Finance Bill

Edward Leigh Excerpts

Tuesday 28th June 2011 Commons Chamber

[Sir Paul Beresford]

The new clauses would provide tax relief on medical insurance premiums for people above a certain age. “Pensioners” might be a better description of them. As a very part-time dentist, I must declare a potential interest, but I had better declare a further potential interest, as birthdays keep relentlessly coming upon me—and the rest of us.

As in much of the south-east, life expectancy in Surrey is somewhat higher than the England mean. The average life expectancy in England is about 78 for males and 82 for females, while in Surrey the figures are about 82 and 86 respectively. Moreover, the proportion of those aged 65 and over in my constituency is about one in five, or 20%. It is obvious to me, as one with a professional interest in health and as an observer of my constituents’ health, that that longevity brings with it a higher demand for health care and imposes large demands on health services, especially cardiac, carcinoma and orthopaedic services. A planeload of Surrey Saga tourists would really set the airport metal detectors buzzing as the hip and knee replacements proceeded towards take-off.

The Mole Valley constituency is served by three good national health service hospitals: East Surrey hospital, Royal Surrey County hospital at Guildford, and Epsom hospital. Those hospitals have expanded in certain health areas to meet the increasing demand for treatment from the elderly, the best example being Epsom, which has a special orthopaedic unit where more than 3,000 hip and knee replacement operations are carried out annually, almost entirely on elderly people from surrounding areas such as Mole Valley. As a result of those medical problems there has been a call for an enhanced and enlarged cardiac unit at Epsom as part of the retention and refurbishment of that much-loved hospital. I have given those two examples to illustrate the increasing demand for national health service care from, predominantly, those aged over 65. That increasing demand is not specific to Mole Valley or even Surrey, but is, to a greater or lesser degree, nationwide among that age group.

My older constituents are also served by private hospital services. Some are relatively local and some are in London, but there is choice for patients. Approximately 12.5% of the United Kingdom population are currently covered by private health insurance, and about 70% of that cover is corporate while about 30% is individual. On retirement, many may wish to take over their corporate private health insurance, but the personal cost becomes a heavy factor. Additionally, many of those who fund their health insurance personally may not feel able to do so when a regular personal income is just a pension or savings. That means that, just as their need for health care is likely to increase, those individuals turn to the national health service and absorb facilities and costs that they would not use if they could be persuaded to retain or take out private health insurance and use the private sector.

Before March 1997, when tax relief was available to those over 60, it was estimated that tax relief was paid in respect of 400,000 contracts to cover about 600,000 individuals.

[Mr Edward Leigh (Gainsborough) (Con)]

I warmly congratulate my hon. Friend on his new clause. Is he aware that a ComRes poll of 150 Members of Parliament found that 66% of Conservative MPs supported the return of tax relief on private insurance for pensioners? That is hardly surprising when even the Major Government gave that elementary service to our elderly people.

[Sir Paul Beresford]

I thank my hon. Friend. One of the delightful things about his intervention is the increase in my education.

Over seven years from 1990, tax relief for the over-60s cost £560 million. However, that included a period when the relief was across all taxpayer rates. In 1994, that was reduced to apply to the basic rate of tax only. Unlike in my proposal, the relief started then at 60, not at 65, so my proposal would reduce the cost to the Revenue in real terms compared to pre-1997.

In 1997 the Labour Government cancelled the tax relief for pensioners, and Western Provident Association estimated that 40% of pensioners would discontinue their private health service. Which? magazine reported in 2002 that private health insurance coverage was lowest in the 65-plus age group. Those who choose to have personally funded private health insurance pay twice for their health—premiums and tax. It would be safe to assume that nigh on 100% of those aged 65 and above are personally funding their health insurance. It is their choice, and for many it may mean sacrificing other choices that may affect their lifestyle.

