If the Conservatives are serious about helping families, allow transferable tax allowances, says Dr Patricia Morgan
David Cameron recently declared that policies should be scrapped or revised if they fail to provide families with enough support. “For me,” he said, “nothing matters more than family. It’s at the centre of my life and the heart of my politics.”
Any ‘family test’ would have its work cut out. Orthodoxy dictates how families come in all shapes and sizes, or exist wherever there are any children. All forms are equally good if it were not for the disadvantage or deprivation of children in their care. This sponge-like notion of family absorbs virtually any association or stage in the life cycle. In such blended families, the to-ing and fro-ing of couple relations is meant to be matched by migratory and androgynous parenting.
On the ground, a half of new-borns experience parental separation by 15 years of age. Falling marriage rates have outpaced divorce and family breakups have doubled since the 1980s, with cohabiters splitting at four times the rate of married parents. Family breakdown costs over £46 billion a year – more than defence - and is the ghost at the multibillion-pound extravaganzas to counteract poverty, educational failure and crime. Children fare worse in virtually every aspect of development which impacts into adult life and subsequent generations. Without fathers, boys miss role models, girls and mothers lack protectors and the wider community is less safe. Declining marriage worsens adult health and wellbeing, strains public services, and increases housing demand.
Rather than the idea of parenting smoothly operating irrespective of any family form or relationship, the reality is often chaos and conflict. Officialdom has to construct clumsy and constantly evaded ways to involve stake-holders with their offspring, or when, where, why and for what they see them. Cameron’s remedy for trouble and strife is counselling, along with extra help for the most troubled families - reminiscent of New Labour’s multifarious meddling for transforming children’s development.
Counselling kicks problems into the long grass, as the state is expected to make good the loss of social capital for children and nurture the skills which sustain communities, as support must constantly expand at the expense of productive society. Opening up lives to unprecedented intrusion, Scotland is gearing up to assign a Named Person to every child up to age 18, able to share information with a range of public authorities and intervene without parental consent.
While family forms are meant to be equal, the incentives they face are decidedly not. Tax credits pay up to an extra £7,100 if parents live apart or pretend to – like a quarter of lone parents do. Ninety-five per cent of single parents would incur a ‘couple penalty’ if they married or lived together, with 10% losing a third of their income. Then there is additional council tax for being a couple.
Lone parents and single people have had a big fall in taxation in the new millennium, while one earner families have seen a substantial increase. This helps account for why UK married parents face a tax burden 42% above the OECD average. Their threshold is so low that a family with three children may even be paying higher rate tax when their disposable income is below that regarded as necessary for a minimum acceptable living standard.
Going back to Adam Smith, ‘ability to pay’ meant that taxation should target the surplus left after subtracting the amount necessary to support self and dependents. Universal provisions provide a floor on which to build, not a ceiling crushing advancement, deterring collaboration and cultivating dishonesty. The 1830s and 1940s saw retreats from means testing ventures - condemned for creating pauperisation at spiralling financial and moral costs. In recent times, measures to ensure some equity between those with and without responsibilities for others have been progressively replaced by ‘targeted’ welfare - encouraged by prevailing antagonism to the conjugal family. On and on ad infinitum, more and means tested benefits arise to offset the disincentives of other mean tested benefits, when evacuation from the morass is indicated.
Child benefit originated from an amalgam of the child tax allowance and family allowance, but the unfortunate name incites a ‘take it from the non needy’ knee jerk. In a further punitive turn in 2013, a parent whose spouse’s income exceeds £50,000 has part of this clawed back and, over £60,000, loses the lot. One earner couples with two children are left paying 89% more tax than double earners. The forthcoming Universal Credit will not compensate for the failure of the system to take account of marital commitment or family responsibilities.
Hostility to mutuality and interdependence fuels such discrimination. The live-in, working father might be among the best bargains society can have, but Nick Clegg’s symbol of oppression is a man coming home from work and his wife putting a meal on the table. The political classes all sign up to Marx and Engels’ decree that all females be in the workplace and all children be in public, ‘wrap-around’ care from birth.
Childcare support via tax credits (Universal Credit by 2016) covers 70% (to rise to 85% for income tax payers) of the costs for over 16 working hours a week for lone parents or two earners up to £300 for two children. A child care voucher scheme for children to 12 years pays up to £1,200 each per year (rising to £2,000) - if both parents work and earn up to £150,000 each or £300,000 total when a tax charge is imposed on other families with an income of £50,000.
The pressure to do something for married families to show they care pushed Government to let lower income couples transfer £200 of unused tax allowance. This sop of £4 per week will vaporise in benefit withdrawal. Labour would spend the pittance extending paternity leave at higher pay. While mother care is sex role tyranny, when men stay at home minding babies it is liberation for “the role they want”, according to the Institute for Public Policy Research. Making it “easier for mothers to return to work” after birth lessens the impact on their careers, claims Shadow Child Care Minister Lucy Powell - while hopefully undermining men’s employment and earnings.
Is it not totalitarian to pressurise parents into acquiescing to one recognised option for distributing their labour over the life cycle - and when retirement ages rise and there are more years to pursue different options and build careers? Choices are for parents, not zealots seeking absolute statistical parity between the sexes at all time. Either spouse should be able to transfer any unused tax allowance to the other. Child allowances should be accessible to parents either via taxation or as cash and children of middle and higher earners are no less worthy than others. This logical and straightforward system would take many out of the poverty, employment and marriage traps as well as taxation. It would help re-build the conjugal family as a protected locale or legitimised zone of privacy where individuals can organise themselves and state intrusion is minimised.
Dr Patricia Morgan is a sociologist specialising in family policy and criminology