Examination of Witnesses (Questins 300-319)
ANGELA EAGLE
MP
6 FEBRUARY 2008
Q300 Chairman: I am trying to distinguish
between the two here. She wants £25 million. She explained
to us about the fourth page and how some of that might be recouped
from other departments, but she also said she needed more money
to improve migration statistics. How much more does she need for
that?
Angela Eagle: There is not a specific
amount for that that has been identified in quite the same way,
but certainly it is important to know that in the CSR settlement
and in the settlement letter there is explicit reference to extra
funding that has been given. I think it is around three million
a year for improvements in migration statistics. She is now saying
that she needs more to add sophistication to migration statistics
and we are certainly looking to see what we can do about that.
Q301 Chairman: You see perhaps why
we are puzzled. We had the CSR settlement, a five year settlement,
fixed for the longest period ever, announced in October and we
had the national statistician coming to us at the end of January
saying it is not enough. I quote her: "We have recognised
we do not have quite enough money."
Angela Eagle: On the fourth page,
the original bid for the five year settlement which is outside
the CSR period to reinforce independence, the view at that time
because of work that had been done by ONS was that there was going
to be a three page census. My understanding is that as a result
of some of the piloting that was done it became clear that having
a fourth page on the census would not reduce the propensity of
people to respond to it. The assumption, when the bid was originally
made, was that there was some kind of trade off between length
of the census and response rates. The pilots which happened subsequent
to the bids brought back the result that you could have a fourth
page without having any serious diminution of response rates.
Given that new information, I think people then started to look
to see whether a fourth page was worthwhile. I think it is important
to say that whether we have a three page census or a four page
census I am confident we will have a robust and useful one, but
at the moment I am looking with other colleagues in government
to see whether we can fund the fourth page.
Q302 Chairman: At the same evidence
session, the chairman designate of the new Board, Sir Michael
Scholar, told us that if there was not sufficient funding provided
then the Board would have to consider restricting the type of
statistics that ONS provide to government departments. Are you
aware of that?
Angela Eagle: I read his evidence.
I was not aware he was going to say it before he did but I think
that is probably the role of the new independent chair of the
Board. I think it is important also to remember that the Statistics
Board has had a very generous settlement in their five year settlement.
They have £30 million to help pay for the process of moving
to independence. They have £450 million for the census and
they have the equivalent of £240 million a year for the next
five years, which is much more generous than the other Chancellor's
departments. They have to deliver some efficiency savings but
they have had a real term flat settlement, rather than the minus
five that everybody else has had. I think it has to be put in
that setting.
Q303 Chairman: There has been quite
a lot of press coverage recently about the most recent population
projections. The ONS in their estimates believe the population
will increase by 4.4 million to 65 million by 2016. Should the
public be concerned about that?
Angela Eagle: I do not think they
should necessarily. The economic arguments for migration are unanswerable
to that extent. The figures to date show that migrants generate
more money in the economy than they use in resources and benefits.
I think we have to ensure that we have the right sort of migration
to ensure that those ratios remain. There are issues about how
to absorb the new people that everybody needs to be concerned
about, but it certainly assists us in ensuring that we continue
to have robust economic growth if we can have migrant workers
in to do the work that would not be done if they were not coming
in to assist us. In general, it is a good picture but I would
not be complacent about the cultural issues that it causes or
the practical issues.
Q304 Chairman: The Institute of Public
Policy Research used data from the United Nations to forecast
that there would be 9.1 million migrants from abroad by 2030 compared
to 5.4 million today. Has the government seen those figures?
Angela Eagle: We have seen the
IPPR research as indeed you have. The issue is that there is an
ongoing response cross-departmentally to ensure that we get the
work permit rules right, that we get managed migration right,
that we minimise illegal immigration and that continues across
all government departments. Certainly the Treasury is not the
lead department for a lot of that practical work.
Q305 Mr Brady: You said the economic
arguments for migration are unanswerable and that may be the case,
but can I turn you to the implications in terms of the planning
of public expenditure because there I think the position is much
less clear. I got the House of Commons Library to prepare some
figures. I accept these are not necessarily entirely scientific
but broadly speaking the 1998, 2000 and 2002 spending review periods
were based on population estimates which turned out to be overestimates
and, for the 2004 and 2007 periods the projections look like being
fairly significant underestimates. If you look at the amount of
money that needs to be spent to maintain public expenditure on
a per capita basis, the effect of this is quite interesting because
for the first three spending review periods it reduces the amount
of money that needs to be spent below that which has been planned
for and for the second two periods it results in quite a significant
saving. Looking ahead to 2011 to 2012, the Library suggests that
it is nearly £10 billion less being planned for than would
be necessary to maintain spending on a per capita basis. That
must be a concern for ministers.
Angela Eagle: Yes, but that is
only one part of the case. First of all, I think it is important
also to remember that migration is good for the economy. It helps
the size of the cake to grow. It also helps the tax take to grow
so there are balancing positives as well as expenditure implications
of migration. In fact, there are inflationary and growth implications
if we cannot get the workforce that we need to do, for example,
big projects which assist us to be a more effective, efficient
economy. One thinks of Crossrail; one thinks of the building projects.
