Select Committee on Treasury Minutes of Evidence


Examination of Witnesses (Questions 140-159)

MR LEN COOK, MR JOHN PULLINGER AND MR ROBIN LYNCH

WEDNESDAY 30 OCTOBER 2002

  140. I am sure I will.
  (Mr Cook) With further criticism.

  Chairman: We will, do not worry.

  Mr Mudie: Just on pensions, your middle name must be Teflon really because you cannot get away with just brushing it aside. This is one of the hottest issues in politics in this country, the amount of money going into pensions. The opposition spokesman has been going on for months that it is more than the figure the Government has been given.

  Chairman: He is right.

  Mr Mudie: Yes, he turns out to be right. You turn out to release a figure that is 43 million out. You just brush it away.

  Chairman: Billion.

Mr Mudie

  141. Yes, billion.
  (Mr Cook) Firstly, can I say I do not seek great comfort from your comment I am Teflon, I think I am the most abused civil servant in the United Kingdom.

Mr Beard

  142. They all say that.
  (Mr Cook) In fact the comments that come out of this, those which are more ignorant and offensive, are not ones that I enjoy at all particularly. You can rest assured that if I was made of Teflon I would probably be more comfortable.

Mr Mudie

  143. You are still in your job. You severely embarrass a minister on a major item of policy by releasing a figure that is 100 per cent wrong and you are still in your job. You are a lucky man.
  (Mr Cook) Can I be clear the figure was quite correct. The precise statement of the figure was contained in a footnote to a table rather than the heading of it and it had been that way for 20-odd years.

  144. It was £43 billion out. Mr Cook, the key element of pensions at the moment is how much money is going in. Right?
  (Mr Cook) Yes.

  145. There is a difference between £43 billion going in, that is slightly up on the year before, and £84 billion which suggests all the Government's problems and all the country's future problems on pensions are solved. You came out with the 84. This is why you are Teflon, you did not really come out with it, did you? You slipped out a press release on 10 October not mentioning your error. You covered it up in best spin doctor fashion with a review and you did not mention the fact that it had been done so badly.
  (Mr Cook) I can disagree with that. I produced a report that was announced well in advance. I stated that I would produce a report which came out. It was quite a clear analysis of the problems. It was a very open statement of what we got wrong. I am sorry, I think you have a very clear assessment of the problems that arose, why they arose, the impact and the way ahead in terms of what we were proposing to do.

  146. Who gave The Times on 22 October the story? When did you put out a press release on this? The press release we have got is 10 October and it does not mention this. It does not mention the amounts. I am just asking. You said you came out and told everybody, well when did you tell them? What date was the press release?
  (Mr Cook) The whole report was released. The report was released, it may have been 10 October, I cannot tell you. Sorry, it was 10 October. The whole report was released then with a comprehensive table.

  Mr Mudie: I bet it was thick and buried away was the £40 billion. You shake your head. Tell me where in your press release did you admit that you were 40 billion out? Nowhere. Mr Teflon Cook, I suggest, how do you get away with it?

Chairman

  147. He has not.
  (Mr Cook) Firstly, I disagree that I have got away with anything.

Mr Mudie

  148. You are still in your job, you are still receiving a six figure salary. What more do you want? Have you been disciplined? Have you been admonished?
  (Mr Cook) I have been abused, certainly.

  149. We will not go into those sorts of things, Mr Cook. Right. Shall we go on to GDP, regional development. What is happening with you and the Statistics Commission over the question of regional figures? Do you have concerns about the quality of regional data? Do you think it is sufficient? Do you think it fits the purposes for which it is used? I will give you a second question but they are all matters which the Statistics Commission is not very happy with, so what do you say in response?
  (Mr Cook) The demands for regional statistics in the United Kingdom have increased probably every couple of years more significantly than before. For example, the existence of devolution in Wales and Scotland has created a shift in interest in producing country wide measures of things which traditionally we did not produce. For example, we produce regional GDP measures annually and Scotland and Northern Ireland produce quarterly GDP measures also based on industrial outputs. There is an interest in Wales in doing the same. The other aspect to it is the neighbourhood statistic project, the urban renewal activities.

