing the opportunities for participation will completely eradicate the culture of civic privatism, and, therefore, that there will be no cultural problem in sustaining radical democracy.11 Some environmental activists have imagined that the Local Agenda 21 programme created at the Rio summit would be a self-sustaining experience of local popular participation on the back of a convergence of local and global environmental concerns. However, the question of increasing participation still is not sufficiently precise. For if we are to explore the cultural conditions of greater participation, we need to ask whose participation is thought desirable, when it is thought desirable and how desirable participation can be sustained. The question of the cultural basis of active participation that is evenly or equally distributed across some key dimensions of a society is a very different and more

9

In the study of political cultures, this view is associated with Almond and Verba, The Civic Culture, although it was revived in particularly virulent form in the 1970s by ‘overload’ writers suspicious of democracy (eg, Brittan, ‘The politics of excessive expectations’; Crozier et al, The Crisis of Democracy: Report on the Governability of Democracies to The Trilateral Commission; King, ‘The problem of overload’; and Olson, The Rise and Decline of Nations: Economic Growth, Stagflation and Social Rigidities. For a liberal rejection of the implications of the ‘overload’ hypothesis, see 6 and Randon, Liberty, Charity and Politics, Pt 2. 10 This view is set out in Barber, Strong Democracy: Participatory Politics for a New Age and Dryzek, Discursive Democracy: Politics, Policy and Political Science. For a British collection in this tradition, see Hirst and Khilnani (eds), Reinventing Democracy. 11 Barber, Strong Democracy: Participatory Politics for a New Age seems particularly close to this position as, at times, does Giddens, Beyond Left and Right: The Future of Radical Politics, ch 4. 81


demanding one from a question about greater aggregate participation that may be skewed in particular ways. The first issue concerns what I will call the life course. In different societies, participation tends to be most evident during different phases of life. There are gerontocratic and there are youth dominated societies, in which the culturally defined roles, opportunities, customs and costs of participation fall differently between the generations. Soviet Russia was famously gerontocratic. Britain offers much more evenly distributed opportunities across the life course. In many African and middle Eastern countries opportunities for political participation are relatively youth dominated, reflecting the age profile of the population. Secondly, participation is lumpy because it is organised around social identities and, indeed, can play a key role in the reinforcement or reinvention of those identities. Political participation in the civil rights, women’s liberation and gay liberation movements in post-war USA has not only reinforced African-American, women’s and feminist and gay social identities, but has played a key role in their formation. Clearly, when participation becomes highly polarised around social identity and the processes of negotiation and tolerance become strained by the identification of many people with particular ‘oppressed’ identities, the result can be gridlock and, as the US expression has it, ‘culture wars’. In such culture wars, sincere participation takes place almost entirely within the enclave furnished by a particular identity and participation outside that enclave is entirely instrumental. The US presents, however, a special and extreme case of the common phenomenon that participation as a collective process is one that builds upon and itself builds identity. Thirdly, in the writings of most activist democrats, it is implicitly or explicitly asserted that the need for greater participation is most urgent among people in the lower socio-economic classes. This places rather different cultural demands than does, say, increasing the participation of the articulate, educated, middle aged, middle income groups in socio-economic classes A and B. Finally, it is necessary to specify the cultural conditions under which a high level of sustainable participation might be achieved. If high levels of participation lead to gridlock in decision making they are not likely to be sustainable for long periods of time. The next section gives a general account of political culture which will enable us to identify the conditions for sustainability.

CULTURAL BIASES ABOUT PARTICIPATION Because there are many cultures within a nation to which a pluralist liberal constitution must give space, it is well to examine what we know about the 82


diversity and interaction of political cultures in order to assess the use of constitutional opportunities to participate. One of the most powerful theories of the range and diversity of cultures has been developed by Mary Douglas (the distinguished British anthropologist), the late Aaron Wildavsky (an American political scientist and policy analyst), and their collaborators.12 Known sometimes simply as ‘cultural theory’13 and sometimes as ‘grid-group theory’, it begins from the argument that there are two fundamental dimensions of social life, the ‘grid’ and the ‘group’, which can be depicted as the axes of a graph on which specific societies can be located. The social structural institutions of rules, roles and the classification of people and norms are the grid. The extent to which the basic unit of social life is the group or the individual, or, more accurately, the degree to which the individual is incorporated in the group, is the group. These two dimensions are fundamental because no human society can sustain itself without devising a workable settlement between the conflicting impulses that each axis represents. In the absence of some such settlement of this kind, it becomes impossible to develop coherent social systems, for example, a law of contract on which basic economic life can be based. Breaking up the space created by a cross-tabulation of these two dimensions into high and low grid and group yields a four-quadrant schema which has proven extremely useful in many empirical contexts in understanding how cultures differ.14 It is set out in Figure 1. Grid-group analysis offers more than simply a typology of the cultural biases exhibited by individuals in particular institutional settings.15 It also offers a body of explanation and prediction. I want here to draw out six key empirically testable hypotheses that emerge from grid-group cultural theory of direct relevance to the question of increasing participation.

12 Adams, Risk; Douglas, Risk and Blame: Essays in Cultural Theory; Douglas and Wildavsky, Risk and Culture: An Essay on the Selection of Technological and Environmental Dangers; and Rayner, ‘Cultural theory and risk analysis’. 13 Thompson et al, Cultural Theory. 14 For some empirical applications, see Coyle and Ellis (eds), Politics, Policy and Culture; and Dake and Wildavsky, ‘Theories of risk perception: who fears what and why?’. 15 There is an extensive debate in cultural theory about the appropriate units of analysis. Although some do, most individuals do not consistently exhibit the same cultural bias in all settings in personal, working and public life. While some organisations and institutional settings consistently evoke particular cultural biases in many individuals, it seems strained to describe an institution as having a culture. The intellectual structure which is a world view is not a culture, but may be a convenient social science shorthand for some of the assumptions that appear in behaviours or expressions exhibiting certain biases. Therefore, this paper will work at several levels. 83


Figure 1: Types of culture grid

æ

fatalism/despotism, isolates systems are capricious Systems deliver luck and misery arbitrarily; property owners can usually expect unfettered rights. My participation would be pointless.

hierarchy/central community systems are necessary Systems must be maintained in an orderly State and given balance and direction by rational management, allowing appropriate roles for all positions and to maintain balance of risk and opportunity. Participation must be channelled.

individualism, libertarianism regulated systems are superfluous Benign and effective social systems are the product of the natural and spontaneous co-ordination of individual decisions; constraining those decisions with regulated social systems will reduce supply and make everyone worse off in the long run; property rights should generally be protected; exit can be substituted for voice.

egalitarianism, enclave, sect systems are oppressive Egalitarian social systems must be protected; other social systems are oppressive and should be regulated and designed to prevent worst risks and distribute costs of protection fairly across society; solidarity within communities and by the rich to the poor is important; high levels of participation are believed to be sustainable and socially benign.

group First, the theory predicts that fundamentally different perceptions of risk, different styles of reasoning (‘world view’ or ‘rationality’), different institutions and different social network structures will emerge in each quadrant, and with them quite different styles of blame, accountability and responsibility (grid), and solidarity and affiliation (group). In short, each quadrant represents a way of life with its own consequences for constitutional culture. While individuals can operate with different cultures in different compartments of their lives, maintaining the boundaries will be costly. Secondly, the theory predicts that the normal condition of inter-cultural relations will be one of tension, because each will define itself in opposition to the others. Thirdly, the theory predicts that certain settlements (treaties, coalitions, etc) between the those bearing each of the four different cultural biases, while all unstable and shifting, will prove more durable than others. In general, diagonal ties will prove more stable for longer periods, at least in favourable conditions, than will vertical or horizontal ones. That between individualism and hierarchy is a fairly common alliance, while that between enclavists or egalitarians and isolates or fatalists is also not uncommon. The former is called the ‘power diagonal’ because individualists and hierarchists are both 84


interested in the structuring of social relations for the wielding of institutional power, whether for the maintenance of property rights or a wider conception of a pattern and stable social and economic order. The tie between fatalism and egalitarianism is referred to as the ‘negative diagonal’ because alliances of that kind are usually of a defensive, reactive character concerned with resistance rather than a programme for the use of authority.16 Fourthly, the theory predicts that cultural changes, both in individuals and among groups, will more often take the form of diagonal rather than vertical or horizontal shifts. Fifthly, the theory offers an enrichment of the Hirschman cycle as it predicts that egalitarians will usually burn out sooner or later because the energy levels involved in such a way of life are very high, and then a shift to one of the other cultures is required. The theory does not, however, predict that any particular culture will be the recipient of a majority of disillusioned egalitarians.17 Sixthly, the theory predicts that no complex society can reproduce itself unless it contains each of the four types.18 While some societies may have relatively fewer, say, fatalists, or relatively fewer individualists than another, the cultural dynamics of any complex society are such that all four will emerge in some shifting, unstable but long-run mutually sustaining relationship over time or else the whole society will fail to sustain itself. For an example of a society dominated by hierarchists using an egalitarian ideology in which they had ceased to believe, governing a society disproportionately fatalistic, and which proved unsustainable, we need only look to the Soviet Union. Colin Turnbull provides a graphic example of a society in which the hierarchy failed completely. An important use of this theory is to explore the different culturally specified perceptions, expectations and valuations of participation in decision making that will be found in each of the four different cultures. The hypothesis offered here is that different perceptions, expectations and valuations of participation will be empirically distinguishable in each quadrant, and that the cultural bias specific to that quadrant will be sufficient to explain a significant proportion of that variance. Egalitarians, committed to extensive participation within the group they themselves are committed to, tend to imagine that high levels of participation are sustainable. The way in which they participate tends to involve distrust of

16 On the importance of diagonal linkages, see Douglas, ‘The choice between the gross and the spiritual: some medical preferences’. For a brief argument that the power diagonal between individualism and hierarchy is the one on which British conservatism has reinvented itself in each generation, see 6, ‘Tories need a vision to stay on earth’. 17 Thompson et al, Cultural Theory, pp 75–78, offer a comprehensive listing of possible routes along which people shift cultures. 18 Ibid, ch 5. 85


the structures of decision making and constitutional order that affords the opportunities for participation. Egalitarians tend to be critical, oppositionist and present a culture of resistance. The risks of participation they perceive are principally those of exclusion from the class of those able or invited to participate, and of the failure of simple voting or other preference-aggregation rules to take account of the intensity of preferences. Hierarchists regard participation as but one stage in a larger policy process, to be structured effectively in order to maximise the number of relevant and useful arguments offered rather than, as egalitarians tends to want, to maximise the number, or the decibel levels, of the voices. For hierarchists, rules of participation, of discourse, and of respect for decision making after the end of a formal period of participation, are key to the usefulness and value of participation. They tend to imagine that low levels of participation are sustainable. Almond and Verba’s argument that a healthy democracy is one in which extensive civic privatism balances moderate activism is a good example of a hierarchist perspective. 19 The risks that hierarchists perceive in connection with participation are those of gridlock in decision making, hyper-activism making it impossible for decision making systems to reach closure, and of over-representation of the interests of those with very intense preferences, or ‘democracy of the activist minorities’. Individualists regard participation as a distraction from focusing upon the substance of the decisions to be taken. They tend to imagine that institutional arrangements are sustainable in which people need and want few opportunities for collective decision making, and therefore need but few occasions for participation. In general, individualists prefer to substitute institutions that redistribute decision making away from collective structures toward individuals in competitive systems that sort effective from ineffective decision making. One reason they can ally with hierarchists is that they share some of the same perceptions of risk, although they share with egalitarians a commitment to intense preferences, provided that giving free reign to those preferences in an individual’s own making of decisions does not interfere with the making of decisions by others. Their principal risk perception about participation is of the growth of the sphere of collective decision making. Fatalists tend to regard participation as a sham, feeling that decisions have usually been taken already long before opportunities for participation are offered. They tend to imagine that whatever institutional arrangements for participation are in place are sustainable, if only because all arrangements boil down to the same capricious, ineffective decision making. Their negative perceptions of participation – either as useless or as sham – enables some of them to be drawn into temporary alliances with egalitarians.

19 Almond and Verba, The Civic Culture. 86


From the perspective of this theory, then, the question of the cultural conditions for increased participation becomes one of achieving the mix of these cultural forms that will produce that increase. The theory suggests that some subtle mix of institutional responses will have to be offered to each culture’s perception of the risks of participation. One might initially imagine a kind of ‘ring of tension’ in which each culture held the others in sufficient check to the point that some system of participation could persuade sufficient numbers at least of non-fatalists to accept some compromise or trade off in order to participate. However, the notion that the ring of tension might be stable is, of course, itself hierarchist, and the stability of any particular ring of tension should not be exaggerated. The first conclusion that we might reasonably draw from cultural theory is that the chances of eradicating Hirschman cycles are very slim indeed. Any feasible conception of sustainable participation must therefore be one in which the conception of sustainability is neither one of an even level of participation over time, nor one of an even distribution of participation across society. This is not to say that cultural theory is conservative or pessimistic about enhancing participation, only that it suggests that enhancements will take the form of amplification of certain sections of the Hirschman cycle by means of incremental shifts in the balance of cultures in the society. Cultural theory also suggests that if the onset of disappointment in participation is seen as the problem, then institutions for the management of the expectations and perceptions of the risk of participation will be crucial.20 These institutions probably will be designed by hierarchists with the consent of the other cultures and in particular of the egalitarians.

CULTURES OF CONSTITUTIONALISM AND PARTICIPATION IN BRITAIN We can, then, expect to identify different cultures of constitutionalism in Britain, the differences following from whichever of the four cultural biases set out in the grid-group classification inform a particular culture. In this section, I will focus on some of the key, differing dimensions of these cultures of constitutionalism. Cultures are complex wholes, variously defined as whole ways of life, shared life, shared meaning, systems for the understanding and governance of 20 Different cultural theorists will, of course, have different own cultural biases and political predilections, as I do. However, the aim in using the theory in the present context is to explore the conditions of dialogue between the cultures, not to justify, still less to celebrate, any particular culture. This rather dispassionate goal will of course be rejected by political romantics in each of the cultural biases, as will the cultural compromises that it suggests are required. 87


behaviour.21 Each cultural bias in the grid-group scheme then encompasses a number of elements. For the present purpose, it is not necessary to try to develop a comprehensive classification of the elements of cultures, though there have been many attempts to produce such taxonomies.22 I want to focus on certain key dimensions of cultures of constitutionalism and explore their significance for participation. These are the affective, the risk perception, the behavioural, the financial and the educational dimensions of culture. Within the affective dimension, I mean to include pride, esteem, trust, loyalty and identification. The risk perception dimension is concerned with the recognition of the risks and opportunities that the constitution affords the constitution and individuals. By the behavioural dimension I mean to refer to the willingness to use opportunities for the exercise of voice by way of complaint or litigation, especially judicial review, and to views of the propriety of restraint and responsibility in the exercise of voice. The financial dimension includes the willingness to pay for and sustain the costs of the prevailing constitutional order, including, for example, the budgets for such expenditures as legal aid, court staff and administration, referenda and innovative forms of consultation. This level is particularly readily linked with that of risk perception, because a commonly perceived risk is that the costs of increasing participation could spiral out of control. Above some threshold expressed as a proportion of the costs of other public services, the costs of constitutional opportunities for participation may become culturally unsustainable. By the educational dimension I mean to refer to the depth and distribution of awareness of constitutional opportunities for participation. Using this framework, I will set out some hypotheses about what is happening to cultures of constitutionalism and participation in Britain.

The affective dimension Reported national pride in Britain generally runs around or just above the 50% mark, which is significantly above the European average.23 However, as reported in surveys by MORI,24 the Henley Centre for Forecasting and others,25 esteem for, trust in and loyalty to the major institutions of the British 21 For a review of the main definitions used in the anthropological and sociological literature, see Geertz, ‘The impact of the concept of culture on the concept of man’. For a recent sociological review, see Berger, An Essay on Culture: Symbolic Structure and Social Structure. 22 For one recent intriguing attempt to distinguish ‘locations’ and ‘dimensions’ for the purpose of describing the political cultures of social movements, see Lofland, ‘Charting degrees of movement culture: the task of the cultural cartographer’. Although it would certainly be useful in understanding cultures of constitutionalism, I have chosen not to try to apply Lofland’s schema here because it ranges too widely for the present purpose. 23 Kaase and Newton, Beliefs in Government, p 116, Table 5.3 for 1985. 24 MORI, British Public Opinion. 25 Atkinson, ‘Suspicious minds: public distrust of government’, pp 12–14. 88


constitutional order, particularly politicians, the established church, the monarchy and the civil service, has been declining for more than a decade. In general, esteem for or trust in hierarchical institutions has declined significantly,26 but levels of alienation from the constitutional order are particularly high among young people.27 Identification with administratively defined locality, 28 with British nationality, and with the constitutional order in general is not falling at such a rapid rate, although Scottish, Welsh and some northern English regional identities are significantly stronger than territorially defined identification in much of southern England. Identification with pressure group organisations, at least as measured by membership data reported in Social Trends, continues to rise and fall in Britain in cycles that look roughly like those posited by Hirschman. A large rise in membership of and support for environmental movements in the 1980s peaked by the end of that decade and have described a plateau in the 1990s. Since 1991, while individual green consumerist attitudes and behaviour have changed little,29 more collective voices on green issues has been quieter. Reported willingness to engage and actual engagement in various forms of political participation other than voting remains relatively high by international standards and has risen since the late 1970s.30 Indeed, a general rise in participation has been observed in most OECD countries over the postwar period,31 but it has not been evenly distributed across society, and, again, both voting and other kinds of participation by young people may be running at low levels in Britain.32

The dimension of risk perception It is much more difficult to discern from survey data clear trends in the perception of risks connected with the constitutional order than it is to see patterns in affective constitutional culture. Few surveys of any scale give data the perception of the risk of gridlock, of over-representation of activist

26 Inglehart, Modernisation and Postmodernisation: Cultural, Economic and Political Change in 43 Countries, pp 299–302. 27 Wilkinson and Mulgan, Freedom’s Children: Work, Relationships and Politics for 18–34 Year Olds in Britain Today, pp 98–108. 28 Gosschalk and Hatter, ‘No sense of place? Changing patterns of local identity’. 29 Henley Centre for Forecasting, Planning for Social Change. 30 Eg, the data from various surveys collected in Kaase and Newton, Beliefs in Government, p 51, Table 3.4. 31 Ibid, Inglehart, ch 6; and Kaase and Kohut, Estranged Friends? The Transatlantic Consequences of Societal Change, pp 35–39. 32 Ibid, Wilkinson and Mulgan, pp 98–108.

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minorities with intense preferences, of political exclusion, of civic privatism, or of a lack of honesty in consultation and involvement practices. Data are available on levels of reported interest in politics, satisfaction with the democratic systems as a whole, fairness of the interaction between taxes and incomes, etc, but these are very imperfect indicators, from which inferences about real perceptions and how they cluster would be risky. Some of the data from the MORI Socioconsult Programme carried out in the early to mid 1990s could be interpreted as suggesting that disproportionate numbers of young people exhibit fatalist perceptions of the risk of political participation. 33 Individualist and hierarchist risk perceptions about gridlock are probably highly correlated with strong preferences for the general contraction of taxes and public spending and unwillingness to pay for additional welfare expenditures. The number of those willing to sustain both of these kinds of public expenditure through taxes may have fallen back in numbers since the late 1970s.34

The behavioural dimension The number of applications for judicial review has risen steadily in Britain through the 1980s and 1990s,35 as have appeals to Social Security Appeal Tribunals, complaints against doctors, medical negligence suits, and expenditure on the civil legal aid budget. This might suggest a general rising willingness to be querulous about public services. It also may at least partly be a result of the greater accessibility of Legal Aid and the introduction of new tribunals and complaints systems, and greater trust and confidence in the quality, responsiveness and efficacy of the means of the redress that are available. Attitudes to restraint and responsibility in participation have not been measured directly.

The financial dimension Survey data on willingness to pay taxes is usually collected through questions that ask about either aggregate tax levels or willingness to pay for certain types of welfare expenditure, rather than about expenditure on the constitutional process. However, there may be a general levelling off in the 1990s, after growth in the 1980s, in self-reported willingness to pay taxes at the aggregate level, at least as found by the British Social Attitudes surveys.36 33 Wilkinson and Mulgan, Freedom’s Children: Work, Relationships and Politics for 18–34 Year Olds in Britain Today. 34 Kaase and Newton, Beliefs in Government, ch 4, which principally uses data from the International Social Attitudes Survey. 35 Marshall, ‘Lions around the throne: the expansion of judicial review in Britain’. 36 Jowell et al, British Social Attitudes. 90


The educational dimension While most people in Britain have been found to be aware of the main opportunities for participation, awareness of forms of redress runs consistently below levels of awareness about opportunities in connections with voting, demonstration, petition and other conventional protest measures.37

TRUST AND THE CONSTITUTIONAL ORDER It is worth examining a little more closely a key aspect of affective constitutional culture – trust. For trust in the leading institutions granted powers by the constitutional order is an important measure of legitimacy, and of the process by which different social identities negotiate with one another in systems of participation. It seems reasonable to suppose that those who trust the relevant institutions to operate with efficacy and procedural fairness when handling the input from wider participation will be more likely themselves to participate than those who do not. I have argued elsewhere that it is useful to distinguish ‘reasons’ and ‘tasks’ in the analysis of trust. The reason for trusting a person or organisation are reasons, and the types of tasks (including refraining from or preventing some conduct) that person or institution is entrusted with are tasks.38 Trust is an agency relationship in which for given reasons we trust people or organisations to carry out particular tasks. Therefore, trust is quite distinct from esteem, in which tasks may not be directly set, and from respect, in which precise reasons for trust may be absent. It is an empirical question whether someone will only trust the people or organisations that she holds in high esteem or respects, and vice versa, and if trust and esteem are highly correlated in this way, and whether esteem comes first, or trust comes first. We can classify reasons in the following way. First, we might trust on the basis of past experience of dealing with the person or organisations in which we have seen them prove reliable. Secondly, we might trust on the basis that the person or organisation has a reputation, in either of two ways. We might take evidence of that reputation as a kind of reference, trusting on the basis of the reported experience of others. Or we might infer that the person or organisation will value that reputation and behave in a trustworthy way, in order not to damage that reputation. In this case, a reputation acts as a kind of hostage built up from experience. Third, we might trust on the basis of characteristics. We might, for example, decide that someone is trustworthy 37 Inglehart, Modernisation and Postmodernisation: Cultural, Economic and Political Change in 43 Countries. 38 6, Trust, Social Theory and Public Policy. 91

Promoting Participation because we share the same nationality or the same local roots, or simply the same gender, with them. Alternatively, if we believe someone to be reliable on the basis of an eyeball-to-eyeball judgement, we are ascribing a characteristic that is, for us, a reason for trust. In some cases, this may be a special kind of reputation based trust, if we think that reputation in the community of shared identity is valued. Alternatively, if we think that the person or organisation may feel some sense of obligation to us because of that shared identity or some other characteristic, the role of the community of identity is more to do with moral scope of duty. Fourth, we might trust on the basis of various institutional factors. Generic institutional factors include the availability of legal redress in the event of default, while specific institutional factors include the warranties and guarantees or other ‘hostages’ that the person or organisation may offer us. We can classify tasks as follows. First, the minimal or merely prudential level of trust arises when we believe the statements of intent toward us that a person or organisation makes. Promises, threats and other indications of intention to do or not do a certain thing can be believed, whether or not they are welcome. Second, we may trust the person or organisation to carry out the contract that we have with them, explicitly or implicitly by virtue of some legal rule, and, presumably, to do so to the threshold level of competence required explicitly or implicitly by the terms of the contract. Third, we may trust the person or organisation to exercise goodwill. That is, we trust them to put our interests first, and use their discretion in the agency relationship to promote our interests. If the terms of the contract turn out not to be in our interest, then one who exercises goodwill will set them aside. If the person or organisation show goodwill towards our interests, they may do a little more for us than the contract requires. There is a fourth category of trust, which we might call absolute or moral trust, in which we no longer trust the person to do anything in particular, but trust them tout court. Organisations are not normally eligible for this category of trust, which shades into esteem, and it will be ignored henceforth. Cross-tabulating these categories yields the following matrix. Figure 2: The dimensions of trust – reasons and tasks Tasks Reasons

Minimal (prudence)

Contract and competence

Experience Reputation Characteristics Institutions 92

Goodwill


In many situations, if we trust at all, we will trust for not just one reason but for a combination of reasons. Moreover, if we have reached the level of goodwill, then analytically we have already achieved (and gone beyond) contract trust, and likewise one cannot place contractual trust without first placing minimal trust. Therefore, we should think of any particular trust relationship as being represented not by occupying a cell in the matrix but rather by an area of the matrix covered. In general, movements (like ink spreading over blotting paper) to the right of the matrix are movements in the direction of greater trust, while the shrinking to the left of an area represents decreasing trust, perhaps the consequence of a betrayal. It is not necessarily the case that after a person or organisation has forfeited our goodwill that their trustworthiness person or organisation will retreat all the way to the left hand border of the matrix, or even back to prudential trust. They may still be trustworthy under contract, provided we retain reasons to think that breach of contract would be so out of character that even their failure to provide goodwill does not lead us to imagine that they would so breach, or that breach would damage their valued reputation, or that breach would run risks imposed by an institution such as contract law. My previous research39 has led me to frame the following key hypothesis. People who place goodwill trust in a person or organisation will be more likely to do so on the basis of experience than on the basis of institutional factors. A culture of active, self-confident consumerism, in which individuals view themselves as powerful purchasers in a market, choosing, questioning, placing provisional trust in an organisation on the basis of evidence, expecting transparency and openness, concrete assurances and some means of redress, will be one in which experience-based reasons are more important than institutional ones. There are two kinds of consumerism. In a consumerism of exit, a provider that does not behave in a trustworthy fashion will be forsaken in favour of the next who might. In a consumerism of voice, people remain with the provider (perhaps because of the absence of any alternative), actively complain, seek redress and make demands. One way to apply all this to participation is to recognise that when we engage in political participation, we engage in activities that generate information about ourselves. Participation analytically involves us wanting to provide information about our preferences. In some situations (such as signing a petition) we may want ourselves as named individuals to be associated with those preferences, while in others, we implicitly agree that a profile of different pieces of information about us are linked together to provide a profile of our preferences, behaviours or whatever, but not necessarily that a true identity be attached at least for public purposes to such a record (as when we complete a 39 6, Trust, Social Theory and Public Policy; and 6 et al, Open Wide: Futures for Dentistry in 2010. For an empirical overview using quantitative data analysis, see 6, with Lasky and Fletcher, The Future of Privacy, Vol 2: Public Trust in the Use of Private Information. 93


survey on our political behaviours and attitudes). However, in other situations we may want to be anonymous (for example, when casting a vote), or not have a strong preference about identification or anonymity (for example, when being filmed for national television during a march or demonstration). Most people are aware that different parts of the public sector hold information on them that may, under certain circumstances (for example, the issuing of a warrant, request from a senior police officer, suspicion by a benefit fraud officer of fraud, etc), be matched, other data sources about us mined and more complex profiles built up. Most people are at least a little uneasy about the prospect, but accept it, subject to safeguards, codes of practice on information ethics and systems of redress, where it is necessary to detect or prevent crime, maintain military security, or, for more limited purposes, to build up a picture for policy makers of who does and does not want or need what.40 Trust in the handling of such personal information therefore involves having confidence that public and private bodies interested in mobilising participation will handle that information according to ethical principles of confidentiality, accuracy, non-disclosure, and of fairness in the method of obtaining the information, such as not collecting excessive and irrelevant material, permitting us (if possible without compromising the purpose of the data collection) to see and correct their records and so on. In a recent survey that colleagues and I conducted on the confidence of British public in institutions handling personal data,41 the key hypothesis I have put forward was supported. To a statistically significant degree, goodwill levels of trust in personal data handling by central and local governments were more likely to be achieved by those who trusted on the basis of experience and reputation (which represents crystallised experience) rather than institutional factors, despite the fact that the vast majority of the sample trusted principally for institutional reasons (mainly, the existence of data protection legislation). This suggests that trust in personal data handling by public bodies is potentially fragile. Moreover, grid-group theory would lead us to expect that different types of cultural bias would yield different initial presumptions about the reasons for trust and the tasks with which a person or organisation is entrusted. 40 6 et al, Public Trust in the Use of Private Information. See, also, Direct Marketing Association, The DMA Census of the UK Direct Marketing Industry 1996; Direct Marketing Association and Informix, The New Information Trade; Equifax, The Equifax Report on Consumers in the Information Age; Equifax, Harris-Equifax Consumer Privacy Survey 1991; Equifax, Harris-Equifax Consumer Privacy Survey 1992; Equifax, Harris-Equifax Mid-decade Consumer Privacy Survey 1995; Hedges, Confidentiality: The Public View; Henley Centre for Forecasting, Dataculture: Privacy, Participation and the Need for Transparency in the Information Age; Hine et al, Privacy in the Electronic Marketplace; 6 and Briscoe, On the Cards: Privacy, Identity and Trust in the Age of Smart Technologies; and Westin, Privacy and Freedom. 41 6 et al, Public Trust in the Use of Private Information. Other research discussed earlier also yielded information about the extent to which aggressive consumerism is to be found in respect of the handling of personal information. 6 et al, Open Wide: Futures for Dentistry in 2010. 94


Figure 3 provides a summary of the main hypotheses I would advance. Fatalists will have no presumptions; hierarchists will seek institutional reasons for trust; egalitarians will look for shared ascribed characteristics or reputation; and individualists will be eclectic. I would expect hierarchists and individualists to be more capable of reaching goodwill levels of trust with regard to tasks than fatalists, who will have some difficulty in getting beyond prudential or minimal trust. Egalitarians will occupy an intermediate position. Figure 3: ‘First Port of Call’ Basis for Trust by Risk Culture Sought after Experience reason for trust based

Reputation based

Characteristic based

Risk culture bias

Generic institution based

Specific institution based

✔

✔

✔

✔

Isolate/ Fatalism Central community/ Hierarchy Enclave/ Egalitarianism Individualism / Libertarianism

✔

✔

✔

CULTURAL CONDITIONS OF ENHANCED PARTICIPATION Having now developed some tools with which to think about the varieties of cultures of constitutionalism that may sustain or undermine willingness (and perhaps also ability) to engage in democratic participation, and briefly reviewed some of the available survey evidence, we can address the question of increasing participation more productively. That question can now be formulated more exactly as follows: what can we reasonably hypothesise about the cultural conditions under which enhanced democratic participation might be benignly sustainable? We must give our answer whilst recognising that: (1) the Hirschman cycle cannot be eliminated, although the troughs of the Hirschman cycles might be raised typically to higher levels of participation than we observe in Britain today; (2) sustainable participation requires the continued existence of all four types of cultures (a great increase in the number of egalitarians might increase participation in the short run, but would threaten the viability of society); (3) a culture of constitutionalism is a complex system, spanning at the very least affective, risk perception, behavioural, financial, and educational aspects of everyday social and political life, the trends of which may not always move in phase; and 95


(4) a key element of any constitutional culture of participation will be the nature of public trust in the institutions affording opportunities for participation (at least) to operate in conformity with certain procedural principles, and perhaps also to deliver outcomes from participation that are broadly acceptable and perhaps also are economically efficacious and affordable? We can now conclude that the following are conditions for enhanced participation. (1) Having fewer fatalists. A decline in the levels of constitutional fatalism is needed, although not to vanishing point, is needed. This can generally be pursued by increasing levels of educational attainment, and by strengthening institutions for social mobility and enhancing their trustworthiness, such as by providing meritocratic recruitment procedures and some measure of greater transparency about their operations. (2) Having an appropriate affective constitutional culture. A modest rise in levels of esteem for, pride in, respect for, and trust in constitutional institutions that afford opportunities for participation and redress is needed. Again, transparency matters, with freedom of information and clearly understood systems of financing for litigation being particularly important. (3) Having a trust dynamic for constitutionalism. A broad range of reasons should be furnished for non-fatalists to trust in the procedural fairness and efficacy of institutions for participation. This trust should extend to at least the contractual level and, in significantly more cases than at present, to the level of goodwill. In particular, more trust should be based on experience of the efficacious achievement of the constitutional actors, rather than on institutional reasons such as legal commitments. This is possible only with sustained effort and investment by leading organisations in their establishing their trustworthiness to those with perceptions formed by a variety of cultural biases. Institutions of scrutiny other than the selfregulation of politicians may be important here,42 as will governmental openness, and a measure of pluralistic political competition. (4) Managing perceptions of the risks of constitutionalism. Enhancement of the levels of participation must not lead to negative cultural feedback, in the form of heightened perception of risks of gridlock, excessive influence for minorities with intense preferences, and perceived associated ‘overload’ in goals, taxation and expenditure. There are some available principal means for working toward this, including recent German and Danish experiments with consensus conferences on highly contentious issues, and the use of citizen’s juries and deliberative polling exercises such as those pioneered by James Fishkin and his colleagues in the US. (5) Having an appropriate behavioural culture of constitutionalism. When the 42 6, Private Life and Public Policy, chs 16–17. 96


willingness to use opportunities for participation afforded by the constitution rises, it does so in tandem with the widespread acceptance of an certain kind of ethic. This can be described as an ethic of restraint and responsibility in the manner and scale of demand among participant activists, in order to reinforce the dampening of negative cultural feedback on risk perceptions. Again, mediation systems and consensus building techniques are important here. (6) Having an appropriate financial culture of constitutionalism. A modest but significant rise must take place in the acceptable maximum threshold the costs to the public budget of facilitating and responding to participation by citizens as a proportion of the expenditure going on substantive public services. With hierarchists and individualists, this can normally be achieved only in situations where there it is made clear that that the enhanced opportunities for participation will lead to effective policy making without unacceptable abridgements of liberty. (7) Having an appropriate educational culture of constitutionalism. Learning systems including schools, private associations, workplaces, public bodies and media must make significant efforts to inform citizens about constitutional opportunities for participation, their costs and benefits, the rights and responsibilities of citizens as participants, and the virtues of responsibility, restraint and efficacy in participation. While American style ‘civics’ are not particularly effective, there are ways being developed to build similar things into education across the curriculum and into programmes linking schools and colleges with the world of work. It seems to be necessary to satisfy these condition if the resistance to increasing participation set up by certain cultural biases is to be overcome. Naturally, each of these conditions will be unacceptable to ‘fundamentalists’ in each of the cultural quadrants. That is their point. They represent a series of cultural compromises that could, it is argued, make culturally possible a sustainable pattern of higher troughs in Hirschman cycles of participation.

BRITAIN’S CONSTITUTIONAL REFORM PROGRAMME IN CULTURAL PERSPECTIVE Using these arguments, we can make some remarks about the cultural basis for more participation on the assumption that the constitutional reforms proposed by the Labour administration for Britain are implemented as expected. Clearly, some of the constitutional changes will increase the number of opportunities for participation by way of introducing referenda, new elected bodies and roles, and new causes of action in the courts. However, it is far

97


from clear that, for example, the levels of identification in Wales with the assembly to be created there are anywhere near the levels that are found in Scotland for the Parliament or even in London for the strategic authority. In general, trust and esteem for politicians, the civil service, the monarchy, and other principal constitutional actors continue to run at low levels, despite initial upward surges around the time of the 1997 general election. Perceptions of the risk of gridlock appear to be relatively low in Scotland, although hierarchists and individualists continue to have qualms about the effect of high levels of participation in Scotland on public expenditure. The main behavioural indicators do not suggest any major, new, consistent upward pattern in national levels of willingness to participate, beyond the slow, secular upward drift reported in the major longitudinal surveys. Turnout figures in local elections remain very low. Levels of social activism are currently probably in a trough, but the absolute levels are not so far above those of the last trough in the 1980s to be considered out of trend. The most rapidly rising participation indicators are in respect of litigation and other forms of juridified redress. Most studies do not suggest that the proposed constitutional reforms will of themselves increase either the willingness to be taxed in aggregate or, more crucially, that raising the ratio of the costs of participation costs to the cost of public service generally would be acceptable. Indeed, rising levels of litigation may actually have a negative effect on this crucial variable. To date, neither educational nor media policy have made great strides toward engaging in constitutional and civic education in ways that they do not already. Taken together, then, these factors suggest that the cultural conditions are not in place in Britain today that would enable the changes to the anatomy of the constitution to be accompanied by any significant, sustainable enhancement in levels of participation. Nor are policies which would nurture the necessary cultural changes being devised. The reasons for trust in constitutional arrangements for participation which have been put forward in left wing thinking, which are based on the idea of ‘stakeholding’, have generally offered rather rigid and institutionally based reasons for trust which are reminiscent of 1970s-style neo-corporatist structures for decision making in firms.43

CONCLUSION In this chapter, I have tried to set out a serviceable framework for analysis of cultures of constitutionalism based on the grid-group cultural theory, and I have applied that framework to the question of developing the cultural 43 6, ‘Yesterday’s tomorrows? Stakeholding and the political economy of the new British centre-left’. 98


conditions necessary for enhanced participation. I have identified the key cultural conditions for an enhancement of participation that is sustainable and benign. I have concluded that on the, admittedly inadequate, evidence we possess, those conditions do not seem to be in place in Britain today, and that there is little in the programme of the Labour Government that would put them in place. Democratic theory and practice has never been soundly based on an understanding of the cultural dimension of politics. Most democratic theory has assumed that the correct design of institutional rules, models of citizenship, and formal opportunities to participate will be a sufficient foundation of democratic life. Occasionally, this is supplemented by requirement of the right kind of leadership, of civic education, and the assertion of certain moral values.44 Traditional democratic theory has so neglected the cultural dimension that it often reduces it to little more than a question of ‘legitimacy’,45 or simply providing security to while preventing excessive polarisation between distinct political currents.46 It should be clear by now that this will not suffice. A workable democratic culture cannot be legislated into existence and ‘legitimated’ by campaigns and/or economic prosperity.47 Rather, it must be the product of careful cultural mediation, dialogue and development. For example, the institution building required to ensure the sustainable use of common pool resources such as water resources or fishing environments involves processes of cultural change before free-riding can effectively be managed.48 Even the most acute theorists of activist democracy have never really specified the cultural processes that would be necessary for their vision to be implemented. Part of the reason for this cultural blindness of radical democratic theory is that its advocates generally comes from the egalitarian

44 45 46 47

Barber, Strong Democracy: Participatory Politics for a New Age. Habermas, Legitimation Crisis. See, also, Connolly (ed), Legitimacy and the State. Dahl, Polyarchy: Participation and Opposition, chs 7–8. This final negative point is stressed heavily in Dahrendorf, After 1989: Morals, Revolution and Civil Society, which warns people in East Central Europe against judging the value of democracy on the economic well being its governments can deliver. Habermas’ theory in Legitimation Crisis was, like that of the overload theorists and O’Connor, The Fiscal Crisis of the State, a theory of the endangering of the democratic order by economic contradictions it could not resolve. Although the later work of Habermas attempted to provide a cultural basis for legitimacy in his work on communication, it is still widely regarded as culturally thin. For example, in Legitimation Crisis, the ‘socio-cultural system’ is simply a black box for delivering or refusing to deliver ‘mass loyalty’ in return for ‘social welfare performances’ and, when loyalty is not delivered, there is a ‘motivation crisis’ hampering willingness to be economically active. While the later communicative action model is a richer and slightly more pluralist account of culture as dialogue, it still lacks the institutional richness and complexity of interactions of the grid-group approach. For an historical account of the mistaken hypothesis about legitimation crisis in the Western European Welfare States, see Klein, ‘O’Goffe’s tale’. 48 Ostom, Governing the Commons: The Evolution of Institutions for Collective Action. 99


communitarian cultural bias and lack a sufficiently sensitive appreciation of the dynamics of the interaction between cultural biases.49 The most common story about that cultural change is that it consists in the slow and steady accretion of social capital founded on norms of trust.50 This is not wholly wrong, but it is simply insufficiently specific, both about the nature of the culture in which social capital consists and about the dynamics of trust that sustain that social capital. The challenge for democratic theory and for social capital theory are to become culturally literate and to become more practically useful in the design of cultural policies. Cultural change among publics in liberal democracies is not an aleatory process (contrary to the view of fatalists). It is one in which policy makers must make interventions, even though certain tools are constitutionally forbidden them.51 Though any conceivable state must make efforts to change those cultures that sustain unambiguous social evils, the principal requirement of a sustainable democratic order of participation is that it allows a creative tension both between the differing cultures of sections of the sovereign people and between the democratic impulse to respond to popular culture and the impulse towards leadership and problem solving that must lead popular culture. Those cultures must compromise to the degree sufficient to allow them engage constructively with one another on the terms of the cultural settlements struck within the State. That is a tall order, but an achievable one. What is neither achievable nor desirable is an end to the cultural cycle of participation, nor a permanent frenzy of participation for which, as Wilde famously put it, seven evenings are not sufficient in a week, nor a rise in participation based on continued dissatisfaction with services. With a greater sensitivity to the cultural dynamics of democratic life, it may be possible that a settlement between the cultures of constitutionalism in Britain may yet emerge.

49 A partial exception to this is Dryzek, ‘The informal logic of institutional design’. Using a Q-sort empirical methodology, Dryzek distinguishes four ‘discourses’ which bear quite a strong relationship to the four cultural biases of cultural theory. He recognises the need for such ‘discourses’ to be brought into constructive relationships with one another before progress can be made on his activist democratic agenda, but says little about how this might be done or what the process of trust might look like. 50 Coleman, Foundations of Social Theory; Fukuyama, Trust: Prosperity and the Social Virtues; Putnam, ‘Tuning in, tuning out: the strange disappearance of social capital in America’; Putnam et al, Making Democracy Work: Civic Traditions in Modern Italy; and 6, Escaping Poverty: From Safety Nets to Networks of Opportunity. 51 6, ‘Governing by cultures’; and 6, Holistic Government, ch 6. 100

CHAPTER 5

PARTICIPATION AND PASSIVITY: NO ROOM AT THE TOP

Stuart Weir Was he free? was he happy? the questions are absurd – Had anything been wrong, we should certainly have heard. WH Auden, The Unknown Citizen

Discussions of participation in Britain usually begin with figures revealing a low level of involvement of citizens in political activities and end fairly quickly, largely because there is little information, with the conclusion that the British people are passive. Indeed, the large cross-national study of ‘civic culture’ in Britain and four other nations in the early 1960s by Gabriel Almond and Sidney Verba concluded that one of the secrets of Britain’s stable democracy was the passivity, or deference, of the people themselves.1 The most recent study of political activity, that by Geraint Parry and his colleagues in the 1980s, found that Britain’s national and local political elite of around 50,000 men and women could fit comfortably into Wembley Stadium. 650,000 ‘complete activists’ and a ‘relatively active’ quarter of the population was more than balanced by a ‘generally passive’ half of the population.2 In this speculative discussion, I am beginning from the other end of the spectrum – at the top. Much of what I say will be familiar. The elite culture of British politics allows little room for democratic practice. This culture is dominated by the traditions of ‘strong’ government and excessive secrecy. Politicians at Westminster live in a political world of ‘consent’ which assumes that ordinary people do not actually take the initiative in deciding what they want, give consent to what they are given, and every so often at elections might transfer that consent to another political party. Whitehall has a Platonic guardianship ethic which imbues the bureaucracy with a conviction that their impartial and objective processes allow them to determine the ‘public good’ quite independently of what the public may think or desire.3 A few years ago, when seeking to explore this ethic for the purposes of auditing democracy in the United Kingdom, my colleagues and I met a group of senior civil servants and explained that we would conduct our audit within the framework of two basic democratic principles, ‘popular control’ and ‘political equality’. ‘Popular control,’ sniffed one madam, ‘surely you don’t mean that!’. One of the clearest 1 2 3

Almond and Verba, The Civic Culture. Parry et al, Political Participation and Democracy in Britain. Weir and Beetham, Political Power and Democratic Control in Britain, nb, ch 2. 101


lessons of the Scott report into the ‘arms to Iraq’ affair, and the executive response it evoked, was that civil servants hold MPs in contempt and are very hostile to any realistic means of holding ministers accountable to Parliament.4 Lord Howe’s evidence to the Scott inquiry contained classic examples of the disdain of the right for the clamour of the crowd. In Howe’s view, even informed MPs and members of the public had to be kept in the dark in case the emotional responses of ‘uncomprehending or malicious commentators’ distorted government’s thought processes and put British business interests abroad at risk. Government knew best. Senior bureaucrats supported Howe’s view.5 Yet such disdain can flourish as strongly on the left. Richard Crossman, a leading Labour party politician and thinker, once said that the patrician ideas of Edmund Burke had quite as much influence on the left as on the right. When the dockers marched on Parliament in support of Enoch Powell’s views on immigration in 1968, Richard Crossman mused in his diary that Parliament was a ‘rock’, sufficiently remote from popular control to ride out such passions.6 Curiously, local authorities, which are deliberative bodies with formally very open constitutions provided by statute, ape the conduct and manners of Whitehall and Westminster. Thus, at the level at which people are most likely to want to participate, they are confronted by remote institutions which for the most part are not open to genuine participation by local people. Even so, the openness of local authorities to electoral pressures was too much for the Conservative governments of the 1980s. They created hierarchies of national and local ‘quangos’ – executive and advisory non-departmental public bodies (NDPBs) and local public spending bodies (LPSBs), to give them their officially acceptable titles – specifically to remove large areas of public life and services from the public gaze. Significant local authority functions and services, such as public housing, further and higher education, urban planning, schools, etc, were successively removed from local authority control.7 In Controlling Nuclear Weapons, Robert Dahl described how liberal democracies created ‘guardianship enclaves’, in which decision making is removed to groups of specialists or other chosen groups, acting largely in secret under executive control and subject only to the most general constraints of remote scrutiny by directly elected political figures. Britain’s quasigovernmental agencies are just such ‘guardianship enclaves’. Their proliferation was justified by the government on the ground that participating in their democratic control was less important to the public than making 4 5 6 7

Norton-Taylor et al, Knee Deep in Dishonour: the Scott Report and its Aftermath, chs 14–15. Scott Committee, Report of the Inquiry into the Export of Defence Equipment and Dual-use Goods to Iraq and Related Prosecutions, Vol 1, paras D4, 52–55. Crossman, The Diaries of a Cabinet Minister, Vol 3, p 30. Weir and Hall, Ego Trip; Weir and Hall, Behind Closed Doors; and Weir and Hall, The Untouchables. 102

Participation and Passivity: No Room at the Top

services ‘consumer-responsive’ through such devices as the Citizen’s Charter, league tables of results, and so on.8 In August 1996, I took part in a debate on BBC Radio 4’s In the Dock programme with three quangocrats, two of whom were passionately opposed to measures of local accountability on the grounds that quangos were simply agents of the central State: We [the board of a NHS trust] cannot be held responsible for the level of government expenditure on health or the number of beds that are provided. The trust is part of a National Health Service, and the policies and strategy, the standards and the requirements while it remains national come from the centre and the local agencies have to operate within what one might regard as this straitjacket.

One of the guests was also of the opinion that: A lot of what’s talked about in terms of local control has, I suspect, more to do with wanting to make different policies locally rather than control of the implementation of policy that is set out nationally. And that really isn’t realistic, it can’t be done in that way.

Such views are not uncommon among the 70,000 strong ‘new magistracy’ which (mostly) mans – rather than womans – the local quango State. The signs are – one year into the New Labour regime – that, at both national and local levels, these guardianship enclaves will survive largely unreformed, except for a few palliative measures.9 (We still await concrete legislative proposals on freedom of information, which could at least open up these enclaves to the public gaze.) In civil society, the trades unions probably are the public organisations which have been most in touch with their members, but nevertheless they had to have elective democracy forced on them by Mrs Thatcher. Not for nothing were the likes of Jack Jones and Hugh Scanlon described as ‘trade union barons’. Of course, the higher echelons of British industry, and other areas of business and public life, are stuffed with their own barons, many of them, indeed, decorated with imperial titles and medals. Even the most watered down schemes for worker participation evoke outrage on the part of business and industry. Britain’s bosses regarded the attempts of Tony Benn, as Industry Secretary, to institute open ‘planning agreements’ between firms and their workers in the early 1970s as the stuff of revolution. So shaken were they by Labour rule in that decade that Mrs Thatcher’s governments gave a high priority to asserting the bosses’ ‘right to rule’. And, while European industry accepts the European Union’s social contract and similar schemes with equanimity, among British industrialists such schemes are taken to spell the end of civilisation as they know it. Even membership bodies do their utmost

8 9

Weir, ‘From strong government and quasi-government to strong democracy’, in Hirst and Khilnani, Reinventing Democracy. Cabinet Office, Quangos: Opening the Doors. 103


to prevent their members having any real influence. The constitutions of the Automobile Association, say, or the National Farmers Union, are designed to entrench oligarchies. The National Trust was riven by struggle when its hierarchy were horrified by members seeking to translate humanitarian and environmental concerns into policy. In brief, one could hardly say that in this country children are born into a culture of popular participation or democratic practice. Nor are they even educated in the ideas of democracy and citizenship, in the workings of the institutions of the State, or in their rights and responsibilities under the law, still less in the notion that they might themselves play a role in determining what government, employers, the State, or other bodies do at any level of society (though the Crick report may change this). In the 1960s, public resentment of the planning process reached such heights that the then Labour Government did attempt to introduce participation in planning, but that enterprise very soon withered in the dry soil of local administration. Only when local people choose to breathe life into the formalities which are still gone through can participation in planning be said to exist. Governments do, of course, consult. But official consultation is permeated by the elite assumptions of the guardianship ethic and is quite unstructured by any democratic ground rules. There is a formal process by which government unloads masses of consultative papers every year onto interest groups, trade associations, pressure groups, professional bodies, etc – to organised civil society in other words. The general public is not so much excluded as included out. These formal processes are sometimes relatively open, sometimes not. For the real external influence on government usually is exerted through policy networks and communities of departmental officials and the representatives of major businesses and interest groups who are affected by a government department’s decisions. Whitehall is largely an uneven federation of government departments which actually make most government policies and take most government decisions. They are governed by informal rules and occasionally ‘guidance’ from the Cabinet Office, but, generally, create their own rules and processes. Through policy networks, often revolving around advisory quangos, departmental officials and organised interests negotiate public policy. It is here that the real external influence on government is exerted, not through the impertinent Dolly Drapers who frequent the demi-monde of national politics. The representatives of recognised interests within these loops also play a far more significant role in forming and making policy and legislation than elected MPs and their committees. Often legislation in front of Parliament has been stitched up in carefully calculated negotiations within policy networks which have then been endorsed by cabinet committees. By the time such legislation reaches the floor of the House or a standing committee, it simply cannot be unstitched. Other measures may sail through largely unseen when broad and vague

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enabling legislation allows it effectively to be ‘passed’ as a succession of statutory instruments.10 The structures of local government have been made more open, but not its culture nor its practice. Of course, there are isolated examples of good practice and experiments in new forms of local democracy, such as citizen’s panels and juries. Some authorities have gone in for devolution to neighbourhood councils. But even here the practice is unguided by an understanding of basic principles of government. Neighbourhood councils (like parish councils) often themselves degenerate into interest groups, and become dominated for example by a particular tenants’ or residents’ group. Local authorities have their own policy networks. Dominant local Labour parties can swamp the council, trade unions and the voluntary sector and public decisions are shaped by the balance of power within the party rather than by the public procedures which give them legitimacy. Public sector trade unions, as the Conservatives pointed out in the 1980s, may therefore wield excessive influence over the policies of a local council. In areas of one-party control, abuses such as the Poulson scandal can erupt. But local business elites can as often employ the local Conservative Party as a formal instrument of their own informal, unseen and unchecked power. Such private-public networks of business, land and property interests are by their nature less vulnerable to investigation. Our Friends in the South could nonetheless make television drama quite capable of rivalling Our Friends in the North. This overview, of course, misses out initiatives such as the Citizen’s Charter, which actually began life in local government (at York), complaints procedures and other attempts to make services responsive to ordinary people. But, as William Waldegrave argued, they function as instruments of consumer rights, not of democratic participation. It is not surprising, therefore, that politics is a turn-off for most citizens, and the idea of participating in it alien to them. In terms of people’s interests, the Henley Centre found that politics ranked a poor 32nd. Actually, politics was equal 32nd with going to the circus, though, for all the affinities between the two spectacles, it is a fair guess that most people find the circus less remote than politics. More seriously, the Parry et al survey found that even talking about politics and national affairs was a fairly rarefied activity. Only one in ten people talked about politics ‘very often’ and fewer than a quarter even ‘fairly often’. As for actually taking part, very many people disqualify themselves from the start simply because they do not feel sufficiently confident to seek to bring their own personal influence to bear on official policies and practices. For example, two thirds of respondents in the Parry et al survey felt that people ‘like them’ could have no influence over MPs.11 Such

10 Weir and Beetham, Political Power and Democratic Control in Britain, ch 7. 11 Parry et al, Political Participation and Democracy in Britain, p 173. 105


people tend also to lack experience of the skills and group work which are required for successful participation. Participation, then, tends to be the pastime of a highly active minority. While most people vote – and believe in the value of the vote – only a small minority was active across a wide range of activities; and that was even when ‘being active’ included people who may have carried out a single act only once in five years. The range of activities extended from the 40% who had signed a petition, and the 20% who had contacted a councillor at least once in the past five years, to the 6% who had attended a protest meeting, the fewer than 5% who had been involved in any form of party campaigning, and the 1% who had blocked a road in the same time period. (Protest generally is an activity of the poor.) It is possible to devise a list of 22 possible activists’ actions; to give a weight to the level of participation in each ranging from ‘never’, ‘only once’, ‘now and then’; and to aggregate these to produce a scale ranging from 0 for doing nothing at all to 100 for being involved at a high level in them all. Parry et al carried out this admittedly rather arbitrary exercise and found that the average citizen’s score was about 6 out of a 100; three quarters of all respondents scored 10 or less; and just over 5% scored between 20 and 100. There is, therefore, a broad pattern of sporadic and sparse participation among the population as a whole, and a high degree of activity among a very small minority. This minority of 650,000 complete activists, or 1.5% of British adults, are drawn largely from the middle and upper classes. In the 1980s, the study showed, about half had gone through university and belonged to the salariat, and very nearly half belonged to the richest quarter of the population. But, they also included working class people on low incomes, with one in six belonging to the poorest quarter of the population. Nearly half of the complete activists were women. Nearly half of them were active in organisations or groups, with each such person having four or more such links. Indeed, belonging seems to be closely associated with activism (as research in the US has indicated). Parry et al identified strong correlations between activism and possession of individual and group resources (as well as relatively high confidence in one’s own effectiveness). As well as these ‘complete’ activists, the study also categorises ‘direct activists’, ‘contacting activists’, ‘collective activists’ and ‘party campaign activists’.12 The assumption which is generally drawn from analysis of politics in Britain, and such figures as these, is, as I have said above, that the British people are deferential and ‘passive’. This fits in with the Schumpeterian view of democracy which allocates to citizens a limited degree of participation and in which politicians and political parties are the main agents of democracy.

12 Parry et al, Political Participation and Democracy in Britain, ch 10. 106


The role of the public is to choose between different parties at periodic elections and between elections and to refrain from ‘back-seat driving’.13 In sum, the majority’s role is criticise if they must, but not to seek to participate in governing. But the fact that most people do not go out to participate in meetings, to hand out petitions, to lobby, campaign or protest, does not mean that they are necessarily either deferential or passive, or are happy to leave the direction of their lives in the hands of politicians. They may be just too busy, too tired, too defeated; they may, as the late Tony Crosland once said, be so materially content that they spend most of their time on leisure activities.14 Furthermore, since Parry et al’s data is now out of date, a more highly educated and more demanding population may well be more active now than in the 1980s, as MORI polls in 1991 and 1995 for the Rowntree Trust’s State of the Nation project, and the 1994 British Social Attitudes (BSA) survey suggest. There are, in short, alternative ways of interpreting the data and the temper of the British people. I will briefly develop one interpretation which is partly justified by some poll data, but is born also of my own political experience in local and national politics. The Parry et al study itself finds evidence of ‘latent activism’. More people than those who had taken any of their list of actions in the past five years say that they might or would ‘probably’ or ‘certainly’ take such action in the future. Only when it came to party political work or aggressive protest did a large majority of people say that they would ‘never’ take action.15 Again, the State of the Nation polls and the 1994 BSA survey indicate a widespread, and growing, willingness to act when the circumstances justify it. As Professor David Donnison surmises in an unpublished paper for the Democratic Audit: ‘it is presumably from these latent activists that emerge the huge crowds which occasionally surprise the authorities’ when a national issue, such as the poll tax, pit closures or a march ban, or proposals for a radioactive waste dump or travellers’ site locally, ignite popular feelings. ‘Their presence’, he adds, ‘also explains the large majorities of the electorate who vote in general elections’. The Parry et al study also refers to previous surveys, one of which by Barnes et al argues that, since political behaviour is contingent on particular events, it is more important to study the readiness of people to act and be mobilised than actual participation. This readiness, they say, is ‘an abiding property of a wide sector of the whole population’.16 They found that one in 10 people would take part in a rent strike and 7% in an unofficial strike or blocking traffic, but the overwhelming majority would ‘never’ take any of these actions.17 13 14 15 16 17

Schumpeter, Capitalism, Socialism and Democracy. Crosland, ‘A social democratic Britain’, in Socialism Now, p 89. Parry et al, Political Participation and Democracy in Britain, p 423. Barnes et al, Political Action: Mass Participation in Five Western Democracies, p 58. Ibid, p 548. 107


Broadly, my interpretation of the sparse information we have is that Britain could be described as a ‘reactive’ rather than a passive democracy. Most people are not interested in politics and they increasingly distrust politicians.18 But they belong to what is still an active civil society. In the 1980s, two thirds of the population were members of at least one voluntary association; 27% were trade unionists (another 30% were past union members – a sign of the times!), but only 6.8% were members of a political party.19 Much of this voluntary belonging will be a natural extension of family or personal interests. More active members will have joined a committee, helped organise a fete, sold raffle tickets, and so on. In other words, the experience of organising in concert with others is there. This is not, however, experience which will often be directed at national issues, even those which opinion polls tell us people feel deeply about, such as the state of the NHS, rising unemployment, crime rates, etc. Issues of this kind are both long-running and complex, and often resistant to the control of most practising politicians or political parties themselves. Even so, according to the 1994 BSA survey, only about one person in five agrees that politics and government sometimes seem so complicated that ‘a person like me’ cannot really understand what is going on, and less than a third accept that ‘people like me’ have no say in what governments do. But few people try to exert an influence on such issues themselves, except through the ballot box. Occasionally, a major national event, such as the introduction of the poll tax, will move masses of people to protest on the streets or join campaigns, but people are largely moved to action at local level. There are of course ‘complete’ and other categories of activists in more or less continuous action locally – like the members of an amenity group, or residents’ or tenants’ associations, or local political activists who campaign for a major party or sell newspapers for a smaller grouping. But people who belong to the three quarters of the population who are generally inactive can be mobilised by an event or threat into participating directly in local affairs. This ‘reactive democracy’ seems to me to reflect the pragmatic ‘keep yourself to yourself’ attitude of the majority of people. I have experienced this type of reactive participation many times during my time as a local activist, councillor in Hackney, Director of the Citizens’ Rights Office (CRO), and in the Child Poverty Action Group. In the 1960s, I was one of a small group which decided to rally local inhabitants of a rundown neighbourhood in Hackney which had been scheduled for the bulldozer by the local Labour council. The population of owners, leaseholders and tenants had been demoralised by the Government’s decision to approve the demolition of a first tranche of the area after the residents had organised a

18 Jowell et al, British Social Attitudes, 12th Report, 1995, ch 7. 19 Parry et al, Political Participation and Democracy in Britain, pp 89–90. 108


massive protest and persuaded a government inspector to back their case for retention and improvement. We swept round the area and loud-hailered an invitation to come to the crypt of the local church to protest directly to councillors and would-be councillors at an election meeting. Two or three minutes before the meeting was due to start, only a desultory handful of people had arrived. A Labour councillor, of the Schumpeterian persuasion, consoled me with ill concealed pleasure: ‘you can’t get people like this out for public meetings’, he said. Within moments, nearly 300 people had poured into the crypt and they gave him a roasting! Ten days later, he and his colleagues were defeated at the polls. But, more significantly, a residents’ association was born which, over the next seven years, reversed the council’s policies; had established action and conservation areas; won outright ownership of their homes for the majority of leaseholders; blocked off traffic from ‘rat runs’ through the area; and set up a housing association, an advice centre, a local nursery, and an adventure playground (reclaimed from a derelict site). Nobody at that initial meeting had the confidence to stand for election to an action committee, and so an open committee, which anyone could attend, was set up instead. Attendance for the first year rarely fell below 20. Two sisters, both OAPs, said they could not do much more than sell raffle tickets. They ended up chairing committees, dealing with council members and officers, and establishing dance evenings for the ‘old folk’. Respectable working class men and women stole planks from a demolition site to fence off a neglected and dangerous site. Tenants blocked a road until the council agreed to install a pedestrian crossing. Fifty or so people, complete with (hired) mechanical digger and tools, turned up to clear an area and erect play equipment for the adventure playground. At the CRO, we worked with a group of owner-occupiers who were being denied compensation payments by Newham Council; council tenants on a rundown Hackney estate seeking to force repairs upon their landlord, the council; single parents on benefit campaigning for reforms in their treatment by social security officials; furnished tenants of a rogue landlord in Islington wanting security and repairs; council tenants organising a formal appeal against high rent levels under the Housing Finance Act 1972; and so on. In every case, people who had never been politically involved were prepared to work together to save their neighbourhood, to enforce their rights, to campaign for changes in the law or government policies. They did not all ‘win’, and often did not expect to do so. But they wanted to try. They are all examples of what I describe as the reactive character of the British attitude towards participation. It would be foolish to argue that this reactive element is ever-present. Some people and some communities are simply too demoralised to have the self-belief, however tentative or fugitive it may be, which encourages ‘reactive’ activists to take their courage in both hands.

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There are, however, rewards, usually unexpected, from participation. People find satisfaction in working purposively together and finding themselves able to perform tasks they had always thought were beyond them. I have vivid memories of the pleasure of particular moments. A group of leaseholders, well briefed at last by the solicitor they had combined to employ, successfully confronted their landlord’s estate managers knowing that their landlord could no longer block their ability to obtain their freeholds. Tenants comprising a delegation to a council explained to members just why they were breaking the law. Single parents on benefit were interviewed in a hot BBC Newsnight television studio, and walked down grandiose Pugin corridors in the Palace of Westminster to lobby for change. (‘Do you think they’ve laid this lovely red carpet down just for us?’) There was pleasure too just in the mischief of wheeling prams back and forth to block commuter traffic on a rat-run road, or nicking floorboards from a demolition site to fence off a dangerous site nearby. (‘Mike said we could take them.’ ‘There’s no Mike on this site!’ ‘Will a tenner do it?’) There were two features common to most of these cases. The first was usually the presence of statutory rights or processes which gave the ‘reactivists’ a handle on their common problem or campaign. These rights and processes were not necessarily especially robust, but they existed and bolstered a more diffuse popular belief in a right to fair and equal treatment. It is often not realised that individual rights often provide a means to demand and even enforce collective redress. The second was the advice and support of a small, ‘professionally’ organised group. In Hackney, this group was composed of active local residents themselves. In the CRO, the staff were experienced advocates who knew the law, the processes of local government, etc., and who had access to specialist lawyers, public health inspectors, valuers, and the local and national media. Where this second element is missing, it is my view that the potential for protest or participation is often choked off or ends prematurely when a local authority accepts a petition and plays for time, or a solicitor sympathetic to the big landlord in the area fails fully to explain leaseholder or tenant rights, or a tribunal rejects a claimant’s individual case. This is why I began this paper at the top. The point is that the culture of government and public life is pitched against ordinary people seeking to resolve a burning issue, to protest against a particular decision, or to solve a problem. This certainly is true locally, and even more so nationally. The formal channels for participation or protest are slow-moving at best and often seem designed simply to prolong any response until every spark of initiative has drained out of those who have raised an issue. The courts and the Ombudsman also grind exceeding slow. Further, people often lack the skills necessary to make any headway with officialdom, which requires composing letters, using the telephone effectively, dealing with a bland person secure

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behind a counter, etc. The use of a public rather than private telephone, choice of words, or even speaking with an accent, is enough subtly and not so subtly to put complainants at a disadvantage. June Jordan, the black American poet, once wrote a moving essay on her students’ collective endeavour to gain justice for a young black member of her writing class, and the agonising choice they had to make to write their pleas for justice in standard (white) language or ‘black American’. The point was that they knew that if they wrote in their own language they could not possibly succeed. What happens if complainants get a blandly evasive reply, or even no reply at all? Or if they are denied the information they require? They will generally be inexperienced in the alien world of politics, government or public administration. Most lawyers and other specialists are costly to consult, and there is no uniformly available advisory network in Britain, especially one with legal expertise on tap, for people to get the guidance they may require to act politically. Especially in urban areas, Citizens’ Advice Bureaux, if they exist at all, are chronically under-funded and have to ration resources and even opening hours. There are relatively few lawyers, surveyors and professionals who are likely to be sympathetic or to specialise in ordinary people’s problems, and access to them usually can be obtained only through agencies or professional advisers. Clearly, tenants’ and residents’ associations, trade unions and other bodies exist which will advise and assist their communities or members, but unorganised communities and isolated individuals will rarely be in contact with them. Moreover, there are certain areas of public life in which communal action is, as it were, part of the warp and weft of life. People are accustomed, for example, to organising a campaign to get a pedestrian crossing, or to oppose the closure of a hospital. or plans for a travellers’ site near their homes. But there are other significant issues which rarely, if ever, spark off a participative response, such as the effects of national health, employment or housing policies on local areas. All these constraints are magnified in rundown inner urban areas or peripheral housing estates, or for more isolated communities living in poverty or neglect. The barriers here are even greater – personal barriers, structural barriers, official barriers. Transport facilities may be costly and inadequate, major services and shopping facilities may be withdrawn, even the police may be unable to maintain normal levels of security. Most importantly, the determining political culture is one of the strong central executive, aped by most other institutions of public life, which expects no more of the ordinary citizen than consent and periodic legitimation at election time. This culture barely knows how to encourage and incorporate popular participation in its processes. Consultation generally is aimed not at people but at organised interests. Thus, while people are far less deferential in most aspects of their lives than they were two generations ago, and more articulate and highly educated, nevertheless politics and public life remain

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relative no go areas. Participation is even shaped by our culture and its constraints. One signs a petition, or contacts a councillor or MP, rather than collectively organising an alternative policy choice or mounting a lawful public protest. Yet we know from public opinion polling that people are capable of forming views about most public issues which are remarkably coherent and consistent if examined from a variety of angles. Are people happy with this state of affairs? Focus groups organised in line with the priorities of political parties tell us they are. Opinion polls tell us they are not. Let me conclude by giving just one example. In 1994, ICM carried out an opinion poll on behalf of Channel 4 to inform their ‘Democracy Week’. They asked people whether voting every four or five years in a general election gave them sufficient power, how much power they had between elections, and how much they should have. By a majority of two to one, people agreed that the act of voting alone did not give them enough power. About four out of five people said that they have ‘a little’ power between elections, or none at all. How much power did they want? Nearly half of them said that they should have ‘a fair amount of power’ between elections. A third said they should have ‘a great deal of power’. Which leaves about 16% who may fairly be described, in attitude at least, as ‘passive’.

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CHAPTER 6

PARTICIPATION AND LOCAL GOVERNMENT

Lucy Gaster

THE ISSUES Local government commitment to participation In British local government, public ‘participation’ and, more particularly, ‘consultation’ could be seen by the cynical as codewords, or passwords, for a democratic legitimacy that is increasingly fragile. Electoral turnouts of 40%, the lowest in the European Union,1 the accelerated centralisation of powers since 1979, 2 and the rise of ‘consumerism’ 3 are perceived by many to challenge the very survival of local government as the local arm of democratic government. Yet if local government could in reality transform itself into the local arena for ‘citizenship’, connecting the triangle of individuals, community and government within the locality through processes of participation,4 this would give it a strong defence against attacks on its legitimacy in the future. 1 2

3

4

Stewart, ‘Democracy and local government’. Rhodes, Understanding Governance: Policy Networks, Governance, Reflexivity and Accountability, ch 6 usefully summarises three phases of intergovernmental relations that clearly demonstrate what Rhodes calls the ‘asymmetrical relationship’ between central and local government. Central government depends on local government to deliver or ensure the delivery of services, but it also has the ultimate power of legislation and money, which it has exercised to the full during the period analysed by Rhodes. How far, if at all, this will change under the new government remains to be seen. By autumn 1997, that government had already put the ‘Community Plans’ proposed in its manifesto on the ‘back burner’ and was enhancing the role of inspectorates and the Audit Commission in taking action against ‘failing’ councils, schools, etc. Gaster, Quality in Public Services: Managers’ Choices; and Gaster, Quality in Local Government: Next Steps. ‘Citizen’s Charters’ were originally introduced by York, Islington, Harlow and some other councils in the late 1980s, recognising that local people, as citizens and users of services, had a right to know what the council intended to do and to complain if those intentions were not carried out. The 1991 Prime Ministerial initiative had an ideological focus on individual consumers, not citizens, and was at first a very top-down affair. Nevertheless, it did highlight the issues of rights and redress in relation to public services, while in recent years the Citizen’s Charter Unit has encouraged the development of a more ‘bottom-up’ approach to the development of Charters which explicitly recognises the role of ‘community’ in their development. The Citizen’s Charter is likely to be revised by the Labour Government after a consultation exercise in the autumn of 1997. Lowndes, ‘Citizenship and urban politics’. 113


Reflecting this intention, or hope, corporate statements of ‘values’ or ‘mission’ would nowadays be incomplete without some reference to the role of the council within the wider community.5 This is usually supplemented by a stated intention to develop new trusting and credible relationships with that ‘community’. The question for this paper is: are these intentions matched in practice? Can local government become the crucible for new relationships between the citizen and the State, and the ‘demonstration project’ for active participation in other public arenas? And if the answer is ‘yes’, can an underlying philosophy be detected that could help those involved – the elected Members and senior officers, the front-line workers and, most of all, the public – see where, how, through what activities and at what stage of the policy process ‘participation’ could and should take place? Do these key ‘stakeholders’ have the rights and responsibilities to enable them to foster and take part in an active process of ‘participation’? If they have the rights, should these be entrenched in law? Of course, it may be the case that the language of participation is merely a cover for some tokenistic and possibly manipulative activity behind which the machine continues as before. Local government has a tendency to jump on managerial and policy bandwagons (and has often been forced onto them) and the sceptics might regard the language of participation as simply the latest of these. However, as someone who has been involved in local government over the last 20 years, both as an active participant and as an observer, I have ranged myself with the ‘optimists’. It seems to me that a real shift is taking place, not just in what Gerry Stoker called ‘sponsored participation’ (that is, participation/consultation initiated by governmental organisations), but also in local government’s ability to respond and work with unsponsored (spontaneous?) user, community and pressure groups wishing to engage with the policy process: Viewed from the dizzy heights of the perspective of radical advocates of maximum citizen participation, all officially sponsored schemes will appear inadequate. Those who adopt a less utopian perspective recognise that, although there are limitations, many local officials and councillors are committed to involving the public. Officially sponsored participation is flawed but nevertheless valuable.6

Bottom-up or top-down? Processes of consultation and participation by consumers and citizens in the affairs of local government have been gathering pace over the last decade and a half. Some recent legislation and government guidance has required that

5 6

Eg, Camden Council, We’re Listening. Stoker, ‘Local political participation’, p 135. 114

Participation and Local Government

‘consultation’ take place over certain defined matters, largely in relation to the environment or planning, and more recently in housing and social services. How and with whom this is done is largely left to each authority to decide. However, there is no general requirement to ‘consult’, far less to ensure any kind of active participation. This means that even in authorities where public participation is a corporate policy, such participation has been developed locally, generally responding to local needs, political ideologies and circumstances. In a very few authorities, participation is becoming more or less a way of life. In most councils, an overall intention to become ‘a participative council’ is just beginning to take shape, now spurred on by the government’s ‘democratic renewal’ and ‘best value’ programmes. In some other authorities, a culture of participation can be found in some sections or departments, while others appear to be untouched. The unevenness of these kinds of developments, especially at the implementation stage, is undoubtedly the cause of some of the problems (and the cynicism) experienced by the public and other key stakeholders. The fact that participation has been largely a ‘bottom-up’7 process explains the diversity and, to some extent, the confusion of purposes, methods and even definitions of ‘consultation’ and ‘participation’.8 The relationship between participative democracy and representative democracy, in particular the role of elected councillors, has been even less clearly thought through.

Participation, citizenship and decision making The idea of participation is closely linked, in the minds of those who write about it and in the minds of those who are trying to promote it, to ideas about citizenship and democracy. Citizenship and democracy in turn relate to processes of government (hence some writers’ concern about participation in the electoral and governing process itself) and to the policies and actions (delivered as services and projects) affecting citizens’ lives. Thus, Mike Geddes writes that: ‘a model of participatory democracy is one in which a knowledgeable and active citizen body is capable of taking a direct and sustained interest in the governing process.’ 9 Geddes suggests that 7

8 9

In using the term ‘bottom-up’, I mean to refer to the fact that the main impetus for consultation and participation has emerged within local government and has not been imposed by central government. At the local level, a bottom-up process would be one that started either within the community or at the bottom of the bureaucratic hierarchy, at the front line. Strongly devolved authorities may be able to build this kind of bottomup approach into their development of participation. However, top-down is the phrase that usually comes to mind when analysing policy developments in local government, and policies and processes to encourage participation are generally part of this pattern. Gaster, ‘Quality services in local government: a bottom-up approach’. Geddes, Extending Democratic Practice in Local Government. 115


requirements for this model to become a reality include a strongly developed civil society, an open institutional system, and participative and accountable political parties. His focus is very much on the structures of democracy, mainly in relation to the representative aspects of local government (getting more people to vote; supporting councillors in their work, etc), but also involving attempts to promote the direct involvement of citizens in political structures through, for example, neighbourhood committees. An alternative – or complementary – approach is to move ‘beyond the blunt mechanism of the ballot box’ 10 to focus on achieving change. Participation – the ‘practice of citizenship’ – is, Marian Barnes suggests in her analysis of community care, a process of collective action based on communities of identity or of interest, where those who have been defined as objects of policy making become active subjects involved as co-producers, both at the level of policy making and in the implementation of day to day practice.11 The notion of action, of active involvement, is central to the concept of participation in the social policy sphere. It is not simply the opposite of ‘apathy’ (although a dictionary definition might see it that way). It implies sharing an activity, undertaking activities with other people. Ann Richardson’s perception of participation was that, by introducing a new set of actors, policy formulation and policy execution would be influenced in a way that would not otherwise have happened. However, she appeared to exclude from her definition participation in voluntary associations, focusing exclusively on ‘participation with officialdom and its services’.12 This seems an odd and artificial division. Gerry Stoker’s review of what he calls ‘political participation’, which has already been mentioned, distinguished between officially sponsored participation (public meetings, forums, co-options, etc) and other forms of participation established to meet group members’ own needs (for example, in local associations, groups and clubs). The lives of the ‘unsponsored’ groups may or may not cross paths with the policy processes of organs of government, but it would be unwise to exclude them from the notion of ‘participation’ as it relates to local government, even if it is not participation in local government. Even if participation in community and voluntary groups was apparently only participation for participation’s sake – the ‘communitarian’ perspective according to Stoker13 – such involvement can foster a sense of citizenship and self-esteem which may (or may not) subsequently lead to policy related participation.

10 11 12 13

Prior et al, Citizenship: Rights, Community and Participation. Barnes, Care, Community and Citizens, p 45. Richardson, Participation, p 9. Stoker, ‘Local political participation’. 116


In practice, council-sponsored structures established in a vacuum do not have a very high chance of success, however this is defined. People invited to join council sponsored user groups or neighbourhood forums feel more confident and legitimate if they have a base of some kind in the community. Sometimes local authorities wanting quick results have to wait for the slow processes of community development to nurture and support local groups which, on the face of it, have nothing much to do with the council. Only then can the council develop enough credibility for those same people to feel able to become directly involved with it.14 The two types of participation go hand in hand.

