Details have at last emerged of David Cameron’s favoured stunt to reward marriage through the tax system. It’s a very attenuated proposal compared with the original, applying to four million marriages, not twelve million as in the original scheme. The overall cost has been reined back too – from £4.9 billion to nearer £0.6 billion – while the benefits are targeted at marriages with incomes below £44,000. The net gain to these couples will be £150 a year; the net cost will be borne by raiding the banks for £1 billion.
Usually the tax system is used to incentivise behaviour, nudging people in a certain approved direction for the public good. Tax incentives or disincentives usually encourage private funds to be committed, or withdrawn, in response to the tax stimuli. So tax relief on mortgages stimulated private house purchase; and tax on cigarettes has encouraged people to stop smoking. After a time, once behaviour has been locked in, tax remedies can be withdrawn.
But with this current proposal, it’s hard to see anything other, in public policy terms, than a waste of public money. Couples will be handed £150 for doing what they are already doing ‘for free’. It’s difficult to imagine that £150 will ever make the difference between a couple thinking of separating, but deciding against it. And it’s not clear that £150 will increase the likelihood of couples marrying rather than cohabiting, nor what public benefits might follow if it did.
So it looks like this proposal is a gift from the Tory party to four million couples, paid for by the banks initially, but thereafter, by you and me. I say ‘gift’, but this is General Election time. So let’s call it for what it really is.
It’s a bribe!
But there’s more – and it’s worse. The payment is triggered for standard rate taxpayers only – ie the less wealthy. It would work best, where it works at all, for low-pay couples where one person stays at home. On Planet Tory, that stay-at-home is the wife & mum. But the moment that mother/wife seeks some independence through a job, or seeks to improve her family’s income by the same means, the gift/bribe is likely withdrawn.
So the unstated Tory message is simple: if you are a woman in a low-wage partnership, stay wed, stay in bed, and stay poor.
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