I have posted before about the quite astonishing percentage of people in the UK – beyond the retired and the disabled – who contribute nothing to the economy. They are decribed as ‘economically inactive’, and they are 3.5 times bigger than the simple unemployment rate. The latter today stands at 7.8% (three years ago it was 7.6%), but for every ten people in the UK, seven are working and three aren’t. Or put another way, almost a third of the working-age population do nothing productive for the economy. With just over 5% of the working-age group disabled, that leaves a quarter of Britons doing nothing for some other reason beyond physical or mental incapacity.
That largely Labour-created welfare dependency has been slightly relieved by Tory reforms, but as yet the progress has been slow. It has been exacerbated, however, by poorly enacted and largely pointless austerity policies which, while leaving the unemployment rate largely unchanged, have dramatically reduced those who have a full-time job. Since the Coalition came to power, the ONS statistics show, long term unemployed (LTU) Brits have nearly doubled in incidence – their numbers are up by 96%. The same source also reveals that three million British citizens are now underemployed: that is, they’d rather work full-time, but can only get part-time jobs.
Much as the Right loves to bash the unemployed and the Left sees them only as noble victims, the situation we find ourselves in today is the result of complex econo-historical factors. But one trend is absolutely irrefutable if one studies that history: in a world where manic globalist mercantilism rules, the number of UK citizens competing usefully in it has collapsed.
In 1978, there were 6.9 million people employed in UK manufacturing; at the start of 2011, the figure had fallen to 2.5 million. Unlike our EU contribution, it is still falling. By the summer of 2012, just 18% of us were employed largely or solely in exports….under one in five. Britain probably has the smallest and least marketing-savvy export sector in the developed world.
Today, however, I want to focus not on this blindingly obvious structural problem in our economy. Rather, I want to examine another trend that has run alongside the truly suicidal policy of deserting our manufacturing base: the rise and rise of the economically useless and ethically bereft professions.
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One of the biggest single flaws of media business reportage in recent years has been the loss of a hard-nosed commercial perspective. This has been largely dumped in favour of ‘good news’ amplification, and statistics that look good but are rarely interrogated. Both here and in the US, for example, we read regularly of rising supermarket profits and ‘a retail recovery’. But for Anglo-Saxon countries already hugely invaded with foreign produce as a result of trade wars, that’s the worst possible recovery they could have; all it will do is increase the deficit, and make the fiscal budget-balancing harder still.In Britain, supermarkets destroy local community business, import enormous quantities of foreign goods to cater for increasingly cosmopolitan and price-driven customer needs, corrupt local authority planning decisions, and weaken our already minute agricultural sector by screwing them on price. Growing supermarket profits are most decidedly not a ‘good thing’ for Britain: their contribution to the Exchequer is massively outweighed by consequently reduced export output and rising import costs.
Even without these factors, retailing is often the process of distributing and selling stuff made and grown elsewhere. It has no specific contribution to make to export income at all. One or two UK retail giants have thriving foreign businesses, but none are significant. The distributive profession in Britain is a massive employer of course, but overall it has a neutral to negative effect on our balance of payments.
The week before last, my brother began the process of unravelling our late father’s estate. The legal profession’s view of its personal entitlement to this estate was 3%. It worked out to a massive sum, and specifically to a charge in the region of £1500 a day – not including phone calls at £80 a pop, and letters at £120. I would be very hard-pushed to know what this contributes to the export potential of Britain, beyond encouraging folks to emigrate. The Law Society talks gaily of operating ‘more than a dozen accreditation schemes designed to put you in contact with the specialist help you need.’ None of this help is productive beyond ‘setting up a business’, and much of it is economically counter-productive: personal injury claims, getting a divorce, making a Will, buying a house, getting gobby with your employer and so on. I have never in 50 years of being economically active heard of a lawyer who’s approach to setting up a business improved profitability.
There are more than 150,000 solicitors on the roll in England and Wales, with approximately 7 – 8,000 qualifying each year. ‘On a roll’ would be a more accurate phrase: since 1970, the number of lawyers has grown by nearly 250%. In the last decade alone, the total of lawyers ‘employed’ has gone from 105,000 to 150,000. Almost none of it exports for Britain. Almost all of it increases the complexity of doing business, and the cost of employing people. Personal injury services are now routinely advertised on television. Lawyers are 1800% over-represented in Parliament. All of these facts are connected.
When my house sale completed last week, I rang my solicitor and said I’d be right down to collect the cheque. Ah well, he said, we have these systems do you see, and the cheque won’t be ready until after 4.30. Thus making it impossible for me to bank the cheque on that day. But very easy for them to earn interest on a large six-figure sum.
The following morning, I went into a branch of LloydsTSB to close three accounts, deposit that very same cheque, and rape the contents of the one account left at the earliest opportunity. There are two reasons why I did so: first, their service is atrocious, and their charges outrageous; and second, I’d rather have my money in a Mutual whose gearing ratios on debt are real and reasonable, as opposed to off with the fairies.
