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The Bill makes it clear that the residual functions and responsibilities discharged by the Chancellor will be transferred to the independent statistics board.
Only in the very narrowest circumstances, defined by the Governor of the Bank of England, will the Chancellor be involved in any way in future. We have decided that because of the potential impact on the gilts market and the public finances.
Chris Bryant (Rhondda) (Lab): I am grateful to the Financial Secretary, who has been extraordinarily generous in giving way this afternoon, for letting me intervene. He and others have already underlined the importance of the independence of national statistics if they are to maintain the confidence of the nation. Is it not also important that there should be consistency? For instance, coroners are entirely free to determine at their own will what counts as a drug-related death. If each coroner around the country records a death as drug-related for different reasons against different criteria, however, the statistics gathered on the back of such judgments will mean absolutely nothing. Will there not still be a role for the Government and Ministers to make sure that there is some consistency in how such things are measured?
John Healey: My hon. Friend raises an interesting specific example, which, it strikes me, relates principally to policy decisions that will remain part of the delivery of the coroner service and will therefore be for Ministers to decide; arguably, that will be part and parcel of managing and administering the coroner service. However, in respect of the methodologies and professional standards by which such data may be gathered, I am sure that the statistics board will take a view, as part of its general remit, on good practice, and on the quality and coverage of the statistics system.
Mr. Brooks Newmark (Braintree) (Con): I should like to ask a more practical question. The national statistician talked about a lack of relevance to ordinary peoples experiences with respect to the consumer prices index. I am curious about how the changes will impact positively on pensioners, for example. They are experiencing inflation of up to 9 per cent., whereas the CPI shows an inflation rate of only about 2.4 per cent.
John Healey: For the conduct of monetary policy and Government economic policy making, we clearly have to have a national index of inflation, and that is established by the CPI. As any close examination of the statistical composition of price indexes shows, over a period some prices of some items will go up and some will fall. That has been the experience of recent years. Clearly, we have to aggregate those figures. Our index serves our purposes well; it covers a very wide range and basket of items, which are constantly updated to reflect modern consumption and economic activity in this country.
I shall give way to the hon. Member for Braintree (Mr. Newmark) once more. I shall then set out some substantive matters to the House as part of the opening of this debate, andif he and other hon. Members will forgive metry to make a bit of progress.
Mr. Newmark: I do not mean to try the Financial Secretarys patience, but the fact is that there is a lack of trust. We cannot be cavalier and simply say, This is what it is. When real people are experiencing a higher inflation rate than that described in the official statistics there is a problem, and I am curious about how the Bill will reconcile those two conflicting elements.
John Healey: The overall inflation rate is the same for everyone. As I have explained, some items may be subject to greater inflation or deflation than others, and patterns of consumption may therefore impinge differently on different people. For instance, the cost of private education has risen considerably more than the general aggregate indexa fact that may concern Conservative Members. The single aggregate index that is required, however, demonstrates a system that is refined in the light of experience. In future it will be set out as a responsibility for the statistics board, and it will be more independent than the current system. Both the hon. Member for Sevenoaks and my right hon. Friend the Member for West Dunbartonshire, as members of the Treasury Committee, have argued for that for some time.
The Bill follows major statistical reforms that the Government introduced in 2000, which established the position of the national statistician, the concept of national statistics and the functions of the Statistics Commission. It is right now to build further on those reforms. The Bill is a tribute to the work of the Statistics Commission: it draws on that work and develops the commissions duties, particularly the duty to monitor and report on the quality and coverage of all official statistics.
The reason why it is right now to legislate for the independence of statistics and build on the reforms that we have already introduced is that statistics matterthe interest in todays debate is testament to thatand in a rapidly changing economy and society, they matter more and more. They provide the data that help us to analyse and understand our economic, demographic, political, environmental and social worlds, and they form the evidence for debate, planning and policy. Importantly, in our modern democracy they inform the judgments that people make about the promises and performance of their Government.
