House of Commons |
Session 2006 - 07 Publications on the internet General Committee Debates Statistics and Registration Service Bill |
Statistics and Registration Service Bill |
The Committee consisted of the following Members:Emily
Commander, Committee Clerk
attended the
Committee
Public Bill CommiteeTuesday 16 January 2007(Afternoon)[Mr. Bill Olner in the Chair]Statistics and Registration Service Bill4.30
pm
The
Chairman:
I was sitting in the back this morning when the
previous Chairman gave Committee members the opportunity to remove
their jackets. That still stands this
evening.
Clause 3Members
Dr.
Vincent Cable (Twickenham) (LD): I beg to move amendment
No. 30, in page 2, line 3, leave out
Treasury and insert Cabinet
Office.
The
Chairman:
With this it will be convenient to discuss the
following amendments: No. 31, in clause 3,
page 2, line 4, leave out
Treasury and insert Cabinet
Office.
No.
32, in clause 3, page 2, line 7, leave out
Treasury and insert Cabinet
Office.
No.
33, in clause 3, page 2, line 9, leave out
Treasury and insert Cabinet
Office.
No.
34, in clause 3, page 2, line 11, leave out
Treasury and insert Cabinet
Office.
No.
35, in clause 3, page 2, line 13, leave out
Treasury and insert Cabinet
Office.
No.
36, in
clause 4, page 2, line 29, leave
out Treasury and insert Cabinet
Office.
No.
37, in
clause 4, page 3, line 3, leave
out Treasury and insert Cabinet
Office.
No.
38, in
clause 4, page 3, line 5, leave
out Treasury and insert Cabinet
Office.
No.
122, in
clause 10, page 5, line 15, at
end insert
(e) the Cabinet
Office..
No.
39, in
clause 11, page 5, line 39, leave
out Treasury and insert Cabinet
Office.
No.
40, in
clause 27, page 11, line 2, leave
out Chancellor of the Exchequer and insert
Prime
Minister.
No.
41, in
clause 27, page 11, line 13, leave
out Chancellor of the Exchequer and insert
Prime
Minister.
No.
42, in
clause 27, page 11, line 20, leave
out Chancellor of the Exchequer and insert
Prime
Minister.
No.
44, in
clause 27, page 11, line 27, leave
out Chancellor of the Exchequer and insert
Prime Minister.
No. 45, in
clause 27, page 11, line 29, leave
out Chancellor of the Exchequer and insert
Prime
Minister.
No.
46, in
clause 27, page 11, line 41, leave
out Chancellor of the Exchequer and insert
Prime
Minister.
No.
47, in
clause 44, page 19, line 6, leave
out Treasury and insert Cabinet
Office.
No.
48, in
clause 44, page 19, line 35, leave
out Treasury and insert Cabinet
Office.
No.
49, in
clause 44, page 19, line 41, leave
out Treasury and insert Cabinet
Office.
No.
50, in
clause 44, page 19, line 42, leave
out Treasury and insert Cabinet
Office.
No.
51, in
clause 44, page 20, line 6, leave
out Treasury and insert Cabinet
Office.
No.
72, in
clause 44, page 20, line 8, leave
out subsection
(11).
No. 73, in
clause 44, page 20, line 8, leave
out Treasury and insert Cabinet
Office.
No.
74, in
clause 44, page 20, line 14, leave
out Treasury and insert Cabinet
Office.
No.
75, in
clause 44, page 20, line 14, leave
out Chancellor of the Exchequer and insert
Prime
Minister.
No.
76, in
clause 44, page 20, line 17, leave
out Treasury and insert Cabinet
Office.
No.
77, in
clause 44, page 20, line 17, leave
out Chancellor of the Exchequer and insert
Prime
Minister.
No.
52, in
clause 44, page 20, line 18, leave
out Treasury and insert Cabinet
Office.
No.
53, in
clause 47, page 22, line 6, leave
out Treasury and insert Cabinet
Office.
No.
54, in
clause 47, page 22, line 16, leave
out Treasury and insert Cabinet
Office.
No.
55, in
clause 47, page 22, line 18, leave
out Treasury and insert Cabinet
Office.
No.
56, in
clause 47, page 22, line 19, leave
out Treasury and insert Cabinet
Office.
No.
57, in
clause 47, page 22, line 24, leave
out Treasury and insert Cabinet
Office.
No.
58, in
clause 47, page 22, line 28, leave
out Treasury and insert Cabinet
Office.
No.
59, in
clause 48, page 22, line 33, leave
out Treasury and insert Cabinet
Office.
No.
60, in
clause 48, page 23, line 21, leave
out Treasury and insert Cabinet
Office.
No.
61, in
clause 48, page 23, line 28, leave
out Treasury and insert Cabinet
Office.
No.
62, in
clause 48, page 23, line 31, leave
out Treasury and insert Cabinet
Office.
No.
63, in
clause 49, page 24, line 17, leave
out Treasury and insert Cabinet
Office.
No.
64, in
clause 49, page 24, line 19, leave
out Treasury and insert Cabinet
Office.
No.
65, in
clause 50, page 25, line 7, leave
out Treasury and insert Cabinet
Office.
No.
66, in
clause 50, page 25, line 9, leave
out Treasury and insert Cabinet
Office.
No. 67, in
clause 55, page 27, line 13, leave
out Treasury and insert Cabinet
Office.
No.
68, in
clause 58, page 28, line 17, leave
out Treasury and insert Cabinet
Office.
No.
69, in
clause 62, page 29, line 4, leave
out Treasury and insert Cabinet
Office.
No.
70, in
clause 62, page 29, line 13, leave
out Treasury and insert Cabinet
Office.
Dr.
Cable:
Welcome to the Chair, Mr. Olner. You
have arrived for one of the more controversial debates after a fairly
quiet morning. The theme of the amendments relates to the residual
ministerial powers vested in the Treasury. My colleagues and I have
tabled this string of about 40 amendments, which are also supported by
the hon. Member for Chipping Barnet and her colleagues, to question the
location of the residual ministerial powers.
I stress from the outset that I
do not see this as an opportunity for Treasury-bashing or bashing this
particular Chancellor. As the Financial Secretary pointed out on Second
Reading, the Treasury has a good record in recent years of being
willing to distance Ministers from day-to-day decisions, most
importantly in the case of the Monetary Policy Committee and in
financial regulation.
Although there are undoubtedly
lots of quibbles with appointments and the efficiency with which they
have been made, I would not argue that any of the major appointments,
particularly to the MPC, have been characterised by cronyism or
political bias. They have all been driven essentially by merit and
relevant qualifications. I am not having a go at the Treasury for how
it discharges its existing responsibilities. However, it is important
to stress from the outset that although the Bill will separate the
National Statistician, his staff and statisticians in general from
political interference to some degree, substantial ministerial powers
none the less remain. A run through the amendments will bring to light
how important those residual powers
are.
Amendments Nos.
30 to 38 deal with clauses 3 and 4, which discuss appointments. As we
were reminded this morning, appointment is not just a process of
putting forward names; it is also about ministerial discretion over
board numbers and dismissal. Ministerial residual powers respecting
pre-release are dealt with in amendment No. 39, and amendments Nos. 40
to 47 deal with powers of direction in the event that the board fails
in its statutory responsibilities. There are ministerial powers for the
disclosure of information to the board, addressed in amendments Nos. 47
to 53, and by the board, in amendments Nos. 59 to 62. Amendments Nos.
53 to 58 deal with ministerial powers in the use of information,
amendment No. 77 with particular powers in relation to the devolved
authorities and transfers of property to the board and amendment No. 68
with powers relating to remuneration and general orders and
obligations. A wide variety of residual powers will still be exercised
by the relevant Minister, in this case the Chancellor, and the
Treasury.
Why do I
argue that the Treasury is not the best place for the powers? There are
two main reasons. The first is that many Government
statisticsprobably the majority, but certainly a very large
parthave nothing
to do with economic matters. The Government statistics most in need of
quality assurance and the improvements that we expect to flow from the
new structure lie outside economics, in Home Office matters and
spending Departments such as health and education. There is no
particular reason why economic considerations should
dominate.
I
have spent all my working life dealing with economic matters, whether
in the private, public or academic sectors, or in work and, indeed,
Parliament. I know, therefore, that there is a tendency if one has an
economic training and background to believe that economic issues and
arguments are the most important. I am sure that spirit animates the
Treasury too, which is perfectly understandable. I am not criticising.
Lawyers will always look at points of legal principle and accountants
at balance sheets. Economists will be fascinated by economic problems.