The purposes of participation Assessing what a process of participation may hope to achieve is a major issue which will be addressed in much of the rest of this chapter. However, it is worth being reminded of the now much-used ‘ladder of participation’, first developed by Sherry Arnstein.15 This was adapted for local government by myself and Marilyn Taylor,16 distinguishing between participation in local government by people as consumers and by people as citizens. It is a model that is now quite widely used in local government, helping to define the objectives and expectations of processes of consultation and participation. Arnstein’s ‘ladder’ started from a recognition that, in order to have any say at all, the first stage in a process of participation is to give and receive information. Without adequate information (the question is, how much?), local people have no hope of being able to question, challenge or take part in decision making processes in a meaningful way. ‘Taking part’ may then take the form of giving feedback on existing policy, services and new ideas or proposed decisions (a consultative process) or suggesting and making recommendations for change (an influencing, advisory process). Taking control of some aspects of the process, generally within an existing policy framework (a tight-loose model of devolved power); sharing power; and ultimately working in a partnership, for example in the management of facilities or in

14 Gaster and Taylor, Learning from Consumers and Citizens. In this report, which examined the practices of consultation and participation in seven local authorities in England and Wales, Marilyn Taylor and I developed (p 17) the idea of a ‘learning curve’ to encapsulate the processes of change for both councils and community participants. This idea was intended to underline the fact that grand goals are not to be achieved overnight and that the way to develop confidence (on both sides) is to achieve some tangible results which are ‘small but important’. 15 Arnstein, ‘A ladder of participation in the USA’. This ‘ladder’ could be thought of as a ‘spectrum’ if this helps to remove the possibly judgmental notion that the aspiration should always be towards some form of ‘power sharing’. 16 Gaster and Taylor, Learning from Consumers and Citizens, p 14. 117


developing or choosing rules of action,17 are further levels of participation which increasingly assume equal power, at least in theory, between institutions of government and the public who are participating.18

What is to be achieved through public participation? It is sometimes said that ‘people don’t want to participate, they just want good services’.19 It is, indeed, unlikely that very many people at any one time will be actively involved in some form of participation, at least as far as it engages with local government. However, in our 1993 study of councils who had for some time been developing mechanisms for public involvement, Marilyn Taylor and I found that what was important for some local residents was not that they would necessarily attend every meeting, but that they knew a forum existed where they could raise and debate issues with the council if they wished. This could be called ‘latent participation’. It would involve removing the barriers to involvement – dependency, exclusion and disempowerment – that could otherwise prevent people from becoming involved how and when it suits them.20 The key lesson in every single experience of ‘participation’ is that the Council’s agenda is not necessarily the people’s agenda. Whether or not people actually participate, it is as well for a council to be clear about what it hopes to achieve by developing mechanisms and removing the barriers to participation. Doing this involves a lot of expensive work, so why do it? It is often difficult to disentangle objectives and expectations from process. Sponsored participation can often appear to be an end in itself. If objectives are not explicit, the questions of what is to be achieved and what is the contribution of local people to this are left unanswered. This vacuum 17 Walsh et al, Contracting for Change: Contracts in Health, Social Care and Other Local Government Services, ch 2, discuss the ‘institutional’ rules, the ‘rules of action’ and the ‘collective choice’ rules by which organisations decide how to behave. The idea of ‘collective choice’ rules (a concept developed by Eleanor Ostrom in Governing the Commons: The Evolution of Collective Action) suggests that both policies and how they are generally to be implemented can be the subject of collective deliberation and joint decision. 18 Commission on the Future of the Voluntary Sector, Meeting the Challenge of Change: Voluntary Action into the 21st Century; and Skelcher et al, Community Networks in Urban Regeneration. 19 Corrigan, Recreating the Public: A Responsibility for Local Government argues that the first focus of a council worried about residents’ alienation from government should be on improving the quality of its services. By engaging and reassuring local people in their role as consumers, they may eventually feel inclined to move to the wider relationships incorporated in ‘citizenship’. Encouraging local people to be active in helping to draw up service guarantees and charters would a method of starting this process. 20 Stewart and Taylor, Empowerment and Estate Regeneration: A Critical Review, identified the need to fight exclusion and marginalisation (in this case on housing estates) both through positive acts of shifting power to the estates, and through practical and confidence building measures to combat isolation and dependency. They argue for a combined, flexible and eclectic approach to participation. 118


leaves plenty of room for everyone to ask why they should bother to get involved. Conversely, to be too clear about the intended outcome could look like manipulation (the bottom end of Arnstein’s ladder), leaving no space for the participants to mould the process and fulfil their own agendas. In the middle ground, some broad local government objectives can be identified, even if they are not always explicit at the local level. They fall into four groups: (1) legitimacy, accountability and effectiveness: to try to reduce the remoteness of local government from everyday life; (2) a consumer rather than a producer orientation: to recognise and respond to the (procedural) rights of people as consumers of services (though not necessarily to increase choice); (3) the ‘public purposes’ of local government: to draw in people in their role as citizens, with civil and social (substantive) rights beyond those of the immediate consumer; (4) extend democracy: to enable (‘empower’) residents to take greater control over their own lives.

Who should be involved? – Consumers, citizens, communities and councillors The idea that participation is one means of increasing choice for individuals as consumers needs to be examined critically in relation to the services provided by or through local government. Most services are in reality universal (provided for everyone without distinction), rationed (restricted through eligibility criteria and often by lack of knowledge of what is available), or imposed on people and organisations by law. Few are available by choice (for example, leisure and libraries). Consultation, feedback and participation are therefore doubly important as means of giving ‘voice’ to those who do not have choice or the power of exit. That ‘voice’ has by no means yet been developed, though the academic language of ‘consumerism’ might suggest that it has. Most local government consumers (not ‘customers’ as they are often called) have very little power and even less inclination to disturb the status quo and call attention to themselves by asserting their procedural rights. Unwilling ‘consumers’ are even less in a position to do this. However, as discussed earlier, the rise of ‘consumerism’, insofar as it has actually happened, has been one apparent cause of local government’s uncertainty about its role and whether it will survive. As numerous commentators have pointed out, to focus all the effort on involving direct consumers of services (as the Citizen’s Charter and most of the pre-1997

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legislation around consultation did) excludes key stakeholders, namely, people in their role as citizens. As John Stewart has argued for many years, everyone living within the boundary of a local authority has certain rights of citizenship derived from residence, the vote and payment of taxes. These are the rights to be informed, to be heard, to be listened to and to receive explanation, and they imply the existence of the mechanisms of accountability. Arguing the case for public accountability (in contrast to ‘consumer responsiveness’), Stewart stresses the need for the public as citizen to be empowered to ‘share in decision making on issues in the public domain’. The citizen may act as an individual or, in the context of this discussion of participation, as a member of a community (who may also be collective ‘customers’). Empowering the public as community involves giving them the right to participate in and, whenever possible, determine issues affecting the community through direct control and through such institutions as neighbourhood forums or community councils. Empowering the community involves the creation of new democratic frameworks that may be concerned with the full range of activities that can be undertaken by local authorities on behalf of their community.21 The emphasis on the involvement of citizens and communities is particularly relevant to discussion of services which people want but cannot have, for services that they or their children (or parents) may want or need in the future or which, because of discriminatory practice, is not accessible or suitable to a particular group’s needs. Citizen participation is therefore essential both for discussing services at the strategic level, where viewpoints beyond those of the immediate consumer will be important, and to increase and promote the involvement of excluded and under-represented groups in society. Participative democracy does, of course, need to be firmly linked with representative democracy. In the context of local government, this means that the role of elected councillors is a key issue. Some elected councillors feel that they have been elected to represent the will of local people and that no further public involvement is necessary. They tend to see power as a finite entity. They fear that giving power to local people (through committees, user groups, forums and the like) will mean the loss of their own power. Other councillors recognise, first, that because of low local electoral turn-outs, they do not necessarily have a very strong mandate; second, that local people generally know a great deal more about any one issue that they can possibly do; and third, that knowing what local people think and listening to their suggestions and ideas is likely to enhance their own power. They are also not afraid of losing power, because they see that, among the multiplicity of interests and ‘stakeholders’, their particular role is to make the final decision.

21 Stewart, ‘Accountability and empowerment in welfare services’, p 300. 120


It is the role of elected representatives to ‘reconcile, to balance and in the end to determine the different demands upon them’.22 Through processes of public participation, better decisions will be made, resources can be targeted and used more effectively, and needs can be met more effectively. Councillors who perceive these benefits, as well as supporting some of the more ideological purposes of representative democracy, often have a difficult task in persuading their fellow councillors of the advantages of greater public participation. However, if it is loss of power that councillors fear, it may be that, in the ‘enabling state’, they can be persuaded that the public, rather than being ‘the enemy’, is in fact a potential ally. Allegiance with the public can help put pressure on the unelected organs of local governance and can strengthen the council’s hand in negotiations with unaccountable providers (direct service organisations, private firms and voluntary organisations).

The role of local government Changes in the role of local government, notably the shift from being a direct – and main - provider of services to being a co-ordinator and enabler of services, has meant that local authorities must now work on a much broader canvass than before. Through partnerships, networks and contracts, councils are necessarily working with other statutory bodies (for example, Training and Enterprise Councils (TECs) and health providers), with voluntary and community providers and with the private sector. In this new world of ‘local governance’, authorities’ increasingly indirect relationship with their own electors has meant that those councils committed to involvement and participation are having to think how best to secure it in novel ways. Underlying principles of empowerment, equality, accountability and public service are not necessarily shared by those with whom they now have to work and who now work with the public. This means that, as well as working on developing new relationships with the public, councils are having to educate their partners in the principles and practice of participation. It also means that, while participation can and should focus on the details of service delivery, as will be suggested below, the urgent requirement, as far as councils are concerned, is to enable people to become involved in the complex processes of purchasing, commissioning and enabling services to be provided by others. This more strategic role involves deciding not only the pattern of services and who should provide them, but also considering whether the services are needed at all in their present form. Should/could new services, tailored more accurately to actual need, be developed instead? These are questions that are rarely debated (and are difficult to debate). But 22 Stewart, ‘Democracy and local government’, p 48. 121


new forms of participation, including in particular ‘citizen’s juries’, and old forms such as neighbourhood forums provide opportunities to consider strategy and planning – and are a highly educational experience, not only for the participants, but also for councillors and officers.23

Levels of participation It is possible to distinguish three distinct levels of participation on the basis of the discussion so far. (1) The ‘micro’ level. Individuals, families and user and pressure groups can be involved at a practical level in the day to day services which they need and/or receive. This level would normally be in the role of consumers, carers, ‘customers,’ clients, where procedural rights to be informed and to complain are supplemented by the right to discuss options, make choices and to challenge professional opinion (‘co-production’). (2) The ‘meso’ level. Services and new initiatives (for example, social, economic and physical regeneration) need to be planned, shaped and resourced. Local people can become involved in these processes both as consumers (past and present) and as citizens (who may or may not be consumers in the future). While service planning of some sort (generally incremental) has existed in the past, the advent of the contract culture and ‘the enabling local authority’ has highlighted the need both for local authorities to be more explicit about what they are aiming to do and for local people to be involved in the planning process. It is local people’s needs and priorities that will need to be met. The ‘expert’ knowledge on which councils formerly relied must now be supplemented by the ‘experiential’ knowledge of people who have been at the receiving end and who in some cases – for example, regarding disability – have developed alternative theories and approaches that the professionals now need to take on board.24 The challenge here may to be to entrenched interests, in departments and services and at the political level, among committees and chairs of committees. (3) The ‘macro’ level. It is increasingly important for local government to move from the ‘we know best’ attitudes that have until now dictated the 23 Stewart and Hall, Citizens’ Juries. 24 Barnes, Care, Community and Citizens points out that the power of the professional is extremely hard to challenge, particularly by consumers of community care who are necessarily at their most vulnerable. The important point – and this is where councillors and managers can come in – is to recognise and legitimate consumers and user groups as ‘competent’ so that they are not marginalised on grounds of ‘ignorance’ by the professionals (a problem also experienced by councillors themselves). Collective action through user groups has been one powerful way of getting professionals to listen to, understand and act on some of the unwelcome messages about their services that they would in the past have tended to ignore. 122


overall pattern of services or capital projects, and to involve local people in voicing their own views, in controlling their own lives. This ‘strategic empowerment’ will normally involve people and communities (determined by geography and by interest/origin) in their role as citizens. It could in particular target ‘excluded groups’ as the most disempowered members of the community. If public participation is genuinely about change, and not about acquiring legitimacy to go on as before, every aspect of local government must be open to question. And if citizens are encouraged to put their questions, those will be different from what the professionals, managers and (often) councillors expect or even want. This approach to public services can be called the ‘citizen question’ approach.25 My suggested definition of the ‘citizen question’ is as follows. A ‘citizen question’ is a question defined by the citizen, either as a direct recipient or applicant for a service, or as an expression of wider concerns, for example about equity, access or priorities. The ‘question’ can take any shape or form, ignoring present patterns of provision. It can be posed collectively or individually. Citizen questions are more likely than not to challenge present practice, and more often than not they will require an integrated response, cutting across organisational, bureaucratic and professional boundaries.26 Citizens do not neatly order their lives so as to fit in with existing service patterns. This will be even more the case when thinking about the quality of life and the environment in which they live. Even when this is not formally required by external rules (legislation, regeneration competitions, etc), this approach must involve other agencies and organisations operating at the local level. The way organisations respond and gear themselves up to respond, to develop integrated, holistic approaches at all levels, will be one test of success in participation.

Summary of issues Of all the agencies of government affecting people’s lives, local government is the only one that operates at the local level (at the neighbourhood level in

25 The ‘citizen question’ is an approach being developed in the Nordic countries, who are devoting a good deal of effort to considering the role of the front line in relation to the public. Various forms of ‘one-stop shops’ are emerging from the debates. Experiments in these countries aim to develop a generic, holistic view of service. Front-line staff are being trained to respond to ‘needs’ as stated by the citizen, not as defined by the service. As with similar decentralised initiatives in the UK, the main difficulty is to get the whole organisation thinking in the same way. This results in the front-line feeling unsupported by the ‘back-line’ and the leaves the public unclear about what, if anything, has really changed. See Gaster and Rutquist, ‘Changing the frontline to meet citizen needs’, Local Government Studies (forthcoming 1999). 26 Gaster, ‘The citizen question: re-thinking service design’. 123


decentralised authorities) and is accountable through democratic elections. It is therefore hardly surprising that a good deal of attention has been paid to the question of ‘participation’ in a local government which is responsible for and affecting so many people in their daily life and in moments of crisis. Local government is very powerful and has great responsibilities. It is also very complex and changing rapidly. It is not a single service, but involves a huge range of very different services. It has responsibilities for the social, economic and physical well being of its residents and of the environment. It can develop enormous capital projects such as city centre improvements and estate regeneration. Finally, its democratic legitimacy, its relationship with local people, and its actual role in their lives are all now being questioned. Participation by consumers, citizens and communities is seen as a way of strengthening the role of local government itself, as well as contributing to the wider projects of democracy and citizenship. Participation can take many forms, serve a variety of purposes, involve different groups of people, and operate at different levels, from the strategic to the day to day service. It is possible to claim that local government is well ahead of the field when it comes to the concept of ‘participation’. However, it still has a huge amount to learn, and is only a few steps along the road when it comes to actual practice. The next part of the paper looks (briefly) at three examples of that practice, aiming to identify some of the key issues that help or hinder the development of participation at the local level.

PARTICIPATION IN PRACTICE: THREE CASE STUDIES The three case studies described here are all drawn from research completed in 1997 by the writer. They reflect the three levels of involvement identified earlier in the paper – the micro level of day to day involvement in service production; the meso level of planning, shaping and resourcing services; and the macro level of strategic values and objectives and of citizen empowerment. The case studies are: (1) service delivery: involvement of users and carers in community care assessments and care planning;27 (2) service planning, community needs and priorities: ‘local service partnerships’ in Burnley and Coventry involving a range of statutory and voluntary agencies and the community;28

27 Willis and Gaster, Quality Standards of Assessment and Care Management. 28 Gregory, Transforming Local Services: Partnership in Action. 124


(3) community empowerment: an evaluation of the early stages of Walsall’s ‘Community Empowerment’ Single Regeneration Budget (SRB) programme.29

Service delivery: a difference of views A small research project was undertaken in the first half of 1997 to help a Social Services Department consider its service standards in relation to community care planning and assessment. The main aim was to learn what services users thought about various aspects of the service. Questionnaires were used to ask individuals what they thought of the reception service (in person or on the telephone) and what their experience had been of a so called ‘simple’ assessment. The reason for including this study here is that the second part of the research, a qualitative, interview based approach, was able to compare the views of users, carers, front-line staff and managers about the more complex processes of ‘comprehensive’ assessment. While the subject of the research was not itself a process explicitly intended to promote participation, it is easy to see how it could lead to this. The findings highlight what the different stakeholders identified as the important elements of the ‘technical’ (fitness for purpose) dimensions of the service. These stakeholders also gave comments on the ‘non-technical’ dimension, the quality of the interaction between provider and member of the public. Questions were also asked about why the desired service characteristics were not necessarily achieved, and interviewees were invited to make suggestions for improvement. Taking the results of this pluralistic, qualitative research and the findings from the surveys of users, the research was able to suggest some new service standards that would enable the process of community care assessment to be more focused on the needs of users and carers, while also taking into consideration the pressures staff and managers were experiencing. This should provide a useful starting point for a participative process of negotiation between the key stakeholders, possibly bringing in some that were not involved in the research, such as senior managers, councillors, and representatives of provider organisations. The full findings are not, of course, reproduced here. However, two tables developed to display the results analysis demonstrate why it is important to find out the views of those producing and receiving services, and then to have the opportunity to discuss and negotiate around the findings (this activity is

29 Gaster and Sullivan, Evaluating ‘Community Empowerment’ in Walsall, 1996–97: An Assessment of the First Year’s Process of ‘Empowerment’ of Communities Living in the Seven Neighbourhoods of Walsall’s 1996–2003 Single Regeneration Budget Scheme. 125


not part of the research, but is an action recommended by it). The tables summarise the views of carers and of front-line staff about the ‘technical’ aspects of community care assessment. They show areas of overlap, but also areas of difference or uncertainty, particularly around the basic definition of ‘need’ (equated largely in the social workers’ minds with ‘risk’), around priority criteria and charging systems, and about the fear of litigation if things go wrong. The ‘expert’ perspective of the professional, and the ‘experiential’ knowledge of the carer are clearly exposed. Table 1: Carers’ views Information Knowledge and Options professional and choice expertise

Co-ordination

Communication Practical help

The charging system

Accurate and consistent information

They should do their homework: be informed about the user’s condition

Full picture of what’s available helps make decisions

Agencies should ‘tie up’ with each other – not to have to keep saying the same thing

Forms with boxes – horrible. Do they just want to fit you into a category?

Put you in in touch with voluntary organisations

The system should be ‘businesslike and efficient’

Explain why a formal ‘social services’ assessment is needed

They need to be very thorough, check what you want

They should be able to suggest different solutions

Social Services should do the overall co-ordination

Good to see them writing things down – you worry they might forget

Reduce the number of forms to be filled in (eg, for respite care)

Payment should not be exacted before the charges are known

Clarify the status of written information (advice, guidance, key data on which decisions will be based, etc)

Get lots of the right people involved, generate ideas and options

Ensure there is real choice, rather than being pressured to ‘go along with’ less good solutions

Clarify which agency has responsibility for what (especially as between health and social services)

See and sign the assessment

Financial advice (‘Welfare rights are very good’)

Create confidence that an appropriate solution is being suggested (you have to be 100% sure …)

Use case conferences to co-ordinate assessment process

Discuss the assessment before it is signed (final version can come by post)

Tell you the rules (eg, in case you need to complain; or your right as carer to see the assessment)

Anticipate situations, do assessments earlier and faster, not at the ‘last minute’

Efficient co-ordination of complex processes – it should be smooth, not ‘bitty and disorganised’

Is everything a user says ‘gospel’? How are user, carer, sibling views balanced?

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The user or carer should have the right (or be aware of the right) to control the budget


Table 2: Front-line staff views Information Knowledge and Options professional and choice expertise

Co-ordination

Communication Practical help

The charging system

Gather information

Respond within guideline times for each priority category

Act as ‘care manager’ to co-ordinate all aspects and take overall responsibility

Check what the client already knows about own condition; check awareness of referral; what do they see as the problem?

Introduce charging issue early in assessment process

Make sure everyone has the same information

Sufficient Clarify accurate options information at ‘screening’ and initial assessment stage

Know what other people do (how much do they know about it?)

Separate out client and carer views; do separate assessment with carer if necessary

Accompany charging information with welfare rights information

Be clear who the information is for and how it will be used

Assess risk on basis of adequate data

Find out the exact nature of the service on offer by the provider (eg, what can be done in 15–30 minutes etc of home care)

Clarify the role and powers of the Social Security Department

Give accurate information about the charging system

Be informed, Check with do your managers when homework, appropriate plan in advance, have the ‘consent forms’ ready

Sort out the key questions of which ‘needs’ take priority? (living alone, ethnicity, etc)

Provide opportunity to reflect on and challenge the assessment

Identify a range of providers, both inhouse and external

Ensure that there is ‘informed consent’ to decisions; go through the assessment with the client

Register ‘unmet needs’

Give information about the assessment process, other services, etc

Build relationships with users, carers, other professionals

Note any disagreement over the assessment, be prepared to defend professional opinion

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Be willing to take immediate action if necessary


Service planning – partnership with the community A two year ‘action research’ project was developed by the Priority Estates Project (PEP), with the support of the Joseph Rowntree Foundation, to work with two local authorities (Burnley District Council and Coventry City Council) on developing a bottom-up and comprehensive approach to service delivery on deprived estates. Neither site was pristine – Coventry had already been working for three years to implement an area co-ordination policy in Wood End, while a lot of effort had been put into developing an Estate Management Board in Burnley West End. In theory, therefore, some of the structures needed to make a targeted ‘local service partnership’ work were already in place. In Coventry, the main change was the provision of a community worker, aiming to reinforce and develop active involvement in the work from within the local community. In Burnley, the Council appointed an area co-ordinator, while PEP employed a community development worker to work with the co-ordinator. In both places, PEP consultants were to be used to guide and steer the project where necessary, and to collect data for monitoring and evaluation.30 In both places, the aim was to work with all the service agencies operating locally, whether or not they had bases in the area. These included the Council’s own departments and, where relevant, other tiers of local government, public agencies such as health authorities and providers, the police and the local TEC, and local businesses and voluntary organisations. At the same time – and it was the comprehensive nature of these initiatives that distinguished them from other localised initiatives – the service providers were to work in partnership with people from the community. The primary activity was to identify local needs and priorities and to develop a local Action Plan. A structured approach was taken, based on processes of problem solving and action planning. This was new to Burnley West End. It was already part of the normal, local process in Wood End, Coventry. The aim of the external evaluation was to consider how far the original objectives had been achieved. A major problem that emerged was that, although PEP had tried to be clear what the project was about, at the end of the two years of the project, it was clear that different perspectives and expectations existed. Tensions arose about the role of each of the players and the limitations that existed for them to do what they thought they should be doing. This was uncomfortable but not at all unusual in partnership arrangements. The key question for people in the community in Burnley was what were they being asked to participate in, and what benefits could they hope to see? They felt they were being expected to ‘represent’ the community in all the

30 The writer was appointed as the external, independent evaluator. 128


working groups that sprang up as a result of the initial identification of local issues – and they could not manage it. There was some resentment that too much was being expected of them, with too few results. (Interestingly enough, going back six months later for a feedback session, the atmosphere was a lot more positive, demonstrating perhaps just how long it takes before any ‘results’ of co-ordinated action become visible on the ground.) In Coventry, a city with a rather weak tradition of community involvement, the question for the service providers, and in particular for the community development worker, was where to start. The decision was taken to focus the efforts, both geographically, to the most deprived parts of the rather large area, and socially, in relation to local needs. Support was given to existing efforts to get people out of their houses (community safety issues were a high priority and many people were afraid to go out), and for small groups to become engaged with day to day services in a very practical way, monitoring grounds maintenance and other environmental contracts and beginning to make suggestions for change. At the same time, a major consultation exercise was developed to identify local priorities to be built into the second area plan, which would in turn be fed into and inform the citywide service planning process. Work to develop consultation and participation was thus taking place on a variety of levels, based on the philosophy of starting where the community was and building up from there. It was particularly important, local officers felt, not to try to impose external models of involvement which would not ‘fit’ the local circumstances. The research identified a set of ‘critical success factors’ to make a coordinated, community based service planning process work. These were: (a) clarity of purpose and expectations among all partners; (b) explicit agreement about respective roles and relationships; (c) building in community development work; (d) a specially appointed co-ordinator; (e) mandate and support from above; (f) links with core/corporate policy; (g) mechanisms for implementation; (h) working methods: problem-solving and action-planning; (i) developing ‘capacity’ in both workers and community; (j) developing trust, clarifying accountability; (k) monitoring and evaluation; (l) an area focus; (m) giving it time.

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Empowering communities A very different form and level of participation was meanwhile being developed in Walsall. This contentious borough had won an SRB bid which was based on a decentralised neighbourhood model with which the former leader (expelled from the Labour Party and from his position as leader just as the bid was won) was closely and personally identified. It was a radical vision, as the formal bid made clear. The main focus of this bid was on empowering residents in targeted local communities, enabling them to exercise real power over resources, to tackle the physical and social problems of their areas and to equip them with the motivation, skills and qualifications to obtain employment in and beyond the borough.31 In the first year, consultants were engaged to develop the first stage of involving communities in the seven targeted neighbourhoods, with the intention of achieving local elections to neighbourhood committees by the end of the first year (of a seven year programme). As with the Local Service Partnerships, the research found considerable variation in the understandings of, perspectives on and expectations of the very wide range of actors interviewed. The process included a series of participative two day ‘events’ in each neighbourhood, culminating in a borough-wide event that brought all the nearly 200 main players into the room together. The links between these high profile events and more on-going processes of involvement and internal cultural change had yet to be worked through, and there was considerable anxiety both about the lack of active involvement of most councillors and about the withdrawal of several of the key people who had kept the process going. However, in November 1997, some months after our evaluation of the first year of SRB was completed, neighbourhood elections to local committees were successfully held. Within the long term process of change, the immediate targets of wider citizen involvement were beginning to be met. We identified several problems which would have to be resolved in the future, some of them relating to the fact that this approach was being carried out under the auspices of a government regeneration programme which had its own rules and timetable. The ability of other than local government agencies actively to engage with the process (they did try) was another concern. Another important issue, nicely illustrating the ‘citizen question’ introduced above, was the need to make links between this programme and the everyday services. The issues, which were not neatly confined to the SRB agenda and had not been consciously anticipated, raised the question of how each partner agency should respond in terms of its day to day services if the raised expectations of local people were not be dashed once more. In similar

31 The Walsall Partnership, SRB Challenge Fund Bid 1995, section 3, p 5. 130


vein, the question was beginning to be asked about why other areas of the borough were not engaged in a similar exercise – why were some residents to be ‘empowered’ and others not? Despite these difficulties, we tried to identify some indicators of future ‘success’ – the achievement of the declared objectives – even though they did (in theory) only apply to the seven SRB neighbourhood and to regeneration issues. Success would depend, we thought, on the following problems being solved: • how the initiative would be sustained and developed, given a problem of clear leadership and the uncertainty about political intentions and support; • how the initiative would be linked more firmly and explicitly to ‘mainstream’ services, and how this would affect the probable role and power of neighbourhood committees; • how appropriate skills and cultures could be developed and nurtured within all the partner agencies, keeping in step with the democratic developments in the neighbourhoods and enabling agencies to respond in a credible and practical way: responding to ‘the community’s agenda’; • how the imperatives of ‘hard outputs’ required by the SRB programme could be matched and linked with the long term, dynamic and less tangible development of community empowerment. We suggested the following indicators which would show whether ‘empowerment’ was taking place: (1) continued existence of neighbourhood groups and forums; (2) ability of the groups to adjust to new circumstances, draw in new people, ensure inclusion of excluded groups; (3) accountability of neighbourhood committees, etc: to whom they would be formally accountable, to whom they would feel accountable, methods of demonstrating accountability, for example, to local residents (reporting back, newsletters, elections, open meetings, etc); (4) accountability of agencies and service providers: to whom they would be formally accountable, to whom they would feel accountable, methods of demonstrating accountability, for example, to local residents (attending local meetings, reporting back, responding to local priorities, re-shaping services, working across boundaries, etc); (5) how decisions are taken – for example, no decision taken unless neighbourhoods have been consulted and have expressed their views; (6) devolved responsibility – for example, for decision making; managing budgets; managing projects; commissioning and purchasing services; making service level agreements; appointing staff, developing contract specifications and monitoring performance;

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(7) existence of explicit values, objectives and expectations which inform the process and the direction it takes in the future (and the acknowledgment that these will be different for different stakeholders).

LESSONS, ISSUES AND CONCLUSIONS Participation in local government links with many of the issues currently being tackled by many of the organisations serving the public, in particular the issues of service quality, empowerment and citizenship and representative democracy. In local government, participation is possibly less about ‘choice’ than ‘voice’. It is about developing mechanisms and approaches that encourage voices to be sounded, and ensure that those voices will be heard and receive a response. Implicitly, there is an acknowledgment that rights of some kind are involved, but whether councillors are beginning to feel a moral obligation to consult and to encourage participation is more doubtful. It seems more likely that the initiatives which have been taken have been a pragmatic response to the unpopularity and declining legitimacy of local government, a way of engaging local people in a way that develops some trust and credibility in the processes and outputs of government, especially local government. Clearly, participation is a process that needs to involve people in a wide range of organisations involved in service provision and regeneration at the local level. What local government can do – and does – is to provide some kind of leadership or example of how this might be done. In all three of the case studies, nothing could be done without the co-operation of other agencies, but it was equally clear that the initiative to involve local people had not come from them. It was local government that was giving the lead. Possibly the most important finding from all three case studies was the need for leadership, through committed professionals, through specially appointed co-ordinators, and through the political and officer formal leaders. The reason for this is the long term nature (and hard work) of participation, where encouragement, support and role models (particularly of ‘success’) are desperately needed. The process of participation in local government is beset with a series of tensions and dilemmas, none of them easy to resolve. They come under four headings: (1) underlying philosophy; (2) objectives, outputs, processes; (3) participants, stakeholders, levels of control; (4) the focus of participation.

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First, the ‘philosophical’ issues of what consultation is about and whether it is a credible, trustworthy process? The relevant juxtaposed views are illustrated in the following table. Table 3: The philosophies of participation A paper exercise

Values and action in practice

Sponsored participation structures (initiated by the council)

Unsponsored/spontaneous participation (initiated by local people and recognised/supported by the council)

Control of the agenda by the council

Control of the agenda by, for and with local people

Consumerist – responding to ‘procedural’ rights

Citizen-orientated – responding to civil and social rights

Imposed – that is, participation is required by legislation

Voluntary – that is, participation takes place in accordance with council values

The second set of problems turns on the question of what is intended to be achieved – the outputs and outcomes. As our research has shown, however explicit the originators have tried to be about why they are fostering and supporting public participation, not everyone involved will know, understand or agree with them. Also, of course, objectives change over time, as it becomes clearer what can and cannot be achieved and as local people gain in selfconfidence and organisations become more responsive. The agenda is a dynamic one, which could explain some of the tensions generally to be found in practice. Table 4: Participation objectives Legitimating local government

Empowering local people

Listening

Acting

Giving voice

Creating choice

Creating structures

Removing barriers

Community development

Organisational development

Pilot project (add-on)

Way of life (cultural change)

The third set of problems relates to the question of who is involved – who are the participants and stakeholders and can they (should they?) be ‘controlled’ if they get out of hand (that is, if they, especially members of the public, ask

133


unexpected question, challenge policies and practice, use the media, etc)? Whose voice is heard and why? Table 5: Power and voice (levels of control) Consumer focus

Citizen focus

‘Expert knowledge’

‘Experiential’ knowledge

Majorities (shout loudest) groups

Minorities (under-represented and excluded

Councillor-led

Officer-led

Single method

Multiple methods

Clarity/honesty about the intended degree of public involvement and control

Confusion/dishonesty about what can be (jointly) decided and what is merely up for discussion

Finally, which aspects of local government and local governance are the focus of attention? Is the agenda open or closed as to which levels of operation – strategic, operational or day to day – the public is being encouraged (allowed) to become involved in? It is often argued either that strategic matters are the prerogative of elected councillors, or that local people do not have enough knowledge to become engaged in strategic thinking and decision making, or that it is the officers who are paid to make decisions, not local people. Not everyone does want the responsibility – and blame – for taking difficult decisions, especially around the allocation, rationing and often cutting of resources. However, the issue is whether there is clarity and agreement about the framework and ground rules, not about what is or is not possible. Participation can and does take place at all the levels just described. It would up to local people to consider what is most appropriate and acceptable to them. Table 6: Focus of participation Local government

Local governance

Collective action

Individual influence and control

Operational level

Strategic level

Corporate focus

Area, community focus

Whether any of these problems could be resolved through some kind of constitutional or legal requirement to consult and/or to develop mechanisms for participation seems rather doubtful. Rigidity might be imposed when, as

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should be clear from the preceding analysis, flexibility is the prime requirement. Central government ‘encouragement’ of local involvement in services through the ‘Best Value’ and ‘Community Planning’ agendas are only now (1999) making their way into practice, while the experience of enforced participation in regeneration, community care or planning matters shows that whether it will be tokenistic or real depends on local commitment and experience. This is not affected by legislation, except in the games people play to get round it. It is values and attitudes that count. Local government has shown a remarkable aptitude in recent years for doing things its own way, even while being subjected to ever increasing constraints. The dangers expressed at the beginning of this paper that consultation and participation could simply be tokenistic, paper exercises, are still with us. Meanwhile, the innovative strain in local government also continues to exist, even where fears of litigation or central government intervention are bringing pressures to standardise and avoid risk: Local government should be promoted because of its capacity to undertake the political tasks of regulating competition, making choices and integrating human activity to cope with unexpected change and to achieve common purposes … ‘Good’ local governance should display the values of openness, deliberation and the capacity to act.32

If local government is to continue to display these values in its changing role, it will need to shift and adapt and, above all, understand and work with local people. Beyond that, it has the task of promoting the social and economic ‘well being’ of local communities. Taking a lead in developing modes of participation, and ensuring that ‘latent participation’ is not hindered by unnecessary barriers, is now a fundamental role of local government.

32 Stoker, The Role and Purpose of Local Government. 135

CHAPTER 7

CONSTITUTIONALISM, DEMOCRACY AND PARTICIPATION IN THE EUROPEAN UNION

Ian Ward1

INTRODUCTION In this chapter I want to discuss the possibility of developing alternative forms of participatory governance and democracy in the European Union. At the heart of this discussion will be the belief that democracy is an immediately constitutional issue. In sections two and three of the chapter, I will examine the nature and extent of the presently perceived constitutional crisis in the Union. In the following two sections, I will then introduce certain alternative theories of democracy which, it will be suggested, might be appropriate for any projected constitutional renewal. In the final two sections, I will conclude by suggesting how far such theories might enjoy specific application in the areas of European social and industrial relations law.

EUROPE AND THE DEMOCRATIC CRISIS There can be little doubt that the idea of a European Community or Union is experiencing something of a crisis. Commentators who are more sceptical about the entire European project suggest that such a crisis is inevitable, given the intellectual deficiencies of the idea itself. Jacques Derrida has famously suggested that there cannot be a European ‘union’, because the whole idea of Europe is one of ‘difference’ and contestation.2 Phillip Allott has recently suggested that the construction of the ‘union’ has been undertaken without the participation of its citizens. The essence of modern European political thought, he suggests, is fashioned around the Hegelian premise of an evolving ‘self-consciousness’, a consciousness which must be enjoyed by all members of the polity. If it continues to exclude the ‘citizen’ from the process of constitutional and political construction, the Community deserves to fail, and

1 2

I should like to thank Clare McGlynn for comments made on an earlier draft of this article. Derrida, The Other Heading: Reflections on Today’s Europe. 137


it will.3 In turn, Goran Therborn suggests that the European idea has been captured by an interest group of technocrats and industrialists whose pervasive ambitions will ultimately lead to the break up of the new political order.4 Even the more committed and ardent supporters of the European idea make increasingly urgent calls for action in order to deal with the potentially damaging effect of the wide scale disillusion, and sheer apathy, which pervades so much of the Union’s citizenry.5 As long ago as 1982, Martin Slater emphasised the extent to which the Community is commonly perceived to be run by elites for elites.6 More than a decade later, Jurgen Habermas suggests that the fundamental problem of identity and affinity in the Union remains. Ordinary people simply do not feel part of the European idea, or its reality. Taking a similar line, Joseph Weiler has consistently identified a problem of legitimacy in the new Europe, at the root of which is the question of democracy. Europe is not, and most importantly appears not to be, accountable to its citizens.7 According to Weiler, the crisis that presently afflicts Europe is one of constitutional and legal legitimacy, precisely because what distinguishes the Community is its constitutional foundation. Moreover, resolution of the crisis is pressing because the democratic shortcomings of Europe are so ‘colossal’. In his most recent writings, Weiler has suggested that constitutional renewal in Europe will require a more imaginative approach to the idea of democracy, one which will acknowledge the reality of ‘co-existing multiple demoi’. Contemporary Europe, he suggests, recognises ‘transnational affinities to shared values’, which are themselves the product of ‘reflective, deliberative rational choice’, without pretending to have any comprehensive theoretical foundation for that recognition. Such ‘shared values’ can only be democratic values.8 In another recent article, Weiler has again advocated mechanisms for more ‘direct democracy’, including legislative ballots and the formation of European ‘public spaces’.9 Such a jurisprudence is immediately resonant of the alternative ideas of participatory democracy associated with John Rawls and Jurgen Habermas, whose work will be considered shortly.

3 4 5 6 7 8 9

Allott, ‘The crisis of European constitutionalism: reflections on the revolution in Europe’, pp 439–90. Therborn, European Modernity and Beyond: The Trajectory of European Societies 1945–2000, p 249. In the aftermath of the Maastricht Treaty on European Union, Eurobarometer surveys revealed that less than 50% of Europeans actually thought that they benefited from membership of the Union. Breakwill, ‘Identity processes and social change’, pp 18–20. Slater, ‘Political elites, popular indifference and community building’, p 69. Weiler, ‘Problems of legitimacy in post-1992 Europe’, pp 411–26. Weiler, ‘The reformation of European constitutionalism’, pp 97–131. Weiler, ‘The European Union belongs to its citizens: three immodest proposals’, pp 150–56. 138

Constitutionalism, Democracy and Participation in the European Union

Weiler’s is, however, something of a lone voice. Such an approach is rare amongst European legal commentators in general, amongst whom there is a ready assumption that, however deep the problem, as a constitutional problem it must be addressed in terms of liberal constitutional legalism. It is the purpose of this article to suggest that the related questions of democracy and legitimacy in Europe will require far more radical solutions if the idea of a European Community or Union is, indeed, to be reinvigorated. It is the very ease with which the Community’s senior institutions, the Council and the Commission, have been able to display a contemptuous disregard for the demands of democracy which suggest the limitations of any form of orthodox, liberal, constitutional democracy. As a number of commentators have increasingly noted, in the absence of institutionalised forms of participatory democracy, the ‘peoples’ of Europe, aside from displaying a reciprocal contempt for the Community itself, have taken more and more to forms of popular protest and interest group politics.10 There has long been talk of a ‘democratic deficit’ in the European Community. The original Treaty of Rome never envisaged a democratic Community. But, there again, it never envisaged a Community which enjoyed the political power which it does today. Monnet designed a form of administrative governance, for which democracy could only be an undesirable distraction. In the first two decades following 1958, the Parliament barely functioned at all, and so the lack of democratic empowerment seemed to matter less. The Council comprised the appropriate ministers of each Member State. It still does. The Commission was populated by various political nominees of Member State governments. Again, it still is. Whilst the Community remained firmly intergovernmental, the lack of democracy mattered less. But, as the supranational process of integration has evolved, primarily in the jurisprudential form of ‘integration through law’, the insufficiency of the original institutional framework has become ever more apparent.11 In 1982, the President of the Parliament, Peter Dankert, suggested that the weakness of the Parliament rendered the entire Community little more than a ‘feeble cardiac patient’, adding perceptively, that the disillusion of the ‘peoples’ of Europe could be directly traced to the blatant lack of democratic process. So deep was the problem, he concluded, that ‘confidence in democracy as an institution’ was itself being rapidly eroded throughout Europe.12 The draft of the Single European Act advised of the need to locate greater legislative powers in the Parliament, but the Council steadfastly refused to agree. A decade later, Shirley Williams bemoaned the lack of progress in dealing with the ‘deficit’. It was, she suggested, the most ‘urgent’ problem in the 10 Kitschelt, ‘A silent revolution in Europe?’. 11 Ward, A Critical Introduction to European Law, pp 18–19. 12 Dankert, ‘The European Community: past, present and future’, pp 8–9. 139


Community. Without a genuine democratic impulse, the Community can never hope to establish a coherent political identity, or attract the affinity of its ‘peoples’.13 Juliet Lodge likewise grounds the wider ‘crisis in governance’ in Europe in institutional inadequacies. The 1990s, she declared in 1993, would be the decade when Europe would finally have to face up to the demands for constitutional renewal. 14 Yet, despite this urgency, the handling of the problem of democratic legitimacy in the Maastricht Treaty was a huge disappointment. In one of the most strident critiques, Deirdre Curtin denounced the entire Treaty, and its institutional provisions in particular, for their failure to address the burning questions of democratic legitimacy. The Treaty, she suggested, threatened to ‘lead to constitutional chaos’. At the root of the problem was the inability of both the European and the national Parliaments to counter this threat effectively.15 The most obvious is the continuing inadequacy of the European Parliament. It is the one institution which pays lip service to the idea of representative democracy at a Community level. Yet it is the one institution which still cannot properly draft or initiate legislation. It remains, according to Philip Raworth, an ‘idiosyncratic body incorporating a European identity that is still artificial’.16 The continuing problem of the Parliament’s democratic inadequacies is enhanced by the fact that those institutions which enjoy real legislative and executive authority, most obviously the Council and Commission, remain wholly undemocratic in constitution. The situation has not changed, and neither, it can be reasonably surmised, will it; at least not in the near future. The recent draft Treaty of Amsterdam appears to offer little hope for reform. As Grainne de Bùrca perceptively observed, although the run up to the Amsterdam Inter-Governmental Conference (IGC) suggested an awareness of the need to address fundamental question of democratic legitimacy, it was all too clear that the pressing concern of all participants was the need to preserve individual political careers and perceived national interests. As she concluded, an ‘exercise primarily in window dressing following a negotiation process which is closed and remote, with public involvement and information largely confined to a few public relations exercises’, will only serve to ‘further reinforce the erosion of legitimacy’.17 The IGC and the draft Treaty have emphasised the acuity of this prophesy. The rhetoric of institutional reform has been shamefully abandoned. In its place, we find fractional amendments to existing Treaty provisions, together with a series of essentially vacuous new provisions relating to the desirability of

13 14 15 16

Williams, ‘Sovereignty and accountability in the European Community’. Lodge, ‘Towards a political union?’, pp 383–85. Curtin, ‘The constitutional structure of the union: a Europe of bits and pieces’, p 67. Raworth, ‘A timid step forwards: Maastricht and the democratisation of the European Community’, pp 22–23. 17 de Bùrca, ‘The quest for legitimacy in the European Union’, pp 374–76. 140


greater transparency, and the limited extension of co-decision powers to such marginal concerns as customs co-operation and veterinary policies. If anything, the delaying powers of the Parliament have been reduced in order to better expedite policies necessary for the continuing establishment of the common market, whilst the co-decision procedure itself has become ever less transparent with each passing amendment. There is certainly no question of addressing the wider pervasive problems of democratic deficit.18

SUBSIDIARITY, CITIZENSHIP AND DECENTRALISATION In the final two parts of this article, I will address the possibilities of an alternative form of participatory democracy in the Union. But before I do, it is important to consider two particular democratic ‘reforms’, both of which have been incorporated in the constitutional framework of the Treaty and are often discussed, even triumphed, in European Union discourse. The first reform is citizenship. Article 8 of the Maastricht Treaty established that every citizen of a Member State is a citizen of Europe. The result of this is a crucial dissonance between alternative political and legal conceptions of citizenship in Europe. Article 8 describes a purely political citizenship. It carries no legally enforceable rights, outside of those enjoyed at a Member State level. Citizenship of the Union is predicated upon citizenship of a Member State. Thus, a guest worker in Germany who does not enjoy national citizenship is also denied European citizenship. Of course, enacted under the Union, and not the Community pillar, there are no justiciable rights according to the Article anyway. But even if the practical legal effects matter less, Art 8 citizenship does suggest that the Union remains subservient to the demands of Member States when it comes to actually governing individuals, and commanding their loyalties. In contrast to the political conception of citizenship, the Court of Justice has constructed a legal citizenship in terms of certain rights enjoyed by individuals against their nation states and legitimated by the Community. The legal citizen is the rational economic actor. Necessarily, this excludes the unemployed, and a disproportionate number of poor, female and ethnic minority residents of the Community who do not fulfil this particular norm of citizenship. The unemployed is not a legal citizen, and enjoys few legal rights. Yet paradoxically, the same German guest worker denied political citizenship of the Union, and even legal rights within Germany, may, as a rational and employed economic actor, enjoy certain legal rights in the Community.19

18 Draft Treaty of Amsterdam, ch 15. 19 For criticism of citizenship in the Union, see de Lange, ‘Paradoxes of European citizenship’, pp 97–112; and O’Leary, ‘The relationship between Community citizenship and the protection of fundamental rights in Community law’, pp 540–41. 141


The second ‘reform’ is subsidiarity. Subsidiarity was designed to effect Altiero Spinelli’s idea of a ‘federalism without federation’. However, its articulation in the Treaty has proved to be infamously unclear. Indeed, it has been suggested that the concept has to remain ambiguous so as to accommodate the individual interpretations of each Member State. Lord Mackenzie Stuart has famously referred to it as a ‘prophylactic’ designed to make the necessary loss of sovereignty a little more palatable.20 Whilst Art A seems to present subsidiarity as a tool for enhancing the federal intent of the Community, Art 3B suggests a more intergovernmental approach. Under Art 3B, the Community can take action only if the ‘objectives of the proposed action cannot be sufficiently achieved’ by Member States. Only in such circumstances, and if by ‘reason of its scale or effects’ it can be ‘better achieved’, does competence pass to the Community. Crucially, ‘scale or effects’ was left undefined. Some thought that Art 3B suggested automatic decentralisation to the Member States. Others thought that the decision as to competence still rested with Community institutions. The Court of Justice, however, has declined to rule on the matter, deciding that subsidiarity, being introduced in the Union part of the Treaty and not the Community part,21 is not obviously justiciable. This is unhelpful though perhaps wise. Once again, the draft of the Amsterdam Treaty does little to clarify the issue, merely repeating the ‘scale and effects’ criterion and emphasising that subsidiarity is a ‘dynamic principle’ which must be applied in ‘light’ of the general principles of the Treaty, whatever they are. At the same time, the Declaration relating to the Protocol on the application of subsidiarity certainly implies that legislative competence rests initially with Member States, whilst the Community merely maintains a ‘supervisory, monitoring and implementing’ authority, whatever that is supposed to mean.22 Closely related to subsidiarity is the idea of decentralisation of power, something which is often aligned with the idea of regional devolution, the fashioning of a ‘Europe of the Regions’. Etienne Tassin has suggested that such regionalisation offers ‘a community framework favourable to the exercise of genuine citizenship’. Tassin’s model, typically, envisages regionalisation within a fully ‘federative’ Europe. 23 Aside from the desirability or otherwise of a federal model for Europe, such regionalism invariably tends towards nationalistic determinants. Closer to home, for example, there is a ready acceptance that the cause of Scottish devolution is enhanced by the direction of European regional policy. However, the cause of

20 Lord Mackenzie Stuart, ‘Subsidiarity: a busted flush?’, pp 19–24. 21 For a general discussion of the continuing problems surrounding subsidiarity, see Harmsen, ‘A European Union of variable geometry: problems and perspectives’, pp 114–18. 22 Draft Treaty of Amsterdam, ch 9. 23 Tassin, ‘Europe: a political community?’, pp 184–85. 142


devolution is quite separate from that of decentralisation. The devolution of power from Westminster to Edinburgh may enhance the sales of shortbread and tartan skirts, but it will make little real difference, at least in terms of actual democratic empowerment, to the political lives of ordinary Scotsmen or women. Devolution is bred of nationalism, and a craving for nostalgic mythologies of belonging. It is not the same as decentralisation.24 As Julia Kristeva has suggested, such nationalist cravings are a peculiarly European obsession. If anything betrays the determination of Europe to promote the interests of its Nation States over that of its citizens, it is the conscious encouragement of these mythologies of essential nationalism. Nationalism is always an excuse for exclusion, and the accretion of power within certain political interests. It is, Kristeva concludes, the antithesis of democracy.25 Habermas has similarly suggested that the challenge of nationalism is a challenge directed at the very heart of any idea of European ‘community’.26 Most recently, Joseph Weiler has advised against the Community becoming a vehicle for encouraging the inevitably ‘destructive potential’ of nationalism. Europe must not be founded on imaginary histories of shared affinities, and the most imaginary of all is the spurious belief that nationalism actually binds people together rather than drives them apart. Nationalism must be resisted at all levels, no matter what excuse is made for it.27 Devolution, then, is no substitute for decentralisation of power, still less, radical participatory democracy.

IDEAS OF COMMUNITY AND PARTICIPATION Michael Sandel has recently suggested that American ‘public life is rife with discontent’.28 It is a statement which could equally describe the public life of the European Union. Indeed, Sandel suggests precisely that, citing Czech President Vaclav Havel’s observation that ‘Europe today lacks an ethos’, and must look ‘to cultivate the values from which the spirit and ethos of European integration might grow’. The European Union, according to Sandel, epitomises a polity built for ‘businessmen’ rather than ‘citizens’, in which ‘market forces, under conditions of inequality, erode those aspects of

24 For a commentary on the distinction, see Frug, ‘Decentering decentralization’, pp 254–338. 25 Kristeva, Nations Without Nationalism. For a similar critique of nationalism, see Fitzpatrick, The Mythology of Modern Law, pp 63–89, 112–18. 26 Habermas, ‘The European nation state: its achievements and its limitations. on the past and future of sovereignty and citizenship’, pp 125–27. 27 Weiler, ‘The reformation of European constitutionalism’, pp 119–22. 28 Sandel, Democracy’s Discontent: America in Search of a Public Philosophy, p 3. 143


community life that bring rich and poor together in public places and pursuits’.29 At the heart of the communitarian critique is the suggestion that the constitutional ethic of the 1776 has been lost, defeated by the countervailing demands of liberal legalism. What Amitai Etzioni famously refers to as the ‘spirit of community’ must be recovered by reinvesting the original ambitions of the American constitution. Resurrecting the spirit of 1776 will entail reforming society in line with Alexis de Tocqueville’s description of a polity of ‘associational’ groups. Etzioni refers to such communities as ‘social webs of people who know one another as persons and have a moral voice’. This is a matter of ‘civic’ and collective ‘responsibility’.30 However, it is not just a matter of listening for such a voice. More importantly, there is a need to reinvent the institutions of a ‘strong democracy’. According to Sandel, the republican tradition of 1776 represents an alternative view of citizenship and democracy in that it decentralised political power to all sorts of localised institutions, to ‘trade unions, reform movements and local government’, as well as families and neighbourhoods. It is ultimately a matter of facilitating ‘self-government’. A more participatory conception of democracy will promote a sense of civic responsibility which has been lost during the last century and the rise of liberal constitutionalism. The inadequacies of such an idea of democracy has been underlined, Sandel suggests, by the experience of the market. The liberal constitution was written in order to facilitate the free market, at the cost of the civic community. But what has been lost is any real sense of participation or belonging.31 The need to recover a sense of community, by encouraging a more active participatory citizenry, is then all the more pressing in a modern world of globalisation and increasing competition.32 As Francis Fukuyama has suggested, there is a need to recover, not merely a sense of community, but a sense of ‘trust’. Fukuyama’s thesis has two premises. The first, following JA Schumpeter, is that capitalism is an exercise in ‘creative destruction’, which can only be countered by ‘social solidarity’. The second is that law, at least liberal legalism, is not a sufficient regulator of the political economy. Competition within any society must be regulated in order to restore the ‘trust’ which any community needs in order to be a community. Such regulation can be legal, but is never only legal. Again, echoing de Tocqueville, he emphasises that the civic ‘art of association’ is also an ‘important economic virtue’. As JK Galbraith has also stressed with increasing urgency, a community’s economy is constituted as much by ‘social’ as by economic capital.33 Thus, a community 29 30 31 32 33

Sandel, Democracy’s Discontent: America in Search of a Public Philosophy, pp 332, 339. Etzioni, The Spirit of Community: Rights, Responsibilities and the Communitarian Agenda, p ix. Ibid, Sandel, pp 117, 125–27, 203–05, 274. Ohmae, The End of the Nation-State: The Rise of Regional Economics. Galbraith, The Good Society. 144


characterised by ‘trust’ will be more efficient that one solely defined by law. Fukuyama refers to the idea of ‘spontaneous sociability’ as a form of inherently fluid politics within which each citizen aligns with multiple identities and affinities. In political terms, such sociability demands a democratisation of the economic process. Trust connotes responsibility and the devolution of power, most obviously to the workplace. The idea of ‘solidarity’, the essence of a community or ‘good society’, is, at once, economic, social and political.34 Despite the common description of the European idea as one of ‘community’, there has been precious little discussion of communitarian ideas in European studies. Weiler rejects the communitarian alternative. An essentially American political theory, he suggests, would have no application in Europe.35 To a certain extent, it is true that communitarianism, at least in its more recent guises, has been consciously shaped in the cause of redefining American public law. However, as Alasdair MacIntyre most obviously observes, the ideas of community enjoy a far more distant historical genesis. The origins of communitarianism lie in Europe, in the classical form of Athenian democracy and then again in the revised continental republicanism of Machiavelli, Harrington and a whole series of like-minded early modern political theorists. 36 Sandel, indeed, concludes his recent Democracy’s Discontent by recalling Montesquieu’s injunction, taken from Aristotle, that ‘good citizens are made, not found’.37 The idea of community long precedes 1776 and is rooted in European political morality. No one appreciated this fact more than Hannah Arendt. According to Arendt, the politics of solidarity is premised on the critique of liberal legalism, and its preclusion of participatory government. Such a preclusion, she suggested, is the precondition, not only of totalitarianism, but of all forms of regulatory government. If democracy is deficient, it is because too few people care. Arendt, like Sandel, echoed Aristotle. Politics is created, not discovered. A democratic politics, in turn, is one which concentrates on facilitating participation by defining and preserving ‘public spaces’ as a locus for political activity and communication.38 Furthermore, the desire to fashion an alternative to the liberal idea of constitutional democracy is not restricted to communitarian models of participatory democracy. Radical democracy also lies at the heart of the critical legal ambition. In a seminal article, cited time and again by critical legal scholars, Hanna Pitkin and Sara Shumer identified democracy as the ‘cutting edge’ of radical politics. The basic idea, they suggested, is ‘simple’, 34 35 36 37 38

Fukuyama, Trust, pp 298–303, 311–13, 318–20, 356–62. Weiler, ‘The reformation of European constitutionalism’, p 120. MacIntyre, After Virtue: A Study in Moral Theory. Sandel, Democracy’s Discontent: America in Search of a Public Philosophy, p 319. Arendt, The Human Condition. 145


that ‘people can and should govern themselves’. Liberal politics secures elites, radical politics seeks to relocate power with ordinary people. The political vision acclaimed by de Tocqueville must be retrieved from the communitarians and reconstructed as a genuinely critical and radical politics. Democracy is the only means by which there can be radical social change. Accordingly, it should be the only concern of the radical legal scholar.39 Of course, a politics that is founded on the radical decentralisation and dispersal of power enjoys a particular popularity amongst those more inclined towards a post-modern jurisprudence. According to Zygmunt Bauman, post-modern politics is ‘marked by a view of the human world as irreducibly and irrevocably pluralistic, split into a multiple of sovereign units and sites of authority, with no horizontal or vertical order’.40 In turn, participatory politics is not the preserve of post-modern jurisprudence. In his more recent writings, Rawls has recognised the ‘fact of reasonable pluralism’. The political individual lives in a community, and so the key political ideas are described in terms of ‘reciprocity between free and equal citizens in a well-ordered society’. Such a politics is one described by an ‘overlapping consensus’ and constituted by a process of ‘political constructivism’.41 RM Unger, though far more readily associated with the critical legal project, describes a radical liberal politics which is strikingly similar to Rawls’s. According to Unger, liberal legalism has preferred the ‘conditions for a pervasive uniformity of desires and preconceptions’ over those of ‘communal solidarity … of extensive, coherent, concrete and intense moral communion’. A radical liberalism, he counters, can only evolve from a reconstruction of ‘group pluralism’ as the creative constituent of democratic politics. In Law in Modern Society, and more recently, in Politics, Unger has advocated a radical decentralisation of power as a precondition for restoring a ‘kernel of solidarity’. Such a kernel is a ‘concern with another as a person rather than just … as a bearer of formally equal rights and duties’.42 Moreover, in his Critical Legal Studies, Unger laid the responsibility for fashioning an alternative radical form of democracy with lawyers. Rethinking rights so as to accommodate the demands of modern society will necessitate various associated substantive rights, of access to markets and to political processes, as well as the more familiar formal rights ‘against’ other private individuals.43 39 Pitkin and Shumer, ‘On participation’, pp 43–54. 40 Bauman, Intimations of Postmodernity, p 35. Such an approach has been taken by Drucilla Cornell, who uses the insight in order to present an alternative approach to critical legal feminism. According to Cornell, there is no essential woman. Women are defined by multiple ‘sites’ of identity. So, rather than concentration on political equality for a mythical model woman, radical feminists must seek political equality for all, founded on an appreciation that everyone is different. At the root of Cornell’s idea of ‘radical difference’ is a return to the essential Kantian idea of respect for each individual as an ‘end’ rather than as a ‘means’. Cornell, The Philosophy of the Limit. 41 Rawls, Political Liberalism. 42 Unger, Law in Modern Society, pp 67–69, 127–28, 142–43, 206. 43 Unger, The Critical Legal Studies Movement, pp 22–36, 41, 93–103. 146


The possibilities of a radical participatory form of democracy in modern society have been most commonly presented by critical lawyers in the specific area of industrial relations. Duncan Kennedy has recently suggested that the workplace is the critical sphere of legal and political conflict in modern society.44 In a series of articles, Karl Klare set out a neo-Marxist analysis of US labour law. At the core of Klare’s analysis is the premise that law is a social and political instrument, one which has historically oppressed the labour force, but which could just as easily facilitate its liberation and empowerment.45 In the US context, labour law has been ‘systematically fashioned’ to serve the interests of management. The primary means by which the management’s interest has been secured is through the denial of worker’s rights to participation. Most immediately, US courts have consistently restricted the possibility of opening up public spaces for management-worker dialogue. The experience of US labour law reveals that legislation permitting, but not requiring, dialogue and agreement, the kind of legislation which, as we shall see, predominates in EC law, merely resigns any hope of genuine participatory governance in the industrial sphere to rhetorical fantasy. Echoing Foucault’s analysis of micro-technics of power, Klare suggests that limited participation, if determined at all times by the degree of concession granted by management interests, merely serves to intensify the democratic deficit suffered by the labour interest. 46 A sense of participation can be engendered which merely disguises the lack of real democratic governance. Only a radical democratic politics, one which denies the specious publicprivate distinction which underpins liberal ideology, by insisting that all legal spheres are to some degree public, can redress the inequality of democratic participation in the workplace. The workplace is a thoroughly public sphere, and a radical politics demands that such spheres are thoroughly democratised.47

HABERMAS ON EUROPE In his recent work, Jurgen Habermas has attempted to describe a radical theory of participatory democracy, in large part to address the crises of legitimacy which he perceives to be pervasive throughout not just Europe but the western world. Whilst also refining the ideas of such as Rawls and Unger,

44 45 46 47

Kennedy, Sexy Dressing etc: Essays on the Power and Politics of Cultural Identity, pp 83–125. Klare, ‘Law-making as praxis’, pp 123–35. It is an argument also made by Kennedy, ibid, pp 112–15. Klare, ‘Labour law as ideology: toward a new historiography of collective bargaining law’, pp 450–82; Klare, ‘The public/private distinction in labor law’, pp 1358–422 and Klare, ‘The quest for industrial democracy and the struggle against racism: perspectives from labor law and civil rights law’, pp 157–200. 147


he founds his thesis on Arendt’s sense of community and participation in community.48 In Between Facts and Norms, Habermas has redefined democracy precisely so as to address the question of constitutional legitimacy. At the root of the present crises which beset western political thought is the question of identity. Modernity, he suggests, is ‘obsessed’ with identity, the subjectivity of the self as co-determinative of and with the ‘other’. The world is fragmenting, politically, socially and intellectually. The ethic of competition is pervasive, whilst that of sympathy or respect is correspondingly diminished.49 To redress this imbalance, Habermas seeks to flesh out the political implications of his theory of communicative action as a constituent of community consciousness. Echoing Hegel to some degree, he suggests that such a consciousness is created, not discovered, and can, thus, be determined as a form of communicative solidarity. Contemporary political theory is precisely located between facticity and normativity, between arrant contingency and totalising foundationalism. Liberal legalism has deliberately restricted the capacity of the individual to participate in government, what Habermas terms the ‘common practice of associated citizens’.50 The essential issue is to facilitate political legitimacy in a world of pluralism through radical democratic institutions. Legitimacy is not located in substantive morality but in constitutional institutions. The concentration on institutional democracy distinguishes Habermas’s theory from those of the more mainstream communitarians such as Sandel or MacIntyre. Concentration on institutions replaces the communitarian concern with families and moral substance, an approach which has attracted much criticism from liberal commentators such as Ronald Dworkin. Habermas does not intend to shape the mind or ethics of the individual. Rather, he intends to facilitate the open democratic engagement of open minds. Ultimately, securing political legitimacy is a legal and constitutional question, the critical ‘interpenetration of the discourse principle and the legal form’. A constitution properly legitimates those rules and laws which ‘refer reflexively to the function of social integration’. In this sense, the structure of law is underpinned by a ‘principle of reciprocity’, which modernism translates into a ‘principle of democracy’, and which is determined in turn by the facility of institutionalised communicative action’. The key to legitimacy, then, in the modern world, lies with democratic institutions and procedures.51 The practice of communicative action is engaged in the ‘spontaneous sources of

48 Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, pp 146–47. For a commentary, see Rehg, ‘Introduction’ to the same work. 49 For a similar thesis, see Giddens, Modernity and Self-Identity: Self and Society in the Late Modern Age, pp 2–9, 37–65, 109–11. 50 Ibid, Habermas, pp 79, 321. 51 Ibid, Habermas, pp 14–16, 80–81, 91, 121, 287–88.

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autonomous public spheres’. Echoing the communitarian thesis to some degree, Habermas emphasises the politics of multiple institutions which compose our particular ‘lifeworlds’, from family and gender politics, and the workplace, through various civic associations, and on to representative democratic institutions. Democratic politics becomes all-encompassing: ‘In the vertigo of this freedom, there is no longer any fixed point outside that of democratic procedure itself’. The ‘success of a deliberative politics’ depends ‘on the institutionalisation of the corresponding procedures and conditions of communication, as well as on the interplay of institutionalised deliberative processes with informally developed public opinions’. In terms of constitutions, this requires a ‘dynamic understanding’ of law and politics as a forever incomplete exercise, rendered contingent by the irreducible contingency of the political community. The modern individual, Habermas concludes, identifies, not with a comprehensive moral theory, but with democratic procedures.52 Habermas has applied his theories of radical democratic politics to the particular problem of Europe. Like, Sandel, Habermas sees the ‘melancholic mood’ which afflicts Europe as being reflective of a global lack of confidence.53 In an increasingly competitive, fragmenting and anxiety-ridden world, Europe is merely the most competitive, most fragmenting and most anxious of all. On one level, the most immediate need is to resist the challenge of capital. Unrestrained capitalism, according to Habermas, is a challenge to democracy.54 At a deeper level, the fate and failure of Europe is symptomatic of that which afflicts modernism generally. Contemporary Europe graphically describes a world of alienated, disorientated consumers devoid of any remembrance of community and social solidarity, distanced from any sense of political participation. Any ambition to govern a community is deflected by a desire to satiate self-interest. The greater the need to engineer market conditions, the greater the need to regulate, and the greater the corresponding democratic deficit. The most ‘disturbing’ characteristic of contemporary Europe is the ‘lack of constitutional controls of administrative activity’.55

52 Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, pp 186, 298–99, 360–91. 53 Ibid, p xxxix 54 There is, of course, much truth in this particular observation. Wealth polarisation is the most immediate practical threat to the Union. Within its geographical boundaries, the Union recognises that 58 million of its residents are ‘poor’. Three million Europeans are homeless. The average rate of accelerating unemployment in the Union has risen year by year for over a decade. Regional inequalities continue to widen. Whilst 14 of the Union Level II regions have GDP per capita above 125% of the average, 158 are less than 75% of average. Deficits are concentrated acutely along the Mediterranean seaboard. Hadjimichalis and Sadler, ‘Open questions: piecing together the new European mosaic’, p 238. 55 Ibid, Habermas, pp 428–31. 149


Bureaucracy has replaced the facility of participation and, thus, community identity. Instead, there is a destructive determination to fragment into increasingly competitive ethnic and national groupings, which can only gnaw away at the very idea of a European ‘community’. It is not surprising therefore, that Europe’s ‘citizens’ do not identify with the Community, or at least not primarily. In order to address the ‘crisis of identity’ in contemporary Europe, there will be a need to shape a ‘shared political culture’. Moreover, such an idea of Europe, a Europe of solidarity, determined by an ethic of multiple political affinities and participatory democracy, depends, in the final analysis, upon a reconstitution of its political institutions. It is a question of democracy. The new European may, indeed, want to be prosperous, but he or she does not want to be only prosperous. The new European also wants to determine him or herself in a multitude of ways, politically and socially, as well as economically. If ever a polity demanded the facility of mechanisms of democratic participation, it is the European Union. The new Europe suggests the potential demise of the Nation State, and with it traditional theories of liberal constitutionalism, but fails to embrace the necessary reconstruction of democracy which such a demise demands. It is not a free market that Europe needs, but relief for an ‘exhausted’ and ‘disintegrating’ sense of ‘social solidarity. Rather than providing an empty political citizenship, the new Europe must reinvent a democratic community citizenship defined not by the Nation States but by facilities for participatory governance. Only such a radical democratic polity will be able to facilitate the necessary ‘solidarity between strangers’ which the modern global world, and contemporary Europe, requires.56

THE RHETORIC OF SOLIDARITY IN THE EUROPEAN COMMUNITY To what extent does the European Union offer the potential for a Habermasian, or, indeed, any other, form of radical democratic politics? At first glance the possibilities might seem to be encouraging. The rhetoric of solidarity certainly enjoys a prominence in the Treaty itself. Article 2 declares that the ‘Community shall have as its task, by establishing a common market … the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States.’ If Art 2 is indeed the constitutional mission statement of the Community, then it would seem that

56 Habermas, Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, p 445. Cf, Habermas, ‘Citizenship and national identity: some reflections on the future of Europe’, pp 2, 8–9; and Habermas, ‘The European nation state: its achievements and its limitations. on the past and future of sovereignty and citizenship’, pp 125–37. 150


the idea of ‘solidarity’ is central to the future development of the European polity. In turn, it might be reasonable to surmise that the shape of democratic politics in Europe will be more than that described by liberal constitutionalism. In the run up to the Maastricht Treaty, Helen Wallace noted that there was a general consensus that liberal constitutionalism could no longer address the shortcomings of the democratic deficit. An ‘elite-driven process’ of legal integration seemed to be ‘no longer an adequate basis for EC governance’, whilst the ‘gap between governed and governors within and between countries’ can no longer be addressed by merely ‘technical and legalistic devices’.57 Giving ‘social cohesion and solidarity’ a real democratic meaning is an obvious approach to bridging this gap. However, the idea of ‘social cohesion and solidarity’ has enjoyed a rather variable history in the European Community, always compromised by the overriding concern that the Community should continue to make money. During the last couple of decades, in particular, there has been much anxiety about the need to invest Europe with a ‘social face’. Jacques Delors placed the satisfaction of this need at the heart of Commission policy. The ambition of the new market, he declared in 1990, ‘extends beyond the single market to solidarity through economic and social cohesion’. Without a vision of social democracy, the Community will be a ‘hollow creation, devoid of vitality and political will’.58 Back in 1974, the Community had supported the idea of a Social Action Programme dedicated to full employment, an improvement in living and working conditions and social dialogue in the workplace. The idea was resurrected at the Fontainebleau summit in 1984, which stressed the need for a ‘balanced’ Europe, and promoted a policy of ‘economic and social cohesion’ as a ‘democratic imperative’. However, the legal and constitutional effects of all this rhetoric and anxiety have been notoriously limited. We have already noted the inadequacies of the constitutional concept of citizenship in Art 8. It adds nothing to a ‘social face’. It should be admitted that the Single European Act introduced, in Art 130, the desirability for social progress to complement the completion of the single market. However, it has always been the case that the argument for social reform has only been validated by evidence that such reforms will enhance the competitiveness of the common market. Accordingly, the Community Charter for the Social Rights of Workers was accepted by the Member States only in 1989, when Delors reluctantly agreed that it should have no legal force but rather be a ‘solemn declaration’. The result of the Community’s inability to establish a coherent social policy was the Protocol on Social Policy to which is annexed the Agreement in Social Policy, and which in turn is annexed to the Maastricht Treaty. The refusal of the UK to subscribe to the Agreement, and the resultant Protocol,

57 Wallace, ‘European governance in turbulent times’, p 96. 58 Quoted in Lodge, ‘Social Europe’, p 135. 151


asked considerable questions of the acquis communautaire.59 Moreover, whilst perhaps being a constitutional document (if it can be accepted that the Agreement was part of the Treaty framework), the Agreement itself asked few commitments of those Member States willing to accede to it, permitting any ensuing legislation to be passed in the form of directives rather than regulations. Erica Szyszczak rightly suggested that, following 1992, social policy ‘so long the Cinderella of the common market, has been transformed, not into a fairy princess, but into an ugly sister’.60 Furthermore, although the idea of ‘social cohesion and solidarity’ enjoy a prominence in the constitutional rhetoric of the Community, the various institutions, including the European Court of Justice, have been less inclined to promote the cause of participatory democracy through the development of a coherent social law. Paul Teague has argued for a ‘European social constitution’, emphasising the extent to which the development of a ‘social face’ must be seen as a political issue and a democratic issue. The ultimate ambition of such a ‘constitution’ must be to achieve dialogue between all interests in the common market.61 In a more recent article, Teague and Grahl have argued for the conscious construction of a labour market characterised by ‘productive decentralisation’ and the empowerment of all sectors of the market, founded on a proactive Keynesian political base.62 It goes without saying that the Draft Treaty of Amsterdam makes no gestures along these lines. Whilst bemoaning the increasing problem of unemployment, the pervasive rhetoric tends far more towards ‘flexibility’ in the area of social policy, and the devolution of responsibility in such areas to the Member States.

