Catherine spoke on behalf of the Opposition in yesterday’s Finance Bill Committee stage in the Commons, moving Labour’s amendment calling on the Government to reconsider its proposal for a Marriage Tax Allowance which will only benefit 1 in 3 married couples/civil partnerships, and just 1 in 6 families with children.
This is Catherine’s speech:
Catherine McKinnell: It is a pleasure to serve under your chairmanship today, Mr Hoyle. I rise to speak to the Opposition’s amendment to clause 11 regarding the coalition’s proposed tax relief for married couples and civil partners. Before I begin, let nobody be in any doubt that the Opposition believe that marriage and civil partnerships are a force for good in society. Making a binding lifelong commitment to a partner in that way is truly to be celebrated. Let us not pretend, however, that the Government’s marriage tax allowance, introduced by clause 11 of this year’s Finance Bill, is anything other than a complete and utter dud of a policy.
Tim Loughton (East Worthing and Shoreham) (Con): If that is the case, why in 13 years did the Labour Government not do a single thing—such as introducing a transferrable tax allowance, for example—to recognise married couples in the tax and benefits system? They did not do a single thing.
Catherine McKinnell: We know what the Chancellor thinks about this marriage tax allowance. He thinks that the idea is a turkey, both politically and economically. Indeed, an article in The Daily Telegraph went so far as to say—[Interruption.] I hear groans from those on the Government Benches. The article went so far as to say that the Chancellor
“loathes the idea. He is not a social conservative and hates the notion of bribing anyone down the aisle. He has made sure the marriage tax break will not come into effect until the very last weeks of this government—and it will be so small as to be unnoticeable. To resolve the impasse, Treasury officials were asked to see whether they could dump the agenda on to Iain Duncan Smith, so the Chancellor could wash his hands of it. But a tax cut has to come from the Treasury.”
Mr Stewart Jackson (Peterborough) (Con): I am sure my right hon. Friend the Chancellor is touched by the hon. Lady’s warm support. Will she share with the House her thoughts on, and specifically answer, the question asked by my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton)? Why did the Labour Government do nothing to support the institution of marriage in 13 years?
Catherine McKinnell: The answer lies in what I have already said; the Labour Government did a huge amount to support all families up and down this country, particularly families with children. Even the Chancellor seems to agree that £3.85 a week is not going to bribe anybody down the aisle or persuade anyone to stay in a marriage if they decide they are going to leave it. The question asked by the hon. Member for East Worthing and Shoreham (Tim Loughton) does not seem to acknowledge the fundamental issues with the Government’s proposal.
Steve McCabe (Birmingham, Selly Oak) (Lab): Does my hon. Friend agree that one difficulty with this proposal is shown in the analysis by the Institute for Fiscal Studies? Robert Joyce, the senior research economist there, says:
“The policy is not a general recognition of marriage in the income tax system”.
So the argument that has been made by the Government is false, in the sense that it gives an impression about this policy which is not actually true. He goes on to say that
“it is difficult to escape the conclusion that an income tax system which makes some people worse off after a pay rise has something wrong with it.”
The Chairman of Ways and Means (Mr Lindsay Hoyle): Order. I think we need shorter interventions rather than speeches—I would sooner save your voice for later.
Catherine McKinnell: On the basis of my hon. Friend’s insightful intervention, I am looking forward to his speech on this matter. He makes the point well, and it is the point that I am seeking to make. As the Chief Secretary to the Treasury has said:
“This policy is not about children and families…it does nothing for millions of families with children struggling to make ends meet.”
Neil Parish (Tiverton and Honiton) (Con): Does the hon. Lady agree that although this marriage allowance is not going to persuade people to go or not to go down the aisle, it does recognise what marriage and stable relationships really bring both to children and to the couples? Does she think that in 13 years the Labour party might perhaps have considered it?
Catherine McKinnell: Today, we are discussing the merits of this Government proposal in this Bill. We think it is a dud of a policy, and the Chancellor and the Chief Secretary seem to think so, too. I will set out all the reasons why it is a dud, but talking about whether the previous Labour Government considered this policy does not address the issues we are debating today—this policy and our amendment to it. If Government Members are so keen for there to be genuine support for families, for children and for marriage, they should welcome our amendment proposing a proper review on the impact of the tax relief that the Government are suggesting as part of this Bill and exploring alternative tax reliefs that could benefit a greater number of families and, potentially, a greater number of married couples, given the Government’s proposition’s clear deficiencies in recognising most marriages.
