Statistics and Registration Service Bill

My Lords, I was sorry not to attend the Minister’s meeting last week. Unfortunately, I was abroad on Select Committee business. I agree with the noble Viscount, Lord Goschen, that this is not an esoteric Bill. Andrew Dilnot, an experienced and respected commentator on the nation’s economy, said it is the most important Bill in this Parliament. He could be right. As the Minister and other noble Lords have said, statistics inform decisions made in every part of society, not only in Government but also in business and throughout the economy. As the noble Lord, Lord Hannay, just said, they inform the important decisions we are going to have to make about climate change. They indicate the success or failure of targets about the public finances, crime, child poverty, health and—an area where the noble Viscount pointed out that there is plenty of temptation—education. The list is endless. Ideally, we would look to statistics and the Office for National Statistics to be the servant of open government. That is the measure of the importance of statistics. However, as nearly all noble Lords have said, unfortunately the public do not trust them. A recent survey indicated that only 14 per cent of the population thought that statistics were honest. As the noble Lord, Lord Hannay, told us, that is not new. The Royal Statistical Society said, "““for several decades now, a lack of trust due to a wide perception of political interference has devalued and undermined official statistics””." So I welcome this effort to raise public confidence in our national statistics. I think it is a genuine attempt to reform the system, and to make it independent and at arm’s length from the Government—if I may say so, about time too. There was a commitment in the Labour Party’s 1997 manifesto to make statistics independent. In 2000, we moved forward a little, but now at last, in 2007, we are taking the major step. With this Bill, the Government have moved a long way towards making the ONS independent. I do not share the concern of the noble Lord, Lord Jenkin, that the board is not independent enough. It is easy to complain because independence is difficult to measure, even for the Office for National Statistics, and there could always be more. This Bill, however, takes a major step towards independence, and at this stage it goes far enough to satisfy most of us. Let us see what happens in Committee. I have other concerns, though. I share other noble Lords’ concerns about pre-release. The Minister told us that this would be dealt with by order. I hope the Government will eventually limit pre-release to minutes rather than hours. We compare badly with others. If, as a result of this Bill, the public have growing confidence in statistics, too much opportunity to bury, combine or distort data will only undermine that confidence. My main concern is about the quality of the statistics. In Clause 8, the board is responsible for monitoring the production and publication of official statistics, and may report any concerns it has about the quality of those statistics. ““Set standards and scrutiny””, the Minister said. Should not the board also be responsible for ensuring the quality, and indeed be responsiblefor the relevance, of the statistics? I realise that is difficult. The noble Lord, Lord Moser, reminded us that the ONS is dependent on others providing the figures. The Minister said that there are 1,300 sets of figures; as I understand it, the ONS is responsible for about 300, and there are 1,000 further sets for which it is not directly responsible, but which affect the ONS’s own statistics. The figures for gross domestic product, for example, depend on data from a large number of other government departments. Recently, the GDP figures were distorted because of errors in the figures supplied about the construction industry from the DTI. Employment figures are dependent on data from the Home Office about immigration, and we all know about the problems there. As other noble Lords have said, the role of the board regarding oversight needs to be very clear. Then there is the judgment about compiling the data. Yes, there are conflicts of interest. For instance, research and development figures are assessed differently by different government departments. The Treasury likes them lower so that tax credits are less expensive. The DTI wants them higher because they flatter the economy. In 2005, the Association of the British Pharmaceutical Industry produced an extraordinary paper indicating that 67 per cent of what it considered R&D spend is excluded from the R&D tax credit calculation. So do we really know what we are spending on research and development in this country? The board or the Cabinet Office should be responsible for assessing these judgments, not the Treasury. It is important; after all, we are creating a modern knowledge economy supported by huge public and private investment in science and engineering. Indeed, in the debate on the Address last November, I wondered whether our national statistics properly measure the knowledge economy we are building in this country. The answer came the following month. December’s Pre-Budget Report, in Box A8, speaks about the changing nature of investment and agrees that in the ONS estimates of UK business investments, although they are based on the internationally agreed system of national accounts, investment in R&D may be misleading. I remind your Lordships of one of the examples given by the Treasury. The ONS estimates that in 2003 the UK invested £8 billion in software. However, the ONS has also estimated that if you add own-account in-house software investment, that could raise the total UK software investment in 2003 to around£21 billion. Surely, in a modern economy, that in-house work is also investment. But it was lost, and the reason was that in-house investment was put into the accounts as ““intangibles””. A distinguished accountant like the noble Baroness, Lady Noakes, will know all about that. The box goes on to point out that in 2004 business invested £112 billion in tangible investment, but the total cost listed as ““intangible”” was estimated to be £116 billion. Does that mean that as a modern knowledge economy we are investing twice as much as we thought we were? Perhaps that is why the economy is performing better than most. My point is that if our statistics do not keep up with the way we look at the world, inevitably the quality and the relevance will decline. That is why I would like to see greater powers for users to propose statistics. The professional organisations have made that point, and so did the noble Lord, Lord Moser. I realise that such powers could be manipulated to provide figures of more political significance, but my intention is that the powers should be available to produce figures of more relevance. Somehow the Bill must ensure that the code of practice, or the conventions about which data really describe our economy, can be challenged, not only by the board but also by users and outsiders. For example, the conventions on describing businesses as ““services”” or ““manufacturing”” are becoming meaningless. Clause 20 approaches that possibility. It entitles the board to provide statistics to any person and to assess the quality and analysis of the data. I welcome that, and I am sure that it will be useful in helping to clarify the misleading or biased interpretation of data that we are continually fed, to which the noble Lord, Lord Desai, referred. However, can this clause be used by the public to demand data or explanations to be provided that are more relevant? Can they demand more information or clarification, as the noble Lord suggested? That is why I consider that the qualityand relevance of the work of the work of the ONSare as importance as its independence and public standing. The Bill has dealt with independence and it can deal with quality, but, most of all, the board must ensure that our statistics keep pace with our changing national life and our economy, and that requires more definition in the Bill.