UK GDP – careful with the numbers

The poor UK GDP figures for 2020 are  not comparable with many other countries. As I explained on 12 August on this site, the UK statisticians reported a large fall in health output with the big drop off in non CV 19 work, and a big fall in education output with the closure of schools from the second quarter of the year. Other countries with large state sectors in education and health report the cost rather than the output, so they do not show any decline in these large areas of activity.

I agree with the UK statisticians that GDP should be based on output. It is a pity other countries do not use the same basis. If we included all the UK spending instead of output in the state sector then the UK had a relatively good GDP performance last year compared to other European countries.


  1. Lifelogic
    February 13, 2021

    It is however mainly the wealth producing private sector that has been hit massively and much of it loaded up with CV loans, deferred tax bills and similar. The idea that they can now burden this sector and people with much more expensive and unreliable energy, even more red tape everywhere, restrictive employment laws, the Brexit adjustments and NI issues, net zero CO2 plant food, the residual legacy of Covid and Sunak’s even higher taxes on top is insane.

    Yet this actually does seem to be the insane Boris & Sunak plan. The best plan would be to cut taxes and fire those part of the state sector that did almost nothing of value last year or did positive harm about 75% of it. Cut all the green crap, electric car subsidies, HS2 and 75%+ of university degrees are fairly worthless too. Certainly they do not deserve tax payer soft loan subsidies.

    1. hefner
      February 13, 2021


    2. Ed M
      February 13, 2021

      Also, in 5 to 10 years time, companies such as Apple and Volkswagen will be competing against each other more and more as ‘Tech’ companies.

      We in the UK need to start building up our own Tech Companies. Otherwise were going to be left behind, big time, behind: Apple, Volkswagen, Google, Amazon, Samsung, Microsoft, Telsa, and so on, as they expand their offerings – hardware, software, services etc – Green and non-Green Tech (with all that becoming more blurred as well and all feeding into each other) and dominate the Tech market more and more.

      At the moment, we don’t even have our own big UK, car brand, or big UK Smartphone brand, or big UK Software brand (like Microsoft) or big UK Tech Services brand (like IBM) etc …

      The UK gov needs to get working on this – fast.

      1. Ed M
        February 14, 2021

        Notice how Amazon (where I bought a book recently, as well as pillow cases – and some chocolate) is now competing in cloud computing – with IBM!

        Tech is just becoming bigger and bigger and more complicated in how all the different tech offerings are integrated. It’s going to get harder and harder for a UK company to start up and to go on to compete with the big boys who have vast wealth and their fingers in lots of different pies, and so on.

        Arm Holdings was the great big hope for the future – but that got sold off to The Japanese which looks like it will be now be bought by an American company.

        Tech should be the number 1 word right now in Tory Vocabulary in terms of building up and diversifying and strengthening our economy (with higher waves, higher skills, higher productivity, higher quality exports etc) . Sadly, it doesn’t seem to be.

        1. Ed
          February 14, 2021

          Lastly, combining Brexit with a vision for expanding and strengthening the UK’s Tech Industry would have been / would be such a boost for Brexit (as the Tech industry would not only increase the wealth of this nation, with exports around the world, but also add a sense of patriotism as people love being involved in companies that manufacture high quality tech brands and by a British company, and all the services associated with that. But I hardly hear anything from Brexiters about Tech (except from Sir John a few times on his site and few others).

      2. Grey Friar
        February 14, 2021

        There is no realistic world where a leading tech firm will want to be based in the UK. It is too small, and too cut off from major export markets. Such a firm will want to be in the EU or the US, preferably both

    3. steve
      February 13, 2021


      “Cut all the green crap, electric car subsidies”

      They won’t, and that’s what will rightly lose them the next general election.

    4. Fedupsoutherner
      February 14, 2021

      Why not tax landowners who have vast arrays of solar panels and wind turbines at a higher rate. After all its unearned income.

  2. Lifelogic
    February 13, 2021

    The Transport Secretary say he is going to make charging electric cars as easy as petrol/diesel refuelling.

    Easy mate just pass a law to say petrol pumps can only deliver one litre of fuel per hour then they will become about the same. But you will need about 1000 times the number of petrol pumps and somewhere for people to sit about for hours waiting. Great plan!

    Has someone told Grant Shapps that electric cars produce about the same CO2 as diesel ones yet all considered and are not remotely zero emission. Emissions elsewhere is the correct description.

    1. Ed M
      February 13, 2021

      Again It took 50 years to go from Wright brothers on beach to planes with jet engines.
      The world has decided that petrol / diesel is out and electric is the future (whether you’re right or not – doesn’t matter).
      The question now is how can the Tory government help the UK become a world leader in Tech – with Tech now covering so much under one umbrella: Servers, Cars, Drones, Smart Phones, Software, Services – Green and non-Green Tech.

    2. steve
      February 13, 2021


      “The Transport Secretary say he is going to make charging electric cars as easy as petrol/diesel refuelling.”

      It’s rumoured he’s going to change his name to Jesus, what with him being able to alter the laws of physics.

