Committee

  • Martin Weale (Chair)
  • David Caplan
  • Robert Heath
  • Paul Mizen
  • Rebecca Riley
  • Mairi Spowage
  • Nick Vaughan

ONS

  • Grant Fitzner
  • Richard Heys
  • Rosie Maslin
  • Cliodhna Taylor
  • Joseph Murphy
  • Simon Rigby
  • Nicola Shearman

Apologies

No apologies were received.

1. Welcome and apologies

  1. The Chair welcomed members to the second meeting of National Statistician’s Committee for Advice on Standards for Economic Statistics (NSCASE) and invited those present briefly to introduce themselves.
  2. The Chair asked members to allow the meeting to be recorded in order to create more accurate minutes, with the recordings to be deleted afterwards. The Committee agreed

2. Approval of minutes from previous meeting and declarations of interest

  1. The Chair invited members to approve the minutes of the previous meeting noting that Robert Heath had some suggestions for modifications.
  2. Robert Heath drew attention to item 5 in the minutes of the first meeting. He also raised concerns regarding the lack of detail recorded.
  3. Robert suggested the addition of “In considering the options set out in the paper for its future work, the Committee welcomed the constructive role the UK is playing in updating international standards, recognising the importance of international comparability of data while taking account of UK specific needs.”
  4. The Committee accepted Robert’s revision which was made to the relevant section of the minutes. Other members added their concerns about the level of detail in the minutes.
  5. There were no declarations of interest from the Committee members with reference to the agenda.

Action – Amend the minutes of the first meeting to include Robert’s comment under item 5. 

3. Approaches to the Committee

  1. The Chair suggested that reporting approaches made to Committee members regarding NSCASE subjects should be a standing item on the agenda. Future approaches to the Committee should go through the secretariat.
  2. The Chair had been approached by Paul Allin [NSCASE 22(07] regarding issues on the use of GDP data raised in an article by Diane Coyle, Tim Jackson and himself. The Chair stated that he saw the Committee as a body giving advice to the National Statistician. It was questioned whether that extended to giving advice to encourage or discourage the use of particular data for particular purposes.
  3. David Caplan observed that when discussing a topic, there might be background information which the Committee might need to take into consideration. He agreed that the Committee’s role was not to advise on how people should use methodologies/statistics.
  4. Rebecca Riley stated there was merit in Paul Allin’s comments. When the Committee was discussing process and standard setting, Rebecca added that it would be helpful If the Committee explained how the standards were developed. Issues of use may not be the Committee’s responsibility, but the Committee should make UKSA/ONS aware of concerns.
  5. Richard Heys noted that the ONS/UKSA were continuously considering how best to improve statistical literacy.

Action – Draft a letter to Paul Allin saying that the Committee had discussed his viewpoints/considerations and summarise the Committee’s discussion. Circulate the letter to the Committee.

4. Update on ISIC/NACE

  1. The Committee received the update from Suzanne Fry on ISIC/NACE update from Suzanne Fry on ISIC [NSCASE 22/03].
  2. The Committee noted that, while the document referred to the dominance of UK requirements over international comparability, the advice offered by the Committee was likely to take international comparability into account. This meant that the issue of comparability would need to be addressed in the proposal which will eventually be put to the Committee.
  3. There was some more general discussion of the information the Committee would need to make decisions. This topic was raised more fully at the end of the meeting in the context of the decision-making framework.

Action: The Committee agreed to set out at its January meeting the broad parameters it would use to judge the forthcoming ONS proposal.

5. Deputy Chair

  1. Robert Heath left the room for this item.
  2. The Committee members unanimously appointed Robert Heath to be Deputy Chair of the Committee, and, on his return, thanked Robert for taking on this role.

