Tag: Speeches

Below is the text of the speech made by Oliver Letwin to the Policy Exchange on 27th January 2009.

Arguably, the biggest failures of the last eleven years have been failures of regulation. Some of these failures have been failures of under-regulation.

Notoriously, bank lending has been under-regulated. Equitable Life was under-regulated. Haringey children’s services department has been under-regulated.

But other failures have been failures of over-regulation.

Doctors, nurses, teachers and police officers all complain about being over-regulated.

Small businesses and voluntary groups are screaming about being over-regulated.

And farmers are being driven mad by over regulation.

How come there is both over-regulation of some things and under-regulation of others?

Superficial answers abound. ‘The Government has its eye on the wrong balls’. ‘It all depends on the tabloid headlines’. ‘Some things are more difficult to regulate than others’. ‘Some things are easier to over-regulate than others’.

But all of these superficial answers miss a deeper point …

… Labour’s failures of under-regulation stem from exactly the same conceptual mistake as Labour’s failures of over-regulation.

Indeed, in many cases, over-regulation of Type A has actually caused under-regulation of Type B.

What are these two types of regulation?

And what is the conceptual mistake that has led both to over-regulation of Type A and to under-regulation of Type B?

First, the two types of regulation:

Type A regulation is RULE-BASED. It has the form (often also the legal character) of law.

Like any other rule-based system, Type A regulation prohibits certain actions and mandates others.

So, for example, the Type A regulation of money-laundering forces every bank and building society to do certain things when a new client seeks to open an account. Passports are to be inspected, the addresses of grandmothers written down, and so forth. In the absence of such procedures, the Type A regulation prohibits a new account being established.

Whether the things that are commanded actually have any effect on the amount of money-laundering is not a concern for the clerks and managers who are compelled to keep these records. As long as the records are amassed, dutifully stored and available for inspection, the call of duty (which is the stern daughter of the voice of God) has been heard and obeyed.

This is, of course, what happened – mutatis mutandis – in the case of Haringey children’s services.

They received, just after the horrific death of Baby P, a commendable Ofsted report. Processes were in order. Everything requiring to be done under regulation of Type A had been done.

The baby was dead – ah yes, a tragic error. But the REGULATION had been observed.

Much the same applies in the case of the over-lending and complex derivatives which are one of the main causes of Labour’s current debt crisis. The FSA – bless its cotton socks – had been studiously applying rule-based regulation. And the rules had been observed.  The procedures had been followed.

The entire financial system was put at severe risk? Well, yes. But that was a mere lacuna. The REGULATION had been complied with.

Proponents of Type A regulation have a touching faith that following the processes mandated in the rules will somehow guarantee the results which the rules are designed to deliver. But, of course, there is no such guarantee in practice. Following a given set of rules will produce the expected results if, but only if, the activity in question is very simple and the rules are very well judged.

In general, the activities we most want to regulate – banking, looking after children at risk, flying airplanes, cutting people up on the operating table and so forth – are not simple at all, and devising rules that will guarantee results in these complex activities is well-nigh impossible.

Hence, the need for regulation of Type B.

In Type B regulation, the regulator supervises the activity in question on the basis not of rules but of professional competence. Type B regulation is not rules-based but JUDGMENT-BASED.

A classic case of Type B regulation was Victorian school inspection. The school inspectors in those days did not require large volumes of paperwork to be produced by the schools they visited. They did not inspect the processes employed by the teachers. Instead, they inspected the children, hearing them say their lessons. If the inspector thought the children knew what they ought to know, given their abilities and ages, then all was well. If not, not.

No rules. No processes. Just a judgment of the outcomes.

It was much the same in the good old days before 1997, when Mr Brown hadn’t yet deprived the Bank of England of the power to supervise the banks. The main instrument of regulation was the Governor’s eyebrow. If, in his judgment (based on the judgment of his colleagues who were respected banking professionals) a given commercial bank was taking excessive risk, the Governor’s eyebrow would be raised – and the risky practice would be discontinued.

No rules. No processes. Just a professional judgment of the risk.

In Type B (judgment-based) regulation, what counts is the ability of the professionals engaged in the regulated activity to satisfy the fellow-professionals doing the regulating that they are properly living up to their professional responsibilities.

By contrast, in Type A (rule-based) regulation, what counts is the ability of the professionals engaged in the regulated activity to tick all the boxes on the questionnaire sent out by the computers of the regulator.

This is what helps to explain both the conceptual mistake that Labour has made about regulation and the reason why that mistake has generated, at one and the same time, over-regulation and under-regulation.

The conceptual mistake is very simple. It consists of confusing Type A regulation with Type B regulation.

