Cameron’s marriage tax on the ropes

The Tory marriage tax plans are in further confusion this morning as it emerged that just 1 in 20 couples would benefit. The policy would cost £800 million.

The Tory marriage tax plans were in further confusion last night as it emerged that just 1 in 20 couples would benefit.

The Mirror reports this morning that:

“David Cameron’s marriage tax-break bribe would help only one in 20 couples who tie the knot, Labour has found.

“And he is again in retreat over the plan after a spending black hole was uncovered. Only marrieds with children under the age of three are now expected to benefit.

“But Treasury figures – showing only 6% of those who get wed would be better off – found that would [sic] still cost other taxpayers [£600 million] to be raised through “green” taxes.

New costings released last night and seen by Left Foot Forward outlined:

“Treasury analysis of this proposal shows it would benefit 6 per cent of married couples, 2 per cent of all family units (single people or couples and  their dependents) and 3 per cent of adults.

“Treasury costing of this proposal shows it costs £800m (not the £600m Iain Duncan Smith claims).”

In yesterday’s Observer, former shadow Home Secretary David Davis mounted a defence of the policy but conceded that:

“Take the category of single mothers alone. The common assumption is that they are mostly young teenagers who are careless or who even deliberately get pregnant as a step to a council flat and a benefit cheque …

“But that is not the typical single mother by a long chalk. Single mothers come in a wide variety of categories. There are married mothers who are separated or divorced from their husbands. There are single mothers who decide to have a baby, but who are capable of providing for that child, both financially and emotionally. Then there are widows.”

Sky News quotes Chief Secretary to the Treasury, Liam Byrne:

“Marriage plays a vital role in our society.

“But David Cameron’s latest marriage tax plan does nothing for 19 out of 20 married couples – except put a tax rise on their cars and holidays.

“David Cameron broke his promise to help all married couples when he was forced to admit his plans didn’t add up.

“Now, he’s got himself into the absurd position of having a married couples policy that leaves the majority of married couples worse off.”

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25 Responses to “Cameron’s marriage tax on the ropes”

  1. MyDavidCameron

    RT @leftfootfwd Cameron’s marriage tax on the ropes: reports @wdjstraw

  2. James Cowley

    RT @mydavidcameron: RT @leftfootfwd Cameron’s marriage tax on the ropes: reports @wdjstraw

  3. Rob

    Yes he seems to be very much on the ropes considering the press confrence i just saw of his where he firmly commited himself to it. Im sure he’ll be biting at the bit to abandon a policy that has seen the national lead over the labour party in the polls be extended in the middle england swing seats.

  4. Martyn Rowe

    Good to see you still splitting hairs over the £600 million figure. Yet nothing on the £178 billion debt Labour have gotten us into.

    To recognise marriage through the tax system is imperfect. The current system, which penalises married/living together couples is imperfect. I’d argue that it is philisophically better to weigh the tax system in favour of benefiting couples (especially those with children) to stay together, rather than be better off living apart.

    There are problems – widows, abandoned mothers and so on – and it will be impossible to penalise these genuinely needy people.

    But the philosophy is generally correct.

  5. Joe

    I have to disagree Martyn. Labour has plenty to say on the debt; the banks were to big to fail, and the stimulus necessary to stop our economy going into free fall. We can pay it back in time, but we shouldn’t endanger the recovery – just look at Ireland.

    Rewarding ‘marriage’ just seems to be a Middle-England bribe. Do tax based incentives encourage couples to stay together? If you’re concerned about a broken society you should be trying to help those who need it; through targeted schemes such as sure start etc?

    More worrying than the muddled philosophy is the terrible way Cameron’s policy has developed. Uncosted, yes, no, maybe, and finally, it seems, watered down to be almost meaningless. Coming up to an election, I’d have expected better.

