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Winner (still) takes all

Why are so many Britons retiring on inadequate pensions? Why are trains still unreliable and most urban comprehensives so poor? Blame our ultra-competitive, winner-takes-all political system

By Michael Prowse   May 2005

The likelihood of Britain adopting a fairer and more efficient electoral system in the near future remains low. As the late Roy Jenkins ruefully conceded in his 1998 report on the voting system, it is only when political parties lack power that they are willing to consider reforms that might result in its fairer distribution. Tony Blair’s unexpectedly decisive victory in 1997 thus put the cause of proportional representation (PR) back for a decade or so.

Yet Blair is no longer the invincible politician that he was when Jenkins completed his review. Although Labour is still likely to win an overall majority on 5th May, a hung parliament is not inconceivable. And if Blair were to find himself able to govern only with the consent of the Liberal Democrats, PR would move into the category of the politically thinkable.

Blair’s personal fall from grace is one reason why electoral reform is again a possibility. But there is a deeper reason. During most of the post-1945 period, Britain’s main parties were so far apart on fundamental issues that co-operation was difficult to secure. Labour did not fully accept the market economy until the 1990s. Yet the political bandwidth has since contracted sharply, not just in the field of economic management but in public policy generally (with the one big exception of Britain’s relations with the EU).

Yet the greater feasibility of PR (and its greater familiarity, given its use in Scottish, Welsh and European elections) does not, in itself, constitute a reason for reform. What are the positive grounds for a change in the voting system? As Jenkins argued, electoral arrangements exist for the benefit of the public rather than for the convenience of political parties. No voting system serves the people’s interests unless it results in a distribution of representatives (MPs) that reasonably reflects the balance of public opinion. And Britain’s system—first past the post (FPTP)—fails this test: it produces patterns of representation that are simply unreasonable.

It is unreasonable, for instance, that Labour won an overwhelming majority of parliamentary seats in 2001 (62.7 per cent of the total) while gaining only 40.7 per cent of the popular vote. As with the Thatcher governments of the 1980s, Labour has governed as though it commanded a sizeable popular majority—forcing through disliked measures, such as university tuition fees—even though nearly three fifths of those who turned out placed their votes elsewhere. Nothing better illustrates the erratic nature of FPTP than the fact that the Tories secured only a narrow majority in 1992 even though they won a larger share of the popular vote (41.9 per cent) than Labour did in its landslide victory of 2001. Meanwhile, FPTP guarantees discrimination against smaller parties. This reached a pitch of absurdity in 1983 when the Liberal/SDP Alliance won 25.4 per cent of the popular vote but only 3.5 per cent of parliamentary seats.

A different way of grasping the unfairness of FPTP is to reflect that a large majority of voters live in constituencies in which the outcome is almost never in doubt. Many never help to elect a winning candidate simply because their party is weak in their area. The essential contest for power occurs in only about 100, or at most 150, “swingable” constituencies, out of a total of 646. Votes in these places are far more potent than elsewhere. And under FPTP it is not at all unusual for an MP to represent a constituency even though a majority of the electors voted for different candidates. The balance at Westminster is a distorted reflection of the popular will not just occasionally, but most of the time.

This, in itself, is grounds enough for dropping FPTP voting rules. But there are more subtle reasons for believing that Britain would function better as a democracy if the electoral system were changed. One of the most significant differences between affluent liberal democracies is the degree to which their political institutions encourage competition between political rivals as opposed to the co-operative search for consensus. Viewed in these terms, Britain is an outlier: FPTP voting is just one of several institutional features that conspire to make it perhaps the world’s most competitive democracy.

Competition is usually an economic virtue. The alternative is monopoly or imperfect competition. But in politics, fierce competition is not always the best way to translate public preferences into practical policies. The relevant contrast is between competition and consensus rather than between competition and monopoly. In a competitive democracy, parties fight for office and the one that wins an election enjoys sweeping powers—until it is defeated at the ballot box. In contrast, in a consensual or “deliberative” democracy, the rules of the game usually prevent a single party gaining untrammelled power. Instead, several parties share power and must negotiate with each other.

