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FINANCIAL ASSISTANCE TO INDUSTRY

Motion made, and Question put forthwith, pursuant to Order [18 July] and Standing Order No. 118(6) (Delegated Legislation Committees),

Question agreed to.


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Statistics Board

3.55 pm

The Exchequer Secretary to the Treasury (Angela Eagle): I beg to move,

I commend Sir Michael Scholar to the House as the chair of the board created by the Statistics and Registration Service Bill, which is now awaiting Royal Assent. Sir Michael was nominated by my right hon. Friend the Chancellor of the Exchequer after an open competition in line with the principles laid out by the Commissioner for Public Appointments. In recommending Sir Michael to the House, I draw Members’ attention to his extensive, successful career in Government and academia, and of course, the recommendation of his candidature by the Select Committee on the Treasury following its pre-appointment hearing on Wednesday 18 July.

In recommending Sir Michael for the role, the Treasury Committee said in its ninth report that

I also draw Members’ attention to the strong support offered for Sir Michael’s appointment during the final stage of the Statistics and Registration Service Bill by Members on all Benches in the other place.

As Members will be aware, the appointment is the first of its kind; confirmation to the post is subject to a pre-appointment hearing, and this debate, which may result in a Division, in accordance with the direction set out in the consultation document, “The Governance of Britain”, is also a first. I note, too, the recommendations in the Select Committee report relating to public appointments more generally, and the proposals in the consultation document. The Government welcome the Committee’s views and its interest in the subject. We intend to take time to consider the recommendations, and we will publish a full response to the Select Committee in due course.

I thank the Treasury Committee for the invaluable role that it has played, and for the speed with which it was able to progress the issue, which ensured that the House had an opportunity to vote on Sir Michael’s appointment before the recess. The Treasury Committee, under the able chairmanship of my right hon. Friend the Member for West Dunbartonshire (John McFall), has helped us a great deal, enabling us to move forward in a short space of time, and I thank him and his Committee members for that. I reiterate our support for Sir Michael, who was nominated by my right hon. Friend the Chancellor of the Exchequer, and endorsed by the Treasury Committee following a full and rigorous selection process. He is an excellent nominee for the first Statistics Board chair.

3.57 pm

Mr. David Gauke (South-West Hertfordshire) (Con): Before I turn to the nomination of Sir Michael Scholar, may I express my support for the broad principle behind the process—the principle of ensuring greater parliamentary involvement in public appointments, particularly the appointment of the chairman of the Statistics Board? It would be difficult for me not to do
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so, given that when considering the Statistics and Registration Service Bill in Committee I tabled amendments calling for much greater parliamentary involvement in appointments to the board, which of course includes the chairman. Unfortunately, although the proposals were supported by my hon. Friends, they were opposed by the Government. The hon. Member for Wentworth (John Healey), who was then the Financial Secretary to the Treasury, stated:

When pressed on whether there was a role for confirmation hearings, he said:

I raised the issue again on 2 July with the Exchequer Secretary to the Treasury. I asked about an increased role for Parliament in major public appointments, including the appointment of members of the Statistics Board. She responded:

She went on to say that

for April 2008, and that

I assume that when the Exchequer Secretary made that statement she did not know that the Prime Minister would the next day announce the change of process and specifically that there would be a parliamentary vote on the appointment of the chairman of the Statistics Board. I should be grateful to know whether the Exchequer Secretary was consulted on the matter, whether she was aware of any rumours, and when she first knew or suspected that the process would change.

Two Ministers have stated that parliamentary involvement was not a matter for the Government. We learn from the excellent report published by the Treasury Committee that on 13 July its Chairman, the right hon. Member for West Dunbartonshire (John McFall), who is in his place, was informed by the Treasury of the forthcoming announcement of a nominee and that there would be an opportunity to undertake a hearing before that appointment and a vote in Parliament. So clearly the Government have been involved, and I welcome the process. Some of us have called for it for some time.

I turn to the appointment of Sir Michael Scholar and the evidence taken by the Treasury Committee. In its report published earlier this week, the Committee highlighted its role in reviewing public appointments in respect of the Monetary Policy Committee. Both the Exchequer Secretary and I are former and recent members of that Select Committee and have been involved in many such cases. The methodology used in those cases, which is being used in the present case, entails considering two aspects: first, professional competence, and secondly, personal independence. In respect of Sir Michael Scholar’s professional competence, as the Exchequer Secretary rightly said, he has had a long and distinguished career
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in the higher reaches of the civil service, and he has considerable experience also in the City and in business and academia. His extensive experience is important, given the stresses and strains in the statistical service.