Every time there is a call for something to be regulated, the Labour Government leaps into the fray – with new rule-based (Type A) regulation that specifies more processes that must or must not be followed.

And, every time, Labour ministers imagine that they are thereby somehow going to affect, in some determinate way, whether the professionals engaged in the regulated activity are properly fulfilling their professional responsibilities.

But, of course, there is in practice no particular reason why mandating processes in a complex activity should generally be expected to produce results similar to Type B regulation – where suitably qualified professionals in the regulatory bodies make judgments about whether the professionals in the field are living up to their professional responsibilities in an effective way.

Neither form of regulation can produce the innovation or pressure for excellence that come only from contest and competition.

Nor can either form of regulation create the sense of duty, the sense of professional ethics, which are the only true and sustainable basis for connecting professional responsibility with social responsibility.

And, of course, there is no guarantee that any form of regulation will be perfect even in its own terms. Rule-based regulation will not produce 100 per cent compliance with the rules; and judgement-based regulation is only as good as the judgment of the regulators.

But, for all that, there is a decisive difference between Type A regulation which dwells on rules and processes, and Type B regulation which dwells on judgment.

Judging professional performance can help to draw attention to poor professional performance, and can thereby help to prevent continuing disasters.

The last eleven years in Britain have provided ample evidence that mandating processes, by contrast, will generally do nothing more than make people follow those processes – often with little or no beneficial effect on outcomes.

But we must add one rider.

Process-based (Type A) regulation may well make things substantially worse.

Indeed, the howls of protest now emanating from all those doctors and nurses, teachers and police officers, business people, charity trustees and farmers, are essentially howls of protest about the distorting effects of excessive Type A regulation.

When processes are mandated, the scope for professional responsibility is diminished – because the time and energy that the professional might otherwise devote to fulfilling his or her professional responsibilities is reduced by the amount of time and effort that has to go into adhering to the mandated processes.

Public choice theory teaches us what common sense in any case indicates – that people in important positions do what the system gives them incentives to do. If the system of regulation gives them incentives to adhere to processes, they will adhere to processes – even if that means suspending their professional judgment.

And this is how the present Government has created the miracle of too much regulation becoming, at one and the same time, too little regulation.

As the amount of Type A, rule-based regulation expands, the amount of process-following and box-ticking rises and the amount of professional responsibility exercised by the professionals in the field diminishes. In the absence of much Type B, judgment-based regulation, no-one notices that decline in professional responsibility – until, all of a sudden, there is a crisis and you wake up to find that (despite all the burdens of following mandatory processes) the activity in question displays the classic symptoms of under-regulation.

Let me end with a little morality tale drawn from real life.

It concerns farmers.

More particularly, it concerns farmers near rivers and streams that are vulnerable to nitrates pollution.

Those (many) farmers who combine high professional standards with a high conception of their social and environmental responsibilities know very well that they should not distribute slurry on land near to rivers on wet days.

But our dearly beloved European Commission and our dearly beloved Department of Environment, Food and Rural Affairs decided that regulation must be introduced to protect these nitrate-vulnerable zones.

What was the reaction?

Search out old hands who could go and use their professional judgment to come down like a ton of bricks on farmers who were recklessly polluting rivers on wet days?

Heaven forfend! That, after all, would be judgment-based Type B regulation.

No, this was a serious matter requiring serious measures from serious men.

Call for the Type A regulators.

Make rules.

And lo, rules were made. Processes designated. No tipping of slurry in certain (wet) months. All tipping of slurry to take place in other (dry) months.

But, cried the farmers, some days in dry months are wet and some days in wet months are dry. Let us take professional responsibility, and we will avoid tipping the slurry when it would pollute the rivers. Come down on us like a ton of bricks if we do pollute the rivers, but let us choose the dates for the slurry.

Alas, the farmers were unaware that they were facing a Government in the grip of a theory.

Only rules and processes were on the menu. Judgments were off.

So there are now, by decree (and largely unnoticed by the almighty), wet months and dry months. And the slurry is being stored in great stores every day in the wet months (including the dry days) and it is being distributed over the fields in huge quantities every day in the dry months (including the wet days); and the process is being adhered to; and the boxes are being ticked; but the farmers are bearing huge new costs of storing slurry and I’ll bet you anything you like that the pollution is not being much reduced, or even – in some cases – that it is being made worse.

And that’s what happens when you get in a muddle about the difference between different types of regulation.

You end up with too much regulation of the wrong kind and too little regulation of the right kind.

Below is the text of the speech made by Oliver Letwin to the Policy Exchange on 27th January 2009.

Arguably, the biggest failures of the last eleven years have been failures of regulation. Some of these failures have been failures of under-regulation.

Notoriously, bank lending has been under-regulated. Equitable Life was under-regulated. Haringey children’s services department has been under-regulated.

