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“It is felt that, of late, the production of statistics has become politicised and when set against a backdrop of distrust in the Government generally, then a comprehensive restructuring of the statistical service is necessary.”
The fact that such a restructuring was necessary is made evident by the Bill, and by the Financial Secretary’s introductory remarks. He acknowledged that lack of trust in our national statistics, so his
colleagues’ attempts to distance the Government from the problem fall rather flat on their face.
I should like to illustrate, with a few brief examples, some of the problems that I hope that the Bill will seek to correct. They go right to the heart of the statistical base of the economy—to, for example, the definition of gross domestic product. The national accounts have been re-based several times in the past 10 years, and that has played havoc with data consistency and continuity of the series of that vital information. Items have regularly been added to the scope of measures of gross domestic product, and that offers the potential for rewriting recent growth history of GDP, often to flattering effect. A more recent example is the inclusion of own-account computer software, which increased GDP by 1 per cent. in 1999 and subsequent years. The Office for National Statistics subsequently acknowledged that software estimates—and I quote from its “Economic Trends” of February 2006—
“did not meet international best practice”,
and that is why the series was revised the year before last.
Another example is the impact on the public accounts of changes of definition of general Government spending, particularly since and including the adoption of the European standard accounts, known as ESA95. Let us consider the 1997-98 national accounts, the last set of accounts for which the Conservative Government could be held responsible, as they largely followed the 1997 Budget. Taking into account all the changes to the definitions of general Government spending and GDP over the past 10 years, a £10 billion reduction on Government expenditure is revealed. That is roughly equivalent to 1.4 per cent. lower expenditure, as a proportion of GDP, than was the case at the time. On the revenue side, the impact is even greater, as the ratio of non-oil taxation to GDP at market prices in the 1997-98 accounts is 1.7 per cent. less than the numbers that were reported at the time. Those figures clearly help to flatter the Government’s public accounts position and management of the golden rule and various other rules by which the Chancellor seeks to conduct his policies.
Another example is the taxes paid directly to the European Union, which are excluded from the definition of Government receipts. Tax as a percentage of GDP is therefore reduced, as it is no longer paid directly to the Treasury, even though individuals and businesses have to fund the payment. They pay it, but the Government do not see it. In the fiscal year 1997-98, that sum amounted to £5.8 billion in today’s prices or 0.7 per cent. of market price GDP on current definitions. It is hard to find in official British data sources what the sum is. Quarterly figures for taxes paid directly to the EU, such as the VAT precept, are tucked away in a series of statistics in the ONS’s calculations of the balance of payments, and do not appear in its taxation series at all.
Another statistic by which the Chancellor sets a great deal of store is the calculation of public sector productivity. I remind the House of his claim in the pre-Budget report of 1998 that productivity growth was the
“fundamental yardstick of economic performance”.
That is an oft-quoted phrase, but the measurement of public sector productivity—I acknowledge it has
improved over the past 10 years—remains woefully inadequate. As the ONS accepts, it is difficult to calculate that growth. It is important, both because it is the fundamental yardstick by which the Chancellor wishes to be judged, and because productivity gains swell GDP and thus, by definition, help him to meet his targets.
An example of the potential for distortion is the calculation of the Gershon efficiency savings, which are more recent than other examples I have given. Despite Government efforts to present those efficiency gains as genuine and verifiable, I am not alone in doubting them. For example, if we look at non-cashable savings in local government, officer time spent working on efficiency gains counts as an efficiency gain. If we look at capital projects, reductions in tender prices through negotiation on capital projects that have not yet been contracted count as an efficiency gain. Those are notional gains—they are definitely non-cashable—and they leave plenty of room for doubt.
I wish to consider three clauses in the Bill, including one on pre-release data, which has been well covered by other hon. Members. The Government have made a feature of seeking to encourage greater transparency across government and the private sector, where companies are encouraged to provide timely and complete disclosure. In the public sector, a raft of target-setting and value-for-money assessment regimes, as well as the Freedom of Information Act 2000, are designed in part to increase transparency and allow greater scrutiny by outsiders and independent bodies. In the Bill, however, the Government seek to apply the existing 40.5 hour pre-release limit to market-sensitive data—not a great advance. As we have heard from many speakers, that is the longest period of advance notice available to any Government of a comparable major economy. Why have the Government failed to take advantage of the opportunity offered by this welcome Bill to look at the issue again?
On page 49 of its report, the Treasury Committee cites the conclusion on the release of market-sensitive data reached by the independent Phillis review of Government communications in 2004. The review decided that there was
“no need for the 40 hours of advance notice of National Statistics that Ministers receive”.
I therefore support the call by my hon. Friend the Member for Chipping Barnet (Mrs. Villiers) for a reduction in the time limit. Indeed, the board itself should decide what the time limit should be. On the issue of pre-release, data should be released in tandem with ministerial comment. Other hon. Members have referred to the problem of allowing Ministers time to put their gloss and spin on numbers as they are released. There would be greater confidence in the numbers if they were made available publicly in a simple format by the board—perhaps through the statistical hub that has been mentioned—with Ministers making a separate release in which they put whatever complexion they wish on the figures. Commentators would be more confident about the figures if they thought that a Government Department spin machine was not driving events.
