Letters: Make sense of the GDP figures if you can

These letters appear in the October 3 edition of The Independent

Hamish McRae has certainly hit the nail on the head (“The baffling world of economic stats”, 1 October) but it needs hitting a lot harder. The question is whether the GDP figures, however they are calculated, really give us the information we think they do.

GDP could be considered an average (mean) and it doesn’t generally correspond to what most people experience. In particular, a large increase in the earnings of a few at the top increases GDP without affecting the finances of most Britons. Average income (median) is much more informative and describes what most of us experience in the economy – it has been going down over the last few years, and don’t we all know it!

The real problem, however, is the idea that any one statistic can really describe a system as complex as a modern economy.

Of course, including prostitution and drugs will surprise many people, but it seems perfectly reasonable to do so – a good example of why GDP is not necessarily the best statistic to measure the economy.

An even shakier area is health. It became clear in the US about 20 years ago (where even government health programmes pay out to private entities) that medical expenditures were contributing strongly to the GDP (now 20 per cent in the US), so that the more people were sick, the better the economy!

In Britain it’s even worse – privatising medicine changes internal government transfers (not part of the GDP) into payments to companies and individuals, very much part of the GDP. How much of the recent supposed increase in GDP is really due to changes in the way that NHS money is handled?

John Day
Port Solent, Hampshire

Ben Chu writes (1 October) that changes to the way the Office for National Statistics calculates GDP, such as including research and development in investment figures, raises the level of real investment in the second quarter of this year 8 per cent above its previous 2008 peak.

Hamish McRae writes in the same issue on the increasing problems of measuring the economy as we move from the traditional world of capital assets such as machines and ships to the virtual world of intellectual property.

Neither makes the connection to Jim Armitage’s article, again in the same issue, on how the UK is an attractive location to register the performance of research and development leading to patented products. This is due to the attractive UK tax breaks on profits made from these products.

If the Chancellor was serious about clamping down on multinationals avoiding corporation tax, and stopped the artificial arrangements designed to profit from such tax breaks, there is every possibility that the UK’s real investment performance would relapse into the usual rather sad story.

Robin Lynch
Woking, Surrey

Life and death in Cameron’s Britain

On the day that David Cameron announced his ambitious plan for a “Britain that everyone is proud to call home” I noticed an inquest report on a suicide.

The poor unfortunate had advised his gas supplier – as they were cutting off the power – that he intended to harm himself: as, indeed, he shortly did. The workers observed that they had simply ignored his comments since they heard similar statements quite regularly.

If we could discover the actual numbers behind “quite regularly” we might gain a clearer idea of the scale of the challenge that Mr Cameron has set himself.

Alan Hallsworth
Waterlooville, Hampshire

Trade deal could ban living wage

Simon Prentis’s suggestion (letter, 1 October) to raise the minimum wage to a living wage in order to eliminate the need for working tax credits and thus help plug the £25bn hole in Britain’s finances is an excellent one. But it is unlikely ever to be put into practise in view of current negotiations in respect of the Transatlantic Trade and Investment Partnership (TTIP) between the EU and US.

A particularly disturbing part of the deal is that it would allow corporations to sue governments for changes they feel might harm their profits. This appalling rule is embedded in many existing agreements, and companies are already using it. For instance, Egypt is currently being sued for nearly £50m for raising the minimum wage in response to a demand of the Arab uprisings.

If TTIP goes ahead any increase in minimum wage to a living one here could result in a similar scenario, and big business would have succeeded in completely replacing the idea of a state run for the benefit of the people by one totally controlled by what is best for corporations.

Norma Lee
Bolton, Greater Manchester

Visitors still flock to Tate Modern

I would like to help dispel an apparent misunderstanding about Tate Modern’s visitor figures (Mary Dejevsky, 30 September).

When Tate Modern opened in 2000 we anticipated visitor figures of around two million. When around five million came in the first year we were simply bowled over. We agree with Mary Dejevsky that things shouldn’t be valued on numbers alone but it’s hard to ignore that, when the public voted with their feet, they demonstrated that a national gallery for modern and contemporary art was wanted as well as needed.

The year after we opened the visitor figures dropped below four million and subsequently grew, now averaging around 4.8 million. Tate Modern’s enormous lift in visitors in 2012, when the eyes of the world were on London, was due to the Olympics and the opening of the new Tank spaces for performance and installation art. That summer received record figures.

Last year we closed the Tanks and also the Turbine Hall to install a bridge linking our new building to the original Tate Modern. Naturally, this had an impact. Figures will inevitably fluctuate, year on year, as we try to strike a balance between exhibitions of well-known artists and those who are new to many audiences in the UK. Even with these fluctuations, Tate Modern remains the most visited contemporary and modern art gallery in the world.

Sir Nicholas Serota
Director, Tate

Whoever you vote for, go and vote

By now, dear voter, the choices available to you come next May’s general election are becoming a little clearer, especially after George Osborne’s upbeat assessment of the next few years under the Conservatives.

However, please promise me something: whatever your age, please use your vote. Don’t listen to those who tell you it won’t make a difference or that voting is not for you or that all politicians are the same. Many of these parties are keen for you to stay at home, especially if you are a young voter.

Many of these money-saving measures will affect younger voters, but pensions will be protected. Why? As older voters can generally be relied on to pitch up at the polling station they have to be courted, whereas younger voters who are getting hammered financially and who don’t vote can safely be ignored and abused.

If politicians are to sit up and notice, you youngsters should start using your vote.

Paul Jenkins
Abbotskerswell, Devon

Last election, I got into bed with Clegg and to my horror woke up with Cameron, who now confirms that you have to back someone you can’t stand to get who you want. This is a very stupid system.

David Penny
Witley, Surrey

Arithmetic on the Iraqi frontier

So a £10m RAF Tornado jet fired a Brimstone missile, price £105,000, over Iraq during a mission costing around another £35,000 to “take out” an Isis pick-up truck, valued at perhaps £5,000. However, it is not known whether any of the jihadi warriors thought to be on board were injured or killed.

Putting aside any moral questions, am I the only one left wondering whether the maths really adds up?

Charles Garth
Ampthill, Bedfordshire

Town has seen it all before

Maidenhead as the divorce capital of Italy (report, 2 October)? The town has seen it all before, to the extent that in the 1920s there was a saying: “Are you married? Or do you live in Maidenhead?” The novel Affairs of the Heart by HG Wells even has a chapter entitled “At Maidenhead”. Pre- and post-Profumo, we take it all in our stride.

Richard Poad
Chairman, Maidenhead Heritage Centre

Bear necessity for students?

I too, many years ago, took my teddy bear with me to university (“Ted talks”, 30 September). The reason? Puerile pretension, pure and simple, and I suspect this is why anyone takes their teddies with them.

Nick Pritchard
Southampton