By Peter Hoskin
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With the Government’s “High Income Child Benefit charge” coming into effect on Monday, the past week has witnessed a flurry of criticism of the policy. My former colleague Jonathan Jones wrote a useful summary of those criticisms yesterday, which ticked off things like high marginal tax rates and the extra complexity that is being wired into the benefits system.
But there’s another criticism, and one that the Centre for Social Justice is highlighting today: the effect that the Child Benefit changes could have on marriage. Christian Guy, the managing director of the CSJ, puts it thus:
“The new rules will mean that married couples where one earns over £50,000 pa will be unable to avoid losing some or all of their child benefit. Meanwhile similar couples who are cohabiting will face unenviable choices: a severe financial penalty if they marry or breaking the law if they deny their relationship status.
This creates a potential ‘marriage penalty’, despite evidence showing how crucial marriage is to stable families and children. Research illustrates that break-up rates are three times higher for couples who cohabit compared with those who marry.”
It all comes down to keeping secrets from the taxman. As Christian Guy suggests, unmarried couples (where one partner earns over £50,000, etc., etc.) have one obvious way to avoid being stung by the Child Benefit policy: they don’t admit to being a couple. And if they don’t want to admit to being a couple, then they may not want to get married. Money could, at least theoretically, trump wedding bells.
In truth, it’s hard to know how many of the estimated 1.2 million families affected by the Child Benefit policy will choose that route. Perhaps it will only be a handful, or even none. But that will do little to salve the concerns of those Tories who already feel the Government isn’t doing enough to promote marriage in the tax system. No doubt, there will now be even more pressure on George Osborne to produce a tonic for them in the next Budget.
> READ: Paul's post from yesterday, on why George Osborne should say that the child benefit restriction is temporary
By Tim Montgomerie
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As you can read on today's ConHome frontpage Nick Clegg is using a speech to attack Tory policy on marriage and family life. 10 Downing Street interpret the speech as an attempt by Nick Clegg to quell unrest within his party after last week's EU veto. David Cameron's advisers fear that one consequence of the EU issue will be that progress on other Coalition business - unrelated to Europe - is likely, at least for a time, to become more difficult.
Gavin Poole, the Executive Director of the CSJ commented:
“Nick Clegg’s stance flies in the face of all the evidence, completely ignoring national and international data demonstrating how important marriage is to the health and well-being of children and families. Marriage is important because 1 in 3 couples who live together when a child is born split up before that child is five, compared to only 1 in 11 married couples. The Centre for Social Justice have repeatedly called for a tax break for marriage and an end to the couple penalty in the welfare system as a strong signal and vote of support in the institution and as a way of reversing decades of decline in our society.”
Polling by YouGov for the Centree of Social Justice found that "70% of those expressing an opinion support introducing an extra tax allowance for married couples" (PDF).
> On Friday the CSJ's Samantha Callan wrote: The Government is missing a coherent policy to challenge family breakdown
This is the second part of ConservativeHome's series looking at the conveyor belt to crime and how to lift young people off it. Yesterday, Samantha Callan looked at the value of early intervention. Today Jill Kirby outlines ideas for strengthening the greatest crime prevention tool of them all - the family.
What kind of mother doesn't know where her 15-year old is at 3 o'clock in the morning? What kind of father doesn't turn up in court when his 14-year old is being tried for criminal damage? Magistrates dealing with the aftermath of the riots have expressed their dismay at the casual reaction of the young looters' parents. What remedies are available to change their behaviour?
The threat of losing council housing or benefits might shock them into action but will not be a lasting remedy, and there is a danger that other children in the family will suffer – not to mention the difficulty of enforcement. Parenting orders, requiring attendance at parenting education programmes, probation orders and curfews, are likely to be the most widespread punishments. These are important, but unlikely to transform attitudes amongst parents who have so far shown no interest in controlling their children. On Monday, David Cameron promised more support for intensive intervention programmes targeted on chaotic families. Such schemes also have a role to play, especially where one family is causing grief to an entire neighbourhood. But they are too expensive to be viable as a widespread or long-term solution. And they are about picking up the pieces, rather than stemming the causes, of the broken society. In that sense, they are more about restoring public order than rebuilding family life.
Matthew Barrett and Tim Montgomerie
A new Centre for Social Justice report by Professor Rebecca Probert of Warwick University and Dr Samantha Callan, the CSJ's senior family researcher, has shown that Britain’s levels of births outside marriage are at the highest point for at least 200 years.
The research shows that:
The research refutes the assertion of a number of academics and campaigners that current levels of cohabitation and family breakdown are not unusually high compared to other points in Britain's history. The CSJ research confirms that the "sexual revolution" of the 1960s was a turning point in the state of Britain's families. Long-standing family research has shown that children brought up by lone parents are much more likely to be unsuccessful at school, and 50% more likely to have alcohol problems.
Gavin Poole, Executive Director of the CSJ, said:
“Current high levels of cohabitation are a key factor in the rise in family breakdown in our country and this paper shows that we have not been here before. The CSJ has consistently argued, from the evidence, that marriage and commitment tend to stabilise and strengthen families and cannot be ignored.”
Recent research showed that Britain had one of the world's least family-friendly tax systems. In today's Telegraph Jill Kirby encourages the Coalition government to look abroad to correct this:
"Most European countries provide support for marriage or long-term cohabitation through their tax systems, with a range of options from income-splitting to homecare allowances, ensuring that families bear less of the nation’s tax burden while they have children to look after. These allowances remain popular and the trend shows no sign of abating."
Read Jill's full article.
The Daily Mail quotes research from the Christian charity Care this morning, noting that Britain's tax system is harder on single earner families than any other major developed country.
The numbered list below records the tax burden on a one earner married couple with two children as a percentage of the burden on a single person with no children - both earning £33,745.
"After taking allowances and benefits into account, the share of income absorbed by taxes has doubled for the average wage-earner with a non-working spouse and children to support. Meanwhile, the tax rate on a single person with the same earnings, but with no family responsibilities, has increased by less than one tenth. The latest OECD figures show that one-earner married couples with children now pay about a third more tax that they would in most other OECD countries. It is difficult to see any argument for penalising this type of family...
Kenneth Clarke, when he was Chancellor of the Exchequer, famously called the married couples tax allowance ʻsomething of an anomalyʼ. Those who question the wisdom or fairness of what has happened are dismissed as reactionaries seeking to turn the clock back to a mythical golden age. To accept their proposals, it is claimed, would put Britain out on a limb and cut off from the common practice of other economically developed countries. Nothing could be further from the truth. As the authors of this paper show, it is modern Britain that is now the exception. The vast majority of developed countries have tax systems that acknowledge family responsibilities towards children and also dependent adults. Many of them also have special tax arrangements for married couples. In some cases, these arrangements are also available for same-sex or mixed-sex couples living in registered partnerships."