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I want to pick up just one point: the one with which the noble Lord, Lord Moser, who played such a notable part in the proceedings on the statistics Bill, finished his speech. As he said, the Act provides that the new UK Statistics Authority—which was originally called the Statistics Board but has wisely changed its name—should be accountable to Parliament. During the Bill’s passage many noble Lords argued that the authority should report to both Houses, ideally via a Joint Committee of both Houses. It may well be within the recollection of the House that I raised this issue again in a short debate on 29 November 2007. With the support of the noble Lord, Lord Turnbull, who has proved to be an immense source of wisdom on this issue, I tabled a paper to go to the Liaison Committee of this House calling for a Joint Committee. The Select Committee unanimously accepted the recommendation. On the same day it rejected three or four other proposals but it did accept mine, which was

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endorsed by the whole House. However, as the noble Lord, Lord Moser, said, Ministers’ preferred solution was adopted in the other place—namely that there should be accountability only to a committee of the other place: a House of Commons Select Committee. The other place subsequently recommended that it should be the Public Administration Committee.

Some of the recent controversies surrounding the issue of statistics have already been mentioned. The Public Administration Committee has therefore had to deal with two serious statistics issues. The Home Office’s release last December of certain statistics about knife crime has already been mentioned. I can assure the noble Lord, Lord Brett, that I do not intend to repeat what I said at some length in the debate on 16 March. The other issue, more recently, is the ONS’s controversial publication of certain statistics about the numbers of immigrants in the UK workforce. My noble friend Lord Hamilton mentioned that.

I have taken the trouble to read a lot of the evidence that was given by Mr Phil Woolas to the Select Committee at the other end, and the way in which the committee handled it was very impressive. Indeed, I have no complaints about or criticism of the Select Committee. It certainly does not pull its punches. It has quite rightly identified the two areas that it wanted to investigate. However, it has a very heavy agenda, most of which has nothing whatever to do with statistics. Moreover, it is a fact—I checked this today with the Clerk to the committee—that it has not yet issued the reports on these two matters of knife crime and immigration statistics.

If anything, that confirms my view that this House’s proposal was indeed the right and wise one. It would have been much better if this House’s view had been accepted and the proposal to establish a separate Joint Committee of both Houses, with the sole remit of holding the UK Statistics Authority to account, had been accepted. I know that that has the support of Sir Michael Scholar, for he has told me so in no uncertain terms. I can also tell the House—perhaps this is of even greater interest—that I have been assured more than once by the shadow Chancellor of the Exchequer, George Osborne, that the next Conservative Government will accept the view of this House that there should be a Joint Committee of both Houses to undertake this work. Let us hope that this House will not have to wait too long for its unanimous view to be implemented. That is something which I am sure we will all welcome.

7.46 pm

Lord Lipsey: My Lords, as the noble Lord, Lord Hamilton, illustrated in his excellent introduction to this debate, there are two ways in which government statistics can go wrong. One is that the statisticians get it wrong, which undermines public confidence. There was an example of that earlier this year when the forecast of what had happened to GDP was revised from minus 1.6 per cent to minus 1.9 per cent. As an economist, I have to say that that was a modest adjustment. However, it caused a tremendous kerfuffle in the press, which thoroughly enjoyed exploiting it. But that is a rare way for statistics to go wrong. What

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is much more common is when politicians bend statistics to suit their ends. I will not give examples of that if only because my party has been in power most recently and is probably the most serious offender. But if we are honest, they all do it: Conservative, Labour, Lib Dem, in opposition and in government. They do it year in and year out.

I applaud the efforts of Sir Michael Scholar and the UK Statistics Authority to act as referee in this Eton wall game of brutality, to no effect. It was very brave of Sir Michael to take on No. 10 so early in the life of his organisation. However, to be fair to Ministers, they did set up the statistics authority, which is a bit like burglars voting for more powers for the police. But they did it and they should get the credit.

I speak tonight to introduce to your Lordships’ House a new campaigning organisation called Straight Statistics, of which I have the honour to be the chair. It has been set up to combat the epidemic—I do not think that that is too strong a word—of statistical abuse that is sweeping through our national life. We launch formally on 17 June.

Of course politicians are not the only ones who bend the facts. Advertisers do it, companies do it, and PR companies do it in spades. The worst culprits, let us face it, are the newspapers, many of which never let statistical integrity stand in the way of a good story. But although there are many offenders, government statistics should be the gold standard by which the statistics of others and their use are judged. If government statistics are once distrusted, there is no basis in fact on which our national policy and political life can proceed.