      So when he comes up with a way to prevent batteries from exploding when they’re charged in a few seconds…..expect some free wine from water.

      Next thing he’ll be telling us he’s solved cold fusion.

  3. MiC
    February 13, 2021

    It’s not the relative performance against other countries which impacts people’s lives.

    It is the absolute one for this country, measured against its recent past.

    You can try to turn every complex matter into a banal, football league type bickering for the dimmer amongst the population, but that won’t affect the material position one bit, John.

    It might get you some votes though, and that, as has always been, would appear to be paramount.

    Your brexit has added enormously to the covid19 woes.

    1. David Brown
      February 13, 2021

      Totally agree and I feel Brexit will play a significant role in the next general election

    2. steve
      February 13, 2021


      Agree with what you say Martin, and am reminded that man doeth not live by bread alone.

      It’s a pity you spoiled it with your last sentence. Brexit has nothing to do with covid 19.

      We would have still got covid in the country whether or not we voted to leave he EU. The fact that covid 19 is here on such a scale is due to Boris Johnson not having the bottle to close all the air routes.

  4. Martin W D T Ward
    February 13, 2021

    It is a shame that the ONS do not issue and vigorously publish two sets of GDP figures during this transition period to a better method of GDP reporting than the distorted method presently used by France, Italy etc with their huge state sectors.

    Government critics (e.g. the BBC etc) choose to compare the UK on a non like-for-like basis claiming that we have done very badly. BBC News, for example, had a piece yesterday with the loathsome Anneliese Dodds whining about how badly the government had performed on an ‘apparently’ comparable GDP basis and, only on the lunchtime edition, did they have a piece from Rishi Sunak where he briefly noted the GDP comparability discrepancy.

    1. oldwulf
      February 13, 2021


      The BBC has some info buried in its website.

      BBC News – Covid-19: Has the UK economy been hardest hit?

  5. DON
    February 13, 2021

    Lies and more lies for purely political ends.

    We’re ruled over by a bunch of chancers and grifters

  6. Ian Wragg
    February 13, 2021

    Health and education are parasitic and poor value for money.
    Our schools are mainly closed and we’re saving the NHS.
    In other countries schools are open and their health services don’t seem to need saving.
    Organisations run for the benefit of the employees.

  7. The Prangwizard
    February 13, 2021

    It seems there is not much your government and party does that you agree with. The rest of us don’t have the clubby comfort of being part of your elite grouping that you have no intention of leaving whatever they do.

  8. Benny
    February 13, 2021

    We have a sharp downturn at the exact time we have put up higher barriers to trade with our nearest neighbours. Go figure

    1. Fred.H
      February 13, 2021

      Yes we don’t want then eating our fish, lamb, beef etc.

  9. London Nick
    February 13, 2021

    GDP is an idiotic measurement which tells us absolutely nothing about a nation’s wealth.

    Take crime, for instance. Dealing with crime (both prevention and after-effects) increases GDP. So does crime make us better off as a society? Is crime a good thing?

    Or consider health ‘outputs’. Prolonging someone’s life is undeniably a very good thing morally, but if that person is chronically ill and unable to work, and if they are dependent on benefits and expensive medical treatment, then prolonging their life is a burden, not a benefit, to society’s overall economic wealth.

    So GDP is, I’m afraid, utter garbage, and I would applaud the government that scrapped this measurement altogether.

    1. Peter from Leeds
      February 13, 2021

      Indeed. It is even worse than that because we also include some criminal activity as part of GDP – for example illegal drugs trade! And on health the NHS is effectively encouraged into much extra activity (consultations, appointments etc) as these are regarded as “outputs” however pointless. Management by KPIs!

    2. steve
      February 13, 2021

      London Nick

      “Is crime a good thing?”

      The criminals running the country would probably say it is.

      1. Mockbeggar
        February 15, 2021

        The ‘black’ and ‘grey’ economies are not included in GDP. However, I’m told that they are somewhat greater in some European economies, though not, perhaps the major countries of the G7. Does anyone have better information?

  10. Fred.H
    February 13, 2021

    One of the investigators examining the origins of the pandemic has said China refused to give raw data on its early cases to the World Health Organization (WHO) team.
    “That’s standard practice for an outbreak investigation,” Dominic Dwyer, an Australian infectious diseases expert, told the Reuters news agency earlier today.
    He added that, despite repeated requests, the WHO-led team was only given a summary of the data on more than 170 cases they were interested in from an early outbreak in Wuhan in December 2019.
    Mr Dwyer said the motive for withholding the raw data was a matter of speculation. “Whether it’s political or time or it’s difficult… I don’t know,” he said.

  11. Margaret Brandreth-
    February 13, 2021

    I trust very few people when it comes to money and taken from the particular to the general the distrust grows. All the talk of loss of jobs ,negative interest rates, closing of businesses , rationalisation of the bigger concerns leaves us all in a position of worry . No doubt many will have a spending spree when we can , but will it be sustained? We need practical realist philosophy to set us on the road to recovery . I do take notice of what John says but fear that politics enters into his value judgement, however I have read somewhere that he actually doesn’t like politics but wants to be allowed to change things .. A book ?