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[Mr Kevan Jones (North Durham) (Lab)]

I rise to oppose the new clauses. I have to say that it is pleasing to see the real Conservative party still alive and kicking on the Back Benches, wanting to create a privilege for a small section of the population. I understand that when tax relief was in operation, it affected only about 5% of the population. It feels as if we are going back in time a little, because if we accepted the new clause we would be stepping back to the late 1980s, when the Conservative party introduced relief on private health insurance—I acknowledge that the new clause would apply to the over-65s, rather than to the over-60s, as was the case then. That was introduced to address a lot of the arguments put by the hon. Member for Mole Valley (Sir Paul Beresford); the aim was to try to ensure that people would be given choice. I hasten to add that people have a choice if they can afford it, but they have no choice whatsoever if they cannot. I believe, as I understand the Conservative Front-Bench team does these days, that we should seek to improve the health service and opportunities for all, rather than give a tax cut and perk to a very small section of the population.

[Mr Leigh]

Surely the point is that the proposal applies to pensioners, that they have paid tax all their life and that, just at an age when they might need private medical care, they find that their insurance premiums rocket. Surely it is only elementary natural justice that they should get tax relief on those insurance premiums.

[Mr Jones]

I disagree with the hon. Gentleman. I do not understand why a low-paid worker in South Stanley in my constituency who has worked hard all his or her life should be given no tax relief or assistance and should pay their taxes just to give a tax relief and perk to individuals who not only might be able to pay for care, but who have an advantage over them. We should seek to ensure equal access to health care.

I understand what has been said about waiting lists and the health service, but when I was elected in 2001 my constituency contained two old hospitals, one of which—the old workhouse—was a disgrace. We now have two new hospitals, thanks to a Labour Government. The hon. Member for Mole Valley mentioned hip and knee replacements, and I can tell him that the industrial legacy of a mining community meant that my area had a long waiting list; it was not uncommon for people to wait for more than two years. I recall people coming to my surgery arguing about how they could get up the list any faster. Waiting lists have more or less been abolished over the intervening 10-year period, which is testament to the changes the previous Labour Government made and the investment we put in. Investment in the health service should be about ensuring equal access to care, not about giving a tax perk to a very small section of the population—the less than 5% who actually have private health insurance—as this proposal seeks to do.

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[Mr Chope]

It is a matter of seeing what the countervailing benefits would be, because obviously, if as a result of my hon. Friend’s new clause a lot more people who are not contributing anything towards the cost of their health care started to do so, thereby reducing the burden on the NHS, the dead-weight cost that my hon. Friend the Member for Skipton and Ripon (Julian Smith) mentions would be exceeded by the overall benefits, and a reduction in the overall burden of taxation. More people who are getting health care in this country would be paying for it, or contributing to its cost, rather than relying on the state and the taxpayer to do so.

[Mr Leigh]

The dead-weight cost argument is always used against ideas such as school vouchers or tax relief for health insurance, but does my hon. Friend agree that the whole point of such proposals is to help the people in the middle? Quite rightly, Parliament is concerned about the people at the bottom of the heap, and the rich can always buy their way out, but this part of the Conservative party should help the people who struggle all their lives, and pay tax all their lives.

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[Mr Chope]

Of course, the original scheme was brought in on the basis that it would apply to everyone over the age of 60, and initially would give full tax relief to higher-rate taxpayers, so the figures would be nothing like as high under the new clause, because its proposals would apply only to people over 65, and would give only 20% in tax relief.

[Mr Leigh]

Is my hon. Friend not being very moderate? Surely there is an argument for giving everyone tax relief, which is how we would move to a continental-type system with much better health outcomes, and blur the boundaries between the private and public sectors. That is what we, as Conservatives, should believe in.

[Mr Chope]

I absolutely agree, but I think that my hon. Friend the Member for Mole Valley, who tabled the new clauses, is a gradualist by nature; that goes back to his time as leader of Wandsworth council, when he was preparing for his time in Parliament and knew that things could not be done immediately but must be done gradually. He can speak for himself when he contributes to the debate, but perhaps that gradualism is part of his thinking.

I will finish soon, because many Members wish to contribute, but let us first put this suggestion in perspective by thinking about roughly how much it would cost. Let us suppose that an average health premium is about £2,000, which a pensioner or pensioner family would be faced with paying, and which previously their employer had paid as part of a contributory or non-contributory occupational scheme. Many pensioners would not pay that, but if we gave them the tax relief, which would amount to more than £400, I submit that many of them would carry on paying for their insurance, thereby contributing towards the cost of the health service, which would be a benefit.

