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David Cameron and the married couple’s tax allowance

27 April 2013

The married couple’s tax allowance is back on the agenda. After Conservative Home’s exclusive yesterday, David Cameron has confirmed that he will introduce one before the end of this parliament. This would allow couples to share a proportion of their personal allowance, lowering the tax bill for those household where one person stays home to look after the children.

Cynics will suggest that this is a good time to float a policy particularly popular with the party base given that there are county council elections on Thursday. But Cameron is a bigger enthusiast for recognising marriage in the tax system than most of his Cabinet colleagues. In opposition, George Osborne always worried that it looked like a measure designed to encourage mothers to stay at home. For their part, the Liberal Democrats have the right to abstain on the matter under the coalition agreement.

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But it is becoming politically imperative for Cameron to introduce this measure. It would fit with his aim of reuniting the Conservative party before the next election campaign. It would also assuage some of the anger of stay at home mothers who feels that the childcare tax break shows that the coalition is trying to push women back into work.

Given that the coalition agreement is going to become ever more frayed as polling day approaches, introducing it sooner rather than later is going to be necessary. If Cameron waits until less than a year before the election to have a vote on it, he might find the Liberal Democrats far more inclined to actually vote against it rather than just abstain.

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  • StephanieJCW

    It’s just a mad concept a marriage tax allowance. An allowance purely for tying the knot. If you want to support stable families have family unit taxation instead of giving money to wealthy childless couples who don’t need it and depriving stable families where mom and dad see no need to sign a bit of paper.

  • itdoesntaddup

    Of course, the allowance will barely be worth sixpence, but Dave will tick the box saying he granted it.

    Properly implemented, the allowance would result in a sharp diminution of the welfare bill. The elderly would be encouraged to stay together and look after each other, rather than divorce and rely on the state. Families would also over time last longer, nurturing their children rather than turning them into teenage tearaways, or bags of nerves unable to concentrate properly at school.

    • StephanieJCW

      “The elderly would be encouraged to stay together and look after each other, rather than divorce and rely on the state.”

      Doubtful. And why would you want people who are so unhappy they choose divorce to stay together?
      Misery in old age?

      Ditto families. My parents separated when I was 8. Lack of a married person’s tax allowance had nothing to do with it (incidentally I was neither a teenage tearaway nor a bag of nerves)

      • itdoesntaddup

        Clearly it would not affect those who wish to divorce anyway. But the present rules give a clear incentive to happy couples to divorce to access more benefits in old age.

  • Fergus Pickering

    This is one of thoe things that a certain type of Tory thinks is important, but isn’t.

  • Iain Hill

    It will of course apply to married gays, and those with civil partnerships.

  • Radford_NG

    The liberal-progressive political magazine Prospect(May 2013) reveals that 85% of graduates are married, compared to 47% of the general population.Work out what you will from that.

  • Newsbot9

    So people will get “married” for tax reasons. Wonderful.

  • HookesLaw

    Polling day?

    ‘Ukip in chaos over policy on eve of key poll, emails reveal’
    ‘Ukip leader Nigel Farage is warned that his party is facing a decade without credible policies, as crippling internal rows rage, and it is suggested that the party should consider buying off-the-shelf strategy from right-leaning thinktanks.’
    ‘Senior members must “get off their hobby-horses” if the party is to develop policies, Farage is told in the bombshell emails from Stuart Wheeler, the party’s treasurer, and Godfrey Bloom, a leading Ukip MEP.’
    ‘A despairing Bloom, writing last Thursday, warns: “My experience thus far is that as soon as more than two people get in a room progress completely stops’

    No point joining UKIP if it means you have to get off your hobby horse.
    And what a hobby horse
    (via the paywalled Telegraph)

  • David Lindsay

    Believe in it when you see it, and not a moment before.

    • telemachus

      It is crazy
      There should be efforts to produce fiscal balance not bring in costly tax breaks
      What resources will pay for it
      If such are available they should be allocated to investment in infrastructure to stimulate the economy

      • David Lindsay

        I didn’t say that it was crazy. I said to believe in it when you saw it, and not a moment before.

  • Renie Anjeh

    Bad, bad, bad idea. Labour should propose to use the money to reform the tax credit system instead, so that couples (all couples) are not penalised and charges for Child Maintenance are scrapped.

  • telemachus

    Does this apply to Gay Marriage?

    • huktra

      We do not usually expect homophobia from you.
      Or was that directed at Cameron?

      • telemachus

        But you do see the paradox?

    • Tom Tom

      No such thing Tel-Boy

  • Russell

    Re-introducing MIRAS would be a lot more popular and make more economic sense as a boost to house purchases and white goods sales etc..

    • HookesLaw

      Giving money away is always popular.

      • Russell

        Giving people who live together a tax advantage because they are married I don’t think would give a boost as much to the economy as tax relief on mortgage payments which would stimulate house/goods purchases and benefit single couples the same as married couples..

        • Tom Tom

          Better to write off all credit card debt and have the B of E buy the Receivables with QE

          • HookesLaw

            Until next time? Why not let the BoE always buy out credit card debt after we have been stupid enough to run it up?

            • Tom Tom

              Why not have the B of E always buy toxic debt from banks each time they run it up ? Just ,make Consumers pay, jack up their interest rates, raise their taxes, increase their food prices, hold down their incomes – rats always thrive when dumped on by bankers and the politicians whose sole goal is to bail out banks. You are a real Tory

        • HookesLaw

          Given where we are I agree with Hj777.

          If tax money is being given back it should go to everybody in a lower rate.
          I however do not object to a married allowance.It seems a very minimal very basic and broadly acceptable little bit of social engineering.

    • Tom Tom

      No it would not. MIRAS is a subsidy to Banks. Better to make them amortise up-front fees over the life of the loan

      • Russell

        QE is a very expensive subsidy to banks, far better to give some relief to the people who weren’t involved with sub prime, Libor, PPI, multi million pound bonuses, Knighthoods and lordships, and let them take some pain with no dividends to shareholders and no bonuses for so called ‘executives’.(more commonly known as gamblers) for a few years.

        • Tom Tom

          I agree. Far better to have the B of E buy Credit Card Receivables and cancel them to free up cash for households. No Dividends to Shareholders ? I have had none from Lloyds for 5 years and lost 90% Capital – I think everyone should lose 90% Capital since Mortgages are being subsidised with taxpayer money. I don’t personally see any difference between HBOS going bankrupt and what the effect of wiping out Lloyds shareholders has had on them

          • Russell

            Shareholders are like bankers, both are gamblers (Shares can go up & down!). I have purchased my house without the ‘subsidised’ mortgage as you put it, and paid cash for my house 3 years ago, cash that had already been taxed. Why should savings of people who weren’t gamblers lose 90%? To make them suffer the same as the gamblers?

            • Tom Tom

              AllCapital belongs to the State and should be sequestrated in the national interewst inclufding houses. Everything belongs to the State when bailing pout Banks the national indsustry of Britain. It is national salavation and evberything should go to The City.

          • Chris Morriss

            This is a joke, yes?

    • HJ777

      MIRAS would provide a boost to house prices, not house purchases. Given that capital gains on your house are not taxed (so housing is already treated more favourably in the tax system than other assets), it would create a further distortion.

      And have you forgotten the problems that endowment mortgages created? Endowment mortgages only existed because of MIRAS in order to exploit the tax break. Do you really want a return to those days?

    • Renie Anjeh

      It would need to be done very carefully.

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