1: Before Clause 1, insert the following new Clause—
“PART A1The Commission for Official StatisticsThe Commission for Official Statistics“Commission for Official Statistics
(1) There shall be a commission to be known as the Commission for Official Statistics (in this Act called “the Commission”) for the examination of the production, release and presentation of official statistics.
(2) The Commission shall consist of six members of the House of Commons appointed by the House of Commons and six members of the House of Lords appointed by the House of Lords, none of whom shall be a Minister of the Crown.
(3) The Commission shall, from time to time, present to each House of Parliament a report on the exercise of its functions.
(4) Schedule (Commission for Official Statistics) shall have effect as regards the Commission.”
The noble Baroness said: As we embark on this Committee stage of the Bill, I shall repeat what I said at Second Reading. We on these Benches will have one test for every clause and subsection of this Bill: is it the best way to achieve the highest degree of public trust in statistics? There can be no other rationale for the Bill and we shall fail if, at the end, there remain doubts about the degree of real independence.
With that background, I shall move Amendment No. 1 and speak to the other 12 amendments in the group. The amendments would strengthen Parliament’s influence on the Statistics Board and, in doing so, lessen the control of the Government. Amendment No. 1 would set up a commission of official statistics, which would consist of six members from each House of Parliament. At the heart of the amendments is a desire to separate the Statistics Board from government. We shall debate in more detail on a later amendment which bit of government—the Treasury or the Cabinet Office—would be the most appropriate guardian of powers over the Statistics Board, but these amendments address the question whether it should be Parliament or the Government in the driving seat.
Clearly, the Statistics Board has to be accountable, but to whom? The Bill’s answer is that the Government will hold all the key levers over the board, while allowing some reporting to Parliament. The amendments take a different approach and would set up direct accountability to Parliament. Amendments Nos. 4, 7, 9, 11, 13, 15, 18, 22, 25 and 29 set out that the commission will replace the role envisaged for the Treasury in Clauses 3, 4 and 5. These involve, in particular, the recommendation to Her Majesty of the appointment of the chairman of the board and the National Statistician, the appointment of the other members of the board and the terms and conditions of those appointments. I am in no doubt that one of the most effective ways of controlling an organisation is to control appointments to it.
The Bill states that the non-executive directors will be appointed for between one and five years. It is a fact of life that individuals who want to be appointed in the first instance, or who want to be reappointed, know that their face has to fit for the person who appoints or reappoints them, usually a Secretary of State. It is also a fact of life that individuals who have been appointed often store up their real criticisms until after it is clear that they are not to be reappointed. We have seen that recently in the case of the outgoing chairman of the Committee on Standards in Public Life. So the question that we should examine is whether individuals who embody the independence that we need to entrench in the Statistics Board will be better appointed by government Ministers or by a body of parliamentarians drawn from both Houses. It may be that politicians in general do not engender trust, but I suggest that the parliamentary solution is the only one designed to maximise trust in the new system.
The other main function of the parliamentary commission will be to examine the budget of the Statistics Board, as set out in Amendments Nos. 237 and 238. The issue of the money available to the Statistics Board is fundamental. The Bill says, in effect, that the Treasury should decide that, but the Government have come up with a formula based on five-year funding deals that they trumpet as solving the problem of giving the Statistics Board the right amount of money. At our Second Reading debate, several noble Lords poured cold water on that idea. All the time that the Government—and, therefore, the Treasury—make the decision, the board will not have proper financial independence.
Concerns have been expressed at the cuts that have already been forced on the ONS and the way in which the ONS is having to relocate itself far from any natural statistical community. That is not a policy of choice for the ONS, as is clear from the lack of retention of senior staff in the move. Even if the five-year settlement announced in the recent Budget is generous—and I have no reason to believe that it is—it gives no long-term certainty that the Statistics Board will not be squeezed in any future five-year settlement. We do not believe that the five-year settlement changes the fact that Treasury control is a recipe for funding problems in future. The only way in which Treasury control can be avoided is to give Parliament control over the budget of the Statistics Board. Nothing else, not even the involvement of the Cabinet Office, which we shall debate later, will guarantee that funding will follow the needs of the body.
Amendment No. 112 creates a new schedule which sets out the detailed provisions for the commission. I do not believe that these provisions raise any particular issues that I need to draw to the attention of the Committee. The ideas behind these amendments are often referred to as the “NAO model”, which has certainly been their inspiration. But the amendments do not replicate the NAO model; they leave the non-ministerial government department structure in place and hence preserve the necessary closeness of the Statistics Board’s activities to the other statistical activities across the whole of government. That would involve no change of status for the staff and thus facilitate the continuing movement within the Government Statistical Service. By contrast, the Comptroller and Auditor-General is a corporation sole and an officer of Parliament, and his staff in the NAO are not civil servants.
My amendments thus represent a third way between the extreme independence created for the C&AG and the NAO by statute, with accountability lines to a parliamentary accounts commission, and the pure non-ministerial department model selected by the Government. The crucial differences are appointments and money, which are the aspects that cry out for a different approach if we are to create a properly independent Statistics Board. My noble friend Lord Jenkin has consistently advocated the role of a Joint Committee of both Houses to act as the scrutiny body in Parliament for the Statistics Board, an idea for which he gained much support at Second Reading. My amendments would create what my noble friend desires, but with the added bonus of powers over appointments and money. I beg to move.
At the conclusion of my Second Reading speech, I supported the proposal from the noble Lord, Lord Jenkin, for a Joint Committee. The amendments share some characteristics with that proposal but go one or possibly two steps too far. If I were charitable, I would say that it was overkill; if I were uncharitable, I would say that it was a constitutional muddle.
It is ironic that the noble Baroness spoke of eliminating conflicts of interest but would create a new one through this measure. A later amendment would change the residual department from the Treasury, which has a conflict of interest in being a major customer and funder of statistics and which stands to gain or lose from many of the definition issues. It is ironic that these proposals would create another conflict of interest. I believe that the role of Parliament is to scrutinise; under these proposals it would go one step further and become involved in appointing the chairman of the body that it is scrutinising. In rugby terms, this would put a foot into touch. Further, it is unnecessary because the shift of the residual department will substantially change the balance of power.
The argument that this block of spending should more or less uniquely be controlled by Parliament needs to be considered with great care. There may be many other cases. I am not convinced that this block should be ring-fenced and treated separately. I have severe doubts about the amendment. I hope that on reflection it will not be pressed.
The chairman would be appointed under Nolan rules; I think that that is made clear in the Bill. The process would be organised by the Cabinet Office, which would make a recommendation to the Prime Minister, who in turn would make a recommendation to Her Majesty.
I am grateful to my noble friend on the Front Bench for what she said about the involvement of both Houses in any parliamentary scrutiny of the Statistics Board and the whole process. Since I first raised the point in the debate on the Loyal Address in response to Her Majesty’s speech, I have been struck by the amount of support for the measure in both Houses. I do not say that support is unanimous in another place but there are certainly voices there that recognise that there is considerable expertise in this House and that the involvement of both Houses would add considerably to the authority of the parliamentary scrutiny of this whole process. As I made clear then, this is not a matter ultimately for the Bill, although amendments are tabled; it is a matter for agreement between the usual channels—I understand that. I and, I have no doubt, others have brought the matter to the attention of the usual channels and I hope that a good result may emerge.
My noble friend’s amendment on resources, to which she referred, is grouped with this one and appears right at the end of the Marshalled List. This is always seen as a very important element of the statistics arrangements of any country. We shall discuss this matter later. I have tabled an amendment on the European principles on statistics. Principle 3, headed “Adequacy of Resources”, states:
“The resources available to statistical authorities must be sufficient to meet European statistics requirements”.
That does not mean the Commission’s requirements; it means the requirements of all the members of the European Union. It is made perfectly clear in the rest of the document that that includes the national requirements of individual countries. I will not read any more. All I am saying is that it is clear that adequacy of resources must be part of the independence of the statistical service. If at any stage it is felt that the National Statistician or the board have to go, as it were, on bended knee to the Treasury and say that they must have more resources to be able to do what is required of them, that immediately puts them in danger of being subject to Treasury pressure. One can see the sort of terms that the Treasury might impose as part of a deal to get more money. I just do not think that that is right.
I have one other example. Of course, this is not typical, but both Houses of Parliament are responsible for their own financing, and it is of the most enormous importance to the independence of Parliament that we are not subject to a cash limit and do not have to beg the Treasury each year for allowances. Of course we must be responsible, and of course we must have arrangements—as we do—to make sure that the country gets value for money, but Parliament, to ensure its independence, is responsible for its own financing. Although not a complete parallel, the statistical service is of the same sort of importance as Parliament in terms of establishing trust in the functions that it performs.
I do not intend to take up a lot of the Committee’s time, but we must never forget that we are engaged in a process of seeking to restore public trust. The amendments in the group, in particular Amendments Nos. 237 and 238, would go some way towards doing that. I hope that both Houses may be involved in that process.
I am sure that the whole Committee would agree with the noble Lord, Lord Jenkin of Roding, that one of the main purposes of the Bill is to enhance public trust in the statistics that the Government produce, and that Parliament must have a strengthened role in achieving that. We strongly support the concept of enhanced parliamentary scrutiny of the statistical service. The model that we always had in mind was a Joint Committee of both Houses, which would act in the traditional manner of parliamentary scrutiny. It might, as part of that process, undertake a series of confirmation hearings for members of the board and possibly for the incoming National Statistician, so that there is proper scrutiny both of the persons and of the procedures of the new bodies.
We have some doubts about whether there should be a statutory commission as set out in the amendments, partly because of the possible conflicts of interest mentioned by the noble Lord, Lord Turnbull, which is a real issue. There is the risk of slightly muddying the waters, which are pretty muddy already, between the roles of the board and of the National Statistician. If you have this very powerful new statutory commission in place, there is a real danger of the roles being muddied further.
The other thing that I have slight doubts about is the idea that Parliament, almost uniquely, should set the budget for the statistical service. We agree that statistics are very important in how the Government are perceived and for trust in government. Is the statistical service such a unique strand of government activity that Parliament should have that role? Is it of a different order of importance from, for example, the Government Economic Service, which also has a specialist role in the overall Civil Service organisation? We are not convinced that statistics are much different from many other public sector functions.
However, I congratulate the noble Baroness on one aspect of the amendment, about which I have a question for the Minister. Whenever we discuss the possibility of establishing a parliamentary body to oversee and to scrutinise new legislation, we are told that we cannot discuss the matter, because it is for Parliament to decide, rather than one House of Parliament in the context of deliberation on a Bill. Yet here we have an amendment that would set up, in effect, a Joint Committee of both Houses of Parliament. Why is it possible to set up a commission that includes six Members of the House of Commons and six Members the House of Lords, when, if I tabled an amendment to establish a Joint Committee with six Members from each House, I might be ruled out of order or, at least, the Minister would say that that was totally against parliamentary procedure? I would be grateful if the Minister could help me on that.
I share the noble Baroness’s concern that any such body should be wholly independent—and certainly independent of government—but I am worried about the amendment to set up the commission. I accept that money for the independent board should be raised independently of government, but the idea of having six Members of each House on the commission, doing that job, rather than being, for example, on a Select Committee to which issues of money and everything else would have to be referred, is entirely different. The accountability to Parliament is right, but those Members of each House would be carrying out an executive job. How else would they do it? They would be working virtually full time, or at least spending a lot of time, on a major commission, seeking to ensure the independence of the board. That worries me. I cannot see how the objective that I share with the noble Baroness would be better achieved by setting up this new commission than by having a Select Committee of both Houses to be responsible for accountability to Parliament.
I agree with the noble Lords, Lord Turnbull and Lord Newby, and my noble friend Lord Barnett. We suspect that Governments might undermine the independence of statistics, but the best way to deal with that would be for Parliament to keep an eye on the Government by asking them to be accountable to it and to give evidence to it. Appointments made to the Statistics Board should also be scrutinised by Parliament. Parliament should not do an executive job; it should do what legislators do. That separation must be there.
This series of amendments tabled by the noble Baroness puzzles me. Once upon a time, our statistics service had independence and trust; we did not need parliamentary commissions. We have not examined when that trust broke down, but it was not last year or the year before—it was some time ago, which is why in 2000 the Government made a first attempt to ensure independence, and now they are having a second bite of the cherry. It is important to realise that the old system was not so broken that we needed to add a whole new system of machinery to it.
We need to ensure some financial stability and I assure noble Lords that a quinquennial settlement is not a bad idea. That was the system under which universities enjoyed substantial autonomy for many years. So far as I can see from Amendment No. 237 in the name of the noble Baroness, Parliament is supposed to carry out this task annually, but I think that that would cause unnecessary harassment and worry.
Perhaps I may add one more comment. We all love Parliament but a recent attempt has been made to interfere with freedom of information with respect to parliamentarians. It has not been successful so far but the idea has not been abandoned. I am concerned that statistics could become a political football if a parliamentary commission had executive powers, and we do not want that to happen. We do not want a parliamentary committee suddenly to decide that no data about Parliament will be released, and things such as that, which I am sure some people would want. So I should prefer scrutiny issues to be handled by a Joint Committee of both Houses of Parliament and executive functions to stay as they are, with a quinquennial settlement for the moneys to be provided to the Statistics Board.
This has been a fascinating debate. It began with a proposal from the Opposition of an alternate model for the system, and it is for them to defend their model. So when the noble Lord, Lord Newby, asks me where Parliament fits into this model and whether it would be in order to table amendments on how to instruct Parliament, that question should be addressed not to me but to the noble Baroness, Lady Noakes, who proposed the amendment. I say only that in legislation we should be somewhat wary of purporting to tell Parliament how it should carry out its scrutiny functions, and I am mindful that significant contributions on this issue in the other place identified support for the government model and not for the one proposed in this group of amendments.
These amendments were considered in the other place but, before I address them head on, I should perhaps explain the Government’s model proposed in the Bill and say why we think that it is the right one and why the amendments and proposed new clauses would confuse the situation. However, several Members of the Committee, including my noble friends Lord Barnett and Lord Desai and the noble Lord, Lord Turnbull, to whom I shall refer in a moment when we get on to the subject of financing the proposal, have already indicated why the alternate model proposed in the amendments has, to put it at its mildest, some imperfections.
The amendments propose an alternative model and suggest how things should be done, but we in government base our position on the concept that statistical production is an executive function and that statistics are a public good serving a wide range of users. It is therefore proper that that function should be located within government rather than within Parliament. At the same time, I accept the strong argument that there has to be adequate parliamentary scrutiny of statistics in order to enhance the nation’s trust in them.
The view that the production of statistics should be an executive function was supported in our public consultation, and the Treasury Select Committee, which has had responsibility for statistics in the past, largely endorsed the Government’s position. It is an almost universal feature of statistical systems internationally that statistical production sits in the Executive, not the legislature. The noble Baroness may be able to produce illustrations of where her model obtains elsewhere, but I did not notice her refer to them in her speech, nor in any other that we have heard in the past. So the model being articulated on the other side of the House certainly has some unique and, we believe, flawed features.
One central pillar of the Government’s model is the production of statistics as a responsibility of government. The next core aspect of our model is scrutiny of the statistical system by an independent board, with statutory powers established in legislation, as this Bill sets out. Parliament’s role in this model is, of course, important and is to hold the statistical system and all those involved in and responsible for it to account. Parliament rightly has that role in relation to other executive functions of government which are devolved or overseen by independent boards, such as the Food Standards Agency.
