Government: Independent Statistics

– in the House of Lords at 4:21 pm on 15th June 2006.

Alert me about debates like this

Photo of Lord Moser Lord Moser Crossbench 4:21 pm, 15th June 2006

rose to ask Her Majesty's Government whether the proposals in the Treasury's consultation document, Independence for Statistics, are intended to ensure independence in all government departments, and not only in the Office for National Statistics.

My Lords, I begin by thanking noble Lords most sincerely for taking part in this short debate. I am very grateful. Having spent most of my professional life in the world of statistics, both as an academic and in charge of the official statistical system, I am well aware that it is not a popular subject, or even particularly respected. When I was appointed director of the Central Statistical Office, as it was then called, the Guardian wrote:

"Like all statisticians, Professor Moser is a man without passion".

So I have gone out of my way throughout my life to prove the opposite. Fighting for good attention to our statistics has been one of my concerns.

I am sure that your Lordships do not need persuading that official statistics matter. Obviously they are crucial for government as a basis for policy-making and evaluation, but government are by no means the only customer, or in my view the main customer. Good quality official statistics are needed in business, in the academic world, in the media, in Parliament and, of course, by all of us as citizens. So when Government propose major statistical reforms, as now, we have to sit up and take notice.

That brings me to the Chancellor's proposal. Put briefly, he intends to legislate for statistics, with direct reporting and accountability to Parliament rather than through Ministers. There is to be a new, independent governing board with key statutory responsibilities for statistics. The Office for National Statistics will be removed from ministerial control and established as a non-ministerial department. Let me say at once that I welcome the principle of independence and the possibility, indeed probability, of legislation.

What evidently led the Chancellor down this route was his concern with poor public trust in official figures. Unfortunately he is right to be concerned, but trust is a complex matter. Of course occasionally there are serious errors or revisions in the figures, especially the very sophisticated national accounts, but overall our professional standards are high and ONS in particular is regarded world-wide as one of the best statistical offices. The problem is not with the figures but more in the way they are used and the spin put on them, quite often by politicians. If you add to that the distrust in authority generally, then clearly we do have a problem, not least because as a nation we do not like figures anyhow. However, I should say that I know that the problem of trust in official statistics is almost unique to this country.

The Statistics Commission has bravely given much support to the system, but I have no doubt that if we manage to distance statistical arrangements from Ministers, as is now on the cards, that will be a great help. So, as I say, I welcome the Chancellor's initiative. What matters now is how it is translated into legislation. On this, our current guide is the Treasury's consultation document. It skilfully covers the ground but there remain some major concerns to be resolved if the reforms are to be a true step forward.

I wish to focus on three points that I hope the Minister will comment on, the first of which is directly related to how we organise our statistics. In almost every other country statistics are organised in a single statistical office. That helps to maintain coherence, consistent standards and linkages. By contrast, we have long had a decentralised system. Each policy department, such as Education, Health or the Home Office, has its own statistical division, and at the centre is the ONS which is responsible not only for most of the economic statistics and the national accounts but, through its head, for co-ordinating the whole system. It is a fragmented system but it is very strong simply because of the closeness of the departmental statisticians to their policy areas.

However, I cannot stress strongly enough that all government statistics, whether they come from departments or the ONS, need to be treated as a single system. This is not only because definitions, classifications and so on must be uniform but because the figures are linked. So I am pleased that the Treasury proposals include the retention of this decentralised system. I am sure that it is wise, but it has serious implications for the proposed reforms.

The Chancellor understandably has focused on the ONS in his independence proposals. However, because the statistical system is, as I stressed, spread over the whole of Whitehall and must be treated as an integrated whole, it would not be acceptable or make sense to confine independence to ONS, leaving departmental statistics as close to their Ministers as at present. The National Statistician, as he is called, and the new board have to be given strong statutory responsibilities covering the entire statistical system. This means lessening the involvement of individual Ministers in their departments' statistics, but I believe that that will be in their interests.

Another reason for thinking system-wide is that most of the problems of trust relate not to the ONS but to departments. Crime, waiting lists and refugees are three examples where that is true. So I emphasise that the responsibility in the new system and its independence must somehow cover the whole area. Obviously that is difficult because there are Ministers and policy officials to be considered.

My second point is on the new governing board, which I welcome as long as it is seen as non-executive. Its role is not to deal with detailed statistical deliveries but to scrutinise the performance of the ONS and the whole system and to report on that scrutiny, as is now proposed, to Parliament. The key executive role must remain with the head of the ONS, the National Statistician, who also has to oversee the system as a whole. This arrangement will have considerable power simply because it is backed, as is proposed, by statute.

There remains, thirdly, one other serious organisational point—the question of how independent is independence? The present proposal is to remove the statistical office from ministerial control and establish it as a non-ministerial department. But presumably such an entity must have some kind of ministerial home—besides which, a Minister will need to answer for it in Parliament. Should we assume that that implies the continued involvement of the Treasury, though short of ministerial control? I suspect that that is behind the proposals. If so, all is well. However, there is an alternative.

In my days and for some years thereafter the government statistician, who was me, reported through the Cabinet Office to the Prime Minister. There is strong merit in this Cabinet Office location and with one of the Cabinet Office Ministers being involved. The point is that, unlike the Treasury, the Cabinet Office does not have a particular interest in one area of statistics—which in the Treasury's case is economic statistics. That lack of particular subject interest means that it gives the centre greater strength over the other departments in our decentralised system.

I want to make one other point on independence and trust. The Chancellor's proposals would go a long way, but they do not totally solve the problem of trust. His proposals must be accompanied by a major change in the present press release arrangements. There is no case for anyone, notably any Minister, to see the figures a day or two in advance as is now the case. I believe that only very few Ministers—those who really need to know—should have advance notice, and even that should be no more than one hour. Moreover, the text accompanying the figures should be limited to a statistical interpretation and not involve political spin. It must be prepared by professionals and not by Ministers. Political comments, which obviously will come, should be separate and as spin-free as one can hope for. If we are serious about wishing to enhance public confidence, those steps are as crucial as the organisational changes proposed.