Many in your Lordships’ House have supported Straight Statistics. I am delighted to say that two noble Lords who have already spoken, the noble Lords, Lord Moser and Lord Jenkin, both sit on our council. The noble Baroness, Lady O’Neill, in her role as chair of the Nuffield Foundation—I am sorry that she is not in her place tonight so that I could thank her publicly—has provided the funding, and we have had from the very start 100 per cent backing from Sir Michael and his vice-chair at the UK Statistics Authority, Sir Roger Jowell. They have done so not because they think that a campaigning organisation is a substitute for their work, but because it can act as a light-footed complement. I may say too that the Royal Statistical Society, which could well have regarded us as a rival, has instead embraced us as a member of our executive and is doing everything it can to help. All these statistical luminaries wish us well and I hope that the House will do so too.

7.50 pm

Lord Skidelsky: My Lords, I should like to take the opportunity provided by the Question of the noble Lord, Lord Hamilton, to raise two topics, one general and one relating to the particular issue of inflation statistics.

My general comment is that I am appalled by the degree of statistical illiteracy abroad. Almost every time I read a newspaper I am aware that the journalists writing it have no knowledge of statistics. They simply pluck out things to create stories, as the noble Lord,

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Lord Lipsey, said, and therefore there is constant statistical abuse. Of course, it is very hard to be against more information but sometimes I think we would be better off with less. A good example of that kind of statistical abuse is the debate on climate change.

I do not know what the answer is. You could say that, as part of their training, journalists ought to have a compulsory course in statistics and should not be licensed to write anything unless they do. That, of course, is not feasible. However, a more sensible suggestion is that health warnings should come with official statistical information. I know that ONS guidelines require that statistics come with health warnings, but the kind of health warnings that they come with are totally incomprehensible to anyone but those who write them. For example:

“The variance of the IoP is fairly insensitive to the assumptions made about the variance of the EPD. This continues to be the case at 4-digit level. Thus the assumption made about the variance of the EPD when deriving formula (4) should be suitable”.

You can do better than that.

If you want any of these official statistics to have any impact on the public, then alongside the necessary technical blurb you must provide much more user-friendly health warnings. One of the most useful that you could provide is a list of a few unlikely but possible events which would render the forecast invalid, such as the collapse by 25 per cent of US house prices between 2006 and 2008. A list of those kinds of unlikely “black swans”, as they have been called recently, would be useful to have.

My second topic involves the battle of the indexes—that is, the pros and cons of the RPI and the CPI. The change in the index for the purposes of inflation forecasting was made in 2003. I remember it very well because I was a member of the Lords Select Committee on Economic Affairs. The assumption was—we were told so by the Chancellor and other witnesses—that the two indexes would converge. That reflected the efficient market hypothesis: after all, you cannot have two indexes which measure roughly the same based on roughly the same things that might diverge in the long term. But, of course, diverge is exactly what they have done.

This raises the question of what the purpose of the change was. As I understood it at the time, the purpose was to lower the headline rate of inflation in order to present the inflation record of the Government in a better light and therefore to decrease wage pressure. What has happened though is that the two indexes have diverged considerably. Which index inspires more confidence as a measure of the rate of inflation? In terms of confidence in the economy, the consumer prices index is better since it regularly grinds out lower rates of inflation than the retail prices index. In terms of confidence in the statistics, however, the RPI might be better because, it seems obvious to me, any credible inflation index should include mortgage interest payments, especially in a country such as Britain where housing is such a huge economic component.

RPI, then, is a better index than CPI, but mortgage payments are not an accurate measure of the flow of consumption in the economy, especially if asset prices are going up. I wish we could find a way of incorporating

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the increasing prices of housing stock in the retail prices index so that it more accurately reflected the trend of transactions in the economy. I hope that we can work towards that, and that this may be one of the lessons we learn from the present wreck of inflation targeting.

7.56 pm

Viscount Eccles: My Lords, it is a pleasure to follow the noble Lord, Lord Skidelsky, in my noble friend Lord Hamilton’s debate. The noble Lord, Lord Skidelsky, referred to the “overload” of information and gave some health warnings. My purpose is to talk about departmental statistics, particularly those produced by DCSF and DIUS. I can only hope that your Lordships are up to date with which departments those acronyms represent. They produce their own national and other statistics, and the confidence in those statistics is pretty low.

One of their aims is to produce data sets with the data and analysis to assess the progress being made in improving educational attainment and emotional and behavioural health—among, I assume, young people. I have three questions. First: some things have so many variables that it is difficult, or perhaps impossible, just to rely on statistical analysis. Can we really produce convincing data sets for young people’s emotional and behavioural health? Does the Minister agree that it is probably wise not to claim too much on this subject?

