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This debate has also been useful in improving and strengthening the coalition of support around my noble friend Lord Jenkin’s views for a joint committee. The noble Lord, Lord Newby, indicated that we could never write in Joint Committees, but I am told that we can write in joint commissions, and we may well have a go at writing in a joint scrutiny commission at a later stage.

I believe that my amendment has enabled us to have a useful debate on some of the issues that we needed to address, but I beg leave to withdraw it.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

Clause 2 [Status]:

On Question, Whether Clause 2 shall stand part of the Bill?

Baroness Noakes: I have tabled our opposition to Clause 2 standing part of the Bill in order to debate whether a non-ministerial department is the best way to achieve an independent organisation for statistics. This aspect of the Government’s proposals has received relatively little attention.

The Government have relied on the existence of 20 or so other non-ministerial departments as a precedent. The use of that model goes back a long way and it is a well tested method of creating some independence within government. However, we should be under no illusions that those organisations remain firmly within government. Indeed, one of the reasons for using the model is to allow fluidity of staffing between the non-ministerial department and the rest of Whitehall, which can certainly have advantages.

The name “non-ministerial department” is a bit of a misnomer because it implies that Ministers disappear from the picture. Clearly, they do not: Ministers remain responsible for the Government’s legislation; they appoint the key people; they retain mechanisms that control the terms and numbers of staff; and generally they set the amount of money that is needed. Under this Bill, they retain powers of direction so that they can step in. We shall come to those powers later.

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The issue I want to draw to the attention of the Committee is that this is the first time the Government have sought to use a non-ministerial department model to encompass an organisation with split functions of oversight and operations, as set out in the Bill which has an assessment function separate from the National Statistician’s functions—in effect, to oversee the latter. The board is responsible both for the production of statistics and regulating them by regulating the work of the National Statistician and the executive office, and I do not believe that any of the other non-ministerial departments has that overlap of functions. We will be looking at the overlap of functions in more detail in later amendments, but for the purposes of this Motion I am trying to explore whether this model has previously been used for the overlapping arrangement.

Other options were examined by the Government, as set out in their various documents before they produced the legislation on the Statistics Board, but none appeared to examine the use of a public corporation to carry out the function as set out in the Bill. Public corporations generally have a greater distance from government. They still have government involvement in appointments and so forth, but they have a greater degree of separation and therefore independence. I am much less clear that a non-ministerial department has sufficient independence. I have worked with some of the other non-ministerial departments—indeed, I sat on the board of two of them. I would characterise them as close to the departments which have responsibilities for them and say that they are certainly not arm’s-length. I have also worked with, or been appointed to, public corporations. In those instances, the length of the arm is very much longer. I believe that the element of distance in government is crucial to creating proper independence.

On non-ministerial departments, I hope that the Minister can answer one question of detail. I understand that every government department must have an accounting officer and a principal finance officer. That applies whether the department is ministerial or non-ministerial. Will there be an accounting officer and a principal finance officer for the Statistics Board, and, if so, who will it be? Will the chairman or the National Statistician be the accounting officer? That might help the Committee to understand what the model means in practice.

I am well aware that there was little opposition to the non-ministerial model during consultation, but I hope that the Minister agrees that the aim of the Bill is to create a statistics body that is actually independent and also has the appearance of independence. In that light, I have tabled the Motion to examine the rationale for using the non-ministerial department and whether it is a robust model for creating the degree of independence that we seek.

4.15 pm

Lord Davies of Oldham: I am grateful for the way in which the noble Baroness described her Motion, even though I am in great danger of repeating the main principles that I adumbrated with regard to the first amendment. It created an alternate model and

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embraced a range of concepts about how the board will work, and I therefore do not have a great deal to add to what I said then. The noble Baroness freely and generously conceded that our public consultation and the deliberations of the Treasury Select Committee of another place confirmed that the Government should identify the board as a Crown body, which is the basis on which we are working. As I indicated, we are convinced that statistics are a public good that serve a wide range of users and it is right that statistical production remains an executive function.

