Clause 3

Statistics and Registration Service Bill – in a Public Bill Committee am 12:00 pm ar 16 Ionawr 2007.

Danfonwch hysbysiad imi am ddadleuon fel hyn


Photo of Michael Fallon Michael Fallon Chair, Treasury Sub-Committee

I beg to move amendment No. 13, in clause 3, page 2, line 3, leave out ‘five’ and insert ‘eight’.

Photo of John Butterfill John Butterfill Ceidwadwyr, Bournemouth West

With this it will be convenient to discuss the following amendments: No. 5, in clause 3, page 2, line 3, at end insert—

‘(c) at least one person appointed by Scottish Ministers.’.

No. 6, in clause 3, page 2, line 7, leave out paragraph (a).

No. 190, in clause 3, page 2, line 12, at end insert—

‘(d) at least one person with knowledge and experience of the use of statistics to inform local service delivery.’.

No. 14, in clause 4, page 2, leave out line 39.

Photo of Michael Fallon Michael Fallon Chair, Treasury Sub-Committee

This group of amendments brings us to consider the size of the new board. We should recognise that Ministers have moved their position on the issue, as they started from the point of view that there should be a substantial number of non-executive board members, but such members will now constitute a majority. That did not, of course, satisfy the Treasury Committee, which was adamant that the board should be fully non-executive for lots of reasons—for example, to ensure that the National Statistician will be properly accountable to the board as the chief executive officer and that the supervisory and production functions of the new board will be properly separated. We may return later in the Bill to consider how we separate those functions, but for today’s purposes I must accept that the Government have made their decision and that the board will have a mix of executive and non-executive members. The issue before us now is what the exact balance should be.

The Bill proposes a board of nine members, of which six will be non-executive and three will be executive. Of the six non-executive members, three will be territorial—I hope that I have used the right term; perhaps national and territorial might have been a more appropriate phrase. Therefore, apart from the chairman, only two of the non-executive members, if they do not represent England, will be properly non-executive for the United Kingdom as a whole.

I thoroughly welcome the extent to which the Financial Secretary has ensured a more consistent coverage across the United Kingdom. That is a good thing, and far more progress has been made on that during the past year than I thought possible. I commend him and his team on that, but I shouldlike to raise the issue of the overall balance with him and the Committee. If only two of the board’snine members are non-territorial, non-executive members—if I can describe them in that way—that is  both too few and too small a proportion of the board, and it will get the board into difficulties.

The board must be credibly independent. If the Governor of the Bank of England complains, as he has done, about the quality of immigration statistics and the effect that they have on policy decision makers in measuring the spare capacity in our economy, he will blame the board under the new system. Equally, however, the part executive, part non-executive board might well want to blame the Home Office or some other Department that has collected the statistics. If only three members of the board are properly non-executive, they may well be asked by the public, “Why didn’t you ensure that these statistics were correct at the time?”

If an issue arose because of the quality of the statistics produced by one of the devolved Administrations, the three territorial non-executive members of the board might well be inhibited from criticising the quality of the statistics or the decision to publish or not to publish them by one of the Administrations, because they rely on them for their appointment. That is unsatisfactory; the way to deal with it is to enlarge the board. My amendment would enlarge the board from nine overall members to 12, which would enable us to have five non-territorial non-executives. That is a better number, and it would give a better overall balance without extending the total membership of the board to a point at which it is unmanageable. Twelve is a perfectly manageable number.

Amendment No. 14, which I also tabled, is a probing amendment. I cannot really believe that the drafting of clause 4(4)(d) is as loose as it appears. I have looked in other statutes and found no reference to misbehaviour, which is incredibly difficult to define. In the Ofsted legislation, I found a measure under which Her Majesty’s chief inspector of schools could be dismissed on the grounds of misconduct or incapacity, which are slightly easier to establish.

Under paragraph (d), a non-executive member of the board could be dismissed for virtually any reason at all. He could be dismissed for a traffic violation, because there is no objective qualification of what could constitute misbehaviour. There is not even a subjective qualification, such as that it should be misbehaviour in the eyes of the person who made the appointment. That needs to be tightened up. If we are talking about summary, on-the-spot dismissal, the behaviour clearly needs to relate to gross misconduct rather than a traffic violation. If it means misconduct, the definition needs to be tighter.