Therefore, the idea of a commission for official statistics established in statute, composed of Members of both Houses of Parliament and with a role in appointments, would surely confuse Parliament’s role and the governance model overall, which is the burden of the representation of my noble friend Lord Desai. Although there are a limited number of other areas where there are commissions of the type proposed—for example, the Public Accounts Commission, which scrutinises the work of the National Audit Office, and the Speaker’s Committee, which oversees the work of the Electoral Commission—they relate to the scrutiny of fundamentally different organisations and issues. Those two bodies relate to the role of the legislature, and that factor is not relevant here.
The Public Accounts Commission’s primary role is to examine the National Audit Office estimates and it is established in a manner akin to the proposed commission for official statistics. The role of the National Audit Office is quite different from that of the statistical system. The National Audit Office has a particular role in ensuring that government departments have achieved value for the money voted to them by Parliament—hence the particular method of scrutiny.
Equally, the Speaker’s Committee, which scrutinises the expenditure and income of the Electoral Commission, is so established because of the special role that the Electoral Commission plays in relation to the legislature. The Electoral Commission is there to establish the integrity and effectiveness of elections to this Parliament as a whole, not just to the Executive. Therefore, those two models are different and have different scrutinising structures in Parliament because of their uniqueness in those terms. I maintain that statistics do not fit within that pattern.
The amendments stipulate that the Queen, in appointing the chair of the board and the National Statistician, is advised by the chair of the Commission for Official Statistics. Notwithstanding what I have already said about the reasons why I do not think we should establish a commission for official statistics, as my honourable friend the Financial Secretary set out in the other place, the Government intend to follow the usual process in these matters. That means that, in the case of Crown appointments, the Queen is advised by the Privy Council, via the Prime Minister or the Lord Chancellor. In this case, it will be the Prime Minister.
That is a well established process, which it is unnecessary to stipulate in the legislation because we are accustomed, in a range of bodies, to following exactly that pattern. There is no such reference, for example, in relation to Crown appointments in the Bank of England Act. Of course, we need to guarantee that the selection process as regards the board is open and fair and conducted in line with the high standards that will be expected of the office.
That aside, we do not think that the chair of such a commission should be the one to advise the Queen on such matters. The Government do not believe it is for Parliament to take a direct role in what we regard as an executive appointment. In fact, it seems to me that the noble Baroness in proposing her amendment has to recognise that it is certainly an executive appointment. The other amendments follow a similar vein, and would transfer the responsibilities for appointing non-executive members of the board, currently assigned in legislation to the Treasury, to the chair of the commission for official statistics. This is inconsistent with the fact that the board serves a function of the Executive. Parliament should not interpose on executive appointments.
The Treasury Select Committee of the other place said last year that public perceptions about the independence of the board would depend more upon the actions of board members than the method of appointment. I am sure that we all recognise that that must be so. The Government certainly agree, and think that the direct involvement of Parliament in the appointments process would skew the accountability model for no gain. The quality of the board’s membership will of course be crucial in ensuring the board’s independence, credibility and ability, if necessary, to challenge government departments on the quality and integrity of their statistics. Parliament’s role will then be to hold such persons to account, as well as the Government for their appointments in such cases.
On funding, I am grateful to the noble Lord, Lord Turnbull, who indicated that there were difficulties in the model of the noble Baroness’s amendments. I am also grateful to my noble friend Lord Desai, who confirmed what must be the case. It is suggested that the five-year period created in the Bill for the funding and budgetary arrangements for the commission will not necessarily guarantee independence. The noble Lord, Lord Jenkin, expressed his anxiety about that. I thought, as my noble friend Lord Desai indicated, that British universities worked on exactly that model for several decades. They did so, justifiably to trumpet across the world that they had state funding but were independent of the state. They gloried in that role and stressed that it was essential that such independence should be maintained. A model not dissimilar to that is being proposed for this board, and it is suggested that the board will be under the Treasury’s thumb. I do not believe that to be so. It is not our intention, which is why have put forward this structure. It obtains for one or two other significant bodies such as the Food Standards Agency or the regulating agencies, which must have their independence from government in dealing with aspects of the utilities. All have guaranteed funding over a period to ensure their independence.
I am sorry to stop the Minister in full flow, and thank him for giving way. If that is the implication in the Bill, why is it not in the Bill? He said that it is implied. Does he expect that everybody interested in this must carry around a copy of both the Act and today’s Hansard? It would be much simpler to put it in the Bill.
It may be simple to put it in the Bill, but that is not the burden of the amendments of the noble Baroness, Lady Noakes. They are there to create an alternative model of how accountability should operate. Having identified that we have other illustrations of the Government in action, funding bodies in these terms, I am identifying at this stage how the Government envisage the board as working and the basis on which funding will be provided for it. It is crucial to the concept and structure of the board that that should be so.
We are committing ourselves to a funding settlement. It will be for the board to decide on spending allocations for its functions, the census, new statistical initiatives and for what is at present the Office for National Statistics, but nearly £30 million has been earmarked for new functions specific to independence, including establishing and maintaining the board’s delivery of the independent assessment of statistics and developing and managing the proposed central publication hub. Therefore, we are already acting in the spirit of the concept of independence of the way in which the board will operate—guaranteed funding will ensure that.
I therefore hope that the noble Baroness and the House will recognise—I appreciate her commitment to an alternative model, and the work that has gone into that in this House and in the other place—that the Government have thought through these issues carefully and that, on the basis of public consultation, their broad position has been supported. The Treasury Committee in the other place is one important body that supports them on the crucial issues contained in the government model. I hope, therefore, that the noble Baroness will feel that she has at least probed satisfactorily into the government model and is able to withdraw her amendment.
I thank all noble Lords who have taken part in this short debate. I am sorry that my model did not gain more support around the House but it has enabled us to have a debate about important issues.
The noble Lords, Lord Turnbull and Lord Newby, raised the question of whether there would be a conflict of interest between Parliament’s holding the Statistics Board to account and also setting its financial envelope and making appointments. I am not sure that that is a huge problem—and it is not a problem with the NAO, which has worked perfectly well—but I accept that some distinctions could be made between the NAO and an organisation such as the Statistics Board.
The noble Lord, Lord Barnett, suggested that this new commission would take up a lot of time. That was not the intent. The intent was that it would deal with appointments and money, which could be done annually or perhaps even five-yearly, and that it would deal with the basic oversight of the Statistics Board, but that it would not be at it every day of the week, which the noble Lord, Lord Barnett, seemed to imply, because it would not be carrying out executive functions. We were not suggesting that the Statistics Board would sit within the legislature, to use the phrase of the noble Lord, Lord Davies of Oldham, merely that certain powers would sit within the legislature.
We had an interesting debate on money, which teased out the fact that that is one of the important areas. My noble friend Lady O’Cathain has helped us to see that this Bill is probably deficient in the way in which it approaches money, because it leaves the issue of money entirely to the Treasury. It does not even enshrine a five-year settlement, which might be one way forward that we may well want to explore later.
This debate has also been useful in improving and strengthening the coalition of support around my noble friend Lord Jenkin’s views for a joint committee. The noble Lord, Lord Newby, indicated that we could never write in Joint Committees, but I am told that we can write in joint commissions, and we may well have a go at writing in a joint scrutiny commission at a later stage.
I believe that my amendment has enabled us to have a useful debate on some of the issues that we needed to address, but I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Status]:
On Question, Whether Clause 2 shall stand part of the Bill?
I have tabled our opposition to Clause 2 standing part of the Bill in order to debate whether a non-ministerial department is the best way to achieve an independent organisation for statistics. This aspect of the Government’s proposals has received relatively little attention.
The Government have relied on the existence of 20 or so other non-ministerial departments as a precedent. The use of that model goes back a long way and it is a well tested method of creating some independence within government. However, we should be under no illusions that those organisations remain firmly within government. Indeed, one of the reasons for using the model is to allow fluidity of staffing between the non-ministerial department and the rest of Whitehall, which can certainly have advantages.
The name “non-ministerial department” is a bit of a misnomer because it implies that Ministers disappear from the picture. Clearly, they do not: Ministers remain responsible for the Government’s legislation; they appoint the key people; they retain mechanisms that control the terms and numbers of staff; and generally they set the amount of money that is needed. Under this Bill, they retain powers of direction so that they can step in. We shall come to those powers later.
The issue I want to draw to the attention of the Committee is that this is the first time the Government have sought to use a non-ministerial department model to encompass an organisation with split functions of oversight and operations, as set out in the Bill which has an assessment function separate from the National Statistician’s functions—in effect, to oversee the latter. The board is responsible both for the production of statistics and regulating them by regulating the work of the National Statistician and the executive office, and I do not believe that any of the other non-ministerial departments has that overlap of functions. We will be looking at the overlap of functions in more detail in later amendments, but for the purposes of this Motion I am trying to explore whether this model has previously been used for the overlapping arrangement.
Other options were examined by the Government, as set out in their various documents before they produced the legislation on the Statistics Board, but none appeared to examine the use of a public corporation to carry out the function as set out in the Bill. Public corporations generally have a greater distance from government. They still have government involvement in appointments and so forth, but they have a greater degree of separation and therefore independence. I am much less clear that a non-ministerial department has sufficient independence. I have worked with some of the other non-ministerial departments—indeed, I sat on the board of two of them. I would characterise them as close to the departments which have responsibilities for them and say that they are certainly not arm’s-length. I have also worked with, or been appointed to, public corporations. In those instances, the length of the arm is very much longer. I believe that the element of distance in government is crucial to creating proper independence.
On non-ministerial departments, I hope that the Minister can answer one question of detail. I understand that every government department must have an accounting officer and a principal finance officer. That applies whether the department is ministerial or non-ministerial. Will there be an accounting officer and a principal finance officer for the Statistics Board, and, if so, who will it be? Will the chairman or the National Statistician be the accounting officer? That might help the Committee to understand what the model means in practice.
I am well aware that there was little opposition to the non-ministerial model during consultation, but I hope that the Minister agrees that the aim of the Bill is to create a statistics body that is actually independent and also has the appearance of independence. In that light, I have tabled the Motion to examine the rationale for using the non-ministerial department and whether it is a robust model for creating the degree of independence that we seek.
I am grateful for the way in which the noble Baroness described her Motion, even though I am in great danger of repeating the main principles that I adumbrated with regard to the first amendment. It created an alternate model and embraced a range of concepts about how the board will work, and I therefore do not have a great deal to add to what I said then. The noble Baroness freely and generously conceded that our public consultation and the deliberations of the Treasury Select Committee of another place confirmed that the Government should identify the board as a Crown body, which is the basis on which we are working. As I indicated, we are convinced that statistics are a public good that serve a wide range of users and it is right that statistical production remains an executive function.
The noble Baroness asked me a specific question about the accounting officer. We expect the National Statistician to be the accounting officer for the board. I think that we are going to have an extensive debate on the role of the National Statistician, its importance and the extent to which these new arrangements pay proper regard to the highly significant position that he occupies. I have no doubt that we will return to those issues. However, the specific answer to the noble Baroness’s question is as I identified.
On the more general points that she raised, I think that I answered them in the debate on the previous amendment. We expect Parliament to play a central role in holding the statistical system to account under the new system, and we expect that there will be full accountability to Parliament for it. However, Ministers will have only the residual responsibility of the interface with Parliament because only they can be directly accountable to Parliament for the operation of the board. They will act as a conduit for the answering of parliamentary questions by the board and the National Statistician and will lay the board’s annual report before Parliament. They will also be responsible for piloting secondary legislation through Parliament and for the structure for appointments. We have models of non-ministerial departments that work satisfactorily.
The most important feature—and the confirmation that I want to emphasise—is that the new board will be established as a Crown body with a defined range of functions and its staff will be civil servants. I know that there is an issue about certain Crown servants being transferred to work for the board. We will have a chance to discuss that in some detail later, and I hope that I will be able to give the fullest possible assurances about the welfare of such individuals within this framework.
The board will not be an executive agency of any government department. It will not report to Ministers. Parliament will play the central role in holding the statistical system to account under the new system, and the board will be fully accountable to Parliament for the statistical system. As I have indicated, the board will have its own funding arrangements. I realise that I will not be able to reassure entirely the most sceptical Members of the Committee when I describe the funding mechanism that we intend to put in place, which we have already started partially to activate within the framework of the most that we can do under law at present. It is not conceivable that we would put the detail of the funding arrangements for this body in legislation. That does not obtain with any other comparable body, and we are not doing so. What we are doing is making explicit and absolutely clear the five-year funding model which guarantees the dependence, which was the subject of the debate on the previous amendment.
I hope that the noble Baroness feels that in this short debate on Clause 2 she has reinforced her anxieties derived from her earlier amendments, but that I have helped perhaps to allay them.
Before my noble friend replies, I offer one or two brief comments on what the Minister said. He emphasised the fact that he is trying to follow precedents in other cases and is dismissing arguments advanced from this side of the Chamber in that they are not supported by precedent. I approach the legislation on the basis that if we do no more than that we will not achieve its primary purpose; namely, to restore trust. We will have to go further than would otherwise have been the case because, if I may put it this way, there is so much lost ground to be made up. I hope that the Minister will recognise not only in this Motion of my noble friend but in others that are coming we really have to fall over backwards to try to create circumstances that will engender trust.
The Minister merely says, “Well, this has not been done in the case of this or that other organisation”. That is not the game we are in today. With respect, we are concerned with the Minister’s intentions. I made this very clear at Second Reading: our objective is to help the Minister to achieve his intentions. If we are going to achieve that, we must be prepared to be bold and innovative. That is what we are looking for from the Government Front Bench. I have to say that so far we have not had it.
Perhaps I may respond briefly to that important contribution. First, I share with the noble Lord, Lord Jenkin, and all other Members of the Committee that the purpose behind the legislation should be and is to improve the position of national statistics, to improve the reputation they enjoy and to enhance public trust. That is why the legislation is before us. If there were not anxiety in that respect, the legislation would not have been forthcoming. Of course we have the same earnest and intent as the noble Lord has indicated.
We have a difference between us at this stage. I hope that we will have a meeting of minds as we develop our work on the Bill and as I hope I become more convincing as I describe it in more detail in due course. I hope that I can assure the noble Lord, Lord Jenkin, that on the basis of the public consultation and all the advice we now put forward, subject of course to the critical scrutiny of this House as much as the other House—if not more so on some occasions—we will arrive at a model which will achieve exactly the objectives he has adumbrated, and which I share.
I am extremely grateful for the intervention of my noble friend Lord Jenkin because he has reminded us what it is we seek with the Bill. The Minister said that he hoped that later on he would be more convincing, in that he has recognised he has not been very convincing to date. The Minister said that the non-ministerial department model was—and I quote him—“satisfactory”. Satisfactory is not what we are trying to seek with the Bill; we are trying to seek the best possible solution.
I asked the Minister whether there were any precedents for an organisation that mixed oversight functions with execution functions. I do not think I heard an answer to that. However, the purpose of tabling the amendment was not to seek the opinion of the Committee; it was to press the important issues that arise out of the model created by the Government. That is why it is so interesting that the Minister went back to the funding model yet again. We will clearly need to do a lot more work on this before the Bill leaves this House.
Clause 2 agreed to.
