The economic figures released this week were not bright. The UK economy is at best flat lining; as someone described it ‘bumping along the corrugated bottom’.

What brightness there was, was provided by the service sector. That’s where any growth we’re achieving is coming. That may not be what we’d like – rebalancing to manufacturing would be very desirable. But the service economy is undoubtedly important in the UK. And that sector of the economy is providing not only domestic product, but exports too.

And that’s a reminder of what the service economy includes – not just coffee shops and restaurants – but services and training that we sell. Like our higher education courses. Or our NHS training. These are aspects of the ‘public sector’, so despised by our coalition rulers. And they are prized all over the world – if not by our Tory/LibDem lords and masters.

The NHS, for example, is considered internationally as a bastion of quality. The NHS is, of course, also a great training organisation – it trains the staff that the private sector then employs – a significant cost to the NHS which is rarely recognised in debates about public/private efficiency. But the international reputation means that that training can also be sold to foreign students – and is. That’s another part of NHS economics which isn’t always factored into the crude debate.

So let’s look down the line a little. The NHS – and our Higher Education sector, for that matter – are starved of funding. They’re being opened up more and more to private competition, which makes it more and more likely that the rump which survives will be less and less able to maintain the high standards. Will the private sector which has creamed off their easy profits step in and provide the high quality training we sell abroad?

Well there’s a nasty scenario which would see the NHS as a sort of cover for private sector sales – a kite-mark of quality on goods it no longer has a hand in fully providing or guaranteeing. But how long would that ‘brand’ keep its cachet? How long would anyone want to go on buying it?

How long will the goose still be alive and pecking – and able to lay golden eggs?

One thought on “The Service economy, golden eggs – and is the Tory/LibDem coalition killing the goose?

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