Tory marriage tax break back on the table, says Cameron

From the Telegraph:

The Prime Minister categorically said he will recognise marriage in the UK tax system within the next two years after receiving heavy criticism for his failure to assist traditional British families.

Speaking in Carlisle, where he was answering questions from workers at a Pirelli factory, Mr Cameron piled pressure on the Liberal Democrats to allow the policy to pass through Parliament.

Asked whether he still has plans to recognise marriage in the tax system the Prime Minister said: “Yes I do, we set them out at the last election in the Conservative manifesto. The Coalition agreement specifically said that while the Liberal Democrats don’t agree with them they would abstain if we promoted them and that’s exactly what we’ll do before the end of this Parliament.”

There have been reports that Mr Cameron could be preparing to introduce the measures in Autumn of this year. However, when asked whether the policy could come into force within the next 12 months, the Prime Minister simply said: “It will be before the end of this Parliament.”

The very idea of forcing the unmarried to pay higher taxes, or to lumber a family where one spouse has left to marry someone else with a bigger bill, is not popular, to say the least, with Liberal Democrats.

However, if the Tories are insistent in pushing ahead with this, is there anything we can do about it?

Unlike secret courts and the NHS bill, this was there, in plain sight, in the Coalition Agreement:

We will also ensure that provision is made for Liberal Democrat MPs to abstain on budget resolutions to introduce transferable tax allowances for married couples without prejudice to the coalition agreement.

That Coalition Agreement was passed overwhelmingly by the Special Conference immediately following the election.

If it is put to the vote in the Commons, and we take no part, the Conservatives (assuming the DUP votes with them), would have a majority of 38. If all our backbenchers defied the whip, and voted against, that still wouldn’t bridge that gap and defeat the measure.

We may be bound by the Coalition Agreement, but that doesn’t mean that we should be quiet about the general silliness of the marriage tax break idea. I hope that we will hear our senior figures give it the ridicule and contempt it deserves if, as seems likely,  the Tories try to push ahead with it.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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38 Comments

  • Would this move be wholly popular with Tory backbenchers if ALL married couples got the tax break. Cameron hasn’t said this will be just for heterosexual marriages and it would be discriminatory if it didn’t also apply to same sex marriage. I could almost go for this if it cemented the same sex marriage plans with tax breaks!

  • Andrew Suffield 27th Apr '13 - 11:50am

    Agreeing to abstain on the final vote would not prevent MPs from voting on amendments to do things like this.

  • Peter Davies 27th Apr '13 - 12:54pm

    Mr Cameron has specifically said it would apply to both homosexual marriage and civil partnerships (and no, not all his backbenchers were pleased).

  • Peter Davies 27th Apr '13 - 1:07pm

    I would like to try for one amendment:
    It should be available to anybody defined as ‘living together as man and wife’ by the benefits system. These people (along with those in a formal union) lose two sets of benefits where one partner works but only receive one personal allowance. Giving them two tax allowances to compensate for the loss of two sets of benefits is ending current discrimination not introducing it. It just needs to be separated from the Tory rhetoric which portrays it as some sort of reward for a traditional lifestyle.

  • It’ll be interesting to see whether it is really a tax incentive to be married, or a tax incentive for one member of the couple not to go to work? A transferable tax allowance does nothing for the marriage of two -earner households, does it?

  • tony dawson 27th Apr '13 - 4:09pm

    I cannot really see how we can oppose transferable tax allowances. But that is not a tax incentive ‘for marriage’ at all. It is a tax concession to recognise that how couples (married or not) address their child rearing responsibilities between them is their business and no one else’s. Personally, I would only allow transferability where there are children of junior school age in a family.

  • Helen Tedcastle 27th Apr '13 - 7:12pm

    Funny how those Liberal Democrats who advocate Gay marriage, stipulating that marriage is generally a social good that all should enjoy regardless of orientation but when it comes to helping married couples financially, those same advocates think that silly.

  • @Helen: We do not think it is silly, we think it is grossly unfair and immoral. We have nothing against people wishing to get married, but it is not the state’s job to financially force people into marriage. Seriously, how any Liberal can justify this as a principle is beyond me.

    Basically, implementing this creates a system where those who choose not to get married are then classed as second class citizens.

    This is therefore not about helping married people because why do married people deserve/need the assistance anymore than any other couple. This is about the state actively enforcing a way of living/lifestyle upon its citizens; that should be completely abhorrent to any Liberal.