INDUSTRIAL DEMOCRACY AND WORKER PARTICIPATION As we have already noted, the idea that participatory democracy and governance can find a real practical application in the sphere of industrial relations has attracted the attention of critical legal scholars. Moreover, it enjoys a particular resonance in contemporary British politics. The report of the Social Justice Commission waxes long and lyrically about the need for workers’ representation and involvement in the workplace as being ‘necessary for efficiency, democracy and regulation’. The Agreement gestures towards

59 Most obviously in that social policy initiatives pursuant to the Agreement could be approved by qualified majority voting, whilst those emanating from Treaty articles continued to require unanimity. This particular anomaly has been alleviated by the willingess of the new Labour government to subscribe to ‘opt in’ to the Agreement. 60 Szyszczak, ‘Social policy: a happy ending or a reworking of the fairy tale?’, p 313. 61 Teague, The European Community: The Social Dimension. 62 Grahl and Teague, ‘Economic citizenship in the new Europe’, pp 395–96. 152


greater industrial democracy and addresses a ‘democratic imperative’. The problem of ‘democratic deficit’, it rightly noted, is not merely felt at Westminster or Strasbourg, but is most acute and pressing in the ‘workplace’.63 The 1978 Industrial Democracy White Paper following the Bullock Report had appreciated this 16 years earlier. As it famously opened, in ‘a democratic society, democracy does not stop at the factory gate, or the office door’. Industrial responsibility is a ‘shared’ enterprise, for in a competitive world, only the co-operative and democratic industry can hope to thrive. Of course, where the Bullock report advocated genuine legal rights of industrial participation and co-decision, the Social Justice Commission adopts the more current, and necessarily weaker, alternative of consultation procedures. To a certain extent, this kind of rhetoric enjoys an affinity with recent literature on the idea of ‘stakeholding’. According to Sally Wheeler, stakeholding connotes duties and responsibilities ‘implicit’ in the citizenship of a democratic polity. It is a measure of ‘active participation’ in that polity. Echoing Fukuyama, she refers to stakeholding as a mechanism for restoring ‘trust’ in economic relations. The adoption of works councils, she suggests, is a gesture towards stakeholding. But it is only a gesture. As we shall see shortly, and as Wheeler concludes, in the absence of genuine rights of participation as opposed to mere consultation, it remains a largely empty one.64 It is, of course, a gesture that owes its immediate origins to the European Community. The underlying idea of industrial partnership has gained increasing voice in Commission rhetoric, and to a lesser degree in the constitutional framework of the Community. The desirability of greater workplace dialogue in the Community, as we have just seen, was articulated in the 1974 Social Action Programme. In a 1975 Commission report, there had been similar emphasis on the need for greater worker participation, as a matter of both democracy and efficiency.65 However, the infamous failures of the draft Fifth Company Law and Vredeling directives signalled the reluctance of the Member States to commit themselves to real industrial democracy. It was not until the Single European Act, over a decade later, that support for the idea of management-labour dialogue was incorporated into the Treaty framework. Article 118B encapsulated the Val Duchesse principle, expressed as a ‘dialogue between management and labour at European level which could, if the two sides consider it desirable, lead to relations based on agreement’. The 1989 Community Charter again repeated the need to facilitate the ‘information, consultation and participation of workers’. Although there were a series of directives aimed at realising this ambition, the majority of which addressed related issues of health and safety, commentators such as Erica Szyszczak and Bob Hepple have continued to argue for a more coherent 63 Commission on Social Justice, Social Justice: Strategies for National Renewal, pp 209–14. 64 Wheeler, ‘Works councils: towards stakeholding?’, pp 44–64. 65 Bulletin of the European Communities, Supplement 8/75. 153


constitutionalisation of management-labour dialogue. The limitation of Community involvement to a ‘Community level’ failed to address the real problems of industrial democracy, and related questions of working conditions and so forth.66 The Community’s competence does not extend to the sphere of industrial relations in the workplace. Article 118B and the 1989 Charter are founded on precisely the fiction familiar to critical labour lawyers, that labour relations is consigned to the private sphere of legal relations and is not a matter of public law or policy. To a certain extent, it might seem that the incorporation of the Community Charter into the Agreement addresses this fiction. However, the uncertain legal status of the Protocol, and the weak nature of the commitments that the Agreement demands of the Member States, tempers such a conclusion. The voluntarism of the Val Duchesse principle remains decisive. Although the Commission consults both management and labour interests with regard to any putative legislation, there is no ultimate requirement for agreement. If need be, as with the Works Council directive itself, the Commission will simply proceed without agreement. The Court of Justice has steadfastly refused to claim any jurisdiction to enforce agreements under Articles 2 and 4 of the Agreement. Most importantly perhaps, the annexed declaration to Art 4.2 of the Agreement expressly provides that the Member States are not obliged ‘to apply the agreements directly or to work out rules for their transposition, nor any obligation to amend national legislation in force to facilitate their implementation’. Furthermore, as Paul Teague has noted, the principle of subsidiarity, if it is, indeed, interpreted as being an instrument designed to return power to Nation State level, will militate against any uniform introduction of constitutionally secured industrial democracy.67 The suspicion, articulated in the 1994 Commission White Paper, that flexible labour strategies must vest responsibility with Nation States, seems to have been realised in the draft Amsterdam Treaty. The proposed new Title on Employment requires Member States to promote employment, but respects the national particularity of policies relating to industrial co-operation. Likewise, proposed amendments to Art 118 of the Treaty and Arts 2 and 4 of the Agreement, whilst reiterating the Community’s desire to promote dialogue, makes few advances. Any legal responsibilities which follow from the process of dialogue must still be readily accepted by both management and labour. If management refuses to make any legal commitment, then there is no question of it being forced. Moreover, Member States are under no obligation to facilitate or ‘apply’ any such agreements even if they reached.68 Most significantly, of course, these commitments, being expressed through the medium of directives, are immediately consigned to the private sphere. The 66 Szyszczak, ‘1992 and the working environment’, pp 3–14. 67 Teague, ‘Co-ordination or decentralization? EC social policy and industrial relations’. 68 Draft Treaty of Amsterdam, ch 4. 154


firm distinction between the public sphere of Community competence and the private sphere of industrial relations remains at the heart of Community industrial relations policy. In the absence of constitutionalised industrial democracy, we must look to the private sphere of directives and the extent of their implementation. Here, of course, the sense of voluntarism is all the greater. Directives uniformly provide rights for consultation, but nothing more. Thus, even when the Court of Justice finds that a directive on collective redundancies has been inadequately implemented, as in the 1994 UK case, the indictment is limited purely to a failure to provide ‘meaningful’ procedures for consultation.69 The same voluntarism founds Directive 94/45 for the establishment of European Works Councils. The idea of works councils was mooted as early as the 1970s, but like so many social policy initiatives of that period never reached fruition.70 The realisation of the 1994 directive carried a certain symbolic importance, but once again, in reality it seemed to suggest the necessity of compromising worker’s rights at least as much as effecting them. Employees still only have the right to be consulted. Of course, the right to be consulted must not be simply dismissed, but it is important to emphasise its limitations in terms of participatory democracy in the workplace. It is also, as Clare McGlynn has observed, important to note that the directive is further evidence of a Community industrial relations policy being pursued through the private sphere, and accordingly realised only in ‘bits and pieces’. It may be a step forward for the idea of participatory workplace democracy, but it is not a particular large or a particularly convincing one. The onus remains firmly on voluntary agreements, ‘flexibility’ and the overriding ‘principle of autonomy’. Industrial relations, in the immediate political sense, remain securely within the mythical realm of private law. Furthermore, in practical terms, it only applies to companies that employ 1,000 workers or more, and do so in least two Member States, each of which must include at least 150 of that workforce. It is a Community measure with no application to purely national companies. 71 For millions of workers, the vast majority, it is entirely irrelevant. For those it effects, the rights it provides fall a long way short of those envisaged in a genuine participatory democracy. The commitment at the Amsterdam IGC to a deregulated flexible labour market does not suggest that this situation will change. Industrial relations law will remain within its fictional private sphere, even if the Community at a public level is prepared to chatter about the virtues of greater industrial

69 Case C-382–3/92 [1994] ECR I-2435. In this case, the Court handed down a damning indictment of the UK government’s failure to implement Directive 75/129 on collective redundancies. More particularly, it castigated the government’s failure to provide an adequate system for the designation of employee representatives. 70 Gold and Hall, ‘Statutory works councils: the final countdown?’, pp 177–79. 71 McGlynn, ‘European works councils: towards industrial democracy?’, p 78. 155


democracy. As Martin Rhodes has concluded, the most likely ‘scenario is for an uneven and spasmodic emergence of an ad hoc institutionalised system of European labour relations’, one in which ‘employers’ maintain the ‘upper hand’.72 Of course, the rhetoric continues, the vague arguments, the grand gestures. On 4 June , the Commission issued another ‘Plan’ for a regulation on worker consultation. With something of an understatement the bulletin opens by acknowledging that the relationship between management and labour with to regard to rights of information on strategic and economic decisions ‘is not always effectively guaranteed’. Workers’ representatives, it continues, ‘tend to be involved’ rather ‘too late’ in any decision making, if at all. Measures to address this would be a good thing. Furthermore, the Commission continues, legislation in worker’s rights is rather ‘fragmented’, located variously in the Works Councils directive, together with other directives on mass redundancies (95/56) and transfer of undertakings (77/187). Consolidation would also be a good thing. Of course, the regulation will only come into existence following lengthy negotiation with employers and trades unions. Moreover, the Commission thinks that such a regulation will only be workable if all parties agree on a ‘voluntary’ basis to its gradual implementation. So if no agreement is reached, the Commission will be reluctant to draft any sort of regulation or even directive itself. The bulletin concludes by noting that preliminary consultation on the matter has suggested that, whilst trade union reaction has been ‘quite positive’, that of employers has ‘tended to express misgivings about such an initiative’. Moreover, rather than merely expressing these misgivings, employers have thrown a constitutional principle back at the Commission, subsidiarity. A Community regulation on workers consultation would be against the pervasive spirit of subsidiarity. The European constitution is cited as the primary authority for resisting any further advance towards participatory governance in the workplace.73 It would be unwise for anyone to hold their breath waiting for genuine radical participatory democracy in tomorrow’s Europe.

72 Rhodes, ‘The future of the social dimension: labour market regulation in post-1992 Europe’, pp 43–44. 73 Europe Information Service, ‘Worker consultation: commission plan for national framework regulation’. 156

CHAPTER 8

CITIZENSHIP, PARTICIPATION AND LEGITIMACY IN THE EUROPEAN UNION

Kevin Featherstone

INTRODUCTION Few can doubt the growing importance of the European Union (EU) in the lives of the peoples of its Member States, or even to the world beyond. The current EU agenda comprises moves to a single currency and closer foreign policy co-operation, including defence. Existing EU policies in regional development and agricultural aid are highly important to those directly affected. Moreover, the increased openness of the European market is revising the regulatory powers of national governments over their domestic economies. New States seek to enter the EU and Third World countries have established important relations with it. The importance of the EU naturally provokes questions of how it affects democratic systems, accountability and participation. The viability of democracy at the national level depends on a resolution of the Member Nations’ relationships with the rest of the EU. Participation at home is of less use, the more ‘power’ is exercised at the EU level. Participation in a polity presumes citizenship. But what defines citizenship? For four decades, the architects of the European integration process shied away from raising this question in relation to their own bold endeavours. Neither the Treaty of Paris (1951) nor the Treaty of Rome (1957) made reference to the notion of citizenship, nor did the Single European Act negotiated in 1985. The Treaty on European Union (TEU) signed at Maastricht in December 1991, however, created a new ‘European’ citizenship (Art 8), and this provoked a backlash from several quarters. Citizenship is normally granted by states, and the rules applied by States vary considerably. The EU is not a State, so the innovation of the TEU raises difficult questions about how the EU relates to its Member States. What kind of political entity is the EU? The answer to this question has implications for how an EU national’s democratic rights (accountability, participation, etc) are to be understood. It also contributes to an evaluation of whether the EU helps or hinders the exercise of these rights. In the ratification process for the TEU, many competing positions were taken on these matters. One of the most important and wide ranging

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statements came from the Bundesverfassungsgericht (the Federal Constitutional Court) in Germany in its judgment on the TEU delivered on 12 October 1993. In a complex, somewhat tortuous, judgment, it defined the EU as a Staatenverbund (an association or ‘compound’ of States), and the implications of its judgment on citizenship deserve careful attention.1 Here, they can only be briefly and crudely put. In essence, the Court determined that there was no European Volk (common people) nor a nation, and therefore there was no European citizenship. As Weiler has interpreted it, the Court was basing its judgment on the fact that: Neither the subjective element (the sense of shared collective identity and loyalty) nor the objective conditions which could produce these (the kind of homogeneity of the organic national-cultural conditions on which peoplehood depend) exist. Long term peaceful relations with thickening economic and social intercourse should not be confused with the bonds of peoplehood and nationality forged by language, history, ethnicity, and all the rest.2

The linkage between Volk/nationality and citizenship – which, of course, has deep roots in German history and culture, beyond the evils of Nazism – is used as the exclusive basis for democratic authority and citizenship. In consequence, EU nationals should treat EU initiatives with great caution. The implication is that democracy can be best – perhaps even only – safeguarded via national action. Indeed, the absence of a European volk/nation would seem to preclude a functioning democracy at the EU level in the future. Yet, should such a rigid interpretation be acceptable to EU nationals? There is no a priori reason why the definition of ‘peoplehood’ need be the same at both the national and the European level. If citizenship is decoupled from volk/nationality, then it is possible to define citizenship in civic, rather than cultural, terms and to accept a notion of multiple citizenship, as Weiler argues. Europe need never be a common volk/nation. The EU can instead be conceived as being based on a social contract among nationals sharing certain values.3 States are not ends in themselves, but they are rather instruments for individuals, alone and collectively, to realise their potential. Deeper integration and more market openness can be accepted as requiring an expansion of democracy and participation across the national-EU divide. The EU states share common values of liberal democracy, they may be understood as having come closer together to mediate the effects of market globalisation, accepting common action in particular areas. A conception of citizenship (involving notions of democracy and participation) that responds to 1 2 3

Herdegen, ‘Maastricht and the German constitutional court: constitutional restraints for an “ever closer union”’; and Weiler, The State ‘Über Alles’: Demos, Telos and the German Maastricht Decision. Ibid, Weiler, pp 14–15. Ibid, Weiler, p 48. 158

Citizenship, Participation and Legitimacy in the European Union

developments at both the national and the European level appears logical, and perhaps attractive. Indeed, an overly rigid definition of citizenship poses a range of political problems, not only in relation to the EU, but also in the context of the multiculturalism of existing Nation States in both East and West Europe. From the Baltic States to the Basque country, or from Northern Ireland to Bosnia, it is more and more apparent that peace and stability is better founded on notions of multiple citizenship, moving beyond a simple equation of people-Statecitizenship (Volk-Staat-Staatsangehoeriger). The reassertion of minority identities in central and east Europe is more readily accommodated by such an acceptance. History is relevant here. Leaders of the minorities’ movements in inter-war Europe, for example, recognised that cultural identity was a multi-faceted phenomenon, transcending existing Nation States. This might be extended further: enabling political rights to follow multiple identities.4

OVERCOMING A DISTORTED LEGACY To realist scholars of international relations, the notion that citizenship can be based on both national and European foundations is an anathema. Raymond Aron, for example, denied that ‘multinational’ citizenship of this sort was possible.5 To him, the then European Community simply did not possess the requisite characteristics to allow citizenship to be associated with it. Yet, the manner in which European integration proceeded indicated that, in reality, it was abrogating to itself, implicitly and then explicitly, some of the rudiments of citizenship.6 Moreover, an increasing European dimension in this regard has been encouraged by an acceptance in recent times that citizenship may have more than one focus. The manner in which the EU has developed has closely affected how it has treated the notion of citizenship. By most conventional measures, the EU pursued a distorted or skewed concept of citizenship. The core notions have been the rights to freedom of movement and of residence, built up since the original Treaty of Rome. These apply, of course, to only those who wish to live and work in another EU country. These rights became linked to the objectives of the single European market, detailed in the Single European Act. The provisions on free movement were expanded to all individuals, not just the

4

5 6

Paul Schiemann, a Baltic German, argued, eg, that a citizen has a dual duty: to the State in which one lived and to a cultural identity which might extend beyond an existing Nation State. Discussions of this kind were evident at the Nationalities’ Congress, a sequence of meetings held in the late 1920s and 1930s. I am grateful to my colleague, John Hiden, for having brought these points to my attention. Quoted in Newman, Democracy, Sovereignty and the European Union, p 147. Meehan, Citizenship and the European Community. 159


economically active. This development, supported by the expansive interpretations of the European Court of Justice (ECJ), provided the basis for the citizenship notion in the Maastricht Treaty.7 Beyond this socio-economic core, the political dimension of EU citizenship has been slow to develop and has been without much coherence. Article 8 of the Maastricht Treaty conferred citizenship on Member State nationals, but the political rights outlined were relatively superficial (the right to vote and stand as a candidate in municipal and European Parliament (EP) elections. These were the right to diplomatic protection by the authorities of other Member States in third countries and the right to petition the EP. More sensitive issues of ‘Justice and Home Affairs’, such as border controls, asylum, immigration of third country nationals, drug addiction, fraud, terrorism, and judicial co-operation, were siphoned-off to the ‘third pillar’ of Title VI of the Treaty, where decisions are made on a strictly intergovernmental basis. It must also be noted that the social rights enumerated in the Social Charter of 1989, and endorsed by an annex to the Maastricht Treaty, were not linked ‘explicitly with citizenship in the text of the Treaty, to which there was both national and ideological opposition’. 8 Moreover, a proposal to incorporate the European Convention on Human Rights (ECHR) into Treaty law was rejected at Maastricht, even though that proposal was supported by the Commission and the EP. National governments apparently feared the consequences of extending such rights to individuals from other than EU countries. 9 Instead, Article F (Title I) committed the EU to respect the ‘fundamental rights’ guaranteed by the ECHR, without any further elaboration of the procedures or rights of adjudication which would give substance to that respect. Overall, despite the claims to radical innovation, it is difficult to contest the conclusion of Anderson et al that the Maastricht Treaty ‘changed very little’ with respect to citizenship.10 In response to some of the backlash against the Maastricht Treaty, further Treaty revisions on citizenship were made at the Amsterdam European Council in June 1997. In the socio-economic field, the Social Protocol of Maastricht was integrated into the new Amsterdam Treaty and a new chapter on employment was added. Free movement of individuals was further enhanced, except in the UK and Ireland which retained their border controls. Decisions on immigration, visa policy and political asylum may be made by majority voting after five years. A zone of ‘freedom, security and justice’ is to come into force within five years of the Treaty’s ratification within which policies towards organised crime and drug trafficking, corruption, asylum and immigration and racism and xenophobia will be developed jointly. 7 8 9 10

Anderson et al, ‘European citizenship and co-operation in justice and home affairs’. Ibid, p 109. Ibid, p 109. Ibid, p 104. 160


More notably, the Amsterdam Treaty took a small step into the sphere of human rights. It declared that: ‘The Union is founded on the principle of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law’ (Art F.1). The preceding Inter-Governmental Conference had again rejected the proposal to incorporate the ECHR, and agreement was possible only on this less far reaching provision. There are two dimensions of relevance here: the relationship of the citizen to his or her national government and the relationship between the individual and the EU institutions. On the first, the Amsterdam Treaty states that if the European Council determines the existence of ‘a serious and persistent breach’ by a Member State of the principles already noted, then the State in question may see some of its rights, including voting rights in the Council of Ministers, suspended. The reality appears very modest, however. A denial of human rights is to be penalised by a withdrawal of Council voting rights. This is, of course, a minefield for the EU. The European Council (not the ECJ) would be intervening in domestic relations between the citizen and his or her Nation State, with no clear set of criteria to which to refer. Moreover, any such action would no doubt be placed alongside the involvement of the European Court of Human Rights in Strasbourg, complicating the process yet more. The Amsterdam provisions may have yielded more on the second dimension. Any individual can now take the European institutions to the ECJ over any action which they consider a breach of their fundamental rights. The process here involves a direct judicial adjudication. The Amsterdam Treaty took a notable first step into the realm of human rights, but its provisions remain limited and unclear. The Strasbourg ECHR was created in direct response to the evils of fascism. The prospect of EU enlargement to incorporate former Stalinist dictatorships prompted the EU to do something of its own, but they could not agree on very much. The result is something of a mishmash. EU citizenship, by itself, still confers little protection of basic human rights and grants few political rights. Its most notable anchor remains the economic one of the creation of an open, internal market, and pursuit of this prompted action on labour mobility, which was subsequently enlarged upon. EU citizenship is clearly supplementary to national provisions and its conception remains much more limited than that normally found within Member States. EU membership is more about travelling across borders than about a separate protection of citizenship or human rights. The overall effect is that the conception of citizenship at the European level remains somewhat skewed.

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PATTERNS OF CIVIL SOCIETY The significance of this distorted conception of citizenship is that it undermines the scope and coherence for public participation in the EU political process. In reality, the scope for participation at the EU level extends well beyond the conception of citizenship outlined above; indeed, the latter is a poor guide to the former. But, the EU notion of citizenship, developed hitherto, obscures our understanding both of what exists and of the present opportunities for, and impediments to, increased participation. The central contention of this chapter is that, for their citizens of Member States, EU membership paradoxically has both broadened and undermined the scope for participation in political, economic and social affairs. To support this argument it is necessary to distinguish between the EU as a policy actor or entrepreneur, on the one hand, and the EU as itself a separate political system on the other. The EU is a policy actor or animateur in those fields where it has accumulated distinct sets of policies and common action, but the interrelationships between the EU institutions themselves form a policy process or system which actors seek to influence. Both dimensions – the EU as an actor and the EU as a system – provide opportunities and threats to public participation. At the ‘systemic’ level, it is important at the outset to note a general contextual limitation. At the European level there is an absence of, or at least a pronounced weakness in, those social structures and processes that normally constitute civil society. At the national level, modern liberal democracy is understood to rest on such structures and processes. The aid given by the West to assist the transitions in central and eastern Europe has been intended to nurture the development of an indigenous civil society. A growing literature in political science recognises the development of civil society as being essential to both democracy and stability. The relative absence of civil society structures at the EU level is denoted by the weakness of Europeanwide bodies representing sectional or promotional interests. Pluralistic politics still largely operates within distinct national settings, with nationally based groups extending their activities, often in a piecemeal fashion, at the EU level, and typically doing so in a manner which retains their national autonomy. European-level interest groups are, in the main, weak agglomerations of their national associations. Similarly, a European party system is only slowly emerging. Political party activity at the EU level has not affected the sovereignty of the national parties to a significant degree. The EP requires its members to sit in cross-national party groups if members are to receive additional financial support, and a number of European ‘parties’ have been proclaimed. In November 1992, the Party of European Socialists replaced an earlier Confederation, and was placed alongside the European People’s Party, the Federation of Christian

162


Democratic Parties of the EC, the Federation of European Liberal, Democrat and Reform Parties and the European Federation of Green Parties. Other, smaller, transnational alliances exist. Strong informal pressures are exerted upon member parties to accept majority decision making, especially when drawing up common manifestos for the European elections. In each grouping, national parties have also accepted some formal limitation of their autonomy.11 Moreover, ‘anoraked’ enthusiasts can join some of these EU ‘parties’ as individual members. But, such groups essentially remain ‘bottomup’ confederations. It is the national parties which have created a European umbrella for themselves and they remain able to exit or derogate from their EU association. Beyond the parties and interest groups, there are few other social structures which have a ‘European’ character as opposed to sets of distinct national forms. Amongst Europe’s multifarious churches, the Roman Catholic Church stands out as having a ‘supranational’ form. Yet, whilst it has long been associated with support for European integration, via the Christian democratic parties, it has made little direct input itself into EU politics. The other churches are predominantly more nationally based. The media may prove to be one sector in which change may take place. In the past, newspaper and television companies had solely a national audience (or single linguistic market in some cases). With the growth of satellite and cable television, there are now more companies providing services on a transnational basis. ‘Euronews’ and ‘Eurosport’ are prominent examples, with CNN Europe and BBC World also relevant in this regard. In addition, many of Europe’s major ‘quality’ national newspapers have now established cooperative links between themselves, and in some cases there is cross-national ownership. The potential exists – though as yet it has barely been realised – for a distinct ‘European’ media input into politics. Media coverage of EU politics remains limited and often fails to develop a European perspective.12 New technologies and the pressures of more open national markets may yet, though, yield a separate media structure as part of a European civil society. So far, however, it is barely possible to speak of an EU level civil society. The consequences of this for democracy and public participation are very profound. The forms of accountability and participation that currently exist at the EU level are based on a hybrid combining both intergovernmental and supranational models. In brief, the citizen can make an indirect input via national parliaments and governments to the Council of Ministers and the European Council. The latter have the greatest power in the EU’s institutional framework, although it must be admitted that this has been partially and

11 Hix, ‘The transnational party federations’, p 308. 12 Sonntag and Featherstone, ‘Looking towards the 1984 European elections: problems of political integration’. 163


steadily eroded over the last two decades. The citizen can also make a direct input into the EU system by voting in the elections for the EP. These elections, the world’s first international elections, have been a significant innovation. Yet, they elect candidates to what is still the weakest of the EU’s major institutions, and though turnout levels vary (in some instances, compulsory voting keeps it relatively high), they are still clearly ‘second order’ elections in comparison to their national counterparts. Putting all this together, the citizen has the most direct input where it matters least, in the EP, and has the most distant input where it matters most, in the Council. More generally, the relative absence of the structures and processes of civil society structures at the European level means that EU politics remains essentially nationally-driven, and national fragmentation seriously limits the scope for democratic accountability. In most instances, legitimacy, in turn, is largely retained by national institutions. 13 In much of northern (if not southern) Europe, ‘Brussels’ and the EP, when not subject to rejection or relative neglect by the mass public, suffer from its indifference. European opinion is rarely more than the sum of its (national) parts.

THE EU POLITY AND PARTICIPATION The operation of the EU political system has a paradoxical effect. The EU institutional framework undermines national parliamentary control,but boosts the scope for policy influence by associations of national interest groups and lobbies. In short, it threatens national parliamentary democracy but provides opportunities for new forms of pluralistic politics. The threat to national parliaments is encapsulated in the notion of there being a ‘democratic deficit’ involved in EU membership. This deficit is the result of a combination of two phenomena: first, the transfer of powers from the Member States to the EC; and, second, the exercise of these powers at Community level by institutions other than the EP, even though, before the transfer, the national parliaments held the power to legislate in the areas concerned.14 In other words, the nature and timing of EC legislation makes it difficult for national parliaments to exercise a right of accountability. They become weakened vis à vis their own governments and the set of EU institutions. EU policy making provides national governments with a series of

13 Eg, Featherstone, ‘“Europeanisation” and the centre-periphery: the case of Greece in the 1990s’. 14 Bogdanor and Woodcock, ‘The European community and sovereignty’, p 482. See Toussaint Committee, Report Drawn up on Behalf of the Committee on Institutional Affairs on the ‘Democratic Deficit’ in the EC; and the subsequent European Parliament resolution of 18 July 1988, OJ C187, 1988, p 229. 164


political advantages, as A Moravcsik has noted.15 Governments benefit in several ways: (1) they are more able to take the political initiative, to introduce issues onto the domestic agenda; (2) they have certain institutional advantages: domestic parliaments find it difficult to control their European policies; (3) governments have better information on Europe, including not only technical information but also political knowledge as to what is feasible in EU negotiations; (4) governments possess an ideological advantage over their domestic opponents: by imposing an ideological, ‘European’ frame on an issue, affecting the terms of the subsequent debate. When the main EU governments agree on a particular ideological justification for a policy, it becomes more difficult for domestic lobbies to challenge it. In short, Moravcsik argues that EU integration has actually made national governments stronger, not weaker, domestically. By contrast, national parliaments have little institutional link with either the EP or the Commission. Members of national parliaments may, depending on national constitutional provisions, become ministerial representatives in the Council of Ministers. Yet, once decisions are taken in the Council (or European Council), it becomes very difficult for national legislatures to challenge, let alone overturn, them. EU Treaty revisions may be distinct in the amount of attention they receive, but it must be noted that no national parliament managed to change a single word of the Maastricht Treaty.16 The exceptional case of Denmark involved a national referendum defeat, the outcome of which was that the damage was ‘ring-fenced’, with additional optouts granted to the Danes. All the parliamentary attention devoted to Maastricht in Westminster, for example, had little, if any, effect in this sense. The terms of British adhesion to the Treaty remained unaffected. The normal texts of EU legislation fare even worse. National parliaments have little time or knowledge by which to seek to revise these texts, and decisions made in the Council are practically impossible to unravel.17 15 Moravcsik, ‘Why the European Community strengthens the State: domestic politics and international cooperation’. 16 The Dutch and German Parliaments did, however, secure some extensive new powers in relation to the EU. In the German case, as a result of the German Constitutional Court upholding these powers, two new Articles (Arts 23 and 45) appeared in the German Constitution. In France, the Parliament exploited the post-Maastricht crisis in 1993–94 to secure new controls over the Government’s EU policy, placing it in a comparable position to the UK Parliament. Newman, Democracy, Sovereignty and the European Union, p 194. 17 The Amsterdam Treaty of 1997 contained a new right to information (to EU documents), and provided that when the Council of Ministers acts in its legislative capacity, it is to make public the results of the votes and explanations of votes. The potential effect of this latter provision is difficult to assess as yet, before it is put into practice. 165


Though the emergence so far of European-wide interest groups is not sufficient to be able to refer to them as constituting a distinct foundation for a European civil society, the manner in which the EU institutions operate does provide very substantial scope for new forms of EU-orientated pluralistic politics. The EU Commission seeks and, indeed, actively encourages lobbying of itself by EU level interest groups. It recognises that this development has been instrumental in the creation of a distinct and coherent identity for the EU, with the concomitant support for further integration that is assumed to bring. Different structures of participation have emerged between the Commission and outside interests. In some sectors, the Commission has taken the lead in developing a European interest group association (for example, the European Disability Forum in 1993); in others, it provides material support (for example, European Forum of Child Welfare). 18 In almost all cases, however, the manner in which the Commission engages in policy discussion recognises the legitimacy of representations made by EU level interest groups. Perhaps most prominently, the Commission engages in dialogue with the ‘European partners’ – EU level business (Union of Industries of the European Community (UNICE)) and trade union (European Trade Union Confederation (ETUC)) organisations – and with the farming lobby (Confederation of Professional Agricultural Organisations (COPA)). Much of the Commission’s policy instinct and style is neo-corporatist. The Commission has successfully sought to place itself at the centre of a system of interest group politics in which support for the EU can be transmitted by elites to the mass public. Yet, whilst the new opportunities for interest group representation exist and are actively encouraged, they remain only partially exploited by national bodies.19 Many interest groups suffer from a lack of understanding of the sometimes Byzantine EU policy processes. Many groups operate on very restricted budgets which do not allow much sustained attention to EU politics. Too many fail to recognise the salience of the EU to their work. Furthermore, on occasions, national governments undermine interest groups’ access to the arenas in which EU policies are formed. 20 As a result, the nature and effectiveness of interest group activity at the EU level varies enormously between different policy sectors. The importance of such linkages in the future also remains in question, given that increased market liberalisation and other social factors are challenging traditional corporatist styles of representation.

18 Pugh, Seeking a Voice: The Voluntary Sector, Social Policies and the European Union. 19 Mazey and Richardson, Lobbying in the European Community; and ibid. 20 Ibid, Pugh. 166


EU POLICIES AND PARTICIPATION The EU’s political system is, then, characterised by the limited effectiveness of national parliaments and interest groups within that system. Participation is also affected, however, by the EU acting as a policy innovator, establishing new regulatory frameworks, standards, and policy projects. The expansion of the EU’s competence inherently affects socio-economic relations at the national level; as it is meant to. Again, however, the picture that results is full of contrasts. The scope for public participation varies significantly between policy sectors. In many instances, EU policy initiatives have to some degree set higher market standards, led to stronger forms of social protection, heightened environmental safeguards, eased access for the disadvantaged to the labour market, promoted cultural preservation and innovation, and facilitated new educational opportunities. Each of these aspects of EU action can be related to a broad, socio-economic conception of citizenship rights and community participation. Not surprisingly, the reality in each policy sector is somewhat complex. Two examples of this complexity will suffice here: social policy and environmental policy. In the social policy arena, the impact of the EU has been disparate. The Treaty of Rome (EEC Treaty 1957) offers protection for matters such as gender equality,21 health and safety,22 and for freedom of movement within the EU.23 The activism of the ECJ in relation to sex equality has had, for example, a major impact on private, and indirectly public, pension schemes.24 But, the attempts of the Commission to construct a significant ‘social dimension’ (with uniform or at least minimum standards) has thus far been ‘a saga of high aspirations and modest results’.25 The obstacles to an activist role for the Commission are formidable, including institutional constraints at the EU level, the resistance of national governments to loss of responsibility, and the relative weakness of ‘social democratic’ forces.26 Yet: The process of European integration has eroded both the sovereignty (legal authority) and the autonomy (de facto regulatory capacity) of Member States in the realm of social policy. National welfare states remain the primary institutions of European social policy, but they do so in the context of an increasingly constraining multi-tiered polity.27 21 22 23 24

EEC Treaty 1957, Art 119. Ibid, Art 118a EEC. Ibid, Arts 30, 7; and EC Regulations 1408/71, 574/72. Barber v Guardian Royal Exchange Case C-262/88 [1990] ECR I-1989. See Shaw, Law of the European Union. 25 Liebfried and Pearson, ‘Social policy’, p 188. 26 Ibid, pp 188–89. 27 Ibid, p 186. 167


The ‘spill over’ from the single European market programme has been highly consequential in this regard, even more so than the activism of the Commission per se. It is characteristic of EU social policy that it should be market driven in this way.28 Thus, the impact of the EU has been to provide a basic and partial set of regulations offering social protection, but also to constrain national governments in a complex, multi-level system of authority. Citizenship rights have been extended to a limited degree, interest groups have found a new focus for lobbying (the Commission), but democratic accountability has been warped by the prism of the EU’s institutional structures and participation by the public remains somewhat distant. EU environmental policy may be regarded as a quiet, and limited, success. EU action has grown considerably in recent times. It was not envisaged in the original Treaty of Rome, and prior to the Single European Act, the Commission’s competence to act was somewhat tenuous.29 Nevertheless, it did act, often led by a troika of Germany, Denmark and the Netherlands whose energy overcame the inertia of the laggard States Belgium, Greece, Italy, Ireland, Spain and Portugal. 30 Moreover, ‘In the absence of (such) Community rules no relevant environmental rules would come into being at all in large parts of the Community’.31 EU action is both heightening and extending environmental protection, intruding into societies where the citizen has little safeguard. Additional provisions on environmental policy were adopted by the Amsterdam Treaty in June 1997. The environmental sector is marked by close interrelation between the Commission and interest groups. Sbragia reports that environmental lobbyists have found Directorate General XI of the Commission very receptive. The Directorate is often accused of having been captured by the green lobby.32 EU level pluralistic politics has clearly emerged, consistent with the citizen activism found in the international environmental movement. But, of course, the sector in which the EU is set to make its newest and biggest impact is European Monetary Union (EMU). This is a case which stands in stark contrast to those of social and environmental policy. Here, policy innovation at the EU level is taking place in relative isolation caused by the lack of democratic accountability and the secrecy of decision making in the EU and the diminution of existing remnants of national parliamentary responsibility. Monetary policy at the national level has long been dealt with in a closed, insular world of technocratic officials and finance ministers. The

28 29 30 31 32

Liebfried and Pearson, ‘Social policy’, p 205. Sbragia, ‘Environmental policy’, p 241. Ibid, p 238. Kramer, Focus on European Environmental Law, p 53. Ibid, Sbragia, p 245. 168


national actors involved operate in a transnational cocoon structured across the International Monetary Fund (IMF), the Group of Eight (G8), the Organisation for Economic Co-operation and Development (OECD), the Bank for International Settlements (BIS), the EC Monetary Committee, and the Council of Economic and Finance Ministers.33 National systems have differed in their institutional arrangements, eg for central bank independence, but the reality has been that policy has been decided by a closed elite. The terms of the Maastricht Treaty on Economic and Monetary Union (Title VI and Protocols) place this dramatis personae on a new stage, but the opera remains largely impenetrable. The EMU policy process has been designed, quite self-consciously, in a manner which makes it very different from other EU policy sectors. Here, the respective roles of the Commission and the EP are weaker and more limited. In most areas, the EP is only informed or consulted. In Stage 3 of EMU, the President of the European Central Bank (ECB) will present an annual report to the EP, which then has the right to debate it. It is not required to approve it. The ECB President and fellow members of the Executive (including central bank governors) can be required to attend hearings of the relevant EP committees. On the other hand, the ECB members can request the right to address the committees. Such a mechanism creates a useful dialogue, but little more. The Commission has fared worse under EMU. The traditional, exclusive right of the Commission to initiate policy found in most other sectors has been overturned here. EMU is both intergovernmentalist and based on intercentral bank co-ordination. More particularly, both parliaments (national and European) and publics are kept distant from the policy process. Instead, EMU management in Stage 3 will be the responsibility of other institutions. Prime amongst these will be the new ECB in Frankfurt. Its Executive Board will have six members, each serving eight year terms of office, appointed by the national governments. A governing council will comprise the Executive Board members and the governors of the national central banks. The Executive Board will give instructions to national central banks on the monetary policy to be pursued. Neither the ECB, nor national central banks, will be allowed to take instructions from any other EU or national body. The central banks of participating states will already have been made independent from their national governments before Stage 3 begins. The primary objective of the European System of Central Banks will be to maintain price stability. When it can be done without prejudice to this objective, it will support EC economic policies that contribute to other EU objectives. A new Economic and Financial Committee composed of national and Commission officials will be set in Stage 3, and this will work alongside

33 Dyson et al, ‘Strapped to the mast: EC central bankers between the Maastricht Treaty and global financial markets’. 169


the Council of Economic and Finance Ministers (ECOFIN). These two bodies will retain the general policy remit their precursors currently enjoy and the right to establish international agreements on the new single currency. But, no outside body can disturb the responsibility of the ECB to maintain price stability. EMU will, thus, be a closed world. Democratic inputs on a change in the policy mix (deflation, reflation, etc) are simply ruled out. National governments will be left to manage their fiscal policy (though even here there are constraints), without use of monetary policy levers. Of course, the commitment to price stability under EMU will also constrain the agenda in other policy areas, for example, the adoption of redistributive fiscal policies. In short, EMU will place a straitjacket on national policies and one determined in a rarefied, closeted sphere of unelected monetary technocrats. Monetary policy is usually opaque, but this creates new distance and excludes any meaningful form of participation. It may be a necessary architecture, also one perhaps based on a set of policy principles essential to economic growth. In the new global, financial environment of George Soros and Nick Leeson, national autonomy increasingly looks a sham. The point is, however, that monetary policy will be more intrusive in to other policy areas and will be determined in a manner which erased any meaningful notion of accountability. This raises deeper and wider questions about the legitimacy of the European integration process.

LEGITIMACY AND THE EU The backlash against the EU in Britain, Denmark and France after the Maastricht negotiations indicates that the comments of Bogdanor and Woodcock still hold true. They have argued that ‘the shortcomings of the Community lie in the feelings of remoteness and lack of influence and involvement on the part of many of its citizens’.34 The revisions of the Maastricht Treaty concluded in Amsterdam in June 1997 have failed to remedy these concerns. The Amsterdam summit had the air of failure about it. The core issue remains the lack of legitimacy enjoyed by the EU institutions.35 Both the EP and the Commission lack legitimacy. As already noted, the EP suffers from low election turn outs and poor media coverage. Its institutional role is complex and highly confusing. An understanding of its role is less a social asset than are the finer points of trainspotting. Candidates seeking election to it can promise very little, other than to use a platform to promote

34 Bogdanor and Woodcock, ‘The European Community and sovereignty’, p 492. 35 Featherstone, ‘Jean Monnet and the “democratic deficit” in the European Union’. 170


favoured interests. Almost nothing in the EU changes as a result of an EP election. The EP has accrued more powers and much more policy influence at the EU level, but only narrow sections of the European public appear to have noticed. The problems of the EP go to the heart of the legitimacy issue. The European integration process was originally designed in a manner which gave little priority to parliamentary accountability or scrutiny.36 Each of the Member States that have joined the process have had a constitutional structure based on cabinet-parliamentary relations. Yet, this was ignored when creating European unity in the 1950s. Jean Monnet’s philosophy underpinning the European Coal and Steel Community (ECSC) emphasised the role of a new technocratic body, the ‘High Authority’. Later, under the EEC, a Commission was created which subsequently subsumed the High Authority. Thus, in place of the framework familiar to all at the national level of parliamentary democracy came a technocratic elitism.37 Much of the essence of that original design has survived until recent times. As Pinder has pointed out: ‘the institutions of the European Community have remained remarkably similar to those designed between May and July 1950.’38 In other words, the legitimacy problem can be traced to the creation and role of the Commission. Much of the philosophy that lay behind its creation was and is alien to many Member States, especially the northern Europeans. It was a philosophy that insisted not only on supranationalism – a key federal characteristic – but, also, on the privileges and benefits of technocracy. Monnet sought to overcome the constraints of intergovernmentalism which had undermined earlier attempts at building European unity (for example, the League of Nations, the Council of Europe). He did so, however, by adopting the technocratic approach he himself had instigated at home in France as the first Commissaire general du Plan de Modernization et d’Equipement in 1946. This 1946 scheme was consistent with the evolving system of planning in France. After its successful launch, technocrats held a special status in French culture.39 The 1946 scheme bequeathed to the emerging EC a neo-corporatist policy style in which the Commission would seek to engage networks of outsider producer and interest groups in the way already noted. More particularly, Monnet’s approach seemed to see parliamentary involvement as meddlesome or unnecessary. In the ECSC negotiations, Monnet did not originally propose a parliamentary assembly. He also sought to defeat the creation of what became the Council of Ministers.

36 37 38 39

Featherstone, ‘Jean Monnet and the “democratic deficit” in the European Union’. Ibid. Pinder, ‘European Community and nation-state: a case for neo-federalism?’, p 43. Ardagh, The New French Revolution: A Social and Economic Survey of France 1945–67, p 17. 171


The long term effect has been for the creation of a sui generis institutional structure at the EU level. It combines different institutional forms, and uniquely, the Commission. The problem is that the Commission on its own possesses little democratic legitimacy. Its heads are appointed by the national governments for renewable five year terms. Public support for the Commission appears dependent on the popularity of the policies with which it is identified. As an institution it is unattractive. This does not deny that public attitudes to the Commission vary significantly. It has a better profile in smaller states (as their protector) and in aid-recipient states (as their benefactor). Rather it is to claim that the Commission’s institutional foundation is fragile when placed in the context of contemporary attitudes towards democracy and accountability. This legitimacy problem can only be overcome by the reform of the Commission. This might embrace its composition, structure or powers. At Amsterdam there was a general failure to agree on how the composition of the Commission might be affected by future enlargement of the EU. Yet, EU history has shown that Monnet was right in one crucial respect. For integration to proceed, it requires a strong driving force at the centre. Monnet ascribed this role to the Commission and it is difficult to see it being effectively located elsewhere. To be successful, it would seem that reform of the Commission should address the participation problem that is linked to the design of the institution. Participation and effective leadership are linked.

CONCLUSION: THE PARTICIPATION PROBLEM IN THE UK AND THE EU It is clear that a problem of citizenship and of participation exists at the EU level in all of its Member States. The problem is expressed in the weakness of democratic accountability at the EU level, the confusion of institutional forms linking Member States with the EU, and the idee fixe of some that citizenship and legitimacy are inexorably and exclusively tied to the Nation State. The resolution of such problems, thus, requires action at the EU level. Nevertheless, the British case is one of the most extreme, given the absence of a UK written constitution, the British attachment to parliamentary sovereignty at Westminster, and the ‘Eurosceptic’ bombast of Thatcher and, more latterly, Major. Resolving the problem of how British nationals can exercise democratic accountability, and participate to the fullest extent in the political, social and economic decision making processes which affect their lives, requires that more emphasis is given to the domestic impact of the EU. It also presumes that a more open attitude is shown to the notions of citizenship and of legitimacy. They need to be conceived of in a manner which at least takes account of the increasing competences and activity at the EU level, if not the cultural affinities which extend beyond this island. The concept of 172


subsidiarity is one which assumes an upward, as well as a downward, shift of political responsibility and action. The costs attached to the status quo should not be underestimated. A disjunction currently exists in which citizenship, accountability and legitimacy are sculptured around the Nation State by those with the greatest self-interest in so doing, whilst more and more power and responsibility is exercised at the EU level where accountability and participation are lacking. The benefit is to national ministers and officials, privileged by parliamentary weakness at home and unchecked power at the EU level. The romanticism of Westminster sovereignty serves their political ends, but is contradicted by the daily realities of the EU. The cost is to the British citizen who finds accountability and participation blocked off by lack of information and by the peddling of archaic Westminster myths. The new British Government has announced a set of reforms which have the potential to breakdown some of these accumulated barriers. The decentralisation of power at home to Scotland, Wales and London, the new attitude to proportional representation, and even the all too modest attempts to reform the House of Lords presage a willingness to break out of the shibboleths of government monopoly power. In relation to the EU, the Blair government has trumpeted its more ‘positive’ approach. Yet, in reality it has moved little beyond traditional British gradualism and centralism. It is notable that it has sought little reform of the EU’s institutions, beyond a little more majority voting and a modest enhancement of the EP. Nor has the Blair government begun to address the institutional linkages between domestic bodies and the EU. Its instinct is to preserve and defend British citizenship, rather than to adapt it to new EU conditions. In Europe, ‘Whitehall’ still knows best. Caution may come, in part, from a fear of a hostile public reaction to EU reform. Major’s legacy is one of anti-EU populism, pandering to popular fears rather than informing and educating about new realities. Good government entails leadership, however, to shift and overcome popular misconceptions. Failure to do so sustains the limitations on accountability and participation that are so often decried at home. True reform can no longer be inwardlooking, but must also embrace Britain’s relations with the EU. Definitions of citizenship give rise to different forms of participation. Moreover, forms of participation vary according to the spread of competences and the range of philosophies attached to different levels of governance. Different levels of governance may exhibit varying types of policy style, possess distinct policy frames, and pursue separate agendas. In the social policy sphere, for example, it is clear that currently only Nation States seek to sustain the ‘Welfare State’. EU initiatives in this area have a different character, as already noted. Moreover, other international regimes acting in this sector (for example, Council of Europe, International Labour Organisation (ILO))

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emphasise a more civically-oriented agenda, regulating for equal opportunities on the basis of some shared set of values. Thus, the way in which citizens may participate in the emerging world of multi-level governance has to take account of what values and competences have been accumulated at the different levels. Participation beyond the domestic sphere need not repeat the institutional forms attached to the Nation State. The latter grew in importance on the basis of distinct historical conditions, many of which are now increasingly under challenge. Participatory forms now have to be adapted to a new global (not merely European) environment which threatens State autonomy, and many of its accumulated practices. Socio-economic interests, and perhaps identities, are likely to be increasingly transformed by these new extra-territorial pressures. Many such pressures have arisen in an uncontrolled manner, by default. The new challenge is to manage them by careful design. A democratic ‘deficit’ has not been pre-determined.

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CHAPTER 9

COMMUNITY POLITICS

Barry Knight1 Community has climbed way up the political agenda. With the election of the Labour Government in May 1997, the issues of local governance and community participation have come to the fore, and are likely to become more important in the early part of the next century. A cornucopia of ideas of community has emerged from academics, think tanks, and practitioners in recent years. They include: communitarianism, citizens’ juries, local referenda, community plans, citizens’ commissions, focus groups monitoring policy and practice, community computer networks, social entrepreneurs, ‘Planning for Real’, ‘Citizen Organising’, decentralisation of power and budgets and Community Chests. This emphasis on community has, however, been evident for some time, and was certainly there before the election. Recent years have seen a massive upsurge in literature reminding us of our mutual responsibilities as citizens. Amitai Etzioni has put forward ‘communitarianism’,2 Robert Putnam has stressed the importance of ‘social capital’,3 Francis Fukuyama has noted the value of ‘trust’,4 and David Selbourne the virtues of ‘duty’.5 Journalists have also taken up the theme of community. In February 1997, Neal Ascherson wrote an article with a significant title: ‘When Soros debunks capitalism, you know a sea-change is on the way.’ Acherson showed how the tide of informed of opinion was turning from the ‘me’ society of the 1980s to the ‘we’ society of the next millennium. He pointed out that politics was shifting from the individual to the collective, from the market to the civic, and from the greed of the few to the morality of the many. Around the same time, Geoff Mulgan, Director of Demos, noted that: Communitarianism, the arguments around civic society, trust, stakeholding, the green arguments about everything from land to the biosphere, even the arguments from evolutionary psychology into why people co-operate; are all like streams feeding into the same river.

1 2 3 4 5

Helpful comments on an earlier draft of this chapter were given by Anita Guy and Eric Adams. Etzioni, The Spirit of Community: Rights, Responsibilities and the Communitarian Agenda. Putnam, Making Democracy Work: Civic Traditions in Modern Italy; and Putnam, ‘Bowling alone, revisited’. Fukuyama, Trust: The Social Virtues and the Creation of Prosperity. Selbourne, The Principle of Duty. 175


The consequence, Mulgan suggests, is that we are now ‘on the brink of a real society’.6 But are we? Is there really such cause for such optimism? Does this represent anything more than an elite group of commentators talking up an issue? In this paper, I want to look at the prospects for the invigoration of ‘community’ in the light of evidence from research currently underway for the Foundation for Civil Society. I want to pick out seven factors with a bearing on this. The first factor is that history teaches us to beware of fashion. The notion of ‘community’, particularly the role of community associations, was promoted vigorously during the Second World War. Indeed, the first major academic study of community organisation stemmed from Peter Kuenstler’s wartime experience of working during the blitz in the East End of London.7 After the war, the importance of community association was quietly forgotten.8 In the late 1960s, community became fashionable again, partly because of fears about race. This time ‘community’ found official expression through the Home Office Community Development Projects, though as soon as the projects began to deliver results that were politically inconvenient, they were dropped.9 There is a big risk in jumping wholesale into any particular sphere without realising that practitioners working in that sphere have to live with the consequences of ‘stop-go’ fashions in social policy. The second factor is the weight of history. Peter Stokes’ and my research, modelled on the work of Robert Putnam from Harvard University, suggests that there is a long term and continuing tendency to develop institutions that foster people’s participation in public life – churches, trade unions, civic associations and mutual aid organisations.10 The importance of ‘local’ has declined over the past 20 years with 138 Acts of Parliament between 1979 and 1994 amending the powers of local government, almost always in the direction of reducing its powers and status. Society has become more atomised, with record numbers of people living alone and relationships between neighbours becoming increasingly cool and distant. Young people’s participation in public affairs is so low that it is common to talk about the ‘lost generation’. We have run our ‘social capital’ – the glue that binds us together in relationships – down to levels that are so low that they are dangerous for our society. There are 40 areas in Britain where social capital appears to be exhausted, where all semblance of community has collapsed and people live in fear. In these areas, burglaries, car crime, violence, threatening behaviour,

6 7 8 9 10

Mulgan, ‘On the brink of a real society’. Kuenstler (ed), Community Organisation in Great Britain. Willmott, Community Initiatives: Patterns and Prospects. Higgins, The Poverty Business in Britain and America. Knight and Stokes, The Deficit in Civil Society in the UK. 176

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all night parties, drunkenness in the street are the norm. People who can think no bigger than dealing with their immediate problems adopt a siege mentality and withdraw from the public stage. Such observations are not confined to areas traditionally considered poor. Thirdly, over the last generation there has been a marked change from the values of community to the values of the market. John Tusa has argued that the language of the market is now so ingrained that even the notion of the ‘whole individual’ is under threat. This ‘Balkanisation’ of identity has elevated the roles of consumer, purchaser, and customer above the broader and more humane roles of family member, citizen, and member of the public.11 Borrowing from Ivan Illich, Tusa says that the answer lies in the pursuit of ‘conviviality’. Conviviality is different from mere pleasure in that it involves personal exchanges and increases social bonds. Tusa argues that all policies and programmes should be evaluated according to the extent that they increase conviviality, and challenges politicians to use conviviality as a criterion in this way. This brings us to the fourth factor. The new government, rather than espousing conviviality, has so far made only cosmetic changes to programmes affecting the community. Single Regeneration Budget programmes have been tweaked a little at the edges and Teaching and Enterprise Councils assured that they will survive despite being evaluated by the House of Commons Select Committee on Employment as ‘mostly harmless’. Proposals for new Regional Development Agencies appear tired, being confined to the stock-intrade of previous government-led economic development initiatives measures such as inward investment, support to small businesses, development of rural areas, co-ordination of regional selective assistance, and European funding. The Social Exclusion Unit, announced on 13 August 1997, is a departure from previous practice, though it appears to be focused on Whitehall machinery and, with its emphasis on co-ordination and targeting, is using the narrow ‘value for money’ language of the previous administration. This is disappointing given the wealth of evidence that, in the past, government policy has failed poorer communities. The previous government’s own research has shown, not only that ‘trickle down’ policies fail, but that economic polarisation has actually increased within areas where government programmes have been active.12 It is perhaps small wonder that the publication of this research was long delayed, and the report is priced at £40 so that few will buy it. However, it would be harsh to judge the present government too soon. It may well find new and effective methods of engaging with the community, moving on beyond its present rhetoric about the importance of civil society

11 Tusa, ‘The price of separation from the good society’. 12 Robson et al, Assessing the Impact of Urban Policy. 177


and the voluntary sector to develop sensitive programmes that make a difference to communities. Time will tell. This brings us to the fifth factor. There is no good blueprint about how to create communities. Michael Young has recently noted that there is no up to date body of theory or practice which politicians can draw on to help them in social and community planning.13 Earlier examples of community planning have ended more or less in disaster – whether we consider urban renewal or new towns. Later empirical work has reached similar conclusions. Keith Yates has identified the seven key outcomes of successful community development as: the development of stronger accountable local communities; increased control over local resources; mounting successful campaigns; achieving greater equality for disadvantaged groups; launching projects and events on the ground; establishing a more equitable partnership between local authorities and communities, and developing a sense of community. Yates concluded: In reality, despite considerable rhetoric, and a lesser translation into resources, the results of community development in Scotland since 1975 have not been totally successful in delivering many of these outcomes.14

The Association of Metropolitan Authorities publication Local Authorities and Community Development: reached similar conclusions: ‘after 15 years and many new initiatives, surprisingly little has been achieved.’15 The sixth factor suggests that intervention in communities needs to start with an understanding of communities. However, community studies has tended to fall off the curriculum as an academic discipline since its heyday in the 1960s and 1970s. When recently carrying out a study of 14 communities in different parts of the UK, I looked for comparable up to date studies and could not locate any.16 This recent study showed that community is a heterogeneous concept. In some areas, the sense of the importance of community was so strong that people were unaware that their organisations were community organisations. For instance, in one isolated rural area of Northern Ireland, there was such a high degree of mutual interdependence between local people that they did not have or need a formal organisation. One came into existence only when a hamlet in the area won a ‘best kept village’ award without entering for it and had to constitute itself and open a bank account to receive the cheque. Up until then, community organisation had depended on patterns of relationships between people that was not self-conscious and went unrecognised. 13 Young, ‘Interview’. 14 Yates, ‘Community development and community education’. 15 Association of Metropolitan Authorities, Local Authorities and Community Development, p 24. 16 Knight, Voluntary Action. 178

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At the other extreme, in an English inner city the sense of collective community was found to be so attenuated that the term ‘community organisation’ had more to do with protecting the interests of the different ethnic groups that had migrated into the area at different times, first the Poles after the Second World War, later African-Caribbeans, and then Asians. These organisations had been set up formally and consciously to provide facilities for their members and to protect their interests in an increasingly difficult local economic situation and a hostile social environment. ‘Community’ and ‘community organisation’ clearly mean different things in the two areas. We urgently need more studies of local communities – preferably on a longitudinal basis rather than as a snapshot – to clarify the different types of communities and to show us how to intervene (or in some cases not to intervene). The seventh and final factor is that most of what is really exciting in communities is happening spontaneously. New grass-roots movements have sprung up in recent years. They cover the local economy, environment, land, roads and transport, animal rights, disability rights, other civil rights, and ‘citizen organising’. Initiatives are disparate and uncoordinated. They include, for example, hundreds of environmental groups working on Agenda 21, 400 Local Exchange Trading Schemes, and 2,000 disabled activists campaigning for ‘rights not charity’. What these initiatives have in common is that they are organised by people who experience problems first hand, and who have lost faith in conventional political systems to deliver solutions. In many cases, action is intended to create a new and alternative lifestyle for a diverse group of people so that a broad based organisation is formed. For the most part, organisations remain outside the grant and contract culture used by the traditional community and voluntary sectors. Since some groups have been demonised by the media, they have developed their own press machinery and have embraced technology, including the Internet, which some regard as a ‘great leveller’. One of the best organised of the initiatives is called ‘citizen organising’. This is a technique that locates and trains community leaders, strengthens communities, and contributes to civil society through building a broad base of people able to take part in local politics. Citizen organising works with ‘ordinary people’, particularly those who originally lack the confidence to become participants in local, regional, or national public affairs. The movement is built on a constituency of faith organisations, including churches, mosques and temples, and includes some secular representation. The aim is to build a genuine ‘broad base’, to include as many different kinds of people (by colour, race, age, gender, faith, etc) as possible. The common bond of those becoming involved is a belief in social justice.

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Citizen action is taken on a multi-issue agenda. The purpose of such action is to engage with people with power and make them accountable. Such accountability is applied internally as well as externally, so that at every stage people are accountable to the organisation as a whole or to their own communities. Organising is non-partisan, non-ideological, committed to a free and open society, and has no permanent allies or opponents. Citizen organising is now established in six locations: the Black Country, North Wales, East London, Sheffield, Bristol and Merseyside. One sign that this new force – sometimes branded the ‘new politics’ – is coming of age is that The Big Issue has recently published a book explaining the nature of some of the initiatives and setting out what they are trying to achieve.17 A key question about the prospects of the new politics is whether the new politics can meet the old? Will the old politics be re-invigorated by the new? Or will it try to crush it? Again, only time will tell. My view is that conventional politics should encourage this new community politics and learn from it. In many cases, this will involve a government policy of benign neglect so that the raw energy displayed by these movements can find their feet and become as a powerful new player on the political stage. In addition to the question whether the old politics will accept the new, there is the question whether the new will accept the old. Many of those in the new politics regard the old politics with a degree of scepticism. As John Bird, the Editor of The Big Issue, has noted: The fact that this new administration may not be so sinister and cynical as the previous government does not in any way guarantee that people involved in DIY Culture will receive more money or social support. In fact, any community or grassroots manifestation can’t really fit in neatly with those in power because they have different aims and purposes. What I would like to hope is that this new government will leave DIY Culture to develop by itself, to remain independent and self-functioning as an alternative to mass production and mass pollution.18

This gap between local views and official views is a vital issue in community politics. Its significance can be illustrated by an incident in international development that took place 50 years ago. Shortly after the Second World War, Peter Kuenstler (whose book on New Community Organisation helped to invent community studies as an academic discipline) arrived at a village that had been more or less obliterated by shellfire. Peter was working for an international development agency and had a lorryload of cement. Although not quite equivalent to the value of gold dust, cement was in short supply at that time and could command a high price. Peter had it within his power to

17 Brass and Poklewski Koziell, Gathering Force: DIY Culture – Radical Action for Those Tired of Waiting. 18 Ibid. 180

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offer the cement to the village, though for reasons of accountability, had to ask the villagers for a formal application so that appropriate paperwork could be completed to cover the transaction. The village elders retired to consider how they would use the cement. Within a short space of time, they returned to tell Peter of their decision. What they needed, they said, was ‘a fountain’, ‘A fountain? What on earth do they need a fountain for?’, thought Peter, surveying the devastation all around him. However, Peter swallowed his doubt, remembering his personal philosophy that people know best what they need. So he signed off the cement and went on his way. Two years later, he returned to the village. It had been completely rebuilt. The people had built the fountain together. Each evening after the day’s work, they had congregated around the fountain, and had planned the next day’s work. Together, as a community, they worked in this way until they had together rebuilt their village. Perhaps the value of the cement was greater than gold dust. This incident reveals a universal truth. Given resources, and freedom to use them as they see fit, people are powerful and competent, and do not need direction from above. Tony Gibson has explored the implications of this truth in a number of books, and has recently drawn attention to the potential for ‘neighbourhood based world shaking’.19 A key question for the next 20 years is whether those in conventional politics can harness the energies of those in community politics for the greater good of our society and, in so doing, reshape power balances and reform the character of politics in favour of greater inclusion. A second question, no less important, is what happens if they do not.

19 Gibson, The Power in Our Hands: Neighbourhood Based World Shaking. 181

CHAPTER 10

CHARITY AND PHILANTHROPY: TOWARDS A NEW PERSPECTIVE

Nicholas Deakin

INTRODUCTION One of the central forms of participation in contemporary British society is involvement in charity, either through charitable donation or voluntary action. This involvement can serve both symbolic and practical ends. In this paper, I will try to disentangle some of the different functions the concept of charity currently performs and relate their development to the broader debate about the future of civil society in this and other Western societies.

THE CONCEPT OF CHARITY The term ‘charity’ comes with some heavy cultural baggage. Many of the labels on it have a religious origin in what are often (misleadingly) termed the ‘Judaeo-Christian’ values. Charity, in this perspective, was a badge of virtue for the donors which enhanced their standing in the community in their lifetime and would be permanently commemorated on the foundation stone or the board in their church’s porch. In most versions, charitable acts were also an imperative necessary to secure the donor’s salvation.1 These notions continued to flourish when the societies in which they were first formed changed under the impact of the industrial revolution. Even the Quaker factory owners used them as justification for amassing sufficient (though not excessive) riches on earth.2 True, the Cadburys and Rowntrees used their profits in part to support good causes and benefit their workforce. But, these charitable acts were still often seen as a means of building up a spiritual credit balance in the light of Andrew Carnegie’s warning that ‘to die rich is to die shamed’.3 But from the recipients’ perspective, the nature of the transaction often seemed rather different. Charity appeared not as a justification of wealth, but 1 2 3

Jordan, Philanthropy in England 1480–1660. Wagner, Chocolate Conscience. Quoted in Mackay, Little Boss: A Life of Andrew Carnegie. 183


a camouflage for the motives and practices involved in obtaining it. Philanthropy was seen from below not as a means of demonstrating common humanity, but, at best, as a device for filling the empty time in the lives of middle class women (‘social work’ in its original sense). The settlement houses in working class neighbourhoods seemed even to some who once worked there not centres for building bridges between social classes in fellowship, but devices for proselytising in order tame potential rebels and inculcate the values (and religion) of the dominant class. Political parties based on mass working class membership (the Labour Party in the British case) inherited this tradition of scepticism and tried to ensure that the early steps towards systematic provision of welfare would, wherever possible, be based not on charity but on citizen entitlement. At least in part as a consequence of these concerns, the Welfare State in the form in which it was eventually created had a role for what was not yet called the voluntary sector, but only a subordinate and supplementary one which reflected deep reservations about the coldness and condescension implied in the term ‘charity’.4 The concept of charity in the late 20th century therefore inherits an emotional ‘halo’ from the past which is still clearly visible. It also lacks precision. The definition of charity remains fuzzy at the edges and poorly understood by the public. The notion of charity as it was originally codified in English common law reflected in its privileging of religion and education the values of Elizabethan society. It also reflected the morality of that society’s poor law which was designed to cope with abrupt social changes exacerbated by the dissolution of the monasteries. The untidiness of the resulting structure as it has evolved over subsequent centuries has attracted the attention of numerous well intentioned reformers (Gladstone, no less, among them), most of whom have retreated in frustration with very little to show for their efforts. Convinced that to win the argument for reform they had only to draw attention to the anomalies and palpable inconsistencies of the current system, the advocates of that reform have persistently underestimated the influence of powerful vested interests always eager to point to the complexities allegedly inherent in any attempt to set up an objective test of public benefit. The Charity Commission, child of an earlier 19th century attempt to bring order to the charitable world and purge it of its more grotesque and corrupt outcrops, is itself one of those interested parties that have a stake in the present system. But the pace of reform – previously decorous in the extreme – has picked up in the past decade with the Woodfield inquiry and the passage of the Charity Acts of 1992 and 1993. Under the energetic current Chief Commissioner, the Commission has moved decisively into the modern age, its much criticised register of charities now being computerised and posted on to

4

Deakin, ‘The perils of partnership’. 184

Charity and Philanthropy: Towards a New Perspective

the internet. The role it has assumed (not to the liking of all concerned) now encompasses acting as advocate and advisor as well as regulator. The model is of a stakeholder organisation which is answerable to all its customers, defined in the broadest sense.5 Yet there are still significant gaps in the range of activity now undertaken by the Commission in the name of charity. The Commission’s writ extends only to England and Wales; and attempts to extend its functions to Scotland have attracted no support there. Those voluntary organisations that operate outside the fold of the Commission or on its margins are not always convinced that its activities are in their best interests. Community and campaigning organisations still express concern that their evolving approach to new situations and responsibilities are not properly reflected. Contrariwise, there is recurrent concern that the tax breaks associated with charitable status are not always going to the right organisations. There are echoes here of a debate about the fiscal and legal environment of charity which presently is much further advanced in the United States.6 These anomalies notwithstanding, the concept of charity, however indistinct its outlines may be, still occupies a prominent position in the national psyche. It remains one of our household gods, to be invoked through sacrifices at times of trouble, rewarded with offerings at moments of success or a pinch of incense to ward off bad luck (the cancer charities surely owe some of their success to their use as an oblique form of insurance). The profile of charity has been enhanced by two recent developments: the rise of highly publicised fundraising events for third world causes (‘Bandaid’ and its successors) and the introduction from 1995 of the National Lottery. The ‘good causes’ with which the Lottery is associated in the public mind (brilliant publicity!) are more varied than the purchasers of tickets who have contributed to them always realise, as was made abundantly clear by the purchase of the Churchill papers. However, the focus on charitable action through the National Lottery Charities Board and the emphasis given to schemes for worthy (telegenic?) recipients at the Lottery draw helps to keep the concept of charity firmly in the public mind as a common good. Through the Lottery, charity has become for the general public a source of near-painless virtue, perhaps to the detriment of other forms of charitable giving that lack the lure of riches almost beyond the bounds of imagination. And for the prominent citizen or celebrity, a charitable donation can wash away unsightly stains of cupidity or taint of excess, or compensate, as in the case of Camelot’s directors, for being too successful in persuading others to contribute to their own profits through purchasing lottery tickets. Few, however, have yet gone as far as the publicist whose advice to politicians

5 6

Fries, ‘Interview’. Salamon, Holding the Center: America’s Non-profit Sector at a Crossroads. 185


caught indulging the sexual peccadilloes that so fascinate British tabloids was: say you do charitable work with dying children. This exhortation represents in extreme form the notion that participation in charitable activity is undertaken for the benefit of the participants. Other forms of involvement do recognise that the process is an exchange that has wider consequences for the recipients as well as the deliverers of voluntary services. It is possible to trace a progression from the visionary work of Alec Dickson, whose invention of Voluntary Service Overseas (VSO) was followed by bringing the lessons of that worthy enterprise back home through the Community Service Volunteers, to the invention of the ‘active citizen’ as a role model by Tory politicians concerned about the ‘missing element’ of morality in their project for the reform of Britain. But, during that progression the notion that volunteering was a useful way of teaching the children of the middle classes in late adolescence some of the civic virtues turned into something altogether less laudable; the notion of the conscript volunteer. In a series of Manpower Services Commission (MSC) programmes informed by this notion, young working class males for whom there was no longer work in the depressed economy of the mid-1980s were to be socialised into acceptance of their permanently limited prospects. Both the programmes and the MSC disappeared once economic recovery began to refresh even those desolate spots where heavy industry had once provided a lifetime of secure manual employment. But the format reappeared, barely modified, with the second Conservative recession at the end of the decade and now forms a component part of the Welfare to Work programme of the Conservatives’ Labour successors. Under this revamped initiative, voluntary organisations are contracted to manage many of the transitional programmes which may, with good fortune and the advantage of favourable demographic trends, perhaps get a proportion of the excluded into lower paid employment (or fill in their time as Millennium Volunteers).

THE CHANGING CONTEXT The pressure to use voluntary and charitable effort to reintegrate the marginalised into the mainstream of society is one of the most vivid illustrations of the relevance of the debate on the role of charity to that of the future of civil society as a whole. This debate has been precipitated partly by a widespread perception that there has been a breakdown of cohesion (or perhaps more superficially of ‘civility’) in advanced industrialised societies. It taps concerns that would be instantly recognisable to a Victorian philanthropist about what would then have been called the ‘dangerous classes’ and their rejection of the values and behaviour patterns of the majority.

186


A variety of reasons have been offered to justify this perception. One is the impact of structural change in the economy leading to the loss of employment in manufacturing industry and the spread of job insecurity in other sectors. Another is social change, and in particular the decline of the family in its traditional form. A third is changing attitudes caused by the impact of a decade of possessive individualism, in which personal success was measured exclusively in financial terms. A further explanation that is sometimes offered is a loss of confidence in established social and political institutions, principally those of government. The public, encouraged by the mass media, see the traditional sources of authority in society as ineffective, even corrupt. The pressure of constant publicity first builds up, then undermines the credibility of those exposed to it. How far are these arguments valid? Even with due allowance made for the crudeness of the paraphrase given here, the answer must surely be not very, at least in the form in which they are normally presented. Many of these arguments are typical ‘golden age’ thinking, the eternal lament of an older generation about the heedless hedonism of the young. It is true that the structure of mature economies in most developed countries has changed and the consequences of this in terms of the distribution of life chances have been far reaching. But to suggest that this process in itself necessarily results in a uniform decline of civility in all the countries affected is simply nonsense. Social, political and cultural factors in each country or even region have produced widely different outcomes. In this regard, one can compare the ‘flexible’ Anglo-Saxons with the Rhenish or Dutch ‘polder’ approach. It is also true that, as its critics would say, the possessive individualism of the 1980s has left its mark, at least in part, in breaking any clear connection between the level of reward for and the merit of an individual’s performance, whether measured by the quality of that performance or by the collective benefit it conveys. But the release of entrepreneurial talent which was one of the objectives of the government’s attack on restriction and regulation has been genuine enough and is of obvious relevance to the voluntary sector, now busy trying to breed its own ‘social entrepreneurs’. The ‘decline of the family’ is contentious territory. It is a favourite argument among critics of recent developments that the traditional family has been one of the ‘basic building blocks of society’ and is now under threat. Others would counter by asking what kind of structure the traditional family helped to construct. It usually was one, they would maintain, in which gender roles were prescribed and aspirations were constrained. What is beyond dispute is that increased participation by women and in particular women with children in the labour force has created a very different situation. This is a process that cannot, and most people would add should not, be reversed. The main question should, therefore, be how to adapt to it, not how to resist and reverse it. 187


The issue of the attitudes of the young is the most pressing issue for many commentators and policy toward it is almost equally vigorously contested. But recent research suggests that the perception of a whole age group as ‘disconnected’ or ‘switched off’ is a gross oversimplification.7 Rather, the problem may lie in the choices which society presents to the young and the type of institution or cause in which it invites them to participate. Finally, there is the question of the institutions of government and the structural changes that have taken place in both their forms and their functions. This is in many respects the hinge on which the debate turns. The future shape of civil society may be being formed in an environment in which the State’s role is changing, but to call this a ‘rolling back’ is to misunderstand the processes that are at work. If there has been a retreat, it is at most a tactical withdrawal and regrouping. The changes in the functions that the State now performs do not reduce the power it exercises, but concentrate it.8 True, some of the spaces surrendered as part of this process of contracting the State do offer new opportunities for other players to take part (for example, organising and delivering services previously provided by the State). But this is territory on which voluntary and community organisations will have to operate on the State’s terms; on the terrain of the ‘contract culture’. The rhetoric of partnership is frequently employed to describe this process, but power and resources remain largely the property of one partner. So, participation in this context is very much a matter of structured involvement on terms which there are only limited opportunities to renegotiate. Whether this contributes in any real sense to the ‘remoralisation’ of society which is part of the agenda for some of those seeking a more permanent withdrawal of the State is a debatable question.9

REDISCOVERING CIVIL SOCIETY: A COMMUNITARIAN AGENDA? Nevertheless, the need to address these issues is often presented in terms of a ‘rediscovery’ of civil society made necessary by a ‘failure of the State’. It is true that in the transitional societies produced by the collapse of previous communist regimes a space has been left which has to be filled, for the most urgent practical reasons. But this was never true of Western democracies. It has been well said that ‘civil society interpenetrates the spheres of the State, government and the market to represent the multiple interests of a mature

7 8 9

Fenton, Report to the Independent Commission on Future of Voluntary Sector; and Wilkinson, No Turning Back: Generations and the Genderquake. Foster and Plowden, The State under Stress. Whelan, The Corruption of Charity. 188


pluralist political culture’.10 The roles of the differing interests change and take differing forms which are determined by the specific historical experience of different societies. But civil society does not need to be reinvented. It has never gone away; and nor has the State. That said, we should also recognise that there are real issues around the decline in participation in most formal institutions, at least in the UK. These institutions include the trades unions, most churches and some political parties. There has also been a decline in participation in orthodox political activities, some of which can be traced to the debilitating effects of social deprivation. In other cases, racism, which remains endemic in some traditional organisations, is the main factor at work; discrimination on grounds of gender, less overt than it once was, is also still significant in affecting both the forms of participation and its extent. All these symptoms might legitimately lead to the conclusion that we are spending social capital faster than we are accumulating it. Certainly, this is one of the main messages in the communitarian texts which have had a significant impact on policy makers on both sides of the Atlantic.11 Here, the emphasis is on reinforcing the primary institutions of society such as family, community, bars, clubs and cafes in the neighbourhood, clubs, churches and other places of worship. One problem is that this activity is often advocated without context. It is never made entirely clear why we should engage in the quite elaborate strategies designed to produce these ‘communal’ outcomes. They are presented as self-evidently good things – the ‘motherhood and apple pie’ of the cliché. Yet we know from experience that participation can produce tyranny, both at local and national level, and that bona fide representatives of communities can compound disadvantage by excluding minorities of all kinds from access to goods and services. The extensive literature on decentralisation and the issues involved in attempting to promote greater citizen participation contain important messages about the tensions between promoting stable, cohesive communities and safeguarding the rights of minorities.12 If the advocates of the communitarian approach are frequently naive about ends, they are also often remarkably insouciant about means. The notion that charities (or associations) can readily take on functions that the State has abandoned or markets do not care to perform is widespread across politics, but rarely is based on evidence or any clear understanding of the 10 Knight and Stokes, The Deficit in Civil Society in the UK. 11 Etzioni, The Spirit of Community: Rights, Responsibilities and the Communitarian Agenda and Putnam, Making Democracy Work. 12 Gaster, Management Skills in Decentralised Environments; Hoggett, The Future of Civic Forms of Organisation; and Jordan and Jones, ‘Association and exclusion in the organisation of social carers’. 189


capacities which charities actually possess.13 The idea that individuals can take on these roles without benefit of formal organisation is even more optimistic. The extent of volunteer involvement in this country is impressive.14 In this country we are generous with our time, though less so with our money. But, the content of volunteer-based action is less impressive. Current anguished debate in the UK about managing and even paying volunteers is symptomatic of a general uncertainty about what purpose is being served and who is really benefiting from volunteering. Yet governments still persist in believing that there is a vast resource out there that can be called up ad lib to serve the official agenda.15 And some representatives of the voluntary sector have a vested interest in colluding with this delusion and not spelling out the difficulties involved both for the government and for the sector itself. Debate about the contribution of voluntary bodies has instead tended to focus on standards of performance and ways of improving the quality of services increasingly delivered ‘outside the State’. These are important topics, but not central to the question of how these tasks are to be performed without compromising the distinctive qualities of the voluntary and community sector. In fact, there is now much hard won knowledge about these issues derived from experience with local community-based initiatives. True, much of it is specific to the localities in which it has taken place and some of it is about failures, which admittedly are sometimes more revealing than successes. This experience has not yet been properly linked to the top-down theorising about ideal institutions and identikit virtuous individuals who can be mobilised in their service. These are the fantasy ‘active citizens’ who are to ‘make a difference’ for governments of all political complexions. The communitarian stress upon obligation, duty and responsibility has met with widespread approval. So how can these qualities best be cultivated? The negative approach is only too well known. It includes bringing back supervised homework, national service, the cat or an avenging god, and showing zero tolerance (or, at most, compassion with a hard edge) toward those who do not conform. This agenda of social control often generates an understandable tendency to opt out of mainstream association activities altogether. The fashionable critique of contemporary society on the grounds that participation is a trap and that good causes are their causes, not ours (reminiscent of the rhetoric of the class of 1968) is based on this sort of feeling of resignation.

13 Hirst, Associative Democracy. 14 See Rees, ch 11, in this volume. 15 Coats, ‘Interview’. 190


TOWARDS A NEW NOTION OF CHARITY? For the concept of charity to be brought back into social policy debate as a positive factor at least four pre-conditions need to be satisfied. First, we will need to deal once and for all with the problem of the previous negative associations of the term. Charity’s history as a device for justifying capitalism’s excesses and mitigating its worst consequences is still not forgotten. There is a real risk that an uncritically updated version could serve, as Victorian philanthropy often did, as an instrument for social control or become a mere mechanical device for engaging the trivial benevolence of the new rich, still doubtful whether charitable giving is sufficiently taxefficient. Some of the modern forms of charitable giving and participation do not help the case. The ritual fixes of media charity, the overpaid publicists and politicians ‘putting something back’, and the bazaar atmosphere of random lottery-charity do not reinvigorate the concept. They cheapen it. But we should also recognise that alongside these distortions charity has a demonstrable capacity for evolution as society has changed. Charitable action has the capacity to express the need for mutual aid that still arises even in complex modern societies. A useful example is the self-help groups that have come together around certain medical conditions. In this form, charity represents not the separate preoccupations of individuals but recognition of the mutual obligations that help to link the individual and society. It is a kind of social collectivism. The case for the modernisation of the concept of charity must rest in large measure on the contribution that that modernised charity would make to the reinforcement of civil society and its values. This raises a second key issue, one of the style in which organisations operating between the market and the State operate, The contribution made by voluntary bodies to democratic practice is another disputed area, 16 but new initiatives that involve individuals at the level of the community must at least be relevant to the health of local democracy. The transformation of existing organisations into more accountable forms though democratisation (through action by the membership is often a messy and uncomfortable process) is essential. Increasing the informality of procedures, practices and even vocabulary as a means of (re)capturing the allegiance of the young is also vital. The third issue is mobilisation and the eternal paradox of ‘charity organisation’, another term with a strong historical resonance. The obligation for charities to perform efficiently and effectively when services are being delivered to the vulnerable needs to set against the need to retain spontaneity and the capacity for flexible response. The standards for performance in 16 Salamon, Holding the Center: America’s Non-profit Sector at a Crossroads. 191


public life laid down in the Nolan Committee Report also represents a challenge to meet standards of performance at least equivalent to those in the reformed public sector. Fitting the activities of volunteers into this pattern presents special difficulties for managers and volunteers alike. Finally and most challengingly of all, it will be necessary to establish reasons for needing to retain and develop a charitable sector, privileged and regulated as such. Some, like Perri 6 at Demos, now argue for abandoning the whole notion of charitable status. Others want to constrain it, by limiting the extent of charitable participation in the space between State and market or the terms on which participation takes place,17 Others still would split the charitable sector as a way of establishing its authenticity.18 This would involve hiving off larger organisations into a separate category and looking beyond the crude criterion of size to the grassroots or to certain forms of practice or styles of activity to identify the authentic charitable sector. This would help to limit both the benefits (tax breaks) and the obligations but leaves the issue of definition unresolved. Yet, given the almost infinite variety of activities now taking place under the title of charity, can they continue to be accommodated in one mansion, however many rooms it contains? There are no clear answers to these questions, yet. Facilitating ‘creative chaos’ (Ralf Dahrendorf’s slogan) is all very well when it can be shown that the creativity is functioning to the public benefit and meeting needs that would otherwise go unmet. But what if creativity is employed to destructive ends or chaos rebounds on those least able to cope with the consequences? Here, the State’s role has to be more than that of a passive observer or a laidback regulator. Yet how can accountability be preserved without compromising independence? To strike that balance successfully may be the most difficult task of all.