Secondly, there are certain to be many more ways than one of moving towards the objective of improving educational attainment, and many more ways of assessing progress. Those who set the statistical questions, however, as has already been referred to, have a need to simplify if they are to offer a national answer to the questions they pose. Which answer is comparable across the board? Education cannot be simplified any more than people can be; after all, when you walk down the street you never see two people who look exactly the same, and I would apply that comment even to my granddaughters, who are identical twins. In view of this complexity and the inevitable controversy, would it not be sensible to involve someone other than the two policy departments themselves in the production of statistics—the Office for National Statistics, for example?

Thirdly, there is a test of information, which is to ask: now that we have it, what can we do with it? I remember that when I was briefly in charge of a firm that was not doing terribly well, I set a test at lunch of who could produce the most interesting piece of useless information, and there was a prize for doing so. For example, the department produces statistical comparisons of educational attainment with other members of the OECD. At the moment, I cannot see what you would do with that information. However, if we produce information about so complex a subject and it is not clear to what that information will contribute, the rightly sceptical public will conclude that departments have simply come up with answers for purposes of their own.

Does the Minister agree that, with all departmental statistics, there must be an explanation of why they are collected and a description of the options for action to which they could lead?

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8.01 pm

Lord Macdonald of Tradeston: My Lords, I, too, thank the noble Lord, Lord Hamilton of Epsom, for the opportunity to debate this important subject. As chairman of the All-Party Parliamentary Humanist Group, my concern, like that of the noble Lord, Lord Harrison, is with the approach taken by the Office for National Statistics to the question in the census on religious beliefs. I will try to reinforce the points so well made by my noble friend.

Following the 2001 census, there was criticism of the ONS for the distorted response it produced by deploying the plainly leading question, “What is your religion?”—to which only 15.5 per cent replied that they had no religion. That result contrasts with the ONS’s own Social Trends survey, which reported about the same proportion of people saying that they belonged to no religion as saying that they belonged to a Christian denomination. Recently, the British Social Attitudes Survey reported that 69 per cent of people either did not claim membership of a religion or said that they never attended a religious service.

Surely it could have been foreseen by statisticians that a leading question was bound to produce a misleadingly stark result. The ONS admits that it would not normally recommend the use of a leading question—so why ask one in 2001 and then plan to repeat it in the census of 2011? The explanation seems to be that the question about religion is also designed to fish for information about ethnicity. The ONS wants to identify by stealth as many members as it can of two ethnic groups protected under race legislation, by asking its leading question on religion, which, it claims,

That may be so, but surely it should not be at the cost of distorting the much larger issue of attitudes to religion in Britain today. To underline the oddness of the ONS report, in a survey of Jews in 2003, only 42 per cent said that they were religious or even “somewhat religious”.

Why does it matter? It matters because inaccurate data can lead to the misallocation of resources and public funds. It matters because misleading statistics can be used to argue the religious case for the expansion of faith schools, when some of the more divisive institutions discriminate against non-religious people in their staffing and admissions policy. It matters because more accurate statistics would offer reassurance to those who fear that their sceptical, tolerant, vaguely agnostic Britain is being defined and divided increasingly by religion. It matters because accurate statistics might have particular importance for the Equality Bill currently before Parliament, which would mandate public authorities to treat non-religious citizens equally and with the same respect as religious people. Finally, it undermines our confidence in the Office for National Statistics when it contradicts other authoritative surveys to declare that only 15 per cent of British people are non-religious.

As noble Lords have emphasised, the most precious attribute in our national statistics is public trust. Does the Minister agree that, in compiling the 2011 census,

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the Office for National Statistics would do better to ensure that it conforms to the highest professional standards in this sensitive and important matter?

8.05 pm

Viscount Goschen: My Lords, a visitor to your Lordships' House this evening could conclude that approximately 15 per cent of parliamentary time is spent debating matters of humanism, which just illustrates that too small a sample can sometimes be misleading.

It was only two years ago that this House was engaged in debating the Bill that set up the new statistics authority. I well remember the noble Lord, Lord Davies of Oldham, making strong points about the need for Ministers to be removed from the accountability structure of the organisation and for the appointment of an independent board. We have now seen the new authority up and running. However, there has been a long and undistinguished trend of this Government getting caught up in a problem, laying down the law as to how everyone should behave and then getting caught circumventing their own rules. One only has to think of the donations to political parties issue to reinforce that. No sooner had the Government brought the legislation through Parliament and ensured, to their great credit, that a powerful chairman was appointed, than they sought to get round the rules, even to the extent of attacking the authority for political bias.

