Regulation

Note to the people at BIS: Don’t just do something, stand there


SUGGESTED ARTICLES

Economic Theory
Government and Institutions
Some of us were hopeful that following the election, the Department for Business Innovation and Skills might be closed down. Vince Cable was an inveterate meddler, but it was hoped that his successor, who comes with a strong free-market pedigree, would at least be a little bit more laid-back even if politics dictated that his Department was retained.

Unfortunately Mr Javid and his team seem to be showing similar signs of hyperactivity. Some are trivial: My colleague Ryan Bourne has pointed to the absurd inquiry into restaurant tipping practices, which will end up either achieving nothing or forcing employers to change payment practices to the likely detriment of their staff.

Other interventions are more worrying. The ‘apprenticeship levy’, for example, is a retread of a 1960s policy – Harold Wilson had a similar training tax  – but the underlying idea that there is some sort of market failure in training goes back to the late 19th century, as does the belief that Germany and other continental European neighbours do things much better than us.

No doubt nostalgics would be happier if we had lots of engineering apprentices like we once had, and as Germany (with a very different industrial structure) continues to have, but the mediaeval notion of time-served apprenticeships is an archaic model in the service-dominated portfolio career gig economy of Britain in the 21st century. As Alison Wolf has shown, government mandates and subsidies to apprenticeships will usually mean dodgy training providers and costly scams as firms struggle to meet arbitrary targets (three million by 2020, apparently). This time it will be different, of course: We’re going to have the title ‘apprentice’ legally protected. Meanwhile firms are incurring heavy costs trying to organise schemes to satisfy BIS and its agents instead of concentrating on their core business.

Then there is the announcement that we are going to have a new teaching assessment scheme imposed on universities. Jo Johnson, the wet-behind-the-ears minister who is now responsible for higher education (why this is still a BIS responsibility, heaven only knows), believes teaching in our universities is poor. Rumour has it that he wants to tie the right to raise fees to ‘results’, measured by a time-consuming and expensive assessment scheme.

He may be right that teaching is neglected in some universities, but why is this? One reason is that supine university managements refuse to tackle trade unions which continue to resist proper appraisal of staff. Another, probably more important, reason is that nowadays UK academics are obsessed by their showing in the Research Excellence Framework. As Philip Booth and I have argued, the REF diverts energies and resources for little benefit. Leading research ‘stars’ in universities (and most of these are not cancer researchers or nuclear physicists, of course) never go near undergraduate teaching but leave it to be farmed out to graduate students.

Jo Johnson’s plan is a classic example of the way in which government intervention to rectify one perceived problem (the UK’s research effort) creates an apparent need for further intervention. Why not try scrapping the REF, as we have advocated? And why not scrap the existing student loan system and introduce something like Peter Ainsworth’s proposal for universities to provide free tuition in exchange for a share in students’ future earnings – which would act as a real incentive for universities to improve teaching?

The Department for Business Innovation and Skills is a drag on UK business and higher education. If Mr Javid was paying attention at any of those IEA sessions he attended, he would go to David Cameron and offer to wind up his Department.

Prof J.R. Shackleton is the IEA’s Editorial and Research Fellow, and a Professor of Economics at the University of Buckingham.


2 thoughts on “Note to the people at BIS: Don’t just do something, stand there”

  1. Posted 11/09/2015 at 08:31 | Permalink

    Me Javid has also been got at by the universities lobby. He is supporting the demand that students be taken out of the migration figures. The spurious argument is that eventually students will go home. Most of them may do, but it is clear that quite large numbers do not. I have no particular problem with this, but the implication is that the numbers coming to work will have to be squeezed even more if net migration is to fall. A point nobody seems to have noticed is that many of the best people we want to attract (from the Governor of the Bank of England downwards) will also go home eventually. Migration policy needs to be much more sophisticated than this, if we are to have restrictions. Me Javids endorsement of the vice-chancellors’ gravy train is going to have a negative impact on the businesses he purports to help.

  2. Posted 11/09/2015 at 08:38 | Permalink

    Me Javid has also been got at by the universities lobby. He is supporting the demand that students be taken out of the migration figures. The spurious argument is that eventually students will go home. Most of them may do, but it is clear that quite large numbers do not. I have no particular problem with this, but the implication is that the numbers coming to work will have to be squeezed even more if net migration is to fall. A point nobody seems to have noticed is that many of the best people we want to attract (from the Governor of the Bank of England downwards) will also go home eventually. Migration policy needs to be much more sophisticated than this, if we are to have restrictions. Me Javids endorsement of the vice-chancellors’ gravy train is going to have a negative impact on the businesses he purports to help.

Comments are closed.


SIGN UP FOR IEA EMAILS