However, statistics in government are not primarily about economic
issues. What seems fundamentally wrong is that the Treasury concern,
which is with economic policy, should necessarily dominate the approach
to government statistics as a
whole.
The
second reason is that the Treasury is not disinterested. The Treasury
is a major consumer of statistics, and a funder; in both respects there
are potential conflicts of interest. Most serious of all, measurement
of the Treasurys basic performance in its primary function of
fiscal policy and of the Governments performance on the Budget
and government debt is critically dependent upon the judgment of
statisticians. There was an exchange between the hon. Member for
Sevenoaks and the Economic Secretary about that. I make no allegations
as to whether the Treasury has exercised improper influence over public
finance data in the past, but there will be enormous pressures to
ensure that people appointed to the statistical board would give the
Treasury an easy ride. That is human nature and nothing to do with the
party in power or the present fiscal situation. It would be much better
if the Department and the Minister responsible did not have that
potential conflict of
interest.
The question
then arises as to whether there is a better locus of responsibility. I
think that there is. That is the Prime Minister, acting executively
through the Cabinet Office, which has an overview of Government as a
whole in a way that the Treasury does not. There are no obvious and
direct conflicts of interests. The Cabinet Office is not a major user
of statistics in the same way and does not have a funding role.
Although of course Government performance is being measured in its
entirety, the Cabinet Office has no direct and acute conflict of
interest over its performance, as with the
Treasury.
Mr.
Brooks Newmark (Braintree) (Con): Will the hon. Gentleman
answer a question? I remain perplexed. Is the purpose of his amendment
simply to follow the current Chancellor from No. 11 to No.
10?
Dr.
Cable:
That is not the purpose, but I suspect that would
be the consequence, which reflects how generous spirited we are, not
discriminating or acting against the current Chancellor; we do not know
what will happen in the Labour party, but that he would inherit the
powers seems likely, were the amendment successful. The hon. Gentleman
correctly said that, although I think he supports the
amendment.
Mr.
Newmark:
Another brief question concerns the Prime
Minister, who, as well as having a larger remit to his or her
responsibility, is First Lord of the Treasury. Does the conflict of
interest for the Chancellor also lie with the First Lord of the
Treasury?
My final point
is that circumstances will arise in which there will be a major
challenge to the independence of the board. What is important in those
circumstances is that the Minister with residual responsibility has the
maximum possible authority. There is no greater authority than that
which resides in the Prime Minister. At the moment we happen to have a
powerful Chancellor of the Exchequer, but that has not always been and
will not always be the case. In the future, Chancellors of the
Exchequer may be relatively weak Ministers, who will not be able to
stand up to departmental Ministers who have been involved in serious
manipulation and use of their Departments statistics. It is
important that we build in institutional checks and balances, which are
more properly and effectively vested in the Cabinet Office, and through
that the Prime
Minister.
Mrs.
Theresa Villiers (Chipping Barnet) (Con): I am delighted
to be serving under your chairmanship, Mr. Olner.
As we have heard, amendment No.
30 is related to a series of amendments that seek to transfer residual
responsibilities from the Treasury to the Cabinet Office. It is a
matter of some importance because the responsibilities are significant
functions in relation to the new statistical
framework.
The
Opposition see some of the amendments as a fall-back alternative to our
preferred model, which is based on the approach of the National Audit
Office. In relation to clauses 3, 4 and 58, our preferred approach is
set out in amendments Nos. 176 to 183, to which I will speak later.
Those amendments would transfer powers not to another Department, but
from the Treasury to the chairman of a powerful new commission of both
Houses of Parliament. That would provide the strongest safeguards to
ensure real independence from Ministers. However, we are happy to
consider the approach set out in amendments Nos. 30 to 42 and
40 to 70 as an alternative on a matter that is subject to the concern
of many stakeholder groups. The compromise would not provide the
safeguards of our preferred approach, but removing the new structures
further from the influence of the Treasury could strengthen the reforms
in an important way.
Professor A.F.M. Smith of Queen
Mary college, university of London, said
that:
It is
important that there be absolute clarity in the separation from
ministerial or Treasury authority and influence.
I would recommend therefore
that ONS be a Cabinet Office department.
Ruth Lea, former head of the policy unit
at the Institute of Directors, told the Treasury Committee that there
was a strong case for locating the new non-ministerial department
within the Cabinet Office as a
much less powerful policy-making
department
with
a ... broader
remit.
Tom Griffin,
former Director of Statistics at the United Nations Economic Commission
for Europe, describes the retention of the Treasury link as placing
an
unnecessary limit on
the break with the present unsatisfactory
arrangements.
He
concluded:
To
sever the link with the Treasury now, and to have the Cabinet Office
speak for statistics in Parliament, would be a very visible and
important move towards
independence.
Commenting
on the Governments initial proposals, Professor David Rhind of
the Statistics Commission told the Treasury Committee that the
commission had examined the statutory arrangements for Her
Majestys Revenue and Customs and how it operated as a
non-ministerial Department. The commission did not feel that those
arrangements represented a sufficiently significant reduction in
ministerial or Treasury authority. That led the commission to conclude
that the transfer of residual functions to the Cabinet Office would be
a better arrangement.
There are mixed views on the
matter. I understand that after much discussion, the Treasury Committee
did not support the proposition contained in the amendments. However,
the Committee rejected the argument that locating the new Department
within the remit of the Cabinet Office would not be
detrimental to the Treasurys ability to co-ordinate and measure
a Departments progress against public service agreements and
efficiency targets.
Some of the most serious
concerns expressed on the issue focus on the potential
conflict of interest that the structure proposed by Government could
involve. The Royal Statistical Society, for example, expressed support
for a switch to the Cabinet Office on the grounds that the
Treasury
has a
particular interest in economic statistics and as a major user is now
perceived to exercise influence on ONSs statistical
priorities.
It would
further enhance public confidence if the residual ministerial
responsibility was returned to the Cabinet Office where it began which
would be seen to act as an honest broker across government should any
Minister need to be consulted on an
issue.
That is a key
concept for the Treasury to consider. Which of the Departments would be
the best, most honest broker in reconciling conflicts between
Departments?
4.45
pm
The Cabinet
Office has far less of a vested interest, because it is not a direct
consumer of as many statistics as the Treasury, so it is less likely to
push the board around and more likely to have a feel for the broader
range of priorities across different Departments and policy areas. Lord
Moser, the former head of the
Governments statistical service, emphasised in a debate that he
initiated in another place that the Cabinet Offices
lack of particular subject
interest
gives
it
greater strength over
the other departments in our decentralised
system.[Official Report, House of Lords, 15 June
2006; Vol. 683, c.
407.]
He has also said that he
feels that giving it this role would enhance the ability of the new
structures to examine issues relating to
education, health and all the
other social areas which are not the direct interest of the
Treasury.
There
is a serious concern that giving residual responsibilities to the
Treasury, a major user of economic statistics, may skew the priorities
of the statistical services towards the Treasury. If the Cabinet Office
were the relevant Department, the Opposition feel that there is more
chance that the board and the National Statistician would be free to
focus on the priorities of the statistical services, the users and the
public interest rather than on the Government and Treasury
interest.
On Second
Reading, the Financial Secretary was anxious to persuade us that the
reforms will cover a wide range of statistics. We will debate that
later, but the Opposition feel that the scope should be wider. Although
we differ on the extent of the scope of the Bill and the code of
practice, there is agreement that the legislations focus should
not be confined to economic data, which are of primary interest to the
Treasury. There is concern that leaving the ministerial home of the
non-ministerial department at the Treasury takes insufficient account
of the importance of statistics on crime, health and education. As the
hon. Member for Twickenham has said, that is often where the most
significant problems have
arisen.
Tom Griffin,
to whom I referred earlier, has said:
Given the breadth of
government statistics (health, welfare, education, migration, crime and
so on) the Cabinet Office is the only department that can legitimately
speak for them.
If, as
Ministers claim, we are to have a structure that covers departmental
statistics as effectively as ONS ones, it makes sense to give residual
ministerial functions to the Cabinet Office, which has co-ordination
between other Departments as one of its primary tasks and
objectives.
The
Cabinet Offices stated objectives
include:
Providing
efficient arrangements for collective decision making, including
analyses of policy and performance that cut across more than one part
of Government, and systems which promote co-ordinated action and
presentation.