Photo of Stewart Hosie Stewart Hosie Shadow Spokesperson (Women), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Treasury)

I wish to speak to amendments Nos. 5 and 6, which concern the appointment of non-executive members to the board. The hon. Member for Sevenoaks described the three board members appointed under clause 3(4) as territorial and said that they might fail to criticise statistics from the devolved Administrations because they will rely on them for their appointments. The whole point about the way in which the clause is drafted is that they should not be territorial and should rely not on the Administrations but on the Treasury for their appointments. I shall come on to that later.

I turn first to the helpful summary briefing provided by the Financial Secretary. It begins with a rather short sentence: “Statistics matter.” It goes on to say that they should allow

“people to judge whether the Government is delivering on its promises. High-quality statistics are a key resource for government, business, academia and the wider community.”

I agree entirely. Indeed, on Second Reading, I explained that our difficulty in Scotland with some statistics, particularly some of the economic ones, is that we cannot trust much of what we see. The general expenditure review for Scotland, designed as a political initiative, is fatally flawed. Information is often wrong and can come with so many caveats that a new analysis of the economy is almost impossible.

It is essential that statistics are accurate and based on complete information—I agree entirely with what the hon. Member for Slough said today and on Second Reading—as well as impartial, and seen to be so, as I have said previously. That is why the provision in the Bill for the appointment of the non-executive members of the board remains of some concern to me. Clause 3(2) describes non-executive members as

“the chairman ... and at least five other persons”.

Clause 3(4) describes what appear to be territorial representatives, but they are not. It reads:

“one person who is appointed by the Treasury after consulting the Scottish Ministers”,


“after consulting the Welsh Ministers”,

and another

“after consulting the Department of Finance and Personnel for Northern Ireland.”

I hope that the intention is that they be territorial representatives—someone from each of the devolved Administrations—but the Bill does not say that. It states specifically that the appointments will be made by the Treasury.

To improve the perception of impartiality and to rebuild trust—we have heard in many debates about the lack of trust and confidence in statistics—I believe that it would make far more sense to allow the devolved Administrations to appoint members. We should also remove what might be perceived as a blocking mechanism—the Treasury appointments. For statistics to be impartial, and seen to be so, the fundamental underlying structure of their production must be beyond reproach. I cannot identify a reason for the provision of Treasury appointments other than Treasury command and control. I spent the weekend trying to work out why it is there. Does it represent a lack of trust in appointments by the Scottish Parliament and the Welsh and Northern Irish Assemblies? I find that hard to believe. They are made up of elected politicians with a mandate and Ministers with responsibility for their nation or province.

If statistics are to be impartial, and seen to be so, the means of their production must be beyond reproach and any accusation or allegation of political interference. I look forward to the Financial Secretary’s justification for retaining what appears to be an overweening Treasury command and control mechanism.

Photo of Rob Marris Rob Marris Llafur, Wolverhampton South West

On the hon. Gentleman’s fears about political interference, how would that be altered if the appointments were made by Scottish Ministers, as proposed in amendment No. 5, which he tabled? That part of his argument does not seem to make sense. Surely, the risk of political interference would be equally great.

Photo of Stewart Hosie Stewart Hosie Shadow Spokesperson (Women), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Treasury)

I thank the hon. Gentleman for his question. I have been struggling with that because in a sense he is absolutely right—the same allegation could be made. However, if the entire board is appointed by the Treasury—a single source—one might be left with the impression that it was simply refusing to let go. For the purposes of debate, my proposed mechanism applies only to Scotland, but if territorial representatives were appointed by Ministers from the relevant Parliament or Assembly, there would be a counterbalance and a removal of the perception of a merely Treasury appointment mechanism.

Photo of Brooks Newmark Brooks Newmark Ceidwadwyr, Braintree

May I support my friend here? The point that I believe that he is making and to which I should like to lend support is that we need to broaden the scope from the narrowness of the Treasury, which seems to have a vice-like grip on appointments throughout the system. The proposal is a step in the right direction and supports the point made by my hon. Friend the Member for Sevenoaks. We need to broaden things out and weaken the Treasury’s grip in that regard. It would be interesting to hear from the Financial Secretary the flaw in that argument.

