Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 1-19)



  Q1 Chairman: Professor Rhind, may I welcome you back to the Sub-Committee and perhaps you would introduce yourself and your colleagues?

  Professor Rhind: Thank you, Chairman. May I start, even before that, with apologising for our late arrival. We have been camped outside for a little while, so, sorry about that. On my left is Martin Weale, a Commission member and on my right is Richard Alldritt, the Chief Executive of the Statistics Commission.

  Q2 Chairman: Thank you very much. Now, we have some fairly rapid fire questions for you today because we, too, have a time constraint from divisions in the House a little later on. Can I start by asking you about the Framework? The Framework for National Statistics is, I think, five years old now. How effective do you think it has been?

  Professor Rhind: I think there is no question that it was an improvement, on the fact that we did not have anything comparable to that beforehand and it has certainly paved the way for the code of practice and the Commission and various other, I think, improvements, but for us it has a number of weaknesses and we therefore welcome the fact that there is going to be a review of this and we have got a number of really rather crucial points which we would like to see addressed in the process of reviewing this and I can go through those, if that would be helpful.

  Q3  Chairman: I think we will come on to those in a moment but it is useful to have your general summary first. One of the things you have discussed in previous appearances before the Sub-Committee is the need to secure and enhance public confidence in official statistics. The latest ONS survey showed that only 17% of those surveyed thought that official figures are produced without political interference, and only 14% thought the figures were deployed honestly. Why do you think that is? What do you think we can do to improve that?

  Professor Rhind: First of all, it is very recent that we have had any idea of how good and/or bad the situation was and I think I am right in saying that the UK is the first country in the world which actually tried to look at how good or how bad it is. So we are beginning the process but we have a long way to go. Our work and that of the Office for National Statistics suggests that there are multiple causal factors which merely shift over time and we are in the throes of putting together—a plan may be too grand a phrase for it—a way of actually trying to address the issue. It is clear, for example, that those who are closer to official statistics—those who are expert commentators, Members of Parliament and indeed various others—do not believe that most of the statistics themselves are actually a serious problem. In many cases, it is the way they are interpreted. If you ask the general public, the general public's view is much worse than the experts', if you like, in that particular area. So we have multiple targets that we have to address. Part of it is a perception issue, no question about that, and that of course involves the media in a number of important respects. So we have four or five different areas in which we have to tackle the issue of public trust. Fixing one of them is not, I think, a solution. On top of that, I would say that it is not a five minute job, either—we were recently in Canada and I was very struck how, there, it took something like a twenty year period for the Statistics Canada people to recover from some serious issues that they had in the 1970s and 1980s. So we have the embryonics of a plan which we are discussing with National Statistics people and others, but it has to cover a number of different points.

  Q4  Chairman: My colleagues may wish to pick that up. Finally from me, the Treasury Committee generally and this Sub-Committee has from time to time looked at this whole issue of re-classification, or the decision taken by the ONS in some of the more controversial areas such as public finances and we have been quite struck by the differing periods of time taken by the ONS when it is faced with a classification or a re-classification decision. Have you looked at that particular area? Do you think there is any evidence that the time taken to decide on classification actually depends on the direction of the proposed change, if I can put it like that?

  Professor Rhind: We have certainly looked at a number of particular cases. In some cases, they have turned out not to be re-classifications but correction of errors or other things, but may I pass over to my colleague, Martin Weale?