Mr Henry Bellingham (North West Norfolk) (Con): Does the hon. Lady agree with the principle that there should never be a financial disincentive for people to be married and remain in a marriage?
Catherine McKinnell: The proposal under consideration only gives any sort of tax benefit, small though it is, to a third of married couples. I am surprised that Government Members are not more keen to explore the potential alternatives to this dud policy.
Tim Loughton rose—
Catherine McKinnell: Let me make some progress. We are left in a position in which the Minister now finds himself trying to defend a policy that neither his boss nor his deputy support. It is an absolute farce, but clearly Government Members do support it, and quite vehemently. I hope to persuade them to consider the Opposition amendment and take a second look at the policy. If that fails and the policy is implemented in the Finance Bill, I want them to agree to review its impact within six months of its implementation to ensure that it is having the maximum benefit for the maximum number of people.
What is it about this policy that is so bad? Frankly, it is hard to know where to start. Let us begin by looking at who will benefit from this highly restrictive and very complicated measure, which will allow couples to transfer up to £1,050 of their income tax personal allowance to their spouse with effect from April 2015. Of course it applies to married couples and those in civil partnerships, but not just to any old marriages or any old civil partnerships. No, the Government have decided that there is a very particular form of marriage or civil partnership that they wish to recognise in the tax system. Unintentionally, misleading statements were made by the Prime Minister to this House—[Hon. Members: “What!”] Unintentionally, I said. The marriage tax allowance introduced by clause 11 applies only to those couples where one spouse is a basic rate taxpayer and the other does not use their full personal allowance. That scenario has been described by the “Don’t judge my family” campaign as a fantasy 1950s family with a breadwinner and a home maker. The policy will therefore exclude married couples and civil partners on the very lowest incomes where both spouses earn below the income tax personal allowance; couples where both spouses, possibly both basic rate taxpayers, have incomes higher than the personal allowance and therefore have no unused portion to transfer; and couples where either spouse pays the higher rate or the additional 45% rate, with an ever increasing number having been drawn into the 40 pence rate under this Government.
How many people are we taking about? How many households across the country will benefit from the Government’s flagship policy for supporting families? Their own recent estimates suggest 4.2 million couples, which equates to a grand total of one in three married couples and civil partnerships in this country. Two-thirds of married couples and civil partnerships will not benefit from a policy intended to recognise marriage in the system.
Tim Loughton: I agree that there is a flaw in what the hon. Lady is discussing. Presumably, like me, she wishes to see that relief being extended not just to those on the basic rate but to a greater number of married couples with children. That is the logical conclusion of what she is saying, unless she admits once and for all that the Opposition do not support marriage in the tax system.
Catherine McKinnell: We have a much better suggestion as to how the money that has been allocated to the marriage tax allowance can be used to support millions of taxpayers up and down the country, including families with children. So what about those families with children who are hoping in vain for any sign of support from this Government whose tax and benefit changes will result in households being, on average, £974 a year worse off by 2015 than they were in 2010? The Exchequer Secretary, who is in his place, has conceded that of Britain’s 7.8 million families with children, just 1.4 million will benefit from this policy. Yes, that is right—one in six families with children will gain from this marriage tax allowance. To put it another way, five in six families with children will not get a penny from this Government’s flagship policy to support them.
The policy does nothing for widows, widowers, lone parents, long-term co-habiting couples, the 300,000 children living with grandparents or kinship carers or for the spouse who has left their partner for good reason, perhaps because of domestic abuse. It will not help the wife who has been left to bring up the kids after the husband has run off with another woman. If her husband chooses to marry that other woman, who have the Government decided will get the reward within the tax system? It is him.
How much will the allowance be worth for those lucky married couples who will be eligible? Just how much value are Ministers putting on the role of marriage in our society? Yes, for the one in three couples who will benefit, it could be worth up to £200 a year, almost £3.85 a week. To put that into language that people on the Labour Benches might understand—that is just over one pint of beer or one off-peak game of bingo a week! Who does the Government expect to reap the benefits from this largesse? Let us take a look at their own assessment of the equality impact, which clearly states that while
“couples will benefit as a unit…the majority…of individual gainers will be male.”