  • Helen Tedcastle 27th Apr '13 - 8:46pm

    @ LiberalAl: I’m quoting from Caron Lindsay’s article: ” We may be bound by the Coalition Agreement, but that doesn’t mean that we should be quiet about the general silliness of the marriage tax break idea.”

    The reason I used the word ‘silly’ was to echo Caron’s comment. My point was actually as I saw it about how one views marriage – if marriage is an over-arching social good, such that all people regardless of previous social norms require access to it, then why not be consistent and support the institution in the tax system. Surely, for consistency of the general principle of the virtue for society of marriage, advocated by Lynne Featherstone et al, the Lib Dems should support tax breaks for this institution.

    We can argue about the relative merits of tax breaks but my point is slightly different.

  • Helen’s point is sound, although I favour absolute equality for all -ie no tax breaks for anyone on the basis of their partnership status. Indeed, if there were a pro-planet stance it would see society reward those who choose not to procreate, married, aprtnered or otherwise.

  • Helen, the support for equal marriage is about not favouring heterosexuals over same-sex couples. The opposition to tax breaks for married couples is about not favouring married couples (heterosexual or same sex) over unmarried couples.

  • “if marriage is an over-arching social good”

    One: That is a big ‘if’.

    Two: It is not the job of the state to use its position of power to financially or forcefully impose morality upon its citizens. This is especially abhorrent because it is not just forcing marriage upon its citizens, it is also trying to force the view of one home-keeper, one bread-winner on to them, as well.

  • Helen Tedcastle 27th Apr '13 - 10:00pm

    @ Phyllis: I understand that point but I’m questioning the consistency of the principle that was advocated by our spokespeople and others – marriage is a great institution, a social good and we want as many people to get married to do so etc… etc.. why not favour it over a less socially desirable unit?

    Surely, one cannot argue consistently for the good of the institution of marriage to the point of widening its definition and not favour it in other ways?

  • Helen Tedcastle 27th Apr '13 - 10:16pm

    @Liberal Al: ” It is not the job of the state to use its position of power to financially or forcefully impose morality upon its citizens”

    It depends on the morality – I cannot see how questions of social good over social harm can be excluded with institutions like marriage. The reason the state is involved with marriage is because of the vested interest the state has in the family unit.

    I’m not sure what is meant by forcing marriage on its citizens. I’m not arguing primarily on the rightness of the Tory policy on tax breaks I am simply questioning the consistency of the Lib Dem position.

  • @Peter Davies: No it should ONLY be available to those couples who have formalised their arrangements through marriage – as it is defined today. This simple measure keeps the rules of entitlement simple and facilitates fraud detection.

    The “living together as man and wife” policy problem, was a creation of the discrimination in the benefits system against married couples. Because of this discrimination, a policy was needed to make co-habitation less financially attractive…

    However, I agree it does need to be separated from the “traditional lifestyle” rhetoric, as this simply devalues marriage as something we do for the sake of history rather than as something that is beneficial to Society and the State moving forward.

  • @Matt “A transferable tax allowance does nothing for the marriage of two -earner households, does it?”

    A transferable tax allowance is of benefit to those couples where the two parties are paying different headline rates of income tax and where the removal of allowance from the one with the lower rate, would not cause them to pay tax at the same rate as the one with the higher rate.

    Hence the transferable allowance is of maximum value to those couples where one is either not working or in part-time work and the other paying higher rate income tax. I suspect that because this is the situation in many households the government would be worried about the potential loss of tax revenues. Also there would be many households where both parties earn similar and hence the transferable tax allowance would have little value.

    So we can see that this policy (transferable tax allowance) presents many opportunities for negative press, because even though it could benefit many households, there will be many that wouldn’t.

  • Eddie Sammon 28th Apr '13 - 1:48am

    This is an awful and highly discriminatory policy. For obvious reasons.

  • Peter Davies 28th Apr '13 - 11:38am

    @Roland
    As far as I can tell, only the unused part of the allowance would be transferable so there would be no tax break for couples with one standard and one higher rate tax-payer (if Tories are not proposing this then we should insist). You could be right that the big winners would be those with one earner paying top rate. If so, we could probably get an amendment saying that the level at which higher rate starts should be absolute, not relative to the personal allowance(s).

  • Michael Parsons 28th Apr '13 - 12:40pm

    I write as a LibDem member. I thought that tax-breaks for married men were introduced as a compensation for having a wife and rearing children, especially at a time of low birth-rate (as in Augustinian Rome when they were introduced, and now in modern UK – when child-allowances were also introduced after the Royal Commission on Population [Henderson was the economist] after the last War.

