Statistics
The Committee consisted of the following Members:
† Andrew, Stuart (Pudsey) (Con)
† Barwell, Gavin (Croydon Central) (Con)
Campbell, Mr Gregory (East Londonderry) (DUP)
Davies, Geraint (Swansea West) (Lab/Co-op)
† Evans, Jonathan (Cardiff North) (Con)
Field, Mr Frank (Birkenhead) (Lab)
† Heaton-Harris, Chris (Daventry) (Con)
† Horwood, Martin (Cheltenham) (LD)
† Hurd, Mr Nick (Minister of State, Cabinet Office)
† Knight, Sir Greg (East Yorkshire) (Con)
† Malhotra, Seema (Feltham and Heston) (Lab/Co-op)
† Vaz, Valerie (Walsall South) (Lab)
John-Paul Flaherty, Sarah Heath, Committee Clerks
† attended the Committee
European Committee B
Monday 20 January 2014
[Miss Anne McIntosh in the Chair]
Statistics
4.30 pm
The Chair: Does a member of the European Scrutiny Committee wish to make a brief statement?
Chris Heaton-Harris (Daventry) (Con): Only one thing makes me happier than making this opening statement, and that is serving under your chairmanship, Miss McIntosh.
It might be helpful to the Committee if I take a few moments to explain the background to the documents and the reason why the European Scrutiny Committee recommended them for debate. Regulation EC 223/2009, commonly referred to as the European statistical law, is the framework legislation for the European statistical system, comprising the Commission statistical office—EUROSTAT—and the producers of official statistics in member states. All other legislation under which EU statistics are produced must be in accordance with the European statistical law.
In April 2012, the Commission proposed amendments through the draft regulation before us to four key features of the European statistical law: the co-ordinating role of the national statistical institutes of member states, the role and professional independence of the heads of the NSIs, the self-assessment of EU statistics produced by a member state and a published statement of confidence in them, and enhanced access to administrative data. The European Court of Auditors’ June 2012 report on EUROSTAT made a number of recommendations and considered in particular whether processes have improved and so achieved full compliance with the European statistics code of practice.
The European Central Bank and the European system of central banks produce EU statistics under a separate legislative framework, independently of EUROSTAT and the NSIs of member states. While independent, the two frameworks are intended to be complementary and there is close co-operation between them. Changes to one framework can have an indirect impact on the other, and that needs to be taken into account. In an opinion of November 2012—document (c) of the draft regulation to amend the European statistical law—the European Central Bank made a number of comments and sought clarification on some issues relating to a clear separation of the roles of the European statistical system and the European system of central banks.
Although the European Scrutiny Committee heard about some encouraging developments on the proposal, it decided that, rather than clearing it from scrutiny, the proposed compromise text should be debated. The Committee suggested that Members might want to focus on the solutions claimed by the Government to previous subsidiarity concerns about “commitments in confidence” and access to administrative data.
4.33 pm
The Minister of State, Cabinet Office (Mr Nick Hurd): To raise the bar on toadyism, I defer to no man in my pleasure at serving under your chairmanship, Miss McIntosh.
I am delighted to respond on behalf of the Government to the Committee’s understandable concerns about subsidiarity. The Government shared those concerns.
I will take a few minutes to make a brief opening statement. The Government support reforms to regulation EC 223/2009 on European statistics because it is important to improve the quality and reliability of the statistics produced by member states. It is in the national interest that EU policy making is based on the most accurate information available and that statistics for policy making in the UK can be reliably compared with those of other member states. Reforming the regulation in the right way should increase the probability of those interests being met. That is our starting point.
In principle, we see a case for reform, not least, as the ECB and the ECA reports point out, as does the Commission, because arrangements in some member states have proved to be inadequate in meeting needs, particularly in respect of key economic statistics. Members will be aware that the catalyst was the situation in Greece, which triggered concerns about key economic statistics and the risk that similar problems could occur in any member state without appropriate and legally enforceable governance arrangements being in place.
From the start, Her Majesty’s Government had concerns about the principle of subsidiarity as it relates to the Commission’s original proposals, but all the indications are that the Council will support a compromise that will alleviate our concerns, not least because other member states share them. That is why we urge the Committee to support the motion.
It is worth considering briefly our two concerns about subsidiarity. The first was to do with the role of the heads of the national statistical institutes. The Government want to ensure that the principle of professional independence for official statisticians is applied throughout the EU, while respecting particular constitutional arrangements in each country. The Commission’s proposal sought to centralise responsibility and decision making in one person, the head of the NSI, but the UK statistical system—quite rightly, in our view—recognises the operational independence required by statisticians in the devolved Administrations and the many different Departments producing statistics in the Government statistical service.