But it is not just any old majority. The Government’s own assessment indicates that a staggering 84% of individual gainers will be male.
Before last year’s autumn statement, we knew that the net impact of this Chancellor’s tax and benefit changes since 2010 would hit women three times harder than men, not least as a result of his decision to give a £3 billion tax cut to the top 1% of earners in this country, 85% of whom just happen to be men. As a result of the autumn statement 2013, in which the marriage tax allowance was confirmed, that appalling record has worsened even further, such that the Chancellor’s tax and benefit strategy is now hitting women a staggering four times harder than men, raising a net £3.047 billion from men, and £11.628 billion, or 79%, from women—[Interruption.] I hear the word scandalous uttered from a sedentary position, and I quite agree.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): I am grateful to my hon. Friend for giving way and for making such powerful points. When these points are put to the Government, they always say that the financial circumstances are such that there must be cutbacks somewhere. Is it not ironic that the Government are putting forward a policy that is so badly thought out that if anyone were asked to choose a priority for public spending, this would not be it? Should we not be taking real measures to tackle problems such as the bedroom tax and the changes in universal credit, all of which will cause much more damage than any benefit that this will bring about?
The Chairman of Ways and Means (Mr Lindsay Hoyle): Order. I appeal for shorter interventions. We have time, but Members cannot make a speech as an intervention.
Catherine McKinnell: I thank you, Mr Hoyle, and also my hon. Friend whose intervention was powerful and to the point.
Kate Green (Stretford and Urmston) (Lab): My hon. Friend is right to highlight the disproportionate benefit of the marriage tax break to men. Does she not agree that the argument that couples will benefit as a unit completely fails to recognise financial coercion in relationships, and that those who get the money have the power?
Catherine McKinnell: My hon. Friend raises an important point and it goes to the heart of so many of the changes that this Government have made. So many of the decisions that they have made time and again in Budget after Budget have hit women hardest. Back in September 2011, a leaked No. 10 memo admitted that the Government had a problem with women, and promised a new communications campaign to turn things around, but it clearly has not worked. A key recommendation of a No. 10 communications campaign to be female friendly was to “focus on more visible women leaders”, but until this morning women made up only four of the 23 Cabinet members and that figure is now down to three. Let us not let the Deputy Prime Minister off the hook. Only four out of 25 Lib Dem Ministers are women—[Interruption.] Government Members are shouting, “What has that got to do with this measure?” I wonder whether one of them would like to intervene.
Andrew Selous (South West Bedfordshire) (Con): During her research for the debate, did the hon. Lady become aware of the fact that 93% of young teenagers still living with both parents are with married parents? That is quite a powerful statistic.
Catherine McKinnell: That is an interesting statistic. I know that the hon. Gentleman is committed to the principle of this measure, but I and other Opposition Members are trying to make the point that the policy is not only dud as regards its practical application but further compounds the unfairness in how the Government have made their decisions in Budget after Budget. Let us remember when hon. Gentlemen question what my point has to do with this measure that we know that the majority of gainers from the policy are men.
Kate Green: Does my hon. Friend think that the hon. Member for South West Bedfordshire (Andrew Selous) was seriously suggesting that £3.85 a week would encourage more couples to stay married? There is no evidence of cause and effect at all.
Catherine McKinnell: My hon. Friend’s point goes to the heart of the matter. It demonstrates what is wrong with this policy and how ill-conceived it is.
Alison Seabeck (Plymouth, Moor View) (Lab): The intervention from the hon. Member for South West Bedfordshire (Andrew Selous) was interesting, but should he not acknowledge that only one in six of those families will benefit from any of this?
Catherine McKinnell: My hon. Friend makes an extremely good point. Our opposition to this measure is that it disproportionately impacts on women and benefits men and that it does not recognise five out of six households with children up and down the country who are, as we know, struggling to make ends meet.
Mr David Burrowes (Enfield, Southgate) (Con): The problem with the hon. Lady’s point is that she is looking at married couples individually. The change is that, rather than wholly going down the route of an individualised tax system, as has happened in the past, this policy considers married couples. Married couples are benefiting and, if we asked them, they would say that they are benefiting as a couple and as a household. They are not hiving off men against women, which is what she seems to be doing.
