Finance (No. 2) Bill

Helen Goodman Excerpts

Wednesday 9th April 2014 Commons Chamber

[Tim Loughton]

My hon. Friend the Member for Peterborough (Mr Jackson) addressed some of those problems, which I hope my hon. Friends on the Treasury Bench will consider as the Bill progresses. Perhaps they can come back with an amendment either in Committee or on Report.

[Helen Goodman (Bishop Auckland) (Lab)]

Will the hon. Gentleman give way?

[Tim Loughton]

I am being terribly generous, but of course I will give way.

[Helen Goodman]

The hon. Gentleman is being most generous. He mentioned that his long-term aspiration is for the transferable allowance to be extended to the full £10,000 of the personal allowance. Does he know what the distributional implications of that would be?

--- Later in debate ---

[Fiona Bruce]

The benefits that are proposed in this clause are for married couples. That is the way in which our society recognises a permanent and lifelong commitment that is intended by the parties.

Of course I would like to see more, but I welcome this positive start. I would like to see a department for families, a dedicated family policy across government and greater investment in relationship education for young people, both in school and later for those embarking on relationships or contemplating having a family. In the meantime, I fully support this proposal. It will encourage marriage and sends out an important signal that, for the first time in a long time from the Government, marriage is valued in our society—something the last Government never did. It places Britain in the position of recognising marriage in the tax system, whereas we were the only country in Europe not to do so. Is it any coincidence that the UK has one of the highest levels of family breakdown in Europe? We have to do what we can to change that, and this is one way. As the Prime Minister said, this change will provide support. Our support for families and marriage puts us on the side of a progressive politics and on the side of change that says, “We can stop social decline, we can fix our broken society and we can make this country a better place to live for everyone.”

[Helen Goodman]

I am pleased to follow the hon. Member for Congleton (Fiona Bruce) and I certainly will not yield one inch to her in the value I place on the importance of marriage. Like her, I am a member of the Mothers’ Union, the Church of England organisation that promotes and supports stable family life in this country. However, she is making a mistake. The undoubted benefits of stable relationships could be far better encouraged by the Government in several ways: if, for example, resources for tackling domestic violence were not being reduced; if, for example, we had compulsory sex and relationship education in schools that prepared people for healthy adult relationships; and if, for example, we had a decent child support system that did not incentivise the non-resident parent to ignore their responsibilities to their children, because that is what is happening. Instead of tackling those real problems, or looking at the factors that put families under stress—debt, long hours and zero-hours contracts—the hon. Lady ignores them. She does not understand that those factors are the cause of rows, tension and stress in families. If Government Members turned their attention to policies that would make a real difference, instead of faffing around with this fatuous married couple’s allowance, families would be a lot better off.

[Andrew Selous]

If this policy is so fatuous, why is it that more than 80% of the population covered by the OECD live in countries that recognise marriage in the tax system? Are they all completely wrong? Are they are all wedded to fatuous systems?

[Helen Goodman]

That is exactly the point that I was about to come on to. The hon. Member for East Worthing and Shoreham (Tim Loughton) said that we should place the well-being of children at the centre of this policy. That is a perfectly reasonable starting point for this debate, but which country is near the bottom of the UNICEF child well-being table and which is at the top? The country near the bottom is the UK: the country at the top is Denmark, which has the highest rate of single parenthood in Europe. It is at the top because it has a proper welfare state, decent child care and properly functioning systems so that people can look after their children properly. If we want to do something for children, we should have policies that promote the well-being of all children, not just a small minority of children who happen to live in a particular family structure.

The hon. Member for East Worthing and Shoreham asked, “Why do Opposition Members suggest that just because you are in favour of marriage, you are against other patterns of family life?” That is not my view. I am in favour of traditional families, as I have said, but I also think that we need to support all families. The reason we are concerned about this policy is—as the hon. Gentleman should understand—that we can only spend the money once. We cannot spend it twice or thrice over—[Interruption.] Government Members talk a good talk, but they do not seem to understand the practical implications.

