The Conservatives again support marriage in the tax system. Any proposal will penalise a number of groups, be regressive, and fail to provide more stable homes.
After much to-ing and fro-ing yesterday, the Conservative party has once again committed to supporting marriage in the tax system. But any proposal will penalise a number of groups, is likely to be regressive, and will fail to provide more stable homes.
As widely reported in this morning’s papers, David Cameron yesterday flip-flopped on his marriage tax plans, first saying “It is something … I’ll definitely hope to do” before later saying “we will definitely do [it] in the next parliament.” On Today this morning, Conservative Home’s Tim Montgomerie confirmed: “What we have is a definite commitment to recognise marriage in the tax system” although it won’t be the expensive £4.9 billion policy originally proposed by Iain Duncan Smith in 2007.
But whichever policy the Conservatives finally adopt will favour old over young. In 1991, 74 per cent of 30-44 year olds were married but the Office of National Statistics projects that only 43 per cent of the age group will be married by 2021 (Table 3a). For the overall population aged over 16, the proportion of married couples is projected to fall from 58 per cent in 1991 to 41 per cent by 2031, as the Chart below shows.
Tim Horton of the Fabian Society told Left Foot Forward,
“When we last had a married couples allowance under the Tories during the 1980s and 1990s there was actually a drop off in marriage. There is little evidence that tax breaks would make much difference. And even if some couples did get together for a tax break it is unlikely their relationships would be as robust as those motivated by love and commitment, which is what actually explains positive outcomes for many married couples.
“What’s more, the Tories’ proposed tax break would unfairly ignore many families, including cohabiting couples, single parents and the low paid. It would also fail to support many younger couples, who often use cohabitation as a ‘practice run’ for marriage.”
The number of cohabiting couples are projected to rise from 2.25 million in 2007 to 3.70 million in 2031. This blog has previously shown that the proportion of households with single parents has risen from 3 per cent in 1971 to 7 per cent in 2008. Marriage is also more common further up the income scale as this analysis of IDS’ proposals has shown.
UPDATE 14.58:
Giles Wilkes also has an excellent piece on his Freethinking Economist blog outlining why the Tories are “on the back foot on marriage”
UPDATE 15.16:
And Chris Giles of the FT has just posted on how “transferable tax allowances are a terrible idea” and that “It wasn’t nutty progressives who got rid of the married man’s allowance and undermined the married couples’ allowance in the tax system. It was a combination of those awful lefties (Nigel Lawson, John Major, Norman Lamont and Kenneth Clarke)”.
16 Responses to “Young and poor among losers of Conservative marriage policy”
Conservatives on the back foot on marriage « Freethinking Economist
[…] The essential figures on this question can be found on LeftFootForward. It also quotes Tim Horton saying: “When we last had a married couples allowance under the […]
hannahnicklin
@CllrRichardLowe linkity link link… http://bit.ly/7iWsd2 http://bit.ly/5McA8Q
alllowercase
Hi Will,
I think that attacking the Tories on this point is misguided.
It’s a policy (or should I say, rather an aspiration) that resonates with loads of middle-class married or civil-partnered voters, especially those without children who feel they don’t get much back from their tax.
I doubt it would actually cost Govt very much (especially in comparison to some of the waste in other parts of the public sector), and these are exactly the kind of voters that Labour needs to keep.
I also think that it’s not the blunt policy tool to encourage people to stay together that some commenters have claimed. Much of government is about signals. An analogy is the Educational Maintenance Allowance – I doubt that many young adults stay on for FE simply because of the EMA, but it is a sign that we, as as society, value education (of course it probably does make some difference around the edges, but the numbers of people staying on hasn’t gone up hugely, I think). In a similar way, recognising marriage/civil partnership in the tax system is a recognition that as a society we value long term, stable, relationships.*
If we are against this policy, we risk being seen as anti-marriage, which is a really bad place to be.
If we are going to adopt a Tory policy and pretend it was ours all along, I’d prefer it was a popular one like this, rather than further extension of the inheritance tax threshold.
*I know that not all marriages and CPs are long-term and stable but all the evidence shows that these relationships are better for society than more transitory partnerships. If they’re not, why do we waste government time and effort in recognising them at all?
alllowercase
StopTheRight
Young and poor among losers of Conservative marriage policy http://alturl.com/ce4i
George M-Baker
RT @StopTheRight: Young and poor among losers of Conservative marriage policy http://alturl.com/ce4i