Prostitution and illegal drugs are contributing around £10bn a year to the British economy, according to official data. More than half of that - £5.3bn - is attributable to prostitution, the Office for National Statistics (ONS) said on Thursday. The total figure for 2009 - the most recent year for which data are available - is more than double the £4bn that construction brought to the economy in the same year, and double the amount earned by the financial intermediation services industry.
Britain has to estimate by how much these black or shadow economy activities are boosting the economy to comply to new EU rules. The Office for National Statistics has released its first estimate, which covers the years between 1997 and 2009. It said the impact ranges from £7bn to £11bn. More recent data will be published in September. The National Accounts that will be published in September 2014 will include the import, production and sale of illegal drugs and the provision of prostitution services. The ONS says that the figures “will be based on a variety of sources and assumptions”.
The move follows guidance from the EU on how countries should calculate their GDP, which is motivated by the EU’s desire to measure its member countries’ economies more closely. Eurostat, the EU's stats body, says if all illegal activity is included in GDP figures, European economies would have a growth rate closer to 2.4pc. The agency says the UK’s GDP figure could be 30pc-4pc higher if the black market was included.
