Office for National Statistics written evidence to the Lords Science and Technology Committee’s inquiry on the Science of COVID-19

Dear Lord Patel,

I write in response to the Science and Technology Committee’s call for evidence for its inquiry on the science of COVID-19.

As the Committee may be aware, the Office for National Statistics (ONS) is the UK’s National Statistical Institute, and largest producer of official statistics. We aim to provide a firm evidence base for sound decisions and develop the role of official statistics in democratic debate. To do this during the coronavirus (COVID-19) pandemic, we are regularly publishing detailed commentary on the impacts of COVID-19 on the UK economy and society, reacting quickly to the need for rapid information from both decision-makers and the public.

COVID-19 Infection Survey

One such development of particular interest to your inquiry is the COVID-19 Infection Survey. We are working in partnership with the Universities of Oxford and Manchester, Public Health England and Wellcome Trust to provide data from the Infection Survey for England. The survey helps track the extent of infection and transmission of COVID-19 within communities and helps address one of the most important questions the country needs to know – how many people in the UK have the coronavirus (COVID-19) infection at a given point in time.

Participants provide samples taken from self-administered nose and throat swabs to test whether they currently have the virus. They are asked to take tests every week for the first five weeks, then every month for 12 months. Around 10% of participants are also asked to provide a blood sample once a month for 12 months, taken by a trained nurse, phlebotomist or healthcare assistant. These blood tests will help determine what proportion of the population has developed antibodies to COVID-19. Participants are chosen from respondents to previous ONS surveys to create a representational sample of the whole population.

IQVIA, a human data science company, are running the field operation, the National Biosample Centre in Milton Keynes test the swab samples and Oxford University test the blood samples.

The vision for the COVID-19 Infection Survey was always that it should cover the whole of the UK and while the pilot was focused on England, we have been successful at securing support from each Devolved Administration. Working with the Welsh Government we extended the survey into Wales on 24 June with 500 households per week being contacted to take part. A further 500 households will be added each week as the survey continues to develop. The Northern Ireland launch is planned for the end of July and discussions with the Scottish Government have commenced.

To date, over 32,000 people in England have enrolled in the survey, with plans to extend this to over 300,000 over the next 12 months and all four UK nations.

As the ONS have extensive experience in running very large household surveys that gather vital information from a genuinely representative sample of the entire population, we are using that capability to help our health expert colleagues create a reliable picture of the scale of COVID-19 infection and antibody development. This will inform the key decisions that lie ahead in this pandemic, for example, it is vital for the Scientific Advisory Group for Emergencies (SAGE) to calculate estimates of R, who are regularly publishing these on gov.uk.

Results from the survey have been published weekly since 14 May. The latest of these show that that the estimated number of people in England infected with COVID-19 has decreased since the start of the study, but that decline has levelled off in recent weeks. At any given point between 8 June and 21 June, an average of 51,000 individuals (95% confidence interval: 21,000 to 105,000) had COVID-19, compared to 145,000 (95% confidence interval: 92,000 to 216,000) between 27 April and 10 May. During the 14-day period from 8 June to 21 June, there were an estimated 4 new COVID-19 infections for every 10,000 individuals per week in the community in England. This equates to an estimated 22,000 new cases per week (95% confidence interval: 10,000 to 49,000).

Results also show that around 5.4% (95% confidence interval: 4.3% to 6.5%) of individuals who provided blood samples tested positive for antibodies to COVID-19.

All estimates are subject to uncertainty, given that a sample is only part of the wider population. The 95% confidence intervals are calculated so that, if we were to repeat this study many times, with many different samples of households, then 95% of the time the confidence intervals would contain the true value that we are seeking to estimate.

Collaboration on the Infection Study is carried out in our Secure Research Service, a technology platform with a service wraparound which enables researchers to access Government deidentified, sensitive data safely and securely. It is the only government data lab that has enabled remote access, supporting significant research projects during lockdown. As the ONS is joint data controller, the Infection Study data will be made available for wider research, in line with the ONS’ vision of enhancing the use of the nation’s data assets.

Cross-Government Collaboration

The ONS are also working in partnership with the Department for Health and Social Care (DHSC), IPSOS-MORI, University College London and Public Health England to deliver a COVID-19 surveillance study in care homes. The Vivaldi Study was commissioned by the DHSC and aims to measure the prevalence of COVID-19 in care homes and the use of disease control measures in each setting. This will inform decisions around the best approach to care home testing in the future. Information on the use of disease control measures will help local public health teams provide effective guidance to care homes. First results from the Vivaldi Study will be published on 3 July, which we will send to the Committee.

Additionally, the Best Practice and Impact Team from the ONS have supported the DHSC in producing the first two Test and Trace statistical publications and the first Personal Protection Equipment statistical publication to ensure best practise was used to communicate the statistics accurately and the methodology transparently.

I hope this evidence is helpful to the Committee, and I look forward to speaking to you on 6 July. Please do not hesitate to contact me if I can be of any further assistance.