The last time I spoke in a debate on a Finance Bill on Report it was about insurance premium tax. The insurance premiums paid for health insurance are already subject to tax, which the Treasury keeps increasing, so an alternative way forward might be to abolish the insurance premium tax paid on health insurance contributions. That is a separate argument and not the subject of this group of new clauses, but it serves as an example. The Financial Secretary to the Treasury would obviously say that we could not afford that—but does he realise that if we increased the number of people taking out health insurance, the Treasury would receive a lot more in insurance premium tax? I am sure that he will take that into account when he—in due course, having done the proper research—tells us the costs and benefits of the proposals in the new clauses.

We should not forget that the dynamic effect of these taxation changes could deliver great benefits and dividends. It is important to send a strong message to those who can afford to contribute towards their health care costs but who currently do not do so, that this would enable them to contribute at a lower cost than would otherwise be the case. I think that it is a well-rounded and sensible proposal, and I am delighted that it is getting so much support from colleagues on the Government side of the House.

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[Mr Hoban]

That is the Treasury’s latest estimate, and it is a number that we are going to stand by.

In his opening speech, my hon. Friend the Member for Mole Valley (Sir Paul Beresford) said that he wanted to restrict the tax relief to the basic rate, but subsection (3) of new clause 1 would not have that effect. It suggests that the relief could be obtained at the highest marginal rate that a person paid. He has used the 1990 legislation, whereas in the 1994 legislation the relief was restricted to the basic rate.

[Mr Leigh]

Why does my hon. Friend think that the social insurance systems on the continent, where there is much more blurring between the public and private sectors, produce much better health outcomes? Also, why does he think that the Major Government followed this policy, which we all supported at the time? Why is this proposal different from the policy of the Major Government, which we all—or some of us—supported?

[Mr Hoban]

I am pleased that my hon. Friend added that qualification. I entered the House only in 2001, so I was not in a position to support the Major Government or to disagree with them. We need to look at this measure on its own merits.

I would say to my hon. Friend the Member for Mole Valley that the way in which his new clause has been drafted means that tax relief could be gained at someone’s highest marginal rate, which could mean relief of up to 50%.

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[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.

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[Helen Goodman (Bishop Auckland) (Lab)]

I agree with the hon. Gentleman about the importance of marriage, but I am not convinced that it is appropriate to encourage and recognise it through the tax system. The hon. Gentleman mentioned unfairness, and I think the question of fairness is the nub of the issue, for if the money were spent on benefits or tax credits for children rather than on a married tax allowance, far more children could be lifted out of poverty.

[Mr Leigh]

As so often in Finance Bill debates, the devil is in the detail. The hon. Lady has made a perfectly reasonable point. However, I hope to establish in my speech that the present system is unfair and, specifically, militates against single-earner families. That applies especially to those who are struggling out of poverty, but it is not necessarily the very poorest about whom we should be concerned. We should also be concerned about families on fairly modest earnings who are desperately trying to look after their children, and who decide that someone, usually the mother, should stay at home and care for them. But, as I have said, the devil is in the detail, and I will try to deal with the hon. Lady’s point later. It is important, and we need to tease the answer out of Ministers. We want to know why action has not been taken.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[Mr Leigh]

I want to make progress, but I will give way.

[Mr Jones]

I agree with the hon. Gentleman that the devil is in the detail, but surely the new clause would unfairly disadvantage those who lost partners through no fault of their own as a result of broken relationships or death.

[Mr Leigh]

That argument has been used against transferable tax allowances. It is true that it is impossible to create a transferable tax allowance that helps everyone, but I do not consider the fact that in certain circumstances, through no fault of their own, people will not be allowed to enjoy the benefits of such allowances to be a good argument against trying to help others—and that is all we are trying to do.

Let us examine the extent of support for marriage in Britain. It is no surprise that marriage rates are at an all-time low and family breakdown is a massive problem, affecting many different areas and, it is estimated, costing us directly between £24 billion and £41 billion per annum. The “Breakdown Britain” report motivated the then Leader of the Opposition, now the Prime Minister, to come up with this policy—our policy—and launched the debate. It was promoted by my right hon. Friend the Secretary of State for Work and Pensions; although he is not present today, I pay tribute to him for his fantastic work.

[Chris Williamson (Derby North) (Lab)]

Will the hon. Gentleman give way?

