These were massively overshadowed by imputed rentals for housing, which were £231 billion. This is the sum that for GDP accounting purposes an owner occupier is deemed to pay themselves for the right to live in their own home. This sum has supposedly to be added to GDP to make sure UK GDP data is comparable with the GDP data of countries, like Germany, where renting is very much more common than it is in this country.
As is apparent from the table the net result is that over the last decade, just over 10% on average of GDP has literally been made up. There is no such income in this country. Nor is any tax paid on it.
It is also curious to note that whilst actual rents have grown from 2.5% of GDP to 4% of GDP these imputed rents have fallen from 12% to 10%. There has, of course, been a switch to rented property in the UK, but it is hard to see how imputed rents have fallen so heavily when the cost of houses has risen to significantly. I have not seen commentary on this issue, and it is not the primary focus of this post.
That focus is on the fact that we really should b aware that when looking at GDP data 10% of it simply does not exist. No wonder it is such a ridiculous measure.
Therefore, one of the things done to make GDP better than not totally bad is a waste. Or so says Spudcup.
Sigh.
For he does keep saying that GDP doesn’t measure the things that really matter. Health, security, blah blah. Well, living somewhere is something that really matters – it should be in GDP, right?
“There is no such income in this country. Nor is any tax paid on it.”
I suspect we all know which one he’s more incensed by.
“an owner occupier is deemed to pay themselves”: cloth-eared cunt. The old neuter pronouns (“old” in the sense of ‘in my boyhood’) in English are identical to the masculine pronouns if the item in question is human.
Thus “an owner occupier is deemed to pay himself” does not – or did not then – carry an implication that the owner-occupier is male. I suppose it must have been ill-educated Californians who introduced the fashion for avoiding “him”, “his” and so on as neuter.
However, even if he wished to honour that taboo there was nothing to stop the daft old git writing “owner occupiers are deemed to pay themselves …”; nothing except his lame brain.
“There is no such income in this country. Nor is any tax paid on it.” But tax was paid on it until the 1963 Budget. So Murph’s idea would have led to their being an imaginary slump in GDP in 1963/4.
it is hard to see how imputed rents have fallen so heavily when the cost of houses has risen to significantly
(Assuming that last “to” should be “so”…)
Not really. What has happened to interest rates in the last decade? — the last 8 months or so excepted, but not really relevant because presently most mortgagees are on low fixed rates. As mortgage rates dropped house prices have risen to the point that the proportion of income spent on housing remains constant. If interest rates remain elevated for any period of time, some combination of wage inflation and house price reduction will occur to reach that same point again.
Old spuddo should be really happy then. The property tax I pay is pretty much a tax on my imputed rent. So I get an actual tax on a theoretical income. Just like government creating money out of nowhere.