7 Statistics
| (27299)
6374/06
COM(06) 39
| Draft Regulation establishing the statistical classification of economic activities NACE Rev. 2 and amending Regulation (EEC) No 3037/90 and certain EC Regulations on specific statistical domains
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| Legal base | Article 285(1) EC; co-decision; QMV
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| Document originated | 06 February 2006
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| Deposited in Parliament | 20 February 2006
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| Department | Office for National Statistics
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| Basis of consideration | EM of 7 March 2006
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| Previous Committee Report | None
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| To be discussed in Council | Not known
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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Background
7.1 Regulation (EEC) No 3037/90 established a common statistical
classification of economic activities within the European Community
in order to ensure comparability between national and Community
classifications and hence national and Community statistics. This
common statistical classification is referred to as NACE (from
"Nomenclature générale des activités
économiques dans le communautés européennes"
— that is "General nomenclature of economic activities
in the European Communities"). In the original legislation
it is referred to as NACE Rev. 1, but a number of subsequent minor
amendments means that it is now known as NACE Rev. 1.1. In order
to ensure the international compatibility of economic statistics
NACE classifications of economic activities are directly linked
to the United Nations International Standard Industrial Classification
(ISIC).
7.2 In the UK the classification of economic activities is commonly
known as the industrial classification and the UK version of the
NACE classification is the Standard Industrial Classification
(SIC).
The document
7.3 This draft Regulation is intended to establish a new common
statistical classification, NACE Rev 2. The Commission says that
this revision is necessary to take account of the development
of the economy during the last fifteen years and major revisions
to other classifications of activities. In particular, the revised
classification reflects the growing importance of services activities
in economies. The revised structure of the classification has
a number of significant changes:
- the Commission claims this matter is within the exclusive
competence of the Community. The Government is taking legal advice
on the practical consequences of this before deciding its view
on the point;
- the number of sections, the highest level of data, is to increase
from 17 to 21 and the number of divisions from 62 to 88;
- there is to be a new section on information and communication,
that is information and communication technology; and
- ICT activities in manufacturing and services are to be more
clearly identified.
7.4 In addition to establishing the revised classification the
draft Regulation would:
- make provision for its implementation in existing statistical
domains, such as short term statistics, structural business statistics,
structure of earnings statistics and the labour cost index;
- allow Member States to establish their own national statistical
classifications consistent with NACE, allowing them to meet the
specific needs of their own economies;
- make provision for the implementation of NACE Rev. 2, covering
amongst others issues related to breaks in time series, including
double reporting and back-casting of time series;
- provide for implementation to be overseen by the Statistical
Programme Committee in a comitology process;[26]
and
- amend eleven Regulations mentioning NACE which need to be
adapted to NACE Rev. 2.
7.5 The draft Regulation would require statistics referring to
economic activities performed from 1 January 2008 onwards to be
produced by Member States in accordance with NACE Rev. 2. But
it would allow for short-term statistics and the labour cost index
to be provided on the new basis from the beginning of 2009.
7.6 The draft Regulation does not cover the production of statistics
for national accounts, agriculture, and balance of payments.
The Government's view
7.7 Although he does not say explicitly that the Government supports
the proposed measure, the Financial Secretary to the Treasury
(John Healey) tells us that the statistics resulting from this
legislation will be of value to the Bank of England, the Department
for Trade and Industry and HM Treasury, as well as to the business
community.
7.8 The Minister also says that:
- the Commission claims this matter is within the exclusive
competence of the Community. The Government is taking legal advice
on the practical consequences of this before deciding its view
on the point;
- the Government feels that implementation in the domain of
short-term statistics from the start of 2009 is too difficult
and should be delayed until the start of 2010; and
- although there would be no extra burden on businesses, there
would be significant costs for government departments in moving
to the new classification, related to changing computer systems,
double running of results of business surveys and producing back
data on the new basis.
7.9 Finally, the Minister tells us that it is the Government's
intention that the UK's new national statistics classification,
SIC 2007, will be consistent with NACE Rev. 2 down to the class
level of the classification (the detailed third level). But it
will include an extra "subclass" level to meet Government
needs for a more detailed breakdown.
Conclusion
7.10 It is implicit in the Minister's Explanatory Memorandum
that the Government supports this draft Regulation. But he expresses
reservations about competence, the implementation date for short-term
statistics and the significant cost for the Office for National
Statistics and other departments in moving to the new NACE. Before
considering the document further we should like to know of progress
towards resolving these issues and to what extent, if they remain
unresolved, they would undermine the Government's support for
the measure.
7.11 Meanwhile we do not clear the document.
26 Comitology is the system of committees which oversees
the exercise by the Commission of legislative powers delegated
to it by the Council and the European Parliament. Comitology committees
are made up of representatives of the Member States and chaired
by the Commission. Back
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