175/98
23 October 1998
EXTERNAL REVIEW ON AVERAGE EARNINGS REVISIONS
Attached is a letter from the Chancellor of the Exchequer, Gordon Brown to the Chairman of the Treasury Select Committee, Giles Radice announcing an external review of the recent revisions to the average earnings figures.
October 1998
Giles Radice
Chairman of the Treasury Select Committee
House of Commons
London
SW1A 0AA
EXTERNAL REVIEW ON AVERAGE EARNINGS REVISIONS
I am sure that you are aware of the recent revisions to the average earnings figures and I know that you share my concern that official statistics should be of the highest possible quality. I welcome the internal review which the Office for National Statistics have set up and I know that their Director, Tim Holt, is as determined as any of us to resolve these concerns. But, given the scale and impact of these revisions, I believe that the proper course is to have an external review to supplement the internal deliberations.
You will know that the Monetary Policy Committee of the Bank of England has attached particular importance to the average earnings data as a key factor in its decisions. After consultation with the Governor of the Bank, I have therefore decided to ask Sir Andrew Turnbull and Mervyn King to conduct a review.
The review will consider the circumstances surrounding the two revisions to the average earnings figures released by the Office for National Statistics on Tuesday 6th and Wednesday 14th October and how they were handled. It should also advise me on whether best practice is being followed in the compilation of this series.
The review, which will consider both methodological and managerial issues, will be carried out by an independent expert in economic statistics. Martin Weale (Director of the National Institute for Economic and Social Research) has agreed to undertake this task, supported by Peter Sedgwick (Deputy Director at HM Treasury). The Office for National Statistics will of course participate fully in the review.
It is hoped that the review will be completed within 4 to 6 weeks and a report of its finding will be published.
GORDON BROWN