Photo of Stewart Hosie Stewart Hosie Shadow Spokesperson (Women), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Treasury) 12:15, 16 Ionawr 2007

I thank the hon. Gentleman. I am not sure whether I am really his hon. Friend, but I know what he means. He said that the amendment would broaden the scope. My intention was to define the scope more clearly by ensuring that the Treasury could appoint its representatives, that the territorial representatives could be appointed by the devolved Administrations and that there was a clear balance between those who were appointed centrally by the Treasury and those who were appointed from elsewhere, which I think is the intention. The amendment would simply ensure a degree of fairness and equity in the composition of the new board and remove any perception of lack of impartiality in the production of statistics thereafter.

Photo of Alun Michael Alun Michael Llafur, De Caerdydd a Phenarth

I, too, am grateful for the opportunity to enter the debate. My amendment goes in a somewhat different direction from the ones discussed. I seek to add to subsection (4) paragraph (d), which says that

“at least one person with knowledge and experience of the use of statistics to inform local service delivery” should be appointed to the board. In an earlier contribution, I made some of the points about the importance of local statistics and I do not want to labour this point. However, I do want to ensure that it is built into the expectation that Parliament is setting on the board for the future, because I believe that the point I am making is shared by all parliamentarians on both sides of the House.

My point is, once more, that official and national statistics are important to effective parliamentary scrutiny and to the development of central Government policy. That is rightly recognised by the Bill. It is explicit; it is there. However, official and national statistics are equally crucial to the effective targeting, delivery and performance management of substantial public resources, delivered and accounted for locally—for example, through local government. Actually, that involves not just local government but local bodies of central Government, such as parts of the national health service or agencies such as the police service.

I referred earlier to a variety of issues such as crime reduction, but neighbourhood renewal is also a good illustration in this respect. As Ministers across Departments, including the Treasury, have recognised repeatedly, policy objectives for neighbourhood renewal and community cohesion can be achieved only if local public and other services can identify who needs help, where they are located and where there are pressure points. I have sat in many meetings of Ministers and many meetings of this House at which discussion of how we ensure that we properly target resources has been right at the heart of how we have debated national policy, so what I am saying does not run counter to the use of statistics for national purposes. It is an essential building block of effective national Government policy and accountability to Parliament.

The amendment is designed to ensure effective local user representation. In other words, there should be someone on the board who understands how proper analysis can be used to inform health services, the organisation of emergency services—indeed, a range of issues that are crucial at the most local level. The amendment would also aid the Government’s objective of keeping statisticians close to data suppliers and customers.

I urge my hon. Friend the Financial Secretary to look with sympathy on that point. I am sure that he shares my experience of hearing many people who have an excellent understanding of research needs and statistics for a variety of purposes—understanding overarching national priorities, looking for international comparisons—but who overlook the importance of local data, simply because such data are outside their experience, not in their area of academic research or not at the forefront of their minds. As I mentioned earlier, the ONS has moved in that direction and is, like Ministers and Departments, conscious of the importance of soundly based local statistics and information.

It has almost seemed as if the Financial Secretary were speaking in favour of the amendment, especially in the light of his comments in response to the earlier debate. He said that the board should be able tomake appropriate judgments about the objectives. I understand his point; it is important for there to be flexibility and for the board to take control of how statistics are developed and their quality and excellence. If that is the case, it is important that the board should have something repeatedly acknowledged by Ministers and also important for Wales, Scotland and Northern Ireland—an understanding of local statistics.

We often end up with lots of discussions about comparisons between English regions, or between them and what is happening in Wales and Scotland, or between local authority areas up and down the country and those across the boundaries. I underline the point again: there is no conflict. All the local government area statistics, regional statistics and territorial comparisons operate well as an aggregation of local statistics. If we get the local ones right, everything else will fall into place. However, it is easy to overlooksuch local statistics; the board could, with the responsibilities that the Financial Secretary has rightly suggested it should take on, overlook the importance of the very local level.

Why do we need to make the issue explicit? All too often when it comes to dealing with data, important issues are overlooked. That is true of the exchange and sharing of information, about which we shall no doubt talk later. At the end of the day, there will be a danger if the information has not been collected at the raw-data level on a basis that makes sense, as could happen if the board did not understand the importance of very local statistics at neighbourhood renewal level.