We have to look at both sides of these arguments. It is a bit
difficult for me to comment in detail when I have not seen the
figures that you have from the House of Commons Library but the
fiscal planning and the work that is done to prepare for budgets
and public expenditure always use a range of migration statistics,
so it is never a forecast that is exact down to a single person.
There is always a range. With the last CSR there was a range.
That was done, as you all know, before the revised mid-year estimate
came in but actually figures show—I think you asked for
some information about this and you have been sent it—that
even with the revised mid-year population estimates, those ranges
were all kept within. We know that planning for public expenditure
and the numbers of people, the size of the economy, is not an
exact science. What the Treasury tries to do is maintain a range
of forecasts and predictions and get it as right as possible within
that range. That was done in this instance.
Q306 Mr Brady: Thank you. I am using
these figures just to illustrate the point. I fully accept that
you cannot comment on them in detail but, as a broad principle,
accepting that inward migration does expand the size of the economy
and therefore is likely to increase the revenue income for the
Treasury, given that public expenditure is based on projections
outward, if those projections are underestimates as they appear
to be at the moment and have been over the last few years, is
there not a sense of the Treasury having its cake and eating it?
You will get a revenue increase but planned expenditure will not
rise as quickly as it would be expected to, to take account of
the increased demand for services.
Angela Eagle: Forecasting is always
a bit of an art as well as a science. If it looked like the forecasts
were completely out in one particular area, we would have to look
to see what the implications of that were. If something that was
outwith the band of the forecast or the estimate happened, clearly
we would have to look at the figures again. There are people in
the Treasury who spend their lives looking at the figures as they
come in on both sides of that equation, making suggestions about
whether we should be making revisions. I am confident that we
have systems in place to respond if there were suddenly to be
a gap of that sort. We certainly have not seen it yet.
Q307 Peter Viggers: We know that
the statistics are wrong from a number of random snapshots. For
example, Slough was the ninth fastest growing population in the
country. Since then estimates show it has the second fastest declining
population. That is one fact. There are more children receiving
child benefit in Slough than there are children in Slough. We
know from these random examples that the statistics are not accurate.
What revisions are made within the Treasury? You referred to revisions
and people studying statistics all the time. How do they make
revisions from established facts?
Angela Eagle: The ONS do this.
The Treasury would not start second guessing the migration statistics
or the allocation of those statistics that the ONS had come up
with. Everybody recognises that we have a system where perhaps
more people are coming in. Certainly more people, be they migrants
or not, are moving round faster and people have different ways
of commuting to work. Sometimes the usual address is not always
capturing who is living in particular places and you illustrate
the point with the Slough example. I believe that Karen was talking
to you and has given evidence about how, as part of the task force
on migration statistics, the ONS intend to try to make their estimates
of the population, particularly its distribution, more accurate
than we think it is at the moment. You will have heard, I hope,
the Local Government Minister, John Healey, announce the setting
up of a ministerial task force to guide the task force that is
looking at migration statistics to see how we can try to improve
the sophistication with which we deal with these statistics. It
would not be for me as a Treasury Minister to tell the ONS how
to gather their statistics but we are certainly very supportive
of the extra work that is now being done to try to capture some
of these other issues. You mentioned some of the examples in Slough.
That is an issue of whether you can use existing administrative
data that is held locally to try and augment the migration statistics
that you collect at ports and in more conventional ways. ONS are
taking a close look at how the statistics we have at the moment
can be refined in order to take account of issues such as that.
I know that the task force identified a series of different work
streams that ONS is looking at to see how it can incorporate the
extra information that we get from administrative statistics like
GP registrations, school registrations, child benefit, to try
and make a more sophisticated guess about what is happening in
particular areas. That work, as you know, is ongoing.
Q308 Peter Viggers: I thought I heard
you say that you have people in the Treasury who pore over these
numbers and make appropriate revisions.
Angela Eagle: When they come in,
we would make appropriate revisions to our plans. It is not for
us to make revisions to the statistics. That is for the ONS. They
are the statisticians. They are the experts. We have recognised
for example that migration statistics need to be improved and
that methodologies perhaps are not keeping up with the pace of
change in this area and perhaps we could try to produce better
statistics, which is why extra money was allocated in the settlement
for the Statistics Board to do that and why there is now a migration
statistics task force looking at how it can collect other information.
That is for the ONS to do using their particular expertise. Once
they give us the figures, what I was trying to say—I am
sorry if I expressed myself badly—was that if the figures
on our existing plans, in answer to Mr Brady's point, changed,
then we would look at existing plans, but what we would not do
is say, "You have your statistics completely wrong. Why not
count it like this?" That is for the ONS to decide.
Q309 Peter Viggers: I recognise that
you respect the ONS figures. What I do not understand is how you
make your revisions to your plans.