But other failures have been failures of over-regulation.

Doctors, nurses, teachers and police officers all complain about being over-regulated.

Small businesses and voluntary groups are screaming about being over-regulated.

And farmers are being driven mad by over regulation.

How come there is both over-regulation of some things and under-regulation of others?

Superficial answers abound. ‘The Government has its eye on the wrong balls’. ‘It all depends on the tabloid headlines’. ‘Some things are more difficult to regulate than others’. ‘Some things are easier to over-regulate than others’.

But all of these superficial answers miss a deeper point …

… Labour’s failures of under-regulation stem from exactly the same conceptual mistake as Labour’s failures of over-regulation.

Indeed, in many cases, over-regulation of Type A has actually caused under-regulation of Type B.

What are these two types of regulation?

And what is the conceptual mistake that has led both to over-regulation of Type A and to under-regulation of Type B?

First, the two types of regulation:

Type A regulation is RULE-BASED. It has the form (often also the legal character) of law.

Like any other rule-based system, Type A regulation prohibits certain actions and mandates others.

So, for example, the Type A regulation of money-laundering forces every bank and building society to do certain things when a new client seeks to open an account. Passports are to be inspected, the addresses of grandmothers written down, and so forth. In the absence of such procedures, the Type A regulation prohibits a new account being established.

Whether the things that are commanded actually have any effect on the amount of money-laundering is not a concern for the clerks and managers who are compelled to keep these records. As long as the records are amassed, dutifully stored and available for inspection, the call of duty (which is the stern daughter of the voice of God) has been heard and obeyed.

This is, of course, what happened – mutatis mutandis – in the case of Haringey children’s services.

They received, just after the horrific death of Baby P, a commendable Ofsted report. Processes were in order. Everything requiring to be done under regulation of Type A had been done.

The baby was dead – ah yes, a tragic error. But the REGULATION had been observed.

Much the same applies in the case of the over-lending and complex derivatives which are one of the main causes of Labour’s current debt crisis. The FSA – bless its cotton socks – had been studiously applying rule-based regulation. And the rules had been observed.  The procedures had been followed.

The entire financial system was put at severe risk? Well, yes. But that was a mere lacuna. The REGULATION had been complied with.

Proponents of Type A regulation have a touching faith that following the processes mandated in the rules will somehow guarantee the results which the rules are designed to deliver. But, of course, there is no such guarantee in practice. Following a given set of rules will produce the expected results if, but only if, the activity in question is very simple and the rules are very well judged.

In general, the activities we most want to regulate – banking, looking after children at risk, flying airplanes, cutting people up on the operating table and so forth – are not simple at all, and devising rules that will guarantee results in these complex activities is well-nigh impossible.

Hence, the need for regulation of Type B.

In Type B regulation, the regulator supervises the activity in question on the basis not of rules but of professional competence. Type B regulation is not rules-based but JUDGMENT-BASED.

A classic case of Type B regulation was Victorian school inspection. The school inspectors in those days did not require large volumes of paperwork to be produced by the schools they visited. They did not inspect the processes employed by the teachers. Instead, they inspected the children, hearing them say their lessons. If the inspector thought the children knew what they ought to know, given their abilities and ages, then all was well. If not, not.

No rules. No processes. Just a judgment of the outcomes.

It was much the same in the good old days before 1997, when Mr Brown hadn’t yet deprived the Bank of England of the power to supervise the banks. The main instrument of regulation was the Governor’s eyebrow. If, in his judgment (based on the judgment of his colleagues who were respected banking professionals) a given commercial bank was taking excessive risk, the Governor’s eyebrow would be raised – and the risky practice would be discontinued.

No rules. No processes. Just a professional judgment of the risk.

In Type B (judgment-based) regulation, what counts is the ability of the professionals engaged in the regulated activity to satisfy the fellow-professionals doing the regulating that they are properly living up to their professional responsibilities.

By contrast, in Type A (rule-based) regulation, what counts is the ability of the professionals engaged in the regulated activity to tick all the boxes on the questionnaire sent out by the computers of the regulator.

This is what helps to explain both the conceptual mistake that Labour has made about regulation and the reason why that mistake has generated, at one and the same time, over-regulation and under-regulation.

The conceptual mistake is very simple. It consists of confusing Type A regulation with Type B regulation.

Every time there is a call for something to be regulated, the Labour Government leaps into the fray – with new rule-based (Type A) regulation that specifies more processes that must or must not be followed.

And, every time, Labour ministers imagine that they are thereby somehow going to affect, in some determinate way, whether the professionals engaged in the regulated activity are properly fulfilling their professional responsibilities.

