Money literally could not buy this kind of publicity for Brand Britain
Published 03/05/2011 | 08:00
What does the UK economy get out of the Royal wedding? That might seem a rather nerdy question to pose, just the sort of question that justifies economics' soubriquet of "the dismal science".
Any tally of the additional money spent by visitors, setting that off against the loss of output because of the extra bank holiday, does have a dismal ring to it. But what lifts the whole matter to a different level is the value and role of a brand. On its ability to attract a global television audience, the British Royal family would appear to be the greatest brand on earth. But is it worth anything?
On conventional arithmetic the impact of the wedding on the economy looks to be broadly neutral, maybe slightly positive. On the one hand it is disruptive, not just because of the extra day of holiday but because it comes in the middle of a whole wodge of extra days off, with the late Easter jumbling up with the early May bank holiday. You would normally expect any lost output to be recovered quickly, as common sense would suggest. But if you look back at the precedent of the Queen's Golden Jubilee in June 2002, there was indeed a sharp fall in industrial output that was not immediately offset by subsequent gains.
On the other hand, the wedding is global in a way the jubilee was not and the commercial sector in London has responded vigorously to the occasion, with all sorts of incentives for visitors to part with their cash. There has been a boom in tourist numbers with estimates varying from 200,000 to 600,000 extra visitors. And I suppose all those foreign news crews who were developing coverage for the two billion viewers must have spent a fair amount extra too.
PricewaterhouseCoopers (PwC) has attempted to put some numbers on this whole thing, estimating that some 550,000 people will witness the event in or around Westminster; that 560,000 people will have travelled to the capital and that the commercial benefit to the London economy would be £107m. That is helpful, particularly at a time such as this, but it is not huge in the context of a regional economy of upwards of £200bn a year. It depends on how you measure it, but I saw calculations recently that ranked the London economy as the third-largest in the world, behind only New York and Tokyo. PwC notes that the Olympics next year is expected to attract more than 10 times the number of visitors, and that they will stay for around a fortnight, not just a day.
Put all this together and I would guess that there is a net plus, particularly to London, but it will not be huge in the context of the whole economy. But in the longer term it reinforces the British brand, gaining publicity that money literally could not buy. No promotional video for the UK could conceivably do what this wedding does.
Unlike that other great European resort, Paris, London is not just a place that people visit; they also come to work. It is a resort where people work as well as play. The London commuter region has the largest number of non-national professionals anywhere in the world. Putting on a show like this anchors and reinforces this role.
But the plain fact is that if the region's economy prospers it will help the whole economy and in any case this wedding is about the British brand, not just the UK one.