The Financial Secretary referred to the statistical hub. The expression is not used in the Bill, but it is an important and welcome development. If I understood
him correctly, benefits would derive from consolidating data releases through the hub. That is quite right, but it is important to look at the proposal in detail in Committee. There are a number of problems with the release of data, many of which have not been covered in our debate, not least the importance of making information available in a readily accessible form. That applies not just to national statistics, as reform would be welcome across government. As the Economic Secretary is in the Chamber, may I remind him that the Chancellor’s pre-Budget and Budget reports have shown a worrying decline in the availability of simple, factual information compared with reports issued by his predecessors? For example, there used to be a standard form of release for politically sensitive figures on the way in which Budget tax changes affect particular income groups, but such figures are no longer available in the published documents.
The economic trends published by the ONS used to show the way in which Britain’s tax and social security burdens compared with those of other countries, but that information has not been published since March 1999, so commentators have to dig around for the data independently. It would be useful if that information were restored to the statistical hub.
The ONS increasingly tends to release less favourable data in a non-standard form on Excel spreadsheets, tucked away, without any announcement at the front of the website. Although the data appear on the website, it is important that in Committee we consider whether any new data that are released could be flagged up at the front of the website, rather than released on the website with no fanfare at all, so that only data junkies who expect to find it can go in and look for it. An example is the taxes and prices index, which shows the direct and indirect tax effect on prices. It appears to have been quietly dropped by the Treasury and therefore by the ONS, because it is hidden in the depths of the website. The solution would be to flag up every new release on the front page of the website, so that people who look at it regularly will know that it is there.
The third clause on which I shall comment is clause 19, covering the retail prices index. Others have touched on the public concern about differing inflation rates, which are attracting considerable publicity. I wish to deal with the relationship between the national statistician, the Bank of England and the Chancellor in relation to any potential changes to the retail prices index. I welcome the fact that that is included in the Bill, confirming the power that the Bank of England has to consider whether any proposed changes to the RPI calculation would be sufficiently detrimental as to adversely affect holders of index-linked gilts. It is important that that is written into the Bill.
However, if the Bank of England does so determine, it is merely up to the Chancellor to decide whether the change should be implemented. I am not sure that there is a sufficient safeguard to allow that to be done at the whim of the Chancellor. Although I am sure that he would recognise his responsibilities, it is important not just because of the impact that the decision would have on existing holders of the eight index-linked gilt issues that are outstanding, but because of the effect on the market, the public and international investors, and their confidence in the Government and in the Government’s integrity and credit rating. That would
all be at stake, should changes of such magnitude be put through. The matter is so significant for this and any subsequent Government that the provision needs close scrutiny in Committee in order to ensure that the Government are obliged to honour their commitments.
8.21 pm
Peter Bottomley (Worthing, West) (Con): It would be helpful if the Economic Secretary could confirm that there is now agreement with the Clerk of the House as to how the reports will be laid. Those who have read the written evidence to the Treasury Committee on the independence of the statistics know that that was an issue. It would also be helpful if the hon. Gentleman could reiterate what the process will be for raising questions that have political significance, which the national statistician would not properly be able to answer. There are further issues in the Bill that may come up now or in Committee.
The scope of clause 20 interests me. The board has freedom to do virtually anything. I do not see the limits to it. Would it, for example, be able to carry out the same opinion surveys as YouGov, Ipsos, MORI or ORC do for clients outside Government? If I have missed the limitations in the Bill, perhaps the Economic Secretary will be able to spell them out for me.
I recommend to those who follow the debate, who are more likely to be specialists than generalists, that they reread the written evidence to the Treasury Committee in its report published on 18 July. That will refresh their minds about some of the more expert opinions, to which we add. I am not the statistician in my family. I am not even the best mathematician, but I have perhaps had more experience of parliamentary service and ministerial service than most others in my family. I remember that when I first became a Minister, officials from the research department of the Department of Employment came to me with a report that did not confirm the prejudices of one of my predecessors, and asked what should be done with it. I said that I assumed that all research paid for by public money was published. They looked at me as though that was the right answer, but they were expecting to tell me that, rather than my suggesting to them that that was the right thing to do.
Can the Economic Secretary tell me how difficult it would be for Government to take on the obligation that all research done for Government, with certain obvious exceptions such as security or significant economic national interest issues which for some reason could not be made public, is published? That would include opinions, possible future policies and all other research, unless there is an explicit reason why it cannot be made available.
I am not saying that there should always be a press notice. However, following on from the remarks of my hon. Friend the Member for Ludlow (Mr. Dunne), when Governments start putting statistical information on a website without any public announcement, could it be a requirement that they notify the statistics board that they have done so? If the information is not statistical, but is important for some other reason for the public to know, could they find a way of making
that known to an invigilator? Although I am not trying to suggest that most of the things that the Government try to do are done in the wrong way, for a wrong purpose or as a result of a wrong policy, this Government can accurately be accused of being more misleading and more guilty of covering things up than many others whom I have observed.