[Mr Leigh]

I will in a moment, but I want to make a little more progress. Others will want to contribute to this important debate.

There is no doubt that the lack of support for marriage gives rise to some family breakdown, not primarily through the breakdown of existing marriages but by making marriage a less attractive and more costly option for some people than it would otherwise be. I do not pretend that that applies to everyone, but undoubtedly our present system, which is very unfair on single earners receiving relatively low wages, is a disincentive for some. As the “Breakdown Britain” report demonstrates, a child born to unmarried parents has a nearly one in two chance, before reaching the age of five, of seeing its parents split up, whereas for children whose parents were married, the figure is just one in 12. That is unmistakably a huge difference. It is, I believe, a commonly held view that marriage is a good thing.

A more recent piece of research, “Family breakdown in the UK”, set out the problem of the lack of support for marriage in the following terms:

“the problem is not divorce. While marriage accounts for 54% of births, the failure of marriages—i.e. divorce—accounts for only 20% of break-ups and 14% of the costs of family breakdown, amongst all families with children under five. Unmarried families account for 80% of the break-ups and 86% of the costs.”

The report also states:

“These new statistics demonstrate dramatically that family breakdown is a huge and growing problem and that the main driver of family breakdown is the collapse of unmarried families. A failure to acknowledge these key points will lead to the inevitable failure of any government policy aimed at strengthening families.”

That is why many Government Members believe that this policy is so important.

[Chris Williamson]

Given the hon. Gentleman’s proposition that the tax system discriminates against single-income households and could cause couples to break up, what does he think of the Government’s decision to force through a change in the child benefit rules for single-income higher earners with, say, three children, whose families will lose up to £3,000 per annum? If he believes that family breakdowns result from financial circumstances, he must surely believe that that will lead to even more of them.

[Mr Leigh]

I agree with the hon. Gentleman. I have made clear my belief that our policy of fiddling around with child benefit is entirely wrong. Child benefit works because there is no fraud and no error, and because it is a flat tax. I strongly oppose the Government’s policy, because it will attack families who are on the margin just as they get into work and emerge from poverty. I predict that we will see a U-turn on that policy, and if it is the 23rd U-turn, it will be one of the best of them.

Why does the lack of stability in marriage matter? We all recognise that most single parents do a fantastic job in very difficult circumstances—I noted earlier interventions on my speech to that effect—and they must enjoy our full support. Nothing that I am saying constitutes an attack on them. However, policy must be based on evidence, and the evidence is very clear. It shows that, on average, children who are brought up in single-parent families do less well than children brought up in two-parent families according to every significant measure: educational attainment, health, the likelihood of getting into trouble with the law, and alcohol and drug abuse. I do not think it wrong for the Government to try to recognise what works when it comes to bringing up children.

Some may be tempted to respond to what I am saying by suggesting that the principal cause of the different outcomes is not marriage but wealth, and that it just so happens that wealthier people are more likely to get married. However, the facts do not support that. No one is trying to argue that marriage is the only important consideration, or that wealth is not relevant—of course it is—but data show substantial differences in family stability between married and unmarried couples in the early years of parenthood, even after the discounting of socio-economic factors such as age, income, education and race.

Most notably, the difference in family breakdown risk between married and cohabiting couples is sufficient that even—this is an important point—the poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples. It is foolish to make ourselves the odd one out in comparison with other developed countries such as France, Germany and America. Why do we not recognise marriage in our tax system, and why has the Minister not fulfilled the pledge that we made in our manifesto?

As we all know, recognition of marriage in the tax system specifically through a transferable allowance brings heightened child development benefits. In a culture that encourages parents to go back to work as quickly as possible, even though research demonstrates that this is a key time for developing attachment which has huge implications for the later development of a child, the provision of a transferable allowance makes it easier for one parent to stay at home to be with their children. I am not saying that everyone will want to do it, I am just giving an opportunity. I am not requiring anybody to do anything.

[Helen Goodman]

Will the hon. Gentleman give way?

[Mr Leigh]

I have given way to the hon. Lady once. I will make a bit of progress and if she is really desperate, of course I will let her in because I am very fond of her, as she knows, and we have served together in a Select Committee.