But, of course, there is in practice no particular reason why mandating processes in a complex activity should generally be expected to produce results similar to Type B regulation – where suitably qualified professionals in the regulatory bodies make judgments about whether the professionals in the field are living up to their professional responsibilities in an effective way.

Neither form of regulation can produce the innovation or pressure for excellence that come only from contest and competition.

Nor can either form of regulation create the sense of duty, the sense of professional ethics, which are the only true and sustainable basis for connecting professional responsibility with social responsibility.

And, of course, there is no guarantee that any form of regulation will be perfect even in its own terms. Rule-based regulation will not produce 100 per cent compliance with the rules; and judgement-based regulation is only as good as the judgment of the regulators.

But, for all that, there is a decisive difference between Type A regulation which dwells on rules and processes, and Type B regulation which dwells on judgment.

Judging professional performance can help to draw attention to poor professional performance, and can thereby help to prevent continuing disasters.

The last eleven years in Britain have provided ample evidence that mandating processes, by contrast, will generally do nothing more than make people follow those processes – often with little or no beneficial effect on outcomes.

But we must add one rider.

Process-based (Type A) regulation may well make things substantially worse.

Indeed, the howls of protest now emanating from all those doctors and nurses, teachers and police officers, business people, charity trustees and farmers, are essentially howls of protest about the distorting effects of excessive Type A regulation.

When processes are mandated, the scope for professional responsibility is diminished – because the time and energy that the professional might otherwise devote to fulfilling his or her professional responsibilities is reduced by the amount of time and effort that has to go into adhering to the mandated processes.

Public choice theory teaches us what common sense in any case indicates – that people in important positions do what the system gives them incentives to do. If the system of regulation gives them incentives to adhere to processes, they will adhere to processes – even if that means suspending their professional judgment.

And this is how the present Government has created the miracle of too much regulation becoming, at one and the same time, too little regulation.

As the amount of Type A, rule-based regulation expands, the amount of process-following and box-ticking rises and the amount of professional responsibility exercised by the professionals in the field diminishes. In the absence of much Type B, judgment-based regulation, no-one notices that decline in professional responsibility – until, all of a sudden, there is a crisis and you wake up to find that (despite all the burdens of following mandatory processes) the activity in question displays the classic symptoms of under-regulation.

Let me end with a little morality tale drawn from real life.

It concerns farmers.

More particularly, it concerns farmers near rivers and streams that are vulnerable to nitrates pollution.

Those (many) farmers who combine high professional standards with a high conception of their social and environmental responsibilities know very well that they should not distribute slurry on land near to rivers on wet days.

But our dearly beloved European Commission and our dearly beloved Department of Environment, Food and Rural Affairs decided that regulation must be introduced to protect these nitrate-vulnerable zones.

What was the reaction?

Search out old hands who could go and use their professional judgment to come down like a ton of bricks on farmers who were recklessly polluting rivers on wet days?

Heaven forfend! That, after all, would be judgment-based Type B regulation.

No, this was a serious matter requiring serious measures from serious men.

Call for the Type A regulators.

Make rules.

And lo, rules were made. Processes designated. No tipping of slurry in certain (wet) months. All tipping of slurry to take place in other (dry) months.

But, cried the farmers, some days in dry months are wet and some days in wet months are dry. Let us take professional responsibility, and we will avoid tipping the slurry when it would pollute the rivers. Come down on us like a ton of bricks if we do pollute the rivers, but let us choose the dates for the slurry.

Alas, the farmers were unaware that they were facing a Government in the grip of a theory.

Only rules and processes were on the menu. Judgments were off.

So there are now, by decree (and largely unnoticed by the almighty), wet months and dry months. And the slurry is being stored in great stores every day in the wet months (including the dry days) and it is being distributed over the fields in huge quantities every day in the dry months (including the wet days); and the process is being adhered to; and the boxes are being ticked; but the farmers are bearing huge new costs of storing slurry and I’ll bet you anything you like that the pollution is not being much reduced, or even – in some cases – that it is being made worse.

And that’s what happens when you get in a muddle about the difference between different types of regulation.

You end up with too much regulation of the wrong kind and too little regulation of the right kind.

Below is the text of the speech made by Oliver Letwin on 8th May 2007.

Do Cameron Conservatives have a theory?

This is not, of course, the same as asking whether Cameron Conservatism is theory-driven.

Like any distinctively Conservative discourse, Cameron Conservatism is radically pragmatic rather than radically dogmatic. It is a practical response to felt need – a balanced answer to what are understood to be real and present challenges.

But a political position which is not theory-driven, (which, indeed, is profoundly sceptical of theory as a guide to political action) may nevertheless disclose deep theoretical dispositions – distinctive patterns of thought which, through their internal coherence, lend strength to pragmatic responses as these come under attack in the battle of ideas and strengthen also the unity of purpose displayed when pragmatically tackling the perceived real-world challenges.