Finally, if I may, I shall end on a domestic point. It is seriously proposed, and I welcome it, that in future Parliament will be the end of the reporting line for the board and the National Statistician. That is good news, but the details are important. Apart from all the obvious roles that Parliament can play, I hope that committee involvement in this very major task will reflect the whole range of statistics and not only economic statistics, as might be the temptation.

Photo of Lord Wakeham Lord Wakeham Conservative 4:32 pm, 15th June 2006

My Lords, I confess that my main reason for wanting to take part in this debate was to hear the noble Lord, Lord Moser, and to hear the Minister's reply. I believe that this is a fundamental and important debate and issue: the collection and publication of statistical information in a democracy. I congratulate the noble Lord on his speech. I suspect that he has forgotten more about statistics than I know. I can think of nobody who is better able to raise these issues in this House or in any other House than the noble Lord. The Government will be well advised to take a considerable amount of notice of what he has to say.

I do not come with any great expertise to talk about this matter. However, as chairman of your Lordships' Select Committee on Economic Affairs I know that we have occasionally had cause to criticise some of the statistics from the ONS. When the Government made their proposals we considered starting an inquiry into the matter, but when they wisely said they wished to consult, we decided to wait and see how the consultation went and to consider the matter afterwards.

In our preliminary consideration we recognised two very important but slightly different roles for the Office for National Statistics. The first and, I think, the most important is to assist Ministers in making sensible decisions. The ONS has to collect the statistics that government need to make decisions. To that limited and important extent, government cannot opt out. They may or may not have to be involved. The ONS may not produce the figures that government want, but government must have the means of getting the information to make the necessary decisions.

The second and subsidiary purpose of national statistics is to provide the figures that are the basis for the rest of us to know exactly what is going on and to have a firm basis for our consideration. Certainly, on the second issue, it is right that there should be some outside oversight, as statistics must be able to stand up to international and national inspection and be seen to be produced by the very highest and proper standards of international accounting. The Minister will understand what I mean. They should not be changed arbitrarily; the basis on which they are produced should be known and understood; and it would be disastrous if they were changed halfway through. Statistics are needed by the Government to make their decisions, but that cannot be left entirely to the ONS or an independent oversight board. The Government must have these accurate figures. I shall not bore the House with the details, but in paragraph 21 of our last report on monetary policy, we expressed some considerable concerns about some of the figures that were produced.

So while I want to see the ONS as independent as possible of government, I do not believe that government can entirely disengage from it. Ministers must have powers to require further sets of figures to be prepared, with more resources devoted to improving the quality of figures, if they think that they are inadequately connected. I see in some documents a comparison between the independence of the ONS and that of the Bank of England. That is a misunderstanding of what I should like to see from the ONS. That is my main concern.

I have one final thing to say, which may not be agreeable to many people—but I shall still say it. There is an issue behind all of this which I find deeply disturbing and worrying and which perhaps is of even greater importance than this debate. The whole debate seems to arise because it is not possible in this day and age for the Government to produce figures which people are prepared to accept. It has to be from some independent body. All that I would say to the Members on the Government Front Bench is that it ought not to be like that and it used not to be like that.

Photo of Baroness Sharp of Guildford Baroness Sharp of Guildford Spokesperson in the Lords (Further & Higher Education), Education & Skills 4:38 pm, 15th June 2006

My Lords, I pay tribute to the noble Lord, Lord Moser, for initiating this timely and useful debate and what he himself achieved when he was the national statistician, as it would now be called. In the 1970s, he moved to head up the then Central Statistical Office and turned it almost from a cottage industry into something that began to be of very considerable use to policymakers. I shall never forget when, in 1975 or 1976—the noble Lord may correct me on this—we had the first publication of social trends. What a revelation that was about the whole social infrastructure of this country.

We have come a long way since the 1970s. In some ways, the heyday of national statistics was at the end of the 1970s. We then saw a very considerable cutting back in statistical services until the mid-1990s, and now we have seen this enormous flourishing of statistics of one form or another.

We now have a proposal that the Office for National Statistics, which was transferred in the 1990s from the Cabinet Office to the Treasury, should become independent, or at least semi-independent. On the whole I agree with the noble Lord, Lord Moser, that this has considerable advantages. The ONS should become independent. I also agree with his observation that,

"when it comes to reducing trust in official statistics, ministers are the main culprits".

That has been the main problem. When statistics have been issued, for all that the statisticians have done their best to make sure they are the best available, it is the spin that Ministers have put on them that has led to the degree of public mistrust mentioned by the noble Lord, Lord Wakeham. Perhaps it is appropriate that today, when we have been debating the Power report about the loss of public trust in the voting system, we are also talking a little about the loss of public trust in the statistics system. Maybe it is a good idea that, to restore that trust, the office be made directly responsible to Parliament and report to it.

Various analogies have been made here. On the one hand, it has been suggested, and rightly denied, that the ONS might be like the NAO, which answers directly to Parliament. The noble Lord, Lord Wakeham, suggested that the Bank of England was a better analogue. I shall suggest yet another analogue, which falls within my bailiwick: Ofsted, which reports directly to Parliament. Her Majesty's Chief Inspector of Schools is appointed by Parliament, and produces his annual report for it. That is perhaps an appropriate analogy.

I also go along with the noble Lords, Lord Wakeham and Lord Moser, in feeling it is important that there should be a fully independent board, an important element that strengthens the independence of the office itself. The board should act as both a guardian of the office's independence and, ultimately, the guardian of professional standards. In fact, the degree to which the Statistics Commission has already served that purpose should be noted. It has fulfilled an important function over the past few years. It is sad that so little is known about it and that people have not been as aware of its services as they might have been.

