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.
David Cameron says he wants to “send a signal” that marriage is better than any other kind of relationship. He intends to do this by giving certain types of married couples a tax break. Sign up to send a signal back – don’t judge my family.
By giving £200 to married couples with a breadwinner and a homemaker, David Cameron is discriminating against:
- the one in four children growing up in a single parent family
- widows and widowers
- people who leave abusive relationships
- working parents
- people who choose not to be married
Sign up now to show David Cameron that his promotion of a fantasy 1950s family has no place in modern Britain.
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?
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)
David Cameron has written in the Daily Mail outlining his plans for married couples tax allowance. We believe great families come in all shapes and sizes and that government has no right to judge how we live our lives.
A couple of points to remember:
* The tax break only goes to around a third of all married couples – those with a breadwinner and a homemaker
* The amount of the personal allowance that can be transferred is £1000. This is worth around £200 a year
* The tax break discriminates against widows and widowers, single parents, the 1 in 4 kids who grow up in a single parent family, couples where neither work, couples where both work, unmarried cohabiting couples…
* Many couples who benefit are actually pensioners, whose children are grown up
“The marriage tax allowance is going to cost over £700m and would give £200 a year to only a third of married couples: those with a breadwinner and a homemaker. It’s a “signal” that the independent Institute of Fiscal Studies says won’t actually help families and that even MPs pushing for it in Parliament admit won’t encourage people to marry or stay married.
It won’t help single parents, widows and widowers, cohabiting couples and married couples who both go out to work. It’s about promoting a fantasy 1950s family and won’t go to many of the families who most need support the most. In these tough times Government should be helping families; not judging them.”
Don’t Judge My Family is holding a call for evidence. We want to know how you would better spend £700m that the marriage tax allowance would cost to support families, sustain relationships or give children the best start in life.
There’s a letter in tomorrow’s telegraph, with some arguing for the marriage tax break to be higher than planned. (It’s already currently due to cost of £600m a year, which is more than the bedroom tax would cost to repeal!)
The marriage tax allowance would go to only a third of married couples, those with a breadwinner and a homemaker. Even MPs in favour of marriage tax breaks admit £150 a year won’t make more people get married or stay married. It’s more about promoting a fantasy fifties family. It would discriminate against single parents, widows and widowers, married couples who both work, and couples who choose not to marry. In these tough times, the government should be helping families not judging them.
Don’t Judge My Family believes the £600m earmarked for tax breaks could be far better spent to help families, relationships and giving kids the best start in life. We have launched a call for evidence to showcase alternative ideas.