Ed Balls speaks at the Labour conference in Brighton last year. Photograph: Getty Images.
Show Hide image

Balls calls for Osborne to scrap marriage tax allowance to fund 10p tax rate

Shadow chancellor says 10p tax rate would benefit two-thirds of married couples, while tax allowance would help just one-third.

Ahead of the Budget on Wednesday, Ed Balls has given an interview to the BBC calling on George Osborne to scrap the planned marriage tax allowance and use the money saved to introduce a 10p tax rate.

It's a smart intervention, not least because the socially liberal Osborne privately loathes the policy (for both political and economic reasons). As Balls notes, despite the broad promise to "recognise marriage" in the tax system, just a third of couples (4.1 million) will gain from the move. Eighty four per cent of the winners are men and just one in six families with children will benefit. By contrast, a 10p rate of tax would help 24 million taxpayers, including two-thirds (eight million) of married couples. 

Here's Balls's exchange with Nick Robinson: 

EB: What did he actually announce last year, he said that he would introduce a married couples allowance which, when you look at the detail, only goes to a third of married couples, and one in six families with children, it goes mainly to men. We think what we should actually do is scrap the married couples allowance which is perverse and unfair, and use that money to give a tax cut for all middle and lower income families. We propose a new 10p starting rate of income tax, it's better than the personal allowance, because it’s better for work incentives, it would help two-thirds of married couples, it would help women as well as men, families with children. Let’s cut taxes for working families, and let’s ease this cost-of-living crisis rather than carrying on pandering to Tory backbenchers with tax cuts that are unfair and don’t make sense.

NR: Let me be clear what you’re telling us, if you’re Chancellor, the marriage tax break goes?

EB: Well it goes, because let’s be honest, it doesn’t go to widows, it doesn’t go to people who’ve been left by an abusive husband, it only goes to a third of married couples, the vast majority of families with children get no benefit, get rid of that, and use that money to help all middle and lower income families struggling with the cost-of-living crisis. Fair tax cuts from Labour, not unfair tax cuts from George Osborne.

When I asked a Balls source whether the announcement meant the revenue that would be raised through a mansion tax (which Labour has pledged to introduce on properties worth more than £2m to fund a 10p rate) could be used for other measures, I was told that the party was not "de-linking 10p and mansion tax", or making a firm commitment to scrap the marriage tax allowance to help pay for the former. Rather, it is an example of a fairer choice that Osborne could make next week and an affirmation of Labour's commitment to tax cuts for the many, not the few. 

Balls is certainly right to emphasise his opposition to the marriage tax allowance, which is, as I've written before, a terrible policy. It will reduce work incentives by encouraging second earners to stay at home, further complicate the tax system and do little to support those families most in need of help. It's also, as Osborne has recognised, bad politics.

In a GQ article earlier this year, Andy Coulson described the perception that the Tories frown upon single parents as "electoral halitosis", but this policy unambiguously discriminates against them. Among those who also don't gain from the policy, as the campaign group Don't Judge My Family has noted, are widows and widowers, people who leave abusive relationships and working couples. Are liberal Conservatives really comfortable with tilting the tax system against them? The philanderer on his third marriage gains, while the hard-pressed single mother is ignored.

But under relentless pressure from Conservative backbenchers, Cameron has been forced to press ahead with a measure that will further toxify the Tory brand. 

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

Unite stewards urge members to back Owen Smith

In a letter to Unite members, the officials have called for a vote for the longshot candidate.

29 Unite officials have broken ranks and thrown their weight behind Owen Smith’s longshot bid for the Labour leadership in an open letter to their members.

The officials serve as stewards, conveners and negotiators in Britain’s aerospace and shipbuilding industries, and are believed in part to be driven by Jeremy Corbyn’s longstanding opposition to the nuclear deterrent and defence spending more generally.

In the letter to Unite members, who are believed to have been signed up in large numbers to vote in the Labour leadership race, the stewards highlight Smith’s support for extra funding in the NHS and his vision for an industrial strategy.