On the same day as the appointment of Sir Michael was published by the Treasury Committee, a report on the efficiency savings of the Treasury’s departments was also published, following a review by the Treasury Sub-Committee. I pay tribute to the Sub-Committee, under the chairmanship of my hon. Friend the Member for Sevenoaks (Mr. Fallon). He highlighted some of the issues that will need to be addressed by the chairman of the Statistics Board, derived from the evidence received by the Sub-Committee indicating some of the strains on the Office for National Statistics, which is described as an organisation under intense pressure. The Committee states:

The report goes on to say that

As chairman of the Statistics Board, Sir Michael will be required to address some of those matters. His experience as a senior civil servant will stand him in good stead.

The second aspect that the Treasury Committee traditionally considers is independence. The oral hearing during which Sir Michael gave evidence to the Committee focused heavily on his independence. It was suggested to him that some might say that as a perhaps naturally discreet career civil servant, of whom the Financial Times wrote that

his main challenge will be to show that his is an independent voice. That is clearly significant. Some might also raise concerns about the fact that he is the father of Mr. Tom Scholar, a civil servant who has returned from the World Bank and the International Monetary Fund in Washington to become the Prime Minister’s chief of staff at No. 10 Downing street.

Nevertheless, the Treasury Committee was satisfied, and I believe rightly so, with Sir Michael’s independence, not only on the basis that if Caesar’s wife must be above suspicion, so must the chief of staff’s father, but on the evidence of what he said in the course of the hearing, particularly about the most controversial issue debated during the passage of the Bill—pre-release practice. I have no intention of dwelling on that but, in brief terms, many of us believe—Conservative Members, Liberal Democrat Members, the House of Lords, which has shown it on at least two occasions, and most experts in the field—that pre-release policy should be determined by the Statistics Board and that it should be somewhat shorter than the 24 hours that the Government eventually settled on as the maximum period.

Sir Michael was questioned about that because the Government’s position has been that Ministers should decide—albeit, now, after consultation with the board. When asked about his position by my hon. Friend the Member for Sevenoaks, he stated that he would prefer to have a shorter pre-release period, and said:


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When asked whether he thought that the board, as opposed to Ministers, should decide pre-release practice, he responded:

Reading the transcript, one can detect a sense of reticence on his part in not wishing to intervene in this controversial area, but when pressed he was clear and unambiguous. I think, therefore, that we can be reassured as to Sir Michael’s independence.

However, there are one or two questions for the Government, who have been forced by defeats in the House of Lords to concede—although they have not gone nearly far enough—that they have to consult the board on pre-release access. Given that the board recommends a maximum pre-release period of less than 24 hours, which is what the Prime Minister announced on 3 July, and that that is the view of the chairman of the board, would the Government be prepared so to reduce it? If not, the whole consultation process would appear to be something of a sham. That would be damaging to the credibility of Sir Michael Scholar in his role of chairman of the Statistics Board, damaging to the board as a whole, and damaging to the reputation for independence of statistics in this country.

The appointment of Sir Michael is welcome, because he is clearly a very able man who showed, in the course of the Treasury Committee hearing, that he is a man of independence. However, there is an important question for the Government, who will have to listen to Sir Michael if they are in any way to protect our statistics’ reputation for independence.

4.8 pm

John McFall (West Dunbartonshire) (Lab/Co-op): On Friday 13 July, I received a call from the Chancellor asking if the Treasury Committee would hold a pre-confirmation hearing into the appointment of the new chair of the Statistics Board if the appointment was made on the subsequent Monday. I was pleased to do that, because this is a new constitutional arrangement and it is important that Parliament, particularly its Select Committees, have more power. I pay tribute to the fellow members of my Committee and particularly to its staff, who have been under quite a lot of pressure in the past few months. We have had many reports to put out. Indeed, in the past few days, we have agreed reports on the Monetary Policy Committee of the Bank of England, on private equity, and on unclaimed assets. The staff were very willing and able to prepare for this pre-appointment hearing.

Sir Michael came before us on Wednesday 18 July, and we published our report on his nomination on Monday of this week. That report, and a transcript of the evidence we took from him, is available in the House, and I would like to make three short points about it in my speech. The first concerns Sir Michael’s evidence, the second, the challenges he faces and the third relates to the role of the House of Commons and its Select Committees in the appointments process.

