Saturday, 19 July 2008

It's time to cut this Gordian Knot

There are times when I imagine that Mervyn Peake was not the tortured author of the Titus books but the management consultant who designed large parts of our government system. The tottering structure is so complex that the wails of 'nothing can be cut' can almost be believed. The quangos find cushy board jobs for 18,500 Labour appointees, employ a further 95,000 staff and cost about £37bn a year. Looking at the list of NDPBs in isolation one can almost believe them to be indispensable.

So, let's just take a quick look at just one area of government regulation and intervention - food. I'm no expert in this area, and this tour d'horizon is the result of a quick skim through the bodies that come most readily to mind.

What do we absolutely need to do collectively? (i.e. that cannot be left to individuals, communities or the market) in relation to food? I'd suggest (a) food security issues at a national level - that we can grow, harvest or import enough food to feed the population (b) adulteration - that consumers are reasonably protected from being poisoned, or sold bread made from sawdust rather than flour. And that's about it. Production, distribution and sale can be left to the market. So what are we actually being charged for by the State?

(1) The Food Standards Agency, current annual cost £135,680,000, describes its purpose as 'to protect the public's health and consumer interests in relation to food'

(2) In addition, each local authority employs Environmental Health Officers to inspect and licence premises preparing, storing, selling or serving food. Say 450 local authorities employing 6 EHOs each on this work at a per capita cost of say £45k including pension and employer's NI - £121,500,000

(3) DEFRA - The Department for the Environment, Food and Rural Affairs - is a big one. Its gross annual budget is £3,936,750,000, but only £2,225,760,000 is for the Whitehall department itself. Since they do water and litter as well as food, say 35% of this is food related; £779,016,000

(4) Food-related Quangos, Agencies and NDPBs:

- School Food Trust
- Agricultural Wages Board for England and Wales
- Agricultural Wages Committees for England x 15
- British Potato Council
- Food from Britain
- Gangmasters Licensing Authority
- Home Grown Cereals Authority
- Horticulture Development Council
- Meat and Livestock Commission
- Milk Development Council
- Sea Fish Industry Authority
- Wine Standards Board
- Advisory Committee on Organic Standards
- Advisory Committee on Packaging
- Advisory Committee on Pesticides
- Agricultural Dwelling House Advisory Committees x 18
- Animal Health and Welfare Strategy England Implementation Group
- Committee of Investigation for Great Britain
- Committee on Agricultural Valuation
- Consumers’ Committee for Great Britain under the Agriculture Marketing Act 1958
- Farm Animal Welfare Council
- Hill Farming Advisory Committee for England, Wales and Northern Ireland
- Independent Agricultural Appeals Panel
- Independent Scientific Group on Cattle TB
- Spongiform Encephalopathy Advisory Committee
- Agricultural Land Tribunals
- Commons Commissioners
- Dairy Produce Quota Tribunal
- Plant Varieties and Seeds Tribunal
- Alcohol Education and Research Council
- Committee on Carcinogenicity of Chemicals in Food, Consumer Products and the Environment
- Committee on Mutagenicity of Chemicals in Food, Consumer Products and the Environment
- Herbal Medicines Advisory Committee
- Scientific Advisory Committee on Nutrition
- Advisory Committee on Animal Feedstuffs
- Advisory Committee on Novel Foods and Processes
- Advisory Committee on Research
- Advisory Committee on the Microbiological Safety of Food
- Committee on Toxicity of Chemicals in Food, Consumer Products and the Environment
- Advisory Committee on Novel Foods and Processes (ACNFP)
- Expert Group on Vitamins and Minerals
- WRAP (minimisation of food waste)
- Marine & Fisheries Agency
- Rural Payments Agency
- Animal Health

The final four cost £456,000,000 a year. The others on a quick count come to about £330,000,000 a year.

(5) The Environment Agency, with a fairly wide brief but which regulates farming through regimes such as Nitrate Vulnerable Zone (NVZ) compliance, water abstraction licences, discharge consents and farm waste regulations, and which regulates aspects of fisheries and fishing, has an annual budget of £796,000,000. Say 35% of this is related to food and farming; £279,000,000.

(6) Finally, the costs of compliance. There's no easy way of calculating the direct costs of compliance, or the opportunity costs of over-regulation. So I'll have to leave these out. Also all the other indirect regulatory costs related to food production, distribution and sale such as planning and transport, energy and health, and all the other Guardianista costs of 'safe eating advisors', 'sugar reduction workers', 'fat education outreach officers' and the like.

Right, totting the above costs up, I get £2,101,196,000 a year. That's probably equivalent to 7% of the annual value of the food we buy at retail cost; exclude retailers' transport costs, premises costs and overheads and profit and it's got to be over 10% on food value alone. Add the costs of compliance and the true costs become terrifying.

Turn him to any cause of policy,
The Gordian Knot of it he will unloose,
Familiar as his garter

And it's time to cut this Gordian Knot. We can pick at it forever, but a bold stroke is needed. Cameron must be prepared to take the blade to not only the mess of food regulation but the whole mess of national regulation. And with the exception of the strategic national policy aspect, the answer is local.


Willy Wombat said...

I note that even Cuba in now viewing food security as a national priority.

Whilst we can all start cycling and wearing an extra pullover to offset increased fuel prices, these are strange times when my local farmer makes his living from set-aside whilst I eat food grown thousands of miles away.

Malthebof said...

I think today the three most important functions of a government should be
1 Security of the realm
2 Security of food supplies
3 Security of energy

Our current leaders fail all three.

yokel said...

Oh dear, you have forgotten the Elephant!

There is the European Food Standards Agency, which is there to tell our own Food Standards Agency what to think. Then there is Directorate-General for Agriculture and Rural Development who tell DEFRA and plenty of others what their marching orders are. Finally you are clearly not aware that the food hygiene regulations currently in force in this country are a European Regulation, which means that it was "done at Brussels" and came into effect in the UK without any further effort. No need even for a rubber stamping and gold plating by Westminster.

Please don't forget the Elephant!

grumpy grandad said...

Yokel: the invisible elephants are ubiquitous - but, if we must subsidise their existence, why do we have to pay these herds so much more than the minimum wage?

Mark Wadsworth said...

Fantastic summary!

You could include another £3 billion or so for agricultural land subsidies?