Second Reading debate resumed.
My Lords, it is not often that a Bill finds such widespread support on all sides of the House, at least for the intentions behind it. I join in encouraging the Government in their introduction of legislation to address the serious issue of the erosion of public trust in government statistics. However, the Bill does not go far enough. It gives us a singular opportunity to devise a robust framework for the delivery and oversight of national statistics. It is highly unlikely that parliamentary time will be found to revisit the issue in the near future, so it is incumbent on us to get it right this first time.
It would be tempting to classify the debate as a technical discussion of an esoteric subject. In some respects, this may be the case, but the Bill deals with the governance and oversight structures of statistics of national importance in assessing the performance of the Administration, in informing budgetary decisions involving billions of pounds, and in informing the capital markets. It is therefore vital that the production of national statistics is, and is seen to be, independent of the Administration whose performance they are used to assess. It is quite clear that the general public now see government information and statistics in the context of spin. Perhaps the moving of the Chancellor’s “golden rule” goalposts is a good example of selective redefinition that is expedient to the Government.
Most have been supportive of the work and quality of the Office for National Statistics, and rightly so. The criticisms have largely been levelled at ministerial interference; but there have been some instances in which the ONS has been accused, correctly or incorrectly, of bowing to government pressure. One example was the classification of Network Rail’s debt. Network Rail has no shareholders, and its inception was preceded by the Government’s hugely controversial decision to force its predecessor, which was listed as a plc company, out of business. Network Rail is fully backed by the Government, who provide a de facto guarantee of its debt. Yet according to the then National Statistician, Network Rail was considered to be a private company. This decision, which was both convenient to the Treasury and very difficult to justify, is exactly the sort of situation in which demonstrable independence would have been of tremendous value to the ONS itself. The Government have the opportunity to make an historic move akin to granting independence to the Monetary Policy Committee. The degree to which Ministers mean what they say in support of independence will be measured and tested by their willingness to remove the constraints of ministerial control from the production of statistics.
The Bill follows good corporate governance principles in establishing a board comprising a chairman and a majority of non-executive members, along with the National Statistician as chief executive. Thus far, it mirrors accepted best practice in the private sector; but why is it also required to exercise an oversight and regulatory function? As I understand the arrangements—the Minister will no doubt be able to put me right when he winds up the debate—we have moved from a separate oversight authority in the form of the Statistics Commission to one that is integrated with the delivery agency. I cannot see how this would be considered a positive development in the separation of functions and the guaranteeing of independence. Perhaps the Minister will explain that a little further.
There will always be a potential conflict in government departments that produce the statistics by which their own performance is measured. Yet we must deal with what is feasible and cost effective, and recognise that this is inevitable. It would not be practical to devise a cumbersome bureaucracy that duplicated the departments’ information-gathering infrastructure for all measures. It must therefore be for the board and not for Ministers to determine which sets of information are deemed to be national statistics. I am sure that amendments will be tabled in this regard at later stages of the Bill.
The status of the code of practice should also be enhanced to ensure that the public can have increased confidence in the statistics that fall under the auspices of government departments. I noted with interest the comments of the noble Lord, Lord Moser, on the relative problems of ONS statistics versus those produced by departments themselves. He felt that the former were much more robust in general than the latter.
Much has been made of pre-release, which is one of the essential criticisms of how statistics are released: the Government have the upper hand and a story ready to go before anyone else has had a chance to read the fine print. After the Chancellor’s Budget speech, we all know the importance of reading the fine print before reacting. The noble Lord, Lord Desai, said that those who spun official figures were found out quickly; the Chancellor probably got away with about two or three minutes in his recent speech.
I have listened to the arguments in favour of pre-release. I accept some of them, particularly, like many noble Lords who have spoken or will speak, as I have been a user of such privileged information in the past. I understand that my noble friend Lady Noakes and her colleagues on the opposition Front Bench believe that decisions on pre-release should be put in the hands of the board. The difficulty is that, essentially, we are talking about a political judgment, not about the quality of the statistics or the type of information. It is about politics, so it may be a little difficult to expect the board to make a political judgment. Perhaps we should look at guidance being written into the Bill, against which the board could make its judgments. However, it should not be left entirely to the board; equally, it should not be left to Ministers either. In recent years, the Government have had a tendency to create a problem, to invent some regulations to deal with it and then to find ways to get around their own regulations. I hope that we are not dealing with such a case in this instance. Despite these reservations, I support the thrust of the Bill and look forward to debating it further at the next stages.
My Lords, it is with some trepidation that I intervene in the Second Reading of this Bill on the Government’s statistical services. I am no statistician, unlike others in this House with much greater qualifications to be heard, prominent among them my noble friend Lord Moser, whose views on this Bill I broadly share. Statistics matter to us all. They are an essential foundation for policy-making, act as an early warning when damaging trends are beginning to develop and are at the heart of handling such hugely complex issues as global warming and climate change. We need to take statistics seriously, even if our proficiency in understanding them is limited and our capacity to be misled by them considerable.
The capacity for ordinary people to be misled by statistical information is at the heart of the current legislative proposals. The misuse of statistics, not just by politicians but also by pressure groups or any group of people with an axe to grind, is a phenomenon of fairly long standing. It is not something that has just arisen in the past few years; here I separate from some of those who have preceded me in this debate in attributing the decline in trust to recent times. It was a former Member of this House—the Earl of Beaconsfield, better known as Disraeli—who gave us the epigram that there are,
“lies, damned lies and statistics”,
and he was no slouch at manipulation.
The problem seems to be getting worse, perhaps largely because so much more statistical material is made available. The result is that the credibility of that material, and public trust in it, seems to be dropping quite sharply. The Government are to be congratulated on bringing forward legislation designed to strengthen the autonomy of their statistical services and thus, one would hope, to enhance public confidence in the material they provide. The overall thrust of this legislation is admirable, but the delivery of real outcomes is half-hearted. The detail of the Bill seems to fall well short of its broad objectives. In some cases, the proposals seem seriously flawed. As so often happens, the other place appears to have done little to confront those flaws, so I hope that it will be possible to remedy some of these as the legislation is scrutinised in your Lordships’ House.
The first area of doubt arises over the structure chosen for overseeing the activities of the Government’s Office for National Statistics and accepting ultimate responsibility for them. Noble Lords preceding me have all mentioned this point. It is surely right to consign that task to a depoliticised body and to remove it from ministerial interference; but the idea of having a single body in which non-executive appointees and executive professional statisticians are mingled, and which has an uneasy mix of supervisory responsibilities and everyday executive ones, does not at first sight seem to be the best way to proceed. It is exactly the opposite of what has been chosen for the BBC, where the supervisory and executive functions have been separated. It is the opposite of the way we handle the governance of our higher education institutions. It will be interesting to hear how the Minister justifies the proposed structure, but it could well be necessary to rethink the approach when we come to Committee.
Then there is the question of resources to be made available to the Office for National Statistics to do its work. This is not something that normally figures in legislation and this Bill is no exception, but in introducing it the Minister said something about that aspect, repeating what was said in the other place. How real is the autonomy being granted to the office if the purse strings are still ultimately held by Her Majesty’s Treasury? How much confidence would we have in the autonomy of the Bank of England when it comes to setting interest rates if it relied totally on the Treasury for the resources it needed to carry out its research? Not much, I suggest. There is a case for underpinning the autonomy of the Office for National Statistics in some way analogous to that applied to the resource requirements of the National Audit Office. Indeed, the more general case for giving Parliament a direct role in guaranteeing the autonomy of the Office for National Statistics would seem hard to refute.
I turn now to the sensitive and vexed question of the arrangements for the pre-release—in advance of publication—to departments and Ministers of the result of statistical inquiries. This is at the heart of the issue of public confidence. It is the belief that statistics are spun and their presentation manipulated for political purposes that is undermining the credibility of our national and departmental statistics. The arrangements proposed are complex, Byzantine and almost certainly capable of being operated in such a way as to provide no substantial change from the present unsatisfactory arrangements. It is worth pointing out that if pre-release was simply banned, there would be no need to provide for any such complex arrangements in the Bill at all. I believe I am right in saying that Norway operates a ban on pre-release; why can we not do so too? I have little doubt that the Minister will say that statistics are often highly sensitive and it is only right for Ministers and their officials to have time to prepare a public reaction to them, but does the argument really hold water? Perhaps the Minister can say whether there are any arrangements for the pre-release of decisions on interest rates by the Monetary Policy Committee of the Bank of England. Are they not published as soon as they are taken? Surely nothing in the economic field is much more sensitive than those decisions on interest rates, so why can the publication of statistics not follow a similar course?
It is no secret that the tabling of this legislation has been greeted with less than wholehearted enthusiasm by those parts of the press with some specialist knowledge; the rest of the press has probably not noticed that it exists at all. The Economist magazine was particularly scathing. While that does not prove that the legislation is at fault, it does underline a real risk; namely, that the detailed provisions of the Bill will undermine its overall target of improving the objectivity of our national statistics and of increasing public support for and confidence in them. If that were to happen, it would be a major opportunity lost, and it will not be one that will recur any time soon. Quite rightly, legislation like this is designed to last for at least a generation, perhaps two, so it is worth getting it right.
My Lords, I was sorry not to attend the Minister’s meeting last week. Unfortunately, I was abroad on Select Committee business.
I agree with the noble Viscount, Lord Goschen, that this is not an esoteric Bill. Andrew Dilnot, an experienced and respected commentator on the nation’s economy, said it is the most important Bill in this Parliament. He could be right. As the Minister and other noble Lords have said, statistics inform decisions made in every part of society, not only in Government but also in business and throughout the economy. As the noble Lord, Lord Hannay, just said, they inform the important decisions we are going to have to make about climate change. They indicate the success or failure of targets about the public finances, crime, child poverty, health and—an area where the noble Viscount pointed out that there is plenty of temptation—education. The list is endless.
Ideally, we would look to statistics and the Office for National Statistics to be the servant of open government. That is the measure of the importance of statistics. However, as nearly all noble Lords have said, unfortunately the public do not trust them. A recent survey indicated that only 14 per cent of the population thought that statistics were honest. As the noble Lord, Lord Hannay, told us, that is not new. The Royal Statistical Society said,
“for several decades now, a lack of trust due to a wide perception of political interference has devalued and undermined official statistics”.