    The 2nd century BC speech by censor Quintus Metellus, said that although men may not relish the idea of marriage, it was a necessity nonetheless:
    ‘If we could survive without a wife, citizens of Rome, all of us would do without that nuisance; but since nature has so decreed that we cannot manage comfortably with them, nor live in any way without them, we must plan for our lasting preservation rather than for our temporary pleasure.’ And this was quoted by Imp. Augustus in his law relating to these matters and his tightening up on ‘loose living’ when he introduced tax-breaks against bachelors.

    It has nothing to do with “imposing certain lifestyles” but is seen as a matter of aiding those who chose to bear such costs. It would seem perfectly reasonable to do this by strictly registering responsibilities for women and children; which could extend to those who employ widows and widowers in recognition of their burdens: from each according to his means to each according to his/her needs and duties, which I would accept as a Liberal too.

    In our discussion the opposition comes from anti-natalists: so John wrote he opposed tax-breaks “Indeed, if there were a pro-planet stance it would see society reward those who choose not to procreate, married, partnered or otherwise”. Which would seem to lend support to the view that ‘middle-class liberalism’ is anti-people, and also fails to address the problems raised by the demographic dwarfing of Europe and its ageing population.

    I think we need to take account of more than newspaper-talk in this discussion, not least as our Abortion Act has resulted on the removal of some 8 million viable conceptions.

  • Peter Davies 28th Apr '13 - 1:01pm

    @Michael
    Even some Tories have got past the point of regarding women primarily as an allowable expense.

  • Andrew Colman 28th Apr '13 - 2:37pm

    Disagree fundementally with the idea of tax subsidy for marriage. People should get married because they want to be together, not in order to take advantage of some tax break. Rarely a day goes by when we don’t witness the results of failed families where parents have failed in their duty to bring up their children to be civilised human beings. Add to this the long term damage being done to the planet through overpopulation. No way should the government be encouraging people to have kids. Off course if couples really want kids and are prepared to make the necessary sacrifices, then they should go ahead .

    However I disagree even more with subsidizing childcare, which is discouraging parents to spend time with their children, subsiidising low wages and based on mickey mouse economics. If I had to choose, I would support transferable tax allowances over child care , but partcularly in a time of austerity, I support neither

  • Andrew Colman 28th Apr '13 - 2:48pm

    To those arguing “we need more kids because there are too many old people”. This is a nonsense argument. All it does is pass the problem on to the next generation. The problem just gets worse and worse until some chatasptrophic event eg exhaustion of oil resources brings everything creashing down. If we should lean anything from the 2008 crash which was triggered by an to oil price spike, it was this.

    This is not an anti people argument as some are suggesting, its just common sense

  • Eddie Sammon 28th Apr '13 - 5:10pm

    I can’t believe we have people actually in favour of tax breaks for couples. So if someone is suffering from domestic abuse and they leave the relationship, they will be penalised???

  • Helen Tedcastle 28th Apr '13 - 5:48pm

    @ Michael Parsons. Your comment is the most interesting one on this thread by far. I do think some in our Party would prefer it if everyone was exactly the same , living in some kind of neutralised, anaesthetised society where tricky issues no longer exist. Although I do not see things entirely the same as you – that women are a necessary expense for husbands – I think the large numbers of women working (although many are now redundant thanks to Osborne) means that sometimes women might find themselves thinking husbands are a necessary expense!

    The main point is that marriage is a overwhelming social good because of the stability is affords to child-rearing and represents the basic family unit – it’s not just a private commitment for private citizens, as some think.

  • Peter Davies 28th Apr '13 - 7:01pm

    @Eddie
    No. If they separated, the non-working partner would receive some benefit (jobseekers’ allowance or in future universal credit) which would be worth more than the tax allowance. However this change works, there will still be discrimination against couples where only one works.

  • Helen “Surely, one cannot argue consistently for the good of the institution of marriage to the point of widening its definition and not favour it in other ways”

    Erm, why not? I don’t see any inconsistency here at all and I don’t think it’s relevant to re-visit the equal marriage debate.. This is about tax breaks for married couples, of whatever sexual orientation.

