§ [Relevant document: First Report from the Treasury Committee, Session 1998–99, Office for National Statistics (HC 43), and the Government's response thereto (HC 267).]
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pope.]5.25 pm
§ Mr. Giles Radice (North Durham)
I congratulate my hon. Friend the Economic Secretary on her appointment. I am sure that she will do very well indeed. I also congratulate the Treasury Sub-Committee on its excellent report on the Office for National Statistics. I am glad to see that the right hon. Member for Fareham (Sir P. Lloyd) is present, because he and his colleagues have done an excellent job. The present Chairman of the Sub-Committee, the hon. Member for West Worcestershire (Sir M. Spicer), has taken over the right hon. Gentleman's work very ably.
There is no doubt that the report has made the Sub-Committee a significant player in the debate. The Sub-Committee's remit is to scrutinise the Departments and agencies for which the Chancellor is responsible. It has a big programme, and it has done very well so far. It has produced reports on the Office for National Statistics and the Inland Revenue; a report on the Valuation Office Agency is expected, and a report on Customs and Excise is in progress. There are also to be hearings on the management of the Government's cash and debt. I believe that only three bodies remain uninvestigated, and they will certainly have been investigated by the end of the current Parliament. The Sub-Committee is making an important contribution to the Committee's work, and, indeed, to parliamentary accountability generally.
The first reaction of most Members to the word "statistics" is probably "very boring", but statistics are also very important. They are certainly key to the running of modern Government, a modern economy and a modern society. In paragraph 8 of the report, the Sub-Committee says—rightly, in my view—There are three key uses for statistics: forming and implementing policies and targets, providing information to enable Parliament and the public to assess the actions of Government, and contributing to efficient resource allocation and improved competitiveness of the economy as a whole.
Not only Government use statistics. At the back of the report is a list of witnesses, including a business user group, a health statistics user group and an education statistics user group. A host of bodies needs to be certain that the Government are producing statistics of integrity.
Statistics need first to be technically accurate, and secondly to be produced in an independent way. People should be able to rely on their integrity. In particular, they should be free from political interference. Let me give an example of technical accuracy. Last year, there was a major problem involving the average earnings index. The index was clearly of great importance to the running of the economy, for the Monetary Policy Committee used it as one of its key indicators. Although the committee never said so specifically, there is no doubt that its decision to raise interest rates last June—or, rather, the June before that—was influenced by the rise in average earnings. It is true that no one quite knew what would have happened 288 otherwise; the MPC might have made the same decision in any event. If it is to do its job properly, however, it must have proper statistics in order to run the economy.
Perhaps more controversial is the question of political interference, Conservative Members may have their own examples, but I remember that, in 1992, there was some controversy about whether the then Chancellor of the Exchequer, Norman Lamont, had massaged the public sector borrowing requirement figures just before the 1992 election. That was a key issue. The then Treasury Committee, asked questions about that. Again, it is important that statistics should be politically independent. We should have faith—trust, as the slogan says—in our statistical system.
§ Dr. Julian Lewis (New Forest, East)
I am sure that the recommendation to which the right hon. Gentleman refers is recommendation (d) of the Select Committee report, which says:For 'National Statistics', where integrity is of the utmost importance, we recommend that the ONS take responsibility rather than home Departments.Does he agree that, in the light of the controversy over the Home Secretary's remarks to the Labour party conference about 5,000 non-existent new police officers, it is disappointing that the White Paper makes no suggestion of reforms relating to the Home Office?
§ Mr. Radice
I said that each side would have its own versions. I repeat: it is important that statistics should be free from political interference.
When the Sub-Committee looked at the whole issue of statistics, it had in front of it the Government's Green Paper and it wanted to influence what came out of the White Paper. It therefore laid down certain criteria in its recommendations: that there should be more effective, more accurate statistics; that national statistics, the concept of which we welcome, should be authoritative; that the head of the statistics department or body should have real authority, including access to the Prime Minister to discuss not just integrity but resources; and that the whole system should be underpinned by legislation.
No doubt, the right hon. Member for Fareham will correct me if I have paraphrased his suggestions and proposals inaccurately, but that is what the Sub-Committee said in broad principle. This is not the occasion for me to speak at length, except in praise of the Sub-Committee.
We have to test the White Paper by comparing it with the Sub-Committee's proposals. I am delighted that the White Paper was published in advance of the debate. Perhaps that is one argument for having such debates. It is no criticism of the present Minister, I hasten to add, but some might think that it would have been good if the White Paper had been published a bit earlier. I am pleased that it has been published, so I will not be curmudgeonly about it. We have the document in front of us, so we can read it. Some of us received it yesterday, when it was published, and have read it. My overall judgment on it is that it is a good start, but that there is some room for improvement.
I propose to refer to three or four themes. I welcome the post of national statistician. It is a good idea to have an important figure in charge of national statistics. It is important that we choose a top-rate person to do the job. 289 We have to ask: has he or she sufficient authority to do the job properly? In relation to the national statistics, I would say yes, because his or her professional responsibility for national statistics will be separate from that of Ministers, and that seems to me to be an important step forward.
In relation to departmental statistics, the situation is more ambiguous. What should we deem to be national statistics, and how might we resolve the argument? The White Paper is ambivalent on that point. Although the national statistician will necessarily be involved in resolving that argument, I should like to know how we are to do so in relation to national crime and health statistics, for example. If Ministers are sensible, they will realise that they will have far greater authority if they can say, "I can cite national statistics on crime and health, which state the following."
The people chosen for the statistics commission must be highly distinguished. However, I have no quarrel with the idea that not every commission member should be a professional statistician, as one or two non-statisticians may be able to bring other qualities to bear. Nevertheless, the majority of commission members should be professional statisticians. Members of the Monetary Policy Committee—to use that model—are appointed because they are highly qualified in monetary policy.
We have to ask whether statistics commission members will be independent and sufficiently competent and authoritative for their pronouncements to carry weight. I welcome the Government's commitment to the commission's independence—of which Ministers are making much—and welcome the commission's ability to make not only spot-checks on quality, but an annual report to Parliament. Any body that can make an annual report to Parliament is starting out on the road to independence. Once a body is able to make an annual report to Parliament, it can make statements independently of Government, which is an important development.
I agree with the Sub-Committee that we should enshrine in legislation the statistics commission's independence, as we did for the Monetary Policy Committee. Although there is pressure on legislative time, I am glad that Ministers are at least keeping an open mind, and that the statistics commission has been given the task of reviewing the issue.
I welcome the statement in the White Paper that national statistics should be scrutinised by Parliament. Although the commission's report to Parliament will provide a focus for such scrutiny, I hope that Select Committees—particularly the Treasury Committee—will continue to have a role. The Select Committee has already shown that we can do a job of scrutiny, and we should continue doing so.
On national statistics and the Government's new model, the proof of the pudding will certainly be in the eating. The choice of national statistician will be very important. If a really impressive person is chosen, it will send a signal to those who understand about statistics. Moreover, if potential national statisticians think that they will not be overruled by Ministers, they will go forward for the job. There may also be a role for confirmation hearings, 290 which the Treasury Committee has pioneered, in ensuring that those who are chosen for the statistics commission are impressive people.
The White Paper contains only very broad outlines, and we shall need to see some of the detail. The framework for national statistics will be very important. Treasury Committee and Treasury Sub-Committee members will be watching developments with great interest.
§ Sir Peter Lloyd (Fareham)
I am grateful to the right hon. Member for North Durham (Mr. Radice) for his kind words about the Sub-Committee report, and for selecting some of the most significant points.
Although, alas, I am no longer a member of the Select Committee on the Treasury—which the right hon. Gentleman chairs with tolerance and skill—I was lucky enough to be the Chairman of the Sub-Committee which produced the report on the Office for National Statistics. I am sure that I speak for my erstwhile colleagues in expressing gratitude for the help that we received from the expert individuals and organisations that gave us written and oral evidence, and in saying a word in appreciation of our astute and immensely energetic Clerk, Jennifer Long. [HON. MEMBERS: "Hear, hear."] I thought that members of the Committee would want to cheer that.
I welcome the Economic Secretary to the Treasury to her post, and I wish her well. Although I shall be critical of the Government, I realise that she arrived well after the die had been cast, and that the Government's shortcomings are not hers. I hope that she will be able to remedy some of them in the months ahead.
It was no accident that the Sub-Committee, which was set up last year to look in turn at all the Departments and agencies for which the Treasury is responsible, made the ONS the subject of its first inquiry. It was plain to us that sound, comprehensive statistical data which everyone could understand and rely on were increasingly essential for good government, and that the services provided by the ONS and the Government's statistical service were central to effective policy formation by Ministers, and to the ability of the public at large—as well as Ministers themselves—to judge their success.
It seems that the Green Paper, "Statistics: A Matter of Trust" reflected the same view, and that the Government were determined to make a fundamental change in the structure of statistical services. We hastened our inquiry in the summer of 1998 with the intention not of pre-empting the Government's Green Paper consultation but—having listened to our expert witnesses—of providing a set of criteria which we felt the new arrangements that were to be produced by the Government last autumn should satisfy.
We need not have hurried. The White Paper was finally published only yesterday—a year later, on the last day of the recess and one day before this debate, making it certain that most Members will not have had a chance to read it and that none will have had the opportunity to study it. It is deplorable that the Government should have contrived to ensure that Members had the minimum of opportunity to reflect on the White Paper before the one day of debate on the subject. The timing of the publication, and of the debate, is effectively in the 291 Government's hands. It is as if the Government are ashamed of their White Paper and do not want it talked about.
Having read the White Paper, I am not clear why it should have taken so long to produce. It sticks more closely to the status quo than the Green Paper appeared to presage. Perhaps the delay and the disappointing content are both explained by the difficulty of finding agreement within Government for the more thoroughgoing change that is required. At this point—time to study it apart—it is difficult to know, as the right hon. Member for North Durham said, what to make of the contents, as much waits to be spelt out in another paper, "The Framework for National Statistics".
A number of major points need to be made now in the light of the Sub-Committee's recommendations and the existing White Paper. The proposal for an independent statistics commission is certainly welcome, as far as it goes. It makes sense that such a commission should be comparatively small and coherent but—apart from the important task of monitoring the methodology and standards of ONS outputs—its role appears to be solely advisory. It may be more wieldy, but it seems to be little different from the advisory committee which the Government have recently disbanded. Perhaps the Minister will tell the House why the Government disbanded the advisory committee when they did. Would it not have been valuable to have the informed comment of that committee on the White Paper? At a time when the Government needed the committee's advice, they got rid of it.
The Sub-Committee set much store by the recommendation that the commission, rather than Minsters, should decide what statistics should be included in the scope of national statistics if the desired level of integrity—real and perceived—for important statistical series is to be achieved. Hospital waiting lists and school league tables are obvious candidates, as so much store is set by them in terms of policy formation and the public's judgment of the Government. The White Paper makes it plain that Ministers will continue to have the last word.
§ Mr. Oliver Heald (North-East Hertfordshire)
Does my right hon. Friend agree that what he says is relevant to issues such as police numbers? The integrity of the statistics is vital and there is a huge cloud over the Home Secretary's recent speech.
§ Sir Peter Lloyd
I agree with my hon. Friend that all Government statistics should be absolutely reliable, although however reliable they are—even if they are produced entirely honestly and clearly and launched in that way by the ONS—politicians on both sides will cherry-pick them to bolster their argument. One sees that at party conferences sometimes, and my hon. Friend has picked a good example.
