Finance (No. 2) Bill

Debate between Tim Loughton and Lord Jackson of Peterborough

Wednesday 9th April 2014 Commons Chamber

[Mr Jackson]

The hon. Lady’s comic timing is exemplary. I will develop my more detailed arguments, if she will allow me, given that she had the thick end of 46 minutes to develop her own. That is probably the record for an Opposition spokesman—or spokesperson—although I accept that it was on the Opposition’s amendment.

This has been a long time coming—

[Tim Loughton]

Forty-seven minutes.

[Mr Jackson]

Indeed—47 minutes, as my hon. Friend says. However, it has definitely been worth waiting for.

In presenting a 10% partly transferable allowance, clause 11 may not yet be worth a huge amount, but it is of seminal importance in supporting marriage in the tax system. For the past 15 years, our tax system has been unusual in not recognising marriage, or indeed any other aspect of family responsibility. Our fiscal policy has been extraordinarily individualistic. Clause 11 changes that by inserting into our system of independent taxation the transferable allowance that former Chancellor Nigel Lawson, the architect of independent taxation, has argued it always should have had. I genuinely believe that qualifying the individualism of our current fiscal policy should be something we can all agree on, and that should appeal to Labour Members. The Opposition spokesperson failed on two occasions to answer the specific question of why, in 13 years in office, her party failed to support the institution of marriage in the tax system in any meaningful way. That is regrettable on her part, because it is disingenuous to say, “We disagree with the policy but, incidentally, this is how you can improve it.” It is churlish and mean-spirited from a party that claims to support the family in the tax system, and children as well.

--- Later in debate ---

[Tim Loughton]

My hon. Friend has done a great amount of work on this issue and there is a much bigger picture.

This policy is popular among the public. It is popular with a majority of Labour voters. It is even popular with an awful lot of Liberal Democrat voters, despite that party’s policy being against it. Last May, the Liberal Democrat Secretary of State for Business, Innovation and Skills attacked the “prejudice” directed at stay-at-home mothers. I am sure that he would have included stay-at-home fathers to be inclusive. It is deeply insulting to the many millions of married couples who have decided to make a lifelong commitment to each other that is recognised in law in front of their family and friends to suggest that we are discriminating in some way against other people.

Some 90% of young people aspire to get married. Some 75% of cohabiting couples under the age of 35 also aspire to get married. There are many forms of family in the 21st century and many people do a fantastic job of keeping their families together and bringing up children, often in difficult circumstances. However, as many of my hon. Friends have said, almost uniquely among the large OECD economies, the UK does not recognise the commitment and stability of marriage in the tax system until one partner dies. Worse still, one-earner married couples on an average wage with two children face a tax burden that is 45% greater than the OECD average, and that gap continues to widen.

To introduce such a recognition of marriage, particularly in the modest form suggested in the Bill, is not to disparage parents who find themselves single through no fault of their own, nor to undermine couples with two hard-working parents, all of whom rightly get help and support from the state in other forms and for whom we might need to do more. Uniquely, married couples, civil partners and same-sex marriage partners are discriminated against in our tax system.

[Mr Stewart Jackson]

My hon. Friend is making a powerful and fluent case. He spoke about the popularity of the policy with Labour voters. Is it not also the case that significant polling evidence shows that young people across all classes, ethnicities and races support the institution of marriage and hope one day to be part of it?

Transferable Tax Allowances

Debate between Tim Loughton and Lord Jackson of Peterborough

Wednesday 28th November 2012 Westminster Hall

[Mr Jackson]

My hon. Friend makes an astute point and I hope that the Chancellor is listening. We will hear his autumn statement a week today. In fairness to the Government, they have sought to ameliorate the cliff-edge effect of the changes that were announced in October 2010, but uprating benefits by 5.2% while seeming to punish people who are aspirational and have done well for themselves sends a confused message, and the Chancellor should seriously think again about that policy. With respect to the Minister, I am not convinced that the infrastructure is even in place to enact that policy change to the maximum degree, but I must not meander on to child benefit.

Back in February 2007, the fact that Britain came bottom of the UNICEF league table for child well-being hit the headlines and rightly caused a stir. On 16 February 2007, that was picked up in an important speech by the then Leader of the Opposition entitled “Nothing matters more than children”. He gave a strong affirmation of the importance of marriage for child development and said,

“I want to see more couples stay together, and we know that the best way to ensure this is to support marriage. Not because it matters how adult men and women conduct their relationships. But because it matters how children are brought up. Nothing matters more than children.”

