HM Government

Sir David Norgrove to the Prime Minister – Employment Statistics

Dear Prime Minister,

You said at Prime Minister’s Questions yesterday that there are now more people in employment than before the pandemic began.

According to the latest ONS figures, it is wrong to claim that there are now more people in work than before the pandemic began: the increase in the number of people who are on payrolls is more than offset by the reduction in the number of people who are self-employed. The number of people in work is estimated to be around 600,000 fewer than at the start of the pandemic (comparing December 2019 – February 2020 with October – December 2021) [1]

If, as seems to be the case, your statement referred only to the increase in the number of people on payrolls, it would be a selective use of data that is likely to give a misleading impression of trends in the labour market unless that distinction is carefully explained.

The distinction has been highlighted by the ONS when they published the most recent labour market figures, as well as in the media, in Parliament, and in a letter of 1 February from the Authority’s Director General for Regulation to 10 Downing Street’s Chief Analyst.

I hope you will agree that public trust requires a complete statement of this important measure of the economy.

Yours sincerely,

Sir David Norgorve

[1] Employment in the UK: February 2022, Office for National Statistics, 15 February 2022

Sir David Norgove to Rt Hon Sajid Javid MP – OSR Covid Lessons Learned report

Dear Secretary of State,

Today, the Office for Statistics Regulation (OSR) has published its review; Improving health and social care statistics: lessons learned from the COVID-19 pandemic.

The pandemic resulted in a huge public appetite for data and statistics. We have seen a remarkable response from producers of data and analysis to meet this demand, in many cases overcoming challenges which would previously have seemed insurmountable. The pandemic has also drawn attention to existing challenges for health and social care statistics. I am sure you would agree that the health system needs both to learn lessons and to build on its achievements in this area.

The pandemic also highlighted the importance of transparency, so essential for building public confidence in statistics and in government decisions based on them. When statistics and data are quoted publicly by ministers or senior officials, they should be supported by a publication which provides the data in an accessible form with appropriate explanations of context, limitations, and sources.

In England the number of organisations responsible for the production and publication of health data and statistics creates additional complexity. It is important that there is strong leadership across health bodies. This will support the release of data which offers a coherent picture and answers the questions of most interest to society, such as the effectiveness of government policy and an understanding of public health.

I would be happy to meet with you to discuss these topics further.

Yours sincerely,

Sir David Norgrove

Bridget Phillipson MP to Sir David Norgrove – Poverty Statistics

Dear Sir David,

I am writing to raise concerns over comments made in an interview with BBC Breakfast by the Chancellor of the Exchequer, Rishi Sunak MP, on 6 July 2021.

The remark in question is as follows: “The number of people in poverty has fallen as a result of the actions the government has taken over the last several years”.

A similar statement was made by Department for Work and Pensions Minister Will Quince MP in the most recent Oral Question session for the department.

The Minister stated that “recent statistics show that before the Covid-19 pandemic, we were in a strong position, with rising incomes and 1.3 million fewer people, including 300,000 fewer children, in absolute poverty, after housing costs, compared with 2010.”1

The Chancellor failed to clarify which poverty measure he was using, while the Minister’s use of the ‘absolute poverty’ measure masks the true reality of poverty in the UK and risks misleading the public on this issue. Internationally the accepted way to measure poverty is by using the ‘relative poverty’ measure.

Since the Conservatives came to power in 2010, we have seen an increase of 1.5 million people who live in relative poverty, after housing costs, across the country.

And according to the established ‘relative poverty’ measure, the number of children living in relative poverty has been steadily rising over recent years, with the figurestanding at 4.2 million in the latest data.

These figures paint a very different picture of the Government’s record on poverty than claimed by the Chancellor on the BBC.

I also note that the Chancellor claimed that inequality was falling, whereas in the period leading up to financial year from April 2019 to March 2020, just before the pandemic, income inequality steadily increased to 36.3%, according to estimates from the Household Finances Survey.

I would welcome your view on the Conservatives’ use of absolute poverty as an accurate measure of poverty and child poverty in the UK, and the claim around inequality falling. With the planned cut to Universal Credit, taking £1000 a year from millions of families, upcoming it is vital that the public are not being misled by Government claims on their record with regards to poverty.

Yours sincerely,

Bridget Phillipson MP

Response from Sir David Norgrove to Bridget Phillipson MP – Poverty Statistics

Dear Ms Phillipson,

Thank you for your letter of 16 July about statements by Ministers on levels of poverty and income inequality.

The Office for Statistics Regulation (OSR) pointed last year in a blog post and more recently in its review of income-based poverty statistics to the complexity of measures of poverty. Figures for absolute and relative poverty of course give different results. They are however both valid measures. They can also be considered before and after housing costs (published as part of the Department for Work and Pensions’ Households Below Average Income Statistics).

