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“for several decades now, a lack of trust due to a wide perception of political interference has devalued and undermined official statistics”.
Mrs. Villiers: I am not asserting that there have never been problems with public trust in statistics in the past, but this Government have become notorious because of their attempts to spin official figures.
Hugh Bayley (City of York) (Lab): I counsel the hon. Lady that she might do better to focus on the measures in the Bill to improve the reliability of statistics and public confidence in them instead of engaging in knockabout, because her party’s performance when it was last in government was absolutely disgraceful. I remember issuing a press release jointly with a fellow of the Royal Statistical Society complaining about 23 manipulations of the unemployment figures. Let us not chuck mud at each other but talk about making the situation better for the future.
Mrs. Villiers: I assure the House that I am going to consider in detail these provisions, some of which are welcome and a step in the right direction. Nevertheless, it is important to look at some of the problems that have arisen as a result of this Government’s treatment of statistics.
Peter Bottomley (Worthing, West) (Con): Just for balance, for which the hon. Member for City of York (Hugh Bayley) is noted, let me point out, first, that all the adjustments were declared publicly in advance and they were not manipulations; secondly, that they did not all appear to reduce levels of unemployment; and thirdly, that the Government’s normal tactic is to blame us when they think they never did it and, when they think they have done it, to say that everyone else has.
Mrs. Villiers: I am grateful to my hon. Friend for his intervention.
Kali Mountford:
Before we let the political knockabout go too far, should we not stick to some facts? I am using the ONS figures, which we accept that we can trust at least to some degree. When we look closely at those figures and people’s trust in them, it is clear that the more complex it is to analyse them, the less people trust them, while the easier it is, the easier it is for people to accept them. Figures on road traffic accidents are trusted because it is easy to count the heads of people who have died. It is harder to
understand more complex figures, which is sometimes why people do not trust them. Let us not pretend that there is some political motive behind these changes—we should stick to the facts.
Mrs. Villiers: I am grateful to the hon. Lady. There is no doubt that there are problems in understanding complex statistics and that that makes some people hesitate to trust them. However, the much more serious problem is not the methodology or the complexity of the statistics but the way in which they are treated and released by Ministers. We need an ethical code to ensure that they cannot be spun, manipulated or subject to political interference.
Rob Marris: The hon. Lady is saying that statistics should not be spun. She said earlier that confidence is at an “all-time low”, citing one statistic—17 per cent.—from one survey. She should know that in order to suggest that something is at an all-time low one needs a sequence of at least two statistics—it is not good enough merely to cite one.
Mrs. Villiers: I suggest to the hon. Gentleman that if he talks to anyone on any average high street he will be told whether people believe Government statistics. As he likes empirical evidence, let me turn to more examples.
No less a person than Professor Adrian Smith recently concluded in an independent report for the Home Office that crime statistics needed “a radical overhaul” and that certain major crime category definitions were “confusing and misleading”. Moreover, grave concern has been expressed about the decision to keep so many private finance initiative and Network Rail liabilities off the nation’s balance sheet even where it seems clear that the bulk of the risk is being borne by the public, not by the private sector. At the general election, the Opposition made a strong appeal for independence for statistical services. The Shadow Chancellor included that as part of his “triple lock” to entrench stability into the economy. We share the view of the Statistics Commission:
“The statistical system should serve the long-term public interest, rather than the interests of the government of the day”.
We welcome the Government’s move in our direction and their acknowledgement that the 2000 reforms were inadequate. We also welcome their attempts to ensure that the new structures apply across the UK. The people of Scotland, Wales and Northern Ireland have as much right to integrity in statistics as the people of England. However, we regret that it has taken them nearly a decade to provide parliamentary time for this reform, and we believe that the proposals before the House today are still too weak to secure statistics that are genuinely independent of political interference.
We shall not vote against the Bill, but we will make the strongest efforts to strengthen it during its passage through Parliament. We want to ensure that the full rigour of the reforms applies to all official statistics, not only to those nominated by Ministers to become national statistics; to ensure a clear split between the people responsible for producing statistics and those who scrutinise them; to strengthen independence from Ministers; and to restrict radically Ministers’ pre-release access to statistics.
John Healey: It is unclear what the hon. Lady is proposing rather than simply criticising. Is it still her policy that statistics should remain a function, National Audit Office-style, of Parliament rather than the Executive? We have examined that carefully and the only example that we can find of such a model is in Mongolia. Does she still take her statistics policy from Mongolia and her tax policy from Estonia?
Mrs. Villiers: Valuable lessons can be learned from the NAO model. We do not propose to base our policy on what happens in Mongolia, but I shall deal shortly with the way in which we would try to strengthen the board’s independence from Ministers by adopting elements that are currently used for the NAO.
Dr. Cable: Perhaps I can help the hon. Lady by suggesting a better source for the NAO model than Mongolia. The Leader of the House prepared such a submission for the Labour party before it came to office.
