Illegal drug sales and prostitution contribute an extra $16.7 billion to the British economy on a yearly basis, according to a new report released Thursday.
“The inclusion of illegal drugs and prostitution is likely to
increase the level of GDP in 2009 by around £10 billion (US$16
bn), around £5.3 billion ($8.86 bn) attributable to prostitution,
and £4.4 billion ($7.35 bn) attributable to illegal drugs. In all
years between 1997 and 2009, the impact ranges from £7 billion
($11.7 bn) to £11 billion ($18.3 bn),” the Office For
National Statistics (ONS) stated in the report.
“The estimates are based on data of variable quality, with the
estimates of illegal drugs activity markedly stronger than those
of prostitution, but both definitely weaker than the estimates of
legal activity,” the ONS concluded.
This is the first time that illegal drugs and prostitution are to
be included in official UK estimates of the size of the country’s
GDP.
“The new estimates cover the import, production and sale of
illegal drugs and the provision of prostitution services,”
the report states.
The $16.7 billion equates to just under one percent of the
country’s overall economic output.
However, compiling accurate statistics for the report has proven
tricky, given the black-market nature of both activities.
While prostitution is legal in the UK, pimping and advertising
the practice is against the law.
The ONS believes that some 58,000 prostitutes were active in the
UK in 2004, extrapolating from a charitable organization’s London
figures. Since then, numbers have only increased as demand has
risen. However, the price estimates were made from a website on
which customers rate their prostitutes.
According to Reuters, calculating illegal drug revenue was easier
on account of government estimates. However, it still proved
problematic to gather information on both prices and purities of
drugs. A United Nations survey and a government forensics
laboratory which used to measure both are no longer available.
Including illegal drugs in the estimates may broaden the UK trade
deficit as the country would assume that the vast majority of
drugs are imported, including crack, heroin, cocaine,
amphetamines, and ecstasy. This is in contrast in cannabis, which
tends to be more 'home-grown.'
Calculating the figures became as a priority as the country moves
to integrate public accounts with a new European Union model from
September this year.