Catherine McKinnell: The tax system works on an individual basis and this proposal introduces incredible complexity to the tax system. I shall cover that in more detail and explain the cost implications. Government Members obviously think that the costs are worth it, but I would be very careful about the concept that all married couples will happily share all their money and any tax gain—although, admittedly, we are talking about £3.85 a week. That seems to be rolling the clock back somewhat and assuming a level of communication within households that I do not think it is the Government’s place to assume.
Women are more than £26 a week—a week—worse off in real terms since 2010, and after significant progress under Labour, when the gender pay gap fell by more than 7%, it is now rising again for the first time in five years. The gap between women’s median weekly earnings in the private sector and the public sector has increased between 2009-10 and 2012-13 from 28% to 31%. The same gap for men has decreased from 17% to 14%. At the same time, the cost of child care places, which we debated at length yesterday, has risen by an average of 30% on this Government’s watch, five times faster than pay.
Analysis by the House of Commons Library shows that the Chancellor’s tax and benefits strategy since 2010 has raised a net £3.047 billion, or 21%, from men and 79%, or just under £12 billion, from women. That includes the Budget 2010 tax credit cuts, which took £2.7 billion from women and only £750 million from men, the 2010 spending review, under which reductions in child care support through tax credits took £343 million from women but just £47 million from men, and the three-year child benefit freeze, which has taken £1.26 billion from women and £26 million from men. That, of course, contrasts with the £3 billion tax cut that was given to the top 1% of earners in this country, under which 85% of the gainers are men, and this marriage tax allowance, under which 84% of the gainers will be men. This issue goes to the heart of the clause and of why we are tabling our amendment.
Mr Stewart Jackson: The hon. Lady is being most generous in giving way. Why does she imagine that 80% of the population covered by the OECD have a tax system that rewards marriage, including countries such as France, Germany and the United States?
Catherine McKinnell: We must consider this clause in the context of the current situation. We know that families up and down the country—in fact, all households—are facing a cost of living crisis. We have had three years of a flatlining, stagnating economy and households up and down the country have been paying the price for that. We have a Government who are introducing measures that will benefit a small proportion of married couples—only one in six households with children—and under which 84% of the gainers will be men, when we know that those who have paid the bulk of the price so far for the deficit reduction strategy that the Government have been pursuing have been women. It is a question of priorities, and this Government seem to have them completely wrong.
Andrew Selous: I want to check that I heard the hon. Lady correctly. She talked about a flatlining, stagnating economy, so I wonder whether she heard the International Monetary Fund say yesterday that we have the fastest rate of growth in the IMF and in the whole of the G7 at 2.9%.
Catherine McKinnell: I think that Government Members would love to try to whitewash and erase from the memory of the public the past four years, three of which have had zero—that is, flatlining—growth in the economy. People will be £1,600 worse off on average in 2015 than they were in 2010 and whatever growth is happening in the economy now is happening despite, not as a result of, the Government’s economic policies. I urge hon. Members to exercise caution in saying that everything in the garden is rosy when people out there are struggling to make ends meet.
Ian Swales (Redcar) (LD): I am following the hon. Lady’s speech with great interest. For completeness, so that we have the full picture, can she say what proportion of tax is paid by men and what proportion of benefits are paid to women?
Catherine McKinnell: I am pleased that the hon. Gentleman has entered the debate, because the Liberal Democrats are key to today’s measure, and I shall go on to explain why. I think we know that there is long-term inequality. The mere fact that 85% of those who benefit from the tax cut from 50p are men speaks volumes about how this country is weighted. The majority of wealth is held by men. I understand the hon. Gentleman’s point, but I urge caution as the Liberal Democrats are in an interesting position today when it comes to how they will vote not only on this measure in the Bill but on our proposed review.
Kate Green: Does my hon. Friend agree that there is evidence stretching back over several decades that shows that when money is paid to the main carer of a child, usually the mother, that money is more likely to be spent on the children? A Government about to preside over a startling rise in child poverty should be mindful of that when they introduce a measures such as this.
Catherine McKinnell: My hon. Friend makes an incredibly pertinent point, and expresses her case powerfully. Child poverty is set to increase by a staggering amount under this Government, and the Institute for Fiscal Studies has clearly said that that is a direct result of the tax and benefit changes that they have implemented. The measure, which Government Members are keen to support, will do nothing to alleviate child poverty or to turn the tide of increasing child poverty over the next few years.