So I welcome this effort to raise public confidence in our national statistics. I think it is a genuine attempt to reform the system, and to make it independent and at arm’s length from the Government—if I may say so, about time too. There was a commitment in the Labour Party’s 1997 manifesto to make statistics independent. In 2000, we moved forward a little, but now at last, in 2007, we are taking the major step.
With this Bill, the Government have moved a long way towards making the ONS independent. I do not share the concern of the noble Lord, Lord Jenkin, that the board is not independent enough. It is easy to complain because independence is difficult to measure, even for the Office for National Statistics, and there could always be more. This Bill, however, takes a major step towards independence, and at this stage it goes far enough to satisfy most of us. Let us see what happens in Committee.
I have other concerns, though. I share other noble Lords’ concerns about pre-release. The Minister told us that this would be dealt with by order. I hope the Government will eventually limit pre-release to minutes rather than hours. We compare badly with others. If, as a result of this Bill, the public have growing confidence in statistics, too much opportunity to bury, combine or distort data will only undermine that confidence.
My main concern is about the quality of the statistics. In Clause 8, the board is responsible for monitoring the production and publication of official statistics, and may report any concerns it has about the quality of those statistics. “Set standards and scrutiny”, the Minister said. Should not the board also be responsible for ensuring the quality, and indeed be responsible for the relevance, of the statistics? I realise that is difficult.
The noble Lord, Lord Moser, reminded us that the ONS is dependent on others providing the figures. The Minister said that there are 1,300 sets of figures; as I understand it, the ONS is responsible for about 300, and there are 1,000 further sets for which it is not directly responsible, but which affect the ONS’s own statistics. The figures for gross domestic product, for example, depend on data from a large number of other government departments. Recently, the GDP figures were distorted because of errors in the figures supplied about the construction industry from the DTI. Employment figures are dependent on data from the Home Office about immigration, and we all know about the problems there. As other noble Lords have said, the role of the board regarding oversight needs to be very clear.
Then there is the judgment about compiling the data. Yes, there are conflicts of interest. For instance, research and development figures are assessed differently by different government departments. The Treasury likes them lower so that tax credits are less expensive. The DTI wants them higher because they flatter the economy. In 2005, the Association of the British Pharmaceutical Industry produced an extraordinary paper indicating that 67 per cent of what it considered R&D spend is excluded from the R&D tax credit calculation. So do we really know what we are spending on research and development in this country?
The board or the Cabinet Office should be responsible for assessing these judgments, not the Treasury. It is important; after all, we are creating a modern knowledge economy supported by huge public and private investment in science and engineering. Indeed, in the debate on the Address last November, I wondered whether our national statistics properly measure the knowledge economy we are building in this country. The answer came the following month. December’s Pre-Budget Report, in Box A8, speaks about the changing nature of investment and agrees that in the ONS estimates of UK business investments, although they are based on the internationally agreed system of national accounts, investment in R&D may be misleading.
I remind your Lordships of one of the examples given by the Treasury. The ONS estimates that in 2003 the UK invested £8 billion in software. However, the ONS has also estimated that if you add own-account in-house software investment, that could raise the total UK software investment in 2003 to around £21 billion. Surely, in a modern economy, that in-house work is also investment. But it was lost, and the reason was that in-house investment was put into the accounts as “intangibles”. A distinguished accountant like the noble Baroness, Lady Noakes, will know all about that. The box goes on to point out that in 2004 business invested £112 billion in tangible investment, but the total cost listed as “intangible” was estimated to be £116 billion. Does that mean that as a modern knowledge economy we are investing twice as much as we thought we were? Perhaps that is why the economy is performing better than most.
My point is that if our statistics do not keep up with the way we look at the world, inevitably the quality and the relevance will decline. That is why I would like to see greater powers for users to propose statistics. The professional organisations have made that point, and so did the noble Lord, Lord Moser. I realise that such powers could be manipulated to provide figures of more political significance, but my intention is that the powers should be available to produce figures of more relevance. Somehow the Bill must ensure that the code of practice, or the conventions about which data really describe our economy, can be challenged, not only by the board but also by users and outsiders. For example, the conventions on describing businesses as “services” or “manufacturing” are becoming meaningless.
Clause 20 approaches that possibility. It entitles the board to provide statistics to any person and to assess the quality and analysis of the data. I welcome that, and I am sure that it will be useful in helping to clarify the misleading or biased interpretation of data that we are continually fed, to which the noble Lord, Lord Desai, referred. However, can this clause be used by the public to demand data or explanations to be provided that are more relevant? Can they demand more information or clarification, as the noble Lord suggested? That is why I consider that the quality and relevance of the work of the ONS are as important as its independence and public standing.
The Bill has dealt with independence and it can deal with quality, but, most of all, the board must ensure that our statistics keep pace with our changing national life and our economy, and that requires more definition in the Bill.
My Lords, it is a pleasure to speak in a debate after the noble Lord, Lord Moser, the doyen of the statistical world. Luckily, my study of statistics began in easier times than did his.
I hope that the Minister will have reflected on the detailed scrutiny made in another place and that, as we proceed, will move into the centre ground of the powerful arguments there made. I shall follow the noble Lord, Lord Desai, by considering the inherent difficulty of being a government statistician.
Statistics are an academic occupation; politics are not. As with all academics—economists, for example—statisticians will debate and disagree. Indeed, as professionals, they enjoy nothing so much as a conference at which, expressing the greatest respect for each other, they will demolish each and every statistical endeavour. In private, as it were, but also when in public, statisticians are aware that somewhere close by is a fellow professional with a different point of view. Statisticians know also that the figures which they produce will be used and misused to support political argument and lobbying. They may wish that it were not so, but they know that there will be angled selection when the messages from published statistics are available to be put across. It is not always manipulation; it is just choosing the most supportive figures.
Therefore, Parliament needs to be cautious when it claims that, by legislation, it can create trust. The best that it can claim is that the strengthening of institutional arrangements will enable the public to believe in the best endeavours and personal integrity of those who produce the figures. Nobody has suggested that the Office for National Statistics has been acting in any way other than in the public interest. The perceived problems are external to the office: it is the relationship between the political system and the office which needs to change.
The Bill was rightly welcomed in the Commons as a step in the right direction, and rightly criticised for not going nearly far enough. There was a mixed response to the proposal to change an organisation which last year reported on 29 ministerial targets. The office is committed by Ministers to,
“create a Government Statistical Service presence in each region by March 2007”—
I wonder whether that has happened—yet the ONS does not have responsibility for the decentralised Government Statistical Service, nor is it proposed in the Bill that it will undertake that responsibility. At the same time, there are targets for relocation out of London and for a one-in-seven reduction in staff. The National Statistician is a very busy person, and the present situation is a far cry from,
“a wholly separate body at arm’s length from Government and fully independent of it”.
Yet that is the Bill’s objective. Is it a truly accurate definition of the intended relationship? If it is, there are outstanding issues of governance and management structure to be addressed, following the best efforts of the opposition parties in the Commons.
Some time hence, one test will be whether the list of national statistics in Clause 16 then convinces the public that the objective of serving the public good is being met. Many commentators have said that a necessary condition for reaching this objective will be that the position of National Statistician is strengthened beyond that proposed in the Bill, so that she becomes the nationally recognised guardian of statistical integrity and openness. Regrettably, the Bill as drafted weakens the position of the National Statistician.
First, it proposes that she become a member of the board, with the majority of the members being non-executive. Being on a public board reduces a chief executive’s room to manage the institution effectively. Having been both chairman of a public body and chief executive of a public corporation, I have no doubt that it is more efficient and effective to have a wholly non-executive board. It also contributes to the separation of scrutiny from operations. As my noble friend Lord Goschen asked, why has the mixed membership option been chosen? The Minister’s explanation is that it conforms to private and public corporate practice. Specifically whose corporate practice do the Government have in mind? Does it conform to the ONS criteria of full independence, being at arm’s length and reporting directly to Parliament? No private body is in that position. Which public bodies are?
Secondly, Clause 5(3) states that the proposed head of assessment will report directly to the board. It is almost as if the board is to have two chief executives. This weakening—a partial destruction of the National Statistician’s accountability—is a strange choice and is very unlikely to work in practice. Immense goodwill is needed to make it work at all. Is it a substitute for internal systems audit? If so, would not external reviews by internationally practising members of the profession serve the board better? Peer group review is common practice among academically driven professions.
The third issue arises in the extraordinary language of subsections (3) and (4) of Clause 29. Subsection (3) states:
“The National Statistician may not exercise the functions of—
(a) determining under section 10 whether to adopt a code as the Code of Practice for National Statistics or to revise the Code, or
(b) determining under section 12(1) or 13(1) whether any official statistics comply with the Code”.
Subsection (4) states:
“The Board may direct the National Statistician—
(a) not to exercise a particular function, or
(b) as to how he should exercise a particular function”.
Now we see the National Statistician as chief executive, and now we don’t. If the board were to direct her not to do something significant or direct as to how to do something equally significant, it would almost amount to a case for constructive dismissal. What do the Government have in mind? Can they really intend to deprive the National Statistician of responsibility for the code? The code is the key to the arch of public trust. It is essential that the chief executive remains accountable for professional integrity and quality control. Production is of less importance and much easier to delegate.
There are other important issues. It appears from Clauses 10 and 12 that, on the day when the Act comes into effect, there will be no new-style national statistics, but only official statistics awaiting the new code of practice and compliance with it before “official” can become “national”. Is this not a highly risky procedure, depending, as it will, on Ministers’ attitudes to their share of the Government Statistical Service? If the code is not firmly backed by statute, it stands a good chance of being ignored. The open position that will prevail will certainly encourage Whitehall games-playing.
I await the Minister’s reply with interest and look forward to Committee, because there is much to be done if the twin objectives of independence and trust are to be achieved.
My Lords, when I spoke in the short debate initiated by the noble Lord, Lord Moser, I broadly welcomed the Government’s proposals. Now that we have the Bill as it has emerged from the other place, I still support its aims, although there are at least five issues that the House needs to address. On some, I will argue that the Government should hold their ground against the attempts to change the Bill, but on others I will suggest that they need to rethink their position.
