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.
"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.