Tim Loughton: The hon. Lady has cited the IFS, which has conducted an analysis of the distributional impact of the transferrable allowance, demonstrating that it is profoundly progressive, disproportionately benefiting those in the bottom half of the income distribution scale. Perhaps she would read us all the research, rather than a selective part of it.
Catherine McKinnell: The hon. Gentleman is incredibly selective. If he genuinely believes that the policy will transform the Government’s appalling record on child poverty and the impact of their tax and benefit changes on women he is deluded.
Mrs Mary Glindon (North Tyneside) (Lab): My hon. Friend is making a good case for the amendment. Only a third of families will get £200 a year extra, but the average family will be £974 a year worse off by the time of the next election, which shows the iniquitous state of affairs that the measure will create.
Catherine McKinnell: My hon. Friend makes an important point. I would add that it is not a third of families who will gain from the policy—it is a third of married couples. Five in six households with children, whom many would consider to be families—particularly the Opposition, but perhaps not the Government—will not gain anything from the policy, which only compounds the child poverty issue about which the Government seem complacent.
Kate Green: Does my hon. Friend not agree that the reading of the figures by the hon. Member for East Worthing and Shoreham (Tim Loughton) was highly selective? Perhaps the bottom half of the income distribution scale benefits from the measure, but the very poorest will not benefit at all, because they are not tax payers.
Catherine McKinnell: Absolutely. That is why many people, including married couples, will not gain anything from the policy, which is why I am astounded by the vehement support for a policy that does not properly recognise marriage in the tax system, which Government Members are usually keen to do.
To conclude the point that I am making about the impact of the measure, I shall give one example of the women who are particularly hard hit by it: low-paid, new mums, who are losing almost £3,000 during pregnancy and their baby’s first year as a result of cuts to child benefit; cuts to the health in pregnancy grant; the axing of the higher rate of tax credit for families with babies under one; restrictions in the Sure Start maternity allowance; and the Chancellor’s “mummy tax”, which will cost new mums £180 by 2015 in real terms—not to mention cuts in public services and the disappearance of Sure Start centres, with three closures a week, which will impact on mums, dads, families and, indeed, married couples up and down the country for years to come.
The policy is a total turkey in terms of its reach and the benefits it brings. Even the Chancellor thinks so, as does the Chief Secretary to the Treasury—and I am sure that we will hear what the Exchequer Secretary thinks later in the debate—but what about its cost and complexity? Surely, Ministers must have learned from the child benefit fiasco, and would not seek to introduce a new, complex aspect to the taxation system—that fiasco must have given them a few grey hairs—or one that might require significant additional administration and input from the taxpayer. Oh—but they are doing so! Her Majesty’s Revenue and Customs has issued a tax information and impact note on the policy that suggests that it will have an Exchequer impact of £515 million in 2015-16, rising to £820 million by 2018-19.
The note is a little less candid about how much the policy will cost HMRC to administer and how many additional staff will be required at a time when the HMRC budget has been slashed and its work force significantly depleted. It simply states:
“HMRC will incur additional costs on the introduction and administration of the transferable allowance. The highest expenditure will be in 2015-16, when HMRC will introduce the application processes to enable everyone who is entitled”—
which is not many—
“to benefit from the transfer. During 2014-15, HMRC will refine its costs as part of its work on the new IT to provide on-line services for customers, other customer support and the new internal IT to link spouses and civil partners’ income tax records.”
Given the lack of clarity in HMRC’s impact note, I submitted a written question on the issue, to which the Exchequer Secretary kindly replied and explained:
“The detail of how this policy will be administered by HMRC is being developed.”—[Official Report, 12 February 2014; Vol. 575, c. 642W.]
Perhaps the Exchequer Secretary would enlighten us about exactly what impact the policy will have on HMRC, which is already coping with the loss of 18,700 full-time equivalent staff, or 26% of its work force, between 2010 and 2016? Equally concerning is the impact that the policy is expected to have on employers. The Government’s tax information and impact note neatly sums up the problem, clearly stating that
“it is estimated that in 2015-16, the cost across 1.6 million employers and pension providers of processing PAYE tax codes to reflect transferred allowances may be up to £5.8 million. In subsequent years, the additional cost across employers and pension providers may be up to £0.8 million. There are also likely to be negligible one-off costs in 2015-16 due to employers and pension providers familiarising themselves with the change to the legislation.”
