Autumn Statement Distributional Analysis, Universal Credit and ESA

Jim Cunningham Excerpts

Wednesday 16th November 2016 Commons Chamber

[Jenny Chapman]

That is right. People want clarity. What everyone wants is for work to pay and for people to be better off in work than out of work, but that is not what we are going to get.

The Government used to be very keen on having a full and detailed distributional analysis, and I have with me the introduction to the one they published in 2012. They said then:

“The Government has taken unprecedented steps to increase transparency and enable effective scrutiny of policy making by publishing detailed distributional analysis of the impact of its reforms on households.”

It was a very good thing that the Government, and the right hon. Member for Tatton (Mr Osborne), did then. The right hon. Gentleman went on to say:

“The analysis shows average impacts due to policy changes over time across the income and expenditure distributions by decile”.

I hope that, at the end of the debate, Ministers will commit themselves to publishing the information by decile, so that we can scrutinise it properly and challenge the Government on what they are about to reveal. That is not just my view. The Tory Chair of the Treasury Committee agrees, because he knows that if he is do his job effectively the information must be published and available to everyone, including the public. This matters: the distributional analysis should reveal the impact of tax, welfare and public spending changes on 10 household income brackets, but the Government want to halve the amount of detail and cover just five brackets.

I was pleased when the Conservatives chose this new Prime Minister, given the choices that they had, and I was pleased when she said that she wanted this to be

“a country that works for everyone”.

Don’t we all? But how can we know whether the Prime Minister is true to her word if she does not proceed to publish the information that we need to test the assertion by which she herself asked to be judged? Unless she does so, we cannot test that claim.

This leads us to ask ourselves what the Government are attempting to hide. What the Minister said sounded incredibly positive, and there were many measures that he said we ought to be welcoming. If that is true—if he is right and Opposition Front Benchers are wrong—he should publish the information, so that we can test him on his claims. Go on, let us see it!

I suspect that the picture is not quite as rosy as the Minister suggested. Perhaps it is the £1,500 a year to be taken from disabled people that he is trying to conceal, but it could be any number of the measures that he has in mind. The Resolution Foundation has estimated that the poorest 50% of households will be £375 worse off on average by 2020-21, while the other half will be £235 better off. We need this information to be published before every Budget and every autumn statement, so that we can compare the impact of the different measures. I want to be able to see what is going to happen next week and compare it with what happened three years ago.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend is making a marvellous speech. Does she agree that we can safely conclude that someone is going to lose out somewhere when the Government speak about their proposals in such glowing terms?

[Jenny Chapman]

My hon. Friend has far more experience of scrutinising Conservative Governments than I have, and I suspect that he may be right.

According to the Institute for Fiscal Studies, the effect of all the tax and benefit changes in last year’s autumn statement would mean losses about 25 times larger for those in the bottom decile than for those in the top decile. If the IFS is wrong, let the Government publish the information so that the Minister can back up the claim that he has made today. The IFS also says that average earnings have been revised down in every year of the forecast, as has real household disposable income.

We want to know exactly what the country is in for. On 23 June, we made a decision to leave the European Union, and what that has done—or part of what it has done—is unleash a huge amount of uncertainty on the country, on business and on decision makers. One thing that the Government could do to ease some of that uncertainty is publish all the information that we need to determine where we are and track the direction in which the Government are taking us.

According to the IFS, nearly half a million children will be plunged into absolute poverty by 2020

“as a result of planned tax and benefit reforms”

in the March Budget. The IFS says that an additional 500,000 people—including 400,000 children—will be in relative poverty because of tax and benefit overhauls. That paints a very different picture from the one presented by the Minister. Unless he is prepared to publish a proper distributional analysis, we shall be forced to conclude that he is, for some reason, trying—his attempt will fail—to conceal the impact of some of the measures that he has in mind. I hope that he will resist that urge and commit himself to publishing a proper analysis with 10 deciles, so that we can see what is happening, make comparisons over time, and challenge and scrutinise the Government effectively.