The problems with the data of the economy of the United Kingdom could be generalized, warn the legislator

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Damaging gaps in UK jobs data may herald wider problems with the country’s statistics, a top lawmaker has warned, saying economic decision-makers were “flying blind” because of the failures.

Dame Meg Hillier, Labor chair of the Treasury committee, said she and her fellow MPs had been “shocked” and “astounded” by a letter Last month the UK’s chief statistician said it could be 2027 before a new labor force survey is ready.

He made parallels with other government bodies, such as the Bank of England, as she warned of the harmful consequences of underinvestment in the systems.

“It really hit me between the eyes (as) something that is a big, big problem,” Hillier said in an interview with the Financial Times. “If there is a data gap here, what other data gaps might there be? What might the implications of this be for predictions?”

A review of former US Federal Reserve Chairman Ben Bernanke last year slammed the BoE for “material under-investment” in its forecasting tools, with “improvised repairs” resulting in “a complicated and cumbersome system”.

Hillier said that the problem with the employment data of the National Statistics Office it was “not just a one-off problem.”

“If we have this with the labor market survey, there will be other areas that we probably need to look at,” he said. “Bernanke took some of that to the Bank (of England).”

An internal review by the ONS last month found its failure to produce reliable employment data was caused by systemic underinvestment and issues with internal strategy and culture. The continued “instability” in data based on the old labor survey will take time to improve, leaving policymakers and investors without a clear picture of the UK labor market.

Senior officials including Andrew Bailey, governor of the BoE, have warned that gaps in UK jobs data will make it harder to set monetary policy. Bailey emphasized his frustration in his Mansion House speech in November, warning that it was a “substantial problem – and not just for monetary policy – when we don’t know how many people participate in the economy”.

The ONS has been working for the past year to increase the number of respondents to the survey – the main source of information on the state of the UK labor market. A immersed in the answer during the pandemic forced him first to suspect the data based on the labor force survey, then to badge as “developing statistics”.

Hillier said the Treasury committee could call on Sir Ian Diamond, the national statistician who oversees the ONS, to discuss the situation. “We were quite taken aback by the letter saying, actually, ‘we won’t settle until 2027,'” he said.

In his letter to the Treasury committee, Diamond said he could not set a firm timetable for moving to the “transformed” labor force survey (TLFS), although he added that his “ambition ” was for 2026 rather than 2027.

Although MPs want to question Diamond, Hillier said that “beating him in public is not what we are looking for, but how do we have a solution to this now – because this is going to be a big problem”.

The difficulties made it harder to assess issues such as the UK’s lackluster growth, he said. “Politicians are flying blind and this is causing real problems – we have productivity challenges (and) we don’t understand what’s going on.”

There were wider questions about public bodies and their ability to modernize their systems given funding constraints, he said.

In his letter, Diamond, who is chief executive of the UK Statistics Authority, spoke of “flatlined core funding, tight budgets and substantial inflationary impacts” following the government’s latest spending review. conservative 2021.

“Operating within our budget in this context has led to difficult priority decisions and the need to deliver efficiencies and cost savings across the organization,” he wrote.

Hillier said: “You’ve seen this with other regulators and other bodies outside the sector – being asked to do more, not given the money to do it.”