10 crazy assumptions about the UK's £10bn 'vice economy'

The ONS has started counting illegal activity as part of GDP. But there are so many 'arbitrary' assumptions, the ONS may as well have been high when it made the estimate.

by Rachel Savage
Last Updated: 19 Nov 2014

Anyone who has hung round Soho a little too late on a Friday will realise prostitution and illegal drugs are big business. However, those with the keys to the official statistics of our great nation have, so far, left those trades plying away in the shadows, without a thought to their contribution to the economy.

No more: narcotics and the so-called world’s oldest profession could be contributing £10bn a year to the British economy. That’s according to some rather dubious number crunching by the Office for National Statistics to begin to bring UK GDP into line with European guidelines, which say illegal activities between consenting parties should be measured (is this a first step to legalisation, MT wonders?).

The ONS reckon drugs and prostitution added 0.7% and £10bn to GDP in 2009, with around £5.3bn attributable to the latter, and between £7bn and £11bn per year from 1997 to 2009.

While MT applauds the agency’s efforts, the figures rests on as many assumptions as there are names for cannabis (although the agency, to its credit, admits its leaps of faith and owns up to using ‘data of a variable quality’). Here are just ten of the ONS' mind-altering assumptions:

1. ‘Both prostitution and drugs activity are assumed to start in 1960.’

Because the world only woke up in the swinging ‘60s.

2. ‘the number of prostitutes has the same pattern through time as the 16+ male population.

'This is a weak assumption.’ You don’t say…

3. ‘There are no imports of prostitution services. All prostitutes in the UK are UK residents’

No 'exotic' brothels then.

4. ‘British residents do not consume prostitution services abroad.’

As the ONS itself put it, ‘The latter is obviously false, but we have no chance of obtaining data on this.’

5. ‘All prostitution in the UK is consumed by UK residents.’

‘Again, this is obviously false' but apparently people don't visit the UK specially to buy sex, so they're clocking that up as 'negligible'. 

6. ‘The benchmark for extrapolation is set at 2004’

The ONS has estimates for the number of London prostitutes ten years ago, so set about happily extrapolating around the country and over the years from that.

7. The only drugs included are: ‘crack cocaine, powder cocaine, heroin, cannabis, ecstasy and amphetamines’

What happened to the ‘shrooms?

8. ‘We assume that the purity-adjusted amount of drugs consumed by the average user remains constant over time.'

'No data', no 'challenge' to those assumptions.

9. ‘We assume that there are no labour costs within drugs activity’

Again ‘probably false’, but the ONS can’t figure out who’s on a king pin’s books and who’s doing it for themselves.

10. We assume that half of cannabis sold in the UK is imported and half home-grown

‘Abitrary’, of course.

- Make sure you don’t miss MT’s feature on ‘Dosh in Dope’ in our upcoming June issue

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