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Much more needs to be said on this matter in connection with later amendments, and I do not want to go on at this stage, but the amendment before us is closely linked to the issue of the division between those two functions, which is why I mention it at this point.

Lord Northbrook: What does the noble Lord think about the composition of the board? Should it have executive and non-executive members, or just non-executive?

Lord Moser: The implication of what I said is that I will talk about that later, when I have heard more clarity on the role of the board—not now.

Baroness O'Cathain: Like the noble Lord, Lord Moser, I shall be brief. I have an inherent problem with having a totally non-executive board. Part of the reason is that although the National Statistician will be present and sitting at the board, there is no question that it looks as though there are important people on the board and one who is less important. If, as everyone has said, we need this Act in order to ensure the independence of, and rebuild trust in, official statistics, it is imperative—although I do not believe it has been mentioned today—that trust in those statistics, once reinstated, is maintained. It is fine in the first flush of a new Act to say, “We have this board, and the National Statistician can sit there”. Then, I fear, unless the National Statistician is of huge humility—which is, by the sound of it, difficult—and great patience, he or she will find it increasingly irritating to sit in on a board without the authority of being a board member.

I have sat on boards since 1984 and, in my experience, the mixed board is the one that works. On the board of Tesco, for example, on which I sat for 15 years—well outside the rules that apply now—if

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Sir Terry Leahy, or Terry Leahy, as he was then, was told that he could sit in on the board when he was operating all the business, with a non-executive chairman, as there was, sitting on it and non-executives members such as me, he would, to use a huge understatement, have been slightly miffed.

I need a lot of convincing on this. I have spoken to my noble friend and, while we are not exactly on the same side, we both take the view that, if the independence of the board is to be guaranteed and there is to be trust in official statistics, it is imperative to get the best people on the board. I also believe that it is very important to support the National Statistician de facto and de jure.

Lord Newby: This is our first opportunity in Committee to discuss what, by common consent, is the most difficult part of the Bill. How do we accurately define the role of the National Statistician if we want him or her to fulfil the functions about which I suspect we are all agreed?

These discussions have demonstrated that the role of the board and the production of national statistics are, like the role of the BBC, sui generis. They cannot easily be pigeonholed; we cannot say, “It is just like that”. Therefore, we cannot rely on any straightforward analogies. Equally, while I agree that in principle the difference between the role of the National Statistician and the board is that between production and supervision, we must be clear as we proceed that the National Statistician is solely responsible for production. I do not believe that the role of the board is simply that of supervision or scrutiny; it is not like the Select Committee of both Houses that we have mentioned. One of the board’s key purposes is to act as a bulwark against a Government trying to undermine the system; it must help to support the independence of the National Statistician. For that to happen, the National Statistician and supporting colleagues must be on the board, as the noble Baroness, Lady O’Cathain, has just described.

A relevant analogy is with the Monetary Policy Committee of the Bank of England. It includes outsiders, but sitting on it are the people doing the detailed work of producing the huge book that members of the committee get every month, against which they take their decision. The reason for having the Governor of the Bank of England, the chief economist and others on the board as executives is that the decisions that the board makes must be seen to have the full involvement of those who work day in, day out to make the assessment. It is important that the chief executive be on the board. Going down the route proposed by the noble Baroness would mean deleting Clause 29(1), which says:

I do not think that he or she would be quite the chief executive—it would be a slightly different role.

We need to amend the Bill to clarify the role of the National Statistician. I understand why the noble Baroness has tabled the amendments, but they would weaken the position of the National Statistician when, broadly speaking, we are seeking to strengthen it.



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4.45 pm

Lord Oakeshott of Seagrove Bay: I support the points made by my noble friend and the noble Baroness, Lady O’Cathain. She has had many years’ experience as a non-executive director. From my own experience as a chief executive of a small public company since 1986, I found the arguments of the noble Baroness, Lady Noakes, hard to follow. It is quite straightforward that the chief executive of an organisation such as this—or the production director, if we want to call her that—should be on the board. That is quite clear.