Polling demonstrates that staying at home is a choice that parents want to exercise. That is all that we are talking about here; we are talking about choice—no requirement. For instance, a 2008 YouGov poll for the Centre for Social Justice, run by the Secretary of State for Work and Pensions, found that 88% of parents thought that more should be done to help parents who wish to stay at home and bring up their children in the early years and 97% agreed that the Government should do more in that area. What other policy has 97% support?

A 2009 YouGov poll for the Centre for Policy Studies found that only 12% of mothers wanted to work full time, 31% did not want to work at all. Only 1% of mothers with children under five thought that the mother in a family where the father worked and there were two children under five should work full time, 49% thought that she should not work at all and fathers, when asked the same question, offered an almost identical response. So the facts are there in the opinion poll data. Only 2% thought that mum should work when her husband worked and the children were under five, and 48% thought that she should not work at all.

Many people are forced into work. Many mothers want desperately to be at home looking after their children when their children are very young, but they simply cannot afford to do so. No one suggests that a transferable allowance will solve the problem of family breakdown or make it incredibly easier for families to cope, but it will be a step in the right direction and a small gesture that we in Parliament could make to mothers who desperately want to stay at home and look after their young children.

Many women, rightly, want to work; they have good jobs. Why should we be forcing young women with very young children into low-paid jobs when they want to be at home looking after their children? Why should we create a tax system that militates against women making that choice?

[Helen Goodman]

I am grateful to the hon. Gentleman for indulging me. He makes a powerful point. Many mothers of small children want to work part time. I worked part time as I am sure did many other hon. Members. I want to bring the hon. Gentleman back to the facts. When the tax system changed from one that included a transferable allowance to one that did not, was there evidence of any impact on family breakdown?

[Mr Leigh]

I confess that I cannot go back to 1999 and I do not know what data were then available to the Chancellor, but the hon. Lady cannot deny that our tax system is unfair because it militates against the choice to stay at home. Surely I can take the hon. Lady just this far, if no further—that it should be a free choice for women with young children whether they work or not, and the tax system should be neutral. That is all that we are asking for. The hon. Lady can make a speech later if she disagrees with me. I do not doubt her sincerity. I am just saying that the system is simply unfair.

Britain’s failure to recognise marriage in the tax system meant, as of May 2010, that it was out of line with other developed countries, with the effect that, far from supporting the best child development environment and being family friendly, it was placing a significantly greater proportion of its total tax burden on this family type than was the case in comparable countries. In that context, it is not surprising that family breakdown, the key driver of the broken Britain phenomenon is particularly pronounced and the case for recognising marriage in the tax system is clear and compelling. So all the arguments for recognising marriage in the tax system stand in one key area. The tax burden on one-earner married couples with children in the UK has now risen such that it is over 40% greater than the OECD average.

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[Mr Jones]

I am sure that the hon. Member for Gainsborough will be shocked at the fact that my hon. Friend’s children actually attended his wedding. I did not realise that my hon. Friend was such a progressive individual, but he makes a perfectly good point.

[Mr Leigh]

The hon. Gentleman knows perfectly well that I am not suggesting for a moment that people get married in order to get tax allowances—I have never said that. All I am saying is that the current system is unfair, because it militates against a family on modest earnings where one person wants to stay at home to look after children. Of course nobody gets married in order to get a little tax allowance, but why should we have an unfair tax system?

[Mr Jones]

I actually do not understand why all this is unfair, because the new clause would give an advantage to people who are married but do not have children. I do not know how the new clause does what the hon. Gentleman is proposing in terms of keeping family units together and alleviating child poverty.

The important point relates to what was in the Conservative manifesto. What came out of that Conservative think-tank was the idea that marriage was an important point in keeping the family unit together and ensuring that children and wider society were not disadvantaged by a breakdown in the family unit. The manifesto made a commitment to “recognise marriage” in the tax system. It proposed that couples and civil partners who were basic rate taxpayers should be entitled to transfer just part of their allowance—this was worth, in effect, up to £150 a year. That is very different from what is contained in the new clause, because it makes no mention of civil partnerships. Given the names of the people who are supporting this proposals, I suspect that this has come from the wing that has not quite gone all the way in being the new cuddly Conservative party in terms of even envisaging the idea that civil partnerships, with or without children, could constitute a family unit.