The first issue, which has come up many times in this debate, is the governance structure of the Statistics Board. The Bill proposes a unitary board that brings together chair, non-executive directors, the National Statistician, plus two other officials. That has given rise to what is referred to as either the “judge and jury” problem or, alternatively, “the BBC analogy”. How, it is asked, can the board be a producer of statistics and a regulator of their quality? That is a valid question, and, in one way or another, an answer has to be found.
In my view, the noble Lord, Lord Burns, was correct in arguing that there was not enough separation between the BBC Trust as regulator and the BBC as broadcaster. The Royal Statistical Society has proposed a number of amendments which seek to enforce a greater separation by making the National Statistician rather than the board responsible for the production of statistics, with the board as an oversight or scrutiny body. The noble Viscount, Lord Eccles, put that case very effectively only minutes ago. However, despite the view that I took in the case of the BBC, I have concluded that I prefer the unitary board in this case.
First, I think that the divided accountability would prove less satisfactory for Parliament as it would have two accountables reporting to it rather than one: the board and the National Statistician. Secondly, and most importantly—and this is based on my experience in dealing with the previous National Statistician—I want national statistics produced under the full authority of the board. Never again do I want to see a National Statistician isolated as was the case with Mr Len Cook. When there is pressure from Ministers—for example, on whether or not something is in the public sector—I want a solid unity between board and National Statistician. For example, the then Secretary of State for Health would have found it more difficult to brand as “absurd” the serious piece of work done by the ONS on productivity in the health sector if it had been published in the name of the board as a whole. Finally, we should remember that only one-quarter of the series designated as national statistics is produced by the ONS. I agree with the noble Lord, Lord Moser, that it is in the statistics produced by departments—for waiting times, crime and so on—that the greatest difficulties arise.
I accept that if we maintain a unitary board we need to find a solution to the “judge and jury” problem. The Bill provides a mechanism through the head of assessment, and it is better to build on that and through the internal constitution rather than to reduce the board to pure regulator and weaken the alliance with the National Statistician.
The second issue is the concept of national statistics. Here I believe that the Government need to rethink their position. Like the Royal Statistical Society, I do not understand the logic of having a concept of official statistics and then a code of practice that applies only to the subset known as national statistics. That can only give rise to suspicion, even if unwarranted, either that the Government want to tolerate a Ryman league of second-rate statistics not covered by the code or, worse, that Ministers want to keep certain statistics in the lower league so that they can get away with things that are outside the disciplines of the code. The process of promotion and relegation in Clause 13 has no credibility. If the crime statistics do not come up to the standards of the code, they are not going to get demoted from national statistics to mere official statistics, they are going to get improved. My recommendation is to bring all official statistics, whatever they are called, under the code, and to claim credit for this as one of the achievements of the Bill.
The third issue is release times. It is not good government to keep Ministers in the dark. If we want them to be accountable we must set up procedures and controls that make that possible. No one expects the President of the United States to appear once a week for questions before Congress; so we have quite different systems and cultures. I doubt whether Parliament really wants to allow Ministers to put forward the excuse that they cannot comment because their officials are still analysing the figures. Nor is it good practice to allow misunderstandings to circulate for hours uncorrected—and the noble Lord, Lord Desai, gave an example of that, although it was rather an old one. The noble Baroness, Lady Thatcher, when Prime Minister, frequently quoted Mark Twain to me—usually when incandescent after listening to the World Service at 5.30 in the morning—saying that a lie,
“can get halfway around the world before the truth even gets its boots on”.
However, I am not happy with the rather brusque wording of the Bill in Clause 11, which in effect tells the board to keep its nose out of setting release times and leaving Ministers to help themselves to as much time as they want. I suggest that the Bill should be redrafted to recognise the principle of pre-release, but to place responsibility to decide with the board, subject to a duty to provide Ministers with adequate time to enable them to fulfil their accountability duties. The Government should welcome getting that principle underpinned by statute; the board should be required to consult Ministers before taking any decisions. If under the Bill the board can be entrusted to manage the RPI, subject to procedural safeguards, then it can certainly deal with release times, too. In my experience, 24 hours would normally be plenty, although I would not make releases on Mondays so that figures are not pre-released on a Friday.
The fourth issue is that of the residual department. No doubt the noble Lord, Lord Moser, feels nostalgic about the days when the Prime Minister had a deep understanding of statistics. It sounds quite a good idea, put that way. But I think that there are problems. Making the Prime Minister the supervising Minister is in practice unrealistic and the Cabinet Office has little expertise in that area. But if the system is working, that is genuinely a residual role and, on balance, it would be better if it went to the Cabinet Office rather than the Treasury, which itself is a major consumer of statistics. I also welcome the suggestions made in the other place that there could be a statement, perhaps outside the Bill, that either the chair and/or the National Statistician could have access to the Prime Minister should a really serious issue of statistics or their governance arise.
The other duty of the residual department is to set the budget. Some prior understandings have been mentioned as a way of ensuring that the board is not unreasonably squeezed, but that too could in the last resort be protected through the assurance of access to the Prime Minister.
Finally, if there is to be greater accountability to Parliament, Parliament itself must reconsider how it performs its part of the process. Departmental Select Committees can look at statistics in their area, but what is missing is consideration of statistics across the piece. As the noble Lord, Lord Jenkin, mentioned, that could be a joint enterprise between both Houses.
My Lords, I thank the Minister for his introduction to the Bill. At the outset, like other noble Lords, I congratulate the Government on the Bill’s direction of travel. It is well recognised that recent years have seen a disintegration of public trust in the independence and probity of the nation’s statistical data. The figures from the ONS survey have been widely cited; namely, that only 17 per cent of the public believe that statistics are produced free of political interference, a perception that may well have deepened as a result of last week’s Budget. Undoubtedly, therefore, there is an urgent need to legislate for independence.
As my honourable friend Michael Fallon said on Second Reading in another place:
“National statistics are not only the Government’s statistics. They are more than simply a ministerial crutch or a parliamentary resource. In a proper democracy, statistics are an essential public good. They belong to all of us. After the suspicions of the past few years, we want our statistics back and we want them to be clean”.—[Official Report, Commons, 8/1/07; col. 68.]
That said, I do not propose to trespass on those matters in the Bill already covered so eloquently by other noble Lords, not least the wise counsel of the noble Lord, Lord Moser, and my noble friend Lord Jenkin of Roding. Rather I wish to focus on the information-sharing provisions of the Bill.
A particular feature of the debates in another place was the recognition that the public at large have a special and considerable interest in statistics. This was represented in a number of ways on all sides, but is neatly encapsulated in the Financial Secretary’s observation on Second Reading that:
“Importantly, in our modern democracy they [statistics] inform the judgments that people make about the promises and performance of their Government”.—[Official Report, Commons, 8/1/07; col. 29.]
Indeed, to the Government’s credit, they amended the Bill on Report to give some measure of statutory force to this. Thus, Clause 7(1) now states:
“In the exercise of its functions … the Board is to have the objective of promoting and safeguarding the production and publication of official statistics that serve the public good”.
However, I cannot help but agree with my honourable friend Michael Fallon that, given that the Bill now defines “public good” in the context of,
“informing the public about social and economic matters”,
“the development and evaluation of public policy”,
this is couched very much in Westminster-centric terms. In other words, while I willingly accept that progress has been made, there is still work to be done here in establishing levels of independence that are a proper fit with the public’s needs and not just those of us operating within the political process.
To my mind, this becomes especially relevant in respect of administrative data, even more so in respect of information that qualifies under the terms of the Data Protection Act as either “sensitive” or “personal”. I am chary of suggesting that “ownership” of this sort of data should more properly reside with the particular individuals who have, one hopes, consented to their collection. Nevertheless, it is essential to realise that, given the huge scope of the data now collected and the sophistication of IT techniques to process them, these are not meagre unconnected morsels of any given individual’s interactions with the state. Rather, taken in toto, they are whole-life delineations of who someone is and how he leads his life. Indeed, this is—or should be—part of the motivation for making administrative data more widely available as a statistical resource. But it also infers that, while the “public good” element of the Bill acknowledges the individual citizen’s interest in statistical output, it should perhaps also reflect no less strongly his interest in—and, to an extent, ownership of—the raw data.
I do not wish to be misunderstood here. I acknowledge absolutely the considerable benefits that could accrue from administrative data being more widely used as a statistical resource. I empathise with the view of Len Cook that this would represent,
“the largest possible improvement to the quality of British statistics”,
that could be enabled by this legislation. Moreover, I pay due heed to a manifest understanding of all sides of this debate, which is evident in these words from the Financial Secretary:
“there is indeed a strong public interest in greater sharing of administrative data … there is also a public interest in ensuring that the confidentiality of such data is properly protected”.—[Official Report, Commons, 8/1/07; col. 25.]
The Minister repeated the same mantra earlier. Needless to say, recognition of this is most welcome. Indeed, I acknowledge that the Government have made strenuous efforts in satisfying the conflicting sides of this equation. Nevertheless, and notwithstanding the words of comfort from the Minister, I remain somewhat concerned that the current drafting may not only fail to deliver as robust a regime as is necessary but, as with the context of the definition of “public good”, be too closely allied to the needs and requirements of, as it were, administrative convenience. As I read it, the construct of the Bill is to create quite deliberately the Statistics Board as a gateway for onward transmission of data.
As highlighted by my honourable friend Mark Hoban during Committee in another place, the current text could permit the Statistics Board to become a conduit for the distribution of data more widely throughout government to be further processed for a purpose at variance with and beyond the terms of that of its original collection. Certainly, in so far as my understanding of the drafting is accurate, this inspires no small measure of discomfort, not least for example in the context of the national identity register or the children’s index. Indeed, it is worth recalling the comment from the Chief Statistician of Canada when giving evidence to the Treasury Select Committee on this matter:
“Of course, the other side of that coin is extremely strong confidentiality guarantees, which are spelled out and which allow no exceptions. Not even the intelligence community, not even the police, not even the courts in the course of a prosecution can have access under the Statistics Act”.