  6. Claire Spencer

    Oooh, well. Divisive, regressive and now almost pointless. Seriously, great idea DC: (via @leftfootfwd)

  7. Rob

    @ Joe If the banks are too big to fail why is the labour government opposing measures to break them up into smaller units. Further i think it is rather hypocritical of the left to have ago at the tories for uncosted measures considering the deficit.

    Further pouring money into a problem without thinking about it does absloutly no good. I grew up in the west of cornwall around penzance. Saw huge amounts of money poured into the sink estates and all it seemed to do was subsidise a certain way of life. Social services were not really intrested in the welfare of these individuals. Children who came from problem homes were left to rot as child services didnt want to get involved. Was truely messed up and the place is still rotten.

  8. Joe

    I didn’t mean big in that sense! I was referring (perhaps badly) to the risk of contagion with other financial institutions and the danger to the wider economy if they failed.

    It’s my understanding that the US and UK banking systems, in relation to hedge-funds and private equity, are quite different, so Obama’s plan is not directly applicable, but that both Obama and Brown are sincere in banking reform.

    It’s kind of besides the point; I was only disagreeing with Martyn, and others unsympathetic to Labour, that the debt is simply due to incompetence, and that it should be bought up as such at every moment no matter what the policy. I’m simply saying it’s better to have used counter-cyclical spending in response to a global crisis and to pay it back sensibly, than to have watched our economy crash and burn, which I reckon would have been much more expensive. But this is a difficult topic to do justice to on an internet comment board!

    And Rob, I agree that welfare dependency can be a problem (also where I grew up), I guess I see it as a legacy of Thatcherite mass unemployment, but whatever… is a marriage tax break really part of any answer?

  9. Rob

    If by big you mean the banks were too spread into non traditional areas why has this government not sought to reinstall something along the lines of the american glass steagall act? A lot of what the banks suffered was an over exposure to an overheated housing market. That is a non political point. Both the major parties have been more than willing to follow a policy of low intrest rates and booming house markets that eventually fell apart. Where i would make a political point is that labour were borrowing to the hilt at the top of the boom and therefore amased crazy debt before the house of cards fell down.

    Regarding how to deal with public debt i realise this is a massive problem to which there are no good answers. It seems either we prolong the debt and suffer economic stagnation and cuts in services later or we cut it now and feel the pain now. I honestly dont think it would kill the recession to start cutting now, that is not to say it would not be painfull.

    Welfare dependancy. No i dont think the marriage thing is the answer. In all i think the marriage thing is a non issue a small part political speck destracting us from much, much bigger issues. I think the answer to dependancy culture is to get a lot stricter on thouse who are claiming benifits for long periods of time. In the long term it will only be solved by a cultrual, educational and socio-economic restructering back to an export economy. We need to rebuild our enginering and technology base. That said i am not unsympathetic to thouse on benifts my mother (now a head teacher) was unemployed when i was younger. Neither am i unsympathetic to labour. My family is labour and so was i for a long time, i campaighned for my local candidate when i was 15. I just thing labour at the moment has gone to the dogs. It has become a narrow minded tribalist party soley intrested in winning over the old enemy the tories. The left needs to spend a long cold look at itself.

  10. Martin Johnston

    RT @leftfootfwd: Cameron’s marriage tax on the ropes: reports @wdjstraw #reasonsnottovotetory

  11. Joe

    Labour were not borrowing to the hilt at the top of boom. As the boom took off, Gordon paid off all the inherited Tory debt. Even when the debt started to rise again, we had a low rate of borrowing compared to other industrialised countries. There’s a compelling argument that the high level of debt we now have is an acceptable compromise, compared to the alternative of not taking action.

    There are good answers to the public debt problem without being hopelessly pessimistic. Once the economy returns to growth (as it tentatively appears to be doing) we can afford to make cuts and savings without endangering employment, essential services and further growth. There is also a matter of philosophy; the same conservative ideas that would have prevented the stimulus and bailouts and would have led to a prolonged recession, would now have us cut too fast; contracting the economy and have paying a cost in social security and lost revenue that otherwise could be paying off the debt.