In the short period since the arrangements have been put in place, there have been a number of clashes between the Government and the authority. It is in some ways encouraging that the authority is prepared to exert its independence and to take issue with the Executive. However, we have to look at the Government’s reaction and what they have done. We have heard of one important episode where statistics were released against the specific advice of the authority, as detailed by my noble friend Lord Hamilton and others. One has to ask why that was done. Was the importance of independence not accepted? Was the authority’s advice found to be unsound? Or had the Government’s commitment to independence wavered?

However, perhaps much more worrying was the row between the Minister in another place, Mr Phil Woolas, and the authority over immigration. The attack that the Minister launched against the authority was very serious. I should like to hear from the Minister this evening, the noble Lord, Lord Brett, whether Mr Woolas was speaking for the Government more broadly or whether they were just personal remarks—it is difficult to come to that conclusion when the Minister is speaking for the Government as a whole.

Have the Government therefore changed their mind on the independence of the statistics authority? Do they now accept that making an attack on it was, at best, extremely ill advised? The Government’s appetite for bad news is limited, notably around the No. 10 bunker, where the sound of messengers being shot is a fairly regular occurrence. In the run-up to the general election, we can expect much more use of statistics and much more controversy around them. However, we must give substantial credit to the statistics authority and in particular to its chairman, Sir Michael Scholar, for the courage that it has shown in bringing the Government to account.

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8.09 pm

Lord Rowe-Beddoe: My Lords, I, too, join in thanking the noble Lord, Lord Hamilton of Epsom, for bringing this matter to the attention of your Lordships today. I wish to declare a close and pecuniary interest as a deputy chairman of the UK Statistics Authority. Noble Lords will recall that this body came into being in April 2008 as a result of legislation contained in the Statistics and Registration Service Act 2007. As the authority has now been up and running for just over 12 months, I thought it might be helpful to inform noble Lords of progress that has been made by highlighting some of the events of the past year, as the authority unfortunately does not report to a Joint Committee of Parliament, which was the unanimous proposal of your Lordships' Liaison Committee in January 2008 in its first report of that Session.

One of the principal reasons for the Government's desire to create the authority was to restore public confidence in official statistics, a confidence which had been greatly eroded with the passage of time by either actual political manipulation and interpretation or the perception thereof. Therefore, from April 2008, the Office for National Statistics reported to this independent body rather than, as hitherto, to the Treasury. The authority itself reports to Parliament through the Public Administration Committee.

Since April 2008, the authority has initiated action to achieve four principal objectives: to improve statistical planning, to maintain high professional standards, to improve communication of statistics and related advice, and to build the trust of those who use official statistics in the statistical service and the authority. These objectives are being achieved by the authority assuming direct responsibility for the ONS, through a principal operating committee—the ONS board, which I chair—on the one hand, and on the other hand by the establishment of a monitoring and assessment team based in London, Newport and Edinburgh to carry out independent investigations and assessments of all official statistics against the code of practice that we published in January.

The code of practice was published after a 12-week public consultation period, which included the devolved Administrations. This activity is under the supervision of the authority’s second principal operating committee, the Committee for Official Statistics, chaired by Professor Sir Roger Jowell, the other deputy chairman of the authority. In the first months of our existence, we went live with UK National Statistics Publication Hub website, which separates statistical releases produced by professional statisticians from ministerial or political commentary. It has been noted that it has also been necessary in this first year for the authority to challenge undue political influence in regard to knife crime and, more recently, immigration statistics. As a result of the former instance, guidance was issued by the Cabinet Secretary to all non-statisticians working in government on how to use official statistics, how best to work with statisticians, and, above all, the importance of everyone respecting the code of practice.

These events, among others, demonstrate that the authority can, and will, act to challenge undue political influence, without fear or favour. The authority's mission,

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enshrined in the legislation, is to safeguard and promote official statistics for the public good. I can assure noble Lords that that is what we will continue to do. The authority operates transparently so that both Parliament and the public can see what it is doing to build the trust required. The authority's board papers are published; a public record is maintained of all issues that have been raised with us; and we publish our correspondence. These are but examples of the beginning of a determined work programme initiated by the authority with the support of Parliament, government and the Government Statistical Service. As an end-of-year report card, the Royal Statistical Society, in March 2009, included a statement in which it said the authority had passed,

but recognising, as we all do, that there is still much to be done.

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