We recommended in particular that, because it is of such central significance, the retail prices index should cease to be the sole responsibility of the Chancellor and should be a candidate for ONS management. However, the Government made it clear in an earlier response that the RPI was too important and too widely used for the Chancellor to let it go. That reply makes nonsense of pious rhetoric to the effect that key national statistics should be seen to be expertly and independently produced. The RPI is apparently too key. If it needs the Chancellor's 292 protection, why is not the earnings index, which is so significant for the Bank of England when it sets interest rates? The Chancellor was rightly bold when he passed responsibility for interest rates to the Bank of England. He should show the same qualities by passing responsibility for the RPI to the ONS in due course.
§ Mr. Oliver Letwin (West Dorset)
Does my right hon. Friend agree that the situation is slightly worse than that? If the Chancellor can manipulate the inflation figures that underlie his target, that target is in his own hands, so he is making nonsense of his policy of delegating monetary control to the Monetary Policy Committee.
§ Sir Peter Lloyd
My hon. Friend makes an extraordinarily good point, with which I entirely agree. He will understand that I am trying to be as cross-party as possible and am sticking to supporting the recommendations of the Sub-Committee rather than laying on with a trowel the reasons why they are even better than some of us thought when we made them.
During its inquiries, the Sub-Committee became very aware that the director of the ONS and his senior colleagues had had a difficult task in building an effective organisation following the merger in 1996 of the Central Statistical Office, the Office of Population Censuses and Surveys and a range of responsibilities and statistical outputs from a number of Government Departments. We felt that the ONS had made commendable progress, but I should like to quote recommendation 48, which puts the issue in the proper context:We recognise that Dr Holt"—the director—faces many difficulties arising from the newness of the organisation, the problems it has inherited and the limitations of the present governance structure. We believe that the combination of roles and responsibilities which the ONS Director is required to fulfil are, as presently constituted, more of a hindrance than a help in dealing with these problems. We recommend that the Government accord a high priority to ensuring that the 'Head of National Statistics'"—the national statistician, as he will now be called—role is managerially workable and supported by sufficient powers to co-ordinate the production of official statistics as well as ensuring that the Head has the required freedom from political interference.
Alas, there is little sign in the White Paper that the Government have fully comprehended that problem. It looks increasingly as though the national statistician, like the director before him, will sit at the top of the ONS with the commission, to whom he is not directly responsible, looking over his shoulder. The ill-defined responsibility for the standards of statistical work done in Departments will continue, without the national statistician having the authority to act if and when necessary.
The Sub-Committee also expressed concern at the lack of strategic vision across the range of official statistics, which we mostly attribute to the organisational structure of the ONS. We feared that the White Paper might not deal with that issue, and our fears appear to be confirmed by yesterday's publication. That issue may be covered in the framework document, but the White Paper gives no grounds for optimism; nor does it encourage us to believe that we are moving beyond the Rayner view that official statistics should be provided primarily to meet the management needs of Government. The needs of local government and business are compelling and should be 293 far better served, not least by better coverage of the vast and growing service area. We recommended that the ONS should publish a document setting out the criteria that it will use to assess the competing demands of Government, local government and business. The Government may have it in mind to do that, and I hope that the Minister will confirm that point later.
As part of KPMG's efficiency review, it was commissioned to make a report. It recommended that great savings would be made by contracting out much of the collection of raw statistical data, releasing resources to improve the service generally and—importantly—releasing the demands on top management time which could then be devoted to strategic and customer concerns, both of which need more attention than they receive at present. Why did the Government not take KPMG's advice?
The Sub-Committee's most important and difficult recommendation is in paragraph 10. I shall read it in full so that its meaning is clear:Canadian Statistician Ivan Fellegi has argued that 'A key end objective is to help the public policy process to discern the relevant "policy levers" that are likely to be most effective in moving us toward the achievement of desirable social and economic objectives' and cautioned that 'We cannot assume that the traditional policy levers are necessarily the most important ones.' For example, he suggested that life expectancy might be affected as much by family income as by medical intervention. We asked Dr Holt, the Director of the ONS, about its role in identifying statistics which would improve understanding of a particular policy area. He replied that 'It is a perception that this aspect of Government statistics is not well developed' and that he expected the issue to be raised in the Green Paper consultation. We recommend that in its response to the Green Paper the Government shows how the independent expertise of the GSS and ONS can be better used to translate politically determined objectives into meaningful targets and indicators.
Everybody can think of examples of that. For example, the reliance on waiting list statistics which, even if accurate, may help to distort rather than improve the provision of health care, and the reliance on class sizes, in statistical form, as a key measure when evidence suggests that others are probably more relevant to raising educational standards and ensuring that educational budgets are spent most effectively.
Elected Ministers must of course set policy, but it is in their interests—and certainly in the electorate's interest—that they have the best statistical assessments to help them find the ways to achieve policy goals. Those ways will not necessarily be the obvious ones, those most readily to hand or those to which Ministers committed themselves in opposition.
I am in good company in being critical of the White Paper. The Royal Statistical Society was extremely disappointed with it, and I suspect that few will give it many cheers. If the Government had been less inconsiderate in the timing of its publication—if I had had the opportunity to study more closely its every detail—I might have found cause to welcome at greater length its promise of higher standards of methodology and more coherent and user-friendly forms of publication. I note, too, that the Sub-Committee was grateful that the Government promptly published the reports that they commissioned during the examination of the Green Paper, although it would have just cause for complaint if the Government had not published them.
294 It is disappointing that the Government have not yet given any sign that they have the courage and wisdom to recognise that they would help themselves if they created a competent structure and handed to it the responsibility to perform a thorough, independent and professional job on all the main statistics that they use and by which the public judge them. However, I draw encouragement from the fact that the commission will be in a position to report publicly on those matters and that the Government have committed themselves to review the case for legislation should the commission recommend it in two years' time. I hope that the commission will use its opportunity well and that more of the Sub-Committee's recommendations will be put into practice than the White Paper portends.
§ Mr. Jim Cousins (Newcastle upon Tyne, Central)
I join my right hon. Friend the Member for North Durham (Mr. Radice) in congratulating my hon. Friend the Economic Secretary on her promotion. I also congratulate her on her wisdom in producing the White Paper the day before our debate. I do not wish to be churlish, and I recognise that this is the first day back for Parliament. It is welcome that the White Paper has been published, albeit that we have not had time to study it in as much detail as we would have liked.
I also add my thanks to the former Chairman of the Sub-Committee, the right hon. Member for Fareham (Sir P. Lloyd), for his leadership. I suspect that he will know that that is not an empty courtesy from the other side of the House, but is said with genuine affection and respect. I identify myself with many—I can probably statistically say most, though sadly not quite all—of the remarks that he made about the White Paper.
We should acknowledge that the Government have taken other steps besides the White Paper to improve the quality of national statistics. The White Paper is entitled "Building Trust in Statistics". It is unfortunate that that title was necessary. We have to rebuild confidence in Government statistics because some notable failures, especially the collapse of the earnings index, have gone to the heart of policy making. That could have—in some ways, it already has had—an effect on the decisions of the Bank of England Monetary Policy Committee and it might have brought those decisions into technical disrepute. I think that it is extremely unfortunate that that episode occurred. One of the aims of this debate, and of the Sub-Committee's recommendations, is that there should be no repetition of that event. The Government are clearly set on correcting those difficulties.
I welcome the fact that, over the summer, the Government appointed two new directors of the Office for National Statistics. I especially welcome the appointment of Mr. Pullinger, with his expertise in census and small-area statistics. That will be warmly welcomed by many of our colleagues in local government. I welcome also the appointment of Mr. Goldsmith, with his extensive commercial background. As the whole House recognises, and as the Sub-Committee's recommendations make clear, there need to be considerable improvements in the quality of British commercial and economic statistics. For example, we are engaged in a major endeavour to raise the level of productivity in this country, but we simply do not know enough about it.
295 In that connection, I welcome also the Government's decision to produce an index on services and distribution. That will go some way towards filling another gap in statistics that the Sub-Committee discovered and listed in its recommendations. I regret that it will be some time before the series of statistics on services will be robust enough to provide a solid basis for making policy. However, it is important that we know more about the service sector of the economy, and about the banking and financial services on which so much of this country's expertise and wealth now depend.
I do not wish to introduce a sour note into the proceedings but, although I acknowledge the very important role played by Dr. Holt in creating the Office for National Statistics in 1996—a not inconsiderable task, to which the House ought to pay tribute—I believe that he could and should have used his right of access to the Prime Minister as soon as he became aware of the deficiencies in the earnings statistics inherited from the former Department of Employment. It is important to make that clear, as future Government national statisticians must regard their right of access to the Prime Minister as an important right in the defence of the public interest. It is not simply an icon to be kept in the cupboard.
Dr. Holt became aware of the deficiencies early in 1996. If he had gone to the Prime Minister at that time, or a little later to the present Prime Minister, we might have avoided the collapse of the average earnings index in 1998, in what were difficult and potentially troubling circumstances. I hope that future holders of the position will bear in mind what I have said, and that they will use their right of access to the Prime Minister in a solid, proactive and meaningful way, on behalf of Parliament and the British public as a whole.
I turn now to the White Paper's proposals to create a statistical commission, which will have clear duties to defend the public interest and patrol the integrity of Government statistics. Clearly, those proposals are to be welcomed, as they represent a considerable step forward. However, I hope that my hon. Friend the Economic Secretary will say how some of the potential difficulties will be resolved.
The White Paper states that Ministers will be able to block the access of the statistical commission and the national statistician to the work of their Departments. The House is entitled to seek an assurance from my hon. Friend the Economic Secretary that that blocking ability will be used sparingly, that its use will be reported to Parliament—not least in the annual report of the statistical commission—and that, if right of access is blocked, a full, serious and comprehensive explanation will be given to Parliament. We must operate on the basis that the ability of Ministers to block access by the national statistician and the statistical commission to statistics being prepared in Departments will be used only in the most exceptional and unusual circumstances.
§ Mr. Letwin
I subscribe entirely to the hon. Gentleman's view, as far as it goes, but can he imagine any circumstances under which it would be legitimate to block the access of the national statistician?
§ Mr. Cousins
It is unwise in debates such as this to engage in flights of fancy or to exercise one's 296 imagination, but I can envisage circumstances in which Ministers might wish to block that access. However, as a Select Committee member of long standing, I am not sure that I should endorse or register approval of the possible exercise of that power to block access.
We are all conscious that this is a new Government, who have embarked on some serious and new projects that will require much stronger statistics than were inherited from the previous Government. We will require much more solid information to guide us in tackling matters such as health improvement and health inequality. We will require better small-area statistics to guide our colleagues in local government and enable them monitor their work.
The Government, too, will require better statistics to determine what really can be made of employment zones, health action zones, education action zones, the sure start initiative, and the like. It is important that the right statistical basis to support such policy initiatives and to measure their achievements is available. Sadly, that is not the case at present, and we look to the statistical commission to help bring it about.
It is extremely important that the Government consider again the need for legislation that would defend and entrench the rights of the Office for National Statistics, and of the proposed statistical commission and office of the national statistician. It is absurd that the quality of small-area statistics in this country depends on a curious quirk of the Census Act 1920, which says that there must be full cost recovery. It is ridiculous that that ancient provision should impede the development of proper small-area statistics, given that the House, local government and the devolved Parliaments all need them in their work. I hope that the Government will reconsider that matter.