I hope that the Financial Secretary will acknowledge the importance of local data, and of building them into how the whole system works and into the board’s work. There should be proper accountability for what will no doubt concern parliamentarians, individually and severally, in the coming years, and it should be built into the operation and composition of the board.

Incidentally, I do not seek an increase in numbers; the amendment does not propose an additional board member specifically for the purpose that I have suggested, but that the membership of the board should include an individual with the relevant experience. I hope that the Financial Secretary will either accept my amendment or give an assurance that consideration of my point will be built into how appointments to the board are made. We should be certain that in its deliberations such local issues are fully taken into account and cannot be overlooked.

Photo of David Gauke David Gauke Ceidwadwyr, South West Hertfordshire

It is a great pleasure to serve under your chairmanship, Sir John.

I wish to speak to amendments Nos. 186 and 187, which stand in my name.

Photo of John Butterfill John Butterfill Ceidwadwyr, Bournemouth West

Order. The amendments to which the hon. Gentleman refers have been grouped with amendment No. 176, which is to be discussed later. If the hon. Gentleman wishes to discuss his amendments now, rather than with amendment No. 176, that would be perfectly proper. I would be happy for him to do so, but he may find the grouping with amendment No. 176 more appropriate.

Photo of David Gauke David Gauke Ceidwadwyr, South West Hertfordshire

I will address the two amendments later, with amendment No. 176, but I will make one brief point on amendment No. 14, which is in the name of my hon. Friend the Member for Sevenoaks. I agree with his concern about “misbehaved” in the context of what may cause the dismissal of non-executive  members. I agree that “misbehaved” is somewhat inappropriate. I would be grateful to know whether there are other circumstances where the concept of misbehaviour is used. It sounds more like something that one would say when admonishing a small child. At least in my own household, the sanction for misbehaviour is usually two minutes on the naughty step as opposed to summary dismissal from the statistics board.

Photo of Vincent Cable Vincent Cable Shadow Chancellor of the Exchequer, Liberal Democrat Spokesperson (Treasury)

I want to say a few words in support, particularly of amendment No. 13. I also agree with writing out misbehaviour as a criterion; such language being used in legislation is rather absurd. On amendment No. 13, there are two reasons why expanding the number of non-executive members in the way that the hon. Member for Sevenoaks was suggesting is important. One is maintaining the appropriate balance between the non-executive and executive members, for the reasons set out. It would be completely wrong to have a situation where, either by intention or inadvertently, the executive members, who have a vested interest in defending the policy of their own product, could outvote non-executives, who have been brought in to supervise and oversee the process. Clearly the intention is not that they should be outvoted, but the risk applies, as suggested by the hon. Gentleman, because three of the non-executives are in a slightly separate category. Whether we describe them as territorial or in some other way, they are clearly not open-ended non-executives in the way that one would expect.

I think that there is another, rather stronger argument, which is the importance of diversity among the non-executive directors. To have six would seem quite generous, but since three are pre-empted for appointments by Scotland, Wales and Northern Ireland, we are effectively talking about three non-executive directors with a broad background. I am not trying to appoint the board, but I can think of categories of people that it would be highly desirable to have on the board. It would be desirable to have somebody from the commercial sector, who is a major user of and familiar with the requirements of statistics from a commercial standpoint. It would be desirable to have a top-class academic, who understands the methodology and the new ideas in statistical method. It would be desirable to have, as the right hon. Member for Cardiff, South and Penarth said, somebody who sees statistics from a different standpoint—that of community use. It would be desirable to have somebody with overseas experience; we have seen the considerable contribution of DeAnne Julius and, latterly, Prof. Blanchflower to the Monetary Policy Committee; they bring to bear a different perspective, whether of the United States and the Anglo-Saxon countries, which are similar in their approach to statistics, or of western Europe. That dimension is desirable. It would also be desirable, in principle, to have a former head of statistics, maintaining continuity, institutional memory and an understanding of the issues.

Without pursuing the issue far, I can think of five potential categories that it would be useful to have on the board as non-executive directors—maybe one or more of each. It would be in all our interests, including  the Government’s, to err on the side of generosity with the number of non-executive appointments, partly to preserve the balance that the hon. Gentleman was concerned about, but also to ensure a proper diversity of opinion and background.

Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury) 12:30, 16 Ionawr 2007

I add my welcome, Sir John, and I look forward to serving under your chairmanship, as I did on the Finance Bill Committee last year. I want to add a little to the remarks made by my hon. Friend the Member for Sevenoaks on amendment No. 13, to which I and my Front-Bench colleagues have added our names. When considering an increase in the number of non-executive members on the board, it is important to reflect not just on the diversity of their backgrounds—to echo the remarks of the hon. Member for Twickenham—but to think in this context about the functions of the board and its responsibilities, and therefore what input the non-executive directors need to give.

Briefly, just to tie this back to the basis of how many non-executives there should be, there are three things the board will have to do. It will monitor compliance with the code of all designated national statistics, whether produced by the ONS, Government Departments, or devolved Administrations. Secondly, it will have responsibility for the production of UK-wide statistics where the National Statistician produces them. Thirdly, it will have responsibility for the production of English statistics from the ONS, which may relate to matters such as internal population trends and health care. So, the non-executive directors will need to supervise a wide range of different responsibilities.

Let me also make it clear in this context that, since the Financial Secretary referred in his opening remarks to the 300th anniversary of the Act of Union, it is good to see that the fragmentation that devolution has led to in the production of statistics has, to an extent, been healed in this Bill. It is therefore right, given the board’s oversight and UK-wide scrutiny, that non-executive members are appointed in consultation with the devolved administrations. I suspect that if the board’s responsibilities were purely UK-wide, we might have a different debate about the representation and number of directors. Yet, given that the National Statistician has particular responsibility for the production of statistics in England, setting aside the executive directors, were the non-executive directors on the current composition to vote as one group on a particular issue there could be deadlock. Three non-executive directors could vote on UK-wide or English responsibilities, and three could take a contrary view, reflecting their roots in the devolved Administrations.

We need to move away from that possibility of deadlock between three non-executive directors, who might have a wider perspective, and three appointed in consultation with the three devolved assemblies. I am conscious that the Financial Secretary has said before that it is important that the board does not become too unwieldy, but it is equally important to get the territorial balance right between members. So, as my  hon. Friend has suggested, it is appropriate to move from at least five non-executive directors to eight, in addition to the non-executive chairman.

In amendments Nos. 5 and 6, the hon. Member for Dundee, East, expresses his concern about the status of the appointments made by the Chancellor of the Exchequer, or the Treasury, and the method of consultation. He proposes that, in the example of Scotland, the board member should be appointed directly by the Scottish Ministers. I am not sure whether that more fragmented appointment process would help resolve some issues about the production of statistics and their comparability across the UK. I am sure it is also the case that if the Treasury did not appoint the person recommended by Scottish Ministers, they would be quick to highlight that. Such political transparency might perhaps achieve the same ends that the hon. Gentleman, has highlighted.

Photo of Stewart Hosie Stewart Hosie Shadow Spokesperson (Women), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Treasury)

I understand the argument that the hon. Gentleman is making, but I just want to make sure he understands the argument that I laid out, where I was attempting to remove the perception of Treasury command and control. This was merely a mechanism. I would just like an understanding or recognition that that was my intention, rather than seeking any fragmentation of the new board.

Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury)

Absolutely, and I agree that at various stages of these Committee debates we will come to ways in which we might try to reduce the Treasury’s influence over this process. I understand that the hon. Gentleman is recommending one way of doing so and there are others, which we will explore in more detail later. It is important to get this issue right and I am not sure that the amendment is the best way of doing so, but I acknowledge the validity of the hon. Gentleman’s arguments.

The right hon. Member for Cardiff, South and Penarth made an important comment about the experience and background of the non-executive directors. I hope that the Financial Secretary will reflect on his plea for a variety of experience. The hon. Member for Twickenham also said that we need to ensure that the non-executive directors appointed to the board reflect a wide range of expertise and experience. Given the three territorial appointments that have been made, I am not entirely sure that simply limiting to five the number of non-executive directors in addition to the chairman, will enable the board to reflect the expertise and experience to which the right hon. Gentleman and the hon. Member for Twickenham referred. There are some persuasive arguments for increasing the number of non-executive directors from at least five to at least eight.

Photo of John Healey John Healey The Financial Secretary to the Treasury

This has been a useful debate, as we have examined the detail of the proposals. I hope that I can explain some of the thinking behind the size and membership of the board.