Statistics are central to the business of government, but they serve us all. They are a much wider public good, with an ever-widening range of users and currency. However, while United Kingdom statistics are widely regarded as among the best in the world, perceived levels of trust in the figures in our system are lower than we would want them to be. We are legislating for a system that can develop in the light of experience and in response to changing demands from users, and can, through its operation, raise levels of public confidence in Government statistics.
We are legislating not just for the statistics currently produced by the Office for National Statistics, which encompass population estimates, labour market statistics and the production of the national accounts, but for the statistics produced in other Departments. In doing so, we are retaining the strongly decentralised nature of United Kingdom statistical production, a feature that has been a characteristic of our system for as long as statistics have been collected. We have been compiling official statistics for instance, on imports and exportsfor almost four centuries, and our first population census was conducted about 200 years ago.
The benefits of such a system are clear, and are widely recognised. Our approach was supported by the vast majority of respondents to our consultation last year, including the Treasury Committee and the Statistics Commission. Not one of the 79 responses to
that consultation argued for the removal of the statistical role of Departments and the centralising of all production in some form of super-ONS.
John Healey: I will come on to that a little later, if I am able to reach that point in my remarks, but let me say at this stage that many respondents strongly considered that arrangements for pre-release needed to be tightened and that arrangements for pre-release as they currently stand contributed to a lack of public trust in our statistics.
John Bercow: I thank the hon. Gentleman for generously giving way again. Given that the Bill purports to be aboutand might prove in substantial measure to be aboutindependence, why is it that under clause 11 the Government judge that they should in effect be the exclusive arbiter, or appropriate authority, in deciding whether a statistic should enjoy the status of an official statistic? Why should that be determined only by the Chancellor?
John Healey: If the hon. Gentleman looks more closely at the Bill, and in particular at clause 11, he will see that it is not for the Chancellor to determine that, but for Ministers. I think that he will also find that he is talking about not official statistics but national statisticsa point that was made by the hon. Member for Chipping Barnet (Mrs. Villiers). I shall address the detail of that a little later.
In a decentralised statistical systemsuch as that which we have had in this country, which is well established and brings significant benefitsthe most effective way to ensure both independence and the highest standards of integrity and quality is through independent setting of standards and independent assessment and reporting against those standards. That is precisely what the Bill would set up.
We recognised from the outset that there was no question of reopeningor of somehow underminingthe devolution settlement in respect of the United Kingdom statistical system, but, following the decisions of Scotland, Northern Ireland and Wales to be part of the new system, I am delighted that the Bill and the boards remit cover the whole of the UK. The Treasury Committee report, and the evidence, was particularly exercised by that. That underlines the importance of what we are trying to accomplish. The new arrangements will help to deliver more coherence and more comparable statistics across the four countries in the future.
Let me turn to the main details of the content of the Bill. At the heart of the Bill is the creation of an independent board, as set out in clause 1, whose core objective is to promote and safeguard quality, good practice and comprehensiveness in respect of official statistics. It will achieve that objective by performing three principal functions. The first of them is the statutory duty to monitor and report on areas of concern about quality, good practice and coverage of all official statistics across Government and Government arms-length bodies. It will also carry out
that function by developing and promoting definitions, methodologies, classifications and standards for all official statistics.
Secondly, as set out in clauses 10 to 17, the board is required to draw up a code of practice that will set professional standards for the production of national statistics and assess and approve all existing national statistics against those standards. It must also assess any additional statistics nominated by Ministers as potential national statistics, and publish the results in respect of those statistics for allespecially Membersto scrutinise.
The third function that the board will perform to achieve its objective is to oversee the executive office of the national statistician, and we expect that office to discharge the boards statistical production functions, which are currently undertaken by the Office for National Statistics.
