The Big Question: Are Tories right to support marriage, and can tax breaks help encourage it?
Wednesday 02 December 2009
Why are we asking this now?
David Cameron set out one of the battle lines for the coming general election yesterday when he accused the Labour government of a "pathological" opposition to "celebrating" and "encouraging" marriage. This raging argument is more technical than it may sound. The leaders of both main parties agree that it is better generally if children grow up in 'nuclear' families made of Mum, Dad and the kids. The issue is whether to tax system should be used to reward Mum and Dad for being married, and conversely to penalise them if they are not.
What are the Conservatives proposing?
David Cameron has promised "extra support for marriage through the tax system" without saying yet what that support would be. However, when he became Tory leader he set up a commission, chaired by one of his predecessors, Iain Duncan Smith, to report on 'social justice'. They proposed what they called a 'transferable personal allowance' (TPA).
What is a transferable personal allowance?
Under the present rules on tax, anyone in paid employment is entitled to a personal allowance of £6,475, in the current year, which is untaxed. It has also been a principle agreed by both main parties since the 1980s that married couples should be taxed individually, not as a couple with a joint income.
But the Duncan Smith commission suggested that the personal tax allowance should, in effect, become a joint allowance for married couples, so that if one is being paid less than £6,475, the high-earning partner gets a correspondingly higher allowance. A husband whose wife stays at home looking after the children would therefore, on today's figures, pay no tax on the first £12,950 of his annual income, making the household nearly £23 a week better off.
Who would gain?
David Cameron has said that if his party were to introduce the TPA, it will apply to all married couples and all couples in civic partnerships. It will not, as some have supposed, be limited to families with children, or the poor. Wealthy childless couples could benefit from it because, the Duncan Smith commission argued, that would make it easier for one partner to "do voluntary work within the community, look after elderly or disabled members or manage a home in a way that enables partners and families to have more undivided time together." Controversially, it would mean that if a man abandoned his wife to marry his mistress, he would keep his TPA as a married man, but his ex-wife loses hers, unless she remarried.
Is this the Conservatives' way of rewarding 'moral' behaviour?
Neither the Committee who produced the report, nor David Cameron, have passed moral judgement on people who choose not to marry, but they do place a great deal of emphasis on 'family stability', of which they believe that marriage is the surest guarantor. "The Tory policy is that marriage is first class and any other relationship is second class," Cameron told the Daily Mail.
Does marriage actually guarantee family stability?
There is, of course, no guarantee that just because a couple have made their wedding vows they will stay together for life and bring up their children lovingly. But the Conservatives argue that they are more likely to. Despite all we hear about the 'broken society' the divorce rate has actually dropped recently back to the sort of level it was more than a quarter of a century ago. The latest statistics show that fewer than 12 married couples out of a thousand get divorced in any one year. That is the good news. But, the number of couples getting married is at a historic low, so broken marriages account for only a fraction of broken homes. In 2007, 144,220 couples divorced in England and Wales, and 51 per cent of those - about 73,500 couples had children under 16. But the Department of Children, School's and Families estimates that every year 250,000 couples, married or unmarried, break up, affecting 350,000 children.
Does this affect the rest of society?
The Conservatives argue, therefore, that couples who have children outside marriage are more likely to separate than those who marry, and that the children of those broken relationships are more likely to be growing up in unsuitable surroundings and to be drawn into anti-social behaviour. Certainly, statistically, lone parents are far more likely than couples to be bringing up their children in sub-standard rented accommodation.
Last month, a poll of 4,000 parents and children commissioned by the family law firm Mishcon de Reya suggested that a third of children from broken homes have been tempted by drink or drugs, and 10 per cent later became involved in crime. Findings such as this have left the Conservatives in no doubt that family break up is a major contributor to the crime rate.
But is £23 a week enough to change anyone's behaviour?
Most people would say that they are not going to marry someone just for the sake of an extra £23 a week. However, when George Osborne was interviewed by Tatler magazine two years ago, he referred to the Iain Duncan Smith proposal, then reckoned to be worth only £20 a week because personal allowances were lower, and insisted "It really makes a difference: it most certainly does." This would seem to imply that if the policy has a clear social purpose, it is to persuade people at the bottom end of the income system to get married because that is where the Conservatives think most of the social problems are concentrated.
No hidden agenda then?
When professional politicians devise policies, they are almost always as concerned about the general impression they give as the practical impact of their polices. The Labour government has been anxious to be seen to tackle poverty, especially child poverty.
According to treasury figures, TPA would cost £4.9 billion a year in lost tax, of which £380 million would go to the richest ten per cent of the population, and £90 million to the poorest 10 per cent.
Labour does not want to be seen redistributing money from poor to rich. David Cameron, on the other hand, believes it is politically smart to be seen to be on the side of the stable family. "Labour's pathological inability to recognise that marriage is a good thing puts them completely on the wrong side" he claimed.
How did the Government respond?
Ministers have repeatedly attacked Cameron's proposals as a mechanism for redistributing wealth from the poor to the rich. Schools Secretary Ed Balls accused Mr Cameron of talking "complete and utter nonsense." Mr Balls went on: "If people are divorced, or if you're a single parent because your husband left you for another woman, the idea that you are then second class or that you should get less tax help is absurd."
Should the tax system be used to encourage couples to get married?
* When people marry, they make a solemn undertaking to stay together, and are then less likely to separate than unmarried couples
* Family break-up is bad for children, driving a minority to crime
* Tax breaks would signal the State's support for stable families, which may influence individual behaviour
* Children growing up in poverty, not separated couples, is the danger: public money should be directed there.
* Rewarding marriage means making childless couples better off, and single parents relatively worse off
* A person who marries severally is rewarded, while abandoned spouses or widows would be penalised
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