The noble Baroness asked me a specific question about the accounting officer. We expect the National Statistician to be the accounting officer for the board. I think that we are going to have an extensive debate on the role of the National Statistician, its importance and the extent to which these new arrangements pay proper regard to the highly significant position that he occupies. I have no doubt that we will return to those issues. However, the specific answer to the noble Baroness’s question is as I identified.

On the more general points that she raised, I think that I answered them in the debate on the previous amendment. We expect Parliament to play a central role in holding the statistical system to account under the new system, and we expect that there will be full accountability to Parliament for it. However, Ministers will have only the residual responsibility of the interface with Parliament because only they can be directly accountable to Parliament for the operation of the board. They will act as a conduit for the answering of parliamentary questions by the board and the National Statistician and will lay the board’s annual report before Parliament. They will also be responsible for piloting secondary legislation through Parliament and for the structure for appointments. We have models of non-ministerial departments that work satisfactorily.

The most important feature—and the confirmation that I want to emphasise—is that the new board will be established as a Crown body with a defined range of functions and its staff will be civil servants. I know that there is an issue about certain Crown servants being transferred to work for the board. We will have a chance to discuss that in some detail later, and I hope that I will be able to give the fullest possible assurances about the welfare of such individuals within this framework.

The board will not be an executive agency of any government department. It will not report to Ministers. Parliament will play the central role in holding the statistical system to account under the new system, and the board will be fully accountable to Parliament for the statistical system. As I have indicated, the board will have its own funding arrangements. I realise that I will not be able to reassure entirely the most sceptical Members of the Committee when I describe the funding mechanism that we intend to put in place, which we have already started partially to activate within the framework of the most that we can do under law at present. It is not conceivable that we would put the detail of the funding arrangements for this body in legislation. That does not obtain with any other comparable body, and we are not doing so. What we are doing is

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making explicit and absolutely clear the five-year funding model which guarantees the dependence, which was the subject of the debate on the previous amendment.

I hope that the noble Baroness feels that in this short debate on Clause 2 she has reinforced her anxieties derived from her earlier amendments, but that I have helped perhaps to allay them.

Lord Jenkin of Roding: Before my noble friend replies, I offer one or two brief comments on what the Minister said. He emphasised the fact that he is trying to follow precedents in other cases and is dismissing arguments advanced from this side of the Chamber in that they are not supported by precedent. I approach the legislation on the basis that if we do no more than that we will not achieve its primary purpose; namely, to restore trust. We will have to go further than would otherwise have been the case because, if I may put it this way, there is so much lost ground to be made up. I hope that the Minister will recognise not only in this Motion of my noble friend but in others that are coming we really have to fall over backwards to try to create circumstances that will engender trust.

The Minister merely says, “Well, this has not been done in the case of this or that other organisation”. That is not the game we are in today. With respect, we are concerned with the Minister’s intentions. I made this very clear at Second Reading: our objective is to help the Minister to achieve his intentions. If we are going to achieve that, we must be prepared to be bold and innovative. That is what we are looking for from the Government Front Bench. I have to say that so far we have not had it.

Lord Davies of Oldham: Perhaps I may respond briefly to that important contribution. First, I share with the noble Lord, Lord Jenkin, and all other Members of the Committee that the purpose behind the legislation should be and is to improve the position of national statistics, to improve the reputation they enjoy and to enhance public trust. That is why the legislation is before us. If there were not anxiety in that respect, the legislation would not have been forthcoming. Of course we have the same earnest and intent as the noble Lord has indicated.

We have a difference between us at this stage. I hope that we will have a meeting of minds as we develop our work on the Bill and as I hope I become more convincing as I describe it in more detail in due course. I hope that I can assure the noble Lord, Lord Jenkin, that on the basis of the public consultation and all the advice we now put forward, subject of course to the critical scrutiny of this House as much as the other House—if not more so on some occasions—we will arrive at a model which will achieve exactly the objectives he has adumbrated, and which I share.