Evidently, the Bill before us today does not encompass such strong data protection as that. That said, there is a case for suggesting that perhaps it should, not least because there is a wider dimension to this. Undoubtedly, there is growing and justified anxiety about the encroachment of what has euphemistically been called “the database state”. In this context it is salutary to reflect that the Home Affairs Select Committee of another place is to initiate an inquiry into this. I can also refer back to the ONS survey that found that only 14 per cent of the public believe that government handle data honestly. While I accept that greater independence for our statistical authority may go some way towards addressing this perception so far as the board will be concerned, there is none the less an over-arching obligation upon government to establish extremely strong and robust data protection regimes in circumstances where information sharing is envisaged.
Some, I suspect not least the Minister, may feel that reliance on the terms of the Data Protection Act offers sufficient reassurance. However, increasingly that is not a view I share, if only because, as a generality, information-sharing regimes will of necessity breach at least the second data principle if not others and, in that sense, lie beyond the reach of the Act. I therefore argue that, in circumstances such as these, we should aim to strengthen data protection rather than either maintaining the status quo or, worse, weakening it.
At the end of the day it would be foolish in the extreme if, in making legislative provision for a more independent statistical regime and thereby, we hope, reinvigorating public confidence and trust in the nation’s statistics, a different but no less corrosive cause for lack of confidence and distrust was substituted. Inadequate or inappropriate data protection could well have that effect. With that in mind, I look forward to probing these issues at greater length as the Bill makes its progress through the House.
My Lords, having looked at the list of speakers, I came to this debate with some diffidence. Indeed, having listened to some of the speeches, I am still rather diffident.
Apart from being a normal user of statistics my direct experience is rather tangential. Some years ago I was chairman of a government committee on the handling of geographic information. It had to do with the then new computer technology, geographic information systems—GIS. This new technology enabled spatial data—and this very much included spatial statistics—to be readily analysed for the first time. There were important issues of how such data were collected, analysed, used and made available. Whitehall was pre-eminently the main collector, user and publisher. Many of the things we had to think about are also relevant to much wider traditional statistical data.
My impression is that there was a warm welcome for the Treasury’s November document, Independence for Statistics. But the Bill itself has been greeted with considerable caution in some quarters, notably by William McLennan, former head of both the UK Central Statistical Office and the equivalent Australian office. He believes that the Bill will not result in independence, cites the Treasury’s powers under Clause 27 and goes on to say that the Bill,
“will set back official statistics in the UK for at least a few generations”.
That is rather strong stuff. Other commentators, such as Professor John Kay, whose judgment I respect, and others writing in the Economist—the noble Lord, Lord Hannay, referred to the Economist article on the Bill—and the Financial Times are all pretty sceptical.
One can conveniently categorise those concerns under the three headings of: first, independence and the wider issues of governance of the new Statistics Board; secondly, the messy area of departmental statistics, their reliability, how they are to be monitored and so forth; and thirdly, the pre-release issue, which is a murky area, as we have heard this afternoon. I do not propose to say anything on the pre-release issue and only a little on the departmental statistical issue. First, I will speak about the governance and the Statistics Board.
I do not have a particular problem with the National Statistician being an executive member of the Statistics Board, provided two things are reflected in the Bill. It is put rather neatly by the Statistics Commission in its briefing paper:
“We remain concerned that the Bill does not secure a sufficiently clear separation of executive and independent scrutiny roles”.
The National Statistician is, in effect, to be the custodian of the Ark of the Covenant, if I may put it that way. As I read it, the Bill accepts that, but in a rather ambivalent manner. The Bill needs to be more explicit that the National Statistician is the chief executive—although I agree that there is a clause saying that—that he has the formal responsibility for overall planning, production and quality of official statistical products, and that he is the professional head of the Government Statistical Service. That surely needs to be set out in practical terms in the Bill. The references to the board, for example, in Clause 6 and Clause 10 and other places, should surely be replaced by references to the National Statistician, a point made by the Statistics Commission in the briefing paper. The more explicit recognition of the responsibility of the National Statistician is the first point.
The second point was also made by the Statistics Commission, and it mirrors the first. The role of the board is one of scrutiny and support for the National Statistician. The board is there to protect and promote his independence. From that, it follows that the chairman must be someone of real calibre and of high reputation and authority. There will be times when the National Statistician will feel compelled to clash with Whitehall executives, even on statistical issues. He will need the support of his board and of his chairman, so the chairman must be of real standing. In those circumstances, one questions whether Clause 27, which the Australians so much objected to, is really appropriate, even on a last resort basis. It also suggests that the board should come under the Cabinet Office rather than the Treasury, as one or two speakers have already said.
There is the role of Parliament and the devolved authorities. They will have the right to receive reports, which I would like to see extended to at least being consulted over the appointment of the chairman and the National Statistician, and over funding issues. I would like to see the acceptance—it obviously does not directly affect the Bill—of the suggestion made by the noble Lord, Lord Jenkin of Roding, of a joint parliamentary Select Committee. That seems exactly the right way for Parliament to exercise its right to hold the Executive to account. A Joint Committee would have both expertise and status.
Certainly the most difficult part of the Bill, in Clause 7, is the requirement of the board to seek to upgrade “official statistics” into the higher category of “national statistics”. One notes immediately that the assessment request for an upgrade can only be instituted by ministerial request, in Clause 12. That is the first difficulty, but there will be other problems. One goes on to ask oneself what incentive a department might have to achieve the kite mark of “national statistics”. What powers have the National Statistician or the board to push a department? What are the levers? Could there be a financial inducement? Is the power of publication under Clause 8 sufficient? I understand what the drafters of the Bill are trying to do, but it seems to me that the board would have precious little carrot and almost no stick. I doubt whether the “national statistics” kite mark is sufficient.
I end on a rather different note, which was struck by the noble Lord, Lord Hannay. Bills such as this one have to last for at least a generation. Therefore, it is important to get this Bill right. The Government have made a good start, to be fair, but as this debate has shown, a lot needs to be done in a few specific areas.
My Lords, I applaud the Bill. I hope someone could cross-examine Len Cook on some of the issues that he is concerned about. I am sure that the pre-release question can be clarified in Committee, as could the question of how parliamentary scrutiny will work. Perhaps the Lords economic committee could give some thought to that. A more general question is how the board can track important changes in society in what people need to know. Incidentally, it is partly for those reasons that my instinct is that the board should report to the Cabinet Office and not to the Treasury, as recommended by the noble Lord, Lord Moser, in his most authoritative speech, and by the noble Lord, Lord Turnbull.
There may be a role for the board in producing what might be called encyclicals, like the Vatican. For example, the question of measuring productivity in services, particularly in public services, is a very important but very old chestnut. I do not know where one now goes to for, as it were, the text of the encyclical. There are different rules about productivity measurement but, as I understand it from my days of doing economics and statistics at Cambridge and studying a book by Professor Richard Stone, national income measurement requires output, income and expenditure all to somehow line up. People ought to produce one-off papers demonstrating how what you might call statistical national income theory lines up with what we do in practice.
However, all such generalisations have to be tested against practical experience of which one has some knowledge. I will take two examples from widely different fields. The first is income distribution in Britain, and the second is how we measure and use measures of national income growth rates in sub-Saharan Africa. On the first, it has been apparent for some time that there is something strange about how we read every day about the explosion of top pay, and that not showing up in genie coefficients. It is not so much the question of City bonuses not being properly recorded—at least I trust not—but there seems to be a misleading narrative shared by the Bank of England about what causes inflation at present, particularly in the south-east of England. Obviously, property inflation comes into that, yet we have no good statistics on how many people are sharing the top £10 billion or £20 billion increases in our economy.
In a debate about four years ago, I raised my concern about not being able to measure how much City earnings contribute to the growth of national income and was told that the figure was peanuts. I have been doing some counting of all these peanuts. If we take national income to be £1 trillion— £1,000 billion—£30 billion or £40 billion is obviously 3 or 4 per cent of national income. If one gets this figure wrong by £10 billion, that adds up to quite a lot of peanuts. My friend Professor Tony Atkinson, who was a colleague of mine in the 1970s on the Royal Commission on the Distribution of Income and Wealth, said that it is important that we collect proper figures for the top 1 per cent and the top 0.1 per cent to see what is happening. It is in everyone’s interests that one has confidence in that information and in information about what one might call the two ends of the income distribution.
Another problem about how we report statistics relates to averages, means, medians and so on. If one’s figure for workers’ wage increases includes all the £10 billion, £20 billion and £30 billion City bonuses, one will get a different figure—and a different analysis of what causes inflation—from the figure obtained if one takes a median within the distribution. I hope that the Bank of England’s analysis of inflation will be a bit more sophisticated. It does not seem to want to know about any of this.
To some extent, this goes to the problem of how the board should be constituted. I tend to be a mongrel man myself—or a mongrel dog, more likely. My experience is that I was a member for some years—wearing my TUC hat—of the Retail Prices Index Advisory Committee. Some of its members were not expert in that they were not professional statisticians, but those around the table all knew something about what was going on. I very much regret the passing of that committee. My recollection is that it was scrapped because it annoyed the Treasury by reaching the wrong conclusion about how we should measure housing costs. Someone may challenge that but that is my recollection.
My second example is about GDP growth in sub-Saharan Africa. It illustrates why statistical methods across Whitehall need to be consistent. We all know that sub-Saharan Africa has gone AWOL in terms of meeting the United Nations millennium development goals. Those goals can be translated into growth of real national income per head—per capita. I say “per capita” because poverty is to do with per capita rates and not overall growth rates. Far too often in DfID publications, there are casual measures of 6 or 8 per cent growth but the authors never define whether the figures are of gross national income in total or even—this is of course very elementary—per head or in real terms; moreover, we are not told whether the figures are comparable with the millennium development goals or even whether, when looking at international comparisons, people are consistently measuring using purchasing power parity, which we all know is an important measure for poorer countries, or euro, dollar or pound exchange rates.
In the OECD we are putting many billions of pounds a year into development but the tracking of the results of that are very much below par. That should be of concern to Whitehall as a whole, not just to DfID. If not, we will cut other budgets in Whitehall—the Foreign Office and so on—assuming that the DfID budget is being spent effectively. The measurement of its results could be improved.
To underline that, it is important to see, when we look at world economic trends, what happens with population growth. That is still a bit of a taboo subject, as we found a couple of weeks ago in a debate on population. If sub-Saharan African populations grow at 3 per cent per annum, and women have a fertility rate of five, six or seven children, one must subtract the 3 per cent before one has any real growth in the per capita figures needed to attain the MDGs. There is a lack of statistical rigour in some of the analysis that we are putting out.