Returning to the research report, I suggested that we hold a press conference and that the press people give three days’ notice of it. The press people rang up every journalist who might conceivably come a few hours before the press conference to add that they thought that the Minister wanted some personal publicity. One journalist came to the press conference and there was no report on that rather embarrassing research result. I commend that approach to the Economic Secretary.
My general approach in my six years as a junior Minister was that it is normally better to make an existing system work better than it is to change the system. The Government brought in the Statistics Commission six years ago. I know a number of the members of that commission and I do not see why it had to become integrated with the executive side of the ONS. The Economic Secretary clearly knows about the evidence presented by the Royal Statistical Society and others that the Government should not have done that.
Last year’s Government response to the Treasury Committee did not explain why the Government did not follow the professional advice that they were given. They said that they would not follow it, but they did not explain the reason in detail. Given the weight of those who argued that the Government should have maintained the separation between non-executive invigilation, support for the independence of the statistical service and the executive work that the statistical office itself must do, the House and the country, as well as the statistical service, deserve a detailed explanation from the Economic Secretary—fortunately, he will have plenty of time to do so in this debate.
There are plenty of amusing things that one can do with statistics, and one of the better examples was told to me by the member of my family who is a statistician: the hourly pay rates of women in part-time manual work are lower than those of men in part-time manual work; the hourly pay rates of white-collar women in part-time work are lower than those of white-collar men in part-time work; but taken together, the figure for all part-time women is higher than that for all part-time men. One needs to be quite a good statistician to know how that is possible—more women than men work part time in white-collar jobs.
That issue does not matter a great deal in this debate. What matters is whether the Government are asking the statistical service to do the right kind of work, whether they make changes in a rational way that has the support, if possible, of people in the statistical service and outside users, whether they put embarrassing information behind some kind of curtain and whether they mislead people by putting out their commentary without allowing people to see a reliable statistical series.
I hope that the Economic Secretary will confirm—I expect him to do so—that the dates for the release of information in a regular series will be announced a year in advance. I also hope that he will confirm that it is the duty of Ministers to ensure that the statistics from their
Departments, whether that involves National Statistics or departmental statistics, are released in press notices that contain the same information in the same order and that any changes to the way in which the statistics are presented will be announced in advance and will not be released suddenly because the figures are available in a particular month, quarter or year.
To those who believe that some kinds of statistics are easier than others, I offer one example. Road casualty figures used to come out in a report called, “Road Safety”, which was not about road safety at all, but the opposite—road casualties. I think that it is now called the accident report and that it counts casualties. When, as a junior Transport Minister, I asked how soon I would know the provisional figures for those who had died in a particular month, I was told that the preliminary provisional figures came out two months after the end of the month in which I was interested. That was because people were counted as having died within the month if they died within 28 days of the crash. I asked why we could not assume that the 28-day hangover, or tail, was roughly the same month by month so that I could have the provisional preliminary figures, or at least an indication of them, on the day after the end of the month. Eventually, it was decided that that was possible.
The figures on drink-driving, which is another critical issue in cutting casualties, came out every six months. The road casualty figures came out more than a year after the year of their being counted because of the need to reconcile information from the police “Stats 19” reports and to employ various other ways of trying to ensure that the statistics had integrity. It was only when I started pushing that we discovered that the figures for the Metropolitan police were not being included in the national figures because a simple error was being made and a link in the statistical flow was missing. That was a pity, but it was not crucial because it was nobody’s intention to try to mislead.
I am trying to make the Minister understand that having the purpose of statistics in mind matters as much as the statistics themselves. Obviously, changes sometimes come about. In the Department of Employment in the old days, say from the time of the war onwards, industrial disputes were counted with mining in one column and the rest of industry and commerce in another. When the mining industry stopped having its series of disputes and then, as events turned out, was going to be significantly reduced, there was no need to carry on doing that. The purpose of statistics can change, as can what people want to focus on. The statistics service, in Departments and centrally across Government, should provide a dampener on Ministers’ enthusiasms. The half-life of the average junior Minister is about nine months. That means that we may find changes to the statistical service being pushed forward by enthusiastic Ministers who have come in and are trying to make a name for themselves but are not there to see the results of their initiatives. I hope that the statistical service, in Departments and in National Statistics, which additionally covers most Departments, will be backed up with sufficient weight to show that there is a degree of inertia in the system as well as a responsiveness to what people are trying to achieve.
It is far better to have earlier figures with subsequent revisions than to wait for too long to have figures that
need far less revision. Certainly, an early indication of what was going on helped me when I had ministerial responsibilities and contributed to some pretty dramatic changes in important matters such as drink-driving, whereby we cut the incidence of drink-driving by young men by two thirds in two years with no changes to the law, sentencing or enforcement. We found an approach that was working and needed the statistics to show us that what we were doing was correct.
I hope that people will use statistics not in the time-honoured joke way but to illuminate what they are doing and give an indication of what they should be trying to achieve. The public purpose of statistics should be to help achieve ambitions, and that matters a great deal.
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