Yours sincerely,

Iain Bell

Related links:

Iain Bell’s oral evidence (July 2020)

Office for Statistics Regulation written evidence to the Lords Democracy and Digital Technologies Committee’s inquiry of the same name

Dear Lord Puttnam,

Following my appearance before the Lords Democracy and Digital Technologies Committee on 28 January 2020, I am writing to offer my thanks for the invitation to contribute to such an important inquiry. I would also like to reiterate what I said to you in person: I really enjoyed the discussion and the opportunity to present the work of the Office for Statistics Regulation (OSR) to the Committee.

I also wanted to share a recent blog which describes our approach in protecting the role of statistics both during election periods and beyond. The blog summarises some of the interventions we made during the recent 2019 General Election and outlines our role in ensuring that the underlying statistics used in political debate are not being misrepresented – and if they are, that we will seek to clarify how they should be interpreted.

I would be very happy to discuss the content of the blog and the work of the OSR further with the Committee.

Yours sincerely

Ed Humpherson
Director General for Regulation

Related Links:

Office for Statistics Regulation oral evidence to Democracy and Digital Technologies Select Committee as part of their Democracy and Digital Technologies inquiry (January 2020)

Office for Statistics Regulation oral evidence to the Lords Democracy and Digital Technologies Committee’s inquiry of the same name

On Tuesday 28 January 2020,  Ed Humpherson, Director General for Regulation, UK Statistics Authority gave evidence to the Lords Democracy and Digital Technologies Committee’s inquiry of the same name.

A transcript of which has been published on the UK Parliament’s website.

Related Links:

Office for Statistics Regulation written evidence to Democracy and Digital Technologies Select Committee as part of their Democracy and Digital Technologies inquiry (January 2020)

Office for National Statistics written response to the Lords Food, Poverty, Health and the Environment Committee’s inquiry of the same name

Dear Lord Krebs,
I write in response to the Food, Poverty, Health and the Environment Committee’s call for evidence.

As the Committee may be aware, the Government Statistical Service (GSS) provides independent, trustworthy statistics in line with the Code of Practice for Official Statistics. The Office for National Statistics (ONS) is the UK’s National Statistical Institute, and largest producer of official statistics within the GSS.

We aim to provide a firm evidence base for sound decisions, and develop the role of official statistics in democratic debate.

The ONS is responsible for sourcing and reporting UK data for the UN’s Sustainable Development Goal indicators on behalf of the UK Government. The measurement of food insecurity is a requirement for the measurement of Goal 2: Zero Hunger.

The following short note provides details of the available data on food insecurity in the UK and crossgovernment plans to improve these data in the near future.

I hope this evidence is helpful to the Committee. Please do not hesitate to contact me if I can be of any further assistance.

Yours sincerely,
Iain Bell
Deputy National Statistician and Director General for Population & Public Policy

 

The Office for National Statistics (ONS) – Written Evidence to the Committee on Food, Poverty, Health and the Environment : Food insecurity and sustainability inquiry (October 2019).

The ONS role As the UK’s national statistical institute, the ONS is responsible for the reporting of data which enables regular monitoring of UK progress towards the 244 global Sustainable Development Goal (SDG) indicators. We work with partners across the Government Statistical Service (GSS) to ensure that we can monitor and report on the indicators.

The comprehensive framework for SDGs fits with our Better Statistics, Better Decisions strategy, which sets out the official statistics system collective mission of providing high quality statistics,
analysis and advice to better inform policymaking. Sourcing and analysing data for the SDGs, which covers the economy, environment and society, and is also broken down to show a more complete picture for the UK, will enable better-evidenced policy decisions.

We are:
• Sourcing the appropriate UK data for the global indicators.
• Providing data to the international organisations responsible for each indicator, known as Custodian Agencies, who are responsible for reporting the data to the United Nations.
• Analysing the data so that it can be understood in context.
• Making the data available to everybody through the development of an online tool and supporting reports.

Background

1. The ONS recognises the measurement of food insecurity is a key priority and requirement for indicator 2.1.2 of the UN Sustainable Development Goals (prevalence of moderate or severe food
insecurity in the population, based on the UN Food Insecurity Experience Scale (FIES)).

2. Emma Lewell-Buck MP wrote to Sir David Norgrove, Chair of the UK Statistics Authority, on 30 May 2018 outlining her concerns in relation to the lack of statistical data on food insecurity in the UK. Her Food Insecurity Private Members Bill asked the Government to introduce a reliable and robust measure of UK hunger. At the time, the Bill had secured the support of 150 MPs and 16
Peers.

3. Following this, a meeting of the ONS with Ms Lewell-Buck MP took place. Given the requirement of the SDGs, we started a programme of work to improve UK statistics on food insecurity. This
began with a comprehensive review of relevant existing data from both official and non-official sources. We convened a roundtable on food insecurity with key third sector and government stakeholders in early 2019 to fully understand all the data requirements before determining next steps. We also partnered with the Food and Agricultrual Organization of the UN (FAO) to better understand the different international measurement approaches.

