§ Lord Kennetasked Her Majesty's Government:
Whether they intend to move from measuring economic "growth" principally or exclusively in terms of Gross Domestic Product towards measuring all economically significant activity, including that currently either not measured or not recorded; if so, what steps they are taking to promote the more accurate measurement of growth in the relevant international bodies (and especially in the Organisation for Economic Co-operation and Development); and by what date can an improved system of measurement be expected to be in operation. [HL2908]
§ Lord McIntosh of HaringeyThe information requested falls within the responsibility of the Director of the Office for National Statistics, who has been asked to reply.
Letter to Lord Kennet from the Director of the Macro-Economic Statistics and Analysis Group of the Office for National Statistics, Mr. John Kidgell, dated 21 June 1999.
In the absence of the Director of the Office for National Statistics (ONS), I have been asked to reply to your recent parliamentary Question on measuring economic growth.
Economic activity as measured by Gross Domestic Product is covered by guidelines in the UN System of National Accounts 1993 and the European System of Accounts 1995. These international agreements aim to improve comparability. Where suitable data sources enable a more complete picture of economic activity to be presented, these data are reflected in the UK National Accounts. For many areas (such as illegal activity) ONS and others have undertaken research to provide illustrative estimates. However, these estimates are not sufficiently developed to be incorporated into the National Accounts.
In addition, the guidelines allow the use of satellite accounts to provide supplementary information about the economy. For example, household accounts, which are being developed in the UK, aim to place a value on unpaid household production. Progress on the household account will be presented in the Economic Trends publication later this year. Other satellite accounts, such as environmental accounts, which describe the relationship between the economy and the environment, are also under development. These satellite accounts could, in theory, be used to produce a measure of GDP which has been adjusted for the effect of the economy upon areas such as the environment. However, in practice there is no agreed methodology of valuing many of the elements in satellite accounts, so the ONS does not have any plans to produce such a measure.