We are Family - Part 2

Thursday, October 2nd, 2008 @ 2:27PM

David Cameron’s Social Justice Commission developed a proposal on tax breaks for married couples. A policy which would make tax free allowances transferable between married couples. George Osbourne argues this would leave married couples £20 a week better off.

Most of the debate around this issue takes place on the top line moral issue of what constitutes a family or a secure home environment. As my friend in the previous post said – the Tories are very prescriptive and one dimensional about what “a family” should constitute whilst Labour recognises that happy families come in all shapes and sizes just as we recognise that there are many deeply unhappy Mark 1 - 2.4 children marriages.

My issue with this policy lies more in the detail. Because the policy relies on transferring tax free allowances, it excludes any married couples where both work and earn over £5,435. As the Tories Shadow Minister for Childcare, Paul Goodman said, this policy “would clearly only help women not in the Labour market.”

The numbers:

Taking the rate of the tax free allowance at £5435*, you could work up to 20 hours a week for 48 weeks of the year on the national minimum wage without paying any tax.

If you had a job that paid a bit more than that, say £16,500 pro rata as a secretary in an office, you can work 12 hours a week – perhaps 10 to 2 whilst the kids are in nursery 3 days a week - without paying any tax.

Or, under the Tories proposals you can choose to stay at home for £20 a week, adding £1040 to the family income a year. The equivalent of working just 3 ½ hours a week at the national minimum wage, or just over 2 hours a week as a secretary.

Why on earth is it “better” in the eyes of the Tories for that person to give up work and stay at home for £20 a week? How can they possibly believe that this will materially address the society they think is broken? They’re proposing to spend £3.2 billion on it and cut SureStart and school building programmes in England and Wales to pay for it!

If you reward stay at home mums (or indeed stay at home dads) with £20 a week and consider being a full time parent a full time job as many do – then its worth is just 60p an hour in the eyes of the Tories. All this policy does is reward stay at home mums in rich families and even then, it undervalues the work they do. Of greatest concern however, is that fact that it both embeds and rewards gender inequality.

This policy doesn’t boost workforce participation and it certainly doesn’t tackle poverty, but it does embed gender inequality. Yet it is supposed to represent the new, fresh radical politics of Cameron’s Conservatives?

Right across Europe there is a trend of marriage decline accompanied by an increase in divorce, cohabitation and lone parenthood. The age of first marriage and the age of first childbirth are generally rising across all nation states. The Tories answer to this apparently “broken society” is simply to throw £20 a week at the problem and hope it goes away. They haven’t got a clue.

Marriage is an increasingly outdated institution. Instead of focusing on the marital status of parents, we should be focused on the welfare and prospects of their offspring. That means enhancing parental leave, increasing tax credits, providing affordable childcare and fully state funded nursery provision with increased hours and flexability.

Sweden is a pretty good case study to examine:

- The provision of childcare is much more affordable and contact hours are longer and more flexible.

- Instead of there being a statutory level of maternity leave, either parent is entitled to receive 85% of their pre-existing wage for the first year after childbirth …. and they’ve been doing this since the 70s!

They also have a speed premium which means that if a mother has a second child within two and half years of the first – then she gets the same benefits she received before, even if she never goes back to work. The welfare of children is enhanced and low fertility rates reversed (countering population decline and avoiding the type of massive pension crisis we face in this country) whilst empowering women to exercise real choices.

The Swedish have long recognised men and women as equals in all aspects of professional and domestic life and they’ve long considered motherhood as a vocation worth paying the going rate for. Of course – all these fantastic social welfare policies come at a price – and that means higher taxes. Something which the Conservatives are ideologically opposed to.

The Tories are never going to come up with radical ideas and credible alternatives to Labour policies until the start thinking about what ‘family’ is, means and looks like through a 21st century kaleidoscope with all its variations and diversity.

If they recognise that there is a society and that government has a role and a duty to steer it - protecting the welfare of children and promoting aspiration - they simply have to swallow their ‘moral’ prejudice and put their tax receipts where there mouth is. £20 a week as an alternative to work just doesn’t cut it.

* I’ve written this article based on the personal allowance rate as it was when the Tories introduced this policy. Since then - Labour has increased the tax free allowance to £6035. I thought that was only fair.

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Categories: Equality Issues, Labour, Tories

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