Statistics and Registration Service Bill

The hon. Member for Colne Valley (Kali Mountford) seems to have a touching faith in the integrity of statistics and of Ministers, who never spin at all. The difficulty that I have arises from a letter that the then Tory Secretary of State, Ian Lang, wrote to the then Prime Minister in 1992, when the general expenditure revenue Scotland statistics, which I shall refer to later, were being developed. The then Secretary of State said that he judged that it was just what was needed at present in the Tory campaign to maintain the initiative and undermine the other parties, and that it could score against all of them. GERS was designed to be a political tool, not to offer an enlightened or accurate description of the Scottish economy. I suppose that the great shame—this is the last political point that I shall make in this speech—is that the Labour party continues to use GERS to this day for exactly the same purpose as the Tories did in 1992. However, I give a broad welcome to the Bill and to some of the Financial Secretary’s opening comments. I particularly welcome what was said about pre-release access, which is to be put on a statutory basis, but I shall listen carefully to the argument that the board may wish to set the rules regarding such access. I remain concerned that the 40-hour period is far too long. The idea that a Minister and his team cannot in 40 hours find one little nugget to spin or one bit of obfuscation to hide a bad bit of news is clearly wrong. I also welcome the announced creation of a publication hub to separate the communication of statistics from political comment on them. If the Government hold to that, it will make an enormous difference in terms of the public perception of statistics and the way in which they are launched. Too often reports are leaked in advance, or the political comment on them immediately thereafter is given a particular spin. As was said earlier, by the time that the journalists and the rest of us have got into the guts of the statistics, the story has gone and a perception has been left. However, in general terms and for the sake of good policy making, it is important that statistics are produced and delivered in an independent and impartial manner; fundamentally, that is what statistics are about. In the case of Scotland in particular, it is time for the figures that tell us so much about the success or otherwise of policy to move outwith the control of Ministers. Of course, we ultimately wish to see an independent Scottish statistics board, but we very much welcome the move that the Government have made through the Bill. Our primary concern is the future structure of statistics: we want adequate, independent and entirely impartial statistical information, which presents a true picture of Scotland at all times, to be available. All such statistics are essential in developing and measuring policy, in assessing need, in measuring the economy and in almost every other Government and local government decision-making process. Furthermore it is vital that the public, media, voluntary organisations and society as a whole have access to independent impartial statistics in which they can have complete trust. Independence is essential to ensure that there can be no implication of manipulation, selectivity or politicisation in the production, publication and dissemination of statistics at any point in the future—which brings me nicely back to GERS, because that was its sole purpose. We have heard from many people that public trust in statistics is low—they had their own different reasons for saying so—and that some publications, including GERS, have been heavily politicised. I have no doubt that the independent board proposed in the Bill would have given short shrift to the Tory attempt, and the subsequent Labour attempts, to use partial and incomplete figures to make a narrow political case. I want to see the removal of any suspicion from our statistics, and to go further by guaranteeing that they are based on real evidence. We must therefore make certain that the Bill as drafted really is sufficient to deliver confidence in the statistics published. I shall use the GERS paper as an example of the difficulties that we face and of the problems that must be overcome. GERS is supposed to be a snapshot of the Scottish economy two years in arrears. It is supposed to look at total income and total expenditure and work out the balance sheet for Scotland—and I shall quote from it to show just how inaccurate the process is. The net borrowing figure—the deficit included—in GERS is based on expenditure and receipts calculations that by necessity include some estimation. GERS says:"““It should therefore be used with some caution””." It fails to include a single penny piece of revenue yield from the Scottish sector of the North sea. It is a wholly misleading figure. On income tax, GERS uses the survey of personal income, yet for the 2004-05 statistics it used the 2003-04 survey of personal income data, because the 2004-05 data were not available. Nor is the calculation based on a known and fixed taxpayer population, so it is wrong in two regards. On VAT, Scotland’s share of UK VAT revenue was estimated on the basis of Scotland’s share of household expenditure on goods and services subject to VAT, as estimated from the expenditure and food survey. GERS describes this in the following manner:"““The results should be treated with caution since they are based only on household expenditure estimates and not the share relating to the amount of VAT received from businesses registered with Scottish VAT offices or received from businesses trading within Scotland.””" The landfill tax has been allocated on a population share basis. The environmental data indicate that Scotland has more landfill per head than the rest of the UK, yet no geographical breakdown of the tax data is available. Again, this method may underestimate the revenue yield from that tax for Scotland. On corporation tax, GERS says:"““This tax is exceptionally difficult to estimate for Scotland, due to both conceptual difficulties and a lack of data, therefore, the estimate of Scottish corporation tax should be treated with extra caution””." In 2003-04 and in 2004-05, GERS allocated £2.4 billion in corporation tax, yet we know that in that latter year, the Royal Bank of Scotland alone paid £2.38 billion in corporation tax. We also know from a survey of 27 of Scotland’s top 50 companies in the same year that they made a profit of £14.794 billion, which would have generated some £4.3 billion in corporation tax. We know from The Scotsman last week that last year Scotland’s 500 biggest companies scored a combined record of £23 billion profit, which would have generated a corporation tax yield of somewhere around £7 billion. So we know that the corporation tax figure is wholly wrong and cannot be trusted. The principal conclusions in GERS are described as deriving a fiscal position for Scotland. They are"““subject to inevitable imprecision due to the need to estimate a number of elements of both expenditure and revenue. The calculation of expenditure for Scotland (specifically the non-identifiable and other expenditure components) cannot be carried out with the same accuracy as that for the UK as a whole.””" It is such inaccuracy that I hope the independent board and the Bill will help to resolve. On the issue of expenditure I have several examples, because this point does not affect Scotland alone, as I shall explain. The non-identifiable expenditure allocations for Scotland include many things, such as, in 2003-04, a Home Office allocation of £2.521 billion from English prisons and offender programmes. The figure included as non-identifiable some millions of pounds that went to the English Tourism Council and the Greater London authority from 2001-02 to 2004-05. It included as non-identifiable inward investment grants made to English regional development agencies by UK Trade & Investment between 2001-02 and 2005-06, and the Courts Service spending by the Department for Constitutional Affairs of £547 million—half a billion. In an average year, more than £3 billion of English only spending—rightly spent in England alone—is allocated as non-identifiable. That has the impact on GERS of overstating Scotland’s expenditure by £262 million and understating English identifiable expenditure by more than £3 billion. We want impartial and accurate statistics that present a true picture of Scotland at all times. They cannot just be impartial; they must be seen to be impartial. I have some concerns about specific clauses. It appears to me—I suspect that my perception will be shared outside the House—that there will still be Treasury control and interference. Under clause 3, Scottish Ministers cannot directly appoint a member to the board: that can be done only by the Treasury. Under clause 27, Scottish Ministers cannot direct without the approval of the Chancellor. Under clause 45, Scottish Ministers cannot authorise disclosure of information to the board without Treasury approval. Under clause 49, Scottish Ministers cannot authorise disclosure by the board without Treasury approval. On certain occasions, such as in the case of cost-sensitive or highly sensitive market information, such Treasury control may be appropriate, but it cannot be so in every case, and I intend to table amendments to those clauses. They may be probing amendments, but I may have to press them further. The Bill contains much to welcome, including the separation of communication and political comment, the recognition of concerns about pre-release access and— notwithstanding my criticisms of enshrined Treasury powers—the ability at least of the Scottish Executive to order statistics from the new board and have their efficacy guaranteed. We will not vote against the Bill tonight—I suspect that there will be no votes at all—but it raises real issues, to which we will return at a later stage. I look forward to hearing the Minister’s comments when he winds up.