6. Work Programme

  1. A programme [NSCASE 22/04] of topics for the Committee to consider was presented to the Committee.
  2. Members were made aware that there might be some changes to topics or dates; the secretariat would keep members updated on.
  3. The Committee noted the agenda item “Treatment of package holidays in Consumer Prices – for information” and restated its view that issues associated with prices should normally be considered by the Advisory Panel on Consumer Prices.
  4. Grant Fitzner stated that the ONS would be in line with Eurostat until 2024. Beyond that he saw departures from European guidance requiring a strong rationale. He added that was important to maintain international comparability.
  5. The Committee was generally happy with the proposed work programme but raised concerns around the number of items per meeting and advised that there might need to be space for new issues that emerge. One suggestion was that the Committee should have the papers further in advance. This would allow comments to be sent in ahead of the meeting and reduce the time needed to present the work in question.
  6. It was suggested that the papers presented to subsequent meetings should show clearly the decision process ONS followed in reaching a recommendation.
  7. The Committee noted that ONS was not planning to raise all issues on classifications but was using its judgement to select those it regarded as most important. The Chair asked whether it would be possible to see the full list of classification issues, so that the Committee was in a position to express a view on where it would like to be involved before a final decision is taken.

Action – Richard Heys to share list of all classification issues with the Committee.

7. The treatment of non-monetary gold and its impact on the UK National Accounts

  1. Richard Heys presented the paper [NSCASE 22/05][1] and provided an overview of the subject, describing the differences between monetary gold and non-monetary gold, and how estimates of the UK Balance of Payments could be very sensitive to the treatment of non-monetary gold. He noted that this issue was of particular concern to the UK because of the importance of London as a focus for the gold trade.
  2. Robert Heath drew attention to the work that Chris Wright (previous head of Statistical Methodology, Bank of England) and Stuart Wright (previously head of Balance of Payments in ONS) had done on non-monetary gold during the previous update of the international manuals. Their work introduced two types of non-monetary gold into SNA and BPM: allocated gold is a claim on a physical piece of gold, while unallocated gold is a financial asset denominated in gold. Robert Heath asked whether ONS made this distinction. He also highlighted that the SNA capital account includes gold as a valuable (paragraph 11.45 of SNA08 states that transactions in gold held by (domestic) financial institutions (other than monetary authorities) are treated as acquisitions less disposals of valuables), whereas the balance of payments capital account does not include gold, as cross-border transactions in gold are treated as exports and imports (BPM6 10.50) from the rest of the world sector. The paper did not bring out this distinction and discuss the implications for its proposals.
  3. Nick Vaughan said it would be helpful to see data on the topic. He suggested it might also be helpful to discuss the matter with the Gold Council. He wondered what would be done with back data if the UK were to depart from international standards.
  4. Richard Heys suggested it would be possible to distinguish industrial gold from other non-monetary gold but doubted that industrial gold was important.
  5. Mairi Spowage noted Richard Heys used an example of crypto currency and crypto platforms in the opening presentation, offering some similarities between the concerns arising from both topics, Mairi asked if there was anything relevant to be learned from the proposed treatment of crypto assets.
  6. Richard Heys noted that crypto assets have become a contentious issue and some international organisations are concerned about making crypto assets financial assets without any corresponding liability. They see that this would introduce changes into the financial account and its workings. Among other issues, this raised questions around how reserve assets are defined. The Advisory Expert Group (AEG) is currently revising its paper on crypto assets for further consultation. One possibility set out in a recent ONS published paper is to introduce a new account between the capital account and the financial account reflecting transactions in existing crypto assets with a liability (CAWLM) (but not the creation of new CAWLM; that would still be considered capital formation in the capital account).
  7. The Chair thanked Richard and his colleagues for the work that was put into preparing this paper. He noted that the Committee could not yet reach a conclusion, but that they’d be very grateful for more information on the treatment of the different types of gold currently set out in the SNA and Balance of Payments manuals. This would enable them to have a better understanding of where the differences arose, and thus what were the implications of different treatments. They would also like an indication of the magnitude of the effects

[1] This paper has gone back for review and will not be published at this time.

Action – Richard Heys to revise the paper in the light of the discussion.