The principles we have tried to follow have been clear from the outset: first, sharing accountability acrossa group of individuals from a wide range of backgrounds and with a wide range of expertise will produce better results than vesting all authority in a  single individual, which some have argued for. Secondly, we have been clear and consistent in wanting the board to carry out independent scrutiny of the statistical system; there should therefore be a majority non-executive board.

However, in keeping with the practice of good corporate governance, and given the board’s governance role in respect of the statistical office, there should be an executive presence on the board, including the national statistician as head of the executive office who would be the board’s chief professional adviser and the chief executive of that office on the board.

Consequently, given the desire to maintain a small, fixed number of executives on the board—three—and then to ensure that there is always a comfortable, non-executive majority, we concluded that we should set the minimum number of non-executives at six, bearing in mind that it is also good practice to maintain an odd number on boards to allow votes to be conclusive. In other words, there will be six non-executives—one executive chair and five non-executives. We also bear in mind that it is common practice in good governance to ensure that boards do not become too large or unwieldy.

I want to make it clear to the hon. Member for Sevenoaks that the Bill does not specify that the board will be composed of nine members, but that it will have at least nine members. Should we deem it appropriate following the consultations and in order to meet our aims, it would allow us to err on the side of generosity as the hon. Member for Twickenham put it.

Photo of Stewart Hosie Stewart Hosie Shadow Spokesperson (Women), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Treasury)

I want some clarification, please. Yes, there is a minimum size, but is it correct that it is the Treasury that would allow it to be increased, not the board itself?

Photo of John Healey John Healey The Financial Secretary to the Treasury

The board will be appointed on Ministers’ advice. The Treasury will co-ordinate that advice and will consult each of the Administrations in the devolved countries on at least one of the board members. It will take into account the wide range of experience and skills we are seeking from academia, from business, from the public sector at local and regional level, from people with experience of running organisations and from those who can assess user needs and act and take decisions in the public interest. That combination of wide experience and expertise will give the board its complexion and its strength.

Photo of Brooks Newmark Brooks Newmark Ceidwadwyr, Braintree

I understand exactly what the Financial Secretary says, but unfortunately he is not answering a discrete and distinct question from the hon. Member for Dundee, East. In order to restore public confidence in statistics, admittedly through the board, will the Treasury or the board itself be the ultimate arbiter of whether the board increases?

Photo of John Healey John Healey The Financial Secretary to the Treasury

The Bill is clear that one residual Government function must inevitably be the conduct of the public appointments. If the hon. Gentleman reads clause 3(5), he will see exactly what is proposed and the  Treasury’s role in it. It will be possible to increase the number of non-executives on the board, but the Bill provides for the minimum number that would allow for the range of experience that we want.

It is important that the board takes proper account of the circumstances and needs of each country in the UK, not just of England. We have been working closely with each devolved Administration to prepare the proposals in the Bill. As the Bill says, each Administration will be consulted on one board appointment to help to ensure that the board can take proper account of devolved circumstances and needs.

There will be a balance between ensuring that the board can collectively represent the needs of all users and ensuring that it has an understanding of the specific circumstances and needs of the devolved countries. Let me be clear that such members will not be appointed to the board as territorial representatives. It is slightly insulting of the hon. Member for Fareham to imply that those appointed in consultation with the devolved Administrations may have a narrower perspective than their board colleagues.

I thank the hon. Member for Sevenoaks for his comments on amendment No. 13 and his recognition of the way in which the Government’s thinking has developed in the territory under discussion. The board may be able to conduct its business with a cohesive range of members, the group of nine people; but the power to appoint more non-executives will remain to provide any flexibility required to adapt to changing circumstances and to respond to any strong views that the board, in light of experience, or that Parliament, in light of examining and holding the board to account for its conduct and operation, may take. I hope that on that basis, he will not press the amendment.

The two amendments that the hon. Member for Dundee, East tabled would allow Scottish Ministers to appoint one member of the board, rather than be consulted on the appointment. In keeping with the proposed legislation, the board will be a UK-wide body, it will represent the widest range of users and its members will be appointed to do that collectively. They will represent users who may be interested in a particular statistical sector, or in local and regional statistics, and users may come from the public or the private sectors, or they may be citizens, the Government, or indeed, Parliament. The board will exist to represent the public interest as a whole. Those members who are appointed after consultation with the devolved Administrations will not be on the board simply as territorial representatives of those countries.

