§ Lord Kennetasked Her Majesty's Government:
Whether, in the light of the work being produced by the National Statistical Office on all economically significant work done, in contradistinction to work only paid for and recorded, they will now measure the Gross Domestic/National Product with the greater accuracy these statistical techniques permit, and, in order to obviate the distortions which current Gross Product measurement methods insert into comparative studies of international economic well-being, whether they will seek to introduce this new accuracy into international measurements of "growth".
§ Lord McIntosh of HaringeyThe information requested falls within the responsibility of the Chief Executive of the Office for National Statistics, who has been asked to arrange for a reply to be given.
Letter to Lord Kennet from the Director of the Office for National Statistics, Dr. T. Holt.
I have been asked to reply, as Director of the Office for National Statistics (ONS), to your recent question on work being produced by ONS on all economically significant work done.
The ONS estimate of unpaid work is presented in a satellite account. This should be read alongside measures of paid activity in Gross Domestic Product. The article entitled A Household Satellite Account for the UK, a copy of which is enclosed, argues on pages 63 and 64 that such parallel presentation is preferable to trying to produce a single index. This article appeared in the October edition of the ONS publication Economic Trends, a copy of which is available in the House of Lords Library. Since unpaid work is unpaid, we feel that to create a single measure based on the assumption of some market valuation would create a meaningless magnitude. The wide range of estimates shown in the article also underlines the judgmental nature of any estimate. Rather than attempt to construct a single measure of "wider GDP" we have taken the view that it would be preferable to see GDP as normally defined in the context of a small set of indicators reflecting elements excluded from national accounts such as unpaid work. The same principle is applied to satellite accounts used in the context of the environment.
There is now a wide range of industrial countries which have constructed similar accounts. There may exist some basis for international comparison of such a set of summary indicators.