Senior Tory urges Treasury to reveal how policies will impact low-paid

Treasury committee chair Andrew Tyrie wants a return to publishing Treasury analysis that shows how policies will impact household incomes

By Josh May

25 Aug 2016

A senior Conservative MP is pressing the Treasury to commit to publishing analysis of how government policies affect different income groups in the UK. 

Andrew Tyrie, the chairman of the powerful cross-party Treasury Committee, said the new government’s commitment to be “driven not by the interests of the privileged few” underlined the need for greater transparency on fiscal policy.

In 2010, George Osborne announced that his Budgets and Autumn Statements would break down the impact of changes to tax, welfare and public spending on ten different household income brackets.

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“There is a clear public interest in understanding how our decisions have affected households, which is why we have accompanied every fiscal event with our ‘Impact on households’ publication,” Osborne said in the foreword to the most recent distributional analysis.

But last year the Treasury switched to a less detailed format which set out by income quintile how much public expenditure is received and how much is paid in taxes.  

Tyrie has now written to new chancellor Philip Hammond, seeking assurance that the new Treasury chief would reverse Osborne's decision, and arguing that the switch in methods had been a "mistake".

"The government's current arrangements for publication of the analysis are inadequate in a number of respects," Tyrie writes, saying that the current format means citizens cannot work out the effect of government policies on household incomes, or the distribution of tax and spending.

Tyrie added: "The new distributional analysis does, of course, provide some information of use but it is manifestly deficient. It should be published alongside the income-based analysis, no instead of it. Any guidance on interpretation and methodoloigcal assumptions can be set out in the accompanying text, as has always been the case."

Commenting on his letter, Tyrie said: “The new prime minister is committing her government to making Britain a country that works ‘not for a privileged few, but for every one of us’. 

“A high level of transparency about the effects of tax and welfare policy on households across the income distribution would seem to be a logical, perhaps essential starting point.”


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