Corbyn was endorsed by Unite, Labour's largest affliated union and the largest trades union in the country, following votes by Unite's ruling executive committee and policy conference. 

Although few expect the intervention to have a decisive role in the Labour leadership, regarded as a formality for Corbyn, the opposition of Unite workers in these industries may prove significant in Len McCluskey’s bid to be re-elected as general secretary of Unite.

 

The full letter is below:

Britain needs a Labour Government to defend jobs, industry and skills and to promote strong trade unions. As convenors and shop stewards in the manufacturing, defence, aerospace and energy sectors we believe that Owen Smith is the best candidate to lead the Labour Party in opposition and in government.

Owen has made clear his support for the industries we work in. He has spelt out his vision for an industrial strategy which supports great British businesses: investing in infrastructure, research and development, skills and training. He has set out ways to back British industry with new procurement rules to protect jobs and contracts from being outsourced to the lowest bidder. He has demanded a seat at the table during the Brexit negotiations to defend trade union and workers’ rights. Defending manufacturing jobs threatened by Brexit must be at the forefront of the negotiations. He has called for the final deal to be put to the British people via a second referendum or at a general election.

But Owen has also talked about the issues which affect our families and our communities. Investing £60 billion extra over 5 years in the NHS funded through new taxes on the wealthiest. Building 300,000 new homes a year over 5 years, half of which should be social housing. Investing in Sure Start schemes by scrapping the charitable status of private schools. That’s why we are backing Owen.

The Labour Party is at a crossroads. We cannot ignore reality – we need to be radical but we also need to be credible – capable of winning the support of the British people. We need an effective Opposition and we need a Labour Government to put policies into practice that will defend our members’ and their families’ interests. That’s why we are backing Owen.

Steve Hibbert, Convenor Rolls Royce, Derby
Howard Turner, Senior Steward, Walter Frank & Sons Limited
Danny Coleman, Branch Secretary, GE Aviation, Wales
Karl Daly, Deputy Convenor, Rolls Royce, Derby
Nigel Stott, Convenor, BASSA, British Airways
John Brough, Works Convenor, Rolls Royce, Barnoldswick
John Bennett, Site Convenor, Babcock Marine, Devonport, Plymouth
Kevin Langford, Mechanical Convenor, Babcock, Devonport, Plymouth
John McAllister, Convenor, Vector Aerospace Helicopter Services
Garry Andrews, Works Convenor, Rolls Royce, Sunderland
Steve Froggatt, Deputy Convenor, Rolls Royce, Derby
Jim McGivern, Convenor, Rolls Royce, Derby
Alan Bird, Chairman & Senior Rep, Rolls Royce, Derby
Raymond Duguid, Convenor, Babcock, Rosyth
Steve Duke, Senior Staff Rep, Rolls Royce, Barnoldswick
Paul Welsh, Works Convenor, Brush Electrical Machines, Loughborough
Bob Holmes, Manual Convenor, BAE Systems, Warton, Lancs
Simon Hemmings, Staff Convenor, Rolls Royce, Derby
Mick Forbes, Works Convenor, GKN, Birmingham
Ian Bestwick, Chief Negotiator, Rolls Royce Submarines, Derby
Mark Barron, Senior Staff Rep, Pallion, Sunderland
Ian Hodgkison, Chief Negotiator, PCO, Rolls Royce
Joe O’Gorman, Convenor, BAE Systems, Maritime Services, Portsmouth
Azza Samms, Manual Workers Convenor, BAE Systems Submarines, Barrow
Dave Thompson, Staff Convenor, BAE Systems Submarines, Barrow
Tim Griffiths, Convenor, BAE Systems Submarines, Barrow
Paul Blake, Convenor, Princess Yachts, Plymouth
Steve Jones, Convenor, Rolls Royce, Bristol
Colin Gosling, Senior Rep, Siemens Traffic Solutions, Poole

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.