If the new board had to write encyclicals or—to use another metaphor—set standards across Whitehall, that would cut out this rather strange dichotomy between what are called national statistics and other statistics; that was new to me today. It is a question not just of producing the statistics but of knowing whether we are happy to use other people’s statistics.
Finally, we should sometimes look at the mote in our own eye when using statistics. Many of us sat through the debate last week on reform of the House of Lords. I notice that a number of people used opinion poll data—based, I trust, on different questions. Some noble Lords told us that 70 per cent of the British people want the House of Lords to be elected and others quoted polls saying that 70 per cent want it to be all-appointed. That may be another question but it is another reason why numbers more generally are not always believed; it is not just to do with numbers coming from the Office for National Statistics.
My Lords, like all other noble Lords who have spoken so far, I welcome the intent of the Bill overall. Official statistics are vital to decision-making in government and to holding the Government to account. For several decades now, a lack of trust due to a wide perception of political interference has lessened the value of, and undermined, official statistics to an extent not seen elsewhere. That seems to be getting worse in recent years; I refer to the examples of Network Rail and the golden rule.
My initial views on the contents of the Bill were positive. I noted with approval that the Bill recognises the need for clear responsibility for independent oversight of the system by a non-ministerial governing board coupled with a clear accountability for the delivery of trustworthy statistics given to the chief statistician. I also welcomed the authority of the board to approve and maintain a code of practice.
I then turned to independent expert judgment on the Bill. The Royal Statistical Society overview, which has been quoted by many other noble Lords, is worth reiterating. It said:
“We believe that trust in official statistics and public confidence in the system that produces them is fundamental to the Government’s objectives for the Bill and it should be judged by whether it addresses these”.
As drafted, the Bill will not meet this standard.
Like the Royal Statistical Society and other noble Lords, I have some major criticisms of the details of the Bill. My main criticisms cover five main areas, all of which have been referred to by other noble Lords. These are the scope of statistics covered by the Bill, the structure of the Statistics Board, the role of the Treasury, pre-release of statistics and, finally, statistical confidentiality. I will deal with each of these in turn.
The scope of statistics covered by the Bill is unsatisfactory. All official statistics, such as those on crime, health and education, should be defined as national statistics. The statistical output of the ONS is only a fraction of government statistics. The much wider Government Statistical Service is responsible for many high-profile and important statistics, but is not adequately dealt with in the Bill. To make matters worse, as my noble friend Lord Jenkin has said, the Bill leaves the decision to offer a particular set of official statistics for designation as national statistics to the Minister of the department concerned. Hence the decision whether a department’s statistics will be national, and thereby subject to the Bill, or non-national rests with the Minister. In my view, that is wrong. All official statistics should be defined as national statistics and thereby subject to the code of practice, thus eliminating the current unsatisfactory two-tier system.
On the code of practice, first, there is no requirement for those who produce statistics to adhere to the code; and, secondly, it does not apply to official statistics outside the narrow range of national statistics. Those omissions need further scrutiny. Finally, I agree with the RSS that the National Statistician should co-ordinate the statistical system across government departments.
I turn to the structure of the new Statistics Board. As already said by many speakers, as drafted, the Bill muddles the roles of the board and the National Statistician. In my view, the National Statistician should be responsible for professional and operational matters and for statistical production. The board should be responsible for holding the National Statistician to account for those responsibilities. It is vital that the board's role of monitoring should be completely separate from the National Statistician's role of statistical production. The board should not produce statistics or maintain systems of classification or be responsible for protecting confidentiality. It must remain independent.
The next area of criticism is the proposed role of the Treasury. The Bill assigns residual ministerial authority to the Treasury. The Treasury naturally has a major interest in economic statistics and is currently perceived—by the RSS among others—to exercise influence on the ONS's statistical priorities, particularly with regard to funding. Assigning ministerial authority to the Treasury takes no account of the importance of statistics on crime, health and education over which the Treasury has no authority but on which it may well seek to restrict funding.
I agree with the noble Lord, Lord Moser, that if the residual ministerial authority returned to the Cabinet Office, where it began, that would increase public confidence. It would be seen to act as an honest broker across Government should any Minister need to be consulted on an issue. In addition, I agree with our party policy that the independent board should have a similar role to the National Audit Office, reporting to a committee of both Houses and having its resources decided by a parliamentary vote. The Bill gives the board power to decide what Office for National Statistics’ figures are produced and published. It also allows the Chancellor, and the Scottish, Welsh and Northern Irish people, should he or they wish, to direct the board to do something other than what it has determined. Even this proposed board does not have independence.
I turn to the pre-release access to statistics for Ministers and policy officials, which has been covered by many other speakers. The RSS and the Statistics Commission both agree with me that there should be no pre-release of statistics to Ministers and policy officials. As I understand it and as others have said, in the UK, the norm is 40 hours or even more for a number of people, and the new rules proposed do not seem much better, whereas in other countries Ministers are given the final statistics only a few hours or even minutes before release. I support the view of the noble Lord, Lord Moser, expressed at a recent meeting that we had with the Financial Secretary to the Treasury, when the noble Lord wished to return to the pre-release regime that existed under Edward Heath's Administration of 1970 to 1974, which was very tight. The Statistics Commission makes the recommendation that the board, rather than Ministers, should have the power to determine the period of their pre-release. Like the commission, I believe this is the only way of giving sufficient public reassurance that official statistics are free from government spin.
I highlight the RSS's concern about the actual release of official statistics. There is nothing in the Bill at present about that. The current problem is that departmental announcements combine policy and statistics. The RSS recommends, in my view sensibly, that the statistical release should be issued from a separate location under the aegis of the National Statistician and that the Minister's press release should not be permitted until at least 30 minutes after the statistical release. Also, the National Statistician should have the freedom to comment publicly on statistical issues, including erroneous interpretation of official statistics.
The final area on which I wish to comment—it has already been covered well by my noble friend Lord Northesk—is statistical confidentiality. Again, the RSS makes a vital point. The public must have confidence that personal data given for statistical purposes will not be made public or used for non-statistical purposes. The Bill does nothing to promote public confidence, as it allows any transfer of information if covered by a ministerial order. We need a much simpler and clearer requirement to hold data in confidence and to use it for statistical purposes only. The same applies to personal data accessed from administrative systems for statistical purposes. Much of the statistical information in connection with health and educational services is derived from such sources. The public should be in no doubt that statistical producers protect confidentiality.
It is not too late for the Government to deliver what they first promised in 1995 when the Leader of the other place, Jack Straw, addressed the Royal Statistical Society. He said that the National Statistical Service should be placed at arm’s length from Ministers, on a similar basis to the National Audit Office and should report to a powerful committee of the Commons—as already stated, I believe that should be a Joint Committee. I agree with the Leader of the other place: that is what is needed; that is what the Government promised; and that is what should be delivered in the Bill.
My Lords, this Bill is to be welcomed because it could, if suitably amended, enable people to have a basis on which to decide when and how far to place their trust in statistical information. Statistical information, like other information, can be based on better or worse evidence that is communicated more or less adequately, hence more or less open to check and challenge and to the intelligent placing and refusal of trust. Where we lack expertise—most of us lack expertise on most, if not all, series of statistics—we need indirect but reliable evidence that can be used to distinguish the more trustworthy from the less trustworthy. We also need that evidence to be carefully communicated. Only so can we move from a world in which we suffer policy-based evidence to one in which we might attain evidenced-based policy.
Therefore, I welcome the fact that the Bill assigns responsibility not only for the quality of statistics, but also for their communication to a board that is more independent of government departments. Clause 7 assigns to the board duties both to promote and to safeguard the production and publication of official statistics that serve the public good. Clause 7(2)(a) and (b) deal with duties to inform the public about economic and social matters and duties to assist in the development and evaluation of public policy.
Knowledgeable commentators have wondered whether the board will have enough independence to secure public trust, as it will combine executive responsibility for the production of national statistics—although not for official statistics produced by other public bodies—with powers to assess the standards to which all statistics are produced. Although the point is a strong one, I believe a case could be made for the adequacy of this structure, provided the board had not only the power to assess and to communicate the compliance of official statistics with the code of practice that it is to publish, but also the requirement to do so. However, as I read the Bill, a requirement to assess official statistics for designation as national statistics has to be triggered by a request from an appropriate authority; that is, from a government department, including departments of the devolved Administrations. Does it then follow that the board will not assess official statistics where no request is made by the relevant Executive? I would be grateful if the Minister could confirm whether that is the intention behind Clauses 12 to 14.
The board being required to communicate an assessment of the adequacy of all official statistics to the public would enable public judgment of those statistics; the duties of the board to communicate could not then be met by self-certification cooked up according to some in-house recipe. However, if no assessment is required, the public will be left without systematic evidence of the adequacy of official but non-national statistics. They will still lack a proper evidential basis for placing and refusing trust intelligently. As we all know, this is not an abstract consideration. Plenty of statistical series are regularly published which are not fit for purpose. I mention just one: the use of the number of passes at grades A to C at GCSE. We sometimes hear complaints that people compare apples and pears; we have a system that compares peanuts with melons.
Trust requires not only good statistics, but good communication. This is not just a point about pre-release, although that is a serious set of issues. There are no real shortcuts for communicating adequately with the public. The many fashionable but one-sided activities that go under the names of disclosure, dissemination and transparency are simply not enough: they cannot ensure that others come to know anything at all. They may provide antidotes to secrecy, but are no guarantee of intelligible communication to various audiences.
The board’s success will hinge as much on the quality of its communication with the public as on its reputation for independence and professional competence. Both competence and independence could be exemplary—although, as we know, there are difficulties with independence and merging the two—but if communication fails the public will rightly withhold their trust. I say “rightly” not because I fantasise that trust requires proof—where proof is available, trust is redundant—but because trust is no mere attitude, as opinion pollsters suppose, but a matter of evidence-based judgment, and stymied if the evidence is not even communicated. The best way to gain trust is to communicate what the case is, how something is done and to stress the limitations as much as the merits of the evidence offered.