Viscount Eccles: It is always difficult to generalise out of personal experience. I have been a chief executive of a public corporation, the Commonwealth Development Corporation, and I was not on the board. The fact that its chief executive was not on the board certainly enhanced the independence of the Commonwealth Development Corporation in those days. The board made its decisions and carried out its full statutory obligations. It mostly accepted the recommendations of the executive before it made its decisions, but on occasions it did not and it told the executive to go back and think again or even to drop some of its plans.

Given that there is no read-across from the private sector to the Statistics Board, this is a completely different operation. The system of appointment is completely different; the system of reappointment is completely different; the systems of remuneration are completely different. The objectives of the organisation have nothing to do with the objectives of a private sector organisation. I asked the Minister to give me an example of a read-across from the private sector and he cited the FSA and its wish to see balanced boards, but what body does the FSA regulate that is remotely like the proposed Statistics Board?

If the National Statistician is not on the board, the status and standing of, and public trust in, the National Statistician will be enormously enhanced, because it will be very much more difficult for Her Majesty the Queen, as advised and decided by the Prime Minister, to dis-appoint the National Statistician. It will not be at all difficult to change the members of the non-executive board. That is easy for Her Majesty's Government to do under the system of public appointments. We should therefore support these amendments to separate the role of the non-executive board from the role of the National Statistician as the board’s chief executive.

Lord Croham: We are worried about the public’s lack of confidence in statistics. The main reason for that lack of confidence is that figures are constantly misused by Ministers when they are produced. The primary role of the National Statistician is to ensure that we get the statistics that we need and that they are properly produced, but it is only the National Statistician who will have the full knowledge of the limitations of their use. The reason so many are suspicious is that, so often, figures are used in a way that makes honest interpretation quite impossible. The greatest misuse is to use figures of cost for figures of production.



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Lord Turnbull: I side in this case with the noble Baroness, Lady O’Cathain. It is inconsistent to propose a series of amendments designed to boost the status of the National Statistician and, at the same time, to propose another amendment that would diminish the status of the National Statistician by saying, “You are not even a member of the board”.

A completely different model is to be found in the relationship between the Health and Safety Commission and the Health and Safety Executive, but I do not think that anyone is proposing a complete separation of the supervisory board from the executive board. So long as you have one board in two parts, it is essential that the chief executive is a member of that board.

On the question of trust, the point is not that statistics are used or misused. There is the whole question of definitions. The really difficult definitions are whether things are in the public sector, whether they are underwritten by the Treasury or whether they are part of the borrowing requirement. That is an important battleground and the board is being assigned responsibility for those definitions and methodologies. I want the board to retain that responsibility, so as not to put it exclusively on the National Statistician, thereby exposing him—although in saying this I am getting on to the next set of amendments—to very personal pressure about whether a decision went one way or the other. With these amendments, I am definitely for keeping the National Statistician as a full board member, along with the finance director and head of assessment.

Lord Davies of Oldham: We have had a most interesting debate, into which I trespass with some trepidation, given the expertise that has been delivered this afternoon on the crucial principles by which governance can be obtained in these circumstances. I am grateful for the support from all parts of the House, not for the government model—I am not suggesting that the noble Lord, Lord Newby, the noble Baroness, Lady O’Cathain, or the noble Lord, Lord Turnbull, accept the government model; that would be to trespass too far on their good will—but in pointing out the limitations of the amendments before us. After all, it is my task to persuade the noble Baroness to withdraw her amendment, and I hope that she has listened carefully to the representations of noble Lords who have pointed out the problems of a non-executive board.

We think that we have established the appropriate governance structure for the statistical system, and the membership of the board reflects the structure that we have adopted. We believe that a single institutional structure with one board is the most effective way in which to deliver the goal of greater independence for the ONS and independent scrutiny and oversight over the statistical system as a whole. This also avoids creating competing centres of statistical expertise in the system as a whole. In line with the principles of good corporate governance, the Bill establishes that the board will have a mix of executives and non-executives. I respect the arguments against this mix, but we are legislating for a non-executive majority; the chair will also be non-executive.