Who in this Chamber could disagree with that?

Why is marriage so central to child well-being? As “Breakthrough Britain” demonstrated, fewer than one in 10 married parents have split by the time a child is five, compared with more than one in three couples who were not married. That is hugely important because although most single parents do a fantastic job in very difficult circumstances, the evidence is clear that, on average, children brought up in married families do better than those brought up in single-parent families on every significant measure: educational attainment, health, likelihood of getting into trouble with the law, and alcohol and drug abuse.

As the Secretary of State for Work and Pensions said in February 2011:

“The Centre for Social Justice has found that those not growing up in a two-parent family are: 75% more likely to fail at school; 70% more likely to become addicted to drugs; and 50% more likely to have an alcohol problem…And the Joseph Rowntree Foundation has found that children from separated families have a higher probability of: living in poor housing; developing behavioural problems; and suffering from a host of other damaging outcomes, whose effects spill over to the rest of society.”

Some might be tempted to respond to that by suggesting that the principal cause for those different outcomes is not marriage, but wealth, and it just so happens that wealthier people are more likely to get married. However, that analysis does not add up. No one is trying to argue that marriage is the only important consideration or that wealth is not relevant. However, as the Under-Secretary of State for Education, Lord Hill of Oareford, has noted, research from the millennium cohort study suggests that the poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples.

In that context, the least we should do is to ensure that getting married in this country is no more difficult than in other developed countries. Given that Britain is unique among large, developed OECD economies in failing to provide any kind of spousal allowance or credit, the fact that it is relatively insensitive to couple and family responsibility must come as no surprise. In making that point, I am aware that when the recognition of marriage in the tax system is mentioned, it provokes in some quarters embarrassed smiles and sarcastic comments such as, “I got married for love.” I hope that we all did—those of us who are married—but such comments demonstrate a complete failure to understand the situation in which we find ourselves.

Let me be clear that people do not fall in love for fiscal reasons. However, when they fall in love and decide that they want to be together, they face a choice. Do they marry or cohabit? Do they make a public lifelong commitment to each other in front of families and friends that is recognised in law, or do they just move in together relatively casually and see how things go? The suggestion that that judgment is in no way impacted by financial considerations can be made only by people whose wealth is such that they are entirely insulated from the real-world considerations that impinge on the lives of most, and they are in danger of seeming very out of touch—I hope, again, that the Deputy Prime Minister is listening.

What of the pertinent financial considerations? The latest international comparison figures demonstrate that one-earner married couples on an average wage with two children face a tax burden that is 42% greater than the OECD average. Why should we make it so much more difficult for people to marry in the UK than in other OECD countries? That is a pressing question, especially when considered in the context of polling.

[Tim Loughton (East Worthing and Shoreham) (Con)]

My hon. Friend makes a powerful case. Let me emphasise that what he is asking for is not a preserve of the middle classes, and nor would it undermine other forms of cohabitation that people are in, in many cases through no choice of their own—particularly when a husband has abandoned a wife. The reason why people go into marriage in the first place is also not based on money, but the empirical evidence that he has started to reel off absolutely shows that marriage is the most sturdy and stable form of bringing up children.

Does my hon. Friend agree that next week’s autumn statement by the Chancellor is absolutely the last opportunity for the Government to make clear the importance that they place on marriage? A commitment was made in the coalition agreement, but we need a full-blooded commitment, not one that only tinkers around the edges with a half-hearted endorsement of what we all believe in.

[Mr Jackson]

I could not have put it better myself. My hon. Friend’s intervention allows me to pay warm tribute to his fantastic work as children’s Minister. I look forward to the day that he is back in government, sharing his plethora of talents with the nation, but I know that he will do a fantastic job on the Back Benches for his constituents and the country.

I return to my argument about polling. My right hon. Friend the Secretary of State for Work and Pensions said during marriage week in February 2011:

“When asked about their aspirations, young people are very clear: three quarters of those under 35 who are currently in cohabiting relationships want to get married, and some 90% of young people aspire to marriage. So perhaps the question we should be asking ourselves is this: if people from the youngest age aspire to make such a commitment in their lives, what stops them doing so? Government cannot and should not try to lecture people or push them on this matter, but it is quite legitimate to ensure people have the opportunity to achieve their aspirations.”