17 Whelan, The Corruption of Charity. 18 Knight, Voluntary Action. 192

CHAPTER 11

PARTICIPATION AND VOLUNTEERING

Tony Rees

VOLUNTEERING This chapter will, as its title indicates, explore the connection between participation and volunteering. Given the strength of voluntarism in the British Isles, this may seem rather an odd enterprise. Surely the relationship is so intimate as to make the two almost synonymous? Nevertheless, it will be argued that the correspondence is less obvious and the conceptual fit less exact than the conventional opinion suggests, and there are many rough edges, many ends left trailing. When Mrs Thatcher, in her famous speech to the Women’s Royal Voluntary Service (WRVS) in 1981, declared that ‘the volunteer movement is at the heart of all our social welfare provision’, and opined that ‘the willingness of men and women to give service is one of freedom’s greatest safeguards’,1 her words were resented by some in the voluntary sector as a crude attempt to co-opt the movement for party political purposes. Nevertheless, the ideal of ‘active citizenship’ as sketched by her and later filled in by Douglas Hurd and others struck many chords. Quite apart from anything else, it was very flattering to the army of volunteers itself. For there is no doubt that there is a great deal of volunteering in Britain. The obvious sources for information on this are the large scale national household surveys carried out for the Volunteer Centre UK/National Centre for Volunteering. To date, there have been three of these, in 1981, 1991, and 1997. 2 The studies employed the same methodology, questions being replicated from survey to survey. All defined volunteering as ‘any activity which involves spending time, unpaid, doing something which aims to

1 2

Quoted in Sheard, ‘From Lady Bountiful to active citizen’, p 118. Nicholas Deakin, who also quotes excerpts, calls Thatcher’s a ‘full dress (in every sense) speech’, The Politics of Welfare, p 168. The first two surveys were commissioned by the Volunteer Centre UK and carried out by Social and Community Planning Research. Field and Hedges, A National Survey of Volunteering; and Lynn and Davis Smith, The 1991 National Survey of Voluntary Activity in the UK. The most recent survey was conducted for the National Centre for Volunteering (formerly, the Volunteer Centre UK) by MRB International. Davis Smith, The 1997 National Survey of Volunteering. 193


benefit someone (individuals or groups) other than or in addition to close relatives, or to benefit the environment’. However, the researchers did not present respondents with this or any other definition, preferring to approach the subject more indirectly, through the identification of various ‘fields of interest’ – such as ‘sports, exercise’, ‘children’s education’ or ‘health and social welfare’ in which people might have been actively engaged. These categorisations were also held constant over the three surveys, as were ‘types of activity’, with a few modifications like the separating out in 1991 of ‘giving advice/information/counselling’ from ‘visiting people’. A broadly similar picture emerged in all three surveys. Around half of respondents were classed as ‘current volunteers’, defined as those having undertaken voluntary work within the previous 12 months (44% in 1981, 51% in 1991, 48% in 1997). Approximately 30% in each sample were ‘regular volunteers’, those involved in any one organisation on at least a monthly basis, and 20% were ‘weekly volunteers’. These activities took up a considerable amount of time. Davis Smith found in 1997 that ‘current volunteers’ had contributed, on average, four hours in the past week, and ‘weekly volunteers’ no less than nine and a half hours. Kendall and Knapp, when conducting the British arm of the Johns Hopkins Comparative Non-profit Sector Project,3 found it impossible to convert these results into estimates of the numbers of volunteers in each area of voluntary work, and their own efforts to elicit precise figures from the voluntary organisations themselves were unsuccessful. However, they have elsewhere given numerous figures, relating to the early 1990s, which indicate the huge scale of volunteering in Britain.4 For example, the 75 national organisations in the Youth Development Sector (part of the International Classification of Non-profit Organisations (ICNPO), sub-group 4.1) organised 5 m young people, both uniformed and non-uniformed, with over 500,000 volunteers at all levels. The Pre-school Playgroup Sector (same ICNPO category) employed nearly 50,000 paid staff and utilised the services of 1,400,000 volunteers. The burgeoning Environmental Sector (Group 5) had 17,000 paid employees and at least 393,000 volunteers. In the Emergency Medical Services Sector (part of sub-group 3.4), nearly 6,000 groups, corps and divisions linked to the Red Cross, St Andrew’s Ambulance and St John’s Ambulance involved over 100,000 volunteers. In 1993–94, there were in England and Wales over 15,000 voluntary staff, nearly all advice workers, in

3 4 5

Kendall and Knapp, The Voluntary Sector in the UK. Kendall and Knapp, ‘A loose and baggy monster’, pp 66–95. These workers were not cited by Kendall and Knapp, but are of particular interest because of the intricacy of the operations involved and the extensive, mandatory training given to advisers. 194

Participation and Volunteering

Citizens Advice Bureaux (ICNPO sub-group 7.1).5 Outside some areas of Inner London, the great bulk of advice hours were everywhere supplied by volunteers.6 Let us now return to the definition of volunteering quoted above, and note first the requirement that volunteers should be unpaid. Some commentators – like Sheard7 – are purist in this regard, for, to them, paid volunteering is a contradiction in terms. However, the growing tendency to offer volunteers ‘more than expenses’ merits consideration. Do such payments negate the volunteering? There is an incipient distinction here between the initial act of volunteering and the terms under which the ensuing service is carried out. The promise of some remuneration may play an essential role in persuading members of previously untapped groups within the population to put themselves forward. One should recall one of the very oldest usages of the word ‘volunteer’, to make a distinction with the conscript in the armed forces. The former, as a reward for his unconstrained action, enjoys better conditions of service than the latter. This mention of the most explicit of imperatively co-ordinated organisations raises a second question, that of compulsion: ‘you will volunteer,’ says the army sergeant, ‘and you and you’. This looks like another contradiction in terms, and, indeed, Sheard criticises the National Survey of Volunteering definition, given above, for omitting a reference to the necessity for volunteers to act out of their own free choice. Nevertheless, the ‘volunteer’ who is more or less under orders has become a familiar presence in recent years. Much of the voluntary sector spent a good part of the 1980s as a kind of depot or out-station for the Manpower Services Commission. Thirdly, much volunteering is carried out not through formal voluntary organisations but more informally. If this kind of activity is added in to the 1997 National Survey of Volunteering figures, the proportion of adults undertaking some kind of voluntary work during the previous 12 months – ‘current volunteers’ – goes up from one half to more than four fifths. In terms of time, current volunteers spent 1.7 hours on average on informal volunteering activities in the week prior to interview. Fourthly, one thing on which all commentators are agreed is that it is a vulgar error to equate volunteering with the voluntary sector. Neighbourly help is obviously important, and in addition many public agencies, and some commercial concerns, call upon the services of volunteers. The 1997 National Survey of Volunteering estimated that 41% of the population were involved in voluntary work in the voluntary sector, 12% in the public sector, and 6% in the commercial sector. 8 Conversely, however, many formal voluntary 6 7 8

National Association of Citizens’ Advice Bureaux Research and Development, The CAB Service: Trends and Statistics. Sheard, ‘From Lady Bountiful to active citizen’, p 115. Davis Smith, The 1997 National Survey of Volunteering, p 44. 195


organisations do not use volunteers, or use them marginally and peripherally, relying upon paid staff for all core service delivery. Yet there must be some injection of voluntary activity if the voluntary sector is to be voluntary. This is provided for in all the definitions, for example the ‘structural operational’ one of the non-profit sector adopted by the Johns Hopkins Project. 9 This lays down that entities in the sector must be: (a) organised (that is, institutionalised to some extent); (b) private (that is, institutionally separate from government); (c) non-profit distributing (that is, not returning any profits generated to their owners or directors); (d) selfgoverning (that is, equipped to control their own activities); and (e) voluntary (that is, involving some meaningful degree of voluntary participation, either in the actual conduct of the agency’s activities or in the management of its affairs). ‘Non-profit’ is a wider concept than ‘voluntary’, so a specification of some voluntary involvement as a necessary condition if an organisation is to be so classified is not an example of redundancy. However, the level at which this involvement may take place is left open. Finally, one curious feature of much writing on the voluntary or non-profit sectors is that its authors seem to adopt an officers’ or sergeants’ mess approach to their subject matter: no religion, no politics. Given the bar on political purposes which is an outstanding element of British charity law, the omission of the latter is perhaps more explicable than the former, for religion is one of the four heads of charitable endeavour listed in Lord Macnaghten’s 1891 judgment in the Pemsel case.10 The exclusion from consideration of participation in sacramental religious organisations removes at one stroke one of the most important areas of voluntary action. In 1997, such participation ranked second equal among the fields of activity delineated, alongside ‘children’s education’ and just behind ‘sports, exercise’.11 Eleven per cent of the total sample, and 23% of current volunteers, said that they were engaged in religious activities. Church members are involved in good works of all kinds. For example, Abrams, Abrams, Humphrey and Snaith12 found the churches to be the commonest source of initiation of the ‘Good Neighbour Schemes’ they studied. British political parties are less involved than their counterparts in some other countries (such as Germany) in the direct provision of services to their members (or anyone else), although their indirect contribution, through policy formulation and the recruitment and grooming of persons for public office, is clearly enormous. However, even if the glory days of mass membership political parties after the Second World War are over, they remain major loci

9 10 11 12

Salaman and Anheier, Defining the Non-profit Sector, pp 33–34. Income Tax Special Purposes Commissioners v Pemsel [1891] AC 531. Davis Smith, The 1997 National Survey of Volunteering, Table 3.4, p 43. Abrams et al, Action for Care: A Review of Good Neighbour Schemes in England. 196


of voluntary effort,13 and a similar observation could be made about trade unions. ‘Activist,’ after all, is merely a mildly pejorative term for a deeply committed volunteer.14

PARTICIPATION In a broad sense, ‘participation’ means no more than taking part in some activity. This introduces at the outset two respects in which ‘volunteering’ and ‘participation’ occupy conceptual terrains which, though overlapping, are far from coterminous. As we have seen, the notion of compulsory volunteering usually evokes a slightly uneasy laugh. However, the parallel concept of compulsory participation should not even raise an eyebrow, since it is a common product or feature of social institutions. Team games at many schools or community service orders would be examples. This is a matter which I shall take up later. On the other hand, someone may volunteer to be a spectator, to make up the numbers for instance, but mere presence at an occasion or event is usually not enough to count as participation. Some degree of active involvement is required, even though it is often difficult to know where to locate the threshold. Take a theatrical performance as an example. The chemistry between the actors and their audience will result in very perceptible messages of approval, disapproval or indifference, and will be one of the chief factors determining the success or failure of the production. ‘Participation’ is therefore commonly arranged along a spectrum or continuum; at some point along the line, advocates of more participatory systems will conclude that the participation has become ‘genuine’ or ‘meaningful’. More than 25 years ago, one such writer, Carole Pateman, summed up a critique of the prevailing tendency to equate democracy with ‘free competition for the people’s vote’ in the following words: The contemporary and participatory theories of democracy can be contrasted on every point of substance, including the characterisation of ‘democracy’ itself and the definition of ‘political’, which in the participatory theory is not confined to the usual national or local government sphere. Again, in the participatory theory ‘participation’ refers to (equal) participation in the making of decisions, and ‘political equality’ refers to equality of power in determining the outcome of decisions, a very different definition from that in the contemporary theory. Finally, the justification for a democratic system in the

13 The 1997 National Survey of Volunteering found that 4% of current volunteers were involved in political organisations. 14 It should however be remembered that councillors (an important subset of the political class) have received allowances for more than 20 years: in the case of Leaders of Councils and Committee Chairs this remuneration may amount to a tidy annual sum. 197


participatory theory of democracy rests primarily on the human results that accrue from the participatory process. One might characterise the participatory model as one where maximum input (participation) is required and where output includes not just policies (decisions), but also the development of the social and political capacities of each individual, so that there is a ‘feedback’ from output to input.15

Some may feel that this is rather too politicised a view of participation to be unequivocally applicable to voluntary associations. The stress on power and decision making, although understandable in political scientists, political philosophers or politicians, may distort the nature of participation. Even without – for the moment – going in to motives for volunteering, it can be quite confidently assumed that most participants do not act because they want a slice of power, or in order to take decisions on behalf of others. Note, however, that Pateman explicitly extends her analysis to institutions other than those central to the political sphere; the latter half of her little book pays much attention to authority structures in industry, a topic more fashionable in the 1960s and 1970s than now. The voluntary sector undoubtedly presents some special problems for participation theory. This is partly because of its heterogeneity, and partly because the existence of a spontaneous order is often simply assumed, despite the formalisation of structures which has been one of the principal developments of recent decades. Thus, there is, first, the question of the delineation of relevant sets of actors, and how they relate one to another (that is, how lines of accountability should be drawn). Secondly, there is a distinction to be made between direct participation and indirect participation (representation). Pateman’s emphasis on decision making makes it easy to separate out work (service delivery, the performance of tasks) from decisions about work (policy making, management, oversight). In voluntary bodies, either or both may be assigned to volunteers. However, although service delivery may be solely carried out by paid staff (in organisations using no volunteers for this purpose), there must be some voluntary input at the higher, or governing board, level. The ubiquity of such bodies – in addition to the legal responsibilities vested in them – makes them a promising starting point for an exploration of these questions. In a series of articles published over the past decade, Margaret Harris has dissected the dilemmas faced by these bodies.16 Here I shall call upon the summary of her researches and experiences contained in the volume she edited with Billis.17 She starts by outlining a number of ‘manifest’ functions of management committees: an accountability function, an employer function, a

15 Pateman, Participation and Democratic Theory, p 43. 16 Eg, Harris, ‘Voluntary leaders in voluntary welfare agencies’. 17 Harris, ‘Do we need governing bodies?’. 198


policy making and priority setting function, a resource acquisition and safeguarding function, and a ‘boundary-spanning’ function, which is elaborated as entailing the provision of ‘a link and a buffer between a voluntary agency and its environment’. 18 Harris grants that these responsibilities overlap, and that not all will fall to the governing body in every organisation, but together they form a textbook definition of their role. She then argues that much current dissatisfaction ‘is rooted in the perception that, in practice, many governing bodies do not perform the functions officially prescribed for them, or do so in an inadequate fashion’.19 Harris goes on to distinguish four sets of actors: the governing body itself; the staff employed by the agency (volunteer staff are not accorded a separate role); the agency’s beneficiaries, clients, consumers or customers; and the ‘guardians’ of the agency. The last sounds like a vague concept – ‘stakeholder’ may be a currently more fashionable synonym – and the impression of vagueness is not dispelled by the definition offered: ‘those who have a positive concern for the long term survival of the agency and its purposes, who may include founders, funders, former members or former clients.’ 20 However, the whole point is that the location of these concerned individuals varies from organisation to organisation, and the contention is presumably that, even if their identification poses some empirical problems, where no such people exist the agency is unlikely to enjoy a very long life. Next, three models are outlined. In the first, the ‘traditional’, or philanthropic association, model, the ‘guardians’ legitimate, or are the same as, the governing board, which employs one or more members of staff, who deliver services to beneficiaries. She suggests that voluntary agencies which operate according to such a linear chain ‘provide a framework which facilitates governing bodies fulfilling the functions officially ascribed to them’.21 In this, Harris may be a bit too kind to the ‘traditional model’, efficient and adaptable though it has in many respects proved to be. Problems arise particularly when (as is usual) board members claim to represent ‘the community’, that loveable but shifty and hard to locate old lag. Frequently, this representation is validated through AGMs, attended only by retiring committee members, a few hand-picked aspirants, some stray representatives of statutory bodies working overtime, paid and volunteer staff, and assorted friends of the staff and committee members. Much more often than not, the number of nominations exactly matches the number of places to be filled on the board. The second model is termed by Harris the ‘membership model’ and is especially applicable to mutual aid groups, self-help organisations and the 18 19 20 21

Harris, ‘Do we need governing bodies?’, p 153. Ibid, p 154, emphasis in original. Ibid, p 155. Ibid, p 157. 199


like. Here, unlike in the ‘traditional model,’ there is a closed circle rather than a chain, since the ‘guardians’ are also the beneficiaries. This leads, according to Harris, to a situation in which the clarity of relationships is lost, and she suggests that either there will be tension between governing boards and professional, paid staff over the ‘authentic’ interpretation of the latter’s role, or the board will be bypassed, since the beneficiaries, as members and ‘guardians,’ already have direct avenues of approach to staff members. The redundancy of the managing body is even more likely in the third, or ‘entrepreneurial’ model, since these are organisations revolving around charismatic leaders, who are also the principal paid staff. If governing boards do not attend to their duties particularly well (and, as a generalisation, this is not proved), this may be for such mundane reasons as that their members lack sufficient experience, expertise or knowledge of their responsibilities, are too busy with too many other boards and committees, or are cripplingly distant from the day to day running of the agency.22 There are some familiar patterns in committee life, for example, chairpersons running the show in tandem with the chief officer and treating the rest of the board like a rubber stamp. There is no reason to suppose that ‘traditional’ philanthropic bodies are freer from these problems than other kinds of voluntary organisation. Membership associations may encounter some of them less, since at least they have members, and often highly committed ones at that, by whom boards can be called to account. Indeed, these varied ailments clearly do not only infect volunteers or voluntary organisations. Board members may be paid and appointed and in the public or the private commercial sectors and yet fail to exercise due oversight or to assert the independence of judgement which they are supposed to bring to their roles. A whole series of well publicised misjudgments on the part of health authorities and NHS trusts, for example, might suggest that their non-executive directors are not always up to their jobs. More needs to be said about statutory organisations, since much of the literature applying participation theory to the voluntary sector is centrally concerned with their roles and relationships with the voluntary organisations. Given that, in a contract culture, fees and charges are the single most important – and growing – source of income for voluntary bodies, especially in the social service field, and that old style government and local authority grants remain significant, this is perhaps not surprising. The concern is with dependence, manipulation and co-option, and appears in its starkest form in theories which view citizen participation as like the rungs in a ladder, stretching from the bottom (bad) to the top (good). This line of thought can be

22 In order to safeguard client confidentiality, members of Citizens Advice Bureaux Management Committees are prohibited from seeing case records, and cannot even discuss individual cases in any save exceptional circumstances. 200


traced back to a seminal 1960s article by Sherry Arnstein.23 Her Rungs 1 and 2 are ‘manipulation’ and ‘therapy’, both non-participative. Rung 3 is ‘informing’, a necessary first step, but frequently one-way and with no channel for feedback. ‘Consultation’ appears on Rung 4. Neighbourhood meetings, public enquiries and attitude surveys are all legitimate mechanisms, but, in Arnstein’s view, usually just window dressing. Rung 5 is entitled, tendentiously, ‘placation’. Selected ‘worthies’ are co-opted onto committees, where they can advise to their heart’s content, but power holders reserve for themselves the right to decide what to do with the advice. ‘Partnership’ makes up Rung 6. Here, for the first time, power is being genuinely redistributed through negotiation between citizens and power holders, and planning and decision making responsibilities are shared by means of joint committees and the like. Rung 7 is ‘delegated power’. Citizens hold a clear majority of seats on committees and the public now has the power to assure accountability of programmes. Finally, topmost on Rung 8, is full ‘citizen control’. It should be noted that Arnstein structures her schema partly through relatively neutral concepts like ‘consultation’, which may appear in a variety of organisational settings and procedures, and partly through attributing some dismissive attitudes or malign motivations to ‘power holders’. In a recent revision of Arnstein’s ladder, Danny Burns24 sorts this out to some extent, for example, by distinguishing between ‘cynical consultation’ and ‘genuine consultation’. He also inserts several fresh rungs into the ladder, mainly towards the top, thus increasing the distance between ‘placation’ and the highest level which he terms ‘Local Policy Bottom Up Decision Making’. As the penultimate stage, he introduces a new requirement, for ‘culture change’, presumably on the part of the ‘power holders’ primarily. Why this should be necessary only on a ‘bigbang’ basis, as a prelude to the full attainment of citizen’s control, is not explained. That effective participation has to be learnt – which entails tutelage by someone – is not accorded due recognition in these models. Arnstein’s citizens start their climb disempowered and alone. There seem to be no pre-existing intermediate associations, including established political ones, to complicate – and, more importantly, to assist – the ascent. Arnstein’s vision of ‘citizen’s control,’ as ‘have-nots’ handling the entire job of planning, policy making and managing a programme, without intermediaries, is in many respects quite wildly romantic. Someone will have to determine the resources to be devoted to the programme, and this will often mean that final control is in the hands of some outside body, probably a public authority. Moreover, the necessity for representative structures, with all their attendant problems of transmission from, and to, the grass-roots, is not acknowledged.

23 Arnstein, ‘A ladder of citizen participation in the USA’. 24 Burns, ‘Ladders: the Sherry Arnstein model’. 201


The entrepreneurial ‘have-nots’ who make it to the top will inevitably cease to be typical of other ‘have-nots’ – if they ever were typical. Volunteerparticipants need to be trained, which also means that they must have a disposition to train themselves. Otherwise, they will be quite rightly ignored, or alternatively do more harm than good. One might even argue that ‘citizen control’ goes beyond the bounds of ‘participation’, as usually conceived. It certainly implies little respect for the autonomy, or even the role, of professionals. If participation involves sharing, its summation might be found towards the halfway point on the ladder, in the area designated as ‘partnership’, rather than right at the top. Spending any length of time on the middle of a ladder necessitates an even more uncomfortable posture than being on the highest rung. Partnerships, in official/voluntary as in marital relationships, may not find it easy to attain or to retain equality and stability. Indeed, there may well be, as radical participation theorists frequently deplore, a certain inbuilt tendency towards official dominance, particularly of the smaller voluntary organisations.

NEIGHBOURLINESS To take this further, we need to consider how organisations and associations might be classified, which typically involves making some assumptions about the motivation of volunteers. I shall take my examples from the burgeoning field of community care. Taylor, Langan and Hoggett25 divide the voluntary sector into three, distinguishing the following kinds of organisation: (1) community (run by and for people from a particular neighbourhood, or a minority ethnic community); (2) user (run by service users or ex-users, or by carers for carers); (3) donor (where people give their time or money to help others). This is a useful, if familiar, categorisation (cf, Harris’ above, which has some resemblances). However, the reason for citing it verbatim is that the authors do not in fact follow it, even though, not surprisingly in a book concerned with the encouragement of diversity, they cover a large variety of organisations, including the wider non-profit and private commercial sectors as well as voluntary associations. They restrict their study of ‘community organisations’ to those catering for ethnic minority needs, specially sampled in one locality only in order to ensure coverage. Organisations ‘run by and for people from a particular neighbourhood’ appear under the heading of ‘simple donor organisations’. They were usually organised as charitable trusts, had small

25 Taylor et al, Encouraging Diversity: Voluntary and Private Organisations in Community Care, p 11. 202


incomes mostly derived from donations, fund-raising and subscriptions, and ‘tended to operate at the very local level, that is, the neighbourhood’.26 In this last respect they differed from user-organisations which ‘were as likely to operate at the level of a town, city or county as at the neighbourhood level’. One can only speculate about the reasons for this strange, if minor, discrepancy. The giving of time or money for the benefit of others is often seen as a middle class pursuit, almost certainly wrongly in the case of cash donations, since the percentage of one’s own money given to charity differs little by income group.27 However, the old image of the Lady Bountiful still lingers, and so do some of the suspicions it engendered. Working class timevolunteering, it is thought, would be and should be less formal, and more based on mutual aid and reciprocity, than its middle class counterpart. However, the trouble with this is that in any locality those who need most help are able to do least in return and it is, therefore, not surprising that a clear distinction between helpers and the helped, as in the traditional philanthropic organisation, is everywhere usual in transactions which do not involve kin, or are not among close neighbours with a long established exchange of services. The researches of Philip Abrams and his associates point in the same direction, even though they stress the importance of reciprocity.28 Indeed, Philip Abrams was suspicious of ‘altruism’, tending to countenance it only as a ‘special, masked, form of reciprocity’.29 Questions about the reasons for volunteering elicit replies which are partly concerned with the circumstances triggering a particular involvement, and are partly in terms of wider considerations, including predispositions and moral or political beliefs.30 It is therefore difficult, perhaps impossible, to arrive at conclusions about motivations in any ‘pure’ form. The available literature typically reports a melange of reasons for volunteering, of both an ‘instrumental’ and an ‘expressive’ kind. Some of these motivations are decidedly self-regarding, including the search for companionship and to fill empty time, the desire to acquire the esteem thought to be attendant on the performance of good works, and the burnishing of the curriculum vitae in order to obtain entrance to certain undergraduate and other courses. As Collini has shown, Victorian

26 Taylor et al, Encouraging Diversity: Voluntary and Private Organisations in Community Care. 27 Ware, Between Profit and State: Intermediate Organizations in Britain and the United States, p 118. 28 Abrams et al, Neighbourhood Care and Social Policy. 29 Bulmer (ed), Neighbours: The Work of Philip Abrams, p 115. 30 Thus, The 1997 National Survey of Volunteering records (Table 6.1, p 62) 47% of currently volunteering respondents saying that they volunteered because ‘someone asked me to help’ and 48% because ‘I offered to help’. These answers may be contrasted with both instrumental and altruistic reasons like ‘connected with my needs, interests’ (42%), ‘connected with the needs, interests of family or friends’ (45%), ‘I wanted to meet people, make friends’ (25%), ‘I wanted to improve things, help people’ (35%) and ‘there was a need in the community’ (26%). Most respondents, of course, must have given more than one reason. 203


philanthropists spent hours searching their consciences to decide if their motivations were altruistic enough; indeed, the word ‘altruism’ and its derivatives only came into use in English in the middle of the 19th century.31 Such strenuous questioning of the purity of motives has long ceased to be fashionable, and no doubt they are usually mixed: however, most of the quids cited for the quo do not seem to me to detract seriously from the conclusion that we are encountering here actions which, at the very least, have a strong other-regarding component. Abrams et al in any case furnish a good deal of evidence for the proposition that volunteers – their volunteers anyway – are in some respects a bit unusual, and that these differences from the general population cut across social class.32 They compare the characteristics and attitudes of helpers in the 10 formally organised Good Neighbour Schemes they studied with those of the residents in the areas which the schemes covered. Most strikingly, 70% of helpers, but only 42% of residents, identified themselves with a religion, and 54%, compared with 27%, claimed to take an active part in religious life. Although working class respondents participated less than middle class ones, the gap between helpers and residents remained very similar. (It should be noted that one of the 10 schemes was run by an ecumenical Christian organisation. The others, however, were all secular). Abrams and his associates stress that religious motivations were not given by helpers as major reasons for joining in the schemes (although 24% did cite them). However, the essential substantive point is made vigorously enough: It would seem that for most religiously inclined helpers, it is not religious teaching specifically, but rather a normative code of helping which can be related to religion, that lies behind their getting involved in organised neighbourhood care. Indeed, for most of our Helpers, whether they claimed to be religious or not, participation was broadly associated with the normative imperative ‘People should care’.33

The comparison between helpers and residents also shows that, although around 70% of both had lived in the area for more than five years, the former were much more positive about their locality than the latter. For example, 49% of helpers, but only 26% of residents, believed that the area had a strong sense of community. However: A striking conclusion to be drawn from the patterns which emerged from the findings regarding class differences is that it is the working class areas which are more likely to be social deserts in terms of neighbourliness. Working class participants and non-participants alike were markedly more likely to describe their locality as one where people kept themselves to themselves than were their middle class counterparts: no fewer than 77% of working class respondents said this was the case.34

31 32 33 34

Collini, Public Moralists: Political Thought and Intellectual Life in Britain, 1850–1930. Abrams et al, Neighbourhood Care and Social Policy, Table H/R4.1, p 37. Ibid, p 38. Abrams et al, Neighbourhood Care and Social Policy, p 42. 204


This clearly has a bearing on the often voiced opinion that volunteers, like voluntary organisations themselves, do not tend to be thickest on the ground where needs are greatest. Indeed, the problem in the most middle class of the Good Neighbour Schemes, serving the most unambiguously middle class area, ‘Southfield Park’ in ‘Affluaville’, was not a shortage of volunteers, but a shortage of people to be helped. Lastly, another vexed question on which the researches of Abrams et al shed light is the payment of volunteers. One of their schemes, ‘Stonegate’ in ‘Hunting Valley’, was actually statutory in its inception and operation, being run as an adjunct to the home help service, and the work it provided was fully waged. However, several other schemes made token payments, and the authors argue that they played a significant role in persuading working class helpers to come forward, less because of the attractions of the money itself – which was not great – than because they were seen as a recognition that the work was esteemed as valuable. Some remuneration, however small, may thus help to break down social class feelings which inhibit volunteering.

CONCLUSIONS: TWO PARADOXES OF VOLUNTARISM One aspect of voluntaristic approaches which needs discussion is that volunteers must be able to depart if they wish without major detriment to their (material) interests. Just as there is a requirement that initial participation be unconstrained, so must there be a relatively painless and freely available right of exit. Someone who gives up paid employment – shall we say, for reasons of principle – may well be jeopardising his or her standard of living. The costs of relinquishing a voluntary activity will be and should be less than that – or so it is felt. Volunteers also may freely choose the causes for which they volunteer. Beneficence cannot be commanded, since then it ceases to spring from benevolence. Furthermore, although the evidence is less clear here, unpaid staff may expect, and obtain, a good deal of discretion over what they are or are not prepared to do once their services have been accepted by an association. There is a paradox here; a Hobbesian paradox, indeed. ‘Voluntarism – selfassumed obligation, consent, and the social contract – is at the heart of Leviathan,’ says Pateman.35 Hobbes’ atomistic individuals need security for their interests in their own bodies and their property beyond what they can acquire through the strength and force which they personally command. As that personal strength is all that is available in the state of nature, they

35 Pateman, The Problem of Political Obligation: A Critique of Liberal Theory, p 37. 205


therefore have to enter civil society, which entails acceding to an enforced covenant and submitting themselves to a protective sovereign power. At a rather later stage in the story, as Hirschman has memorably described in his study of the arguments for capitalism before its triumph,36 some of the thinkers of the Enlightenment sought to bring in the ‘interests’ to counter and redress the vagaries and arbitrariness of the ‘passions’, especially those of the rulers who wielded this very same sovereign power. At both stages, the aim was to secure a greater degree of stability and predictability than had prevailed before. The relevance of this in the present context may be illustrated by moving still further forward in history, to the organisation of charity in the later 19th century. As part of the search for its own version of these same virtues of predictability and stability – both for the philanthropic associations and their clients – the Charity Organisation Society (COS) aimed to formalise the relationships between bodies set up under the poor laws and charitable societies. The COS was not actually very successful in organising charities, but the process it started, of defining and fixing the basis on which public authorities and voluntary bodies interacted and transacted, has gone on to this day. Of course, the terms of trade have shifted markedly over the years. The State moved into the direct provision of social welfare tentatively, and at first on a very small scale, but since the Second World War a flood of legislation has placed more and more detailed, mandatory requirements on government departments, non-departmental public bodies (or quangos), and local authorities. Public agencies continue to call the shots, in spite of such stipulations as that of the Major government that 85% of the money transferred from social security to local authority community care budgets should be spent on contracts let to the ‘independent’ sector. Over 80 years the arguments adduced in favour of public sector predominance in this field have always been the same. Charitable endeavour cannot cover the field. Reliance on the donation of money or time would produce, in the aggregate, a most peculiar pattern of services – peculiar at any rate in the eyes of academics – with some groups routinely neglected and others over-endowed. In a society where strict obligations apply only to close kin (and even some of these, especially in relation to children, have to be backed up with legal enforcement), decentralised, individual giving cannot be expected to play any major role in structuring relationships among strangers. The essential needs of the vulnerable can only be met through an assumption of public responsibility. Here it may be noted that Abrams and his associates found that the only one of the ten neighbourhood care projects they studied which was said by a majority of its beneficiaries to be ‘vital’ to their well being

36 Hirschman, The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph. 206


was also the only one that was clearly in the statutory sector, the Stonegate Home Warden Scheme.37 This response was a very solid one, too, at 77%. The case for statutory dominance has had other strands than top-down, bureaucratic considerations, couched in terms of administrative efficiency, coverage and adequacy. The impact of democratisation also needs to be taken into account. To turn over the material fate of applicants for relief to unelected members of the middle classes increasingly came to be seen, from the 1880s onwards, as fundamentally disrespectful of the poor. One is reminded of the ‘crimes’ of the mother in JB Priestley’s An Inspector Calls. As the leading member of a panel of charity volunteers, the mother denied help to a pregnant girl who later killed herself, whilst unaware that the father of the baby was her own son. For this was a world without either procedural or substantive rights, not even the scanty entitlements of the poor laws. From this standpoint, the recommendation of the Majority Report of the 1905–09 Royal Commission on the Poor Laws, made under the influence of the COS, that newly created statutory Public Assistance Authorities should delegate vital parts of their work to Voluntary Aid Committees, looks like something of a nightmare. The proposal has, however, attracted the admiration of a present-day neoconservative, David Green. The intention, he says, was ‘to maintain the centuries-old tradition of a duty on government to provide a minimum benefit, whilst avoiding the corruption of morals which had been the bane of earlier schemes’.38 One aspect of the developments referred to above is that volunteers have gradually been more and more organised, which means subjected to discipline. Volunteers have, thus, become more ‘unfree’ and more like paid employees in respects apart from remuneration. On the whole, it seems, volunteers have taken to being managed pretty well. There is an appetite for training, and it is suggested that what most surely demotivates volunteers is a lack of clarity about what is expected of them.39 In many voluntary bodies, the transition to modernised structures, with mission statements, precise job descriptions, performance evaluation, the full use of information technology and so on, has been made easier by the growth in the numbers of those whom Peter Drucker calls ‘knowledge volunteers’. These volunteers, often early retirees from large-scale public or private sector organisations, are highly educated, with varied expertise and accustomed to the rituals and language of corporate existence. However, there are limits. Many people worry that voluntary bodies are losing their distinctiveness and their spontaneity, turning into bureaucratic organisations like any others. And, as the lines separating the public, the private commercial, and the voluntary blur almost to vanishing point, the 37 Abrams et al, Neighbourhood Care and Social Policy, p 124. 38 Green, Benefit Dependency: How Welfare Undermines Independence, p 37. 39 For a discussion of this, see Davis Smith, ‘Should volunteers be managed?’. 207


perception is likely to grow that unfair advantage is being taken of volunteers. The government has piled onerous and potentially punitive new responsibilities on trustees in the Charities Acts of 1990, 1992 and 1993. At service delivery level, statutory authorities are increasingly enlisting the help of ‘paid volunteers’ – or sometimes of unpaid ones – usually via contracts with some kind of voluntary body. As Baldock and Ungerson point out, social service departments have increasingly vacated responsibility for the direct provision of services at the same time as they have assumed their new role in ‘care management’.40 From either a feminist or a trade union standpoint, this has its disturbing aspects. The cost advantages of voluntary sector provision appear to be mainly attributable to the use of volunteers, principally in service delivery, but also at managing body level. Thus, disquiet about possible exploitation merges with disquiet about unfair competition.41 The second paradox is not dissimilar, although it has its origins in the thought of Rousseau rather than that of Hobbes. It can only be lightly sketched here. Rousseau moved between two utopias – the tranquil household, consisting of nuclear families, largely separate one from another, and a republic modelled on Sparta. The latter was almost as small-scale as the former: ‘it is always an evil,’ says Rousseau, ‘to unite several towns in one nation’.42 His republic also required a high and, as near as possible, equal level of participation from all citizens. We have seen that his disciples in our own time agree that this is what democratic citizenship entails. According to Judith Shklar, Rousseau’s novelty lay in his belief that a stark choice had to be made between the two. She argues that he maintained that ‘all our self-created miseries stem from our mixed condition, our half-natural and half-social state’.43 However, if these two visions were reconcilable, clearly it was in the cantonal democracy of rural Switzerland, and perhaps only there: When we see among the happiest people in the world bands of peasants regulating the affairs of State under an oak tree, and always acting wisely, can we help feeling a certain contempt for the refinements of other nations, which employ so much skill and mystery to make themselves at once illustrious and wretched?44

For Rousseau, the great danger was that the general will would dissolve into a multiplicity of particular wills. Republican virtue was always liable to be subverted through the growth in inequality and its attendant vice of amourpropre. It therefore had to be constantly reinforced with programmes of civic

40 Baldock and Ungerson, ‘What d’ya want if you don’ want money?’. 41 Ware, Between Profit and State: Intermediate Organizations in Britain and the United States, ch 3 is devoted to ‘economic competition involving charities’, a subject which has otherwise received little treatment in the literature. 42 Rousseau, The Social Contract, p 138. 43 Shklar, Men and Citizens: A Study of Rousseau’s Social Theory, p 5. 44 Ibid, Rousseau, p 149. 208


education and the repeated, almost ritualistic, enactment of citizenship obligations. Rousseau’s standards were austere: As soon as public service ceases to be the main concern of the citizens and they come to prefer to serve the State with their purse rather than their person, the State is already close to ruin.45

Present day advocates of large scale citizen involvement essentially make the same plea as Rousseau, and, as we have noted, many individuals do devote small amounts of their time to good works in the community, and, in some cases, to committee work and to organising the activities of others. Nevertheless, given the existence of many other concerns and distractions, these seem unlikely in present day conditions to be hobbies freely adopted by other than a smallish minority, at least on anything like the scale advocated and required. Moreover, a society in which very large numbers busied themselves with citizenship obligations could easily turn out to be oppressive and illiberal – not so much a matter of taking in other people’s washing, as of seeing that everybody carries out the weekly wash. In the political field, activists expect, as a reward for their activism, a dividend in the form of control of, or at least significant influence over, the policies adopted by their party. The only question is how large for them this dividend should be. Currently, it appears to have diminished in the Labour Party, with only sporadic dissent from the grassroots, but demands for a greater say have become commonplace in the Conservative Party. As we have seen, it less easy to specify dividends for volunteer participants in social welfare associations, but the continued prevalence of donor organisations and the fact that volunteers differ markedly from non-volunteers mean that a gap opens up between helpers and helped, which it is very hard to close even when those involved sincerely wish to do so. Compulsory participation is currently very much in the air, like a prickly sensation. It is quite likely to migrate from the atmosphere to a more institutionally solid location. The new Blair administration simultaneously possesses both permissive and prescriptive impulses. So far it has stressed that it wants participation in its various welfare to work projects to be voluntary. However, such State administered or State sponsored schemes invariably depend on Benthamite incentives and disincentives, the balance between which is constantly shifting. It may well turn out that, over time, the carrots become thinner and less nutritious, and the sticks thicker and more crudely crafted for belabouring. In any case, from a voluntaristic standpoint, the manipulation of inducements and counter-inducements leaves only a little space for moral choice, so it becomes difficult to determine whether actions and behaviour are freely chosen or are enforced.

45 Rousseau, The Social Contract, p 140. 209


Another area in which compulsion can prove seductive is where it is desired, for one reason or another, to produce or represent a cross section of a particular population. This is commonly the case in schemes of national service, and is often accompanied, as in the draft in the USA, by selection through lot, a device designed to trim the available manpower to current military requirements. At the same time it is meant to be fair, although it rarely is so in practice, because of exemptions. In Britain, no serious body of opinion has contemplated military conscription for more than 30 years, but the notion of ‘Citizens’ Service’ has recently secured a precarious foothold on the political agenda. The establishment of a scheme to be targeted mainly but not exclusively on young people aged between 16 and 25 formed one of the recommendations of the Commission on Social Justice,46 following on from an ‘Issue Paper’ prepared for the Commission by James McCormick.47 However, the Commission disavows any idea of conscription, seeing its scheme as ‘a voluntary community service initiative aiming to meet identified needs and to bridge the gap between personal, social and learning skills’.48 It goes on to say, grandiloquently and in revealingly military language, that: ‘quality, not compulsion, will be our recruiting sergeant.’49 The trouble with this is that, if Citizens’ Service is to fulfil its stated objectives of breaking down social barriers and attracting participants of varying social class, ethnic and regional backgrounds, it needs to recruit both young people with prospects, who have mostly done well out of the existing educational system, and those who have so far conspicuously failed to derive advantage from it, the unskilled, the never employed, the long term unemployed, and so on. The Commission rightly rejects selective compulsion, which would almost certainly be directed at the latter group. The judicial system has, after all, already annexed ‘Community Service’, which otherwise might have been quite an acceptable alternative name for Citizens’ Service. The case for universal compulsion is, however, less easily dismissed. The Commission seeks to avert it in the usual way, through the erection of a trampoline of varying incentives, such as educational credits. Some of the most recent and exciting ventures in citizen involvement, like citizens’ juries, attempt to mimic compulsory participation by assembling panels selected to be representative of the whole adult population.50 Yet, the distinction between the volunteer and the non-volunteer is pervasive. Even so radical, indeed eccentric, a vision of democracy as that of John Burnheim, in which public offices are filled by lot, rests on interested candidates putting

46 47 48 49 50

Commission on Social Justice, Social Justice: Strategies for National Renewal. McCormick, Citizens’ Service. Ibid, Commission on Social Justice, p 363. Ibid, Commission on Social Justice, p 363. Coote and Lenaghan, Citizens’ Justice: Theory into Practice. 210


their names forward voluntarily. 51 The distinction between active and inactive citizens raises the question of how the interests of the latter are to be protected. Not all the inactive want, need, or, in the view of some liberal voluntarists, deserve, such protection; but the spectres of exclusion and its hardening into underclasses are ever present. However, that should be obvious, and there is no need to elaborate.

51 Burnheim, Is Democracy Possible?. 211

CHAPTER 12

PARTICIPATION AND LEGAL AUTONOMY

N Douglas Lewis If a society were to design an institution which had the job of finding the society’s set of moral principles and determining how they bear in concrete situations, that institution would be sharply different from one charged with proposing policies … It would provide an environment conducive to rumination, reflection, and analysis. ‘Reason, not Power’ would be the motto over its door.1

PREFATORY REMARKS Participation through politics is an ancient pastime, but during most of what passes for modern civilisation, the judiciary has been seen as a necessary antidote to politicians selling the pass. This is at least as great a likelihood as it ever was, but as soon as participation is seen in an expanded context, the field on which the judiciary can be expected to play must almost certainly expand. If social and material well being is a pre-condition of effective participation in various levels of community living, then it has to be guaranteed within the framework of the constitution. The debate then becomes whether politicians alone can be trusted to furnish the preconditions for participation, or whether participation rights need a more institutional and far sighted degree of constitutional protection. This is the battleground of ‘law or politics’. The debate which this book is intended encourage should reawaken discussion about the separation of powers, in particular, discussion about the separation of judicial and (loosely) political functions. At one level, there is no debate. The simple version of separation is accepted by the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, the 1995 Beijing Statement on Judicial Independence, and, most recently, the Declaration on Judicial Independence of the Chief Justices of the Australian Supreme Courts of the States and Territories.2 The question is, rather, how separate is separate, and over what sort of issues must the separation be observed? It is by claiming more for constitutions than has been common in the past that old enmities are aroused and fierce debates fired. 1 2

Wellington, ‘Common law, rules and double standards’, pp 246–47. Eg, Chief Justices of the Australian Supreme Courts of the States and Territories, ‘Declaration on judicial independence’, pp 43–45. 213


Let me begin by distinguishing two different, although linked, notions of legal autonomy. The first is that there is the, presumably uncontested, notion that politicians must be held to their promises and that a separate assessment of what those promises mean falls to be made. This is the public equivalent of pacta sunt servanda, or holding that contracts should be independently enforced, since these public promises also should be honoured. To put it another way, holding politicians to their promises ensures the avoidance of arbitrary conduct, and this is nowhere better illustrated than in the historic Case of Proclamations.3 The citizenry can plan its life on the basis of rational and predictable assessments only if this security is given. Beyond the uncontested level, we are confronted with the question of the larger ‘constitution’. Either there is a constitution or there isn’t, and if there isn’t, then either all collective issues are resolved by raw politics (or at best there is an implicit assumption that ‘process’ replaces substance), or that raw politics is acceptable provided that it is mediated by some agreed process, probably turning on elections. The former position, which is a ‘solution’ based on might, is, at least for me, totally unacceptable. The latter would have to be based on at least some implicit notion of democratic politics and that would have to be theoretically grounded. Once on that ground, the ultimate assumptions of constitutional theory become as contestable as almost any other part of that theory. I have argued elsewhere that there are ‘ties that bind’,4 and I have no wish to remake the argument here, except that I would probably make it in spades if I were to revisit the propositions which I then put forward. It seems to me that almost everyone, if pressed, would say that they believe in the fundamentals of the constitution. The extreme cases of, for example, abolition of the judiciary, the replacement (or extending the life) of the House of Commons, or placing serious limitations on freedom of speech, would meet with a predictable general response. Indeed, if we cast our minds back to the 17th and 18th centuries, we shall see that the common law was assumed to embrace the democratic decencies. We were all brought up to believe that Parliament was self-denying in important respects. Added to this, we now have the complexities of the European Union (EU) and the European Convention on Human Rights (ECHR), and we will soon be faced with semi-detached Welsh, Scottish and even London assemblies, the futures of which will only be constitutionally abridged with some little difficulty and legerdemain. Factortame 5 has already exploded the omnicompetence myth, and we shall not, I believe, be able to return whence we came.

3 4 5

Case of Proclamations (1611) 12 Co Rep 74. Lewis and Harden, The Noble Lie: The British Constitution and the Rule of Law. R v Secretary of State for Transport ex p Factortame [1991] AC 603. 214

Participation and Legal Autonomy

THE STRANGE CASE OF THE UK Constitutions, of whatever sort, require a considerable deal of common agreement, and preferably consensus. They need, at the very least, a special procedure for underscoring the nation’s common beliefs and sentiments. Thus, the Canadian Constitution and Bill of Rights were drafted only after a fairly extensive and systematic series of ‘roadshows’ which presented the proposals to the mass of Canadians with the proposed changes; Something like consensus was thought preferable to the adoption of more elegant proposals which were not easily embraced and, indeed, during the consultation period, it became clear that some previously preferred solutions were not acceptable at that time. This is where the UK has problems. It is as if UK citizens had accepted the Glorious Revolution as embodying nationhood as they understand it. But this is, to say the least, a strange, mythic consent, and to it one would have to tag on a belief in a constantly expanded suffrage, the inherent nature of judicial review, perhaps habeas corpus and perhaps even the Ombudsman. Constitutional texts in the UK differ widely on what are thought to be constitutional foundations. It seems to me clear that the average citizen would agree about certain principles and indeed institutions – give or take a little streamlining – being fundamental, but no one has thought it worth gaining assent to this through a great constitutional debate. The reasons for this need not detain us. Many are obvious and self-serving. From time to time, especially when confronted with principles of EU judicial review, the ECHR, a raft of international covenants, etc, others convince us that we need to grasp at least some part of this nettle, but we never go the whole hog. The intellectual reality must be that a constitution – including our constitution – embodies values which transcend individual parliaments, which are merely entitled to fight over constitutionally neutral options. If this were not so, Parliament itself would have, as an institution, no superior claim to virtue than particular governments. Now, of course, particular governments behave as if that were the case, but their rhetoric is very different, and the rhetoric represents at least part of the true constitution. Thus, the limits to extending the life of Parliament, and many other conventions and assumptions besides, are observed. If governments have limited powers, then, at least at the level of intellectual argument, the game is up. What are the limits of those powers? How do we debate them? How do we resolve them? In the UK, there are no readily available institutional or intellectual answers. But answers there must be. It is interesting to note how this simple, logical, argument can be ignored in the general scholarship surrounding our constitutional affairs. But the fact remains that, once limits on executive power are conceded, we are on a 215


slippery slope. Concessions to the separation of powers and legal autonomy then become, to a large extent, a matter of degree. The second generation – social and economic – human rights tend to cause apoplexy among elected politicians if a hands-on role for the judges is envisaged. But, although one can see the dangers in non-elected judges engaging in distributive justice, the argument for political or executive illimitability remains ultimately unsustainable. Let us accept that if a polity, including ours, has any constitutional content, any notion of limited government, then it has to accept a version of legal autonomy and, I shall argue, of judicial autonomy. The limits cannot, ex hypothesi, be determined in the political sphere. Politicians cannot be allowed to decide on the limits of their powers without some prior constraint. There has to be an independent judgment. We can argue about what constitutes independence, and we can dispute the qualifications of those best fitted to make a judgment, but the concept of limitability and independent verification is inescapable. Recent reassertions of judicial independence have been forceful, and the quest has been undertaken to establish a position in which ‘the least dangerous branch’6 will rule on constitutional parameters. Whether the method of reason familiar to the discourse of moral philosophy is what is needed, and if so, whether traditional judges are best suited to use this method, can be debated. However, Bickel surely is right to argue that: ‘Judges have, or should have, the leisure, the training and the insulation to follow the ways of the scholar in pursuing the ends of government.’7 Ely echoes this sentiment: Since judges tend generally to be drawn from roughly the same ranks as legislators, the heart of the argument here is that moral judgments are sounder if made dispassionately, and that because of their comparative isolation judges are likely so to make them.8

The other side of the same coin is that the environment in which legislators function makes a bias-free perspective difficult. The pressures are too great and the opportunities for mature reflection on the long term over short term advantage too restricted. This does not, of course, foreclose the arguments about ‘judicial’ as opposed to simple ‘legal’ autonomy. There is, perhaps, a case for some kind of ombudsman or auditor replacing the traditional judge, but a rose by any other name … The crucial issue is establishing genuine independence from the body politic, whether that be the executive or, in the British case, the executive and 6 7 8

Bickel, The Least Dangerous Branch: The Supreme Court at the Bar of Politics. Bickel’s position is ultimately sceptical, but many of his arguments are of more than passing interest. Bickel, The Least Dangerous Branch: The Supreme Court at the Bar of Politics, pp 25–26. Ely, Democracy and Distrust: A Theory of Judicial Review, p 57. 216


its lapdog Parliament. The notion that Parliament can or should audit its own constitutional conduct overall is unthinkable, in spite of the Blair Government’s partial incorporation of the ECHR. As they presently stand, this incorporation constitutes a compromise over the issue at stake, in that the judiciary will arbitrate on whether or not a breach of the ECHR has taken place, yet will have no authority to strike down offending legislation. Parliament will be expected to ‘fast track’ remedial action. We shall see. However, the Government might have unwittingly produced a mechanism capable of giving teeth to second-generation rights. I shall return to this shortly. There seems, ultimately, to be little alternative to separately constituted judges who do nothing else but judge, being the ultimate umpires of constitutional interpretation. Ombudsmen and other auditors, for all their many virtues, tend to mix their functions. They comment on administrative systems, on efficiency, recommend reform and conduct systems audits. These are all admirable, but they tend to blur the lines between the larger compact and the conduct of politics and administration. Without wishing to revisit the conceptual argument about the desirability of judicial autonomy, it is worth saying a little at the purely descriptive level about the contemporary nature of the political sphere. When Ely described the ‘legislative law making process’ in Congress, he surely was speaking to a wider audience of political science students: Much of the typical representative’s time is consumed, not with considering legislation, but rather with running errands (big and small) for his or her constituents [and] much of the law is, thus, effectively left to be made by the legions of unelected administrators whose duty it becomes to give operative meaning to the broad delegations the statutes contain. The point is not that such ‘faceless bureaucrats’ necessarily do a bad job as our effective legislators. It is rather that they are neither elected nor reelected, and are controlled only spasmodically by officials who are.9

‘Running errands’ may be necessary, but it is hardly Athenian stuff. It is not what we imagine Pericles doing. Furthermore, the reference to ‘unelected administrators’ and to ‘giving operative meaning to delegations’ may be seen by British observers in a new light after the Arms to Iraq affair and the Report of Sir Richard Scott.10 There is little obviously democratic in legislators refusing to legislate but allowing broad delegations to unelected officials. That simply allows legislators and officials to escape ‘the sort of accountability that is crucial to the intelligible functioning of a democratic republic’.11

9 Ely, Democracy and Distrust: A Theory of Judicial Review, p 131. 10 Scott, Report of the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq and Related Prosecutions. See, further, Lewis and Longley, ‘Ministerial responsibility: the next steps’. 11 Ibid, Ely, p 132. 217


We may argue about who is best suited to adjudicate and what should be the preferred method of their appointment.12 These matters are important but of no ultimate consequence to the argument for ‘judicial’ autonomy. What is important, apart from the question of independence, is the job specification. What is required of constitutional judges is a broad understanding of the national culture, reinforced by comparative and international perspectives, cross-cultural knowledge, philosophic grasp and the integrity necessary to reinforce their essential independence. The rest can be left to the nature of the office, which will develop its own culture, its own rigour and its own sense of its position in the order of things. This pinnacle office is not, after all, like most other careers. It is not about money or empire or celebrity, although each of these might be an incidental accompaniment. It is about judgment and about sagacity. The office holders will want to be remembered for what they have contributed to the corpus; for a doctrinal contribution. Being a judge is not like being a politician, where ambition, vanity, power, even a willingness to improve people’s lot are likely to be in play at some point. These are ideal types of the roles of judge and politician, but as such they serve to differentiate their roles. Judging is about preserving, upholding and refining the compact; it is about compact and not combat. The method of judicial appointment should reflect these concerns and understandings, and there is no one correct method of appointment, save that independence should be central to it. It does seem to follow, however, that those appointing should not be, at least directly, of the political class and that they should be chosen from amongst those who are neutral about everything except the need to uphold the compact and the dignity of the office. There have been many criticisms of judicial appointments being informed by class considerations, by narrowness of cast of mind, and by immersion in non-constitutional ways of thinking. By ‘non-constitutional’ I mean things like a commitment to Diceyean versions of the polity, in which politicians alone should be entrusted with the power to propose and dispose. Any serious consideration of the concept of the separation of powers must lead to a refusal to accede to such constitutional surrender. No doubt we get the judges we deserve, and if we believe we deserve better, then no doubt we shall find the means of ensuring appropriate appointments are made. One thing is worth adding, however, as a particularly personal reading of the way the dice are cast. Even UK judges, not traditionally trained to think ‘public’ as opposed to ‘private’, usually acquit themselves with honour when asked to move into the firing line of policy. I am thinking, in particular, of

12 It is important to note that the Labour Party has recently suggested that the House of Lords Judicial might be augmented by ‘three further lay members’. They were ‘unsympathetic’ to creating a special constitutional court. Labour Party, Bringing Rights Home: Labour’s Plans to Incorporate the European Convention on Human Rights into UK Law. 218


their record of imposing obligations on the administration/Executive to give ‘reasons for decisions’ in the field of land use planning. Any disinterested assessment of their record over, say, a 40 year period will exonerate them from charges of political interference. When they have sent decisions back for reconsideration, it has almost always been on the grounds that the decisions were taken without adequate consultation and without relevant considerations being taken into account; in short because the executive failed to pay adequate attention to ‘rational discourse’. And this is precisely what they were asked to do, in the same way that American judges have been asked to assert the ‘hard look’ doctrine in the context of rule making, or policy making as we should prefer to describe it.13 When British judges have, arguably over-stepped the mark or got things wrong – quite clearly in Wheeler v Leicester City Council14 and in the Bromley case15 probably being ‘right-for-the-wrong-reasons’ – it has almost certainly been because they have not been encouraged to think through their constitutional role. Not accustomed to being asked to weigh issues of constitutional balance with an Olympian fastness, they nevertheless have an obligation to strike down Westminster governments for overstepping their jurisdiction. My own belief is that judges do not permit themselves to go far enough in calling policy makers to account for the processes by which policies are reached. The imposition of due process writ large, so to speak, should be their duty and, aside from requiring reasons for decisions, they have avoided calling the executive properly to account for the way they arrive at decisions. They could have done so, and should do so, without ever trespassing on the merits of the case. On the other hand, there is no getting away from the ‘merits’ when bills of rights/human rights are involved. My argument is that judges’ merits are likely to be more substantial than the merits of the politician for the simple reason that the latter is almost certainly looking at what is deemed expedient, and not at constitutional merit based on deep down, entrenched, moral rights. We have to have faith in the least dangerous branch. Processes are crucial to the nature of an open democracy, and although our own democracy falls short in this regard, the judges can be entrusted to do more in this arena than they traditionally have done. Nonetheless, ‘the sceptical view that the process of policy making is a higher value than the content of policy making is a difficult position to defend in this postHolocaustal age’.16 And that was written before ethnic cleansing in Bosnia.

13 For US Federal practice in these matters, see Office of the Chairman, Administrative Conference of the United States, A Guide to Federal Agency Rulemaking. 14 Wheeler v Leicester City Council [1985] AC 1054. 15 Bromley Borough Council v Greater London Council [1983] 1 AC 768. 16 Perry, ‘The abortion funding cases: a comment on the supreme court’s role in American government’. 219


However, to return to an earlier point. If we once concede constitutional limits, then we have to face the content of the constitution and ask of what our deep down rights consist. If we opt, inter alia, for autonomy and participation as constitutional entitlements, then we must seriously rethink the nature of the separation of powers. At this point, the argument is joined in earnest. We may not believe that autonomy and rights of participation should be respected, but we shall have the devil of the job to defend such an anti-humanistic assertion. But, if we believe that these rights should be respected, then we have to think again about the limits of the judicial reach. We assert the human condition; we assert that raw politics is too partisan to be the final arbiter of decision making, and so we must refashion our institutional thinking and our methods for getting public/private business done.

THE JUDGES AND THE NEW LANDSCAPE By now, we have conceded the idea of a constitution and accepted the consequent necessary limitation of the legislative/executive branch. The next question is, then, what we pour into the constitutional bottle? I shall not even address the issue of first generation human rights, which has been so well addressed elsewhere, but turn to second generation rights. Second generation human rights have been accepted by the UK since the 1960s, although remedies for their infringement have been anaemic compared to the accepted enforceability and justiciability of the traditional civil and political rights. The case for enforceable second generation rights has been forcefully made by Alan Gewirth, and in this book by Mary Seneviratne, as well as being sketched out a few years ago by both Dr Seneviratne and myself. 17 There have been recent attempts by the Council of Europe to improve the reporting procedures attached to the Social Charter, although they still leave a considerable amount to be desired.18 Any movement on this front is to be welcomed, especially since, until recent times, Isiah Berlin’s famous opposition to asserting positive rights has dominated the thinking of Western intellectuals.19 At the time of writing, the Blair Government, although radical in historical terms, has seemed to back off from a number of its promises of constitutional reform. But, it should not be forgotten that only three years ago Graham Allen, the Labour Party’s spokesperson on Democracy and the Constitution, advocated the importation of a second generation of human rights into the

17 Lewis and Seneviratne, ‘A social charter for Britain’. 18 But, see Harris, ‘A fresh impetus for the European social charter’. 19 Berlin, Four Essays on Liberty. 220


British Constitution in a Labour Party consultation document. It is as well to quote Mr Allen directly: The first stage consists of Labour’s commitment, endorsed at the 1993 Party Conference, to a two stage implementation. Firstly, the passing of a Bill to incorporate into British law the civil and political rights found in the European Convention on Human Rights … Secondly, for an all Party Commission to deliver to Parliament within two years a home grown British Bill of Rights which, as well as updating the civil and political rights found in the ECHR, would also include social and economic rights.20

There may or may not have been significance in Graham Allen’s being removed from the constitutional reform portfolio shortly after he wrote this, but his intellectual arguments still carry weight. It is also important to remember, that at least at one point in time, the Labour Party at large was committed not just to upgrading and updating first generation rights, but also to incorporating the second. The draft parliamentary Bill ‘already prepared to a detail hitherto unmatched’ (nb, three years ago) would, it is worth stressing, include the ‘right to association’, the importance of which I have set out in Chapter 1. However, the Labour Manifesto of 1997 contained only two paragraphs relating to ‘real rights for citizens’ and said nothing about social and economic rights. The consultation paper already referred to merely pointed out that the ECHR ‘does not embrace issues of social and economic rights which have surfaced in advanced industrial societies in the past two or three decades’. 21 Referring to the European Social Charter, opened for signature in 1961, to which the UK Government is, of course, a party, as having just ‘surfaced’ perhaps tells us as much as we need to know. At the time of writing, there is still no formal announcement from the Government, but at the time of the Allen paper there was also clear agreement on the need to establish a Human Rights Commission (HRC) charged with monitoring citizens’ rights, providing advice and, in a limited number of cases, supporting court action. This commitment was reaffirmed in 1996 and hopefully will be implemented in the next year or so. In the light of the UK’s participation in the 1993 Vienna Conference on Human Rights, the 1996 Consultation Paper recognised the benefit of a new institution for the promotion and protection of human rights. 22 It also supported the establishment of a new Joint Committee on Human Rights of both Houses of Parliament. Even so, the paper seems to show only limited enthusiasm for concepts in which Allen himself clearly believed.

20 Allen, Labour and Rights: Stage 2 – A British Bill of Rights, p 1 (emphasis in original). 21 Ibid, p 3. 22 Ibid, p 11. 221


Allen again: The ECHR is 40 years old and doesn’t deal with freedom of information, data protection, disability and discrimination. Similarly, it leaves out social and economic rights … The scope of the new Bill is so wide and of such historic importance that every possible effort should be made to ensure that every political party has the opportunity to participate in this historic development.23

Leaving aside the issue of socio-economic rights for the moment, two points stand out. The first is the reference to ‘discrimination’. As I have indicated in Chapter 1, rights jurisprudence based on unqualified use of ‘discrimination’ could have the most significant repercussions, not just in terms of disability, sexual preference and the like, but in terms of civic participation and participation in material terms. When not unduly circumscribed, discrimination partakes of the notion of ‘equality’, which is, of course, potentially extremely far ranging. How far anti-discrimination jurisprudence will be developed is a matter which, like so many others, will be determined within the next couple of years. The second point is the evident concern to gain as much consensus as possible about constitutional reform. We have noted how this was achieved in Canada through a nation-wide search for agreement. If a constitution is to stick, it needs a degree of all-party, all-faction support. Before examining Allen’s approach to the more problematic question of second generation rights, however, let me briefly recap some of the main developments in this field after the Second World War. The two immediate post-war developments years were establishment of the Federal Republic of Germany and the Constitution of India, both of which I have referred to in Chapter 1. In varying degrees, both constitutions support social market arrangements. In the Indian version, with its celebrated ‘directive principles’, this has occasionally led to interventions which partake much more of a larger notion of ‘participative rights’ in all aspects of public, and, to a more limited extent, private life. The German courts have not, for the most part, been as expansive as the constitution would seem to permit them to be, which cannot be said of the Indian judiciary. It may be argued that social and political conditions in what is still an essentially Third World country are no guide to the problems confronted by, say, EU countries. I am less than convinced by this argument, but would settle, at this point, for indicating how intellectually coherent the Indian constitution has proven to be, and how more flexible procedural arrangements adopted by the courts can help to afford a special status to new generation rights without undermining the electoral process.

23 Allen, Labour and Rights: Stage 2 – A British Bill of Rights, p 2. 222


It is also worth reminding ourselves that the former Iron Curtain countries, advised by the Council of Europe, have almost all adopted constitutions which promise some socio-economic rights. It is too early to draw firm conclusions from their experience, but the fact that they (and the Council of Europe) regard material well being as essential to rational purposive action is, it is submitted, important in itself. The Maastricht Protocol, or ‘Social Chapter’, may presently be limited in scope, but it comes out of the same stable as the European Social Charter. It is not presently possible to envisage the juristic relationship between the European Court of Justice and the Council of Europe institutions in the years to come with any precision, but it would be surprising if it did not begin to cement expectations about a broader concept of rights than is presently accepted by member countries. However, the question of enforcement or justiciability will have to be addressed. My own view is that the new rights must be entrenched at some constitutional level, and that we have to think about constitutions more flexibly than formerly if we are to grasp this nettle. The position adopted by Allen is that, to some extent like India, the new rights should be established as ‘underlying principles’ against which government action should be judged, rather than enforceable entitlements to specific forms of provision: This would not only be a massive step forward but a focus for further campaigning about improving service levels. It would be important, however, to ensure that the mechanics of implementing these rights could lead to some practical advantages – as well as establishing clear principles and contributing to civic education. The introduction of social and economic rights will not, of course, inhibit the passage of normal statute law to improve specific provisions or introduce individual entitlements. On the contrary, it will be a stimulus for Parliamentary bills on a wide range of employment and social policy matters, and influence the shape which they take.24

As a stepping-stone, he argues for a version of procedural rights – the ‘right to fair treatment’ – which appears to seek to enshrine the principle of natural justice or ‘fairness’. This clearly is a step in the right direction, if hardly a step far enough. In any event, Allen sees these process rights as essentially enforceable below the level of the courts, through ombudsmen, audit arrangements and the like. I shall not develop the perceived advantages of this idea here, but refer the reader to Allen’s text. However, it is worth noting that Mary Seneviratne, in her contribution, also argues for some version of ‘process’ rights to underpin social and economic expectations, and adds that the doctrine of proportionality might help buttress enforcement. This is an interesting idea, to which I would add one more which might still be regarded as essentially procedural. This is that a requirement for a government to report back on an adjudged breach of second generation rights could be 24 Allen, Labour and Rights: Stage 2 – A British Bill of Rights, p 3. 223


accompanied by a degree of cross-examination of that response by interested parties. This could be achieved by an independent regulatory process or, if we are to seek to smooth parliamentary feathers, by the procedures of Parliament itself. A second avenue for Allen would be provided by the establishment of the HRC. As in Canada, the HRC would be able to make submissions, initiate proceedings, conduct negotiations, issue codes of practice, examine the implications for rights of proposed bills, report to Parliament and undertake research and education when human rights are seen to be violated. Given the similarity of these ideas to those proposed by Dr Seneviratne and myself some little time ago, I am bound to welcome them. However, Graham Allen remained coy about the role of the courts, since he implies their ultimate authority without sewing them doctrinally into his overall system of jurisprudence. Still, these are difficult matters, not least for serving politicians. In accepting an inevitable role for the courts, Allen seems at one point to be falling over backwards. Thus: If, say, inadequate social services and community care are provided and no appeal to a special tribunal or appeal existed, an order for judicial review could be sought asking that the public body concerned, whether central or local government, carry out its duty.25

The lack of specificity need not concern us. It is clear that, in spite of everything, logic dictates that constitutions need courts at some point. It is equally clear that we share Allen’s view that social entitlements could involve potentially open-ended commitments which no Chancellor of the Exchequer could countenance. But, it clearly is possible to steer a middle course as far as some rights are concerned while conceding the overall premiership of the judiciary, who must be seen as the ultimate ‘owners’ of the constitution. What is to prevent second generation rights being justiciable in the courts, yet with Parliament having the final say on whether the offending legislation should be amended? It will be recalled that I am arguing that autonomy and participation, alongside equality and non-discrimination and a range of ‘directive’ principles, should help the interpreters of the constitution when determining individual entitlements. The judges must be given primacy in decisions regarding civil and political rights and regarding certain rights to participation in the political sphere and elsewhere. The matter may well be different regarding, for example, social entitlements and the environment. An important distinction must be made. It will still be for the courts to decide whether, at the end of the day,26 there has been an infringement of rights. What

25 Allen, Labour and Rights: Stage 2 – A British Bill of Rights, p 5. 26 This is still without prejudice to the argument that, in the ordinary case, commissions, ombudsmen and others may well be the best first port of call. 224


response should be made to such infringements is another matter. It is perfectly possible to leave the remedy for an infringement with the political authorities, while investing the courts with the power to determine whether even prima facie rights have been infringed in the first place. Again, the response of the Indian courts is worth noting. Last year, for example, the Supreme Court responded to litigation brought by members of the public to direct the government on issues including removing garbage from Delhi, shutting polluting industries and endorsing the government’s method of privatising its telecommunication services. In February 1996, the court ordered the bureau of investigation to conduct an inquiry into what it called a ‘housing scam’, in which officials of the urban development ministry allegedly allotted more than 8,000 houses out of turn to MPs, officials and former ministers. Frequently, the courts have insisted that government, or its agents, conduct ‘audits’ to ensure that they have taken economic and social rights seriously and to report back on the progress made. The attendant publicity is often remedy enough, but the sheer flexibility of the ‘remedies’ adopted shows how valuable courts can be in affirming rights in the area, even if those remedies are not accompanied by compulsion. I would argue that fears of judicial tyranny are unfounded, because judges themselves are aware of the fact that the non-elected judiciary is neither meant to nor equipped to act as a policy making body. It is notable that the judges of the Supreme Court are appointed by the president, a figure above party politics. The issue of enforcement of socio-economic rights clearly is controversial. As a general rule, I would argue that judges should decide on the ‘ought’ and politicians on the ‘can’. That is to say that the judges would identify a breach, and the politicians would decide on whether a government was able, within its own assessment of the imperatives of its own economic policies, to afford a remedy. This involves an ideal typical divide and the jurisprudence of Continental Europe, for example, shows that certain social and economic rights are capable of constitutional enforcement. The right to education and to housing are obvious examples, with health being not far behind. The decision in R v Cambridgeshire Health Authority ex p B27 indicates both the difficulties inherent in making judgments in this area and also the possibilities for more imaginative use of judicial techniques. Although the Court of Appeal ultimately decided that they could not adjudicate on the allocation of scarce resources, the judgment of Sir John Laws at first instance indicated greater willingness to intercede, and greater flexibility in the use of judicial procedures. 28 Were a constitution to have entrenched second

27 R v Cambridgeshire Health Authority ex p B [1955] 2 All ER 129. 28 James and Longley, ‘Judicial review and tragic choices’. 225


generation rights at some level, not least through a series of ‘directive principles’, it is doubtful if the Court of Appeal would have been quite so formalistic. In any event, there are areas where it would not be improper, in my view, for courts to cross swords with government. For example, if the right to an adequate standard of living were entrenched, it would not seem improper for Courts to refuse to allow the abolition of Wages Councils, Fair Wages Resolutions and the like, without at least some guarantee that other procedures necessary for the pursuit of similar ends were put in place. If we take social, economic and participative rights seriously, we have an obligation to debate these matters and to ensure that our legal and constitutional arrangements reflect our basic beliefs. It is important to stress that new, flexible, legal remedies are called for in order to underwrite what are constituted as new constitutional rights which have more significance than simple primary legislation. Sometimes ordering the government to conduct an inquiry with a broad-based input will be enough as the aim would sometimes simply be to ensure that the government had taken such rights seriously, even if the political response to such an effort would not satisfy others. Once we abandon the belief that legal institutions are only suitable for adjudicating in simple rights/duties/entitlement situations, we can look forward to seeing our larger constitutional expectations unfolding gradually, and hopefully, consensually. Participation may usefully serve as an example. If an ombudsman or court had found that it was not being adequately encouraged in any particular context, it might order an investigation and/or a report or inquiry in much the same way that the Indian courts have done. It would be for the court to decide whether the response was satisfactory. In circumstances where large budgetary sums were involved, it would not be acceptable for the courts to make affirmative orders. They might wish, however, to ask for a further report at some later date to describe what progress had been made. This is, in a manner of speaking what the Council of Europe already does, albeit in rather an ineffective way. It would be a grave error to believe that either ombudsmen or courts would seek confrontation and flex institutional muscle. On occasion firmness would be required, but that is already the position in many fields. The purpose, after all, would be to make real the goals of life which the constitution, informed by a spirit of national unity, expressed. Constitutions, after all, must reflect the aspirations of the nation, not a faction. Autonomy, equality, non-discrimination and participation (which is a function of purposive rational action) go to the heart of what we know about ourselves and our relationship with the world. ‘What to do about these needs poses,’ according to Gewirth, ‘the major challenge that confronts moral and political

226


philosophy’.29 To which it is only necessary to add some words of Ely, albeit used with something of a spin: … constitutional law appropriately exists for those situations where representative government cannot be trusted, not those where we know it can.30

29 Gewirth, A Community of Rights, p 357. 30 Ely, Democracy and Distrust: A Theory of Judicial Review, p 183. 227

CHAPTER 13

THE SEPARATION OF POWERS IN THE CHANGING ENVIRONMENT

Patrick Birkinshaw The separation of powers exists to prevent the rise of arbitrary executive power.1

INTRODUCTION: ‘KNOW THAT WE HAVE DIVIDED IN THREE OUR KINGDOM …’ The separation of powers is seen as an essential element of good government which can be traced to the notion of balanced and mixed constitutions in medieval writings and ancient literature.2 In the 1960s, the doctrine was subject to a good deal of scepticism which was, in effect, a particular form of the general paradox of legal order identified by RM Unger: the more one looked for that order, and the more one identified it in descriptive outline, the further it receded as a real practice.3 The separation of powers was yet another paradoxical ideal of liberalism, the realisation of which would forever be frustrated by the attempted practical application of those ideals. And of course, as AV Dicey realised in his Law and Public Opinion in England (particularly in the ‘Introduction’ to the second edition), the age of collectivism and regulation would inexorably undermine the doctrine, or at least Dicey’s version, even to the extent of introducing a droit administratif in England. But the doctrine endures, its necessity reinforced no doubt by the excesses of the executive during the 1980s and 1990s. Where the doctrine is not observed at all, the executive inevitably assumes all the responsibilities of government. Historically, to take a British example, all the power and institutions of government evolved from the Crown. Where my will is law, and where I stand in judgment over that law, there is an inevitable decline from self-certainty to autocracy, to impatience, to arrogance, to arbitrariness, and to tyranny. The lesson is timeless. The strident tone adopted by judges in both their judicial and extrajudicial utterances since the early 1980s was a calculated reaction to high 1 2 3

Steyn, ‘The weakest and least dangerous department of government’, p 87. See, also, Stevens, The Independence of the Judiciary; Justice, The Judiciary in England and Wales; and Bean (ed), Law Reform for All. Vile, Constitutionalism and the Separation of Powers. Unger, Law in Modern Society, pp 166–81. 229


handed government in this period. Volumes have been written on executive interference through the legislature – so easy to achieve when the executive is a part of and dominates the legislature, as in the UK – with judicial sentencing powers. A long chronicle of litigation expressed a judicial desire to fashion a power of judicial review subtle enough to counter executive excesses that were not simply manifestations of egregious error. The cases include the GCHQ decision banning trade union membership at the national intelligence centre in which, although the Government was successful in the litigation, its exercise of prerogative powers was held subject to judicial review on the same basis as the exercise of its statutory powers.4 Injunctions have been awarded against officers of the Crown in their official capacity even when no question of infringement of EC law had arisen.5 More recently, in the Fire Brigades Union litigation, the courts ruled invalid an attempt by the Home Secretary to resort to prerogative powers to implement a tariff scheme to compensate the victims of violent crime, powers which were inconsistent with an existing statutory framework which allowed for the introduction of a more generous scheme of compensation based on tort.6 Also well known were the attacks on judicial independence brought about by that ‘Treasury bludgeon’, the Courts and Legal Services Act 1990, and the former Lord Chancellor’s7 alleged interference with the ‘independence’ of the Chairman of the Employment Appeals Tribunal, whose desire to do justice to the parties before the Tribunal led him to furnish them with procedural safeguards which were felt to be too costly for the taxpayer.8 In sum, since the early 1980s, the rule of law has had to be safeguarded with particular vigilance, and the judges have ruled on the law and its scope accordingly. Judicial intervention in human rights cases has, to the judiciary’s credit, been prominent and, as I shall explain, seems set to be encouraged by the Human Rights Act ‘implementing’ the European Convention on Human Rights (ECHR) as a system of interpretative principles. Even the tariff period set by the Home Secretary on those prisoners who are sentenced to mandatory life imprisonment (or, in the case of young offenders, detention during Her Majesty’s pleasure), which he felt was the minimum period of imprisonment necessary for punishment and deterrence before those prisoners’ cases could

4 5 6

7

8

Council of Civil Service Unions v Minister for the Civil Service [1984] 3 All ER 935 (HL). M v Home Office [1993] 3 All ER 537 (HL). R v Secretary of State for the Home Department ex p Fire Brigades Union [1995] 2 All ER 244 (HL). Cf R v Parliamentary Commissioner for Standards ex p Fayed [1998] 1 All ER 93 (CA) and the general judicial refusal to interfere with Parliament’s business under the Bill of Rights 1689, Art 9. This was the same Chancellor, Lord Mackay, who refused to introduce monitoring of the performance of full time judges because such monitoring would interfere with ‘judicial independence’. Malleson, ‘Judicial training and performance appraisal: the problem of judicial independence’. Purchass, ‘Lord Mackay and the judiciary’. 230

The Separation of Powers in the Changing Environment

be referred to the Parole Board for consideration for release, has been reviewed by the courts. Setting the tariff was found to be a function which the Home Secretary had to perform in a judicial capacity and tariffs therefore could not be set or retrospectively increased without reference to relevant criteria. 9 There is a spirit of adventure in judicial decisions which has perturbed the executive and caused the incoming Lord Chancellor to remind judges of the limits to the proper conduct of their public duties. This is perhaps not quite the stuff of Marbury v Madison,10 in which the US Supreme court famously allotted to itself the power of judicial review of statutes enacted by Congress, but it nevertheless is quite remarkable. The views of Lord Woolf, Sir John Laws and others on parliamentary sovereignty and the protection of fundamental rights are well known.11 Such judges are certainly more inclined to debate the nature of parliamentary sovereignty than is the New Labour Government, at least as is evidenced by that government’s White Papers on constitutional reform, which mount no attack on the highest shibboleth of British constitutionalism.12 What the above all indicate is a powerful belief in the separation of powers by the executive and judiciary, which each has seen the other undermining in recent years, to the point where the judicial role may have to be reaffirmed in order to protect the fundamental democratic values underpinning our notion of government and rule. This chapter will ask what will be the role, if any, of the separation of powers in a more participatory democracy?