It is important that the code of practice in national statistics, which is what we shall have to rely on for the integrity of Government information, should be entrenched and defined in law. It is important that the right of access to information—by Members of Parliament and by our fellow citizens—should also be entrenched in law. Parliament will soon consider freedom of information legislation, so it is important that that concept be brought to bear on the information and statistical work of the Government. I hope that my hon. Friend the Economic Secretary will look at that matter again.
In addition, I hope that my hon. Friend will assure the House that the statistical commission and the Government national statistician will have right of access to the service agreements between the Bank of England and the Office for National Statistics that underpin much of the work of the Bank of England's Monetary Policy Committee. Parliament should be aware of the dialogue between the Bank of England and the Government in that respect. It should know of any exchange of information between the Bank and the Government, and of any anxieties that may exist about the quality of the economic information being dealt with.
I share some of the anxieties expressed by other hon. Members about the fact that responsibility for the retail prices index will remain with the Chancellor of the Exchequer. I believe that the Chancellor would be far more comfortable if responsibility for the RPI were passed to the statistical commission and the national statistician. My right hon. Friend would benefit from 297 passing over that responsibility and would find that remarks—such as those he apparently intends to make tonight about average earnings—would be reinforced if he operated against a background in which no one could dispute the independence or integrity of the information that he intended to deploy.
There is current and active concern in the House over whether the RPI properly reflects the needs and conditions of pensioners. That cannot be dealt with in a political way as it requires independent and robust investigation. I ask the Minister to consider these matters. We, and the Government, might be better served by legislation that entrenched the right to independence of the statistical commission and the national statistician.
Finally, we have to deal with the devolved Parliaments. The Government address the Parliaments in the White Paper and have also produced within the past few weeks a memorandum of understanding on statistics between the devolved Parliaments and the UK Parliament and Government. The devolved Parliaments clearly have their own duties and their own understandings of priorities. No one wants to stand in the way of that.
However, it is of fundamental importance to citizens of the UK that on some basic measures of public information—waiting lists or economic information such as measurements of productivity—statistical unity should remain. There must be a common base for statistics. The UK must not be prised apart by a growing disconnection between statistical bases deployed for policy making in the devolved Parliaments and the Westminster Parliament. I hope that the Economic Secretary will address that point, and I know that the Government would wish to ensure that statistical unity was maintained.
Our debate is informed by a Select Committee report on an important matter of public interest. We acknowledge the serious consideration and importance that the Government accorded to their response and the position that they have taken in the debate. We welcome publication of the White Paper, which in many ways goes towards meeting the anxieties and recommendations of the Treasury Committee. However, the White Paper remains deficient in some vital respects. We invite the Economic Secretary to consider views expressed across the House about those deficiencies. I am sure that she will at some time and in some form consider those matters again.
§ Mr. Edward Davey (Kingston and Surbiton)
I, too, welcome the Minister to the Treasury Bench. I look forward to our debate today and debates over next year's Finance Bill. I am sure that she looks forward to that as much as I do.
I congratulate the Treasury Committee on its work and its report. I also congratulate the right hon. Member for Fareham (Sir P. Lloyd) and the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) on their speeches, although I felt that they did not do full justice to their report. In many ways, I felt, they hid their feelings of disappointment about the White Paper. They were critical of it, but pulled their punches.
I had the privilege of speaking today to the president of the Royal Statistical Society, which is incredibly disappointed by the White Paper. The society was 298 encouraged by the Green Paper and the Government's consultation process. It agreed with many of the Treasury Committee's recommendations. However, it feels that the Government have let the side down in the White Paper, the last-minute publication of which seems to reflect a new Government attitude. The society fears that the Government will not be as open and transparent as they had implied during consultation and that they will not deliver on their promises.
We have seen the same happen before under the present Government. They promise a sea change and a modernisation of the whole approach to the government of the country. However, when they try to deliver, they fail significantly to do so. The White Paper is another example of that.
The society would make two major points if it could speak to the House. First, it is concerned about the scope of statistics that will fall to the statistics commission. The commission is to be given control of national statistics, but not of other statistics produced by Departments. Decisions about whether the commission should have access to information will, as the hon. Member for Newcastle upon Tyne, Central said, be taken by Ministers. He called that a right to block, and I believe that that position is unfortunate.
The second key weakness of the White Paper is that there will be no legislative framework. The hon. Gentleman said that the Government remained open-minded about that, but it is noticeable that they will remain open-minded until after the next general election as they do not promise legislation before it. It would be nice to have an independent statistics commission before then to judge the Government on their election pledges last time round. We could see whether the statistics that the Government are producing on hospital waiting lists and class sizes are correct, and judge whether the pledges have been kept. The House and the country would feel more confident about all the statistics the Government publish if the figures came from a statistics commission. The failure to legislate is a great weakness.
I want to link those two points to the Government's failure on freedom of information. Citizens and Parliament will not know what statistics and what factual information lie behind the Government's policies. They will have no access to that information under the draft Freedom of Information Bill, even after the changes announced during the summer recess. The blanket exemption will apply to statistics, and that is much to be regretted.
On the detail on the scope of statistics to come under the commission, the Treasury Committee's first report stated, at paragraph 13, thatin order to achieve the desired levels of integrity, real and perceived, it will be crucial that the Head of National Statistics or of any statistical commission decides which statistics are included within the scope of National Statistics rather than Ministers, and for the distinction to be strongly enforced.However, the White Paper, written on the basis of the Committee's recommendations, states at paragraph 4.5 that Ministers will decide whether any changes to the scope of national statistics are appropriate, publishing their response. That has caused consternation among the country's top statisticians.
299 The Royal Statistical Society, in a press release yesterday,expressed its extreme disappointment at the very limited scope of the Government's proposals to guarantee the future integrity of National Statistics. Only the statistics currently produced by the Office for National Statistics will automatically come under the new arrangements.The society adds:National Statistics has been defined much too narrowly.During my conversation with the president of the society, she said that the narrow definition went against all the soundings that the Government had given during the consultation period. It is her belief that the vast majority of respondents favoured a much broader definition of the statistics that the commission is to control. The Government have not delivered on what they were promising the respondents to that consultation process.
Other models were debated during the process, such as the Select Committee model, whereby it would be up to the commission to decide what statistics it should have access to. One might have considered a purchaser-provider split, with Government Departments purchasing statistics from a commission that was in charge of all national statistics, which were defined as covering everything. The Government should study those models. I hope that the Economic Secretary will tell us that this is not the last shot and that the Government will reconsider whether they are prepared to widen the scope of the statistics that will come under the new commission.
The importance of statistics in public policy debate cannot be underestimated. In the Select Committee report, we see how they can be used to make decisions about the allocation of resources and to measure the Government's performance so that we can scrutinise Government properly. In recent years, they have been used to measure the objectives and targets of Government, which is relevant to the debate about waiting lists.
Unless the Government are prepared to ensure in legislation that such statistics, which are crucial to public policy, are made available independently, they will not rebuild the confidence of the British people in the statistics that we debate. Under the previous Government, we had an annual discussion about the unemployment statistics and whether the various definitions were correct, which brought the whole process into disrepute. Many people did not believe that Government when they said that unemployment was coming down. There was a huge argument about which way it was going and about what the real level was. On the one hand, the right hon. Member for Chesterfield (Mr. Benn) might have put it at 3 million, 4 million or even 5 million, while other politicians put it much lower even than the Government. That brought the whole debate into disrepute and made it rather sterile.
It is so important for the Government to get this matter right. The hon. Member for Newcastle upon Tyne, Central talked about pensions. He is right; that is a topical debate. As we know, the retail prices index figure for September was low at 1.1 per cent., which means that pensioners who rely on the basic state pension are looking forward to an increase of only 75p a week next April. The important question is whether that is the right inflation measure. Should we use the underlying rate, or should we consider a special pensioner RPI? Those statistics could be made available by a statistics commission. It could give 300 Parliament public advice about the most appropriate RPI. Pensioners in my constituency will not be terribly happy if the current RPI is used to make the decision.
Deciding the right statistic is also important. We note that the Government have ensured that they will keep total control over such decisions. One might argue that subjectivity is involved when one is commenting on and deciding between different statistics—that that is always subjective and should therefore be a political decision. I believe that if such a decision is based on authoritative advice, the Government can be held far more accountable for it.
When the Government present their information, in particular when it relates to election pledges and key political targets, they are always likely to try to manipulate the figures. I do not think that any of us could say hand on heart that if our party were in government, we would not be up to the same tricks. Of course we would and that is why the Government must try to ensure that independence is enshrined in the system.
Debating statistics in the House is always difficult; the truth is often complex. One isolated statistic can give one picture, but when others relating to it are considered, one can draw a completely different picture. That is why we need the statistics commission to give that sort of high-level advice—commentary, if one likes—when it provides statistics for the Government. Judging from the White Paper, I do not see that sort of role being given to the commission.
There are many other problems, but because of lack of time, I will mention only three. The first is that so much is resting on the document, "The Framework for National Statistics", as the right hon. Member for Fareham pointed out. I have it on authority that the Royal Statistical Society would like to be consulted on that framework document. I hope that the Government will not publish it as soon as possible, as they state in the White Paper. Before it is published, many people, including in the House, should have a chance to have an input. If the Government fail to do that, they will be breaking faith with their previous excellent consultation process.
The second problem is that the accountability proposals in the White Paper should be reviewed. The Government seem to want to ensure that the statistics commission reports to the Treasury. They want to maintain that structure. As the right hon. Member for North Durham (Mr. Radice) said, it is time that we ensured that such bodies report to the House—to Select Committees. If we could develop the informal process of confirmatory systems into a statutorily based system of confirmatory hearings, we could ensure accountability and strengthen the integrity and independence of such commissions.
The third and final problem is that the commission is being given the huge task of auditing, collecting and presenting. According to the White Paper, the commission will be relatively small. Unless it is given serious backing, in terms of both resources and support, it will find that too hard a task. As we approach the census, that is extremely worrying.
The Government started on this process with the best of intentions. They talked about ensuring independence, rebuilding trust, maintaining and developing integrity and improving quality. Although some of the recommendations of the White Paper go that way, by ducking out and not ensuring that an independent statistics 301 commission can comment on and be involved in all statistics if it so chooses, and by failing to ensure that its independence is enshrined in law, I am afraid that the Government will fail to meet their own objectives.
§ Mr. David Kidney (Stafford)
I was pleased to serve on the Treasury Sub-Committee under the leadership of the right hon. Member for Fareham (Sir P. Lloyd), who was always a wise and good-humoured guide in our deliberations. What he omitted to say about our choice of the Office for National Statistics as the subject for our first inquiry is that the members of the Committee suspected that it would be a fairly straightforward issue—a gentle dipping of our toes into the water. Little did we suspect that there would be the great national explosion of the failure of the average earnings index in October, which would concentrate the attention, seemingly, of the world on the work of the investigation and of the ONS itself.
In defence of the Government—I ask myself why I should defend them, but I choose to do so—and as regards the timing of the publication of the White Paper, following what happened with the average earnings index we had two investigations into the index, a further review of the efficiencies of the ONS and the deliberations of our Sub-Committee report—all of which feature strongly in the White Paper, which is good to see, as matters that have been taken into account. Those also include the work of the Select Committee. That is all pleasing and a reasonable defence of the timing of the production of the White Paper.
Information is power, and statistics are a component of that for policy advisers or makers in the public, private or voluntary sectors and for the public at large. Everyone is interested in possessing accurate statistics and information. I shall use the story of the average earnings index to show what happens when official statistics are compromised and what the possible causes of that might be. The story of the AEI shows two pressing needs for the work of the Office for National Statistics. First, there should be strong management capable of clear strategic thinking. Secondly, the management must have robust independence from political interference.