I must, in addressing this point, congratulate the Secretary of State on bringing in the long-overdue reform that our benefits system requires and on introducing universal credit, which takes important steps to erode the couple penalty. However, the couple penalty remains such that, even with a fully transferable allowance, it would still be in place for all couples, apart from those without children. In other words, where one is dealing with one-earner married couples with children, the provision of a fully transferable allowance would not even create a level playing field, let alone any incentive to marry. It would simply erode the disincentive not to marry.

In the current context, where we make it harder for people to marry in this country than it is across the EU on average, the lack of support for marriage gives rise to family breakdown, not primarily through the breakdown of existing marriages, but by making marriage no more fiscally attractive than cohabitation, despite requiring a much higher and much more costly level of commitment than cohabitation. In such a context, cohabiting, which, as we have seen, is far less stable, inevitably becomes more attractive.

“Family breakdown in the UK”, a publication from December 2010, made the point that

“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.”

It subsequently stated:

“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. Witness the continued rise of lone parenthood since the 1980s at a time while divorce rates remained stable or declined.”

The arguments for a transferable allowance for married couples, defined narrowly in terms of the benefits of marriage, are more than enough to justify the change, but there are other compelling arguments for introducing transferable allowances: first, to make the tax system fairer by reducing the tax burden on one-earner families with modest incomes; and secondly, to make work pay, which is even more important.

In the first instance, it is not fair to place a tax burden on the income of one-earner families that is 42% greater than the OECD average. Crucially, most one-earner families who would benefit from a transferable allowance are in the poorer half of the population. The Institute for Fiscal Studies published figures shortly before the election showing that the transferable allowance proposals in our manifesto would have overwhelmingly benefited families in the poorer half of the population. In contrast, the IFS said that raising the tax threshold—the implementation of which has been prioritised to date in order to please the Liberal Democrats—would benefit mainly taxpayers in the top half of the population.

When independent taxation was introduced in 1990, it was realised that, unless special provision was made for families, they would lose out. As Nigel Lawson recognised at the time, the logical solution was to give a non-earner in a one-earner household the right to transfer their unused personal allowance to their spouse. He was not able to do that and as a compromise, the married couples allowance and the additional personal allowance were introduced. It is now clear that, without those allowances or transferable allowances, one-income married couples, most of whom are relatively poor, were bound to end up bearing an increasing share of the tax burden. That is what has happened, generating a completely unfair situation.

A few years ago, the Treasury published figures showing that, in 2009-10, a single taxpayer on three quarters of the median wage—approximately £20,000—was paying 21% less tax than in 1990. A single-earner married couple were paying 11% more tax. Under the coalition agreement, we are putting considerable resources into raising the tax threshold. For a single person under 65, the tax threshold this year is 170% higher than it was in 1990. However, the tax threshold for a one-earner married couple has risen by only 71%, so in real terms it is lower than it was in 1990. I urge the Minister to examine those figures carefully and to draw them to the Chancellor’s attention.

Oral Answers to Questions

Debate between Tim Loughton and Lord Jackson of Peterborough

Monday 27th February 2012 Commons Chamber

[Tim Loughton]

Again, my hon. Friend, who has great expertise in this area, makes some pertinent points. I do not want to pre-empt what the consultation will focus on, given the findings already received. Relationships are absolutely a really important part of this. We have heard a lot about the mechanics of sex; we need to hear much more about the ways sex is carried on through relationships—hopefully consensual. The teaching of sexual consent will be strengthened through the planned revision of PSHE guidance. As I say, relationships are a really important part of it.

[Mr Stewart Jackson (Peterborough) (Con)]

The Minister inadvertently and uncharacteristically failed to answer the question from my hon. Friend the Member for Salisbury (John Glen). Will he confirm that the responsibility for SRE in the curriculum will remain with individual school governing bodies and parents and not be subject to ministerial fiat?