In this sense, then, I repeat my question, do Cameron Conservatives have a theory?

And my answer, in that same sense, is yes. The pragmatic responses of Cameron Conservatism to perceived real-world challenges do disclose a set of coherent theoretical dispositions.

In particular, Cameron Conservatism is an attempt to achieve two paradigm shifts – a shift in the locus of political debate and a shift in the theory of the state.

First, it is an attempt to shift the locus of debate from an econo-centric paradigm to a socio-centric paradigm.

Second, it is an attempt to shift the theory of the state from a provision-based paradigm to a framework-based paradigm, within which government (apart from its perennial role in guaranteeing security and stability)…

is conceived principally as an agency for enabling individuals, families, associations and corporations to internalise externalities and hence to live up to social responsibilities without the further intervention of authority.

This concise description of the theory is inevitably both dense and unfamiliar.

Let me now unpack it, employing a somewhat more perspicuous and familiar idiom.

But before I do so, let me offer you what is sometimes called a meta-thought or a second-order observation.

There is a reason why I have been using this ridiculous, high-falutin language.

I want to make the point that ridiculous high-falutin language is not the sole prerogative of Gordon Brown with his post neo-classical endogenous growth theory…

Nor of David Miliband with his “emphasis on the value of equality and solidarity…supplemented by renewed commitment to the extension of personal autonomy in an increasingly interdependent world”.

You shouldn’t think that, just because someone uses complicated words, they have a coherent theory. And you shouldn’t think that, just because someone tries, most of the time to speak in plain English, they don’t have a theory.

Cameron Conservatives have a strong attachment to plain English. That is because we think that it is easier to think clearly in clear language. But this has misled some people who think that theories come in complicated language to think we haven’t got one.

And my point is that, despite our general preference for plain language, we do have a theory. It can be expressed (as I have just expressed it) in complicated language. It can also be expressed (as I am about to do) in much simpler terms.

So what do I mean by Cameron Conservatism being an attempt to shift the locus of debate from an econo-centric paradigm to a socio-centric paradigm?

It all goes back to Marx.

Before Marx, politics was multi-dimensional – constitutional, social, environmental as well as economic. But Marx changed all that. The real triumph of Marxism consisted in the way that it defined the preoccupations not only of its supporters but also of its opponents.

After Marx, socialists defended socialism and free marketeers defended capitalism. For both sides, the centrepiece of the debate was the system of economic management. Politics became econo-centric.

But, as we begin the 21st century, things have changed. Since Thatcher, and despite recent recurrences of something like full-blooded socialism in some parts of Latin America, the capitalist/socialist debate has in general ceased to dominate modern politics. From Beijing to Brussels, the free market has won the battle of economic ideas.

Victories like this often cause a hiatus in political thought. And the transition to a post-Marxist politics caused just such a hiatus.

For several years, politicians have been wandering round in the mist, trying to discern the shape of a new politics more suited to an age in which socialism and capitalism no longer vie for acceptance.

After war, the peace is sometimes more difficult for the victors than for the vanquished. So it was in this ideological war. Peace proved particularly difficult for British Conservatives – the very group that had raised the battle-standard and led the global army of the free market to victory.

But, after a decade of disarray and enforced reflection on the part of the British Conservative Party, an answer has emerged. Cameron Conservatives have recognised the profound consequences of the fact that we have entered a post-Marxist era. Politics – once econo-centric – must now become socio-centric.

If the free market is a matter of consensus, the debate must change its nature. Instead of arguing about systems of economic management, we have to discuss how to make better lives out of the prosperity generated by the free market. Growth in well-being hasn’t kept pace with growth in domestic product.

At the recent Conservative Spring Forum, I chaired a discussion about the work of our six policy groups. Afterwards, a senior party official – who had taken time off from his arduous administrative responsibilities to listen to the discussion – approached me to say that he had now understood what we were up to. “Instead of economics”, he said, “it’s now about the whole way we live our lives”.

Bull’s eye.

Instead of being about economics, politics in a post-Marxist age is about the whole way we live our lives; it is about society.

Politics today is socio-centric.

The first theoretical advance (the first paradigm shift) of Cameron-Conservatism is to see that fact clearly – to refocus the debate, to change the terms of political trade, to ask a different set of questions.