John Healey: We have an established system for judging our fiscal rules and the economic cycle. As the hon. Gentleman knows, the National Audit Office audits the assumptions that we make, and the data on which that is based are produced by the independent Office for National Statistics. The NAO has independently audited the start of the economic cycle and it will be asked to audit its conclusion. The hon. Gentleman must concede that the existing system has a significant element of independence and transparency and is fundamentally different from the way in which the previous Government conducted economic policy making.
Kali Mountford (Colne Valley) (Lab): On setting standards, the hon. Member for South-West Bedfordshire (Andrew Selous), who has now left his place, raised the question earlier of family life, and it is my view that such studies are best carried out in an interdisciplinary way. When the board looks at standards, will statisticians work with other researchers in a long-term study to ensure that we examine not simply snapshots of family life on a particular day, but what happens to families in the long term, so that we can properly inform and determine public policy?
John Healey: My hon. Friend makes an important point. Of course, the Bill deals with official statistics, but a good deal of other research is conducted and we should bear in mind the high professional standards of the national statistician and of the ONS. Given that there will be strong representation of the users of statistics among the non-executive positions on the board, I am certain that it will take into account precisely those interests and concerns.
Rob Marris (Wolverhampton, South-West) (Lab):
I am grateful to my hon. Friend for his usual generosity in giving way. As he knows, it is my view that one reason why we have difficulties with pensions is that actuaries messed up their interpretation of growing life
expectancy and did not advise pension schemes accordingly. Against that background, can he assure me that the statistics board will not be packed with actuarieseither among its three executive members or, most importantly, among its six non-executive members? The track record of that profession is at best mixed.
John Healey: My hon. Friend makes the point that he often makes about his view of actuaries. I can give him that general assurance, and nor will the boards six non-executive members all be statisticians. It is important that we have the strongest possible board and the widest range of user interests, in order to constitute the governance and authority that this independent body requires from Ministers. Furthermore, my hon. Friend may be interested to know that the board will be established as a non-ministerial department and that it will have a majority of non-executive members and a non-executive chair, who will be appointed by the Queen. We will ensure that its members are appointed in open competition, in line with guidance from the Office of the Commissioner for Public Appointments.
As I was saying, we want the non-executive membership to bring to the board a broad range of skills and backgroundsin business, academia and public servicein order fully to represent the range of interests of users of official statistics. That will be crucial in ensuring the boards credibility, its ability to hold the national statistician properly to account for the running of the executive office, and its ability to discharge its wider responsibilities for the quality and integrity of statistics.
There, are, however, some criticisms of the approach that we are taking, so let me try to deal with them. First, some sayindeed, one or two Members have raised this issue this afternoonthat the scope of the system of board assessment and approval should apply to all Government statistics, not just to national statistics. A second argument that has commonly been made is that the board and not Ministers should have responsibility for submitting additional statistics for assessment and approval as new national statistics. I have looked very carefully at both the cases that have been made, and let me try to explain to the House why we have drawn the conclusions captured in the Bill.
On scope, first, the nature of statistics, how they are published, the sources of data used, the officials responsible and the methods of production are all widening and changing rapidly. In Government, we no longer just use the traditional collection methods of surveys and census: important statistics are increasingly derived from administrative and management systems. We no longer see statistics as a semi-academic discipline, with statisticians working in the isolation that implies. Increasingly, statisticians contribute with other analysts as key members of multi-skilled, multi-disciplinary teams. We also no longer expect professional statisticians to produce only formal series of statistics. Increasingly they offer expert advice on many other issues and other Government products with a statistical component.
The old definitions of what is and what is not a statistic are becoming blurred. In a modern statistics system, in which we have determined that decentralised
production and the flexibility to respond to user needs are real strengths, what is most important and practical is not that the board, and its independent audit function, covers all Government-produced statistics, but that it covers all the statistics that are most relevant to policy formulation, delivery and accountability and, of course, those statistics that are most valuable to business, academics and a wide range of other users.
