Coalition rebuked again by UK Statistics Authority- this time on flood defence spending

Statistics head Andrew Dilnot says a Treasury graph on infrastructure left readers with "a false impression of the relative size of investment between sectors".

After entering office in 2010, David Cameron promised to lead "the most open and transparent government in the world". But once again, the coalition has fallen foul of the number crunchers at the UK Statistics Authority. This time, the dispute centres over the Treasury's presentation of figures on infrastructure investment in the government's National Infrastructure Plan.

When the document was published last December, several were struck by how the unusual logarithmic scale used on one of the graphs made it appear as if investment was balanced across all sectors, including, most pertinently, flood defence. In fact, the government had spent £4bn in this area, compared to £218bn on energy, £121bn on transport and £14bn on communications. But the graph, as shadow chief secretary to the Treasury Chris Leslie noted in a letter to UK Statistics Authority head Andrew Dilnot, suggested otherwise. 

Dilnot has now responded to Labour, stating that "the chart could leave readers with a false impression of the relative size of investment between sectors" and including a redrawn version by stats officials. 

The Treasury version

UK Statistics Authority version

And that wasn't the only correction he issued. 

The coalition also boasted that "average annual infrastructure investment has increased to £45 billion per year compared to an average of £41 billion per year between 2005 and 2010". But as Labour MP John Healey noted in a letter to Dilnot, a footnote to the document admitted that there were "challenges when collecting this data", that the figures did not derive from consistent source material and that they were not comparable with the other data used. He added: "Despite these admissions, the methodology by which the figures were produced is not made clear, nor are the timeframes which have been selected for comparison - 2005-10 and 2011-13 - explained or justified." In response, Dilnot writes that "It would have been good practice for this analysis to have been accompanied by full information about the methods used."

As I noted earlier, this is far from the first time that ministers have been rebuked for their statistical chicanery. In December 2012, Jeremy Hunt was ordered to correct his false claim that spending on the NHS had risen in real terms "in each of the last two years". A month later, David Cameron was criticised for stating that the coalition "was paying down Britain’s debts" (the national debt has risen from £828.7bn, or 57.1 per cent of GDP, to £1.25trn, or 75.7 per cent of GDP since May 2010) and then in May 2013, Iain Duncan Smith was rebuked for claiming that 8,000 people moved into work as a result of the introduction of the benefit cap. 

Here's Chris Leslie's response to today's letter: 

Time and again Ministers are being warned not to mislead the public with false claims, dodgy statistics and biased graphs.

Now George Osborne and the Treasury have been told off for misleading people about the government's investment in infrastructure. For example, their chart made it look like investment in flood defences was roughly the same as in other areas, when in fact it was a tiny fraction.

This government has a track record of trying to pull the wool over people's eyes. David Cameron has now been rebuked several times for making false claims: on NHS spending, the rising national debt and the impact of his tax rises and spending cuts on economic growth.

And only last month the Tories came up with more dodgy figures to claim people are better off, but which totally ignored the impact of things like the rise in VAT and cuts to tax credits.

In their desperation to paint a rosier picture than the truth David Cameron and George Osborne are showing just how out of touch they are from reality.

David Cameron talks with residents and environment agency workers in the village of Yalding in Kent on December 27, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.