Last night, the Prime Minister announced than in April 2015 the Government will be introducing a transferable tax allowance for married couples and couples in civil partnerships, delivering one of the promises we made in the Conservative Party manifesto at the last Election.
The idea is that if you are a basic rate taxpayer and your partner doesn’t use all of their personal allowance (ie he or she earns less than £10,000 a year), you’ll be able to use up to £1,000 of it. This will benefit married couples and those in civil partnerships where one person gives up work, or only works very limited hours, so that he or she can bring up kids by up to £200 a year.
As is inevitably the case in politics, some people will welcome this and others won’t. Even within the Conservative Party, there are two schools of thought when it comes to tax policy – some believe in keeping the tax system as simple as possible; others in using it to support things which are good for society.
Marriage and civil partnership certainly fall into that category. Many of the problems we face today are the result of the increasing incidence of family breakdown. Clearly marriages and civil partnerships aren’t immune from that but study upon study has shown that married couples are less likely to break up and that children brought up by married couples on average do better at school, are less likely to get involved in crime etc.
I hope no-one reading this blog who is a single parent or who is living with partner but has chosen not to get married takes that last paragraph as a personal criticism of them. First, I wouldn’t dream of telling anyone how to live their lives and in any case many single parents are single because their partner died or they fled an abusive or unhappy relationship, not because they have chosen to be single. And second, the average child brought up by a married couple may do better, but many co-habiting couples and single parents do an amazing job (I find sharing the responsibility of bringing up three young boys with my wife hard enough, so I’m in awe of anyone who copes on their own) and some married couples don’t; likewise, the average married couple might be less likely to break up, but many co-habiting couples are absolutely committed to each other and some married couples aren’t. So this isn’t about passing judgement on your relationship, but about looking at the aggregate evidence about what most benefits society.
Some people will no doubt say, “I accept marriage is a good thing for society, but why shouldn’t I get a tax cut too?” If this was the only tax change the Government had made or will make, this would be a fair criticism. But it’s not. The biggest change has been raising the personal allowance from £6,475 when we came to power to £10,000 next April, cutting tax for everyone but particularly benefiting those on low incomes. Many of my constituents don’t have the luxury of one person staying at home to look after the kids – they both have to go out to work - and the Government is introducing tax-free childcare to help them. And we’ve cancelled Labour’s planned increases in fuel duty and helped councils freeze Council Tax.
So whether you will personally benefit from this change or not, I hope you’ll feel that marriage is a force for good in our society and it is right that this is recognised in our tax system.