Statistics and Registration Service Bill
In a debate on the Statistics and Registration Service Bill, which will create a Statistics Board to oversee production of impartial official statistics, Brooks Newmark raises concerns that in several areas it fails to achieve the independence it needs.
6.41 pm
Mr. Brooks Newmark (Braintree) (Con): The intentions that underlie the Bill have been welcomed by hon. Members on both sides of the House as well as by various groups representing producers and users of statistics. While the intentions are clear, however, the delivery is muddled and, as we are dealing with statistics, we should remember that if there is a 50:50 chance that something can go wrong, nine times out of 10 it will.
The weaknesses in the Bill are such that little will change and some of the uncertainty that it introduces will do more harm than good. Although the short title deals with the independence of statistics, the Bill must also guarantee sufficient scrutiny if the reality of that independence is to be realised. The two strands of independence and scrutiny give rise to a third: that of public confidence, which is the real purpose of the Bill, as my hon. Friend the Member for Sevenoaks (Mr. Fallon) pointed out. Lord Moser told me when questioned about the structure and powers of the independent board during the Treasury Committee inquiry that
"if one needs one word, it is 'scrutiny'".
The hon. Member for City of York (Hugh Bayley) also made that point.
We have all heard the results of the study recently conducted into falling levels of public confidence in statistics, but those not wishing to use statistics to prove the lack of public confidence in statisticians need look no further than the number of jokes made at their expense. Alternatively, they could ask the national statistician, who was quoted on Friday as saying:
"People often ask why the national inflation figures, which we publish every month, do not seem to correspond with their own experience."
That was the point that I was trying to make to the Financial Secretary. The example that I gave was that we have the Bank of England basing interest rate decisions on a consumer prices index inflation rate of 2.7 per cent., while the reality for some people, especially pensioners, is an inflation index almost as high as 9 per cent. Is it really surprising that trust is undermined when personal experience seems to bear no relation to official figures? An ONS spokesman said recently:
"The CPI and RPI are specifically not intended to measure what people often refer to as 'the cost of living'."
That reasoning is not good enough, because it suggests that the real point of statistics is not to give the public the information that they want but simply to produce the lowest possible number on which to base policy decisions.
Public confidence stems from clarity and simplicity. Form must follow function in our national statistical architecture, not vice versa. But the form is not just window-dressing. The best impartial statistics in the world are useless if they are not generally believed. The difficulty of the system proposed in the Bill is that it is neither clear nor simple, and its products will be no more likely to be believed by the public than those that are in place at present.
My first point is that decentralisation of the kind preserved in the Bill does nothing to encourage public confidence in statistics produced by the Government Statistical Service, particularly those not designated as national statistics. As the Committee's inquiry found recently, the public are unlikely to distinguish between different sources of data and the varying standards that apply to each. The scattered delivery of statistics by heads of profession who are based within Government Departments may indeed deliver advantages by placing the statistician closer to users, suppliers and policy makers while sharing expertise across Government, but the question remains over who the user of statistics really is: the Government, the public or both?
The statisticians of the Government Statistical Service are consistently double-hatted, because they prepare statistics for public consumption and provide the data which inform and monitor the policy of their parent Departments. The Royal Statistical Society is fairly damning about that confusion of roles-it represents a prima facie conflict of interest. As ever, no one can serve two masters. Even if the decentralised structure of UK statistics is to be preserved-the Committee heard strong arguments that it should be-the Bill needs clearly to address that conflict. If it does not, it will in every sense be a missed opportunity.
Central release of statistics by a single body is one option with compelling advantages for encouraging public trust. It would remove the temptation to use the same departmental officials both to prepare data sets for public consumption and to become involved in their subsequent use by the Departments from which they originated. The Government suggested in their response to the Committee's recommendation in this area that
"all statisticians in Government will have a line of professional accountability to the National Statistician."
Not only is that responsibility absent from the Bill, but the reasoning behind it is circular-or perhaps just optimistic-because it merely returns us to the problems implicit in statisticians serving two masters. What happens in the event of a conflict between a civil servant's professional duty to the national statistician and political duty to his or her Department? I find it hard to believe that statisticians themselves will be content with such a potentially duplicitous situation. Does the Minister really have confidence that statisticians will withstand pressure from their immediate superiors in favour of a duty owed to a physically and professionally remote national statistician? Perhaps the code of practice to be developed under clause 10 will have something to say on that point, but we should not have to wait and see.
Of course, many professionals, including statisticians, are quite used to the idea of reconciling conflicts of interest, and Chinese walls are common in these circumstances. Statisticians have highly organised minds, and they are presumably quite competent in keeping their various responsibilities separate. In recent years, however, the trend has been towards formalising the procedures needed to avoid conflicts of interest, through legislation if necessary. That idea was particularly apparent in the United States in the context of the Sarbanes-Oxley Act.