  150. I have read that.
  (Mr Cook) In that respect there is a large amount of work put into increasing the quality of regional statistics. Underneath it all there has been a major shift in statistics to create a more effective, consistent long term geographic framework for statistics of the United Kingdom. At the moment we have well over 160 different areas in the UK, there are pretty much no administrative areas which are the same. What we have developed in the 2001 Census is a common geography for the United Kingdom that we want to carry through for at least the following two Censuses which will bring together data from a large variety of sources into common areas. In each of the Census output areas there are roughly 200 households. That will be a common geography which will try and tie together the statistical data we get from administrative survey sources .

  151. Mr Cook, I specifically asked you did you have concerns about the clarity of the regional data. Does that answer mean yes, you do have?
  (Mr Cook) I think we have to do more, yes. I think we have to produce more and there is a large amount of work in my office in producing more. Demands have increased, yes.

  152. This Committee is looking at regional GDP etc and we are very concerned about that so we share the concern.
  (Mr Cook) Can I say, the regional GDP we produce is of a similar standard to the European data.

  153. I am coming on to that. The second question I asked you, so you share that concern, do you think the regional data is fit for the purpose for which it is used?
  (Mr Cook) I cannot speak for all uses. The data that we produce is responding to increased demands and I think that for what we have now, for what those needs are, we have to produce more detailed information. Can I give you an example. Our labour force survey at the moment produces estimates for regions at quite a highly aggregated level. There is a demand for us to produce it for territorial local authority areas and, rather than collecting more information, what we are doing is we are modelling other administrative sources to be able to take that data down.

  154. For the record, for us, for the Treasury, for the DTI and for the Statistics Commission, which area do you admit it is deficient in?
  (Mr Cook) I think the area we will be doing the most work is in the area of economic statistics. That is where, for example, we would look in the future to use tax data as a source to drive more detailed information rather than statistical surveys.

  155. Now, as I understand this note, the Statistics Commission undertook a short study and they said they identified five topics they wanted to be covered in an ONS review of regional accounts. You agreed four but not the fifth. Now why are you jibbing at the fifth? There is some question of resources. Having said that I notice you are happy to put resources in when Number 10 asks you to do something at a neighbourhood level but when other people want something done on regional you are crying no resources.
  (Mr Cook) Number 10 was able to provide the resources for the work on neighbourhood statistics.

  156. Just on Number 10, can you tell the Committee are you looking at doing a 2006 Census?
  (Mr Cook) No, we have come to the conclusion—

  157. You have looked at it?
  (Mr Cook) We looked at the issue and decided that there were other things we could do which would substantively meet the needs of a 2006 Census given the cost of a 2006 Census. If we do a 2006 Census it will mean over a 10 year period there will be nearly 40 per cent of the British budget on official statistics as it comes into my Department which will be allocated to two Censuses.

  158. As I understand this now, looking back at this, the fifth issue you will not touch, the Department are doing it themselves, but the Statistics Commission wanted you to do that. Now are you still adamant you are not going to do it, the effects of GDP deflators?
  (Mr Cook) Firstly, we believe that we can improve the accuracy of regional GDP more by other things we can do in terms of the current value of GDP and its allocation to regions. In terms of the value for money that we have, we believe we can continue to improve regional GDP in that way. Secondly, there is a huge amount of regional prices which are essentially national prices, and that is increasing in terms of our ability to measure price change not price level. The third point, we are seeing as administrative data in private sector data the ability for us to get price data more and more cheaply over time. We expect that the same developments which are giving us more cost effective access to administrative data will allow us over time to get ready access to quite rich price databases. The whole economics of that question is going to change over the next five years.

  Chairman: Mr Cook, we are moving towards the end now. We have two final questions.

Mr Beard

  159. Following on George Mudie's question, one of the aims of Government economic policy is to bring up productivity in different regions and if we do not have the GDP deflators, that is the fifth one Mr Mudie has been talking about, how can we measure reasonably productivity in different regions?
  (Mr Cook) At this stage the gross domestic product measure that we provide is based on the GDP of the United Kingdom allocated by income shares to the different regions. That is a method that is in common with other European Union countries.


 
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