People in this country are facing a severe cost of living crisis. We are seeing an increase in the number of children living in absolute poverty. More than 600,000 families are going to food banks. If hon. Members had any real concern for child well-being, they would address those issues, not come here proposing £700 million of expenditure on a tiny group.

[Andrew Selous]

Those of us on the Government Benches care deeply about child poverty, and we believe that family breakdown is a cause of child poverty. By trying to deal with breakdown, we are dealing with a severe cause of child poverty.

[Helen Goodman]

If the hon. Gentleman would pause for a second, he must surely understand that giving people an extra £200 a year is not likely to enable them to continue their marriages when they are under stress. It does not make sense. For £4 a week, the couple could not even have a pint of beer together. The whole thing is absurd—

[Tim Loughton]

It should be higher.

[Helen Goodman]

The hon. Gentleman says that, but the policy is not well targeted. The transferable marriage tax allowance will help just one third of married couples. If we scrapped this allowance and had a mansion tax on homes worth more than £2 million, we could have a tax cut of £100 for 24 million people.

This allowance will go to a third of married couples, and 85% of the benefit will go to men, not to women. Only one in six families with children will get it, and families will only get it if they have only one earner in the family. My test for whether or not this is a good policy is a conversation I had with a constituent of mine recently. She is a shop worker in a supermarket and works 16 hours a week. She has two school-age children. Her husband is not working, because he had an industrial injury. He is on employment and support allowance which, under this Government, will come to an end after 365 days. I simply do not know how a family of four can be expected to live on 16 hours at minimum wage and two lots of child benefit. She cannot. She will lose her tax credits, because she cannot get a shift to increase her hours to 24 a week. Instead of dealing with people like that, who are doing the most responsible things and struggling against all the odds, we have this totally mis-targeted transferable allowance proposal. The Chancellor does not agree with it and the Prime Minister does not agree with it, so why are they doing it? They have made it absolutely clear, in all discussions, that this is about seeing off the Tory right.

I am sorry that the right hon. Member for Haltemprice and Howden (Mr Davis) is not in the Chamber. He had three articles on this subject in the newspapers this morning. The one in The Times is headlined, “Davis the kingmaker plots the next leadership challenge”. He wrote an article for the Daily Mail online promoting large-scale new breaks for married couples and making many of the points we have heard repeated by less elevated hon. Members this afternoon. Let us look at the response the article received from the public; they are not Guardianistas, but people reading the Daily Mail:

“No…I do not want my taxes going to ‘stay at home’ (eg gym/lunch/shopping) women. I want them to go to help vulnerable, disadvantaged people, not the ‘I’ll park my 4x4 on the pavement even if it inconveniences other people’ bunch. Bad idea.”

Another comment reads:

“This is ridiculous. Surely tax should be calculated on household income rather than basing this on a wife staying at home…some people are carers for the elderly, some are in full time education - just focusing on stay-at-home mums is very unfair.”

Then there is this:

“Thanks to this government telling us what we must believe and what we must not believe…This whole article is politically and socially incorrect and out of date.”

I do not think that this proposal will deliver the political benefits that Government Members are hoping for. It certainly will not deliver the social and economic benefit.

When I was first elected to this House, I sat on the Finance Bill Public Bill Committee with the Exchequer Secretary, the hon. Member for South West Hertfordshire (Mr Gauke). Throughout the Committee’s proceedings he told us, on many issues, what Mrs Gauke thought. I hope we will hear what Mrs Gauke thinks this afternoon.

[Andrew Selous]

I speak as the chair of the all-party group on strengthening couple relationships. Family stability lies at the heart of this debate, and I was pleased to hear the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) say that she is a supporter of marriage.

This proposal is one of a range Government policies. The Government have put £30 million into strengthening relationship support. For the first time ever, the Department for Work and Pensions is conducting a family stability review. The good news is that family stability is increasing and strengthening, by a bit in the most recent figures. The scariest statistic in this whole area is that by the time children born today are 15, roughly half will see their parents separate. That saddens me hugely. My own parents divorced and I am very much less than a perfect husband myself—none of us is perfect. We all bring our baggage and personal experiences to these issues, so I understand the emotion on both sides of the House. We need to speak with care and moderation. When I look at the pain experienced by the children of friends of mine who are going through divorce, there is something that makes me want to try to do everything possible to increase family stability and reduce family breakdown.

