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.

Photo: Getty
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Why is Theresa May wasting time and money on the Article 50 case?

The Prime Minister has wasted time, money and weakened her position for no good reason. 

The question of who has the power to pull the Article 50 trigger – the executive or the legislature – is still rumbling at the Supreme Court, but yesterday’s vote renders the matter somewhat otiose. 

461 MPs voted in favour of a motion supporting the government’s timetable for triggering Article 50, with just 89 dissidents, with 23 Labour MPs and Ken Clarke joining Caroline Lucas, the nine Liberal Democrats and the SNP in voting against the motion. 

“MPs hand May 'blank cheque' for Brexit” is the Telegraph’s splash. “Hooray! MPs say yes to EU exit” roars the Express. “Victory for PM: Commons backs May on Brexit” is the i’s take. “Day MPs spoke for Britain” is the Mail’s splash, while the Guardian goes for the somewhat more sedate “MPs back government timetable to trigger Article 50” below the fold.

But that doesn’t mean that the deliberations of David Neuberger and the rest of the Court don’t matter. If the Court rules that Article 50 does represent a loss of rights not provided for in the referendum, that requires a vote of the legislature – and that means both houses of Parliament and an full Act of Parliament. 

It’s entirely possible that the Supreme Court could rule that Article 50 does entail a loss of rights BUT that the legislature had already weighed in by voting to have a referendum – Neuberger described this as the “hole” in the claimants’ case – but the whole affair raises questions of Theresa May’s judgement. It’s not clear what the government has gained by appealing a judgement rather than seeking parliamentary approval. It is clear that the government has wasted both money and time on the court case, when a parliamentary majority was always at hand.

There's a bigger risk to the PM, too. If the Supreme Court judgement limits executive power further, or rules that not only Westminster, but the devolved legislatures, must also vote on whether to pull the Article 50 trigger, the PM’s pugnacious manner could put Brexit – and her premiership – in some jeopardy. 

TROUBLE AHEAD

Speaking of the PM…Theresa May is interviewed in today’s FT by George Parker and Lionel Barber. Among the topics: why she gave George Osborne the push, whether or not she’s a “control freak”, and why she once compared herself to Elizabeth I. 

But the striking moment is the brief appearance of the old Remain-backing May, with her warning that the nations of the EU27 “don’t want to see others looking to break away and to vote to leave in the way the UK has done” making the negotiations over Britain’s Brexit deal trickier than many – including May herself – are often willing to admit publicly. 

DERAILING GRAYLING

Chris Grayling is under fire after the Evening Standard’s Pippa Crerar revealed that he blocked Sadiq Khan’s takeover of London’s suburban railways not in order to look out for passengers, but to keep his grubby Labour hands off it. Bob Neil, the Conservative MP for Bromley, demanded that Theresa May sack the Transport Secretary at PMQs yesterday. Over at CityMetric, Jonn is very angry about the whole thing.

SO, EVERYONE, THEN? 

Another Theresa May interview, this time with Fraser Nelson and James Forsyth in the Spectator. She has some sharp words for the Civil Service, accusing officials of trying to second-guess her and to quantify everything. Particularly exercising her: Whitehall’s attempt to quantify what the “just managing” she wants to help means in terms of income (£18k-£21k).  She says it means anything from “holding down two or three jobs in order to make ends meet”, to those worried about job security, to homeowners “worried about paying the mortgage”.

SLING YOUR HYKE

Polls are open in the Sleaford and North Hykeham by-election, an ultra-safe Conservative seat that voted to leave the European Union by 60 per cent to 40 per cent. But all attention is being focused on the battle for second and third place, with Ukip expecting to steal second from Labour. Meanwhile, Labour fears they may be pushed into fourth by the Liberal Democrats.

OUR STEEL, SAVED?
A deal has been struck to save the steelworks at Port Talbot, with Tata Steel commiting to keep production there running, provided that workers agree to close off the pension scheme they inherited from British Steel to new workers. “Tata and unions agree rescue plan for Port Talbot steelworks” is the FT’s splash.

MATTE-OH

Matteo Renzi has officially resigned as Italian Prime Minister after two-and-a-half years, the fourth-longest serving PM in the history of the Republic. 

DFID CONSULTANCIES

Private consultancies working in international development will be forced to disclose their fees and salaries, Priti Patel has vowed after a Timesinvestigation into the millions spent on consultancies by the department. 

SEE? IMMIGRATION CREATES JOBS

The Home Affairs Select Committee will launch an inquiry into public attitudes to immigration today. Committee chair Yvette Cooper says that it will be “a different kind of inquiry, looking outward at the country, not inward at the government.” MPs will tour the country talking to the public about the issue. 

DOMINIC, AGGRIEVED

Dominic Grieve, the former Attorney-General, has called on Theresa May to dissociate herself from the Mail’s “vitriolic abuse” of judges in the Supreme Court case. Anushka Asthana has the story in the Guardian.

CAMERON, INC

David Cameron has set up a limited company to manage his speaking engagements and private ventures in retirement. He has also sold his memoirs, albeit for what is believed to be a lower fee than that secured by Tony Blair for The Journey. Michael Savage has the story in the Times.

AND NOW FOR SOMETHING COMPLETELY DIFFERENT

Christmas is coming! And the Christmas sandwich is already here. The NS team – including our editor – share their thoughts on the best and the worst.

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This originally appeared in today's Morning Call: get it in your inboxes Monday through Friday - sign up here.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.