    Yeah, the answers to welfare dependency have to be big. Just cutting welfare is tempting but would most probably make the problem worse and hurt those in genuine need. I think Labour’s record on encouraging employment has been important, and on crime even more so. As to your opinion on restructuring to an export economy, look at Lord Mandelson’s ideas (not perhaps the most appealing politician but hear him out.) Anthony Painter’s blog is interesting in comparing it with the Tory position;

  12. Rob i think that shows borrowing during the boom

  13. Rob

    That is not to say labour didnt do some important work paying down debt in the early years.

    I respect mandleson as ironically beneath the spin he is a conviction politician who is up to telling uncomftable truths. Ironically mandy is probably right of the soft tory position re economic stuff. Within this gov I grudginly respect mandy and to an extent the chancelor as both have tried to be realists in the face of browns investment vs cuts mantra.

  14. Rob american liberal perspective on dependancy culture.

  15. Joe

    Ah, we simply have different definitions of when the boom was at its height!

    To find differences between Brown, Mandelson and Darling is a little hair splitting; any Government navigating such difficult economic waters is bound to have some disagreements. They have a difficult job explaining the complex economic situation in simple terms (when previously it had been very easy) and Brown and Darling are hardly the best communicators!

    At least the government’s position on the economy is now pretty clear, or as clear as it can be given current uncertainties. A return to growth and a deficit reduction plan over four years that protects essential services. The conservative alternative is still mysterious; a long list of uncosted promises they’ve yet to be clear on, yet with calls for fiscal responsibility that is put in similarly vague terms. Maybe they’ll do a good job on working out all the contradictions, but with the example of the marriage tax break (back on topic…) that’s clearly not the case so far.

  16. Rob

    @joe. Appologies on my poor use of language. My point with the graphs and borrowing during the “boom” was merely to show that the government was running heavy debts and large amounts of borrowing before the economy went over the edge. That is to say we have a structual deficit beyond our current problems that needs to be dealt with.

    I disagree that the philosophies of the leading figures in labour are that minor. I think especially with mandelson/brown there is a clear substantial difference of out look. Brown is old school labour keynsian with some real class issues going on. Whereas mandy is economically liberal i think his aproach to economics would not sit uncomftably with the soft centre tory position. Admitadly the diffrences between brown/darling are more about how to aproach the issue than they are real deep divisions. Brown wants to put off the cuts wheras darling is all up for talking about public sector pay cuts and the need for structual changes in the budgets.

    Regarding the tory position. Yes i think it is a little fuzy but such is the way in a long ellection season. You never run strong and heavy early on otherwise you leave your flanks open. That said i think they have painted a broad picture of what needs to be done regarding cutting the budget. They were brave to short step labour and come out first regarding cutting but they have not been brave about what the cuts will mean. I think they underestimate the resolve of the british people and our ability to deal with unpalatable truths.

    Regarding uncosted promises. Most of your post was strong i disagreed with it but it was consistant, this last point wasnt. If you measure a politician on his ability to adequatly cost his preposals then cameroon thrashs brown. What happened to the national care service or all the splurging that went on in the Labour confrence. Or even telling departments what they are going to have in the next couple of years. Brown is trying to string the british along by promising us that this wont hurt and it just dosnt stand up.

  17. Joe

    The example you give is clearly outrageous – but when has Labour (especially new Labour) ever been on the side of people who abuse the benefit system? The problem is finding an answer. Remove benefits, or savagely cut them, and can you imagine what happens to crime and child poverty? The consequences of tough love might be worse than the original problem.