  12. acorn
    February 13, 2021

    Other countries know that the “Output” (production) measure of GDP is only slightly less useful that the “Income” measure of GDP. The only measure that shows what’s going on is the “Expenditure” measure of GDP. It measures the total expenditure incurred by all entities on goods and services within the domestic boundaries of a country. GDP (expenditure) = C + I + G + (EX-IM) Where:

    C = Consumption Expenditure, when consumers spend money to buy various goods and services. For example – food, gas bill, car etc.
    I = Investment Expenditure, when businesses spend money as they invest in their business activities. For example, buying land, machinery etc.
    G = Government Expenditure, when government spends money on various services and infrastructure activities.
    (EX-IM) = Exports minus Imports, that is, Net Exports. Exports less imports to and from the rest of the world.

    BTW. It’s time a Select Committee(s) did a cost benefit analysis on the OBR; the ONS; the monetary policy part of the BoE and the non-fiscal policy part of the Treasury. I reckon Rishi could save near half a billion there with little effort and no consequence.

  13. Roy Grainger
    February 13, 2021

    No queues of lorries at Dover. Odd. Andy and his mates promised there would be. Maybe he can explain why he was quite so wrong ?

    1. Fred.H
      February 13, 2021

      All that concreting over of fields ! Environment Agency should be asking questions.

      1. Mockbeggar
        February 15, 2021

        They will be very useful in keeping the M20 clear the next time French fishermen decide to block Calais harbour for any reason.

    2. MiC
      February 14, 2021

      No, as I recall Andy only predicted that in the event of your feverishly-craved No Deal – which didn’t happen did it?

      Not only that, but you need a passport to drive a lorry into Kent anyway now, and there are acres of concrete on what were once green fields on which to park if you do get delayed, plus the fact that many exporters have simply given up or gone bust too.

    3. acorn
      February 15, 2021

      UK exporters can’t get hauliers to quote for trips into the EU. Those that are quoting are two to three times pre-brexit rates.

  14. Jamie
    February 13, 2021

    Great to see Mario Draghi becoming PM in Italy- he certainly knows a thing or two about financials and GDP and should serve well to get Italy back on track

    1. Sir Joe Soap
      February 13, 2021

      If we reported per capita instead of overall GDP, the UK would have a far worse GDP than most other western countries
      I prefer the touch and feel method of GDP. If you’re struggling to move out of your house because of government restrictions due to a virus where 1 person in your county died last month, then any benefit from any GDP feels awful. If you’re struggling to access even private healthcare or education for your kids, then that feels pretty awful too. We are really back to pre-Victorian GDP in that sense.

    2. MiC
      February 14, 2021

      Yes, the ex-head of the ECB has the support of Cinque Stelle and Liga Nord too.

      They’ve pretty well given up on their anti European Union stance, having seen the tragicomic example that Tory England has made of itself.

      1. Fred.H
        February 15, 2021

        SNP Scotland is excelling everywhere you look – the main plus points being taking taxpayers money of the English.

  15. steve
    February 13, 2021

    “….compared to other European countries.”

    Note that we are not a European country.

    Also if European countries are not doing so well, that’s a good thing.

    1. MWB
      February 14, 2021

      We are a European country, or have you managed to move us somewhere else. I must have a look.

      1. steve
        February 14, 2021

        We’re an island and as such not part of the European continent.

  16. Newmania
    February 13, 2021

    Well thats one way of looking at it The ONS specifically stated that the UK`s poor performance relative to other countries was not a statistical trick . Rob Kent Smith , head of GDP at the ONS ( an expert …) said that even excluding public services the decline up the third quarter of 2020 was still one of the largest of the G7 .The UK has also suffered one of the worst death tolls from Covid , partly by its lunatic and fatal delay in locking down .
    The second surge is now under control from a looser lock down giving the lie to the paper thin excuse that the many unnecessary deaths in the second wave were an unforeseeable consequence of a new variant .
    The encouragement to re start ordinary life is now proven to be the cause.

    1. a-tracy
      February 14, 2021

      The oNS experts have been wrong a few times hefner, a quick google search.

      BBC “ admission by the ONS – 24 hours before the latest immigration statistics are published – that its figures have been wrong for over a decade is acutely embarrassing for a body which prides …”

      City AM @Wednesday 5 October 2011 8:46 pm ONS: We got GDP figures wrong by tens of billions”

      Many others…

  17. Lindsay McDougall
    February 13, 2021

    When are we going to measure the performance of the UK economy by per capita income, a measure that does not show mass immigration to be a ‘good thing’? And when are we going to demand that State investments show a financial return on the capital investment in the long term – and not just short term job creation.?
    For example HS2 is a total ‘lemon’ with £100 billion of investment forecast to yield only £45 billion of extra revenue, even with a 60 year evaluation period, as opposed to the standard 30 years for public sector road schemes and a maximum 20 years for toll roads. Some clowns are even talking of extending the evaluation period for HS2 to 100 years in order to obtain better numbers. The mind boggles!!

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