ECONOMIC STATISTICS (Hansard, 1 August 1956)

§ The Chancellor of the Exchequer (Mr. Harold Macmillan)
With your permission, Mr. Speaker, and that of the House, I should like to make a statement on the subject of statistics.
In my Budget speech, I said that I was considering ways of improving our economic statistics. During the last two years important improvements have been made with the full co-operation of industry. But the information available still does not provide us with enough up-to-date knowledge of changes in the economic situation. It is in the interests of everyone that this information should be available. The earlier the Government have it the more timely can be their action to keep the economy on an even course. In economics, as in medicine, early diagnosis is the essential preliminary to effective treatment.
The Government do not need this information only for their own use. The business community and the public need it just as much. The improvement of our statistical information must be a continuing process, but I can now indicate the general lines of our immediate programme.
Our first need is to be up to date. We are, of course, largely in the hands of the people who supply the information. I 1401 cannot stress too much how important it is that firms should provide the statistics we need just as soon as they can.
Secondly, some material which informs us about the state of industry is received at intervals which are too long in relation to the speed with which events can move. From some important industries which are not already providing them we shall be asking for monthly statistics about their production and orders; and in a variety of industries we shall be seeking more frequent returns or new returns where none is now made.
Thirdly, there are serious gaps in our information about fixed investment and stocks, particularly in the distributive and service trades. Yet fixed investment and stocks are two of the most volatile elements in the economy. They are liable to fluctuate widely, causing substantial changes in the economic climate and in the balance of payments.
We propose, therefore, to institute an annual sample inquiry, in the distributive and service trades which, if it is to yield reliable information, must be compulsory so that the value of the figures willingly supplied by the majority of traders will not be nullified by the inaction of a minority. In addition, we shall be asking more firms in these trades to provide on a voluntary basis quarterly information on fixed investment and stocks. The figures we need are few but vital, and I believe that they can be provided without undue trouble.
Fourthly, it is important to know as far in advance as possible the trend of investment in building. The Minister of Works is consulting the building and civil engineering industries about the possibility of their providing analysed information of their new contracts.
Fifthly, we propose to invite a number of companies voluntarily to provide quarterly estimates of profits, in confidence, to the Inland Revenue Department. Of course, only summaries of the returns, which will not reveal the affairs of individual concerns, will be published or made available outside the Department. Neither I nor anyone else in the Treasury will have the individual figures.
Sixthly, we are studying, in co-operation with the Bank of England, how we can best improve the statistics of the balance of payments, especially capital transactions.
1402 Seventhly, it is proposed to have a continuing inquiry among a small sample of households in order to provide up-to-date information about changes in income and expenditure. This will keep up to date the information obtained by the Ministry of Labour in 1953–54.
We are very much aware that all this information depends on the willing cooperation of the public. I am sure that this will be forthcoming, for it really is in the public interest.
We are considering what improvements and extensions can be made in the presentation and publication of statistics so that Parliament, industry and the public may be kept as well informed as possible. One important objective is to combine the available information into quarterly estimates of the national expenditure and its components, similar to the annual figures given in the National Income Blue Book and Economic Surveys.

§ Mr. Gaitskell
Is the Chancellor aware that nobody on this side of the House would question the need for the Government to have more, more up-to-date and more accurate statistics with the hope, at any rate, that they will be able to guide the economy somewhat better than they have done in recent months? For that reason we welcome the statement he has made, even though it means an enormous plethora of forms descending on industries and businesses. May I ask this specific question? Will he give an assurance that the figures of stocks which he collects will be published as frequently as they are collected, so that the general public may have an idea of the trend of this extremely important index of economic activity?

§ Mr. Macmillan
I am glad to have the right hon. Gentleman's approval, even with the degree of castigation which he thought it proper, for purely party reasons, to impart to it. I will do my best to see that publication is made in the most suitable way possible.

§ Sir R. Boothby
Is my right hon. Friend aware that there will be general relief that he will no longer be required to make his economic decisions by reference to last year's time-tables? Will there be direct liaison between the statistical department—that is what I suppose it will be—and Sir Roger Makins? Will Sir Roger be in charge of this department?

§ Mr. Macmillan
Sir Roger Makins, who succeeds Sir Edward Bridges in one part of the functions of the Treasury, will, of course, preside over the whole of that part of the Treasury which deals with finance and economics and all these activities will be organised under him as the chief civil servant responsible.

§ Mr. H. Morrison
While associating myself with the welcoming words of my right hon. Friend the Leader of the Opposition, I wonder whether the Chancellor of the Exchequer would now care to withdraw the castigations made in earlier years against Sir Stafford Cripps. May we now assume that there will be no more talk about the Socialists wanting to spend their lives in getting people to fill up forms? Have the Government now accepted or adumbrated the doctrine that "the filling up of another little form will not do you any harm"?

§ Mr. Macmillan
That is a very fair comment, and I accept it as such. What we must try to do—and, I think, we can do—is to get rid of some statistical returns which are not necessary and concentrate upon the ones which are necessary; to do much more in the way of more frequent sampling, rather than wait for absolutely complete returns. It is in that direction that great experience has been gained, and I have taken the precaution of trying to get in touch with and find out what is being done by the American Government in similar cases, from which we have a good deal to learn.

§ Mr. Rippon
I welcome my right hon. Friend's statement—

§ Mr. Snow
The hon. Member was not here in 1946.

§ Mr. Rippon
I should like to ask him two questions. First, does he propose to supplement the monthly trade figures by fuller information about the terms and trends of trade, including such factors as invisible exports and stocks? Secondly, does he hope to provide fuller information not only about the balance of payments but also about the state of our gold and dollar reserves?

§ Mr. Macmillan
I think that the part of our statistics which is already almost complete is that which deals with exports and imports. That is very complete and up-to-date, and I do not think that very much more needs to be done to improve 1404 it. With regard to the invisibles and the balance of payments—and especially the movement of capital—we are consulting the Bank of England to see whether we can make this information more up to date, more complete and more accurate.

§ Mr. Gordon Walker
Will the right hon. Gentleman tell us which statistical returns he is getting rid of? He has just said that it is his intention to get rid of some. Will he give us an example?

§ Mr. Macmillan
What I mean is that I do not think it is necessary, to get the kind of information that we want, in every case to cover the whole field. That is why I laid great emphasis upon getting particular firms to give us, upon a voluntary basis, monthly or quarterly statistics of their orders, rather than try to get compulsory returns over the whole field, which would cover every little twopenny-halfpenny firm and would not really make a very great addition to the total amount of information. I feel that I have laid emphasis here upon the sampling method as opposed to the complete method.

§ Mr. Gaitskell
The right hon. Gentleman referred to the fact that he was getting rid of some forms which were now being sent out. Would he please tell us which forms he is getting rid of?

§ Mr. Macmillan
I say that I will certainly try to reduce the number. In this matter I cannot give an exact indication—I accept that—but I will try to see, as I am sure will be everybody's wish, that we get the maximum information which is really valuable to us with the minimum of extra work either to industry or to ourselves. I do not want to create large staffs to produce information which is not of real value.

Several Hon. Members
rose—

§ Mr. Speaker
Order. There is no Question before the House.