Cost of Living
Debate between Edward Leigh and Nigel Evans(12 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sovereign Grant Bill
Debate between Edward Leigh and Nigel Evans(13 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Is the hon. Member for Gainsborough (Mr Leigh) giving way, or has he sat down?
Finance Bill
Debate between Edward Leigh and Nigel Evans(13 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Nigel Evans)
We now come to new clause 5. Fiona Bruce. Not moved?
New Clause 5
Transfer of personal allowances between spouses
‘After section 37 of the Income Tax Act 2007, insert—
“37A Transfer of personal allowances between spouses
(1) This section applies to an individual who is entitled to a personal allowance under sections 35 to 37 for a tax year if—
(a) the individual is a person whose spouse who is living with the individual for the whole or any part of the tax year, and
(b) the spouse meets the requirements of section 56 (residence, etc).
(2) If—
(a) the allowance exceeds the individual’s remaining relievable income;
(b) the individual makes an election, and
(c) the individual’s spouse makes a claim,
the individual’s spouse is entitled to an allowance for the tax year equal to the amount of the excess.
(3) The individual’s remaining relievable income is found by—
(a) taking the amount of the individual’s net income, and
(b) subtracting any personal allowance to which the individual is entitled for the tax year.”’.—(Mr Leigh.)
Brought up, and read the First time.
Mr Leigh
I beg to move, That the clause be read a Second time.
In the last Parliament the Prime Minister and other senior Conservatives repeatedly expressed their commitment to recognise marriage in the tax system. There were some very strong statements, particularly by the Prime Minister. For instance, in Glasgow, in July 2008, he said:
“And when it comes perhaps to the most important area of all, families, we will take action not just to support marriage and family stability”,
because he wanted to say
“to parents, your responsibility and your commitment matters, so we will give a tax break for marriage and end the couple penalty.”
That was the leader of our party speaking during the last Parliament. This was the key policy response to the challenge of social breakdown, or the “broken Britain” phenomenon, and it became an important manifesto pledge at the 2010 election—a manifesto pledge on which every Conservative MP was elected. It was a sacred bond, as it were, with the electorate to support marriage, which was considered to be an absolutely key part of dealing with broken Britain. We put that in our manifesto.
I know that our party did not win an outright majority, but the commitment, most importantly, got into the coalition agreement with a provision for our Lib-Dem friends to abstain. I am not asking them to do anything, but I am asking our Front-Bench team to fulfil the pledge that they solemnly made in the manifesto and put in the coalition agreement. We are still waiting for it, which is why new clause 5 is so important and why I believe that, whatever else has been going on in the background this afternoon—I need not go into that—it was my duty to move it. If it had not been moved, many people involved in the Christian community or in the Christian Institute or in churches would have wondered why this new clause—clearly on the agenda this afternoon, and a vital part of what we are trying to achieve for Britain—had suddenly been withdrawn. I was not prepared to let that happen. I have therefore moved it to allow a debate, to which the Government should be made to respond.
Since the election the Prime Minister has reiterated his commitment to recognise marriage in the tax system on a number of occasions, including at his second Prime Minister’s Question Time—but no action has yet been taken. Given that the manifesto pledge is backed by the coalition agreement and pertains to the period between 2010 and 2015, the fact that the Government have not yet acted to recognise marriage in the tax system is, I hope, no cause for alarm. This debate is important: the Minister will have to respond to it later, when he can assure us that although it has not been possible to do this yet, it is definitely going to happen in this Parliament because it was in our manifesto and in the coalition agreement. At the very least, I want the Minister to say that.
Since the commitment to recognise marriage in the tax system was made last year, there have been some significant changes, which in my personal view greatly increase the need for swift action. In this context, the tabling of new clause 5 on Report to recognise marriage in the tax system is an important step. It provides an opportunity to put on the record the standard arguments for recognising marriage in the tax system and, more importantly, to set out the changes over the last 12 months that have greatly increased the urgency of taking action in this area. As I have said, the Government are obliged to respond and engage with the implications of the changes as they relate to the importance of recognising marriage in the tax system.
Let us go into a bit more detail. Apart from married couples with at least one spouse born before 1935—a number that will clearly reduce over the years—and couples in which at least one partner is blind, everyone in the United Kingdom is taxed on an individual basis. Unused tax allowances cannot be transferred from a non-earning spouse to an earning spouse.
Under the system of transferable allowances, which we have constantly promoted as a party for several years and as is envisaged in our coalition agreement, a non-earning spouse would be able to transfer the whole or part of the basic income tax personal allowance to their earning spouse. Depending on how it was introduced, the whole allowance or part of it could be transferable, and it could be limited to couples with children under a specified age, or limited to tax at the basic rate. The Government can decide what they can afford and they can bring it in gradually; there need not be dead-weight costs or the other problems that were aired in the previous debate. Moreover, I am not at all sure that it is appropriate to talk about dead-weight costs in this context at all. For 2011-12 the personal allowance is £7,475; if the whole allowance were transferable it would be worth up to £1,495, so we are not talking about huge sums of money.
Let us look at what other countries are doing, because it is important to nail the untruth that this idea comes just from the right wing of the British Tory party, or from the Christian community, when it is very common throughout the world. In fact, Britain is unusual among developed countries in failing to recognise marriage in the tax system. This is something that we did as a country, with cross-party agreement, as it was considered absolutely the right thing to do, right up to 1999-2000. Only 24% of citizens of OECD states live in countries that do not recognise marriage in the tax system in one way or another, and most of those live in just three countries—Mexico, Turkey and the UK. We are very much in the minority in not recognising marriage through our tax system. Why should we not recognise marriage when most countries and tax administrations in the world think that marriage is a force for stability? It is not unusual to want to recognise that. Other developed countries such as France, Germany, Italy and America all recognise marriage. In that context it was hardly surprising to learn that, according to the latest figures—published in May 2010—the resulting tax burden on single-earner married families in the United Kingdom was one third greater than the OECD average.