Food insecurity data sources

UN (FAO) published food insecurity data

4. In June 2019, the UN (FAO) published the latest version of its annual report entitled ‘The state of Food Insecurity and Nutrition in the World’. The Gallup World Poll was used to collect data for this report, which included a detailed methodology for the UK data. The data collected was used to produce baseline country estimates for the Food Insecurity Experience Scale (FIES) for more
than 140 countries, including the UK. A detailed methodology for the UK data included was also published alongside the report.
5. The Gallup World Poll surveys at least 1,000 individuals using a telephone interviewing method in the UK.

GSS food insecurity data

6. The biennial Food and You Survey, commissioned by the Food Standards Agency (FSA), collects information about the public’s reported behaviours, attitudes and knowledge relating to food safety and food issues. Wave 5 of the survey was conducted in 2018 and consisted of 2,241 interviews from a representative sample of adults aged 16 and over across England, Wales and Northern
Ireland (not Scotland). In line with 2016, the 2018 survey incorporated a suite of 10 food insecurity questions used by the United States Department of Agriculture Economic Research Service in
their annual, nationally representative survey monitoring the extent of food insecurity in the U.S.

7. Results from the 2018 Food and You Survey found 80% of respondents lived in households with high food security, 10% in households classified as marginally food secure, and 10% reported
living in households with low or very low food security.

8. The following graph shows that 4% of respondents lived in households with very low food security in 2018. There has not been a statistically significant increase compared with 2016.

Estimated prevalence of very low food security, England, Wales and Northern Ireland, 2016 to 2018

9. The Scottish Government committed to monitoring household food insecurity in 2016 following recommendations from an Independent Working Group on Food Poverty. Three priority questions on household food insecurity, selected from the wider set of UN FIES questions, were included in the 2017 and 2018 Scottish Health Surveys. The 2018 Scottish Health Survey showed that 9% of adults in Scotland reported that they worried they would run out of food due to a lack of money or resources at some point in the previous 12 months. Furthermore, 6% of adults said they ate less than they should and 3% said they had run out of food due to lack of money or resources in the previous 12 months. There was no statistically significant change in the prevalence of food insecurity between the 2017 and 2018 Scottish Health Surveys. In 2017, 8% of adults reported that they worried about running out of food, 7% reported they ate less than they should and 4%
reported that they had run out of food.

10. Combined analyses of the 2017 and 2018 Scottish Health Surveys showed that worrying about running out of food was more prevalent among single parents (25%), single adults aged under 65
living alone (21%) and adults living in the most deprived areas (16%). These analyses also showed that adults experiencing food insecurity had substantially lower mental wellbeing and were more likely to have consumed no fruit and vegetables on a given day than the rest of the adult population.

11. The prevalence of food insecurity in Scotland will continue to be monitored in the 2019 Scottish Health Survey. Data from the 2019 Scottish Health Survey will be published in September 2020.
Thereafter food insecurity in Scotland will be monitored in the UK-wide Family Resources Survey.

Why are we working to improve the data?

12. While existing official data are available, the aforementioned evidence points to limitations in its ability to appropriately report progress towards the SDGs. We promised to consider ways the ONS can improve official statistics on food insecurity for the UK.

13. The UN (FAO) data collection has now been discontinued, due to the FAO expecting countries to collect and report their own national survey data.

14. Both the Gallup World poll for the UN (FAO) and the Food and You survey have limited sample sizes of 1000 individuals and 3000 adults respectively. This means the findings lack statistical
robustness and reliability. It also limits our ability to identify characteristics that are associated with food insecurity, which goes against our commitment to ‘leave no one behind’.

15. The Food and You survey is only collected once every two years and lacks UK wide coverage as it does not report data for Scotland.

Delivering better statistics on food insecurity

16. During our roundtable with key third sector and government stakeholders, the Department for Work and Pensions (DWP) confirmed they would include food insecurity questions on the Family Resources Survey (FRS) from April 2019. This development was strongly welcomed by all stakeholders.

17. The FRS questions follow the same general format as those already used in the United States and Canada to measure food insecurity (the questions are available at Annex A).

18. The FRS has a sample of 20,000 households, that is designed to be representative of the UK.

19. Data from these questions is now being collected. The current survey year ends in March 2020 and we would expect DWP to publish the first set of results by end March 2021, subject to quality
assurance. These will be on a UK basis; the level of detail of results will depend on the level of actual response. The ONS will work with DWP to ensure that, as far as the data allows, the reporting requirements of the SDGs are met by the results from the FRS.

20. We have committed to a further roundtable to keep stakeholders abreast of developments. This is scheduled for November 2019.

What are the benefits of this new method for food insecurity data collection?

21. The summary table below identifies the benefits the FRS will offer in respect of food insecurity measurement compared with the Food and You Survey and the UN FAO statistics currently collected using the Gallup World Poll. By having UK-wide coverage and a much larger sample size the data will be much more reliable and statistically robust. Furthermore, it will enable the reporting of more characteristics associated with food security, helping to fulfil our commitment to leave no one behind.

22. The new food insecurity questions on the FRS are undergoing thorough checks to ensure they meet the required high quality standards. Assuming these standards are met, the new FRS data
will be available from 2021. Until these data are available, we will continue to report progress towards SDG indicator 2.1.2 using data for the Food and You Survey. All data are published and
available to all via our National Reporting Platform (NRP).