As David Cameron put it in his speech to the same Spring Forum:

“It’s not economic breakdown that Britain now faces, but social breakdown. Not businesses that aren’t delivering, but public services. Not rampant inflation but rampant crime, disorder and anti-social behaviour. Not irresponsible unions – it’s irresponsible parents…

And as a recent report from UNICEF showed – a report which put Britain at the bottom of the international league table for the well-being of children – it’s not that Britain is the sick man of Europe; we’re becoming the sick family of Europe…The mission of the modern Conservative Party, could not be clearer. It is to bring about Britain’s social revival: to improve the quality of life for everyone in our country, increasing our well-being, not just our wealth.”

So far, I hope, so clear.

But what do I mean by saying that Cameron Conservatism is also “an attempt to shift the theory of the state from a provision-based paradigm to a framework-based paradigm, within which government (apart from its perennial role in guaranteeing security and stability)…

is conceived principally as an agency for enabling individuals, families, associations and corporations to internalise externalities and hence to live up to social responsibilities without the further intervention of authority?”

Here, we move from the focus of the debate to the arguments on each side of the refocused debate – from the nature of the question to the nature of the answer.

And, first, we have to attend to the meaning of the provision-theory of the modern state.

This is the successor to socialism in the post-Marxist era. It is, in British terms, the essence of Gordon Brown’s version of New Labour.

The provision-theory accepts the free market as the engine of economic growth. But, just as Clause 4 socialism once saw the state as the proper provider of goods and services through ownership of the means of production, so the provision-theorists of Brownian New Labour see the state as the proper provider of public services and of well-being through direction and control.

The tell-tale marks of provision-theory are to be seen in much of the record of the last ten years – the targets and directives, the reorganisations, schemes and initiatives. Direct government intervention has been brought – with the best of intentions, though often with notable lack of practical success – to bear on schools and hospitals, police officers and neighbourhoods, local authorities and universities…

The state has been seen as the source of enlightened social action, just as it was once seen as the source of enlightened economic action.

The Cameron Conservative framework-theory of the state is fundamentally different. It takes the same place in the socio-centric political debate of the twenty-first century that free market theory once took before it triumphed in, and hence outdated, the econo-centric debate of the twentieth century.

The framework theory of the modern state sees government as having two fundamental roles: to guarantee the stability and security upon which, by common consent, both the free market and well-being depend; and, much more controversially, to establish a framework…

of support and incentive which enables and induces individual citizens and organisations to act in ways that fulfil not merely their own self-interested ambitions but also their wider social responsibilities.

It is in emphasising this second duty of government that Cameron Conservatism distinguishes itself radically from the provision-theory of Brownian New Labour.

Cameron Conservatism puts no faith in central direction and control. Instead, it seeks to identify externalities (social and environmental responsibilities) that participants in the free market are likely to neglect, and then seeks to establish frameworks that will lead people and organisations to internalise those externalities – to act of their own volition in ways that will improve society by increasing general well being.

The intuitions about human nature that underpin this framework-theory of the modern state in twenty-first century post-Marxist socio-centric politics are unsurprisingly the same as the intuitions about human nature that underpinned free market theory in twentieth century econo-centric politics.

The first intuition is that human enterprise, initiative, vocation and morale are the things that lead to progress and sustainable success in the socio-environmental sphere, just as in the economic sphere. The second, allied intuition is that command and control systems eventually fall under their own weight because they stifle enterprise, initiative, vocation and morale.

And the third intuition is that a framework which leads people to internalise their social responsibilities and to fulfil those responsibilities of their own volition in their own ways is accordingly a much more powerful engine for sustained socio-environmental success than direct government control.

Will the framework-theory based on these liberal conservative intuitions come in time to win the battle of ideas in socio-centric politics as comprehensively as its precursor, liberal conservative free market theory, did in the old econo-centric political debates?

It is too early to tell.

But one thing at least is clear. Cameron Conservatives have both an analysis of the nature of twenty-first century politics and a theory of the role of the modern state.

To win a battle of ideas is always a hard task. But having an idea is certainly a good starting-point.

Below is the text of the speech made by Oliver Letwin at the 2003 Conservative Spring Conference on 16th March 2003.

On our minds today, we have two great matters: the war with Iraq and the threat of terrorism in this country. But we cannot allow these matters to prevent us from considering the abiding problems of our society – in particular, the problems of crime and disorder. Just as Rab Butler took his great Education Act through Parliament in 1944, against the backdrop of war, so, we, today, must attend to the nature of our society, notwithstanding the dangers in which we find ourselves.

2003 did not begin well for Britain.

It began with a tragedy.

On New Years Day two teenage cousins Letisha Shakespeare and Charlene Ellis – out at a party in Birmingham – died in a hail of sub machinegun fire.

Alas, this was not an isolated incident.

Gun crime has risen; violent crime has risen; burglary has risen; drug offences have risen; and criminals contemplating a crime know they have only a 3% chance of being caught and convicted.