[Tim Loughton]

I will give my hon. Friend the same answer that I have just given to my hon. Friend the Member for East Dunbartonshire (Jo Swinson)—I am not going to pre-empt what the consultation will come up with. When this matter was discussed as part of the then Children, Schools and Familes Bill before the last election, a major consideration of many Conservative Members was that the power of parents to withdraw their children from sex education should remain if they saw fit. I would hope that the quality of sex education would be such that parents would not withdraw their children because they wanted to ensure that they were well informed and confident to make the right choices.

Private Schools (Access)

Debate between Tim Loughton and Lord Jackson of Peterborough

Wednesday 16th March 2011 Westminster Hall

[Tim Loughton]

I am not entirely sure about the relevance of that question. What I do know is that we argued for 13 years in opposition that the Labour Government were spending money like it was going out of fashion. The efficiency of that spending was enormously compromised, as we have seen. Anybody who comes to the Department for Education will throw their hands up in horror at the amount that was wasted. I am afraid that deficit denial will not butter any parsnips in this debate.

[Mr Stewart Jackson]

Will the Minister give way?

[Tim Loughton]

Well, I will. I might start my speech in a minute, as well.

[Mr Jackson]

Does the Minister not think that the hon. Member for Chesterfield (Toby Perkins) and the Labour party have a cheek lecturing us about social mobility when, after 14 years of economic growth, they have bequeathed us a situation in which 5.2 million people are on out-of-work benefits and we have the highest number of young unemployed ever, as well as the highest number of young people not in education, employment or training? Is that not the tragic legacy of the previous Labour Government?

[Tim Loughton]

My hon. Friend is absolutely right, and all Government Members know that.

I want to get on to my substantive comments. Before I do, however, I should say that it was slightly worrying that the hon. Member for Chesterfield started by saying that his party did not want to interfere with independent schools, but then listed a whole area where they had better watch out—I think that that is what he was telling them. The Labour party still cannot stop meddling. It was also rather patronising of him to say so many times that Government Members have well-intentioned motives, even if he did not agree with any of us.

My hon. Friend the Member for Reading East referred to the excellent work of the Sutton Trust, to which I pay tribute, and that is particularly true of its head, Sir Peter Lampl. For more than a decade, the trust’s work to promote social mobility has played an important role in all debates covering the early years, schools and higher education.

It is important to recognise at the outset of any debate about the quality of education that we have many great schools in the state and independent sectors, where the hard work and commitment of superb head teachers and inspirational teachers enable pupils to achieve good qualifications. The Government have a responsibility to ensure that all children have access to the best possible education. The challenge facing us is to ensure that there are more of these great schools so that all children can get the best possible education.

Over the past decade, we have slipped down the international league tables for school performance, as my hon. Friend the Member for Peterborough said. What makes that so much worse is that we also have one of the most stratified and segregated school systems in the developed world. Studies such as those undertaken by UNICEF and the OECD underline the fact that we have one of the most unequal educational systems in the world, coming near bottom out of 57 countries for educational equity.

The gap in attainment between rich and poor remains persistently stubborn, as my hon. Friend recognised. It opens even before children get to school. We know from Leon Feinstein’s research that the highest early achievers from disadvantaged backgrounds are overtaken by lower achieving children from advantaged backgrounds by the age of five. The achievement gap between rich and poor then widens at the beginning of primary school. By the end of key stage 1, a child eligible for free school meals is a third as likely as other pupils to reach the expected level in reading, writing and maths.

The gap then widens further still. A child eligible for free school meals is less than a third as likely to achieve five or more GCSEs at grade A* to C, including in English and maths, than a child from a less deprived background. By 18, the gap is vast. In the most recent year for which we have data, of 80,000 young people eligible for free school meals, just 40 made it to Oxbridge— less than some independent schools manage in a single year. Our schools should be engines of social mobility, offering a route to liberation from the constraints imposed by accidents of birth and background. At the moment, however, that just is not the case.

Like my hon. Friend the Member for Reading East, I am a big fan of independent schools; like him, I want the advantages of the independent sector to be available to a great many more of our children. Independent schools have a proven track record of success. Children who attend private schools are three times more likely to achieve three A-grade A-levels than those who attend state-funded schools. The coalition Government believe independent schools have a vital role to play in our education system in ensuring that more children achieve such excellence.

