Treasury hints at return of analysis revealing Budget winners and losers

Treasury minister says government is "very seriously" considering bringing back detailed publication of impact of policies on the low-paid, as Treasury committee member tells CSW that George Osborne's decision to axe analysis was a blow for "public transparency and parliamentary scrutiny"

By Matt Foster

07 Sep 2016

The Treasury has signaled that it may once again start publishing a detailed breakdown of how decisions made at the Budget impact on different income groups, after the move was scrapped by George Osborne.

In 2010, Osborne – the then-chancellor – announced that his Budgets and Autumn Statements would be accompanied by a full distributional analysis, revealing the impact of changes to tax, welfare and public spending on ten different household income brackets.

At the time he hailed it as the "most comprehensive and robust assessment available” and a step forward for transparency in fiscal policy. However, in the wake of last year's general election the Treasury switched to a less detailed format, instead setting out by income quintile how much public expenditure is received and how much is paid in taxes.

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Anti-poverty campaigners criticised the move as allowing the finance ministry to duck scrutiny of its decisions, and organisations including the independent Institute for Fiscal Studies have instead been forced to run their own analysis on the impact of policies on the poorest and wealthiest households.

Andrew Tyrie (pictured), the Conservative chair of the Treasury select committee, last week wrote to Osborne's successor, Philip Hammond, urging him to reinstate the analysis in light of new prime minister Theresa May's stated commitment to make Britain "a country that works for everyone".

Tyrie said: "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."

Meanwhile fellow Labour Treasury committee members Wes Streeting and Rachel Reeves took to this week to say such a move would "help concentrate the minds of ministers and civil servants" ahead of May's first Budget, and said the decision to withhold the information was "a political choice, not practical judgement".

Treasury minister Jane Ellison was pressed on the fate of the analysis in the House of Commons on Tuesday, as Streeting and Reeves tabled an amendment to the Finance Bill which would effectively reinstate the publication.

"The government have received representations on this matter, not just from opposition members but from my right honourable friend the member for Chichester, on behalf of his committee," she said.

"We will consider the appropriate format of documents to be published at future fiscal events at a time closer to the date of the autumn statement."

Questioned further by Tyrie, who said he would not vote for the Labour amendment "on the understanding that the chancellor really is considering reinstating the arrangements that had been in operation for the preceding five years", Ellison said the Treasury took his concerns "very seriously".

"As I said earlier and as has been confirmed in an exchange of letters between my right honourable friend and the chancellor, we will consider the issue at future fiscal events closer to the date of the Autumn Statement. I may be able to write to my right honourable friend with further information, but that is what I am able to say at the moment."

Streeting subsequently withdrew his amendment saying he wanted to give Hammond "time to reflect" on the reintroduction of proper distributional analysis – but said the committee would continue to keep up the pressure on the finance ministry.

Speaking after the debate, the Labour MP told Civil Service World: "I'm glad that the chancellor is looking seriously at re-introducing the distributional analysis of the Budget following strong representations made by the Treasury Committee.

"George Osborne's decision to discontinue the practice of publishing a thorough analysis of Budget winners and losers was a serious mistake – undermining public transparency and parliamentary scrutiny. We'll give the new chancellor an opportunity to reflect on the issue, but if there is no movement on this it is an issue that we'll return to in the Treasury Committee and on the floor of the House of Commons."

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