Clause 3 [Members]:
2: Clause 3, page 1, line 15, leave out “executive and”
The noble Baroness said: I shall also speak to Amendments Nos. 3 and 20. The amendments continue the theme of examining whether the constitutional model for the Statistics Board set out in the Bill is the best one for creating the environment in which trust in statistics can flourish again. They challenge whether the model of a mixed executive and non-executive board is the correct one, and would create a board composed entirely of non-executive members. This does not change the Bill’s basic approach, which is to have a non-ministerial government department, a National Statistician, and an executive office within the board to replicate what is currently found in the Office for National Statistics. The amendments are designed to move to a structure that more clearly recognises the supervisory or regulatory functions created by the Bill, and the executive or operational functions in the Bill. A later group of amendments, led by Amendment No. 30, allows us to explore the detail of the separation of functions between the board and the National Statistician, and are an essential accompaniment to these amendments.
I want to be clear that I do not seek to minimise the role or status of the National Statistician. Indeed, we have a great desire to enhance the role of the National Statistician as we go through the Bill. Although the National Statistician would no longer be a member of the board, nor would any of his or her executive colleagues, so the board would have a clear oversight function. We would leave completely intact the National Statistician’s role as the board’s adviser on statistics, as provided by Clause 28. It is pretty clear that the board would expect the National Statistician to attend all board meetings, except of course when the board specifically appraises the work of the National Statistician. The fact that the National Statistician remains a part of the board while the board appraises his or her work is one of the Bill’s problems.
I mentioned earlier that, so far as I could ascertain, the Statistics Board that is being created is the only example of a non-ministerial department with explicit regulatory as well as operational functions. It is exactly that form of internal conflict that led to the separation of executive and non-executive functions in the BBC, with the non-executive functions being discharged by the BBC Trust. As with our concept for the National Statistician, the role of the director-general of the BBC remains undiminished by the new structural arrangements in the BBC. Arguably, that role would be enhanced because it gives clear operational leadership to the senior executive in the structure.
The unitary board model of mixing executives and non-executives was created in the private sector for commercial bodies. It has evolved, particularly in the UK, to a general understanding now enshrined in the corporate governance code, which is overseen by the Financial Reporting Council, that at least half the members of boards of directors, excluding the chairman, are non-executives. This is designed to provide an environment in which entrepreneurialism and profit maximisation can flourish, while providing checks and balances on behalf of the interests of shareholders overall.
The mixed model of executives and non-executives serves the business community well, but we should be wary of assuming that it is the only model for a corporate body. I am sure that it also works well for public bodies that operate on commercial lines, although there are relatively few of them left in the public sector. It might seem to work quite well in some of the newer regulatory bodies, such as the Financial Services Authority and Ofgem, but there have been no studies, so far as I am aware, of the detailed ways in which those boards work. The fact that they are mixed executive and non-executive does not mean that they operate in line with the private sector model, as found in the combined code. Of course, relatively few bodies combine regulatory and operational functions. Indeed, I am not sure that there are many beyond the BBC. So we cannot assume that the model in this Bill produces the right result.
I hope that the Minister will answer a few questions which are relevant to this issue. Will he describe how the Government see the role of the chairman developing? They announced last week that the search for the chairman would begin this month, and so there must be a detailed specification. Will the Minister make it available to the Committee? Will the chairman be expected to report publicly on the work of the National Statistician? What will happen to the functioning of the unitary board if the chairman and the other non-executives disagree with the National Statistician?
We see a potential issue also in the nature of the chairman. I believe it has been said that the role is seen as a significant one which should attract a heavyweight candidate. That gives comfort to those who want a champion for statistics within Whitehall—someone who can kick up a fuss, for example, if resources for statistics are insufficient or if there is non-compliance with the code. But the bigger that role is within a unitary board, the smaller will be the role of the National Statistician, especially if the chairman has a head of assessment overseeing the work of the National Statistician. I think the Minister will agree that when two large roles are found on one board, they cannot both be top dog. As I have said, we want the role and status of the National Statistician to be enhanced, so his or her role in relation to the chairman is important. In Clause 29 the Bill provides that the National Statistician is to be the chief executive of the board, but it is unclear exactly what that is intended to convey. Will the Minister explain what the Government mean by that, and how they see the relative roles of the chairman and chief executive playing out?
These issues are important because the Government have decided on a unitary structure for the board. Currently there is no confusion between the roles of the chairman of the Statistics Commission and the National Statistician, but throwing the two roles into one board creates a huge potential for confusion or worse. I am concerned that the apparent tidiness of the unitary corporate model will not serve our statistics arrangements well. We ought to pause to see whether there is a better structure which will enhance trust in statistics. I beg to move.
This is the first of a number of amendments related to the structure of the proposed reforms and therefore it has a crucial bearing on a number of issues we are going to be discussing throughout the Committee stage. I want to speak briefly at this point because I am sure that I will want to speak again when we come to other substantive amendments. It is worth recalling once more the main purpose the Chancellor had in mind when starting us down this road: it is to achieve independence for official statistics with a view to improving trust. That is the whole point here, and as one or two noble Lords have again referred to “trust”, as we must throughout our debates, let me say—especially in response to the noble Lord, Lord Desai, who is not in his place—that he is absolutely right to say that we need to give more thought as to why the problem of “trust” has come along. In my view, it clearly relates not to poor statistics but almost entirely to the poor use of statistics by Ministers, politicians generally, advisers, the media and so forth. It is also worth pointing out that this is a greater problem now than it was in the past. I speak from personal experience in my 10 years in charge. Trust was occasionally a problem, but it was not a general one. I can also say, more importantly, that it is hardly a problem in any other country. The chief statistician of Canada, whom I regard as the top dog in our international world, has said repeatedly that he is puzzled why we have the problem here. However, we shall come back to the issue time and again.
The amendment moved by the noble Baroness relates to the structure of the board, and my reason for wanting to comment on that at this stage is to serve as a reminder of two key issues which I hope we will bear in mind throughout our debates. Issue number one is that the board and the National Statistician are both totally concerned with all official statistics. We are tempted to think of the ONS, which is at the centre, but I remind your Lordships that 80 per cent of government statistics stem from outside the ONS.
Issue number two, which is more crucial for this amendment, is that it is vital that we have a clear distinction in our minds throughout between, on the one hand, the production role—that is, planning the statistical work, collecting, analysing, interpreting and so on—which belongs to the National Statistician and her forces, and on the other hand supervision or scrutiny, which belongs to the board. It is still rather confusing to have the two combined as they are in the Bill. The Minister said at Second Reading:
“We have ensured that, within the single structure that we propose, there is a clear separation between the board’s production and scrutiny responsibilities”.—[Official Report, 26/3/07; col. 1445.]
That is the distinction we all want but, to my innocent eyes, it does not come through in the legal drafting of the Bill. I am not alone. The Royal Statistical Society, no less, to which we owe a great deal of thanks for its help in working through the Bill, called it “a muddle”. Time and again in the draft Bill the board is given production responsibilities that integrally belong to the National Statistician, thus confusing the issue and the new system. We still need clarity, which I do not think is a controversial matter. It is for the Government to redraft the Bill so that that clarity is achieved.
Much more needs to be said on this matter in connection with later amendments, and I do not want to go on at this stage, but the amendment before us is closely linked to the issue of the division between those two functions, which is why I mention it at this point.
Like the noble Lord, Lord Moser, I shall be brief. I have an inherent problem with having a totally non-executive board. Part of the reason is that although the National Statistician will be present and sitting at the board, there is no question that it looks as though there are important people on the board and one who is less important. If, as everyone has said, we need this Act in order to ensure the independence of, and rebuild trust in, official statistics, it is imperative—although I do not believe it has been mentioned today—that trust in those statistics, once reinstated, is maintained. It is fine in the first flush of a new Act to say, “We have this board, and the National Statistician can sit there”. Then, I fear, unless the National Statistician is of huge humility—which is, by the sound of it, difficult—and great patience, he or she will find it increasingly irritating to sit in on a board without the authority of being a board member.
I have sat on boards since 1984 and, in my experience, the mixed board is the one that works. On the board of Tesco, for example, on which I sat for 15 years—well outside the rules that apply now—if Sir Terry Leahy, or Terry Leahy, as he was then, was told that he could sit in on the board when he was operating all the business, with a non-executive chairman, as there was, sitting on it and non-executives members such as me, he would, to use a huge understatement, have been slightly miffed.
I need a lot of convincing on this. I have spoken to my noble friend and, while we are not exactly on the same side, we both take the view that, if the independence of the board is to be guaranteed and there is to be trust in official statistics, it is imperative to get the best people on the board. I also believe that it is very important to support the National Statistician de facto and de jure.
This is our first opportunity in Committee to discuss what, by common consent, is the most difficult part of the Bill. How do we accurately define the role of the National Statistician if we want him or her to fulfil the functions about which I suspect we are all agreed?
These discussions have demonstrated that the role of the board and the production of national statistics are, like the role of the BBC, sui generis. They cannot easily be pigeonholed; we cannot say, “It is just like that”. Therefore, we cannot rely on any straightforward analogies. Equally, while I agree that in principle the difference between the role of the National Statistician and the board is that between production and supervision, we must be clear as we proceed that the National Statistician is solely responsible for production. I do not believe that the role of the board is simply that of supervision or scrutiny; it is not like the Select Committee of both Houses that we have mentioned. One of the board’s key purposes is to act as a bulwark against a Government trying to undermine the system; it must help to support the independence of the National Statistician. For that to happen, the National Statistician and supporting colleagues must be on the board, as the noble Baroness, Lady O’Cathain, has just described.
A relevant analogy is with the Monetary Policy Committee of the Bank of England. It includes outsiders, but sitting on it are the people doing the detailed work of producing the huge book that members of the committee get every month, against which they take their decision. The reason for having the Governor of the Bank of England, the chief economist and others on the board as executives is that the decisions that the board makes must be seen to have the full involvement of those who work day in, day out to make the assessment. It is important that the chief executive be on the board. Going down the route proposed by the noble Baroness would mean deleting Clause 29(1), which says:
“The National Statistician is also to be the chief executive of the Board”.
I do not think that he or she would be quite the chief executive—it would be a slightly different role.
We need to amend the Bill to clarify the role of the National Statistician. I understand why the noble Baroness has tabled the amendments, but they would weaken the position of the National Statistician when, broadly speaking, we are seeking to strengthen it.
I support the points made by my noble friend and the noble Baroness, Lady O’Cathain. She has had many years’ experience as a non-executive director. From my own experience as a chief executive of a small public company since 1986, I found the arguments of the noble Baroness, Lady Noakes, hard to follow. It is quite straightforward that the chief executive of an organisation such as this—or the production director, if we want to call her that—should be on the board. That is quite clear.
It is always difficult to generalise out of personal experience. I have been a chief executive of a public corporation, the Commonwealth Development Corporation, and I was not on the board. The fact that its chief executive was not on the board certainly enhanced the independence of the Commonwealth Development Corporation in those days. The board made its decisions and carried out its full statutory obligations. It mostly accepted the recommendations of the executive before it made its decisions, but on occasions it did not and it told the executive to go back and think again or even to drop some of its plans.
Given that there is no read-across from the private sector to the Statistics Board, this is a completely different operation. The system of appointment is completely different; the system of reappointment is completely different; the systems of remuneration are completely different. The objectives of the organisation have nothing to do with the objectives of a private sector organisation. I asked the Minister to give me an example of a read-across from the private sector and he cited the FSA and its wish to see balanced boards, but what body does the FSA regulate that is remotely like the proposed Statistics Board?
If the National Statistician is not on the board, the status and standing of, and public trust in, the National Statistician will be enormously enhanced, because it will be very much more difficult for Her Majesty the Queen, as advised and decided by the Prime Minister, to dis-appoint the National Statistician. It will not be at all difficult to change the members of the non-executive board. That is easy for Her Majesty's Government to do under the system of public appointments. We should therefore support these amendments to separate the role of the non-executive board from the role of the National Statistician as the board’s chief executive.
We are worried about the public’s lack of confidence in statistics. The main reason for that lack of confidence is that figures are constantly misused by Ministers when they are produced. The primary role of the National Statistician is to ensure that we get the statistics that we need and that they are properly produced, but it is only the National Statistician who will have the full knowledge of the limitations of their use. The reason so many are suspicious is that, so often, figures are used in a way that makes honest interpretation quite impossible. The greatest misuse is to use figures of cost for figures of production.
I side in this case with the noble Baroness, Lady O’Cathain. It is inconsistent to propose a series of amendments designed to boost the status of the National Statistician and, at the same time, to propose another amendment that would diminish the status of the National Statistician by saying, “You are not even a member of the board”.
A completely different model is to be found in the relationship between the Health and Safety Commission and the Health and Safety Executive, but I do not think that anyone is proposing a complete separation of the supervisory board from the executive board. So long as you have one board in two parts, it is essential that the chief executive is a member of that board.
On the question of trust, the point is not that statistics are used or misused. There is the whole question of definitions. The really difficult definitions are whether things are in the public sector, whether they are underwritten by the Treasury or whether they are part of the borrowing requirement. That is an important battleground and the board is being assigned responsibility for those definitions and methodologies. I want the board to retain that responsibility, so as not to put it exclusively on the National Statistician, thereby exposing him—although in saying this I am getting on to the next set of amendments—to very personal pressure about whether a decision went one way or the other. With these amendments, I am definitely for keeping the National Statistician as a full board member, along with the finance director and head of assessment.
We have had a most interesting debate, into which I trespass with some trepidation, given the expertise that has been delivered this afternoon on the crucial principles by which governance can be obtained in these circumstances. I am grateful for the support from all parts of the House, not for the government model—I am not suggesting that the noble Lord, Lord Newby, the noble Baroness, Lady O’Cathain, or the noble Lord, Lord Turnbull, accept the government model; that would be to trespass too far on their good will—but in pointing out the limitations of the amendments before us. After all, it is my task to persuade the noble Baroness to withdraw her amendment, and I hope that she has listened carefully to the representations of noble Lords who have pointed out the problems of a non-executive board.
We think that we have established the appropriate governance structure for the statistical system, and the membership of the board reflects the structure that we have adopted. We believe that a single institutional structure with one board is the most effective way in which to deliver the goal of greater independence for the ONS and independent scrutiny and oversight over the statistical system as a whole. This also avoids creating competing centres of statistical expertise in the system as a whole. In line with the principles of good corporate governance, the Bill establishes that the board will have a mix of executives and non-executives. I respect the arguments against this mix, but we are legislating for a non-executive majority; the chair will also be non-executive.
In a framework of one structure, we think it important that the National Statistician should be the board’s chief executive. That is the linchpin of the enhancement of the status of the National Statistician and a crucial part of the objectives that we seek to achieve, as the noble Baroness, Lady O’Cathain, emphasised. The National Statistician will be the board’s chief executive, responsible for the executive, day-to-day running of the ONS and independent of the assessment or scrutiny function. The assessment function will be operationally independent of statistical production in the ONS, as it should be; a statutory post holder, the head of assessment, will report directly to the board, not via the National Statistician, and will lead on assessment. To strengthen the separation, the National Statistician may not take part in deliberations or decisions about assessment of his own statistics, nor may the head of assessment take part in statistical production. It is essential that we keep those two concepts—of production and oversight or scrutiny—separate.
