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House of Lords

Tuesday, 4th November 2003.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Oxford.

Lord Grantchester, having received a Writ of Summons in accordance with Standing Order 10 (Hereditary Peers: By-elections) following the death of Lord Milner of Leeds—took the Oath.

Statistics Commission Review of Economic Statistics

2.37 p.m.

Lord Roberts of Conwy asked Her Majesty's Government:

    Whether they will publish the results of the Statistics Commission review of the way official statistics relating to economic growth and other data are compiled by the Office for National Statistics.

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, as specified in the framework for national statistics, the Statistics Commission operates independently of Ministers, so decisions on publication are a matter for the commission itself. However, the commission operates in a transparent and open way, with the minutes of its meetings, correspondence and the advice that it gives all normally made available for public scrutiny.

Lord Roberts of Conwy: My Lords, I am grateful to the noble Lord for that reply, but he would have to admit that there is a touch of the miraculous about the doubling of the economic growth figures for the first half of the year. In view of the importance of the figures, and the way in which they affect interest rates, government revenue and other important issues, is there not something that can be done to look into the extreme variability of the figures provided by the ONS?

Lord McIntosh of Haringey: My Lords, I agree with the noble Lord, Lord Roberts, that these are important matters. However, the implication behind his question, that there is "a touch of the miraculous", rather sounds to me as if he were implying that there is collusion between the Office for National Statistics and the Government. I am glad to see him shaking his head, because, as he recognises, that is certainly not the case.

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Revisions of statistics, such as growth or manufacturing output statistics, have been a feature of national statistics ever since they first started to be collected. It is important that figures should be given as early as possible, and they are; but it must be recognised that the price paid for that is that returns sometimes come in late and have to be changed. There is no greater change recently than there has been in the past.

Lord Moser: My Lords, I have long experience of government statistics, and of the mistakes and errors that are almost inevitable. I remember when I was in charge, when we made mistakes or revisions, the media had a field day—and, of course, so did politicians. Sometimes, politicians use faulty statistics as a cover for somewhat faulty policies. I should like to quote to your Lordships—

Noble Lords: Question!

Lord Moser: My Lords, I should like to quote a minute from a Chancellor who said to the then director, "Please recalculate these statistics, they are not compatible with my policies".

Does the Minister agree that two things are important in the context of the Statistics Commission's report? First, should not a clear distinction be made between mistakes that are very rare and revisions that are necessary and which are a trade-off for timeliness? Secondly, does he agree that those in high places, whether in the Monetary Policy Committee or in government, must never rely on any one statistic that is inevitably subject to some errors?

Lord McIntosh of Haringey: My Lords, I acknowledge the expertise of the noble Lord, Lord Moser, in this matter, as the former head of the Central Statistical Office. I cannot remember his exact title, but it was something like chief statistical adviser to Her Majesty's Government. It is important that he should point out the difference between errors, which is what the press tends to call them, and necessary revisions. If things are produced in a timely way and not all of the information is available, revisions sometimes have to be made. There is nothing wrong with that.

Lord Newby: My Lords, given the problems of credibility and trust at the Office for National Statistics at the moment, and the potential conflict of interest between the National Statistician and the Chancellor—bearing in mind that he is appointed by the Chancellor and is asked to make decisions bearing on government policy—does the Minister agree that it would be preferable in future if the national statistician were appointed by the Statistics Commission and not directly by the Chancellor?

Lord McIntosh of Haringey: My Lords, I do not accept either of the premises of the noble Lord, Lord Newby. I do not accept that there are particular problems at present, or that the National Statistician is appointed on a personal basis by the Chancellor. They are Nolan appointments, and it is entirely proper

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that they should be so. Indeed, the setting up of the Statistics Commission shows that the Government believe that the commission and the Office for National Statistics should operate independently of government. That has not always been the case. However, I am interested by his suggestion about future appointments.

