Tories propose tax breaks for married couples

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Married couples would get a tax and benefits boost potentially worth thousands of pounds a year under a Tory strategy unveiled today to avert family breakdown.

A major policy review commissioned by David Cameron called for spouses to be allowed to transfer any unused tax allowances to their partner. The Conservative social justice policy group said the move would particularly help single-earner couples where one parent stayed at home with young children.

Under the proposals, set out in a bumper 671-page report entitled Breakthrough Britain, disincentives for couples to stay together would also be removed from the benefits system. The measures are among 190 policy recommendations outlined in the report on tackling family breakdown, educational under-achievement and crime.

The document sets the cost of social breakdown at £102 billion a year.

In a section on family breakdown, the report argues that the tax system fails to recognise the “benefits which marriage brings to society”.

It says that the transferable personal tax allowance would provide symbolic recognition for the institution of marriage. “It would indicate that marriage is valued because of its benefits to children and wider society,” it adds.

Mr Cameron will not necessarily accept the recommendations of the policy group, chaired by the former Tory leader Iain Duncan Smith. But he has already indicated his concern about disincentives to marriage in the tax system. He will respond to the report in a speech this afternoon.

As well as the transferable allowance, which the group said would be worth £20 a week to one-earner households, it suggests increasing couples’ allowances through working tax credits. This could give up to 1.8 million couples an additional £32 a week.

Mr Duncan Smith said that this would primarily help alleviate poverty. “I believe that this is the single most important step that the Conservative Party could take to start supporting stable family life,” he said.

In a further bid to help families, the policy group proposes “front-loading” child benefit to give parents greater financial freedom to look after their children in their first three years.

The report claims that, without urgent action, the number of children with two working parents in poverty will increase from 1.4 million to 1.8 million by the end of the decade. Meanwhile, lone parents would be required to work full time once their children reached the age of 11 in a bid to get more people off benefits and into work.

“Helping more lone parents into work, through both a deliberate shift in expectations and providing support - including childcare as appropriate - will help them and their children in a very real way,” the report states.

Other recommendations set out in the report include:

:: Increasing the scope of credit unions providing low-interest loans to low-income families in an attempt to save them from loan sharks;

:: Making volunteering part of the school curriculum and rewarding youngsters who undertake community work with tickets for pop concerts;

:: Raising the gambling age limit from 16 to 18 and requiring the gaming industry to spend more than £10 million a year on research into anti-addiction programmes;

:: A £400 million tax on alcohol to double the amount spent on drink and drugs treatment;

:: Charities and parents to be allowed to set up new “pioneer schools”, set up as charities, free of local authority control, and able to recruit staff and set pay levels.

Today’s publication marks the culmination of 18 months of research by Mr Duncan Smith’s team, which is one of several policy review groups set up by Mr Cameron shortly after he became leader.

Mr Cameron’s response to its findings is expected to form one of the main planks of his manifesto for the next general election.

In an overview document accompanying the report, Mr Duncan Smith said: “I have seen levels of social breakdown which have appalled and angered me.

“In the fourth largest economy in the world, too many people live in dysfunctional homes, trapped on benefits. Too many children leave school with no qualifications or skills to enable them to work and prosper. Too many communities are blighted by alcohol and drug addiction, debt and criminality and have low levels of life expectancy.”

The proposals came under immediate fire from anti-poverty campaigners, among them Kate Green, chief executive of the Child Poverty Action Group. “A marriage certificate does not end addiction, it does not cure a mental health condition, it does not cancel debt, it does not increase skills and qualifications and it does not provide employment," she said.

"Addressing these problems will do more to support relationships and lift children out of poverty than using the tax and benefit system to penalise children for their family background.

“The priority for families must be delivering the extra £4 billion investment that the Institute for Fiscal Studies says is needed to halve child poverty by 2010. David Cameron must resist the temptation to squander the resources needed on tax breaks that will do nothing to help the majority of children living in poverty.”

Ed Miliband, the Social Exclusion Minister, said that the proposals would damage children. “I don’t think that paying £20 a week to all married couples in this country - which would cost billions of pounds and I’m got no idea how Iain would pay for it - is the right thing to do,” he told BBC Radio 4’s Today programme.

“What we should be doing is supporting children. We shouldn’t be saying because of the decisions your parents have made, whether a spouse has left another, that children should lose out, and whatever Iain says that is the implication.”

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