The Conservative Party have had a particularly controversial pet policy for about a decade now. The policy, which was in place for several decades until well into the 1970s, is based on the simple idea that married couples should have to pay lower tax contributions than unmarried coupes and single people. There is a lack of reasoning to explain how this is fair or indeed justifiable.
The idea gets worse when you look at how the Coalition intends to implement it, as it has committed to do by 2015. The lower earner will be able to transfer £750 of their tax-free allowance to the higher earner. To a basic rate earner, this is worth £150- but this rises with the income of the higher earner. Therefore this policy will not benefit couples with incomes in the same tax band, with three regressive effects:
The first is that it transfers money from the hands of the lower earner to the higher earner. With the gender pay gap being all too prevalent, this is much more likely to be the husband.
Secondly, only the well-off can afford to have a non-employed spouse. Most people on real world incomes (that is, a Tory Cabinet minister’s income divided by 100) will say that living costs are such that, even if their spouse wanted to be, to use the outmoded ’50s term, “homemakers”, they would not be able to balance the books on one income.
Thirdly, the tax break is worth more to a married couple with a very high earner than one with an average earner. Indeed, the tax break is worth £300 to somebody on the 40p tax band and £337.50 to those on the top rate.
And what is the real purpose of this? To pressurise couples into marrying. By reducing individual choice as to how to live their lives, the Conservatives, or at least their rabid right wing, are displaying their usual combination of social authoritarianism and economic liberalism, an attitude which is sometimes puzzling to say the least.
And what of those who simply never cohabit? Do they deserve to be penalised by the tax system? Whatever the Tories may think, they depend on the Liberal Democrats, a party which has the establishment of a fairer tax system written into its constitution, to abstain in order to pass the legislation. Nick Clegg and his associates must be held responsible for collaborating with this, if indeed they choose to do so.