The right place to start the story of the AEI is in the spring of 1998. The earnings growth figures that spring were worrying. The Monetary Policy Committee had delivered itself of the opinion that average earnings growth in excess of about 4.5 per cent. would be inconsistent with meeting its inflation target without having to raise interest rates. That spring, earnings growth was about that figure. Everyone knew that bonuses influenced the figures but people wanted to know whether they represented one-off payments as a reward for the past 12 months' performance, in which case they could largely be discounted as an inflationary pressure, or whether there was something more to them. In spring 1998, the Bank of England asked the ONS to work on analysing the bonus-related element. In April and May that year, the ONS did some work on that and passed its findings to the MPC.
In June 1998, the MPC announced another rise of a quarter of a percentage point in the base rate, to 7.5 per cent. That decision surprised forecasters and, in explaining its 302 decision, the MPC said that it had had regard to the average earnings growth figures. The figure available was that from the ONS for March 1998, which had risen to 4.9 per cent., clearly above the 4.5 per cent. that the MPC had stated was consistent with not raising interest rates. Given the MPC's thinking, it was no surprise that it raised interest rates at that months' meeting. The MPC was heavily criticised at the time for that rate rise, for giving too much emphasis to only one economic indicator. In defence of the MPC, although the indicator that it was relying on was earnings growth, it did not rely only on the figures from the ONS. It had access to other information such as that produced by the Reward Group, business surveys and its contacts with the business community. Nevertheless, that was its decision.
We returned to the average earnings index in October 1998. The public's attention was attracted to the index by two sets of startling revisions in a short space of time. First, on 6 October, the earnings figures for May, June and July were slightly revised. There were no great shocks there, but on 14 October, the whole back-run of data was heavily revised without any warning to the markets interested in the statistics. It was a stunning event and everyone was shocked. There was huge criticism of the MPC's decision back in June because the revised data suggested that the peak in earnings growth in spring and summer had not been as high as the MPC had been led to believe. One national newspaper carried a banner headline saying that the MPC's blunder had cost the country 10,000 jobs. Little wonder that the Chancellor was described as being incandescent with rage.
The director of the ONS, Tim Holt, announced that he was suspending the index forthwith and that an independent inquiry was to be undertaken by Southampton university into what had gone wrong. He said that it was right to suspend the index from publication because everyone had lost trust in the statistics. At the same time, the Chancellor announced a separate inquiry into what had gone wrong with the index, led by Andrew Turnbull from the Treasury and Mervyn King from the Bank of England. They directed Martin Weale of the National Institute of Economic and Social Research to conduct a second inquiry especially for the Chancellor. Both inquiries produced reports this March, when the average earnings index was rehabilitated and reinstated.
It is interesting now to look back at what the reviews concluded was the state of earnings growth back in spring and summer of 1998. The reviews showed that the original figures, prior to any revisions, were about correct; if anything, they were slightly overstated. It was a case of "as you were". It could be argued that the MPC had been vindicated but, alas, there were no banner headlines to that effect.
During the furore of the reviews, the Treasury also announced a new efficiency review of the ONS. KPMG was to report to a Treasury-appointed steering group with recommendations for making further efficiency savings in the costs of the ONS. That review led to several recommendations, three of which I shall cite as examples. It said that the number of ONS offices could be reduced, that more support services could be outsourced and that there should be changes at the top of the management. The collective result of the recommendations would eventually be annual savings of £20 million. In announcing that it accepted most of the report's recommendations, the Treasury said that the £20 million would be recycled into improving the rest of the ONS's services.
303 I fear that all this demonstrates the potential for political control of statistics. The Government set the ONS' s budget and are its major customer. On this occasion, the Government appointed their own review into what had happened with a particular set of statistics and put in train their own efficiency review. Those are the sort of things that we as politicians should guard against in protecting national statistics. As the Green Paper said, it is a matter of trust.
As the right hon. Member for Fareham said, the ONS has many other customers, not only the Government of the day. As my example showed, the Bank of England is an important customer. The nations and regions of the United Kingdom, local government, business and the public at large also all want accurate statistics.
When the Government responded to the Treasury Select Committee report, it seemed that there was agreement between the Committee and Government on two things that should be improved in the ONS: improving the statistical base and capacity, and prioritising services to users of the ONS. That offers some encouragement as to how we go from here.
I want to consider the White Paper. No one has mentioned that our report draws attention to the international comparison of the costs of the ONS with those of similar bodies in other countries. We get our statistics remarkably cheaply. Who am I to say whether those countries are spending too much on the provision of statistics or we too little?
Despite several speeches this evening which showed ways in which doubt could be cast on statistics, the people producing them or the Government standing behind them, it has to be said that the evidence received by the Select Committee was that by and large the statistics produced by the ONS are among the best in the world in terms of their reliability and the processes by which they are produced. It is important to make that point to redress the balance of the tone of the debate so far. There is no reason why we should not have it as our ambition, White Paper or not, to make the statistics produced in this country world leaders. Indeed, that phrase appears in the foreword to the White Paper.
Some of the vital issues to be discussed as a result of the White Paper have already been mentioned by other hon. Members. In deciding what statistics are national and what are not, I stand by the recommendation of the Select Committee. It ought to be the job of the national statistician, the statistics commission or a combination of the two. It is not the job of Ministers who want to defend their departmental interests. So in that area, the White Paper needs further development.
Mention has also been made of the right of the director of national statistics to go to the top—to the Prime Minister of the day—to complain about any infringement of the integrity of national statistics. As two hon. Members have mentioned already, the Select Committee recommended that in addition to being able to go to the Prime Minister about the integrity of national statistics, the director ought to be able to go to the Prime Minister on the question of resources. Resources are the Achilles heel of the White Paper. There is no explicit mention of the mechanisms by which anyone can decide whether we are spending the right or the wrong amount on producing national statistics. That needs to be corrected.
304 Four components are essential to our future statistical service. The first is quality management. That is dealt with in the White Paper. The second is political accountability—not interference in management. To some extent, that is dealt with in the White Paper, but not to my satisfaction. I make it clear that that is my own opinion. The third is adequate resources, which I have now mentioned twice. It is important to stress a third time that, when used by some people such as exporters, accurate and timely statistics may have an influence on the wealth of the country. So if we need to spend more money to produce greater wealth, that is a consideration to which we ought to have regard. The fourth component is customer involvement. It is important for the commission to take on the role of ensuring that the views of those who want good statistics are heard right at the top of the tree.
I said at the beginning of my speech that information is power. I hope that what we are about tonight is helping to form a view on how to create a statistical commission and national statistician that produce statistics that contribute to the power and wealth of our country. I suggest that statistics ought to be impartial, reliable, accessible, timely and economic to produce. When right hon. and hon. Members read Hansard tomorrow, they will see that the first letters of those words spell irate. I suggest that Members of this House will be very angry indeed if we do not produce a statistical service of which we can all be proud.
§ Mr. Oliver Letwin (West Dorset)
I begin by echoing the welcome given to the Economic Secretary in her new post by hon. Members on both sides of the House. I also welcome the debate. In many ways, it shows the House at its best. We have heard measured comments from hon. Members of all parties. We are debating a Select Committee report that firmly shows the House of Commons trying to fulfil its age-old task of holding Governments to account and insisting, in the terms used by the hon. Member for Stafford (Mr. Kidney), that the public, experts and democracy as a whole have the power to understand what is being done to them and on their behalf. Statistics, therefore, are not a byway. They are one of the centrepieces of democratic society. Without faith in accurate statistics, we stand in imminent danger of beginning at any time on the slippery slope to totalitarian rule. I do not mean that we are anywhere near it today or have been at any time in our history, but it behoves us, and it is right that we take the responsibility seriously, to concentrate without the slightest complacency on whether our statistics are accurate and our systems for making sure robust. Otherwise, the threat to our democratic liberty will be very great.
I welcome the Select Committee report. As several hon. Members have mentioned, there is no doubt that recommendation (b) goes to the heart of the matter. It has been quoted already. I merely remind the House that it states clearly that it should be the head of national statistics or any statistical commission who decides what is included in the national statistics and hence what is subject to the rigours of the new commission.
The White Paper has been much discussed in the debate so far. It is headed "Building Trust in Statistics". It was introduced with great acclaim by the Government. 305 The Economic Secretary told the world in her press release:This White Paper marks a new era for official statistics.I am bound to say that I am not a great believer in Government hype, whatever Government are in power. I am afraid to say that this Government have been rather better at Government hype than most in our history, but hype is least appropriate when it is least true. I accept the infinite delicacy of the comments of Government Members in attacking the White Paper. Labour Members have been careful to avoid outright attack, and I understand entirely that I should do the same in their position. But the mood of the House this evening has shown clearly that the Royal Statistical Society, to which the hon. Member for Kingston and Surbiton (Mr. Davey) referred, was right.
The White Paper does not mark a new era for official statistics. It is perhaps at best the beginning of an idea of what, later, if put in legislative form and much enhanced in various ways, might be a somewhat better way of arranging official statistics. I admit that that does not quite carry the same soundbite characteristics asa new era for official statistics",but it is alas the truth. It is the truth not least because, as various hon. Members, including my right hon. Friend the Member for Fareham (Sir P. Lloyd), have said, the crucial recommendation (b)—that the decision about what goes into national statistics should be independently made—is precisely the one that is by implication turned down in the White Paper.
We have to attend to just how much of a problem there is here. The Chairman of the Select Committee, who carries some weight in the matter, said that there was some ambiguity about who would decide what went in and what stayed out. I rather agree with the hon. Member for Kingston and Surbiton. I do not think that there is any ambiguity. The Select Committee talked in terms of decision, but section 2.10 of the White Paper on page 5 makes it clear that the new commission willadvise on the scope of National Statistics".As if that left any ambiguity—I suppose that it might be argued that the phrase by itself was ambiguous—the White Paper says in section 4.5 on page 13:The Government will ask the Statistics Commission to keep under review the scope of national statistics and make periodic recommendations"—again, in advisory mode—and… Ministers will decide".I think that it is pretty clear that we are dealing not with an independent body that will decide what things it vets but with a wonderful combination of Ministers. The Minister is undoubtedly a human being and hence probably prey to the temptations to which we are all subject. That certainly applies to all of us on the Opposition Front Bench. How convenient not to admit into the fold of national statistics any series of statistics that may be dubious because of the character of the collection.
Collection is a difficult matter. Economic judgments, as many hon. Members have said, often depend on judgments about how accurate statistics really are. However, any Minister may also wish to conceal a series that is politically embarrassing.
306 I wish I could say that, from my own experience of working in a bureaucracy, I had any confidence that our civil service would always provide a bastion sufficient against that temptation. However, I fear that the structure of our government makes it systematically unlikely that the civil service will do so. On the whole, civil servants are entirely decent people trying to do a good job, but the job that they are asked to do is to serve the Government of the day—not Parliament and not the electorate. It becomes extraordinarily difficult for them to resist a Minister who finds it inconvenient to have a particular piece of information released.
Hon. Members on both sides of the House who have any experience of government—most of them have vastly more such experience than I have—will know what I am talking about when I say that one cannot rely on the home Departments to vet their own statistics. That was the conclusion reached by the Sub-Committee and that was very clear and right. It is extremely to be deplored that the White Paper says nothing as to how we can avoid that problem in the future. That is what the Royal Statistical Society is on about.
