CITY AND SUBURBAN
The City's astronauts retrieve our exports from the black hole
C H R ISTOPHER FI LDES
Silencing Denis Healey is beyond my powers, but I came closest to it when he was Chancellor and I asked him about the black economy. The-Treasury thinks of it in terms of tax forgone, and he quoted the Revenue's estimates, which were rising smartly. 'You mean, Chancellor' (I asked him) `that if we had the full figures we could see that the economy was really doing quite well?' He guffawed and changed the subject. After the black eco- nomy comes the black hole which is now swallowing the world's exports at a rate of $80 billion a year. If all countries' balance of payments figures were added together they ought, as a matter of arithmetic (and barring trade with the moon) to balance— but they come out $80 billion in deficit. Imports are more fully recorded than exports, and trade in goods is far easier to measure that trade in services. Britain stands to lose more than most countries down this black hole. This week brokers Phillips & Drew estimate that we are understating the surplus on our trade in services by something like £2 billion a year. It looks credibly small as a discrepancy in figures which now show the private sector's service exports at £73 billion and service imports at £61 billion. But add it back into the balance of payments, and once again we are really doing quite well — in strong surplus last year, in or near balance this year . . . . Why all the fuss about the trade figures? Down another black hole fell Britain's share of world trade in services. Lord Limerick of the British Invisible Export Council explains this week that Britain's figures treated bank interest dif- ferently from other countries' figures. With 600 international banks in London, that discrepancy was enough, when put right, to double Britain's share — now 17 per cent, and second only to the United States. Our surplus is bigger than the US's or anybody else's, on figures which Nigel Lawson quoted but which Lord Limerick modestly disclaims because they include the transac- tions of governments and thus the servicing of the huge US debt. Our own monthly figure of £600 million for invisibles is quoted net (imports and exports are quoted gross) and includes government transactions, which are always in deficit. We still tend to talk about them as if they were a windfall, a small national private income — rather than deriving from ex- ports now as large as our exports of goods, and needing just as much hard work and selling. What is for sure is that we should be down a black hole without them.
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