That is exactly what this Bill is meant to do. We are adding legislative weight to the gradual accretion of safeguards that are intended to guarantee the independence of statistics. The Bill ought to be explicit about how statisticians at the Government Statistical Service are expected to resolve a conflict of interest between professional standards and political expectations. If the Bill does not address such a central conflict of interest, that cannot help but damage public confidence. The public do not want another opaque code of practice or informal Chinese wall. They want, and the Bill must deliver, a simple and transparent division of responsibility and accountability.
My second point is that the Bill must not become a triumph of form over substance by neglecting to provide an inclusive definition of what constitutes national statistics. Not enough has been done to address the false dichotomy between designated national statistics and other official statistics. The Government's consultation response was adamant, if slightly unctuous, about the public's ownership of statistics, saying twice that statistics "are a public good". If that is the case, the public's ownership is still heavily mortgaged to the good will of Ministers.
The Phillis review affirmed the principle that
"statistics about crime, or the performance of the police, schools, hospitals and the like, belong in essence to the public, not to government or the party in government."
However, the Government's response to the Committee's concerns affirmed that
"It will be a matter for Ministers...to propose statistics for assessment by the new Board",
and that idea is central to the Bill. By keeping any statistics that are not "national statistics" outside the purview of the proposed code of practice, the Bill invites Ministers to ensure that their statistical output remains under their control and is subject to less stringent auditing.
It is no accident that the statistics in which the public are most interested-those on health, education and crime-are not national statistics. As we heard earlier, maintaining the existing anomalies of classification does little to encourage public faith in the system. There must be a resolution to issues such as the presentation of quarterly hospital waiting lists, but not monthly waiting lists, as national statistics.
I am also concerned about the absence of the customary "carrot and stick" inducements that might encourage Ministers to ensure that their outputs are designated as national statistics. The vain hope that Ministers will want their statistics to be awarded a quality kite-mark is wishful thinking; I suspect that pigs will fly before Ministers scramble to fly their kite-marks. We need to examine methods of inducement or compulsion.
The Committee was very clear that the Government were in danger of formalising a two-tier structure with their proposals and were missing an opportunity to consolidate and simplify the existing system. We must be more rigorous about divorcing the admitted benefits of decentralisation from damage to public confidence done by ministerial control over outputs. I hope to return to that issue in Committee.
My third point is that in addition to a marked lack of certainty about delivery and content, the Bill introduces some very worrying confusion about the role of the national statistician. I am grateful that the Government responded to the Committee's concerns about the national statistician's title, but in many ways that was the Committee's least significant concern because it dealt with form, not function.
It seems strange that the formal separation of the executive and oversight functions is still lacking in the Bill, given that elsewhere the Government are pursuing the doctrine of the separation of powers with all the fervour of a recent convert to the gospel according to Montesquieu. Much like the staff of the Government Statistical Service, the national statistician is expected to wear more than one hat-as chief executive of the board, head of the Government Statistical Service and chief adviser to the Government on statistical matters.
However, the board's responsibility for both its own statistical output and oversight of the national statistician's work is more problematic, which was a point made earlier. The conflation of executive functions and a role in scrutiny is a recipe for uncertainty and it is not clear how the new arrangements will improve existing oversight. At the same time, the abolition of the Statistics Commission will do little to bolster public faith in the system. The Bill has another spasm of optimism about the national statistician's advisory role by imputing to Ministers a willingness to listen to advice rather than recognising the occasional need to compel them or-in extremis-to remove decisions on statistics from them altogether. In short, the national statistician must not be toothless.
My final point is that the ambiguous place of scrutiny in the Bill raises concerns about the residual involvement of Ministers in the operation of the board. The announcement of the board as a non-ministerial Department has made a positive splash, but if Ministers can continue to play the part of eminence grise with impunity, it remains a sop to independence. That will be of particular concern if the board remains under the auspices of the Treasury, which is the largest single producer-cum-consumer of statistics; many whiffs of Government interference in statistics occur in connection with it.
A suspicious person needs to look no further than the movement of the "golden rule" goalposts, about which we heard earlier from my hon. Friend the Member for Sevenoaks, or the scrap between the ONS and the NAO about whether to classify Network Rail's debt as off-balance sheet. As a suspicious person myself, I have recently drawn attention to the slow drip of more than £11 billion of private finance initiative debt on to the Government's balance sheet in the past 18 months as a result of ONS reclassification. Perhaps my hon. Friend was being diplomatic; I shall not be as diplomatic with the Economic Secretary-although I notice that he is not in his place. Did the Treasury exercise some restraint over the ONS in those belated decisions? If so, how much similar debt still awaits reclassification? We do not want to have to ask such questions of a new board.
