Yesterday the Prime Minister not only confirmed his intention to spend £700m on marriage tax breaks that most married people won’t get, but also said that he wanted to go even further.
As reported in the Mirror, David Cameron said:
“I believe in marriage, I believe marriage should be recognised in the tax system. I see this as yes, a start of something I would like to extend further,”
There’s no evidence that marriage tax breaks will encourage couples to marry or stay married (or that we a Government should encourage people to marry) and it discriminates against married couples who both work, separated and single parents, widows and widowers and couples who cohabit. Only one in five families with children will get the tax breaks.
Don’t Judge My Family has just published our advent calendar and report “Help don’t judge: 24 better ideas than a marriage tax allowance” which suggests better ideas for spending £700m which would help all families: investing in childcare for all, reversing £430m Sure Start cuts, halting the plans to reduce payments to newly widowed parents and providing free relationship counselling for all couples that need help.
However it seems that the Prime Minister instead wants to spend £700m of public money on what he himself has called a “signal”.
At Don’t Judge My Family, the campaign against marriage tax breaks, we don’t believe that the government should be using £700m of taxpayers’ money to judge one type of family over another. We think in these tough times, the government should be helping families not judging them. So over the summer we launched our call for evidence and asked you how you’d better spend the £700m currently earmarked for marriage tax breaks. We got hundreds of great responses – thank you! We’ve turned the 24 most popular ideas into an advent calendar, and there’s a also a full report.
We hope you’ll click every day to see your better ideas, tell others and then tell us your even better ideas by email, twitter @dontjudgemy using the hashtag #helpdontjudge or facebook
Despite these many useful alternatives we’re giving the Government, we still expect that on Thursday the Chancellor will (again) announce he is going ahead with marriage tax breaks in the autumn statement. This means that there will probably be a vote on it in the House of Commons early next year.
We believe the marriage tax allowance wastes £700m of public money to promote a fantasy 1950s family- one with a “breadwinner” and a “homemaker”. It discriminates against working parents, widows and widowers, single parents and people who chose not to marry. And we’ll carry on campaigning until the Government reverses the marriage tax allowance and spends the money helping families, not judging them.
In the meantime, happy advent!
An independent Scotland would scrap the Marriage Tax Allowance, according to the Scottish National Party. Amongst a host of commitments should the Scottish people vote for independence today’s white paper on Scotland’s Future promised that the Marriage Tax Allowance would be dropped.
We’ve never believed that marriage tax breaks will encourage any couple to stay together. But two reports this week make us wonder whether they might actually lead to an acrimonious split within the Government.
An article in the Telegraph contrasts and compares the Prime Minister’s instinctive support for marriage tax breaks, stating that “his proposal to offer a tax break to married couples projects his personal vision of Conservatism”, while describing how the Chancellor ”loathes” the idea; “He is not a social conservative and hates the notion of bribing anyone down the aisle.
Meanwhile the Evening Standard and Huffington Post carry interviews with Liberal Democrat MP Nick Harvey. He’s criticising Nick Clegg for wasting millions of pounds in a deal with the Tories over married couples tax allowance and free school meals. Nick Harvey described his reaction to Nick Clegg announcing free school meals for all infants:
“It seemed to be part of some coalition deal where it was meant to make the Lib Dems feel better about allowing the Tories to progress their wretched married couples tax allowance. I am supposed to rejoice at this other policy that seems to me to be squandering a lot of money”.
The coalition agreement allowed Lib Dems to abstain from a vote on marriage tax breaks. That agreement looked likely to break down this summer until reinforced with a one-for-you (free school meals) and-for-us (marriage tax breaks) deal announced at conference.
We’re of course really pleased to hear Nick Harvey willing to speak out against £700m being spent on marriage tax breaks. And we’d really like to hear George Osborne do the same – and perhaps he could also tell us what he’d prefer to spend the money on instead…
The Institute for Fiscal Studies (IFS) have released the findings of their detailed study on cohabitation, marriage, relationship stability and child outcomes. Contrary to reporting in the Daily Mail and in a blow to David Cameron and the marriage tax allowance they find that there is no justification for policies to encourage marriage. The IFS conclude: “Overall, our findings suggest that the differences in relationship stability between cohabiting and married parents, and the cognitive and non-cognitive skills and behaviours of their children, mainly or entirely reflect the fact that different types of people choose to get married (the selection effect), rather than that marriage has a direct positive causal effect on relationship stability or children’s outcomes. On the basis of this evidence, therefore, there does not seem to be a strong rationale for policies that seek to encourage couples to get married, at least not if the aim is to increase these measures of relationship stability or child development.”
The full report is available from http://www.ifs.org.uk/publications/6908
Grandparents Plus has responded to Don’t Judge My Family’s call for evidence to say that they believe “it is deeply unfair that many children living with wider family members because they can’t live with parents will lose out on the new tax break for married couples”.
Sarah Wellard from Grandparents Plus continued: “There are up to 300,000 children in the UK living with grandparents, older brothers and sisters, aunts, uncles and other family members because they can’t live with their parents. Most are with their kinship carer because of serious family problems like parental drug or alcohol misuse, death, serious illness or disability, domestic violence or imprisonment. Many kinship carers struggle financially because no one plans to bring up someone else’s child, and they often have to give up work to settle children who are traumatised by what has happened in their family. Some are pensioners trying to get by on a pension, others are older brothers and sisters who put their own lives on hold to look after their siblings.