It has been said that one of the reasons the Treasury is suggesting this move is that it has been embarrassed on occasion by the Statistics Commission, and would like to get rid of it. However, I hope that any replacement board would be as independent as the commission.

There are interesting features in education that illustrate some of the issues that arise at a national level. I shall quote from a report published last year by the Statistics Commission but written for it by the National Foundation for Educational Research. It is a review of education statistics in schools, and what it says is very true. It talks about the change that is taking place in education statistics, involving,

"a shift from manual collection of uncollated aggregate data which is presented in annual printed tables and interpreted relatively superficially, to electronic collection of matched individual-level data combined into 'data warehouses'. The data warehouses can be interrogated and modelled using sophisticated techniques and used for a range of purposes by different stakeholders to address current educational issues at a variety of levels".

That summarises some of the changes taking place.

In the 1980s tables listed the number of schools and pupils, spending per pupil and the number of GCSEs and A-levels achieved. In the 1990s the national curriculum, the standard aptitude tests and SATs tables were introduced. From then on we began to see the publication of league tables. Huge problems have arisen from the publication of those league tables. Essentially, they comprise very crude data. As everybody knows, how children achieve at school is influenced primarily by their parents' income. We well know that schools tend to reflect the income of their neighbourhood. Inevitably, the results obtained by schools situated in better-off neighbourhoods are better than those of other schools in less-well-off neighbourhoods. As I say, the publication of this crude data has led to enormous problems.

Now we are shifting away from that and towards what the Government term "personalised learning". The SATs data can be tracked over time to individual pupils. Pupils who took their initial standard aptitude tests back in the 1990s are now finishing school. The use of those tests has become increasingly sophisticated. The Government intend to use that data to develop the data warehouses, which can be mined in different ways. However, we should be aware of the limitations and, to some extent, the dangers of that use. The report refers to the uses to which educational statistics can be put by,

"schools and local authorities (to inform self-evaluation and improve teaching) . . . policy-makers (to evaluate the effects of policy initiatives) . . . and academics (to gain longer-term understanding of the educational system . . . In most cases these uses are better met by a comprehensive 'data warehouse' system linked to careful and detailed analysis, rather than through the collection of regular tabulated statistics which are not necessarily focused on uses. It should be noted, however, that this move cannot be successful without high-quality analysis applied to the data—data does not speak for itself, and has to be carefully interpreted so that it can be used for this variety of purposes. More statisticians should be in place at key points in the system and greater access to data for researchers who would add value to it through detailed analysis or matching to other datasets should be encouraged".

Those caveats are extremely important. We are moving into an age where data are easily available. Masses of these data warehouses are being established in one form or another. They pose problems for data protection and interpretation. It is vital that we have at the peak of our national statistics hierarchy people who preserve and defend the profession and its standards.

Photo of Lord Best Lord Best Crossbench 4:48 pm, 15th June 2006

My Lords, on behalf of the social policy organisations that use statistics for their research and analysis—bodies such as the Joseph Rowntree Foundation, in which I declare an interest as director—I thank the noble Lord, Lord Moser, for initiating the debate. While at university I rather grudgingly read the seminal statistics textbooks written by the noble Lord; however, today it is a great pleasure to follow his lead in the debate.

My organisation relies on the Office for National Statistics and admires the excellent work it does. We belong to the Statistics Users' Forum, alongside eminent bodies such as the Royal Statistical Society and the research councils. In our case the researchers whom we support in numerous universities and research institutions are mining the national statistics for insights which can help social policy formulation and policy change. For this work, which is often in politically sensitive areas, it is vital that official statistics are independent of government and are seen to be so. From the perspective of users of official statistics, we welcome the proposals to ensure that they are independent of government and to give oversight of the system to Parliament. Perhaps I could raise four questions that concern us relating to the content of the Treasury's consultation document.

First, the lack of coherent statistics for the different countries of the UK is a major problem for users. Statistics are often produced on different bases, making it impossible either to make comparisons between countries or to aggregate figures to create statistics for the whole of the UK. At the Joseph Rowntree Foundation, we publish with the New Policy Institute an annual monitor of poverty and social exclusion statistics using nearly 30 statistics-based indicators. Surprisingly, it is not possible to make adequate comparisons between countries in the UK on their progress in tackling several elements of poverty and deprivation, including some measures of educational attainment.

We are also publishing a new annual monitor of housing statistics edited by Professor Steve Wilcox of the University of York. Again, I have discovered that incompatibility in the bases for official statistics makes a UK-wide aggregation of the figures impossible. Of course, the devolved Administrations have legal powers over statistical matters in their countries, which means that Westminster has limited legislative opportunity to intervene. That argues the case for the new central organisation taking a special responsibility for ensuring coherence between countries and holding the system together. Are any steps contemplated for enhancing the opportunities for comparison through achieving greater compatibility of the statistical evidence? That could help us all to understand what works in social policy and practice.

Secondly, we feel that facilitating user access to statistics needs to be an explicit objective of the new body. To that end, we want to see user input into the new body's planning processes so that user needs can be identified, evaluated and met. The consultation document suggests that the proposed board brings a perspective on user needs, but that is rather vague. Proper structures and funding will need to be in place to ensure that happens. Could places be reserved on the board specifically for user representation?

Thirdly, we would like to see the proposed body having oversight of all official statistics, some of which, including many on the health side, are produced outside departments and are not classified as national statistics. The new body presents the opportunity for oversight of a more comprehensive range of official statistics, which would bring more statistics within the quality control and code of conduct of which the proposed new body will have oversight. Could the scope of the proposed body be widened in this way?

