Why the Government should boost the marriage allowance

Jan 19, 2017 by

by Ranil Jayawardena MP, Conservative Home:

As a pretty traditional sort of Conservative, I believe that families are the central blocks of building a society that works for everyone. That’s why I believe that it is the responsibility of all Governments – of whatever hue – to remove the obstacles that might discriminate against families.

Families come in all shapes and sizes. Over the last few decades, British society has experienced an unprecedented change in its attitudes towards family, including its attitudes to marriage and children. Prior to the 1960s, the percentage of children born outside marriage had remained remarkably stable for centuries and rarely went much above five per cent. Today, nearly half of all children born in Britain are born to unwed parents, of whom, sadly, 35 per cent have split up before their child’s fifth birthday – compared with only 9 per cent of parents married before the birth.

Not only is the UK almost last amongst OECD countries ranked by the proportion of children and adolescents living in households with both parents, it is behind in recognition of family and marriage in the tax system also. While the human cost of this to children is impossible to quantify, the financial cost of family breakdown – children of separated parents being up to 75 per cent more likely to face educational, behavioural, financial and health problems – is estimated at £47.5 billion a year.

Yesterday, I was pleased to host, along with the Bishop of Chester, the Parliamentary launch event of a quantitative report into how different countries distribute the tax burden between married couples, families and single people. Written by Fiscal Policy Consultant, Alistair Pearson, one of their headline findings is that UK married couples with a single-earner and two children face an income tax burden 26 per cent greater than the OECD average. If this wasn’t concerning enough, another is that UK families earning 50-75 per cent of the average wage face the highest effective marginal tax rates – and over double the average – of any OECD country, keeping just 27 pence in every extra pound earned!

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