In the two days before the Queen’s birthday parade – Trooping the Colour, on Horseguards’ Parade in London on June 16^th – two lists were published.  One of these was the list of those receiving an award in the Queen’s birthday honours.  The second list was the trade figures for May 2012 and previous months and quarters.

While everyone – retired, working in the public sector or the private sector, unemployed, families, the government – buys imports, only the private sector exports products and services to pay for those imports[1].

Imports continue to flow in, but fewer exports flow out

The UK goods trade deficit is the figure which nobody seems to want to talk about.  Yet it is the single biggest factor in the two most vital external features of the UK’s loss of national power and well-being: the pound sterling exchange rate with the Deutsche Mark[2] and the net financial worth of the United Kingdom[3].

Figures released by the UK government’s Office for National Statistics (ONS) including the adjusted figures for 2010 showed that:

A number of things stand out from the table.  When allowance is made for the fact that in modern manufacture, on average one person per year creates about £100,000 of added value, then the goods deficit of £98 billion, which is approximately equal to added value, means that 980,000 skilled or semi-skilled people are not being employed for a year, more than half the claimant count.

The 2012 monthly figures indicate that these adverse trade figures are set to continue as even in a recession imports continue to rise.  A more detailed look at the figures reveals that the biggest single items are consumer goods and food products, principally from the EU and China.  The major retail chains are the chief culprits here as they spend next to no time working with British manufacturers to see how they could design and make products for their stores.  (This especially applies to textile manufacturers where large quantities are imported from high wage economies such as Germany and Italy.)

The annual goods deficit is comparable at £100 billion with the UK’s internal fiscal deficit, to which the present government is giving massive attention (rightly) but without a coherent growth strategy.  Yet halving the goods trade deficit through increasing exports by about 20%, or £50 billion, would create around half a million new jobs, stop the increase in the UK’s external debt accumulation, and add 3% to GDP.

Honours continue to flow to the public sector

Given these ominous figures one might have though that any rational society would honour and reward those trying to correct them.

The actuality is the reverse.  Excluding awards of the Royal Victorian Order, which are made for services directly rendered to the Sovereign, there were 140 senior awards carrying titles or CBs and CBEs to what may be expected to be the leadership sections of British society.  This is repeated every six months!  Of these 140, 23 or 16% were made to the private sector (generously interpreted) and 84% to the public[5] and charity sectors who up to now have exerted little or no effort towards the absolutely vital objective of increasing exports or import substitution.  Put another way, the private sector with three and a half times the number of employees as the public sector, received one sixth of the number of senior honours, i.e. the worthiness of senior people in the private sector was deemed to be one twentieth that in the public sector.  If you extend the analysis to the junior orders (OBEs and MBEs) the private to public disproportion is even greater.  Indeed it is difficult to discern any private sector workers amid the welter of employees of local authorities, quangos, education, social and health services, many on salaries and final salary pension schemes which private sector employees can only dream of[6].

What is to be done?

Given the figures in the table above, increasing output, predominantly in goods, and therefore growth and employment, is the only way to provide the standard of living which people assume to be the prerogative of a first world country like the UK.  The state services generally, and the education, health and social services systems in particular have been pampered, and excuses have been made by and for them for the last 20 years at least.  Now is the time for them to shape up, shut up and deliver.

One of the striking features of British society – as observed by the writer – is the total disconnection between the outlook of those in the public sector from those in the private sector.  Generals, admirals, air-marshals, chiefs of local authorities, the civil service, the National Health Service, university staff, head-teachers and so on routinely say that the balance of trade, exports and imports, are nothing to do with them – that’s the responsibility of the private sector.  But it’s not true.  These groups are responsible for billions of pounds of goods and software purchases each year – most of it imported.

If it were made clear that no senior honours at all would be made in the banking and public sectors, including of course the Civil Service, until both the trade and fiscal deficits had been eliminated by increased exports and import substitution, businesses and exporters especially would be overwhelmed by offers to help clear away the obstacles to achieving these goals by increased home production.  State schools would begin to ensure that every young person could read, write and speak properly.   Public sector labour costs and therefore budgets would be reduced at all levels, especially at the top, by reducing paperwork and time-wasting meetings.

A basic systems principle is, “You get what you measure”.  No honours without measurable results is one way to make any country, especially a status conscious one like the UK, a much more productive society.

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