Winner of the New Statesman SPERI Prize in Political Economy 2016

Saturday 25 May 2019

On the use, or not, of expertise by government

I will write some thoughts, next week when I have had a chance to collect them, following an excellent PEF book launch two days ago, with great discussion from Ann Pettifor, Aeron Davis and Maya Goodfellow and a packed audience. In the meantime, as spring turns to summer, I wanted to write about something else.

In a recent post I ask why we were governed by incompetents, and I related that to ideology, which in recent times means neoliberalism. But I think it is a little more than working in a neoliberal context, because I say that the Labour government often did try and do evidence based policy. Not always. I mentioned Iraq but there are other examples, but in comparison to Conservative governments they did evidence based policy a lot. The difference is while the Conservatives had neoliberal zeal, Labour were prepared to intervene in the market, particularly to help the poor. A good example was the minimum wage, which was set by a specific body who aimed to keep it at a level that did not cause significant employment loss.

The Coalition government of 2010-5 contained Liberal Democrats who did often check the neoliberal zeal of Conservative ministers. But they often failed to do so, and one example was abolishing the Agricultural Wages Board (AWB) in England. (The rest of the UK kept them.). It was part of their programme to abolish red tape. The argument was that although Thatcher had spared the AWB in her bonfire of wages boards, the minimum wage made it redundant.

I have spent a lot of my life on or near farms. When we moved from London to rural Sussex some 36 years ago I still remember vividly two conversations. One was with a farm worker. I had already noticed the unsocial hours they regularly worked, and I asked him about it. He told me how when his son was born he worked so much that he hardly saw her during the first three months. It was just a bad time of year from the farm's point of view. I guess I remember that conversation so well because we had quite recently had our first child.

What the AWB did and what the minimum wage doesn’t is regulate pay for anti-social of excessive hours. But what about market pressure from labour scarcity? The other conversation I remember was with the owner of the same farm. He was complaining about how hard it was to get additional labour when he needed it. He told me how far he had advertised but it was still difficult. I suggested he try raising his hourly wage. He laughed and said he couldn’t possibly. Those in his local farmers group would stop speaking to him if he did that.

Farming is a classic monopsony, where firms can fix wages well below the market clearing level. The ability of farm workers to find work elsewhere is limited, particularly when employers operate a cartel on wages. The farm I lived on back then was typical: I have watched farm workers working late at night and weekends everywhere I have lived near farms.

Abolishing the AWB allowed farm owners not to increase in nominal terms payments for anti-social or overtime hours on existing contracts, such that they gradually wither away in real terms. It allows farmers not to offer any of these type of payments on new contracts. Some farmers may even have tried to abolish these payments on existing contracts. The governments impact assessment calculated that AWB abolition would lead to a substantial transfer of income from farm workers to farm owners.

I wrote about the abolishing the AWB in 2014. I later had a conversation with a SPAD about their decision. He told me the level of analysis in my post was well above anything he had seen in government when the decision was made. You might think the policy was not surprising from Conservatives, who have a close relationship with the National Farmers Union (a farm owner’s club), but there was no attempt to get even the simplest of evidence, and a very short consultation period for this decision.

This illustrates a neoliberal zeal to abolish regulations, with the inevitable transfer of income from the poor to the rich, without even thinking about making a serious attempt to look at evidence on this issue. In the absence of evidence the LibDem Coalition partners chose not to fight a battle on this issue. Scotland, Wales and Northern Ireland have retained their AWBs. The Labour party opposition have pledged to reintroduce them in England.


  1. Do you know if anyone has done an analysis of the impact of removing the farm boards? With the right data it should be a relatively straightforward Card and Krueger type analysis, do you know if such data exist?

  2. Spot on. Since 2010 we have seen a shift away from the basically evidence based policy stance of Blair/Brown governments. It's a shift from policy based on evidence of how the world works to ideologically driven policy based on beliefs about how the world should work.

    For a specific example, contrast the approach to accountability and evaluation that applied to the RDAs with that now applied to local growth initiatives: "The Department’s accounting officer is accountable for the Local Growth Fund delivered through LEPs. However, the Department has made no effort to evaluate the value for money of nearly £12 billion in public funding, nor does it have robust plans to do so" NAO May 2019

  3. From PFI to Hospital Cleaning to poor bullying to their attempts at internment please don't excuse Labour the credit they demanded and deserve. Too much of what they did was rhetoric led [rhetoric for policy, analysis and justification] - "get another expert" Malcolm Tucker did not arise in a vacuum.

    They may not have been as nasty but we never got to see what happened after the Ponzi scheme ruptured in 07 08. The Lib Lab Con manifesto spending plans for 2010 were rounding error close for example - 8 Bn from memory.

    They did not in 6 years come up with analysis/rhetoric even against the economic absurdity of austerity. Ed Balls who stood alone it seemed arguing against it then about turned as Shadow Chancellor.

    Rose tints for LLG like now for Obama in US do not help. The denunciation of Brown would be better.

    For instance it took 10 years for Johnson to order a deep clean after the [insert word here I say murder but mundane bureacratic indifference generally escapes proper censure] of CDIFF MRSA. A friend reminds me in 97 I said 2 things will happen after the election the econ will be the same and the Hospitals will be cleaned - yeah I was no expert but..... I was wrong on one of those points, and indeed Clarke claims Labour spent less than he would in a drive for a surplus 97-01....

    I don't deny things are worse and the downbound train a steeper angle but let's not pretend.

  4. Isn't it funny how free enterprise capitalism only works for capital, whilst the rest of us can go to hell in a handcart.

    The farmer who said the rest of his farming community would not speak to him if he raised his wage levels to encourage workers to take up his employment offer, just goes to prove, that they can afford to pay more, but refuse because of personal greed.

    Which also reminds me of the Graph which shows productivity rises compared to incomes, where after the mid 1970s when Neo-Liberal wage restraint took hold, The very rich benefited with huge increases in wealth compared to average wage earners that remained virtually static.

    Neo-Liberal new Labour were as complicit as the Tories and Libdems for supporting the privatisation agenda, and blamed the unions for the failings of the capitalist system. The 'Orange Book' even spells out how the libdems would introduce co-payments and an insurance scheme in place of free at the point of use care.

    Anyone that understands money creation clearly understands the big lie that a country such as ours needs austerity measures to balance the budget. Clearly it doesn't even make sense to talk in terms of budgets, unless of course you believe that our country is just like a household. Which it is patently not!


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