The cost to employers of processing this shabby policy is thought by the Government themselves to be up to £5.8 million in its first year. Surely there are better ways for that money to be spent. The Institute for Fiscal Studies indicates that the precise costs of this policy for the Government, HMRC and employers
“will depend on the rate of take-up, as people will presumably have to make an active claim to HMRC to benefit, and the extent to which individuals change their behaviour in order to qualify.”
Sheila Gilmore (Edinburgh East) (Lab): My hon. Friend will have attended previous debates on this issue. Indeed, only yesterday in the Chamber, lectures were being given by Government Members about the need to simplify the tax code. Does she not find surprising the support for measures such as the one that we are debating today?
Catherine McKinnell: Indeed. Government Members often lament red tape and the complexity of the tax system. I am not entirely sure that they will be thanked for adding to it in this way and putting the burden of implementation on employers.
The apparent onus on taxpayers proactively to apply for this allowance is a concern that has been raised more widely. The Low Incomes Tax Reform Group has pressed the Government to ensure that a claim for the marriage tax allowance can
“be made on paper, as well as online; digital exclusion affects disproportionately people on low incomes, the very people to whom this relief is directed. It is particularly important that a paper copy is available since, in some cases, taxpayers will seek assistance from the voluntary and charitable sector with, perhaps, only one spouse being physically present at such meetings.”
LITRG goes on to urge that
“the claim/election process will be made as simple as possible—preferably a joint election rather than separate claim and election.”
I look forward to the Minister’s response to those concerns.
The complexity of the Government’s marriage tax allowance proposal has been commented on by the IFS, which stated, when the measure was first announced:
“One striking feature of the policy is that it complicates the income tax system. A transferable personal allowance for married couples capped at £1,000 and then withdrawn using a cliff-edge at the higher-rate threshold is not the simplest to understand. It is three years since another cliff-edge at the higher rate threshold was announced at the 2010 Conservative Party conference as a way of effectively means-testing Child Benefit, only to be removed and replaced with a less egregious taper at Budget 2012. The amounts involved here are less than in that case, which perhaps explains the willingness to cliff-edge again rather than implement a taper. Nevertheless, it is difficult to escape the conclusion that an income tax system which makes some people worse off after a pay rise has something wrong with it.”
One might think that, as my hon. Friend the Member for Edinburgh East (Sheila Gilmore) pointed out, a Government who have so boasted about being committed to tax simplification would want to avoid further complicating the system. At the launch of the Office of Tax Simplification, the Chancellor commented:
“A decade of meddling and intervening has made the tax affairs of millions of families and businesses across the UK extremely complicated. We need to sort out this mess.”
What does the Office of Tax Simplification make of the marriage tax allowance, which will clearly make the tax affairs of couples and employers more complex? We do not know because, in the words of the Exchequer Secretary in response to a written question I tabled:
“The Office of Tax Simplification (OTS) has not made an assessment of the proposals for a transferable tax allowance.”—[Official Report, 12 February 2014; Vol. 575, c. 642W.]
Why on earth not? What could Ministers possibly fear from the outcome of such an assessment?
It may be clear now that the Opposition oppose the Government’s marriage tax allowance and will vote against clause 11. We believe that the marriage tax allowance is perverse and unfair. It is a poorly targeted use of resources and is overly complex, and our amendment to clause 11 presses the Government to undertake a proper review of the cost, the impact and the benefits for those who will receive it and for the overwhelming majority of married couples and families who will not benefit at all.
Amendment 3 calls on the Government to ensure that any such review includes an assessment of alternative tax reliefs that would benefit a much greater number of families, because we are not just opposing the marriage tax allowance today. Indeed, we have said that a future Labour Government would scrap this policy and use the money saved, together with funding from a mansion tax on properties worth over £2 million, to reintroduce the 10p starting rate of tax, meaning a tax cut for 24 million people on low and middle incomes, by contrast with the 4.2 million couples who will benefit from the marriage tax allowance. Crucially, almost half of those benefiting from a new 10p tax rate would be women.
We know that the Liberal Democrats are apparently implacably opposed to the policy introduced by clause 11 and secured a deal in the coalition agreement to go so far as to abstain on the measure. I believe it was before the 2010 general election that the now Deputy Prime Minister described the Conservatives’ proposal for a transferable tax allowance for married couples as
“patronising drivel that belongs in the Edwardian age.”