Its
website also specifically refers to its role of brokering agreements
between Departments. The website sets out a lengthy list of areas where
it performs that co-ordinating function, for example on
e-government, social exclusion, drugs policy, womens equality
and regulatory impact. Professor David Rhind told the Treasury
Sub-Committee that a switch to the Cabinet Office
would
assist with
coherent planning to meet future statistical
requirements.
Its
expertise across Departments would assist in such coherent
planning.
Aside from ensuring that the
non-ministerial Department and the board are free to set their own
priorities, another more important aspect of this is ensuring that the
board and the ONS have someone to fight their corner in negotiating
with the Treasury on funding. Getting funding arrangements right is, of
course, crucial in ensuring that the Bill is successful in granting
real independence to statistics. I imagine that there is cross-party
agreement on that. We believe that our parliamentary model would solve
the problem, with funding determined by a direct parliamentary vote.
However, we are examining this proposal as a compromise and fall-back
option, and the issue is important in that
context.
Everyone is
aware of the struggles between Ministers and the Treasury during the
funding round. Under the Bill, Treasury Ministers would effectively be
negotiating with themselves when it comes to funding arrangements for
statistical services. Yes; presumably the board and the National
Statistician would have something to say about funding but, if residual
ministerial responsibilities are to remain part of the new structure,
surely the statistical services deserve a Minister from a different
Department to argue their case with the Treasury. Such arguments can be
advanced effectively only if they come from a Department outside the
Treasury.
Inextricably
linked with the debate is the role of the Prime Minister, which has
been alluded to already. It is important that the National Statistician
has direct regular access to the Prime Minister. I hope that such
access is envisaged by the Government, even though it is not stated in
the Bill. If the reforms are to succeed in the way in which both
Government and Opposition Members want them to succeed, they will need
to have political will behind them, and they will need to operate in a
way that builds up the authority and political clout of the board and
the National Statistician. Ensuring that the National Statistician has
direct access to the Prime Minister will play a key part in that
strategy, which is another reason why the transfer of responsibilities
from the Chancellor to the Prime Minister will help to build and
strengthen proposals for
independence.
Len
Cook, former head of the government statistical service, has
said:
Almost
all of the current concerns involve departments where only the Prime
Minister has the authority to challenge Ministers, so the Prime
Minister needs to have his existing contingent involvement still
recognised.
That issue
certainly seems to be at the heart of Lord Mosers wish to see
the Cabinet Office holding the relevant functions that we are
discussing. He said to the Treasury
Committee:
In
the old daysand I do not say in the good old days, because lots
of things are much better now than they were thenthe reporting
line was through the Cabinet Office to the Prime Minister. This is a
very real link. I served three Prime Ministers. I would see the Prime
Minister quite regularly and he would take serious interest. That
obviously was a great strength, especially vis-Ã -vis other
departments. So it was much less difficult to influence other
ministries when it was known that behind me was the Prime
Minister.
Lord Moser
considers that, since the switch of responsibility for the ONS from the
Cabinet Office to the Treasury, the direct link with the Prime Minister
has been broken.
Rob
Marris (Wolverhampton, South-West) (Lab): Will the hon.
Lady say whether the issue is really about whoever is running
statistics influencing the Government, or is it about the Government
influencing those who are running statistics? It seems that the latter
point is much more
important.
Mrs.
Villiers:
In this context, it is important to ensure that
statisticians have independence, but, when the National Statistician
needs to stand up to a particular Department, having direct prime
ministerial backing will bolster them in ensuring that good practice is
adhered to. It will help to give authority to the new structures if the
National Statistician is seen to have the Prime Ministers
support.
Having read
the Hansard report of the announcement of the changes that made
the transfer to the Treasury, the Prime Minister of the day envisaged
that the National Statistician would continue to have access on the
validity and integrity of Government statistics. It would be useful to
receive clarification from the Financial Secretary on that matter to
ensure that the worries of the National Statistician are heard at the
highest level of the Government. For example, how often does the
National Statistician see the Prime Minister? Does she have access when
she needs it? The amendments that would transfer functions to
the Cabinet Office would give a visible signal that the National
Statistician has that political backing from the Prime Minister, and
that would represent an important improvement in the new
framework.
Mr.
Newmark:
We have heard, and rightly so, from the hon.
Member for Twickenham that the Treasury is the greatest producer and
user of statistics, and that it should be removed completely from its
influence over the board. My hon. Friend the Member for Chipping Barnet
has made the point that only parliamentary scrutiny and approval of
appointments to the board will give the board the necessary legitimacy
in the publics
eyes.
The matter concerns the lack of
confidence that the public have in those figures. I want to repeat the
point that the Financial Secretary made on Second
Reading:
The
House has a central role in and responsibility for the new statistics
system.[Official Report, 8 January 2007; Vol.
455, c. 23.]
That
statement will be true, however, only if the new commission which our
amendments would establish comes into
being.
Mr.
David Gauke (South-West Hertfordshire) (Con): It is a
pleasure to serve under your chairmanship, Mr. Olner. I want
to make a brief point. I am sympathetic to the views expressed by the
hon. Member for Twickenham and my hon. Friend the Member for Chipping
Barnet. I am a member of the Treasury Committee, which has considered
the issue. The Committee concluded that the Treasury should remain a
residual Department in this context, but the
decision was finely balanced. I must admit that my sympathies lean
towards the idea of the Cabinet Office being responsible for the
matter.
A starting
point is the question whether the Treasury is a major user of
statistics. In his evidence to the Treasury Sub-Committee on 14 June,
in answer to my question 255, which is set out on page 45 of the
evidence in the report of the Treasury Committee, the Financial
Secretary made the case that one reason for considering the Treasury to
be the correct residual body is the fact that, although many
Departments produce statistics that fall within the definition of
national statistics, economic statistics are generally of greater
importance and frequency than those produced by other Departments. The
point that economic statistics are very important is central to his
case.
I think that the
Financial Secretary is right to say that Office for National Statistics
economic statistics are more important than many of the departmental
statistics, but that argument leads in a slightly dangerous direction
with regard to the Governments stance on the Bill as a whole.
One of the points made by my hon. Friend the Member for Chipping Barnet
on Second Reading was that the area most affected by the Bill will be
statistics produced by the ONS, which, as Lord Moser has pointed out,
is the part of the statistical system in need of the least
reform.
The Financial
Secretarys response on Second Reading
was:
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.[Official Report, 8
January 2007; Vol. 455, c. 44.]
It seems to me that there is a
contradiction in claiming on the one hand that ONS statistics will be
the least affected by the Bill, and on the other that, effectively, ONS
economics statistics are the most important, because they are both
important and frequent.
None
the less, if we accept that the Treasury is the principal user of
statistics, we can be led in one of two directions. We could argue that
the Treasury is indeed the most closely involved; on the other hand,
the hon. Member for Twickenham has expressed the view that that is an
argument for the Treasurys not being involved. Without
impugning the honesty of the present Treasury, or its predecessors or
successors, part of the point of the Bill is ensuring a perception of
independence and a lack of political interference in statistics. The
bigger the gap that can be created between the Department that is being
assessed or scrutinised by the statistics and the producers of
statistics, the greater the perception of independence, which seems to
be a strong and powerful argument. Even accepting the position of the
Financial Secretary that the important statistics are Treasury-related,
it seems to be an argument for switching the residual powers back to
the Cabinet Office, as was the case until
1989.
5
pm
Mr.
Michael Fallon (Sevenoaks) (Con): I reiterate the
Committees welcome to you, Mr. Olner. I, too,
support amendment No. 30. It is true that the Treasury Committee
recommended that, on balance, the responsibilities should remain with
the Treasury. However, the arguments were
finely balanced. There is no finer example of that than the evidence
that we took from the Financial Secretary himself on 14 June, when we
pursued that point with him. He told the
Committee:
Without
being hard and fast about it, therefore, it seems to me sensible to
leave with the Treasury whatever residual responsibilities need to be
with ministers. As I say, however, we will examine the views that come
in through the
consultation.
So I do
not think that this is some great issue of principle. Seven months ago,
the Financial Secretary accepted that the arguments were reasonably
balanced. The Committee went on to say:
However, if HM Treasury
is to retain residual responsibility for the new department, we
recommend that the Government consider carefully how it will
demonstrate that its proposals will result in a genuinely independent
statistics office. What is important is that the new department should
be perceived to be more independent than the present
arrangement.
Given that
it is not an argument of principle, that is the test that the Financial
Secretary has to meet in coming to his preference in the legislation
for the Treasury to retain the residual responsibilities. His problem
is that, on the face of it, little has changed. The Chancellor appoints
the board and the Chancellor sets its funding. That is the current
position and it is the arrangement proposed in the
Bill.
