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6.45 pm

Lord Howard of Rising: We are talking about taxpayers’ money. Non-executives are not employees. Therefore, if they are not able to serve as non-executives for whatever reason, there is no reason to give them compensation. I urge the Minister to look at withdrawing the provision, but I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 25 not moved.]

Baroness Noakes moved Amendment No. 26:

On Question, amendment agreed to.

Lord Newby moved Amendment No. 27:

On Question, amendment agreed to.

Baroness Noakes moved Amendment No. 28:

The noble Baroness said: Under Clause 4 initial terms for non-executive directors are to be between one and five years, and under subsection (6) a non-executive director can be reappointed “on any number of occasions”. Amendment No. 28 would set a maximum time limit of 10 years for a non-executive director.

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The norm in the corporate world is now driven by the combined code on corporate governance, to which I referred earlier. It provides for appointments of three years at a time, with an especially careful review after the second set of three years, leading to a presumption that, after nine years, a non-executive loses his independence; therefore, while he may stay on the board, he does not count as an independent director under the code, which has implications for his involvement on the board and board committees.

The basis of the Bill is that non-executives will exercise an independent oversight function, so it is relevant to consider whether time limits should be set to avoid the directors becoming stale, unquestioning or simply ground down by years of not being able to achieve changes that they consider desirable. I hope that the Minister will agree that refreshing a board is highly desirable to inject new vigour and that this applies however meritorious or committed board members are.

My amendment sets a maximum of 10 years, but I am not wedded to that formulation. However, we should write something into the Bill that ensures that non-executive appointments cannot become stale and that those appointing them are forced to look carefully at alternatives. There is sometimes nothing worse than “the devil you know” in board appointments.

I hope that the Minister will set out how he sees these appointments working over time. I hope that he will also say something about the possibility that someone might be appointed for as short a period as one year. It seems remarkably short and not conducive to the non-executive being committed to the Statistics Board and the learning inevitably involved on appointment to a board. I beg to move.

Lord Turnbull: I wonder whether the amendment is necessary. My understanding of the getting-on-for-two-years-old public appointment rules is that two terms is normally the maximum and that one has to make a very special case to the commissioner for anything more. That could be six years or two times four or two times five, but it would be in defiance of the OCPA rules to go beyond 10 years.

When a new body is set up, all the members are appointed at the same time, but you may want flexibility at the first renewal process to start staggering the end of members’ appointments. You may therefore offer someone a one-, two-, three- or four-year extension to ensure a reasonable turnover of members; otherwise everyone leaves at the same time. An inspection of the OCPA appointments rules will deal with the point raised in the amendment.

Lord Newby: The amendment raises an important point. On the one hand, one wants to have a refreshed board, but equally one does not want to be too rigid. The problem with public appointments that go on too long and re-reappointments has, in part, been exemplified by the re-reappointment of Kate Barker. She is no doubt an extremely good member of the Monetary Policy Committee. However, further to our discussion on perceptions, it is perceived that she is very close to the Government and that that has played a part in her re-reappointment.

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One could envisage a situation in which a member of the Statistics Board—someone like the noble Lord, Lord Moser, to pick an individual at random—was thought an estimable member who should remain on the board for more than the normal span. Therefore, the policy that the noble Lord, Lord Turnbull, set out—that there should be a norm of no more than two terms but the possibility, too, of exceptional circumstances and an explanation of why they are exceptional—seems the best way forward. I suspect that if the Minister could reassure us that that is what the Government have in mind, we would be reassured!

Lord Evans of Temple Guiting: I hope that I can reassure all noble Lords because this is, in a sense, a technical amendment.

Amendment No. 28 would create a time limit of 10 years, which is the limit contained in the current OCPA guidance. The noble Baroness, Lady Noakes, said many things that I absolutely agree with. She mentioned the rules of corporate governance—and here we have the OCPA guidance, which is widely accepted for public appointments. However, we want to maintain flexibility and consistency in case, for any reason, the OCPA guidance should change in future, for example; so it seems sensible not to specify the maximum period in legislation. For example, good practice may be that the period should be somewhat shorter, or even a bit longer in a few years, in the light of further experience with appointments of this type. Whatever happens, it is the Government’s intention to continue to follow OCPA guidance.

To answer a point raised by the noble Baroness, Lady Noakes, which was also referred to by the noble Lord, Lord Turnbull, we would not usually expect to appoint for a year alone, but there may be circumstances in which a reappointment is made and a year or two years is appropriate. That takes up the noble Lord’s point about continuity and ensuring that not all non-executive members leave at once.

I hope that it reassures noble Lords who have spoken in this brief debate that we will continue to follow the OCPA guidance rules.

