What if the tax and benefits system already rewards marriage?

If you want the system to incentivise staying together, then relax.

MPs have written to the Chancellor this morning calling for the introduction of a marriage tax allowance. But what if the tax and benefits system already rewards marriage?

This would challenge the idea of the 'couple penalty' - the idea that the tax and benefit system makes it more attractive for families to split up than stay together. It's not mentioned in the MPs' letter, but it's an implicit part of the debate around the issue.

In principle, it sounds like a simple thing to work out: you would just need to calculate whether the system makes people richer if they split up, or not.

The problem is that it's relatively easy to work out how taxes and benefits change if a couple split up - but harder to work out how their cost of living changes. Economies of scale kick in when you live with a partner, and you need to calculate how much cheaper bills, rent and living expenses are under one roof.

The usual way of working out this is using an equivalence scale: a ratio that estimates how much extra family members cost. Most analyses that have suggested a 'couple penalty' exists rely on these scales, and usually an OECD scale drawn up in 1982. These scales generally rely on researchers' assumptions [pdf] about economies of scale and how people live - not, as a rule, actual evidence about how people live. They're not entirely plucked out of the air, but they are not really a meaningful way to assess relative need.

So why not ditch the abstraction, and actually aim to understand what people in the real world need to live on based on a common framework, and then work out the relative cost of living together or apart?

We need not imagine: this June some researchers did just that (report here [pdf]). Analysing what real, live, actual people said they need to live, and then combing through that to work out the precise cost of living, it found a rather different picture. An unemployed couple, for example, would be £62 a week worse off if they split up; if one parent was in work at £9 an hour they would £36 worse off; if both worked, it was £44. The numbers vary by family size and type but as a rule, people are not better off apart.

None of this necessarily makes the idea of marriage tax allowances a bad one, or undermines the aim of supporting families more generally. It does suggest extreme caution though. Policy based on a purely theoretical understanding of how couples manage money is likely to be ineffective policy. Examining the couple penalty is far from easy, but the best analysis we have suggests it doesn't exist on a systematic basis.

What's more, it suggests much of the angst about undermining marriage is misplaced. If you want the system to incentivise staying together, then relax, and rejoice: it already does.

Photograph: Getty Images

Gordon Hector is public affairs manager for the Joseph Rowntree Foundation.

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The trouble with a second Brexit referendum

A new vote risks coming too soon for Remainers. But there is an alternative. 

In any given week, a senior political figure will call for a second Brexit referendum (the most recent being David Miliband). It's not hard to see why. EU withdrawal risks proving an act of political and economic self-harm and Leave's victory was narrow (52-48). Had Remain won by a similar margin, the Brexiteers would have immediately demanded a re-run. 

But the obstacles to another vote are significant. Though only 52 per cent backed Brexit, a far larger number (c. 65 per cent) believe the result should be respected. No major party currently supports a second referendum and time is short.

Even if Remainers succeed in securing a vote, it risks being lost. As Theresa May learned to her cost, electorates have a habit of punishing those who force them to polls. "It would simply be too risky," a senior Labour MP told me, citing one definition of insanity: doing the same thing and expecting a different result. Were a second referendum lost, any hope of blocking Brexit, or even softening it, would be ended. 

The vote, as some Remainers note, would also come at the wrong moment. By 2018/19, the UK will, at best, have finalised its divorce terms. A new trade agreement with the EU will take far longer to conclude. Thus, the Brexiteers would be free to paint a false picture of the UK's future relationship. "It would be another half-baked, ill-informed campaign," a Labour MP told me. 

For this reason, as I write in my column this week, an increasing number of Remainers are attracted to an alternative strategy. After a lengthy transition, they argue, voters should be offered a choice between a new EU trade deal and re-entry under Article 49 of the Lisbon Treaty. By the mid-2020s, Remainers calculate, the risks of Brexit will be clearer and the original referendum will be a distant memory. The proviso, they add, is that the EU would have to allow the UK re-entry on its existing membership terms (rather than ending its opt-outs from the euro and the border-free Schengen Area). 

Rather than publicly proposing this plan, MPs are wisely keeping their counsel. As they know, those who hope to overturn the Brexit result must first be seen to respect it. 

George Eaton is political editor of the New Statesman.