As the hon. Gentleman mentioned briefly, the policy came unstuck in the coalition agreement because this proposal is clearly not supported by the Liberal Democrats. I believe that during a general election television interview, the Deputy Prime Minister called it “Edwardian”.

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[Mr Jones]

I have not had the pleasure of meeting Mrs P, but she certainly deserves a medal for the longevity of her marriage to my hon. Friend.

[Mr Leigh]

I am not sure that that intervention was entirely helpful, because the hon. Member for Ealing North (Stephen Pound) has just proved that tax policy at that time did influence behaviour.

[Mr Jones]

It might have done, but clearly if it raised the cost of a wedding, any financial benefit that people got from their £150 would soon be used up as a result of the extra costs involved. It did nothing to ensure that people stayed together longer.

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[Jim Shannon]

I can tell the House that when I married, I married for love. I am one of those old-fashioned boys; that is just the way I am.

[Mr Leigh]

In the light of the intervention from the hon. Member for Linlithgow and East Falkirk (Michael Connarty), it is important to point out that we are not trying to penalise single-parent families or families in which there are two earners. All we are trying to do is remove the severe penalty on families in which there is only one earner, because our system is totally out of step with most of the rest of the world in that regard.

[Jim Shannon]

I thank the hon. Member for his contribution and for providing a bit of focus to this debate.

Given that the agreement pertains to a full Parliament, one ordinarily would not be concerned at the failure to action a commitment in just over a year. What we need is for legislative change to be approved by the coalition Government, to move forward and perhaps see this legislation coming through in two years. The latest publication of the international tax comparison, CARE’s “The Taxation of Families 2009-10” puts things in a very different light. It demonstrates that we are now headed to a place where the tax burden on a married family with children with one earner on an average wage is growing so much that it will soon be more than 50% greater than the OECD average. That breaks new ground, taking us into territory that not even new Labour dreamt of occupying.

Some will no doubt respond by saying that this is a result of the tax burden having to increase on everyone in the context of the debt crisis. I understand that, but it is not exactly the case. Let me quote a director of an influential think-tank, who said:

“Given that it will take some time between changing the law and implementing the actual recognition of marriage in the tax system, it is important that the Government makes this a priority, takes swift action. The change, or at least a recognition of it, should be made”.

I very much hope that that report can be taken seriously, that the Government can look further at the issue and perhaps bring it forward in future legislation.

--- Later in debate ---

[Dan Rogerson]

The hon. Gentleman has raised a useful point. However, given the existing pressures on families I do not think that the new clause is sufficient to allow that to happen, although it may be a step in the right direction. The argument presented by, mainly, Members in a particular corner of the Chamber is that on one hand that this is about incentives and on the other hand that it would make a financial difference, and I think there is a weakness at the heart of that argument.

Members have produced evidence relating to what happened at the time of the change in the tax system. My own marriage took place in 1999 and was not related to tax considerations; I am pleased to say that other factors were operating. I suspect that, given the way in which tax has risen and fallen in every Budget, if such decisions were based on tax policy we would see a huge flux in the nature of relationships and marriage.

[Mr Leigh]

The hon. Gentleman is making a perfectly honourable speech and his party’s position is entirely consistent, but, as possibly the only Liberal Democrat speaking in the debate, will he confirm that, given the coalition agreement, he would be perfectly relaxed if our Government produced such a transferable allowance? Surely the Liberal Democrats could simply abstain.

[Dan Rogerson]

The hon. Gentleman knows that I am generally a relaxed person. We in Cornwall are famed for being laid back and not wanting the hectic pace of life that some other constituencies thrive on. I am focusing on the debate about the Government’s policy in the Bill and whether the Government will choose to accept the new clause that the hon. Gentleman proposed in such an able and distinguished manner. I hope that the Government will not at this juncture look to act on the proposal in the new clause.

I am happy to update the House that during the course of the debate news reached me that Julia Goldsworthy, the former Member for Falmouth and Camborne, has announced her engagement, which I am delighted to hear. Whether she and Chris have been watching the debate and decided that this was it is unclear. I think it is unlikely, but I am delighted that the institution of marriage is taking a step forward in terms of our political life in Cornwall.