WHY A SEPARATION OF POWERS? The doctrine of the separation of powers is really about high politics. It represents the view from the summit of government. It is in the people’s interest not to be governed arbitrarily. What is best for the people is also best for those who rule in the interests of good government and its survival. Absolutism destroys all it touches. Those in power are eager to define the territories of others in power so as best to protect their own patch while simultaneously protecting citizens, and themselves, against abuse, and so those who carry out the functions of government tend to adopt a top-down view of the constitutional architecture. Nevertheless, by separating the powers of government, our governors help to preserve those values which underpin our social system. These are justice, equality, liberty and welfare. 9

R v Secretary of State for the Home Department ex p Pierson [1997] 3 All ER 577 (HL); and R v Secretary of State for the Home Department ex p Venables [1997] 3 All ER 97 (HL) concerning young offenders. 10 (1803) 1 Cranch 103. 11 Laws, ‘Law and democracy’; and Woolf, ‘Droit-public English style’. 12 This is especially true in the White Papers on Scottish Devolution and ‘incorporating’ the European Convention. 231


The separation of powers involves a separation of institutions into the executive, the legislature and the judiciary, although historically (and as John Locke believed) the exercise of the judicial power was inherently part of regal and executive responsibility. Even today, judges are ‘Her Majesty’s judges’. Historically, of course, judicial concern was with justice as between subjects not as between Crown and subjects except where the Crown was prosecutor.13 There is a further separation of functions corresponding to the three institutions: the executive/administrative, the legislative and the judicial. Each institution of government must perform its own function and not trespass onto another’s domain. Once again, although these divisions (even if only in ideal typical terms) seem second nature to us today, if we examine Locke we see that not only is the judicial function part of the executive, with a consequential fusion of functions, but the ‘federative’ power to conduct foreign policy is distinguished from the executive and legislative powers, although those who exercise that power will be a part of the executive. As MJC Vile has argued, this was an insightful observation by Locke, who of course wrote at a time when Parliament was attempting to constitutionalise the Monarchy. Nevertheless, the ceding to government of the right to conduct foreign affairs has led to the position in which, to this day, foreign policy is an area largely unsupervised by Parliament and domestic courts, as can clearly be seen from the paucity of the information placed before the Westminster Parliament on the second and third pillars of the European Union.14 The third feature is a separation of personnel. No individual should perform different functions in different institutions of government at any one time and there should be no duplication of role by any one person. However, any first year law student can point out the anomalies in the British constitution which still remain with us as a result of the fact that all the powers and institutions of government evolved from the Crown. The Law Lords form a judicial committee of the upper legislative chamber and are part of the ‘High Court of Parliament’. Prosecution is an executive function which ultimately is the responsibility of a member of government who is also an elected MP.15 Perhaps most anomalous of all, the head of the judiciary is not simply Speaker of the Upper House and a member of the Cabinet but, in the case of the current Lord Chancellor, a particularly active member presiding over several crucial committees, as well as being the person who effectively appoints circuit judges and has the single largest influence on the

13 Sedley, ‘The sound of silence: constitutional law without a constitution’. 14 The Amsterdam Treaty has improved the position under the third pillar, but not at all under the Second. The Treaty revisions still leave it in the hands of national governments to pass on information, rather than imposing a legal duty on them to do so. Birkinshaw and Ashiagbor, ‘National participation in Community affairs: democracy in the UK Parliament and the EU’. 15 On the role of the Attorney General in upholding the public law, see Attorney General v Blake [1998] 1 All ER 833 (CA). 232


appointment of senior judges.16 This point was seized upon by commentators when two conservative commercial lawyers were raised from the Court of Appeal to the House of Lords though their future responsibilities would include interpreting the Human Rights Act. Would they possess the necessary qualities, it was asked in the summer of 1998, to interpret that Act in a manner which provided adequate protection against the State? But, it is an unrealistically simplistic model which sees the legislature only legislating, and the executive only governing by making policy and executing the laws. For a good deal of this century, the term ‘administrative’ was used as a cloaking device to justify excessive use of discretion by the executive when carrying out what were essentially judicial tasks without applying any of the formal procedural protections which would have been afforded in a court of law. The judicial response was to describe some administrative functions as ‘quasi-judicial’, thereby affording at least some protection against unfairness by applying rather rigid tests of natural justice. The executive resorts to making secondary legislation which is far more voluminous than primary legislation; the judiciary participate in administrative practices, and so on. The legislature has interfered enormously in the judicial sphere. Under s 3 of the European Communities Act 1973, Parliament instructed British courts that they were to follow rulings of the European Court of Justice (ECJ) in matters of Community law. In fact, it is remarkable how flexible and fluid a system of government the British system is, especially when one sees the constant legal barriers placed in the way of governments elsewhere by a more rigid adherence to the separation of powers doctrine.17 The legal inviolability of the Attorney General’s office, and his responsibility to the House of Commons alone, together with the confusion of the roles of the Lord Chancellor, emphasise the ‘balanced constitution’ which has been the British legacy rather than any attempt to realise the ideal typical concept of the separation of powers identified in theoretical literature and pursued in other political systems. The pragmatic British experience appreciates that different functions in government require different decision making approaches and different skills and techniques. So long as there is appropriate accountability, then the fact that there may be some confusion of roles is of no great concern. Whether there is appropriate accountability is another matter.

16 Hugo Young’s ‘Lord Irvine must not appoint the judges’ is a critical account of the Lord Chancellor’s (Lord Irvine’s) tenure of office. Young describes how Lord Irvine sought to remove the legal requirement that his department’s permanent secretary should be legally qualified, which removal would further buttress his, the Lord Chancellor’s, powerful position in government. On the appropriateness of the Lord Chancellor sitting as a judge, see HL Debs Vol 594 col 138, 20 October 1998. On judicial appointments, see Home Affairs Committee, Judicial Appointments Procedures and the government’s reply, Judicial Appointments, Cm 3387. 17 On a recent German example, see Nolte and Rädler, ‘German report’. 233


SEPARATION OF POWERS AND PARTICIPATION Vile has observed that the separation of powers is a deep rooted desideratum revealed in the experience of government, the spirit of which gives shape to different features and practices over time. Different constitutions set different boundaries to the practice of the functions of government, some more rigidly so than others, so that in some countries the observance of the doctrine is constantly setting limits to what one branch of government legally may do. This is particularly true in the US, but it is also a common feature of constitutional litigation in Germany and in France. Judicial determination of the respective law making powers of the Executive and the Parliament is a marked feature of the French constitution. The doctrine basically acknowledges that in modern societies power can be exercised only by a few and that the few must exercise diffuse forms of power in a different, distinct and divorced manner to avoid its contamination and corruption. It is here, I think, that participation stands in opposition to the separation of powers doctrine as traditionally understood. The wider diffusion of power which is implicit in greater participation represents a further dilution of power bases which are already separated and a movement from a representative to a participative model of democracy. Such a move is often seen as highly questionable with regard to the judicial function. There is no obvious reason why adjudication should be subject to participative democracy. We do not elect our judges though we do allow for community participation in criminal justice. Over 90% of criminal judges are lay citizens appointed by the Lord Chancellor and the ‘judges’ in indictable or ‘either way’ offences tried on indictment are juries of lay persons chosen from the electoral roll. ‘Lay’ membership of tribunals is widespread. An advisory committee on judicial appointments, two of the four members of which are lay members appointed by the Lord Chancellor, advises the Lord Chancellor on judicial appointments up to the circuit judge level. Nevertheless, it obviously is unclear whether extensive participation in those aspects of the judicial function which turn on legal technique is appropriate. Turning to the executive function, greater participation is more obviously welcome. Greater participation by citizens may well lead to a ‘communicative constitution’ which is built on norms of transparency and self-fulfilment through collective enterprise. It will lead us away from a constitutionalism of institutions in which a strong State dominates and in which notions of State sovereignty, built upon doctrines of a separation of powers, prevail. In the ‘communicative constitution’, the role of the State declines as its mystique is dispelled.18 18 Himsworth, ‘In a state no longer: the end of constitutionalism’, p 659, citing Morison and Livingstone, Reshaping Public Power: Northern Ireland and the British Constitutional Crisis, chs 1 and 7. 234


There is little that is new in discussing the movement from representative to participative models of democracy.19 But, it is novel to consider how that movement may be built into a constitutional framework and seeing what the effect of doing so would be upon the separation of powers. The relationship between the separation of powers and those constitutional guarantees of participation which Douglas Lewis has advocated in his contributions to this book poses new problems because the separation of powers is, as I have said, an elitist doctrine. So also is government. But, the separation of powers is a construct which is absolutely necessary where power is ultimately exercised on a representative basis, and a representative basis is the ultimate truism of those systems of government with which we are all familiar. And it is a construct which represents basic necessities about collective endeavour and its direction. These necessities are: executive effectiveness; participative deliberation; and the quest for justice.

Executive effectiveness If government exists for the benefit of the people and not simply for itself, it has to be organised in a manner which enhances its efficiency and effectiveness. The people may not be able to make the decisions but they should provide government with information which it can use in order to allow it to spend resources most effectively and to govern wisely. However imperfectly, the Citizen’s Charter programme of the previous government and the ‘Better Government’ consultation exercises of the New Labour Government seek to bring government and public services closer to the people. However, the fact that, as of December 1997, government departments could not communicate with each other via e-mail is an indication of how far there is to go, although a Government Secure Intranet was launched in April 1998. A White Paper in March 1999, Modernising Government, set out plans for greater use by government of information technology.

Participative deliberation The legislature is the forum for deliberation of legislation and scrutiny of government expenditure, policy and administration by representatives elected to the assembly. The legislature’s representative nature means that it has to work on our behalf. We cannot all be there. But, to be properly representative, and, therefore, to fulfil its role properly, the legislature requires information; it should pass this information on to the public; and it should devise ever wider programmes actively to sound out public opinion. The Government has

19 Macpherson, The Life and Times of Liberal Democracy. 235


promised early publication of Bills, contemporaneously with a White Paper, and this happened in the case of the Human Rights Bill, though it did not publish a Bill in the case of the Freedom of Information White Paper because further thought had to be given to the finer points of legal detail in this case. The increasing use made by government of the internet could revolutionise participative democracy so that early publication of Bills, White Papers and other parliamentary publications could lead to enormous citizen feedback. But not all citizens have access to the internet and its greater use may heighten alienation and inequality, rather like the introduction of different payment methods by the utilities which resulted in higher financial and other costs for those without bank accounts or telephones. An example of good practice is being set by the European Parliament, which is putting more and more of its legislative programme and official publications on the internet. The UK Parliament should develop a role as a forum for public debate of the European agenda, the precedent for this already having been established by the Danish Parliament.20 Devolution has encouraged wider participation in, for instance, parliamentary committees in Edinburgh, as well as an extensive use of telematics to achieve democratic innovation.

The doing of justice We do not elect our generals, judges or professors. The judiciary is the most elite group in government because the development of judges’ skills requires long training in, and experience and mastery of, legal doctrine, and the elevation of judges depends upon peer support based on success in an exclusive and privileged profession. The judiciary should never seek populist approval in respect of the exercise of that part of their task that is rooted in legal doctrine and the principles of justice. But judges cannot be at loggerheads with social and popular culture, or at least not regularly so. There may well be questions concerning judicial appointments and judicial training, however, which do raise important questions about exclusiveness which have to be addressed. At present the appointment of judges is an internal and mysterious process. In October 1997, it was announced that High Court judgeships were to be advertised for the first time. But the Government has shelved indefinitely plans to establish a Judicial Appointments Commission. This would have helped in the appointment of judges and would have involved lay members. Senior judiciary were opposed to such a body. Possible plans

20 Millar, ‘Appendix’, p 333. For democratic innovations in Scotland’s devolved Parliament, see Citizen Participation and Social Partnerships. 236


are said to include the establishment of an ombudsman to receive complaints from those who believe they were rejected unfairly for judicial appointment and an annual report for Parliament on the judicial appointments system commencing in 1998–99. Pressures to reform the appointments procedure are bound to increase the more we witness the development of a career judiciary, most of the members of which will be dependent upon promotion, and therefore on the approval of superiors, for increases in their income. Those seeking a position as a Recorder or full time employment as a circuit judge are subject to constant monitoring and appraisal. The number of competences which will be monitored presumably will grow following the Woolf reforms of civil justice which will make the judges managers as well as adjudicators.21 Between 1970 and 1995, Malleson has calculated that there was an increase in the number of judges from 200 (which seems a low figure) to 1,800.22 Most of these are seeking full time employment as circuit judges. However, those members of the judiciary directly concerned with the protection of individual rights against government and embroiled with collective and policy making procedures in public law, whose independence from government therefore is regarded as essential (that is, judges of the High Court, Court of Appeal and the Law Lords), number less than 150.

THE JOBS OF GOVERNMENT The three different jobs of government distinguished in the separation of powers revolve around three different types of decision making each of which requires distinct skills and attitudes towards decision making. The tensions that exist between these three have been the basis of much of political and legal debate over centuries. That these tensions exist is no bad thing providing they do not make the work of any one branch of government impossible or unnecessarily burdensome. Of course, some people may be possessed of the skills necessary to take all or at least more than one of all of these three types of decision. Those skills do overlap and, doubtless, the different decision makers have much to learn from each other. But, in their essence, these jobs involve different approaches to different problems. Again, hear Vile: It cannot be too strongly stressed that procedures, the rules governing behaviour, reflect certain value-patterns. The way in which things are done makes a very great difference. Men could be condemned to death, and in some countries are, by an administrative procedure. Roads could be built by a

21 Woolf (Chair), Report of the Committee on Access to Justice. 22 Malleson, ‘Judicial training and performance appraisal: the problem of judicial independence’. The calculation was based on figures given by the Lord Chancellor’s Department. 237


collegium determining by vote, after discussion, where every stroke of the pick should be made. The judicial method involving open discussion and an adversary procedure before a jury could be used to determine important questions of foreign policy and diplomacy. The results of allocating these tasks of government to be decided in this way would undoubtedly be disastrous. The present day procedures in Britain and the US, and the matters decided by them, have not been evolved by chance; they represent the collective judgment of centuries concerning the way in which certain things should be decided. This is not an argument against all innovation, but it should lead us to enquire into, and to examine the values which these procedures embody, and to look very closely at new procedures, and at the allocation of tasks to them, in order to be sure what we are doing.23

I do not think that any of this is new to anyone interested in law and government. But, when focusing upon the developments we are discussing in this book, viz, participation as a constitutional necessity and, in this chapter, its relationship with the separation of powers, we ought to think about new power centres distinct from, or developed from, existing power configurations. These configurations can be regarded as horizontal or vertical. I think the traditional separation of powers is best seen as a horizontal configuration. Vertical configurations follow from a devolved allocation of power, such as the model about to be implemented in the UK, or in a federal model such as the US, or in the law making and decision making arrangements of the EU under the doctrine of ‘subsidiarity’ and Art 3(b) of the EC Treaty (new Art 5). Their vertical nature does not remove the legal and political problems about the appropriate level of government at which decisions should be taken. After the Amsterdam Treaty, EU decisions are to be taken not only as ‘closely to the people’ but, also, ‘as openly’ as possible.

THE SEPARATION OF POWERS AND NEW INSTITUTIONS The nature of the decision making structures that are fostered by the ‘new environment’ of participation that we wish to see requires close analysis. An extension of the regulatory and responsive State through administrative agencies, bodies and tribunals makes it necessary to provide the safeguards which must accompany more participative forms of procedure. The rule making exercises and licence revisions by which OFTEL has encouraged greater participation in the running of the telecommunications agency seem to be a good example of what is needed. The Government has engaged in a variety of consultation exercises to try to formulate suggestions to make quangos more accountable.24 Such bodies often are symptomatic of an

23 Vile, Constitutionalism and the Separation of Powers, p 347. 24 Cabinet Office, Opening Up Quangos. 238


undermining of a separation of powers approach to government in which the divisions of responsibility become blurred, often seemingly deliberately in order to render the executive power less accountable. The New Labour Government has introduced various reforms covering bodies such as quangos which seek to meet concerns over accountability, openness and appointments. The White Paper on freedom of information, Your Right to Know, has indicated that meetings of NHS trusts will be open to the public; it referred to the reforms indicated by the Nolan recommendations which led to the Commissioner for Public Appointments. There is a Commissioner for Public Standards. The Food Standards Agency promises to be more open than the arrangements between the Ministry of Agriculture, Fisheries and Food and its specialist advisory agencies and committees have been. One could go on.

THE NEW ENVIRONMENT AND ITS IMPACT ON EXISTING INSTITUTIONS What will be the impact on existing institutions of greater participation? It may be correct to say that there is little that can be done with existing institutions and that the greatest opportunity to participate will be provided by devolved tiers of government and regional bodies closer to the people such as regional planning authorities. What would a more participatory Parliament look like and how feasible would it be? If anything, Mr Blair’s government has displayed itself in its most conservative mode in its deliberations on the sovereignty of Parliament. Sovereignty will be maintained at all costs. It is the Westminster Parliament that will be sovereign in ‘reserved’, devolved government, and it is the Westminster Parliament that will remain sovereign after the incorporation of the ECHR. However, in its White Paper on Freedom of Information, the government has opted for a Commissioner who will have the power to make decisions binding upon public bodies covered by the legislation and who will not have to enforce those decisions through Parliament, like the Parliamentary Ombudsman. There will be no Ministerial override of a Commissioner’s decisions, although ultimate enforcement will be by a court treating an authority’s failure to comply with a Commissioner’s decision as a contempt. However, as publication of the Bill was delayed, rumours began to circulate that the Commissioner’s decisions would be appealable to a tribunal.

GROWING INTERNATIONALISM Another major impact on the doctrine of the separation of powers has been made by the growing internationalism of law and politics which is all part of 239


the irresistible momentum, commented upon by many, towards globalisation. This internationalism has done more to promote the culture of legalism in European national governments than almost anything of which I can think. This is certainly so in the case of our own government. Powerful and influential judgments, although some would claim them to be edicts, from the ECJ25 and ECHR26 have hammered home the supremacy of law and the extent of legality and liability for aberrant governmental action to which even claims of national security may be no answer.27 The EU/EC has done more than anything else to foster the development of internationalism in a British context by making what originated in international law a living law giving individuals rights in our domestic legal system. And yet, we have recently been reminded of what an emasculated court the ECJ is when it comes to human rights in a manner which makes it difficult to identify it as the constitutional ogre described by conservative lawyers and politicians (I use conservative with a small ‘c’).28 The Court cannot give judgments about human rights in cases which do not involve questions of Community law, and this serves to remind us that, although the field of Community involvement is ‘ever widening’, it also is ‘limited’. Furthermore, as the eastward expansion of the Community now appears imminent, it is important to recall that Member States can lose their rights under the Treaty when they are found to be in breach of basic human rights and democratic values. The body to make this judgment is to be the Council of Ministers, not the ECJ, and no opportunity was taken at Amsterdam to give the Community power to accede to the ECHR.29 The limitations of the jurisdiction of the ECJ were also seen in the way that the new third pillar power for Member States to make framework decisions legally binding was to apply only between governments, with those decisions specifically being declared not to be ‘directly effective’. Furthermore, the ECJ may give rulings on these matters vis à vis a Member State, but only where the Member State has consented to such a ruling. It is also revealing to note that the EU/EC is not built on a separation of powers model as we know it. The European Parliament is weak, having no oversight of the second and third pillars. Even after Maastricht, co-decision and the Amsterdam revisions, the initiation of and control over legislation lies with the Commission and Council. The Commission principally is a

25 Van Gend en Loos [1963] ECR 1 and the important case law on sovereignty and supremacy, direct effect, etc. 26 Sunday Times v UK (1979) 2 EHRR 245; Chalal v UK (1997) EHRR 413; and McCann v UK (1995) The Times, 9 October. 27 Johnstone v Chief Constable of the RUC [1986] 3 All ER 135 (CJEC). Cf, Chalal v UK; and McCann v UK; and Svenska Journalist Förbundet v EU Council [1998] All ER (EC) 620. 28 Kremzow v Republik Österreich (1997) The Times, 11 August; and Grogan [1991] ECR I-4685 (CJEC). 29 Opinion 2/94 (23 March 1996) (ECJ). 240


secretariat, but it is also a legislature as well as a law enforcer, guardian, executive and legislative initiator/adviser. The judicial role is shared by the Community’s courts and by those of the Member States. If we look to the EC as a model of government for the future, then the rather sorry open government experience of the Council and Commission, the ECJ’s somewhat tame interpretation of the relevant provisions,30 the convoluted and highly selective participation in the committee structure of the Commission and its rule making functions, and the emergence of European agencies without any appropriate accountability devices should give us cause for concern.31 Furthermore, the EC has probably done more to enhance executive power in the UK than anything since the Bill of Rights 1689. Within 30 years of the Glorious Revolution, Walpole had a more extensive network of spies in every city and port in England than any king before him. Could it be that the absence of a stronger practice of a separation of powers in the Community assists those who wish to undermine the Community’s existence? The Community has certainly not done enough to encourage greater participation in its deliberations.32 The influence on our judges of international legal norms and European jurisprudence, and particularly the spirit of adventure which they seem to have encouraged, has been the subject of much debate.33 The Human Rights Act appears set to become the most important influence on judicial development since Coke sought to make the common law the sovereign power in the land. Growing internationalism of British judges and ever more sophisticated administrative law and protection of human rights have introduced the phenomenon of the ‘globe-trotting judge’. As Hunt has said, echoing Mike Taggart: ‘The experience has led some to dream of the emergence of an international common law of human rights.’34 This is an experience which the Pinochet judgments may have encouraged (see ‘Postscript’, p 250, below). Judges have shown a remarkable sensitivity to the protection of human rights in the development of the common law and in the interpretation of statute so as to bring it into conformity with protection of basic human rights, except in the clearest of cases where Parliament has legislated against their protection.

30 Especially in Netherlands v EU Council [1996] ECR I-2169. 31 On the committees and commitology, see Pedler and Schaefer (eds), Shaping European Law and Policy and the House of Lords Paper 23 (1998–99), Delegation of Powers to the Commission: Reforming Commitology; and, on the agencies, see Kreher (ed), The New European Agencies. 32 Birkinshaw, ‘Freedom of information and open government: the European Community/Union dimension’. 33 Nb, Hunt, Using Human Rights Law in English Courts. 34 Ibid, p 54. 241


As a result of the European experience, doctrines of proportionality, legitimate expectation and equality have been openly used in British courts. The doctrines have their provenance in decisions of the ECJ and the Court of Human Rights and in turn derive from the case law of Member States where, at least since the Second World War, there has been a stronger tradition of control of government discretion by legal principles. Hesitation has been shown in some cases by British judges who are anxious not to exploit their judicial discretion excessively and thereby invade the executive sphere. It has been denied that, when no question of European law is involved, proportionality is a discrete basis of review existing in addition to Wednesbury unreasonableness and irrationality. 35 The notion of proportionality nevertheless exists in English law and its development will be encouraged there by the incorporation of the ECHR under the Human Rights Act. In applying the law developed by the ECHR, English judges will apply the case law of the ECHR, which has long acknowledged proportionality. It will be interesting to see what English or Scottish gloss domestic judges will give to the development of human rights involving the ECHR. Needless to say, not all the senior judiciary are enthusiastic advocates of the new development of principles of judicial review. In R v Secretary of State for the Home Department ex p Hargreaves,36 the Court of Appeal poured scorn on Sedley J’s attempts to introduce a workable doctrine of substantive legitimate expectation in English law.37 In Hargreaves, under a ‘compact’ issued to them by the prison authorities, certain prisoners were informed of their entitlement to home leave after a certain period. The Home Secretary, in the exercise of his discretion, then reneged upon that compact. The court held that the compact did not create a substantive legitimate expectation for the prisoner which the Home Secretary would be forced to recognise. His revocation was not Wednesbury unreasonable. The decision is not fatal to the existence of the doctrine of substantive legitimate expectation, for which, in fact, there is too much authority,38 but it is a warning that there is a significant cohort of senior judges who are quick to remind themselves and others that any suspicious sounding doctrines must not be allowed to subvert the executive role and place the judge in the shoes of the Minister. I expect the Human Rights Act to sharpen the conflict between executive discretion and legal principle, especially in the areas of freedom of speech and the protection of privacy, and also under Arts 5 and 6 and the fair trial provisions as they operate in questioning those suspected of fraudulent activities.39 It is unlikely that the jurisprudence of the ECHR will add a great deal to our law on 35 36 37 38 39

Brind v Secretary of State for the Home Department [1991] 1 All ER 720 (HL). [1997] 1 All ER 379 (CA). In Hamble v MAFF [1995] 2 All ER 714 Eg, R v IRC ex p Unilever (1996) COD 421 (CA). Eg, Saunders v UK (1997) 23 EHRR 313. 242


administrative hearings and inquiries where, in spite of a considerable advance in our sense of administrative justice, English judges have not advanced any notion of participation that significantly affects the policy making process. Their more lasting contribution has been to allow wider access to the courts under an expanded interpretation of locus standi. However, the Government was careful to provide only a narrow locus standi when challenges are to be made under the Human Rights Act. Judges may make declarations of incompatibility between domestic statutes and the requirements of the ECHR but not overrule them. The Government has promised that, where there is a conflict between the provisions of a statute and the Human Rights Act, a fast track procedure will be available to amend the offending legislation. No one can legally compel a Minister to take action. This is a reaffirmation of Parliament’s role as the ultimate protector of our civil liberties and that the political will of the people as represented in the legislative chamber is the appropriate source of individual protection. But too often Parliament has been silent or cowed into submission where unpopular causes are concerned. In adopting this model of human rights protection, the Government has done a great deal to perpetuate ancient notions of a balanced constitution which hold that the most important decisions, including those on fundamental rights, must be the preserve of the political levels of government. In spite of its great advances, then, human rights jurisprudence in the UK remains an anomaly in the modern world.

WHAT SHOULD HAPPEN? PROBLEMS AND PRESCRIPTIONS If the practice of participation does gather momentum, what concomitant development in the separation of powers is necessary? What I want is quite simple: it is more openness and transparency and more effective redress of grievances. Openness and transparency are necessary features of a more participatory democracy, and this is as true of the European legal order as it is of the domestic one. But they are not in themselves sufficient to sustain a participatory culture. There has to be encouragement of citizen involvement. This involves educating the public in the process of government and thereby developing an awareness of where the public can make the most effective contribution. No tier of government should be excluded from the participatory culture, which therefore should also apply to local authorities, regional planning authorities, devolved government, quangos and so on. One of the interesting developments in the White Paper on Open Government is the extension of duties to privatised utilities and private bodies (when they are carrying out statutory duties) to provide documents to the public. The duty will be extended to all those performing a service on behalf of a public authority under contract or otherwise, but non-statutory self-regulation would appear not to be included. 243


I believe we have come an enormous way since the mid 1970s, when there was a remarkable indifference to the consideration of the redress of grievances other than by way of the courts, tribunals, ombudsmen and routine political processes. The Citizen’s Charter brought the provision of effective internal procedures for the redress of citizens’ grievances to the fore, and the Charter’s Complaints Task Force working in the Cabinet Office, now succeeded by Service First, came to see grievances as a valuable means of gaining information about service delivery and failure. As well as being devices to produce fairer outcomes to disputes, grievance mechanisms are essential management tools from which to learn in order to improve performance. Effective internal disputes procedures will not undermine the ombudsman, no more than effective ombudsmen will undermine the courts. However, there are some signs of tension between ombudsmen schemes and the courts. The High Court has, for example, criticised a set of recommendations by the Parliamentary Commissioner for not taking into consideration a failure by a government department to remind a local authority of its newly acquired powers to award compensation in cases of planning blight.40 Elsewhere, the courts have instructed the local ombudsman to keep under constant review the necessity of handing a complaint over to the courts where the latter might award more appropriate relief. Furthermore, the chances of success before the courts was not a factor that the ombudsman should consider in deciding whether to take up a complaint.41 The most notable clash between courts and ombudsmen has concerned the Pensions Ombudsman who took exception to the resort to technicalities by the High Court to override his attempts to achieve more substantive justice in complaints concerning pensions. Professor Farrand’s news release as Pensions Ombudsman graphically illustrates the nature of the conflict between different mechanisms for the remedy of grievances: Unfortunately, the attitude of certain members of the judiciary has seemed inimical to the Ombudsman idea. Alternative dispute resolution is supposed to be different from the High Court. Ombudsmen should not be condemned for being informal and inquisitorial rather than legalistic and adversarial. The contrary attitude has appeared unfortunate in encouraging appeals where the merits may be marginalised and technicalities triumph, notably where the ‘costs-risk’ precludes participation by complainants themselves.

As government moves more and more towards contract as a governing device, a wide range of problems concerning participation and the separation of powers present themselves. The New Labour Government seems set to continue along the market driven lines of the previous Conservative

40 R v Parliamentary Commissioner for Administration ex p Balchin (1996) unreported, 25 October, per Sedley J. 41 R v Commissioner for Local Administration ex p Croydon LBC [1989] 1 All ER 1033. 244


administration and contract will be a central tool in its strategies of government. Where government seeks to use contract to pursue its policies, the traditional English doctrine of privity will ensure that wider interests than those of the public body/contractor are not part of the communicative framework and have no legal entitlement to be allowed in to the relationship.42 Such relationships are often cocooned within the most secretive and protective formulae of commercial confidentiality. Indeed, the Government has spelt out in guidance documents for business that the latter should adopt secrecy classifications not unlike its own and that basically everything should be considered commercially confidential. As it once was said by a justice of the US Supreme Court: ‘Where everything is a secret, nothing is a secret.’ Secrecy can become self-defeating. It would be hard to create rights to be consulted about such arrangements and the contractual relationship makes it inappropriate for challenge by way of judicial review, although more recent decisions in the High Court may show signs of flexibility here.43 This problem with contract illustrates how governing by novel means also makes nonsense of the traditional doctrine of the separation of powers. Usually, policy is formulated by the executive in secrecy until the executive deems it appropriate to go to Parliament to announce the outcome of its deliberations. The budgetary round is an outstanding example of such a process. In government by contract, policy is formulated within the interstices of commercial or contractual arrangements protected, as we have seen, by exaggerated claims for commercial secrecy. Accordingly, the Comptroller and Auditor General (CAG) assumes greater significance as an accountability mechanism than political chambers or legal fora, except in those rare circumstances when decisions on expenditure are ultra vires.44 The fact that the New Labour Government has lifted some of the restrictions on the CAG access to documents is a welcome development and will assist that body, which, along with the Audit Commission in relation to local government, has been centrally involved in holding the modern executive to account. A further device used by governments to circumvent political and legal control of their actions has been to resort to use of the specialised agency, and such agencies have grown enormously. What makes it difficult to make such agencies accountable is the absence of an appropriately drafted Administrative Procedure Act. Without adequate legislation to provide for

42 See the press report of a case involving the London Borough of Merton in which children could not bring proceedings to attack an authority’s reneging on terms to which it had agreed in a planning agreement which affected them. Younge, ‘Children fail in High Court attempt to hold council to swimming pool plan’. 43 R v Legal Aid Board ex p Donn and Co [1996] 3 All ER 1. 44 The Pergau Dam episode is the striking episode. R v Secretary of State for the Home Department ex p WDM Ltd [1995] 1 All ER 611 (CA). The CAG does, of course, report to the Public Accounts Committee of the House of Commons. 245


openness and transparency in the operations of these bodies, we have not been able to fashion suitable forms of judicial or parliamentary control. We lack the means to be sufficiently informed about those bodies’ activities and to know the basis of their decisions. Lack of accountability in appointments has been the subject of a good deal of comment in so far as those appointments were seen to be unacceptable devices to extend political/ministerial patronage in a manner more suitable to the erstwhile activities of the East India Company. Lord Nolan’s suggestions on public appointments have led to improvements and one expects Lord Neill his successor to continue in similar vein. Details of public appointments are now placed on the internet. The Government has published a consultation paper on quangos and it contains many suggestions for enhanced openness. Nevertheless, is there not a need for legislation in this area to cover appointments, open meetings, access to documents, openness for advisory bodies, as well as regular reports of activities and participation in the executive and rule making functions of such bodies? The White Paper on Freedom of Information goes some of the way, but a good deal more remains to be done. The absence of appropriate legislation on administrative procedure is also being felt in the European Union, where a new generation of administrative agencies is taking on more and more administrative responsibility whilst lacking coherent structure and lines of accountability. The resort of the Commission to committees comprised of national, Community and private organisational interests to assist in the former’s rule making and regulatory responsibilities has long been seen as yet another device to obscure the lines of accountability of the European Community’s legislative process. As elsewhere, the problems we face at home are felt more widely in Europe. On the domestic front, devolution, which will involve a vertical separation of powers as I explained above, will, the Secretary of State assures us, lead in Scotland’s case to more transparency and plans are under way for a regime of freedom of information to cover Scottish bodies. In the referenda about devolution, there were signs of the Labour Party machine silencing rebellious Labour MPs in a manner which appeared to be the complete antithesis of open debate. Here, as in other aspects of government, a party which has promised constitutional reform, and which has quite impressively set about that reform, has about it more than the suggestion of rigid, if not oppressive, central control. With such a large majority, it will be difficult for government control over Parliament to avoid being tinged with the folly of arrogance – and worse. Already there are signs that the Lord Chancellor, in spite of his undoubted abilities, has let the dizzy grandeur of his office diminish the wisdom of his public declarations. If we are to avoid the worst aspects of arrogant government we need a strong independent Parliament and a brave and independent judiciary. We are back to basics. These were the features of

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the British constitution which Montesquieu believed to be sufficiently discrete to justify him concluding that the separation of powers in a pristine sense existed as a reality of English public life.45 What meaningfully could we hope for to bring about greater participation in and by Parliament? If we provided for increased use of pre-legislative hearings, reduction of constraints on civil servants and agency chiefs in giving evidence, and provision of better and fuller information, there would be a significant improvement. In his famous report on Matrix Churchill,46 Sir Richard Scott suggested that a commissioner be appointed to adjudicate upon refusals to answer questions in parliamentary hearings. Might this not be a role for the Commissioner which has been suggested for freedom of information? Could that Commissioner not also deal with failures by government to respond to parliamentary questions and to force disclosure when it would serve the greater public interest? I have already discussed protection of human rights and specifically considered the incorporation of the ECHR under the Human Rights Act. I believe this measure will enrich our notion of fundamental rights and give those rights the protection they deserve. They simply are too important to be left to the vagaries of the political arena and particularly to party discipline dictating the sense of the public interest. The lack of a means of legally enforcing the ECHR domestically when the Government remains opposed may perhaps be a signal of weakness and a cause for regret. There are also the so called second generation human rights, the social and economic rights (which are so prominent in the revised European Union Treaty), as well as the third generation concerning environmental protection and rights to greater participation in decision making and collective welfare. In the UK, the contribution of the judiciary to the development of these rights has not been illuminating or visionary, though its contribution to the protection of individual primary human rights clearly has encouraged the development of a human rights culture.47 Turning to what are often termed surrogate political processes, one is obliged to observe that the record of the courts when they have been asked to widen participatory exercises, obtain better reasoning for decisions on environmental matters, or simply to extract more information about the decision making process has not been so encouraging. Indeed, leading jurists have questioned whether it is the judiciary’s business to make such processes

45 Montesquieu, The Spirit of the Laws, bk 11, ch 6. 46 Scott Committee, Report of the Inquiry into the Export of Defence Equipment and Dual-use Goods to Iraq and Related Prosecutions. See Birkinshaw, ‘Government and the end of its tether’; and Scott, ‘The acceptable and unacceptable uses of public interest immunity’, p 440, on Ministers and the provision of information to Parliament. 47 Although there are inconsistencies. See Abdi v Secretary of State for the Home Department [1996] 1 All ER 641 (HL); and R v Secretary of State for the Home Department ex p Simms [1998] 2 All ER 491. 247


more open and whether such decision making is not inherently political and largely best left to political and expert processes.48 The separation of powers in its contemporary guise! My feeling is that judges, or at least judicial techniques, have more to give in terms of collective decision making processes and the proper balance between fairness and efficiency than they are given credit by such jurists. The judges certainly have made great strides in extracting reasons for the decisions taken by the executive in the performance of its administrative and judicial functions, and are not so easily fooled by legal nominalism as was an earlier generation of their brethren. 49 Nevertheless, the question remains whether contemporary judges and lawyers are up to the job. I do not think anyone seriously believes that judges who interface with political forces in their work are card carrying class warriors suppressing dissent and unpopular ideas. Most judges are aware of their own limitations and the institutional biases of their occupation, and consequently that their autonomy in any real sense is limited. But, if what we seek is greater democratic participation, and any encouragement that legal process may give to that participation, then we have to appreciate that the legal technique does not cease once decision making stops being directly concerned with the protection of individual rights and becomes embroiled with collective and policy making procedures, and this is something to which new judges must face up.50 My last point concerns the establishment of a body to oversee administrative justice and the administration of justice. The latter might involve the creation of a Ministry of Justice, for which Norman Lewis and I have argued.51 In the USA and Australia, there is the experience of the Administrative Conference of the United States (ACUS) and the 48 Dworkin, A Matter of Principle, ch 3. 49 See R v Secretary of State for the Home Department ex p Fayed [1997] 1 All ER 228 (CA); and, particularly, R v Secretary of State for the Home Department ex p Venables; R v Secretary of State for the Home Department ex p Thompson [1997] 1 All ER 327 (CA), per Lord Woolf MR, for an imaginative approach to the duty to explain the motives behind the exercise of official discretion. The fallacious argument developed by judges to prevent this area of governmental responsibility being appropriately developed was exposed by Sir William Holdsworth: ‘I do not see why the fact that they are administrative should be a reason why no reason should be given. They are decisions whether administrative or judicial.’ Holdsworth Committee, Report of the Committee on Ministers Powers, Vol 2, Minutes of Evidence, p 265. 50 On the question of participatory rights; rule making processes and the courts in the UK, see R v Secretary of State for the Home Department ex p USTII [1992] 1 All ER 212; R v Secretary of State for Foreign Affairs ex p WDM Ltd [1995] 1 All ER 611 (CA); R v Secretary of State for Transport ex p Richmond LBC [1996] 4 All ER 903 (CA); R v Secretary of State for Wales ex p Emery [1996] 4 All ER 1. For criticism by the Court of Appeal of attempts to develop participatory procedures in the absence of statutory procedures, see Emery (1997) The Times, 22 July (on appeal); and R v Secretary of State for the Environment ex p O’Keeffe (1997) The Times, 5 August. Cf, Bushell v Secretary of State [1980] 2 All ER 608 (HL). On the background issues, see Dworkin, A Matter of Principle, ch 3. 51 Birkinshaw and Lewis, When Citizens Complain: Reforming Justice and Administration. 248


Administrative Review Council (ARC) respectively. Both have provided expert guidance and research for government, the judiciary and the legislature in their respective countries. ACUS was disbanded for disgraceful reasons, the victim of internecine governmental jealousies.52 The ARC still manages to survive. But ‘administrative’ should perhaps be interpreted broadly. We have legislators who are largely ignorant of the judicial and the administrative processes, and judges who are ignorant of the legislative process53 and too many of whom are mostly not well informed about the executive and administrative processes. We have an executive that paradoxically is simultaneously fearful and contemptuous of both legislature and judiciary.54 Is a body needed for administrative justice in the round which will oversee and advise especially on human rights developments and comparative approaches? What relationship would such a body have with the Judicial Studies Board? The Board intends to undertake responsibility for race and gender awareness among the judiciary. Do our judges (and our senior civil servants) require instruction in their ‘social awareness’ of lower socioeconomic groups and their problems? Judicial aloofness helps generate the widespread misconception of the judicial role and judicial work.55 I stated earlier that judges are not card carrying class warriors suppressing the claims of unpopular or alienated groups. But in an elitist framework they are a particularly exclusive band of brethren. They are possibly the least dangerous branch of government, but anecdotal evidence of racial and sexist bigotry, and press reports likewise, are common. I certainly have witnessed amazing ignorance of ombudsman schemes by judges and this ignorance is probably widely, not universally, repeated in terms of ignorance of other mechanisms for the resolution of disputes. While the three branches of government must maintain their mutual independence, the separation of powers does not dictate that they remain ignorant of each other’s work, or in the case of judges, the work of others that

52 Edles, ‘Lessons from the Administrative Conference of the USA’. 53 This is so even after Pepper v Hart [1993] 1 All ER 42 (HL) and the judges’ abandonment of their self-denying ordinance not to refer to Hansard to interpret unclear clauses in statutes. 54 As was evident in the first (1987) edition of The Judge Over Your Shoulder: Judicial Review of Administrative Decisions, a document prepared by the Treasuary Solicitors’ Department for internal circulation within the senior Civil Service which was not intended to be available to the public. The second edition of May 1995 was less caustic. Note Lord Howe’s allegation that Scott was naive to think judicial techniques can be applied to governmental policy formulation in the course of pouring scorn on Scott’s procedures when criticism of individuals was possibly involved. Lord Howe, ‘Procedure at the Scott Inquiry’. There also have been frequent political attacks on the claimed inconsistency of judges in judicial review proceedings. 55 Hough and Roberts, Attitudes to Punishment 1996.

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is linked to the redress of grievances.56 And there is no good reason why all three branches of government, and the miscellaneous offshoots of government, should not explain to us all more clearly, more openly and more regularly how they exercise power, and in some cases, barter their public responsibility, to advance the public – our – interest.

POSTSCRIPT The extraordinary events surrounding the proceedings before the House of Lords involving the immunity of General Pinochet from extradition came too late for detailed comment. Institutionally, it did focus attention on the desirability of the judicial committees of the House of Lords and Privy Council as courts which will be asked to deal with increasingly demanding questions of constitutional law and human rights. The shortcomings in Lord Hoffman’s position also reminded us of the undesirability of Law Lords taking an active role in law making. Lord Hoffman was used by the Conservatives to move amendments to the Bill of Rights 1689, allowing Ian Hamilton MP to sue the Guardian for defamation.

56 Of course, some judges will know an infinite amount about particular processes because of the accident of their practice in, eg, arbitration, tribunals and so on. The point made here concerns training for all judges in other processes. 250

CHAPTER 14

THE HUMAN RIGHTS ACT: AN ASSESSMENT OF THE ACT DESIGNED TO INCORPORATE THE EUROPEAN CONVENTION ON HUMAN RIGHTS INTO DOMESTIC LAW

John Wadham

INTRODUCTION The Government’s Act to incorporate the European Convention on Human Rights and Fundamental Freedoms (ECHR)1 is the most significant human rights reform in the 60 years that Liberty has been in existence. For the first time, positive rights such as privacy and family life, freedom of expression and assembly, the right to a fair trial, freedom from arbitrary arrest, and freedom from discrimination will be enshrined in domestic law, and those who claim that their fundamental human rights have been breached will no longer necessarily have to endure the expensive and lengthy process of going to the European Court of Human Rights in Strasbourg. Despite earlier fears that the Government might incorporate the ECHR in a way which provided people with a weak form of human rights protection, some of the concerns raised by human rights organisations and lawyers have been addressed. The ECHR will apply to all public authorities performing a public function, damages will be available for most of those whose ECHR rights have been breached, there will be a duty on Government ministers to certify compliance with the ECHR on new legislation, Statutory Instruments will be subject to the ECHR, and the Government has announced the creation of a Parliamentary Committee on human rights. But the Act also brings with it a number of debates about how best to incorporate the ECHR, the need for a Human Rights Commission, the availability of legal aid and access to the courts, the need to include the Protocols to ECHR, and even about the adequacy of the ECHR itself. The ECHR will not be a panacea for all human rights abuses. Its age is clearly discernible from the weakness of its equality provisions, and it is silent on increasingly important issues such as the rights of children and standards in prisons. The limitations it places on rights are too broad, and the anti-

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Human Rights Act 1998, ch 42. 251


discrimination provisions too narrow. Ultimately, it is no substitute for a ‘home-grown’, or indigenous, Bill of Rights. However, the Government appears to have deferred the idea of an indigenous Bill of Rights. In the 1993 Labour Party policy statement, the incorporation of the ECHR was described as only the first step towards such a Bill of Rights. Liberty is disappointed that the new Act does not set up a mechanism to consult on and develop this. Incorporation of the ECHR is a necessary but insufficient first step. The ECHR is some 50 years old, and its origins predate even the establishment of the Council of Europe. Stronger rights are contained in other, more modern, human rights instruments such as the UN International Covenant on Civil and Political Rights (ICCPR), and Liberty’s own Bill of Rights, drafted in 1991 and updated in 1994, which draws on the ICCPR and other UN conventions and regional human rights instruments, as well as the ECHR itself.

MISSING RIGHTS There are a number of significant civil and political rights which do not appear in the ECHR at all. Perhaps the most well known of these is the lack of a right to information from public bodies. In addition, there are several other ‘missing rights’, which clearly illustrate the need for a more up to date Bill of Rights.

Deportation and extradition The ECHR provides little assistance to those held in detention pending deportation or extradition because Art 5(1)(f) allows detention in such circumstances, and there is, on the face 2 of it, no limit to the length of detention or any restriction on the legal justification for such a detention. Furthermore, the rights of ‘aliens’ are further and specifically restricted by Art 16. The only restrictions on removal from a country are imposed by other articles such as the right to family life or to freedom from torture. Even in private and family life cases, the Court’s decisions are particularly restrictive and if, for example, the ‘private and family life’ can take place in the country to which the person is being deported, then there is no breach of Art 8. The ECHR does not include the right to enter a country either as a resident, national or asylum seeker. Some of these defects could be cured by the adoption of Protocol 4 to the ECHR and Liberty is disappointed to see that this has been ruled out. Nevertheless, we are pleased to see that the White Paper proposed that Protocol 7 to the ECHR will ratified by the Government. 2

But, see Chahal v UK (1977) 23 EHRR 413. 252

The Human Rights Act: An Assessment

Discrimination The right to freedom from discrimination contained in Article 14 is notably weak. It does not refer to sexual orientation or to disability. And, unlike the equivalent provision in the ICCPR, it applies only when another ECHR right has been violated.

Self-incrimination When considering the minimum standards which should be observed by the criminal justice system, it is worrying to note that the ECHR does not contain any equivalent of Art 14(3)(g) of the ICCPR. That is, that in the determination of any criminal charge, a person shall not ‘be compelled to testify against himself or to confess guilt’. There is also no right to jury trial under the ECHR.

Detention Although there are restrictions on the lawfulness of detention in the ECHR, no minimum conditions are set for conditions of detention except for the provision against torture, inhuman and degrading treatment or punishment. Other missing rights include the right of access to a lawyer and the right not to be held incommunicado.

Children Also absent from the ECHR are any specific rights for children, such as those contained in the UN Convention on the Rights of the Child.

LIMITATIONS ON RIGHTS Apart from wholesale omissions of important rights, there are considerable gaps in the rights as provided by the ECHR. A few have been chosen to illustrate the problems.

Lethal force Whilst the right to life contained in Art 2 is protected by the condition that actions breaching the right need to be ‘absolutely necessary’, the limitations include allowing lethal force to be used to effect an arrest or to quell a riot.

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Detention on public health grounds Article 5(1)(e) allows the ‘detention of persons for the prevention of the spreading of infectious diseases … alcoholics or drug addicts or vagrants’. This is now an out of date limitation that has no place in a modern Bill of Rights.

Limitations on privacy, freedom of religion and freedom of expression and assembly The rights to privacy and to freedom of religion, expression and assembly are all subject to similar limitations in the ECHR. These are all contained in the second part of the relevant article, Art 8(2), which states: There shall be no interference by a public authority with the exercise of this right except such as in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

Whilst significant numbers of cases against the UK in Strasbourg have succeeded because the interference with the right was not ‘in accordance with the law’ or the interference was not proportionate – not ‘necessary in a democratic society’ – few have succeeded because the purported aim of the interference was outside of the range provided for in the second part of the article. There is not space here to deal with all of the difficulties that the expression ‘national security’ creates for the courts, but it is arguable that the expression is too vague to be contained in a Bill of Rights. Similarly, the expression ‘public safety’ makes too wide an exception and Liberty has substituted ‘imminent physical harm’ in its Bill of Rights. Interestingly, ‘the economic well being of the country’ features only as a limitation in Art 8 and is far too vague to be a justifiable restriction.

Sexual minorities Article 12 of the ECHR includes a right to marry and found a family, but does not provide such a right for transsexuals. Furthermore, it only allows marriage between men and women, making no provision for partnerships between lesbians or between gay men. Liberty believes that the case for going beyond the ECHR in this respect is now overwhelming.

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The Human Rights Act and the current law Liberty welcomes the fact that the Act will ensure that the common law is subject to the ECHR and that secondary legislation will be subject to the rights set out in the ECHR. However, the proposals that delegated legislation can be protected from such challenge may create problems if used extensively or inappropriately by government. The most difficult issue when considering this Act is the status that the ECHR should have in the new constitutional order. Liberty argued that, when the courts have to resolve a conflict between the rights set out in the ECHR and any other legislation, the ECHR – which expresses the fundamental values of liberal democracy – should be given precedence. Anxieties about parliamentary sovereignty, and the possibility of the judges being involved in ‘political’ decisions, have led to a weaker model. The Government’s model will mean that where rights and statute conflict, statute will always prevail. This will mean that the individual who is able to show to the satisfaction of the domestic court that his or her ECHR rights have been violated will, nevertheless, lose the case. The ‘loser’ will then either have to petition the European Commission in Strasbourg for redress, or wait for Parliament to change the law. The ‘loser’ might be able to obtain compensation, but only several years later. They will not be able to obtain any other remedy, such as an injunction, or any of the usual remedies in judicial review, such as certiorari, prohibition, mandamus or a declaration. These may often be the only true remedy for a person who has suffered a violation of the ECHR. If the court is unable to construe a statute in a way which is compatible with the ECHR, the Act states that the courts will be able expose the problem by making a declaration that there has been a violation. This is an important improvement over some weaker models of incorporation, and, clearly, there will be strong pressure on the Government to change the law where such a declaration is made. Significantly, the Act provides that, although the court will not be able to set aside the statute, there will be a ‘fast track’ procedure which will allow Parliament to amend the offending law relatively quickly to bring it into line with human rights principles. Liberty welcomes these improvements on the basic approach. However, problems arise when one starts to consider how such mechanisms might operate under a government which has no commitment to human rights. Governments have a habit of ignoring individual rights when there is a need to be seen to be ‘tough on crime’, or where they perceive that public or media opinion, or other pressures, would not be in their favour, particularly in the run up to a general election. It is precisely this that human rights law is designed to prevent. Human rights are neither a reward for good behaviour

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nor only the property of the respectable. They are fundamental, universal and inalienable. But, if a case concerned an unpopular group of people, like suspected terrorists, travellers or protesters, or was controversial in some other way, it is all too easy to imagine that a future government would be reluctant to change the law. Human rights cases are often, by definition, brought by people who are part of an ‘unpopular’ minority, or are controversial cases for some other reason. Anxieties about the possible erosion of parliamentary sovereignty are misplaced. Other countries have established systems which uphold both the importance of human rights and the sovereignty of Parliament, and there is no genuine obstacle to prevent the UK doing the same. In Canada, for example, the courts either ‘read in’ missing rights into the statute under consideration or alternatively make it clear that, in the particular circumstances, part of the statute no longer applies. Parliament then has the opportunity of either cleaning up the statute to comply with the ruling or re-enacting the statute and adding a clause stating that the provision applies ‘notwithstanding’ the contravention of the ECHR. This latter option then prevents the court from refusing to apply that provision of the statute even if it does conflict with human rights. Parliamentary sovereignty is, thus, preserved and parliamentary accountability is enhanced by the need for the decision to override rights to be clearly argued and debated. But, when Parliament has enacted legislation in a rush, which is all too often the case, any unintended consequences that might have resulted in violations of fundamental human rights can be put right by the courts. Parliamentary sovereignty would not be compromised by allowing the courts to strike down legislation, as this very power would have been given to them by Parliament itself, in limited circumstances, to provide a human rights ‘safety net’. The European Communities Act 1972 is an example of such an exercise of sovereignty which has worked successfully. There is more at stake here than a theoretical debate for constitutional theorists and lawyers, as a few examples will show.

Official Secrets Act 1989 Imagine that a ex-member of MI5, concerned about unnecessary invasions of privacy by the Secret Service, believes that it is right to expose the details of this malpractice. This is a criminal offence under the Official Secrets Act 1989, and remains an offence however much the revelations are in the public interest. Article 10 of the ECHR provides a right of freedom of expression. If the ECHR is incorporated as the Government intends, that right will not be available as a defence because the statute, the Official Secrets Act, does not provide such a defence. If the ECHR is to make a difference in this case, the MI5 officer – and the journalists that aided and abetted her or him – need to 256


have a clear right to argue that the Official Secrets Act has been altered by incorporation of the ECHR and freedom of expression is something the jury is entitled to consider when deciding whether or not to convict.

Criminal Justice and Public Order Act 1994 The Criminal Justice and Public Order Act 1994 completely removed the right to bail for those charged with very serious offences who already have a conviction for a similar offence. This denial of bail applies regardless of the circumstances of the person and however weak the evidence is. This raised serious questions about the presumption of innocence and the right to liberty and is presently being challenged in the Court in Strasbourg by a person who was denied bail and spent time on remand in prison before being acquitted. The best model would allow a court to grant bail if this were necessary to avoid violating the defendant’s human rights, despite the technical restriction in the 1994 Act. Under the Government’s proposed model, the court would be powerless to do any more than decide that the 1994 Act breached the individual’s human rights and the person would have to remain in custody.

Politician’s veto The European Court of Human Rights has held that juveniles sentenced to detention during ‘Her Majesty’s Pleasure’ (for murder) must be provided with real rights and that courts, not politicians, should decide when they should be released. Some years before the European Court heard the case, the High Court in this country was given the chance to resolve the issue but was not able to do so because the ECHR was not part of our law. Under the proposed model, the High Court will not be able declare the procedure unlawful; instead it will be left in the hands of Parliament.

Assisted conception Finally, Diane Blood wanted to have her dead husband’s child but needed access to his sperm. An Act of Parliament prevented access to sperm without the donor’s consent. Parliament never properly considered this state of affairs. If the courts had been able to consider the rules in the context of the right to family life contained in Art 8 of the ECHR, the case might have been resolved more quickly. Unfortunately, the Government’s model might have forced the courts to follow the letter of the law laid down by Parliament. The Act provides that the specified courts may make a ‘declaration of incompatibility’ where they are satisfied that a provision of primary

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legislation is incompatible with ECHR rights, or that a provision of subordinate legislation is incompatible and the primary legislation under which it was made prevents the removal of that incompatibility. It also provides that such a declaration does not affect the validity, continuing operation or enforcement of the provision in respect of which it was given. Section 7 of the Act provides that a person who claims that a public authority has acted (or proposes to act) in a way which is unlawful, because incompatible with ECHR rights, may bring proceedings against that authority under the Act, or may rely on ECHR rights in any legal proceedings. Such a person may only bring proceedings or rely on ECHR rights if he or she is (or would be) a victim of the unlawful act. Section 10 enables the amendment by order of a provision of legislation which has been declared incompatible with ECHR rights or which, in view of a finding of the European Court of Human Rights, appears to a Minister of the Crown to be incompatible, so as to remove the incompatibility or possible incompatibility. The declaration procedure is an important new procedure which is to be welcomed. However, Liberty is concerned to explore what happens to the person concerned in such a case. An example may be helpful. The Criminal Justice and Public Order Act 1994 created a number of new public order offences, one of which made it an offence to trespass on land with the intent of obstructing the lawful activities of others. Imagine a completely peaceful protest about the human rights record of Nigeria, carried out on the premises of an oil company. Assume that the protest had the effect of making the employees of the company late for work. This would be a criminal offence, but a conviction of a person for such a peaceful protest might well violate the rights of freedom of expression and assembly in the ECHR. If the facts were proved and there was no defence of ‘reasonable excuse’, the magistrates would be bound to convict. Although in most cases the individual would be unlikely to receive a custodial sentence, this cannot be ruled out. And in addition to having a criminal record, the individual would also have to pay costs. Liberty would suggest that powers should exist to provide the executive to quash such a conviction and make an ex gratia payment to the person concerned. The alternative would be for the person concerned to take proceedings in Strasbourg. This would not only entail considerable costs and delay for the individual, but also for government lawyers, with a corresponding increase in costs to the taxpayer. If the higher courts do not have the power to give remedies or damages in such circumstances, this may result in legal aid not being available. Legal aid is not granted for litigation which will not provide an actual benefit to the person concerned, or which is academic. The final problem for the Government’s proposals is what happens the day after the courts have declared that a particular rule in statute remains the

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law but, at least in some circumstances, violates human rights law. In a controversial or difficult case, perhaps involving sex offenders, the Government may take some time to change the law. In fact, a late amendment to the Act means that the Government can only use the fast track procedure where there are ‘compelling reasons’ to do so. In the interim, there is a legal anomaly, the solution to which is difficult to discern. The police could continue to enforce the law as set out in the statute, but each time they did so they would violate the accused’s human rights, creating further opportunities for litigation and costs in this country and in Strasbourg. The power to make a ‘declaration of incompatibility’ is also restricted to the higher courts. Liberty has no difficulty in principle with such a restriction, providing that matters dealt with in the lower courts and tribunals can be referred to the higher courts on appeal or by way of judicial review. An analysis of all of the processes by which issues in the lower courts reach the higher courts is impossible in this chapter.

PUBLIC AUTHORITIES The definition of public authority in s 6 of the Act is broad and open to interpretation. It includes, but is not limited to, a court, a tribunal which exercises functions in relation to legal proceedings, and any person certain of whose functions are of a public nature. This definition of a public authority does not include circumstances in which a person, though he or she is a public authority for other purposes, is engaged in an act of a private nature. The Act is clear in that it will be unlawful for public authorities to act in a way which is incompatible with one or more ECHR rights. An act also includes a failure to act. The only exception to this is where primary legislation mandates such action and where that primary legislation cannot be read or given effect in a way compatible with the ECHR. All public bodies and all quasi-public bodies will now have to apply ECHR standards. As the White Paper Rights Brought Home points out, these will include central and local government, the police, immigration officers and prisons. It will also include areas of activity which were previously within the public sector, such as privatised utilities, and so would include companies such as Group 4. These organisations are already susceptible to judicial review under Ord 53 of the Rules of the Supreme Court. The Act would also appear to include in its definition of a public authority private organisations which are carrying out a function which would otherwise be undertaken by a public authority, such as the Jockey Club. The ECHR will also bite on mixed enterprises, that is, when a public enterprise is not a statutory corporation but one where the Government owns shares in a limited company. In relation to the latter points, the ECHR will apply only 259


when the act concerned is of a public nature, not a private one. Therefore, it will not necessarily apply to an internal grievance procedure, but would apply to dealings with members of the public or membership of an organisation such as the Jockey Club, if that membership was of a public character.

CAUSES OF ACTION, COURTS AND TRIBUNALS This section sets out the categories of legal proceedings, and the courts and tribunals, in which the ECHR may be used. The Act will make it unlawful for a public authority to act in a way which is incompatible with one or more ECHR rights. There are two exceptions to this – where the public authority could not have acted differently as a result of a provision of primary legislation, or where the public authority was acting to give effect to provisions of primary legislation (or made under primary legislation) which cannot be read or given effect in a way compatible with the ECHR. The Act provides that a person who claims that a public authority has acted unlawfully may bring proceedings under the Human Rights Act in the appropriate court or tribunal, or they may rely on the ECHR in any legal proceedings (that is, any proceedings brought by, or at the instigation of, a public authority, and any appeal proceedings) provided that they are, or would be, a victim of the unlawful act. A ‘victim’ is defined in the same way as a victim is defined under the ECHR (Art 34). The ECHR provides that: ‘the Court may receive applications from any person, non-governmental organisation or group of individuals claiming to be the victim of a violation [of the ECHR].’ This will include individuals, companies and unincorporated associations. There is extensive case law under the ECHR as to who can be regarded as a ‘victim’. In many cases this will be clear. For example, there will be no doubt that a person who has been arrested and detained by the police, or who is the subject of a deportation order, may claim to be a victim of a violation of their ECHR rights. However, there are a number of situations where the position is less clear. For example, it is not possible to bring an ECHR case about a purely hypothetical situation, but it is possible to be considered a ‘victim’ if a person is at risk of being directly affected by legislation or administrative practices which breach the ECHR (such as the applicants in cases concerning the Northern Ireland legislation which prohibited homosexual acts). A second example is that a person who is indirectly the victim of an act or decision which breaches ECHR rights may also claim to be a ‘victim’. Cases are frequently taken to Strasbourg by the relatives of a person who has been excluded or deported from their country of residence. A third example is that the heirs of an applicant who has died may continue the proceedings in Strasbourg. 260


The effect of adopting the Strasbourg test as to who is a victim will be to, to a certain extent, expand the categories of people who may bring proceedings in the courts in this country, as the Strasbourg rules are wider than the equivalent rules in the domestic courts. For example, it would not ordinarily be possible in the domestic courts for a person to bring proceedings on the basis that they are at risk of being directly affected by a particular practice in the same way as such cases have been dealt with in Strasbourg. However, in other crucial respects, to adopt the Strasbourg test would be to restrict the categories of organisations who may bring public interest cases, and therefore to reduce access to justice. For example, an applicant in judicial review proceedings must satisfy the court that they have ‘sufficient interest’ in the case. In a series of cases in recent years, the courts have accepted that this definition can include non-governmental organisations such as the Child Poverty Action Group, 3 Greenpeace, 4 and the World Development Movement5 in circumstances where there is no one individual in a position to litigate a case raising important issues of public interest, but where a respected non-governmental organisation (NGO) is able to do so. A second example is the position of statutory bodies such as the Equal Opportunities Commission (EOC). The House of Lords has held that the EOC may have standing to bring cases challenging discriminatory practices, in view of its remit under the Sex Discrimination Act 1975. The EOC consequently has successfully challenged the Government’s failure to implement European directives affecting part time workers (a majority of whom are women).6 Despite the suggestion in the earlier Labour Party consultation paper Bringing Rights Home7 that the rules of standing might be widened (or at least maintained as they are), the Government proposes to reduce the scope of standing to bring proceedings invoking the ECHR. Liberty believes that there is no justification for such a retrograde step and that it is essential that statutory bodies such as the EOC, and NGOs, continue to be able to bring proceedings in the circumstances already established by the High Court. Such organisations can play a vital role in bringing matters of important public interest before the courts. The proposals would mean that an organisation such as the EOC would have standing to bring proceedings in a case in which domestic and/or European Community law was invoked, but not if the ECHR were invoked. That would be a nonsensical situation. It cannot be justifiable

3 4 5 6 7

R v Secretary of State for Social Services ex p CPAG [1990] 2 QB 540. R v Her Majesty’s Inspectorate on Pollution ex p Greenpeace (No 2) [1994] 4 All ER 329. R v Secretary of State for Foreign and Commonwealth Affairs ex p World Development Movement [1995] 1 WLR 386. R v Secretary of State for Employment ex p Equal Opportunities Commission [1994] 2 WLR 409. Labour Party, Bringing Rights Home: Labour’s Plans to Incorporate the European Convention on Human Rights into UK Law, para 4. 261


for one effect of the incorporation of the ECHR to be a serious restriction on access to justice in the way we have outlined above. The effect of the Act is that the ECHR may be cited in any proceedings relating to a public authority. Therefore, the ECHR could be invoked in proceedings for an established tort, such as negligence, breach of confidence or false imprisonment. When the violation of ECHR rights complained of does not amount to an established cause of action, then proceedings could be brought for a breach of the Human Rights Act itself. An example of the latter situation is a case concerning privacy. There is currently no statutory or common law right of privacy, but, in this case, proceedings could be brought under the Act alleging a violation of Art 8 of the ECHR. The ECHR could also be invoked as a defence in criminal proceedings, or in other proceedings such as judicial review, industrial tribunal proceedings or breach of contract (and as a defence and/or counterclaim in such proceedings). Liberty believes that this broad approach is the right one to take. The Act goes further than some commentators had expected on the question of remedies, by leaving it to the discretion of the courts. This principle is supported by Liberty. It means, for example, that (depending upon the jurisdiction and powers of the court in question) damages and injunctions will be available in civil actions. In judicial review, the usual orders will be available: certiorari (an order quashing a decision), prohibition (an order stopping a particular act), mandamus (an order to compel a particular act to be carried out), injunction, declaration and damages. Damages are, however, restricted by the Act, which places a number of qualifications on the quantum of the damages which can be awarded as a remedy, and stipulates that such damages can be awarded only by a court which explicitly has the power to do so or has the power to order the payment of compensation in civil proceedings. Furthermore, damages will not be awarded unless a court is satisfied that is it necessary to provide just satisfaction, having taken into account any other relief granted by any court, and the consequences of any decisions taken by any court relating to the act complained of. The Act requires the court to take into account the principles applied by the European Court in deciding both whether to award damages and the quantum of award. Finally, damages cannot be awarded under the Act in respect of any act of a court. A challenge to an act of a court may only be made by way of an appeal, or by judicial review. The test of just satisfaction is taken from Art 41 (under Protocol 11, which came into force on 1 November 1998) of the ECHR, under which the Strasbourg Court may award compensation to successful applicants. The object of awarding compensation in Strasbourg is to put the successful applicant, so far as is possible, in the position he or she would have been in had the violation not occurred. Such compensation may include both pecuniary loss (quantifiable financial loss) and non-pecuniary loss (such as

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emotional distress and anxiety). These principles are very similar to the principles applied by the domestic courts in deciding the amount of damages in tort. One consequence of incorporating the Strasbourg compensation test is that a court which finds violations of both the ECHR and domestic statutory or common law arising out of the same incident in the same case may have to consider different tests in awarding damages. For example, a case concerning a person’s arrest, detention and treatment by the police could be argued on a number of grounds, such as a breach of provisions in the Police and Criminal Evidence Act 1984 and Art 5 of the ECHR (right to liberty and security of the person). Were a court to find a violation of both the 1984 Act and Art 5, different considerations would apply as to how to decide the level of damages to be awarded. Awards in Strasbourg have been relatively infrequent and lower than comparable awards might have been in our domestic courts. Indeed, the European Court will not infrequently find that the finding of a violation of the ECHR is in itself ‘just satisfaction’ for the applicant. An example will help to illustrate the problem. A recent Court of Appeal case laid down guidelines for awards of damages in false imprisonment cases.8 In that case, £500 was suggested as compensation for the first hour of imprisonment, continuing on a sliding scale to £3,000 for the first 24 hours. In addition, the Court of Appeal advised that exemplary damages of £25,000 could be awarded in ‘deserving’ cases (with a usual maximum of £50,000). In contrast to this, in the case of Stanley Johnson,9 the European Court found that Mr Johnson’s detention in a psychiatric hospital between June 1989 and January 1993 violated Art 5(1) of the ECHR. Mr Johnson was awarded £10,000 in non-pecuniary damages. Whilst these two cases of course concern very different circumstances, they do illustrate the difference in approach in determining what are considered to be suitable levels of damages.

OTHER SUBSTANTIVE RIGHTS Liberty is also concerned that Art 13 of the ECHR has not been incorporated. Article 13 is an important Article which ensures that for any violation there are effective remedies. It states: Everyone whose rights and freedoms set forth in this Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.

Although it is the Government’s intention that this Act will provide all the mechanisms necessary for effective remedies, the inclusion of Art 13 itself 8 9

Thompson v Commissioner of Police for the Metropolis; and Hsu v Commissioner of Police for the Metropolis [1997] 2 All ER 762. (1997) unreported, 24 October. 263


would have ensured that the courts could assist with this process and could fill in any unintended gaps when necessary. The same argument applies for Art 1 of the ECHR although the wording makes it difficult to apply directly. Article 1 states: The High Contracting Parties shall secure to everyone within their jurisdiction the rights and freedoms defined in Section 1 of this Convention.

It might have been worthwhile to incorporate a modified version of this as a preamble to the Act as a whole. There are also a number of additional protocols to ECHR which contain substantive rights. Protocols 1 and 6 are incorporated by the Act. Protocol 4 contains the right of freedom from imprisonment for breach of contract, the right of freedom of movement within and from and to the country. Protocol 7 gives rights of due process to aliens and those subject to deportation procedures. It also includes the right to appeal in criminal cases, compensation for miscarriages of justice, a ban on double jeopardy and equality between spouses. There are also other protocols being drafted by the Council of Europe which, if ratified and incorporated by the UK, would substantially improve UK citizens’ rights.10 The Government has not included these other Protocols in the list to be incorporated, although the White Paper proposes that the rights contained in Protocol 7 will be ratified and incorporated after there have been adjustments to domestic law to bring it in line with those rights.

NEW LEGISLATION The Human Rights Act requires that declarations of compatibility with the ECHR be made by a Minister in charge of any new Bill. The Minister either must make a statement that the Bill’s provisions are compatible with the ECHR or make a statement that, although he or she is unable to make a statement of compatibility, the Government nevertheless wishes the House to proceed with the Bill. Either statement must be in writing, although it is up to the Minister to decide what manner he or she considers to be appropriate. Liberty welcomes the principle behind s 19, however, we consider that it requires considerably more detail and certainty. Liberty proposes that a human rights impact assessment of all legislation (primary, secondary and delegated) should be introduced. A Human Rights Impact Assessment would require the relevant Minister to ensure that the proposed Bill or policy has been scrutinised for conformity with the ECHR and, when relevant, other

10 The first of these concerns minority rights and the second a new improved antidiscrimination provision modelled on ICCPR, Art 26. 264


international standards. The result of that assessment would appear on the face of that legislation, thereby alerting MPs and others to the potential consequences. Where the Minister accepts that a human rights issue is raised, then he or she must give reasons for pursuing the policy. This information should be made available when the Bill or other legislation is first published. If human rights impact assessments are successfully introduced, it will be this system more than any other which nurtures a culture of rights and responsibilities, not only within Parliament and the judiciary, but also the Executive and Whitehall. Bills and other legislation which are identified as raising human rights concerns, or in regard of which the Government chooses not to issue a statement of compatibility, should be required to undergo more stringent scrutiny, including review by a Special Standing Committee, members of which are able to call evidence and cross-examine witnesses. When there is dispute as to a Bill’s human rights impact, the dispute should ultimately be decided by an authorised person outside of the party political process, such as Speaker’s Counsel.

CONCLUSION The Human Rights Act is a highly significant reform which will bring enormous benefits regardless of how its incorporation is achieved. Parliamentary sovereignty will undoubtedly be upheld, whatever reforms are brought in. The challenge is to identify a way of ensuring that parliamentary sovereignty is maintained, and maybe even enhanced, by providing additional opportunities for Parliament to hold the Executive to account. If such a challenge were met, it would improve both individual rights and the quality of democracy. The UK’s human rights record is not as one would expect from the world’s oldest democracy. We may not witness the torture and extra-legal killings usually associated with human rights abuses overseas, but, nevertheless, not only has Amnesty International had cause to raise concerns about the UK’s record with regard to Northern Ireland, criminal trials and the treatment of refugees and asylum seekers, but we have one of the worst records of any country in Europe in the European Court of Human Rights.11 The UK is also without a written constitution, highly unusual amongst modern democracies, and, in addition, the legislature does not embrace the concept of ‘rights’. In their place, we have ‘privileges’, these being any actions not expressly proscribed by law. As such, there are no identifiable and enforceable positive

11 Up to the end of 1997, the Court had upheld violations in 50 cases against the UK. 265


human rights to protect the people of this country. At present, and until the Human Rights Act currently before Parliament is enacted, our rights exist only to the extent that they have not been taken away by the courts or, more frequently, by Parliament. They exist only ‘in the silence of the law’. The incorporation of the ECHR into domestic law will begin to redress this situation. However, both the ECHR itself and its manner of incorporation are far from perfect solutions. The introduction of a full constitutional Bill of Rights would guarantee those rights which the UK has already agreed to uphold in international law and introduce a recognised culture of rights into society. That a Bill of Rights would give considerable new powers to the judiciary has given rise to concerns among some who would otherwise support a Bill. It is arguable, therefore, that a constitutional Bill of Rights should not be introduced without the reform of judicial appointments that would remedy the unrepresentative nature of the present judiciary. The constituency from which appointments are currently made should be broadened, allowing solicitors, barristers and academic lawyers to be appointed to all courts. A modern appointment and promotion system should be adopted, which would include public advertising of posts, shortlisting and interview. This would serve to create a more accountable system and allow for the implementation of an equal opportunities policy.

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CHAPTER 15

THE CASE FOR SOCIAL AND ECONOMIC RIGHTS

Mary Seneviratne

INTRODUCTION This chapter examines the arguments for developing socio-economic rights for citizens, and the philosophical and practical implications of doing so. The theme of this book being participation, the argument of this chapter is that unless citizens have access to the good things in life, they will not be able to participate effectively in citizenship. Aside from participation, there is also an argument that the right to well being is itself a basic human right which the constitution ought to guarantee. Two questions arise here: first, does the widening of participation require some kind of redistribution of material resources and, secondly, is the creation or recognition of rights an appropriate way of doing this? What, then are social and economic rights? They include rights of access to housing, health care services, sufficient food and clean water, social security and education. They are not just rights to the basic necessities for sustaining life (food, clothing, shelter), but also to the means of improving the capacity to achieve one’s full potential, and, thus, include a right to education and to effective opportunities for productive employment. They are sometimes referred to as ‘second generation’ rights, which derive from the growth of socialist ideas in the late 19th and early 20th centuries, and as such, they are distinguished from the ‘first generation’ civil and political rights which are associated with 18th century notions of the rights of man.1 While there appears to be some measure of agreement about the justification for the traditional civil and political rights, the right to social and economic well being is not universally accepted. Even where such rights are accepted, the method of enforcement is often considered problematic.

