HM Treasury News Release

175/98                               23 October 1998
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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



# = pounds sterling