But we want one board. In our view that is the way to enhance the role of the National Statistician and the status of statistics in public esteem. It is difficult for one body to undertake dual roles. It is clearly more challenging than if a body has one role only. However, we make these demands on public bodies. Local authorities are empowered to promote development within their boundaries and to grant planning permission. A local authority must have a structure that can perform both functions although those functions have, and are clearly intended, to be separate. A body can successfully perform such functions provided that it is accountable. Local authorities are accountable in their audits and to their electorates. The board will be accountable to Parliament for the work that it does.
The noble Baroness, Lady Noakes, asked about the significance of the chair and what role he or she played. Those questions were an undercurrent in other contributions. Without doubt the chair plays a highly significant role, which is why the Government are taking judicious steps to recruit a chair who will enable the new system to be introduced with the least possible disruption. What does the chair’s position involve? He will give the body strategic direction and support the National Statistician in his role as chief executive of the board. The chair must also support the head of assessment in the delivery of his executive function. The duality of the functions requires effective chairmanship and board participation in order to embrace the two roles.
The chair of the board is bound to have a major public role. He or she will appear before parliamentary Select Committees. I put it in the plural but one would be enough to guarantee that anyone seeking the role would expect to defend their annual report and the board’s proceedings before Parliament. The chair will comment publicly on the role of the chief officers. He is bound to comment on the role of the National Statistician. The chair will be responsible for the process by which assessment is obtained. He has a very significant role indeed.
The noble Baroness, Lady Noakes, asked who would be top dog. I understand the question, which is graphic in its clarity. However, it presents the obvious challenge of the extent to which I can and should describe, within the time constraints in which we operate, how the board will work. I make it absolutely clear that the National Statistician is the technical expert and outstanding figure in the production of statistics. Of course, the board must take account of his advice in all matters. The National Statistician will be the chief executive of the board, but the chair—
I must ask the Minister how there can be a chief executive of the board. The chairman is the chairman of the board. The chief executive of statistics production and of assessment is obviously the National Statistician. You cannot have a chief executive of the board. What about the other non-executives? Do they report to a chief executive who happens to be the National Statistician? That is a muddle. I really hope that we have a mixed board of executives and non-executives, but you cannot have a chief executive of the board. You just have the one top dog, as my noble friend said, and that would be the chairman.
I am shying away from the crudity of the concept of top dog, but I emphasise that, while the National Statistician is chief executive, the chair takes responsibility for the duality of roles that the board embraces, which is the production of national statistics to the highest possible standard, engendering trust in those statistics, and responsibility for the work of the head of assessment. In that sense, if the noble Baroness wants it expressed in those terms, it is clear that the chair has a more embracing role than the National Statistician.
What are we about? We are about seeking to produce the highest level of trust in our national and official statistics as we can achieve. That is clearly going to be the major responsibility of the executive officer responsible for this, who is the National Statistician. It is right that he should be chief executive to the board, because he is the producer of the material for the board, which is the basis of the work that it does. There is also the head of assessment and the assessment function, which is supervised by the chair. I do not think that I can be any more explicit than that. I recognise—
I do not know whether it will help the noble Baroness or the Minister, but one of the confusions about the drafting is that, when the Bill refers to the chief executive of the board, by “board” it means the Statistics Board, which is the body corporate, and not the members of the board.
I am grateful for that point, as I have been grateful over the past half an hour for the noble Lord’s interventions; I encourage him in his helpfulness.
The noble Baroness asked what will happen when there is a disagreement between the chief executive and the chair. We are concerned to make those disagreements transparent. That is what would be important. If the board rejects the advice of the National Statistician, it has to publish a statement of its reasons. There was reference to the Bank of England, although that is not a totally accurate analogy. There was a reference to accountability, and we all know what the accountability of the Bank of England is in final terms; namely, the letter that has to be sent with regard to inflation exceeding a certain level. It is clear in Clause 28 that,
“the Board must publish a statement of its reasons”,
for any disagreement with the National Statistician.
We have had an interesting and wide-ranging debate. I recognise that I have not been able to answer every point that has been raised, which is a reflection of the great expertise in the Committee on this crucial governance area. However, I emphasise that the Government have thought through this model very carefully. It involves a board with a duality of functions and objectives. It certainly will require executive and non-executive members, and it will require the National Statistician to be chief executive. I hope that on that basis the noble Baroness will feel that it is safe to withdraw her amendment.
I thank all noble Lords for taking part in the debate, although I cannot claim that I sit here surrounded by people who support my propositions. I say to noble Lords who like the idea of a unitary board, because that is what they are most comfortable with in the private sector, that we will have to re-examine whether that model transposes to the area of statistics. I am a great supporter of the unitary model in the private sector. My amendments query whether it is the right model for this set of circumstances. The noble Lord, Lord Newby, was right in saying that what we have before us is sui generis and that, therefore, we are entitled to design the best solution possible.
When I asked the Minister what the chief executive would do, he told the Committee that the National Statistician, qua chief executive, would be responsible for the Office for National Statistics. That means that he is a chief executive of the executive office, as created by Clause 29, not chief executive of the board, because, as the Minister rightly reminded us, there will be a separate and independent stream of activity within the board, under the head of assessment, which does not, by definition, come under the National Statistician and therefore under the so-called chief executive of the board. I was trying to draw out that muddle.
The problem is that because separate and distinct assessment functions are provided for, which we understand, it is inevitable that the National Statistician cannot be a complete chief executive in the sense that he would cover all the activities of the Statistics Board; by definition, responsibility for some of the board’s activities will be elsewhere and will be reportable directly to the chairman and non-executives on the board. That is the heart of the problem.
Two models were offered in support of the proposals in the Bill. The Minister offered the local authority model in support of the ability to have two sets of functions operating within one organisation. That is, indeed, the case, but in that model the chief executive is not a member of the council, but sits outside it; that model works perfectly well without the chief executive being embedded within the main decision-making organisation. The noble Lord, Lord Newby, referred to the MPC, which has insiders and outsiders. However, the non-bank members—the independent members—of the MPC are not non-executive, because they work almost full time at the Bank of England. They have suites of offices and support staff to assist them, and their contracts are at least half time and sometimes more than that in practice. So that is not a fair parallel.
I shall not press my amendment today, but as we go through the Bill I would like noble Lords to think about the muddle that is inherent in the structure that is to be set up and how we could evolve a better one. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 3 and 4 not moved.]
5: Clause 3, page 2, line 3, leave out “five” and insert “six”
The noble Lord said: I have tabled three related amendments, two of which we are considering in this group, which provide for recognition in the composition of the board of the needs of the regions and local authorities of England. The first amendment proposes that the number of ordinary, non-executive members should be increased from five to six, so that, just as there will be a non-executive member to reflect the interests of Scotland, another for Wales and another for Northern Ireland, there is room for another with the same role in relation to the regions and local authorities of England. The second amendment defines the representational role of that ordinary non-executive member.
I have been prompted to table these amendments by the Local Government Association and the Association of Regional Observatories in England. Long ago, I was the regional director of a number of government departments in the north of England and my first job was to produce a regional strategy. Therefore, I speak with some feeling of the need for an adequate information base in developing such a thing. Perhaps since my day the responsibilities are much greater: I understand that local and regional government are now responsible for something like £100 billion a year.
There is currently particular sensitivity over this matter among the English regions and local authorities, because in 2004 a recommendation by Professor Allsopp recognised that there was a need for better information of a statistical character to support the development of local and regional strategies. I understand that, as part of the 2004 Comprehensive Spending Review, the Treasury undertook that those needs would be fully met and the funding provided. As things turned out, there were difficulties: there was not enough money. The English regions came up with £1 million in 2005 to help, but I am told that in 2006 and 2007 it became increasingly clear that there was still not enough money and, because of other pressures, some statistical series, which are in fact much needed, were dropped without consultation. Therefore, noble Lords will understand that there is some concern about these matters.
I think it was Frederick the Great of Prussia who once said that diplomacy without an army is much like music without instruments. To develop a regional policy without an evidential base is much like a government Minister approaching the Treasury to ask for money without any reasonable arguments or evidential basis. When there seems to be a growing consensus among the political parties that it makes sense to devolve more decision-taking to local levels, we should provide the people with the responsibility for spending that £100 billion a year with an adequate evidential basis for it. To provide assurance in that respect, we need to look at the board’s composition to ensure that, just as there is legitimate representation of the interests of Scotland, Wales and Northern Ireland, there is equal recognition of the English local authorities and regions. I hope that the Government will be able to respond to this very modest amendment. I beg to move.
Amendment No. 6 is intended to probe the Government’s decision to set the minimum number of board members, in addition to the chairman, at five. Many groups not mentioned in Clause 3(4) may feel that they should also be represented on the board. Although it is not the Government’s intention, I am concerned that there might be a misunderstanding that the aim of this lower limit is to exclude representation.
As we have heard, the noble Lord, Lord Dearing, would like to balance the representation of Scotland, Wales and Northern Ireland with a representative of the regions in England. His amendments, drawn from the briefing of the Association of Regional Observatories, are not surprising. The Local Government Association recommends a full quarter of the board being drawn from local data users, such as the emergency services. Outside the field of geography, many others could arguably have a useful role to play; for example, the Statistics User Forum. Presumably, there also need to be sufficient members with the appropriate experience to participate in the audit committee. If the board has only two non-executive members who do not already represent certain countries within the UK, those appointees will have to be impressive polymaths to satisfy the various competing groups.
With this amendment, I do not mean to offer an opinion on the relative value of each of those stakeholder groups. Clearly, it would be to the board's advantage to have as much expertise and representation as is feasible at its disposal. However, with all the special interest members, I cannot help wondering whether any of the non-executive members will have time left over after fighting their specialities’ corner to supervise the National Statistician. Our amendment would, I hope, send a message to the public that the Government do not seek to exclude some of those interested parties.
I support the amendment tabled by the noble Lord, Lord Dearing, for the reasons he has given. His comments derive from his considerable experience and involvement in regional issues. I hope that that experience will count with the Minister when he responds to this group of amendments and that he will be sympathetic, given his own track record in promoting and defending Oldham and the north-west during his time in another place.
I recognise and welcome the improvements to the quality of regional statistics that have been brought in under this Government. At the same time, the existence of regional development agencies and many other regional and local bodies means that they need to be able to put forward policies on the basis of good evidence and good statistics, as was argued by the noble Lord, Lord Dearing. It is right that the board recognises the multinational nature of the United Kingdom and the age of devolution in which we live. The board does that in the formal recognition that it gives to Scotland, Wales and Northern Ireland.
While it is very important that that national dimension is represented, there is also the matter of scale and the distribution of the population within the United Kingdom. Therefore, the argument comes down strongly in favour of having some representation from English regions and English local authorities. I believe these amendments go very much with the grain of government policy and not against it. For that reason I hope that the Government will respond positively.
It may be no surprise to the Committee that the fact that Scotland is receiving due consideration on this matter is very pleasing to me. I would not wish to deny that to English regions, if the Committee feels that is proper. I support the amendment of my noble friend Lord Howard of Rising on the membership being eight. With the Committee’s permission, I shall explain why my support is not strictly logical. I am the eighth member of my family to be a Duke in this House. All that I can offer the statisticians is that that shows that each generation has lasted, on average, 37 years. By a happy coincidence, today, 24 April, is the 300th anniversary of my ancestor being promoted to the dukedom and it is over 500 years since the title of Earl was conferred on my family.
I am in general support of the amendment. The relevant clause says, “at least five”. It is up to the board to have as many members as it likes. It does not say, “no more than five”. There should be room for more, but I am more concerned that we might begin to add non-executive members, on a variety of principles, without any real logic. Yes, perhaps English regions should be there, but someone will then say, “What about London or Cornwall?”, and so on. I would prefer clarification from the Minister that “at least” means “at least”—that more are allowed. It should then be up to the board, having followed the debates in Committee, to determine the principles whereby it would induct more non-executive members.
Will the Minister address whether non-executive members of the board are all meant to be representative of some interest or there in their individual capacity? If I read the code for public appointments correctly, it does not recommend that members of boards be representative of particular interests, but that they are there in their individual capacity. That Scottish Ministers are consulted does not necessarily mean that a Scottish member selected would therefore see his or her role as primarily the representation of Scotland. I hope that the Minister can confirm that their interests should be wider, and that he gives his support to the minimum of eight. I agree with the noble Lord, Lord Desai: the board is not constrained from having a larger membership. Under the Bill, however, it would need some sort of ministerial permission.
I strongly support the arguments of the noble Lord, Lord Dearing, and the noble Baroness, Lady Quin. A tremendous amount of government decision-making, not least on allocation of resources, already takes place at regional rather than national level, contrary to one of the myths of how we run the country.
One of the main roles of the regional development agencies, for example, is to produce a regional economic strategy. How on earth can they do that if they do not have adequate regional statistics with which to do so? If there were adequate resources in the regions to produce the statistics needed, the amendment might not be needed. Unfortunately, however, that is not the case. The noble Lord, Lord Dearing, referred to Christopher Allsopp’s review of regional economic statistics, as a result of which the Government committed themselves to the production of further regional economic output figures. I understand that they have not been produced, however, because resources have not been made available.
The English regions need a voice on this body to ensure that their needs are not swept under the carpet. No doubt representatives from Scotland, Wales and Northern Ireland will worry about the generality of the quality of the work of the National Statistician, but when push comes to shove they will also worry a lot about whether the statistics produced in their regions are adequately generated, and with adequate resources to do so. There is currently nobody with a similar interest in promoting the interests of the English regions. I therefore support the amendment.
On Second Reading, I asked the Minister to explain what the Chancellor meant when he said, in the Red Book produced with the Budget, that the ONS was establishing a full regional statistical presence in England by the end of March. We are now in the happy position of the end of March having happened, so the Minister can no doubt tell us exactly what a “full regional statistical presence” means. This is not merely a piece of rhetoric from the Chancellor; it is a commitment in an official publication to do something. At best, it is not taken seriously and, at worst, I have no confidence that it has happened. To these Benches, in considering these amendments—which I would support anyway—it matters whether the Chancellor has fulfilled this requirement to establish a “full regional statistical presence” already. I hope that the Minister can explain exactly how that firm commitment has already been met.
We have had a most interesting debate, the cardinal point of which was expressed by the noble Viscount, Lord Eccles. The board does not consist of representatives; it consists of individuals with expertise and experience to contribute. As he indicated, the fact that consultation will take place before appointments are made does not mean that the search is there for a representative individual; what is sought is a board that is able to fulfil its task. If it does not fulfil its task, it is quite clear, as far as the Government are concerned. We have not set a maximum number of non-executive directors, so if a case is made for additional expertise it will be for the Government to take a decision on that. It may be that what prompts the Government to do that is Parliament’s commenting on the work of the board and being of the view that there would be value in extending the number of non-executive directors. It might be that Parliament will comment exactly as my noble friend Lady Quin suggested in her contribution and as suggested in the burden of the amendments of the noble Lord, Lord Dearing, in terms of the significance of the regional position. However, we think that we have the size of the board right. There is flexibility that can take account of changing circumstances or additional representations, but we consider that the board that we have before us will be able to fulfil its functions and purpose.