  • @Peter Davies (28th Apr ’13 – 11:38am):
    >only the unused part of the allowance would be transferable
    Lets hope not, not only would such an approach would be stupid and hardly worth MP’s time debating the measure, it would be complex to administer – even with real-time PAYE data. Far simpler is to remember that we are talking about a tax allowance and not a benefit or tax credit and treat it as such. Hence couples nominate the split upfront, their PAYE tax codes get adjusted and the existing PAYE system handles the rest. If at the end of the tax year things worked out such that a different split would of been more beneficial this can be done through the tax return (or sorry you lost it). Note the simpler approach leaves the taxpayer in charge of their tax affairs, which is the right place for the responsibility to reside.

    Additionally, if only the unused part is transferable, it creates the situation where there is little or no benefit for the low income partner to take any employment that does not result in them earning more than the personal allowance. So the only real beneficaries would be those households where one partner stays at home and is not otherwise employed. Given that currently the stay at home partner is typically a woman, the policy would clearly be discrimitary and hence the LibDems would be correct in opposing the proposal.

    >big winners would be those with one earner paying top rate.
    On the basis of one income earning more than the single persons personal allowance over the HRT threshold the maximum benefit would be £4,000 (from 2014). Whilst not to be sneezed at, I would hardly call this a big winner, particularly as a couple/household with two incomes will in general still be taking home more than a household/couple with a single income subject to HRT. No HRT payers would win big if they could allocate income to their partner…

    >If so, we could probably get an amendment saying that the level at which higher rate starts should be absolute, not relative to the personal allowance(s).
    Stop trying to complicate matters! Keep It Simple! Remember we are talking about a tax allowance, which only impacts the monies the government receives, there is no payout liability as there is with benefits and tax credits. The personal allowance is already phased out where the income is over £100,000, all that is necessary is to add the transferred personall allowance onto the individual’s existing allowance and follow HMRC’s formula…

  • Eddie Sammon 28th Apr '13 - 8:01pm

    Hi Peter, I admit the idea of a transferable personal allowance has some merits – it shows that parents who stay at home are truly valued by the government rather than making out that everyone should hire a carer and have both parents working – I have not liked this at all and I am totally against the government’s childcare tax breaks, as if it is a bad thing to bring up your own children.

    Having read through the thread more, I like the fact you are against the tory motivations for this policy, as a way of simply rewarding people who have traditional values. Overall I think drawing a line between people who can transfer their allowance and those who can’t is wrong.

    Overall, I don’t think marriage should be recognised in the tax system and neither do I think childcare should be either. However I am not as vehemently against a transferable personal allowance as I am against simply a few extra quid for those who are married, even very wealthy people. This seems to be what the Conservatives have been calling for.

  • Michael Parsons 29th Apr '13 - 2:28am

    Well! Some say children should not be “subsidized”, that women are not an “expense” etc.
    Who cares? Any man getting married under current UK legislation would be a fool and suffer accordingly: he places his earnings, pension, property and assets at jeopardy (for example if he comes home early and finds his ‘wife’ devoted to music i.e. in bed with the local jazz band drummer) she may well leave taking with her a large portion of all these things, as well as having the right to deny him fatherhood even without consulting him and certainly without his agreement by ending her pregnancies. Women “breadwinners” no doubt also disadvantaged.
    In a system where people come together through affection and part when affection fails, marriage is a one-way street to disaster.

    Old Metellus had a point: accepting responsibility for children and their mother is a burden men could well do without, though the social consequences may well prove unpleasant. Also the idea that living freely without the accepted obligations of marriage of some sort will reduce births(Andrew Coleman’s point if I tread him aright) seems to me laughable, as the growing number of births outside marriage would suggest. No-one seems to have looked at the Royal Commission’s investigation of effect on couples of the costs of parenthood so far. These are so great that I would advise young men to sow their wild oats and stay fancy-free, as that is the most rational and emotionally safe response at present, given the natural fluctuation of the emotions of sexual attraction (three-years being the peak divorce-decision time). They should live a more fulfilled life devoted to the pursuit of love. This is the opposite of seeing women as a chattel or cost, but rather as an opportunity.

  • Helen Tedcastle 29th Apr '13 - 10:14am

    @ Michael Parsons: I think your view that men should simply sow their wild oats and forget the burden of marriage is rather reckless – the result of cynicism perhaps? I read your first comment to be in support of Marriage as a way of the state supporting those who take on the responsibilities of family life. I support the latter not the former.

    @ Phyllis: I don’t think the Gay Marriage issue is going to go away yet, because there is still opposition on the point of principle to it. However, my main point was questioning the inconsistency of our approach as a Party to the institution of marriage – in the light of the arguments used in the Gay Marriage debate.

    I long to hear politicians on the so-called left make arguments on the basis of a consistent philosophy rather than pragmatics or expediency.