  Mr Weale: Yes. On the issue of re-classification, obviously different sorts of classifications are of different types. What was initially presented by the ONS as a re-classification of the treatment of roads in the national accounts, they subsequently changed their minds and said it was a correction for double counting. Now, taking that, we have no reason to doubt that the second description was the correct one, and incidentally the initial favourable impact on the Government's budget—favourable from the Government's point of view, was subsequently halved by a revision in the national accounts later in the year although that received much less publicity—here I am quoting Len Cook on that change. So I think that the difficulty in saying that there is a bias one way or the other, that favourable changes go through quickly, unfavourable changes are perhaps delayed, is that some changes, some things, are much easier to address than others. I know, I am quite sure we would all be shocked if, having found that there was a mistake, that there was double counting, it was not corrected as quickly as possible. I think on the sort of particular issue that is in some people's minds, the treatment of the Private Finance Initiative and whether elements of liability associated with that should be treated as a Government debt or not, that is something where the ONS seems to be taking its time, but of course, at the same time, the sort of political issue, whether or how much it brings the Government's borrowing closer to the upper limit of the fiscal rule 40% of GDP, that is also a slow moving issue; it is quite a way off 40% of GDP at the moment, and if borrowing goes on it will get closer, but certainly I think it would be wrong to say—we have no reason to think and the arithmetic would not support it, either—that slow progress of that was done with the aim of stopping crossing the debt limit.

  Q5  Chairman: Sure. I was really wondering about decisions that seem to get postponed or run on for ever, whether there was some way the Commission would note in its Annual Report that there are classifications still awaiting, if you like, that there should be some end date or at least some notification from you that there are outstanding matters and there was a period beyond which you would expect them not to be left outstanding, if you like.

  Professor Rhind: As a matter of principle, if it is within our locus we should be monitoring those and trying to ensure that undue delay does not occur. This may be an expression of failure, but I do not recall any at this particular moment.

  Mr Alldritt: I cannot recall any being raised with us directly; if there were, there are steps we could take to investigate and would do. It is quite possible that an issue of that kind has been raised, but I cannot seem to recall it at the moment.

  Professor Rhind: Can we offer you a note on that?

  Chairman: Sure. That would be very helpful.[1]

  Q6 Peter Viggers: The Framework for National Statistics when published in June 2000 said that it would be reviewed in five years or so, which would take us through to the summer of this year. What progress has been made in reviewing the Framework, to your knowledge?

  Professor Rhind: We are awaiting the Government's statement of the launch of this and the details of the terms of reference. We have had some discussions with HM Treasury and, indeed, with the Office for National Statistics. We are, as I say, still waiting for the formal announcement of who is going to do this and how it is going to be done, and what it is for. On 16 November the Commission has its annual Open Meeting and the theme this year is the Framework for National Statistics, at which we will have the National Statistician and various other people speaking and the Treasury has welcomed that as an input into the review but we very much hope and wish that this gets on and progresses very rapidly.

  Q7  Peter Viggers: I would submit that you are, whilst a very small body, very strong in specialist knowledge and I would hope that you will be centrally involved in the review.

  Professor Rhind: Thank you. We certainly believe we have something to contribute and we have already written to the Financial Secretary to the Treasury with a number of points that we believe the Review has to consider and are matters in the public domain so we can talk about it, if that would be helpful.

  Q8  Peter Viggers: Would I be fair in pitching in rather higher than that and saying that your mission statement might be summarised as saying that you would like to see an accurate and appropriate Framework for National Statistics and that very much centres your objectives?

  Professor Rhind: Absolutely. We think some of the things in that are not too difficult to achieve—we have all learnt, I think, from the experience of the last five years—a number of things are improvable. There are some big issues in there which will be more difficult, but some progress can certainly be made relatively easily.

  Q9  Peter Viggers: Well, speaking personally, I would like to strengthen your arm in those discussions. Turning to the code of practice, what revisions would you like to see made to the code of practice?

  Mr Alldritt: I think there are a number of changes we would like to see to the code of practice. The code is quite a complicated document; it comes in 13 booklets and it covers a great range of things. There are only a small number of those which are very specific about what action is acceptable and what action is unacceptable. There are a lot of areas, for example, on how to manage the quality of statistics and the consultation processes that should take place in deciding what statistics to collect and in relation to what independent commentary with statistics looks like, where it is very much left at the discretion of government departments producing the statistics to interpret the code. We would like to see that ambiguity and the exceptions and exemptions taken out of the code, so there is quite a lot of change we would like to see.

