In the absence of George Orwell’s 1984 and Animal Farm becoming embedded as non-negotiable elements of the national curriculum, it is surely the duty of every parent to remind their offspring of the dangers of economic inference, particularly when uttered by our political masters.
We should advise our children to also be wary of statistics, especially those bandied about by politicians adept at massaging and manipulating them to ‘prove’ a point.
Consider, for example, last week’s figures which purported to prove that the UK had enjoyed, and would continue to enjoy, a significant economic boost from last year’s Olympic Games.
There is absolutely no doubt that the Games acted as a wonderful morale-booster for a largely disgruntled nation weighed down by the relentless, often heartless, affects of austerity.
The opening ceremony showed the world we had, despite everything, retained our sense of humour. Many Britons expected an embarrassing display of extreme political correctness. Instead, we had a laugh, the Queen and James Bond stealing the show.
Then, as gold medals accumulated at a terrifically rapid rate, so the country’s mood changed. Patriotism became fashionable once more.
Unfortunately, there is no reliable measure of a nation’s ‘feelgood factor’ and its subsequent economic impact, although sport provided the former in spades last summer.
But did that translate directly into improved economic activity?
According to a government report published last week, more than £9.9 billion in trade and investment had been generated as a direct consequence of Britain hosting the 2012 Olympics, conveniently exceeding the (still as yet unverified) Games costs of £9.3 billion.
A report by UK Trade and Investment (UKTI) calculated that contracts worth £1.5 billion had been awarded to British firms in countries such as Singapore, Brazil and Saudi Arabia due to “credentials established through London 2012 and UKTI-led events.”
In addition, UKTI estimate that a further £5.9 billion-worth of deals were agreed during a high-powered, 18-day business summit held at the same time as the Games, while an additional £2.5 billion of inward investment has flowed into the UK over the past 12 months.
However, Tony Travers of the London School of Economics questioned the validity of these figures, ostensibly because it’s impossible to say whether this business would have occurred without the Games.
Indeed, it could be argued that many companies were hamstrung by Olympic red tape, unable to advise prospective clients of the work they had successfully completed before and during the Games as a result of a protocol agreed by LOCOG to protect sponsors; the restrictions were not lifted until seven months after the Olympics had finished.
“It is,” said Mr Travers of the UKTI figures, “a stylised interpretation of some possible economic impact.”
Even more oblique were the numbers published by accountants Grant Thornton who suggested that the longer-term impact of London 2012 would be worth between £28bn and £41bn to the UK economy between 2004-20.
Politicians, keen to emphasise how valuable the Games had been, forgot to mention the 16-year timeframe, nor did they highlight Grant Thornton’s reasonable assertion that most of the economic benefits had already accrued and would taper off markedly after 2015.
The extent of the enormous variation in these figures is also cause for concern.
Claiming that estimated Olympic expenditure of £9.3 billion might have an annual impact of £1.75 billion over a decade and a half has considerably less impact upon the electorate than suggesting a £41 billion return on investment.
Unfortunately, too many folk take economic (and statistical) inference at face value; the more polished the numbers appear and the slicker they’re presented, the greater the likelihood they’ll be accepted.
The same is true of figures regarding sporting participation, supposedly the primary purpose of paying for the Games in the first instance.
The government would have us believe that participation in sport has risen by 1.5 million, though closer examination suggests otherwise.
For a start, the 1.5 million figure is not a total arrived at in the Games’ immediate aftermath – it refers to the apparently growing number of us taking part in some form of sport since 2005, without taking account of a massive corresponding increase in UK population.
Moreover, figures produced by Sport England suggest a fall in the number of people exercising over the past 12 months. Between April 2012 and April 2013, more than 100,000 fewer people were exercising for at least 30 minutes a week. Sport England blamed the decline in sporting participation on a cold and wet winter, ie a normal one. The run-up and aftermath of every Olympic Games is invariably shrouded in economic ambiguity and statistical ambivalence; London 2012 is no different, although Business Secretary Vince Cable is right to claim that the Games “created a multi-billion pound business springboard to take British expertise to the world.”
Attempting to apply absolute figures to the Games’ economic impact, however, is an extraordinarily difficult task.
Perhaps the greatest commercial benefit accruing from the Olympics was a wholesale reassertion of British expertise across a number of different fields.
As Mr Travers suggested, this is an impressive list, which included, “delivering the Olympics on time, (acting as) a showcase for British architecture and project management and managing the legacy better than any other cities or countries before.”
While infused with a large dose of subjectivity (no city has ever been late delivering an Olympic Games and London’s ‘legacy’ is only 12 months old), it’s fair to say that the Games did provide a timely boost for business, the extent of which is unknown and there will be a longer-term, beneficial economic legacy, concentrated primarily in London and the south east. Most Britons are looking forward to the coming weekend’s anniversary of what was a wonderful, national sporting occasion which succeeded in engendering a jubilant mood.
Objections to the Games’ cost quickly melted away when the medal count began to build, but that does not mean we should subsequently accept every set of figures presented to us by politicos claiming the Olympics were the greatest thing since sliced bread.
When we’re told at the weekend that London 2012 was a roaring economic success and that benefits will continue to accrue for years to come, retaining a healthy dose of scepticism should be what might be called the ‘George Orwell default mode’, particularly as we still do not know how much the Games actually cost.