    Fortunately most people want to work and Labour have done a good job with the New Deal, family tax credits (ignoring some of the administrative cock-ups) and the recent promise of a young person’s work guarantee. Far better than just telling people to get on their bikes. It’s also a relief that unemployment hasn’t spiralled out of control like in the recessions of the early nineties and eighties. Other schemes like Sure Start are important in the long run; targeted help for young families (married or not) in deprived areas. The Tories are still unclear on whether they’ll keep that one going, but surely it makes more sense than a tax break for married couples?

  18. Rob

    @joe, it is a very complex problem. I think the answer is a combination of tough love with incentives to work. Growing up in a household where my mum was out of work through no fault of her own i understand the issue relating to child poverty.

    New Deal- Going down the right road, one of labours good achievments.
    Tax Credits – An idea that went badly wrong. Have had personel experience of how these can go wrong in my family. Through no fault of your own you can get a letter demanding thousands back in over paid credit. A better idea would have been targeted tax cuts so people in such positions could keep a larger preportion of their own money.

    Re tories cutting programs. Times are tough the tories aint looking to cut these programs because they are cruel people they are looking to cut because we are running out of money.

  19. Joe

    At the risk of running around in circles; I believe we have far more detail on Labour’s approach. Yeah, sure in terms of language they are being careful not to emphasise cuts and pain etc. for the sake of dividing lines, but ultimately it does spell a different philosophy.

    Neither parties have outlined everything, and until we have more detail on the economy it would be inadvisable, granted. But the Tories have never revealed anything but a mess of contradictory aspirations in both philosophy and policy; trying to have the best of both worlds. I know that George Osborne wants immediate and deep cuts (of which we have no idea of his priorities) followed by a public pay freeze. I but I also know the Tories have also promised some 23 billion in spending promises…

    Martian Kettle spells things out pretty well;

    I think Mandy’s position is more flexible than you suggest; a strategic economic strategy is more Keynesian than liberal after all. Anyways, I should get back to some real work myself… nice talking to you Rob.

    Ah, just read your later post, and yes there was a tax-credit cock up, I would defend the policy, but the way it went wrong in that instance is something different!

  20. Joe

    Blah, now my language is going to hell…

  21. Mike McTait

    Cameron's marriage tax on the ropes | Left Foot Forward: And Rob, I agree that welfare dependency can be a ..

  22. Mr. Sensible

    Joe, I completely agree with you.

    I believe the IMF, who Cameron frequently likes to quote, warned against endangering a recovery by cutting too soon.

    And Rob, the problem with breaking the banks up is that I don’t think that would solve the problem; I believe Leyman Brothers was a retail bank, and we know what happened to it.

    And in response to Rob’s comment:
    “Re Tories cutting programs. Times are tough the Tories aint looking to cut these programs because they are cruel people they are looking to cut because we are running out of money.”

    Well Rob, here in Nottinghamshire the Conservative administration is cutting for the sake of cutting; Labour, the Lib Dems and Unison have identified several alternative ideas for cutting budget deficits without cutting services.

    And as Joe says, so far they’ve just outlined spending commitments, such as this shambles.

    And, Osborne’s approach seems to be to throw the baby out with the bathwater by punishing the frontline bank staff as well; the ones who serve you and I, who cannot be blamed for this recession, whilst giving their friends in the City who can be blamed for it a tax cut by aiming to scrap the top rate of income tax!

    Anyway, back to the subject…

    This idea seems to have been on the ropes ever since early January when Cameron was forced to rush out 2 contradictory statements within 2 hours.

    The idea’s just wrong; surely it’s not the type of family you live in, but that that family is happy that matters?

    And, I fear that one unintended consequence is that a couple could try and stay together when it’s not working, with negative consequences for family members involved, such as domestic violence; I am not sure the last Tory government took that problem seriously.

    I think the report in the Daily Mirror is the icing on the cake.

  23. Mr Nasty: The regressive, judgemental horror of IDS’ marriage tax plans | Left Foot Forward

    […] few as one in 20 couples may benefit; as Left Foot Forward reported last January: “Treasury analysis of this proposal shows it would benefit 6 per cent of married […]

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