Five problems with the Tories' married couple's tax allowance

Including, only a third of married couples will actually gain, it discriminates against single parents and it reduces work incentives.

With Tory MPs continuing to agitate for the introduction of a married couple's tax allowance, Treasury minister David Gauke has written a letter to backbenchers reassuring them that the government "will legislate for this in this Parliament". 

The policy, as outlined in the 2010 Conservative manifesto, would allow individuals not using all of their personal tax allowance (because their income is less than the current threshold of £9,440) to transfer up to £750 of this unused allowance to their spouse or civil partner, reducing the latter's tax bill by up to £150. It would apply only to couples where the higher-income member is a basic rate taxpayer, with gains tapered away from higher earners. The proposal was included in the Tory manifesto and the coalition agreement provided the Lib Dems with the right to abstain, so Tory MPs are understandably angered by the government's tardiness. But as I show below, there are at least five good reasons why George Osborne (one of the most socially liberal MPs) shows every sign of wanting to abandon it. 

1. Only a third of married couples will​ benefit 

Despite the broad promise to "recognise marriage" in the tax system, most married couples won't gain from it. In 2010, the IFS estimated that just four million out of 12.3 million married couples would benefit (at a cost of £550m), including only 2.5 million of the 8.7 million married couples with someone in work. The remaining 1.5 million gainers are mostly married pensioners. As the IFS noted, "The policy is not, therefore, a general recognition of marriage in the tax system, as it affects only 32% of married couples and 29% of non-pensioner married couples." 

The policy could, of course, be redesigned so that all or most married couples benefit but this, not least for the fiscally conservative Osborne, would be prohibitively expensive. 

2. It discriminates against single parents, widows and widowers and more

In his recent GQ article, Andy Coulson described the perception that David Cameron does not like single parents as "electoral halitosis", but this policy unambiguously discriminates against them. Among those who also don't gain from the policy, as Don't Judge My Family notes, are widows and widowers, people who leave abusive relationships and working couples (discussed below). Is Osborne comfortable with tilting the tax system against them? In addition, if, as previously suggested, those in civil partnerships benefit from the measure, it will become even harder for the government to argue against introducing them for heterosexual couples (a policy that, unlike equal marriage, really would undermine marriage). 

3. It will reduce work incentives

Through policies such as reserving childcare support for dual-earner couples, Osborne has sought to increase work incentives, but this measure will reduce them. Since only those couples with one earner with an income above the personal allowance will benefit, it will encourage actual or potential second earners to stay at home. 

4. There's no evidence that marriage improves child outcomes

One of the main justifications for the policy is that marriage is beneficial for children. As Iain Duncan Smith has argued, "You cannot mend Britain’s broken society unless you support and value the institution which is at the heart of a stable society". But while children born to married couples have better developmental outcomes than those born to cohabiting couples, there's no evidence that this is due to marriage itself. Instead, as the IFS and others have argued, it is more likely due to the fact that better educated and higher-earning couples are more likely to get married. The right has confused correlation and cause. 

5. It will further complicate the tax system

Osborne has made much of his commitment to simplifying the tax system, but this proposal will create a new layer of complexity. To summarise, it will introduce a transferable allowance restricted to a third of married couples, capped at £750 and tapered away from higher-rate taxpayers. As the IFS points out, "Simpler ways to provide support to low- to middle income married couples would include introducing a married couples’ ‘premium’ into working tax credit and pension credit." 

David Cameron speaks with scientists before opening the Li Ka Shing Centre for Health Information and Discovery at Oxford University on May 3, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.