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In a framework of one structure, we think it important that the National Statistician should be the board’s chief executive. That is the linchpin of the enhancement of the status of the National Statistician and a crucial part of the objectives that we seek to achieve, as the noble Baroness, Lady O’Cathain, emphasised. The National Statistician will be the board’s chief executive, responsible for the executive, day-to-day running of the ONS and independent of the assessment or scrutiny function. The assessment function will be operationally independent of statistical production in the ONS, as it should be; a statutory post holder, the head of assessment, will report directly to the board, not via the National Statistician, and will lead on assessment. To strengthen the separation, the National Statistician may not take part in deliberations or decisions about assessment of his own statistics, nor may the head of assessment take part in statistical production. It is essential that we keep those two concepts—of production and oversight or scrutiny—separate.

But we want one board. In our view that is the way to enhance the role of the National Statistician and the status of statistics in public esteem. It is difficult for one body to undertake dual roles. It is clearly more challenging than if a body has one role only. However, we make these demands on public bodies. Local authorities are empowered to promote development within their boundaries and to grant planning permission. A local authority must have a structure that can perform both functions although those functions have, and are clearly intended, to be separate. A body can successfully perform such functions provided that it is accountable. Local authorities are accountable in their audits and to their electorates. The board will be accountable to Parliament for the work that it does.

The noble Baroness, Lady Noakes, asked about the significance of the chair and what role he or she played. Those questions were an undercurrent in other contributions. Without doubt the chair plays a highly significant role, which is why the Government are taking judicious steps to recruit a chair who will enable the new system to be introduced with the least possible disruption. What does the chair’s position involve? He will give the body strategic direction and support the National Statistician in his role as chief executive of the board. The chair must also support the head of assessment in the delivery of his executive function. The duality of the functions requires effective chairmanship and board participation in order to embrace the two roles.

The chair of the board is bound to have a major public role. He or she will appear before parliamentary Select Committees. I put it in the plural but one would be enough to guarantee that anyone seeking the role would expect to defend their annual report and the board’s proceedings before Parliament. The chair will comment publicly on the role of the chief officers. He is bound to comment on the role of the National Statistician. The chair will be responsible for the process by which assessment is obtained. He has a very significant role indeed.

The noble Baroness, Lady Noakes, asked who would be top dog. I understand the question, which is graphic in its clarity. However, it presents the obvious

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challenge of the extent to which I can and should describe, within the time constraints in which we operate, how the board will work. I make it absolutely clear that the National Statistician is the technical expert and outstanding figure in the production of statistics. Of course, the board must take account of his advice in all matters. The National Statistician will be the chief executive of the board, but the chair—

5 pm

Baroness O'Cathain: I must ask the Minister how there can be a chief executive of the board. The chairman is the chairman of the board. The chief executive of statistics production and of assessment is obviously the National Statistician. You cannot have a chief executive of the board. What about the other non-executives? Do they report to a chief executive who happens to be the National Statistician? That is a muddle. I really hope that we have a mixed board of executives and non-executives, but you cannot have a chief executive of the board. You just have the one top dog, as my noble friend said, and that would be the chairman.

Lord Davies of Oldham: I am shying away from the crudity of the concept of top dog, but I emphasise that, while the National Statistician is chief executive, the chair takes responsibility for the duality of roles that the board embraces, which is the production of national statistics to the highest possible standard, engendering trust in those statistics, and responsibility for the work of the head of assessment. In that sense, if the noble Baroness wants it expressed in those terms, it is clear that the chair has a more embracing role than the National Statistician.