“Around 40% of kinship carers are bringing up children alone – they may be widowed, divorced or they may be single and have never been married. It is completely wrong that they should penalised because they are not married.
“Instead, we believe if the Government has money to spend on families this would be much better used to provide financial and practical support for kinship carers who have done the right thing and stepped in to bring up a vulnerable child and keep them out of care. For example, it would cost £550 million to provide every kinship care family with an allowance of £2,750 a year to help with the extra costs of bringing up a child. Alternatively, the money could be spent on providing kinship carers with the equivalent of adoption leave so they don’t have to leave work when they give a child a permanent home.”
Grandparents Plus were responding to a call for evidence by Don’t Judge My Family, the campaign against the marriage tax allowance. They are calling for evidence from organisations and individuals to find alternative uses for the funds earmarked for a marriage tax allowance. How should the Government use £550m a year to support families, sustain relationships or give children the best start in life?
At PMQ today the Prime Minister stated that the marriage tax allowance was “available to every basic rate tax payer“.
Despite spending £700m on marriage tax allowances, the Prime Minister didn’t seem to understand his own policy.
Only married couples (or people in civil partnerships) that have a basic rate income tax payer and a non tax payer would benefit – that’s less than a third of all married couples and just 1.4 million married couples with children.
Married couples who both pay basic rate tax or both don’t earn enough to pay tax won’t benefit. So a married couple who both work full time on the minimum wage wouldn’t get any help.
The marriage tax allowance won’t help the many families who need it the most including single parents, widows and widowers, cohabiting parents and working married parents.
Even proponents of the marriage tax allowance accept it won’t encourage people to marry or stay married. Maybe the details aren’t that important as it’s actually an expensive signal rather than a genuine attempt to help families.
We think the the Government should be spending £700m to help families, not judging them. If you have any better ideas on spending £700m please let us know.
WAY Widowed And Young, the national charity supporting young widowed men and women, has responded to Don’t Judge My Family’s call for evidence to say that they are “very disappointed that the government is introducing tax breaks for married couples at the same time as it is planning to cut benefits for those who are widowed with children.”
Georgia Elms, WAY Chairman, continued “Widowed parents, through no fault of their own, can no longer enjoy the benefits of a traditional married life and will not be eligible for the marriage tax allowance as currently envisaged.
“At the same time the Government is introducing changes to the financial assistance received by widowed parents. The Childhood Bereavement Network estimate that 90% of new claimants would be worse off under the proposed new scheme and those with younger children will be particularly badly affected. These changes will further disadvantage affected families leading to an often unplanned return to full-time work with consequences for the care and upbringing of bereaved children.
“We believe that the Government should use the funds earmarked for the marriage tax allowance to amend their proposals for Bereavement Support Payments to bring about a system that is simple for families to understand and underpins the crucial support they provide to their grieving children.”
WAY Widowed and Young were responding to a call for evidence by Don’t Judge My Family, the campaign against the marriage tax allowance. They are calling for evidence from organisations and individuals to find alternative uses for the funds earmarked for a marriage tax allowance. How should the Government use £700m a year to support families, sustain relationships or give children the best start in life?
More information on the call for evidence is available here. The deadline for responses is Friday 18th October 2013. You can tweet us @dontjudgemy or by using the hashtag #helpdontjudge
Nick Clegg has sent a “letter from the leader” to Liberal Democrat members asking them who is right over free school meals and marriage tax breaks. Members are asked to add their names to a petition which tells David Cameron that his priorities are wrong.
We agree with Nick Clegg’s sentiment but don’t understand how he can vocally oppose the marriage tax allowance while asking his MPs to abstain on a vote which will lead to them being introduced.
There’s also a great article in today’s Liberal Democrat Voice by Lib Dem member Laura Willoughby. She argues that money spent on the marriage tax allowance (£700m) could be better spent providing more school meals for more children (the current proposals are for free school meals for 5-7 year olds).
Laura demonstrates the opposition felt by Lib Dems as expressed in an uncontested conference motion:
“the proposed marriage tax allowance, that would give certain types of married couples a tax break, is discriminatory, unnecessary and expensive . Conference therefore resolves to oppose and repeal the proposed marriage tax allowance at the earliest opportunity.”
Laura concludes by asking colleagues in Westminster to “stand strong”.
We couldn’t agree more.
The Prime Minister’s marriage tax allowance announcement has been judged by the well respected and independent Institute of Fiscal Studies and has been found wanting.
The IFS calculated that it would cost £700m a year to provide £200 a year for 3.9m qualifying couples (that’s less than a third of all married couples/civil partnerships). It will only go to 1.4m married couples with children.
The IFS notes that the tax breaks will go to families in the middle or lower-middle of the income distribution (rather than those on the lowest incomes) and that the policy is clearly not a “general recognition of marriage in the income tax system” as it is only paid to much less than a third of all married couples.
So most married couples won’t get the marriage tax allowance, most families with children won’t get the marriage tax allowance and married couples on the lowest incomes won’t get the marriage tax allowance. Which begs the question – who is the marriage tax allowance for?
There is also a note that this very much complicates the income tax system: “it is difficult to escape the conclusion that an income tax system which makes some people worse off after a pay rise has something wrong with it.”. And it concludes that an easier way to help low- and middle- income married couples would be to include a higher work allowance in Universal Credit.
(these figures have been been changed since we originally posted this in response to the changes the IFS made to their figures)