Summary table: Current and Future data sources

Summary table: Current and Future data sources

Annex A: Food insecurity questions to be asked on the Family Resources Survey

Annex A: Food insecurity questions to be asked on the Family Resources Survey

UK Statistics Authority response to the Lords Economic Affairs Committee report on their use of RPI inquiry

Dear Lord Forsyth,

Following the Committee’s recent report on Measuring Inflation, I write with the UK Statistics Authority’s response to your recommendations.

As your report made clear, the question faced by the Authority in 2012 was whether to make substantive changes to the construction of the Retail Prices Index (RPI). The decision made by the then National Statistician, one widely supported in the consultation at the time, was to leave the RPI unchanged. This decision gave rise in turn to the conclusion that the RPI should be treated as a legacy measure, with no future substantive changes to its construction and methods. That position was endorsed by an independent review of consumer prices led by Paul Johnson, which reported in 2015. In the period since, the Office for National Statistics (ONS) has developed alternative measures of inflation, and the Authority has urged users to move away from the RPI.

Nonetheless, the RPI continues in widespread use. This – along with new advice from ONS on the flaws of the RPI, new advice from the National Statistician’s Advisory Panels, and the urgings of your Committee – convinced the Board that further action was necessary. The then National Statistician put options for the future of the RPI to the UK Statistics Authority’s Board on 26 February 2019.

After receiving this advice, Sir David Norgrove, Chair of the UK Statistics Authority, wrote on behalf of the Board to the previous Chancellor of the Exchequer on 4 March 2019 with the following recommendations:

  • that the publication of the RPI be stopped at a point in future; and
  • in the interim, the shortcomings of the RPI should be addressed by bringing the methods of the CPIH into it.

Today the Chancellor has announced his intention to consult on whether to bring the methods in CPIH into RPI between 2025 and 2030, effectively aligning the measures.

The proposals made by the Authority address many of the recommendations made by the Committee in its report. More detailed responses to the other recommendations are set out in the attached Annex.
Yours sincerely,

Sir David Norgrove

Related Links:

ONS oral evidence – (2018)

UKSA oral evidence – (2018)

UKSA follow up written evidence – (2018)

 

Annex: Detailed Response to Specific Recommendations

  1. We heard evidence that the Carli formula, as used in the RPI, produces an upward bias. But expert opinion on the shortcomings of the RPI differs. (Paragraph 99)
  2. There is however broad agreement that the widening of the range of clothing for which prices were collected has produced price data which, when combined with the Carli formula, have led to a substantial increase in the annual rate of growth of RPI. (Paragraph 100)
  3. We are not in a position to reach a conclusion on the question of whether the Carli formula is problematic in areas other than clothing. Given the properties of the Carli formula that may lead to upward bias have long been evident, yet expert opinion still differs, it may be a perpetual debate. (Paragraph 101)

The Authority agrees that there is never likely to be unanimity on the issue of the elementary indices (e.g. Carli, Jevons or Dutot) used in inflation measurement. There is no single universally agreed set of criteria against which to judge them and there are specific examples where each index can be shown to produce either plausible or implausible results. A judgement therefore needs to be taken in the round.

Our view is that the Carli is not generally a good index. A thorough exploration of the issues related to the Carli index was set out in both Chapter 10 of the independent review of consumer prices by Paul Johnson and the 2012 review of UK consumer price statistics conducted by Erwin Diewert, a leading authority on index numbers.

This view is supported by international practice and the National Statistician’s Technical Advisory Panel for Consumer Prices. Many technical manuals and academic papers also highlight the undesirable properties of the Carli index. Regulations on the production of the Harmonised Index of Consumer Prices go further and state that the Carli should not be used unless it can be demonstrated to behave in a similar way to the Jevons or Dutot.

We agree that the interaction between the Carli index and the collection of clothing prices created an increase in the rate of RPI inflation in 2010. It was this event that led ONS and the Authority to put in place a programme of work that led to the 2012 consultation on the future of RPI.

4. Given its widespread use, it is surprising that the UK Statistics Authority is treating RPI as a ‘legacy measure’. The programme of periodic methodological improvements should be resumed. (Paragraph 116)

5. We are unconvinced by the National Statistician’s suggestion that in publishing statistics that serve the public good, the interests of those who may be affected negatively by any change should be taken into account. It is not clear from section 7 of the Statistics and Registration Service Act 2007 that this is a relevant consideration for the statistical authorities to be taking into account when they are producing and publishing statistics. (Paragraph 117)

6. What is clear from section 7 is that the UK Statistics Authority has to promote and safeguard the quality of official statistics, which includes their impartiality, accuracy and relevance, and coherence with other statistics. In publishing an index which it admits is flawed but refuses to fix, the Authority could be accused of failing in its statutory duties. (Paragraph 118)

7. We believe section 7 requires the Authority to attempt to fix the issue with clothing prices. Section 21 may require the Authority to consult the Bank of England over the change and obtain the consent of the Chancellor of the Exchequer, however this provision cannot be cited as a reason for not requesting the change in the first place. (Paragraph 119)

8. If the Authority requests the change, the Chancellor of the Exchequer should consent to it. It is untenable for an official statistic, that is used widely, to continue to be published with flaws that are admitted openly. (Paragraph 120) 

The announcements by the UK Statistics Authority and HM Treasury on 4 September deal with this substantive issue raised in these recommendations, and are summarised in the covering letter to this response.