The broad conclusion is that since 2009/10 the number of individuals in absolute poverty has fallen both before and after housing costs, whilst the number of individuals in relative poverty has increased during this time.

Similarly there are multiple ways to measure income inequality. Some inequality measures, as published by the Department for Work and Pensions and the Office for National Statistics, use the Gini coefficient, an international standard technical measure of how incomes are distributed across all individuals. This measure of income inequality according to both sources is lower in 2019/20 than it was in 2009/10 and the trend has been broadly flat since 2010/11.

As the OSR review found, statistics on poverty, income inequality and material deprivation are most helpfully thought of as a basket of measures serving a broad range of needs. To focus on one measure risks masking a more nuanced picture of the nature of poverty in the UK. We are pleased to see statistical producers across government commit to addressing the findings of OSR’s report and that they are already taking steps to move away from producing a series of individual outputs in favour of a more coherent and comprehensive evidence base.

It is of course important to public understanding that statements should be clear about the measure and time period being referred to, particularly where other measures present a different trend.

Yours sincerely,

Sir David Norgrove

Response from the Chair to the Chancellor of the Exchequer: RPI consultation response

Dear Chancellor,

Thank you for your letter of 23 October setting out your conclusions on the timing of changes to the Retail Prices Index (RPI) following the joint consultation between the UK Statistics Authority and HM Treasury.

I am pleased that you acknowledge the statistical case for our proposal. I understand that you have a wider set of issues that you must take into account in making your decision but I regret of course the Government’s decision that the method of calculation should not be changed before 2030.

Your letter emphasises the need for certainty on the future of the RPI, something that came up both in the consultation but also in wider engagement with users.

It is UK Statistics Authority policy to address the shortcomings of the RPI in full at the earliest practical time. I have written to the Bank of England about the legislative constraints and enclose a copy of their response. The change we propose can legally and practically be made by the Authority in February 2030.

On this basis I propose that the UK Statistics Authority and HM Treasury work together to announce the outcome of the consultation.

We continue to urge the Government and others to cease to use the RPI. It would be wrong for Government to continue to use a measure of inflation which it itself recognises is not fit for purpose, where it has the opportunity to change.

Yours sincerely,

Sir David Norgrove

Sir David Norgrove response to Chancellor of the Exchequer – RPI consultation update

Dear Chancellor,

Thank you for your letter about the joint consultation by the UK Statistics Authority and HM Treasury on changes to the Retail Prices Index. As you say, we committed to respond to the consultation this autumn and have agreed that we will do so at the time of the Spending Review on 25 November.

I will be publishing this letter on the Authority’s website.

Yours sincerely,

Sir David Norgrove

Letter from Rishi Sunak: RPI consultation response

Dear David,

At the Budget in March, the Government and UK Statistics Authority (UKSA) launched a joint consultation seeking views on whether UKSA’s intended approach to reform the Retail Prices Index (RPI) should be implemented at a date other than 2030, and, if so, when between 2025 and 2030. The consultation closed for responses on 21 August.

As you know, under current legislation, the UKSA Board requires my consent as Chancellor before fundamental changes which would be materially detrimental to the interests of the holders of specific index-linked gilts, as judged by the Bank of England, can be made to RPI. The last of these specific index-linked gilts matures in 2030. The consultation sought to inform me of the relevant impacts of reform in order that I could make this assessment. The relevant impacts that I have been able to consider in this assessment are those on the holders of index-linked gilts, the index-linked gilt market and the consequent impacts on the public finances.

Having considered the responses submitted to the consultation, I am informing you and the Board that while, like my predecessor, I see the statistical arguments of the Board’s intended approach to reform RPI, in order to minimise the impact of UKSA’s reform to RPI on the holders of index-linked gilts, I will be unable to offer my consent to the implementation of such a proposal before the maturity of the final specific index-linked gilt in 2030.

After this specific index-linked gilt has matured, the UKSA Board can implement changes to RPI unilaterally. You will be aware from the responses to the consultation, that there have been widespread calls from users of RPI – particularly index-linked gilt holders – for the authorities to provide certainty on the future of the index in the outcome of the consultation. I recommend that we both are mindful of this when we issue our joint response.

Rishi Sunak

Sir David Norgrove to the Prime Minister – Employment Statistics

Sir David Norgove to Rt Hon Sajid Javid MP – OSR Covid Lessons Learned report

Bridget Phillipson MP to Sir David Norgrove – Poverty Statistics

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Response from Sir David Norgrove to Bridget Phillipson MP – Poverty Statistics

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Response from the Chair to the Chancellor of the Exchequer: RPI consultation response

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Sir David Norgrove response to Chancellor of the Exchequer – RPI consultation update

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Letter from Rishi Sunak: RPI consultation response

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