‘POSITIVE’ AND ‘NEGATIVE’ RIGHTS? The difference between the two types of rights is often expressed in terms of ‘negative’ and ‘positive’. Civil and political rights, the ‘first generation rights’, 1

Craven, The International Covenant on Economic, Social and Political Rights, p 8. 267


are thought of as ‘negative’ rights based on the principle of minimal interference. They set a minimum standard for the relationship between the ruler and the ruled, and are concerned with protecting citizens from tyranny by the ruler. They are a method of checking the political power of the majority, and removing some matters from the ambit of parliamentary politics so that certain interests ‘will not be sacrificed at the whim of majoritarian preferences’.2 Social and economic rights, on the other hand, are seen as ‘positive’ in the sense that, rather than requiring the State to refrain from interfering with the exercise of certain rights by individuals, the State is actively to facilitate access and provide certain goods and services. In other words, the State must take reasonable and progressive measures to secure these rights. In most countries and in international law, generally, a distinction is drawn between civil and political rights, which are the traditional subject of human rights doctrine, and social and economic rights. The latter are perceived to be a more recent phenomenon, and considered to be different from the former as they impose a positive administrative duty and, more importantly, a financial burden on the part of the State. So, while a decent standard of living for all is a proper aim of social policy, it could be argued that the delivery of this depends more on economic prosperity than legislation.3 This makes it difficult to insist upon the imposition of social and economic duties towards its citizens on the State. Even if formally recognised, these rights are, in practice, difficult actually to deliver. Certainly, in international law, the enforceability of socio-economic obligations cannot be divorced from economic realities and politics.4 This is not to say that there are no international obligations in relation to social and economic rights,5 and, indeed, one of the principal aims of the Charter of the United Nations, as expressed in its preamble, is the ‘promotion of the economic and social advancement of all peoples’. Despite this, the Universal Declaration of Human Rights adopted on 10 December 1948 by the General Assembly of the United Nations devotes the first 21 Articles to traditional political and civil rights. It is Arts 22–25 which provide for social and economic rights, including the right to social security, the right to work, the right to rest and leisure, and the right to a standard of living adequate for health and well being. Two separate Covenants, based on the Declaration, were drafted by the Human Rights Commission, one for civil and political rights, and the other for economic, social and cultural rights. This was done on the basis that the latter, involving as they did a financial imposition on governments, could not be drafted in the same way as the traditional rights, 2 3 4 5

Cockrell, ‘The South African Bill of Rights and the duck/rabbit’, p 529. Robertson and Merrills, Human Rights in Europe, p 349. Dowald-Beck, ‘A duty in international law to provide for basic needs’, p 44. Lewis and Seneviratne, ‘A Social Charter for Britain’, pp 31–37. 268

The Case for Social and Economic Rights

which essentially guarantee the individual’s freedom and non-interference by the Government.6 It has, however, been suggested that the distinction between the two categories of rights, and indeed, the reasons for the two Covenants, is a function of the ideological conflict between East and West during the drafting of the Covenants. The communist states championed the cause of social, economic and cultural rights, which they associated with the aims of a socialist society. It was the Western states which asserted the priority of civil and political rights as the foundation of liberty and democracy in the free world.7 As a result of this, two separate Conventions were drafted, which reflected ‘the perception that the two categories of rights were different in nature, origin and significance’.8 This has since been used as evidence of the ‘inherent opposition of the two categories of rights,’ and has contributed to the idea that socio-economic rights ‘are in reality a distinct and separate group of human rights’.9 More seriously, however, it has contributed to the idea that these rights are of a lower order than civil and political rights, and has led Craven to the conclusion that, as a matter of international practice, they are largely ignored. Certainly, it appears that the international community treats breaches of civil and political rights as though they were far more serious than the direct denial of social, economic and cultural rights.10 The differences between the two types of rights have been seen to be so fundamental that the validity of the ‘second generation’ rights have been called into question. Hayek, for example, argues that rights are concerned with the protection of individual autonomy. He differentiates between being ‘free’, that is not being constrained by intentional coercion, and being ‘unable’, and argues that it is only civil and political rights that relate to ‘being free’, and, thus, to individual autonomy. This guarantee of freedom requires the absence of intentional restraint and coercion, and this is protected by negative rights. Freedom and autonomy are not concerned with rights to resources.11 Such scepticism about the validity of socio-economic rights has been said to rest on two basic assertions.12 First, human rights are said to derive from a natural law tradition which is concerned with individualism, personal autonomy and freedom from interference by the State. This provides justification for a limited range of civil and political rights, but not for social and economic rights, which have a different, even a conflicting, theoretical

6 7 8 9 10 11 12

Dowald-Beck, ‘A duty in international law to provide for basic needs’, p 47. Craven, The International Covenant on Economic, Social and Political Rights, pp 8–9. Ibid, p 7. Ibid, p 9. Ibid, p 9. Hayek, The Constitution of Liberty, p 9. Ibid, Craven, p 10. 269


rationale.13 These latter rights have, indeed, been perceived by some as involving an unjustified interference with personal liberty because they require some redistribution of wealth and positive interference by the State.14 The second reason for scepticism is because it is claimed that social and economic rights are not universal and absolute, characteristics which are seen as essential for human rights, and this has ‘debilitated, muddied and obscured’ the concept of human rights.15 Plant has argued that there is no categorical difference between these two kinds of rights, and that the philosophical case for social rights is no less plausible than the case for civil liberties. He takes issue with the arguments in which the New Right has attacked the idea of social and economic rights.16 For the New Right, social and economic rights are not proper rights because there are no corresponding duties attached to them. Civil rights, being negative and, in essence, demanding freedom from interference, do not present a resource problem for the State. On the other hand, social and economic rights imply a commitment to expending resources, and thus involve costs. If the resources are not available, the rights cannot be met. The argument is that, as these rights have to be rationed, they cannot be rights. As there cannot be a legally enforceable right to a scarce resource, and as needs are open-ended without clear limit, these rights are not justiciable, and, therefore, cannot be proper rights. Another argument of the New Right is that enforcement of these rights would present problems because there is no clear agreement on how to distribute scarce resources. Such resources could be distributed on the basis of merit, or need, or desert, or entitlement, or equality. Distribution which was not based on the market would have to depend on ‘professional’ judgment, and this would empower professionals and bureaucrats in the public sector. In addition, if provision of social resources is seen in terms of rights, public services could not be privatised because no market could possibly guarantee delivering these basic resources as rights of citizenship. Plant’s response to these arguments is that they reflect a view about the nature of citizenship which is only seen in civil and political terms. He argues that citizenship can also be seen in social and economic terms, and that political and civil freedoms would remain abstractions unless people have the social and economic resources to be independent citizens.17 As for the argument that civil and political rights do not involve resources, he argues18 that the enforcement of civil rights has resource implications as 13 14 15 16 17 18

Minogue, ‘The history of the idea of human rights’, pp 13–14. Nozick, Anarchy, the State and Utopia, pp 167–74. Cranston, ‘Human rights real and supposed’, p 43. Plant, ‘Citizenship, rights and welfare’, pp 18–20. Ibid, p 21. Ibid, pp 21–22. 270


there are costs involved in sustaining police forces, courts and prisons. He anticipates the counter-argument, that enforcement is a more incidental feature of civil and political rights whereas costs are intrinsic to social rights, by arguing that an enforcement mechanism, and therefore the costs of enforceability, are intrinsic to all sorts of rights, not just social ones. Thus, civil and political rights become positive rights to resources because of the costs of enforcement. He also argues that, like social and economic rights, society, through political processes, decides what level of resources to allocate to the police service and other enforcement mechanisms, just as there are political negotiations about the level of resources allocated to health care or education. Fried, too, points out that, although negative rights, being essentially about being left alone, are not a scarce or limited commodity, they are not costless, in that resources are needed to enforce them.19 In addition, not all civil and political rights are negative. For example, the right to a fair trial is not concerned with being left alone, nor is the right to vote. Sadurski sees no reason, therefore, to limit the notion of rights only to those ‘which are correlated with negative duties’,20 and sees nothing in the concept of a right, or in a general theory of rights, ‘which confines the notion of rights only to those rights which are coupled with the negative duties of non-interference’.21 The differentiation of rights into negative and positive categories does not provide a reliable test for the notion of a right, and there may be an argument for saying that the boundary between negative and positive rights often becomes blurred.22 For example, the right to a good education may be seen as a positive right, but it could also be seen as an essential component of free speech, since without it, citizens are not able to communicate their opinions to others effectively.23 Similarly, a right of subsistence may be a positive right, but it may also be interpreted as a right of non-interference, which would ensure, for example, that agricultural land was not used for purposes which would prevent its being used to provide the staple diet of a rural community.24 It is, then, implausible to deny that socio-economic rights are not ‘proper’ rights simply because they are positive and require the allocation of scarce resources. Fried has argued that if there are rights at all, then there are positive and negative ones. What may need further elaboration is the moral basis on which rights are grounded, but ‘the case for negative and positive rights stands or falls together’.25 Craven has pointed out that it is not universally 19 20 21 22 23 24 25

Fried, Right and Wrong, p 32. Sadurski, ‘Economic rights and basic needs’, p 54. Ibid, p 55. Laws, ‘The constitution, morals and rights’, p 630. Irvine, ‘Response to Sir John Laws’, p 638. Ibid, Sadurski, p 58. Ibid, Fried, p 47. 271


agreed that the natural law tradition, with its emphasis on individual freedom and autonomy, did in fact provide a coherent philosophical basis for the modern notion of a human right.26 The collectivist values inherent in social and economic rights are thus not in conflict with modern ideas about human rights. Social and economic rights, being essentially contingent on resource allocation, may, to a large extent, be of a different order to civil and political rights. This does not mean, however, that there is no case for socio-economic rights.

WHY HAVE SOCIO-ECONOMIC RIGHTS? The argument for socio-economic rights can be based on one of social justice. Gewirth has noted that ‘economic justice is one of the most controversial areas in the whole range of moral philosophy’.27 To say that the State has a duty to refrain from interfering with the exercise of rights by individuals is one thing. It is of a different order to argue that the State has actively to facilitate access to social and economic rights, which involves the State implementing reasonable and progressive measures to secure them. The difficulty is that, even if the rightness of such a course of action is conceded on the basis of social justice, the concept of justice itself is not unproblematic. Several classical statements about the nature of justice exist. For John Rawls, justice meant that ‘All social values – liberty and opportunity, income and wealth, and the basis of self-respect – are to be equally distributed unless an unequal distribution of any, or all of these values is to everyone’s advantage’.28 According to Dworkin, justice involves individuals having a right to equal concern and respect.29 Tunc did not try to define justice, noting that Aristotle failed to do so, and that some authors feel that no single theory can account for the complexity and diversity of the concept. He does, however, believe that there is general agreement that equality is an important ingredient of justice.30 As for economic justice, while at a basic level it ‘may be characterised as being concerned with who should get what and why’,31 Gewirth has noted that six different ways of distributing social and economic goods have been identified: to each according to his virtue, effort, contribution, agreements, needs and society’s rules. Each of these has different

26 27 28 29 30 31

Craven, The International Covenant on Economic, Social and Political Rights, p 11. Gerwirth, ‘Economic justice: concepts and criteria’, p 7. Rawls, A Theory of Justice, p 62. Dworkin, Taking Rights Seriously. Tunc, ‘The quest for justice’, p 350. Ibid, Gerwirth, p 7. 272


implications for social policy and the relation between freedom and equality.32 Douglas Lewis and myself base our discussion about the introduction of a Social Charter in the UK on a belief that people have basic rights to well being and to share in the nation’s prosperity. 33 Such rights are backed by international obligations. These rights are seen as a necessary condition for self-fulfilment and expression, on the basis that it is difficult to express one’s personality or make free choices if one is economically deprived.34 If there is general agreement that individuals have rights to self-determination, the right to well being becomes an aspect of this. JK Galbraith has noted that ‘Nothing … sets a stronger limit on the liberty of the individual than a total absence of money’.35 At a simple level, this can be expressed as ‘beggars can’t be choosers’. Plant considers that welfare is a basic human right which should be ranked alongside other rights such as the right to life, liberty and property. He argues that welfare institutions are central to the moral legitimacy of government in the same way as are institutions which protect civil and political rights.36 He bases his justification for social and economic rights on the interrelationship between liberty and ability or power. The value or worth of liberty is that it allows individuals to do more of what they want to do, and, therefore, being enabled to do something is interrelated with the concept of liberty. Thus, liberty requires resources which secure the same kind of value for liberty for each individual. All human beings require a class of basic goods which are a necessary condition of agency, and which should therefore be protected in terms of rights. These basic needs are more than is necessary for mere survival, and must include some element of a worthwhile life, or physical well being. This would therefore include not only food and shelter, but also healthcare, and education, which ensures an individual’s capacity for choice and effective functioning.37 Sadurski justifies socio-economic rights on the basis that all human beings have certain basic needs. If these are not satisfied, an individual cannot subsist and participate meaningfully in social life.38 This approach is adopted by Shue, who sees social and economic rights as essential conditions for the full enjoyment of civil and political rights, since ‘No one can fully, if at all, enjoy any right that is supposedly protected by society if he or she lacks the

32 33 34 35 36 37 38

Gewirth, ‘Economic justice: concepts and criteria’, p 12. Lewis and Seneviratne, ‘A Social Charter for Britain’, p 31. Ibid, p 53. Galbraith, ‘The good society considered: the economic dimension’, p 3. Plant, ‘Needs, agency and rights’, p 22. Ibid, pp 28–29. Sadurski, ‘Economic rights and basic needs’, p 50. 273


essentials for a reasonably healthy life’.39 The argument is, therefore, that freedom and autonomy can only be made meaningful if an individual also has a certain degree of material security. Freedom of expression is of little value, for example, if one is starving, but, as Craven points out, this is a limited justification, as material security only has an instrumental value, and is relevant only in so far as it contributes to individual freedom and the enjoyment of civil and political rights.40 Gewirth argues that social and economic rights have a more than instrumental value. They are inherently valuable in so far as they relate to fundamental elements of the physical nature of human beings, which includes their ability to enjoy social goods.41 Gewirth makes the case for such rights on the basis that every agent must logically hold or accept that he or she has rights to freedom and well being, and must accept that others have these rights equal to her or his own (that is, that every person has equal rights to freedom and well being). 42 as the necessary conditions of action and successful action in general.43 For Gewirth, basic needs and the protection of liberty are not fundamentally distinguishable, and these basic human rights can be shown to follow logically from the generic requirements of consistency in action.44 Whether one bases one’s reasoning upon Gewirth or upon the old maxim ‘do unto others as you would have done to you’, such a stance has implications for social and economic justice and the distribution of social and economic goods. It could be argued that the market is the only mechanism of exchange which is needed, as it is the most effective way of distributing social and economic goods. The market may be considered to be a superior mechanism for distribution because it is based on consumer choice, and economic selfinterest may be the most efficient way of ensuring that citizens have a share in the nation’s prosperity. Moreover, the argument is that any interference with the market is a threat to liberty and ought to be resisted. In other words, redistribution of social and economic goods distorts the market, and therefore is unacceptable. The driving force of this model is a commitment to individual choice as a means to self-determination. There is recognition that some essential services, education and health, for example, must be available to all, irrespective of means, but even welfare policies should promote choice as far as possible, and exist only to provide a safety net for those who are incapable of choosing to help themselves. Free choice in the market is, thus, seen as the most effective way of empowering individuals. 39 40 41 42 43 44

Shue, Basic Rights, pp 24–25. Craven, The International Covenant on Economic, Social and Political Rights, p 22. Gerwirth, Human Rights, p 7. Gerwirth, ‘Economic justice: concepts and criteria’, p 18. Ibid, p 22. Gerwirth, ‘Economic rights’. 274


But, the market is not necessarily the most efficient, nor, indeed, the most fair, way of exchanging economic and social goods. The model does not acknowledge the inequalities already existing in society, except insofar as there seems to be a belief that inequality may be a fair price to pay for freedom to choose. There is no acknowledgement that some individuals might require protection from unfettered market forces. One may accept that the market system provides a large range of consumer goods abundantly and efficiently, but, as Galbraith notes, there are some things which cannot be left to the market system, and in ‘the good society’, these will be the responsibility of the State.45 By way of example, he cites good, low cost housing, which the market system does not provide. Given that ‘few things are more visibly at odds with the good society than badly housed or homeless people’, the provision of such housing is of prime importance and must be a public responsibility.46 Health care for the needful must also be a public responsibility. Gewirth, too, casts doubt on the classical free market system model as a sufficient criterion of economic justice. He doubts whether the so called freedom of choice guaranteed by the market can be upheld, given the complexities of the productive process and the difficulties of discovering whether an individual’s abilities to take part in the productive process are derived from themselves or ‘from a complex prior matrix of inheritance and social nurture, including education’. He also questions the quality of ‘freedom’ which is based on economic necessity.47 In other words, we are not all coming to the ‘free’ market as equal players, and this inequality is not necessarily (indeed, in most cases, not at all) the outcome of our own action or inaction. Furthermore, the market system does nothing for those ‘who do not participate in the productive process at all, or who do participate, but only to an extent that does not enable them to fulfil their basic needs’.48 The argument for distribution by means other than the market is, therefore, that increases in overall prosperity do not guarantee that all citizens will share in that prosperity. The private enterprise economy does not meet all individual needs. Indeed, it can be argued that self-interest can be selfdefeating, and that on many occasions the rational choice for each individual is to act collectively as it is only by acting with others that individuals can improve their individual welfare.49 Although living standards in general may improve under a market economy, it does not necessarily follow that all citizens enjoy greater social and economic prosperity than they did before. National economic growth, under a market economy, can mean profits for 45 46 47 48 49

Gerwirth, ‘Economic rights’, p 4. Ibid, p 4. Gerwirth, ‘Economic justice: concepts and criteria’, p 23. Ibid, p 23. Ranson and Stewart, ‘Citizenship and government: the challenge for management in the public domain’, p 8. 275


companies, but the existence of millionaires does not necessarily translate into benefits and prosperity for all citizens. The ‘trickle down’ effect has been largely illusory. Increased wealth in a country does not of itself improve the access of the poor to basic social and economic rights, and it may in fact diminish access. Increases in gross national product usually are unevenly distributed, and the gap between the rich and the poor consequently widens. The market economy may lead to an overall growth of the economy and an increase in the availability of material goods to the average citizen. But, it can also lead to an increase in human misery in terms of the increase in pollution, workplace hazards and an increase in inequality. The market system may therefore encourage wealth creation, but, if it is accepted that prosperity needs to be shared, it is implicit that there has to be some redistribution. In order to ensure the social and economic well being of all citizens, some mechanism, other than the market, is needed to distribute certain goods and services and ensure access to resources. Even when this is accepted, there is still the question of what goods and services need to be redistributed, and the basis of that distribution. Many are content to argue for equality of opportunity rather than equality of outcome. So, for example, there is an argument that there is no need for wealth or property to be equalised, but rather that, beyond the minimum requirement for basic goods, people should have as nearly as possible equal chances for developing and utilising their own capabilities for successful agency. 50 Equality of opportunity does not necessarily produce an egalitarian society, although it can go some way to minimising inequality of outcomes. It reduces inequalities, rather than producing equality. Hutton has argued that the Welfare State has to address inequalities in income and wealth because these result in inequalities in power, and, thus, mean that freedom is qualified.51 Also, in order even for there to be sufficient equality of opportunity, there must be a certain redistribution of income and wealth. One method of achieving equality of opportunity and equality of outcome is by employing the language of socio-economic rights.

WHY ‘RIGHTS?’ The discourse of ‘rights’ has emerged, internationally as well as nationally, as an appropriate way of ensuring access to resources. As we have seen, the Universal Declaration of Human Rights proclaims that there should be, inter alia, a ‘right to social security’, a ‘right to work’, a ‘right to rest and leisure’, a

50 Gerwirth, ‘Economic justice: concepts and criteria’, p 29. 51 Hutton, The State We’re In. 276


‘right to education’, and a ‘right to freely participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits’. Modern liberal thought is very often expressed in terms of rights, and their appeal is compelling in that they represent the idea that there is a higher order law to which even Parliament is subject.52 Thus, minorities, and others who cannot protect themselves adequately through the democratic process are protected by Bills of Rights, and certain subjects are withdrawn ‘from the vicissitudes of political controversy, to place them beyond the reach of majorities and officials and to establish them as legal principles to be applied by the courts’.53 Minogue also notes that rights are valuable because of their purchase upon some superior source of authority, beyond the hazards of shifting political judgment.54 The appeal of the rights discourse is not lost on political parties. The previous government introduced the Citizen’s Charter, which was based on an implication of the ideology of free choice that people had rights to be informed and choose for themselves on the basis of that information. The Charter aimed to set out a new standard for the delivery of quality in public services, and the way to achieve this was to publish performance targets and information on standards, introduce complaints procedures and inspectorates, and provide better redress for aggrieved citizens. It is sometimes forgotten that the Labour Party also published a Citizen’s Charter in 1991,55 just days before the, then, Conservative Government published their White Paper. The Labour Party, too, believed that consumers needed rights to protect themselves, and that as citizens they needed powers to have these rights enforced. Although using similar rhetoric, Coote notes the different messages propounded by the two parties. Labour’s Charter was to give consumers and citizens nine practical rights in their dealings with companies, public bodies and central and local government. There was to be not only a right to choice, quality, swift and fair redress, information, and some say in decision making, but also rights to safety, equal treatment, citizen’s action and advocacy. The Conservatives, on the other hand emphasised privatisation, wider competition, further contracting out, and performance related pay.56 These differences seem to embody the difference between being a consumer and being a citizen, and, as Ranson and Stewart note, a ‘concept of organisation that encompasses citizens differs from an organisation that knows only

52 53 54 55 56

Laws, ‘Law and democracy’, p 72. Cockrell, ‘The South African Bill of Rights and the duck/rabbit’, p 529. Minogue, ‘What’s wrong with rights?’, p 210. The Labour Government is in the process of relaunching the Citizens’ Charter. Coote (ed), The Welfare of Citizens, p 3.

277


consumers’, 57 as the citizen is both an individual and a member of a collectivity.58 Citizenship, therefore, embodies wider concerns than consumer rights, and rights which are expressed as an aspect of consumerism are failing to address many of the issues. For Coote, these divergent views about how welfare services should be delivered represent a fundamental conflict between left and right about what a welfare system is for and what it should seek to achieve. This reflects different ideas about equality, individual empowerment and collective action. The left has traditionally supported policies which aimed at promoting equality of opportunity, in the broad sense of providing everyone with an equal chance in life. Welfare policies should, therefore, aim to minimise, and compensate for, disadvantages, in order to equalise the life chances of all. This is linked to the idea of individual empowerment being implied in citizenship, which entails being able to participate fully in society, to enjoy its fruits, and to fulfil one’s own potential. The conclusion of this is that all citizens must have equal access to education and healthcare, and other services which are necessary to give them an equal chance in life. This model is not built upon philanthropy, but on equal citizenship as a means of self-determination.59 For the Right, on the other hand, the rights of citizens are little more than individuals having the right to make certain transactions; to receive a service and to complain and seek redress.60 Plant sees the conflict between left and right in terms of a different approach to empowerment. For the right, the only method of empowerment is as a consumer in the market place. For the left, empowerment is seen in terms of regulating or democratising the delivery of public services in order to curb the power of professionals. This may be achieved by making professional power more accountable to a higher bureaucracy, such as an inspectorate or regulatory body, or more accountable to democratic bodies.61 For Plant, the idea of rights presents a new way of empowering citizens in addition to these two.62 Certainly, it is no longer an article of faith on the left that direct state provision of services is the best guarantee of quality, and there is perhaps some agreement across the political spectrum that services should be more flexible to meet individual needs. In addition, it is accepted that appropriate standards for services should be set, and that where there is a grievance, there

57 Ransom and Stewart, ‘Citizenship and government: the challenge for management in the public domain’, p 5. 58 Ibid, p 12. 59 Coote (ed), The Welfare of Citizens, p 4. 60 Ibid, p 6. 61 Plant, ‘Citizenship, rights and welfare’, p 27. 62 Ibid, p 28. 278


should be appropriate redress. Social rights are, thus, seen as a way of enhancing the quality of citizenship.63 The rationale for socio-economic rights is, therefore, that social and economic deprivation effectively excludes citizens from participation in the democratic process. The right to well being is as much a basic human right as is the right to freedom, since without it one cannot participate fully in society. Social justice demands that all citizens should have the opportunity to share in the world’s resources. Such rights are part of our international obligations, including the Universal Declaration of Human Rights. Rights discourse is an appropriate mechanism for achieving social and economic justice because the language of rights has become a powerful political force. Ideas of collectivism and social justice seem now to be unfashionable,64 but that is one of the reasons why the method of achieving social justice and economic and social well being has to be expressed in the language of rights. It is the language which is now used by all political parties, where individual choice has replaced collective responsibility. The new Labour Government is now committed to the market, private enterprise and choice. Given that approach, the language of rights is appropriate to the achievement of economic and social well being. It is now accepted that freedom of choice is a value to be pursued, but the argument for socioeconomic rights is that, in order to fully participate in society and exercise one’s freedom of choice, one must have access to economic resources. Indeed, one has a right, as a citizen, to these resources. Individuals cannot be empowered without access to resources. In the present political climate it may not be possible to achieve any progress in this area, unless these values are conceptualised as rights, so the contemporary rhetoric of rights can be used to achieve this objective. Rights discourse thus has symbolic value. There are some, however, who are wary of adopting the discourse of rights as a method of achieving some redistribution of resources. If one accepts that a right is ‘something to be asserted against someone else’,65 then it could be argued that the language of rights may not be appropriate in the socio-economic context. Rather than resulting in the collective good and a sense of community, if the language of rights ‘becomes a systematic feature of a prevailing social philosophy’, it could ‘tend to give rise to a community of selfish individuals, and therefore no community’.66 In a similar vein, Irvine notes that ‘a society which considers its values to be defined by its rights, rather than its rights defined by its values, is a society that is likely to fail to recognise the value of community and, in particular, the role of individual

63 64 65 66

Plant, ‘Citizenship, rights and welfare’, p 29. Cotterrell and Bercusson, ‘Law, democracy and social justice’, p 1. Laws, ‘The constitution, morals and rights’, p 626. Ibid, p 624. 279


duty within that community’.67 The thrust of these views is that the discourse of rights may result in an individualistic approach, which is out of keeping with a society that seeks to ensure the well being of all. It may be that rights discourse helps to perpetuate the cult of individuality, and panders to the pursuit of self-interest. In addition, as well as fostering individualism, charters of rights may have the effect of entrenching inequalities which already exist in society. At another level, Minogue argues that socio-economic rights discourse obscures the real issues, which are whether transfers of wealth ought to happen, and if they ought, by what means.68 Ison points out some of the dangers in using charters of rights by concluding that the Canadian Charter of Rights and Freedoms has undermined rather than promoted the values which it purports to embody. Rather than adopting the orthodox view, that such charters offer protection to citizens, he concludes that the Charter is counter-productive because it is based upon a conception of the State which does not accord with contemporary reality. The main threat to liberty is not from elected governments, but from agencies such as business and multi-nationals, and the Charter does not ‘reflect, or even accommodate, the perception of elected governments as the only hope that most people have of protection from those who really wield power’.69 The Charter, being based upon a perception ‘of a people whose liberties may be threatened by the power of elected governments’, 70 actually helps to disempower citizens, as it is used by business to defeat and delay legislation which may be in the interests of the wider community. For example, pollution control has been held to be unconstitutional. The major difficulty perceived by some commentators in establishing rights to social and economic well being is that of framing social and economic entitlement in terms of rights since the allocation of scarce social and economic resources has to be a political matter. Indeed, for Minogue the very aspects of rights which make them valuable, the fact that they make a claim to a superior source of authority, beyond political judgment, is what makes socio-economic rights problematic.71 These rights refer essentially to political questions. Laws too, draws a distinction between positive rights, which are ‘the stuff of political debate’, involving, as they do choices between education, health, defence, and many other goals, and the traditional, negative rights, which set minimum standards. While there is general agreement about civil and political rights, there can be much disagreement between ‘decent and

67 68 69 70 71

Irvine, ‘Response to Sir John Laws’, pp 636–37. Minogue, ‘What’s wrong with rights?’, p 220. Ison, ‘A constitutional Bill of Rights: the Canadian experience’, p 499. Ibid, p 499. Ibid, Minogue. 280


honourable people’, in deciding how best ‘to promote opportunities of selffulfilment’, which will necessarily involve hard choices.72 The argument, then, is that these matters cannot be rights because, being political issues, they are not justiciable, and therefore cannot be enforced in the same way as other legal rights. What is it about these kinds of rights which make then not susceptible to legal challenge? LL Fuller has argued that there are three methods of resolving disputes: political, managerial, and judicial. Political and ‘polycentric’ disputes are not capable of resolution by the courts, and should be left to political processes or to administrative discretion as appropriate. Fuller uses a football game to illustrate the point, in that there is no ‘correct’ way to position players during a game, but it has to be a matter of judgment, and any change in position of one player would have consequences for the rest of the team.73 Many of the disputes which arise in respect of socioeconomic rights would be classified not as political but as ‘polycentric’, in the sense that they have a number of interconnected, linked issues. The result is that, if one aspect of the matter is changed, it results in unpredictable consequences for other aspects. Despite involving, as they do, the allocation of limited resources, socio-economic rights are ‘polycentric’ rather than political because of the complexity of the issues involved, and the unforeseen consequences of making a change to one aspect of the allocation process. The courts are understandably wary of entering such a minefield. In a recent case concerning the extent of a public body’s liability for negligence, the judges refused to recognise that the local highway authority had a duty of care in the circumstances of the case, even on the grounds ‘of irrationality in failing to exercise a power’, on the basis that this would ‘inevitably expose the authority’s budgetary decisions to judicial inquiry’, and ‘distort the priorities of local authorities, which would be bound to play safe … rather than risk enormous liabilities for personal injury accidents’.74 Convery notes that to find liability in such cases could be seen as indirectly confining the discretion of public authorities ‘to decide how best to fulfil any number of competing statutory calls on their limited budgets’,75 in addition to opening up ‘a drain on resources which are already overstretched’.76 It is no easy matter to adjudicate in areas of polycentricity even where basic rights and freedoms are concerned. For example, in a recent case

72 Laws, ‘The constitution, morals and rights’. 73 Fuller, ‘The forms and limits of adjudication’, p 359. 74 Stovin v Wise (Norfolk County Council, third party) [1996] 3 WLR 388, p 419, per Lord Hoffman. 75 Convery, ‘Public or private? Duty of care in a statutory framework: Stovin v Wise in the House of Lords’, p 562. 76 Ibid, p 571. 281


concerning the export of live animals,77 the Court of Appeal refused to accept that the chief constable’s policy of restricting police protection to exporters to two days each week, and preventing exports at any other time, was unreasonable in the sense defined by Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation.78 The policy decisions of senior police officers are susceptible to judicial review, but in this case the judges were unwilling to override the judgment of the Chief Constable on how best to deploy his resources. The fact that the decision of the Chief Constable was based on local and resource considerations was effective in undermining ‘the rigour of judicial scrutiny’, with the ‘Tight and relatively inflexible budgetary constraints under which chief constables are obliged to operate’ providing a ‘deterrent to judicial intervention’.79 Any judicial intervention would have had implications for resources, which would have had an impact on other areas of policing activities in the county. In a case arising from the refusal of a health authority to fund expensive medical treatment, the Master of the Rolls spoke of the ‘Difficult and agonising judgments’ which had to be made about how best to allocate limited budgets to the maximum number of patients, concluding that it was ‘not a judgment that the court can make’.80 There is, therefore, a serious issue to be addressed about the enforceability of these rights, but this does not invalidate the basic human right to well being. Some may argue that a right which is not legally justiciable is not a right, but on the other hand, justiciability ‘is merely one of a number of ways to verify a human right’.81 Social and economic rights may not be capable of direct enforcement, but that ‘is not to say that they are meaningless’.82 It is the question of enforceability which will now be addressed.

ENFORCEMENT OF SOCIO-ECONOMIC RIGHTS There can be no doubt that social and economic rights may place demands on resources, and that fully recognising such rights is a matter of making a policy which requires progressive implementation. However, the fact that they are not of the same order as the first generation rights does not mean that they cannot be rights, and one of the main issues facing those who wish to give these rights the same kind of status in the constitution as civil and political 77 R v Chief Constable of Sussex ex p International Trader’s Ferry Ltd [1997] 2 All ER 65. 78 [1948] 1 KB 223 79 Barnard and Hare, ‘The right to protest and the right to export: police discretion and the free movement of goods’, p 399. 80 R v Cambridgeshire Health Authority ex p B [1995] 1 WLR 898, p 906. 81 Chu, ‘The human right to adequate housing’, p 89. 82 Tunc, ‘The quest for justice’, p 335. 282


rights is what mechanisms can be used to make them effective. Without these mechanisms, they could be seen as, at best, bland statements of intent, and, at worst, a sham. Questions of enforceability cannot be divorced from the actual content of socio-economic rights. Even in the context of civil and political rights, where ‘the fundamental importance of human rights is almost universally recognised, the nature and content of those rights is not’.83 How much more difficult it is to determine the nature and content of social and economic rights, particularly when these are set against a background of scarcity.84 At a general level, the rights can be expressed in the same terms as those used in international treaties and charters: social security, healthcare, food, clothing, housing, and education. Of course, at one level, these can only be delivered if there is economic prosperity and the political will to do so. But, the whole idea of using rights discourse is to claim that they should not be granted as a result of political doctrine, but as an aspect of citizenship, and that, whatever the level of economic development, there is a commitment to sharing what prosperity there is fairly between citizens, or at least recognising that sharing as a principle. The difficulties of establishing and making meaningful the enforcement of socio-economic rights should not be underestimated, and judicial enforcement may not be appropriate. In any case, some of the decided cases illustrate a reluctance on the part of judges to become involved in decisions about the allocation of resources, based on the belief that this is an ‘area in which constitutional responsibility rests on the shoulders of our elected politicians’, and that in ‘relation to positive rights, Parliament is necessarily and rightly supreme’. 85 Judicial supremacy may not achieve desired outcomes, as Canadian experience has shown. In this context, Beatty has concluded that the judges have not used the Charter of Rights to hold politicians and public officials to account,86 and that ‘the extent to which human rights are protected in society depends, more than anything else, on the way judges are appointed to its courts’.87 If judges are to be the primary control mechanism, what effective control is there to be against judicial tyranny? Of course, whether one is more concerned about this than Parliamentary supremacy depends, according to Blair, on whether ‘one would prefer to place one’s trust in the integrity of the judiciary rather than the imperfections of the political process; or whether one prefers to trust in a government accountable through the ballot box rather than a judiciary which is unrepresentative, unelected and

83 84 85 86 87

Irvine, ‘Response to Sir John Laws’, p 638. Plant, ‘Citizenship, rights and welfare,’ p 26. Laws, ‘The constitution, morals and rights’, p 629. Beatty, ‘The Canadian Charter of Rights: lessons and laments’, p 482. Ibid, p 498. 283


virtually irremovable’.88 I agree with her that, given this conflict, we are really looking for safeguards and checks and balances. Judicial intervention on the substantive issue, that is, in the allocation of resources, is inappropriate. This would allow to the judges too much power and an influence in areas where they are ill equipped to make the necessary judgment. Nor is there any evidence that the judges are eager to become involved in the function of distributing resources. In fact, the evidence is to the contrary, and judges accept that most aspects of these matters are best left to the discretion of the body entitled to make the decision. For example, in the Stovin case, Lord Hoffman was clear that the timing of the necessary work to be performed by the highway authority, and the budgetary year in which the money was spent, was ‘surely as much a matter of discretion as the decision in principle to do it’.89 Provided the authority has exercised its discretion in the correct manner, the courts will not, and ought not, to interfere. It is this aspect of judicial intervention, the procedural aspect, which holds the key to the effective enforceability of social and economic rights. Given the complexity of the decisions about the allocation of resources, given that these must in essence be matters of political judgment and managerial discretion, the better approach in this area is that of overseeing that decisions are taken correctly. As these rights cannot be absolute rights, fair procedures are crucial in determining who is to be given the resource.90 If social and economic rights become enshrined in the constitution, judicial scrutiny should consist of ensuring that there is effective scrutiny and fair procedures in relation to the delivery of these rights. By way of an example, let us examine the supposed right to housing. This is enshrined as a basic human right in the Universal Declaration of Human Rights in 1948, and is provided for in the International Convention on Social and Cultural Rights, which recognises the right of everyone to an adequate standard of living, including housing. One of the primary human needs is that of shelter, and, in any developed legal system, there should be provision by the State of accommodation for those unable to provide it for themselves.91 The implementation of this right could involve considerable public expense, and decisions have to be made about the nature of the obligation. Even if it is decided that accommodation should only be provided for those in genuine need, should the obligation be reserved for those without any shelter at all, or those in unsatisfactory accommodation?

88 Blair, Discretion and Rights: Political Power and Judicial Control, p 16. 89 Stovin v Wise (Norfolk County Council, third party) [1996] 3 WLR 388, p 417, per Lord Hoffman. 90 Galligan, ‘Rights, discretion and procedures’, p 155. 91 Coombes, ‘The duty to house the homeless’, p 53. 284


Even when the parameters have been set, implementation or enforcement of the right could be achieved in a number of ways. It could, for example, involve the right to have one’s name placed on the housing waiting list administered by a local authority, and the right to fair administration of that list. It could include landlord and tenant legislation, incorporating security of tenure. 92 It could involve a duty on local authorities to provide accommodation for those who are (unintentionally) homeless. All these are mechanisms for establishing the human right to housing. However, the granting of priority rights to some prospective tenants affects those on the housing list who have no such claims to priority, and this can give rise to resentment. But the appropriate allocation of resources to housing in the public sector is a political decision, and the ‘right’ to housing can only really be achieved when there is sufficient stock in the public and private sectors to meet the total demand.93 Given that this has not yet been achieved, the enforcement of the right is really about procedures, and this can take various forms. At one level, the fair administration of a housing list can be the subject of scrutiny by the Local Government Ombudsman, who could find maladministration in relation to the conduct of an authority and recommend an appropriate remedy. Where an authority fails in its statutory duty to provide suitable accommodation to a homeless person, this can be challenged in the courts, although there will be matters of interpretation as to the meaning of ‘intentional’, ‘suitable’, etc. Again, the Ombudsman may, for example, decide that there has been maladministration because of undue delay. The enforcement of homelessness legislation has been sporadic, and it may be more appropriate to have a system of appeal either to the county court or an administrative tribunal to ensure that there is effective oversight of the discretionary process. Education is another area where battles are constantly being fought about resource allocation. Yet, the right to education has presented few problems in terms of implementation and enforcement. Education is a basic human right, established by international treaties, and implemented in this country by placing a duty on local education authorities to provide education for all children within its area who are of school age. The imposition of this duty has led to a set of bureaucratic and complicated arrangements which set a framework for ensuring that education is delivered to each child, even to the extent of interfering with another basic freedom. No parent can refuse to have their child educated, and if this is not done within the state or independent system, then adequate arrangements must be made for home tuition, which is subject to inspection and approval by the local state on behalf of the community.

92 Tunc, ‘The quest for justice’, p 335. 93 Coombes, ‘The duty to house the homeless’, p 66. 285


The result of this is that all children are given the opportunity to be educated, irrespective of the wishes of their parents, or their own wishes, and this ensures that they have the opportunity to partake in what society has to offer. Elaborate procedures are in place to ensure that schools are provided, that an adequate supply of teachers are trained, and that the curriculum is delivered. Local authorities know how many children in their area need a place at school and have to ensure that education is provided. The enforcement of this right at an individual level does not interfere with the discretion of the local education authority to provide suitable education. Thus, despite legislation in relation to parental choice, parents cannot insist on a place at a particular school for their child. The implementation of this ‘right’, which is really on a right to express a preference, is that there are procedures in place to ensure that decisions about such matters are decided fairly, and that there are rights of appeal. What is appropriate, then, in the enforcement of social and economic rights, is that there should be procedural fairness in decision making in these areas. Moreover, laws and practices should be interpreted on the assumption that these basic rights are not to be infringed. In this context, a recent report of the Ombudsman of the Republic of Ireland has some interesting features. This concerned an investigation into three separate complaints arising from the refusal of the department to pay full arrears of pension to complainants who, for various reasons, were late in making their claims. In reaching his decision that the department should pay the arrears, the Ombudsman stressed that the decisions of the department should serve ‘to support and foster the principles upon which ‘social insurance’ is based’.94 Furthermore, he felt that the loss of arrears was a disproportionate sanction. The doctrine of proportionality does have an important role to play in the context of social and economic rights. This doctrine provides that there must be a reasonable relationship between the severity of the sanction and the aim which the imposition of the sanctions seeks to achieve.95 In the context of socio-economic rights, it would operate to ensure that any decision which appeared to be in breach of one of the fundamental rights would need to be explained and justified. This appears to have been the approach of Laws J in the High Court decision in R v Cambridgeshire Health Authority ex p B, where his judgment was based on the proposition that a public body should not be permitted to infringe a fundamental human right (in this case, the right to life) ‘unless it could show substantial objective justification for doing so on public interest grounds’.96

94 Ombudsman of the Republic of Ireland, Investigation of Complaints Against the Department of Social Welfare, 14 March 1997. 95 Sir John Laws, ‘The constitution, morals and rights’, p 631. 96 James and Longley, ‘Judicial review and tragic choices: ex p B’, p 368. 286


The fact that the treatment would have implications for the health authority’s budget was not sufficient reason to absolve the authority from having to explain the priorities that had led them to the decision not to fund the treatment. Laws J did not go so far as to insist that treatment be given, but said that the authority should re-take the decision in the light of his judgment. In this way, he was not encroaching on the function of the authority, whose business it was to make the decision. The Court of Appeal were reluctant to go this far, and overturned the decision, saying that it was unrealistic for health authorities to be required to present such a detailed justification for their actions to the court. Rhoda James and Diane Longley are critical of the approach adopted by the Court of Appeal. They are not arguing for judicial interference with decisions, but for ‘refining the decision making process’ and for the adoption of rigorous standards of scrutiny.97 Such rigorous standards of scrutiny could be a way of securing the enforceability of social and economic rights. Where these rights are at stake, authorities will be required to present detailed justifications. Of course, one must be wary of spending too many resources adjudicating on the correct allocation of scarce resources. Writing about the Canadian Charter of Rights, Ison regrets the fact that vast sums of public and private money are being spent in court proceedings while at the same time there are cuts in public expenditure on healthcare, pensions and education, concluding that ‘the allocation of large resources to dilettante legal debate now has a constitutional priority’.98 Galligan also notes the understandable reluctance to spend scarce resources on procedures which could have been used for welfare services.99 Blair too doubts whether, in the case of scarce resource allocation, very much in the way of resources ought to be diverted from the provision of the services themselves into the provision of procedures that demonstrate that decisions have been made fairly.100 This is not an argument against oversight and review mechanisms, but for these matters to be kept in perspective. We need to guard against litigation becoming a substitute for political discourse,101 but we should also accept that better procedures may make the system of distribution more effective, and ‘in that way improve the level of distribution’.102 Moreover, it should not be thought that judicial review is the only way of making social and economic rights of any practical benefit. Other methods include improved complaints procedures, and the role of ombudsmen should not be overlooked. The advantage of ombudsmen procedures is that, as well 97 98 99 100 101 102

James and Longley, ‘Judicial review and tragic choices: ex p B’, p 373. Ison, ‘A constitutional Bill of Rights: the Canadian experience’, p 510. Galligan, ‘Procedural rights in social welfare’, p 55. Blair, Discretion and Rights: Political Power and Judicial Control, p 131. Coote (ed), The Welfare of Citizens, p 11. Ibid, Galligan, p 66. 287


as providing individual redress, an investigation by the ombudsman may result in improved procedures in general. In addition, the ombudsmen are adopting procedures to ensure that those who may have been affected in a similar way by the maladministration are to be traced and given an appropriate remedy. Tribunals also have a part to play. In this way, the courts will only be used as a last resort. As a method of enforcing social and economic rights, it has been suggested that the UK should enact legislation based on the European Social Charter.103 Such legislation would set out the commitment to social and economic rights. Its effect would be that any ambiguities in legislation would be resolved in favour of the Charter, and in cases of judicial review, the courts would be guided by the Charter in deciding whether an authority had breached its duty. As an additional mechanism of enforcement, it is suggested that a standing advisory committee be established which could comment upon any possible deleterious effects which proposed legislation may have in relation to the Charter. The standing committee would also produce an annual report assessing the impact of the Charter.104

CONCLUSION Questions of rights are fundamental to the widening of participation and fashioning a constitution which will facilitate that widening. The appeal to the socio-economic rights discourse is based upon a belief that there is a fundamental human right to well being which is of no lesser value than rights to civil and political freedoms. The market alone is an inappropriate mechanism for guaranteeing social and economic well being, and the language of rights may be an appropriate way of guaranteeing these benefits to all citizens. Much has been achieved in terms of civil and political freedoms by enshrining these notions as basic human rights. Social and economic rights can similarly be enshrined, but there has to be a recognition that these ‘second generation’ rights are of a different order. The problem with using rights discourse is that these rights refer to matters which are often to do with basic questions about the allocation of scarce resources, which are the concern of politics and managerial discretion, and which are probably not justiciable. Enforcement becomes the key issue here, unless they are to become empty promises, and only of symbolic value. Not that symbolism has no place here, and in many respects it may not be possible to achieve anything unless they

103 The European Social Charter was adopted by the Council of Europe in 1961, and came into force in 1965. See Lewis and Seneviratne, ‘A Social Charter for Britain’, for a full discussion of its operation. 104 Ibid, Lewis and Seneviratne. 288


are so conceptualised. The main method of enforcement is in terms of procedural processes rather than substantive issues. Thus, the courts could be charged with oversight of the decision making process in a much more rigorous manner than at present. We should also note, as Plant points out, that ‘rights’ to social and economic well being are not a panacea. They are not a universal solution overriding markets and democracy as a means of empowerment, but are an alternative, and possibly a complementary, approach to the problem of how best to ensure that everyone has a decent standard of living and the opportunity to participate in the democratic process. There will still be some areas where inspection, democratic accountability and other forms of regulation will have a part to play.105 We should not abandon the search for other methods of ensuring that the benefits of life are shared between citizens. For example, local communities should be encouraged to establish independent user and consumer groups for public sector services. But, in all this, we should not lose sight of politics. The only effective guarantee of these rights is a commitment to equality of opportunity and redistribution of basic resources. This depends more on political will than on constitutionally enshrined rights, but as ‘Notions of rights and equality are inextricably linked’,106 to argue for social and economic rights is a step in the right direction.

105 Plant, ‘Citizenship, rights and welfare’, p 26. 106 Sampford and Galligan (eds), Law, Rights and the Welfare State, p xiii. 289

CHAPTER 16

CONSUMERS AND PARTICIPATION

Geraint Howells

INTRODUCTION

Consumer protection in the modern world. The paradox of both increased globalisation and decentralisation and its impact on the ability of consumers to participate It has always been important for interest groups to influence decision makers. Modern democracies have changed the way in which such influence can be exerted. No longer should it be a case of whispering in the ear of an all powerful decision maker. Instead, attempts have been made to introduce procedures which are open, transparent and fair. Such decentralisation and formalism is particularly needed in the modern Welfare State, since its activities reaches into many areas of society and its decisions affect groups with often conflicting interests. A concern to protect the safety, health and economic interests of its citizens through consumer protection legislation has been one of the characteristics of the Welfare State. In the UK, the first significant event was the establishment of the Molony Committee, which reported in 1962. 1 As a result of the Committee’s Interim Report, the Consumer Protection Act 1961 had made the first attempt to regulate product safety. The Committee’s Final Report led to the Trade Descriptions Act 1968. The 1970s saw the passage of the Fair Trading Act 1973, which established the Office of Fair Trading (OFT), and the Consumer Credit Act 1974, which introduced comprehensive regulation of consumer credit. Various amendments in the area of product safety culminated in the Consumer Protection Act 1987, Part II of which introduced a general safety requirement as well as consolidating previous powers. Part I of that Act introduced strict product liability and Part III adopted a new way of regulating pricing misdescriptions through the use of a broad, general clause. In the 1990s, we have seen an overhaul of food safety regulation by the Food Safety Act 1990 and further amendment to the Sale of Goods Act 1979, 1

Report on Consumer Protection, Cmnd 1781. 291


by, for example, changing the implied term of merchantable quality to one of satisfactory quality.2 The purpose of mentioning these highlights in the development of UK consumer law is not to provide a description of that law,3 but, rather, to illustrate the breadth of interest the modern State has shown in consumer protection. Clearly, being able to influence the decision to adopt such legislative measures and to have an input into their content is of importance to consumers and the consumer movement. However, it must be stressed that the national legislative process is becoming less important as decisions are being increasingly taken at both higher and lower political levels. The EC has been an important influence on the development of consumer policy.4 Even in an area such as product safety, where the UK’s laws were well developed, those laws had to be amended to comply with EC obligations.5 In other areas, such as doorstep selling, new rules have had to be introduced in the UK as a result of EC regulation.6 Less prominent, but increasingly discernible, has been the influence of international economic law on consumer policy. Consumer issues have come under scrutiny within the framework of GATT as trade regulations have been perceived to act as barriers to trade.7 The United Nations has also adopted Guidelines for Consumer Protection.8 Equally, at the national level consumer rights are increasingly being provided for by secondary legislation. This is because of powers in the European Communities Act 1972 to use secondary legislation to meet European obligations and because many of the primary Acts are enabling statutes which envisage secondary legislation being enacted to expand on the principles laid down in the statute or to deal with future contingencies. There has been a change in the style of both primary and secondary legislation so that the laws are less prescriptive and instead rely more on general clauses which are fleshed out by codes, guidance, standards, and by the courts. Consumer protection is clearly recognised by the modern State as being an important dimension of both trade and social policy. However, the range of topics of interest to consumers9 and the fora in which they are discussed 2 3 4 5 6 7 8 9

Sale and Supply of Goods Act 1994. A comprehensive description is given in Howells and Weatherill, Consumer Protection Law. Howells and Wilhelmsson, EC Consumer Law. General Product Safety Regulations 1994, SI 1994/2328. Consumer Protection (Cancellation of Contracts Concluded Away from Business Premises) Regulations 1987, SI 1987/2117. Kleftodimou, ‘Protecting the consumer under GATT’. Harland, ‘The United Nations Guidelines for Consumer Protection’; and Harland, ‘The United Nations Guidelines for Consumer Protection: their impact in the first decade’. The type of legislation listed above lies in the heartland of consumer protection, but issues such as financial services, transport, health care, education, social security, housing and environmentalism are also of concern to consumer groups. 292

Consumers and Participation

present problems for consumer groups. Having to track issues at the international, regional and national levels (both at the formal legislative level and at the more informal level of codes of practice or guidance), as well as within self-regulatory bodies, poses problems for consumer organisations which tend to work with limited resources.

Different fora for participation. Consumers cannot simply rely on lobbying government, but must also take advantage of litigation strategies and be able to influence self-regulatory institutions Influencing the legislative process is an obvious goal of the consumer movement. The changes outlined in the last section have complicated this task. No longer is it simply a matter of lobbying national government. Influence needs to be exerted at the inter-state level as well. When regional or international agreements have been concluded, then scrutiny must again be exercised when that policy is being implemented at the national level. I will not focus on the impact of pressure groups on the lobbying process within the political system. Rather, I will focus on the other changes which have opened up new avenues for consumer participation through litigation and involvement in self-regulation. These can be viewed as both opportunities and challenges for the consumer movement. What is clear is that having to be active on so many fronts is placing great strains on the consumer movement, which consequently is having to be selective about how it allocates its resources. Litigation has always been an important means of developing the law in a common law system. Litigation should be seen as having an importance beyond the individual case, because of the power it has to expose consumer concerns and to stimulate changes in business practices if consumers are successful.10 However, traditionally, individual consumer cases have not featured frequently in the law reports. A few consumer cases are heard by the higher courts, but they remain the exceptions. They are normally the result of a test case strategy by a consumer organisation, the odd maverick who has the energy and resources to litigate a claim (which is normally for luxury goods), or the occasional person able to persuade the Legal Aid Board that their claim should be financed by the public purse. (This avenue is likely to be further restricted in the future as legal aid is replaced by conditional fees.) A trend in the reform of civil procedure has been to provide new avenues for consumers to obtain cheaper, simpler justice. Such developments have no doubt promoted the individual’s access to justice, but there is a danger that they simply hide problems from public view. Even the decisions of small

10 Indeed, even defeats can be valuable if they promote discussion of the issue and cause business or regulators to respond to the public’s perception of deficiencies in the law. 293


claims courts do not have a significant impact on the development of legal principles as their decisions have no precedent value. The growth of ombudsmen and other forms of alternative dispute resolution (such as arbitration under trade association codes of practice) are important means of consumer redress, but it is important that, as well as resolving individual disputes, broader lessons are learned from these cases. Ombudsmen do produce Annual Reports, provide guidance and the Insurance Ombudsmen even produces anonymous case reports.11 These efforts need to be built upon. The position with regard to consumer arbitration schemes is less developed. The National Consumer Council has recommended that the current practice of arbitrators meeting informally to discuss the schemes should be formalised and that the Chartered Institute for Arbitrators should be responsible for publishing annual reports giving statistical breakdowns of the cases heard, a summary of what the arbitrators perceive to be the main issues, and anonymous case reports.12 The development of an efficient class action procedure would open up new opportunities for the courts to be used as fora for debating and resolving consumer disputes. Not only will it make access to justice more practicable and affordable, but it will also highlight the collective dimension of consumer problems and prevent consumer disputes being viewed as purely isolated problems. The representative action is another vehicle for using the private law to promote the consumer interest when individual damages would be too small to justify action by individuals (although the collective damage may be considerable) or the victims are not identifiable. The courts are also going to become a more significant fora for policy debate because of the legislative trend to rely on general clauses. Such clauses reflect a policy decision by government that it can only determine the direction of policy and influence the way the debates are undertaken, but cannot propose specific solutions. Of course, in many ways, the courts are even less well equipped to undertake such policy decisions than government. Therefore, self-regulatory bodies or specialist government agencies, such as the OFT, are seen as important agents in developing policy within the legislative framework. Yet the courts will have an important role in supervising their work, either through judicial review procedures or because of an express role provided for in the legislation. Litigation may also become an increasingly important avenue for consumer participation because of the retraction of the Welfare State. As the State turns its back on regulating certain areas or enforcement authorities become less vigilant (either through lack of resources or because of a

11 James, Private Ombudsmen and Public Law. 12 National Consumer Council, Out of Court, pp 60–61; and Office of Fair Trading, Consumer Redress Mechanisms, p 53. 294


deliberate policy of lax enforcement), consumers are increasingly going to turn to the courts as part of a strategy for having their interests recognised and protected.13 Ultimately, one must be pessimistic about the ability of consumers to outgun businesses in a litigation battle.14 Businesses typically have advantages in resources, expertise and are able to develop a litigation strategy which allows them to settle cases which may produce unfavourable precedents and to push home the advantage of favourable decisions. What is needed are institutions to equalise this imbalance. These might take the form of ombudsmen, agencies like the OFT or collective consumer power through class or representative actions. The private law should not continue to be viewed as the battlefield for individual consumer litigation but should be melded with public law institutions to promote the general consumer interest. ‘Soft law’ or self-regulation has recently become popular.15 This is because it has been welcomed by both the right wing, which views it as a form of deregulation, and by some on the left, who are disappointed with the efforts of the Welfare State to impose changes through legislation and believe more progress can be made through mechanisms which permit dialogue and selfregulation.16 In consumer law, one sees manifestations of soft law both in areas where the State has deliberately not regulated (such as the taste and decency of advertising),17 or has only introduced back-up powers to support self-regulation (misleading advertising)18 or has left self-regulation to supplement general norms fixed by legislation (as in the new approach to technical harmonisation).19 One consequence of self-regulation is to disperse the decision making process. Instead of simply dealing with central government bodies, consumers now have to deal with numerous private bodies whose decisions will affect them. This poses a problem for consumers who have to locate the new power centres and find means of influencing their decisions. This requires both that they persuade these self-regulatory bodies of the need to involve consumers in their decision making processes and also that they can find the expertise and resources to operate on numerous fronts.

13 The role of private law in the light of the changes in the modern Welfare State was the subject of a conference in Finland in August 1997, the proceedings of which are published in Wilhelmsson (ed), From Dissonance to Sense. 14 Galanter, ‘Why the “haves” come out ahead: speculations on the limits of legal change’. 15 See my more detailed views in Howells, ‘Soft law in EC consumer law’. 16 See classically Teubner, ‘Substantive and reflexive elements in modern law’. 17 Advertising Standards Authority, British Code of Advertising and Sales Promotion. 18 Control of Misleading Advertisements Regulations 1988, SI 1988/915. 19 As outlined in Council Resolution of 7 May 1985. The new approach to technical harmonisation and standards set out in OJ C136/1, 1985, is discussed below. 295


Consumer representatives. Whilst many are welcome to promote concern for consumers only consumer organisations can claim to speak for consumers Ideally, each and every consumer should be able to influence consumer policy. The most obvious mechanism for consumers to be able to express a preference is through the market mechanism. There are some innovative attempts to enable consumers to fashion the market, with ethical banking20 and eco-labelling 21 being obvious examples, but these are exceptional instances of consumers attempting positively to influence the market. Of course, when consumers have bad experiences they often react in a negative fashion by ‘exiting’ the market, in the sense of not dealing with unsatisfactory traders in the future.22 When significant numbers of consumers behave in a similar manner, the cumulative affect may be sufficient to cause traders to alter their behaviour.23 This would only seem to be an appropriate solution for small, repeat purchases. When individual consumers have suffered large losses, they need to be able to ‘voice’ their concerns.24 Even for small repeat losses, it may not be sufficient to trust the market to rectify the situation through consumers choosing the ‘exit’ option. There may be sufficient consumers to keep unsatisfactory traders in business (if there is a rapid turnover in consumers, for example, in tourist resorts or the deficiencies are difficult to detect), or the market effect of exit may take some time to have an impact on the trader. In the last section, I discussed the fora in which consumers could ‘voice’ their concerns. In this section, I will consider who can best represent consumers. It is appropriate to think in terms of the collective interest of consumers. This is not to say that the collective interest cannot be promoted by the actions of individuals bringing claims either individually or as part of a group action. Neither should it be thought that I am suggesting that any one group has a monopoly on the right to speak on behalf of consumers. There are not so many advocates of the consumer cause that one can be too choosy about whom one permits to speak up for that consumer. Indeed, as the legitimation of consumer representatives is problematic and the interests of different consumers sometimes conflict, it is appropriate to link the issue of consumer representation with the task of devising institutions which are able to filter the views expressed by consumer representatives and to balance consumer interests against other interests. We have already noted 20 Reifner, ‘Social banking and new poverty: towards a new approach in law and economics’. 21 Maniet, ‘The eco-label and consumer protection in Europe’. 22 Hirschman, Exit, Voice and Loyalty. 23 Schwartz and Wilde, ‘Intervening in markets on the basis of imperfect information: a legal and economic analysis’. 24 Ibid, Hirschman. 296


that the courts are one obvious candidate to perform this function. They are, clearly, going to have a fallback role. But, given the specialised and often technical issues at stake, it may be sensible in the first instance to facilitate consumers’ participation in government agencies (such as the OFT) or selfregulatory bodies. Although there are dangers connected to consumers in operating within these less formalised procedures (in that, especially with regard to self-regulatory bodies, they may not understand the dynamics of the process), there are also benefits, not least in terms of costs. Before looking at the potential candidates to represent consumers, it will be useful to separate out three different conceptions of the consumer interest: (1) Consumer interest as the public interest. Consumers cannot afford to be single-minded in their objectives in the same way as trade unionists or even environmentalists can be. If workers obtain excessive wage increases or environmentalists impose unduly rigorous standards, this may harmful to the public interest, but these interest groups may still consider the result a success. For whilst they may share in the general burden placed on society, this will be more than compensated for by the advancement of their specific interest. Consumers, however, have to pay for the benefits which accrue to them. So, for example, the benefits of increased product safety obtained through stricter regulation and increased compensation have to be balanced against possible increased prices and slower innovation and release of products to the market. Thus, there would appear to be a close identity between the consumer and the public interest. However, the criteria which determine a final choice of policy should not be confused with the means of making that choice. If the final choice is to be as informed as possible, there is a need for the particular concerns of consumers to be represented and for the consumer viewpoint to be recognised when balancing competing interests. Indeed, there is a danger that as the impact of most decisions on individual consumers is normally rather weak,25 the concerns of those more immediately affected, such as workers and industrialists, will be voiced more loudly. (2) Consumer interest as the preference of well informed and articulate consumers. Much of consumer law works on the assumption that it is responding to the needs of well informed consumers who are able to look after their own interests if given the right information. This has at least two dangerous consequences. First, it associates consumerism with bourgeois values. Whilst the interests of the well off, articulate consumer should not be ignored, neither should they have undue preference over the concerns of other consumers, in particular the often more vital needs of vulnerable consumers. Here one sees shades of the debate about whether consumer

25 Even if some decisions can ultimately have tragic consequences for some consumers, this is actually only perceived as representing a marginal increase in risk at the time the decision is made. 297


law should simply seek to perfect the functioning of the market or should have more distributive goals.26 Secondly, it is problematic to assume that individuals always know what is in their best interest. Whilst it is appropriate on many occasions to respect the autonomy of individuals and to allow them a freedom to express their legitimate preferences through the market mechanism, this should not be confused with a machismo which fails to reflect the limited ability of individuals to make sensible decisions. The consumer marketplace is becoming increasingly complex. Not only are products and services becoming increasing sophisticated, but so are methods of advertising, marketing, and providing for payment for those goods and services. Many thousands of professionals are involved in ensuring that the relevant rules and standards reflect business interests. An individual consumer would be foolhardy to suggest that he or she had the ability or time to debate these issues on her or his own behalf. The best he or she can do is to delegate the decision making to a body he or she trusts and which will continue to allow individual freedom of choice to an extent that is compatible with the general good. Controversially, it must be suggested that there are some situations in which the clear preference of consumers to enter into certain types of agreement should be overridden. 27 What is sometimes pejoratively described as paternalism can also be viewed as effective regulation, which prevents consumers from inflicting harm unnecessarily on themselves due to their failure to assess their own interests properly.28 (3) Consumer interest as protecting vulnerable consumers. This conception of consumer interest views the protection of vulnerable consumers as a particular concern of consumer law. Consumers may be vulnerable for various reasons – poverty, poor education, disability, youth, old age, etc. Vulnerable consumers may have particular concerns which need addressing and strategies for protecting well off, educated and articulate consumers may not be appropriate for vulnerable consumers. Equally, regulations introduced to protect the well off may harm poorer consumers if it results in their no longer having access to certain products (with no affordable or practicable alternative) or to price increases which have a disproportionate impact on their budgets. The concerns of vulnerable consumers should be taken into account and balanced against the interests of other consumers. They need to have their particular concerns voiced and, because of their weak position, it will often be necessary to create institutions to articulate their concerns. 26 Howells, ‘Contract law: the challenge for the critical consumer lawyer’. 27 Kennedy, ‘Distributive and paternalist motives in contract and tort law, with special reference to compulsory terms and unequal bargaining power’. 28 This is a big issue which I cannot develop fully here. See my views in the context of consumer credit and product safety in, respectively, Howells, ‘Seeking social justice for poor consumers in credit markets’; and Howells, Consumer Product Safety. 298


Bearing the above conceptions of the consumer interest in mind, we will consider who should represent the consumer. Businesses often claim to have the interests of consumers at heart. They point out that they will prosper only if they keep their customers happy and if sub-standard competitors are driven out of the marketplace. There obviously is some truth in this. Certainly, the businesses which participate in government consultations and enter into dialogue with consumers are usually the ones which take their responsibilities to consumers most seriously. However, one often suspects there is a difference between the attitude of company and trade association public spokesmen and the reality of daily business practice, especially in sales departments. Whatever the motivations of companies when they claim to have the interest of consumers at heart, it is self-evident that they should not be the voice of consumers. Many would not even claim such a right. But, it is slightly shocking to discover that the British Retail Consortium and the co-operative movement have secured seats on the British Standards Institution’s Consumer Policy Committee. They may well, as purchasing organisations, share similar interests to consumers, but they will also have conflicts of interest with the consumer movement and have other avenues through which they can participate in policy formulation. One should welcome, rather than oppose, the involvement of members of the business community with a genuine concern for the consumer interest. What is objected to is any suggestion that such people are speaking on behalf of consumers, not least because their conception of the consumer interest may be rather conservative and not seek to question the fundamentals of market structure and operation. Similarly, one should be circumspect about viewing bodies such as standards organisations and testing and certification bodies as representatives of the consumer interest. Certainly, such bodies will share many common objectives with consumers, but they will also have their own agendas and, although independent of specific business interests, certainly form part of the business community and therefore reflect the values of that community. The difference between the consumer interest and the public interest was set out above. As the Government is the guardian of the public interest, it cannot also be entrusted to be the sole representative of the consumer interest, because the two interests may conflict. Reich has noted that governments will tend to favour highly organised special interest groups which have a lot at stake over any specific trade regulation at the expense of more loosely organised diffuse interests, such as consumers.29 However, Reich also points to the limit of collective consumer organisation as a justification for government involvement.30 Thus, government has both an obligation to 29 Reich, Internal Market and Diffuse Interests, p 16. 30 In The Logic of Collective Action and The Rise and Fall of Nations, Olsen argues that in large groups, there is little incentive for members to promote the group cause because of the free-rider phenomenon. 299


ensure the consumer voice is heard and a duty to separate out its role as protector of the public and consumer interests. In an ideal world, government would delegate the task of protecting consumers to specific bodies which had the objective of promoting the consumer interest. This could involve the delegation of resources (as happens in the area of standardisation) or the establishment of specialised government agencies which had the task of promoting the consumer interest. Yet even consumer oriented government bodies like the OFT must balance the interests of the business community against those of consumers. The National Consumer Council is an interesting institution. It has the express purpose of researching matters of consumer interest and lobbying government on the consumer’s behalf. It is particularly valuable as it has a special brief to look after the interests of vulnerable consumers.31 However, even government departments closely associated with industry concerns, such as the Department of Trade and Industry, have valuable expertise which, if used in an appropriate way, can enhance the ability of consumers to participate in the decision making process. We have already noted that individual consumers can only weakly affect consumer policy through their actions in the marketplace. There are instances of individual consumers becoming involved in consumer policy by sitting on committees, etc. However, this is problematic as they often lack the technical skills to be able to compete with business representatives and there are problems about how such persons are selected, their legitimacy to claim to speak on behalf of the consumer collective and the possible unrepresentative nature of such volunteers. Obvious candidates to represent the consumer interest are organisations established for that purpose which are organised along democratic lines. There are a wide range of range of consumer bodies. Some operate at the local level, 32 but the majority operate at the national level. The Consumers’ Association has some 715,000 members,33 although the majority of these will not be active members but rather subscribers to its products. There are many more product specific consumer groups, from the Campaigns for Real Ale to the Automobile Association and the Royal Automobile Club. So long as such bodies can show that they are accountable to their members, then they are obvious candidates to speak on behalf of consumers. Clearly, however, they are a self-selecting sample of consumers. Specific consumers’ willingness to

31 At the international level, Consumers International (CI) (although having a membership of consumer organisations from all corners of the world) also has a special brief to look after the interest of consumers in the developing world. There are similarities between the need to take on board the interest of vulnerable consumers and the needs of consumers in developing countries. 32 Their umbrella body in the National Federation of Consumer Groups. 33 Each edition of Which? states the current membership. 300


join a consumer group perhaps suggests they are more concerned and articulate about consumer issues than the average consumer. The need to levy a membership fee (which in the case of the Consumers’ Association involves a not insubstantial subscription to Which?) may further slant membership towards the middle and upper classes. There is a potential danger that this causes consumerism to promote bourgeois values and interests, but it is more likely that non-members will be free-rider beneficiaries of the efforts of consumer organisations.34 In fact, consumer groups in the UK have a good record of showing concern for vulnerable consumers, but obviously their efforts will principally be directed towards the issues which concern their members. Government funding may be appropriate to permit them to take on a broader role of representing the general consumer interest. Consumer interests are also represented by a wide range of Consumer Councils and user groups which operate predominantly in the utility sectors. Normally, members of these bodies are appointed rather than elected. Such bodies can play a useful role in representing the consumer perspective within those industries, but are probably less able to claim a mandate to speak on behalf of consumers than consumer organisations and are unlikely to want to become involved in litigation on the consumer’s behalf.

PARTICIPATION THROUGH LITIGATION Individual actions perform a valuable function in sensitising the legal system to the problems of consumers We have already noted some of the difficulties individual consumers face in bringing actions and that various forms of alternative dispute resolution and simplified court procedures have been established to overcome these problems. Whilst these new avenues for redress may resolve individual disputes, it was commented that they may do little to assist in the development of the law and the improvement of trade practices. Given the problems consumers face in bringing claims,35 even with the new avenues for redress, the number of cases brought to some sort of dispute resolution forum is likely to continue to represent only the tip of the iceberg. It is important that procedures are put in place to learn from the disputes which are adjudicated upon in order that industry cannot simply pay off the few who seek redress at the expense of the many who continue to be harmed by various breaches of the law.

34 Olsen, The Logic of Collective Action. The free-rider argument is one justification for providing government support to such organisations. 35 Macaulay, ‘Lawyers and consumer protection’. 301


A particular problem with consumer disputes is that they arise in isolation. Individual consumers are often unaware that other consumers have similar problems. They act alone against various business entities (retailers, producers, insurers) who can conspire to make consumers feel as if they are behaving unreasonably. Instead of being seen as a citizen’s champion, the complaining consumer is frequently viewed as a self-interested golddigger whose efforts are using up valuable commercial and judicial time. This impression is often due to the fact that the amount at issue is relatively small and the scale of some consumer problems is often not fully appreciated as the total impact on the consumer population is not evident. Strategies to ensure that the collective dimension to consumer problems is brought to the fore will be suggested below, but this should not detract from the value of individuals making their grievances heard through the various channels for redress. Consumer problems need to be visible and familiarity with consumer problems is the only way that adjudicators will become sensitised to the dynamic of consumer issues and the need to take them seriously. Whatever the motivation of consumers who bring genuine claims to the court – seeking redress, venting anger or a concern to promote standards – they perform an important service in revealing the extent of harm to the consumer.

Introducing a class action procedure is necessary not only to make the litigation of large-scale consumer problems manageable and affordable, but also to highlight the collective dimension to consumer problems An obvious way for the collective dimension to consumer problems to be expressed is for consumers with the same or similar claims to bring a class or group action. The UK has no such procedure at present and has muddled through with a mixture of adopting a test case strategy and invoking the representative action under Ord 15 r 12 of the Rules of the Supreme Court.36 The representative action can be invoked ‘where numerous persons have the same interest in any proceedings’. At one time it was said that this excluded claims for damages or debt, but the modern approach is to be more flexible concerning the circumstances when such actions can be brought. Nevertheless, representative actions remain subject to limitations and, as a method for promoting consumer participation, suffer from the fact that the representee is in exclusive control of the action. He is also solely liable for any costs. The representee must be one of the litigants and so a consumer organisation would not seem able to use this procedure to bring an action on behalf of consumers.

36 The Supreme Court Procedure Committee has issued a Guide For Use in Group Actions. For a critique of the existing law, see Howells, ‘Mass torts’. For an up to date look at recent reform proposals, see Howells, ‘Consumer mass damages in the common law’. 302


For most consumer claims, the test case strategy has been the preferred option (although these have invariably involved large personal injury claims for product liability). In practice, the courts have been innovative in adapting their procedures, for they have recognised the need to prevent the court system being overwhelmed by such mass claims brought in numerous individual actions.37 Lord Woolf has suggested that a formal multi-party action procedure be adopted when the courts recognise a multi-party situation.38 His proposals adopt a flexible approach to when such procedures should be invoked and look likely to be adopted in some form.39 However, the proposed new rules fail adequately to address the question of funding such litigation. This issue has bedevilled this area since Hirst J’s ruling in Davies v Eli Lilley and Co40 that non-legally aided plaintiffs could not have a free ride on the back of lead plaintiffs selected from amongst those with legal aid.41 All members of the group action must bear a proportion of any award of costs made in favour of the defendants, which in such group actions can be enormous and which may be incurred even if the plaintiffs are eventually successful in their claim, because of interlocutory proceedings. Furthermore, the availability of legal aid for such cases is under threat. The Legal Aid Board has become cautious about backing such actions since it spent £35 m on the denzodisapene tranquilliser case without the matter even reaching court. The Government has now proposed removing legal aid from this area and replacing it by an extension of the conditional fee scheme under which lawyers work on a ‘no win, no fee’ basis, but are able to claim an uplift of up to 100% of their fee if successful. Such a scheme seems inappropriate in the area of mass product liability claims. The cost of supporting such litigation is beyond the means of most plaintiff personal injury firms, which tend to be of no more than modest size. The ‘uplift’ is too modest to be attractive for all but the relatively safe cases and in these cases there is little reason why plaintiffs should have to meet inflated lawyers’ bills. If the class action is to be a vehicle for consumer participation, these funding problems need to be addressed. Some suggestions have been put forward. For instance, class actions could be financed by a contingency legal aid fund. This would require at least initial pump-priming funding, which is 37 Horrocks v Ford Motor Company (1990) The Times, 15 February, per Lord Donaldson: ‘Standard court procedures were designed for the determination of the general run of claims coming before the courts. But, if the courts were presented with large numbers of claims with special features in common, they would devise new procedures specially adapted to such cases.’ 38 Woolf Committee, Report of the Committee on Access to Justice. This drew heavily on Law Society Civil Litigation Committee, Group Actions Made Easier. 39 See the consultation paper: Lord Chancellor’s Department, Access to Justice – Multi-party Situations: Proposed New Procedures. 40 [1987] 1 WLR 1136. 41 Legally aided plaintiffs have the advantage that not only does the Legal Aid Board meet the costs of bringing the action, but also the normal rule that costs are awarded against an unsuccessful party does not generally apply in the case of a party on legal aid. 303


unlikely to be forthcoming from the Government. Such funds operate in Ontario and in Hong Kong where they have been funded, respectively, from interest on solicitors’ trust accounts and from the lottery. The fund can replenished by successful litigants paying into it a percentage of their damages.42 However, the problem of liability for the other party’s costs remains. The rule that costs follow the event may have to be departed from in such actions or at least an upper limit for a plaintiff’s liability might have to be set.43 Insurance may be another option to cover any potential liability for the other side’s costs, but this is unlikely to be available in the cutting edge cases where the risks are greatest. For example, the Law Society’s scheme to insure such risks, the Accident Line Policy, excludes claims relating to drugs or tobacco.

Representative actions are needed to deal with consumer problems which it is not appropriate to seek to resolve through individual litigation, but the problem of seeking redress for small consumer claims has to be distinguished from a procedure which seeks to improve business practices through court adjudication and injunctive relief Class actions are most suitable when individuals have significant amounts at stake to warrant their personal commitment to the litigation. In the consumer context, this normally means that they have suffered personal injury or else the claims relate to financial services. When the amounts involved are small or no specific individual has been harmed, there is little incentive for individual consumers to participate in litigation and under current procedures there is little financial incentive for lawyers to become involved. The Lord Chancellor has recognised that access to justice in these cases needs to be addressed in a different way from class actions and has set up a working group to consider how some form of representative action can be established.44 However, it is unclear whether the problem that is being addressed is that of how small claims can be litigated or the broader issue of how consumers or consumer organisations can litigate to seek injunctive relief against breaches of the law.