9. While we accept the arguments that consumer price indices have different purposes, we do not believe this warrants the production of multiple indices for government use. Two different measures of inflation allow a government to engage in ‘inflation shopping’. (Paragraph 134)

10. The Government should address the imbalance in its use of consumer price indices. It risks undermining public confidence in economic statistics. It is encouraging to see that the present Government is taking some steps to address the imbalance, for example with the change to uprating business rates by CPI and recent discussions around rail fares. (Paragraph 135)

11. In future there should be one measure of general inflation that is used by the Government for all purposes. This would be simpler and easier for the public to understand. But the UK Statistics Authority should also continue to develop the Household Cost Indices, discussed below. (Paragraph 136)

We welcome the Committee’s recommendation that the Household Cost Indices should continue to be developed. On 28 June 2019, the National Statistician outlined the next steps in the development of these Indices.

12. We disagree with the UK Statistics Authority that RPI does not have the potential to become a good measure of inflation. With the improvements to RPI that we set out in the previous chapter, and a better method of capturing owner-occupier housing costs as discussed below, we believe RPI would be a viable candidate for the single general measure of inflation. (Paragraph 139)

13. We are not convinced by the use of rental equivalence in CPIH to impute owneroccupier housing costs. The UK Statistics Authority, together with its stakeholder and technical advisory panels and a consultation of a wide range of interested parties, should agree on the best method for capturing owner-occupier housing costs in a consumer price index. (Paragraph 153)

14. Once a method of capturing owner-occupier housing costs has been agreed, the UK Statistics Authority, after consulting the stakeholder and technical panels, should decide which index to recommend as the Government’s single general measure of inflation. The Government should have adopted the preferred candidate as its single general measure of inflation within five years. (Paragraph 154)

Owner occupiers’ housing (OOH) costs are one of the most challenging aspects of inflation to measure. There is also no single approach that will be correct in all circumstances, as the choice will depend on the purpose of the index and also practical issues around data availability. In light of this, ONS has spent the last 10 years developing and consulting on its approaches to owner occupiers’ housing costs.

The development of an OOH measure for CPI was first considered in 2009 by the Consumer Prices Advisory Committee (CPAC). The committee then spent the next three years investigating different approaches to measuring OOH costs. In September 2010 it narrowed down the options to two – net acquisitions and rental equivalence – which it evaluated in detail against the five dimensions of statistical quality defined by the European Statistical System. The Committee finally agreed on rental equivalence in April 2012, giving consideration to both conceptual appropriateness and how well the index could be calculated in practice.

A first consultation was launched in the summer of 2012, in which users were asked about rental equivalence. The responses were fairly evenly split between support for rental equivalence, net acquisitions and neither approach. The National Statistician chose rental equivalence reflecting the quality of the underlying data available and whether asset prices were appropriately treated. The process is described in more detail in Appendix A of the CPIH Compendium.

Paul Johnson’s review of consumer prices was published in January 2015. This looked again at CPAC’s recommendation to use the rental equivalence method. It concluded the underlying assumptions are reasonable in a UK context and that the measure is based on a large, detailed source of underlying data. Therefore, the Review recommended that ONS should continue to use the rental equivalence measure.

A further consultation was conducted on the findings of the Johnson Review. Responses to the review on CPIH and OOH were again mixed, highlighting that users are unlikely to come to an agreement on the most appropriate choice for measuring OOH costs.

The Office for Statistics Regulation’s 2016 re-assessment of CPIH as a National Statistic noted that ‘there is some disagreement among users about the concepts and methods…’ Work to address these recommendations resulted in a wide ranging process of user engagement on CPIH, and the publication of numerous supporting materials such as the CPIH Compendium, which articulates the rationale for ONS’s choice of rental equivalence alongside the pros and cons of each approach, an ongoing published comparison of alternative OOH measures, and documentation on the various users and uses of our consumer price inflation statistics.

ONS have also looked at international practice where they found widespread use of the rental equivalence measure. The approach taken by different countries is summarised in the CPIH Compendium. Of the 40 countries considered, the most common approach is rental equivalence (12 countries) if discounting those that exclude OOH altogether (15 countries). It is also worth noting that the method requires a reasonably large rental market to work, and so many countries may be constrained in their choice by the availability of data. The countries that use rental equivalence include the United States, Germany, Norway and the Netherlands.

In light of the 10 years of development and consultation, ONS are not minded to undertake any further engagement with users and experts specifically on rental equivalence and owner-occupier housing costs. There is never likely to be agreement on a single approach. ONS views rental equivalence as the correct approach conceptually for an economic measure of inflation, and one where sufficient data is available to make it practical. Of course, they remain committed to ongoing monitoring and development of the CPIH and the Household Cost Indices.

