Divorce, Dissolution and Separation Bill [HL]

Debate between Lord Mackay of Clashfern and Lord McColl of Dulwich

Committee stage & Committee: 1st sitting (Hansard - continued) & Committee: 1st sitting (Hansard - continued): House of Lords
Tuesday 3rd March 2020 Lords Chamber

[Lord McColl of Dulwich (Con)]

My Lords, Amendment 19A is in my name. One of the headline Conservative Government commitments in the relatively recent past was abolishing the couple penalty. The couple penalty, noble Lords will recall, was the unintended fiscal incentive for a couple with children on low to modest incomes not to live together or marry because of the benefits that would be lost. Abolishing this was a headline Conservative manifesto commitment in the 2010 general election. At that time the Government’s primary concern with respect to marriage was the removal of obstacles to marriage, whereas today, their focus in this Bill seems to be on removing obstacles to divorce.

In this context, I have tabled this amendment for two reasons. First, I think that as the Government engage with this new task, it would be wise to pause to reflect on the progress made in relation to the earlier task of abolishing the couple penalty. Given both the importance of removing the couple penalty to help couples commit, and the potential for easier divorce to inflame the commitment problem in the presence of an ongoing couple penalty problem, it would be premature to prioritise making divorce any easier until we have dealt with the couple penalty problem.

Secondly, we must understand the impact of the couple penalty on divorce itself. If a couple on low or modest income manage to marry despite the couple penalty, they will none the less feel the negative impact on their marriage in that, if they were to terminate it, they would experience some fiscal benefits. For this reason, it is very important that we understand the impact of the couple penalty on divorce rates.

The main mechanism identified by the Government for addressing the couple penalty was the marriage allowance. A fully transferable marriage allowance was proposed by the Centre for Social Justice, commissioned by the Conservative Party and chaired by the right honourable Iain Duncan Smith MP in 2007, and adopted by the then Conservative Party leader, David Cameron.

Some upper- and middle-class people scoffed at this proposal, stating sarcastically that they got married for love. The idea that anyone would fall in love for fiscal reasons was plainly nonsense, and the suggestion that the purpose of the couple penalty was to assist in this regard only helped demonstrate just how out of touch with reality the wealthy scoffers were.

The point was simply that, when a couple fall in love and decide that they want to be together, they have a choice about what form their relationship should take. If formalising their commitment through a “till death us do part” marriage commitment would cause them to lose benefits, they would be more likely to formalise their relationship in some other, less stable way.

The point of dealing with the couple penalty was that, if the tax and benefit design had the unintended consequence of making it harder for couples on low to modest incomes to formalise their commitment through marriage, with all its benefits for adult and child well-being, the couple penalty was a bad thing and should be removed. However, at the beginning of the 2010 general election campaign, Mr Cameron explained that a fully transferable allowance could not be afforded immediately and that we would start with a provision allowing a non-earning spouse to transfer 11.6% of his or her allowance to an earner spouse. He added that he wanted the allowance to be increased and that he was sure that in the course of the Parliament it could be.

The marriage allowance was not actually introduced until the very end of the Parliament, in 2015, and then only as an even more meagre 10% allowance. It has continued to be just 10% ever since. At 10%, the marriage allowance is so small that it barely makes any impression on the couple penalty, which remains very considerable. In this context, we must assume that the couple penalty continues to act both as an obstacle to entering marriage and as a pressure for divorce.

As the Government have moved on to prioritising helping people to leave marriages with greater ease, there is now an urgent need for them to address the couple penalty problem in order both to remove an obstacle to marriage and to remove a strain on marriages that we must assume provides a fiscal incentive for divorce. If the Government want to get this Bill through, they would be well advised to use the Budget to significantly increase the marriage allowance in order to be seen to balance their efforts to help people to leave marriages more quickly with efforts to strengthen marriage.

[Lord Mackay of Clashfern]

My Lords, I put my name to the amendment of my noble friend Lord Farmer with the view that, if it is easy to produce those results, it might be quite wise to do so.

So far as the amendment of my noble friend Lord McColl of Dulwich is concerned, I noticed that he said that the Bill was intended to remove an obstacle to divorce, but I do not really think that that is a fair way to describe it. As far as I am concerned, the Bill deals principally with an unnecessary irritant to the relationship between divorcing parties. It does no good: it does not establish fault or anything of the kind; it just creates the possibility of renewed ill feeling as a result of a rehearsal of what one party to the marriage thinks about the other party. That is often not particularly flattering and certainly not particularly comforting, and removing it does not seem to remove an obstacle to divorce at all.