8. Update on international guidance

  1. Richard Heys gave an update on international guidance [NSCASE 22/06] noting that the UN Secretary-General has become increasingly focussed on the need to accelerate and widen work on ‘Beyond GDP’ – a project to promote better understanding of the trade-offs between society, environment and the economy. Engaging policy users from each of those areas is important to help statisticians develop relevant datasets. The United Nations Network of Economic Statisticians, which the ONS actively participates in, has been pushing for guidance to be created and given to countries on which indicators would be the most helpful. He added that there may be a summit on wellbeing and ‘Beyond GDP’ in 2023, which could introduce a parallel stream of activity to the SNA revision.
  2. Richard Heys flagged that ONS would be attending a conference at the OECD in late October and a UN/Eurostat event in Brussels in mid-November. The ONS delegation in Brussels will be led by Mike Keoghan and include Martin Weale, Grant Fitzner, and Richard Heys. This conference on macro-economic statistics for the future will facilitate communication with users from finance ministries and central banks.
  3. Questions focused on the SNA consultations at the joint AEG and Balance of Payments Committee (BOPCOM) meeting and seeing the outcomes, and resultant timelines.
  4. Nick Vaughan asked how ONS are transforming population statistics and how they are balancing the different data sources. He also asked whether statistics on income distribution should be included in proposed population and social accounts or in the National Accounts.
  5. Robert Heath emphasised the need for the Committee to be made aware of SNA/BoP papers that are particularly relevant for the UK. He gave the example of the paper on margins on buying and selling transactions.

Action: Secretariat to share joint AEG BOPCOM outcome documents.

9. Present Terms of Reference (ToRs)

  1. The Chair formally noted that the Terms of Reference would be revised to reflect the appointment of the Deputy Chair. The revised Terms of Refence would be circulated to members for approval.

Action – Circulate the changes of the ToRs consequent on the Committee appointing a Deputy Chair.

10. Update on Secretariat

  1. The Chair notified the Committee that Millie Campbell had left ONS. Martin thanked Millie for her work and support throughout. A member of the International Team will take over the responsibility for the secretariat until a new successor may be appointed. Further details will be shared once this appointment is confirmed.

11. Production of minutes

  1. Several Committee members raised concerns regarding the minutes of the previous meeting.
  2. Paul Mizen highlighted that in the ToR the minutes would be the method of reporting to the National Statistician and as such should have more detail. Paul recommended that papers or briefings should be used alongside the minutes to allow for further information to be shared.
  3. It was agreed amongst the Committee that the ToR should be amended to reflect that more detailed minutes will act as the principal information for the National Statistician and recognise that at times, supplementary papers and briefings may be required.
  4. A discussion was held on whether remarks should be attributed. It was agreed that they should be for Committee members and those ONS staff at Grade 7 or higher.
  5. Robert Heath wished to clarify whether the paper “The treatment of non-monetary gold and its impact on the UK National Accounts” would be released with the minutes, as the work was not complete.
  6. The Chair noted that it would be more appropriate to release the paper on the treatment of non-monetary gold and its impact on the UK National Accounts minutes once the work was completed. The paper need not be released at this stage since it was an input into policy under formulation.
  7. The Committee agreed that draft minutes would be circulated to members two weeks after each meeting, and that the minutes would be made public four weeks after each meeting. The final minutes and papers to be published would be circulated to members two working days before release.
  8. If the National Statistician required feedback urgently this would be provided verbally by the Chair.

Action –Revise TOR as suggested in 11.3.

 The Committee will be notified forty-eight hours before the minutes are published.

12. Any other business

  1. The Chair suggested that a decision-making framework should be set out and mentioned that the Deputy Chair and he had drawn up a preliminary draft. After review by the secretariat, it will then be circulated to the Committee for comment. There would be a full document for the Committee to discuss at the next meeting.
  2. The next meeting will take place on 16th Jan 2023. Future meetings will begin at 12 noon.

Action – The secretariat will confirm meeting dates for the coming year

The papers that informed this Committee meeting are attached as a PDF document for transparency. If you would like an accessible version of the attached papers, please contact us at nscase@uksa.gov.uk