It is also relevant to remind ourselves of which sort of statistics are involved. Some of them have already been mentioned this evening: waiting lists and crime statistics—and police numbers, which are so topical. However, the most interesting question of all relates to those statistics that never appear. I feel morally confident—I am absolutely sure that the right hon. Member for North Durham (Mr. Radice), the Chairman of the Treasury Select Committee, who, in a previous incarnation, played a distinguished role as the Opposition spokesman on education, would echo what I say—that buried somewhere in the Department for Education and Employment are fairly large numbers of surveys and a fair number of statistics as to how effective or ineffective the new deal is turning out, and that they have not been revealed. I say that because it was always the practice of the DfEE and its predecessors not to reveal surveys and statistics that they did not find convenient. I am sure that Ministers have sought to inform themselves as to those matters and have revealed—perfectly honestly—those things that they think are convenient, and have concealed those things that they think are inconvenient. That is not the way to convey to an electorate or to Parliament a proper picture. It is not special to this Government; it has been true of Governments for ages past. Now there is an opportunity to change it by consensus. The Select Committee has given us that opportunity; the White Paper should be rewritten to give it to us properly.
We turn to the home Department that is the most important; that is what I want to add to the debate. That Department is of course the Treasury—Her Majesty's Treasury—the august body that is the subject of the Select Committee's whole endeavour and which produced this splendid, or not so splendid, White Paper, and which is responsible for enormously important statistics.
My right hon. Friend the Member for Fareham has already referred to the inflation figures. I restate the point that I made in an intervention to him; if there is a single set of exogenous statistics that matter most, it is the inflation statistics. Those statistics are not merely a piece of information; they are an operator. As the Chancellor has chosen to set the targets of the Monetary Policy Committee in a series of statistics, the choice of the series itself and the governing of the way in which that series is 307 compiled are matters that quite directly affect policy as well as information. Clearly, that is intolerable. It is not possible for a Chancellor of the Exchequer honestly to claim that he has subcontracted the control of monetary policy to another body under a clear and transparent target, if the target is in fact not clear and transparent, but opaque, and run by his own officials in ways that he does not declare.
I admit that, in principle, the national statistician could come along and say, "But Chancellor, I do not really believe you, I should like to see exactly how this is made up". Earlier, we heard an exchange on that matter. However, the poor old national statistician—be he ever so distinguished a statistician, as I hope and believe that he will be—will not stand much chance against a Chancellor of the Exchequer, a Chief Secretary, a Financial Secretary, an Economic Secretary, a Paymaster General, a Permanent Secretary and a head of the economic service, all of whom tell him, "We don't really think you ought to have this".
I do not speculate in this matter—or if I do so, it is based on recent experience—because, in dealing with certain matters to which I am about to turn, I asked whether I could go to see Professor Likierman, the head of the financial management, reporting and audit service to ask him some questions. First, a record of my telephoned request was lost. Secondly, it transpired that we had to send a request by fax, so I did so. It then transpired that my request could not be answered, but had to be referred to the office of the Chancellor of the Exchequer. It was referred to that office and a long delay ensued. We were then informed that I could not see Professor Likierman about the national accounts, because I could only do so if a Minister was present and it was not felt that a Minister should be present.
§ Mr. Radice
I can remember a similar occasion when the hon. Gentleman's party was in power and I wanted to see the chief inspector of the then HMI. I was told that I could not do so unless the Secretary of State for Education was also present—he was Sir Keith Joseph. I thought that that was not appropriate, so I arranged to meet the chief inspector at a party.
§ Mr. Letwin
I admire the right hon. Gentleman's ingenuity. I may adopt the same tactic, although my social sphere is not yet as elevated as his. Indeed, my point is not about the Government; it is not a party political point. The truth is that all Governments have an institutional tendency to conceal. I fear that there will not be much chance for that ever-so-distinguished chap to break through that veil.
§ Mr. Cousins
I have already expressed myself on the substance of the point that the hon. Gentleman makes; I agree with him. None the less, we should record that neither the Sub-Committee in its investigations of the Office for National Statistics, nor the main Committee, when it considered resource accounting and budgeting—we shall come back to that—found a shred of evidence that the Chancellor and the Government had exercised the kind of influence to which the hon. Gentleman refers and which he rightly fears.
§ Mr. Letwin
I am terribly grateful to the hon. Gentleman because he moves me on to precisely the topic 308 that I now address: the belief—at least on our part—that there is some evidence of that problem, in respect not of exogenous statistics, but of the most important statistics of all, which are those under the Government's operational control. I refer to the national accounts.
if there is one set of statistics that matters most, it is those that relate to the fiscal balance. Alas, that is also the area in which there is the greatest scope for any Government to engage in subterfuge. I have to say that the present Chancellor and his colleagues have raised that subterfuge to a fine art. We are dealing with a sort of Mr. Mephistopheles, who has managed to conjure the most extraordinary results from the brilliantly illuminating 189-page document that is the Red Book. One of the nation's leading experts told me that for years he had felt that he knew little about life, but he knew one thing: how to make sense of the national accounts at last—until the Red Book and its predecessor of the previous year appeared on the scene. At that point he more or less gave up.
Why is that? Some of those matters must be conscious, because the Chancellor of the Exchequer is an extremely intelligent man, with a bright set of officials and colleagues who work with him. It cannot be an unconscious act that the working families tax credit—billions of pounds of public expenditure on any normal definition—has famously disappeared into an accounting adjustment. If it is unconscious, I suppose that is a resigning matter, but I do not believe that for a moment. It was a conscious adjustment—an adjustment of an adjustment, so to speak—in order to make us wholly unaware of what was going on, except that it was so obvious that most people caught up with it eventually. It did take a couple of days after the production of the Red Book, but eventually people caught up with it.
Alas, as one goes through the whole document, one finds dizzyingly many minor examples of misleading or ambiguous arrangements of statistics, which make it extraordinarily difficult for someone trained in ordinary accounts or finance to penetrate the document. Some of those may be the result of error, some may be unconscious and some may be conscious—I genuinely do not know which is which. We struggled mightily to find out but, not least because of our failure to meet Professor Likierman, we have been unable to do so.
§ Mr. Cousins
Does the hon. Gentleman accept that how to present the working families tax credit is an interesting problem: should it be presented as expenditure, or in some other way? He should give the Government some credit. The way in which the presentation used was arrived at is comprehensively set out in the Red Book, and further documents were produced to reinforce the presentation in that document. The hon. Gentleman is perfectly entitled to disagree with that presentation, but it is undeniable that the Government have made it entirely clear how the presentation of the working families tax credit in the national accounts was arrived at.
§ Mr. Letwin
In a way, I agree with the hon. Gentleman, in that if one reads all the fine print, one can eventually work out what has happened. I also agree that how to deal with the tax credit—indeed, with tax credits in general—is an interesting question: are they expenditure or negative income? There is no case for calling them an accounting adjustment; the only reason 309 for doing so was to ensure that we did not notice for a little while. That is not a good way to present such matters.
Let me move on to some other examples. Table B27 in the Red Book registers the current budget surplus as 0.5 per cent. of gross domestic product. Yet, in table B25, something ostensibly similar called surplus on current budget is labelled as £6.2 billion. Those are both 1998–99 figures. With GDP at rather less than £900 billion, it is extraordinary difficult for the ordinary man to make those two figures match. There might be a perfectly good explanation for that, but as the Red Book does not provide it and one cannot meet the man who drew up the figures, it is difficult to tell what it is, which is probably why the press does not have the slightest idea what has happened. I rang a couple of expert commentators, who told me that I had a good point and that they could not work it out either.
The question is not merely one of figures and principles of accounting; we are dealing with a sort of definitional glory. I have never seen so many definitions as have been produced, changed and reproduced over the past couple of years. We have current expenditure, net capital expenditure—although of what it is net is an interesting question in itself—and general Government expenditure. Then, we have total managed expenditure, which is not to be confused with annually managed expenditure or with net departmental outlays, which a common man might have thought bore some relationship to it. We have net borrowing, which is quite different from net cash requirement and from the surplus or deficit on the current budget. Most mysterious of all, we have other financial transactions, which are wholly different from miscellaneous financial transactions.
I could bore the House by going on for another 20 minutes with other definitions, but I shall please the House by not doing so. The fact is that it would all be a joke—if it were not so serious. What makes it serious is that a 189-page document—which is 186 pages longer than a set of company accounts, containing straightforward profit and loss, balance sheet and cashflow figures—has been produced, partly in an effort to inform and partly in an effort to conceal and obfuscate. Nobody has the slightest idea which component of the item in question is generated by which of the two motives, and I strongly believe that it will not be long before the Treasury itself loses sight of the distinction.
In the end, it will be the Government—and, of course, those who elected them—who will suffer from not understanding their own rhetoric expressed in their own statistics. That is the very fate that befell regime after regime in circumstances in which there was not the same degree of public accountability as we in a democracy are used to. It became genuinely impossible for decent people trying to run a country such as Czechoslovakia to understand their own accounts, because they had been so concocted that those who concocted them had lost sight of the motives and techniques of concoction. That is a fate to which we have not yet succumbed, and we must never succumb to it.
§ Mr. Cousins
We have been having a most interesting debate within the debate. The hon. Gentleman offers the example of Czechoslovakia—I do not know whether that 310 is intended to upset us. One of the interesting features of the former communist regimes in eastern Europe is that they drew no distinction between capital and revenue, but neither did British public sector accounts until the innovations made by my right hon. Friend the Chancellor. Those are the very innovations which the hon. Gentleman criticises, and he makes heavy weather of the resulting difficulty in presentational terms. However, does he disagree that the current Government were entirely right to bring about a long overdue revolution in British public accounts by introducing a distinction between capital and revenue, which all of us—every enterprise, company and household—make as a matter of daily routine?
§ Mr. Letwin
No, I do not disagree at all. It is entirely right that the resource accounting process, which began under the previous Government and has admirably been continued under the current Government, along with the national asset register, the effort to create some principles, including the fundamental underlying principles of the golden rule, and the distinction between capital and current, are all common currency—I should not say that—and are all commonly accepted on both sides of the House. That is not the issue. The issue is whether the methods of presentation are such as to make matters clear, or to keep matters obscure. I maintain that they are not such as to make matters clear.
The remedy is to have an independent body, statutorily established, that creates firm and clear definitions, just as the accountancy profession has, for hundreds of years—since the 13th century—in one way or another established definitions for private sector business. That is the appropriate way to set the standards for fiscal accounting. I do not claim perfection for previous Governments of either party. The situation is not unique—we have merely reached a pinnacle of obfuscations during the current Government's tenure—but there has been a lacuna for many years and it needs to be resolved.
Alas, the concern of the Sub-Committee was not with that matter. Even more regrettable is the fact that the White Paper says nothing about it. I hope that the Select Committee will continue its good work—[Interruption.] Notwithstanding the sedentary remarks of the right hon. Member for North Durham, I have read what the Committee has so far produced and I accept that it is moving in the right direction. However, I do not accept for a moment that the Government have shown the least sign of moving in the right direction.
The Government should strengthen the statistics commission and the role of the national statistician and increase the rights and powers of those bodies to ensure that matters that they think should be documented in certain ways, not things which Ministers think should be documented, are so documented. The Government should also establish an independent commission that will govern the definitions and principles of national accounting, so that we are never again faced with an incomprehensible 189-page set of statistics that diminish democracy and the ability of Government to govern.