Thanks to Sir Michael’s evidence, we were satisfied unanimously as a Committee about his independence from Ministers and his commitment to the importance
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and integrity of statistics. We asked him tough questions, including one that I put to him at the beginning of the meeting about his close family connections with No. 10 Downing street—his son is the chief of staff to the Prime Minister. Sir Michael answered that question very clearly, saying that his son was a civil servant, and that he phoned him up after the appointment to congratulate him. He was very clear on that, and I have read since that Sir Michael prepared a report on independence for the Bank of England when he was personal assistant to the Chancellor of the Exchequer at the time, Lord Lawson, but it was not implemented by that Government. His son, Tom Scholar, however, was involved in the preparation of the report on independence for the Bank of England in 1997. The Governor of the Bank of England has referred to that as “a scholarly achievement” and I would endorse that comment.

Sir Michael answered that question very satisfactorily. We also tested his willingness to take a position at odds with Ministers and we were encouraged by his answers. I suggest that we brought the best out of Sir Michael, because he is a civil servant, and he mentioned that since his retirement six years ago, and during his time spent heading St. John’s college, Oxford that—unlike a number of other civil servants—he has never spoken to the press. We suggested to him that perhaps everything he had said in the past six years had been off the record, but it was very important that everything he said as chair of the Statistics Board was on the record, and that he should question the Government on a number of points.

The hon. Member for South-West Hertfordshire (Mr. Gauke) and the Minister were both on the Treasury Select Committee, so if anyone thinks of it as a Select Committee that is in isolation from the House, they can forget it. I would suggest that on the evidence of today—from both the Front Benchers—the Treasury Committee is a good training ground for people who want to get on and get promotion. I congratulate the hon. Gentleman and the Minister on the distinction of their service on the Treasury Committee, and I wish both of them well for the future. I suggest that wishing both Front Benchers well shows a real independent stance by the Chairman of the Treasury Committee.

We were encouraged by Sir Michael’s responses, and as a result, we recommend him to the House. I want to touch on the challenges that he will face. Public confidence in statistics in the United Kingdom is low. That may be because of the perception that statistics can be spun by Ministers, and a key challenge for Sir Michael will be to work to overcome this perception and to monitor the arrangements that give rise to it. When questioned by the hon. Member for Sevenoaks (Mr. Fallon), Sir Michael was very clear that he wanted pre-release times to be shorter. Furthermore, he wished that that had been a decision for the board, and the Committee agreed with those comments. We look forward to him chairing the board in the professional manner he has shown in his life as a civil servant and as an academic, and we also hope that at times, he will make constructive criticism of the Government when we feel that they have got it wrong.

We know that the Government have given ground on pre-release times, such as the 24-hour notice period for national statistics, but that is still out of line with
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international comparisons and the United Nations recommendation. Indeed, the Select Committee visited the Republic of Ireland a few months ago, when we examined arrangements there for statistics and pre-release. The Act that governs that in the Republic of Ireland dates back to 1993, which shows how far behind we were. We have come far, but there is still a distance to go on pre-release statistics.

I remember an opinion poll that suggested that only 17 per cent. of the population in the United Kingdom had confidence in official statistics. That is bad for statistics, politicians and the democratic process. It is important to improve the position and I hope that Sir Michael’s appointment will help.

Sir Michael will face an organisational challenge. It has already been said that, earlier this week, we published a report arising from an inquiry by the Sub-Committee, which is ably chaired by the hon. Member for Sevenoaks. It characterised the Office for National Statistics as an organisation under intense pressure. I trust that my hon. Friend the Exchequer Secretary will tackle some of those pressures before 1 April 2008. In doing that, I hope that she will work closely with Sir Michael as shadow chair.

The combined task that Sir Michael faces will make demands on his time. He has been appointed as a non-executive chairman to work a three-day week. We questioned him about his other commitments, most notably his post as head of St. John’s college, Oxford. He told us that he would work three days at St. John’s college and three days at the Statistics Board. That is a six-day week and we forcefully suggested to him that his primary responsibility should be his Statistics Board job. He took that point on board. The position as chair of the Statistics Board must be his primary commitment.

Let me offer some thoughts on the new process. In the case that we are considering, a pre-appointment Select Committee hearing and a debate on the Floor of the House have taken place. However, the Government’s report on the new constitutional arrangements does not make clear the posts that are up for pre-appointment hearing and those that are not. The Government have much work to do on that.

I welcome the Government’s proposals that Select Committee hearings should precede formal appointments, but the case for motions and debates on non-controversial appointments is not clear. Taking the two points together, along with the Government’s argument that Select Committees’ views should be non-binding, the Committee proposes that debates and votes in the House should be reserved for cases in which Select Committees reach an adverse opinion on a Government nominee. We have not reached such an opinion about Sir Michael’s appointment, which we welcome and support.

We are glad to support the motion and we wish Sir Michael and his colleagues every success on the Statistics Board in the next few years, with a view to improving confidence in statistics and thereby in the democratic process.


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