  • Eddie Sammon 29th Apr '13 - 10:36am

    Hi Helen, the argument for gay marriage is about freedom and anti discrimination. Most of the party believe that if a same sex couple want to marry then they should be free to do so. The argument is not about us promoting marriage.

    I really do respect opposing views on marriage, I just thought I would explain that our view is mainly about freeing people from discrimination, rather than promoting marriage as a virtuous institution.

  • @Eddie “The argument is not about us promoting marriage.”
    Sorry to disappoint you, the case for gay marriage did promote marriage! By campaigning for same sex marriage the campaign has had the consequence of promoting marriage as something of value and providing something that cannot be achieved through simply living together as a cohabiting couple.

  • Eddie Sammon 29th Apr '13 - 6:22pm

    OK, but I still don’t think we should be encouraging people to get married for financial reasons; if anything that would devalue marriage.

  • I can’t se the justification for reintroducing the marriage allowance. When tax rates were much higher than they are today, we had a lot of deductions and reliefs. Interest on loans (particularly to buy or improve property) was much more widely tax deductable, life insurance and assurance premiums were relievable, there were child allowances, there was the married persons allowance and unlimited payments into pension funds were also allowable.

    A lot of those reliefs have gone (or been reduced in the case of pension fund contributions )and income tax rates have come down in tandem although national insurance has continued to climb. When the Labour government abolished the marriage allowance in April 2000 they argued it had been replaced by Child tax credit in 2001 that extended tax allowances to single parent families.

  • @Eddie “I still don’t think we should be encouraging people to get married for financial reasons”

    It is fine line between supporting an ‘institution’ that is beneficial to society through a tax concession and providing financial encouragement/bribery. I think Peter Davies almost put his finger on it by calling it a concession, primarily to those marriages where one partner isn’t working and is being supported by the other partner due to them not being able to claim benefits in their own right.

    However, from what has been published todate, the proposals are more about box ticking than actually delivering anything substantive:
    “Spouses not using all of their tax-free personal allowance, either because they stay at home or work part-time and earn less than the threshold for basic rate income tax, were to be able to transfer £750 of their benefit to their working partner. Eligible couples where one partner is not using all the tax-free personal allowance and the other earns up to £44,000 would be up to £150 a year better off.”
    [Source: http://www.dailymail.co.uk/news/article-2315309/Tax-break-married-couples-months-Cameron-ready-defy-Osborne-Clegg-force-policy-through.html ]

  • Eddie Sammon 29th Apr '13 - 11:02pm

    I’m not strongly against a transferable personal allowance. My protests were mainly about bringing something back such as the Married Couple’s Allowance, which is just a higher personal allowance for people who are married.

  • Michael Parsons 1st May '13 - 3:51pm

    Thanks Helen
    Yes it is reckless but my point really is:
    (a) marriage as such is not recognised in English law : contract law the party that5bfaiols to abide by the contract bears the cost; but the “marriage contract” gives compensation to the party who breaks it regardless of the other party having abided by the agreement in full. (so called “no fault” arrangements). Pretending that marriage contracts are binding and fussing about details of the tax and other arrangements, that is true cynicism, and misleading.

    (b) concern for care of children by making their production a binding arrangement for support predates “Christian marriage” by a long chalk, and we should not discuss marriage as if it is just some attempt to impose a life style (especially as it is a bogus contract). If you take the “we don’t need a piece of paper to tell us we are in love” approach you end up in the wild oats situation I caricatured. We do need binding care arrangements, and if we atre not living on communes with collective parenthood these must involve individuals in some way.

    (c) Discussion of this issue ducks the very real problem of the growing cost of parenthood in a non-agricultural economy, tha6t acts as a real deterrent to child-rearing and makes the duties of parenthood intolerable without State recognition and support. Otherwise we face growing child poverty ( as on UK today) or increased failure to reproduce and carry the population forward

    (d) Christian marriage represents a revolutionary challenge to family rights of ownership over daughters, since priests are strictly enjoined to test that agreement is voluntary (as in supporting Romeo and Juliet) and support for it may well be found among women seeking protection from polygamy and from arranged marriages in UK today.

    In short. I am cynical of the way a lot of high-sounding discussion goes on in avoidance of the very fundamental and ancient problems this topic raises. There shpould be far more at stake than gay issues and dislike of Christianity, and over-blown rhetoric about “equality”, as far as a careful Liberal appraisal of marrtiaghe and the child-care is involved, I suggest.

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