Big Government on the Horizon

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Yesterday there were no less than three stories that indicated that the government would take steps to legislate to change their control or create control over areas of daily life. As ever government intervention can be a very blunt tool and more importantly have undesired unintended consequences.

The three areas where government are looking to intervene are, child care, soft drinks and football – you cannot get more random than that – but all are markets that are well established and either regulated or have self regulatory arrangements

Child care

Child care is already, as you would imaging, well regulated in the UK – but it is also more expensive than child care in many other EU states.  It is the cost of child care that is often put forwards as the reason for parents not being able to return to work – so the government is proposing to change the legislation controlling child care to try and reduce the costs.

Education Minister outlined the governments proposal at the think tank Policy Exchange, theses proposals are in response to the report “More great childcare – Raising quality and giving parents more choice.” published this month.

Currently there are strict controls on the ratios of staff to children in nurseries, these are sat present:

  • Under one and one-year-olds – 1:3
  • Two-year-olds – 1:4
  • Three-year-olds and above – 1:8 or 1:13 (teacher-led)

The government is proposing that these should be amended to:

  • Under one and one-year-olds 1:4
  • Two-year-olds – 1:6
  • Three-year-olds and above – 1:8 or 1:13 (teacher-led)

There are various arguments emerging for and against these changes – on the one hand it is said that the UK has the highest child care fees and that these changes would help lower the costs to encourage women back into work.  This is countered by concerns as to the safety of children and standards of care, however the government proposes these will be addressed by increased training and the requirements of qualifications.

BBC News story

Channel 4 – Childcare plans will hit standards

 Football

The Department of Culture, Media and Sport has been seeking the governing body of football to improve it’s governance and published it’s first report in July 2011. The Commons Select Committee for Culture, Media and Sport published “Follow-Up Report” on the 29th January 2013.  This process was set up as a response to concerns about the financial management of the support and concludes that the Football Association (FA) “was in need of urgent reform,”  This was based on the feeling that the Premier League clubs had too greater influence on the sport as a whole and the committee felt that since the 2011 report the FA had not gone far enough to address the issues raised.

The committee Chair, John Whittingdale, went on to say: “We recommend that the DCMS make it clear to the football authorities that further progress on these issues is expected within twelve months. If football cannot reform itself, the Government should introduce legislation as soon as practically possible.”

There was no response on the FA site (www.thefa.com) to this threat of government intervention  at the time of writing but in a Radio 4 interview an FA spokesman stressed  the football was an international business and needed to managed as such and that football actually contributed financially to the UK both with internal revenue and taxes and through exports.

BBC Story

Soft Drinks

Medical bodies are putting pressure on the government to increase the tax on soft drinks to curb demand for a product that is seen as being too high in sugar and a major contributor to the obesity problem we are seeing in the UK, particularly in children.  In response the industry body, the British Soft Drinks Association(BSDA) responded by pointing out that the self regulation and guidelines were working with 61% of soft drinks containing no added sugar and a reduction in pack size also limiting consumption.

However the medical evidence seems to be very strong that soft drinks are at the best not a good part of the any diet and potentially harmful, so it would seem a logical action by the government to use tax as an incentive to change behaviour as they do with alcohol and tobacco. However some would suggest that this could lead to taxation of other products that are high in sugar or fat and consequently accusations of the “Nannie state.”

BBC Story

Comment

I just found the juxtaposition of these three stories in the news very interesting – the conflict between the Laissezfaire approach of letting the markets decide and the need to control some key aspects of life.  However perhaps governments need to realise that the market has no morals and does not operate ethically – so government has a responsibility to govern.

I am concerned that changes in childcare will result in across the board benefits and inevitably disadvantaging the less well off, nurseries offering high cost care might pass on the savings and will already have very high standards.  In less well off areas there is a real danger that these measures will reduce standards of childcare for those that can least support it.

If there is evidence of financial irregularities in football – surely there is already legislation to deal with this.  I personally find it obscene that the average family wishing to support their local club cannot afford to take their children to the match – ticket prices are prohibitively expensive – but the FA are not concerned about empty seats they are far more interested in TV rights and the football royalty – I think if the FA are not prepared to make attending matches affordable the government should intervene – seeing the national game played live should be a right.

As to the soft drinks – we cannot on the one hand offer free health care and on the other not control behaviour that directly impacts on health and the only tool that a government should use is regulation and taxation.  I would be concerned if there was prohibition as this inevitably leads to activity outside controlled markets increasing, I know that it is hard to believe that children would be hiding in the garage drinking a cola drink spiked with sugar, but if there were a ban on sugar we would see producers using all manner of chemical in stead – so regulation and taxation – softly softly.

 

1 Comment

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