One further aspect of the communication that the Bill requires may be a source of some concern; the noble Earl, Lord Northesk, has already commented on this. In the Bill, 16 clauses are devoted entirely to issues of data protection and information sharing; that is a hefty proportion. Statistical information about populations and social and economic trends is, of course, based on anonymised information about individuals, so concerns about privacy are unavoidable. But I will not be the only Member of your Lordships’ House who has concluded, perhaps reluctantly, that our data protection legislation generates more problems than it resolves. That is why we are faced with 16 clauses. Briefly, the trouble arises because our data protection legislation seeks to secure privacy by controlling or sequestering types of information defined as personal or sensitive, rather by regulating the ways in which we communicate information of all sorts, including that which is neither personal nor sensitive, as traditional conceptions of confidentiality sought to do.
For example, Clause 36 contains some of the consequences of relying on this conception of personal information: information identifies a particular person, and so counts as personal and may not be disclosed by the board,
“if the identity of that person—
(a) is specified in the information,
(b) can be deduced from the information, or
(c) can be deduced from the information taken together with any other published information”.
This criterion is both wide and vague. The amount of information in circulation about most persons provides a huge corpus for inference, which often and unavoidably enables the identification of persons and aspects of their lives rightly seen as private matters.
There is a great deal to be said on this matter, and I expect that your Lordships will be pleased that I shall not say it. However, I hope that the Bill will not add to the great morass of data protection confusion.
My Lords, I speak with hesitancy on the Bill; it is 50 years since the Government Statistical Service abandoned me to other pleasures. I was prompted to speak by regional interests who are concerned that there is inadequate recognition in the Bill for the regional need in England for excellent statistics. There is disappointment that statistics on production by sector, so important to the development of regional strategies, have not been made available.
That has led to concern about the composition of the board itself. Whereas there is representation taking account of consultation in Scotland, Wales and Northern Ireland, there is nothing comparable for the English regions or local communities, which, after all, spend £100 billion a year. The importance of their decisions is clear, and they need to be well based. There is therefore a case for recognising that particular interest in the composition of the board and extending the definition of the role of the board in Clause 7(2)(b) to read, “assisting in the development and evaluation of public policy at national, regional and local levels”.
Having, I hope with some effect, made the regional point that stimulated me to listen to this debate I wish to make a few observations in the light of what I have heard. I am troubled, as many other noble Lords are, by the creation of a board that has the role of code maker and umpire of conformity with the code and yet is also a player. As others have said, this combination of roles is difficult to discharge with the degree of public confidence which it is a major purpose of the Bill to promote.
I also noted that the combination of functions is recognised in the composition of the structure of the executives reporting to the board. On the one hand, there is the head of national statistics; on the other, there is the national assessor, whose responsibility is to advise the board on conformity with the code. I do not like it. Whereas the board has a duty to make a public statement if it disregards the National Statistician’s advice, laying the reason before Parliament, it also has a duty to have regard to the views of the national assessor. There is not the same sanction of setting him aside, as with the National Statistician. I would feel more comfortable about the regulatory role of the board if there was the same provision on the advice of the national assessor as there is for the National Statistician.
I would have some sympathy with the Minister if statistics he was receiving for the first time were published instantly, as is the praised practice of other countries. In this country, where Parliament and the press expect the Minister to be able to make an immediate and sensible response to any wind that blows, it is sensible to allow a small time, perhaps regulated by the board, for good, sensible thinking by the Minister before he is exposed to selling the word. The time needs to be regulated, but the genuine need should be recognised.
The board is a welcome development. It will help to restore public confidence, especially if we can understand better why some statistics are pukka and comply with the code and others published on behalf of the community by the Government do not conform to those standards. If there is to be a division, perhaps there should be some rationality behind it rather than it being left to chance and the Minister concerned. I am concerned that the board should have a role in providing some rationality about what are code-based statistics and what are not.
My Lords, as this debate has demonstrated, statistics matter, because they are central to the management of public policy by government and, just as importantly, they inform the citizen about what is happening in almost every aspect of life in our country. In some cases, of which crime statistics are perhaps the clearest example, published statistics directly affect an individual’s sense of well-being. As the debate has demonstrated, all is not well with the management of official statistics in the UK. In its survey, the Office for National Statistics found that only 17 per cent of the population believe that government statistics are produced without political interference and a mere 14 per cent think that they are honest. Those are almost incredible figures. They reflect extremely badly both on this Government, who have a particularly disreputable track record in their use and abuse of statistics, and on our system of government over a number of decades.
The Bill is a once-in-a-generation opportunity to put in place a framework that can begin to restore faith in government statistics, and we welcome it in principle. However, it is far from clear that it will achieve its aim. Virtually all noble Lords who have spoken in this debate have many concerns. They are shared by the professional statistics community, including the Statistics Commission, the Royal Statistical Society and distinguished former chief statisticians from a number of Commonwealth countries. A number of concerns have been expressed about the Bill. The House has made it clear that it wants to concentrate on four concerns in its detailed consideration of the Bill and that there is a fifth concern that the Bill cannot adequately address.
The first concern relates to where responsibility for statistics should lie. The Bill places it with the Treasury. Like the majority of noble Lords who have spoken, we would like to see it shifted to the Cabinet Office, which seems logical. Within the terms of the Government’s thinking, if they are about to establish a central hub for the release of statistics, it would be bizarre to place it with the Treasury; the logical place would surely be the Cabinet Office. The principal argument for placing responsibility with the Cabinet Office is that the buck for maintaining the integrity of the statistical system should rest with the Prime Minister not the Chancellor. Under the current Chancellor, Treasury writ has run across much of the domestic public policy-making agenda, but that will change when he moves next door. It is also unusual and, in our view, unadvisable for the Chancellor to have quite such a wide remit. As a general principle, the Prime Minister not the Chancellor must be best placed to deal with abuses of official statistics at ministerial level. To put it crudely, the Prime Minister can sack a recalcitrant or misbehaving Minister, and even this Chancellor has not had that power.
There is also the question of resources. Although it could be argued that the Treasury is best positioned to ensure that the statistical service has adequate resources, recent experience suggests that it may need protecting against a rather macho cost-cutting Treasury, against which, as the Bill is drafted, it would have little appeal. This is not a theoretical concern. As has been pointed out, the current resources of the statistical service are far from satisfactory. The ONS is moving to Newport and will undergo a further reduction in staff. The staff is already down from 1,000 to 600, and a further 250 job cuts are in the pipeline. The move to Newport has led to a third of the staff resigning, retiring early or taking redundancy, and I believe that, to date, only 40 of the 600 staff due to move have accepted the offer of relocation. This is already having a major impact on the quality of statistics produced. The ONS has already announced that this year’s Blue Book on the national accounts will not be published in full and that the annual statement of the UK’s balance of payments will include “less detail than normal”. Can the Minister give us the latest picture on the movement of staff to Newport and say whether the Treasury is satisfied that the move and the staff reductions will not seriously impact on the ability of the ONS to meet its ongoing requirements?
Given the current staffing shortages and the further cuts planned, I would be grateful if the Minister could explain what the Chancellor meant when he said in the Red Book that the ONS was establishing,
“a full regional statistical presence”,
across the English regions. Is that to be one man, or woman, and a dog, or will there be adequate staff to produce the expanded range of regional statistics promised?
The Minister said that we need not worry about funding for the statistical service because its decision-making is dealt with separately, and it has a budget for five years. So far, so good, but the bad news is that it appears that the budget is inadequate, so the budget for five years is inadequate. I fear that the assurances that the Minister gave about the budget-setting procedure do not reassure us.
The second concern, expressed in virtually every speech, relates to the pre-release procedures. It is probably the area that causes the greatest concern. There is a growing practice of Ministers and advisers using the long pre-release period to massage how the figures are presented. This, more than anything else, has led to the fall in trust in government statistics. There was a long discussion of this issue in another place, but there was no satisfactory conclusion. The Government propose to deal with the code that covers pre-release in secondary legislation. Unfortunately, it has not been published, even in draft, so we do not know what it is likely to contain. However, we know that Ministers consider that 40.5 hours is an appropriate period for Ministers to have access to sensitive statistics before they are published. That is a bizarrely precise period; it is certainly far too long. It is very long by international standards. Even in the US, on which the Government have placed great store in debates in another place, the maximum notice for a very limited range of statistics is overnight. Even then, access to those statistics is much more tightly constrained than in the UK.
The Government have said that the regulations that they propose to introduce will be reviewed after 12 months, so if they are found to be inadequate, they can be changed. That will not do. There is no reason why the regulatory framework cannot be got right from the start. Some noble Lords have suggested what the pre-release procedure and period should be. My colleagues in another place suggested that two hours should be adequate in virtually every case. We will have the chance to discuss the various options in Committee, but the House is clearly already agreed that the current provisions and the plans of the Government in this area are inadequate.
I wish to mention two aspects of this House’s scrutiny of the Bill. First, the regulations to which I have just referred will come to Parliament as affirmative resolution statutory instruments. I think that the Minister and the noble Lord, Lord Desai, said that that was tremendous because we would then be able to discuss them. It is nothing of the sort. We all know that any secondary legislation is rubber-stamped by this House and another place. We cannot amend it. It causes a near constitutional crisis if we throw it out; therefore, the offer of affirmative resolution procedure, although it at least allows people more time to look at the regulations than the negative resolution procedure, is no reassurance that Parliament has a real say in what they contain.
The second aspect of parliamentary scrutiny raised by a number of noble Lords—an aspect that the Bill does not and probably cannot cover—is how Parliament will scrutinise the new arrangements. The Bill simply says that reports will be made to Parliament. So far as I am aware, the Government have not expressed a view about how that might then be dealt with. Often, when we raise this kind of question, the Ministers say, “This is for the House”. Again that is a sophistry. It would be of great help to the House if the Minister this afternoon could give us some idea how the Government see parliamentary scrutiny being exercised.
The next concern relates to the difference between national and official statistics—where the line between them is and who draws it. This matters because the current boundaries clearly are not satisfactory. Examples have been given, such as the fact that quarterly NHS waiting-list figures are national statistics and monthly ones are not. Many Home Office statistics, in which trust is particularly lacking at the moment, are not even national statistics at all. I suspect that few people outside Parliament, and, indeed, most people inside Parliament, are aware that there is a distinction between the two sets of statistics. As the Minister pointed out in another place, quite correctly, there is obviously a great difference between the major issues such as census data, employment or balance of payment figures and the many detailed sets of statistics that have a narrow focus. My initial view was that we should simply categorise everything as a national statistic and be done with it. I am still quite tempted by that approach, as, I think, are the noble Lords, Lord Turnbull and Lord Moser. However, if there is to be a distinction, we need to be clear on where the decision-making on the boundary should lie.