§ 7.8 pm
§ Sir Michael Spicer (West Worcestershire)
I think that it was Disraeli who coined the aphorism:lies, damned lies and statistics.Much of today's debate has underscored the political warning implicit in that statement. Disraeli would have enjoyed the fact that the first subject debated in the 311 spillover Session is statistics, although that probably has more to do with lack of demand from other quarters than with any obsession with statistics on the part of the business managers. However, there is no doubt that statistics deserve Parliament's close attention, for at least two reasons that have already been touched on.
First, statistics are often—not always—useful props to Government propaganda, and sometimes they are of critical importance. Examples have been quoted by hon. Members on both sides of the House of the way in which unemployment, health and education statistics have been presented. Such statistics have formed part of the propaganda of Governments from both sides. Secondly, statistics sometimes—but not always—play a vital role in the formation of policy. Some examples have been given this evening, the most obvious current example being the retail prices index and the average wages index and their effect on the interest rate policy of the Bank of England Monetary Policy Committee. I shall come in a moment to other examples, including European trade statistics and statistical decisions that might or might not be made about the single currency, which can have policy implications.
As has been said, a national statistical service has two requirements. First, it should be independent and, secondly, it should be open—especially when matters are subjective and when the methodology upon which the statistics are based is changing.
The report of the Treasury Sub-Committee—I also congratulate my right hon. Friend the Member for Fareham (Sir P. Lloyd) and his colleagues on their achievements—states clearly that neither independence nor openness apply fully to national statistics in general or to the Office for National Statistics in particular. Several relevant examples have been given in this debate.
On the question of independence, the RPI—which is crucial to policy determination and propaganda—remains within the power and gift of the Chancellor of the Exchequer. The report's recommendation (b) addresses that issue in particular.
As to openness, the report documents fully the average earnings debacle. It is a nice coincidence that we are debating this issue on the day that the average earnings index has apparently reached 4.9 per cent., which was the same figure cited in June 1998. That was an overstatement and the real figure was apparently much lower. The report states clearly that there has been no openness in describing national statistics in a way that the public can understand.
The real question that we are debating tonight is what will happen as a result of the Treasury Committee report, the publication of the White Paper and this debate. The omens are not good. The White Paper—which is, perhaps significantly, black rather than white—was produced yesterday without any real notice. I am told that Treasury Committee staff did not know about the imminent publication of the paper until fairly late on Friday. That is quite extraordinary, especially given that my right hon. Friend and his colleagues had worked on the paper for a year. I am told that the document was produced at a press conference at which journalists were controlled unusually tightly: only six journalists were permitted to attend and they were allowed to ask questions for only 10 minutes. So much for open government and so much for the aspirations of the black paper.
312 At the beginning of the paper, the Prime Minister says:In the consultation document 'Statistics: A Matter of Trust', the Government emphasised its intention to seek a new relationship with citizens based on openness and trust. I believe that having access to official statistics which we can all trust is essential in any healthy society.On the facing page, the Economic Secretary begins her contribution by saying:The Government is committed to establishing public confidence in official statistics.A nice photograph of the hon. Lady accompanies those comments. She may not have had much of a chance to influence policy decisions, but there was obviously time to print her picture—which is rather better than the slightly indifferent photograph of the Prime Minister that appears on the other page. The aspirations in the Economic Secretary's comments and throughout the black paper do not square with the way in which the paper was produced.
As to openness, the fundamental point that has been made in this debate is that vital statistics—the RPI and information about hospital waiting lists and educational performance, for instance—remain under direct ministerial control. That is contrary to the basic proposition advanced by the Treasury Committee. My hon. Friend the Member for West Dorset (Mr. Letwin) pointed out clearly that the pivotal point in the Select Committee's recommendations has been refused. Therefore, there is no question—as the Liberal Democrat spokesman, the hon. Member for Kingston and Surbiton (Mr. Davey), said—that the White Paper flies in the face of the Select Committee's recommendations. Not only was it produced at the last moment in a manner that was pretty discourteous to all those involved, but, in essence, it contradicts the main recommendations of the Select Committee.
As to the future of the ONS and the way in which it operates, nothing seems to have changed since the average earnings debacle. My hon. Friend the Member for West Dorset said that he was tossing a new thought into the proceedings and I shall toss a new piece of information to the House about openness and the way in which the ONS explains its statistics. I refer to correspondence initiated by my noble friend Lord Pearson of Rannoch this summer on the question of European trade statistics. He wrote to Dr. Holt about those trade statistics on 14 September and, in essence, said:When … the 1999 Pink Book is compared with … Economic Trends in December 1998, it becomes apparent that very substantial re-allocations have been made between countries.He then instances this case and states:Income in respect of EU '14': it appears that Credits have been increased (compared with the figure given in December 1998 Economic Trends); while Debits have been decreased, resulting in a 'swing' in aggregated Balances over that period of £37.6 billion … In other words, the 'picture' suggested in the December 1998 Economic Trends breakdown, of the UK having a more-or-less structural 'Income' deficit with the rest of the EU … now turns out … not to have been the case. The new Pink Book appears to indicate the opposite: that the UK has an on-going 'Income' surplus with the EU".That is quite important information. Dr. Holt replied to that letter on 4 October, and said:Dear Lord Pearson"—313 I shall quote key extracts from the letter—First, let me say that estimating portfolio investment and associated income flows across international boundaries is one of the most difficult parts of national accounting statistics … The statistics we publish are therefore subject to wider margins of error than most of our other statistics.This problem is not confined to the UK. Other countries face the same difficulties. Indeed, it has been a matter for international discussion for many years. In 1992, a committee under the auspices of the IMF felt that to address the problem there should be a survey … The results of this survey, although only partial thus far, are the cause of much of the revision you refer to in your letter.The fact that the IMF has sponsored an international survey on those statistics is revealed, and some rather complicated arguments ensue. That disclosure was prompted by a letter; none of the information was forthcoming when the statistics were produced—even though they are profoundly important when making policy decisions.
For instance, policies towards monetary union and the single currency may hang to some extent on such trade statistics. To come out blandly with figures on trade flows for one year that say the opposite to what was shown for the previous year, and then—only when prompted—to add that all the statistics are very subjective and difficult, and moreover are subject to international surveys, IMF reports and so on, does not square with the objective of openness.
The Committee has been nosing around those matters for a whole year now, and the ONS and its head must have known that questions would be asked about openness, and about describing what the methodologies were, and when they were required. There have certainly been definitive questions about subjective judgments. All those ideas have been floating around, and have been the subject of intense questioning by my right hon. Friend the Member for Fareham and his colleagues on the Committee. What is so difficult to understand is that, even this summer—this month, indeed—we have still heard examples of bland assurances and remarks that prove that the need of people outside to know and understand why statistics have been produced in a particular form is not taken seriously. All that seems to continue, despite the work that my right hon. Friend and others have done.
The obscurantism is profound; the latest information that one can glean suggests that it is still there. The problem needs to be addressed, yet I understand that Dr. Holt is to leave his job before Christmas, and no replacement has yet been made.
The White Paper says that there will be a statistics commission. I hope that colleagues both on the Committee as a whole and on the Sub-Committee will take a strong interest in that prospect, because this cannot be the end of the matter. We now have the White Paper, but it has denied the essence of what the Committee wanted. It would seem that the people producing the statistics are still carrying on with their bad old ways. For all the reasons that have been given in the debate, we must continue to watch the matter carefully, and I hope that we shall do so.
§ Mrs. Caroline Spelman (Meriden)
I add my congratulations to those of my colleagues to the new Economic Secretary to the Treasury. May I reassure her 314 that we are in no doubt that she is a human being? I also congratulate the Committee on its excellent report, which recognises the growing role of statistics in the political process.
Nowhere is that more true than in health, the subject on which I speak, and which I would like to draw into the debate. Statistics are critical in measuring performance, determining the allocation of resources and setting policy targets—all uses of statistics that were singled out by the Select Committee.
A Government's performance on health is seen as a barometer of their overall success or failure, so the use of statistics to demonstrate relative success or failure will have an important effect on the future electoral chances of any Government. I therefore argue strongly the case for health statistics to be taken into the ambit of the Office for National Statistics.
As we know, the ONS does not collect centrally data on health or expenditure on health. As a relatively new politician, I say that there is a need for independent collation of statistics, so as to allow more objective assessment. There are many areas in which the Department of Health does not publish national data, despite the fact that we are talking about a national health service. As a former member of the Select Committee on Science and Technology, I inquired about the booking system for the maternity services required at the time of the new millennium, and the crisis that we may face at the end of the year. When I asked about the additional number of bookings for women due to have babies at the time of the date change, I was told that the information was not available centrally.
I found that frustrating in my work, because I was trying to assess whether there had been a rapid increase in demand for maternity services at that time, and to assess the sort of provision that had been made in our national health service.
Many other important health statistics are not collected centrally. So as to be even-handed, and in case my point about the lack of centrally collected data might appear partisan, I did a little research on questions asked by Members from other parties.
The hon. Member for Newport, West (Mr. Flynn) asked a question about MRSA. I shall not attempt to pronounce the full version of that term, but it is a drug-resistant infection by the staphylococcus bacterium. When the hon. Gentleman asked for the basic statistical information about the number of infections by that bacterium, the response was:there are no centrally held statistics on deaths from this cause."—[Official Report, 5 May 1998; Vol. 311, c. 352.]That would have frustrated him in his work as a Member of the House in trying to get to the bottom of the subject.
Another important national issue is the high rate of abortions in this country, about which questions have been asked by Members in all parts of the House. Specifically, the hon. Member for Richmond Park (Dr. Tonge) wanted to know the cost to the national health service of abortions carried out in the first trimester. She received the same sort of reply—that the information requested was not centrally collected. That is another example of an important area of the national health service's responsibility in which it is difficult for Members of Parliament to carry out their work and make assessments based on nationally collected data.
315 Another important question—indeed, it was raised by the Opposition during Health questions today—is the rise in the instance of autism, and whether there is any correlation between that and the introduction of the triple vaccine for mumps, measles and rubella. The hon. Member for Warrington, South (Ms Southworth) once asked how many health authorities held a database with detailed information about how many people had autism. Again, she received the dry reply:The information requested is not held centrally."—[Official Report, 9 June 1998; Vol. 313, c. 539.]
All those examples show how difficult it is for Parliament and parliamentarians, whether they are on the Government or the Opposition side, to carry out their work when data concerning our national health service are not centrally collected.
As several hon. Members have said, statistics about patients waiting for treatment in the national health service have become something of a political football. In that regard, the trust in statistical information that has been mentioned has been called into question. There is a huge temptation for Governments to manipulate statistics to meet political targets.
In closely examining the use of waiting lists, we have discovered that not a little use of smoke and mirrors is being practised. It transpires that there are main waiting lists, subsidiary waiting lists and lists of people who are not on any lists at all. Only the main list counts, and it concerns the time that somebody waits between seeing a specialist and getting treatment.
The officially collected statistics on the waiting list of patients in the national health service take no account of the number of people who are waiting to get on the waiting list. According to the Government's own statistics, that number is about 190,000, which is an increase of 140,000 since they came to power. That staggering increase in the number of out-patients who are waiting to get on to the list has arisen as a direct result of the Government's attempts to reduce the main waiting list. It creates great confusion for people who are waiting for treatment and whose experience does not match the vaunted claims about falling waiting lists.