I trust that the House will accept that statistics produced and published by the Government differ in importance. Few would contest the importance of unemployment statistics for a wide range of purposes and users. Others may regard the results of the television export survey, carried out by the Department for Culture, Media and Sport, or the egg bulletin as less important. Still fewer would argue that regularly published data on departmental stationery consumption should be treated in the same way or with the same status as the jobless figures.
Mrs. Villiers: It seems strange that the Government are prepared to contemplate a range of official statistics that do not comply with a code of practice that is essentially ethical. The draft code produced by the Statistics Commission suggests that it will cover issues such as integrity, honesty, objectivity and impartiality. Why produce official statistics that do not comply with such basic principles? What will be the value of such statistics?
John Healey: The hon. Lady has got the wrong end of the stick. The point about the code and the responsibility of the statistics board is not only that it formulates the code, but assesses the national statistics and their production against that code. Clearly, with such a wideand wideningrange of Government data, it does not make sense to give the same attention or submit to the same process as the jobless figures, or the economic data that constitutes the national accounts, to some of the more minor examples that the hon. Lady, if she considers some of the 1,300 national statistics that I have placed in the Library, will accept should not be accorded the same status or importance.
Dr. Vincent Cable (Twickenham) (LD): Does the Financial Secretary accept that the difficulty is often not the type of statistics but the frequency? For example, the quarterly waiting list figures, which are national statistics and highly politically sensitive, would be subject to the code of practice, but the monthly figures, which come from the same raw data, would remain official statistics to be used or abused by the Department without the same degree of scrutiny. How can he justify the difference in approach?
John Healey: As I said earlier, the purpose of the Bill is to create a framework that can evolve in the light of experience and changing demands from data users. I would expect the board, as part of its statutory duty to comment on the comprehensiveness and coverage of official statistics, which I have explained, to look at precisely those matters. I would also expect there to be a much stronger incentive and discipline for Ministers to look actively at submitting additional departmental statistics for approval as national statistics where they are central to the policy functions or delivery of programmes for which those Ministers are responsible.
John Bercow: The hon. Gentleman seemed to be perilously close to suggesting that some statistics currently collected and collated by the Government are not worthy of the process. I hope that is not his position, but he needs to clarify that statement. On the assumption that he does not believe that the Government currently collect an exhaustive supply of statistics and that he is, therefore, open to suggestions as to additional statistics that it would be useful to have, may I put it to him that if the board recommends that a new statistic relevant to policy be collected but a Department wishes to decline that request, it ought at least to have a duty publicly to state its reasons for so declining?
John Healey: No doubt we shall return to such detailed points in our deliberations in Committee. However, in my view, where Ministers are also responsible for deciding about resources in their Department, including those devoted to statistical production, such decisions are about policy and resource rather than about professional and technical matters. They should thus properly be matters for Ministers, not for statisticians.
Paul Flynn: Does my hon. Friend agree that cynicism about Government statistics is not new? Alan Clark recalled in his Diaries his view that the only useful purpose of the Department of Employment was to meet once a month to fiddle the employment and unemployment figures, and that it was probably the biggest and most disreputable massage parlour in the kingdom. We should look to the responsibilities of not just one Government but all Governments and give credit to the Labour Government for their great work in restoring the independence of Government statistics.
John Healey: I welcome my hon. Friends remarks and his support for the work of the ONS more generally. I am glad that he takes an active interest in such matters; perhaps we may persuade him to follow a little more closely the Bills progress after Second Reading.
I want to make it clear that the board will be strengthened by the presence of the national statisticiana post that the Bill makes statutory for the first time, and which will have the title national statistician in light of the responses to the consultation.
Mr. Michael Fallon (Sevenoaks) (Con): The Financial Secretary refers to the welcome statutory basis for the appointment of the national statistician, but it is not clear from the Bill whether the national statistician will be appointed on the advice of the Prime Minister rather than the Chancellor, or indeed whether he will have direct access to the Prime Minister in the event of disputes, as, for example, Claus, now Lord, Moser used to enjoy and the service chiefs enjoy at present.
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