A Socialist Abroad: Every Number Counts

Before reading any further, try to answer this quiz question:

How much does the financial services sector contribute to GDP?

We frequently hear it said that the British economy is dominated by services. Indeed, in the debate in parliament on 30 December both Kier Starmer and Rachel Reeves claimed that services account for 80% of our economic output. Leaders of other parties also referenced this same number. This figure is accurate enough but still misleading in the context of a discussion about trade. Where trade is concerned services are the junior partner. World Trade Organisation data suggest that trade in goods makes up about 63% of UK trade.[1]

Motor vehicle repair needed

(Still, this is better than Labour’s shadow chancellor who told the BBC on 27 December that one in every 14 people in Britain works in financial services. Her claim is false. If she was correct then the population of the UK would be 14 million. Of course, she meant that one in 14 workers was employed in financial services. Which would put the total workforce at 14 million instead of the 33 million it actually is.)

Financial services is a very profitable industry. It can afford to splash a bit of money on lobbyists and one reason that the 80% figure is well known is that apologists for finance tend to promote it. An impressive statistic serves their agenda even if it creates a false impression that finance is typical of services. This is misdirection which takes our attention away from the true scale of the sector’s contribution.

To answer the quiz question I have prepared this table. It shows a breakdown of gross value added by industrial sector using data from Eurostat[2]. Naturally, services are more than one sector. In the table they are the categories from G to T.

A Agriculture, forestry and fishing	0.5%
B Mining and quarrying	0.9%
C Manufacturing	10.0%
D Electricity, gas, steam and air conditioning supply	1.0%
E Water supply; sewerage, waste management and remediation activities	1.3%
F Construction	6.1%
G Wholesale and retail trade; repair of motor vehicles and motorcycles	11.9%
H Transportation and storage	3.3%
I Accommodation and food service activities	2.8%
J Information and communication	7.9%
K Financial and insurance activities	6.4%
L Real estate activities	14.0%
M Professional, scientific and technical activities	9.0%
N Administrative and support service activities	6.4%
O Public administration and defence; compulsory social security	4.0%
P Education	4.9%
Q Human health and social work activities	7.9%
R Arts, entertainment and recreation	1.3%
S Other service activities	1.5%
T Activities of households as employers etc.	0.3%