There has been a policy of removing certain patients from the list, and that has been done by creating a subsidiary list. There are several examples of that practice around the country, but I shall just use one of them, which is sufficient to make my point. A memorandum from the Bradford Hospitals NHS trust states:Following new NHS guidelines, patients on waiting lists for operations to remove metalwork are not to be included in the monthly returns. To enable us to identify patients more easily, a new list '05' has been set up.One wonders what list 05 is. One thing is for certain, it does not appear in the headline figure for the waiting list of patients by which the Government invite the electorate to judge their performance. That causes me considerable disquiet as a parliamentarian, because the people on the 05 list have disappeared from the national statistics that we have received from the Government and that have been used as a measure of their performance.
Certain operations are being collated on an alternative list, which does not count in the overall tally. It is significant that this ruse started in June 1998, which was the month when the numbers on the main list supposedly began to fall.
316 We are also beginning to see the use of time-efficient operations—as opposed to more complex operations—to manipulate the figures. The trouble is that, if the target is to reduce statistically the number of patients on the list, that will have a huge impact on clinical priorities. It is a fact that to reduce the numbers on the main waiting list, there has had to be an increase in the number of minor conditions that are treated. If all cases of in-growing toenails are treated quickly, that will reduce the size of the list, whereas if the operations that are carried out are for cardiac by-passes, which take longer, are more expensive and reduce the budget, the wait will be much longer. My right hon. Friend the Member for Fareham (Sir P. Lloyd) pointed out that this use of statistics distorts priorities for health care. Not only do we deplore that, but, in the decision of the new Secretary of State for Health to have what he called a change of tack and to put fresh emphasis on the treatment of cancer and heart disease, we detect a recognition on his part that clinical priorities have been distorted by attempts to reduce the waiting list statistically.
§ Mr. Desmond Swayne (New Forest, West)
Does my hon. Friend agree that it is not only clinical priorities that have been distorted, but the figures for NHS personnel? Will she comment on the British Medical Association's discovery yesterday that the announced additional 400 consultants are already in the system?
§ Mrs. Spelman
I was going to come to that, because it is another example of the "Jack Straw style of creative accounting" to show the number of people working in a public service.
The statistical debate on waiting lists has obscured the facts about how long people are actually waiting. That is all that matters to a patient. They do not want to know how many people are in front of them or behind them on the waiting list: they want to know how long it will take. It is hard for an ordinary person to get that information. That is yet another case for having health data collected, collated and published through the Office for National Statistics.
There has been a large increase in the number of people waiting more than a year to be seen. The figure is up from 30,000 to 48,300 since the election, which is an increase of 61 per cent. in two years. During the past two years, the number of patients waiting to be seen after being referred to a specialist has also increased.
MPs have recourse to the House of Commons Library and, if requested by our constituents, we can obtain information. In March 1999, in response to a request from a constituent, I asked the Library about the number of people waiting more than 13 weeks for treatment. The figure given to me was 248,000. By June 1999, that figure had risen to 485,000, so between March 1999 and June 1999 there was an increase of 84 per cent. That statistic shows what happens when clinical priorities are distorted so as to produce a reduction in the headline figure for the main waiting list.
The House of Commons Library has also given me the figure for the number of patients still waiting for more than 13 weeks. The number of people who have waited 13 weeks or more has increased by 115 per cent. The average waiting time is a more useful statistical measure of the performance of the national health service, 317 and closer to people's experience of treatment under the NHS. The average waiting time between being referred to, and being seen by, a specialist has gone up from six to seven weeks. Without an independent official statistical source, it is difficult to get such information into the public domain.
Although the Government have said today that, with only 30,000 to go, they are on target to meet their promised reduction in the in-patient waiting list, the number of people on the out-patient waiting list is steadily increasing. It will be easy for the Government to achieve their target and to pronounce that their early election pledge has been fulfilled, but it will not reflect the true position or people's real experience of having to wait longer to be seen and, on average, to be treated.
Other statistics for the health service have been quoted, such as the 400 extra specialists. The new Secretary of State was quoted in The Guardian as saying that they were extra resources, but only a day later that was denied by the BMA. In fact, those specialists are already training in the system. The correction of such information by the profession concerned does nothing to build trust in the use of statistics by Departments.
The use of statistics in a misleading way can undermine trust. The new Secretary of State announced that the £15 million was new money, but it is not new money: it is part of the £21 billion allocated to the health service in the spending review that was announced by his predecessor. The money is new only in the sense that it will not be borrowed from other NHS departments. That nuance is lost on the public. When it becomes the subject of a debate about the truth of the matter, public confidence in the initial statements is undermined.
I want to make a strong case for the inclusion of health statistics in the remit of a reformed Office for National Statistics, rather than leaving their publication to the Home Department. The right hon. Member for North Durham (Mr. Radice) said that the collection of statistics should be free from political interference. Nowhere is that more true than in the health service.
I could not agree more with the recommendation that the decision about which data the ONS ought to publish should lie with a statistician outside Government. A cursory reading of the White—or black—Paper led me to identify only one item that troubled me greatly. I read very clearly that it was the Minister who would decide, and that leaves me dissatisfied. I fear that insufficient independence will be involved in the remit for data collection—in decisions about what should be collected, and about how it should be published—if the final decision rests with the Minister. I fear that the temptation will be too great for the Home Department to restrict access to information which, as my hon. Friend the Member for West Dorset (Mr. Letwin) pointed out, could prove inconvenient to Government if it came out.
For that reason, although we wholly endorse the Government's pursuit of a method of collecting statistical information that will build trust, we are anxious to hear the Minister's latest thinking, in the hope that it will give us a degree more assurance than the White Paper gives us that the long arm of Government can be kept well clear of the collection of information that must be accurate, 318 accessible and reliable if ordinary people are to be able to assess properly the performance of a Government and the public services within their care.
§ The Economic Secretary to the Treasury (Miss Melanie Johnson)
I thank all right hon. and hon. Members on both sides of the House who have welcomed me to my new post and given me their kind good wishes. I also thank the hon. Member for West Dorset (Mr. Letwin) for his hesitation on the question of my humanity, which was welcome. I note that he did not agree with the hon. Member for Meriden (Mrs. Spelman), who clearly thinks that I am human—another example of the Opposition's failure to arrive at a common policy.
§ Mr. Letwin
I am sorry to interrupt, but I do not want anyone who was not present earlier to be in the slightest doubt when they read Hansard. I fully recognise the Minister's humanity.
§ Miss Johnson
I am disappointed by the hon. Gentleman's response, but I realise that he had to make up for his earlier comments about a common currency, and that he is very much on message now.
I thank the Treasury Committee and its Chairman, and the Sub-Committee and its Chairman, for producing the report and providing the subject of today's debate. I am delighted to be able to announce that yesterday we published a White Paper entitled "Building Trust in Statistics", although I am sorry that the timing has caused consternation to some. We can now deliver—and are delivering—on yet another of the Government's manifesto commitments: the transparency of the arrangements included in the White Paper will further our aim of making government more open.
The then Economic Secretary, my right hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell), launched the process at the beginning of last year, when we published our Green Paper "Statistics: A Matter of Trust". The Green Paper stimulated a wide-ranging debate about how we should proceed, and the White Paper is very much a result of that. Following our consultations, we have decided that the best way in which to secure the independence of the statistical service is to create a statistics commission, which will be independent of the users and the producers of statistics. It is worth noting that that is what 70 per cent. or more of respondents to the consultation requested, in the context of independence and accountability. A number of Members on both sides of the House asked about that.
The commission will report to Parliament annually, if that is Parliament's wish, which will create a very different environment. It will play a key role in strengthening quality control of official statistics, ensuring that they are trustworthy and that they respond to users' needs. The overriding aim is to establish public confidence in official statistics. Not all members of the commission will necessarily be statisticians; users may also be represented.
A good deal of time was rightly spent on the question of appointing a national statistician. My right hon. Friend the Member for North Durham (Mr. Radice) spoke of the importance of the calibre and authority of such an individual—and, indeed, we want to appoint someone of 319 international calibre, given that that person will bring about a key development in terms of the transparency and accountability of national statistics in the future. We see that as a major professional responsibility.
The White Paper also sets out the roles and responsibilities of Ministers, of the commission and of the national statistician, and—as I have said—suggests that Parliament may wish to consider how it deals with questions relating to national statistics in the future. In response to comments made by the right hon. Member for Fareham (Sir P. Lloyd), let me also say that we consider this to be one of the ways in which we can involve leadership in the process.
The Office for National Statistics is and always will be at the heart of national statistics in this country. Today's debate has raised many of the points discussed in the recommendations of the Sub-Committee's report; the White Paper meets those recommendations, and goes even further by providing a sound base for the delivery of public confidence in our official statistics.
§ Mr. Letwin
I thank the Minister for giving way again. She said that the White Paper had "met the recommendations" of the Select Committee. Is she asserting that recommendation (b)—that the national statistician, rather than the Government, should decide which statistics are governed by the new commission—has been met by her White Paper?
§ Miss Johnson
I would prefer to come on to my answers to that point later. I am trying to weave into my speech the many points that have been made during the debate, as well as addressing other points that remain to be addressed.
The new arrangements reflect the strong consensus that emerged from the consultation exercise. Those arrangements will deliver quality-assured statistics of integrity and relevance. They will be implemented on a non-statutory basis to secure the benefits as soon as possible. It is important for me to emphasise that that is one of the reasons for implementing them on a non-statutory basis at this stage. As is clearly explained in the White Paper, however, that matter will be the subject of further consideration by the new statistics commission. We do not rule out legislation, but we hope that it will not prove necessary.
I am conscious that the debate was probably prompted in part by the average earnings index scrutinies which exposed some shortcomings on the part of the ONS. Several lessons can be learned from the scrutinies, and I assure hon. Members that they have, indeed, been learned. Indeed, they can go a long way to promoting future success and countering complacency. A major lesson is that, no matter how highly its products are regarded, there will always be room for the ONS to improve, to innovate and to examine its statistical procedures. It is doing just that, and some of the procedures that are now in place result from the average earnings index scrutinies.
The ONS has a long-standing continuous programme of improvement, and is now doing, and will continue to do, even more. For example, many changes were made to the AEI before its relaunch. Many of the issues that were raised in the Turnbull and King report were addressed before the relaunch of the index. Those changes are critical as they will deliver quality more widely across Government statistics.
320 To my grief, several hon. Members have given the impression that there is something suspect about some ONS statistics. Statistics that are produced by the ONS are already of high quality. We aspire to even greater quality, but the ONS already offers a sound base for many of the decisions that are made in government.
We have published the efficiency review—of which many hon. Members are aware—and both reviews of AEI in response to the Committee's recommendations. Last December, my immediate predecessor as Economic Secretary wrote to the Committee to give details of the timing and responsibility of the AEI work. That is all in the public domain.
As I have said, the ONS is well regarded internationally. It produces timely, relevant data of high quality: the national accounts that it produces are equal to the best produced by our European partners. For a long time, the ONS has been regarded as an inward-looking organisation. That is all changing: today the ONS makes more extensive use of external expertise from universities and elsewhere. That will ensure that any improvements include best practice methodology.
To respond to user needs, which are continuously changing, an organisation needs to be flexible and attuned to those needs. It needs to prioritise continually. Therefore, the ONS is developing a comprehensive system to assess the views of users; the value of statistics in policy making; and the contribution of statistics to the economy and society. That addresses generally some of the points that the hon. Member for Meriden made. It will ensure that the ONS gets its priorities right, and that they stay right.
As I said, in terms of legislation, we took the view that implementing the new arrangements was the priority, but it is worth pointing out that several concordats and service-level agreements are already in place with regard to the future work of the ONS. The service-level agreement with the Bank of England has already been completed and signed.