Parliament and the Committee can be assured that the Government will maintain a red line during negotiations and will not agree to anything that dismantles the UK’s well functioning framework for statistical governance. Indeed, we believe that we have gained agreement with other member states to ensure that the proposal places an obligation on member state Governments to report publicly on their compliance with the European statistics code, but gives respective Governments the freedom to implement code compliance in ways suitable to the country.
Sir Greg Knight (East Yorkshire) (Con): Will the Minister give way?
The Chair: Order. I apologise, but there are no interventions at this stage—no interventions until the Minister has concluded. There will be plenty of opportunity to put questions and to intervene during the debate that follows questions.
Mr Hurd: In the UK, this would mean that our Government system for official statistics, which sets one of the highest standards internationally for providing independent, reliable statistics, can continue to operate without unnecessary reforms imposed by the EU.
The second aim, to which my hon. Friend the Member for Daventry referred in his opening remarks, is to do with access to administrative data for statistical purposes. Her Majesty’s Government accept the principle that the sharing of administrative data between different Departments is beneficial to the accuracy and efficiency of the official statistical system. However, the current European statistical law prevents this principle from being applied to the production of European statistics even when appropriate and justified.
We want to ensure that EU law does not give blanket rights for the administrative data held by UK Government Departments to be used by UK statisticians for the purposes of producing statistics for the EU. It is proper that such rights should be granted via EU regulations only on a case-by-case basis and if properly justified. After careful analysis, because the issue does matter, we are now content with the Commission’s proposals. It will remain a red line for Her Majesty’s Government that we will not support any extension of the rights granted in the Commission proposal.
The analysis also confirms that there is no possibility of the measure’s being used to enable any non-UK organisation to obtain access to a UK source of administrative data. The Commission’s proposal gives EU institutions the ability to propose access to a national administrative source by a national producer of European statistics if necessary, but member states will subject any future regulatory proposals to scrutiny and a vote, in particular with respect to the subsidiarity principle. When member states conclude that specifying access is not necessary in a regulation, it defaults to member states to make that determination under national laws and policies. Hence, we consider the subsidiarity principle to be upheld.
Finally, I reassure the Committee that Her Majesty’s Government will hold to an additional and important red line. We will not support granting any further powers to the Commission on statistics—as has been supported by the European Parliament—beyond its legitimate role as a guardian of the EU legal framework established by the treaty of Lisbon.
Parliamentary support from this Committee for the motion will enable Her Majesty’s Government to play a more active role in defending the red lines and in supporting necessary improvements to statistical governance throughout the UK and the European Union—improvements that we believe to be in the UK national interest.
The Chair: We now have until 5.30 pm for questions to the Minister. May I remind Members that these should be brief? It is open to a Member, subject to my discretion, to ask related supplementary questions.
Lisa Nandy (Wigan) (Lab): It is a pleasure to serve under your chairmanship, Miss McIntosh—I will leave it at that. I have three questions for the Minister. According to the European Court of Auditors, there is ambiguity about the nature of the obligation to adhere to the code that is not resolved by the proposed measures. Will he tell us whether he believes that any progress has been made on that, and indeed, whether he believes that that has now been resolved?
The same report also highlights concern that there is no mechanism for independent inspection of data, where they may be unreliable. Clearly, that is essential, as the Minister said, both for public confidence and for sound decision making that may arise from those statistics. What representations and progress have the Government made on that issue?
Finally, the Minister has set out a number of safeguards relating to access to administrative data. We are very grateful for his assurances and particularly for the commitment that future decisions to extend that would be done on the basis of a vote. In response to the European Scrutiny Committee, he said that any element where the use of a particular administrative source of data was specified would be examined on a case-by-case basis, from the perspective of subsidiarity as well as on its statistical merits. Will he set out what tests he thinks should apply in such future considerations?
Mr Hurd: The hon. Lady is right to cite the ECA report, which, as she knows, includes evidence from the 2006 peer review of governance measured against the EU code of practice. It is striking to me that the report states that only four EU countries had institutional structures that comply fully with the code; I am delighted that the UK was one of them—the others being Austria, Finland and Sweden. Furthermore, the same report indicates that the European Statistical Governance Advisory Board reported that only 11 member states had adequate rules for appointing and dismissing senior statisticians.
I could go on, but the point is well made by the hon. Lady that the case for reform is strong. The systems and governance of the way in which statistics are produced and regulated across the EU are not good enough. That is the main thrust of the reform, which is to strengthen governance. I have to say that, in many ways, it is inspired by and modelled on what we did in legislation in 2007 in this country to produce a governance framework for statistics. That may not yet be perfect, but it is a vast improvement on what came before. It would be churlish of us not to support the instinct of other countries to follow our example and improve their governance arrangements, as long as what is proposed does not materially affect, undermine or change the way in which we go about our business of producing and regulating statistics, which we believe to be fit for purpose. The ECA report adds ammunition to the case for reform.