The Westminster system was the inspiration for Joseph Schumpeter’s classic description of competitive democracy in Capitalism, Socialism and Democracy (1946). It is not hard to see why. Given FPTP voting, British general elections are generally a tussle between two dominant political parties. Once one of them has gained a parliamentary majority, its leadership cabal enjoys extraordinary powers so long as the whips can maintain party discipline. Notwithstanding Labour’s recent reforms, there are still relatively few of the formal checks and balances that are common in other liberal democracies.

British governments pay lip service to the ideal of public debate and discussion. They issue consultative papers. They hold parliamentary debates. Labour has even promoted a dialogue with the electorate that it calls the “Big Conversation.” Yet the consultation has an unreal quality. Those who win British elections do not believe in the importance of achieving a broad consensus for policy changes. They enter office to enact their party’s programme, and if the opposition is unhappy it has but one remedy: to wrest back power at the next election.

We can better grasp Britain’s status as the world’s most competitive democracy by contrasting its institutions with those of the US and Switzerland. Americans have a competitive self-image but their democracy corresponds less closely to the Schumpeterian paradigm than ours. Like Britain, the US relies on FPTP voting rules rather than PR. As a result, two big parties, the Democrats and the Republicans, dominate its political landscape. But here the similarities end. American politicians cannot compete for power as nakedly as their British counterparts because the founding fathers took great care to spread it around.

Although individual US elections are fought on a winner-takes-all basis, the elaborate separation of powers—between the executive, legislative and judicial branches, and between the federal government and the states—makes the system in aggregate less competitive than Britain’s. For instance, a US president’s capacity to enact the policies on which he campaigned for office is obviously impaired if his party fails to win control of either the House of Representatives or the Senate. And even when, as now, the same party controls both houses of congress and the White House, power is divided to a much greater degree than in the British parliamentary system. The authority of congressional leaders, such as the Senate majority leader or the speaker of the House of Representatives, is not closely tied to that of the president. The point is not merely that the constitution gives them powers to initiate or block legislation. It is that their authority arises as a result of different electoral processes and does not depend directly on presidential patronage.

The upshot is that presidents must debate policies with congressional leaders—without any guarantee of winning the argument—even when their party enjoys a majority in both houses. In the early 1990s, it was a Democrat-controlled House and Senate that defeated Bill Clinton’s health reform plan. Because the separation of powers is real, the US political process has a deliberative character that is largely unknown at Westminster. And in the US significant changes of domestic policy typically require broad support; unlike in Britain, a party, or faction within a party, cannot easily impose its will on its political opponents.

Meanwhile, Switzerland can justly claim to be the world’s leading consensual democracy. As with the US, the mere fact of being a federation encourages power-sharing: the central government in Bern must negotiate with cantonal governments that it cannot easily dominate. Under the constitution, any powers not reserved for the central government remain with the cantons, which have the right to make laws and raise taxes. Regardless of population, they are equally represented in the upper house of the Swiss parliament, and this senate enjoys formal equality with the lower parliamentary house. Both must approve legislation and, as in the US, there are complex procedures for reconciling differences between the two.

The Swiss have a PR voting system—partly to accommodate the country’s linguistic and religious divisions—but they have also gone further and created a uniquely collegial federal government. It consists of a seven-member executive, the Federal Council, elected by both houses of parliament. The seven councillors, who also serve as the heads of government departments, deliberate over policy as equals and have a duty to reach a consensus. The seven members are divided among the four largest parties, roughly in proportion to their share of the vote. The Free Democrats, Christian Democrats and Social Democrats used to have two members each, while the People’s party had just one. After winning the largest share of the vote in the 2003 election, the People’s party demanded—and got—a second seat (at the expense of the Christian Democrats).