The view of Ministers is charmingly frank. Speaking on Report in another place, the Financial Secretary to the Treasury said of Ministers:
“We are responsible for making policy and, as such, we are arguably best placed to know which statistics are most critical to the development, delivery and evaluation of the policies for which we are responsible and accountable”.—[Official Report, Commons, 13/3/07; col. 196.]
That statement has the advantage of clarity; however, it is a mistaken principle that Ministers should have a veto on which statistics qualify for the enhanced scrutiny by the National Statistician and his staff that national statistics attract.
We have concerns about the role of the National Statistician vis-à-vis the board. This is an area of major contention, but it is arguably the most difficult to get right under the proposed structure in the Bill. The issue is the distinction between executive and oversight authority. It is very important that the board does not attempt to second-guess the National Statistician on statistical production issues. Let us take the example of deciding, in cases like Network Rail, whether to designate a body’s liabilities as on or off the government balance sheet. The decision in that case is a technical one, in theory at least, that the National Statistician should take. The role of the board in such a case should be to satisfy itself that the process for making such a judgment has been properly applied, that there has been no undue political pressure or interference, that the code of practice has been adhered to and that the outcome has then been adequately communicated to the public. Noble Lords can see in that case that the board has a crucial but different role from the National Statistician.
That difference has not been made clear enough in the Bill. While we agree with the noble Lord, Lord Turnbull, that we should retain the unitary status of the board and the National Statistician and his staff, we should try to clarify this area.
This debate has demonstrated that there are serious concerns about the Bill but that there is a pretty clear consensus about what they are. They are relatively few in number and can be dealt with without a fundamental rewriting of the Bill. I was very encouraged at the start of our debate to see the Financial Secretary to the Treasury here to listen to the speeches of the noble Lords, Lord Jenkin and Lord Moser. I cherish the hope that he is, as I speak, turning his mind to the changes those noble Lords said the Bill required; if not, I fear we may need to change the Bill for him.
My Lords, I thank the Minister for introducing the Bill today. We have had a good debate. I hope that he has got the message that your Lordships’ House is not 100 per cent happy with the Bill. All noble Lords have rightly referred to the crucial issue of public trust in statistics. If I mark out just one contribution, it is the thoughtful speech of the noble Baroness, Lady O’Neill, on the different aspects of trust fitting together. I make no apology for returning to that issue. It is a fact that public trust has declined and we should be clear that politicians must bear most of the blame for that. I do not dispute that some of this occurred on our watch.
In 1997, the Labour Party pledged in its manifesto to create an independent statistical service. However, as the noble Lord, Lord Haskel, pointed out, once in power it did not do so. Instead, it launched a decade of spin, which has made the position very much worse. I plagiarise an aphorism about liberty:
“Trust lies in the hearts of men and women; when it dies there, no constitution, no law, no court can save it … While it lies there, it needs no constitution, no law, no court to save it”.
Put simply, law itself cannot create trust.
The Bill will not of itself restore trust, but it may create an environment in which trust can again flourish. When we scrutinise the Bill, we will have one test for every clause and subsection: is it the best way to achieve the highest degree of public trust? It will not be enough that it simply improves the situation. We shall actively seek ways of doing it even better. If we get these judgments right, we shall have created the possibility that trust in statistics will return. However, if we do not get them right, there will probably not be another legislative opportunity for a couple of decades, as the noble Lords, Lord Hannay and Lord Chorley, pointed out. We will bear a very heavy burden in scrutinising the Bill.
We are clear that the Bill in its current form does not give our statistical arrangements the best possible chance of restoring and then maintaining public trust. I shall outline the areas in which we shall seek change during the Bill’s passage through your Lordships’ House. I start with the scope of the Statistics Board’s powers and the nonsensical distinction in the Bill between official and national statistics. The Bill allows the Government to decide which of their statistics are to be tested against the code for national statistics. They will be allowed to publish statistics that do not meet the rigours of the code. I cannot think of anything more inclined to entrench the lack of trust that we are trying to reverse. The public will not carry nice distinctions between national and official statistics in their mind. These are all government statistics and will be tarred with the same brush. We cannot let the Bill retain that distinction. The writ of the Statistics Board must clearly and unambiguously run across all statistics.
A closely related issue, about which many noble Lords have spoken at length, is the pre-release arrangements. The Bill reserves those to the Government with no role for the Statistics Board. The Minister will recall that the MORI survey carried out in late 2005 showed that 59 per cent of people thought that the Government used figures dishonestly and that only 34 per cent thought that government figures were accurate. That is the mountain that we have to climb and it is why the pre-release arrangements will need radical change.
The Bill appears to give control over pre-release to Parliament through the approval of a statutory instrument setting out the rules. My honourable friend Mr Michael Fallon described the proposed arrangements as,
“giving batsmen the ability to decide whether the leg before wicket rule should apply to them”.—[Official Report, Commons Public Bill Committee on the Statistics and Registration Service Bill, 23/01/07; col. 170.]
We all know that affirmative instruments give the appearance of parliamentary power, but in practice, as the noble Lord, Lord Newby, pointed out, they act an elaborate rubber stamp for the Government's views. Parliament would have no power to initiate changes if the arrangements set up by the order proved not to work in practice.
A purist response would be to give Ministers no pre-release access and hence open up no possibility of abuse. However, we agree with several noble Lords—in particular, the noble Lords, Lord Turnbull and Lord Dearing—that it is a legitimate role of government to make effective policy responses. In our society, that is what is expected. But at present the Bill positively prohibits the Statistics Board from getting involved in pre-release. We are very clear that the Statistics Board must be given the leading role in pre-release arrangements.
More important, if the pre-release arrangements do not work well in practice, we need a flexible mechanism for changes to be made. Let us suppose, for example, that a ministerial team abused the pre-release access that they had been given. That is not fanciful. The Statistics Board should be able to decide in that case that different arrangements for those Ministers and their department are to apply in future. Statutory instruments cannot do that. They cannot be used with either the precision or the speed that may well be needed. Under the Bill, it will be left for the Government to initiate changes, but they have the most to gain from abusing the system.
The third area in which we find the Bill deficient is the status of the National Statistician. We have a vision of a strong and independent National Statistician with a remit that runs across the whole of government. The Bill does not give the National Statistician any powers outside the Statistics Board. He has no formal role across Whitehall or the devolved Administrations. Other aspects of that include access to the Prime Minister, which I know the noble Lord, Lord Moser, valued when he was our leading National Statistician. The Bill needs to enhance the National Statistician’s role.
Alongside that, we need to consider the role of the National Statistician and the governance arrangements that are being set up. It is proposed that he will become a member of the new Statistics Board, but that board will have a chairman who may himself become the face or the story of statistics. When I asked the Financial Secretary at the helpful briefing meeting that the Minister arranged what sort of role was envisaged for the chairman, I was told that that was regarded as a very significant job. That may reassure the noble Lord, Lord Chorley, but if the chairman is himself or herself a big beast in the world of statistics, there must be questions about who will be the public face of statistics in the UK and whether the National Statistician’s role is enhanced or diminished by the arrangements.
There is also the issue of confusion of roles under the Bill. My noble friend Lord Eccles made a powerful contribution on that subject. As others have pointed out, the board produces and publishes statistics under Clause 18, but under Clause 8 the board monitors the production and publication of statistics. Which is it? It cannot be both. Under Clause 3 the National Statistician is a member of the board, but under Clause 28 he is the board's principal adviser—which I think means that he advises himself. There are similar confusions with the role of the head of assessment and his position with the board vis-à-vis the National Statistician.
We must look very carefully at the BBC precedent cited by the noble Lord, Lord Hannay. I hope that the noble Lord, Lord Turnbull, who has a different view of the applicability of the BBC precedent, will be able to join us in Committee when we will debate that.
My noble friend Lord Goschen raised the question of disputes about statistical decisions taken by the ONS—for example, in the classification of Network Rail. Those ambiguities about roles will represent no improvement on the current position in getting a satisfactory response to those difficult issues.
We also want to look carefully at the role of the Treasury, whose fingerprints are all over the Bill. The Treasury is involved in appointments to the board and in removing people from the board—and, of course, the Chancellor of the Exchequer has extensive powers of direction. The Treasury will be setting the budget of the Statistics Board, as the Chancellor did in last week's Budget. We do not believe that five-year budget settlements are any substitute for non-Treasury influence on the budget-setting process. I agree with what the noble Lord, Lord Newby, said about that budget-setting arrangement. If the Statistics Board is under-resourced, the quality of statistics will drift down, as happened following resource constraints in the 1980s. As night follows day, trust will ebb away.
Whether the solution is a role for the Cabinet Office, which has attracted a lot of support today, or for Parliament is a question that we must debate in Committee. Whatever the answer on money, my noble friend Lord Jenkin rightly raised the issue of parliamentary scrutiny and the role of your Lordships' House. I hope that we can get more clarity about that as the Bill goes through later stages.
A large part of the Bill deals with the use of information by the board. My noble friend Lord Northesk drew out some important issues here. We understand the desire of statisticians to use data to generate powerful statistics, but we are wary of increasing powers through the use of gateways without commensurate controls or restrictions. As my noble friend Lord Northbrook pointed out, there are important links between the confidentiality protections and the issue of public trust. In Committee, we will want to strengthen those clauses.
In another place, many of those issues were rehearsed in detail, but the Government did not listen. They still have their parliamentary majority in the other place and they do not have to listen. Only small changes were made to the Bill. I hope that the Minister will take away two clear messages from today's debate. The first is that your Lordships' House is committed to ensuring that trust is restored to a national statistics system. We support the Bill, but only because it is a step in the right direction. The second is that we will be mounting a strong challenge to the detail of the Bill as it proceeds through your Lordships' House. There are major issues here that strike at the heart of whether trust will be restored and maintained. We shall be ruthless with those parts of the Bill that do not maximise that potential.