Finally, from the user perspective, access to information is sometimes not allowed on somewhat zealous grounds of confidentiality. The Joseph Rowntree Foundation is very interested in the social issues that affect neighbourhoods, which are relatively small geographical areas. That kind of analysis is difficult if administrative data are not released at a sufficiently local level. The confidentiality of individuals is important, but this line can be taken too far. We would wish to ensure that the new body is empowered to enable increased access to such local data. Will the Minister look at the role of the new body in that regard, to ensure that the somewhat draconian guidelines currently in place can be reconsidered?

With those four questions, I conclude, with appreciation for the Government's efforts to ensure the independence of official statistics, which is the essential prerequisite for so much social policy analysis, and with thanks to the noble Lord, Lord Moser, for initiating this debate and for all that he has done to enable social policy-making to be based on sound statistical evidence.

Photo of Lord Northbrook Lord Northbrook Conservative 4:54 pm, 15th June 2006

My Lords, like other speakers, I am grateful to the noble Lord, Lord Moser, for initiating this debate. I claim no special interest in this subject, except as a director of a fund management company. I see the way that economic statistics move the markets. So, from that viewpoint, their accuracy, as far as that is possible to achieve, is vital.

There has been cynicism about statistics for many years. Andrew Lang, the prolific Scottish novelist and expert on mythology and folklore, is noted for saying:

"An unsophisticated forecaster uses statistics as a drunken man uses lamp-posts—for support, rather than illumination".

Yet statistics, not least of all, official statistics, matter. They are a necessary input into vital policy decisions by Governments, companies and individuals. To take just one example, the Bank of England's Monetary Policy Committee, when making its interest rate decisions, relies heavily on a battery of survey evidence and official data—even though those data are inevitably lagging indicators.

Unfortunately, public confidence and trust in official data have deteriorated in recent years, at the same time that users of statistics have become more demanding. The much-respected head of the Nuffield Trust, Sir Denis Pereira Gray, said at a recent seminar at the Cass Business School that the crisis of confidence in national statistics is getting worse. As the Financial Secretary to the Treasury, John Healey, stated at the same seminar, there is a need to build and reinforce public trust in the statistical system, which will take a long time.

Suspicions remain, as other speakers have mentioned, that there is ministerial interference in the classification and presentation of official statistics, and the Treasury, as I will demonstrate, is a prime culprit in that exercise. The first example was the altering of the goalposts in determining the golden rule. Its refusal to classify Network Rail's liabilities of some £17 billion as public sector debt was incorrect. Also, the extent of private finance initiative liabilities is understated, according to Capital Economics, by some £25 billion, thus ignoring the requirements of UK accounting standard FRS5, which seeks to ensure transparency in corporate accounting for off-balance-sheet items. Also the public sector unfunded pension liability has, according to the actuaries Watson Wyatt, been understated by some £230 billion and the local government pension shortfall by some £71 billion, because too high a discount rate has been used.

So it is ironic, but nevertheless welcome, that the Chancellor, as Minister for national statistics, has made moves to improve the independence of statistics. Last November, he announced that the Government intended to,

"legislate for . . . the creation of an independent Governing Board for the Office for National Statistics, with delegated responsibility for meeting an overall objective for the statistical system's integrity".—[Hansard, Commons, 28/11/05; col. 78.]

In March this year, the Treasury launched its consultation document. I found the document a bit of a curate's egg; it has some merit. One promising proposal is to make the ONS a non-ministerial department directly accountable to its independent governing board and Parliament. Professor David Rhind, chairman of the Statistics Commission, stated at the recent Cass Business School seminar that the key points about the board were its two roles: the oversight of the Office for National Statistics and scrutiny of all government statistics. The board also has an important role in reporting to Parliament.

However, I am concerned that unless the powers given to the governing board are considerable, it may not be able to resist ministerial interference in the ONS's statistical output. At a recent seminar, Professor Adrian Smith, principal at Queen Mary, University of London, had concerns about how the board would function. Would it have executive powers, a monitoring role, or both? I put the same question to the Minister.

At the same seminar, John Pullinger, chairman of the Royal Statistical Society national statistics working party, thought that the board could play a leading role in getting departments to work together to create a single statistical system but that would be successful only if it was non-executive. He believed that executive responsibility, as the noble Lord, Lord Moser, stated, should remain with the National Statistician, who should have a statutory duty to lead the ONS and to co-ordinate colleagues across government departments so that there is a single agreed picture of what is going on in society and the economy.

One move that may improve confidence in the ONS's output is for the Treasury to relinquish its role as the ONS's parent department. Even if the ONS becomes a non-ministerial department, as proposed in the document, it is likely that there would still be Treasury departmental involvement. An ideal could be an organisational structure similar to the National Audit Office or the Electoral Commission, answerable to Parliament rather than to the Treasury. Or, as the noble Lord, Lord Moser, stated today and in the debate of 23 February last year, the ONS could report to the Prime Minister, through the Cabinet Office, where its predecessor was until 1989. However the document is silent on this subject.

In my view, it would be foolish to see independence as a magic solution: scrutiny is also key, either through a new body or a strengthened Statistics Commission. A scrutiny body should be able to influence the quality of official statistics over time. It would help to identify a gold standard applying to key statistics and it would drive up the quality of other statistics by establishing high expectations.

The document's biggest failure, in my view, is the relative discussion of the data issued by departments. These include such politically sensitive issues as the Home Office's crime figures and the Department of Health's hospital waiting times, or subjects such as public sector productivity, where early experimental data from the ONS showed a truly dire picture.

These departmental data are especially vulnerable to ministerial spin on release. The big question is: what can be done about these figures? I ask the Minister whether the Government would consider the radical proposal to centralise all data compilation and delivery in the ONS, out of government departments. Alternatively, a half-way house would be to transfer release procedures from the departments to the ONS, distancing them from any accompanying ministerial statements. Without that transfer of power, the notion of independence of statistics is a pipedream.