I know that Liberal Democrats have, as some might say, an irritating habit of saying one thing before a general election, then doing precisely the opposite—university tuition fees and the VAT bombshell spring to mind—or of saying one thing at any point in the electoral cycle and doing precisely the opposite: for example, 46 Lib Dem peers voted to retain the bedroom tax just 24 hours after their party president, the hon. Member for Westmorland and Lonsdale (Tim Farron), said it was something his party could not “continue to support”.
Although the Liberal Democrats may be thinking about abstaining on clause 11 as it stands, it is difficult to see how they could sit on their hands this afternoon and vote against our reasonable amendment.
We know that the Lib Dems apparently secured the policy of free school meals for every child in reception, year 1 and year 2 from September 2014, reportedly in exchange for agreeing to abstain on the marriage tax allowance. We of course back the policy, having piloted the idea in government in County Durham and Newham, with excellent results, but there are very real concerns about the way in which the policy was announced, and how it will be implemented. The initial pledge was for a “hot, nutritious meal at lunchtime”, but that is now being described as an aspiration. Ministers are now simply referring to a free, nutritious school lunch.
Many thousands of schools across the country simply do not have the facilities to ensure this provision. The Liberal Democrats have stated that around £80 million of the additional £150 million capital funding required for the project will come from an underspend in the Department for Education and an additional £70 million would be new money from the Treasury.[Interruption.]
I hear hon. Members on the Government Benches chuntering from a sedentary position. They seem very disturbed by the Liberal Democrat policy of free school meals and do not see how it is linked to the marriage tax allowance. Would they like to confirm that that was not an agreement, as has been reported?
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. The advice is not needed. There is a definite link, and if Members were to listen a little more closely, they would understand where the link is between the choice and where the money can be spent. Less advice and more listening might help all of us.
Catherine McKinnell: I thank the Deputy Speaker for his clarification. The link is clear. It is to do with the allocation of resources and the agreement that has been made. It also goes fundamentally to the heart of the Liberal Democrats and how they intend to vote on the matter. We believe they are likely to abstain on the measure, although we have not had that confirmed. We hope and assume that although they will abstain on the Government’s motion in relation to implementing the marriage tax allowance, they will support our call for a review. If the measure goes through, they would have as much of an interest as we would in ensuring that it is properly reviewed and monitored in the months to come, and that the Government take seriously the proposals for possible alternatives that benefit a larger number of families throughout the country.
The Opposition believe that the money allocated to the marriage tax allowance could be put to much better use elsewhere. That is why we have pressed the Chancellor to scrap it, and to use the money to give tax help to many more working people instead, including more married couples and more families.
Dr Thérèse Coffey (Suffolk Coastal) (Con): I am interested that the Opposition want to give tax cuts to hard-working people, yet they voted against the Second Reading of the Bill, which provided a tax cut for 25 million people.
Catherine McKinnell: The Bill is inadequate as it entirely fails to recognise the cost of living crisis facing many households, including families and married couples, throughout the country, and does nothing to address the problems that people are facing. The review proposed by amendment 3 would be an important first step in looking at how the Government can allocate the available resources to help more people than a few carefully selected types of married couples who they have deemed should benefit.
Susan Elan Jones (Clwyd South) (Lab): Does my hon. Friend agree that one of the problems of the married couples tax allowance as proposed by the Government is the situation of what might traditionally have been called the deserted spouse, often the wife who was left? What would happen in that situation? That is a very real issue to be answered.
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. May I say once again that we must have shorter interventions? I know that many Members wish to speak. We have been going for a long time and have not even got to the Back Benches yet.
Catherine McKinnell: Although my hon. Friend’s intervention took longer than Mr Deputy Speaker might have liked, it was a very good intervention.
I would be interested to hear what Government Members think about the fact that this provision could very much reward men who desert their spouses, leave them with the children to care for, and then receive a tax benefit, but only if they marry the woman they ran off with.
I will be interested to hear what the Minister and Government Back Benchers have to say about the total inadequacy of this policy in terms of its outreach, implementation, cost to Her Majesty’s Revenue and Customs, and cost to employers to implement. I urge all hon. Members, particularly the Liberal Democrats, although they are severely under-represented today, to support us. We are grateful to the hon. Member for Redcar (Ian Swales) for being here. I hope that he will not sit on his hands and will back our amendment.