I recognise the strengths of the amendments of the noble Lord, Lord Dearing. He wants to make absolutely sure that the board members’ expertise takes account of an important dimension of statistics that relate to the regions. I fully recognise that. However, again, this is not a representative body; it is an executive body doing a job on behalf of the public, and it has a most important role in the public interest as a whole. Therefore, I do not believe that it is consistent with the philosophy behind the concept of the board, as the Government have defined it in the Bill, to argue for representative non-executive directors in the way in which the noble Lord has suggested in his amendments. He has succeeded in emphasising that, in the appointment of the non-executive directors, such expertise would be of great advantage to the board and, of course, it will be part and parcel of the basis upon which decisions are taken. However, that is different from conceding to the concept of the amendments, which effectively would give rise to some kind of representative role with regard to the board.
I emphasise that, if the board at any stage looks as though it is not fulfilling its duty and is deficient in any respect, it can indicate where it may have weaknesses. However, much more likely is that there will be public comment, through Parliament, on weaknesses in the board’s structure. We have flexibility within the Bill—it does not stipulate the maximum number of non-executive directors—so that should such an eventuality occur, it would be possible for the Government to respond to public will and Parliament’s views by appointing one or more additional non-executive member. Our belief is clear; that the model of the board which we put before the Committee will be able to fulfil its function. I therefore hope that the noble Lord will feel able to withdraw his amendment.
I want to ask a question of clarification. Being a member of a number of boards, I understand the point about representation and non-representation. I was grateful for the noble Lord’s clarification in saying that people do not represent, but bring their skills to a board. If that is so, why do we have only three nations mentioned as board members but not England? The Food Standards Agency, which was similarly constituted, had Scotland, Ireland, Wales and also England represented as nations and it had a sense of equality. It meant that those representatives brought different skills and the knowledge of what was needed by their country. It is strange that my noble friend Lord Dearing’s eloquent speech about England was not accepted.
I am grateful to the noble Baroness for the point she makes. Consultation is specified in the Bill, not the creation of a representative quality for any individual appointed. It is right that a body set up for the whole of the United Kingdom has some respect for the views of the devolved Administrations. In the same way, I am attesting to the fact that today’s debate and the contributions of the noble Lord, Lord Dearing, my noble friend Lady Quin and others will emphasise the fact that expertise in regional statistics is an important part of the board’s role—as if one could ever think that one could construct such a board without having due reference to that. The devolved Administrations are identified in the Bill for obvious reasons, but I hasten to emphasise the point—reinforced by the noble Baroness and excellently expressed by the noble Viscount, Lord Eccles—that this is not a representative body but an executive one.
The Minister has gone some way to meeting the substance of the amendment. I concede that it is not well drafted. It would be wrong in principle for there to be a representative, but that was the best way I could find in a hurry of expressing the point. If I could have found a clause structured in exactly the same way as those for Scotland, Wales and Northern Ireland, I might have done better. I may well try again and return to the matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 6 and 7 not moved.]
8: Clause 3, page 2, line 3, leave out “Treasury” and insert “Cabinet Office”
The noble Baroness said: I rise briefly to move Amendment No. 8 and to introduce the various amendments in this very large group. They have the effect of replacing the Treasury’s role in relation to the Statistics Board with that of the Cabinet Office.
The noble Lord, Lord Moser, tried hard, with our support and that of the Liberal Democrat Benches, to add his name to the amendments, but was defeated by the greater powers of bureaucracy, which I can assure Members of the Committee are still alive and well in your Lordships' House. I hope that the Committee will accept my brief introduction to the group and then let the noble Lord, Lord Moser, speak in more detail to the amendments. He will address the substance of the group and I will start with some of the mechanics.
There are nine amendments in the group to which the Liberal Democrat Benches and these Benches have subscribed. They are Amendments Nos. 8, 10, 12, 14, 16, 19, 23, 26 and 239. In addition, there are 23 amendments in the names of the noble Lords, Lord Newby and Lord Oakeshott, with which we fully agree. They are Amendments Nos. 27, 75, 200, 205, 206 and all the other amendments in the group from 210 onwards. There are two amendments—Amendments Nos. 208 and 209—which we understand that the noble Lord, Lord Newby, or the noble Lord, Lord Oakeshott, will not press. That leaves 20 amendments which are similar in form but different in detail. Amendments Nos. 125, 127, 129, 131, 133, 137, 138, 140, 142 and 145 in my name and that of my noble friend Lord Howard of Rising and the noble Lord, Lord Moser, amend various clauses to replace the Chancellor of the Exchequer with the Cabinet Office. The equivalent Liberal Democrat amendments—Amendments Nos. 126, 128, 130, 132, 134, 136, 139, 141, 143 and 146—use the Prime Minister as the replacement.
We sought arbitration through the Public Bill Office, which advised us that both groups would be acceptable. Members of the Committee will therefore understand that this issue has involved the most delicate negotiation between the parties. I can today announce that we have forged an historic agreement, as on this occasion we will be supporting the Liberal Democrats. This has the advantage of replacing one office of government with another—replacing the Chancellor’s with the Prime Minister’s—and therefore probably not making much difference in practice, at least for the next couple of years.
Before turning to the noble Lord, Lord Moser, to speak to these amendments, I remind the Committee that the restoration of public trust is the driving force behind our approach to the Bill. This allows us to create a new regime which is in fact independent but perceived as independent. We should not underestimate the power of symbols to indicate a new beginning. Perhaps I may quote what the former director of statistics at the United Nations Economic Commission for Europe, Mr Tom Griffin, said in his evidence to the Treasury Select Committee in another place:
“To sever the link with the Treasury now would be a very visible move towards independence”.
I beg to move.
I thank the noble Baroness for allowing me to speak at this point. I have no problem with the bureaucracy here; it was just that partly because of my age it took me some time to get up to the Public Bill Office. I was therefore a bit late, but never mind.
I support the amendment, which would give the residual roles for Ministers to the Cabinet Office rather than to the Treasury. It is an important issue and I assure Members of the Committee that I am not governed by nostalgia. I do not regard my days as golden—they were interesting—but this issue is relevant to the purposes of the Bill; namely, independence from Ministers and trust, to which we keep returning. We need to remind ourselves of what we are talking about: the residual roles. The main roles performed by Treasury Ministers in the past are to be transferred to the new Statistics Board. We have all welcomed that publicly and in your Lordships’ House. It is to be a non-ministerial department that will report to Parliament. Everybody has welcomed it including the Royal Statistical Society, the Statistics Commission and your Lordships. Equally, everybody has recognised that there will be some so-called residual roles. They are not major. Some appear in later clauses to do with what happens if the board is responsible for some failures in operation. There are also questions about appointments, who lays the report before Parliament, PQs and other matters. There are a number of residual responsibilities, which are all that we are talking about.
I shall say a word about the historical background. Noble Lords probably know that the Central Statistical Office, which was the origin of official statistics in this country, was set up by Winston Churchill in 1941. That great man had wisdom in that, as in everything else. First, he placed it squarely in the Cabinet Office. Secondly, he was clear that the real issue at that high time of the war was linking statistics coming from different departments—the role of co-ordination. That is why he put the Central Statistical Office in the Cabinet Office, and that is why I think that the residual responsibilities should be there. In my day, and for long after—until 1989—the statistical service reported to the Prime Minister via the Cabinet Secretary. I speak from experience of three Prime Ministers when I say that that was a very helpful situation for the statisticians. Several times— twice in my period in office—the Chancellor tried to take us over. It was resisted for reasons that still apply today. There is no antipathy to the Treasury in anything I say; I simply think that it would make more sense in view of the Chancellor’s vision in leading us down this route of independence if the Statistics Board ended up under the Prime Minister in the Cabinet Office.
My main points are few. First, we have a decentralised system, and we are sticking with it. It inevitably keeps coming up in our debates. The system is different from those in most other countries where all statistics come from a single statistics office, which makes life much simpler, not least in keeping a distance from politicians and on the key issue of trust. We do not have that system, and it is right that we do not. I used to argue for the decentralised system. I still do, and I am very pleased that in these reforms, it remains. It means that at the centre we have the Office for National Statistics, which is responsible for all the key economic data: GNP, unemployment and much else, including population figures and other macro data. It is a key office, and it comes under the Chancellor and the Financial Secretary. However, 80 per cent of all statistical series come out of other ministries: education, the Home Office, health, environment. That is where most of the most sensitive figures come from, and where there is most need for improvement and governance of some kind.
In passing, I shall say that my suspicious mind has some doubts about whether the Bill has the backing of the Government, as opposed to the backing of the Chancellor and the Treasury—I hope the Minister will reply to this because it is relevant not only to this issue but also to much else that we are discussing. I say this because there are one or two issues in the Bill where I sense the hand of “hanging on” from departmental Ministers. We will come to them later: one is national statistics and the other is pre-release. I would like to be reassured that independence—which was the Chancellor’s invention, and all praise to him—is meant to apply for all government statistics. It means independence from the Secretary of State for Health, the Secretary of State for Education, the Home Secretary and so on. I need some reassurance on that.
That query is relevant to this amendment because the real argument in favour of the Cabinet Office as opposed to the Treasury is that the Treasury is a major and very important consumer of statistics: about 20 per cent of all statistics, but very important ones. On the whole, even for the residual responsibilities, which are all that is left for discussion, I would rather have the Cabinet Office as the ultimate authority—the department in charge—because it is not a consumer of statistics. I cannot think of a better department. The Treasury is a major consumer of data—although only 20 per cent—so there is always the risk of distorting priorities in what is done in the statistical system. It may be less of a risk in reality than in perception, but it is certainly a risk in perception. People will find it harder to accept that we have really gone down the road of independence if a major consumer has responsibility for statistics.
My second point also goes back to Winston Churchill. As we have a decentralised system, it is crucial that the residual responsibilities should be placed in a department that can deal easily and neutrally with co-ordination across all the departments. I regard our statistical system as a single whole. It is spread, but all the bits fit together. As was said at Second Reading, the national accounts that come out of ONS are totally dependent on all the other departments.
Finally, I shall describe how the system works. I speak from experience when I say that the department with responsibility for the residual matters has two enormous advantages if it is the Cabinet Office. First, it has the advantage of co-ordinating across all the departments. I used to find it very easy, as did my successor chief statisticians, to link from the base of the Cabinet Office with fellow permanent secretaries throughout the departments when issues were at stake. The fact that we were the neutral central department, not the Treasury with which all departments have different relationships, made it very simple.
That is at official level. I hardly need to say that it was an enormous advantage, with all the respect I can muster to past and present Chancellors, that my ultimate boss was the Prime Minister. Not only did I have access to the Prime Minister—that is obvious and in the Bill in a different clause—but it was seen publicly and, above all, throughout Whitehall that the Prime Minister was ultimately in charge. That, incidentally, was very real. I would see the three Prime Ministers I served fairly regularly, probably once every three or four weeks and I often had contact with them in between. These were real responsibilities. In the present situation, we are talking about minor final responsibilities and we are talking more about the public vision and perception of independence, and therefore trust.
It is enormously helpful if, for example, there remains a problem with waiting list statistics or crime or migration statistics, the Chief Statistician and the board have behind them the Prime Minister—and I suspect that the next Prime Minister will feel this quite strongly as a necessary responsibility.
So for those basic reasons—first, that the Treasury is a main consumer, and, secondly, that from the point of view of co-ordination and keeping the whole system under integrity and control—I think that the Cabinet Office is to be much preferred. I hope that the Government may decide to take the final responsibility back to where it used to be.
So far I have largely supported the arguments put forward by the Minister, but I am afraid that we come to the parting of the ways at this point. I too, after not having started in this position, have reached the conclusion that these responsibilities should be moved from the Treasury. It undoubtedly has the greatest expertise of any department in Whitehall in statistical matters, simply through the nature of the people it employs—a lot of economists who have learnt statistics as part of their training—but it also has the greatest conflicts of interest. It is a user and a customer of statistics; it is also a producer of statistics; it produces the figures on public spending and national debt; it has an interest in the funding issue we have already talked about; and it has a great deal at stake in the issue of definitions. All these things tell me that there would be a very powerful signal in making this choice.
However, I am less convinced that the Prime Minister should be the designated recipient as opposed to the Cabinet Office. Perhaps the Prime Minister might ask, “Where do I get my advice from?”—to go back to old haunts, perhaps. The Cabinet Office is important for the reasons that the noble Lord, Lord Moser, mentioned—it has a power of co-ordination.
The other reason for making the choice is to recognise that statistics are not simply the big economic statistics—prices, earnings, trade and so on. Increasingly, we are interested in social statistics and the measurement of outcomes achieved by public spending. The location of the responsibility in the Cabinet Office would signal very strongly that statistics were a pan-government issue and not simply an issue of economic policy.
I, too, hope that we can make this change. I would need a little more discussion with other noble Lords on whether the recipient should be the Prime Minister or the Cabinet Office, but that is not really the big issue. The big issue is where this responsibility comes from. I support the amendment.
Not surprisingly, as we put our names to some of these amendments, we support them. I do not wish to repeat the extremely powerful arguments made so far in this debate; I just want to make two points about the strength of the argument, the moving of responsibility for the Statistics Board—the residual responsibilities, as the noble Lord, Lord Moser, described them—to the Cabinet Office.
The first point harks back to the debate we had a few moments ago about regions. One of the key features of the Statistics Board is that it has to deal with the fact that the nations as well as the regions of England have a major part to play in the whole production of statistics—that Scotland, Wales and Northern Ireland need to produce their own statistics. It seems to me that if one is looking at a place in government which worries and thinks about the roles of Scotland, Northern Ireland and Wales in the round, it is the Cabinet Office rather than the Treasury. As a co-ordinator of the inputs of the nations and regions, the Cabinet Office seems a more logical place.
The second argument relates to resources, paradoxically in some ways. I think that a Treasury in charge of the Statistics Board is more likely to be macho about its budget than the Cabinet Office, which is worried about the quality of the statistics produced. The Minister has said on a number of occasions, “The budget has been set for five years ahead. Why should one be worried?”. One should be worried because it has not been set necessarily at an adequate level. Certainty has a value of its own, obviously, but if the level is wrong certainty is not sufficient.
At Second Reading I referred to the cuts in staffing among statistical staff, and the consequence of that along with the move to Newport in terms of the production of statistics moving forward. Since Second Reading I have received a communication from someone who works within the ONS and shares these concerns. I would like to refer to that now, partly because it is absolutely relevant, but also because I think that the question of the short-term situation in which we find ourselves is pretty serious. This person is concerned because he believes that senior staff within the ONS are more worried about the financial targets they have been asked to meet than in maintaining statistical quality. He continues:
“The reality regarding relocation is that very few London staff are able or willing to move to Newport and it is proving impossible to recruit sufficient replacements in South Wales. The most worrying example at present is the division that produces the RPI and CPI. The Division is due to relocate this year. So far none of the 35 staff have chosen to relocate, including international experts. The risks to the production and quality of these key statistics is of serious concern to the London staff.
There is serious danger that similar problems will occur with National Accounts and labour market statistics. The impact on measuring the economy and setting economic policy could be disastrous”.
That is the consequence of Treasury control of our statistical service. It is only an ancillary argument to some of the extremely powerful arguments made by the noble Lord, Lord Moser, but it certainly reinforces me in my belief that the Treasury is not an adequate place to manage and retain residual responsibility for the Statistics Board.
