The Economic Contribution of UK Rail, published 2021
APPENDIX 3: METHODOLOGY MODELLING THE WHOLE UK ECONOMY Oxford Economics put together a detailed model of the UK economy, initially comprising 105 industries in each of the 12 standard statistical regions. The 105 industries are those found in the most detailed version of the ONS set of UK ‘input-output tables’, which provide data on transactions between UK industries in a given year, as well as other details of their sales, purchases, and components of GVA. To start with, for each industry in each region, for calendar year 2019: 1. The number of employee jobs was derived from the ONS Business Register Employment Survey (BRES). 2. Average wages were derived from the ONS Annual Survey of Hours and Earnings (ASHE). 3. The wage bill for each industry in each region was taken as the product of employee jobs and average wages. 4. Total GVA was estimated by combining data on GVA by region and broad industry from the ONS Regional Accounts, with national GVA for industries at the very refined level from the ONS Low Level GVA (Output) dataset, and the detailed pattern of employee jobs by narrow industry and region. The components of GVA other than the wage bill were then added in, on a more stylised basis: 1. Employers’ national insurance contributions (NICs) were calculated on the basis of the average wage, the UK NICs system in place in 2019, and the number of employees. 2. At the national level, the share of total employee compensation in GVA, in each industry, was estimated using ratios in the latest ONS ‘input-output table’ with the 105-industry split. Employers’ pension contributions were taken to be employee compensation, minus wages and employers’ NICs. This was spread across the regions in proportion to the wage bill. 3. The number of self-employed jobs by broad industry group, at the national level, was taken from the ONS Labour Market Statistics dataset, while the share of GVA accounted for by selfemployed income, at a 64-industry level, was taken from the most recent ONS input-output table.35 Self-employed jobs and self-employed income were then spread across the 105 industries, using the pattern of employee jobs, and relative wages, as a guide. The ratio of self-employed individuals to employees in each region was then assumed to be the same, for each industry separately. 4. The share of taxes on production in GVA was taken from the 105-industry input-output table, while capital depreciation was estimated for each of those industries, using information from the 64-industry table. 5. For each industry in each region, the net corporate operating surplus or deficit was taken as the residual, i.e. total GVA minus total employee compensation, self-employed income, taxes on production, and capital depreciation.
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The most recent table has only 64 industries, but includes a more detailed breakdown of GVA by component than the most detailed, 105-industry table. In particular, self-employed income and capital depreciation are split out of the gross operating surplus.
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