Mrs. Villiers: Indeed. Perhaps I should quote directly from the Leader of the House’s speech in 1995. He said that the new independent statistics organisation
“should be placed at arm’s length to Ministers on a similar basis to that of the National Audit Office, and should report principally to a powerful Committee of the Commons”.
The Leader of the House clearly believed that the proposal was credible and I am sorry that the Financial Secretary disagrees.
John Healey: Does the hon. Lady accept that, in the 1997 Labour party manifesto—I can provide her with a copy—which appeared a good two years after the speech to which she refers, Labour committed itself to setting up an independent system of national statistics? We did precisely that in 2000, under the new national framework. We are now moving to reinforce it further by entrenching the independence in legislation. It would be nice to hear the hon. Lady welcoming those moves.
Mrs. Villiers: As I said, I welcome a step in the right direction, but it is too timid and will not restore the public trust in Government statistics that the Financial Secretary wishes to see.
The scope and impact of the code of practice are key issues. We warmly welcome the proposal in clause 10 that the new statistics board draft a code of practice. However, the Bill does not oblige anyone to comply with the code—a striking omission. We will seek to amend that significant flaw and impose a legal obligation.
Even more worryingly, the Bill envisages the code of practice operating in relation only to National Statistics. The Opposition believe that all official statistics should be subjected to the code of practice and the full rigour of the reforms. As drafted, the powers that the Bill grants the board for official figures that fall outside the scope of National Statistics are limited and vague. Consequently, the Bill focuses primarily on the Office for National Statistics, which, as distinguished former national statistician Lord Moser has pointed out, is the part of the statistical system least in need of reform.
John Healey: It is wrong to assert that the Bill or National Statistics focuses principally on what the ONS produces. The ONS is responsible for approximately 250 national statistics. That leaves a little more than 1,000 national statistics that are produced elsewhere in Government and will be subject to the code, the independent assessment and reporting by the statistics board.
Mrs. Villiers: As I have stated, we have evidence that a range of important figures currently fall outside the National Statistics system. I refer again to the figure that the Home Office produced and that the Library reported: only 12 per cent. of Home Office statistical output is covered by the current National Statistics system. If we are to secure statistics that are genuinely free from political interference, it is critical to ensure that the reforms encompass not just National Statistics and the Office for National Statistics, but the decentralised statistical activities of different Government Departments. The Statistics Commission agrees that
“the biggest issues are outside the ONS”,
and has rightly called on the Government to ensure that the reforms
“address the totality of the system”
or “risk public confidence in” departmental
“statistics being reduced rather than enhanced”.
The Bill leaves intact the two-tier system between National Statistics and other official figures—a system about which many have expressed concern. Retaining that two-tier system may not bother the Financial Secretary, but it is a matter of concern to the Audit Commission, the Treasury Select Committee, the Statistics Users Forum, the Market Research Society, the Statistics Commission and the First Division Association of senior civil servants.
Under the Bill, Ministers will retain the power to decide which statistics from their Departments should go forward for assessment to become part of the National Statistics system and which should not. As the Royal Statistical Society has pointed out, that effectively gives Ministers the job of deciding whether the legislation should apply to them or not. The Treasury Committee concluded that that approach would leave out some of the most frequently quoted data and performance indicators on health, crime, education and the management of public services.
For example, as we have already heard from the Liberal Front-Bench spokesman, quarterly NHS waiting lists are national statistics, but monthly ones are not. Figures on sensitive issues such as race and the criminal justice system are not national statistics. Lord Moser described it as “a very basic flaw” to have a category of statistics that are “left totally” in Ministers’ hands. He said that it was a formula for lack of trust, because anybody who looks can see that the Minister has decided that particular things do not go anywhere near the ONS. Charles Bean, chief economist at the Bank of England, expressed concern that retaining a ministerial veto over which figures could be treated as national statistics appeared
“to run against the broad thrust of the proposals”
to make statistics more independent of the Government.
Mr. Fallon: My hon. Friend touches on a really important point: the power of nomination and the power of initiative. It is important that the power to propose statistics for designation is within the hands of the board. If Ministers are so keen to keep some of that power within their Departments, there is no reason why there could not be a co-power, with both the board and Ministers equally able to propose, if necessary. What is really important is that the board should have as much—and probably more—power to propose and nominate statistics for inclusion as Ministers themselves.
Mrs. Villiers: I thank my hon. Friend for that useful contribution. He has much to offer our debate and I congratulate him on his work with the Treasury Sub-Committee, which looked into the matter and produced a powerful report.
The Financial Secretary has argued—not today, but certainly in the past—that Ministers fired by an enthusiasm for transparency and openness will be falling over themselves to nominate their key departmental figures to be assessed as national statistics and thus voluntarily subject themselves to additional independent and searching scrutiny. The Royal Statistical Society points out that that is simply not borne out by experience over the past six years during which the National Statistics system has been in operation. The RSS states:
“If decisions about scope are left to Ministers... we are likely still to have patchy coverage based on the views of individual Ministers rather than the significance of the information to public debate.”
Ideally, the whole two-tier division should be abolished.