42 Such schemes have been mooted in both Scottish Consumer Council, Class Actions in the Scottish Courts and Scottish Law Commission, Multi-Party Actions; Court Proceedings and Funding. The Woolf Committee also seems sympathetic to the idea. Woolf Committee, Report of the Committee on Access to Justice, p 242. 43 The National Consumer Council Ordinary Justice, p 334 proposes a maximum contribution of £1,000 when the development risks defence is raised in product liability litigation. 44 The author is a member of that working group. 304


If the question is simply about redress for small claims, then some form of modified class action or representative action (in the sense or Ord 15 r 12) might be appropriate. It might be desirable to permit consumer organisations to act as the representative for a group of consumers or on behalf of the collective consumer interest. It is envisaged that the multi-party action will usually only bind members of the class who ‘opt in’ by signing a register. Representative actions bind all parties who are considered to have been present by representation, even if they had not been informed of the court action. However, an ‘opt out’ procedure is the most appropriate model when the amounts at stake are very small, for individuals will not bother to join a register when they have so little at stake personally. This also raises important issues about remedies. In large class, actions the collective dimension can permit scope for innovative settlements.45 When individual claims are small, it may indeed be necessary for novel remedies to be fashioned which adequately deter the trader and compensate consumers as a group, even if individual consumers cannot benefit personally. The New York Yellow Cab case provides a classic example.46 This involved overcharging by New York cabbies. Clearly, those affected could not be traced and would probably have been unable to prove their losses. The remedy was for the cabbies to undercharge for a similar period. Nearer to home, when Rover were found to be breaching EC competition law, the punishment was for them to pay £1 m to the Consumers’ Association for research into car safety. This obviously was a benefit to the consumers as a group. This reflects the fact that the harm is suffered by consumers collectively.47 Of course, where the amounts at stake are undisputed, the affected consumers are easily identifiable and it is practicable to make payments direct to them (for example, if a fixed charge by a utility is challenged), then individual redress may be appropriate even for relatively small amounts. When the harm suffered by individuals is small, non-specific or not yet inflicted, consumer welfare may be more appropriately enhanced by the introduction of a system of injunctive relief. Within Europe, there are two models for market regulation in this way. The Scandinavian model relies upon a public official, the Consumer Ombudsman, to bring such actions,48

45 See the interesting discussion of the ‘agent orange’ litigation in Schuck, Agent Orange on Trial. 46 Daar v Yellow Cab Co (1967) 433 P 2d 732. 47 In France, a distinction is drawn between harm to the consumer collective and the accumulated harm suffered by individual consumers. The former type of harm although intellectually appealing is rather ethereal and so the French courts often end up only awarding nominal damages under this theory. Calais-Auloy and Steinmetz, Droit de la Consommation, pp 475 et seq. 48 Wilhelmsson, ‘Administrative procedures for the control of marketing practices – theoretical rationale and perspectives’. In fact, Nordic consumer organisations also have the formal right of action, but this is rarely invoked. Tala, ‘Soft law as a method for consumer protection and consumer influence’. 305


whereas in France and Germany consumer organisations have standing in such actions.49 The Misleading Advertising Directive required that persons or organisations having a legitimate interest in prohibiting misleading advertising should either be able to bring legal actions against such advertising or else bring the matter before a competent administrative authority, either to decide on complaints or to initiate legal proceedings.50 This clearly did not require that consumer organisations be given standing. The position is more ambivalent under the Unfair Terms in Consumer Contracts Directive which provides that ‘persons or organisations, having a legitimate interest under national law in protecting consumers, may take action according to the national law concerned before the courts or before competent administrative bodies for a decision as to whether contractual terms drawn up for general use are unfair’.51 The UK Government took the view that it was sufficient that the Director General of Fair Trading be given powers to seek injunctions as the Directive did not require that consumer organisations be granted standing.52 I considered this to be a permissible, albeit mean spirited, interpretation of the Directive, but views about this have differed.53 The UK Consumers’ Association commenced an action before the European Court of Justice alleging that the UK had failed to implement the Directive properly. The new government has agreed to settle the case by granting consumer groups the right to bring representative actions and that partly explains why there is a Lord Chancellor’s Department working group on this subject. There is also continued pressure from Europe to provide for representative actions granting injunctive relief. The recently adopted Distance Selling Directive also provides for injunctive relief, although this time clearly leaving it up to the Member States to determine whether an independent public body specifically responsible for protecting consumer interests or a consumer group should have a right of standing.54 Of more far reaching significance is the directive on injunctions for the protection of consumers’ interests.55 This extends the injunctive procedure to cover a wider range of directives and also 49 In France, groups are authorised by the State to bring such actions, whilst in Germany, the courts apply criteria for standing laid down under the Unfair Competition Act 1909 and the General Conditions of Contract Act 1976. Howells and Wilhelmsson, EC Consumer Law, p 287. 50 OJ L250/17, 1984, Art 4(1) 51 OJ L95/29, 1993, Art 7(2). 52 Unfair Terms in Consumer Contracts Regulations 1994, SI 1994/3159. 53 Brownsword and Howells, ‘The implementation of the EC Directive on Unfair Terms in Consumer Contracts: some unresolved questions’, p 260. Cf Wilhelmsson, ‘Public interest litigation on unfair terms’. 54 OJ L144/19, 1997. 55 OJ L166/57, 1998, on the draft directive see Howells and Wilhelmsson, EC Consumer Law, pp 288–94; and Bethlem and Joustra, ‘The Draft Consumer Injunctions Directive’. 306


provide for the internal market dimension by permitting qualified entities to bring actions in other member states. The directive would clearly leave it to member states to decide whether the qualified entity should be a public body or a consumer organisation or both. The UK is going to have to implement this directive and the present government is likely to grant standing to consumer organisations. No doubt, standing will also be granted to the OFT within its area of competence as it can properly be considered to be sufficiently independent and to have the function of protecting consumer interests. The matter is more problematic in relation to areas which are the responsibility of government departments (for instance, consumer safety is the responsibility of the Department of Trade and Industry) as these ministries cannot be considered to be independent and are not specifically responsible for protecting consumer interests. The ideal solution would be to establish the dual competence of a public body and consumer organisations. Public bodies are more likely to have resources to supervise the market and bring such actions on a consistent and large scale. They can also be placed under a duty to perform this function and public law remedies are available if they fail to perform their duties diligently. Consumer protection is also then not subject to the vagaries of possibly intermittent interest on the part of consumer organisations. Indeed, the work of the OFT in relation to unfair terms has been very impressive.56 However, the OFT was no doubt keen to impress with its ability to protect consumers, in part, because of the pressure from the Consumers’ Association to be granted standing. The possibility of actions being brought by consumer groups will no doubt act as a mechanism to keep public bodies vigilant and as a further incentive for industry to come to a satisfactory accommodation. Granting consumer organisations a right of action will permit them to challenge the public body’s application and interpretation of the law. Although the court is intended to be the final arbiter of the law under the injunctive procedure, in practice cases are currently settled by negotiation between the industry and the regulator. Consumers may also prefer to bring an action themselves rather than rely on public bodies. This privatisation of justice may be necessary given the increasingly limited resources available to State consumer protection agencies. If a representative action is to be introduced, then consideration will have to be given to whether its scope should be more extensive than that required by the EC Directive. For instance, should it apply to any breach of the civil/criminal law affecting consumers? Should a general duty to trade fairly be introduced and an injunction be obtainable for breach of that obligation?57

56 See the bulletins issued by the OFT in May 1996, September 1996, March 1997 and December 1997. It is understood that more than 2,000 terms have been challenged by the OFT. 307


Should the remedies be restricted to injunctions or could this be combined with giving the courts additional powers to enable them to achieve justice, such as requiring appropriate corrective advertising, product recalls, repairs or even awarding damages? How are consumer organisations to finance their role as market monitors? Will it be necessary to ensure that in successful cases costs awards are on a full indemnity basis or would it be necessary to go even further and award double or treble costs to compensate for those cases which consumer groups will inevitably lose from time to time? The present government seems to have recognised the need for consumers and their organisations to participate in the legal process through representative actions, but one suspects that it has not yet taken on board the implications of this policy choice or all the dimensions of the problem. It seems clear that some of these reforms will be more than purely procedural and will require new substantive rights of action to be established.

PARTICIPATION THROUGH SELF-REGULATION There is a need to involve consumers in the self-regulatory process and to integrate self-regulation into the legal framework In the last section, we reflected on one consequence of the reduced role of the State in regulating the market, namely, the increased role of litigation. Another symptom of the changed nature of the State’s involvement has been the development of self-regulation. Sometimes, this is seen as a substitute for regulation, at other times it is a means of fleshing out principles laid down in law. I am not one of those who reject self-regulation out of hand. It is true that a great deal of experience to date has been disappointing, with self-regulation offering little beyond what could have been achieved through statutory regulation and, indeed, often being a sop offered by industries which knew they were unlikely to face regulation so long as they made a pretence at putting their own house in order. Self-regulation can, however, have some potential benefits to consumers. It can deal with some issues, such as matters of taste and decency, more effectively than is possible in legislation. The appropriate rules can be drafted in language which is more familiar to those who will have to use them, industry may be more committed to uphold standards which it has set for itself, and such rules may be more expeditiously produced and up-dated. However, to be effective, self-regulation has to work within a legislative framework which both sets the parameters for policy development and carries the implicit threat that a legislative solution will be imposed if self-regulation 57 Office of Fair Trading, A General Duty to Trade Fairly. 308


proves to be unsatisfactory. There must also be dialogue with consumers so that the self-regulatory solutions represent a genuine reconciliation of business and consumer interests, rather than simply the offerings of the business community to the unrepresented consumer.58 This is problematic because of the weak organisation of consumers and so there may be a case for the Government to play a role in facilitating the involvement of consumers.59 I will look at three areas of self-regulation to assess its current performance and suggest ways of enhancing consumer participation and the integration of self-regulation into the legislative framework. First, I consider standardisation within the context of the new approach to technical harmonisation, which in many respects might serve as a model for the integration of law and selfregulation. Next, I take the topic of advertising, which has had a long tradition of self-regulation in the UK. This area illustrates another technique of integration by using the legal system as a back-up to self-regulation. Then, I look at the way in which the OFT promotes Codes of Practice. A recent report by the OFT has been critical of how these have operated in the past and I consider new ways of developing business standards on a voluntary basis. Finally, I will conclude by considering how consumers can participate more pro-actively in the self-regulation of the market.

Standardisation – a possible model for the development of new reflexive forms of law making which involve consumers in the regulatory process The new approach to technical harmonisation adopted by the EC is an innovative attempt to reconcile the need for regulation of product safety with the demand by industry that it be allowed to satisfy these standards in a manner which does not stifle innovation or impose undue burdens.60 New approach directives cover broad categories of products and contain a general safety requirement and a list of essential safety requirements. The essential safety requirements will be deemed to be complied with if the product meets the relevant standards produced by CEN (European standardisation body) as adopted by national standardisation bodies (for example, the British Standards Institute (BSI)); alternatively, the producer can satisfy them by other means and obtain third party assessment of conformity. Conforming products carry the CE marking and can circulate freely within the internal

58 Howells, ‘Soft law in EC consumer law’. 59 One of the main proponents of self-regulation has conceded that consumer law would be ‘a shaky example of reflexive law at work because the social asymmetries of power and information are resistant to institutional attempts at equalisation’. Teubner, ‘Substantive and reflexive elements in modern law’, p 277. 60 Council Resolution on the new approach to technical harmonisation and standardisation: OJ 1985 C 136/1. For more detail, see Howells, Consumer Product Safety. 309


market. Member States may, nevertheless, invoke safeguard clauses and dangerous products can, therefore, still be removed from the market. Standardisation is crucial to the new approach. Consumers need both to persuade standardisation bodies that their interests should be taken into account and to exercise their right to participate effectively.61 In practice, consumer representation requires consumer representatives to have sufficient technical knowledge to be able to hold their own with the other members of technical committees. These will mainly be industry representatives with a technical background. Clearly, Government officials may also have a role to play in ensuring that consumer interests are taken into account. Consumers are fairly well represented within the BSI. The BSI has a Consumer Policy Committee (CPC), supported by a secretariat, which represents consumers within the political organs of the BSI. Consumer representation on technical committees comes from two sources. The BSI has its own panel of lay consumer representatives who serve on technical committees. These seem to be well motivated individuals who do their best to come to grips with the issues in the sectors they cover, yet it is difficult to believe that they can really make a serious impact when faced with technical experts from industry. There is also the issue of the legitimacy of their claim to represent the consumer interest. They are appointed by the BSI in their personal capacity. Fortunately, the UK Consumers’ Association also provides a pool of technical experts who can participate in the work of technical committees in their own right. The whole system is relatively well supported by the DTI, which provides the BSI with £100,000 per annum to enable consumers to participate in standards work. This funding is particularly important given that increasingly the vital decisions are being made at the European (CEN) and international level (International Standards Organisation (ISO)). One might, however, question whether better use of the money might be made if it was channelled directly to the consumer organisations which have technical expertise, with lay consumers having a more general consultative role. Overall, then, UK consumers seem fairly well represented at the national level. However, the focus of standardisation work has switched from the national to the regional and international levels. Within Europe, the national standardisation bodies are members of the CEN. The CEN produces European standards (ENs) which have to be converted into national standards. Consumers therefore need to be represented at the European level. At CEN committees, consumers can be represented in two ways. There may be a consumer representative within the national delegations from member

61 For more detail on the role of consumer representation in standardisation, see Howells, ‘Consumer safety and standardisation: protection through representation?’; and Howells, Consumer Product Safety. 310


standards bodies. However, such a representative would be there as a representative of the national body and would be expected to follow the national body’s line, even if this was counter to the consumer interest. Alternatively, the CEN makes it possible for representatives of consumer groups to participate as observers on CEN committees. The structure of consumer representation at the European level was a matter of fierce debate. The CEN would have preferred to have housed a consumer body within its own structure with its membership being drawn primarily from the consumer councils of national members. However, consumer groups opposed this as not all national consumer councils were perceived to be sufficiently independent. The consumer organisations view prevailed and an independent body was established comprised of national consumer organisations. This is known as ANEC.62 It is relatively well funded by the EC, but still it is difficult for consumers to organise at the regional level because of travel costs and the problems of reconciling different consumer interests between the various Member States. These problems are more extreme at the international level where the difficulties are accentuated because of weaker consumer representation. The ISO’s consumer council (COPOLCO) is drawn from national member consumer councils (the model rejected by Europe) and Consumers International (CI) is the only body with the right to represent consumers on ISO technical committees. This gives rise to several problems. Until recently, CI (the only body with the right to represent consumers) had not taken its role in relation to standardisation seriously. Now it is trying to improve matters, but as it has a commendable bias towards protecting consumers in the developing world, it is unlikely to do much to promote the interest of first world consumers. In any event, it has no funds to sponsor participation at ISO committees. Ironically, this often leads it to accept offers from ANEC to send European delegates to ISO meetings. Thus, world consumers tend to be represented by relatively affluent European consumer associations. Standardisation within the framework of the new approach offers an interesting model of how regulation and self-regulation can be combined. The key to the success of this model will lie in ensuring that consumers are represented in the standardisation process. Some efforts have been made in this direction, but these are counter-balanced by moves toward the regionalisation or globalisation of standardisation. It becomes increasingly difficult to organise consumers as the focus of activity moves away from the national to the regional and international levels. However, this could be seen as a positive development if consumers could be sufficiently organised to concentrate their efforts at a few regional or international focal points rather than having to fight battles on many national fronts.

62 Farquhar, ‘Consumer representation in standardisation’. 311


Advertising self-regulation was established in the early days of consumerism and needs to involve consumers more and to become better integrated with the legal system The UK has a strong tradition of self-regulation of advertising.63 There is no doubt that since its inception in 1962 the Advertising Standards Authority (ASA) has helped clean up print advertising,64 and self-regulation probably continues to be the best way to regulate matters of taste and decency. However, it lacks effective sanctions. Although, it can prevent advertisements being published in media owned by adherents to the Code, and contravention may lead to expulsions from trade associations and the withdrawal of financial privileges by trade or media organisations, nevertheless, it frequently simply asks advertisers not to use an advertisement again or to take more care in the future. There appears to be little fear of the ASA by advertisers, or more particularly by the advertising agencies which devise marketing campaigns. Some campaigns such as those by Benetton seem to court publicity by working at the edge of what is permissible. For instance, at a seminar organised by the ASA, I was shown an advert for a strong cider drink which showed people, who certainly appeared to be under 25,65 fooling around in supermarket trolleys in a carpark.66 The advertisers commented that this was simply a group of young people having fun in a supermarket carpark after shopping. Their gall simply beggared my belief and underlined to me the contemptuous attitude of some towards the ASA. When advertisements are misleading yet the self-regulatory procedures have been exhausted with the advertiser failing to conform with the ASA’s wishes, the Director General of Fair Trading can seek an injunction.67 However, this is only available for misleading advertisements. This is, nevertheless, a welcome attempt to integrate the self-regulatory structure into the legal system. However, it only uses the law as a back-up and does not attempt to create a legal framework within which self-regulation can operate in a manner which complements the legal rules and ensures the active participation of consumers. Generally, self-regulation and regulation (such as the Trade Descriptions Act 1968) have proceeded in parallel in the areas of false and misleading advertising, with self-regulation extending beyond these confines to touch on matters of taste and decency. 63 For an endorsement of self-regulation, see Thomson, ‘Self-regulation in advertising: some observations from the Advertising Standards Authority’. 64 The Independent Television Commission performs a similar function for television advertisements. For a recent assessment of the ASA, see Munro, ‘Self-regulation in the media’. 65 Models in alcohol advertisements should be 25 years of age. 66 (1996) 65 ASA Reports, 16 October. In that case, future advertisements were required to be cleared by the Copy Advice team. Only tobacco advertisements normally require pre-clearance. 67 Control of Misleading Advertisements Regulations 1988, SI 1988/915. 312


For present purposes, it is important to note that advertising selfregulation is a relatively closed process with little scope for consumer participation. Doubtless this was because its structure was established at an early stage in the development of consumerism. The British Code of Advertising and Sales Promotion is drafted by the Code of Advertising Practice Committee (CAP). The CAP comprises 20 representatives of trade associations representing advertisers, advertising agencies and media, such as cinema, newspaper, magazine and poster site owners. There is no formal consumer input at all, although when the Code is revised it is put out for consultation. However, consumer organisations and/or the National Consumer Council surely should merit a place on this committee which establishes the ‘rules of the game’. Some independent ASA members do sit on CAP committees.68 The ASA supervises the Code and acts as an enforcement agency. It has a chairman from outside the industry and two thirds of its membership must have no connection with industry, with the advertising industry members sitting as individuals and not representing any sectional interest. Thus, not only does the industry draft its own rules, but it also involved in applying them. Admittedly, advertising industry members are not in the majority, but one can imagine that the voices of seasoned industry experts carry significant weight in discussions. Equally, the independent members are appointed by the chairman of the ASA itself, and it is unlikely that radical candidates will be appointed as the chairman is himself appointed by the Advertising Standards Board of Finance, which is the body that collects the levy from advertisers used to fund the self-regulatory system. The ASA has a good pedigree and was a trailblazer in the area of selfregulation. It is still one of the most sophisticated models of advertising selfregulation. Nevertheless, when judged against the twin requirements of integrating self-regulation into the legal system and participation by consumers, one can see that it has significant flaws. A possible model for reform might be provided by Part III of the Consumer Protection Act 1987. This provides for a general offence of giving misleading price indications (s 20) and backs this up with a statutory code of practice which has an evidential status under the Act (s 25). Possibly the self-regulatory bodies may be suited to the task of producing such guidance within a legislative framework, which could also ensure the involvement of interested parties such as pressure groups, perhaps by placing the development of such codes under the supervision of the OFT with the actual process being undertaken within the auspices of the BSI.

68 The CAP has two review panels, one for general media, the other for sales promotion and direct response advertising, and one independent ASA council member sits on each panel. 313


Codes of Practice need to be more influenced by consumers and better integrated into the legal system The original Fair Trading Bill contained no provisions on Codes of Practice, but, at the suggestion of a trade association, the Government introduced a clause (now s 124(3) of the Fair Trading Act 1973) which imposes a ‘duty on the Director to encourage relevant associations to prepare, and to disseminate to their members, codes of practice for guidance in safeguarding and promoting the interests of consumers in the United Kingdom’. At first this was not seen as a primary tool for promoting trading standards, but after the Part II rule making procedure quickly became moribund because of its excessively bureaucratic procedures, the OFT began devoting more attention to Codes of Practice as a means of improving standards. However, a former Director General, Sir Gordon Borrie, has described how, as the OFT became more interested in Codes, industry became less enthusiastic as they realised the threat of legislation had receded.69 In the 1970s, the OFT was proactive in developing codes of practice in problem sectors. By the mid-1980s, the emphasis had switched from negotiating new codes to monitoring existing ones, although minimum requirements for new codes had been developed. The OFT was, however, becoming disillusioned about the benefits of Codes and tried to distance itself by putting forward guidelines and offering a degree of endorsement, but leaving the implementation, publicity and monitoring to the relevant associations. It has recently seen an upsurge in interest in Codes and issued a consultation paper, Voluntary Codes of Practice,70 to determine its future policy. The follow up report is discussed below. The OFT found that many codes are not well respected by enforcement authorities and consumer advisers.71 Nevertheless, it considered that Codes have achieved ‘real, though limited, successes’.72 It suggests that indicators of the likely effectiveness of Codes are a combination of one or more of the following factors: the availability of a strong sanction, a plausible threat of statutory regulation, a clear wish by the good players in the industry to distinguish themselves from others, and obvious benefits to consumers, sufficient to affect their choice of traders.73 The Director General of Fair Trading has issued ‘best practice’ guidance on the development of Codes and is prepared to endorse Codes which comply with these guidelines by signing a forward to the Code which welcomes its introduction. The more tangible benefit is that, whilst all Codes are 69 70 71 72 73

Quoted in Ramsay, Consumer Protection, p 287. Office of Fair Trading, Voluntary Codes of Practice. Ibid, p 7 (citing a 1987 study). Ibid, p 15. Ibid, p 11. 314


registerable under the Restrictive Practices Act 1976, codes which have the Director General’s support will not be treated as placing significant restrictions on competition. To date, 42 trade association voluntary codes have been supported by the OFT. The British Code of Advertising and Sales Promotion Practice (BCASPP) are outside this scheme as it is not developed by a relevant association. We have already noted that placing this code under the supervision of the OFT may be one way of ensuring closer integration of that code with the legal system. Without reviewing all the pros and cons of codes of practice,74 two issues of particular concern to us here will briefly be considered, namely, the extent of consumer participation and the enforceability of the codes. There seems to be a wide variety of approaches to involving consumers in the development of the Codes. The OFT guidelines require that consultation with consumers, enforcement bodies and advisory services take place throughout the preparation of the Code. It is important that consumers are not simply asked to comment on the final draft as by that time the main contours of the document would have been defined and only marginal improvements might be obtained for consumers. However, practice seems to vary between trade associations as to how fully they involve consumers. It is generally assumed that, unless mentioned in the contract (or possibly the advertising and promotional literature), codes of practice do not provide consumers with direct contractual rights. The powers of the associations are also limited both formally (for example, they may only be able to reprimand or expel members and may not be able to require them to compensate consumers) and practically (by the association having to rely on membership fees for its very existence). Trade associations divide over whether the best way to treat delinquent members is to expel them (leaving them totally uncontrolled, but upholding the reputation of the association) or to try to keep them within the fold and educate them as to their responsibilities. The nonapplicability of codes to non-members is a serious weakness, particularly in sectors where membership of a trade association is not a significant factor affecting consumer choice. This could be countered in two ways. Legislation could provide a framework in specific areas so that the function of codes would be to assist traders to meet their obligations and even non-members or members who flouted the law could have the primary law enforced against them. Taking this one stage further, one could again go back to the Director General’s 1986 report on A General Duty to Trade Fairly which proposed that the content of the general duty be spelt out in codes of practice. Once codes had been approved by Parliament, they would have been given statutory backing and could therefore be applied to all traders, not just those covered by

74 Howells and Weatherill, Consumer Protection Law, pp 507–11. 315


the trade associations. It was envisaged that compliance with the Code would be a defence to the allegation that the general duty had been breached, whereas non-observance would be evidence of breach, although it would be open to the defendant to show he had given equivalent protection.75 Reactions to codes of practice are almost instinctive. The business community is sympathetic to them, whilst consumer representatives are suspicious of them. I take a positive view of their potential. Note, I am referring here to their potential and not to the current position. Codes could be a useful complement to legislation, fleshing out the broad aspirations set out in the law (thereby making codes indirectly relevant to non-members) and dealing with issues not amenable to formal legislation. For this to work two pre-conditions must be met. First, the self-regulatory codes must be developed within a legislative framework and, secondly, consumer representatives must participate in the development of the codes. There are, clearly, great variations in the quality of codes and this must be partly a result of the OFT developing a hands-off approach. After its latest consultation exercise, the OFT has proposed going beyond codes of practice by suggesting that the BSI should develop a core standard and a suite of sectoral standards which businesses would sign up to in order to be able to display a ‘better trader’ logo.76 Policing would be undertaken by an independent agency to avoid the difficulties which arise from trade associations having to discipline their own members. This seems a positive way forward which would place self-regulation within a more structured environment and permit consumer participation. However, I would still prefer this to be undertaken against a legislative backdrop which both provided a framework for the self-regulatory process and imposed some general obligations, even on those traders who did not sign up to the new scheme.

Consumer organisations should consider taking a more proactive role in their dialogues with business So far we have seen consumer organisations playing a largely reactive role in the self-regulatory process. Consumer organisations should consider being more pro-active in channelling the collective power of consumers more directly so that consumers rather than traders set the framework within which trading standards are set. Recently, in the context of unfair terms regulation, I have advocated a policy of collective bargaining in which consumer organisations give their approval to model contracts.77 Of course, if the recent OFT report on Raising Standards of Consumer Care bears fruit, consumer groups 75 Office of Fair Trading, A General Duty to Trade Fairly, pp 35–38. 76 Office of Fair Trading, Raising Standards of Consumer Care. 77 Howells, ‘Good faith in consumer contracting’. 316


may find they can effectively participate in the development of meaningful standards within BSI procedures but, if that does not materialise, consumer groups should consider becoming more proactive. Such tactics have been tried to some extent by consumer groups in Belgium and Holland78 and the Scandinavian Ombudsmen negotiates model contract terms.79 Closer to home, the Northern Ireland Consumer Council has negotiated public transport contracts.80 One knowledgeable commentator has admitted to being disillusioned about the impact of such model contracts, because of the time and effort needed to negotiate them.81 However, he still describes the negotiation model as the ideal model. There is also the problem that the model contracts may not apply to the worst traders, who are unlikely to be members of trade associations or otherwise fail to use the model terms. However, whatever the experience has been in the past, it seems possible for consumer organisations to develop their role in this area. A useful model might be the crystal mark for plain English awarded by the Plain English Campaign. This is highly prized by many businesses, who allocate substantial resources to obtain it. There are, of course, always traders who do not follow best practice and that is why we will need to maintain regulatory powers as a back up. Whether consumers can be persuaded to demand contracts approved by consumer organisations or products which meet their standards will depend upon the quality of the assurance and the consumer organisations’ ability to convince consumers of the added value provided by their approval.82 This will require the collective bargain to have secured tangible improvements for consumers and these must be wanted by consumers, if necessary to the extent of being prepared to pay for any additional costs. Testing the results of consumer organisation negotiations in the market in this manner both deflects from any possible criticism that consumer organisations do not reflect ordinary consumers wishes and encourages consumer groups to concentrate on those sectors where the market currently provides consumers with the worst deals.

78 Hondius, Unfair Terms in Consumer Contracts, pp 170, 190. 79 Wilhelmsson, ‘Control of unfair contract terms and social values: EC and Nordic approaches’. 80 I am indebted to Brian Collins of the University of Ulster for this information. 81 Hondius, Unfair Terms in Consumer Contracts, pp 224–25. 82 It should not be necessary that all consumers be sensitive to the value of the new contract, so long as there is a significant margin of consumers who will seek it out. Schwartz and Wilde, ‘Intervening in markets on the basis of imperfect information: a legal and economic analysis’. 317


CONCLUSIONS Regulation is becoming increasingly polycentric. It takes place at the local, national, regional and international levels. Its tools are no longer restricted to detailed prescriptive national laws. Primary legislation is often simply an excuse for secondary legislation or guidance. Legal rules themselves are increasingly drafted in broad general terms leaving the content of the law to be defined by government agencies, the courts or self-regulatory bodies. All these developments place increased stress on the resources of those who seek to ensure the consumer’s voice is heard in the regulatory process. Democratic consumer organisations have an important role to play in representing the consumer, but government also has a duty to ensure either that consumer organisations are properly financed or relatively independent government institutions look after the consumer interest. Consumer organisations are going to have to prioritise their efforts carefully. Direct lobbying of government should not necessarily be their sole means of promoting the consumer interest. Social disputes are increasingly likely to be resolved in the courts and self-regulatory bodies will make important decisions affecting consumer welfare. Whether consumers can have access to the courts and these self-regulatory institutions will be an important litmus test as to the nature of the new regulatory environment. It will help us to decide whether we are developing a more socially responsive law or simply one which is privatising legal and social policy and placing power even more firmly in the hands of the business community. Consumer organisations may find it fruitful to tackle the problems consumers face directly through the market mechanism. They should set the standards they believe it is legitimate for consumers to expect and only give their approval to goods and services which meet these standards (whether this can be achieved through BSI procedures or whether more direct appeals to the public are necessary remains a matter of debate). In this way, they can harness the purchasing power of the consumer body to demand better standards. If this approach was successful, it would then provide the mainstream traders with an incentive to ensure similar standards are applied to all traders through legislation.

318

CHAPTER 17

PARTICIPATION AND CORPORATE GOVERNANCE

JE Parkinson

INTRODUCTION Fifty of the world’s hundred largest economies are companies. The 500 biggest corporations control 25% of the world’s economic output.1 These and other large businesses have power in the very important sense that their managers make choices that affect others significantly.2 The scope of this power is wide ranging: … by making ordinary business decisions managers now have more power than most sovereign governments to determine where people will live; what work they will do if any; what they will eat, drink, and wear; and what sorts of knowledge they will encourage; and what kinds of society their children will inherit.3

It is true that companies’ freedom of action is constrained by the operation of product, capital, and labour markets, but within these limits there remains a large core of discretion. Company decision making is not, in other words, merely a matter of slavish obedience to market signals. Nor is corporate power being eliminated by the trend towards globalisation. Domestic companies that operate in internationally traded sectors may no longer be able to shelter from the forces of competition within national boundaries, but globalisation has, if anything, increased rather than diminished the power of the large multinationals. Economies of scale and scope and the judicious use of strategic alliances and other forms of networking ensure that these organisations operate in conditions in which competition is suitably attenuated.4 The sheer economic clout of large public companies and the international mobility of their activities give them some capacity to resist attempts by

1 2 3 4

Korten, When Corporations Rule the World, pp 220–21. Kaysen, ‘The corporation: how much power? What scope?’, p 85. Barnett and Muller, Global Reach: The Power of the Multinational Corporations, p 15, quoted in Monks, ‘Corporate governance in the twenty-first century, a preliminary outline’, p 9. Korten, When Corporations Rule the World, ch 17; Hirst and Thompson, Globalisation in Question, ch 3. 319


national governments and broader political groupings to regulate their operations in the public interest. Nevertheless, the image of the truly transnational enterprise, lacking a natural home base and willing to move any of its operations to wherever costs are lowest, has little basis in reality.5 Moreover, differences between national and regional economies in terms of workforce skills, levels of trust and the development of social capital,6 and local geography, mean that not all are forced to compete to attract and retain corporate patronage on the basis of crude cost conditions alone. While the scope for intervention to reorientate corporate behaviour is not unlimited therefore, the power of international companies and the demands of the capital market do not completely block a reformist agenda. The recognition that large businesses have power to make decisions that have important consequences for a wide range of groups has led many theorists to classify them as political organisations, possessing a public, rather than a purely private character.7 In accordance with the principle that those who are directly affected by decisions should have a right to participate in making them,8 many of these theorists have argued that the relevant groups or ‘constituencies’ should be represented in the company’s decision making structures.9 In this way conflicts between the company and its external environment might be resolved internally, by political processes of dialogue and negotiation. Some envisage a ‘version of the corporation as the Republic in miniature’.10 The forum often suggested for constituency representation is the board of directors,11 on the assumption that it is here that the ultimate power of control over the company lies.12 No system of corporate governance found in practice currently mandates multi-constituency board representation, though there are examples of

5 6 7

Hirst and Thompson, Globalisation in Question, chs 4 and 6. Plender, A Stake in the Future: The Stakeholding Solution, pp 18–21. Eg, Dahl, ‘A prelude to corporate reform’. There is a long tradition of regarding the company as a body whose existence originates in a ‘concession’ from the State and which, in return, owes public responsibilities which the State may, if necessary, intervene to enforce. Parkinson, Corporate Power and Responsibility: Issues in the Theory of Company Law, pp 25–32. 8 Archer, Economic Democracy: The Politics of Feasible Socialism, ch 1. 9 For a critical analysis of political models of the corporation, see Eisenberg, ‘Corporate legitimacy, conduct, and governance: two models of the corporation’. For a sympathetic analysis, see Dallas, ‘Two models of the corporation: beyond Berle and Means’; and Dallas, ‘Working toward a new paradigm’. 10 Chayes, ‘The modern corporation and the rule of law’, p 39, quoted in Orts, ‘The complexity and legitimacy of corporate law’, p 1620. 11 Eg, Steinmann, ‘The enterprise as a political system’, p 401; Beck, ‘Corporate power and public policy’, pp 209–13; and Porter, ‘Capital disadvantage: America’s failing capital investment system’. The proposals in Nader et al, Taming the Giant Corporation, involve the appointment of directors with responsibilities for a wide range of constituencies, but with appointment to be by the shareholders exclusively. 12 As to which, see Demb and Neubauer, The Corporate Board: Confronting the Paradoxes. 320

Participation and Corporate Governance

systems that incorporate dual participation, by shareholders and employees.13 The absence of requirements for multiple representation no doubt in part reflects fears that increased complexity of decision-making and possible confusion over corporate objectives would seriously detract from the wealthcreating capacity of the company.14 But there is also considerable room for doubt about how effective such an arrangement would be in furthering the interests of the relevant groups. Ideally, all groups on whom the company has a significant impact should be included if a defensible balancing of interests is to be achieved, but identifying and facilitating representation for all affected interests would be likely to prove impossible. There is in addition a real danger that policy outcomes would either be arbitrary, being dependent on the bargaining strength of particular constituencies and the shifting composition of coalitions between them, or else little different from current ones, given management’s superior access to information, the ability of managerial insiders to set the company’s agenda, and their greater expertise in the practicalities of running the business.15 Although there are theoretical and practical difficulties associated with multi-constituency board representation, it will be suggested that there are good arguments for increasing participation in corporate decision making by other means. What needs to be recognised is that participation can serve a number of different purposes and hence that the form participation should take in particular instances and the institutional arrangements necessary to facilitate it vary. This chapter will examine three reasons for extending participation. They are: to constrain profit making to reduce various kinds of adverse third-party effects; to consolidate productive relationships between stakeholders; and to reflect the special status of employees within the organisation. Before that, it is necessary to look briefly at the model of the company that is currently reflected in English company law, which provides exclusively for participation by shareholders. The aim is to draw attention to the fact that in practice participation even by shareholders is problematical and to give an impression of the structural arrangements upon which mechanisms to allow participation by other groups must be superimposed.

SHAREHOLDER PARTICIPATION The legal model of the company is often described as a principal-agent model, the directors being the agents and the shareholders the principals. Technically 13 Eg, Germany and Sweden. It is common for companies to decide in their commercial interests to appoint representatives of third parties, eg, major lenders or suppliers, to the board. 14 Orts, ‘The complexity and legitimacy of corporate law’, p 1620; and Herman, Corporate Control, Corporate Power, pp 281–89. 15 See, generally, Parkinson, Corporate Power and Responsibility, pp 386–93. 321


the directors are agents of the company rather than of the shareholders,16 but the shareholder-director relationship is sufficiently close to one of agency to make analysis in those terms illuminating for some purposes.17 Thus, while the corporate constitution invariably vests the authority to manage the business in the board, to the exclusion of the shareholders,18 the shareholders appoint and are entitled to remove the directors from office,19 the directors’ fiduciary duties require them to act in the shareholders’ interests exclusively,20 and the directors are obliged to report to the shareholders on their stewardship of the business.21 The shareholders’ rights of participation conferred by company law, which are exercised by voting in general meeting, are designed principally to ensure that the directors exercise their powers for the shareholders’ benefit. 22 They include mechanisms that allow the shareholders to hold the directors accountable for, and to monitor, their performance of the management function. In addition to the ability of the shareholders to remove the directors from office, the directors must, for example, seek shareholder consent to enter into transactions affected by potential conflicts of interest.23 The Companies Act also allocates to the shareholders the power to redefine the boundaries of managerial authority and to make decisions on issues that are deemed to fall outside the responsibilities of management. The approval of the shareholders must accordingly be obtained to amend the company’s constitution and for such matters as altering the size and structure of its share capital.24 The decision making rights provided by the Companies Act are only minimum 16 See, further, Griffiths, ‘Shareholding and the governance of public companies’, pp 64–65. 17 Eg, Cadbury Committee, Report of the Committee on the Financial Aspects of Corporate Governance, para 6.1: ‘the shareholders as owners of the company elect the directors to run the business on their behalf and hold them accountable for its progress.’ 18 The shareholders can, however, intervene by special resolution. Companies (Tables A to F) Regulations 1985, Table A, Art 70. 19 Companies (Tables A to F) Regulations 1985, Art 78; and Companies Act 1985, s 303. 20 Where the company is insolvent or on the verge of insolvency, the directors’ duty mutates to one to have concern for the interests of creditors. West Mercia Safetywear Ltd v Dodd [1988] BCLC 250. The directors must also have regard to the interests of employees, but it is doubtful whether this entitles them to give preference to employee interests over those of the shareholders where there is a clash. Companies Act 1985, s 309. 21 Companies Act 1985, Pt VII. 22 Somewhat surprisingly, the shareholders’ rights do not include the right to enforce directors’ duties in the company’s name. Breckland Group Holdings Ltd v London and Suffolk Properties [1989] BCLC 100. In certain circumstances, individual shareholders are permitted to sue on the company’s behalf by means of a derivative action. The law is generally thought to be too restrictive and is currently under review. Law Commission, Shareholder Remedies. 23 Companies Act 1985, Pt X. 24 Companies listed on the Stock Exchange must also obtain shareholder consent for major asset disposals and acquisitions (‘super class 1 transactions’). Stock Exchange, The Listing Rules, ch 10. 322


requirements and they may be supplemented in the company’s own constitution. It is not uncommon, for instance, for the company’s articles of association to lay down borrowing limits that can be exceeded only with shareholder consent. The shareholders also have voting rights in relation to issues that affect the relationship of the shareholders between themselves, for example, changing the rights attached to shares.

Participation in practice It is well documented that in practice only a small percentage of shareholders in public companies exercise their voting rights.25 With shares in the majority of companies being very widely dispersed, each shareholder usually controls a tiny proportion of the votes. This being so, most shareholders are ‘rationally apathetic’.26 That is, because whether or not they vote will on its own make no difference to the outcome, and the costs of co-operating with other shareholders to bring about a particular result are likely to outweigh the benefits, the best solution is to remain passive. The upshot is the ‘separation of ownership and control’ identified by AA Berle and GC Means over 60 years ago,27 implying a level of freedom on the part of management to pursue goals at variance with the maximisation of shareholder returns. Subsequently, the trend towards concentration of holdings in the hands of institutional investors has increased the incentives for more active engagement and reduced the costs of collaboration. There is now plenty of evidence to show that institutions have regular contact with the managements of portfolio companies and often succeed in bringing about changes in policy and board composition and improvements in the governance framework.28 While the voting power normally exercised at general meetings may be low, therefore, shareholders’ formal rights of participation are supplemented in practice by a significant level of ‘behind the scenes’ activity. Precisely which issues are reserved for determination by the shareholders is accordingly likely to be of some practical importance, because of the leverage that the ability to reject company proposals gives the institutions in their contacts with managers. The significance of the role of the institutions should not be exaggerated, however. Institutions have widely diversified investments and typically hold a very small proportion of the shares in a large number of companies. Paying close attention to the affairs of all these companies on a continuing basis is not feasible. Further, many funds are managed externally. Fund managers will be reluctant to incur the costs of intervention, since the benefits are likely to be

25 26 27 28

Stapledon, Institutional Shareholders and Corporate Governance, pp 92–98. Easterbrook and Fischel, The Economic Structure of Corporate Law, pp 66–67. Berle and Means, The Modern Corporation and Private Property. Ibid, Stapledon, ch 5; and Gaved, Ownership and Influence. 323


deferred and will accrue to their clients rather than themselves, and in a competitive market for fund management services they will have difficulty in passing the costs on.29 It also seems that the most extreme and often the most valuable form of intervention, removing an inadequate board, is usually beyond the institutions’ capacity. It has been suggested that forcing a change in policy or personnel that management is disposed to resist normally requires a coalition of institutions holding between them at least 20–30% of the equity, but numbering no more than three or four institutions. With a greater number of participants, effective coordination becomes impossible. The crucial point is that even if the top three or four institutions in terms of percentage holdings were to be members of the coalition, they would together still have inadequate voting strength for a successful intervention.30 This partly explains why major interventions are so few, and why institutions, despite being aware of the shortcomings of the company’s current management, often sit back in the hope that a take-over bid will come to their rescue.

Participation by means of ‘exit’ The obstacles shareholders face in attempting to remove the boards of poorly performing companies might seem to have major implications for their ability to protect their interests. Participation by means of ‘exit’, associated with the take-over market, is regarded by many, however, as an efficient substitute for participation by means of ‘voice’.31 The process by which shareholders are able through exit to influence the way in which the company is run can be explained as follows. Shareholders who are dissatisfied with the returns they are obtaining on their investment are likely to sell their shares, and this will have the effect of driving down the market price of the company’s equity. The company’s low market valuation will then act as a signal to rival managements that its assets are being under-utilised and that there is an opportunity to make a profit by taking control of the company and operating it at a level closer to its true potential. The bidder will therefore make an offer to buy the company’s shares, at a premium above their current market price, in order to induce the bulk of the existing shareholders to sell. On obtaining control, the bidder will replace the management team with its own nominees. In this way inefficient managements are ‘selected out’ by the market, but at least as importantly, managers are provided with a strong incentive to run the

29 Coffee, ‘Liquidity versus control: the institutional investor as corporate monitor’, p 1328. 30 Stapledon, Institutional Shareholders, pp 106–17. 31 For the origin of this terminology, see Hirschman, Exit, Voice and Loyalty: Responses to Decline in Firms, Organisations and States. 324


company in accordance with shareholder preferences, for fear of being displaced. In reality, the market for control as a mechanism for correcting managerial inefficiency seems to work rather poorly. The results of consummated takeovers show that many were mistakes.32 Among other explanations, this may be a result of the difficulties bidders face in putting an accurate value on what they are buying. Furthermore, there are significant frictions in the working of the market. In order to obtain control, a hostile bidder must bear significant transaction costs in the form of professional and underwriting fees. To make an acquisition worthwhile a raider must be confident of recouping these costs, together with what is likely to be the even greater sum of the control premium, 33 through improvements in efficiency and other gains. Managements who are unresponsive to shareholders’ wishes are able to shelter behind these costs and it has been suggested that the price of obtaining control is so high that the disciplinary force of the market is ‘likely to be limited to instances of gross managerial failure’.34 It is easy enough to see that the market would be too insensitive to regulate the level of management remuneration, for example, since even the most extravagant sums currently paid amount to only a very small proportion of the costs of a successful bid. Quite apart from questions of cost, there is little evidence to suggest that in practice take-overs are inspired by inadequacies in the management of the target company, as distinct, for instance, from opportunities to obtain economies of scale or other operating efficiencies, or simply a desire for the aggrandisement of the bidder.35 If poor performers are not singled out, the market for control cannot be regarded as a mechanism for correcting management failure. This is not to deny that the fear of take-over has a major effect on managerial conduct, however. It gives the directors of all companies, whether badly managed or not, a reason to be concerned about share price. While this may have positive effects in terms of stimulating efficiency, many believe it also encourages an unhealthy preoccupation with short term financial results, at the expense of investment in physical plant, research and development, and training.36

32 Hughes, ‘Mergers and economic performance in the UK: a survey of the empirical evidence’. 33 In effect, the bidder must share a substantial proportion of its potential gains with target shareholders, thereby reducing the attractiveness to the bidder of mounting a bid. See, further, Grossman and Hart, ‘Takeover bids, the free-rider problem and the theory of the corporation’. 34 Coffee, ‘Regulating the market for corporate control: a critical assessment of the tender offer’s role in corporate governance’, p 1200. 35 Franks and Mayer, ‘Hostile takeovers and the correction of managerial failure’. 36 There is an extensive literature on this issue. For a sample, see Marsh, Short-Termism on Trial; and Lipton and Rosenblum, ‘A new system of corporate governance: the quinquennial election of directors’. 325


There are then significant weaknesses in both voice and exit as mechanisms of shareholder participation. Concern that managements are insufficiently accountable to shareholders and as a result have too much freedom to act in their own interests, or otherwise inefficiently, has been the predominant issue in the corporate governance debate in this country. So far, continued exhortations to shareholders to exercise their voting rights and to become more actively involved in the affairs of the companies in which they invest, and the modest, though not insignificant recommendations in the Cadbury37 and Greenbury38 Codes of Best Practice, have been the only outcome. Providing effective mechanisms of managerial accountability is important, not just for the sake of ensuring that the shareholders obtain a proper return on their investment, but more broadly in order to underpin the legitimacy of the system and to protect the wealth-creating capacity of the economy. This facet of the corporate governance debate will not be taken further here, however. Instead, the rest of this chapter will examine aspects of governance that have been given much less prominence in the UK, namely how governance mechanisms might be used to influence the company’s social and environmental performance and to secure the interests of all the parties involved in corporate wealth creation, and not just those of the shareholders. Before leaving the shareholders, however, something should be said about the role that they can play in the first of these functions.

Shareholder activism It has been assumed in the foregoing discussion that shareholders will use their rights of participation in order to further their own financial interests. Some shareholders have different objectives, however, and it is open to them to use their position as members to further other causes. A recent illustration is the campaign by the corporate governance pressure group PIRC, which put forward resolutions at the AGM of Shell calling for it to improve its environmental and human rights policies and reporting practices.39 More broadly, a growing (but still small) proportion of the stock market is under the

37 Cadbury Committee, Report of the Committee on the Financial Aspects of Corporate Governance. The Code’s requirements, which are not binding (though the company’s annual report must explain non-compliance), include the appointment of non-executive directors and improved financial reporting and controls. And see, also, now, Hampel Committee, Preliminary Report of the Committee on Corporate Governance. 38 Greenbury Committee, Directors’ Remuneration: Report of a Study Group chaired by Sir Richard Greenbury. The report relies on remuneration committees made up of nonexecutive directors and increased disclosure to control excessive pay and inappropriate ‘incentive’ schemes. 39 The resolutions were defeated, but they attracted significant support at more than 10% of the votes cast. There is a longer tradition of such activity in the United States. Kuhn and Shriver, Beyond Success: Corporations and their Critics in the 1990s, pp 54–67. 326


control of ethical investment funds.40 In general, these bodies simply refuse to hold shares in companies involved in proscribed activities such as tobacco or arms manufacture, but there are also other organisations, notably charities and campaigning groups, that are prepared to engage more actively with managements in their capacity as shareholders to bring about changes in company policy. Such groups invariably lack the voting support needed to carry their resolutions, but their primary aim is usually to influence company behaviour by putting pressure on management through adverse publicity and in this they may well succeed.41 In this connection, the restrictive terms on which shareholders are entitled to propose resolutions at AGMs should be noted.42 The company is required to give notice of a shareholders’ resolution (which is a precondition of the resolution being put to the meeting) only if it is requisitioned to do so by shareholders who between them have at least 5% of the voting rights, or they number 100 or more and their paid up share capital averages not less than £100.43 The requisitionists are also entitled to insist that the company circulate a statement prepared by them about the resolution of not more than 1,000 words (or other business to be dealt with at the AGM). Since it is rare for even the very largest institutions to hold as much 5% of the votes,44 and given the logistical problems of organising 100 shareholders, it is not surprising that shareholders’ resolutions are extremely uncommon. 45 Added to these difficulties, the shareholders making a requisition must meet the company’s costs in complying with it.46 There is a case for relaxing these provisions. A suitable reduction in the percentage holding requirement could increase the 40 The amount invested in ethical funds is reported to have almost doubled over the past two years, from £800 m in June 1995 to £1.5 billion in June 1997. The total sum invested in unit trusts as a whole, however, is £149 billion. 41 Sparkes, The Ethical Investor. 42 Shareholders have no right to propose resolutions at extraordinary general meetings, other than those called by the shareholders themselves. In order to requisition a meeting, shareholders must have at least 10% of the paid up capital of the company. Companies Act 1985, s 368. 43 Companies Act 1985, s 376. 44 Stapledon, Institutional Shareholders, pp 106–13. 45 DTI, Shareholder Communications at the Annual General Meeting: A Consultative Document, pp 30–31, gives details of five in 1995. 46 It has been estimated that the cost of a separate mailing is likely to be up to £50,000 for the majority of listed companies and for some in excess of £100,000. DTI, Shareholder Communications at the Annual General Meeting: A Consultative Document, para 2.11. The cost falls considerably if the requisition is received in time to be included with the notice of the AGM. For this to be possible, however, the resolution will have to be formulated in ignorance of the contents of the company’s annual report. The DTI consultation document, published by the previous government, addressed ways of reducing the cost to requisitionists of proposing a resolution, but not of relaxing the qualifying requirements. In fact, it suggests that the £100 average paid-up capital threshold be raised to the equivalent of £100 in real terms in 1948 when the figure was set. DTI, Shareholder Communications at the Annual General Meeting: A Consultative Document, para 2.22. 327


scope for members’ resolutions without exposing companies to fruitless harassment by campaign groups with nominal holdings.47

PARTICIPATION TO REDUCE ADVERSE THIRD PARTY EFFECTS This section is concerned with participation as a means of limiting the negative social impact of corporate activity. Parties external to the corporate framework who make contracts with companies participate in the organisation’s decision making in an attenuated sense, not through company law mechanisms, but through their ability to exit the relationship. The parties who do this in the most obvious way are the company’s customers.

Consumer activism and the role of information Customers in their purchase behaviour, at least in aggregate, influence the nature of the goods and services that companies provide. More importantly, for present purposes, they can have some effect on the wider social consequences of the company’s conduct, for example in relation to its environmental or human rights record. By refusing to buy a particular company’s products, consumers threaten its profits. The restricted character of the form of participation involved here should, however, be recognised. Consumers are not parties to the corporate decision making process. Rather, the effect of consumer behaviour is to alter the incentive structure within which managements exercise their discretion. A rational response of a management whose aim is to maximise profits will be to remedy the cause of consumers’ concerns if the cost of so doing is less than the value of lost sales and on-going reputational damage. More cynical responses, in the form of obfuscation, cosmetic changes or alternative, image building expenditures are also possible, however, as is a decision simply to ‘tough it out’.48 An important prerequisite for effective consumer action is access to information about the company’s activities and their impact. In the absence of appropriate information, consumers will be unaware of corporate abuses and unless the information available is sufficiently detailed and reliable it will be impossible to identify which companies are the most serious offenders and hence to ensure that consumer efforts are appropriately targeted. The social disclosure requirements currently contained in the Companies Act are very 47 It has been suggested that the threshold should be ten shareholders holding an aggregate of 10,000 shares, or one shareholder holding more than one per cent by market value of the company’s shares: PIRC, The AGM: A Focus for Shareholder Involvement. 48 Herman, Corporate Control, Corporate Power, p 278. 328


limited, comprising a duty to disclose the company’s policy on the employment of disabled persons,49 information concerning arrangements for securing the health and safety of the company’s employees,50 and action taken to inform and consult the workforce on matters of relevance to them as employees and to promote employee share schemes.51 It is now common, however, for companies to disclose information additional to that required by law. The most popular subject for disclosure is the company’s environmental performance.52 According to recent research, 79 of the FTSE 100 companies produced an environmental report last year.53 Helpful as the information revealed may be, there are nevertheless significant drawbacks to voluntary disclosure, particularly where reports are not independently audited. In an earlier survey of environmental disclosure in the UK it was observed that ‘the majority of the information provided was selective and almost solely concentrated on the positive aspects of a company’s environmental performance. Most disclosures would appear to have been public relations driven, making it virtually impossible to derive a comprehensive picture of a company’s environmental record’.54 There is accordingly a clear case for imposing on companies that have a significant impact on the environment a duty to disclose information on a standardised basis and to have the information independently verified.55 This need not involve enormous expense, since most companies already collect and analyse the relevant information for internal management purposes. Development of disclosure techniques in other areas of corporate social performance, for example, in relation to employment policy in the company’s overseas operations, product safety, and equal opportunities is less

49 Companies Act 1985, s 234, Sched 7, Pt III. 50 Provisions for disclosure relating to health, safety, and welfare at work of employees have been inserted into companies legislation (see, now, Companies Act 1985, Sched 7, Pt IV), but the necessary regulations to bring them into force have never been introduced. 51 Companies Act 1985, s 234, Sched 7, Pt V. There is no duty to do any of the things that must be reported on. There is also an obligation to disclose charitable and political donations. Companies Act 1985, s 234, Sched 7, Pt I. 52 A small number of companies report more widely. Eg, the Body Shop produces an independently verified ‘values report’, detailing the company’s record on environmental, animal protection and human relationships issues. 53 KPMG, The KPMG Survey of Environmental Reporting 1997. 54 Kirkman and Hope, Environmental Disclosure in UK Company Annual Reports, p 21. 55 There is also a case for regulating claims made about the environmental properties of particular products. The previous government proposed a voluntary code of practice. DTI, Green Claims: Code of Practice, A Consultation Paper. It is also possible to take more positive steps to stimulate green consumerism via schemes such as the European Union Eco-label Award Scheme which provide assurances of good environmental practice in the design and production of goods. Council Regulation 880/92 of 23 March 1992 on a Community Eco-label and Award Scheme, OJ L35/1, 1992. See, generally, McIntyre, ‘Environmental labelling: clean conscience for the consumer or missed opportunity?’. 329


advanced.56 There is no reason in principle, however, why companies could not be made to report on all areas in which they have a significant social impact.57 An alternative approach to formal publication of information is to allow public access to company records. The organisation Social Audit experimented in the 1970s with investigations into the operations of a number of major companies, producing wide ranging reports on such matters as employee relations, redundancies, pensions, race relations, overseas activities, and the environment.58 External reporting of this kind might be a promising way of increasing managerial circumspection and activating social pressure. The role that campaign groups or ‘social monitors’59 can play in processing information should also be mentioned. Raw social data is often meaningless and needs to be analysed and placed in context before it enables consumers to distinguish ‘good’ companies from ‘bad’. Quantitative details about harmful emissions, for example, obtain significance only with a background appreciation of the effects of the material released in the quantity and in the specific environment into which it is discharged. As well as analysing and highlighting information about companies’ social performance, campaign groups can also increase the effectiveness of consumer action by organising boycotts of a particular company’s products.60 The assurance that many other consumers are refusing to deal with the company too, helps reduce the ‘collective action’ problem associated with ethical purchase behaviour. That is, in order to register disapproval of the company’s policies by buying a substitute product, I may incur additional expense or the alternative product may be inferior in some way. Since I know that my own individual purchase decision will have no material impact on the company concerned, it will not be worth incurring the disadvantages of buying a substitute unless I am confident that a sufficiently large number of other customers will do likewise. The existence of an organised campaign can create this confidence. Even so, customer boycotts tend to be successful only where the issues are narrowly defined, and it is often difficult to sustain the momentum on a continuing basis.61

56 See, generally, Gray et al, Corporate Social Reporting: Accounting and Accountability, nb, chs 4 and 5; and Dierkes, ‘Corporate social reporting and auditing: theory and practice’. 57 For some proposals, see TUC, Your Stake at Work, pp 27–35. 58 Social Audit, Vol 1, No 3, 1973–74; and Vol 2, Nos 3–4, 1976. See, also, Adams et al, Changing Corporate Values: A Guide to Social and Environmental Policy and Practice in Britain’s Top Companies, produced by New Consumer and containing brief information on the record of a large number of consumer goods companies in such areas as equal opportunities, marketing policy, Third World relationships, and the environment. 59 Boswell, Community and the Economy: The Theory of Public Co-operation, nb, ch 7. 60 For a number of case studies, see Smith, Morality and the Market: Consumer Pressure for Corporate Accountability, ch 8. 61 See, generally, Craig Smith, Morality and the Market: Consumer Pressure for Corporate Accountability; and Kuhn and Shriver, Beyond Success, ch 2. 330


Consumer action can, then, play an important part in controlling corporate behaviour. Its potential should not be exaggerated, however. Many groups affected by corporate externalities, for example, inhabitants of developing countries whose way of life is disrupted by the extraction of raw materials, have no market relationship with the company and hence no ability to put pressure on management in the course of that relationship. Parties with whom companies do enter into contracts possess limited altruism,62 and problems over gaining access to, and interpreting information, even with improved disclosure and social monitoring, mean that much of the impact of corporate activity is likely to remain opaque. There is, therefore, and there is likely to continue to be, a gulf between shareholder interests and those of other affected parties. Behaviour which damages the well-being of the latter will not necessarily be matched by a market penalty resulting in a corresponding reduction in profits. A management owing an exclusive loyalty to shareholders can thus not be expected always to act in ways consistent with maximum social welfare. It might be recognised in this connection that a company’s ‘licence to operate’, referred to in the RSA Inquiry’s report, Tomorrow’s Company,63 is a metaphorical and not a real licence, and the consequences for the company of breaching it are not necessarily serious.

Pressure from other groups and consultation The discussion has so far been confined to consumer participation, but other groups that have market relationships with the company, namely, employees, lenders,64 business customers,65 and suppliers, are potential participants in company policy making too. The emphasis has been on market relationships

62 A survey conducted in 1991 found that 30% of customers were willing to pay at least 5% extra for products which did not harm the ozone layer, and 35% the same for products which were not harmful to animals. It also discovered that the size of the premium customers were prepared to pay fell during the recession, prompting the conclusion ‘that “conscience appeasement”, like “altruism”, is a luxury commodity, the need for which declines in the face of other pressures on consumers’ incomes’. Lansley, After the Gold Rush: the Trouble with Affluence: ‘Consumer Capitalism’ and the Way Forward, pp 207–08. 63 RSA, Tomorrow’s Company: The Role of Business in a Changing World, pp 5–6. 64 Lenders are particularly concerned about environmental damage caused by borrowers. ‘Clean up’ costs might endanger the solvency of the borrower, or the lender may even be required to take over the borrower’s environmental liabilities. Gray, The Greening of Accountancy: The Profession after Pearce, pp 52–53; and DTI Advisory Committee on Business and the Environment, Environmental Reporting and the Financial Sector: An Approach to Good Practice. 65 Some companies, particularly retailers, require suppliers to comply with guidelines, eg, on employment conditions. Christopher Haskins, chairman of Northern Foods, has suggested a supplier code of practice, modelled on the Cadbury code on corporate governance, requiring companies to ensure that suppliers comply with laws relating to employment, the environment, etc, and to encourage them to invest in training and technology. 331


and the ability of contracting parties to threaten profits, but this is not to say that some managers may not also have a broader disposition to respond to public pressure. They may view the company’s reputation, and their own, as valuable in themselves, for example, or simply be concerned to ‘do the right thing’. Relationships with interest groups need not necessarily be wholly adversarial, therefore, and there may be room for constructive dialogue. The DTI’s Advisory Committee on Business and the Environment, for example, has recently suggested that companies should discuss business decisions that have major environmental implications with interested parties at an early stage, before key decisions are taken. The resulting dialogue could ‘lead to better solutions, which provide environmental gain’, and at the same time satisfy business objectives.66 In relation to certain employment issues, namely, health and safety, redundancies, and transfers of the undertaking,67 companies are under an obligation formally to consult the employees. Now that the UK has become a party to the Social Policy Agreement, the European Works Council Directive will apply to it, requiring companies with more than 1,000 employees in Europe, including at least 150 in two Member States, to consult employees on transnational issues that affect them.68 There is obvious scope for extending rights of consultation in relation to major issues that have an impact on employees within the national context, such as the financial performance of the business, investment plans, and changes in working methods, by means of domestic works councils69 or through trade union channels. As regards other groups there may be greater practical difficulties in creating representative structures and ensuring the legitimacy of the consultees, but these problems are not necessarily insoluble. The TUC, for example, has suggested that companies enter into ‘structured dialogue’ with local communities prior to planning applications, with local authorities acting as coordinating bodies. The intention is to enable community views to inform company decisions about expansion or restructuring and to facilitate creative solutions which are less likely to be forthcoming through the normal operation of planning procedures.70 By expanding the informational base on which decisions are made, providing access to additional sources of expertise, and giving managers 66 DTI Advisory Committee on Business and the Environment, Integrating The Environment into Business Decisions: The Consensus Approach, p 6. See, also, Steinmann and Zerfab, ‘Corporate dialogue: a new perspective for public relations’. 67 Health and Safety at Work Act 1974, s 2; Employment Protection Act 1975, ss 99–107 and Transfer of Undertakings (Protection of Employment) Regulations 1981, amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995, respectively. 68 Directive 94/45/EC of 22 September 1994. 69 For proposals in relation to which, see Communication on Worker Information and Consultation COM (95) 547 final, 14.11.1995. 70 TUC, Your Stake at Work, pp 33–34. 332


greater insights into the points of view of other parties, consultation procedures are capable of producing an improved accommodation of interests. Consultation does not in itself oblige managements to change their position, however, and the ability of third parties to obtain concessions that are contrary to the company’s financial interests is likely to depend on their bargaining power. The experience with the obligation to consult over redundancies, which appears in general to have had little impact on management decisions to shed labour,71 is not encouraging. But, it may be noted that consultation procedures can also be structured in such a way as in themselves to alter the respective bargaining power of the parties. This will be the case where the obligation on the company is not merely to consult, but to reach agreement, and a mechanism is provided to impose a solution if the parties are unable to agree. Such an arrangement operates in Germany, where works councils have co-determination rights in relation to ‘social issues’ such as working hours, health and safety, and personnel questions. 72 Works councils also have important rights where the management proposes a major change that will have an adverse effect on the employees, such as a plant closure or restructuring. Management must agree with the works council a ‘social plan’ providing for the transfer of employees to alternative employment or the making of severance payments. If the parties cannot agree, the issue goes to arbitration, and the company must then either accept the arbitrator’s decision or cancel the proposed changes. The possibility of an externally imposed solution provides an inducement to the parties to reach an agreement and may cause the company to make concessions that would not otherwise be forthcoming.

Altering corporate objectives It is not true, as is sometimes suggested, that if an appropriately long-term view is taken, the shareholders’ interests and those of other affected groups coincide. As noted above, damage inflicted on third parties is not necessarily translated into an equivalent loss in profits to the company. It follows that there is a case for amending directors’ fiduciary duties, which currently require the board to act exclusively in the interests of shareholders, to allow them to pay greater attention to the interests of non-shareholder groups.73 In practice, directors’ duties do not constitute a serious barrier to conduct designed to safeguard third party interests. The duty in question is a subjective one, that is, the issue is what the directors ‘consider – not what a

71 Anderman, Labour Law: Management Decisions and Workers’ Rights, p 267. 72 Wooldridge, ‘The system of co-determination in Western Germany and its proposed reform’, pp 22–26. 73 See the qualification in fn 20 above. 333


court may consider – is in the interests of the company’.74 Since the directors are entitled to view the shareholders’ interests as being long term ones, it will usually be impossible to mount a successful challenge to concessions made to third parties, since in most cases they could plausibly be defended as protecting or enhancing the company’s reputation and hence contributing to its long term commercial success. Nevertheless, there is a widespread view that directors misinterpret their duties as being to maximise current returns to shareholders,75 and in any event, if it is thought desirable that companies should sometimes act in the interests of third parties, even though this is contrary to the company’s financial goals, then there is much to be said for redefining directors’ duties to make this clear. A practicable response would be expressly to permit directors to take account of the interests of third parties, but not to seek to compel them to respond to their concerns. The latter course, perhaps involving duties owed to a range of different constituencies, is not technically feasible. Duties owed to beneficiaries with potentially inconsistent interests are incapable of effective enforcement, because the disputes that are likely to result where the interests of one group are advanced at the expense of another do not give rise to issues which courts are capable of resolving. Not only would the court need to assess the impact of a contested policy on each group, both in the short and the long term, it would also have to evaluate the policy in accordance with a theory which stipulated when one set of interests should prevail over the others. Even if the courts had the resources to perform the first of these tasks, the latter involves value judgements of a kind inappropriate to the judicial function. An alteration to directors’ duties that was merely permissive would be unlikely in itself to have a major impact on corporate conduct. In providing a clear legal basis for directors to take account of the interests of third parties, however, it could help create a boardroom culture in which ethical issues are regarded as a legitimate concern of management and strengthen the hand of board members who are already pressing for improved social performance. It would also provide an appropriate setting for directors to respond constructively to the interests of non-shareholder constituencies expressed through the participative mechanisms discussed above.

74 Re Smith and Fawcett Ltd [1942] Ch 304, p 306, per Lord Greene MR. 75 RSA, Tomorrow’s Company, pp 11–12; and Institute for Public Policy Research/ Commission on Public Policy and British Business, Promoting Prosperity, pp 23–24. 334


Participation as an alternative form of regulation Measures to increase the scope and effectiveness of non-shareholder participation –improving the flow of information, mandatory consultation, and broadening directors’ fiduciary duties – can be regarded as a form of regulation of corporate conduct supplementary to more conventional techniques.76 They are a response to limitations in the ability of traditional legal controls to bring corporate behaviour into line with society’s expectations. 77 The problems include the inevitable delay in the legal response to new sources of harm, deficiencies in the information available to standard-setters, and the inability of law to educe the highest standards of performance, as distinct from securing compliance with base line, minimum standards. As well as problems of encapsulating desired controls in law, there may be failures in the democratic process itself. Legislators may give insufficient weight to the interests of those directly affected by damaging corporate activities, for example, or otherwise pay too little attention to the popular view. In the international context, the inadequacies of supranational rule making and enforcement agencies and the laxity of local laws may mean that companies are free to engage in conduct overseas which is regarded as unacceptable in the company’s country of origin. Increased participation may, then, be seen as a means of compensating for the regulatory deficit that results from these various shortcomings in the capacity of external legal rules to modify anti-social corporate behaviour.

LONG TERM, CO-OPERATIVE RELATIONSHIPS This section moves from a concern with reducing undesirable third-party effects, to realigning the core relationships in the company. The purpose of so doing is to increase the efficiency of the wealth creation process and the welfare of the parties to it. The aim is to promote long term, co-operative relationships, and the role of participation is to secure their integrity. In its report, Tomorrow’s Company, the RSA Inquiry noted that, while Britain had a few outstanding businesses, the average performance of UK companies was significantly worse than that of its competitors. 78 The Inquiry’s central recommendation to improve this position was that

76 They are forms of what has been termed ‘reflexive’ law. Teubner, ‘Substantive and reflexive elements in modern law’; and Teubner, ‘Corporate fiduciary duties and their beneficiaries: a functional approach to the legal institutionalization of corporate responsibility’. 77 See, further, Stone, Where the Law Ends: The Social Control of Corporate Behavior, ch 10; and Parkinson, Corporate Power and Responsibility, pp 325–29. 78 RSA, Tomorrow’s Company, pp 3–4. 335


companies adopt an ‘inclusive’ approach to business relationships. That is, they should pay greater attention to cultivating long term relationships with employees, customers, and suppliers. While these are the key to competitive strength, they are often subordinated in the drive to maximise short term shareholder returns. The IPPR’s Commission on Public Policy and British Business reached a similar conclusion.79 Both bodies considered that an ‘inclusive’ approach was compatible with the existing shareholder model of the company, so long as it was understood that the duty of the directors was to advance the long term interests of the shareholders by developing the wealth-creating potential of the business on a sustainable basis. This chapter takes issue with that conclusion. The systems overseas in which co-operative relationships have proved to be the most successful are those in which a stakeholder model of the company prevails, and in which stakeholders additional to shareholders are to a degree empowered within the corporate structure. A brief sketch of the advantages of co-operative relationships follows, and then the role of participation in upholding them will be examined.