The
Financial Secretary generously offered to weigh up the consultation and
outside views. As my hon. Friend the Member for Chipping Barnet has
illustrated, overwhelmingly opinion outside this House among users,
academics and those professionally involved in statistics is that it
would be better to put the residual responsibility with the Cabinet
Office. I take a slightly different view. My conclusion is that there
is nothing wrong, per se, with that responsibility staying with the
Treasury, and there is nothing particularly preferable about moving it
to the Cabinet Office. However, the attraction of the amendment is that
it would at least be moved to a Department other than the one that has
the responsibility at the momentit is a different arrangement.
We would be demonstrating that we are making a difference, thereby
increasing the perception that the statistics office will be more
independent than its predecessor.
Stewart
Hosie (Dundee, East) (SNP): I shall be brief. This is
essentially a question for the Financial Secretary. On Second Reading,
in response to a question from the right hon. Member for Birkenhead
(Mr. Field), he said:
He is right to point
out that this is indeed the next step in the Chancellors
reforms of the machinery of economic
governance.[Official Report, 8 January 2007;
Vol. 455, c. 25.]
Given that
that is the natural and understandable focus of a Treasury Minister, is
there not a real risk that other, non-economic, statistics will be
given less prominence than they should have? That is a simple question,
but it summarises a large amount of what we have heard in the past 25
minutes or so, and I should be grateful if the Financial Secretary
would put our minds at rest and say that that will not happen, given
that it is anticipated that the residual responsibilities will remain
with the Treasury.
John
Healey:
I welcome you to the Chair, Mr. Olner;
it is a pleasure to serve under you this afternoon and for the rest of
the Committees proceedings. I pay
tribute to the way in which the hon. Member for Twickenham moved the
amendment. He set a constructive tone and avoided allowing this debate
to become a simple Treasury-bashing exercise.
The Committee has debated what
is a serious set of issues and, as the hon. Member for Sevenoaks and
the Treasury Committee both recognised, a set of questions about which
there are arguments on both sides. My view, as reflected in the
legislation, remains as it was when I gave evidence to the Treasury
Committee, which is that it is sensible for the residual functions for
Ministers under the Billand they are residual
functionsto remain with the Treasury. The key point in
countering that seems to be that retaining ministerial responsibility
for the board within the Treasury risks undermining public confidence,
in so far as the Treasury, with its particular policy responsibilities,
has a special interest in economic statistics, of which it is a major
user. In contrast, some of the advocates of change point out that the
Cabinet Office does not produce statistics, is not directly a heavy
user of statistics and therefore does not have an axe to grind. Some
argue that the Cabinet Office might be better placed to take on the
residual, but nevertheless important co-ordinating role, in relation to
the Governments responsibilities for and interest in the
reformed system.
Three members of the Treasury
Committee are serving on our Committee this afternoon. As the Treasury
Committee concluded in its
report:
On
balance ... the residual
responsibilities
for the
board
should remain with
HM Treasury.
The
Treasury Committee noted that the residual responsibilities for
Ministers were likely to be limited, and came to the view that the
precise location of the new Department was not particularly important,
but that it should remain with the Treasury. The Government agree with
that, and that is the approach that we are
taking.
The important
issue is not so much where the residual ministerial responsibilities
sitalthough I shall explain why the best solution is for them
to remain with the Treasurybut the point to which my hon.
Friend the Member for Wolverhampton, South-West alluded in his
intervention. Our intention is to create a strong independent board,
and therefore to remove some of the arguments that the hon. Member for
Chipping Barnet made about Ministers in the future, although I shall
return to those, too. If the legislation is effective, the question of
which Department holds the residual ministerial responsibilities will
be of much lesser
importance.
Whatever
arrangements we contemplate and regardless of which Ministers have
residual responsibilities for the board, it is an inescapable fact that
the Treasury will alwaysand rightlyhave a role in
funding. We have therefore constructed a funding arrangement for the
board that, as far as possible, reinforces the independence and
freedoms of the board, while retainingquite rightly, from the
public interest point of viewsafeguards for value for money,
efficiency and spending control. Consequently, I confirmed on Second
Reading that the board would benefit from a special arrangement, under
which its
funding will be set on a five-year basis and will not be determined
through the regular pattern of Government spending reviews. Whatever
other arrangements are made, funding is one area in which the Treasury
will have a continuing involvement and interest with the board and the
new system.
The few
responsibilities that will remain with Ministers and the Treasury under
the new regime are making appointments and maintaining the interface
with Parliament, which includes tabling secondary legislation, laying
the boards annual account formally before Parliament and acting
as a conduitas we do currentlyfor parliamentary
questions that are answered by the board or by the National
Statistician. Finally, in extremis only, the Chancellor will also have
a responsibility to issue directions to the board under the terms of
clause 27.
Why do I
suggest that the approach in the Bill is the right one and that the
residual responsibilities that remain for Ministers are best and most
sensibly left with the Minister in the Treasury? The case is as
follows. The Treasury clearly does not currently skew the ONSs
priorities towards its own interests and therefore nor would it seek to
influence the board in a similar way. The hon. Member for Twickenham
opened this afternoons debate in Committee by saying that the
Treasury has had a good record in distancing Ministers from day-to-day
decisions.
Let me
turn to the arguments that the hon. Member for Chipping Barnet tried to
make. This is the second area of argument that suggests we lead with
the Treasury. I have to say that she got it wrong when she argued that
the board or the National Statistician somehow need a strong Minister
or Department to argue their case with the Treasury. The purpose of the
reform is to remove the need for Ministers to argue their case within
Government.
Even if
that were a legitimate concern, I would urge the hon. Lady to read the
remarks of Lord Turnbullthe former Cabinet Secretaryin
the House of Lords debate in which, in supporting the proposal that the
responsibilities remain with the Treasury, he commented about the
Cabinet Office that
that
department has had seven Ministers in four years, and something like
nine months in which it did not have a senior Minister at
all.
If the hon. Lady is
looking for a strong Department to argue for the statistics board with
the Treasury, I would suggest that she look
elsewhere.
Mrs.
Villiers:
The point was not based on the relative
strengths of the Cabinet Office and the Treasury. Of course the
Treasury is a much more powerful Department than the Cabinet Office.
The point that I was making is that it is important for statistical
services to have a voice external to the Cabinet Office within
Government to argue its case for funding. Yes, the Minister is planning
to put in place arrangements for funding that are not conventional and
are slightly different. However, there will still be negotiation.
Therefore, presumably there should also still be a Minister who is able
to argue on the same side as the board and the National
Statistician.
John
Healey:
I think that the hon. Lady meant a voice outside
the Treasury, not outside the Cabinet Office. The point of the
reformsand putting the new system and the board at arms
length with Ministersis that they are not dependent on
Ministers arguing their case for them in the normal spending review
rounds and that the board itself will have special funding arrangements
for its money and other resources.
I should like to suggest the
following points to the Committee. Given that the board should be
strong enough not to have its strategic priorities skewed by the
Department in which the residual ministerial responsibility resides, in
addition, the board could benefit from having the Treasury as its link
with Government. The Treasury, from the point of view of co-ordinating
Government interest in statistics, has a long experience of working
with and of understanding statistics. It has a crucial role in
co-ordinating the reporting of Government performance and monitoring
that across Government.
Therefore, I strongly disagree
with one of the points that the hon. Member for Twickenham made, which
seemed to suggest that the Treasury was principally or only interested
in economic statistics. More than perhaps any other Department, it has
an interest in maintaining a good evidence basis, which includes
statistics on departmental policies, given the significance of
statistics in reporting on departmental performance and understanding
the levers for successful reform and the development of public services
in which the Treasury has inevitably and increasingly taken an
important co-ordinating
role.
5.15
pm
Mr.
Fallon:
I want to return to the point about funding. I do
not think that the Financial Secretary is arguing that there will be no
ministerial involvement at all. Of course, the arrangement is
specialthe review will take place every five years, rather than
every three years or annually, and we welcome thatbut the BBC
has to have somebody to argue with the Treasury. Presumably, every five
years the Treasury Minister with residual responsibility will have to
support the board in the case that it makes to the Chief Secretary.
Will that not be the position?