Photo of Lord Turnbull Lord Turnbull Crossbench 5:03 pm, 15th June 2006

My Lords, I too am grateful to the noble Lord, Lord Moser, for instigating this debate. Technically we are one day late in responding to the consultation document, but I am confident that the Treasury will find it worth while waiting an extra day to take account of the House's views.

I broadly welcome the Government's proposals, but not because I believe there is a crisis in UK statistics. I agree with the finding of the Statistics Commission that,

"the statistical quality of official outputs [in the UK] was considered to be generally good and to rival the best in the world".

There have been a number of significant improvements in recent years: the development of small area statistics; work, still ongoing, to unravel the difficult issue of measuring non-marketed government output in, for example, health and education; and the creation of the integrated household survey. But what is good can always be improved, not just in the technical quality of the data, but more importantly in public confidence in the way in which statistics are released and handled.

In terms of governance, the changes introduced in 2000, championed strongly by the current Leader of the other House, but with lukewarm support and even opposition from some colleagues, were an important advance. The concept of national statistics underpinned by a code of practice was designed to provide a brand, a quality mark, for all major series, whether produced by the ONS directly or by departments. At the same time, the Statistics Commission was set up to advise on quality assurance and integrity.

In considering statistics, I have found it helpful to divide the field into four. First, there are those statistics produced by the ONS, largely drawing on data from third parties: the RPI, average earnings index, national accounts and so on. Secondly, statistics are produced by departments on a decentralised basis, arising out of the conduct of their businesses, such as crime, education and health. Many of these series have also been adopted as targets in the department's PSA objectives, but this has produced a conflict of interests, and problems may arise when a Minister wants to show a department's achievement in the best possible light. There is the suspicion that if there is a Select Committee on a Wednesday, good news is released on a Tuesday, bad news on a Thursday and very bad news on a Friday before a Bank Holiday.

Thirdly, there are issues of classification which may make very little difference to the real world, but the Treasury may be suspected—as has been suggested today—of trying to lean on the statisticians. Fourthly, there are measures of the non-market services, where an improvement in quality, such as a smaller class size, can be misrepresented as a fall in output.

Most of the difficulties arise in the last three categories, as there is general acceptance that market-sensitive statistics must be handled and released as carefully as company results. But we must remember that reputation is indivisible. If one Minister plays fast and loose, the damage is done not just to his figures but to all of the Government's figures. The proposals are an advance, and I suspect that there will quickly be a consensus on the principle of entrenching independence by providing a statutory basis. The examples of the Bank of England and the Competition Commission are encouraging.

So there remain essentially four issues and choices. First, should we retain the division between statistics directly produced by the ONS and those produced by departments on a decentralised basis, but within a framework of standards set by the ONS? Like the noble Lord, Lord Moser, I think there is no real choice here. Just as Marks & Spencer would insist that the data on sales in its stores were produced by its managers rather than an outside agency, so the statistics on health and education must be produced by those responsible for delivering those services. But the code of practice must be given greater force and bite for all national statistics, whether produced by the ONS or departments.

Secondly, should Ministers be entirely free to pick and choose which of their statistics should be incorporated into the suite of national statistics and the disciplines of the code? No. There should be some checks and balances. For example, the new statistics board should have the right to propose changes. If the Minister did not wish to accept them, they should be required to justify their view.

Thirdly, on the structure of the new governance arrangements, should we simply put the existing Statistics Commission on a statutory basis? Or should we, as proposed, create a new unified body with a non-executive chair and a board of non-executive directors with the National Statistician—the title I prefer—as the professional head of department? Some have argued that the board cannot be responsible for both the delivery and the oversight of the system—pretty much the same arguments that led some, including myself, to criticise the new structure for the BBC.

In this case, however, I support the Government's proposals. My main reservation about the Statistics Commission, particularly in its early days, was that it spent too much time in second-guessing mode, in conflict with the National Statistician rather than forming an alliance with him in tackling the real source of the problems in departments and with Ministers. A unified organisation would be better for creating a common sense of purpose. The division of responsibilities between the board and the National Statistician should be addressed in its internal structure. Incidentally, I welcome the proposal to create a ring-fenced budget for the board.

Fourthly, should the new body be part of government, as a non-ministerial department, though reporting directly to Parliament without the intermediation of a Minister? Or should it be, like the NAO, a creature of Parliament? I agree with the Government on this. Statistics are an essential component of the executive part of government. If the NAO stopped work, Parliament would be inconvenienced. But if the flow of statistics were interrupted, the management of the economy and the delivery of public services would quickly grind to a halt.

Fifthly, who is the residual Minister? I understand the case which the noble Lord, Lord Moser, has made for the Cabinet Office. I remind him that that department has had seven Ministers in four years, and something like nine months in which it did not have a senior Minister at all.

I have one final observation. The development of pensions policy depends vitally on well based demographic projections, which we have not always had. In his review of the Government Actuary's Department, Sir Derek Morris recommended that the responsibility for demographics be transferred to the ONS. I welcome that. To make those projections successfully requires mobilising a wider range of inputs than just actuarial ones, and I believe that that can be better done within the ONS.

In conclusion, the Government's proposals recognise that high-quality statistics that command public confidence are a huge national asset. Our objective should be to take something that is good and make it genuinely world class. These proposals, with some tightening up, can take us towards that goal.

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Spokesperson in the Lords, Treasury, Spokesperson in the Lords, Work & Pensions 5:11 pm, 15th June 2006

My Lords, I follow the noble Lord, Lord Turnbull, by saying that I am sure that we would appreciate an assurance from the Treasury that a delay of one day in responding to the deadline is not statistically significant.

I agree with the noble Lord on one point, which is that demographic statistics should be transferred to the ONS. Wearing my other hat as a pensions spokesman, I remember that, in researching the problems of ageing a few years ago, the House of Lords Economic Affairs Committee was most unimpressed with the service of the Government Actuary's Department and its speed of adjustment to changes that were pretty obvious to the rest of us. I support moving demographic statistics to ONS.