I will not regale hon. Members with many figures, but I will mention the UK’s biggest household study, “Understanding Society, the UK household longitudinal study” by the university of Essex. Most academics and researchers in this area respect it as one of the most authoritative studies. It shows us that 93% of 13 to 15-year-olds whose parents are still together are living with parents who are married. I am not making that up or making a judgment on anyone; I am merely presenting the House with the facts. There may be many reasons for that, and I accept that there are cause and effect arguments both ways. I accept absolutely that poverty is a cause of breakdown, but I also accept that strong families are a bulwark against poverty.

We should use every tool in the box to try to strengthen family life for everyone, whatever relationship they are in at the moment. We need to care deeply about the 38% of constituents of the hon. Member for Plymouth, Moor View (Alison Seabeck). I want to strengthen family life for everyone. Some of the relationship support money that the Government have put forward will be for her constituents. The work we are doing on the family stability review will be for her constituents. I wish these debates did not become quite so heated, because I can assure her that Government Members who support this measure are for everyone—we are for all her constituents as well. We will defend the measures for everyone in the tax and benefit system—child benefit and child tax credits—because we recognise the important part that marriage plays in family stability. I do not want Opposition Members to think that this is a divisive policy. We are bringing this forward as part of a suite of measures to try to do deal with an epidemic of family breakdown in this country and because we want to do something to promote family stability.

As we look at other countries, we see that this is not an outlandish or an unusual thing to do. In fact, the UK is the odd country out in the OECD. Across OECD countries, Mexico is the only other large economy not to have any recognition of marriage in the tax and benefit system. We have tax benefits for all sorts of policies. We have tax benefits for Christmas parties. Just because we favour a firm providing for Christmas parties does not mean that we are against Muslims, Sikhs or Hindus who might not choose to celebrate. It is just something we recognise. We have tax policies that support people parking their bicycles at work. Just because we favour people bicycling to work does not mean that we are against people who come to work in cars or scooters, or who walk, or take the train or the bus. We need to get out of the mentality that, because we are introducing a tax break for an institution we know is good for family stability, we are being in any way divisive.

--- Later in debate ---

[Mr Gauke]

There is no reason to believe that the measure is discriminatory. I will address that point in slightly more detail in a moment.

The third category of people who will not benefit is couples where both members are basic rate taxpayers, but those are the households that have benefited most from the very significant increases in the personal allowance that this Government have been able to deliver. One has to look at the overall package and what this Government have done in terms of cutting taxes. I come back to the point that couples with two earners have benefited significantly, more so than couples with one earner, as a consequence of the personal allowance increase.

I mentioned that the Opposition want to use the money to fund a 10p rate of income tax. They have complained in the course of the debate that the benefit is worth only £3.85 a week. This is about sending a signal. The benefit from the new 10p rate, assuming that it were funded from this, would be in the region of 50p a week, and I am not sure that that would change things significantly.

[Helen Goodman]

rose—

[Mr Gauke]

I am short of time so, if the hon. Lady will forgive me, I will not give way.

Let me deal with a couple more points. On support for women, it is worth bearing in mind that of the 3.2 million people who have been taken out of income tax, 56% of the beneficiaries are women, and we have done a lot to help with child care. On the practical points raised by the hon. Member for Newcastle upon Tyne North, only the transferor will need to make an election, which will make it administratively easier for couples. We also want to implement the measure through a digital process, but we recognise the need for support for those unable or unwilling to use that method. HMRC will be properly funded to deliver this policy.

Let me conclude by reiterating the purpose of the clause. It is to reinforce the important institution which is marriage—whether gay, straight or civil partnerships—while also providing support for many households that have not been able to benefit fully from our changes to the personal allowance. I therefore request that amendment 3 be withdrawn, and move that clause 11 stand part of the Bill.