The process took me an hour and twenty minutes, and cost me £42. How many businesses do you know where, to fire the supplier with no existing contract at all, it costs £42? They spent fifteen minutes trying to ‘help’ me lose the six-figure sum, then gave up and said it would take six days for the cheque to clear. This was my branch and my money, but somehow they assumed the right to earn 72 hours of overnight interest income on it…and charge me £42 on top.
We all know what the banking profession has done for this country. The increasingly ludicrous bleating about tax contributions to the Exchequer have become intensely irritating and an insult to the average citizen’s intelligence: they are dwarfed by the £800 billion bill to bail them out, the £1.1 trillion of potential liabilities with which we are still saddled, and the thus far £560 billion cost of QE allowing them to rebuild balance sheets. Four years of Zirp have decimated the income of most people over sixty, but are seen as vital as, without it, every Sovereign in the West would be insolvent within months. The UK is quite different to the US in this respect: America has become hopelessly indebted as the result of decades in which fiscal managers have kicked multiple cans down increasingly narrow roads. Whereas the US debt position has been exacerbated by the banks, Britain is chiefly insolvent because of its banks’ failures on a massive scale. The other main oncost is senior civil servant pension emoluments.
It’s best not to get me started on Mandarins. I refer to them in the narrow sense of a professional group of administrators based in Whitehall and local government: other professions like teaching and social work cause their own unique problems, but neither of those are either overpaid or obesely pensioned. Mandarins and local officers are. Together, their pension liabilities comprise a quite unbelievable £1.2 trillion of national debt liability.
David Cameron may have cut a salami slice off the EU budget yesterday, but no Prime Minister or Chancellor in British history has ever reduced the number of senior civil servants in employment. By halving their numbers, George Osborne could, next year, reduce our spending bill going forward by £800 billion. Compared to the 15.5 billion he’s managed to date, that is big bulah.
Asking if they’re worth it is rather like asking whether foxes help or hinder the nurture of chickens. Foxes are, in fact, an excellent animal analogy: Mandarins are cunning like a fox, crazy like a fox and – exactly as a fox will kill seven chickens and eat only one – these folks spend on average £7 of our money, and waste £4.75 of it. And finally, as foxes know nothing about farming, so too are Mandarins clueless about commerce. They are also bereft of skills in foreign policy, health, fiscal management, local transport and any other activity that comes to mind involving an attempt to enrich the life of Man. They have but two talents: self-aggrandisement, and the creation of pointless jobs.
Do they contribute to exports via things like the British Council and the Foreign Office or the whatever they call the DTi these days? No. The British Council has made a major contribution to Jeremy Hunt’s personal fortune, but is regarded by most sensible exporters as a risibly feather-bedded club for the mutual scratching of mediocre backs. David Cameron took fully 23 personnel from the FCO to India on his recent ‘business’ trip there, and they achieved nothing beyond a bill for airfares and expenses.
The DwP runs the one remaining job-creation scheme through the private sector; as I’ve posted many times before, this is creating almost no new jobs, but is succeeding brilliantly at getting the taxpayer ripped off at every turn. The Locog Quango put together to plan the 2012 Olympic Games produced one discernible outcome: the appointment of G4S. To date under the stewardship of Lord ‘Drugs’ Green, the number of export contracts achieved as a result of the Games has failed to reach one.
However, few people would disagree that we need professional people to audit the progress of growth and expenditure on these fronts. Oddly enough, I am one of the few – but mainly in the sense that accountants are increasingly to be found at the crease in the 21st Century, whereas their place is behind the scoreboard counting runs. Accountants do not make runs, they make trouble. Their parallax view of business has probably done more harm to British exports than any other management form involved in it.
What corporate accountants (not corporate finance directors, they’re much worse) do is cut. They cut jobs, they cut expenses, they cut value for money, and they cut product quality. What they rarely cut is bonuses and shareholder dividends. When they’re not doing this, they cut deals with the HMRC ensuring that the average FTSE 100 company pays a tax rate of around 6%. And when the chief outcome of their ownership of the bat is falling sales plus zero exports, they make the results look better to get the best price…to sell to foreign-owned outfits who understand markets and the social anthropology of consumers.
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My contention this morning is very simple: when asked “What good are you?” very few professionals could give a defensible answer in terms of good for Britain. Very few Brits are good for nothing, but the unemployed could be retrained if the Coalition had half a brain for business: that is to say, they could be good at something contributing to Britain’s income. You cannot retrain lawyers, accountants, Mandarins, bankers and multiple distributors: they do what they do because are, quite simply, no good at anything which makes money for the greater good of their fellow citizens.Harsh but fair, I think. And I haven’t included politicians, because I don’t regard anything most of them do as capable of creeping into any definition I know of professional activity.
Until this changes, Britannia will move forward far too slowly….hampered by a millstone as she tries in vain to swim the choppy waters of the intensifying global trade war. As I write, it is turning into a currency war. I challenge anyone to tell me how the professions examined above are going to help in that regard.
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banzai7
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