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Mr. Love: I thank the hon. Gentleman for giving way. I have some difficulty in understanding the relevance of his argument to the married couples allowance. Can he give the Committee any evidence of the role of the married couples allowance in maintaining marriages in this country?
Mr. Brazier: If I reply to that point, I shall risk being out of order. It has been a feature of both of this afternoon's debates that Conservative Members trying to make the case for particular amendments have been challenged by interventions from Labour Members that go well beyond the amendments, so that we are bound to go beyond the amendment in replying to them. However, I shall answer the hon. Gentleman. Given the overwhelming evidence that there is more likely to be a stable family when parents are married and that married parents are much more likely to stay together, it is at least a desirable objective that we should encourage marriage.
I would turn the hon. Gentleman's point around and ask him the following question: does he or any other hon. Member present in the Chamber really believe that the measures in a Budget have no effect at all on behaviour? If he does, I am not sure why we bother to provide tax
reliefs of one sort or another if we do not think that they affect behaviour. I am certain that many of my constituents, not all of whom support the Conservative party, see the decision to abolish the married couples allowance that is embodied in the clause--and which the amendment would defer for a year--as a severe blow against the single most important institution in the country.
Mr. Healey:
The hon. Member for Gainsborough (Mr. Leigh) has tabled a narrow amendment, but introduced a rather broader debate. To that extent, he has done the House and this Committee a service.
Ultimately, one's assessment of the married couples allowance and the amendment proposing a year's delay before it is abolished depends on the view one takes of the fiscal and social purposes of the tax system in general and the married couples allowance in particular. It raises two questions. The first is whether one agrees with using the tax system to pursue particular policy aims, and the second is whether a particular tax break or allowance meets those objectives.
I believe that the tax system should support family life and not just marriage and that our first concern in providing that support must be the children, particularly the 4 million children who are growing up in poverty. The abolition of the married couples allowance, the introduction of the children's tax credit, the working families tax credit and a range of other measures have precisely that aim.
Of course, the married couples allowance is a tax credit and the same flat rate linked allowances are also payable to married couples, single parents and unmarried parents living together. In particular, as the married couples allowance can be paid out at twice the rate, individually, to separating or divorcing couples during the year of their separation, it cannot be said that it encourages or reinforces marriage. This afternoon, hon. Members on both sides of the Committee have recognised that people marry for reasons other than tax. Therefore, delaying the proposal is not the answer.
The abolition of the married couples allowance is overdue and should not be delayed as amendment No. 8 proposes. The original rationale for its predecessor, the married man's allowance, was that, in 1918, when it was introduced, marriage imposed additional burdens that needed to be recognised by the tax system. In those days, when two people got married, they became dependent on one salary. Women almost invariably gave up work when they married. That is no longer the case, as the Paymaster General pointed out during our debate on amendments Nos.1 and 2--70 per cent. of married women now work. Therefore, marriage no longer results in a fall in couples' joint income or an increase in costs or financial penalties. Indeed, one could argue that married couples without children are often better off than when they lived separately.
However, marriage has a bearing on the tax system when it has a bearing on earnings capacity. Very often--although not exclusively--marriage results in children, and women often take a career break to have, and care for, their children. At that point, there is greater dependency and increased costs and there is a case for
more support from the tax system. It is precisely where my right hon. Friend the Chancellor has stepped up support and proposes to do so further with large increases in child benefit and the introduction of the children's tax credit and the working families tax credit.
The clause, if it remains unamended, will implement the decision to end the basic married couples allowance. It also specifies the relevant dates for that implementation. Essentially, it takes to their logical conclusion the changes to the MCA introduced by successive Tory Chancellors, who, by progressively reducing the allowance from 40 per cent. to 15 per cent., were well on the way to the step proposed in the Bill.
Amendment No. 8 would simply delay the logical action that the Government propose, which is based on the November 1993 observation by the right hon. and learned Member for Rushcliffe (Mr. Clarke), who was then Chancellor of the Exchequer and who said, quite candidly and characteristically, that the married couples tax allowance was a "bit of an anomaly". The amendment would frustrate the Government's intention with clause 28, which is part of a wider move to redefine the nature and purposes of tax breaks for families and to redirect resources better to support those families and children who have extra costs and real needs.
The Government's plans are clear. There is no case for delaying the date of implementation, and I urge the Committee to oppose amendment No. 8.
Mr. Edward Davey:
I agree with many of the arguments advanced by the hon. Member for Wentworth (Mr. Healey) against the amendment and against delay. He is right to say that the married couples allowance is now outdated, and he was right to recall that the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), termed it an anomaly. The money currently paid out in the married couples allowance is compounded by the tax revenue that the Exchequer thereby forgoes. The Government's proposals go some way towards using that money more effectively to support families and their children.
The faults in the stance of Conservative Members on this matter were exposed when the hon. Member for Gainsborough (Mr. Leigh) compared the tax incentive for marriage--which is what he considers the married couples allowance to be--with the tax incentives given for taking out pensions, or for employee share ownership. I suggest that marriage is not a financial undertaking. It happens for many reasons, the least of which is financial rationale.
It is sensible to have financial incentives for financial transactions such as pensions or share ownership, but not for something that is completely different. That is why the abolition of the married couples allowance should not be delayed.
Mr. Leigh:
That is a fair point, but I am sure that the hon. Gentleman will agree that the tax system has been used to encourage home ownership for years. That is much more than just a financial transaction: it is the most important element in people's lives, after their personal family life. The tax system can be used to encourage behaviour that society considers useful, as society considered it useful to encourage home ownership.
Mr. Davey:
I am afraid that the hon. Gentleman only emphasises my point. The problem with mortgage tax
One of my key arguments in this debate is that the married couples allowance did not assist marriage or families. Like the hon. Member for Gainsborough, I believe that we need a set of policies to promote marriage and to keep families together, but we should not look to the tax system to achieve them.
Other elements that seem to have been ignored include education policies governing school hours, the national curriculum and our attitude to sex education. Also important are employment policies with respect to child care, parental leave and working hours. Those areas of public policy would be far more fruitful for the promotion of the family. Often, families are torn apart because their members rarely meet, with parents hardly ever seeing their children or each other because they work such long hours outside the home.
The Second Deputy Chairman:
Order. I wonder whether the hon. Gentleman can now relate his remarks to the date of implementation.
Mr. Davey:
I take your direction in this matter, Mr. Lord, but I make these points because I believe that the married couples allowance is outdated and should be got rid of as soon as possible. We should pursue other policies to promote the family and marriage. The sooner that the MCA is abolished--and the sooner that the resources spent on it are used elsewhere--the better. I know that my initial remarks were some way off the topic, Mr. Lord, but they were germane.
Far more important than the retention of the married couples allowance is the support that the Government give to relationship counselling, especially to Relate, the former Marriage Guidance Council. Government support for such counselling would go much further towards achieving the objectives of the hon. Member for Gainsborough.
The second fallacy trotted out in the debate is that people marry for tax reasons. If that were true, the divorce rate would not have risen and people would not marry increasingly later in life. As the section on household and families in "Social Trends 1999" states:
"Between 1971 and 1996 the average age in Great Britain at first marriage rose from 25 years to 29 years for men and from 23 years to 27 years for women."
28 Apr 1999 : Column 394
If the married couples allowance had given people an incentive to get married, and thus supported the institution of marriage, the trend would have been in the opposite direction.
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