UK To Include $17 Billion Prostitution Industry And Illegal Drugs Trade In GDP Estimates

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A truck illuminated with the amount of Britain's debt passes the Houses of Parliament in London June 2010. Chancellor of the Exchequer George Osborne promised to bring a record budget deficit of 11 percent of GDP down to 1 percent in 5 years.

For the first time, Britain will consider illegal enterprises, including drugs and prostitution, in its economic measurements, the Office of National Statistics announced Friday.

The statistics office estimates that paying for illegal drugs and sex adds about £10 billion, or $16.7 billion, a year to the UK economy. That’s about 0.7 percent of Britain’s GDP.

Officials say approximately £5.3 billion is attributed to prostitution and £4.4 billion pertains to the import, manufacture and consumption of illegal drugs like heroin and crack cocaine.

Because some of these activities, such as prostitution, are legal in other European Union member states, the move is seen as a way to better assess the UK’s contribution to the EU budget.  

In the UK, where prostitution and many narcotics are still legal, the government is using data from police seizures and other sources to estimate how much money these activities are adding to the economy. The government is also considering including other areas of illegal activities, such as illegal gambling and illegally copying software, games, movies and music.

"As economies develop and evolve, so do the statistics we use to measure them," Joe Grice, the chief economic adviser to the Office of National Statistics, told the Associated Press. "These improvements are going on across the world and we are working with our partners in Europe and the wider world on the same agenda."

The UK will join a handful of other European countries whose economic growth estimates include prostitution and illegal drug use. They are Estonia, Austria, Slovenia, Finland, Sweden and Norway.

Britain already counts illegal alcohol and tobacco smuggling in its GDP estimates.

Italy made a similar announcement last week that the country would tally narcotics and sex work into its GDP calculations.  

Nevada, the only U.S. state (in some counties) where prostitution is legal, does measure legal prostitution as part of its GDP.  

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