Till Taxes Do Us Part

The Conservatives are convinced that bad fiscal policies for married couples are to blame for Britain’s ‘broken society’.

Stuart and Jill met at university in the mid-1980s and began dating. After graduation, the most natural progression was for them to live together. The couple didn’t feel the need to get married for nearly a decade. Then one fine day, they announced to their family and friends that they were officially tying the knot—for financial reasons. “How unromantic!” cried their shocked friends. Both worked in the education sector and earned good salaries, large chunks of which were taken away by the British taxman. Keen to take advantage of the UK’s Married Couples Tax Allowance, by which they could pool their tax-free personal allowances, Stuart and Jill decided to give legal validation to a relationship that had lasted nearly a decade. Ironically, a year after they got married, Stuart and Jill got divorced because one of them fell in love with someone else.

Marriage in Britain has been in steady decline for many years, and divorce rates are rising faster than ever. But the UK’s Conservative Party hopes to reverse this alarming trend by handing married couples tax breaks.

The Office for National Statistics (ONS) shows that 370,022 weddings took place in England and Wales in 1980, compared to 283,012 in 1995, 244,710 in 2005 and 236,980 in 2006—the lowest number since 1895 and the smallest proportion of marriages vis-a-vis the population since records began in the mid-Victorian era. In 2008, married people officially became a minority in the adult population of the UK.

According to the ONS, most people above the age of 16 are now single, divorced or widowed. Live-in relationships have become an acceptable part of society and are even recognised legally for investment and inheritance purposes. In 2000, the Labour Party’s Gordon Brown, then the UK’s Chancellor of the Exchequer, decided to scrap the Married Couples Tax Allowance. It was unfair on singles, lone parents and live-in couples, he said.

Ten years on, the Conservatives have promised to bring back marriage tax perks if they win the general election later this year. According to their manifesto, encouraging marriage is essential to fostering a healthy society, and so it is right to offer fiscal rewards. “Of course, everyone is entitled to choose how to live their lives, and some marriages do fail, but we know that in general marriage is an institution that contributes to building a stronger society. That is why Labour was wrong to stop supporting it through the tax system and that is why we will recognise it,” says George Osborne, who is tipped to become Chancellor of the Exchequer if the Tories win.

Mending Britain’s ‘broken society’ is a key plank for the party. David Cameron, the Tory Prime Minister-in-waiting, wants to lead by example and is regularly seen on YouTube with his young family promoting the merits of marriage and family values. “If we get the family right, we can fix our broken society. Britain is almost the only country in Europe that doesn’t recognise marriage in the tax system, and the benefits system actively discourages parents from living together. We have the highest rate of family breakdown in Europe and we have the worst social problems in Europe. Don’t tell me these things aren’t connected,” says Cameron.

Supporters of the traditional family unit say marriage has considerable health and economic benefits for wider society. Surveys have shown that much of the youth crime that blights British streets today, such as knife crime, stabbings, gang wars among teenagers and cases of happy slapping (insane acts of violence without any motive or reason), are caused by the lack of a male role model in children’s lives.

Former Prime Minister Tony Blair had launched a ‘Respect’ campaign during his long tenure to erase such Clockwork Orange problems, but youth crime continues to rise, with both victims and perpetrators often being as shockingly young as 10-12 years old.

The Tories lay the blame for Britain’s ‘broken society’ at the door of ‘broken families’. Research last year, from the Millennium Cohort Study, found that married parents are more than twice as likely to stay together as those who are unwed. Evidence shows that almost half of unmarried couples split up before their child’s fifth birthday, compared with a divorce rate of one in 12. The children are generally left in the mother’s care who has to nurture him/her single-handedly. She then moves on to another boyfriend or partner, who may father a child too, but is quite likely to leave him/her in the mother’s care and move on once the relationship breaks up. Single mothers bringing up half siblings are quite common now, particularly among poorer people, among whom marriage is rarer. Psychiatrists argue that the lack of a steady father figure in a child’s formative years can lead to waywardness, indiscipline, inability to react positively to authority and in some cases violence.

Brown has been accused of orchestrating a tax and benefits system that is fuelling ‘Broken Britain’. A study by Civitas, Institute for the Study of Civil Society, shows that people who marry and establish a stable family are 20 per cent poorer than single mums who live on child care benefits. For example, Kayleigh Tidswell-Brown, a mother with a two-year-old son, lost a £9,400 child-care grant after marrying her partner. Kayleigh, who was studying to become a teacher, and her husband Leigh were considering a separation just to claw back the cash. “The current benefits system has huge in-built biases against socially responsible behaviour and the tax system punishes families who try to do the right thing. Not only is this situation completely unfair, it also undermines the creation of a better, more socially just society,” says Matthew Elliott, chief executive of the TaxPayers’ Alliance.

“It is little short of insane that we have a tax and benefits system that encourages couples to live apart rather than together. This is something the Conservatives are committed to changing,” says Chris Grayling, a would-be Cabinet member.

However, the tax breaks that the Tories are offering are too low, argue critics, to entice couples to marry or stay married. Their proposal is to offer a tax break of £1,000 a year, which is about £20 a week, and certainly not enough incentive to get married. Nor can it save marriages gone bad. The Tories, though, argue that the tax break is a token. “What we are trying to do is support an institution that does, on average, deliver better outcomes for children and adults,” says Dr Samantha Callan, of the Centre for Social Justice, who helped put the Tory proposals together.

What may better bolster the institution of marriage is the proposal to reinstate the transferable personal tax allowance. This would particularly benefit couples with one spouse staying home. Critics argue that this policy is unfair too and only favours ‘the middle classes in middle England’, the Tories’ traditional vote bank. “It is unfair because it gives tax breaks to married couples where one person can afford to stay at home, but does nothing for couples who both work. It is unfair because a family that loses one parent will have their tragedy compounded by an effective tax rise. And it is unfair because it takes money from the pockets of poorer families and gives it to rich ones,” argues Danny Alexander, senior Liberal Democrat MP.

Jenny North, head of public policy for Relate, an NGO which offers relationship counselling, is even more dismissive of the Tory proposal, calling it “gesture politics” and “naïve”. Says she, “It’s true that married couples stay together longer than co-habiting couples. But it tends to be better-off couples who get married and £20 a week will make little difference to them. It will benefit people who are already quite well off.”

The Conservatives have watered down their proposal, since, but there has been a furore within the party. “Promoting marriage comes up repeatedly in the top five most pressing concerns of core Tory voters,” says Tim Montgomerie, editor of the Conservative Home website.

A final word of caution for anyone tempted to marry for that £20 a week extra. The average cost of a wedding in the UK is put at about £17,000 a shot. That means it will take 16 years of married bliss to offset the tax break.

Stuart and Jill’s surnames have been withheld since they are personally known to the writer.

marriagetaxesUK