The noble Lord criticised the Statistics Commission for not working sufficiently in alliance with the previous National Statistician, but I do not think that he has that quite right. I think that the problem was the previous National Statistician, who needed something robust and independently critical. I hope that this National Statistician and other national statisticians will be able to work more in alliance. As noble Lords may recall, the problem was with that particular gentleman, Mr Cook.

It is an honour to respond from this Bench to the noble Lord, Lord Moser. My noble friend Lady Sharp described the British statistical service in the 1970s as a cottage industry. Just to declare my own very ancient interest, in 1968, at the age of 21, and six weeks after I sat finals, I was put in charge of the cost of living statistics of a country of 10 million people. That was in Kenya, so if Britain was a cottage industry, I must have started in a statistical mud hut.

The first key question is: how independent is independent? I do not find the consultation document as clear as it might be. With long experience of the Treasury, I am worried why that is. My view is that the Treasury should no longer be involved when the changes take place. In so far as there is any ministerial responsibility, it should be through the Cabinet Office. The point that the noble Lord, Lord Turnbull, made about the number of Ministers in the Cabinet Office, which applies to all sorts of departments, is an argument about speed of change of Ministers in government. It does not just relate to the luck that we happen to have had one Chancellor of the Exchequer for the past nine years, so I do not think that it is a very good argument.

The second key argument is about the pre-release of statistics. Evidence from the Royal Statistical Society and other organisations has shown that our practice falls well short of the best international standards. I do not see why there needs to be pre-release to Ministers and civil servants. I believe that having, typically, 30 or 40 hours is an open invitation to unfair spin. I do not know what else it can be. I am prepared to be persuaded if there are one or two individual examples that the Minister can give me about why pre-release might be necessary. Perhaps he would like to give us two or three examples now, or, if he has not got them, perhaps he could write to us. But I think that, except in exceptional, clearly defined cases, the numbers should be released at the same time for all parties, including outside interests and so on, to look at on a fair basis. I think that that is a fundamental point, and I notice that it is not an issue that is addressed properly in the consultation document. I would welcome a substantive answer on that.

The point about having proper control and co-ordination across departments was put very well by the president of the Royal Statistical Society, Tim Holt, who said that the system needs to span the whole of the Government's statistical service, that the document produced by the Treasury focuses on ONS and does not give as much attention to the wider statistical situation as it should, and that he is worried that individual departments could be narrow fiefdoms. He set out the criticism very well in his evidence to the Select Committee. I am not sure that I get from him any necessary good prescription and I think instinctively that I would be against the total centralisation suggested by the noble Lord, Lord Northbrook. However, clearly that is an issue and I would be interested to hear the Minister's response.

My final point—we discussed this in a debate in this House 18 months ago—is about the appointments process. We must make sure, as has been suggested by the Royal Statistical Society, that leaders of opposition parties and First Ministers are involved and consulted in the appointment of the National Statistician. It is an important and sensitive job. I remind noble Lords that in no other European country does the appointment in any way rest with the relevant Finance Minister. But I think that the most significant question now is about the pre-release of statistics.

Photo of Baroness Noakes Baroness Noakes Shadow Minister, Treasury, Shadow Minister, Work & Pensions 5:16 pm, 15th June 2006

My Lords, it is a pleasure to take part in this important debate. I am particularly grateful to the noble Lord, Lord Moser, because a few weeks ago a contact of mine, who knows much more about statistics than I do, alerted me to the problems in Independence for Statistics. While I was thinking what to do about those problems, the noble Lord, Lord Moser, tabled his Question. I am enormously grateful to him because it saved me having to decide what to do. I am very glad that he has given the House the opportunity to debate these issues. As other noble Lords have said, he is pre-eminently well equipped to do that on behalf of the House.

As some noble Lords have said, a key challenge facing our national statistics is one of public trust. A MORI poll late last year was truly appalling. It showed that not much more than a third of people felt that government figures were accurate and that 60 per cent thought that the Government used figures dishonestly. Trust relies on perception and it does not much matter what the facts are. These figures show the size of the mountain that must be scaled. I am particularly surprised to find that, in the Government's consultation document, there is little or no mention of this crucial issue of trust.

I shall not pretend that there were no problems with national statistics before 1997. It is plain that there were some, whether of perception or fact. The Labour Party manifesto in 1997 pledged the creation of an independent statistical service. When in power, the Government did not exactly rush to achieve that, but in 2000 they did introduce the Framework for National Statistics. Some of those changes were potentially helpful but they did not go far enough. In the mean time, confidence in national statistics has deteriorated since 2000. Various prominent issues have come to light, some of which were laid out in the excellent speech of my noble friend Lord Northbrook. That is why we are going round the loop again with the Government's latest consultation. The fact that the previous changes lasted only six years is no testament to the judgment of the Chancellor back in 2000.

National statistics have been bound up in politics and it is hardly surprising that they have been tarred with the same brush. But there is another way, and it is based on the genuine independence of the statistical service. However, I do not believe that that is what the Government truly have in mind. What they have planned is a series of smoke and mirrors designed to achieve the illusion of independent national statistics with the practice in fact falling far short of that.

The Government say they propose to introduce direct reporting and accountability to Parliament rather than the Treasury. While a non-ministerial government department model does have some merit compared with the executive agency model, it does not go far enough. The Chancellor has not taken up the model of the Comptroller and Auditor General, who is an officer of Parliament, whose budget is set by Parliament and who cannot easily be removed from office. My party proposed that before the last election. I think that my noble friend Lord Wakeham would not agree with that. However, I suspect that the attractions of a model so far removed from Government are rooted in the extent to which trust in statistics has been so clearly undermined. That has accelerated in the last 10 years.

