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Mr. Brazier: The married couples allowance fell in that period, so if the direct linkage that the hon. Gentleman seeks does in fact exist, the argument is exactly the other way around.
Mr. Davey: For most of that period, the allowance did not fall, and in some Budgets it was increased above indexation. I am afraid that the hon. Gentleman's point is therefore not valid.
Mr. Brazier: Except for one year, at no time did the allowance go up by more than the combined rate of prices and economic growth. As a proportion of income, it did not rise, and in several of the years it fell. If anything, the argument is slightly against the hon. Gentleman, whose point could stand only if the married couples allowance had risen consistently in each year of the period that he has quoted. For my sins, I used to be a professional statistician and I urge the hon. Gentleman to think about what he is suggesting.
Mr. Davey: We could bandy about our recollections of when Budgets put the married couples allowance above indexation and when they did not, but the truth is that, in the period to which I referred, the average age at marriage rose. The supposed tax incentive in the allowance had no contrary effect.
It is symptomatic of many of the attitudes to social policy among Conservative Members that they are very atomistic in their approach. Conservative Members look at such matters in the same way as they look at balance sheet calculations. People's lives are not like that. People do not take decisions in that narrow, financially driven way. Decisions are taken for many other reasons.
The third fallacy, and another reason why married couples allowance should be abolished this year, is the apparent belief of the Conservatives that it has been a good way to support marriage and the family. The record does not show that to be so. Indeed, Conservative Chancellors did not think so. It is a mystery why Conservative Members are not more shamefaced about all this. When their Chancellors reduced the value of the married couples allowance, they did not often redeploy the saved resources into family friendly policies such as increased child benefit or child care support.
Mr. Davey:
I am pleased that the hon. Gentleman has the honesty to nod in affirmation. The Conservatives must at least admit that the Government are putting resources into support for children and families.
The hon. Gentleman said that one reason for Conservative opposition to the delay was that the children's tax credit was not being introduced until next year. However, the Conservatives seem conveniently to have forgotten that child benefit has been increased, and will be increased further. The working families tax credit is also coming in, as is the child care tax credit. A back-of-an-envelope calculation would show that families
with children are far better off as a result of that package of measures than they would be if we had simply retained the married couples allowance.
That is not to say that the Liberal Democrats have no criticism of the Government's family policy and the collection of tax benefits that they are giving to families with children. As I said on Second Reading, they are producing a complex system of support for families with children, including child benefit, the children's tax credit, working families tax credit and the child care tax credit. People are confused about this complex system of support. However, the Government are giving support, and we welcome the changes to that extent.
The Liberal Democrats will vote against amendment No. 8 because the Government are following the logic of their predecessors by saying, as Conservative Chancellors admitted, that the married couples allowance does not achieve the ends that people seek. There are far better ways to support marriage and the family. I hope that the Committee will reject the amendment.
Mr. Gibb:
I support the amendment and congratulate my hon. Friend the Member for Gainsborough (Mr. Leigh) on his excellent introductory speech. One of the most glaring sleights of hand, pocketing £1.4 billion for the Chancellor, was the putting into effect of the children's tax credit a full year after abolition of the married couples allowance. It is sheer hypocrisy for the Chancellor to claim, as he did in his Budget speech, that the married couples allowance is being replaced by the children's tax credit.
The amendment brings the dates together. The abolition of married couples allowance is just another stealth tax that will increase income tax bills. The delay of a year before introduction of the children's tax credit is a further revenue-raising ruse that will be widely recognised for what it is.
Dawn Primarolo:
The hon. Member for Gainsborough (Mr. Leigh) made several suggestions about resources being provided for families. My right hon. Friend the Chancellor made it clear in his Budget speech that family life is the foundation of our society. Our first principle is support for the family, and the interests of children must be paramount.
Many points made in both debates this evening have been about the married couples allowance. It was originally provided for married men, from 1918, in recognition of the fact that their wives were not in paid employment after marriage. That lasted until just before the second world war when the Government of the day advanced tax policy to encourage married women to stay in the labour market or return to it.
After years of amendment and change, the present Government inherited a married couples allowance that is, in fact, restricted neither to marriage nor to couples. Nor, indeed, is it strictly an allowance, as it is a tax credit paid at the same flat rate to married couples, single parents and unmarried parents who live together. Far from recognising marriage, as the hon. Member for Gainsborough suggested, the allowance is so confused that it can even be paid twice--at the full rate to both partners in the year of separation or divorce. A married
couples allowance that can pay more for separation or divorce surely cannot be said to uphold the institution of marriage.
Mr. Brazier:
The point made several times by Conservative Members is that anomalies of that sort could be ruled out by having a year's delay. There is a serious underlying issue to the amendment, not just a technical objection.
Dawn Primarolo:
I shall come shortly to the points made by the hon. Members for Bognor Regis and Littlehampton (Mr. Gibb)--whose incorrect understanding of the Budget we heard, once again, from the Dispatch Box--for Canterbury (Mr. Brazier) and for Gainsborough. The hon. Member for Kingston and Surbiton (Mr. Davey) was quite correct in what he said about what is being provided to families.
First, however, I shall outline some facts. Child poverty has increased dramatically since 1979. The bottom 10 to 20 per cent. of children have lower real incomes now than in 1979. The United Kingdom has one of the highest rates of child poverty in the industrialised world. The Chancellor is seeking specifically to help families with children whose budgets are under enormous pressure. Many of them are trapped in poverty.
The hon. Member for Gainsborough said that the proposals for the children's tax credit were less generous than the married couples allowance would have been if it was indexed. He mentioned £552, but he did not say that the base year for that was 1990. He was referring to the value of the married couples allowance before the Conservative Government made substantial cuts--what we would now, I think, call a stealth tax.
Had the hon. Gentleman made his comparison with the value of married couples allowance inherited by the Labour Government, he would have been talking about something like £274.50 a year. The children's tax credit provides £416 a year, and one need not be a mathematical genius to work out that that is far more generous.
The second Opposition proposition was that there was a gap year--that we were taking £197 a year away from the families with children upon whom Conservative Members have concentrated, and made no other policy changes. The hon. Gentleman said that, as a parent, he was in receipt of child benefit, so I remind him that child benefit was increased by £2.95 this month, and that next April there will be another increase, with the premium for the second child also going up. For families with more than one child, those increases in child benefit alone are worth more than the loss of the married couples allowance--and the Government have done more than that.
The idea that the hon. Member for Bognor Regis and Littlehampton advanced--that there is a gap year, and that we are stealing funds from families--ignores the fact that the working families tax credit will be increased by £4.70 a week from October, before the married couples allowance is taken away. There is no gap year. Resources greater than the married couples allowance, which has yet to be taken away, are being given to families with children. The additions will be paid before the allowance disappears, and they will also receive the children's tax credit.
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