Osborne confirms that he'll introduce a tax allowance for married couples

Rachel Sylvester recently hinted that George Osborne was opposed to the Conservative leader's support for a recognition of marriage in the tax system.  We said at the time that the recognition would happen and George Osborne has ended speculated by telling The Telegraph that, yes, it will.  Two questions flow from Mr Osborne's confirmation:

(1) Will this tax allowance apply to all married couples or, more likely, will it be focused on those with children?  A middle option (resurrecting a pledge from the Tories' 1997 manifesto) might see the allowance favour all married couples who care for a dependent - this would include children but also elderly or very disabled dependents.

(2) How will it be funded?  The idea had been for lower tax on families to be financed by higher taxes on pollution but the current economic climate makes any tax hike (even a replacement tax) a hard sell.  24% ahead the Tories may decide that they can get away with this but you can be sure that the victims of the green tax rise will be more voluble than the likely beneficiaries of a family tax cut.

By way of footnote: There was a time when Tory family policy was a tax allowance and nothing more.  Under David Cameron it has become multifaceted.  Perhaps most important of all is the commitment to end the couple penalty in the benefits system - a penalty that encourages too many low income mums and dads to live apart.  There are also the plans to give parents a real choice in their children's school.  Recently there was also a pledge to invest in relationship support services and action against debt.  In addition, Maria Miller wrote for ConHome about plans for 4,200 more health visitors and more flexible working rights.   

Comments

[Tony Makara]

I would like to see more done for families who help a dependant, be they elderly or with disability. We should do more to encourage families to look after their own, which has always been the way until recent years. Having a person being looked after by familiy vastly improves the quality of life, especially for the elderly who still feel like they belong and are wanted. If we can do more to support the care professions we can help families to cope in the more trying of circumstances. This is the sort of familiy-focused policy that I'd like to see.

[grumpy old man]

If the Marriage Allowance is just for those with dependents, whether young, old or disabled, then the allowance would merely mirror allowances and benefits which already exist, It would do nothing to encourage the state of marriage and would be rapidly written down by a profoundly cynical electorate as a smoke and mirrors gimmick. All those legally married or none. No NuLab small print, please.

[Sally Roberts]

I have been listening to a phone in on LBC about this and the overwhelming number of callers were against it - seeing it as a "bribe"! I believe they are missing the point - which is that it might encourage a couple in financial difficulties and having serious problems with their relationship as a result, to stay together thereby saving one broken family! Maybe we need to think about how we "market" the policy? Also, many people raised the question what about civil partnerships - do they benefit too or are they left out of this one?

[grumpy old man]

Sally. A civil partnership is not a marriage, and as far as I am aware was never intended to be treated as such.

[Stewart Geddes]

All the evidence shows that society is stronger when marriage is strong. Society is even stronger when families are encouraged to look after their own. The state is a very poor substitute for the family in providing support.

The best solution here is to allow all members of a family to pool their allowances whether that be husband and wife, dependent parents or other blood relatives. This way the family is encouraged to look after their own and the financial incentives offset the costs.

Abolish stamp duty where a family sell their houses in order to pool resources to buy a bigger house where all can live together.

[Tony Makara]

Stewart, interesting points. This also raises the question of housing. There are not that many reasonably priced four bedroomed houses around as I found out about ten years ago when my girlfriend and myself, we both had children from previous relationships, needed a bigger place. If a family occupy a three bedroomed house and there are a couple of children of different sex its practically impossible to take in an aged or disabled relative, unless they are lucky enough to have a parlour and convert that into a bedroom. If we want to encourage families to look after their own, we need to find ways to make housing more compatible.

[RichardJ]

This is old news surely?

[Sally Roberts]

GOM - I'm only reporting what people were saying on the programme! I think that treating those who have entered a Civil Partnership as "different" to those who have married sends out perhaps the wrong message - or am I wrong? Perhaps someone here who is Civil Partnered could enlighten us?

[David_at_Home]

"I think that treating those who have entered a Civil Partnership as "different" to those who have married sends out perhaps the wrong message - or am I wrong? "

Yes, you are wrong. Marriage is the cement that holds society together and has done so for thousands of years.

Civil partnerships are just part of the fashionable but transitory obsession with homosexuality.

[Graeme Archer]

when I was a student at Glasgow, a long time ago, and I couldn't stand being in the library anymore, I used to dog off and walk across the campus to the Kelvingrove art gallery. There was - still is, I hope! - a picture which fascinated me. It showed a Victorian couple, very formally dressed, sat at either end of their long dinner table in a very dark and unwelcoming dining room. The man didn't look at the woman, who played desultorily with her food. It was called "a marriage of convenience". I used to wonder "why on earth did they marry? For whose convenience?". Eventually I thought "you can't know", and I decided this was what the painter wanted me to think, the old adage, that every marriage is a mystery to the people not part of it.

Still "fashionable" will do me too! I've never been fashionable before.

[Tanuki]

Us single non-traditionally-sexed people are distinctly unimpressed by the idea of 'nudging' people to stay together by way of tax-breaks.

What price true equality? Surely we should treat everyone as an individual in the eyes of the tax-system? I'm really rather fed up with all forms of social engineering claptrap, whether from the left or the right.

[Londoner]

I am encouraged that there is speculation that this tax allowance would only apply to married couples with children (or other dependents). In that case I would be in favour (and it would not matter if it included civil partnerships - there is no way that any tax break for marrieds could not apply, subject to the same criteria, to cp's).

If, however, it gives a tax break to the married/cp'd without children/dependents, then I would be totally against it. A two income married couple with no children is not a deserving case and indeed, although I know some on here will disagree, so far as I am concerned, it is no business of State fiscal policy whether they are married or not. Let's hope that this is the compromise that Osborne has extracted as the price of his support.

Although I understamd the reasons for highlighting this at the forthcoming conference - IHT 2007 coup Mark II - I am actually more concerned about corporate taxation and the current very real present danger of large numbers of major British plc's redomiciling in Switzerland, Ireland, Bermuda etc. I do hope this urgent issue is not being forgotten in the wish to bung a few hundred quid a year to middle class families such as my own.

[Matt Wright]

Lowering tax on business to encourage enterprise and lowering tax on the low paid to discourage benefits, is key to getting the economy moving.

[no one important]

Well said Matt.
Giving tax breaks to married people who may not have children when an unmarried couple who has children will not receive them makes no sense at all.
Unless you are a rich person who wishes to protect their financial interests during a recession and is happy to throw every one else to the wolves.
Very nasty toryism, isn't it?
Makes Thatcher look like a communist.