  Professor Rhind: If I may, Chairman, just add to that—the 13 different sections of the code—the code itself and 12 protocols—almost all the complaints we have had relate to one of those 12 areas and that is, in terms of release practices, information being released early, or inappropriately. You can either take the view that the rest of the code is exemplary and no-one has a problem with it or, alternatively, the view that I think we take, which is that significant portions of the rest of the code are so ambiguous and aspirational that it is very difficult to pin down whether the code is being followed or not. Our experience of visiting a number of government departments over the last few years is that the interpretations of the existing code made by different government departments, really does vary a great deal and almost all of them—in fact, all of them, I think—believe that their interpretation is perfectly fair and reasonable. That suggests to us that we need to re-visit the code and make it a clearer and tighter document.

  Q10  Peter Viggers: So would it be a fair paraphrase of that to say that some departments are selective and early in the use of some statistics?

  Professor Rhind: I am sorry; I am not trying to avoid the question, but there is a very interesting issue which at the moment I do not believe anyone knows how to handle, which is that the distinction between statistics collected by surveys, which is the traditional method, and for which the code was originally written, and statistics which are increasingly flowing out of administrative and bureaucratic systems and release practices in regard to things that you are collecting every week, every day, are a very difficult and not thought-through challenge yet. So forgive my being complicated, but there are these two different sorts of statistics and the code really relates to one of them and we need, all of us, to think how we can cope with the other sort of statistics.

  Q11  Peter Viggers: You have in the past been prepared, under cross-examination, to agree that certain departments are more culpable than others. Are you prepared to name government departments which you find are frequently among the worst offenders?

  Professor Rhind: At the risk of sounding complacent, I have to say that the problems we have had with clear breaches of the code this year are substantially fewer and we have reported a number of cases in our Annual Report, I think annex D from memory. You will see that those are fairly modest. We have investigated all of the ones which seemed to be breaches and in some cases there were, we think, genuine mistakes made and we are pretty confident that we are on a path of improving that, so the obvious issues are less serious than they have been and we have put them out in there; the non-obvious issues are about this big problem about how on earth do you know if you are transgressing a code which is ambiguous and, in some cases, simply aspirational. So I think there are problems, but the trouble is, we cannot pin them down until we actually set the guidelines a bit more clearly.

  Q12  Peter Viggers: Your small body is there because it is objective but, if it is to retain a reputation for objectivity, it must occasionally be judgmental.

  Professor Rhind: Absolutely. And there are a number of government departments that have not always totally agreed with our observations on what they have done in times past.

  Q13  Peter Viggers: To what extent are the worst offending departments named and shamed? What sanctions do you have?

  Professor Rhind: Our standard process, is to do some kind of study, get some evidence, often in response to a complaint or a query and then to go to the department and say, "On the evidence we have available, this is what has happened, it appears to us to breach the code or some other criterion; do you have any observations on that?". If that department then says, "Oh, dear, clearly we got that wrong and we will write it down to you and say that this was a mistake and it will not happen again" then I think that is a reasonably satisfactory situation as long as we monitor that it does not happen again. If a department were not to take us terribly seriously, we have two sanctions; the first is that our operations are largely in the public domain and our correspondence is in the public domain and our reports are in the public domain, and the media take quite an interest in this, so that is helpful—usually helpful—in terms of publicity, and the second sanction, Sir, is to come back to this Committee; through your Chairman you have kindly offered to assist us in times past and we would not hesitate to do that if that seemed the necessary step to take.

  Q14  Peter Viggers: The latter step, really, I assume you have not taken that.

  Professor Rhind: We have not taken the Armageddon option yet, Sir!

  Q15  Peter Viggers: How many bodies are hung out to dry, or how many heads are on spikes?