Switzerland’s commitment to direct democracy also encourages power-sharing and a consensual search for solutions. There would be little point in the Federal Council imposing a law or policy that lacked wide support, because a disgruntled section of the population would simply launch a legislative challenge. In most modern democracies, citizens can participate politically in only two ways: they can vote periodically for representatives who will take decisions on their behalf, or they can stand for political office themselves. Through referendums and popular initiatives, the Swiss give the people a third option: the chance to challenge the legislative proposals of politicians and to make their own proposals. Direct democracy encourages at least a portion of the public to educate itself politically and debate issues more intelligently.

What works for the Swiss would not work for Americans. And what works for Americans would not work for the British. Moreover, a sceptic might point out that it is doubtful whether consensual democracy works even for the Swiss. Since the late 1980s, their self-congratulatory mood has evaporated. Their economy has stagnated, albeit at a level of wealth that others still envy. Many big corporations have failed, including the iconic Swissair. And the rise of the xenophobic People’s party reflects fears that rapid immigration is undermining the cohesion of Swiss society. It is thus arguable that Switzerland might recently have fared better with a more competitive democracy. With Westminster institutions, a Swiss government might have reacted more decisively to the pressures that globalisation has imposed, so heading off the rise in anti-immigrant sentiment. Most continental European countries are sclerotic to a greater or lesser degree, and some blame the sclerosis on these nations’ devotion to PR, which also allows greater representation to extremist parties.

Yet even if some European nations could gain from greater political competition, this does not imply that a nation at the other end of the political spectrum, such as Britain, could not gain from somewhat greater collegiality. The Jenkins report, after all, advocated only a mild shift towards PR. Under its proposals, the majority of MPs would be elected on an individual constituency basis, albeit by a method (the “alternative vote”) that would give weight to voters’ second preferences and so ensure that every MP enjoyed majority support. Only 15-20 per cent of MPs would be elected on a “top-up” basis, according to rules designed to bring the distribution of seats more closely into line with voter preferences. Under Jenkins-style reforms, British political parties would need to co-operate more often than today, but such reforms would not produce anything remotely like Switzerland’s institutionalised co-operation.

Competitive and consensual democrats disagree profoundly about our nature as social animals, and the constraints that this places on political organisation. Competitive democrats regard themselves as realists, but are better understood as pessimists. Schumpeter, like “public choice” economists of a more recent vintage, dismissed as naive the traditional idea that politicians are statesmen who strive to promote the public good. They are as self-regarding as anybody else, he thought, and are best understood as the political equivalent of business entrepreneurs. Just as the latter compete for our dollars by selling products in a market-place, so political entrepreneurs compete for the public’s votes by marketing their policy platforms during election campaigns. Representative democracy is not self-rule; it is rule by an elite class of political entrepreneurs. Its saving grace is that we loan power to these political sharks. Thanks to periodic elections, we can kick out one bunch of rulers and hire another.

In Law, Pragmatism and Democracy (2003), Richard Posner, the US legal scholar and judge, powerfully restates the Schumpeterian case for political competition. In his view, the qualities that politicians need are not those of the intellectual or statesman but those of the broker, the salesman, the actor and the entrepreneur. He takes issue with the idea that if people debate and discuss in good faith, they will eventually resolve their differences. Not so, Posner claims: his experience as a judge for more than 20 years convinces him that “argument over fundamentals creates anger and is more likely to deepen and congeal disagreement than to overcome it.”

Far from producing sane policies, consensual democracy is thus likely to result in political paralysis. If all shades of opinion enjoy a veto, radical reform becomes almost impossible. A consensual democracy is thus bound to be a sclerotic or “do nothing” democracy: one that is dominated by futile wrangling and destined to decline relative to its rivals because it cannot adapt. We should, instead, understand the ballot box as a surrogate for force, rather than a source of deliberative legitimacy. What makes democracy attractive on this view is not that it facilitates the reaching of agreement but that it assures the orderly management of disagreement.

According to the competitive model, the public good is best approached in zigzag fashion: the party in office should experiment with radical reforms, even if they are initially resented by much of the population. If the reforms fail to deliver the promised benefits, the electorate can kick out the team responsible and try something different. What voters need, in other words, is not interminable debate but a clear choice.