15.Our recommendations will not however solve the issue of index or inflation shopping immediately. The Government will need to take action in the interim to address this. (Paragraph 155)

16.While the single general measure is being determined, the Government should switch to CPI for uprating purposes in all areas where it is not bound by contract to use RPI (except for the interest rate on student loans which, as we recommended in our Treating Students Fairly report, should be set at the ten year gilt rate thus reflecting the Government’s cost of borrowing). (Paragraph 156)

17.The Government should begin to issue CPI-linked gilts and stop issuing RPI-linked gilts. We heard evidence to suggest there was sufficient demand to make a viable market. (Paragraph 170)

18.Once the long-term single official measure of inflation has been agreed, gilts should begin to be issued that are linked to that index. The prospectuses for new issuances of index-linked gilts should be clear that the inflation index will change to the Government’s single general measure of inflation once it has been agreed. (Paragraph 171)

Recommendations (15) to (18) are primarily directed at HM Government and the Authority has nothing to say on those issues. We continue to urge the Government to cease to use the RPI for its own purposes where practical.

19. Once the single general measure of inflation has been introduced, the UK Statistics Authority and the Government should decide whether RPI should continue to be published in its existing form for the purposes of existing RPI-linked contracts, or whether a programme of adjustments should be made to the RPI so that it converges on the single general measure. (Paragraph 194)

20. To avoid disruption, we envisage any programme of convergence would take place gradually, over a sufficiently long time, and that the plan for that should be published at the outset. (Paragraph 195)

21. We note that the consent of the Chancellor of the Exchequer to changes to RPI that cause material detriment to index-linked gilts holders is no longer required after the last issuance to which that clause relates to expires in 2030. (Paragraph 196)

We strongly agree that any changes to the RPI or stopping the publication of RPI needs to be carefully planned. The Authority and ONS have been discussing the mechanics of any changes with the Government in the run up to the 4 September announcement.

Office for National Statistics response to the Lords Intergenerational Fairness and Provision inquiry report of the same name

Dear Lord True,

I am writing to offer the Office for National Statistics (ONS) response to the Intergenerational Fairness and Provision Committee report on ‘Tackling Intergenerational Unfairness’. The Committee made the following recommendation to the ONS:

“The UK Statistics Authority should prioritise improving generational statistics. This work should begin by the Office for National Statistics introducing a generational breakdown of the Effects of Tax and Benefits on Household Income data set and releasing a backdated time-series of this data. The Office for National Statistics should also investigate ways to improve the Wealth and Assets Survey’s coverage of gifts and inheritances as well as publishing a generational breakdown of the survey’s findings in each release.” (Paragraph 52)

ONS welcomes the report and this recommendation. As the report highlights, it is important that both Government and wider users of statistics have access to robust and trusted data on intergenerational issues, to ensure policy discussion and public debate in these areas are supported by sound evidence.

Regarding the specific aspects of this recommendation, I am pleased to confirm that ONS are already in the process of taking them forward. We are currently developing a new generational breakdown of the Effects of Taxes and Benefits on Household Income (ETB) data and are working to extend this time series as far back as the data allows. This new data will be released later this summer, alongside an analytical article focusing on the generational effects of taxes and benefits. Following this, we intend to incorporate these new generational data into the main annual ETB release.

Similarly, following the release of new data from the Wealth and Assets Survey (WAS) covering 2016/18 in autumn 2019, we will introduce new breakdowns of wealth by both age group and birth cohort, with the intention of making them part of our regular reporting.

We also recognise the importance of data and analysis on gifts and inheritances. Since my letter to the Committee submitting our written evidence in September, ONS have published new analysis on intergenerational transfers, looking at the distribution of inheritances, gifts and loans by both age and levels of income and wealth, seeking to make best use of the data that is already collected on the survey.

Collecting more detailed data on these topics, in particular inter vivos gifts, in a way that is sufficiently robust to inform policy making is challenging. However, we recognise the importance of developing
these data further. ONS are therefore currently working both with other government departments, including DWP and HRMC, as well as other external stakeholders, including the IFS and the Resolution Foundation’s new Intergenerational Centre, to identify ways to improve WAS’s coverage of both inheritances and gifts. These developments will be introduced at the start of the next round of the survey in April 2020.

Beyond the specific aspects of the recommendation relating to incomes, taxes and benefits, and wealth, ONS are also working more widely to improve the evidence base on generational issues. A key aspect of this is the work being taken forward by the new ONS Centre for Equalities and Inclusion and also by the ONS Centre for Ageing and Demography, which I mentioned in our written evidence to the Committee.

In October 2018, the Centre for Equalities and Inclusion published its final report on the findings from its audit of equalities data3. The report highlighted a number of issues with the existing data covering the 9 protected characteristics and several areas in which data were lacking. Data gaps, including those in relation to intergenerational fairness, are discussed with the Centre’s Strategic Advisory Board, which helps to determine priorities for the Centre’s activities going forward. In addition to the audit report and the article on young people’s earnings progression noted in our earlier written evidence, the Centre also published an article in March 2019 exploring the UK’s digital divide. This highlighted that digital exclusion is more prevalent among the older age groups, possibly leading to inequalities in access to opportunities, goods and services.

