Accounting for drugs and prostitution to help push UK economy up by £65bn

by Guest Wed Jun 11, 2014 7:45 pm

A more inclusive approach to GDP comes into force in September to comply with EU rules on measuring the economy

Britain's economy could be as much as £65bn bigger – almost 5% – when new GDP figures are published in September incorporating items such as prostitution and drug dealing under new statistical rules.

The Office for National Statistics said its latest estimate was that GDP in 2009 was 4.6% higher than previously stated on the back of the planned improvements in measuring the size of the economy.

The update will be part of a more inclusive approach to GDP that comes into force in September to comply with EU statistical rules and to "provide the best possible framework for analysing the UK economy and comparing it with those of other countries".

But economists said the change in the size of GDP in official figures, which is unlikely to change the pace of growth in the economy, meant little in reality.

"On paper the economy is £65bn bigger – which is massive. But it is purely an accounting treatment. These activities have always been there – particularly research and development activities – they just weren't necessarily taken into account in GDP previously," said Alan Clarke, an economist at Scotiabank.

"In isolation, if the economy is 4.6% bigger and nothing else changed, the public finances would look much better – since we tend to look at borrowing relative to GDP or debt relative to GDP. That would be the equivalent of public finances alchemy but we know that the ONS is going to adjust the way it accounts for debt as well – and this is going to be revised higher – so there is no free lunch here."

The ONS said it will release figures for the impact on the size of GDP in 2010-13 nearer to September. Looking further back, it said that over the period 1997 to 2009 the annual impact of the changes was on average to raise the level of GDP by 3.6%, rising from an additional £25bn (2.6%) in 1999 to £65bn in 2009.

Tuesday's update on the impact of the changes follows estimates last month from the ONS that in 2009 illegal drugs and prostitution boosted the economy by £9.7bn – equal to 0.7% of gross domestic product and roughly the same contribution as farming.

http://www.theguardian.com/business/2014/jun/10/accounting-drugs-prostitution-uk-economy-gdp-eu-rules

Love one of the comments underneath:

And the pocket money we give our kids may help too!

and money found in the street and profits from muggings and other petty crimes, selling the big issue, begging, receiving more change than you're entitled too and keeping schtum. etc.

Every little helps!

by Fred Wed Jun 11, 2014 8:48 pm

Having seen your photo as your avatar Sassy I was wondering whether you had offered your services as a specialist n the Prostitution line.

I believe there are certain blokes who have fetishes for the Big Arsed and Pug Ugly. You'd solve the defict problem with the taxes you'd pay. ::D::

by Guest Wed Jun 11, 2014 8:53 pm

Ah, and there was Shady saying how gorgeous I was lol You on the other hand wouldn't dare show your face in public and as a foul mouthed misogynistic little apology for a man, that is appreciated by all.

Drinky, there are men on the internet who are vile for their views. You on the other hand are vile because that is your nature. You are at heart a pervert that probably relieves yourself while you say things like that, that is obvious. You get a kick out of it. That makes you in my eyes, less of a man than just about anyone. Calling you a wanker wouldn't work, because it would just be a statement of what you do.

by Ben Reilly Wed Jun 11, 2014 8:58 pm

Alright said Fred wrote:Having seen your photo as your avatar Sassy I was wondering whether you had offered your services as a specialist n the Prostitution line.

I believe there are certain blokes who have fetishes for the Big Arsed and Pug Ugly. You'd solve the defict problem with the taxes you'd pay. ::D::

That's out of line, and I'm getting tired of seeing all these drive-by insults lately. Could we at least try to comment on the topic and not the poster, please???

by Irn Bru Wed Jun 11, 2014 10:38 pm

Sassy wrote:A more inclusive approach to GDP comes into force in September to comply with EU rules on measuring the economy

Britain's economy could be as much as £65bn bigger – almost 5% – when new GDP figures are published in September incorporating items such as prostitution and drug dealing under new statistical rules.

The Office for National Statistics said its latest estimate was that GDP in 2009 was 4.6% higher than previously stated on the back of the planned improvements in measuring the size of the economy.

The update will be part of a more inclusive approach to GDP that comes into force in September to comply with EU statistical rules and to "provide the best possible framework for analysing the UK economy and comparing it with those of other countries".

But economists said the change in the size of GDP in official figures, which is unlikely to change the pace of growth in the economy, meant little in reality.

"On paper the economy is £65bn bigger – which is massive. But it is purely an accounting treatment. These activities have always been there – particularly research and development activities – they just weren't necessarily taken into account in GDP previously," said Alan Clarke, an economist at Scotiabank.

"In isolation, if the economy is 4.6% bigger and nothing else changed, the public finances would look much better – since we tend to look at borrowing relative to GDP or debt relative to GDP. That would be the equivalent of public finances alchemy but we know that the ONS is going to adjust the way it accounts for debt as well – and this is going to be revised higher – so there is no free lunch here."

The ONS said it will release figures for the impact on the size of GDP in 2010-13 nearer to September. Looking further back, it said that over the period 1997 to 2009 the annual impact of the changes was on average to raise the level of GDP by 3.6%, rising from an additional £25bn (2.6%) in 1999 to £65bn in 2009.

Tuesday's update on the impact of the changes follows estimates last month from the ONS that in 2009 illegal drugs and prostitution boosted the economy by £9.7bn – equal to 0.7% of gross domestic product and roughly the same contribution as farming.

http://www.theguardian.com/business/2014/jun/10/accounting-drugs-prostitution-uk-economy-gdp-eu-rules

Love one of the comments underneath:

And the pocket money we give our kids may help too!

and money found in the street and profits from muggings and other petty crimes, selling the big issue, begging, receiving more change than you're entitled too and keeping schtum. etc.

Every little helps!

No doubt the prostitutes and the drug dealers will be added to the number of new private sector jobs that the Tories have created - if the haven't already been added that is.