The Bill also proposes that the Chancellor should relinquish control of the retail prices index, and I think that everyone agrees that that is well overdue. However, clause 19 provides a caveat to protect bondholders from fundamental changes to the RPI. That is rather like the Chancellor ceding control of interest rates to the Bank of England except in cases when, for example, a change would adversely affect mortgage lenders-a rather pointless gesture. In any event, the proposal is not likely to convince the public that the Chancellor does not retain the whip hand; again, the issue becomes one of public confidence. At the very least, we need to look again at whether a transfer of residual responsibility should not, after all, be made from the Treasury to the Cabinet Office, as was suggested by the Royal Statistical Society. Perhaps that would be "back to the future".
To conclude, the Bill is as much a test of perceived as of real independence. As it stands, the Bill fails to clear the former hurdle before even getting started on the latter. The nuts and bolts will become a matter for debate in Committee, but I am concerned that Ministers are not sufficiently sensitive to the need for the public to have total faith in the Government's commitment to both independence and oversight. If the Bill is not unequivocal about encouraging public trust, there is no point in getting started on the detail. I look forward to a reiteration of that commitment in the Minister's reply.
6.59 pm
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OTHER CONTRIBUTIONS TO THE DEBATE
Mr. Brooks Newmark (Braintree) (Con): I should like to ask a more practical question. The national statistician talked about a lack of relevance to ordinary people's experiences with respect to the consumer prices index. I am curious about how the changes will impact positively on pensioners, for example. They are experiencing inflation of up to 9 per cent., whereas the CPI shows an inflation rate of only about 2.4 per cent.
John Healey: For the conduct of monetary policy and Government economic policy making, we clearly have to have a national index of inflation, and that is established by the CPI. As any close examination of the statistical composition of price indexes shows, over a period some prices of some items will go up and some will fall. That has been the experience of recent years. Clearly, we have to aggregate those figures. Our index serves our purposes well; it covers a very wide range and basket of items, which are constantly updated to reflect modern consumption and economic activity in this country.
I shall give way to the hon. Member for Braintree (Mr. Newmark) once more. I shall then set out some substantive matters to the House as part of the opening of this debate, and-if he and other hon. Members will forgive me-try to make a bit of progress.
Mr. Newmark: I do not mean to try the Financial Secretary's patience, but the fact is that there is a lack of trust. We cannot be cavalier and simply say, "This is what it is." When real people are experiencing a higher inflation rate than that described in the official statistics there is a problem, and I am curious about how the Bill will reconcile those two conflicting elements.
John Healey: The overall inflation rate is the same for everyone. As I have explained, some items may be subject to greater inflation or deflation than others, and patterns of consumption may therefore impinge differently on different people. For instance, the cost of private education has risen considerably more than the general aggregate index-a fact that may concern Conservative Members. The single aggregate index that is required, however, demonstrates a system that is refined in the light of experience. In future it will be set out as a responsibility for the statistics board, and it will be more independent than the current system. Both the hon. Member for Sevenoaks and my right hon. Friend the Member for West Dunbartonshire, as members of the Treasury Committee, have argued for that for some time.
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Mr. Newmark: Is the hon. Lady honestly saying that Health Ministers do not try to spin figures to suggest that things are better in the health service? Is she saying that the Home Office is not trying to spin criminal statistics to suggest that things are better than they are? People look at the reality on the ground, because their own personal experience does not match politicians' announcements. That is the problem, and that is the cause of the lack of trust.
Fiona Mactaggart: The hon. Gentleman is right to say that a lack of trust arises when people's experience differs from the figures. That is my point. He says that the difference arises only because politicians make up facts, but he is wrong. In fact, in many cases statistics are not accurate, and the most undermining factor for any statistical series arises when it is simply wrong. We need to ensure that the Bill addresses that issue properly.
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Mr. Newmark: The issue of public confidence comes down to how politicians manipulate the statistics that they are given. The hon. Lady is right in saying that if knife crime is on the increase, Ministers should be honest enough to say, "Knife crime is on the increase, but break-ins are in decline." They should give all the figures in context. The problem lies in the fact that politicians tend to give the most favourable figure rather than showing the true picture.
Kali Mountford: If that were true I would think it was the problem, but the figures are published in their entirety. If it were true that only the burglary figures were published, that would be a problem. If Ministers came to the House and said, "We are keeping knife crime a secret from you", that would be a real problem-but they do not. There may be a debate about Ministers' response-about whether a knife amnesty was the correct response, for instance. It is right for Parliament to debate such matters, but it is not true that Ministers should not respond to a change in the number of people carrying knives.