More broadly, the Centre for Equalities and Inclusionare also coordinating a range of analyses relating to issues of intergenerational and social mobility, looking to investigate the effects of family background, including parents’ educational and occupational outcomes, on their children’s subsequent outcomes, and how this has varied across time and for different groups of the population. To do this we are using a variety of data sources, including exploring the feasibility of using a new Data for Children dataset which uses Census data with educational data from the National Pupil Database, as well as the Labour Force Survey and the Census Longitudinal Study.

Following a Public Policy Forum on ageing hosted by ONS in 2018, the Centre for Ageing and Demography published an overview of ageing and what it means across a number of policy areas in the UK. This has continued as a ‘Living Longer’ series that covers the implications of an ageing population on informal care, health and the labour market. Later this month, the Centre will publish an article examining how we measure old age dependency and the impact of economic participation of older people and international migration. You may have also noted that in February, the Centre published analysis showing how key milestones to adulthood have changed over time in terms of working and living arrangements. The Centre intends to extend this work to cover milestones in later life during 2019.

I hope this response confirms to you that ONS is committed to addressing data gaps and extending the evidence base in this area. I am of course happy to keep yourself and members of the Committee updated on this work.

Yours sincerely,

Iain Bell, Deputy National Statistician and Director General, Population and Public Policy

Related links:

Iain Bell’s written evidence

Office for National Statistics written evidence to the Lords Intergenerational Fairness and Provision Committee’s inquiry of the same name

Dear Lord True,

I write in response to the call for evidence from the House of Lords Select Committee on Intergenerational Fairness and Provision.

The Office for National Statistics (ONS) is the UK’s National Statistical Institute, and largest producer of official statistics. We aim to provide a firm evidence base for sound decisions, and develop the role of official statistics in democratic debate.

In response to the Committee’s call for evidence, we have reviewed the data we currently hold relating to the issue of intergenerational fairness. The following short note provides a summary of the existing evidence we have on the broad issue of which generations are better or worse off in specific areas of life and highlights some planned and possible future work relating to intergenerational fairness.

It also describes the aims of two centres we have recently established in response to policy demand for data on these relevant issues: Centre for Inequalities and Centre for Ageing and Demography. Given the scope of the Intergenerational Fairness review, staff from the Centres would welcome exploring with the Committee the potential to collaborate and contribute to this evidence base. ONS are also keen to take into account the Committee’s priorities when developing our future workplans in these areas.

I hope this is helpful to the Committee. Please do not hesitate to contact me if I can be of any further assistance.

Yours sincerely,

Iain Bell

Deputy National Statistician and Director General, Population and Public Policy

Related links:

Iain Bell’s response to the Lords Committee on Intergenerational Fairness and Provision report

 

Official Statistics on Intergenerational Fairness and Provision

The first section of the following note considers the question posed by the Committee ‘Which generations are better or worse off, and in which ways?’ summarising existing data we hold. The second section outlines our planned future work relating to this area. Finally, the third section sets out the work of our recently established centres for inequality and ageing and demography.

1. Summary of Existing Evidence

ONS publishes a range of statistics and analyses which includes comparisons between different age groups; this allows us to explore differences in life experiences for different generations.

Some key findings that emerge from existing evidence include:

  • Overall, the well-being of people of different ages in the UK highlights that those aged 65 and over are currently faring better on many measures of personal, social and financial well-being than their younger counter-parts. However, those over 75 particularly note less satisfaction with health. Personal well-being declines as people move into their 80s.
  • While those aged between 16 and 24 are more likely to be physically active and are more satisfied with their general health than older people, they are also more likely to report symptoms of mental ill health, and less likely to feel they have someone to rely on or a sense of belonging in their neighbourhood. They also have higher rates of unemployment and more frequently report loneliness.
  • Although retired households have on average lower incomes than non-retired households, older people are more satisfied with their income and report finding it easier to get by financially than younger people. In addition, the taxes and benefits system affects different age groups in different ways. Households where the head is aged between 25 and 64 years on average pay more in taxes than they receive in benefits, while the reverse is true for those aged 65 and over. There is also lower income inequality among retired households than non-retired households.
  • Comparing the experience of breadwinners in different age groups in recent times with those in previous generations, has shown that households with breadwinners in their 20s have seen the slowest growth in income since the mid 1980s of all age groups, and they were worst affected by the economic downturn. In contrast, while households with breadwinners aged 60 and over had the lowest disposable income on average in 1986, in 2014/15 they had the highest.
  • As might be expected, average wealth increases with age, however the experience of younger generations has changed over time, with younger generations having less wealth at the same age than previous generations.

2. Planned and possible future work on intergenerational fairness

In response to policy interest, ONS is planning new pieces of relevant analysis to increase the evidence base.

Wealth inequality in Great Britain

We are currently working on an article on intergenerational inequalities specifically exploring inheritances and gifts/loans from friends and family, the number of people with negative net wealth, and how this is broken down across age, income and wealth distributions. It will detail the percentage of each age group and wealth/income quintile that has received an inheritance or gift/loan, or has financial debts or negative net wealth. It will also detail the amounts received or held and how this is distributed across the aforementioned categories. The analysis uses data from the Wealth and Assets Survey and is expected to be published in October. We would be happy to send a copy of this publication to the Committee.