Baroness Wilcox: My Lords, will the Minister confirm that the Statistics Commission review will include the treatment of £110 billion of PFI liabilities shown in table C20 of the Red Book 2003? Will he accept that the present treatment of these government debts is not in conformity with generally accepted accounting practice, and that if it were, it would put the Government in breach of both their own golden rule and the EU growth and stability pact?

Lord McIntosh of Haringey: My Lords, I do not carry the Red Book with me. Therefore, unless the noble Baroness, Lady Wilcox, tells me what table C20 is about, it is very difficult for me to give a direct answer. If she is referring to the treatment of the obligations of Network Rail, then I can tell her that the Statistics Commission has confirmed that the Office for National Statistics has behaved entirely properly and correctly and in accordance with its obligations under international statistical standards.

Lord Livsey of Talgarth: My Lords, is the Minister aware that the sub-regional GDP figures assembled by the Office for National Statistics—and this applies to Wales, which has a 76 per cent average GDP, as against the South East, which has a 140 per cent GDP—have not been produced promptly for some areas? That has complicated matters in applying for European funding.

Lord McIntosh of Haringey: My Lords, I would never have dared to call Wales a sub-region. I am shocked that the noble Lord, Lord Livsey, should use such a term for the Principality.

Lord Livsey of Talgarth: My Lords, I am sure the Minister will understand that I am talking about sub-regions within Wales.

Lord McIntosh of Haringey: My Lords, I am grateful for that clarification. Of course, what I said about the potential conflict between timeliness and the final figures applies to Wales and to sub-regions in Wales as well. If the data are not returned to the DTI in time, then there is the possibility that revisions have to be made. That applies to Wales as it does to any other part of the country.

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European Parliament: Members' Allowances

2.45 p.m.

Lord Waddington asked Her Majesty's Government:

    How much the British taxpayer pays directly or indirectly towards the allowances paid to Members of the European Parliament.

Lord McIntosh of Haringey: My Lords, MEPs' allowances fall within the operating expenditure of the European Parliament under the administration heading of the European Communities budget. In 2003, the expenditure on MEPs' allowances is budgeted at 79.92 million euros, or £51.95 million, out of the European Parliament's total budgeted expenditure of 1,020.3 million euros or £663.2 million. The UK's expected financing share of the 2003 EC budget is estimated at 13 per cent after the UK's abatement.

Lord Waddington: My Lords, I thank the Minister for that very detailed reply. However, would he not agree that when a British MP with considerable courage writes to the newspapers pointing out that the allowances paid to MEPs bear not the slightest relationship to the costs actually incurred it is time for all of us to sit up and take notice? Travel costs are reimbursed on the basis of the most expensive form of travel, plus 20 per cent; a staff allowance of £8,000 a month; a general expenses allowance of £2,500 a month on top of the £180 daily allowance, not to mention £35 a week for taxis after 10 p.m. when the limousine service ceases to run. Is this not a matter of great public importance because, so long as the European Parliament itself operates a racket, it is in a very weak position morally to investigate fraud in the Commission?

Lord McIntosh of Haringey: My Lords, I very much enjoyed Mr Daniel Hannan's article in the Sunday Telegraph to which the noble Lord, Lord Waddington, is no doubt referring. I particularly enjoyed the remark made to Mr Hannan by a French MEP:

    "What is it about you English? You employ your wives and you sleep with your staff",

unquote, I think.

I entirely agree that the existence and nature of the statute that controls the expenses of Members of the European Parliament are unsatisfactory. The European Parliament needs a new statute, but the proposed new European Parliament version of the statute has proved to be unacceptable to the Council of Ministers. We are on the side of the Council of Ministers. To that extent I agree with the noble Lord, Lord Waddington. However, as I pointed out in my first Answer, the costs of MEPs' staff are only 19 per cent of the total costs of the European Parliament. The Kinnock reforms are resulting in savings of 80 million euros a year by 2006. Those include

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pension reforms, promotion on merit and many other necessary reforms which I am sure the noble Lord, Lord Waddington, will applaud.

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