John
Healey:
That would depend on which Minister had residual
responsibility for the statistics system in the Treasury. The important
point is that the statistics board, which is on a separate and special
footing outside the normal Government monitoring process, will be in a
powerful position to make its own arguments and its own case. Clearly,
Parliament will have a view as part of its role in judging and
assessing the systems performance. However, the board and those
who are interested in the resources of the statistical system are
likely to be in a far stronger position when the five-yearly settlement
comes up for renewal if they have direct meetings with the Treasury,
rather than playing their arguments through the intermediary of some
other Department. That would not be necessary or to the advantage of
the board and those who are interested in ensuring that it and the
system are strong, significantly independent and
authoritative.
Mr.
Hoban:
Would the Financial Secretary characterise the
relationship between the ONS and the Treasury as regards funding as
good? The impression that one gets from the evidence of the Public and
Commercial Services Union to the Treasury Committee is that there is
actually a very poor relationship between the ONS and the Treasury as
regards funding. There have certainly been critical comments about some
of the savings targets that the ONS has agreed with the Treasury, and
reference has been made to being over-stretched. It appears that there
is not a good relationship as regards funding at the moment. Does the
Financial Secretary concur with the PCSs view of that
relationship?
John
Healey:
No Minister would entirely concur with the
PCSs view of the adequacy of funding or of the plans for the
central Government work forcethat is the PCSs job. In
the 15 or 18 months that I have been Minister with responsibility for
the ONS, I have played an active role, which has had a beneficial
impact on the ONS and the resources available to it in that time. On
one or two occasions, I have been able to convince my right hon. Friend
the Chief Secretary that there is a case for special additional
resources. If the hon. Gentleman is interested in judgments on the
funding relationship with the ONS, he should probably ask that question
elsewhere.
Given the
background that I have set out, the Treasury is well placed to play a
constructive and co-ordinating role in respect of its residual
responsibilities towards the board. Ruth Lea, the director of the
Centre for Policy Studies, set out quite openly her reasons for wanting
the Cabinet Office to be in charge. As the hon. Member for Chipping
Barnet noted, she said that there was
a very, very strong
case
for locating the
new non-ministerial department in the Cabinet Office because it
was
a much less
powerful policy-making
department
than the
Treasury. If the objective of some, including perhaps Ruth Lea, is to
find one of the weaker locations in the Government for these
responsibilities, I would suggest that that does not pay due respect to
the importance of the statistical system. Such a move may be attractive
to some, but I do not think that it would benefit the board or
strengthen the reformed statistical system. Following consultation and
the report by the Treasury Committee, therefore, I have concluded, as
the hon. Member for Sevenoaks suggested, that the Treasury, not the
Cabinet Office or another Department, is the appropriate place for
these residual
responsibilities.
I
hope that our debate on this group of amendments has been useful and
that the hon. Gentleman will ask leave to withdraw his
amendment.
Dr.
Cable:
I certainly concur with the Ministers last
remark. There have been some good, helpful interventions. The hon.
Member for Chipping Barnet developed many of the key arguments in more
detail than I did. She also reminded us that there are various options,
not just the two that we are exploring. We have not yet considered what
will now and for ever be known as the Mongolian
optionalthough I do not want to belittle itwhich has a
good deal of appeal and is still in
play.
The contribution
of the hon. Member for Sevenoaks was particularly important, because he
played a key role in the Treasury Committee report, which had not
decided against the option of using the Cabinet Office as the point of
reference. He helpfully reminded us that that Committees
recommendation was not only finely balanced, but was predicated on
certain assumptions about how the legislation would be framed and would
give greater strength to ministerial statisticians than the current
legislation does. It would work similarly in other respects, too. As
the hon. Gentleman has reminded us, it is not helpful to take the
conclusion of the Treasury Committee out of context. His punch line,
which was original, was that shifting responsibility from the Treasury
to somewhere else credible would be quite a powerful statement of
independence.
In his
response, the Minister quoted various external sources of opinion,
which we need to heed. I have particular respect for Sir Andrew
Turnbull, because we started our professional lives together four
decades ago in east Africa, trying to improve the quality of economic
statistics there. So we have been over this ground before. He was taken
slightly out of context, because whereas it may be true that there has
been a rapid turnover of permanent parliamentary under-secretaries and
Ministers of State in the Cabinet Office, the key point is that its
political authority rests on the Prime Minister. This Prime Minister
has been in office for the longest time in recent history, so whatever
the current problems are they are not to do with turnover in relation
to its authority. The same point could be made in respect of Ruth Lea.
The issue is not the Cabinet Office as a relatively modest civil
service department, but the political head of the Cabinet Office, who
is the Prime
Minister.
The Minister
was open minded, as all Committee members have been, in accepting that
there are other options. He was fair minded in acknowledging that there
are pros and cons. His key argument, as I understand it, is that
because the board will be independent it does not matter which
Department has the residual powers. However, although it is independent
up to a point, the Minister makes the key appointments. We need a
source of authority whose appointments are clearly and totally
disinterested. The present arrangements do not seem to be the
optimum.
To bring my
remarks to a conclusion, I am not proposing to put the amendment to a
vote. It is not that I am satisfied with the answers, because I am not.
However, this issue requires further debate and exchange. There are
quite a few ex-Ministers on both sides of the House who will want to
pool their experiences of different Departments dealing with
statistics. People in the other place have a great deal of direct
experience. Lord Moser is the obvious person, because he operated under
a system where the Cabinet Office had authority. It is important that
those arguments are heard before we come to closure. In that context, I
beg to ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Mr.
Hoban:
I beg to move amendment No. 176, in
page 2, line 3, leave out
Treasury and insert Chairman of the
Commission.
No. 177, in
page 2, line 4, leave out
Treasury and insert Chairman of the
Commission.
No.
186, in page 2, line 5, at end
insert
(3A) No appointment
shall be made under subsection (2) until it has been approved by the
Commission established under section (Establishment of a Commission for
Official
Statistics)..
No.
187, in page 2, line 5, at end
insert
(3A) Appointments
made under subsection (2) shall be subject to review by the Commission
established under section (Establishment of a Commission for Official
Statistics) within one year of their having been
made.
(3B) The Commission shall
produce a report on any review carried out under subsection (3A) and
shall lay it before each House of
Parliament..
No.
178, in page 2, line 7, leave out
Treasury and insert Chairman of the
Commission.
No.
179, in page 2, line 9, leave out
Treasury and insert Chairman of the
Commission.
No.
180, in page 2, line 11, leave out
Treasury and insert Chairman of the
Commission.
No.
181, in
clause 4, page 2, line 29, leave
out Treasury and insert Chairman of the
Commission.
No.
182, in
clause 4, page 3, line 3, leave
out Treasury and insert Chairman of the
Commission.
No.
183, in
clause 58, page 28, line 17, leave
out Treasury and insert Chairman of the
Commission.
New
clause 2Establishment of a Commission for Official
Statistics
(1) There
shall be a commission name the Commission for Official Statistics (in
this Act referred to as the Commission) for the
examination of the production, release and presentation of official
statistics.
(2) The Commission
shall consist of six members of the House of Commons appointed by the
House of Commons and six Members of the House of Lords appointed by the
House of Lords, none of whom shall be a Minister of the
Crown.
(3) The Commission
shall, from time to time, present to each House of Parliament a report
on the exercise of its
functions.
(4) Schedule
(Commission for Official Statistics) to this Act shall have effect as
regards the
Commission..
New
schedule
1
Schedule
1A
Commission
for Official
Statistics
Tenure of office1 (1) Subject to
paragraph 2 of this Schedule, a member of the Commission shall vacate
his office
(a) if he
ceases to be a Member of the House of Commons or the House of
Lords;
(b) if another person is
appointed in his place.
(2)
Subject to sub-paragraph (1) above, a member of the Commission shall
hold office for the duration of the Parliament in which he is nominated
or appointed and for a further period provided by paragraph 2 of this
Schedule.
(3) A member of the
Commission may resign at any time by notice to the
Commission.
(4) Past service is
no bar to nomination or appointment as a member of the
Commission.
2 (1) Subject to
sub-paragraph (2) below, on a dissolution of Parliament, the members of
the Commission shall continue in office until members are nominated or
appointed in their place.
(2) Where at any time after Parliament has been
dissolved, it appears that a member of the Commission who is not a
Member of the House of
Lords
(a) has not been
validly nominated as a candidate in the ensuing general election;
or
(b) although so nominated,
has not been elected as a Member of Parliament at that
election
that member
shall resign from the Commission forthwith; but nothing in
sub-paragraph (1) above or this sub-paragraph shall be taken as
preventing any such member from resigning otherwise than in pursuance
of this
sub-paragraph.
Chairman3
The Commission shall elect a chairman from amongst its members (in this
Act referred to as the Chairman of the
Committee).
