RESS RELEASE
For Immediate Release
24 March 2011
CARE responds to the Budget – Marriage in the Tax System

CARE is disappointed that the Government has not chosen, in its second Budget, to implement its commitment to recognise marriage in the tax system.

The Conservative Party committed to recognise marriage in the tax system in their 2010 Manifesto and the commitment finds expression on page 30 of the Coalition Agreement, with provision for the Liberal Democrats to abstain.

CARE’s Chief Executive Nola Leach said, ‘We are delighted that the Prime Minister has committed to recognising marriage in the tax system – a point he has returned to on a number of occasions since entering Number 10 – and fully appreciate that his Manifesto commitment did not specify which Budget. The truth is, however, that the imperative for swift action has greatly increased since the commitment to recognise marriage was initially made.’

Nola Leach added, ‘In 2008/09 the tax burden on one-earner married couples with two children on average wage was 33 per cent greater than the OECD average1 but as research we have published this month demonstrates, this figure rose to 39 per cent in 2009/10.2 Of much greater concern, however, is that the same research demonstrates that without urgent action this discrepancy will rise to over 50 per cent in 2012/13 unless radical changes – like recognising marriage in the tax system – are made.3 The Conservative Party Manifesto committed to making Britain the most family-friendly country in Europe; for these families, however, it is actually in danger of becoming one of the least.’

Leach responded to potential counter-arguments with some prescient observations. ‘Some may say that the current economic difficulties change everything. However, this completely ignores the fact that when the commitment to recognise marriage in the tax system was made, the current fiscal challenges had been factored in. When introducing the policy, David Cameron said he was sorry that the partially transferable allowance was rather limited but that, in the current climate, it was the best that could be offered. He also stressed, however, that it was a ‘start’, clearly suggesting that he intended to build on the provision when economic conditions improved.

Leach concluded, ‘We want to use this opportunity to again applaud the Government’s commitment to recognise marriage in the tax system, but also to emphasise that action on this point is urgent. We would ask them to make recognising marriage in the tax system an absolute priority to be actioned at the very earliest opportunity.’

Contact Dan Boucher on 07768165543 or Chris Buttenshaw on 0207 233 0455 or 07921 837499

Notes

1. Beighton and Draper, The Tax Burden on Families 2008/09, CARE, 2010, p.7

2. Beighton, Draper and Pearson, The Taxation of Families 2009/10, CARE, 2011, p.31

3. Ibid., p. 32.

4. Apart from Britain, the only large developed countries not to recognise marriage in the tax system are Mexico and Turkey. We are completely out of line with other large developed states like the USA, France, Germany, Italy etc.

5. Britain did recognise marriage in the tax system until 1999 through the Married Couples Allowance. The Conservative proposals are for a Transferable Personal Allowance enabling a non-working spouse to transfer their tax allowance to the working spouse. CARE strongly supports this. In the context of fiscal pressure the Manifesto commitment was limited to a Partially Transferable Allowance.

6. CARE is a well-established mainstream Christian charity providing resources and helping to bring Christian insight and experience to matters of public policy and practical caring initiatives. CARE is represented in the UK Parliaments and Assemblies, at the EU in Brussels and the UN in Geneva and New York. CARE is a company limited by guarantee registered in England and Wales at 53 Romney Street, London, SW1P 3RF, Company No: 3481417, Charity No: 1066963, Scottish Charity No: SC038911