If we want the board to be small and cohesive, it is ultimately dictated that one authority should be responsible for all appointments, as the Bill proposes. That is emphatically not a Treasury blocking mechanism. It is of course right that Scottish Ministers, Welsh Ministers and, in due course, I hope, Ministers in Northern Ireland should be consulted on appointments to ensure that the board has sufficient understanding of the devolved need for statistics. Let me tell the hon. Gentleman that Scottish Ministers have agreed to that role in appointments to the board. They have agreed that it is appropriate that they should be consulted before the appointment of the relevant  non-executive member. They are content with the Bill and with the fact that it offers the Scottish Executive and the Scottish Parliament safeguards in relation to their role in devolved statistics. I therefore encourage him to refrain from pressing his amendments.

On the points raised by my right hon. Friend the Member for Cardiff, South and Penarth, I have said a couple of times that we want the board to be appointed in such a way that it can represent the widest range of interests in statistics. Its members will do so collectively and by including the interests of those who are concerned about local and regional statistics, and I repeat that the board’s job will be to represent the public interest as a whole. If my right hon. Friend has not already studied clause 32 carefully, he might be interested to hear that it enables the board to establish committees, including advisory committees, on which further external members can sit. Those committees, and the power to set them up, will be important in helping the board to deliver its statutory functions. I would expect it to establish committees and other mechanisms to ensure that it can fully assess the widest range of statistical users’ needs and deal with the concerns that those who rely on statistics, including for local policy making, may have. I hope that my right hon. Friend will accept that, in rather the same way as on the previous group of amendments, it would not be appropriate or sensible to specify in the Bill the requirement for one particular interest group. I therefore encourage him not to press his amendment.

Photo of Alun Michael Alun Michael Llafur, De Caerdydd a Phenarth 12:45, 16 Ionawr 2007

I understand the Minister’s point, and he is close to satisfying me. It would be some reassurance if he suggested, as I believe he has, that it will be essential for board members to have a knowledge of, and to deal with, the local and very local use of statistics—the fine-grained use of statistics that I described earlier. My concern is that he referred to that in terms of one group of users, as if everybody is the same. My key point is that local statistics are the essential building blocks; if we get them right, everything else can be aggregated for the benefit of every other user. Does the Minister expect the importance of that point to be understood by those dealing with appointments? Should the Bill not be amended in the way that I suggest, with the essence of what I propose being incorporated in the appointments process, although not quite in the way that I suggest?

Photo of John Healey John Healey The Financial Secretary to the Treasury

My right hon. Friend is right to remind me and the Committee that the value of local, neighbourhood statistics applies not only to the interests of a single group of users. He also raises an important issue. Over the past five or six years, we have seen a significant increase in the demand for such data and a significant change in the view of how it canbe used. Indeed, the ONS and statisticians in Departments have started to respond well to improve our ability to collect statistics on a local and very local basis. That trend will clearly continue. The quality in that area of data is still not good enough. The statistics board will be set up independently to discharge the functions set out in the Bill, and the Committee and my right hon. Friend can confidently expect it to ensure that it is aware of that trend and the developing requirement of such data.

The hon. Member for Sevenoaks made it clear that amendment No. 14 is a probing amendment, and the hon. Member for South-West Hertfordshire had some concerns on the same matter. The hon. Member for Sevenoaks said that he had been looking for precedents of our proposed formulation in bodies with which he was familiar and had not found it. We were working on the basis of precedents in drafting this part of the Bill, and if members of the Committee wish to consult other legislation that adopts the same approach they could look at the provisions of the Energy Act 2004 on the Nuclear Decommissioning Authority or those in the Railways and Transport Safety Act 2003 on the Office of Rail Regulation. Both contain lists aligned to the one set out in the Bill.

Photo of Rob Marris Rob Marris Llafur, Wolverhampton South West

On amendment No. 14, could my hon. Friend say how the use of the word “misbehaved” is different from the use of the word “unfit” in paragraph (f), two lines later? As a lawyer, I share the reservations of Opposition Members, and I had the same vision of the naughty chair as the hon. Member for South-West Hertfordshire.

Photo of John Healey John Healey The Financial Secretary to the Treasury

I am not sure whether the hon. Member for South-West Hertfordshire wishes to table a naughty chair amendment, but I do not believe that any of us on the Committee would regard that as appropriate.