Proceedings and business4 (1) The
validity of any proceedings of the Commission shall not be affected by
any vacancy among the members of the Committee or by any defect in the
appointment or nomination of any
member.
(2) The Commission may
determine its own
procedures.
(3) The Commission
may appoint one of its members to act as chairman at any meeting of the
Commission in the absence of the elected chairman of the
Commission..
In his closing remarks on the
previous group of amendments, the hon. Member for Twickenham said that
other models were available. He called the one that we are discussing
the Mongolian model; that would establish a structure similar to that
of the NAO asa means of governing the statistics board and
theONS.
I
would prefer not to call it the Mongolian model; we could use a word
much closer to home[Interruption.] We could call it the
Blackburn model. In 1995, the right hon. Member for Blackburn
(Mr. Straw), now the Leader of the House, said in a
speech:
The
National Statistical Service should be placed at arms 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.
We should give
the right hon. Gentleman the credit for identifying that model, and
refer to it as the Blackburn model. Why did he suggest that that might
be the right approach for the governance of the new board? He did so
because the NAO is recognised for its independence from the Government;
that independence is created not just through its robust reports to
Parliament on how taxpayers money is spent, but because it is
seen to be demonstrably at arms length from the Treasury and
all other Government Departments.
The National
Audit Act 1983 established the Public Accounts Commission, which is
responsible for the appointment of the Comptroller and Auditor General
and determining the funding of the National Audit Office. Following
that model will best ensure that the new board establishes a
reputation like that of the NAO. This is the best opportunity to
enshrine the independence of national statistics and put them at
arms length, not only from the Treasurythis is not
about Treasury bashing at allbut from all Government
Departments.
The new clause
and schedule replicate the wording of the 1983 Act. They would set up
the commission and establish how its members were appointed. However, I
should like to draw attention to the crucial difference, in respect of
commission membership, between the model proposed by the new clause and
schedule and that introduced by the 1983 Act. The Public Accounts
Commission is drawn from Members of this House. However, interest in
statistics importance, use and accuracy, and how they are used
to hold the Government to account, is felt not only in this House, but
in the other place. We feel that the other place should be represented
in the commission. Many Lords have an interest in the issues; Lord
Mosers views have already been referred to in the context of
that wider
interest.
We believe
that the model is right; it has proved to work with the NAO. The NAO
seems independent of the Government and we should consider how to apply
its model to the board and its executive and scrutiny functions. Why
might that not be right? In his evidence to the Treasury Committee, the
Minister touched on one potential reason when he said that the
NAO
has a very
particular role in supporting Parliament's proper scrutiny and
accountability function in relation to the
executive.
He went on to
say that
the purpose,
the value, the users of national statistics, go very much wider than
Parliament.
He was
right; no one would disagree. However, we should also ensure that we do
not minimise the vital role of statistics in enabling Parliament to
hold the Executive to
account.
5.30
pm
For example,
measuring the number of children achieving five or more good GCSEs does
not just provide data to parents, schools, employers or local councils;
it helps hon. Members to hold the Government to account on their own
policy goals. Data on productivity will help us to decide how the
Chancellor is doing by what he refers to as the fundamental yardstick
of economic performance. Without accurate, robust data, it is difficult
for us to hold the Government to account. The distinction between the
role of the National Statistics Board and that of the National Audit
Office is perhaps not as great as the Minister
indicated.
Rob
Marris:
Many other hon. Members and I use information from
the diplomatic service to hold the Government to account on their
foreign policies. Does the hon. Gentleman suggest a 12-person
commission should run the diplomatic service because it generates
information that Members use to hold the Government to account? That
seems to be the thrust of his argument about
statistics.
Mr.
Hoban:
Mr. Olner, you pre-empt me in that
comment. I would not wish to tread down that path, although I am
grateful for your guidance. There is a
distinction. We are talking about data that can be
measuredinformation about aspects of life that can be measured
and need to be collatedand there is an issue about how to
measure, report and produce that data accurately. That might be
slightly different, I suspect, from some of the diplomatic service
information to which the hon. Gentleman refers. To use your words,
Mr. Olner, he is rather wide of the
mark.
We propose that
a commission, rather than Her Majesty the Queen on the Prime
Ministers advice, should appoint the National Statistician. The
decision would be made on the basis not of the Prime Ministers
advice but of the advice of Members of this House and the other place.
It would give the National Statistician some independence. He would not
be beholden to the Government on reappointment, so he would be seen to
be independent of the political process. It is important for him to be
able to undertake his professional responsibilities without having to
look over his shoulder to
Government.
Our
proposals would meet the concerns of the Society of Business
Economists, whose evidence to the Select Committee said that the
appointments process needed to
be
as independent, and
perceived to be as independent, as
possible.
The amendments
would take the appointment out of the party political arena and enhance
the accountability of national statistics to the House.
A recurring theme on Second
Reading was how to increase parliamentary scrutiny of statistics, and
various models were proposed. The hon. Member for Southampton, Test
(Dr. Whitehead) suggested that we could use as our model the
Speakers Committee on the Electoral Commission, and that model
has advantagesfor example, questions about the
committees operation can be tabled in the House. My
parliamentary neighbour, my hon. Friend the Member for Gosport (Peter
Viggers), answers questions on the committees behalf in the
House once every four weeks. The committee also scrutinises the
commissions funding and business plans, ensuring that its
funding is kept at arms length from the political process. That
model differs from our proposed model in that it does not appoint
members of the Electoral Commission. It does not go as far as the
amendments would.
Last week, a number of hon.
Members questioned whether existing scrutiny of statistical issues
through Select Committees was sufficient, as we cannot set up Select
Committees through legislation. The ONS is scrutinised at the moment by
the Treasury Sub-Committee, but that does not necessarily ensure the
full breadth of coverage. With a commission, a wider range of scrutiny
might be possible, but that indicates why a Select Committee would not
give the same independence as a commission for official statistics. A
Select Committee could scrutinise the financial plans of the board and
the ONS, but it could not determine their level of funding. Although it
could have an important role in enhancing the independence of the
statistician, board and ONS, it would not go as far as the NAO model
that we are
proposing.
In
conclusion, the NAO model would achieve two key goals: it would remove
the residual power of the Treasury to appoint the National Statistician
and the
board and move funding away from the political process so that it would
not be accountable or beholden to the Treasury. Earlier, I intervened
on the Minister regarding remarks made by the PCS about the ONS. I have
to say that from the submission of the PCS to the Treasury
Sub-Committee, I was not entirely clear whether it felt that the
ONSs funding problems were the responsibility of the ONS board
or the Treasury. As the Minister said, that is a question for somebody
else.
I see no
evidence in that submission, however, to suggest that the current
method of funding is satisfactory. A commission set up to appoint the
National Statistician and board and to determine funding would be the
best means by which to ensure independence and restore trust in
statistics. That would send a clear signal that statistics in the UK
are independent of the Government, particularly in respect of the scope
of the Bill. I commend the amendment to the
Committee.
To develop my earlier point,
and to respond to those made by the hon. Member for Fareham, it is
inherent to the function of the NAO that it hold the Government to
account by scrutinising their actions, and particularly their spending.
That is not inherent to the function of the statistics board, which
instead marshals information that others may use in order to hold the
Government to account.
Please bear with me,
Mr. Olner, while I draw a fair analogy. If I asked an
ambassador whether they had made representations to their country about
breaches of human rights and that ambassador said no, I could use that
information to hold the Government to account for their failure to
instruct their diplomats to make such representations. The statistics
board produces, and checks the quality of, information, which may then
be used by othersand properly soin this House and
outside in order to hold the Government to account. In shorthand, it is
an information generating or marshalling body, whose information is
used by others.
As I
understand it, the position of the NAO is very different. It is an
inherent part of the scrutiny mechanismit scrutinises the
spending and actions of the Government. Were the hon. Member for
Fareham, in whose name the amendments stand, to adopt a logical
position, he would either abandon them or agree that the diplomatic
service itself should be supervised by a commission made up of 12
memberssix from each
House.
Mr.
Gauke:
I shall speak to amendments Nos. 186 and 187, which
stand in my name, and to which one or two Opposition Members have been
anxious to
speak.
Amendment No.
186 would establish a requirement that the appointment of non-executive
members of the statistics board be approved by the commission for
official statistics, to which my hon. Friend the Member for Fareham
referred. The concept is not dissimilar to the Senate hearings that
take place in respect of various appointments.
