Mr. Pádraig Dalton:

I thank the Chairperson and the committee for inviting the Central Statistics Office here today. I am accompanied by my colleagues, Ms Jennifer Banim, Mr. Joe Treacy, Ms Orla McCarthy and Ms Tara Davis.

The draft Regulation on European business statistics, amending Regulation No. 184/2005 and repealing ten legal acts in the field of business statistics is part of the Renewable Energy Feed In Tariff, REFIT, programme. It is the European Commission's regulatory fitness and performance programme for making EU law simpler and reducing unnecessary regulatory costs. Business statistics has been identified as a priority area under the REFIT programme. The draft regulation is known by the acronym FRIBS which stands for framework regulation integrating business statistics. The draft regulation envisages the integration of statistical requirements and legal acts for business statistics by streamlining and simplifying them, leading to an intended reduction of the reporting burden on businesses. The current system for producing European business statistics is fragmented into separate domain specific regulations, which leads to inconsistencies in the data collected and inefficiencies in their production. FRIBS will provide a common legal framework for the production and compilation of business statistics for the European Statistical System.

The CSO can support the broader aims of the proposal, particularly relating to the rationalisation of the relevant legislation and the focus on burden reduction for respondents. However, the CSO is extremely concerned about an aspect of the regulation that makes a provision for the mandatory exchange of confidential identifiable enterprise level data between national statistics authorities. In the context of trade data compilers, that can include national central banks and national customs offices in the EU while usage is optional. The inclusion of an "optional usage" clause is a pragmatic decision that reflects the reality that the asymmetries in trade data are significant. In other words, exports captured by country A to country B do not match import data of country B from country A. It is anticipated, for at least the medium term, that the collection of both export and import data will be required to ensure quality hence the optional usage clause. This provision would involve the CSO in having to share sensitive, commercial information such as exports of a particular multinational with a statistical authority of another EU member state. The essence and ultimate goal of this aspect of the proposal is that trade data compilers would eventually only collect data on the export side and that the amalgamation of the exports from the other 27 member states would provide the import data for any given country. In this environment compilers of trade data would be dependent on 27 other statistical organisations spread across the EU. The rationale being put forward for this initiative revolves around burden reduction and quality improvement, especially in a globalisation context. The CSO does not believe that the proposal will address either of these objectives in a meaningful way.

On the burden side, the provisions set out that while the exchange of identifiable enterprise level data on exports is mandatory the usage, by individual member states, is voluntary. It is widely accepted that in the medium term most member states will continue to collect both export and import data. The overall burden on exporters will be increased in the medium-term under this proposal, as the VAT number of the counterpart to the transaction, that is the VAT number of the importer in the trading country, will need to be supplied by the exporter to allow for meaningful use of the exchanged data. The burden issue, therefore, can and will only be addressed if member states stop collecting the import data.

Aside from the burden issues outlined, the mandatory exchange of identifiable and confidential micro data could seriously impede the CSO's ability to collect important commercially sensitive data from the large multinationals that are so critical to compiling Ireland’s economic statistics, including the national accounts. The guarantee of confidentiality that the CSO provides to respondents is critical to building trust and ensures that enterprises feel secure in providing accurate information on a timely basis. The CSO's view is that this regulation poses a serious risk to the relationship with respondents and may compromise the CSO's ability to compile accurate business and economic statistics. In the CSO's engagement with stakeholders, IBEC and a number of Irish-based multinationals have expressed concerns about the proposals.

In addition, the CSO has concerns about quality. One of the arguments put forward by the Commission relates to the need to share data to get a better insight on globalisation. In Ireland, to take account of our highly globalised economy, the CSO co-ordinates the collection of all enterprise-based statistics. For example, structural business statistics, short-term statistical returns, trade data, balance of payments data and corporation tax data. All of this work is done through one unit called the large cases unit to ensure consistency at enterprise or company level across the various statistical domains. This approach of having a dedicated large cases unit is the exception across Europe rather than the norm. In the absence of such a co-ordinated approach, and timely access to all of the relevant data sources, including on exported and imported goods, it would be difficult to compile data that is nationally consistent across these domains. It is the CSO's view that in the absence of a co-ordinated approach the quality of the data being shared across member states could be of limited use.