If my hon. Friend is looking for a parallel to the serious potential misconduct and misbehaviour in question and a definition of misbehaviour, he would do better to consider the concept of misconduct rather than of unfitness. Misconduct might principally be held to be connected with the office held. In this case, for instance, it could be interference with statistics produced by the board or covering up information relevant to an assessment decision made by the board.

Photo of Brooks Newmark Brooks Newmark Ceidwadwyr, Braintree

I totally agree with the Minister on that point, but could not the matter be integrated within the reference in subsection (4)(e) to the “terms of his appointment”? It could be clearly laid out in those terms.

Photo of John Healey John Healey The Financial Secretary to the Treasury

The hon. Gentleman makes a weaker argument than other members. The terms of employment might be much more specific and notdeal with the unlikely and almost unthinkable circumstances that we must nevertheless consider.The essential difference between misconduct and misbehaviour is that misbehaviour can be not just activities related to holding an office but behaviour that could be sufficiently infamous as to render someone unfit to continue to hold office—perhaps serious corruption or violence.

On the basis that our concept is not novel and that I have given him at least two precedents, I hope that the hon. Member for Sevenoaks will regard that as satisfactory explanation of the drafting.

Photo of Stewart Hosie Stewart Hosie Shadow Spokesperson (Women), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Treasury)

I can agree with the Financial Secretary that the board should represent the widest possible range of people and that it should fully represent the public interest. I have no quibble with  that, but I am disappointed that he suggested that the people appointed under clause 3(4) will not effectively be appointed by the devolved Administrations. My concern is that it appears that the Treasury intends to keep the control mechanism firmly in its grip by controlling all the appointments and the size of the board. He referred to agreement by Scottish Ministers. It would be surprising if Labour-Liberal Ministers did not agree with this Administration at this time.

The purpose of my amendment is to try to release and remove the Treasury grip on the board, to free it up and ensure that there is a perception of impartiality, but there may be other ways in which to achieve that, so I shall not press my amendment to a vote.

Photo of Michael Fallon Michael Fallon Chair, Treasury Sub-Committee

I sense that the Committee may want to deal with this matter before it adjourns. On amendment No. 14, I challenged the Minister to provide examples, and he gave some, so I cannot question them although I note that they are from the later period of this Government. However, it is rather odd that he talked first about misbehaviour in terms of misconduct, but when he suggested the sort of misbehaviour he talked about corruption or violence. I do not think the provision is well drafted, but we may come to that later.

On amendment No. 13, I want to make it clear to the hon. Member for Dundee, East that I do not like the concept of territorial membership of the board. If I were a Scottish nationalist and a Scottish member were appointed by the Chancellor, I would find that just as offensive as him. I do not like it because it is a corporatist model. When territorial distinctions are introduced, England always ends up being underweight in population terms. If England had the right number of members in population terms, it would have 18 or 19. It seems to replicate the BBC model and there is no transparent evidence that the BBC has been well governed on that principle.

The Financial Secretary’s basic response was that the board is small but can be increased. However, he then revealed that under the legislation it is the Chancellor who will be able to increase its size. That again perturbs  me, and there may be a link between amendmentsNos. 14 and 13. If the Chancellor does not like the way in which a board member is behaving—perhaps because they are being critical, and issuing press releases and so on—he can simply appoint two or three more people to the board to redress the balance. That alarms me, and I am not reassured by the fact that the Chancellor can increase the membership.

The arguments are fairly simple. First, increasing the board from nine to 12 would not undermine its manageability. A board of 12 members is perfectly manageable. Secondly, the Treasury Committee recommended a fully non-executive board. All Iam trying to do is to increase the proportionof non-executives. Thirdly, increasing the proportion of non-executives would send out an important signal of reassurance as the current watchdog—the Statistics Commission is fully non-executive—is wiped away by the Bill that the new board is sufficiently independent.

Question put, That the amendment be made.

The Committee divided: Ayes 8, Noes 10.

Rhif adran 2 Nimrod Review — Statement — Clause 3

Ie: 8 MPs

Na: 10 MPs

Ie: A-Z fesul cyfenw

Na: A-Z fesul cyfenw

Question accordingly negatived.

It being One o’clock, The Chairmanadjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Four o’clock.