On the concerns about access to administrative data, the hon. Lady asked what criteria might be set for consideration by any committee. That is hard for me to do, in that the point is that matters will be looked at on a case-by-case basis. The fundamental test for any committee looking at any specific proposal is whether it is necessary.
Sir Greg Knight: Miss McIntosh, I owe you an apology. I was so transfixed by the Minister’s eloquence that I rather jumped the gun. We all know that when Governments
are faced with other Governments who disagree with their position, the tendency is to seek a compromise. The Minister referred twice to a red line. Is he giving the Committee an unequivocal undertaking that it will be a red line, and not a yellow one?Mr Hurd: Red is not my favourite colour, and neither is yellow—I would much prefer to talk about blue lines. However, I assure my right hon. Friend that I do not use language lightly, and when we talk about red lines, we mean it.
We take great confidence and strength from the fact that we seem to be carrying other member states with us: Germany, for example, sees the world in the same way.
For clarity, the only issue is that this is ongoing, in the sense that the Greek presidency wants to reach some sort of deal. That has a fixed timetable and time is running out as there has been an impasse between views, not least because of what the European Parliament suggested. We are therefore watching closely, but, on balance, we think that the Greek presidency will come forward with a proposal, possibly in the first week of February.
We welcome the opportunity to explain our red lines and seek the Committee’s approval on that basis. We support the direction of reform as long as it does not mean that we have to change the way we do things here.
Martin Horwood (Cheltenham) (LD): It is a pleasure to serve under your chairmanship, Miss McIntosh—I, too, will leave it at that. I have only one question, but I think it is crucial: given the background of the debacle over the Greek statistics specifically, does the Minister think that the commitments on confidence are sufficiently robust to prevent a recurrence of that kind of event? Even if that will not be the case immediately, will the proposal before us lead us to that satisfactory place?
Mr Hurd: What has been proposed and what we expect to materialise as a final outcome will be quite a significant step in that direction. That the integrity of statistics, including their production and regulation, has been raised to this extent means that this will be much more under the spotlight than it was before there was a realisation that some big decisions can flow from such data and statistics. Therefore, the profile of this issue has been raised.
We went through this in this country in the prelude to the Statistics and Registration Service Act 2007, when we recognised in this place that we were taking too many risks with the integrity of the statistical system—I do not want to make a party political point—and that a new governance system was needed. I sense that, across Europe, the penny is beginning to drop on that. The proposals are sensible, as long as member states are allowed to decide the how, and there is transparency around the process, with good peer-to-peer review and a persistent spotlight on integrity from those in the supervisory and accountability business. It may not be perfect, but it is certainly an important step in the right direction.
The Chair: If no further Members wish to ask questions, we will proceed to debate the motion.
Motion made, and Question p roposed,
That the Committee takes note of European Union Documents No. 9122/12, a draft Regulation amending Regulation (EC) No. 223/2009 on European statistics, No. 14230/12, European Court of Auditors Special Report No. 12/2012: Did the Commission and Eurostat improve the process for producing reliable and credible European Statistics?, and No. 15976/12, a European Central Bank Opinion on the draft Regulation amending Regulation (EC) No. 223/2009 on European statistics (CON/2012/84); notes the success that the UK has achieved so far against its negotiating objectives in Council negotiations on amendments to Regulation (EC) No. 223/2009; and supports the Government’s view that it should approve any final compromise text which ensures those objectives and improves the legal framework for the production of reliable and credible European Statistics.—(Mr Hurd.)
4.48 pm
Lisa Nandy: I am grateful to the Minister for his comments and reassurances. The Opposition share the Government’s view that the proposed reforms are helpful in principle, particularly the commitments on confidence, but the implementation and how we move forward will be profoundly important.
As the Minister said, this matter is ongoing. The European Court of Auditors recommended that it should be kept under constant review. In the light of the reassurances he gave, particularly about administrative data and future consideration of the extension of access to that, I feel much more comfortable with the proposals. It just remains for me to say that Opposition Members are grateful to the European Scrutiny Committee for referring this matter for debate.
Today, several examples were given, such as that of Greece in 2004, but there are many others besides. It is essential that the public can have confidence in statistics. We increasingly rely on them to make decisions of enormous consequence to people’s lives. It is shocking that about 50% of the public do not have great confidence in European statistics, especially when it comes to the economy. It is clear that we must do more and do better. I echo the comments of the hon. Member for Daventry and the answer the Minister gave in response. We obviously need to continue to shine the spotlight on and scrutinise this. I am grateful for the opportunity to do that today.