§ Mr. Cousins
Can the Minister confirm that the statistical commission will have full access to those service-level agreements and concordats with the devolved Parliaments, and that it will review them, maintain their integrity and report on their significance, unencumbered by any difficulty in getting Treasury Ministers' approval to do so?
§ Miss Johnson
The arrangements on devolution are that we have service-level agreements with the devolved Administrations. The ONS in any case has direct responsibility for Wales. However, as envisaged by the working party and in the memorandum of understanding to which my hon. Friend referred, we anticipate that arrangements will be made to protect the integrity of national statistics and to enable the devolved Administrations to receive the figures that they require to work on a devolved basis. The ONS hopes that, as a result of all that, customers and users will be able to be involved in prioritising and in the quality-assurance process.
We share the Committee's view that high-quality official statistics would be improved by increased timeliness and accessibility. It is widely accepted that the vast range of statistics produced by the ONS is extensively used by Government and the public alike: indeed, it is important that there should be a wide range of users.
321 Statistics give us a picture of the fabric of the nation, and inform policy decisions both inside and outside Government. That is one reason why a review of release practices is under way at the ONS. and will be published shortly, but the ONS has already made much progress in getting its first releases available on the world wide web. All first releases appear on the ONS website within five minutes of release, and the office is looking to improve the arrangements for the remaining releases.
Several of the Committee's recommendations proposed changes in ONS's internal arrangements to improve management and research capabilities, and the White Paper addresses the workability of ONS management arrangements to secure those objectives; the lack of strategic vision in some aspects of past ONS work; and the need for strong leadership. In particular, the White Paper stresses the need to strengthen management at the ONS to give much greater emphasis to quality issues. Several hon. Members have recognised the importance of that particular dimension of change. Following the efficiency review and scrutiny of the average earnings index, the Government have accepted proposals from the ONS director to strengthen the senior management structure.
The new management includes new directors of economic and social statistics, who will promote a more coherent set of national statistics not just within the ONS but across national statistics generally. That will help to plug gaps in coherence and coverage across government as a whole.
Quality control of national statistics and the research capabilities of the Government statistical service in general need to be beefed up. That was clear from the AEI review and the Committee's recommendations, so we are creating a new director of methodology and quality post at a senior level.
The right hon. Member for Fareham referred to the way in which the ONS considered criteria for determining priorities. I should make it clear that the plan is that a guide should be developed that explains the process and the factors involved in the consideration of priorities. That will build on the existing method, whereby pressures—for example, from new users—are balanced against resources for planning. That is an important element of the way in which we proceed in deciding which statistics are to be developed and paid for, and which we regard as not important in terms of overall information.
The hon. Member for Kingston and Surbiton (Mr. Davey) asked for a commitment that there would be consultation on the framework document. We have had a long consultation period and the whole process, including publication of the White Paper yesterday and the debate today, has been long drawn out, as hon. Members have commented. We now want to move forward as quickly as we can. The hon. Gentleman's wishes might be reasonable in an ideal world, but at this point we want to get on and implement the new system.
§ Mr. Edward Davey
Does the Minister realise that I was passing on a question to the Government from the president of the Royal Statistical Society? Is she not disturbed that the president is disappointed at the Government's White Paper and believes that they should 322 accept the Select Committee's recommendation (b) that the statistics commission, not Ministers, should decide on the scope of the statistics to be covered?
§ Miss Johnson
I assure the hon. Gentleman that I will come shortly to the question of the scope of the statistics, but if we go through a further consultation, which—with all due respect to the Royal Statistical Society—would have to include other organisations, we will have a much more elongated process. In that case, I imagine that hon. Members would wish to grill me at some future date about why we had not made more progress.
On the point that was made by my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) on access by the director, or the national statistician, to the Prime Minister, the Government agree that access to the Prime Minister on integrity matters is important. That is why we have maintained it in the White Paper.
The ONS is responsible for statistics arising from the registration of births and deaths. Those statistics result in the calculation of death and infant mortality rates, which are used to monitor policy and to allocate resources. The statistics also include the cause of death—such as cancer or heart disease—the number of abortions and teenage pregnancies, and cancer rates and survival rates.
§ Mrs. Spelman
As I said in my question on MRSA, data collection methods do not recognise the category of death. Therefore, although the number of deaths may be collated, the statistics will tell us nothing about the trend in different categories of death.
§ Miss Johnson
Perhaps I can best deal with the hon. Lady's point by elaborating on some of the other points that I should like to make.
Currently, there is not a very clear distinction between national, Government statistical service and departmental statistics. Let me give a couple of current examples of the confusion surrounding types of statistics which should be dealt with in discussions on scope and framework.
Some major statistical surveys, and particularly one-off surveys, are not published under the ONS logo. Currently, even the annual Department of Health survey for England is not published under the Government statistical service logo. Moreover, as Northern Ireland has its own civil service, statisticians in Northern Ireland are not part of the Government statistical service and, consequently, their output does not appear under its logo.
We have a patchwork of arrangements. The source of statistics and the methodology used to produce them are not always obvious from the statistics themselves or from the credibility that they are accorded. However, the statistics commission, and the preceding discussions on the framework, should help us to strike the best balance.
I appreciate the frustrations expressed by the hon. Member for Meriden, but longer-serving Members experienced the same frustrations when the previous Government were in office. Labour Members have a long history of being in opposition, although we have no intention of returning to it. All the problems cannot be blamed on the Office for National Statistics.
We believe that the issues of who will bear the cost of producing statistics and who will categorise them will not only be addressed in the framework discussions but will become major features of the commission's work.
323 The hon. Member for Meriden asked which statistics will be collected, and how they will be collected. As I said, the current system is a patchwork, and the priorities will have to be discussed with the commission, with Departments and with the House. One matter that will have to be dealt with is the fact that, in many cases, Departments pay for the statistics that they collect. The statistics that the hon. Lady would like us to collect would also involve a cost.
§ Sir Michael Spicer
The Minister is obviously reaching the end of her speech. Will she confirm that the statistics that are currently controlled by Ministers—statistics, for example, on the RPI, waiting lists and education performance—will still be controlled by Ministers? If that is the case, what is the Minister's comment?
§ Miss Johnson
I shall address all those issues. This has been a very useful and good debate, with many worthwhile speeches and thoughtful comments. We believe that the scope will be dealt with in the discussions on the framework, and by the new commission.
My hon. Friend the Member for Newcastle upon Tyne, Central asked about the commission's work. The key words in our proposals are transparency and openness. Those words are not said lightly, and they will be backed by our actions. The commission will have full powers to comment on, and even to criticise in public, any proposals. It will also be able to decide on its programme and to make proposals of its own. We envisage that there will be an annual debate on the commission's report.
My right hon. Friend the Member for North Durham asked about Ministers' role. There will be a public debate on ministerial views on statistics, and Ministers will be entirely accountable for their decisions. That is a vast improvement on the situation that pertained when the previous Government were in office—and, indeed, has pertained hitherto—in which all those decisions were made in private.
§ Mr. Letwin
If the hon. Lady is about to answer this question, I apologise for asking it once again. Has she not just admitted that Ministers will decide—that the crucial recommendation, recommendation (b), is not being fulfilled and that Ministers will continue to control most of the essential statistics?
§ Miss Johnson
The commission will be able publicly to say what it wants to say about any proposals or set of statistics. Ministers will be able to say whether they would like something to be included. Nevertheless, the matter will be for the commission, since if statistics are to qualify as national statistics, the way in which they are collected and audited will have to meet all the criteria established by the commission. The quality of statistics produced will have to be decided on the basis of the criteria for national statistics. If a Minister and the commission disagree on statistics, there will be a debate about what should be done with those statistics.
§ Mr. Letwin
I am very grateful to the hon. Lady, who is being most courteous, but I really do want to press the point. If the commission believes that it, rather than the Treasury, should control the definition and collection of data on the RPI, will its view or the Chancellor's prevail?
§ Miss Johnson
I shall deal with the RPI in a moment.
324 My hon. Friend the Member for Stafford (Mr. Kidney) made a very interesting speech on all the central issues surrounding the average earnings index. He made the point that international cost comparisons are fraught with difficulty. It is clear, however, that United Kingdom statistics are among the most highly regarded internationally and in Europe. Nevertheless, we must strive for further improvements. I have noted my hon. Friend's remarks. He also mentioned what he regarded as the lack of a mechanism for determining ONS resources. On the contrary, the White Paper makes it clear that Ministers will determine resources. That will be done publicly, following advice provided publicly by the statistics commission, which will be more accountable for decisions.
The right hon. Member for Fareham asked why the advisory committee had been disbanded. I am told that that was done on the advice of the director of the ONS, in anticipation of the statistics commission being set up.
My hon. Friend the Member for Newcastle upon Tyne, Central referred to the development of a monthly index of services, which is an exciting and important development. Services represent over 70 per cent. of the UK's gross domestic product and it is right that we have frequent and up-to-date information on this key sector. The UK will be one of the first industrial nations to achieve the compilation of that statistical series. That confirms our interest in the matter and our ability to be ahead of the game.
A number of hon. Members referred to the RPI, which is of special importance to the UK economy—as no hon. Member would dispute. It is worth while explaining how it is produced. The ONS is responsible for the compilation, presentation and publication of the index, its sub-groups and subsections. To listen to the hon. Member for West Dorset, one might imagine that it is produced by the Chancellor in a matter of moments. I can assure the hon. Gentleman that the ONS is responsible for producing the RPI. That is a long-standing arrangement, as is the arrangement that the RPI remains ultimately under the authority of the Chancellor.
The detail is produced by the ONS, and any changes to be made to the RPI would have to be announced to Parliament. The Chancellor is answerable to Parliament for those changes, and that is the most direct form of accountability for something of major statistical importance.
§ Mr. Letwin
Does that not amount to saying that, although the technicians are provided by the ONS, all the critical decisions about the compilation of the index are made by the Chancellor of the Exchequer? Can she genuinely maintain that that is in any sense a fulfilment of recommendation (b)?
§ Miss Johnson
The Chancellor remains directly accountable to Parliament for what is done with the RPI. There is no evidence—nor has there been any suggestion—of any political interference. If the hon. Gentleman wishes to egg me on, I can contrast the present situation with what happened to the claimant count under the previous Government: over 18 years it was amended 30 times. Strangely, the vast majority of those amendments led to a large drop in the claimant count. I do not recall the Conservatives objecting to that.
§ Mr. Edward Davey
Why should the RPI be treated differently from every other statistic? The whole purpose 325 of having an independent statistics commission is to get reliability and integrity back into statistics for the reason to which she referred—the abuse of unemployment statistics by the previous Government. Why should the RPI still be under political control?
§ Miss Johnson
The RPI is of special importance to the UK economy and, for that reason, is directly—and under long-standing arrangements—under the authority of the Chancellor, who is accountable to this House.
§ Miss Johnson
No, I will not give way. I have given way plenty of times.
The Government attach great importance to high-quality national statistics that command public confidence. At the heart of the production of those statistics will remain the ONS, both in its role as the major statistics organisation in the country and in its role in enhancing statistics across government.
I am confident that the processes and structures that we have put in place through the White Paper will ensure that, in future, the Office for National Statistics will be an outward-looking and innovative organisation, producing statistics to the highest standards of quality and integrity, and responsive to user needs.
We have great aspirations for the future work of the commission and the national statistician. We believe that we will end up with national statistics of greater transparency, and with more accountability built into the system, than anything we have seen in the UK. This will provide what so many hon. Members have supported—a recognition that we cannot have good government without good information. We believe that the changes we are making in the White Paper will lead to the good information on which even better government can be based.