I wonder whether the excellent speeches on the amendments are relevant to the Bill. After all, we are setting up a new Statistics Board, and it is not as though these people will be responsible to the Prime Minister or the Chancellor of the Exchequer from day to day. There are many other issues, such as those raised by the noble Lord, Lord Newby, on which I hope to speak next week. However, surely the real point is to have an independent board. If this was a question of whether power should rest with the Treasury or the Cabinet Office, I would vote for the Cabinet Office, but I ask the noble Lord, Lord Moser, whether he is not taking a sledgehammer to crack a nut on this point.
The simple answer is that many clauses relate to the Treasury rather than to the Cabinet Office, so the decision must be taken anyhow. I do not want to repeat everything that I have already said but, quite apart from all those points, from the point of view of public perception and integrity, one department will be mentioned as being responsible for residual roles, and it would be better for it to be the Cabinet Office rather than the Treasury.
The noble Lord has made the point that I was going to make in answer to the noble Lord, Lord Lea of Crondall. My noble friend on the Front Bench drew attention to the evidence given to the Select Committee in another place that this may be the one move that would be conspicuous evidence of the Government’s intention to change things. We cannot go on as we are. That has been the central theme of a great many speeches on Second Reading, in another place, and today. The problem of regaining and restoring trust, not simply enhancing it, is at the centre of what we are all doing. My noble friend on the Front Bench has made a deal with our friends on the Liberal Democrat Benches that we will support the amendments that would put in the name of the Prime Minister; that in effect is what they would do.
One of the arguments against giving the board, with residual functions, to the Cabinet Office was that it would point to the fact that Ministers of the Cabinet Office have tended to come and go and that there have been quite long periods during which a Minister has not been appointed to the Cabinet Office. The Prime Minister, however, is always there. He or she is, of course, the head of the Cabinet Office, with the Secretary of the Cabinet—no one will know more about that than the noble Lord, Lord Turnbull—answerable to the Prime Minister. I feel very strongly that we must make this move. I hope that the Government will listen to the argument and, if we can persuade our colleagues that this should be done, that it can eventually be returned to another place, which may see the wisdom of this.
My only other point is, in a sense, frivolous. The noble Lord, Lord Moser, mentioned Winston Churchill. The story that I have always told about Winston Churchill and statistics is that he asked about infant mortality. He was brought a huge dossier, which he looked at and handed back, saying, “All I want to know is that more babies died when they were in office than when I am in office”.
I am genuinely puzzled by the amendment, because fashions change. People somehow think that Prime Ministers are less political than Chancellors of the Exchequer. That may be so, but one cannot guarantee that. If we are worried about political interference, the questions to examine are how autonomous the Statistics Board can be and, when push comes to shove, what it can do to preserve its independence. A parliamentary scrutiny committee is very good for that. I am surprised if people think that the Cabinet Office is a less political place than the Treasury. As the noble Lord, Lord Jenkin, said, the Cabinet Office often has very junior Ministers, and if it is a matter of clout, I would rather have a Chancellor on my side than a junior Minister in the Cabinet Office.
Last week, the Evening Standard carried headlines on the clash between the Liberal Democrats and the Conservative Party over the possible candidature of Greg Dyke as Mayor of London. I do not think that there will be headlines this evening saying, “Liberals and Conservatives reach agreement on an amendment in the House of Lords”. The reason for that is quite straightforward. My noble friend Lord Lea emphasised the point when he asked what we are really talking about. We are talking about a Minister’s residual functions. The necessary independence that is sought, and thus the enhanced respect for our national statistics, derives from the creation of the board and its attendant structures, not from the sponsoring body. As we discussed earlier today, the Minister’s residual functions act as a link with Parliament through the board’s annual report.
There is the role in making appointments, but one that fits with the framework of guidance from the Commissioner for Public Appointments. There is also the limited role with regard to resources, as we have already indicated, although not to the satisfaction of the noble Lord, Lord Newby, because we did so not in tablets of stone but merely by Ministers from the Dispatch Box saying that we intend to introduce a five-year budgetary settlement for the board to guarantee its independence. Who will provide those resources, whatever happens to the amendments? The Treasury will. My noble friend Lord Lea is therefore almost certainly right that we are straining to crack a small nut.
I will address the arguments advanced by the noble Lord, Lord Moser, in a moment. First, he should thank heaven that he arrived a little late at the Table Office, because all the amendments are deficient. Should they be carried, we would have to make them coherent and put them into proper legislation on Report. Ministerial departments to which they relate do not have a formal, legal personality. Statutory functions exercised in those departments are conferred on the Ministers of the Crown, and the amendments should address that and not adopt the defective positions that they have adopted. That is a small matter, but it may help the noble Lord, Lord Moser, to recognise that he may be behind the amendments in spirit but that it is better that his name has not been added to defective amendments.
On the broad issues, I do not need to go through the vast list of the amendments because they are all virtually identical and address one significant issue. Let me emphasise that the Bill is constructed on the basis of the independence of national statistics. That is why we have set out elaborately to define the degree of the board’s independence and its responsibility for the construction, development, recording and assessment of national statistics. I attest again to the fact that the Treasury Select Committee in the other place agreed with the Government that the residual responsibilities—here I emphasise once more that they are merely residual in nature—should remain with the Treasury. The Government remain of that view.
As the noble Lord, Lord Moser, indicated, the Treasury has vast experience of statistics. It is important for the Committee to recognise that 20 per cent of all statistics produced are related to the work of the Treasury. While I note that the noble Lord, Lord Turnbull, is departing from his support for the Government on this group of amendments, he did testify to the importance of the role of statistics to the work of the Treasury. The co-ordinating and reporting role which the Treasury plays in, for example, the spending review and the setting of public service agreements means that it is ideally placed to play the residual role with respect to the board’s relationship with the Government which is defined by the legislation. I should add that the Treasury has considerable expertise in making high-profile appointments to independent bodies; it does so currently to the Monetary Policy Committee and the Financial Services Authority. But again it is carefully specified that that role would be consistent with the requirements laid down by the Commissioner for Public Appointments.
Consistent with the Select Committee’s recommendation, we have set out to ensure that the board should have independence. Although we still maintain that the Treasury should continue to perform the residual functions, it is why we intend to put the funding on to a five-year basis, thus guaranteeing the board very considerable independence, which again meets an issue we discussed earlier this afternoon.
What I want to emphasise is this: of course it is important that eventually the board should be publicly accountable. Its public accountability will be through Parliament. Parliament is the means by which the board’s annual report can be considered and the basis on which any dissatisfaction with its work can be expressed. Further, it should be recognised that the residual functions of any Minister are exactly that: they are residual and limited functions. We have it on evidence from the other place that the view is that those functions should be with the Treasury, and the Government have always maintained that position. One noble Lord suggested that there might be doubts about the Government’s view, but I can point out the obvious fact that when a Minister speaks from the Dispatch Box, he or she is speaking on behalf of the whole Government. What I am reflecting today is clear government policy on this issue.
I recognise the element of symbolic gesture here. We are not in the business of making symbolic gestures in legislation. We are about the business of creating an independent board with clear lines of responsibility, distance in its funding from the Treasury, and being responsible for the quality, status and respect in which national statistics are held. Those are the objectives behind this legislation and why it has been brought forward. It is clear evidence of the Government’s intention to improve things in this way and it would be a pity if the group of amendments before us, which are in any case defective, was carried purely for its symbolic value when we have the reality of improvement to our national statistics embodied in the Bill.
Perhaps I may make two brief points. The Minister has not responded to or commented on the main argument for the move to the Cabinet Office, which is the co-ordination argument. He has failed to recall that we are dealing with a decentralised system, so how can one argue that the Treasury, as one of the key consumers, would be a less biased head than the Cabinet Office? However, my real reason for speaking again is to address the Minister’s seemingly powerful point that this is such a minor issue that it does not warrant such an apparently major attack. I shall come clean. When the whole idea of the transfer was first mentioned, I had many opportunities to hold talks with Treasury officials and Ministers, and I was impressed by the idea of a board which was going to have total responsibility. However, the more I talked, the more I realised that the Treasury was going to hang on to quite a lot of the so-called residual responsibilities, some of which have entered the drafting of the Bill and some of which have not. The longer that went on, the more I realised that the Treasury—I am not talking about funding—was intent on remaining a powerful head of the whole operation. That is when I became fairly keen on trying to get it moved back to the Cabinet Office.
We have had a good debate. The noble Lord, Lord Moser, has reinforced his main points and I will not seek to do that again. In addition to giving us an interesting view of the background to our national statistical service, he emphasised that the most important point is the perception of independence. A number of noble Lords who have spoken feel strongly about this. Indeed, my noble friend Lord Jenkin referred to this as the single most important sign of change—a sign to the outside world that the new statistics arrangements are a break with those of the past. We have to remember that at the moment the Treasury is associated with what happens in the Office for National Statistics in ways that are not always helpful to the perception of independence. Whatever the truth behind events such as the Network Rail decision, there lingers a thought that the Treasury has more involvement than perhaps it should.
The noble Lord, Lord Newby, reminded us about the issue of resources. It is important that someone in Whitehall is batting for the Statistics Board in any discussions about resources for statistics. We cannot trust the Treasury always to make the right decisions, whether on a one-year or a five-year basis.
The noble Lord said that these amendments are technically deficient. They were approved for use by the Public Bill Office of another place and we have had specific discussions on their terms with the relevant office of your Lordships’ House. I believe that these amendments are fit to be put before noble Lords for decision and I seek leave to test the opinion of the House.
[Amendment No. 9 not moved.]
10: Clause 3, page 2, line 4, leave out “Treasury” and insert “Cabinet Office”
On Question, amendment agreed to.
[Amendment No. 11 not moved.]
12: Clause 3, page 2, line 7, leave out “Treasury” and insert “Cabinet Office”
On Question, amendment agreed to.
[Amendment No. 13 not moved.]
14: Clause 3, page 2, line 9, leave out “Treasury” and insert “Cabinet Office”
On Question, amendment agreed to.
[Amendment No. 15 not moved.]
16: Clause 3, page 2, line 11, leave out “Treasury” and insert “Cabinet Office”
On Question, amendment agreed to.
[Amendments Nos. 17 and 18 not moved.]
19: Clause 3, page 2, line 13, leave out “Treasury” and insert “Cabinet Office”
On Question, amendment agreed to.
[Amendment No. 20 not moved.]
21: Clause 3, page 2, line 20, at end insert—
“( ) Appointments may be made under this section only if the persons appointed have been selected by way of an open competition overseen by persons who are independent of the Board and the Treasury.”
The noble Lord said: It is to be hoped that this amendment will continue the useful debate in another place on the appointment of non-executive board members. The Minister made it clear that he saw no loss of independence for the board if the Minister played the primary role in deciding the appointment. Indeed, he considered it “inappropriate” for anyone else to make the decision, given the executive function of the board. Although some would think that this argument is rather misapplied, given that the Treasury is only to appoint the non-executive members of the board, the amendment is intended not to deal with who makes the appointment but to probe what procedure the Government are planning to use to make the appointments.
The Minister in another place made the commitment to,
“make appointments entirely in line with the guidance of the Commissioner for Public Appointments”.—[Official Report, Commons Statistics and Registration Service Bill Committee, 16/1/07; col. 69.]
Obviously it is good to hear that, especially as the code of practice includes a requirement for every appointment to be scrutinised by an independent panel. It is to be hoped that the noble Lord will agree to put this reassurance in the Bill, as our amendment would do. In addition, it would be a pleasure to hear just how the Minister will decide on who should be appointed. There has been a trend towards the use of shortlists that are often not very short at all, off which the Minister is able to choose his preferred appointee. This is clearly less independent than being given a single recommendation by an independent panel, which the Minister can reject or approve as he sees fit. Will the noble Lord reassure the House that this appointment will be filled after an independent recommendation of just one person? I beg to move.
The amendment is in two parts. It is keen to ensure that there is open competition and that that competition should be overseen by people who are independent of the board and, as one presumably now says, the Cabinet Office.
It is essential to have an open competition. It is important to have an assurance that that will be the case. The Minister referred earlier to the track record of the Treasury and the Chancellor in making major appointments; he referred to the MPC. Whatever the strengths of the individuals who sit on the MPC—and those individuals have been very good—there has been nothing vaguely approaching an open competition for appointments to it. There has not even been a closed competition; it has been a question not of a knock in the middle of the night but of a phone call, with the Chancellor asking “Would you like to be on the MPC?”. It is important that that approach should not be repeated for the Statistics Board and that there should be an open competition.
I am less convinced that the competition should be overseen by people who are independent of the board and the Cabinet Office. If the competition is open, the Cabinet Office should be capable of conducting it in an acceptable manner. Presumably that is the way in which the Nolan principles operate in most cases—there is an open competition but the department or the Minister making the appointment makes it without the belt-and-braces approach of having an independent overseer.
The Government agree with the spirit of the amendment, but we believe that it is unnecessary. I hope that I will be able to reassure your Lordships on this point.
The Government have said many times, both here and in the other place, that they intend to ensure that all appointments are carried out in an open way in line with the guidance from the Commissioner for Public Appointments. As I have said, the Treasury Committee endorsed this approach and the Government will of course be accountable to both Houses of Parliament for their discharge of this obligation. It is unnecessary to provide further detail in the Bill.
The Government will ensure that the approach taken to appointments is consistent with good practice, as promulgated by the Office of the Commissioner for Public Appointments. That includes the requirement for the involvement of an independent assessor through the appointments process.
I should like to comment on a point made by the noble Lord, Lord Howard of Rising. I have sat on committees under the guidance of OCPA and there has been no possibility of the Government distorting the results of the appointment process. It just does not happen. Noble Lords opposite asked a question about an appointment, which I answered a month or so ago; I am afraid that their evidence was quite wrong. We are sure that the commitment that we will operate under guidance from OCPA will ensure that the process is fair and reasonable.
I am glad that the Minister agrees with the spirit of the amendment. Will he go further by giving it practical application in having one single applicant chosen by an outside body? That would genuinely ensure that there is no distortion. Some would say that there have been distortions in government appointments; for example, there are very few monetarist economists on the Bank of England’s advisory board. I urge the Minister to take that on board. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3, as amended, agreed to.
Clause 4 [Non-executive members]:
[Amendment No. 22 not moved.]
23: Clause 4, page 2, line 29, leave out “Treasury” and insert “Cabinet Office”
On Question, amendment agreed to.
If Amendment No. 24 is agreed to, I cannot call Amendments Nos. 25 to 27 for reasons of pre-emption.
24: Clause 4, page 2, line 43, leave out subsection (5)
The noble Lord said: Amendment No. 24 is a probing amendment, exploring what circumstances would lead to the Government feeling that the power in Clause 4(5) should be exercised. It is difficult to imagine circumstances in which a non-executive board member would need to be compensated. Non-executives in the private sector rarely if ever receive compensation for their resignation or loss of office. If the power has not been used previously, is it really necessary? If the Minister cannot think of a time when the power would unquestionably be necessary, the Bill would be improved by its removal. I hope that he will consider the amendment carefully. I beg to move.
I am apprehensive about the subsection, because it could be used to ease out non-executive members of the board who had somehow displeased the Government. They could say, “Would you go, and we’ll pay you some compensation?”. I am afraid that one has at the back of one’s mind the not very salutary case of Sir Alistair Graham, who is not having his appointment as chairman of the Committee on Standards in Public Life renewed and appears simply to have fallen out with Ministers in Whitehall. If ever there was a chairman of a committee who ought to have felt in an impregnable position when making his strictures, without the risk of losing his job, I should have thought that it would be somebody who held that kind of appointment. My anxiety is that, if the Government have a statutory right to pay compensation to somebody who is leaving office prematurely, that power could be misused. I agree with my noble friend on the Front Bench that it would be better if this subsection did not exist.