In almost every sphere of criminality it is the criminal that is winning.

What kind of country are we now becoming?

We are facing a retreat from civilised values.

Things happened yesterday that didn’t happen last year. Things happened last year that didn’t happen ten years ago.

First fists, then knives, then guns. First pot, then smack, then crack. First cities, then towns, then villages. First men, then women, and then children.

Only a few years ago we were worried about knives. Now we are worried about sub machine guns.

In some of our inner city estates, those who can get out do so. The poor, the old, the weak retreat from parks and playgrounds, from streets and shopping areas to live behind closed doors.

But, despite this crisis of criminality, despite the retreat from civilisation that is occurring in many of our most vulnerable neighbourhoods, I am still optimistic we can turn back the tide.

Across the country, I have met and seen remarkable individuals who are determined to reduce crime on their estates.

These are individuals who refuse to give up. We Conservatives must do everything we can to support them.

I want to tell you this morning about some of these people.

Recently, I visited Handsworth in Birmingham where I met two groups, Parents United and the Partnership Against Crime. These groups were set up in response to the shootings in Aston. They are determined to work with local churches to draw their young people away from the gun culture and off the conveyer belt to crime.

They are doing everything possible to ensure that the tragedy that befell the families of Letisha Shakespeare and Charlene Ellis does not happen to another family.

Recently I also went to the Clarence Way Estate in Camden, North London. This is an Estate riddled with drug users, dealers and drug related prostitution. Residents often have to step through needles, excrement and vomit just to get out of their front door. Young children see addicts injecting in front of them on their way to school, as often as other luckier children might see their friends on swings in a park.

The whole Estate has just one part time WPC who manages to patrol every Tuesday, Wednesday and every other Saturday. I doubt that the drug-dealers wait politely to let her arrest them when she arrives!

I am not sure that the drug dealers regard the police as having a right to be on the estate. When I was there, I saw at first hand drug addicts waiting for their next drop and dealers providing it. They even shouted at us to move on as we were on their “territory”.

I was told of a man who lives in the block and is a leaseholder. He hasn’ t seen his daughter for three years because she is too afraid to make her way through the drug addicts on every corner. He has had excrement and firebombs put through his letterbox because he had the temerity to ask the drug addicts to get away from the outside of his front door. The police couldn’t deal with it because they were tied up with other crimes in the area, or as it was described “with paperwork”.

Mental torture is not too strong a term for this man who suffers day in, day out, for months, for years.

This is an Estate which has been virtually taken over by the forces of criminality…

Almost.

I say “almost” because of the efforts of a remarkable woman, Silla Carron who lives on the Estate.

Almost single handedly she has worked hard to make her Estate a better place to live. She has established a Tenants Association and she has organised petitions for more police on her Estate. Through vigorous campaigning she has secured funding for a dog patrol that provides some safety on the estate.

When Silla Carron decided to do something about her estate, nobody told her to do this.

She did it out of a sense of service and responsibility to her family and neighbours.

You can’t teach good neighbourliness from on high or for that matter from Downing Street.

This is something the Home Secretary doesn’t understand. He is well intentioned. He talks tough. But he delivers very little.

Every time there is a crisis, every criminal outrage we face, Mr Blunkett responds with initiatives and targets, ably designed to create favourable newspaper headlines to show that he is doing something.

He thinks that every problem can be controlled by pressing buttons at his desk in Queen Anne’s Gate.

But, what is really needed, is to find ways to encourage and motivate the networks of individuals, families and community associations that are doing their best to keep their neighbourly society alive.

Over 5 years we have had over sixteen Criminal Justice Bills and over 100 initiatives. We have had targets galore. But the targets have not been met. Targets for recorded crime, for class A drugs and for reducing robbery have been missed. Other targets on drugs, vehicle crime, burglary and asylum have gone missing altogether.

Then there are the inevitable “summits” at the Home Office and Downing Street.

An American philosopher George Santayana once said:

“trust the man who hesitates in his speech and is quick and steady in action. But beware of long arguments and long beards”.

Thinking of David Blunkett, I agree.

It is time he was reminded of that old proverb “saying is one thing, doing another”.

All this tough talk by the Home Secretary impresses for a while. The problem is that the failure to deliver in the long run breeds at best cynicism and at worse despair.

If we are not careful, the public will turn away from traditional politicians to local, dangerous extremists whose only appeal is that they are ‘outsiders’ and offer quick and simplistic solutions. Their success will cause immense damage to the fabric of our society.

That is why all of us have to work hard to ensure that the success of the BNP in some towns in the North is not replicated across the country.

We face the threat of ever growing apathy and of ever-decreasing turnouts at elections. We face the danger of ever-increasing support for the kind of people who want to make this country a nasty and brutish place to live.