Baroness Noakes: I am extremely grateful for the intervention of my noble friend Lord Jenkin because he has reminded us what it is we seek with the Bill. The Minister said that he hoped that later on he would be more convincing, in that he has recognised he has not been very convincing to date. The Minister said that

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the non-ministerial department model was—and I quote him—“satisfactory”. Satisfactory is not what we are trying to seek with the Bill; we are trying to seek the best possible solution.

I asked the Minister whether there were any precedents for an organisation that mixed oversight functions with execution functions. I do not think I heard an answer to that. However, the purpose of tabling the amendment was not to seek the opinion of the Committee; it was to press the important issues that arise out of the model created by the Government. That is why it is so interesting that the Minister went back to the funding model yet again. We will clearly need to do a lot more work on this before the Bill leaves this House.

Clause 2 agreed to.

Clause 3 [Members]:

Baroness Noakes moved Amendment No. 2:

The noble Baroness said: I shall also speak to Amendments Nos. 3 and 20. The amendments continue the theme of examining whether the constitutional model for the Statistics Board set out in the Bill is the best one for creating the environment in which trust in statistics can flourish again. They challenge whether the model of a mixed executive and non-executive board is the correct one, and would create a board composed entirely of non-executive members. This does not change the Bill’s basic approach, which is to have a non-ministerial government department, a National Statistician, and an executive office within the board to replicate what is currently found in the Office for National Statistics. The amendments are designed to move to a structure that more clearly recognises the supervisory or regulatory functions created by the Bill, and the executive or operational functions in the Bill. A later group of amendments, led by Amendment No. 30, allows us to explore the detail of the separation of functions between the board and the National Statistician, and are an essential accompaniment to these amendments.

I want to be clear that I do not seek to minimise the role or status of the National Statistician. Indeed, we have a great desire to enhance the role of the National Statistician as we go through the Bill. Although the National Statistician would no longer be a member of the board, nor would any of his or her executive colleagues, so the board would have a clear oversight function. We would leave completely intact the National Statistician’s role as the board’s adviser on statistics, as provided by Clause 28. It is pretty clear that the board would expect the National Statistician to attend all board meetings, except of course when the board specifically appraises the work of the National Statistician. The fact that the National Statistician remains a part of the board while the board appraises his or her work is one of the Bill’s problems.

I mentioned earlier that, so far as I could ascertain, the Statistics Board that is being created is the only example of a non-ministerial department with explicit regulatory as well as operational functions. It is exactly that form of internal conflict that led to the

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separation of executive and non-executive functions in the BBC, with the non-executive functions being discharged by the BBC Trust. As with our concept for the National Statistician, the role of the director-general of the BBC remains undiminished by the new structural arrangements in the BBC. Arguably, that role would be enhanced because it gives clear operational leadership to the senior executive in the structure.

The unitary board model of mixing executives and non-executives was created in the private sector for commercial bodies. It has evolved, particularly in the UK, to a general understanding now enshrined in the corporate governance code, which is overseen by the Financial Reporting Council, that at least half the members of boards of directors, excluding the chairman, are non-executives. This is designed to provide an environment in which entrepreneurialism and profit maximisation can flourish, while providing checks and balances on behalf of the interests of shareholders overall.

The mixed model of executives and non-executives serves the business community well, but we should be wary of assuming that it is the only model for a corporate body. I am sure that it also works well for public bodies that operate on commercial lines, although there are relatively few of them left in the public sector. It might seem to work quite well in some of the newer regulatory bodies, such as the Financial Services Authority and Ofgem, but there have been no studies, so far as I am aware, of the detailed ways in which those boards work. The fact that they are mixed executive and non-executive does not mean that they operate in line with the private sector model, as found in the combined code. Of course, relatively few bodies combine regulatory and operational functions. Indeed, I am not sure that there are many beyond the BBC. So we cannot assume that the model in this Bill produces the right result.