As we have heard, Amendment No. 24 would remove the ability of the board to pay compensation to a member if, for any reason, they left office early or the Treasury considered it otherwise necessary to pay compensation. It is important to maintain this provision. It might be required if, for example, a non-executive member of the board were to finish an appointment early for reasons of ill health. I have served on a board where a non-executive director became extremely ill and was paid compensation to leave.
The noble Lord, Lord Jenkin of Roding, made a point that does not have great substance. He chose as an example the case of Alistair Graham, which has been discussed previously in this House. He was not sacked. He came to the end of his contracted period of chairing the commission and, as with every other previous chairman, his term of office was not renewed. I do not accept the notion that the Government might try to get rid of members of the board who cause them discomfort by offering compensation, but a non-executive member having to leave for reasons of ill health is an important consideration. For that reason, we are not prepared to agree to the removal of the subsection.
We are talking about taxpayers’ money. Non-executives are not employees. Therefore, if they are not able to serve as non-executives for whatever reason, there is no reason to give them compensation. I urge the Minister to look at withdrawing the provision, but I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 25 not moved.]
26: Clause 4, page 3, line 3, leave out “Treasury” and insert “Cabinet Office”
On Question, amendment agreed to.
27: Clause 4, page 3, line 5, leave out “Treasury” and insert “Cabinet Office”
On Question, amendment agreed to.
28: Clause 4, page 3, line 7, at end insert “, provided that the total time that a non-executive member may be appointed as a member of the Board does not exceed 10 years”
The noble Baroness said: Under Clause 4 initial terms for non-executive directors are to be between one and five years, and under subsection (6) a non-executive director can be reappointed “on any number of occasions”. Amendment No. 28 would set a maximum time limit of 10 years for a non-executive director.
The norm in the corporate world is now driven by the combined code on corporate governance, to which I referred earlier. It provides for appointments of three years at a time, with an especially careful review after the second set of three years, leading to a presumption that, after nine years, a non-executive loses his independence; therefore, while he may stay on the board, he does not count as an independent director under the code, which has implications for his involvement on the board and board committees.
The basis of the Bill is that non-executives will exercise an independent oversight function, so it is relevant to consider whether time limits should be set to avoid the directors becoming stale, unquestioning or simply ground down by years of not being able to achieve changes that they consider desirable. I hope that the Minister will agree that refreshing a board is highly desirable to inject new vigour and that this applies however meritorious or committed board members are.
My amendment sets a maximum of 10 years, but I am not wedded to that formulation. However, we should write something into the Bill that ensures that non-executive appointments cannot become stale and that those appointing them are forced to look carefully at alternatives. There is sometimes nothing worse than “the devil you know” in board appointments.
I hope that the Minister will set out how he sees these appointments working over time. I hope that he will also say something about the possibility that someone might be appointed for as short a period as one year. It seems remarkably short and not conducive to the non-executive being committed to the Statistics Board and the learning inevitably involved on appointment to a board. I beg to move.
I wonder whether the amendment is necessary. My understanding of the getting-on-for-two-years-old public appointment rules is that two terms is normally the maximum and that one has to make a very special case to the commissioner for anything more. That could be six years or two times four or two times five, but it would be in defiance of the OCPA rules to go beyond 10 years.
When a new body is set up, all the members are appointed at the same time, but you may want flexibility at the first renewal process to start staggering the end of members’ appointments. You may therefore offer someone a one-, two-, three- or four-year extension to ensure a reasonable turnover of members; otherwise everyone leaves at the same time. An inspection of the OCPA appointments rules will deal with the point raised in the amendment.
The amendment raises an important point. On the one hand, one wants to have a refreshed board, but equally one does not want to be too rigid. The problem with public appointments that go on too long and re-reappointments has, in part, been exemplified by the re-reappointment of Kate Barker. She is no doubt an extremely good member of the Monetary Policy Committee. However, further to our discussion on perceptions, it is perceived that she is very close to the Government and that that has played a part in her re-reappointment.
One could envisage a situation in which a member of the Statistics Board—someone like the noble Lord, Lord Moser, to pick an individual at random—was thought an estimable member who should remain on the board for more than the normal span. Therefore, the policy that the noble Lord, Lord Turnbull, set out—that there should be a norm of no more than two terms but the possibility, too, of exceptional circumstances and an explanation of why they are exceptional—seems the best way forward. I suspect that if the Minister could reassure us that that is what the Government have in mind, we would be reassured!
I hope that I can reassure all noble Lords because this is, in a sense, a technical amendment.
Amendment No. 28 would create a time limit of 10 years, which is the limit contained in the current OCPA guidance. The noble Baroness, Lady Noakes, said many things that I absolutely agree with. She mentioned the rules of corporate governance—and here we have the OCPA guidance, which is widely accepted for public appointments. However, we want to maintain flexibility and consistency in case, for any reason, the OCPA guidance should change in future, for example; so it seems sensible not to specify the maximum period in legislation. For example, good practice may be that the period should be somewhat shorter, or even a bit longer in a few years, in the light of further experience with appointments of this type. Whatever happens, it is the Government’s intention to continue to follow OCPA guidance.
To answer a point raised by the noble Baroness, Lady Noakes, which was also referred to by the noble Lord, Lord Turnbull, we would not usually expect to appoint for a year alone, but there may be circumstances in which a reappointment is made and a year or two years is appropriate. That takes up the noble Lord’s point about continuity and ensuring that not all non-executive members leave at once.
I hope that it reassures noble Lords who have spoken in this brief debate that we will continue to follow the OCPA guidance rules.
Can the Minister elaborate on one matter? I asked how he saw the appointments working out in practice; he said that they would follow the rules. I drew attention to the possibility of one-year appointments. Do the Government intend in the initial round of appointments to make one-year, two-year or three-year appointments? They clearly have their minds set on this matter, because they announced last week that they were just about to go out and get these new non-executives. Will the Minister explain what the Government’s policy will be?
I cannot tell the noble Baroness at the moment what the initial term of appointment will be, but I shall come back immediately to her on that point. I am rather surprised at the general thrust of her question because she is a very distinguished member of various boards. Once a board is established the chairman and other board members look at how it is developing and see whether it is doing its business properly and refreshing itself—all the points that the noble Baroness raised. In that way, the board, chairman and chief executive will determine whether the board is functioning properly; if it is, that is fine; if it is not, changes have to be made. It would be quite wrong for the Government to prescribe how the board should change, or not, once it has been established.
I do not quite understand what the Minister is saying because the Treasury not the board makes all these decisions. I was trying to establish what the Government’s position was. The Minister said that he could not tell me what the policy is, but I know that it must be set because an announcement was made in a Written Statement last week that budgetary cover had been taken to go out and get all these new people. I am disappointed that the Minister cannot answer that question, but I hope that he will undertake to write to me on it.
I am grateful to the Minister.
The amendment was tabled to have a discussion about how appointments would work. I am grateful to the Minister for saying that the OCPA guidelines would be applied. Those guidelines were most ably described by the noble Lord, Lord Turnbull, who knows all about these things. That is clearly very important and we are grateful for that confirmation. If the Minister would provide details of what the Government plan to do in the early round of appointments, it would be most helpful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5 [Executive members and other staff]:
[Amendment No. 29 not moved.]
30: Clause 5, page 3, line 14, leave out paragraph (b) and insert—
“(b) employed to operate independently of the Board with scrutiny and oversight of the role provided by the Board”
The noble Lord said: This group of amendments is our second bite of the cherry in looking at the role of the National Statistician as opposed to the board. Earlier in the debate the Minister implied that we did not accept the Government’s model for the new Statistics Board. The key element of that model is that it must be a unitary board. We accept that it should be a unitary board; the question that we are grappling with now, having accepted the principle that the National Statistician is a member of that board, is exactly how the relationship between the National Statistician and the board works and his formal roles and responsibilities.
One reason why we are dealing with a situation here that is sui generis—which I think that everyone has accepted—is that, unlike in virtually every other situation that we have discussed, whether it is a corporate board or the BBC, the National Statistician is a technician and has deep expertise on matters on which the non-executive members of the board have virtually no expertise. In most cases those are probably very detailed issues. That is why it is so important that, when the National Statistician is exercising his professional judgment on these technical issues, he can do it independently, and that the board realises that its role is to ensure that the process is followed properly rather than trying to do the job of the National Statistician when he exercises those technical powers.
We have tabled a raft of amendments. The noble Baroness, Lady Noakes, has joined in on some of them, and she and her colleagues have tabled others. We are trying in all these amendments to introduce clarity to achieve that purpose, to give the National Statistician clear independence to do a technical job properly and to ensure that he plays a full part on the board.
I shall briefly describe our principal amendments. Amendment No. 30 makes explicit the point that everybody made when we discussed this matter earlier; namely, that the National Statistician is employed to operate independently of the board, with scrutiny and oversight of that role provided by the board. Noble Lords used that phraseology earlier.
Amendment No. 34 is one of a raft of amendments which deal with slightly poor drafting. It is not a hugely substantive point but at present the Bill says that the board produces statistics. The one thing on which everybody is agreed is that the board does not produce statistics; the National Statistician does. Given that this and a number of similar amendments make this point, I hope very much that the Government will agree that is the case and will accept them. It is not a matter of principle but of having drafting which achieves the purpose that all noble Lords wish to achieve.
Amendment No. 30 describes the role of the National Statistician and Amendment No. 40 describes the role of the board as we see it. Amendment No. 47 explains how the board and the National Statistician should relate to each other as the board will be responsible for monitoring and assessing the performance of the National Statistician against her assigned responsibilities.
Amendment No. 95 attempts to rectify sloppy drafting. Clause 18(1) states:
“The Board may itself produce and publish statistics”.
As I said, the one thing the board does not do is produce statistics. The amendment seeks to delete “itself”.
Amendment No. 101 relates to who should consult the Bank of England in respect of changes to the RPI. This is not a matter for the board; the National Statistician is responsible for recalibrating the RPI. She should perform that function rather than the board. Amendment No. 102 is consequential on that amendment.
Amendment No. 154 is substantive. It would prevent the board instructing the National Statistician on how to do her technical job. This is not purely a theoretical or drafting matter. A high profile example arose in recent years where the National Statistician had to exercise judgment in dealing with Railtrack. It seems to us and our advisers that if the board intervened in circumstances where the National Statistician was exercising her technical responsibility, it would potentially be subject to judicial review because it does not have the technical expertise to exercise the judgment that is required in such a case. Therefore, it is important that Amendments Nos. 154 and 156 are passed to recognise that.
Amendment No. 168 is consequential. Amendments Nos. 170, 173 and 175 relate to personal information. It seems to us that the National Statistician rather than the board should hold that information as part of her production function.
Amendments Nos. 184, 185, 186 and 188 relate to access to information and who grants access to approved researchers. It seems to us that that is logically a matter for the National Statistician, not the board.
This is rather a rag-bag set of amendments. However, the amendments seek to clarify the role of the National Statistician, tidy up what seems to us to be infelicitous drafting, and achieve technical improvements through this series of minor changes, as I think noble Lords on all sides of the Committee wish. I beg to move.
I agree with almost every word that the noble Lord, Lord Newby, said. To my mind this goes absolutely to the heart of the matter. The only point on which I disagree with the noble Lord is with regard to his reference to infelicitous drafting. With respect, I do not think that is the case. I believe that the Government are genuinely confused about the role of the National Statistician and that of the board. As the noble Lord said, I thought we were all agreed that the production and dissemination of statistics is the job of the National Statistician, while the job of the board is to oversee and scrutinise that process. Yet here we have in the Bill as drafted the board doing one thing after another that amounts to the production or dissemination of statistics.
The noble Lord took us through the whole range of the amendments. This is one of the most important groups of amendments and we have to get this right. I fear that at the moment there is confusion. Our advisers describe it simply as very muddled. If ever there were a need for clarity, it is in differentiating between the function of the National Statistician, the professional man or woman—one must say woman because the post is held by a woman at the moment—who has the professional expertise and must have the professional independence to use that expertise, and that of the board which oversees the process.
I draw a parallel with the time when I chaired a health trust and had a consultant surgeon on my board. There was never any conceivable suggestion that I could tell him how to do his job. He was there in a somewhat different capacity. Any suggestion that non-executive chairmen or directors can tell professional people how to do their jobs is absurd. My right honourable friend David Cameron has made the point that we need to trust professional people and give them the independence to get on with their jobs and not tell them what to do the whole time. I fear that, as the Bill is drafted, this is totally confused, as the noble Lord, Lord Newby, made very clear. I regard this as an extremely important set of amendments. I hope that when the time comes we shall vote to get clarity because the position is not clear at the moment.
I very much support all these amendments spoken to by the noble Lord, Lord Newby, partly because of the view that I expressed earlier about the total responsibility of the National Statistician for the whole production system as the chief technical adviser to the Government. We shall come back to that on a later clause. It is important that his or her—at the moment it is a woman—responsibilities are fully set out in statute for the first time, which is totally welcome, and that the statutory formulation reflects her double role: her obvious one of presiding over the Office for National Statistics and that of presiding professionally and technically over the entire system. As I know from experience, that is a much tougher part of the role. Both elements of the role are combined in one person and the second is just as important as the first.
It saddens me to part company with the alliance that I have had with the noble Lord, Lord Moser. At Second Reading, I was almost alone in arguing the case for a unitary board. I wanted a situation in which the statistics produced and the methodologies that underpinned them were seen as being published with the full authority of the board. I was worried that those might be personalised to the National Statistician, which would put a tremendous personal pressure on the holder of the post. I gave examples from previous regimes of Secretaries of State speaking pretty abusively about the National Statistician in ways which I do not believe would happen if the statistics were produced in the name of the board. There may be one or two specific functions, such as who consults the Bank of England, that are relevant to the National Statistician, but in general the construction of the Bill safeguards that position already.
The National Statistician is the principal adviser: that is in Clause 28(1); the board has to “have regard to” that advice, as set out in Clause 28(2); and if the board overrules the statistician, it must give reasons, as set out in Clause 28(3). In effect, the National Statistician’s advice is board policy, unless there is some reason not to do it. There are important advantages in having advice that is seen to have the backing not just of the National Statistician, who is after all an official like the rest of us. It means that a Minister who wants to pick an argument cannot do so with the National Statistician alone but must do so with the board as a whole. There may be one or two exceptions, but for the most part, I would leave “board” where “board” is stated and rely on the structure set out in Clause 28.
Let me add one more thing to what the noble Lord, Lord Turnbull, said, with whom I agree. Statistics are a technical matter, and we require a technically competent National Statistician to be in charge of them. However, there are statistics that will be socially explosive. I mentioned the census in my Second Reading speech. Questions of census definitions of identity will come. I would prefer it not to be the National Statistician who takes the heat of the moment but the board and especially the chairman of the board. We must remember that statistics may look technical to statisticians, but a lot of people view them as quite incendiary, explosive stuff. For that, we need the board to protect the National Statistician and to allow the National Statistician to do his or her work as well as possible.
