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Devastating gaps in UK jobs data could herald wider problems in the country's statistics, a senior lawmaker has warned, saying economic policymakers are “flying blind” over failures.
Dame Meg Hellyer, Labour's chair of the Treasury Committee, said she and her fellow MPs were shocked and appalled by the decision. message Last month the UK's chief statistician said it could be 2027 before the new labor force survey is ready.
It drew parallels with other government bodies, such as the Bank of England, which have warned of the harmful consequences of underinvestment in systems.
“It really struck me as a very big problem,” Hellyer said in an interview with the Financial Times. “If there is a data gap here, what other data gaps might there be? What implications does that have for forecasts?”
A review conducted by former US Federal Reserve Chairman Ben Bernanke last year He criticized the Bank of England Due to a “lack of material investment” in forecasting tools, with “temporary fixes” resulting in a “complex and unwieldy system”.
The problem is with business data, Hellyer said Office for National Statistics “It wasn't just a one-time issue.”
“If we get this through a labor market survey, there will be other areas that we probably need to look at,” she said. “Bernanke picked up some of that at the Bank (of England).”
An internal review by the Office for National Statistics last month found it was to blame for its failure to produce reliable jobs data Lack of systemic investment and issues related to internal strategy and culture. The ongoing “instability” in data based on the Old Jobs Survey will take some time to improve, leaving policymakers and investors without a clear picture of the UK jobs market.
Senior officials, including Andrew Bailey, governor of the Bank of England, have warned that gaps in UK jobs data make setting monetary policy more difficult. Bailey underscored his frustration in his Mansion House speech in November, warning that “it is a big problem – and not just for monetary policy – when we don’t know how many people are participating in the economy.”
Over the past year, the Office for National Statistics has been working to increase the number of respondents to its survey – the main source of information on the state of the UK labor market. A He drowns in the response The unemployment rate during the pandemic first forced it to suspend data based on the Labor Force Survey, then classify it as “development statistics.”
Hillier said the Treasury Committee was likely to summon Sir Ian Diamond, the national statistician who oversees the Office for National Statistics. Discuss the situation. “We were blown away by the message that, in fact, we won't solve this problem until 2027,” she said.
In his letter to the Treasury Committee, Diamond said he could not set a firm timetable for the shift to a “transforming” labor force survey, although he added that his “ambition” was for 2026 rather than 2027.
Although deputies want to question Diamond, Hillier said, “Bashing him publicly is not what we're about, as far as how we figure this out now — because that's going to be a big problem.”
She said the difficulties make it difficult to assess issues such as the UK's lackluster growth. “Policy makers are flying blind and this is causing real problems – we have productivity challenges (and) we don't understand what's going on.”
She said there are broader questions about public bodies and their ability to modernize their systems in light of funding constraints.
In his letter, Diamond, who is chief executive of the UK Statistics Authority, spoke of “flat core funding, ring-fenced budgets and significant inflationary impacts” in the wake of the Conservative government’s latest 2021 spending review.
“Working within our budget in this context has led to difficult decisions regarding prioritization and the need to drive efficiencies and cost savings across the organization,” he wrote.
“You've seen it with other regulators and other bodies outside the sector – they're being asked to do more, not given the money to do it,” Hillier said.