I hope that the Minister will answer a few questions which are relevant to this issue. Will he describe how the Government see the role of the chairman developing? They announced last week that the search for the chairman would begin this month, and so there must be a detailed specification. Will the Minister make it available to the Committee? Will the chairman be expected to report publicly on the work of the National Statistician? What will happen to the functioning of the unitary board if the chairman and the other non-executives disagree with the National Statistician?

We see a potential issue also in the nature of the chairman. I believe it has been said that the role is seen as a significant one which should attract a heavyweight candidate. That gives comfort to those who want a champion for statistics within Whitehall—someone who can kick up a fuss, for example, if resources for statistics are insufficient or if there is non-compliance with the code. But the bigger that role is within a unitary board, the smaller will be the role of the National Statistician, especially if the chairman has a head of assessment overseeing the work of the National Statistician. I think the Minister will agree that when

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two large roles are found on one board, they cannot both be top dog. As I have said, we want the role and status of the National Statistician to be enhanced, so his or her role in relation to the chairman is important. In Clause 29 the Bill provides that the National Statistician is to be the chief executive of the board, but it is unclear exactly what that is intended to convey. Will the Minister explain what the Government mean by that, and how they see the relative roles of the chairman and chief executive playing out?

These issues are important because the Government have decided on a unitary structure for the board. Currently there is no confusion between the roles of the chairman of the Statistics Commission and the National Statistician, but throwing the two roles into one board creates a huge potential for confusion or worse. I am concerned that the apparent tidiness of the unitary corporate model will not serve our statistics arrangements well. We ought to pause to see whether there is a better structure which will enhance trust in statistics. I beg to move.

4.30 pm

Lord Moser: This is the first of a number of amendments related to the structure of the proposed reforms and therefore it has a crucial bearing on a number of issues we are going to be discussing throughout the Committee stage. I want to speak briefly at this point because I am sure that I will want to speak again when we come to other substantive amendments. It is worth recalling once more the main purpose the Chancellor had in mind when starting us down this road: it is to achieve independence for official statistics with a view to improving trust. That is the whole point here, and as one or two noble Lords have again referred to “trust”, as we must throughout our debates, let me say—especially in response to the noble Lord, Lord Desai, who is not in his place—that he is absolutely right to say that we need to give more thought as to why the problem of “trust” has come along. In my view, it clearly relates not to poor statistics but almost entirely to the poor use of statistics by Ministers, politicians generally, advisers, the media and so forth. It is also worth pointing out that this is a greater problem now than it was in the past. I speak from personal experience in my 10 years in charge. Trust was occasionally a problem, but it was not a general one. I can also say, more importantly, that it is hardly a problem in any other country. The chief statistician of Canada, whom I regard as the top dog in our international world, has said repeatedly that he is puzzled why we have the problem here. However, we shall come back to the issue time and again.

The amendment moved by the noble Baroness relates to the structure of the board, and my reason for wanting to comment on that at this stage is to serve as a reminder of two key issues which I hope we will bear in mind throughout our debates. Issue number one is that the board and the National Statistician are both totally concerned with all official statistics. We are tempted to think of the ONS, which is at the centre, but I remind your Lordships that 80 per cent of government statistics stem from outside the ONS.

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Issue number two, which is more crucial for this amendment, is that it is vital that we have a clear distinction in our minds throughout between, on the one hand, the production role—that is, planning the statistical work, collecting, analysing, interpreting and so on—which belongs to the National Statistician and her forces, and on the other hand supervision or scrutiny, which belongs to the board. It is still rather confusing to have the two combined as they are in the Bill. The Minister said at Second Reading:

That is the distinction we all want but, to my innocent eyes, it does not come through in the legal drafting of the Bill. I am not alone. The Royal Statistical Society, no less, to which we owe a great deal of thanks for its help in working through the Bill, called it “a muddle”. Time and again in the draft Bill the board is given production responsibilities that integrally belong to the National Statistician, thus confusing the issue and the new system. We still need clarity, which I do not think is a controversial matter. It is for the Government to redraft the Bill so that that clarity is achieved.

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