Is it not perfectly consistent with what the noble Lords, Lord Newby and Lord Moser, and I have been arguing that the National Statistician should have full responsibility for the production and dissemination of statistics? If disputes arise, the board can give the National Statistician its full support without itself becoming responsible for any of the professional work that the statistician has done. The board will have a scrutiny role, and it will presumably be able to say, “We are satisfied by the processes, and therefore we believe that she is absolutely right, and we back her”. Does that not meet the case that the noble Lord, Lord Desai, has been making?
I think that will not be enough. I still think that I would rather the National Statistician not to be put on the spot and then the board coming in. We can always say that the board has guaranteed the National Statistician’s independence and allowed him or her to issue the statistics. When it comes to the dissemination or production of statistics, believe you me, when the next census comes there will be explosive social issues, and the National Statistician should not be left alone.
I am sorry but, with respect, I do not accept the argument made by the noble Lord, Lord Desai. The noble Lord, Lord Turnbull, was absolutely right. Previous statisticians have come in for much flak, if I may put it that way. The former National Statistician Len Cook described himself as the country’s most abused civil servant. Who was supporting him? I do not know. He came in for a great deal of flak. Under the Bill, there will be the board, and if we accept the Government’s advice, the National Statistician will be a member of the board, but the board will be there to support and endorse the work of the National Statistician. It will not be producing the statistics. This raft of amendments, which I totally support, is getting the board out of the business of producing and disseminating, because that is to be the responsibility of the National Statistician.
It seems to me that this was the main point that the briefing material put out by the Statistics Commission in March was on about. I totally agree with the noble Lord, Lord Jenkin, that it is terribly important that the National Statistician is responsible at the sharp end and he is backed up by his board. I agree with everything that the noble Lords, Lord Jenkin and Lord Newby, said, and I hope I agree with what the noble Baroness, Lady Noakes, will say.
I will speak to Amendment No. 34 and the other amendments in this group, some of which have my name attached. Some of them are in the names of those on these Benches alone, some have been tabled with the Liberal Democrats, and some have been tabled with the noble Lord, Lord Moser. Amendment No. 40 rejoices in the support of all of us.
The noble Lord, Lord Newby, moved his Amendment No. 30, which leads this group. I suggest to him that he has in part thrown the baby out with the bathwater, since his amendment deletes Clause 5(2)(b), and in doing so he would not allow the board to set the terms and conditions of the National Statistician’s appointment, including those relating to dismissal. I still think that is important, so we cannot support that amendment, although we agree with the thrust of it, which is to emphasise that the National Statistician has to operate independently within the board.
Noble Lords know that my preference was for a non-executive board, as I outlined when I spoke to Amendment No. 2, and the amendments attempt to tease out the split between executive and oversight functions. Even if we stick with a unitary structure, there should be much more clarity about the oversight functions of the board and the executive functions of the National Statistician. Therefore, we believe that all or part of this group of amendments is necessary.
Our amendments in this group are formulated slightly differently to those of the Liberal Democrats, and I will briefly outline our approach of placing more functions in the name of the National Statistician rather than the board. That should go beyond the production of statistics in Clause 6, which both Front Benches have suggested. We have also suggested the definitions for official statistics in Clause 9, which is in Amendments Nos. 50, 51 and 53; the production of statistics in Clause 18, which is Amendments Nos. 94 and 96 to 99; and the compilation of the retail prices index in Clause 90, which is in Amendment No. 100, which is in addition to the consultation of the Bank of England, which the noble Lord, Lord Newby, referred to in separate amendments, which we agree with. There is also the provision of statistical services in Clause 20. It seems to me to be nonsense that the board is going to be offering statistical services; it must be the National Statistician via the executive office. In addition, we have amendments to Clauses 21, 22, 23, 26, 29 and 31.
To put it simply, we have written the National Statistician more into the Bill and have, therefore, reduced the functions attributable to the board. The board will remain, but with the important function of monitoring the National Statistician, as set out in our Amendment No. 40 and the Liberal Democrats’ Amendment No. 34. Their Amendment No. 47 also mentions assessing the performance of the National Statistician, which is a helpful addition and we support it.
The noble Lord, Lord Turnbull, suggested that the board should have a bigger role, which would de-emphasise the role of the National Statistician, so that if there was trouble, she could hide behind the board. That is one possibility, but that would downgrade her role. She should be the public face of statistics and, while she may need to be backed by the board in her judgments, she should certainly not hide behind the board in all circumstances.
My point was that Clause 28 makes clear the status of the National Statistician as the principal adviser. That is where her strength comes from; her advice must be taken into account and can be over-ruled in only exceptional circumstances. I was certainly not trying to downgrade the position of the National Statistician, which is why I earlier supported the fact that she should be the chief executive of the board.
I am grateful for that clarification from the noble Lord, Lord Turnbull, but if the National Statistician is seen as the board’s adviser and the board is still in the front line, the public perception of her will be that this is a back-room person, not a front-line person. That is what we need to tease out in these amendments.
The Minister will be aware that the Royal Statistical Society, the Statistics Commission and the Treasury Select Committee in another place are at one on this issue. If we allow the Bill to remain without amendment, we will have created much scope for misunderstanding and muddle which would almost certainly lead to the undermining of trust—and we are trying to create trust in statistics.
Perhaps the Minister would deal with the practical impact of some real-life examples. Suppose that expert users in local government, with academic support, criticise local government finance methodology on technical grounds—for example, that the weights in a linear model are not derived in a sensible way and that a non-linear approach would be better. The board agrees with that, but the National Statistician and the Department for Communities and Local Government argue that the criticisms are unfounded and that there is no case to answer. Whose opinion prevails? The noble Lord, Lord Turnbull, will say that the National Statistician is the adviser and that any disagreement with that needs to be made public; but is that a sensible way to go about this? Should it not be the National Statistician who makes that judgment? The board should deal with any issues relating to the National Statistician’s performance if it believes that those judgments are incorrect or do not gain a proper degree of support in the communities affected by those judgments.
These are difficult issues. We are creating a board with oversight functions but to which we give most of the functions; those functions are then carried out by the National Statistician who somehow hides behind the board. This has not been thought through and executed properly. I hope that the Minister will either accept some of the amendments, although I am sure that he will not accept all of them, or agree to come back at Report with government amendments to sort out this mess.
I am grateful for the way that the noble Baroness, Lady Noakes, has advanced the cause of her amendments and I am grateful also to all other noble Lords who have contributed to this debate—and to the noble Lord, Lord Newby, for his amendments. I am not going to accept any of the amendments this evening, but this has been a useful debate in clarifying some of the issues and I wish to say a little more about that in due course. First, let me explain why I cannot accept the bulk of the amendments.
The Bill creates a new, independent Statistics Board, reflecting the Government’s commitment to two key principles: first, where appropriate, devolving ministerial power in statute to credible independent institutions with a clear remit set by government and Parliament and, secondly, leadership by a board, which means sharing accountability across a group of individuals with a range of expertise, rather than vesting all authority in one individual.
Given the unique features of the UK’s strongly supported decentralised system of statistical production, the Government have concluded that it would be best to establish a single oversight board to scrutinise the statistical system, and to provide the top governance layer in an independent ONS, reflecting the key goals to put statistical production and scrutiny on an independent footing. One of the key reasons for that is to avoid creating competing, independent centres of “statistical expertise” that might undermine confidence in the system. In the Government’s chosen model, the board is able to draw on the professional advice of the independent statutory National Statistician, rather than requiring its own separate independent professional adviser.
As Ministers have effectively been removed from the accountability structure for the ONS, it is absolutely fundamental to replace that governance role, and a new statutory board will undertake the role that Ministers currently undertake. Within that single structure, the Government have included mechanisms to ensure clear delineation of production and scrutiny responsibilities. However, I recognise that there is uncertainty in parts of the Chamber on how clear we have been on these matters. That is why this debate, to which I will respond, has advanced the cause further.
The National Statistician is required to establish an executive office of the board, to which she must appoint the other executive board members and can appoint other staff. It is through that office that we expect the executive activity of statistical production to be undertaken on a day-to-day basis, just as the ONS does now. Some have suggested that the legislation involves some kind of downgrading of the post of National Statistician. We regard that post as being extremely important and high status. Unlike at present, the post will be a statutory, Crown appointment and key roles are designated within our proposals.
The National Statistician is the board’s chief professional adviser, she is the chief executive of the board, she is head of the executive office responsible for establishing, managing and leading that office and its staff, and although this is not in the legislation, we intend that she will be the head of the Government Statistical Service. The assessment function will be operationally independent of statistical production in the executive office. A statutory post holder, the head of assessment, reporting directly to the board, will lead the assessment function and all the staff working on assessment. The head of assessment cannot work on statistical production and will not be part of the executive office. We are seeking to establish that structure within the Bill and I recognise that doubts have been expressed about aspects of that structure.
I turn, first, to the amendments spoken to by the noble Lord, Lord Newby, which would require the National Statistician to operate independently of the board but with scrutiny of the National Statistician provided by the board. I understand some of the thinking behind this proposal but I consider that it would confuse the governance model and leave blurred lines of accountability. For example, under Amendment No. 30, the National Statistician would be employed by the board but she would act independently of it and therefore not be accountable to it.
The Government believe that it is right that the board provides a top layer of governance for the statistics office—currently the ONS—replacing the role that Ministers currently undertake where they are not involved in day-to-day operations but provide strategic oversight and help to set direction. The majority non-executive board will provide support for, and exercise a challenge function to, the National Statistician and her executive team in the usual role played by non-executive boards. We expect the board to feed into and sign off long-term strategic documents, such as high-level business plans for statistical production, as well as take a key role in issues such as high-level risk management.
As I said earlier, the National Statistician’s role is clear and her status is assured in the Bill. As I indicated, in addition to the functions that I identified, the Government also intend the National Statistician to be the head of the Government Statistical Service, leading the professional development of staff across government and having responsibility for maintaining staff development functions to ensure the availability of skilled, professional statisticians across government. I believe that that is clear and that Amendments Nos. 30, 40 and 47 muddy the waters.
The noble Baroness, Lady Noakes, spoke to a large group of similar amendments, which all seek to reassign responsibilities in the Bill from the board to the National Statistician. As I have already said, we expect the National Statistician to undertake the largely executive functions on the board’s behalf through the executive office that she will be obliged to establish. Under Clause 29(2), the National Statistician may exercise all the board’s functions, with a couple of limited exceptions, related to that separate assessment function.
There is also another lock to assure the National Statistician’s rightful and clear role as adviser to the board on all statistical matters. The board is required to publish and report to Parliament, including the reasons why it over-rules the National Statistician’s advice on technical issues, if indeed it does so. That would be a significant action by the board and would require publicity.
The board is the legal entity which will be statutorily responsible for the exercise of the functions established in the Bill. This provides a governance structure that allows corporate oversight of executive and assessment functions, while maintaining a single centre of expertise for statistics.
As has been reiterated this evening and in other quarters—I think that the noble Lord, Lord Jenkin, referred to it—there has been some confusion about the unitary model adopted in the Bill. I do not accept that. We are clear about the model that we are following. One corporate legal entity has statutory responsibility for discharging all the statutory functions conferred by the Bill, acting through a professional executive, except in relation to certain reserved functions; namely questions of assessment. That is a fairly familiar set-up for governance arrangements throughout government and the wider public sector, and we think it is an appropriate model for the board. That is why I express difficulty in accepting the amendments, although I recognise that some of them are probing and that they intend to ensure that we are clear about these functions.
In speaking to Amendment No. 95, the noble Lord, Lord Newby, suggested that there was some anomaly in the drafting. However, the use of the word “itself” is to make it clear that this clause, unlike the preceding ones, is about statistics which the board ultimately produces, rather than the statistics that other organisations, such as government departments, produce and which the board monitors. We have already discussed why the Government are committed to the principle that the board should be ultimately responsible for statistical production, although on a day-to-day basis the National Statistician will run the organisation responsible for that delivery. So, in an attempt to preserve the clarity of this clause, I hope that the noble Lord will recognise that his amendment would cause some degree of confusion.
Amendments Nos. 121 to 124 would require the National Statistician, as well as the board, to exercise their functions efficiently under the terms set out in Clause 26. The board has ultimate responsibility for the functions established in the Bill and it has ultimate responsibility for the proper discharge of those functions, even if delegated to the National Statistician. Therefore, only the board can properly be ultimately and legally responsible—the point that we are considering in the Bill—for the efficient exercise of those functions, although we would of course expect the National Statistician to play a full part in operating efficiently as a member of the board and as the board’s chief executive.
Amendment No. 150 seeks to make the National Statistician chief executive of the executive office, rather than the board’s chief executive. We do not regard this as a necessary or helpful change. The board, as a corporate body, needs a chief executive. Parliament will expect a single person to be accountable for the activities of the board as accounting officer. In response to a question from the noble Baroness, Lady Noakes, I indicated that that accounting officer would be the National Statistician. The chief executive need not be operationally involved in every aspect of the board’s activities to discharge that responsibility, and the Bill ensures that that is the case.
Finally, Amendments Nos. 154, 155 and 156 seek to alter the governance arrangements that we have established and would prohibit the board from directing the National Statistician and staff of the executive office on the exercise of executive functions. Again, I simply repeat what I have said before: we have chosen what we believe to be the right governance structure in this respect.
I said “finally” but I have overlooked one amendment. Amendment No. 157 seeks to alter the name of the executive office, making it no longer “an executive office of the Board” but just “an executive office”. I cannot agree with that. The executive office that the National Statistician is to establish will ultimately be under the board’s direction, and consequently it is appropriate to describe it as such in the Bill.
I recognise that all noble Lords have been constructive in this debate. I also recognise that anxieties have been expressed and that the amendments give vent to those anxieties. I shall not accept the amendments this evening and I do not want noble Lords to press them, but I agree with the Committee that clarity about the roles is extremely important. If these anxieties are expressed in the Committee, it is incumbent on the Government to take further steps to clarify the roles—particularly that of the National Statistician—within the structure as set out in the Bill. I undertake to dwell on the contributions concerning this important area and to reflect on previous amendments which have given clear verse to some of these problems. I undertake that on Report I shall attempt to satisfy noble Lords’ anxieties, possibly more fully than I have been able to do this evening.
Before the noble Lord, Lord Newby, decides what to do with his amendment, I ask the Minister whether he agrees with Amendment No. 47 that:
“The board shall have responsibility to monitor and assess the performance of the National Statistician”.
In my remarks I said that that is an important element of the board's functions. How do we put that alongside Clause 28, which says that the National Statistician is the chief adviser to the board? It is difficult to see how we can put those two points together, although I strongly support the notion that we should write into the Bill the fact that the board is there to oversee, to monitor and to assess the performance of the National Statistician.
I am grateful to all Members of the Committee who have spoken in this debate. I am extremely pleased that the Minister is to give further thought to the points made. Everyone is after truth in this area rather than attempting to take a partisan or an acrimonious view.
Whatever the Bill says, the kind of problems that we will end up with were exemplified by the point made by the noble Lord, Lord Turnbull, about how best to protect the National Statistician when he or she has exercised technical judgment to the best of their ability. Is that best done by the board saying, “Actually, it was our decision and not just hers”, or is it best done by the board saying, “We employ her to take that responsibility; we have looked at the way in which she has exercised her responsibility; she has done it in a perfectly proper way and we support it”? Those are two ways of dealing with that problem and neither delivers a knockout blow to the other.
I welcome the fact that the Minister is prepared to take all these concerns away for further consideration and deal with them on Report. Bearing that in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.