Amendment No. 187 would put in
place a reporting system similar to that which currently exists through
the Monetary Policy Committee of the Bank of England. That committee
holds hearings in front of the Treasury Sub-Committee, which makes a
report on a proposed appointment but does not have a right of veto.
That is essentially the model that the amendment follows. I would
prefer amendment No. 186 to be accepted, but amendment No. 187 presents
an alternative.
Both
amendments neatly complement the Blackburn model, as my hon. Friend
called it. That model would give Parliament a greater role in
appointments, which are a key part of the overall statistics system.
That does not necessarily mean that the Blackburn model must apply in
its entirety for the amendment to be appropriate, but I have used that
model because it would allow for the creation of the commission for
official statistics, which would be a convenient body to review
statistical matters. There could alternatively be parliamentary
proceedings to do much the same thing, but I felt it important to
suggest an addition to the Bill and considered that the model I chose
presented the best opportunity to do
so.
I know what the
Governments position will be on the Blackburn model as a whole,
but there are two reasons why they should receive the amendments with a
degree of sympathy. First, the Bills intention is to create
greater independence and a greater perception of independence for
statistics. One of its weaknesses is the fact that the Treasury will
have enormous appointment powers, specifically the ability to appoint a
minimum of five non-executive directors other than the chairman. The
chairman will be appointed by Her Majesty under the Crown prerogative
but presumably with significant advice from the Treasury.
We are concerned about the
appointment powers that the Treasury will have, which the Bill does
nothing to restrain. There is no provision to prevent members of the
board from serving a number of terms. There are always arguments to be
had about term limits and so on, and I am not necessarily putting the
case for them, but one could argue that a member of the board wanting
to renew his position would be under pressure not to upset the
Government. Perhaps that is unduly cynical, but we are considering
perceptions and it is an issue to consider. If we wish to improve the
independence of statistics, giving Parliament a role in the
appointments process seems sensible. A right of veto would be stronger
than a right to report, but either would be a step in the right
direction.
The second
reason why the Government might greet the amendments with some degree
of sympathy relates to the larger issue of reforming the royal
prerogative, a desire that I believe is shared in all parts of the
House. The Chancellor of the Exchequer indicated in his interview with
Andrew Marr in the new year that a Government led by him would
rebalance the relationship between the Executive and Parliament and
consider areas in which the royal prerogative could be reformed. Most
of that debate has focused on Parliament voting before we go to war,
but that happens relatively infrequently, even under this Government.
Appointments happen much more
frequently.
5.45
pm
The
hon. Member for Wolverhampton, South-West has raised the issue of
Parliament and the diplomatic service. Clearly, the diplomatic service
reporting directly to Parliament would not be appropriate, and such a
Blackburn
model
Mr.
Gauke:
My point is that if we want to rebalance the
relationship between Parliament and Executive, which my amendments
attempt to do, a role for Parliament in appointments, be they of
members of the statistics board, diplomats, ambassadors or high
commissioners, could be hugely important and valuable. The idea of
Senate-style hearings before appointments are made by the Executive
might be very
helpful.
It
is worth considering that even if my amendments were accepted, or if
the Government were to make alternative proposals along such lines,
considerable powers would still be left in the hands of the Treasury,
which would still have the opportunity to initiate appointments or to
come up with names. A parliamentary Committee would not interview or
canvass opinion on a wide range of candidates, because Parliament would
be presented with a name and given an opportunity to say yes or
no.
Likewise, when we
come to the number of non-executive members, the Treasury can create a
large number of members of the board, if it wishes to dilute the power
of a difficult individual, which is a point made earlier today. In that
case, short of using the veto powers in amendment No. 186, Parliament
would not be able to do anything, because residual powers would be
retained within the Treasury. None the less, if the Government want to
increase independence and take the opportunity to rebalance the
relationship between Parliament and the Executive, I hope that the
Financial Secretary will sympathise with the thrust of my amendments.
Here is a clear opportunity to improve parliamentary accountability and
the standing of Parliament and, in so doing, aid the
Governments laudable objective of improving independence within
the field of
statistics.
Mr.
Newmark:
I will begin where I ended, because, as the
Financial Secretary was kind enough to point out, I pre-empted myself
in my previous
remarks.
Mr.
Newmark:
Yes, but it involved less than the half hour that
the President of the United States
gets.
As I have
pointed out, the Financial Secretary said this on Second
Reading:
The
House has a central role in and responsibility for the new statistics
system[Official Report, 8 January 2007; Vol.
455, c. 23.].
That is
essential to our argument and is the point that drives new clause 2.
Surely only through parliamentary scrutiny and approval of appointments
to the board will we get the necessary legitimacy in the
publics eyes. The real issue behind our debates in the next
seven sittings is public confidence in the numbers that are released,
which is what we are trying for.
Anything that removes the
Treasury as much as possible from decision making or influence, whether
it is over appointments to the board or whether it is over saying what
is good or not, has to be a good thing. The point is not that the
Treasury is dishonest, but that it is the greatest user and consumer of
Government statistics. That is what drives new clause 2. I believe, as
do my hon. Friend the Member for Fareham and, I hope, my other hon.
Friends, that a separate commission will allow two tiers of scrutiny.
The boards oversight of operational matters and parliamentary
scrutiny will lock integrity into official statistics, which is the
best solution to the current problem of the muddled responsibilities
identified by the Royal Statistical
Society.
John
Healey:
We have had another constructive and useful
discussion. I am especially glad that the hon. Member for Braintree
shared his full remarks with the Committee on this occasion. As we have
heard, the amendments, the new clause and the proposed new schedule
would have two main effects. First, they would establish in statute a
commission for official statistics that would be a Committee of both
Houses. Subsequently, they would assign to it several roles, including
appointments of board members. While we shall deal in more detail with
amendments on appointments and on funding, those proposals would
significantly alter the accountability model proposed under the Bill.
It is useful to examine the principles on which appointments, funding
or governance in general should be based to reflect the function and
the role that we expect the board to
play.
I shall deal
with governance as we want to construct it under the Bill, after which
I shall turn to the proposals advocated by hon. Members. On the
principles, statistical production is as an Executive function, which
is appropriately located within Government rather than within
Parliament. As has been acknowledged by the Committee, statistics are a
public good that serve a wide range of users and interests. That point
was supported in our public consultation and by the Treasury Committee
in its report earlier this
year.
The second
principle is that, while there is no overriding international precedent
or principle for the organisation of statistical systems, an almost
universal feature is that the production of statistics sits with the
Executive, with the one exception of Mongolia. A central pillar of our
model is the production of statistics as a responsibility of the
Executive.
The third
important principle is that the monitoring and auditing of the
statistics system is carried out by the independent board that requires
a non-Executive majority that is capable of reflecting the expertise
and experience of a wide range of statistical users and interests in
such a way that it is impossible to envisage Parliament doing, even
with the combined expertise of both
Houses.
The fourth
component is that Parliaments role in the model is to hold to
account all those involved in or responsible for the operation and
aspects of the system. That is rightly the role that Parliament plays
in relation to other executive functions of Government that are
devolved or overseen by independent boards, such as the Food Standards
Agency. A commission for official
statistics that is established in statute, that is composed of Members
of both Houses and that has a role in funding and appointments would
therefore complicate the system of governance and Parliaments
role in it, and it would not assist in achieving the overall objectives
of the Bill.
Let me
set out the principles on which the model proposed by hon. Members is
based and the flaws in it. In expressing his interest, the hon. Member
for Fareham referred to the National Audit Office and the Electoral
Commission. It is true that there are a limited number of other areas
where there are commissions of the type proposed in the new clause and
new schedule; for example, the Public Accounts Commission, which
scrutinises the work of the NAO, and the Speakers Committee,
which oversees the work of the Electoral Commission. However, there is
an important principal difference with the statistics board and what is
proposed in the new clause and new
schedule.
The
Speakers Committee and the Electoral Commission, and the Public
Accounts Commission and the National Audit Office, are involved in the
scrutiny of fundamentally different organisations and issues, neither
of which are the responsibility of the Executive. Consequently, those
models are not appropriate ones on which to base an accountability
regime for the statistical system. The functions of both the NAO and
the Electoral Commission are to serve and support the legislature in
carrying out specific roles. Therefore, neither example is appropriate
in the case of
statistics.
The Public
Accounts Commissions primary role is to examine the NAO
estimates, and it was established in a manner akin to the proposed
commission for official statistics. As I have said, the role of the NAO
is quite different from that of the statistical system. The NAO has a
particular role in ensuring that Departments achieve the required value
for the money, and a particular responsibility for assisting this House
in ensuring that the resources authorised by it to Departments are
properly
spent.