What are we about? We are about seeking to produce the highest level of trust in our national and official statistics as we can achieve. That is clearly going to be the major responsibility of the executive officer responsible for this, who is the National Statistician. It is right that he should be chief executive to the board, because he is the producer of the material for the board, which is the basis of the work that it does. There is also the head of assessment and the assessment function, which is supervised by the chair. I do not think that I can be any more explicit than that. I recognise—

Lord Newby: I do not know whether it will help the noble Baroness or the Minister, but one of the confusions about the drafting is that, when the Bill refers to the chief executive of the board, by “board” it means the Statistics Board, which is the body corporate, and not the members of the board.

Lord Davies of Oldham: I am grateful for that point, as I have been grateful over the past half an hour for the noble Lord’s interventions; I encourage him in his helpfulness.

The noble Baroness asked what will happen when there is a disagreement between the chief executive and the chair. We are concerned to make those disagreements transparent. That is what would be important. If the board rejects the advice of the

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National Statistician, it has to publish a statement of its reasons. There was reference to the Bank of England, although that is not a totally accurate analogy. There was a reference to accountability, and we all know what the accountability of the Bank of England is in final terms; namely, the letter that has to be sent with regard to inflation exceeding a certain level. It is clear in Clause 28 that,

for any disagreement with the National Statistician.

We have had an interesting and wide-ranging debate. I recognise that I have not been able to answer every point that has been raised, which is a reflection of the great expertise in the Committee on this crucial governance area. However, I emphasise that the Government have thought through this model very carefully. It involves a board with a duality of functions and objectives. It certainly will require executive and non-executive members, and it will require the National Statistician to be chief executive. I hope that on that basis the noble Baroness will feel that it is safe to withdraw her amendment.

Baroness Noakes: Before I decide what to do with my amendment, I repeat a simple question to which I hope the Minister may respond: will he make available to the Committee the draft terms of reference or job specification for the chairman?

Lord Davies of Oldham: That is a perfectly reasonable request and I shall do my very best to comply with it as soon as possible.

Baroness Noakes: I thank all noble Lords for taking part in the debate, although I cannot claim that I sit here surrounded by people who support my propositions. I say to noble Lords who like the idea of a unitary board, because that is what they are most comfortable with in the private sector, that we will have to re-examine whether that model transposes to the area of statistics. I am a great supporter of the unitary model in the private sector. My amendments query whether it is the right model for this set of circumstances. The noble Lord, Lord Newby, was right in saying that what we have before us is sui generis and that, therefore, we are entitled to design the best solution possible.

When I asked the Minister what the chief executive would do, he told the Committee that the National Statistician, qua chief executive, would be responsible for the Office for National Statistics. That means that he is a chief executive of the executive office, as created by Clause 29, not chief executive of the board, because, as the Minister rightly reminded us, there will be a separate and independent stream of activity within the board, under the head of assessment, which does not, by definition, come under the National Statistician and therefore under the so-called chief executive of the board. I was trying to draw out that muddle.

The problem is that because separate and distinct assessment functions are provided for, which we understand, it is inevitable that the National Statistician

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cannot be a complete chief executive in the sense that he would cover all the activities of the Statistics Board; by definition, responsibility for some of the board’s activities will be elsewhere and will be reportable directly to the chairman and non-executives on the board. That is the heart of the problem.

Two models were offered in support of the proposals in the Bill. The Minister offered the local authority model in support of the ability to have two sets of functions operating within one organisation. That is, indeed, the case, but in that model the chief executive is not a member of the council, but sits outside it; that model works perfectly well without the chief executive being embedded within the main decision-making organisation. The noble Lord, Lord Newby, referred to the MPC, which has insiders and outsiders. However, the non-bank members—the independent members—of the MPC are not non-executive, because they work almost full time at the Bank of England. They have suites of offices and support staff to assist them, and their contracts are at least half time and sometimes more than that in practice. So that is not a fair parallel.

I shall not press my amendment today, but as we go through the Bill I would like noble Lords to think about the muddle that is inherent in the structure that is to be set up and how we could evolve a better one. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 3 and 4 not moved.]

Lord Dearing moved Amendment No. 5:


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