The National Statistician, to be renamed the Chief Statistician, may well appear before parliamentary committees under the new proposals, but he will remain ultimately accountable to the Chancellor. That was admitted by the Financial Secretary to the Treasury in evidence to the Treasury Committee in another place. Under the Government's proposals, the purse strings will still be held by the Treasury, whatever the consultation paper says about money being settled outside the normal spending review. And the poor statistics office will not even have another government department such as the Cabinet Office as a sponsoring department to go into bat against the Treasury when funding issues are being discussed.

The Chief Statistician will be appointed formally by the Crown, but we know that, in practice, that means the Chancellor will be making the recommendation. The Government say they will make the recommendation after an open competition in line with the Commission for Public Appointments guidance. That does not mean that Ministers will not interfere in the appointment process. The plain fact is that they can do so in various ways, as other government departments have amply shown in recent years.

There will be a new governing body, but the chairman will be appointed in the same way as the Chief Statistician, with all the problems to which I have just referred. Other non-executives will be appointed by Ministers in consultation with the chairman. We can see the Treasury's fingerprints accumulating all over this new body.

The role of the new governing body lacks clarity. It is supposed to oversee official statistics, including maintaining the national code of practice and assessing national statistics against the code. But the board will have both executive and non-executive members, including the Chief Statistician, who will head the statistics office. The board will have to assess the performance of the statistics office. That will require the fiction of an independent function within the statistics office reporting direct to the non-executives on the board. That is simply not credible.

The new board will have some of the elements of independence which are part of the separate nature of the current Statistics Commission. So when the Government transfer the functions of the commission to the new body, that will in effect make the new body both judge and jury on matters of statistical policy decisions. None of that is satisfactory. It is also unclear precisely how the new arrangements will apply to statistics which remain under the control of other government departments. My party's proposals before the last general election envisaged a national statistics office which would be properly independent of Government and responsible for the statistical methods and audit of all government departments and agencies. There is nothing approaching that in the Government's proposals.

Under the Government's plans it is for the Government to decide what statistics count as national statistics and are therefore subject to the new regime. I agree with the noble Lord, Lord Turnbull, that that is unsatisfactory. There is nothing in the government consultation document to deal with the issue of the early release of statistics to Ministers, which enables them to get their spin machines working overtime. The noble Lords, Lord Moser and Lord Oakeshott, rightly criticised that.

The Government describe their proposals as entrenching independence in legislation. The truth is that they will be entrenching spin in legislation. The nation will be the poorer for that. The proposals go nothing like far enough to secure the kind of independent statistical service, with a strong remit running across the whole of Government, that the country deserves. I put the Minister on notice that we will be arguing strongly on those lines when the Government produce their proposals in legislative form.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Government Whip, Government Whip 5:25 pm, 15th June 2006

My Lords, I start by thanking the noble Lord, Lord Moser, for initiating this debate today. As others have recognised, no one speaks with more authority on the subject than him. The debate comes at a good moment, as the public consultation on the Government's proposals concluded yesterday. That was also the final day before the meeting of the Treasury Select Committee. I have no doubt that our deliberations will be put into the pot for consideration.

I said that it was a good moment in the process, but I am bound to say that this is not a very good time for the debate, although that was outwith our control. I am grateful that we were not beguiled by the noble Lord, Lord Tanlaw, into taking double summer time, because we would have missed the second half of the match as well as the first.

All views gathered today will feed into the further development of the Government's proposals, which are designed to ensure the independence of statistics and that those statistics are produced to high standards of quality and integrity. Those goals, which the Government propose to underpin through legislation, are widely shared across the statistical stakeholder community. That has been demonstrated both in this debate and in the evidence given in the other place, as well as in the consultation responses received by the Treasury.

Since 1997, the Government have introduced wide-ranging reforms to establish a platform of economic stability, to promote work and enterprise, to tackle poverty, and to deliver sustained investment to modernise public services. Delivering independence to the Bank of England, creating the Financial Services Authority and reforming the regulatory framework were all reforms based on good corporate governance principles underpinned by legislation.

The Government's proposed reforms for statistics are in a similar vein. Strong, reliable and independent official statistics are a vital component of modern democracy. They provide information on all aspects of our economy and society. The noble Baroness, Lady Sharp, spoke about the importance of statistics and how they create a real picture of what is going on, which can be misunderstood if the data are not available. They are a key resource on which Government, business and the wider public rely to tell them whether Government are delivering on their commitments.

They are also a key resource for business, academia and the wider community. They play a key role in enabling Britain to meet the challenges and to rise to the opportunities of the global economy. So it is important that they are of high quality, relevant and reliable and that the public trust them. Government statisticians in the UK—both in the ONS and in other government departments and agencies—have world-class skills and training. The public recognise that. The noble Lord, Lord Turnbull, said that that reflected the quality in the system. According to a survey to which the noble Baroness, Lady Noakes, referred, the public believe that the statistical quality of official outputs in the UK is generally good and rivals the best in the world. But the same survey noted that only 17 per cent of respondents agreed that official statistics are produced without political interference. The issue of trust was raised by a number of noble Lords, including the noble Lords, Lord Wakeham, Lord Moser and Lord Northbrook, and the noble Baroness, Lady Noakes.

Trust is not only an issue for the Government. Time and again, official data have been challenged by Members on the opposition Benches as being a fiddling of the figures. We heard that again about Network Rail. We did not today hear about reclassification of maintenance of roads, but I thought that we might. The reality is that these things are independently determined. The Statistics Commission reviewed Network Rail decisions and PFI decisions and determined that there was no government interference in the changes that were made. If we are all to avoid spin on statistics, that should run across the political spectrum. This is why the Government propose to legislate for independence in statistics, which the community has been calling for for many years. This is the next step in an evolutionary process that began in 1998 and culminated with the introduction of the framework for national statistics in 2000. This framework established for the first time clear roles and responsibilities across the official statistical system, establishing in particular the post of the National Statistician as the Government's chief statistical adviser, setting up the independent Statistics Commission to advise on the quality and integrity of the statistical system, and establishing the concept of national statistics, aimed at providing an accurate, up-to-date, comprehensive and meaningful description of the UK economy and society.