Equally,
the Speakers Committee, which scrutinises the expenditure and
income of the Electoral Commission, was established because of the
special role that the Electoral Commission plays in relation to this
legislature. The commission is set up to establish and assess the
integrity of the conduct and administration of elections to this House
and of referendums. Elections to Parliament and the expenditure of
moneys voted by it are constitutional matters and are fundamentally
different from the production of statistics by the Government, so the
governance and accountability models proposed in the Bill are rightly
and appropriately
different.
On the
basis of those principal points, let me turn specifically to amendments
Nos. 176 and 177, which would allow the chairman of a commission for
official statistics to appoint the non-executive members of the board.
That is inconsistent with the boards executive function, and
Parliament should not interpose on executive appointments in that
way.
As has been
mentioned a couple of times, a recent Treasury Committee report stated
that public perceptions about the independence of the board will depend
more on the actions of board members than on
the method of their appointment. I agree with that, and I believe that
the involvement of Parliament in the appointments process, as proposed
in the amendments, would skew and confuse the accountability model. For
those reasons, I cannot accept the amendment, and I hope that in the
light of this debate the hon. Member for Fareham will withdraw
it.
The
amendments tabled by the hon. Member for South-West Hertfordshire are a
different approach to the same issue. Giving the commission a role in
approving appointments would be inconsistent with the boards
wider executive function. It is appropriate that Ministers play a role
in appointments, because it is an executive function. For clarity, I
shall confirm to the Committee what I said before: we will make
appointments entirely in line with the guidance of the Commissioner for
Public Appointments. In its report, the Treasury Committee said that
that would be sufficient to ensure the independence of the appointments
process.
6
pm
Mr.
Gauke:
The Minister considers it inappropriate for
Parliament to play a role in the appointment of persons performing an
executive function. Does he hold that position in principle? If so,
will he explain why?
John
Healey:
I have tried to explain to the Committee that that
position follows from an attempt to draw out the principles of a proper
accountability model. It is worth pointing out that even without the
hon. Gentlemans amendments, Parliament will be able to review
the appointments and report its findings as part of the discharge of
its responsibility to hold to account the overall operation of the
reformed system.
Mrs.
Villiers:
Briefly on that point, is the Minister prepared
to consider the confirmation-hearing model? Before the appointments
were finalised, Parliament would have the opportunity to question the
candidates.
John
Healey:
That is not a matter for the Government. On this
Committee there are three distinguished members of the Treasury
Committee, and it holds confirmation hearings for appointments to
relevant bodies.
On the
subject of the hon. Ladys new clause and new schedule, I hope
that the deliberations of this Committee are a prompt that helps to
inform the debate about how Parliament must organise to discharge its
functions and responsibilities under the Bill. She may want to ensure
that her arguments form part of those discussions in this House and in
another place.
Turning to new clause 2, I have
said clearly and more than once that under the new arrangements we
expect Parliament and the devolved legislatures to play the central
role in holding the new system to account. The Bill makes provision to
ensure that they can do so. However, Parliament must decide how best to
hold the statistical system to account, and it must decide in
particular on the arrangements that it wants to put in place so that it
can do so.
I see some
merit in the proposal for a Joint Committee of the two Houses, although
it is not a
matter for me as a Minister. It would enable both Houses
expertise and interest in such matters to be played in, and it would
allow their breadth and depth of expertise to play a part in the strong
and proper scrutiny of the system. However, I do not want to establish
the proposal in statute. Ultimately, it would reduce the flexibility
and discretion of Parliament to set up the arrangements that it saw fit
and to refine them in light of experience.
At the outset this morning, the
hon. Member for Sevenoaks reminded us that statistics legislation is
rare in this place, and that the last major statistics legislation was
debated 60 years ago in 1947. So, to set arrangements for the discharge
of the scrutiny and accountability functions of this House and
Parliament in primary legislation would risk introducing a
counter-productive degree of inflexibility.
Mr.
Gauke:
I note the Financial Secretarys comments
about giving greater flexibility to Parliament. If we were ever to give
a veto power on appointments to Parliament, it would need to be
contained in statute. I return to a question I raised earlier: whether
he was objecting to Parliament ever having a veto role on executive
functions. Does he not accept that in many countries, the United States
in particular, using a veto is precisely what the legislature is able
to do?
John
Healey:
As we are talking about an executive function, I
have explained that it is right that Ministers play the role in the
appointments process that we are proposing.
In conclusion,
Parliaments role will be central. Unless I have missed
significant discussions that have been going on, Parliament has still
to come to a considered view on how best to approach this. Legislating
for a commission would prevent the sort of developments that have been
seen in recent years in Parliament: trialling certain arrangements,
reviewing them in Parliament and then refining, strengthening and
reinforcing them. Including such an arrangement in this Bill would
prevent precisely that sort of approach in the future.
It is important for the proper
and strongest possible discharge of Parliaments scrutiny
function that it can adapt and develop further in the light of
experience. I hope that the hon. Members who have tabled these
amendments, new clause 2 and new schedule 1, and proposed setting up a
commission for official statistics, will consider the matter further,
having listened to the debate, and will not press them to a
Division.
Mr.
Hoban:
May I thank the Financial Secretary for the way in
which he explained his perspective on the amendments and for the way in
which the parliamentary scrutiny of the board will be conducted? He was
right to say that he expects Parliament to play a central role in
holding the statistical system to account.
Mr.
Hoban:
I am grateful to the Financial Secretary for
correcting my grammar. I do not think that there can be more than one
centre.
In a sense, part of the problem
with our debate on this group of amendments, new clause 2 and new
schedule 1 is that we are having half a debate, because we cannot, in
primary legislation, set out the detailed arrangements for Select
Committees, for example. That is a House matter, so it will be debated
on the Floor of the House. We almost need to have a debate running in
parallel to this one to tell us how parliamentary scrutiny should work
and how Members should expect it to take place.
While it is not in the
Bills power to determine what parliamentary scrutiny there
should be beyond the proposals in this group of amendments, in a sense,
by speaking against new clause 2 and new schedule 1, the Financial
Secretary is setting a limit on the way in which Parliament can deal
with the funding and the appointment of the board. He is effectively
saying that Parliament will not be able to appoint the board or to
determine the funding. The way in which Parliament will hold the board,
its members and the way in which it performs its functions to account
is being constrained by the Bill.
The Financial Secretary was
right to say that we seem to have a Bill on this matter once every 60
years. I am sure that if more detailed arrangements were put in place,
such Bills might be more frequent, to allow us to adjust to
circumstances. This Bill sets a limit to parliamentary scrutiny. We
ought to have a parallel debate in the House to the one that is taking
place in this Committee. I suppose that that is a good argument for not
pushing the amendment to a vote at this point, because it is important
to see how the debate on parliamentary scrutiny develops over the
coming weeks.
The
Minister set out clearly in his opening remarks the various functions
of the board and highlighted its responsibility for the production of
statistics, which is the executive function. He also highlighted the
monitoring and auditing role that the board will play, although we
shall come to the detailed arrangements for that in later clauses. One
of the Ministers argumentswhich I shall characterise to
make a pointfor why the proposed route is not the best route to
go down is based on the existence of those executive responsibilities
within the board. Some have argued that if a different structure had
been proposed, whereby the boards oversight role was separate
from the production of the statistics, the NAO model would be
appropriate, in respect of the board exercising its oversight role. The
way in which the people whom the board appointed to exercise that
auditing and monitoring function would be employed and the way in which
that oversight role was funded would lend themselves more readily to
the NAO model.
It is
partly because of the confusion of roles within the board that we have
an unsatisfactory means of holding the board to account. The Minister
highlighted examples of how the executive function is held to account
elsewhere and of how it is funded in other territories and
jurisdictions. It is almost because of that confusion of roles that we
cannot move to an NAO model to fund the scrutiny and oversight
role.
We shall return
to that issue, but it is important to recognise that the way in which
the two roles have been fused in the board makes it more difficult to
come up with a more satisfactory way of having the funding and
appointing of the board National Statistician at arms length
from the Treasury. My hon. Friends will talk about that issue later,
but that confusion works its way through the Bill and will affect the
practical way in which the board will be held to account. I hope that
there will be more opportunities for discussions about how Parliament
should hold the body to account, as the Committee debates the Bill and
as it goes to the other place. I beg to ask leave to withdraw the
amendment.
Amendment,
by leave, withdrawn.
Clause 3 ordered to stand
part of the Bill.
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