Baroness Noakes: Can the Minister elaborate on one matter? I asked how he saw the appointments working out in practice; he said that they would follow the rules. I drew attention to the possibility of one-year appointments. Do the Government intend in the initial round of appointments to make one-year, two-year or three-year appointments? They clearly have their minds set on this matter, because they announced last week that they were just about to go out and get these new non-executives. Will the Minister explain what the Government’s policy will be?

Lord Evans of Temple Guiting: I cannot tell the noble Baroness at the moment what the initial term of appointment will be, but I shall come back immediately to her on that point. I am rather surprised at the general thrust of her question because she is a very

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distinguished member of various boards. Once a board is established the chairman and other board members look at how it is developing and see whether it is doing its business properly and refreshing itself—all the points that the noble Baroness raised. In that way, the board, chairman and chief executive will determine whether the board is functioning properly; if it is, that is fine; if it is not, changes have to be made. It would be quite wrong for the Government to prescribe how the board should change, or not, once it has been established.

Baroness Noakes: I do not quite understand what the Minister is saying because the Treasury not the board makes all these decisions. I was trying to establish what the Government’s position was. The Minister said that he could not tell me what the policy is, but I know that it must be set because an announcement was made in a Written Statement last week that budgetary cover had been taken to go out and get all these new people. I am disappointed that the Minister cannot answer that question, but I hope that he will undertake to write to me on it.

Lord Evans of Temple Guiting: I undertake to do just that very quickly.

Baroness Noakes: I am grateful to the Minister.

The amendment was tabled to have a discussion about how appointments would work. I am grateful to the Minister for saying that the OCPA guidelines would be applied. Those guidelines were most ably described by the noble Lord, Lord Turnbull, who knows all about these things. That is clearly very important and we are grateful for that confirmation. If the Minister would provide details of what the Government plan to do in the early round of appointments, it would be most helpful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

Clause 5 [Executive members and other staff]:

[Amendment No. 29 not moved.]

Lord Newby moved Amendment No. 30:

“(b) employed to operate independently of the Board with scrutiny and oversight of the role provided by the Board”

The noble Lord said: This group of amendments is our second bite of the cherry in looking at the role of the National Statistician as opposed to the board. Earlier in the debate the Minister implied that we did not accept the Government’s model for the new Statistics Board. The key element of that model is that it must be a unitary board. We accept that it should be a unitary board; the question that we are grappling with now, having accepted the principle that the National Statistician is a member of that board, is exactly how the relationship between the National Statistician and the board works and his formal roles and responsibilities.

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One reason why we are dealing with a situation here that is sui generis—which I think that everyone has accepted—is that, unlike in virtually every other situation that we have discussed, whether it is a corporate board or the BBC, the National Statistician is a technician and has deep expertise on matters on which the non-executive members of the board have virtually no expertise. In most cases those are probably very detailed issues. That is why it is so important that, when the National Statistician is exercising his professional judgment on these technical issues, he can do it independently, and that the board realises that its role is to ensure that the process is followed properly rather than trying to do the job of the National Statistician when he exercises those technical powers.

We have tabled a raft of amendments. The noble Baroness, Lady Noakes, has joined in on some of them, and she and her colleagues have tabled others. We are trying in all these amendments to introduce clarity to achieve that purpose, to give the National Statistician clear independence to do a technical job properly and to ensure that he plays a full part on the board.

7 pm

I shall briefly describe our principal amendments. Amendment No. 30 makes explicit the point that everybody made when we discussed this matter earlier; namely, that the National Statistician is employed to operate independently of the board, with scrutiny and oversight of that role provided by the board. Noble Lords used that phraseology earlier.

Amendment No. 34 is one of a raft of amendments which deal with slightly poor drafting. It is not a hugely substantive point but at present the Bill says that the board produces statistics. The one thing on which everybody is agreed is that the board does not produce statistics; the National Statistician does. Given that this and a number of similar amendments make this point, I hope very much that the Government will agree that is the case and will accept them. It is not a matter of principle but of having drafting which achieves the purpose that all noble Lords wish to achieve.

Amendment No. 30 describes the role of the National Statistician and Amendment No. 40 describes the role of the board as we see it. Amendment No. 47 explains how the board and the National Statistician should relate to each other as the board will be responsible for monitoring and assessing the performance of the National Statistician against her assigned responsibilities.

Amendment No. 95 attempts to rectify sloppy drafting. Clause 18(1) states:

As I said, the one thing the board does not do is produce statistics. The amendment seeks to delete “itself”.

Amendment No. 101 relates to who should consult the Bank of England in respect of changes to the RPI. This is not a matter for the board; the National Statistician is responsible for recalibrating the RPI. She should perform that function rather than the board. Amendment No. 102 is consequential on that amendment.