Hon. Members’ speeches have made it clear that the new clause is an attempt to send a signal to a group of people in society, but I am not convinced that we should use the tax system to send a signal. There are other ways in which we could support marriage.

--- Later in debate ---

[Mr Chope]

If there is a defect in the wording of the new clause and it fails to recognise everything that the Prime Minister said—he certainly referred specifically to civil partnerships—the hon. Gentleman may have a point about that, but he does not have a point about much else, in my submission.

[Mr Leigh]

I am happy to make the concession to the hon. Member for Linlithgow and East Falkirk (Michael Connarty), who spoke at some length on this point, that if the new clause is defective, I am happy to withdraw it and for the Government to bring back a new clause that includes civil partnerships. I make it absolutely clear that we have nothing against civil partnerships.

[Mr Chope]

My final point is that there is a read-across between the new clause and the conundrum that the Government face in the debate about the withdrawal of child benefit from families that comprise at least one higher rate taxpayer. That issue is causing a lot of angst among our constituents, particularly for parents in single income households in which one parent stays at home to look after the children. As I have said in correspondence with the Minister, in some cases one parent stays at home to look after a disabled child. If there is one parent who is the breadwinner and he is a higher rate taxpayer on an income of about £45,000 or £50,000, he will be above the threshold and will be deprived of his child benefit.

--- Later in debate ---

[Mr Gauke]

We have heard a lot in this debate about single parents. One group that will be affected if teachers go on strike and schools close on Thursday will be single working parents, who will face substantial disruption in dealing with child care. I hope that Members in all parts of the House will strongly urge teachers to go to work on Thursday.

[Mr Leigh]

I am quite prepared to accept that we are only Back Benchers and that the new clause may be defective, but I would be prepared not to force it to a vote if my hon. Friend now gives a firm and solemn pledge that during this Parliament the Government will honour our manifesto pledge to recognise marriage in the tax system. If my hon. Friend gives me that pledge, I will not force the new clause to a vote; if he does not give that pledge now, I will force it to a vote.

[Mr Gauke]

As always, my hon. Friend is very forceful in the points that he makes. Let me make a little progress; whether he considers it to be sufficient progress we shall wait and see.

--- Later in debate ---

[Mr Leigh]

I am afraid that the Minister has not answered the specific question that I asked him. It is not good enough to say that we will honour a commitment, but then give no date for when that commitment will be honoured. I am very sorry, but there is not a cigarette paper between what my hon. Friends and I are proposing in new clause 5 and what the Prime Minister said, which I shall repeat:

“I believe that we should bring forward proposals to recognise marriage in the tax system. Those in our happy coalition”—

notice that he mentioned the coalition, because this is about now, in this Parliament; he was not talking about some time in the future—

“will have the right to abstain on them, I am happy to say, but I support marriage. We support so many other things in the tax system, including Christmas parties and parking bicycles at work, so why do we not recognise marriage?”—[Official Report, 2 June 2010; Vol. 510, c. 428.]

--- Later in debate ---

[Ian Austin]

rose—

[Mr Leigh]

I am not going to give way, because the House wants to come to a decision on this.

The House is held in such contempt because we make pledges and then we do not carry them out. We made a solemn pledge before the election, and we repeated it after the election—

[Ian Austin]

Nonsense!

[Mr Leigh]

I will not be shouted down by the hon. Gentleman. He was not here for most of the debate anyway.

We made that pledge, and we should now respect it. I was hoping to be able to say that the new clause was defective, and that we would be quite happy to withdraw it and to redraft it to enable civil partnerships to be recognised. We would be quite happy if the Minister then said that it could be introduced during the course of this Parliament. However, he has not said that. I am afraid that he has not answered the points that we have put to him. We had an hour’s speech by the hon. Member for North Durham (Mr Jones), most of which did not address what we are trying to say. I want to end by saying that none of us is trying to penalise two-earner families or single parents. We are simply trying to remove the severe penalty that this country imposes on one-earner families. The United Kingdom is completely out of step with most of the world in that regard. Nothing in our proposal is radical; it is sensible and it is right, and I think that we should now have a Division on it.

Question put, That the clause be read a Second time.

The House proceeded to a Division.

[Mr Speaker]

Order. Open the doors for a further minute, owing to the extreme congestion in one Division Lobby.