The board’s role should be consistent across the statistics produced by the ONS and by Departments; and the code of practice should apply to all official statistics. At the very least, Ministers should not have the power to veto inclusion of their departmental figures in the National Statistics system. There is no good reason why departmental figures, many of which are absolutely vital in assessing the performance of our public services, should be treated to a lesser regime. We need a regime based on integrity, honesty, objectivity and impartiality. As the British Society for Population Studies has pointed out, there is nothing inherent in social statistics that justifies differential treatment under the Bill. Quite the contrary, they make up the very currency of political debate in this country and the Opposition believe that they should be subject to the same ethical standards as those currently part of the National Statistics system.
The Opposition would also like greater clarity in the Bill on the role of the national statistician. It is important that her remit should explicitly include an obligation to co-ordinate the UK statistical system as a whole, and we need a much clearer split between her functions and those of the board. As drafted, the Bill confuses oversight and delivery functions. It gives the board executive responsibility for the way in which the ONS is run and the statistics that it produces, in addition to its scrutiny function. That will give rise to a conflict of interest and, in the words of the Treasury Committee,
“would be likely to have a negative impact on the board’s perceived independence”.
Under the proposed model, in which the producer of statistics takes over a regulatory role for the system as a whole, the board would be judge and jury in its own case. In media terms, it would be the equivalent of the BBC governors not only regulating the corporation’s output but taking over major Ofcom functions and regulating the most important part of the rest of the broadcast media as well.
The Opposition share the view of the Treasury Committee, the Royal Statistical Society, the Statistics Commission, the Statistics Users Forum and many others that there should be a clear separation between executive and scrutiny functions. The Government have sought to provide for an internal split in the way in which the board performs those two different functions. However, the attempt to establish that internal split does not go far enough to answer the serious concerns that have been expressed during the consultation process.
The Statistics Commission has done valuable work to improve the quality and integrity of statistics in the UK. Indeed, one might be tempted to speculate that the structure of the proposed reforms was motivated in part by the Government’s wish to shut down the Statistics Commission, given its fearless criticism of the Government. The commission’s standing as an impartial and powerful voice in favour of statistical integrity has been strengthened by the fact that it has never been involved in the production of official statistics or in the management of the ONS. There is a good case for ensuring that that separation of functions continues with the new board in charge of scrutiny, and for leaving the executive functions to the national statistician. We will table amendments to that effect.
To strengthen its independence from Ministers, we would like the board to be established as part of Parliament on similar lines to the National Audit Office, reporting to a powerful new committee of both Houses so as to utilise the powerful expertise and knowledge across the two Houses. We would like the board’s resources to be determined by a direct parliamentary vote.
John Healey: Will the hon. Lady explain to whom the separate Office for National Statistics would be accountable under her model?
Mrs. Villiers: The Office for National Statistics would primarily be run by the national statistician, because she is the person who is best able to deliver executive functions. The board would also look at the operation of the ONS to ensure that it was held to account. The problem with the Government’s proposals is that the board will be given not only the function of running the ONS and being responsible for producing statistics through it, but the responsibility of regulating it. We would like to separate those functions so that the board could regulate the ONS without being responsible for running it. Such a model would be consistent with promises made by the Leader of the House in a speech made as far back as 1995. It would provide the strongest safeguards and independence from ministerial control.
We are also prepared to look at the alternative approach that has been highlighted by several of my colleagues. That proposes that, if residual ministerial responsibilities are to be retained, there is a strong case
for those responsibilities to be exercised by the Cabinet Office rather than the Treasury. We do not believe that that would provide safeguards as strong as those that would result from a complete shift to the National Audit Office model, but removing the new structures further from the hegemony of the Treasury would secure more effective independence from Ministers.
On pre-release and release practices, the Opposition believe that Ministers’ pre-release access should be radically curtailed.
Paul Flynn: I believe that it was in 1989 that the responsibility for statistics was transferred from the Cabinet Office to the Treasury. That caused considerable concern, and I received a letter from the then Prime Minister, Margaret Thatcher, to say that although the Treasury had the greatest vested interest in fiddling the figures, one should respect its integrity. Should not the hon. Lady consider the Bill—which has been described as arguably the most important and radical reforming Bill of this Parliament—with a little more generosity, and with guilt for what happened to national statistics during the dark age between 1979 and 1997?
Mrs. Villiers: Clearly, the hon. Gentleman is concerned about the decision back in the ’80s to shift responsibility for the ONS from the Cabinet Office to the Treasury. In that case, I hope that he will vote in favour of amendments to change the Government’s proposal that the Treasury should retain those functions.
I turn to release practices. If the reform is to succeed in building public trust, pre-release rules should be determined by the board, not by politicians. Lax pre-release rules can significantly undermine public trust in statistics by fuelling justifiable concern that Ministers will be able to place a misleading spin on the figures. According to the Statistics Commission, restriction of pre-release access is much more important for restoring trust than making the ONS a non-ministerial department. As former national statistician, Len Cook, put it:
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