In the past, access to independent schools was provided to disadvantaged pupils. During the 1980s and 1990s, as we have heard, the previous Conservative Government’s assisted places scheme provided means-tested Government-supported places at leading independent schools. In fact, I made my maiden speech on the very Bill that did away with the scheme—the first piece of legislation from the previous Labour Government to do away with something.

The scheme followed the principle that the lower a family’s income, the more support the state should provide. I am pleased to say that the coalition Government are following the same principle today with our pupil premium. As I said, the previous Government phased the assisted place scheme out. That is not to say that no disadvantaged pupils are educated in the independent sector, because they are. Independent schools cater for about 7% of pupils. Of those pupils, more than 160,000—about a third—receive support to help cover the cost of their fees. That support is worth more than £660 million every year.

Around 80% of that support comes as bursaries or scholarships provided by the schools themselves. I welcome that and hope that it continues. Access to an independent education can also be supported by local authorities; for instance, where a vulnerable child is at risk of being taken into care and where it may be in the interests of the child to attend a boarding school, or where support needs to be provided to a child with a special educational need that cannot be met in the state sector. Again, that support is welcome and it is right that it continues. Indeed, independent schools can approach local authorities that can come up with arrangements of their own. In Cheshire, I gather the local authority already buys in places at the boys’ independent grammar, Sandbach school, for example. Many local authorities also place pupils with special educational needs in independent mainstream and special schools. I have already mentioned children in the care system.

My hon. Friend the Member for Reading East specifically mentioned the open access project run by the Sutton Trust to support access to the Belvedere school. It is an impressive project, and I would naturally be fascinated by any proposal that my hon. Friend might put forward that would enable more pupils from disadvantaged backgrounds to access independent education. However, I regret to say that it is neither practicable nor affordable for the state to fund a similar project today. Instead, our priority must be to improve the state school system and to close the gap between rich and poor for all.

Those were the twin goals of our recent White Paper, “The Importance of Teaching”, which set out a comprehensive programme of reform, based on evidence of what has worked for nations with the best-performing education systems in the world. While they have taken their own unique approach to education reform, all successful systems share certain common features. They have prioritised plans to improve teacher quality, for example, granted greater autonomy to the front line, made schools more accountable to their communities, modernised curricula and qualifications, and encouraged more professional collaboration.

We are enacting the same kind of whole-system reform here in this country, with both profound structural change and rigorous attention to standards. We have also taken steps to support the education of the most disadvantaged pupils. Our pupil premium, as I mentioned earlier, will see schools receive additional money—starting at £430 per pupil but rising in total from £625 million this year to £2.5 billion per year by 2015—that will provide an incentive for them to take pupils from disadvantaged backgrounds, and, I hope, give them a better education than they are able to access at the moment.

On top of that, we have created a new education endowment fund worth £110 million, which provides a further incentive for schools and local authorities to work together to bring forward innovative projects that will raise attainment of disadvantaged children in under-performing schools. Because nothing matters more than giving more of the poorest children access to the best teaching, we are more than doubling the size of Teach First, so more of the best young graduates are able to teach in more of our most challenging schools, including primary schools. We have appointed Dr Liz Sidwell, herself an inspirational head, to use her experience and knowledge to work with local authorities to identify those schools most in need of support and help them develop plans for their improvement.

Once again, the independent sector has an important role to play. At the heart of our approach to school improvement is a belief that the best way to help schools improve is to encourage other schools with great head teachers and impressive track records to collaborate with them. There are already many examples of successful partnerships between schools in the independent and state sectors. The Independent Schools Council survey showed that more than four in five independent schools are now working with local state schools, to mutual benefit. I am very keen that that continues. Indeed, an independent school has sponsored an academy in my constituency. Beyond the financial and direct assistance given to the academy, there is shared teaching, use of resources and a greater integration between those two sets of pupils, to the benefit of both schools.

One way to build on that is for independent schools to become academy sponsors, as I have said. As outstanding schools in their own right, they can share their expertise and set a clear ethos that together help to transform state schools that are under-performing. More than 30 independent schools are already sponsoring academies, and I hope many more will do so in future, again, as I say, for the mutual benefit of both the independent and maintained sectors.

Another way that independent schools can play a wider role in the school system is by proposing a new free school, and we have already heard examples of that. We have already received applications from independent schools and I hope that others will join them in the months and years ahead.

Let me end by thanking my right hon. Friend—my hon. Friend, rather—once again.