How did the ONS get its GDP figures so wrong?

The Office for National Statistics let a bombshell drop on Friday. Halfway down the first page of their grippingly-titled document ‘Impact of methodological and data improvements on current price and chain volume measure of quarterly gross domestic product (GDP), 1997 to 2021’, they slipped out this sentence:

‘Annual volume GDP growth in 2021 is revised up 1.1 percentage points to an 8.7 per cent increase; this follows an upwardly revised 10.4 per cent fall in 2020 (previously an 11 per cent fall).’

This dry text conceals the revelation that GDP is 1.7 per cent higher than they had previously reckoned. This meant that by the time the Omicron variant hit, the UK economy was actually 0.6 per cent above its pre-Covid level – not 1.2 per cent below, as had been thought. So it turned out that we were not, as Chris Giles of the Financial Times put it, ‘a global outlier anymore’ in terms of economic recovery from lockdown. In fact, it wasn’t a case of ‘anymore’, we never had been. Britain had even outperformed France and Germany.

This is good news, of course, and the ONS deserves some praise for coming clean, even if they did so in their own lustreless way. But this is still disconcerting. The UK’s sluggish, teetering-on-recession GDP has been the constant background to almost all news, and almost all political discourse, over the last three years, something we all just ‘knew’. What next? ‘Arch Duke Ferdinand still alive, World War One all a terrible mistake’? ‘Martin Stanford Peters’ goal disallowed, Germany win 1966 World Cup’?

Chancellor Jeremy Hunt reacted to the news like a house master popping his head round the door of the dorm in the penultimate chapter of a ripping school story when all seems lost: ‘Good news, chaps!’.  I suppose he can hardly express anger or frustration that another part of his own government has made such a colossal error. To us mere punters, the nonchalance of the ONS dropping this bombshell is more galling. After all, when the situation is reversed – when we are even slightly late or inaccurate with our figures on far more trifling sums – the powers that be immediately get sniffy with us, issuing fines and sending nasty letters.

But perhaps just as remarkable is not the bombshell itself but the muted reaction to it. By Saturday the story was relegated to the sidelines. And that is odd, because shouldn’t this be a bigger deal? Imagine if it had been the other way round, and GDP was 1.8 per cent lower than first thought? I suspect we’d have heard quite a lot about that.

The ‘you had one job’ of the ONS is to compile accurate national statistics. And GDP surely is the most important national statistic of all. You’d think they’d pay particularly close attention to that. But not, it seems.

Indeed, this blunder makes you wonder: if they can get this one wrong, just what else are they cooking up or nodding through? This is the same organisation, remember, that confidently proclaimed earlier this year that 1 in 67 Muslims is ‘transgender’. You begin to see why some people start going fuzzy round the edges about official information and preferring their own research on YouTube.

Because, despite it falling out of the news so quickly, this story really matters. As everybody knows, if you feed the wrong information into a computer it will give you a wrong answer. Huge economic policy decisions, affecting everyone in the country, were taken – not least during the brief span of the Truss administration – on the back of some dodgy data.

The ONS seems often to be little better than ‘our survey said’ on Family Fortunes. We are often told that crime stats, stats on population and immigration, or on employment (as noted here) are likely much lower or higher than stated, or hiding something embarrassing deep in their folds. What exactly is the point of stats that are incomplete, misleading, opaque or just wrong?

Here’s a radical thought. Produce accurate, clear national statistics. Maybe we could even have some sort of an office to compile them?