Examination of Witnesses (Questions 212-219)
Mr Robin Lynch and Mr Simon Humphries
16 JANUARY 2007
Q212 Chairman: Good morning, Mr Lynch,
thank you for coming to see us. You know that we are inquiring
into the system of Own Resources but today our particular concern—and
why we are so pleased to see you—is about the reliability
and comparability of GNI numbers in the European Union. We are
on the record and of course you will receive a transcript afterwards.
Is there any opening statement that you would like to make to
us, and would you like to introduce your colleague?
Mr Lynch: My name is Robin Lynch and I am the
Director of National Accounts in the Office for National Statistics;
this is my colleague Simon Humphries, who runs the National Accounts
Coordination Division. If there is an opening statement it is
simply to say that we are active participants in this system.
Q213 Chairman: As a Glaswegian it
is a pleasure on today's Union anniversary, to welcome a Dundonian.
I am sure you will navigate through our questions as skilfully
as other great Dundonian navigators like Admiral Cochrane or Dennis
the Menace! Can you explain to us the work that ONS undertakes
with the Commission and other Member States to control the reliability
and comparability of the EU's GNP data?
Mr Lynch: We are members of this committee called
the GNI Committee, which is a regulatory committee. That committee
develops regulations and monitors and implements the regulations,
and in this case the regulation says that each country, each Member
State should measure the GNI and national accounts according to
common standards. So we serve on the committee; we take part in
task forces to examine particular issues of interest; we welcome
visits from the European Community and from other members of Member
States into our office, who look at we do; and we produce an inventory
of all our various compilation techniques.
Q214 Lord Cobbold: Is the GNI Committee
a forum for change? Does it have any particular powers, or is
it just a discussion group?
Mr Lynch: It is a forum for change; it is one
of the more powerful committees and it is a regulatory committee.
It has developed the Regulation and is responsible for monitoring
the Regulation. So, for example, it can put reserves, it can reserve
its position on estimates of GNI through Member States, and the
reservation on the figures is a very important issue for us because
it is a public statement that we are not doing as well as we should.
Q215 Lord Cobbold: That is happening
at this moment, is it not?
Mr Lynch: I think we have seven reservations
at the moment, six of which are what I would call process reservations
about the way we have documented things, and one is a reservation
on how we estimate the insurance industry.
Q216 Lord Cobbold: Has the Committee
had any special achievements in recent years?
Mr Lynch: I think the biggest achievement by
far is that for each Member State in the European Union there
now exists an inventory drawn up to common standards of how we
compile our figures. I am not sure that is unique but it is certainly
a remarkable achievement over all the Member States of the existing
European Union to have such an inventory in English—I believe
they are all in English—and they are open to inspection,
public documents available on the ONS website, and I can go and
look at the Dutch, the French or the Germans, and that is a tremendous
achievement.
Q217 Lord Blackwell: Mr Lynch, I
am sure you understand that one of our concerns is to understand
how comparable GNI figures are and how robust they are as a basis
for Own Resource calculation. So I would like to ask you about
a number of individual countries and the issues around them starting,
if I could, with the UK, and we understand that there have been
some issues raised by Eurostat about the comparability of the
UK accounts, and I wondered if you could comment on that?
Mr Lynch: I do not think that the UK has had
any more issues than is normal. The job of the Committee is to
impose reservations where they think we have not done our job
properly, so we have these seven reservations. I do not think
we are the worst.
Mr Humphries: I think there is only one country
that does not have a single reservation; I think for the major
countries there are generally six, seven, eight reservations.
Mr Lynch: It is the way the Committee works,
so it would be unusual and a happy day for me if there were no
reservations on the UK national accounts.
Q218 Lord Blackwell: Can you give
us an idea of what the scale of these reservations would be? If
you agreed with them how much difference would it make?
Mr Lynch: Of the seven existing reservations
six of them are process, we have not described adequately what
we do inside our national accounts; and one is on insurance and
how we estimated value added in insurance. I cannot really remember
a large one on the UK national accounts at the moment. We are
talking about less than one per cent of level—much less
than one per cent of level. They are big in terms of the industry
but in terms of the whole GNI they are small figures.
Q219 Lord Blackwell: So in terms
of our concern they would not make very much difference to the
level of contribution. Can I turn then to Italy and Greece, where
there have been quite significant revisions; Greece increased
its GNP by something like 20, 25 per cent? What view do you have
of the causes of that and what it says about the reliability of
numbers?
Mr Lynch: I do not have a personal view of the
Italian or Greek statistics because I have never been there; all
I can observe is their behaviour at Committee and listening to
what the European Commission does as a result of the Committee.
So, for example, as soon as the Greeks changed their figures they
came to the GNI Committee, there was a discussion about their
figures and Eurostat proposed that a reservation was placed on
these figures immediately, and that Eurostat should investigate
and they should send somebody to that country. So the UK was an
active participant in that meeting, agreed that this was an unusual
revision, agreed it should be looked into immediately and the
report should come back to the Committee. I have told you now
about as much as I know about the Greek situation.
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