George Osborne is facing a formal investigation by the equalities watchdog to establish whether the Treasury fulfilled its statutory duty to assess the impact of the spending review on women, disabled and ethnic minority people.

Labour said the chancellor had "something to hide" after the Equality and Human Rights Commission announced today that it would launch a formal assessment into the Treasury's conduct prior to the spending review last month.

In a statement the watchdog said: "Under the public sector equality duties, covering race, gender and disability, the Treasury, like all public bodies, has a legal duty to pay 'due regard' to equality and consider any disproportionate impact on protected groups when making decisions, including decisions about the budget. Where decisions are found to have a disproportionate impact on a particular group protected by the legislation, public bodies must consider what actions can be taken to avoid, mitigate or justify that impact."