Although there is some truth in such arguments, they are too cynical. Moreover, political competition continues to rest on a deeper level of consensus. In a competitive democracy opposing parties must agree on the rules underpinning the transfer of power. Also, the rationality of zigzag politics looks questionable if one reflects on the state’s principal tasks. Governing is mainly a long-term business, even if politicians often think and act otherwise. You measure success over decades, not a few years. Whether it is exchange rate policy or the school curriculum or pension rules—stability of the policy regime is crucial.

This means that in practice the Schumpeterian ideal will often produce poor results. Governing a nation is not like selling soap powder. It is a delusion to argue that the interests of voters are best served if they are given a fresh menu of policies every four or five years. If power alternates between political parties committed to different ideologies and programmes, the long-term outcome may ultimately please nobody. This kind of politics can produce a succession of governments each of which is opposed by a majority of the voters.

The lesson from Britain’s recent history is that excessive political competition can produce systemic failure in the public sector. Why are so many Britons now retiring with inadequate pensions? Why are the trains still unreliable? Why are exam results still so poor in urban comprehensives? In every case, the partisan behaviour of politicians, and their reluctance to build a broad consensus in favour of reform, helps explain the disappointing results. Pensions policy illustrates the problem. In the 1970s, Barbara Castle, the relevant Labour minister, saw the need for long-term stability and so patiently negotiated a bipartisan agreement with the Tory opposition. Both parties agreed a new state earnings-related pension scheme (Serps), which offered a modest supplement to the basic state pension. But when the Tories got back into office (under a new leader, Margaret Thatcher), they reneged on the bipartisan accord.

And when partisan politicians attempt to impose policies without first building a consensus, they tend not to make good use of the knowledge available in the wider society. In spheres such as health, education and transport, Labour and Tory governments have relied on elite groups of politicians and officials to devise reform blueprints. But their ideas have not commanded the support of the providers or users of the services to be reformed, of academics, opposition parties, or the public at large.

For that reason, politicians have had little option but to rely on a form of “command and control.” Because they have not won people over by rational argument, they have had to rely on self-interest as a motivational tool. To get reform implemented they have resorted to material incentives—devices such as performance-related pay and bonuses, targets (with penalties for falling short) and onerous forms of audit and inspection. And, as the Blair government has discovered, these targets and financial incentives are far less effective than their champions—mostly economists and consultants—claimed.

Consensual or deliberative politics, on the other hand, marshals the available knowledge. And it does this because no one group or faction is able to implement policies unilaterally. Instead the parties must forge a synthesis from their initially conflicting positions. Much of the challenge of public policy is to motivate the rank and file providers of services. The consensual politician does this by convincing them of the merits of reform, and relies on them changing their behaviour as a result.

A modest shift towards PR in Britain, such as outlined in the Jenkins report, is feasible because there is a greater consensus on policies than in the past. But if this consensus has arisen anyway, why bother to alter the voting system? One answer that should appeal to New Labour is that the policy consensus it has constructed is fragile. Some day the Tories will be the strongest party again: PR remains the best way of preventing Britain falling into the hands of a rejuvenated right. The second answer is that although the parties seem to agree more than in the past—both want greater personal choice in education and healthcare, for instance—they have not yet learned to co-operate constructively and they are unlikely to do so, for the reasons already mentioned. Until they begin to draw on the informational and motivational advantages of consensual politics, public policy is likely to produce disappointing results.

Sceptics may regard consensual democrats as naive. But many of Britain’s problems today reflect its excessively competitive political system and its correspondingly attenuated sense of a public good that transcends individual differences. And nothing is likely to change until the political class stops regarding elections as contests for brute power—power that is to be used against its opponents, until such time, of course, as it slips from its fingers. Consensus may not always be attainable, but deliberative democrats rightly regard it as a goal worth striving for, and PR is a way of bringing it closer.

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