Laura Perrins is a
former barrister turned stay at home mother. She campaigns for Mothers at Home
Marriage is back on
the agenda. This hottest of political potatoes has been tossed around from
vigorous supporter (Tim Loughton MP) to a lukewarm “let’s placate the masses’ David Cameron, with various groups – including Labour and the Liberal Democrats – in
opposition. So why should marriage be ‘supported’ in the tax system?
The first point is
that marriage is currently penalised in the tax system. If you are a mother
lower down the income scale and move in with a partner, the extra income they
bring into your household means you stand to lose most or all of the £3,270 you
otherwise receive in child tax credits. Harry Benson of The Marriage Foundation
estimates that there are at least 300,000 families that pretend they live
separately, but in reality are together. Similarly, higher up the income scale,
if you have children and are in receipt of child benefit you will lose it if
you marry a higher rate tax payer. You can hide your relationship from the
tax-man, as some do, but you cannot hide the fact you are married.
So this is the
starting point – that marriage is penalised in the current tax system. The second
issue is to ask: why should any person be able to transfer some of their
tax-free allowance to his or her spouse? Every adult has a tax-free allowance,
but in the UK – uniquely amongst large OECD countries, bar Mexico – it is on a use-it-or-lose-it basis. This proposal says that because marriage is distinctive, a
non-working spouse can transfer a small sum (about £150 a
year) to their spouse.
There are two grounds why the state should allow this
The first is that the
reason why one spouse is not using their allowance is because they have
sacrificed a salary to care for their children at home. This is why Loughton’s
amendment, which would only apply to married couples with at least one child
under five, is to be preferred to the original proposal that would apply to all
married couples whether they had children or not. The state has always
recognised that raising children is a unique contribution, not just to each
individual family, but to society as a whole. With this contribution comes great
responsibility as well as financial expense which in the past the state always
– literally – made allowance for by the ‘child tax allowance,’ later child benefit.
As the Labour MP Frank
Field explained in the House of Commons on 2 July 2013: “By abolishing child
benefit for higher-rate taxpayers, the Government forewent the one instrument
at their disposal to maintain tax equity for higher-rate taxpayers between
those who have no children and those who do have children.”
In fact, when
debating the proposed transferable tax allowance, Mr Field asked “ … will
they extend it and rectify the injustice whereby in abolishing child benefit
for higher-rate taxpayers they abolished the tax-free income for higher-rate
taxpayers if they had children and therefore put them on the same level as
people who do not have children? We never
had that in the tax system before; we have had it in the past couple of
years.” (My emphasis).
The second ground is
that marriage is the most secure environment in which to raise children. By a
child’s seventh birthday, 31 per cent of the couples who were cohabiting when their
child was nine months old had separated, compared to only 12 per cent of married parents.
The Marriage Foundation found that by the time children become teenagers a full
45 per cent are not living with both parents. Of the 55 per cent who are living with both
parents 51 per cent are married. As children have a right to be cared for by
both parents the state should be improving the overall chances of this happening, rather than stacking obstacles against this outcome as the current tax system does. So
yes, separation and divorce happen, but marriage is the gold standard.
Opponents of the tax
allowance complain that it does not benefit single parents or widows, but both
of these groups are already supported within the tax system. The only group who
can rightly complain are cohabiting stay-at-home mums, as they are in a similar
position to married stay-at-home mums yet will not benefit from this allowance.
Although statistically these partnerships are less stable than married ones, it
must also be the case that many are committed.
But the key to the marriage
allowance is that the state knows a couple are committed because the couple
themselves have told them through the formal signing of that ‘piece of paper’
opponents say is so unimportant. The state cannot guess at the commitment
between couples that are cohabiting, therefore they cannot transfer their
allowance to their partner. Those who do not wish to marry on principle
(because it is seen as a patriarchal or religious institution) could have
been offered the choice of civil partnerships, but this amendment was scuppered
in the House of Commons by the Liberal Democrats and Labour.
A further complaint is
that the marriage allowance is ‘out of date’ and harks back to the 1950s or
to the ‘Edwardian era’ (opponents do not seem too sure how old it is). Well, it is
a lot older than either of these two periods. Marriage predates all of the main
religions and all nation-states. The words of the Church of England marriage
ritual, “To have and to hold, from this day forward, for
better for worse, for richer for poorer, in sickness and in health, to love and
to cherish, till death us do part”, date back to 1552. I find them inspiring. Nick Clegg, on the other hand, believes that favouring marriage is ‘patronising drivel'. Not so
The wording from the Jewish wedding contract have remained unchanged
for at least two thousand years. So this is something that has been around for a very
long time. Furthermore, marriage is something that young people aspire to: 70 per cent of young people say they want to get married in the future (if the Government
do not make it next to impossible for them to do so). So opponents are not only
bad at history, but are ‘out of date’ and out of touch with the desires and
wants of young people.
If the opponents of
the transfer were so vocal in public one would assume they are not married in
private. Yet when it comes to marriage for the gilded ruling elite it certainly
is a matter of do as I say and not as ‘I do’: all four Liberal Democrat Cabinet
members as well as the Deputy Prime Minster himself are married. Not only that, but there is now a growing marriage gap between high-income couples who marry
each other and lower income people who do not.
Highly educated women
on very high incomes almost always marry before having children, as they know
it has better outcomes for their children as well as their careers. The latest US Census shows that a full 94 per cent of college-educated women who do have children do so within marriage. In his book ‘The
Coming Apart of America’, Charles Murray explains how reduced social mobility is linked to
high-income couples that always marry, reside in ‘super-zips’ (postcodes) and who pour all
their resources into their children. They and especially their children pull
away from those at the bottom.
Alison Wolf in the ‘XX
Factor’ similarly found that of the educated women who
do have children they nearly always do so within marriage; births outside
wedlock amongst highly educated men and women are tiny. This group marry
each other and form what Wolf calls 'superfamilies', further exacerbating the gap between
the very rich and everyone else.
These trends are less pronounced in the UK, but they are real nonetheless. Marriage rates decline with both lower income
and education. Thus any party that is interested in social mobility
should be interested in promoting the transferrable tax allowance. The benefits
of marriage are still strong among lower income couples who do marry. The
millennium cohort research revealed that the poorest 20 per cent of married couples are
more stable than all but the richest 20 per cent of cohabiting couples.
It is fast becoming the case that the tax
system is structured in the such away that it will become very expensive not
just to care for your own children at home (should you choose to do so) but to
get married in the first place. The current tax system, which operates to
penalise marriage, is having a disastrous impact not only on children but also
on couples lower down the income scale, as well as the majority of young people
who wish to marry in the future. Marriage and caring for ones children should
not be preserve of the rich – it should be a realistic option for all. It is
time for a fair and transferrable allowance.