telegraph | Illegal drugs and prostitution are worth 0.7pc of GDP, which is roughly the
same proportion as agriculture, gambling and accommodation services which
includes hotels, bed and breakfasts and caravan parks.
They are worth more than advertising, which is 0.5pc of GDP, and double the
contribution of real estate activities, at 0.35pc.
“In terms of the new concepts coming in, illegal activities is the biggest,”
said Graeme Walker, head of national accounts at the ONS.
“For the rest of GDP we do things like sending questionnaires to businesses,
asking them how much they have earned.
“We don’t think it would be right to directly collect information on [illegal
drugs and prostitution] and we have no plans to contact people involved in
these activities.
"We think our data fits the purpose for giving people an idea of the size
of illegal activity.”
The contribution of prostitution to GDP was calculated using a number of
estimates, including the clients per prostitute per week based on Dutch
practise, the average price per visit and the cost of room rental and
clothing.
Meanwhile the contribution of cannabis to GDP was calculated using estimated
figures including sales, number of users, street price and imports.
For drugs other than cannabis, estimates are based on figures such as sales,
import price and value, purity from police seizures and street price.
As a first estimate, the ONS says that from 1997 to 2009 the impact of the
illegal drugs and prostitution on GDP ranges from £7bn to £11bn.
The national accounts, published in September 2014, will include the import,
production and sale of illegal drugs as well as the provision of
prostitution services.
The ONS say that the figures “will be based on a variety of sources and
assumptions” and add that there are “significant limitations in the
availability of data”.
This is part of a
raft of changes being made to the national accounts that will increase
the level of GDP in 2009 by between 4pc and 5pc.
This will include the contribution of “non-profit institutions serving
households” such as charities, universities and trade unions, which is the
ONS have valued at £24bn, or 1.7pc of GDP.
People who build their own homes will also be included as a category, which
contributes £4bn, or 0.3pc to GDP.
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