The framework established sound structures, which the Government have reviewed and now propose to build on. Other noble Lords have referred to the key elements. The Government intend to maintain the current decentralised system of statistical production, which benefits from maintaining professional expertise across Government and keeping statisticians close to policy work, key customers and suppliers in departments. I am pleased that this had the support of many noble Lords but not, I accept, of all. I recognise that the noble Baroness and her party will be heading in a different direction in the decentralisation debate. That is why, in entrenching independence in legislation, the Government propose to establish a new independent governing board to provide strategic direction and to ensure quality and integrity across the wider statistical system.

The statistics office will be a non-ministerial department and will be led by the Chief Statistician as chief executive who, rather than reporting to Ministers as he does now, will report to the governing board. To extend independence, the statistics office will be funded through special arrangements outside the normal spending review system. This is not, I suggest, smoke and mirrors. Some have asked how far these reforms will extend across the statistical system. I understand those concerns and that bit of the debate. The Government propose to strengthen the current system by placing a new statutory responsibility on the governing board to assess and approve all national statistics produced both in the ONS and across government departments against the statutory code of practice. Only those statistics independently adjudged to meet the required standard of quality and integrity will be approved as national statistics, which will provide an important assurance to users of statistics.

The noble Lord, Lord Wakeham, referred to the necessity of consistency in data, which is why the development of the statutory code is so important. That, of course, will be an issue for the board. In addition, the Government also propose that the board will have a role across the full set of official statistics, advising Ministers on areas of concern about quality, maintaining an overview of the coverage of the statistical system, and ensuring it meets key user needs. A number of noble Lords have talked about the extent to which statistics might be outside that system, and it is right that the proposals envisage Ministers using and producing statistics in departments which they do not have to offer up as national statistics. That process will continue. It seems to me that there is not necessarily any great difficulty in all that. In some instances at the moment, some monthly data, for example in the Department of Health, are not national statistics, but the relevant quarterly data are. That does not necessarily create a great problem. At the end of the day, departments must have responsibility for their budgets and the way in which resources are allocated. However, if any department were to persist in using inappropriate data that are not in the national statistics system, surely that is the sort of matter that would quite properly come under the scrutiny of Select Committees when Ministers have to account for their departments. Taken together, that creates the framework which the noble Lord was seeking. In addition, the Government propose that the board will have a role across the full set of statistics, as I said.

Some noble Lords asked about the role of Ministers, what they will retain under the reforms and where the Ministers responsible for statistics would be located in Government. These reforms are designed to take Ministers further out of the process, including, as I have said, by making the statistics office a non-ministerial department. It is closer to the Ofsted model, which is a better analogy than the NAO. I am pleased that that also has the support of a number of noble Lords, including the noble Lord, Lord Turnbull.

Further safeguarding the independence of the system, appointments to the new board will be made through open and fair competition in line with the guidelines of the Office for the Commissioner of Public Appointments. We have heard again scepticism from the noble Baroness, Lady Noakes, but this works in other situations. Again, Ofsted is an example. There is no doubt about the continuing importance of specialist statistical expertise at the highest level. The Government propose an enhanced role for the Chief Statistician, who will be responsible and accountable for leading and managing the statistics office day to day. He or she will be a member of the board advising as required on technical, professional issues, including drafting the code of practice, and taking part in the high-level corporate decision-making process. The largely non-executive board's activities will be oversight, scrutiny and direction. It will be fully and directly accountable to Parliament for the statistical system.

A number of noble Lords, including the noble Lords, Lord Moser and Lord Oakeshott, and the noble Baroness, Lady Noakes, touched on pre-release. The Government recognise that current pre-release access arrangements have been widely highlighted as contributing to an ongoing perception of ministerial interference in the production of official statistics, although, on examination, no great evidence for that has been brought forward. The principle of early access is widely accepted internationally. It is important that Ministers are able to understand and to respond immediately to statistical releases relating to policy areas for which they are constitutionally responsible and accountable. That is why the Government raised the issue in their consultation and are considering how pre-release access might operate in the future to best achieve this balance between an informed Government and the desire to reinforce the independence, integrity and quality of statistics produced in Government.

I will try to deal with as many questions as I can. The noble Lord, Lord Best, talked about the devolved Administrations. The Government have no intention of reopening the devolution settlement. There is a concordat. I am aware that it has been criticised. If the devolved authorities are open to this, we are keen to explore with them how the concordat might be revised and strengthened. Of course, that is not a new issue.

The noble Lord, Lord Best, also mentioned data access and burden on business. Any move to extend data access for statistical purposes would need to be accompanied by safeguards and enhanced data protection provisions. The proposal on statistical users is that the board will, as the Statistics Commission now does, keep an overview of the coverage of the statistical system, ensuring that it meets key user needs. We expect the membership of the independent board to include those who can bring a perspective on user needs and public interest. As I said earlier, the board will be largely non-executive, drawing on people from academia and business.

The noble Baroness, Lady Noakes, made a point about the NAO model. We do not think that this is the right way forward. The National Audit Office has a special role to ensure that government departments have achieved value for money when using resources that Parliament voted for it. That is a different situation from national statistics, which are used in a variety of ways and are a matter very much for the Executive. However, we have strengthened parliamentary scrutiny and involvement with the proposals before us.

I am confident that the Government's proposals are practical and pragmatic. They build on the existing strengths of the UK statistical system and will deliver high-quality statistics that command public trust. However, as I said at the beginning, the Government will now consider all the contributions made to the debate over the past few months, with the intention of putting a Bill before Parliament as soon as possible. While it is important not to rush a new system into being before getting it right, it is also important not to lose the momentum created over the past few months and years.

House adjourned at twenty-one minutes before six o'clock.