Intergenerational mobility

We are examining the feasibility of new analysis on intergenerational mobility to inform policy relating to social mobility. The aim would be to examine how the relationship of parents’ earnings to their children’s earnings has changed over time, and whether it has become stronger or weaker. The research would look at both occupational and educational mobility using data from the ONS Longitudinal Study and the Annual Survey of Hours and Earnings.

3. Centre for Inequalities and Centre for Ageing and Demography

Centre for Inequalities

The Centre for Inequalities at ONS has recently been established to ensure that the right data are available to address the main social and policy questions about fairness and equity in society, with relevant analysis taken forward using the most appropriate methods. The Centre acts as a convening centre, bringing together a range of experts from across UK government, academia and other organisations to achieve these aims.

For example, we are currently working collaboratively on an Inequalities Data Audit to identify the extent and quality of data available on the nine protected characteristics of the Equality Act (2010). These include age as well as disability, gender reassignment, race, religion or beliefs, sex, sexual orientation, marriage and civil partnership, and pregnancy/maternity. We are reviewing the data available for each protected characteristic group across several important areas of life including: education, work, living standards, health, justice and personal security, and civic participation. A report of the audit’s findings will be published at the end of October. Through its consideration of data sources relating to age, the audit will provide an opportunity to consider where data currently exist that could answer questions related to intergenerational fairness and where there are gaps that need to be addressed before we are able to do this.

We are producing an article on young people’s earnings progression and geographic mobility, which explores young people’s earning progression and the effects on earnings growth of moving to London and other major city regions in England and Wales. The article focuses specifically on young people, but also includes comparisons with older age groups to understand intergenerational differences. It also examines any disparities in earnings growth in terms of sex and ethnicity to shed further light on the extent and nature of gender and ethnicity pay gaps. The analysis uses data from the Census 2011 linked to Department for Work and Pensions (DWP) data and Her Majesty’s Revenue and Customs (HMRC) PAYE data. We intend to publish this by the end of October and would be happy to send a copy to the Committee when published.

Centre for Ageing and Demography

ONS has established a new Centre of Ageing and Demography which will ensure that statistics, analysis and expertise provide the necessary evidence to inform public debate and policy decisions. The Centre will work in partnerships across central and local government, academia and other organisations to identify the highest priority topics are and where evidence is needed most and aims to bring coherence and accessibility to the multiplicity of evidence that is produced across (and outside of) government to assist decision makers.

The Centre recently published a report on Living longer – how our population is changing and why it matters. This provides an overview of population ageing in the UK and some of the implications for the economy, public services, society and the individual and includes further analysis to that already referenced above. An evidence slide pack and blog were also published alongside this.

Office for National Statistics response to the Lords Economic Affairs Committee’s report on economics of higher, further and technical education

Dear Lord Forsyth,

Further to the National Statistician’s comments to the Committee on 17 July, I am writing to offer the Office for National Statistics (ONS) response to the Economic Affairs Committee report on Treating Students Fairly: The Economics of Post-School Education.

The Committee made one recommendation relating to ONS:

“Most student loans will not be repaid in full: some will be paid in full, some not at all, and a lot only partially repaid. The expected write-offs should be shown in the deficit when the loan is issued. The true cost of funding higher education would then be immediately apparent. This would allow for a better discussion as to where funding in the higher education system should be allocated. (Paragraph 42 and 388)”

In our written evidence, submitted to the Committee January 2018, we explained how student loans are currently treated in the National Accounts and public finance statistics, specifically that student loans are treated as any other loan following the approach mandated in the European System of Accounts and the United Nations System of National Accounts.

However, as you mention in your report, there are certain features of UK student loans that appear to distinguish them from other loans. They have a high level of contingency, both as they are based on a student’s subsequent income and as there are a number of scenarios under which the loans, or the portion of the loans not yet repaid, will be written off.

Reflecting further on the contingent nature of student loans and the issues raised by the Committee, we recognise that there is a need to establish whether student loans should be treated within national accounts as loan assets for government, or whether they should in part, or in total, be viewed as contingent assets.

In April we announced that we had begun a review into how best to record student loans within national accounts and the public sector finances. This is not an easy issue to tackle and one which has implications wider than the UK given the use of income contingent loans in other countries. We have therefore been discussing with international agencies and other countries the relevant issues and examples with a view to identifying the appropriate statistical treatment, and from there to develop relevant guidance.

On 17 July we published information on the main accounting options we have been considering as part of the student loan review, along with the pros and cons and implications for each option. There is still work to do on evaluating the different options but we are continuing to engage with our international partners and are hopeful that we will reach internationally an agreed treatment by the end of the year. It is important to note, however, that implementation within the fiscal statistics and national accounts is likely to take longer given the complex nature of many of the options under consideration. I hope the Committee will welcome this work.

Yours sincerely,

Jonathan Athow Deputy National Statistician and Director General, Economic Statistics Office for National Statistics

Related links:

ONS written evidence (2018)