My Lords, I am grateful to all noble Lords who have contributed to a most interesting debate, which presages a lively Committee and beyond.
I begin with an apology to the noble Lord, Lord Jenkin, and all those who attended the meeting last week. The Financial Secretary to the Treasury was aghast when he heard that the letters, which he had signed on Thursday, did not arrive until today. They were posted on Thursday evening; I have ascertained that. I regret that they did not arrive until they did. That was by no intention on his part and he asked me to pass on his apology to all colleagues who attended what we all thought at the time was a useful meeting. The letters were designed to capitalise on that.
In this wide-ranging debate, we heard points of real criticism. The noble Baroness, Lady Noakes, duly wound up her speech by suggesting that fire and brimstone might attend certain parts of the Committee. I am heartened by the broad areas of support I heard in all speeches on the Government’s intent with regard to the importance of national statistics, which are of enormous value for business, academia, the media, charities and the wider community as well as for Government. Changes in technology and the availability of data via the web also mean that more people use statistics more regularly. We owe it to the citizen to provide accurate statistics more fully than we have been able to do in the past. I appreciate the recognition on all sides that the intention behind the Bill—and, the Government will argue, the realisation contained in it—is to improve the quality of our national statistics, the process by which they are generated and the extent to which they are safeguarded by proper public scrutiny, including the role of Parliament.
We believe that these proposals will help to reinforce and strengthen the UK’s statistical system, ensuring that it adapts to the needs of the modern world and that public confidence in it is reinforced. We are aware of the loss of respect for certain aspects of national statistics in recent years—perhaps even decades, if the noble Baroness, Lady Noakes, will allow me to say that. It is important to restore confidence, which is the intention behind the Bill.
Several areas of controversy were identified in the contributions, such as the separation of the board’s executive and scrutiny roles, the scope of its responsibility for official statistics, the application of the code of practice for national statistics, the critical issue of pre-release—which emerged very early on in the debate—parliamentary scrutiny and resources. It is unlikely that in the 12 or 15 minutes I have for a winding-up speech, I will be able to satisfy all noble Lords on all those points, but I am heartened by the fact that we will deal with them in detail in the not-too-distant future.
The noble Lord, Lord Jenkin, spoke of pre-release arrangements at the beginning of the debate and, towards the end, the noble Lord, Lord Newby, castigated the 40.5 hours proposed in the Bill as unacceptable and too precise. Pre-release arrangements will be given a special status in the new system. Unlike the rest of the code, the content of which will be backed by but not prescribed in statute, new pre-release rules will be set out in secondary legislation, proposed by Ministers but approved by Parliament.
I hear what the noble Lord says about secondary legislation not providing the same opportunities as primary legislation. Of course he is right, but although dealing with issues in statute which give both Houses the opportunity for scrutiny places additional limitations on this House, there are some fairly lively debates on secondary legislation at the other end, to say nothing of the fact that from time to time it is rejected. And in the space of only eight days, this House will have engaged in fairly lively debate on secondary legislation—there was such a debate last Wednesday and one is forecast for this Wednesday. I am not prepared to accede to the proposition that where Parliament is engaged in scrutiny of issues by affirmative resolution, it is somehow superficial. That is not the view taken in the other place, nor is it its practice. Moreover, Ministers at this Dispatch Box do not get an easy ride every time secondary legislation is debated.
The noble Lord, Lord Jenkin, also spoke about whether it is appropriate for one board to have responsibility for production and scrutiny. This is a point of principle on which we at this stage disagree, although I hope to persuade him of the virtues of the Government’s case as we proceed through the decisions on the Bill. We believe that a single-institution structure is the most effective way to deliver our goal of greater independence for the ONS, and independent scrutiny and oversight of the system as a whole. It avoids creating competing centres of statistical expertise. We see the board as being held fully to account by Parliament.
We all listened to the noble Lord, Lord Moser, with considerable respect; he has played a significant role in this area in the past. I pay tribute to the enormous interest he has taken in the development of this legislation, while he has reserved a critical stance with regard to certain aspects of it. Both he and the noble Lord, Lord Turnbull, questioned the scope of official statistics as defined by the Bill. We are intending that it will be extremely wide and flexible. All statistical information produced within government falls into the category of official statistics. The independent board will be able to promote standards and comment publicly on this vast range of information. It is important to focus the board’s assessment function on the core set of national statistics most relevant to policy formulation, delivery and accountability and those that are most valuable to business, academics and a wide range of other user interests.
In addition to the two noble Lords I have mentioned, others have expressed reservations about this approach. We will debate them further. The Government have thought about these issues with great seriousness and intend to present and protect the Bill in terms of this commitment, as we regard producing essential flexibility as one of the key strengths of the provision of statistics.
My noble friend Lord Desai questioned me on the quality of such statistics. That is of the greatest importance. The board will not be doing its job, nor will it be able to restore public regard for national statistics, unless it addresses itself to the quality of the statistics provided.
The noble Viscount, Lord Goschen, and the noble Lord, Lord Hannay, among others, spoke of the board’s responsibility for scrutiny and delivery—its two crucial functions. There are competing models of how these issues can be tackled; we considered having a separate scrutiny body, but decided that as a key goal is to place the ONS on an independent statutory footing, a single oversight board and a single line of accountability is the best way to achieve this. It avoids creating competing centres of statistical expertise. The Bill therefore includes mechanisms to ensure the clear delineation of production and scrutiny responsibilities. I outlined those mechanisms in my opening speech, and I have no doubt that they will be subjected to full scrutiny in our debates in Committee as one of the areas that causes anxiety in the House.
The noble Lord, Lord Newby, mentioned funding near the end of his contribution, as did other noble Lords, including the noble Lord, Lord Hannay. In common with all government departments, the budget will be set by the Treasury as the holder of the public purse. I know that it is easy for noble Lords to disparage the Treasury, particularly a week after the Budget—indeed, that seems to be the common sport of Parliament at this stage—but some department must take responsibility for the proper discharging of national resources, and the Treasury is obviously the first port of call. The arrangements for the new board reinforce statutory independence. Funding for the board is set outside the normal spending review process, and is decided by periodic review. The noble Lord, Lord Newby, must have taken great sustenance from the fact that the noble Baroness, Lady Noakes, on the opposition Front Bench also supports the view that this is the most minor of concessions. However, five-year funding is not a minor concession; it is an indication of the proper independence of the body. The Government will guarantee the board funding over periods of five years. Parliament will of course be able to hold the board to account for the way in which it allocates and controls its resources, in the same way in which it ultimately does for the rest of government and for the ONS at present. If in due course the funding for the board is criticised as inadequate, Parliament will have plenty of opportunities to raise these issues. However, the way in which we have set up the funding for the board is an indication of our recognition of the independence that it needs.
My noble friend Lord Haskel talked not only about the quality and comprehensiveness of statistics, but their relevance. It is right that he should have drawn attention to this. We expect the code of practice to include quality standards and to focus on relevance. There is no doubt that, in a rapidly changing world, government and wider society must keep up to date with the changes that will be reflected in technology and in the wider aspects of society. I was grateful to my noble friend for emphasising that point.
The noble Viscount, Lord Eccles, referred to the status of the National Statistician. The National Statistician is the board’s chief executive. The noble Viscount disputed the suggestion that the Government’s model could have a proper structure. However, the Financial Services Authority’s combined code principles of good governance and code of best practice include the principle of board balance and independence. It says:
“The board should include a balance of executive and non-executive directors (including independent non-executives) such that no individual or small group of individuals can dominate the board’s decision taking”.
The Bill is clear that the National Statistician is the board’s chief executive. The majority non-executive board replaces Ministers’ current oversight role and support of the National Statistician in the delivery of that role. As the board is accountable for delivering its statutory functions, it must be able to exercise oversight over the chief executive and executive office. The National Statistician has been subject to that scrutiny—I would not go so far as to say “controlled”—by Ministers. That scrutiny has now been transferred to a more independent structure in the form of the board, and I hope that, despite his doubts about the board, the noble Viscount will recognise that as an important step forward.
My noble friend Lord Lea also emphasised the relevance of statistics. He will forgive me if I do not discuss income statistics at this stage, as it would take me all my allotted time to deal with the issues that he raises. He threw a sharp focus on where statistics might prove to be inadequate. It is important that we have a framework within which we can deal more effectively with such issues.
The noble Earl, Lord Northesk, supported by the noble Baroness, Lady O’Neill, referred to the confidentiality obligations in the Bill. These are strong. As she said, we may be moving into a period of some confusion over data protection. This is an important issue that we must all scrutinise most closely. As the Government move into an era of greater data sharing to deliver better, more customer-focused services, it is essential for people to be confident that their personal data will be handled appropriately. The noble Earl will recognise that we are taking the opportunity provided by the Bill to increase the confidentiality safeguards on personal information. The Bill introduces a criminal sanction on unlawful disclosure, whether by board members and employees or by anyone to whom the board has passed the data, where that information identifies the individual or business or where it might allow someone to deduce their identity. Even after information has been shared, the information remains subject to the confidentiality obligation. Anyone passing the information on to others without authorisation could incur these criminal sanctions. I recognise the noble Earl’s anxieties, which no doubt will be expressed in Committee, but we have a robust response to certain aspects of the points that he made.
The noble Lord, Lord Chorley, was also anxious about the status of the National Statistician. Ministers will actively seek the added authority and credibility gained from “national statistic” status. After all, they rely on accurate, up-to-date statistics and data for their policy decisions. In a decentralised system, the responsibility for submitting statistics for assessment must lie with departments. That is the reason for our separation. Certain statistics need to lie with departments, but we recognise that the quality of official statistics needs to be promoted and safeguarded. The board will have a statutory responsibility to advise on areas of concern about any statistics right across government. The independent board will be enabled to comment publicly and make recommendations on statistical information used throughout government. Parliament is, of course, likely to take an interest in any public comment made by the board, and might choose to call Ministers to account if it is thought that their statistics are less than adequate.
I am conscious of the fact that I have not answered every point made in this debate. Far too many points are always made in debates of this kind that cannot be dealt with adequately in a winding-up speech, but I take consolation in the fact that we have a number of opportunities to return to these important issues in Committee and on Report. I look forward to those opportunities as much as the rest of the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.