4.50 pm
Martin Horwood: I will not delay the Committee long. Two crucial question face us today. One is about the questions raised by the European Scrutiny Committee about subsidiarity. They do not seem to be particularly contentious. Guarding the operational independence of national statistical authorities, and in so doing not crossing any lines of subsidiarity, is an important principle that Government is right to try and uphold. I think the European Scrutiny Committee endorses that, as I am sure do all political parties in this place.
The more substantial issue is whether the rules are sufficiently robust to avoid a repeat of the situation in which the Greek Government revised their debt forecast from 6%-8% to 12.7% in one leap. Such uncertainty, and therefore instability, around debt statistics obviously had an immediate impact on the eurozone and, through the eurozone, the whole European economy, including our own. Whatever systems are put in place, it is vital that they are sufficiently robust and that we can look forward with confidence to a situation in which such events simply cannot be allowed to happen.
The Minister talked about putting a spotlight on the provision of statistics to the European Union, and that is right, but there might be circumstances in which a spotlight is not enough. We need to ensure that the Commission has the tools at its disposal to require, in some circumstances, statistics from specific administrative sources, for example. We talked about that. I assume that it would require further regulation or specific proposals on a case-by-case basis, which is fine, but, as the hon. Member for Wigan rightly said, it will require ongoing scrutiny by the Commission, the European Council, the European Parliament and this Parliament. How that scrutiny is done in this Parliament is an issue.
It is not that I do not like exercising parliamentary scrutiny of European regulations on statistics—it is the kind of thing that makes me get up in the morning—but I am not sure that it is something that should have been referred to this Committee by the European Scrutiny Committee. The European Scrutiny Committee itself has scrutinised the proposal. Government is performing scrutiny. It seems to me that this is a classic case where no great issues of principle were in dispute. Although the issue is important, I am not sure that there was much disagreement about it across the House or much to be debated in a Committee such as this one. The subject should perhaps have gone to a more expert Select Committee—the Public Accounts Committee or the Public Administration Committee—which could have looked at the whole issue of statistics in a lot more depth and with expert input. That is the kind of reform to parliamentary scrutiny of European legislation that we in the Liberal Democrats have called for, which I think the European Scrutiny Committee has called for and for which we have a growing consensus.
Would the Minister support that kind of wider scrutiny? If so, will he and his fellow Ministers, including the Minister for Europe, see whether we can move the process forward, so that Select Committees can be involved on a more routine and regular basis in looking at the substance of issues? I am not absolutely convinced that a Committee of this kind adds a great deal to the debate. It is however an absolute pleasure not only to serve under your chairmanship, Miss McIntosh—I take any opportunity to do that—but to debate European statistics at length. It is something to which we should all look forward. I hope that the Minister will take seriously my comments about how we can scrutinise such proposals properly and effectively.
The Chair: In inviting the Minister to reply to the debate, I remind the Committee that we are restricted to the terms of the motion and must not have a wide-ranging debate on European scrutiny more generally.
4.55 pm
Mr Hurd: I am particularly grateful for that clarification, Miss McIntosh, although the hon. Member for Cheltenham raises a serious point. I think it would be in order to say that the Public Administration Committee is taking a keen interest in the production and regulation of statistics, and it has conducted 11 separate inquires into statistics, so there is no shortage of scrutiny on that important issue.
I am grateful to the hon. Member for Wigan for her constructive approach. I note the concerns raised by the hon. Member for Cheltenham about whether the improvement will have teeth. The European Parliament took a view that EUROSTAT and the regulatory authorities at the centre should have more powers, including the ability to impose fines. That idea has been rejected, not least because it was considered to be unlawful. A consistent upgrade of member states’ arrangements for the production and regulation of statistics across Europe, with Governments standing behind their systems and issuing public statements on their compliance, is an important step forward.
Whether we call the lines red, yellow or blue, I assure the Committee that we will not agree to anything that dismantles the UK’s well functioning framework for statistical governance. EU law does not give blanket rights for administrative data held by UK Government Departments to be used for European statistics or accessed by the Commission. We will not support the granting of any further powers to the Commission in the area of statistics, beyond its legitimate role as guardian of the EU legal framework established by the treaty of Lisbon.
However, we should not miss the opportunity to support reforms that we think are in the UK’s long-term interest. I hope that the House will recognise that Her Majesty’s Government have set themselves negotiating objectives that are achievable and will offer adequate protection for our right as a nation to uphold the principle of subsidiarity.