Ministers are clearly mindful of the potential damage that Tim Loughton’s amendment to the Finance Bill calling for tax breaks for married couples could cause. This is one of those issues that could become a rebellion if it is poorly-managed by the leadership, or equally could be a bit of a damp squib if enough backbenchers are reassured and feel they should show loyalty to George Osborne.
David Gauke has sent out a letter to Tory MPs trying to do just that. This ‘dear colleague’ message, which I’ve been passed, tells backbenchers that the Chancellor will announce the details of a transferable tax allowance ‘in due course’, which is what the Chancellor himself told a recent Cornerstone dinner. You can read the letter in full below:
Recognition of marriage in the tax system
A number of colleagues will have recently been contacted by constituents on the issue of the recognition of marriage in the tax system.
The Prime Minister has always been clear that it is important to recognise marriage in the tax system, and this firm commitment remains.
As you will be aware, the Conservative manifesto at the last General Election set out our policy to introduce a transferable tax allowance of £750 between spouses and civil partners. This was restricted to basic rate taxpayers.
In the Coalition Agreement, it was agreed that our tax priority was to increase the personal allowance to £10,000 – an objective that will be met in 2014-15. However, our commitment to a transferable tax allowance was restated. The Coalition Agreement also stated that the Liberal Democrats will be permitted to abstain on any legislation introducing transferable allowances for married couples.
The Prime Minister and Chancellor have consistently made clear that we remain committed to recognising marriage in the tax system. I know that many of you will have heard the Chancellor set out his commitment to deliver on this during the course of this Parliament. An announcement on details of how we will legislate for this in this Parliament will be made by the Chancellor in due course.
I am, of course, available to talk to any colleague who needs more information.
David Gauke MP
Exchequer Secretary to the Treasury