Angela Eagle: You would have to
ask me a more specific point so that we could have a meaningful
discussion. On the migration statistics, I thought the point that
was being made by you was that the allocation to particular areas
was not as accurate as it should be. Everybody has recognised
that and that obviously has implications for how local government
spending is decided and disbursed by the CLG. It has implications
for NHS funding, distribution and all of those things. It is for
those departments to distribute according to a particular formula
and it is for the Statistics Board and the ONS to try to make
their own estimates of migration and population statistics in
areas more accurate. We can respond and we have responded by setting
up the migration task force to do that, to try to make our measurement
of migration statistics more sophisticated, but it is for the
ONS to decide what is statistically relevant there, not for me.
I cannot go to Karen Dunnell and say, "I demand that you
add GP registrations." I can suggest it and they can look
to see whether that is a reasonable thing to do. That is the work
that is going on now.
Q310 Peter Viggers: Talking about
migration, you have come back in response to questions by saying
that migration appears to have considerable benefits but if the
numbers are wrong, if for example immigrants raise aggregate supply
more than they raise aggregate demand, one would expect inflationary
pressures to ease for a period of time. I am not saying that migration
is good or bad but if it is not accurate the monetary projections
could be wrong.
Angela Eagle: Clearly. If migrants
come in, they can ease inflationary pressures by ensuring that
we do not have cost push inflation in the labour market because
they are filling posts that could otherwise not have been filled.
These things operate in all sorts of directions and obviously
it is important that we have as accurate a measurement of what
is going on in as timely a fashion as we can. That is what the
extra work in this area is meant to help us produce.
Q311 Mr Todd: One of the ways in
which we may improve the accuracy of the census on which statistics
can be based is to have a reliable address register as a means
to identify people living in particular homes. That was identified
as a requirement many years ago, certainly in time for the 2001
Census and it has been considered for some time since then. No
progress appears to have been made. Who bears responsibility for
that?
Angela Eagle: I do not think there
is an easy answer to that. As you know, there are three different
sources of address registers. We have never had a national address
register. It was decided several years ago that we should work
to see whether we could find a project that would give us a national
address register. In the end, that was—
Q312 Mr Todd: All those sources lie
within public sector control.
Angela Eagle: They do. There are
some issues about intellectual property rights and ownership to
do with the Ordnance Survey. That is my understanding. Also, I
think it was decided in 2005-06 that the work being done to develop
the national identity register would provide us with a national
address register route in due course and therefore the other parallel
work, it was decided, was a substitution. The parallel work was
discontinued partially, I suspect, because some of these issues
of intellectual property and failure to agree on how to move forward
on those was a pretty intractable problem.
Q313 Mr Todd: To be honest, to have
one unified address register would obviously be very important
for this particular initiative but for many others as well. Why
was it not given sufficient weight within government? I appreciate
the point you are making about intellectual property but again
the intellectual property all lies within the public sector. It
is not an issue of some third party engagement in this.
Angela Eagle: The Ordnance Survey
has its own trading fund status and its intellectual property
rights issues. It would say that most of the electoral registers
and the gazetteers are compiled using information that is their
intellectual property. There were some pretty thorny issues. That
is my understanding. The decision was taken that the best way
of proceeding with this would be the work that was ongoing to
create the national identity card scheme and the address register
that would follow could be piggy backed on that, rather than this.
That was the decision that was taken and announced in Parliament,
my understanding is, in about 2006, a bit before my time in this
Department.
Q314 Mr Todd: Anyone who took the
view that the establishment of the national identity register
would resolve this problem over time would only have taken that
view with a very long periscope attached to it, because that is
certainly not going to produce any solution before the census
and probably not before the next one, in my personal view.
Angela Eagle: It is one of those
examples of something that is pretty frustrating in that we have
not made progress. I would not underestimate the difficulty of
the issues surrounding it.
Q315 Mr Todd: I remember the biblical
story of the Gordian knot. That was resolved in due course, was
it not?
Angela Eagle: We can all hope.
Q316 Mr Todd: The ONS are now saying
that they will prepare a register for themselves, which indeed
they will have to do if they are going to collect the data.
Angela Eagle: My understanding
is that they are using the existing three basic registers and
then they are going to use their enumerators to try to hit the
harder to reach areas.
Q317 Mr Todd: Has that been costed
into their programme?
Angela Eagle: That is my understanding.
Q318 Mr Todd: It has been costed?
Angela Eagle: That is my understanding.
I do not know the detail of what they have put in their procurement
but that is the plan that they have in place and I am assuming
they have costed it.
Q319 Mr Todd: Bearing in mind they
are going to use the three different sources of the data which
have clearly caused us this apparently insoluble problem, has
some instruction been given out to those three agencies or local
government collectively and the Post Office and the Ordnance Survey
that they should cooperate in this process?
Angela Eagle: Clearly the census
is a legal requirement and we want to get the best coverage that
we can in the circumstances. A great deal of work will be going
into the planning for getting this right, especially after some
of the issues that emerged in the 2001 Census. I am pretty confident
that they have a good, robust plan for dealing with this.
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