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Amendment No. 154 is substantive. It would prevent the board instructing the National Statistician on how to do her technical job. This is not purely a theoretical or drafting matter. A high profile example arose in recent years where the National Statistician had to exercise judgment in dealing with Railtrack. It seems to us and our advisers that if the board intervened in circumstances where the National Statistician was exercising her technical responsibility, it would potentially be subject to judicial review because it does not have the technical expertise to exercise the judgment that is required in such a case. Therefore, it is important that Amendments Nos. 154 and 156 are passed to recognise that.

Amendment No. 168 is consequential. Amendments Nos. 170, 173 and 175 relate to personal information. It seems to us that the National Statistician rather than the board should hold that information as part of her production function.

Amendments Nos. 184, 185, 186 and 188 relate to access to information and who grants access to approved researchers. It seems to us that that is logically a matter for the National Statistician, not the board.

This is rather a rag-bag set of amendments. However, the amendments seek to clarify the role of the National Statistician, tidy up what seems to us to be infelicitous drafting, and achieve technical improvements through this series of minor changes, as I think noble Lords on all sides of the Committee wish. I beg to move.

Lord Jenkin of Roding: I agree with almost every word that the noble Lord, Lord Newby, said. To my mind this goes absolutely to the heart of the matter. The only point on which I disagree with the noble Lord is with regard to his reference to infelicitous drafting. With respect, I do not think that is the case. I believe that the Government are genuinely confused about the role of the National Statistician and that of the board. As the noble Lord said, I thought we were all agreed that the production and dissemination of statistics is the job of the National Statistician, while the job of the board is to oversee and scrutinise that process. Yet here we have in the Bill as drafted the board doing one thing after another that amounts to the production or dissemination of statistics.

The noble Lord took us through the whole range of the amendments. This is one of the most important groups of amendments and we have to get this right. I fear that at the moment there is confusion. Our advisers describe it simply as very muddled. If ever there were a need for clarity, it is in differentiating between the function of the National Statistician, the professional man or woman—one must say woman because the post is held by a woman at the moment—who has the professional expertise and must have the professional independence to use that expertise, and that of the board which oversees the process.

I draw a parallel with the time when I chaired a health trust and had a consultant surgeon on my board. There was never any conceivable suggestion that I could tell him how to do his job. He was there in a somewhat different capacity. Any suggestion that

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non-executive chairmen or directors can tell professional people how to do their jobs is absurd. My right honourable friend David Cameron has made the point that we need to trust professional people and give them the independence to get on with their jobs and not tell them what to do the whole time. I fear that, as the Bill is drafted, this is totally confused, as the noble Lord, Lord Newby, made very clear. I regard this as an extremely important set of amendments. I hope that when the time comes we shall vote to get clarity because the position is not clear at the moment.

Lord Moser: I very much support all these amendments spoken to by the noble Lord, Lord Newby, partly because of the view that I expressed earlier about the total responsibility of the National Statistician for the whole production system as the chief technical adviser to the Government. We shall come back to that on a later clause. It is important that his or her—at the moment it is a woman—responsibilities are fully set out in statute for the first time, which is totally welcome, and that the statutory formulation reflects her double role: her obvious one of presiding over the Office for National Statistics and that of presiding professionally and technically over the entire system. As I know from experience, that is a much tougher part of the role. Both elements of the role are combined in one person and the second is just as important as the first.

Lord Turnbull: It saddens me to part company with the alliance that I have had with the noble Lord, Lord Moser. At Second Reading, I was almost alone in arguing the case for a unitary board. I wanted a situation in which the statistics produced and the methodologies that underpinned them were seen as being published with the full authority of the board. I was worried that those might be personalised to the National Statistician, which would put a tremendous personal pressure on the holder of the post. I gave examples from previous regimes of Secretaries of State speaking pretty abusively about the National Statistician in ways which I do not believe would happen if the statistics were produced in the name of the board. There may be one or two specific functions, such as who consults the Bank of England, that are relevant to the National Statistician, but in general the construction of the Bill safeguards that position already.

The National Statistician is the principal adviser: that is in Clause 28(1); the board has to “have regard to” that advice, as set out in Clause 28(2); and if the board overrules the statistician, it must give reasons, as set out in Clause 28(3). In effect, the National Statistician’s advice is board policy, unless there is some reason not to do it. There are important advantages in having advice that is seen to have the backing not just of the National Statistician, who is after all an official like the rest of us. It means that a Minister who wants to pick an argument cannot do so with the National Statistician alone but must do so with the board as a whole. There may be one or two exceptions, but for the most part, I would leave “board” where “board” is stated and rely on the structure set out in Clause 28.

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