We must not and we will not allow the contrast between rhetoric and the Government’s reality to be exploited by such people.

Nowhere is that contrast between rhetoric and reality greater than in the case of asylum.

Britain has lost control of her borders. Last year a record 110,000 people sought asylum here – the highest number in Europe. Of these, just 8,000 and their dependents were judged to be genuine refugees.

Yet of the tens of thousands who were turned down, a mere 3,000 were removed from the country.

The whole system is in chaos.

David Blunkett’s response to this problem has been the same again: talk tough but do very little.

Now we have the implausible spectacle of the Prime Minister, clearly under pressure, pledging to halve the numbers of asylum seekers by September. Unless the Government intend to manipulate the statistics by issuing in-country work permits or visas without restrictions on work to people who would otherwise claim asylum, this is a very rash promise indeed.

A future Conservative Government will scrap our entire asylum system.

We will replace it with a system of rational quotas for genuine refugees. We will accept around 20,000 refugees in a quota identified offshore with the help of the United Nations High Commission for Refugees. That 20,000 is larger than the number of genuine refugees admitted each year at present, but only one-fifth of the number of people currently using our asylum system to enter the country.

Conservatives are determined to end the asylum chaos. We can no longer tolerate a system in which the genuine refugee, sometimes suffering from the most horrific persecution, is pushed way down the queue by those who are brought here frequently by people traffickers, to seek economic security.

We can no longer support a system on which the taxpayer is spending £1,800 million a year. The quota system eliminates the need for asylum centres and costly processing. There will be no need for processing here because those within the quota will already have been identified as genuine refugees in refugee camps overseas. All those who arrive illegally and outside the quota will be removed. Our scarce financial resources could be better spent elsewhere.

And I have a clear idea – which I am glad to say I share with the Shadow Chancellor – about where the money we save on the asylum system could and should be spent.

We will spend it on the police.

I know very well that policing is not the whole answer to the breakdown of order.

That is why we have set out a range of policies that will offer long-term solutions to crime rather than quick fixes.

For over fifteen months we have been meeting and consulting with hundreds of experts and practitioners in the field. We have travelled to America and countries across Europe visiting prisons, young offenders institutions, drug offender projects and neighbourhood policing schemes. In Bournemouth last October I set out to you the direction of our policy.

We are determined to tackle crime at its source by lifting young people off the Conveyer Belt to Crime. We will intervene early when children show signs of disruptive behaviour, giving support to parents struggling to provide necessary authority and guidance. We will tackle persistent young offenders by providing for longer but more constructive custodial sentences, in which there is an intensive effort to rehabilitate and in which support continues long after they have been released. And we will focus effort on getting children off heroin and crack cocaine, providing a choice for every addict between compulsory, intensive treatment and rehabilitation or the penal system.

But before we can do any of these things effectively, we have to reclaim our streets for the honest citizen.

We have to ensure that once again police become the custodians of our neighbourhoods and the guarantors of authority and order.

We can do this only by putting police on the streets where they can apprehend criminals and deal with social disorder.

Often politicians promise more police on the beat but the reality is empty. The Government have been doing this for the past six years.

It is time for real policemen and real neighbourhood policing.

That is why I make this pledge to you today that the next Conservative Government will increase police numbers by 40,000.

That is 5,000 extra police officers a year over eight years.

This commitment will cost money.

For those of you wondering where we will get the money from, let me reassure you: I have never been a serial spender! And I do not intend to start now.

As I mentioned to you a moment ago, Britain pays a heavy price for the shambles on asylum.

Total spending on asylum seekers is now – I remind you – £1.8 billion a year. This is a crazy figure given that most of the cash goes on those who are not genuine refugees.

Were we to have an efficient and working system we could make significant savings on this amount and spend it where it is needed the most: waging the battle against ever rising crime by having tens of thousands more policemen on our streets.

Our strict quota system for refugees will in due course save more than £1.3 billion a year. We know that, because the Australian quota system shows how much such an arrangement costs.

These savings will allow us to provide 5,000 extra police officers a year, starting one year into the next Conservative Government. And amazingly enough we will have money left in the bank.

Our proposals will enable our chief constables to put police officers back onto the streets in every Parish and neighbourhood across Britain.

A long time ago, the Prime Minister promised to be tough on crime and tough on the causes of crime.

The truth is that under Labour there has been very little serious, concerted and effective action to achieve a long-term change in the level of crime.

There are no coherent and focused programmes to take young people off the conveyer belt to crime. There are no substantive measures to get people off hard drugs. There are no efforts to recapture the streets through real and sustained neighbourhood policing.

The Government have missed an opportunity to get to grips with crime.

It is time to offer a real alternative.