Monday 28 October 2013

Is Amazon included in the growth figures?

George Osborne is looking pleased with himself.  The coalition believes it has been vindicated on the economy.  Growth is now the fastest since - well only 2010, actually.

One of the casualties of the last few years, with Osborne anxiously scanning the horizon for the rescue he felt had to arrive, is a saner approach to the word 'growth'.  Most radicals since Bobby Kennedy have regarded the unadorned growth figures as wholly irrelevant - and sometimes downright corrosive - to prosperity.

I think they are right, personally.  If you can increase growth by spilling oil in the North Sea, by speeding up deaths on the roads or by going around blowing up the house price bubble, then it isn't a terribly meaningful figure.

I would leave that on one side, were it not for the handful of continuing mysteries about the growth figures.

Mystery 1: If growth is rising so fast, why are we not reducing the deficit this year?

Mystery 2: How much of it is actually just the ludicrous increase in house prices that is going on in London and the south east - fake prosperity if ever there was any?

Mystery 3: Given the continuing bubble in house prices (average home up £50,000 in value in a month), why is growth not actually much higher?

I ask the last of these because that key question, and one not being answered by any of the commentators now, is how much of the economy has been taken offshore and therefore not counted in the growth figures?  Because that might explain something about why, despite sticking to spending cuts, the deficit is still not coming down.

So here are the questions to ask any official statisticians you happen to find standing next to you.

What percentage of the UK economy is now operating offshore?

What tax would the offshore sector be paying if they were not being allowed an unfair advantage over businesses that are still operating in the light?

Is Amazon's considerable business, including the wreckage of the UK book trade, counted in UK growth figures given that it is said to be operating out of Luxembourg?

In other words, can we rely on any of these figures as being anything like accurate?

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