The advantages of co-operative relationships The essence of a co-operative relationship is that it is beneficial to each party, but that the full benefits do not accrue immediately. Rather, they flow over an extended period. For either party to be willing to enter into such a relationship, it must have some confidence, therefore, that the relationship will endure, and that the value of its investment in the relationship will not be diminished by the self-interested conduct of the other. As regards relationships with employees, it is increasingly recognised that in the modern economy the knowledge and skills of employees and effective team-working are of central importance to competitive strength. 80 Providing credible assurances of continuity of employment and paying genuine attention to the welfare of their staff are likely to be crucial factors in enabling companies to take full advantage of the wealth-creating potential of their employees. Thus, if employees know that their jobs are secure they will consider it worthwhile to acquire company-specific skills and undergo training more generally. They are also more likely to co-operate with the introduction of new technology and working methods, rather than attempt to undermine them. Furthermore, employees who are treated as members of the organisation and not just dispensable factors of production are liable to respond constructively and

79 Institute for Public Policy Research/Commission on Public Policy and British Business, Promoting Prosperity, pp 20–23. 80 See, generally, Handy, The Empty Raincoat: Making Sense of the Future, nb, ch 9; and International Survey Research, Employee Satisfaction: Tracking European Trends. 336


innovatively to the challenges they face in carrying out their duties. And employees who have a positive attitude to the firm tend to need less supervision. The advantages of co-operative relationships between a company and its customers and suppliers can be understood by contrasting relationships based on ‘classical’ contracts and those involving ‘relational’ contracts. In a classical contract, the parties attempt to set out in exhaustive detail their respective rights and obligations in the various situations that might arise during the performance of the agreement. Given the impossibility of anticipating all future contingencies, the contract is likely to be incomplete or to contain provisions that are inappropriate in the circumstances that actually unfold. The parties do not regard themselves as owing any additional obligations extending beyond the letter of the agreement, however, and as a result a further round of bargaining is required. This process of adjustment is liable to be adversarial in character, with each side attempting to obtain the maximum advantage for itself. Renegotiations are, thus, often time consuming and disruptive, and may involve the exploitation of bargaining position by one side or the other. Again, once the current agreement expires there is no commitment to continue with the relationship, and there is unlikely to be a renewal where a third party can offer a better price. In many cases, it will be appropriate to transact in this way, for example, when obtaining routine, standardised supplies. The company does not tie itself into a relationship that in changed circumstances may become disadvantageous to it, and being free from long term commitments it can quickly move resources out of unproductive uses. In other situations, however, relational contracting may bring considerable advantages. In a relational contract, while the relationship between the parties will be founded in a formal agreement, they will not view that agreement as capturing the totality of their mutual rights and obligations. Rather, they will regard each other as owing more extensive obligations of co-operation and good faith, to the point that each party will be expected to incorporate the interests of the other in its decision-making. In contrast with classical contracting, the non-adversarial character of the relationship promotes the free flow of information, in effect lowering the boundaries between the organisations to allow collaboration in such areas as product design and cost reduction, monitoring of quality, and delivery schedules. A further advantage of high trust relationships is that they lessen the risks associated with transaction-specific investments.81 For example, a supplier of components will be reluctant to make costly investments in a production process tailored to the requirements of a particular customer, unless it is confident both that the

81 See, generally, Williamson, The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting. 337


relationship will be sufficiently long lasting for the investment to be recouped, and that the customer will not opportunistically seek to alter the terms of trade once the supplier is locked into the relationship by virtue of having made the investment. For the same reasons, a customer will not wish to become dependent on a particular supplier without credible assurances of fair dealing. Where a company’s trading partners are prepared to make transaction-specific investments it ought to be in a position to reap the advantages of flexibility and reliability which are normally associated with absorbing the relevant activity within the organisation itself. But, at the same time, because the trading partner remains an independent entity benefiting from ‘high powered’ market incentives and avoiding the penalties associated with an overly complex organisational structure, the stimulus for innovation and cost-cutting, from which both enterprises should benefit, remains.82

Co-operative relationships and participation What, then, are the implications of co-operative relationships for participation? First, it is arguable that a model of the company in which participation rights are enjoyed exclusively by shareholders is ill suited to productive co-operation with other parties. It was noted earlier that the dominant form of shareholder participation in the UK is via the market for corporate control. While the value of the market as a disciplinary mechanism is questionable, there is no doubt that it creates an environment in which managers ascribe considerable importance to the company’s share price. Share price may, however, inadequately reflect the value to the business of its relationships. ‘Soft’ information about the quality of relationships may not be fully communicated to the market and is difficult to evaluate. This problem may at least in part be remediable through improved disclosure and appraisal techniques,83 but to the extent that it persists, a management pursuing a policy of shareholder value maximisation may be deterred from investing in relationships the benefits from which accrue over the longer term.84 It may also be possible for a company to increase its short term profits, and possibly its share price, by reneging on implicit agreements, for example, by dropping a regular supplier when substitutes can be obtained more cheaply elsewhere, or by refusing to meet the urgent needs of a customer in circumstances in which it may not be possible immediately to recoup the costs. Where such

82 See, further, Kester, ‘Industrial groups as systems of contractual governance’. 83 See RSA, Tomorrow’s Company, pp 13; and Institute for Public Policy Research/Commission on Public Policy and British Business, Promoting Prosperity, pp 111–17. 84 This is an aspect of the short-termism debate. See, further, Marsh, Short-Termism on Trial and Morris, ‘The Stock Market and problems of corporate control in the UK’. 338


behaviour can be anticipated, co-operative relationships are unlikely to develop.85 A further problem is that an active take-over market increases uncertainty about the future. Because there can be little confidence that long term cooperative relationships will be sustained through a change in control, entering into them may be perceived to be too risky. The new management might have entirely different plans about how to run the business, and may feel little compunction about breaking ‘understandings’ that are not legally binding, to which they have not personally been a party. The high rate of executive turnover associated with hostile acquisitions may also make co-operative relations difficult to establish. As one commentator has noted, the success of relational contracts founded on trust ‘depends critically on preserving continuity of identity of specific managers interacting at the trading interface’.86 Second, in the stakeholder economies, not only does shareholder participation take the form of voice rather than exit, but shareholder voice is balanced by the representation of other interests. The system of codetermination in Germany, for example, involving interlocking employee participation through trade unions, works councils and representation on the supervisory board, provides employees with some assurance that their interest in employment stability will be taken seriously.87 It is also common in Germany and Japan for companies in trading relationships to hold significant stakes in each other’s equity. These holdings, which may also be accompanied by board representation, serve to cement relationships and facilitate information sharing.88 They may also deter opportunism, since a gain made in the capacity of reneging customer or supplier may be lost in the capacity of shareholder.89 None of this is to say that more successful relationships could not be developed in this country without a transformation in the system of corporate governance. Measures to promote co-operative relationships, such as the adoption by companies of techniques to evaluate and report on the quality of their relationships, are likely to have a positive effect.90 Nevertheless, there are grounds for scepticism about whether the full benefits of co-operation are

85 Franks and Mayer, ‘Corporate ownership and corporate control: a study of France, Germany and the UK’. 86 Kester, ‘Industrial groups’, p 32. 87 Streek, Social Institutions and Economic Performance: Studies of Industrial Relations in Advanced Capitalist Economies, ch 5. 88 Mayer, ‘Stock markets, financial institutions, and corporate performance’. 89 Roe, ‘Some difference in corporate structure in Germany, Japan and the United States’. 90 RSA Inquiry, Tomorrow’s Company, pp 12–13; and Institute for Public Policy Research/Commission on Public Policy and British Business, Promoting Prosperity, pp 111–14. 339


realisable in a system in which the interests of shareholders are afforded an overriding importance.91 The essence of the stakeholder approach is that the parties with whom the company enters into co-operative relationships are viewed non-instrumentally. That is, their interests are regarded as valuable in themselves, and not merely as a means to the end of maximising the wealth of the shareholders.92 This attitude creates the necessary level of trust, which is then reinforced by participative arrangements. From this perspective ‘the company’ is not just the shareholders, but the various co-operating parties together. The long term goal of the enterprise, rather than being to maximise shareholder wealth, accordingly becomes to maximise the joint wealth of the constituent groups.93 Such a model has disadvantages as well as benefits. Companies may, for example, become locked into relationships with suppliers that no longer adequately meet their needs, and labour market inflexibility may inhibit restructuring and reduce the demand for labour. Whether the full benefits of relational contracting could be obtained without also building in excessive rigidity is unclear. If the UK did want to move in the stakeholding direction, steps would need to be taken to reduce hostile take-over activity, to develop an alternative source of management discipline,94 and to create mechanisms for stakeholder participation. As to the last of these, in relation to employees a system based on works councils rather than board representation might best suit the British context.95 Customer and supplier participation on the other hand is not something that can be mandated. It is only with particular

91 Eg, a recent survey reports that while there is a growing awareness among British managers of the benefits of relational contracting between customers and suppliers and there are many examples of successful implementation, there are few instances of relationships in which the parties have had the confidence to make transaction-specific investments. Confederation of British Industry/Arthur D Little, Partnership Sourcing and British Industry. 92 Kay and Silberston, ‘Corporate governance’, pp 89–90. 93 See, also, Blair, Ownership and Control: Rethinking Corporate Governance for The TwentyFirst Century, nb, ch 7, who argues that since parties who make firm-specific investments in the company (some employees, customers, and suppliers) share rents with the shareholders, behaviour which maximises shareholder wealth does not necessarily maximise social wealth. Cf Wallman, ‘The proper interpretation of corporate constituency statutes and formulation of directors’ duties’, pp 177–79, who points out that diversified shareholders will prefer the company to pursue higher risk policies than those which maximise wealth overall. Both argue that directors should accordingly aim to maximise the total wealth creating potential of the company rather than shareholder wealth. 94 The proposals put forward by Kay and Silberston, ‘Corporate governance’, pp 94–95, involving the appointment of independent directors who would appoint executive management, but whose own position would not depend on the shareholders, would effectively eliminate hostile take-overs and provide a new means of holding management accountable. 95 Apart from limited support during the period of the Bullock Report, British trade unions have been sceptical about the advantages of board representation. Parkinson, Corporate Power and Responsibility, pp 408–10; and Wheeler, ‘Works councils: towards stakeholding’, p 46. 340


customers and suppliers that companies are likely to have stakeholder relationships, and the best means of consolidating those relationships will vary between individual cases. There may, however, be a case for reviewing measures that restrict the accumulation of cross-shareholdings, to ensure that companies that want to are nor prevented from supporting relationship specific investments in this way.96

EMPLOYEE PARTICIPATION MORE BROADLY CONCEIVED The case for employee participation considered in the previous section, aimed at providing employees with a means of protecting the ‘human capital’ they have invested in the company, is a rather narrow one. There are, however, numerous other arguments for employee participation that are more broadly based and which call for more far-reaching rights. One stresses the subjection of employees to managerial authority. Their position of subordination in the enterprise distinguishes employees from the company’s other constituencies, and is used to justify full democratic participation by them in decision-making in the firm.97 Another argument points to the importance of decisions made by companies to the lives of their employees, and the ‘democratic imperative that those who will be substantially affected by decisions made by social and political institutions must be involved in the making of those decisions’.98 Yet other arguments commend participation as a means of increasing selfrealisation at work, countering the ‘alienation’ to which capitalist relations are thought to give rise.99 It is not intended to pursue these arguments here, but to take a second look at employee participation as a means of increasing employment stability. It is suggested that the stakeholder analysis, at least when understood in narrow, economic terms, does not fully capture the case for consolidating employee interests in the company. From the stakeholder perspective, the ‘stake’ that participation is designed to safeguard is a legally unprotected interest in obtaining a return on firm specific investments made by the employee. Not all employees acquire stakes in this sense, however, and for

96 See Mayer, ‘Financial systems and corporate governance’. 97 Eg, Archer, Economic Democracy, ch 2; and Dahl, A Preface to Economic Democracy, chs 2 and 4. True democracy is not possible within the capitalist company. Co-determination does not meet democratic criteria. As Oakeshott, The Case for Workers’ Co-ops, p 21, points out: ‘the essence of a democracy is precisely that all its members should be on the same footing in crucial matters, such as choice of leadership. If an enterprise is necessarily binary and two-sided that condition cannot strictly be met.’ 98 Commission of the European Communities, ‘Employee participation and company structure in the European Community’ (1975) EC Bull Supp 8/75, p 9. 99 Eg, Elster, ‘Self-realisation in work and politics: the Marxist conception of the good life’. 341


those who do, the interest obtained will often be fairly insubstantial.100 Some employees will accordingly be excluded from rights of participation that are geared only to protecting stakes, and for many others the rights implied will not be extensive. The same is true of a couple of other arguments for increased employment protection that have recently been advanced and have some similarities with the stakeholder position. One relies on the existence of implicit, but not legally enforceable, promises of job security,101 and the other on inadequacies in contractual technology which prevent the true agreement between the parties being reflected in the employment bargain.102 All of these arguments rely on an exchange relation rather than status. As such they are liable to be under-inclusive and contingent.103 They need to be supplemented by an approach that stresses the importance of job stability to the employee, norms of fairness, and the social interest in minimising insecurity and dislocation. This approach invites a revision of the standard model of the company, to give effect, as Collins has argued, to the idea that employees are members of the corporate organisation and should be treated with respect.104 ‘Respect,’ at least in so far as it is manifested in employment stability, is a quality that seems increasingly to be lacking. Recent years have seen a growth in job insecurity, with employees laid off not merely as a response to recession, but as a means of boosting returns to shareholders in periods of corporate prosperity.105 Where profits have fallen, companies have often reacted by cutting employment rather than dividends, which are supposedly a residual rather than a fixed entitlement. There has, according to one analyst, been a ‘redistribution of risk among corporate stakeholders away from shareholders who are traditionally the professional bearers of risk’ towards other groups, and in particular, employees.106 Risk has also been transferred to the State, through additional calls on the welfare budget to support the

100 Williamson, The Economic Institutions of Capitalism, p 302. 101 Eg, Stone, ‘Labour markets, employment contracts, and corporate change’; and O’Connor, ‘Restructuring the corporation’s nexus of contracts: recognizing a fiduciary duty to protect displaced workers’. For an argument that expectations created by employers generate property rights in the firm for employees, see Singer, ‘The reliance interest in property’. 102 Eg, Daniels, ‘Stakeholders and takeovers: can contractarianism be compassionate?’; and Howse and Trebilcock, ‘Protecting the employment bargain’, p 751. 103 See, further, Collins, ‘Organizational regulation and the limits of contract’; Millon, ‘Communitarianism in corporate law: foundations and law reform strategies’; and Parkinson, ‘The contractual theory of the company and the protection of nonshareholder interests’. 104 Parkinson, ‘The contractual theory of the company and the protection of nonshareholder interests’, p 99. 105 There has, more generally, been a marked shift in returns away from employment income and in favour of investment income. Ryan, ‘Factor shares and inequality in the UK’. 106 Kay, ‘Governance for success’, p 73. 342


unemployed and to subsidise employment by supplementing the incomes of those in work on inadequate pay. Clearly, employees cannot be given guarantees of continuity of employment. To do so might fatally damage the company’s competitive position. It would also act as a strong disincentive for companies to recruit and might encourage them to transfer operations to jurisdictions that provided lower levels of job protection. At the same time, however, there is little reason to suppose that maintaining an entirely unregulated environment, which leaves management free to respond to what may be damaging short term pressure from the stock market or to implement the prevailing management fad for ‘down-sizing’ or ‘re-engineering’, is the only way in which the company’s long term future can be secured. As discussed in the previous section, a degree of employment inflexibility may actually bring benefits to the organisation. The negative effects can also be managed. A leading German commentator has noted, for instance, that the system of codetermination has not in general damaged the efficiency of the enterprise. German management has learned to plan for employment stability, and the assurance of stability has in turn led to ‘acceptance by the workforce of rapid technological change, flexible work organization and high internal mobility’.107 Furthermore, to the extent that protecting employment involves redistribution rather than an increase in the wealth generated by the enterprise, it is important to remember that what is in issue is the distribution of rents, that is, the surplus remaining after a market return has been paid to each factor of production. A diversion of rents from shareholders to employees need have no adverse impact, at least in the short term, on the company’s ability to compete in its product markets.108 It is suggested, therefore, that intervention to ensure that the interest of employees in job security is taken seriously by management is a legitimate objective of public policy. Implementation might take a variety of forms, including higher redundancy payments, designed to force companies to internalise more of the cost of lay-offs and, thus, to limit recourse to them, more extensive union bargaining rights, covering investment policy and manpower planning, and rights of participation through works councils on the German model.109

107 Streek, ‘Social and economic performance’, p 159. 108 Teubner, ‘Industrial democracy through law? Social functions of law in institutional innovations’, pp 268–69; and Kay, ‘Governance for success’, p 76. 109 See, also, McCarthy, The Future of Industrial Democracy; Hall, ‘Works councils for the UK? Lessons from the German system’. 343


CONCLUSION: PROTECTING PUBLIC SPACE It was stated at the beginning of this chapter that the issue of participation in company affairs arises because of the enormous social, economic, and political power that companies possess. By extending rights of participation in company decision making to groups additional to managers and shareholders this power might be brought under greater social control. In particular, participation might be used to reduce the harmful third party effects of corporate activity and to rebalance the interests of internal constituencies in the firm. There is, however, another connection between corporate power and participation. Here, the concern is not with opening company decision making processes to wider participation, but with preserving political, social, and cultural spheres as participative spaces free from domination by the corporate sector and business values. In other words, as well as facilitating participation in companies, attention should be paid to preventing ‘excessive participation’ by companies in the public space. The pervasive effects of the decisions taken within companies were noted at the beginning of this chapter. The level and location of employment, the rate of economic growth, and the condition of the physical environment, are substantially affected by the policies companies choose to adopt. That companies should have power in relation to these issues is an inevitable incident of the existence of large scale enterprise. However, it should also be noted that the scope of corporate influence is currently expanding beyond matters that are unavoidably linked to mainstream business activity. Company involvement in areas such as education and community programmes, and the growing presence of big business in the arts, media, and sport, mean that the objectives pursued within these activities are increasingly being shaped by the corporate sector. There is a danger that the intrusion of the ‘sphere of money and commodities’ into these other spheres will undermine their distinctive character and values.110 At a more general level, advertising and media manipulation, necessary to maintain an appropriate level of demand for company products, promote a set of values that elevate consumption above other, more community oriented forms of human flourishing.111 And the power of business in the political arena creates a ‘second order’ problem, by narrowing the range of possibilities for regulating corporate behaviour and for defining the boundaries of the corporate sphere in line with popular preferences.

110 Waltzer, Spheres of Justice: A Defence of Pluralism and Equality, ch 4; and Keat, ‘The moral boundaries of the market’. 111 See Galbraith, The New Industrial State, 1969, ch 19; Lansley, After the Goldrush, ch 5. 344


In the face of the economic success of corporate capitalism, the scope for halting the business colonisation of social life, in order to preserve participative values and the integrity of non-market practices, seems limited. One approach is to rebuild local government and to revitalise other democratic and intermediate organisations as a counterweight to the expansion of company decision-making and the spread of corporate values. Another, focused on the company itself, is to attempt to restrain, or at least not to encourage, the extension of corporate influence into what have hitherto been regarded as non-business spheres. Discussion will be confined here to the second of these possibilities. In the last decade or so the view has increasingly been advanced in this country, following a much older tradition in the US, that it is the social responsibility of companies to become involved in activities such as providing support for local communities, financing and otherwise participating in education, arts sponsorship, and charitable giving.112 A number of bodies exist for the purpose of encouraging and facilitating such ventures. 113 Companies have responded, and what is now becoming known as ‘corporate community investment’114 has evolved into an important aspect of many firms’ business strategy. There has been a move away from regarding social responsibility simply as philanthropy, perhaps involving cash donations to the chairman’s favourite charity, to seeing it as a mainstream business activity designed to produce a variety of measurable benefits to the company. These include improvements in its public image, and the ability to reach segments of the market that are otherwise difficult to target. Social responsibility understood in this way should be distinguished from a different meaning of that term, namely, the voluntary adoption of constraints designed to reduce the harm caused by the company’s ordinary commercial activities. The latter topic was touched on earlier in this chapter. Unlike social responsibility in this sense, corporate community investment constitutes an extension of corporate power into new areas of social life. While there are undoubted benefits from bringing corporate resources to bear in attempting to solve social problems, there are also a number of dangers. The first is that of displacement. There is a risk that if companies take on tasks that have previously been regarded as the responsibility of government, then government will treat this as an opportunity to withdraw support. The result will be that provision that was at least nominally subject to public accountability and governed by criteria determined through the democratic process, will be exchanged for provision that is shaped by the corporate 112 See Parkinson, Corporate Power and Responsibility, ch 9. 113 Eg, Business in the Community, whose mission is to ‘support the economic and social regeneration of communities by raising the quality and extent of business involvement, and by making that involvement a natural part of successful business practice’: Financial Times, Business in the Community: A Financial Times Guide, Foreword. 114 Ibid, Financial Times, p 5. 345


agenda and without public participation. It has been argued that the motivating purpose of corporate social policy in the US earlier in this century, involving, for example, the payment of generous welfare benefits to employees, was precisely to reduce the need for the development of a Welfare State and, thus, to limit the ambit of government.115 The second danger is that of distortion. In essence, if activities become dependent on corporate financial and other forms of support, there is a risk that companies, without necessarily intending to do so, will cause the priorities of recipients to be reordered in accordance with business objectives. Referring to business financial support for City Technology Colleges and involvement in their management, for example, it has been suggested that ‘the attitudes and political leanings of big business will produce hostility towards, or incomprehension of, the demands and interests of the inner city communities that in theory are meant to benefit by the presence of the schools’.116 It is important that business should have a voice in education, but where educational institutions become financially dependent on companies there is a possibility that that voice will become too loud. Similarly, with regard to sponsorship of the arts, business is likely to lean towards supporting ‘safe’ productions consonant with the image the company wishes to project and which are not too challenging to prevailing commercial values. 117 Business support does nothing to prevent artists from engaging in more nonconformist varieties of expression, but it may alter the balance of what is produced and what is given public prominence. The third danger operates at the level of perception. If non-commercial activities, such as education and the arts, come to be seen as appendages of corporate public relations efforts, then it is likely that they will be regarded as having been debased. Confidence in the integrity of their practitioners and their commitment to the distinctive values of the practices in question are liable to be undermined. The manipulation of images may also have another significance. It has been argued that: … the architects of the corporate global vision seek a world in which universalized symbols created and owned by the world’s most powerful corporations replace the distinctive cultural symbols that link people to particular places, values, and human communities. Our cultural symbols provide an important source of identity and meaning; they affirm our worth, our place in society. They arouse our loyalty to and sense of responsibility for the health and well-being of our community and its distinctive ecosystem.

115 See Mitchell, The Generous Corporation: A Political Analysis of Economic Power. See, also, the discussion in Sorell and Hendry, Business Ethics, pp 159–63. 116 Sorell and Hendry, Business Ethics, p 162. 117 See, generally, Schiller, Culture Inc: the Corporate Takeover of Public Expression. 346


When control of our cultural symbols passes to corporations, we are essentially yielding to them the power to define who we are.118

There is little that can be done in terms of company law to contain the spread of corporate influence beyond the commercial arena. Directors’ duties and the ultra vires doctrine limit the ability of managers to expend company resources on activities which are not premised on generating returns for shareholders, but corporate social involvement will usually have a long-term profit maximising rationale. Even if it did not, it would be only in extreme cases that it would be possible to demonstrate that the directors had acted improperly in terms of the existing law.119 And it is difficult to see how the law could be made more restrictive, given the problems that would be involved in distinguishing between ‘legitimate’ commercial activity and behaviour that constitutes an undesirable extension of the corporate realm. One area in which a reasonably clear dividing line can be drawn, however, is financial support for political parties.120 Prohibiting political donations would not have a dramatic effect on the ability of business to affect the outcome of the democratic process, but it would remove one of the methods by which companies are able to exert private influence over public decisions. But, mainly, protecting the public space is not a task for law. For the moment, the priority should be to open up the debate on the proper boundaries of business power.

118 Korten, When Corporations Rule the World, p 158. 119 See Parkinson, Corporate Power and Responsibility, pp 271–81. Prior to modern developments, for a transaction to be reasonably incidental to the carrying on of business, which is the test for a transaction which is not expressly authorised by the company’s objects clause being intra vires, it was necessary that it should be directly connected to the company’s stated objects and not merely for the company’s commercial benefit: see, eg, Tomkinson v South-Eastern Railway Co (1887) 35 Ch D 675 (donation to railway company ultra vires, even though railway would carry passengers to the donor’s place of business). 120 It is arguable currently that unless the company has as an express object the making of political donations, it has no power to make gifts to political parties which are not tied to some purpose closely connected with the company’s business. Simmonds v Heffer [1983] BCLC 298. See, generally, Parkinson, Corporate Power and Responsibility: Issues in the Theory of Company Law, pp 275–77. 347

CHAPTER 18

PARTICIPATION AND THE REGULATORY ORDER

Tony Prosser

INTRODUCTION In this chapter, I shall describe the practice of UK regulators in permitting participation by groups and individuals when regulatory decisions are made and assess the potential those regulators have to expand such participation. I shall assume for the purposes of this book that the legitimacy of participation in this context is agreed, and shall concentrate on the different devices adopted and the different models of regulation which they assume. In particular, I shall contrast the distinction between the legal model adopted for utility regulation with the rather different model applied by the regulators themselves which, I shall argue, requires that effective regulation implies wide participation and so undermines the familiar opposition of legitimacy and efficiency in this context. I shall then finish with a brief discussion of some of the issues currently unresolved in the debates. As these introductory remarks suggest, my concern will be almost exclusively with the utility regulators in telecommunications, water, gas, electricity and transport, but I shall also make brief reference to broadcasting and civil aviation. Another chapter could be written on horizontal regulation, for example, in the form of health and safety requirements.1

THE UK MODEL OF UTILITY REGULATION It is fair to say that three characteristics worked to limit the degree to which participation was envisaged and encouraged in the legal structure adopted for UK utility regulation. The first was the essentially economistic logic envisaged for its operation. The second was the concentration on the bilateral relationship between regulator and regulated monopoly to the exclusion of other interests. And the third was the deliberate decision to neglect overseas experience in regulatory procedures.

1

Procedural issues in the regulation of public utilities are examined at much greater length in Prosser, Law and the Regulators. 349


The nearest we have to a blueprint for the design of utility regulation in the UK is the Littlechild Report commissioned before the privatisation of British Telecom.2 This very seriously underestimated the complexity of the regulatory task. First, it saw regulation as essentially temporary. In a famous phrase, Littlechild described the function of regulation as ‘holding the fort’ until competition arrived. In practice, however, much regulation is clearly with us for the foreseeable future. Secondly, where regulation existed the stress was on regulating monopoly power by attempting to mimic the effect of a competitive market. Other functions of regulation, such as policing competition and social regulation, were neglected. Thirdly, even the regulation of monopoly was envisaged as a much more static and mechanical process than that which actually has occurred. Thus, the price control formula of RPI-X, by which prices were to be pegged to the Retail Price Index minus a figure representing feasible efficiency gains, was seen as meaning that, outside occasional periodic reviews, the regulator ‘does not have to make any judgments or calculations with respect to capital, allocation of costs, rates of return, future movements of costs and demand, desirable performance, etc’.3 In practice, all these considerations have had to be taken into account in the regulatory decision making process, which has been continuous, not periodic. This version of regulation influenced the model in which, rather than participation, the economic expertise of the regulator became the basis of and justification for her or his decisions. Secondly, regulation was seen as essentially a bilateral bargain between government and regulated firms, with third parties having at most a marginal role. Some examples can illustrate this. First, the initial price control formulae, now universally admitted to have been far too generous and designed to assist privatisation rather than setting any real balance between firm and consumer, were determined through bilateral negotiation between government and regulated company. Other interests such as consumers were not permitted to participate, despite requests by consumer groups to do so. It can be convincingly argued that the most important part of the utility regulators’ work since, and their biggest problem, has been the correction of these over-generous formulae through the price control process. Correcting the formulae is, however, in turn influenced by the second example of the way the bilateral model worked, which is the procedures adopted for modifying the licences under which the regulated firms operate. These procedures include those for changing the price formulae as well as for incorporating new conditions such as those limiting disconnection of supply and, more recently, relating to fair trading. The details vary from case to case, but in outline an amendment can be made if the licenced firm agrees, subject

2 3

Littlechild, Regulation of British Telecommunications’ Profitability. Ibid, paras 13.14, 13.20. 350

Participation and the Regulatory Order

to procedures for the publication and receipt of comments by the regulator.4 However, these procedural duties come into play only after agreement has been reached with the dominant firm so that a proposal can be publicised. This is, of course, far too late to have any real influence on the substance of the decision. If the firm does not agree to a proposal, the regulator can make a reference to the Monopolies and Mergers Commission (MMC) and will be in a position to impose a modification taking into account the Commission’s report. This cumbersome procedure has been used relatively rarely, though its use has increased a little recently, most notably with the recent reference relating to British Gas’s transportation and storage charges.5 However, the key point is that the legal regime envisages a situation in which the licence can be amended if the firm agrees, irrespective of the views of others. Moreover, the ‘appeal right’ of an MMC reference, though made at the initiative of the regulator, will only be exercised when the regulated firm will not accept a proposed licence modification and not, for example, at the instance of a consumer group which objects to a change agreed between firm and regulator. It has been argued that this restriction is part of an institutional model which has provided a degree of certainty and regulatory credibility for investors essential for the success of privatisation.6 This is doubtful given the more tangible incentives presented to investors on privatisation, notably the underpricing of shares, and neglects the importance of interests other than investors who may be affected by the company’s decisions. Nevertheless, it is the model reflected in the law. Thirdly, the model of regulation adopted was deliberately distanced from experience elsewhere, especially from regulatory institutions in the United States, which were seen by the Government as involving an over-legalistic regulatory style and as leading to potentially disastrous involvement by the courts in the regulatory process.7 As has been argued elsewhere, the US process has much greater flexibility than this caricature suggests and has important lessons for regulation on this side of the Atlantic.8 Nevertheless, it was deliberately not used as the model for UK regulatory institutions and the important participative provisions of the Administrative Procedure Act and of specific regulatory statutes have no counterpart in general UK regulatory law.

4 5 6 7 8

The relevant provisions are Telecommunications Act 1984, ss 12–15; Gas Act 1986, ss 23–27; Electricity Act 1989, ss 11–14; Water Industry Act 1991, ss 13–16; and Railways Act 1993, ss 12–15. Monopolies and Mergers Commission, British Gas plc. Levy and Spiller, Regulation, Institutions and Commitment. Foster, Privatization, Public Ownership and the Regulation of Natural Monopoly, pp 125, 259–67. Harden and Lewis, The Noble Lie, nb, ch 9; and Prosser, Law and the Regulators, pp 277–86. 351


THE ALTERNATIVE MODEL The legal arrangements for utility regulation in the UK, then, suffered from an oversimplified and economistic conception of the regulatory task, from an unduly narrow bilateral conception of the regulators’ relationship with other interests, and from a refusal to learn from overseas experience. Yet the practice of regulators has been significantly different from what this legal model would suggest. Indeed, it could be argued (with backing from regulators’ speeches) that in practice a different, stakeholder model of regulation has characterised at least some of the processes actually adopted. This is only a partial form of participation and some interests have been excluded. Nevertheless, it does suggest not only that the legal model was inadequate to meet moral demands for participation, but that it was, in a strict form, unworkable. As the water regulator has put it, after rejecting the concept of a ‘regulatory contract’ between regulator and regulated firm: There should also be clarity about what are the proper objectives of the business. The stakeholder approach may be able to cast some light in this area. The privatised utilities may have paid too much attention to City matters compared with other aspects of the business. Customers may have higher expectations from a private profit making body than from a public corporation.9

The implication is that a different style of regulation is required to reflect these different perceptions. The stakeholder approach has also played a part in recent critical literature about regulation. Thus, it has been suggested in an Institute for Public Policy Research report that regulators ‘should pay explicit attention to the interests of different stakeholder groups and adjust their regulatory instruments to ensure that outcomes are not inconsistent with a desirable balance between them’.10 The relevant stakeholders are to be business and residential customers, shareholders, utility managers, market entrants, suppliers and other companies dependent on utility industries, and employees in the affected sectors. How has this new approach been reflected in regulatory practice? Given the major differences between the different regulators, it will be best to examine them sector by sector and then to consider overall patterns and possible reforms.

9 Byatt, Speech at the European Policy Forum. 10 Souter, ‘A stakeholder approach to regulation’, p 43. 352


TELECOMMUNICATIONS The Director General of Telecommunications and OFTEL is the most advanced of the regulators in developing participative procedures, despite the chaotic nature of the formal arrangements for consumer representation in this industry. To deal with the latter point first, before privatisation telecommunications consumers had been represented through the Post Office Users National Council, one of the stronger of the notoriously weak nationalised industry consumer councils. With the establishment of OFTEL in 1984 the Director General was assisted by a number of advisory committees, including those for consumers in each part of the UK and specialist committees for small businesses and the elderly and disabled. One hundred and sixty four local Telecommunications Advisory Committees were also recognised to represent the interests of consumers, although this system is now under review. 11 This complexity hardly encourages coherence in consumer representation and puts a considerable burden on the Director General himself to ensure that the consumer view is represented. The first Director General promised openness in his first Annual Report. He intended ‘to invite representations from interested parties [and] to establish contact with individuals, companies and representative bodies with interests in telecommunications so that I may become fully aware of their views on important issues’.12 In order to implement this approach, consultation documents were issued on which representations were invited and meetings called with representatives of the industry and other groups. The most important procedural developments occurred, however, under the Directorship of Don Cruickshank. Information provision became very impressive. OFTEL was the first of the regulators to establish a website containing consultative papers, responses to them and other information. Since 1995, an annual operating plan has been published setting out objectives, priorities and a work programme, an exercise very similar to the requirement of the submission of a regulatory plan required from the US agencies as part of the Clinton Administration’s regulatory reform. In the same year, a review of the consultation process was announced, the results of which applied both to statutory and non-statutory consultation exercises. All responses to consultations were to be made public unless clearly marked confidential. Respondents were asked to avoid such markings and were warned that confidential representations might in some circumstances nevertheless still be published by use of the regulator’s statutory powers. Moreover, ‘responses (or parts of responses) which are not put into the public domain and are therefore untested by other participants in the industry, may

11 OFTEL, Improving Accountability, ch 4. 12 OFTEL, Annual Report 1984, para 1.27. 353


in particular cases be considered by the Director General to have less probative value, and accordingly to carry less weight’.13 Perhaps most innovatively (for the UK), future consultations would incorporate a second consultation stage. After representations had been received, the Director General would be prepared to receive further comments on them within fourteen days. This was to enable there to be an opportunity for review of comments made by others to assist analysis of the formal submissions. A summary of submissions made and detailed reasons would accompany the final decision. As well as these procedural developments, selective public hearings were to be held. The most important uses of these procedures so far have concerned the 1996 price control revision and the accompanying fair trading condition to be incorporated into BT’s licence, and the development of a policy on securing universal service. In the first an initial consultation document of 68 pages was issued in December 1995, followed by the double consultation described above. A further document of 95 pages was published in March 1996, again followed by double consultation and five open hearings held in different UK cities. The hearings were opened with statements from OFTEL, BT, other operators and then took views from the floor, and a summary record was published as an annex to the next consultative document which appeared in June 1996, again followed by double consultation. Final proposals were put to BT and followed by statutory consultation by the end of July. One outcome was the inclusion of an unfair trading condition in BT’s licence, mirroring the requirements of European Community law. Implementation is monitored by a standing advisory committee of experts to which cases may be referred either by the regulator or by the company. In the case of universal service, consultation commenced in December 1994 with further documents in July 1995, December 1995 and February 1997. Apart from the consultation procedures described above, five working groups of consumer and industry representatives were established, a combined industry/consumer workshop was held, and a consumer panel of residential consumer representatives advised the Director General. Two points are noticeable about the processes adopted in telecommunications. First, they do permit a genuine degree of debate amongst those consulted rather than simply asking for isolated input to be assessed by the regulator. This is achieved by the double round of consultation and by the (so far rather limited) use of hearings. Secondly, the process need not delay decisions seriously. The decision about the far reaching price control proposals took less than eight months. A more serious delay would have taken place had BT had the matter referred to the MMC. Perhaps the best

13 OFTEL, Consultation Procedures and Transparency. 354


summary of the approach taken is from OFTEL’s response to the National Audit Office’s review of the work of the regulators: The telecommunications and associated markets are very fast moving and complex and include many different and conflicting interests. OFTEL could not reach appropriate regulatory decisions without widespread and open consultation of all concerned … Consultations often aim simultaneously: to obtain views of stakeholders; to involve stakeholders in the regulatory process and to explain the process. In addition, part of the objectives may be to refine the consultation process itself: seeking views from stakeholders on methods of consultation.14

WATER AND SEWERAGE The arrangements for participation in decision making by the Director General of Water Services are radically different from those in telecommunications. To a considerable degree this reflects institutional structures, and particularly the arrangements for the representation of consumers. The Director General is obliged to establish customer service committees of which he appoints the members. The Committees are responsible for reviewing matters affecting the interests of consumers and for investigating complaints, and ten have been established. 15 An OFWAT National Consumer Council was also established on a non-statutory basis, comprising the chairs of the Committees and the Director General, who has however now left it to highlight its independence and has recommended that it be given statutory status. The Director General has expressed strong support for this model of consumer representation as enabling a more direct input for the consumer voice in monitoring company performance, and the Committees played a particularly important role in the periodic review of price controls in 1994. In the periodic review, the Director General issued consultation papers and commissioned market research into customer views. He also asked the water companies to undertake their own consultations with customers. The second stage of consultation involved the consumer representation machinery described above. The Director General made the confidential business plans of the companies and his draft determinations available to the Chairmen of the Committees, and those Chairmen were present at the formal meetings between him and the companies to hear representations from the latter. The Chairmen were also given a further opportunity to comment. As a result, they supported the outcome of the Review, and it has been suggested that the

14 National Audit Office, The Work of the Directors General of Telecommunications, Gas Supply, Water Services and Electricity Supply, HC 645, 1995–96, p 112. 15 Water Industry Act 1991, ss 32–35. 355


consultation process was important in shaping it through moving the emphasis from customer willingness to pay to the narrower criterion of ‘affordability’, thereby limiting the ability of companies to charge more to support investment schemes and other expenditure.16 A number of criticisms have been made of this consultation process; for example, that it was used to inform the industry and consumers rather than to create a dialogue, that the results of the consultations were not published as such, and that too much discretion was given to the companies as to how they organised their own consultations. It is intended that these criticisms will be met in the process leading to the next periodic review in 1999, and the Director General has indicated that he will lay greater stress on the exchange of information as the review proceeds rather than receiving detailed confidential submissions from companies at a late stage in the process. This time ‘The burden of proof will be on those wishing to impose confidentiality restrictions on information to justify their decisions’. 17 A fundamental criticism made by the National Consumer Council is that the consumer representation machinery is not independent of the Director General, and the Public Accounts Committee has also made this criticism recently.18 Despite the point, however, the involvement of the Committee Chairmen was an important element in the process permitting extensive access to information for them. It should not prove impossible to combine this with the sort of developmental consultation used by OFTEL. A number of other consultative processes have been organised by the Director General, for example, in connection with reviewing methods of paying for water.19

THE ENERGY REGULATORS The energy regulators have also taken steps to organise participative procedures and to open up their decision making. According to the Trade and Industry Select Committee, ‘the consensus was that, although there is still room for improvement, and the energy regulators are still not as open as OFWAT and OFTEL, they are now more open about their decision making process and publishing more information than in the past’.20 The model of 16 Smith, ‘Water service 1994: a watershed year’, p 110. 17 OFWAT, The Business Planning Process, Customer Consultation and Information Requirements for the 1999 Periodic Review. 18 National Consumer Council, Consumer Representation in the Public Utilities; Public Accounts Committee, The Work of the Directors General of Telecommunications, Gas Supply, Water Services and Electricity Supply, HC 89, 1996–97, p 3. 19 OFWAT, Paying for Water: A Time for Decisions; and OFWAT, Paying for Water: The Way Ahead. 20 Trade and Industry Committee, Energy Regulation, HC 50, 1996–97, para 157 (footnotes omitted). 356


consumer representation adopted in the case of gas is widely considered to be the most satisfactory, and, indeed, has been proposed as a model for other sectors.21 Rather than requiring the regulator to establish consumer protection machinery, the Gas Act created a separate Gas Consumers Council to investigate complaints and represent the consumer’s interest.22 Members are appointed by the Secretary of State rather than by the regulator. The Gas Consumers Council was able to achieve a high profile and survived a critical review of its future by government, largely by contrasting its performance with that of the less independent machinery in electricity. Both the Directors General of Gas Supply have made public commitments to be as open as possible in their decision making, but less ambitious steps have been taken to implement this openness than in the case of OFTEL. OFGAS has not published a formal management plan, although the Trade and Industry Committee has now recommended that both it and OFFER should do so.23 The consultation process has gradually improved. The first review of the gas price formula was criticised because the regulator took the issue out to consultation only after reaching agreement with British Gas (though this is all the statute requires, as I have noted). However, more recent price control decisions have involved the issue of several consultation documents, progress reports and proposals setting out options, For example, in 1994 OFGAS published 14 consultation documents and discussion papers relating to changes to be introduced by the Gas Act 1995. Responses have been made publicly available unless otherwise requested, and the views of British Gas and of other participants in the consultation process have been summarised in final OFGAS proposals. What does not yet exist is a procedure for debating different inputs into the consultative process, either in the form of hearings or of the OFTEL practice of a second round of comments on each consultative stage, though something of this is achieved by issuing successive consultation papers and inviting representations on each. A particular recent problem concerned the extensive use of outside consultants made by OFGAS, as British Gas complained about lack of access to consultants’ reports in the price review process. However, summaries had been published with information removed at British Gas’s request because of commercial confidentiality, so it was not just OFGAS which could be accused of lacking a full commitment to transparency. The story has been similar in the case of electricity. In this case, the consumer representation machinery is like that for water. The Director General appoints regional Consumers Committees, though as a result of a National Consumer Council inspired amendment to the Electricity Bill, a 21 National Consumer Council, Consumer Representation in the Public Utilities and Public Accounts Committee, The Work of the Directors General of Telecommunications, Gas Supply, Water Services and Electricity Supply, HC 89, 1996–97. 22 Gas Act 1986, ss 2, 32, 40, Sched 2. 23 Trade and Industry Committee, Energy Regulation, HC 50, 1996–97, para 160. 357


statutory National Consumers’ Consultative Committee was added, composed of the Chairs of the Consumers Committees and chaired by the Director General. A non-statutory Electricity Consumers Committees Chairmen’s Group was established in 1993 to provide a national view in a more independent way.24 There has been a substantial amount of criticism of the procedures adopted by OFFER, more so than for the other utility regulators, which has come both from the industry and from consumer groups. For example, the Chief Executive of Yorkshire Electricity publicly criticised the lack of an explanation of the calculations used in the Director General’s distribution price review, whilst, according to the National Consumer Council, ‘the process of decision making in electricity price regulation has been distinctly less open than for the other industries’.25 Nor were the consumer committee chairs used directly in price reviews as they were in the case of water. They were instead expected to respond after the publication of proposals by the regulator. A particular problem has been the absence of a forum in which evidence submitted by others could be subject to challenge and criticism. This was particularly important in the case of the 1994 distribution price review which had to be withdrawn shortly before implementation after a company’s response to a takeover bid revealed that the Director General had been seriously misled as to the financial resources of the electricity supply companies. This point was made by the Trade and Industry Select Committee which recommended that the regulator should be required to give reasons for his decisions; that he should engage in more effective consultation, including giving contributors to the consultation exercises the ability to comment on and challenge each others’ evidence; that a forum be set up in which he be required to explain his activities; and that an appeals or arbitration procedure be set up.26 The recommendations mirrored some of the evidence which the Committee had received. National Power, for example, argued that: … the Regulator would have a better opportunity to weigh the evidence being put forward if contributors were able to comment in advance of a decision being taken on other parties’ submissions … In some cases, consultation exercises based on written submissions will not be enough. Some public hearings may be necessary, although for some this may be moving too close to the US system.27

24 Electricity Act 1989, ss 2, 46, 51, 53, Sched 2. 25 Chatwin, ‘The companies’ interest’, pp 44–47; and National Consumer Council, Paying the Price, pp 76–77. 26 Trade and Industry Committee, Aspects of the Electricity Supply Industry, HC 481, 1994–95, para 96. 27 Ibid, Minutes of Evidence, pp 76–77. 358


In response, the Government rejected the proposal for a duty to give reasons on the curious ground that ministers eschewed unnecessary regulation and that reasons were given in practice anyway. The Director General has recently made more use of consultation papers, undertaking to publish successive papers during the course of a review rather than simply one at the beginning. He issued four papers in the course of the transmission price control review during 1995–96, the final one of which set out his proposals and summarised earlier responses which had been made. These responses were also made available in the OFFER library, unless confidentiality had been requested. Consultants’ reports were published in summary form, although the full report on operating costs, including projected staff reductions, was not made available to the trade unions, despite a request from them for it. In the current preparation for a competitive domestic market from 1998, consultation is currently at the stage of the issue of the fifth consultation paper. The issue of successive papers has of course been common practice amongst other regulators. So far, no public hearings have been organised, although the Director General has accepted that the process might be valuable as it gives others a chance to put questions.28

SOME OTHER REGULATORS As the above discussion shows, there is much variation in practice between the different regulators, with OFTEL being by a considerable margin the most sophisticated in the arrangements it makes for participation in its decision making. Nevertheless, there is some degree of consistency in that none of the regulators see the limited statutory consultation as adequate, and there is considerable stress on the need to include other interests, or stakeholders, apart from the dominant regulated firm, in the consultation process which has become the main participative device used by the utility regulators. The acceptance of some sort of due process is not limited to the examples discussed above. For example, the Rail Regulator has issued a large number of consultation papers and received responses on them, and he has also used formal hearings where major issues are raised in consultation relating to passenger service access, though these have taken place in private. Moreover, the Independent Broadcasting Authority was notorious for its lack of any structured procedures in making allocation decisions,29 but its successor, the Independent Television Commission, has accepted that they are necessary and has consulted before making such decisions though publicising in advance the parts of the applications concerned with proposals for services

28 Trade and Industry Committee, Energy Regulation, HC 50, 1996–97, para 162. 29 Lewis, ‘IBA programme contract awards’. 359


and the composition and identity of applicants, though not the accompanying business plans. Large numbers of representations were received on these applications and detailed reasons are now given for decisions. In part this is due to a greater willingness of the courts to scrutinise the process. Though they have not been prepared to intervene in relation to matters of substantive judgment by the Commission, the courts have indicated that basic due process is required.30 In contrast to these developments, however, less participative means are now used by the Civil Aviation Authority in licensing decisions due to liberalisation of European civil aviation. Previously, the Authority had been unusual in using public hearings with legal representation, cross-examination and the intervention of third parties such as users’ groups. The use of such hearings appeared to be highly successful.31 These procedures still apply to the Authority’s licensing hearings, but their numbers have been seriously reduced because automatic access to almost all routes within the European Union will be given by the issue of an operating licence. The conditions for the award of such licences are set out in a Council regulation and if they are satisfied the licence must be granted unconditionally. No provision for objections is made, so public hearings are not held in relation to the issue of such licences.32 Hearings may still be required for non-European services, but their use declined from 13 hearings over 18 days in the year 1989–90 to two over two days in 1994.

REFORM If there is a general move towards more participative regulatory procedures, how could this be developed further and made more consistent? Convincing arguments have been made for the creation of a British Administrative Procedure Act on the US model. I shall not repeat these arguments here.33 In the shorter term, a number of modifications to the role of the utility regulators have been canvassed, and are now being considered in the review of utility regulation initiated by the new President of the Board of Trade.34 Some of the

30 R v Independent Television Commission ex p TSW Broadcasting Ltd [1996] EMLR 291; R v Independent Television Commission ex p Virgin Television Ltd [1996] EMLR 318. 31 Baldwin, Regulating the Airlines, pp 143–59. 32 Council Regulation 2407/92, 23 July 1992; OJ L240/1, 1992. 33 Harden and Lewis, The Noble Lie; and Prosser, Law and the Regulators, pp 277–86. 34 For some of the reform proposals, see Graham, Is There a Crisis in Regulatory Accountability? For the review, see Beckett, Speech for ‘Utilities 2000’ Conference: Review of Utility Regulation and Department of Trade and Industry, Margaret Beckett Announces Review of Utility Regulation. The Green Paper setting out the possible reforms under consideration is A Fair Deal for Consumers: Modernising the Framework for Utility Regulation, Cm 3898. 360


proposed changes would permit new forms of participation. A well known proposal is to replace the highly personalised model of individual Directors General, in whom legal powers are directly vested, by commissions of the kind familiar from the US and, indeed, from other British examples such as the Independent Television Commission or the Civil Aviation Authority. The advantage of such a model is that it is an admission that regulation involves a plurality of approaches and of different skills, and that membership should reflect this. What would not be desirable, however, would be the appointment of members of a regulatory commission to represent different interests, such as those of consumers, employees, and suppliers, as this would be a recipe both for regulatory paralysis and for the resolution of conflicts being obtained through closed bargaining within the commission when these should be worked out in the open through consultation procedures. A milder form of the same proposal is that regulators be assisted by panels representing particular interests, such as consumers or competition specialists. As we have seen, this has already occurred in the case of telecommunications. The key point is that the input of such panels is subject to scrutiny as part of wider debate, including other interests. It was suggested early in this paper that the ‘appeal’ right to the MMC on the part of the regulated company when the Director General wishes to modify licences was the strongest expression of the early bilateral conception of regulatory relations and was inappropriate to a stakeholder approach. An alternative model which could be borrowed for this purpose was that included in the last government’s dropped Bill for competition reform. It included a tribunal to hear appeals in cases concerning non-competitive agreements. Such appeals could be made by anyone with a sufficient interest or who represents persons with a sufficient interest, thereby giving relatively wide rights of standing similar to those in judicial review. Consumer groups would also be permitted to participate in the tribunal process and proceedings would normally be in public. The new Government has also made similar proposals for a tribunal of the proposed Competition Commission, including the wider standing rights.35 This would provide a better model than the existing arrangements for an MMC reference, and revised appeal mechanisms are canvassed in the current DTI review of regulation.

CONCLUSIONS The general introduction to this book presents a powerful case for participation as a human right, as an essential moral concern. If I fail to make this case here it is not because I do not fully accept it but because it would be 35 Department of Trade and Industry, A Prohibition Approach to Anti-Competitive Agreements and Abuse of Dominant Position: Draft Bill. 361


out of place in discussion of one particular area of regulation. What we have seen in the work of the utility regulators is something slightly different which makes the case even stronger. It is a move away from a legal structure which had only limited participation requirements and, indeed, in some respects discouraged participation, to a practical structure which is coming to encourage it through voluntary experiments in procedural design. This is a partial process. As I have shown, it varies considerably between different regulators and still excludes important interests. For example, it is arguable that the victims of privatisation and of regulatory change have been the workforces of the utility companies, the membership of which has been drastically reduced. They have had virtually no role in the processes described. Despite these limitations, the experience I have described seems to suggest that, contrary to expectations when the utility regulation schemes were created, participation is a functional necessity for effective regulation. This would be the case even if the functions of the regulators are seen as essentially economic, for taking market-mimicking decisions is itself not a science, but an art involving assessment of highly controversial data relating to acceptable rates of return and potential efficiency savings. The only effective way of testing this data is through the creation of fora, either in the form of hearings or of the exchange of documents, in which debate can take place. However, it has become apparent that regulatory tasks are not limited to the economic. Universal service, for example, involves the use of social based argument which is also controversial and needs a forum of this kind for its assessment. I have suggested elsewhere that the major task facing utility regulation at the current time is that of developing social principles such as universal service and that these can drawn from the notion of public service in other jurisdictions. Encouraging moves in this direction are taking place at EC level. 36 In other words, substantive principle as well as procedural development are required. However, in the absence of effective participatory arrangements for the development of such principles by government and regulators, they will be stillborn, for substantive principles presuppose participative procedures for their development. I hope that my account of the work of the regulators will go some way to illustrate this.

36 Prosser, Law and the Regulators, pp 27–30, 287–92. 362

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404

INDEX Abrams, Philip,

203, 204, 205, 206

Acquis communautaire,

152

Activists, political,

106, 107

Administrative procedure legislation,

245, 351

Advertising Standards Authority (ASA),

312, 313

Advisory Committee on Business and the Environment, DTI,

332

Affective constitutional culture,

88–89

Africa, political participation,

82 326, 327

Allen, Graham,

220–21, 222, 223, 224

Allott, Phillip,

137

Almond, Gabriel,

86, 101 203, 204, 331

American Federation of Labour,

24

Amnesty International,

265

Amsterdam Inter-Governmental Conference (IGC), Anarchy, economic defence, ANEC (international consumer group), Angell, Ian,

104, 300

Autonomy company law, 20–21, 22–23 EU, 155 legal, 28, 213–27 playing the market, 4 rights, 269 See, also, Separation of powers

Bail, right of court to grant,

257

Bank of International Settlements (BIS),

169

Banking systems, civil society,

AGMs (Annual General Meetings),

Altruism,

Automobile Association,

BCASPP (British Code of Advertising and Sales Promotion Practice),

34–35 311 42

313, 315

Belgium consumer groups, European environmental policy,

317 168

Bird, John,

180

BIS (Bank of International Settlements),

169

‘Blackboard economics’, Braithwaite, John,

140, 155

36

59, 64 71

Britain See United Kingdom British Code of Advertising and Sales Promotion Practice (BCASPP),

313, 315 351, 357

Aristotle,

145, 272

British Gas,

Arnstein, Sherry,

117, 201

British Retail Consortium,

312, 313

British Standards Institution (BSI),

299, 310

British Telecom (BT),

350, 354

ASA (Advertising Standards Authority), Assembly, freedom of, Association of Metropolitan Authorities, Attitude surveys, Audit Commission, Australia Administrative Review Council (ARC), Declaration on Judicial Independence,

254

Broadcasting regulation, 178 90, 107, 108 16, 245

248, 249

299

359–60

BSA (British Social Attitudes) surveys,

90, 107, 108

BSI (British Standards Institution),

299, 310

BT (British Telecom),

350, 354

Bullock Report, on industrial democracy,

213 405

153

Promoting Participation Cadbury Committee, on corporate governance, Canada human rights, legal autonomy, Cannan, Edwin,

Civil Aviation Authority, 322, 326 256 215 58, 61, 65

CAP (Code of Advertising Practice Committee),

313

Capitalism, conservative,

52

Carnegie, Andrew, Causes of action, ECHR, and, CEN (European standardisation body), Certiorari orders, Ceteris paribus,

183 260–63 309, 310, 311 255, 262 68

Charities changing context of, concept of, new notion of, undermining of, See, also, Volunteering

186–88 183–86 191–92 38

Charity Commission,

184–85

Charity Organisation Society (COS),

206, 207

Chartered Institute for Arbitrators, Child Poverty Action Group, Children, ECHR, and, Choice doctrine, CI (Consumers International), Citizen organising,

294 108, 261 253 1, 2, 10 311 179–80 111, 195

Citizen’s control,

201, 202

Citizens Rights Office (CRO),

108

Citizens’ Service,

210

City Technology Colleges,

Civil rights,

267–68

Civil society anarchy, European Union, financial matters, individualist view, law and order, participation, political processes, public goods, re-inventing, rediscovering, State, erosion of, undermining by State institutions,

34–35 162–64 36 33–37 36 31–43 39–41 35–36 41–42 188–90 42–43 38–39

Co-operative relationships, advantages, participation, See, also, Employee participation Coase, RH,

335–41 336–38 338–41

53–55, 58, 59, 62–65

Code of Advertising Practice Committee (CAP), Cole, GDH,

313 2–3, 6, 11, 17, 18

Citizens’ Advice Bureaux,

Citizenship democracy, European Court of Justice, European Union, local government,

360, 361

115 141, 160 141, 158–59 115–17 346

Commission on Future of the Voluntary Sector, Commission on Social Justice, Communism, Communitarianism, Communities creation, ethnic groups, fashion, fund raising, government action, grass-roots movements, heterogeneous concept, history, housing, markets, participation, politics, Second World War, 406

11, 12, 19 210 53, 80 175, 188–90 178 179 176 12 177–78 179 178 176 13 177 10–13, 143–47 175–81 176

Index social capital, social and economic exclusion, understanding,

175, 176 13 178

Community Service Volunteers, Company law,

186 17–23

Competition policy,

8–9

Comptroller and Auditor General (CAG),

245

Conception, assisted, ECHR, and,

257

Confederation of Professional Agricultural Organisations (COPA), Constitutional order, trust,

166 91–95, 92, 95

Constitutions cultures, and,

78–79, 87–91, 95–98 75–77 1–29, 78–79, 87–91 97–98

everyday life, participation, reform in Britain, Consultation corporate governance, local government, organised interests,

331–33 114–15 111

Consumer Councils,

Consumers activism, consumer interest, consumer protection legislation, litigation, local government, markets, public interest, representation of, self-regulation, utilities, and, vulnerable, well informed,

Consumers International (CI),

311

Contract, law of See Hybrid contracts Conviviality, Coote, A,

177 277, 278

COPA (Confederation of Professional Agricultural Organisations),

166

COPOLCO (consumer council of ISO),

311

Corporate governance adverse third party effects, participation to reduce, alternating corporate objectives, Cadbury Committee, co-operative relationships, long term, company law, consultation consumer activism, employee participation Greenbury Committee, Hempel Committee, multi-constituency board representation, participation as a form of regulation, public companies, economic clout, public space, protection of, shareholder participation,

299, 310 8 328–31 297–98

291–93 293–95, 301–08 113 296 297, 299 8, 299–301 295, 308–17 7 298 297–98

300, 301, 306, 307, 310

301

Consumer Policy Committee (CPC), BSI, Consumer representation,

Consumers’ Association,

Corporations, private, COS (Charity Organisation Society), Council of Economic and Finance Ministers (ECOFIN), Council of Europe human rights, legal autonomy,

407

328–35 333–34 322, 326 335–41 22 331–33 328–31 331, 332, 341–43 326 22 320–21 27, 335 319–20 344–47 321–28 5 206, 207

163, 169, 170, 171 264 220

Promoting Participation local self-government, participation improvement, social market economy,

3 29 25

Courts, ECHR, and, CRO (Citizens Rights Office),

260–63 108, 109, 110

Crosland, Anthony,

107

Crossman, Richard,

102

Cultural theory,

83–87, 84, 92–95, 92, 95

Cultures biases about participation, constitutionalism, sustainable participation,

82–87 78–79, 87–91, 95–98 80–82

Czech Republic, fall of Communism,

Deportation, ECHR, and,

252

Derrida, Jacques,

137

Detention, ECHR, and,

253

public health,

254

Devolution, Scotland,

173, 236 Dicey, AV,

229

Dickson, Alec,

186

Director General of Fair Trading, Directors as agents of companies, duties of, Discrimination, Distance Selling Directive,

80

Douglas, Mary, Droit administratif,

Dahl, Robert,

102

Drucker, Peter,

Dahrendorf, Ralf,

192

Damages,

262

DTI (Department of Trade and Industry),

de Tocqueville, Alexis

144, 146

Declarations,

255, 262

Delors, Jacques, Democracy analytical attention, citizenship, and, culture, and, employee participation, industrial, legitimacy, markets, radical form, ‘reactive’, Britain as, Schumpeter, JA, view of, social institutions, Denmark EU, and, European environmental policy, referendum defeat, separation of powers, Department of Trade and Industry (DTI),

151 2 115 99, 100 20 152–56 148 17 147 108 106, 144 69 170 168 165 236 300, 332

79, 142–43,

Dworkin, Ronald,

Eastern bloc countries dissident movements, decay of, social market economy, socio-economic rights, voluntary sector in, See, also, Soviet Union

312, 314 321–22 333–34, 347 222, 253 306 83 229 20, 207 300, 332 148

80 25 223 12

EC (European Community) consumer policy, Monetary Committee,

292 169

ECB (European Central Bank),

169

ECHR (European Convention on Human Rights) assisted conception, 257 breach of contract, freedom from imprisonment, 264 British law, incorporation into, 79, 251–52, 266 causes of action, 260–63 courts, 260–63 fascism, 161 408

Index Energy regulation,

incompatibility with legislation, legal autonomy,

258, 259 214, 215, 217, 221 252–54 257 259–60 263–64 230, 239, 240, 242 160 260–63 260

missing rights, politician’s veto, public authorities, remedies, separation of power, social rights, tribunals, ‘victims’, ECJ See European Court of Justice ECOFIN (Council of Economic and Finance Ministers), Economic Co-operation and Development, Organisation for,

163, 169, 170, 171

7

34–35, 48

Egalitarianism See Grid-group theory EIAs (Environmental Impact Assessments),

14, 24

Elections See Voting behaviour Electricity Consumers Committees,

358

Electricity regulation,

357–58

Employees citizens as, company law, legal position, participation, protection, redundancy, stakeholding, EMU (European Monetary Union), EN (European standards), Enclavists,

Environment, participation, and,

14–15

Environmental Impact Assessments (EIAs),

14, 24

EOC (Equal Opportunities Commission),

261

EP (European Parliament),

160, 164, 170, 171, 236

Equal Opportunities Commission (EOC), Equality, ETUC (European Trade Union Conferation),

ECSC (European Coal and Steel Community), 24, 25, 171 Efficiency policy,

356–58

23–24 20–23 21 152–56, 341–43 17–23 21 17–20

Etzioni, Amitai, EU (European Union) as actor, agricultural aid, citizenship, community, ideas of, defence, democratic crisis, devolution, employee protection, environmental issues, Habermas, Jurgen, participatory democracy theory, industrial democracy, legal autonomy, legitimacy, media coverage, new States seeking to enter, overcoming a distorted legacy, participation, and, patterns of civil society, playing the market, regional development, single currency, Social Affairs Commissioner, role of, social contract, solidarity, Staatenverbund, as,

168, 169, 170 310 84 409

261 8, 9–10 166 144, 175 162 157 141, 158–59 143–47 157 137–41 142–43 21, 22, 24 14

147–50 152–56 214 170–72 163 157 159–61 164–70, 172–74 162–64 7 157 157 12 103 150–52 158

Promoting Participation subsidiarity, as system, Third World countries, worker participation, European Central Bank (ECB),

142 62 157 152–56 169

European Coal and Steel Community (ECSC),

24, 25, 171

European Commission, Directorate General XI,

167, 240–41 168

European Convention on Human Rights See ECHR European Council,

solidarity, subsidiarity,

141, 160 306 154, 155 223 233, 240, 241, 242 152 142

European Disability Forum,

166

European Federation of Green Parties,

163

European Forum of Child Welfare,

166

European Monetary Union (EMU), European Parliament (EP),

162

European Socialists, Party of,

162

European System of Central Banks,

169

European Trade Union Confederation (ETUC),

66

European Union See EU (European Union) European Works Councils,

155, 156

Expression, freedom of,

254

Extradition, ECHR, and,

252

139, 161, 163

European Court of Human Rights, Strasbourg compensation awards, 263 conflicts, rights and statutes, 255, 258, 259 domestic relations, 161 ECHR, UK, and, 251 equality doctrine, 242 juvenile crime, 257 legitimate expectation doctrine, 242 proportionality doctrine, 242 UK record, human rights, 265 European Court of Justice citizenship, consumers, industrial democracy, legal autonomy, separation of powers,

European People’s Party,

168, 169, 170 160, 164, 170, 171, 236

Factions See Fiefdoms Fairness doctrine,

8

Family, decline of,

187

Fatalism See Grid-group theory Federation of Christian Democratic Parties,

162–63

Federation of European Liberal, Democrat and Reform Parties,

163

Fiefdoms (special interest groups),

5, 6, 18, 27

Financial systems, sound,

36

Fontainebleau, summit at,

151

Food Standards Agency,

239

France EU, and, separation of powers, Vichy regime,

170 234 79

Fried, C,

271

FTSE 100 index,

329

Fukuyama, Francis, Fuller, LL, Future of Voluntary Sector, Commission on,

Galbraith, JK, Gas regulation, 410

144, 145, 175 281 11, 12, 19

144, 273, 275 356

Index Geddes, Mike,

115–16

General Agreement on Tariffs and Trade (GATT) See World Trade Organisation Germany citizenship, co-operative relationships, employees, EU, European environmental policy, Federal Constitutional Court, judiciary, Nazism, R and D spending, separation of powers, social market economy, volunteer activity, works councils, Gewirth, Alan choice, community, legal autonomy, playing the market, publicly recognised rights, social and economic rights,

Habeas corpus, Habermas, Jurgen, 141, 158 339 21, 343 141 168 158 222 158 18 234 25 196 333 1–2 11 20, 220, 226–27 5 68 272, 274, 275 181

Gladstone, William Ewart,

184

Good Neighbour Schemes,

204, 205

Greece European environmental policy, social market economy,

168 26

Greenbury Committee, on corporate governance,

326

Greenpeace,

261 83–87, 84, 92–95, 92, 95

Group of Eight (G8), ‘Guardianship enclaves’, Guilds, mediaeval,

68–69, 138, 147–50

Gibson, Tony,

Grid-group theory,

215

169 102, 103 11, 17

Hampel Committee (on corporate governance), Harris, Margaret, on volunteer theory, Havel, Vaclav (Czech President),

22 198–200 143

Henley Centre for Forecasting,

88, 105

Hepple, Bob,

153–54

Hierarchism,

84–87, 95

Hirschman, AO, cycles of participation, Hobbes, Thomas,

80, 85, 87, 89, 95, 97, 206 61–62, 205

Home Office Community Development Projects,

176

House of Commons Select Committee on Employment,

177

House of Lords equal opportunities, reform, HRC (Human Rights Commission), ‘Human capital’, Human rights assisted conception, children, criminal justice, current UK law, defined, deportation, detention, discrimination, extradition, freedom of expression and assembly, freedom of religion, lethal force,

411

261 79 221, 224, 268 18 257 253 257, 258 255–56 31, 32–33 252 253, 254 253 252 254 254 253

Promoting Participation limitation on privacy, 254 politician’s veto, 257 public health, 254 sexual minorities, 254 See, also, ECHR (European Convention on Human Rights); Liberty (National Council for Civil Liberties); Negative rights; Positive rights; Social and economic rights Human Rights Commission (HRC), Hungary, fall of Communism, Hutton, Will, Hybrid contracts contradictory structure of, defined, intervention, merger of private and public spheres, neo-liberalism, participation, private interests disappearance of, public critique of, public interests, private critique of, regulation, spurious novelty of, welfare systems,

ICCPR (UN International Covenant on Civil and Political Rights), ICNPO (International Classification of Non-profit Organisations), IGC (Amsterdam Inter-Governmental Conference), Illich, Ivan, ILO (International Labour Organisation), IMF (International Monetary Fund),

Independent Broadcasting Authority,

359

Independent Television Commission,

361

India autonomy, equality in, social market economy, Individualism,

6–7 47 45–47 58–67 45–46, 68–69 52–55 69–73 68–69 48–51 52–55 58–67 56–57 48–51

See, also, Grid-group theory Industrialisation,

194, 195

262, 308

Institute for Public Policy Research (IPPR),

336, 352

International Classification of Non-profit Organisations (ICNPO),

194, 195

International Covenant on Economic, Social and Cultural Rights, International Labour Organisatio (ILO),

16, 22, 173 169

International Settlements, Bank of,

169 310, 311

Internationalism, growing,

239–43

Intervention, regulation distinguished,

58–67

IPPR (Institute for Public Policy Research),

177 16, 22, 173

Iron Curtain countries See Eastern bloc countries

169

213

International Monetary Fund (IMF),

Ireland European environmental policy, See, also, Northern Ireland

140, 155

17

Injunctions,

International Standards Organisation (ISO), 252

10, 33–37, 84–87, 269

221, 224, 268 80

222, 225 9 25

ISO (International Standards Organisation),

412

336, 352

168

310, 311

Index Italy, European environmental policy,

168

Japan co-operative relationships, R and D spending,

339 18

Johns Hopkins Comparative Non-profit Sector Project,

236

Judicial Studies Board,

249

Judiciary autonomy, Circuit judges, High Court judgeships, Recorders, separation of powers,

215–20 237 236 237 236–37

Just satisfaction test,

262

Justice natural, separation of powers,

8, 9, 10 236–37

Keynesian demand management,

52, 152

Klare, Karl,

47

Kristeva, Julia,

143

Kuenstler, Peter,

176, 180–81

Labour policy,

24

Ladder of participation,

117

Latent participation,

118, 135

Law and order,

36

Laws, Sir John,

231 76, 90, 293, 303

Legitimacy European Union, theory of Jurgen Habermas, Lethal force, ECHR, and, Levels of participation, local authorities,

170–72 147–50 253

264 254 293–95, 301–08

Littlechild Report,

350

Local Exchange Trading Schemes,

179

Local government case studies, citizenship, commitment to participation, community bodies, consultation processes, decision making, dominant interests, environmental issues, focus of participation, involvement in, leadership issues, levels of participation, philosophies of participation, process of participation, purposes of participation, role, self-government, stakeholding,

124–32, 115–17 113–14 13 114–15 115–17 105 15 134 119–21 132 122–23 133 132–35 117–19, 133 121–22 3 20

Local Government Management Board, Locus standi, London Voluntary Service Council, LPSBs (local public spending bodies), Luhmann, N, Madison, James, Major, John,

22–23

252 251, 255, 258, 262, 263

human rights legislation, sexual minorities, Litigation, consumers,

194, 196

Judicial Appointments Commission,

Legal Aid,

Liberty (National Council for Civil Liberties) Bill of Rights, ECHR, and,

Mandamus orders, 413

15, 20 243 13 102 56 6 172 255, 262

Promoting Participation Manpower Services Commission (MSC), Market, playing the, Markets consumers, democracy, merger of private and public, private, public critique of, public, private critique of, socio-economic rights, values of, Meade, JE, Metropolitan Authorities, Association of,

for Volunteering, 186, 195

National Consumer Councils,

296 17 68–69 48–51, 71 52–55 274–75 177 50, 52 178

313, 355, 356, 357, 358 National Consumers’ Consultative Committee,

National Council of Voluntary Organisations (NCVO),

104

National Lottery Charities Board,

185 195

Mill, JS,

18

National Trust,

Monetarist economic policy,

351, 354, 361 291 52, 168–69 169

Monnet, Jean,

139, 171, 172

Montesquieu, Charles Louis de Secondant, Baron de, MORI opinion poll, Socioconsult Programme, MSC (Manpower Services Commission), Mulgan, Geoff,

National Audit Office, National Centre

11, 104

Nationalism, 306

Monetary Committee, EC,

Monopolies and Mergers Commission (MMC),

11, 23

National Farmers Union,

National Survey of Volunteering (1997),

Moloney Committee,

358

National Council for Civil Liberties See Liberty

82

MMC (Monopolies and Mergers Commission),

294, 300,

4–8

Middle East, political participation, Misleading Advertising Directive,

193

351, 354, 361

247 88, 107 90 186, 195 175–76

355

143

Natural justice,

8, 9, 10

NCVO (National Council of Voluntary Organisations),

11, 23

NDPBs (non-departmental public bodies),

102

Negative human rights,

32, 33, 68, 267–72, 280

Neighbourliness, Neo-liberalism,

202–05 52–55

New Public Management (NPM),

19

New Zealand, NPM in,

19

NGO (non-governmental organisation), Nolan Committee, North American Free Trade Association,

261 192, 239 7

Northern Ireland, community,

178

Northern Ireland Consumer Council,

317

Nozick, R,

68

NPM (New Public Management),

19

414

Index

OECD (Organisation for Economic Co-operation and Development), OFFER,

civil society, communities, constitutions, 7, 89, 169

consumers, corporate governance, corruption, cultures, decline in, educational dimension, enhanced, environment, European Union, expectations, financial dimension, hybrid contracts, ladder of, latent, legal and constitutional order, levels of, litigation, local government, logic of, market, playing the, as means to an end, passivity, and, political process, purposes of, regulation and regulators,

357, 358, 359

Office of Fair Trading (OFT) ASA, business community, interests of, Codes of Practice, consumer legislation, court action, public bodies, OFGAS (gas watchdog),

313 300 309, 314–16 291 294, 295 307 357

OFT See Office of Fair Trading OFTEL,

27, 238, 353, 354, 355, 356, 357

OFWAT (water consumer council), Ombudsman systems,

355, 356 16, 244, 286, 287–88, 294

Open Space Society, Organisation for Economic Co-operation and Development (OECD),

Pacta sunt servanda, Pareto, Vilfredo, optimality theory, Parliamentary sovereignty, Parry, Geraint, Participation affective dimension, autonomy, behavioural dimension, bottom-up process, case studies,

11

28–29 122–23 301–08 113–35 2–4 4–8 41 101–12 39–41 117–18 27, 335, 349–62 89–90 308–17 234–37

risk perception, self-regulation, separation of powers, social and industrial life, and, 15–16 sponsored, 116, 118 sustainable, 80–82 top-down process, 13, 114–15 volunteering, 39, 197–201 See, also, Hirschman, AO: cycles of participation

7, 89, 169

214 34–35, 48, 60, 61 255, 256 101 88–89 213–27 90 13, 114–15 124–32

31–43 10–13, 143–47 1–29, 78–79, 87–91 291–317 22, 319–47 40 78–91 189 91 95–97 14–15 164–70, 172–74 8–10 90 69–73 117 118, 135

Party of European Socialists,

162

Passivist attitudes, UK people,

101–12

Pateman, Carole,

197–98

Pension funds,

415

20, 24

Promoting Participation Pensions Ombudsman, Philanthropy,

244 184, 191, 203–04

Pigou, AC,

49–50, 53, 55, 58–59, 60, 61, 65, 67

Pinochet, General,

250

Pitkin, Hanna,

145–46

Plain English Campaign

317

Plant, R,

270, 278, 279

Pluralism,

13, 146, 162, 166

Poland, fall of Communism,

80

Political processes, participation and,

39–41

Political rights,

267–68

Politics, community,

175–81

Portugal European environmental policy, social market economy, Positive human rights,

168 26 32, 68,

267–72, 280 Post Office Users National Council,

353

Price control formulae, utility regulation,

350

Priority Estates Project (PEP),

128–29

Privacy, limitations on,

254

Public Accounts Committee,

356

Public Appointments, Commissioner for,

239

Public Assistance Authorities,

207

Public authorities, ECHR, and

259–60

‘Public goods’, Public interest, consumers, Public space, protection of, Public Standards, Commissioner for, Putnam, Robert,

Quangos (non-governmental organizations),

18, 35–36, 53–54 297, 299 344–47 239

Rawls, John, Red Cross, Reflexive laws, Regional Development Agencies, Regulation broadcasting, civil aviation, energy, fiefdoms (interest groups), intervention distinguished, participation, and, rail, reform of procedures, telecommunications, utility regulation models, water and sewerage, See, also, Self-regulation Religion, freedom of, Research and Development spending,

3, 102, 103, 104, 206 138, 146, 272 194 70 177 359 360 356–59 27 58–67 27, 335 359 360–61 353–55 349–52 355–56 254 18

Retail Price Index,

350

Rhodes, Martin,

156

Rights civil, human See Human rights political, socio-economic See Socio-economic rights Rothbard, Murray, Rousseau, Jean Jacques,

267–68

267–68

33, 34 5, 208–09

Rowntree Trust,

107

Royal Automobile Club,

300

Royal Commission on the Poor Laws (1905–09),

207

Royal Society of Arts (RSA),

21, 331, 335–36

175, 176 Sadurski, W, St Andrew’s Ambulance, 416

273–74 194

Index St John’s Ambulance, Sandel, Michael, Schumpeter, JA, Scotland devolution in, public expenditure,

voting rights, exercise of,

194 143, 144,

Shumer, Sara,

145, 149

Single Regeneration Budget (SRB) programmes,

106, 144 79, 142–43, 236 98

Scott Committee, on arms to Iraq,

102, 217, 247

Scott, Sir Richard,

217, 247

Selbourne, David,

175

Select Committee, Trade and Industry, Self-help groups, medical,

191

145–46

3, 125, 130–31, 177

Smith, Adam,

58

Social capital,

175, 176

Social Exclusion Unit, Social and industrial life, participation and, Social Justice Commission,

356, 358

323

Social market economy,

177 15–16 152, 153 25–27

Social Security Appeal Tribunals,

90

Self-incrimination, ECHR, and,

253

Social Services Inspectorate,

16

Self-regulation, consumers,

295,

Social Trends,

89

308–17 Separation of powers deliberation, executive effectiveness, history, human rights cases, interference, internationalism, growing, jobs of government, justice, doing of, new environment, impact on existing institutions, new institutions, participation, problems, purpose, reform, suggestions for, See, also, Autonomy: legal Sewerage regulation, Sexual minorities, ECHR, and, Shareholder participation activism, agents, shareholders as, by means of ‘exit’, institutions, role of, powers of shareholders,

235–36 235 229 230–31 230 239–43 237–38 236–37

Socio-economic rights defined, education, empowerment, enforcement, housing, justice, Maastricht Treaty, markets, political parties, rationale, resources, access to,

239 238–39 234–37 243–50 231–33 243–50 355–56 254 326–28 321–22 324–26 323–24 322

267 285–86 278–79 282–88 284–85 272, 275 160 274–75 277 272–82 273, 275, 276, 279

social and political life, participation in, 16 threats to, 174 welfare economics, 278 See, also, Human rights; Negative rights; Positive rights Solidarity, EU, South Africa, social market economy, Sovereignty of Parliament, Soviet Union gerontocratic nature, grid-group theory, Spain 417

150–52 25 255, 256 82 85

Promoting Participation European environmental policy, social market economy, Sponsored participation,

116, 118

SRB (Single Regeneration Budget),

3, 125, 130–31

Stakeholding company law, corporate governance, employee protection, EU, local government, regulatory order, voluntary organisations,

17–20 339 17–20 153 114, 133 352 12, 199

State erosion of, ‘nightwatchman’ role,

42–43 68

Stoker, Gerry,

116

Stokes, Peter,

176

Strasbourg Court See European Court of Human Rights, Strasbourg Subsidiarity,

142

Sui generis,

46, 47, 56, 57, 172

Szyszczak, Erica,

21, 22

Tassin, Etienne,

142

Taxes, willingness to pay,

90

Teaching and Enterprise Councils,

177

Teague, Paul,

152

Telecommunications, Telecommunications Advisory Committees, Teubner, G, Thatcher, Lady Margaret, The Netherlands consumer groups,

Thoreau, Henry David, Tomorrow’s Company, Centre for, Trade and Industry Select Committee, Trades Union Congress (TUC), Trades unions British people, decline in participation, elective democracy, employee rights, public sector, stakeholders,

168 26 40 21, 331, 335–36 356, 358 19, 24, 332 108, 111 189 103 23 105 19

Training and Enterprise Councils (TECs),

6, 121

Tribunals, ECHR, and,

260–63

Trust, constitutional order,

91–95,

TUC (Trades Union Congress), Turnbull, Colin,

19, 24, 332 85

Tusa, John,

177

Ultra vires,

245, 347

152, 153–54

Take-overs,

TECS (Training and Enterprise Councils),

European environmental policy, social market economy,

168 26

Unfair Terms in Consumer Contracts Directive, Unger, RM, UNICE (Union of Industries of the European Community), Unipart,

6, 121 353–55 353 69, 71

United Kingdom autonomy, judicial, constitutional reform, decline in participation, ethnic groups in England, EU and,

76, 103, 172, 193

human rights, life courses, literacy in,

317 418

306 146, 229 166 19 215–20 79, 97–98 189 179 170, 172–74 79, 251–66 82 37

Index passivity of people, product safety laws, R and D spending, separation of powers, Social Charter, introduction of, sub-cultures, utility regulation model, volunteer activity, written constitution, lack of, United Nations General Assembly, Guidelines for Consumer Protection,

101–12 92 18 230 273, 288 78 349–51 190, 194–95 265 268 292

United Nations Convention on the Rights of the Child,

253

United Nations International Covenant on Civil and Political Rights (ICCPR),

252

United States Administrative Conference of (ACUS), American Federation of Labour, community, and, conscription, constitutionalism, individualism, labour law, literacy in, North American Free Trade Association, political participation, public life, R and D spending, R-Corps and R-Funds in, separation of powers, Universal Declaration of Human Rights, Utility regulation extension of duties, utilities, secrecy of utilities, sewerage, stakeholder model, UK model,

248, 249 24 143–44, 145 210 75–76 37 24, 147 37 7 82 143 18 20 234 213 243 7 355–56 352 349–51

water,

355–56

Val Duchesse principle,

153, 154

Venice Conference on Human Rights,

29, 221

Verba, Sidney,

86, 101

Vienna Conference on Human Rights (1993),

221

Volk (common people),

158, 159

Voluntary Aid Committees,

207

Voluntary Service Overseas (VSO),

186

Volunteer Centre UK,

193

Volunteering community, 11–12 defined, 193–94, 195, 196 free choice, 195 informal nature, 195 neighbourliness, 202–05 non-profit sectors, 196 paradoxes, 205–11 participation, 39, 197–202 scale in Britain, 194–95 stakeholding, 19 unpaid nature, 195 See, also, Altruism; Charities; Philanthropy Voting behaviour,

5, 106, 107, 113

shareholders,

323

VSO (Voluntary Service Overseas),

186

Wales, assembly in, Wallace, Helen, Water regulation, Weiler, Joseph, Welfare economics, socio-economic rights, Welfare systems, Welfare to Work programme, Wildavsky, Aaaron,

419

79, 173 151 355–56 138, 143, 145 278 38, 48–51 186 83

Promoting Participation Williamson, OE, Women’s Royal Voluntary Service (WRVS), Woolf Committee,

57 193 231, 237,

World Trade Organisation (WTO),

7, 24, 292

WRVS (Women’s Royal Voluntary Service),

193

Yates, Keith,

178

Young, Michael,

178

303, 304 Worker participation, EU, Works Councils, World Bank, World Development Movement,

152–56 155, 156 7, 14 261

420

Promoting Participation : Law or Politics?

Promoting Conflict or Peace through Identity

Control or Economic Law

Law or Spirit?

Control or Economic Law

European Childhoods: Cultures, Politics and Participation

Participation

Levinas, Law, Politics

Morality, Politics, and Law

Promoting Extensionality

Immigration Detention: Law, History, Politics

On Law, Politics, and Judicialization

Fundamentalism, Politics, and the Law

Emergency Politics: Paradox, Law, Democracy

The politics of provocation: participation and protest in Israel

Redefining British Politics: Culture, Consumerism and Participation, 1954-70

The Politics of Participation in Sustainable Development Governance

Politics, Democracy and E-Government: Participation and Service Delivery

Children, Politics and Communication: Participation at the margins

Local Politics and Participation in Britain and France

The Politics Of Evaluation: Participation And Policy Implementation

Promoting Racial Harmony

Promoting Racial Harmony

Promoting Inclusive Practice

Studies in Law, Politics and Society, Volume 43: SPECIAL ISSUE: LAW AND LITERATURE RECONSIDERED (Studies in Law, Politics & Society) (Studies in Law, Politics, and Society)

Promoting Sustainable Fisheries

Promoting the Saints

Promoting Mental Health Internationally

Investment Banking: Institutions, Politics, and Law

Studies in Law, Politics, and Society, Volume 45 (Studies in Law, Politics and Society)

Promoting Participation : Law or Politics?

Promoting Conflict or Peace through Identity

Control or Economic Law

Law or Spirit?

Control or Economic Law

European Childhoods: Cultures, Politics and Participation

Participation

Levinas, Law, Politics

Morality, Politics, and Law

Promoting Extensionality

Immigration Detention: Law, History, Politics

On Law, Politics, and Judicialization

Fundamentalism, Politics, and the Law

Emergency Politics: Paradox, Law, Democracy

The politics of provocation: participation and protest in Israel

Redefining British Politics: Culture, Consumerism and Participation, 1954-70

The Politics of Participation in Sustainable Development Governance

Politics, Democracy and E-Government: Participation and Service Delivery

Children, Politics and Communication: Participation at the margins

Local Politics and Participation in Britain and France

The Politics Of Evaluation: Participation And Policy Implementation

Promoting Racial Harmony

Promoting Racial Harmony

Promoting Inclusive Practice

Studies in Law, Politics and Society, Volume 43: SPECIAL ISSUE: LAW AND LITERATURE RECONSIDERED (Studies in Law, Politics & Society) (Studies in Law, Politics, and Society)

Promoting Sustainable Fisheries

Promoting the Saints

Promoting Mental Health Internationally

Investment Banking: Institutions, Politics, and Law

Studies in Law, Politics, and Society, Volume 45 (Studies in Law, Politics and Society)

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