  Professor Rhind: We have had, as I said, I think, earlier, rather fewer problems of the discernible kind this year and I think there are 15 cases of some issues in the Annual Report, of which five or six are where we believe there were breaches of the code. We followed each of them up and were happy with the result, so on that basis we did not feel it was necessary to come to you.

  Q16  Peter Viggers: How significant is the influence of ministers over statisticians in government departments? To what extent is the principle that statistics should be free from political influence compromised? Is it possible to answer that general question?

  Professor Rhind: We think that, first of all, there is a widespread perception issue that ministers interfere in everything and that that certainly is manifested in the response that the Office for National Statistics got to their Omnibus survey where the very low percentage of people believing that the figures were not fiddled came out. I think it is clear that ministers do have some strong influences on statistics and examples of that are, first of all, that ministers decide which statistics are to be classified as national statistics and thereby to be created following a process which is related to the code of practice and supposed to meet the code of practice. More than half—it is rather difficult to be precise—of British Government statistics are not produced by the Office for National Statistics. In other words, they are produced in whatever manner the department deems to be the right manner to create those and, as I say, the ministers decide which ones are to be so labelled and to meet the code of practice. Ministers also decide a number of issues about release practices within the code of practice and they also, in some senses, decide which statistics are to be created, or be collected. There is no question that ministers do have some real impact on this and we have always taken the view, for example, that ministers should not decide on which statistics are to be produced in accordance with the code of practice.

  Q17  Peter Viggers: If the National Statistician were granted greater authority over government department statistics, would this help to neutralise ministerial influence?

  Professor Rhind: Certainly we think it would be a helpful step forward if the National Statistician had some greater authority over statistics created across the piece. As I said a moment ago, I think probably more than half of official statistics are created outside of the Office for National Statistics, which is where the National Statistician has direct line management responsibility. She has influence in various forms across statisticians elsewhere as Head of the Government Statistical Service. She certainly has some influence in the development of staff and so on, but her real authority is pretty modest.

  Q18  Peter Viggers: Often the statistics are all correct—I am thinking of crime statistics, a well known case. Every time the crime statistics come out, Opposition parties say crime is up, pointing at one figure and Ministers say that crime is down, pointing at another. Does anybody have any role in blowing the whistle on this dispute and saying, "The whole piece is not being reflected"?

  Professor Rhind: That is a very timely question. As it happens, we were having presentations by Home Office statisticians this morning about explaining the nature of the different sources of evidence and what they mean, and so on. I think generally we believe that the quality of British statistics as a group, insofar as you can talk about all of them, is probably getting a bit better. In some respects, actually, they are as good as anywhere else in the world, but what we are most worried about at the moment is exactly the issues raised; in other words, reasonable interpretations out of the statistics. We have seen a number of examples where what has been said, for example in the media, bears no relationship to what came out in statistical releases and descriptions of the statistics. I think there is a very major issue about whom you can trust to interpret statistics and how do you get simple, clear but reasonable messages out of it.

  Mr Alldritt: At present we are in the early stages of a review of crime statistics, which by Christmas we expect to have pinned down about five or six issues that we will want to look at in greater depth. It seems highly probable that one of those is going to be exactly this issue of how to extract messages or interpretations from the statistics convincingly, in a way that will command wide confidence. We will be expecting to make recommendations in this area.

  Professor Rhind: May I turn to my colleague, Commissioner Weale.

  Mr Weale: Could I just add another point on that note? This seems to me to demonstrate very clearly the importance of having a means of disseminating statistics which is not only independent but also visibly independent—that the phenomenon you have described over crime statistics and the way they are presented in different ways is, in my mind, associated with the fact that statistics at large are not trusted by the public and I think that would be helped by having more visible independence in their presentation and interpretation.

  Q19  Peter Viggers: So rather than presenting a large well from which people can select their own facts, you go some way to sifting this and producing some kind of summary?

  Mr Weale: Well, you do that, but it needs to be visibly independent of the political process.

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