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Finance Bill

I confess that I cannot go back to 1999 and I do not know what data were then available to the Chancellor, but the hon. Lady cannot deny that our tax system is unfair because it militates against the choice to stay at home. Surely I can take the hon. Lady just this far, if no further—that it should be a free choice for women with young children whether they work or not, and the tax system should be neutral. That is all that we are asking for. The hon. Lady can make a speech later if she disagrees with me. I do not doubt her sincerity. I am just saying that the system is simply unfair. Britain's failure to recognise marriage in the tax system meant, as of May 2010, that it was out of line with other developed countries, with the effect that, far from supporting the best child development environment and being family friendly, it was placing a significantly greater proportion of its total tax burden on this family type than was the case in comparable countries. In that context, it is not surprising that family breakdown, the key driver of the broken Britain phenomenon is particularly pronounced and the case for recognising marriage in the tax system is clear and compelling. So all the arguments for recognising marriage in the tax system stand in one key area. The tax burden on one-earner married couples with children in the UK has now risen such that it is over 40% greater than the OECD average. Should we be proud of that as a Conservative Government when we went to the country on the basis of supporting marriage? Why are we doing that? Why are we not taking action when it was a key part of our manifesto pledge to deal with broken Britain? What is even more important is that, if all the tax and benefit changes proposed for 2012 are introduced, the burden is projected to increase to over 50% more than the OECD average. So it is getting worse, not better, for every month that the Minister delays carrying out the pledge in our manifesto. I want to go into a tiny bit more detail before I finish because the hon. Member for Bishop Auckland (Helen Goodman) made a point and I have to reply to it. If 2012-13 rates had applied in 2009-10, the tax burden on a one-earner married couple with two children would have been 20% rather than 18%—in other words, 80% rather than 73% of that on a single person. OECD figures show that in 2009 a UK one-earner couple with two children on an average wage paid 39% more than the OECD average. They would have paid over 50% more if 2012-13 rates had applied. The figures are there. They are Treasury-approved figures and there is no doubt about it. One can disagree with the policy, and no doubt the Minister will say that there are a 101 reasons why we cannot introduce a transferable allowance yet, but the figures are there. We are out of touch with other civilised countries, and we should be, above all, a civilised country that helps young mothers look after their children. Under Labour, the tax burden on one-earner married couples with two children on the average wage oscillated between 33% and 44% greater than the OECD average. That means that the phenomenon is getting worse under a Conservative Government. I do not think that, for all those people who supported us at the election, that is tolerable. When the burden reached the 44% level in 2007-08, the then Conservative Opposition spoke out against the extraordinary unfairness and committed ourselves to addressing it when in office through the introduction of the transferable personal allowance. It was 44% under Labour; it is now going to increase to 50%, and we are still not taking action. It is worth quoting the then shadow Chief Secretary to the Treasury, now the Secretary of State for Transport. He said that the report ““Taxation of Families 2008-9””, which demonstrated that the tax burden on one-earner married couples on average wage with two children in the UK was 44% greater than the OECD average"““highlights the continuing bias in the tax system against two parent families where only one adult works. No other European country penalises families in this way. If we want to end child poverty we must end this discrimination.””—" what a ringing statement from a member of the current Cabinet—"““That is why Conservatives have pledged to reintroduce a recognition of marriage into the tax system””." For the figure to deteriorate even further under a Conservative Administration such that the burden was over 50% greater than the average—breaking new ground never reached even by new Labour—would be a wrong thing for the Government to do, and that is why we should take action. I hope that the Minister will accept the new clause or at least give a commitment that he will address the issue in the next few months. It would make the manifesto commitment to make Britain the most ““family-friendly country in Europe”” utterly ridiculous. Why is Parliament held in contempt? Why do people not follow these debates? It is because they vote for parties who make solemn pledges and five minutes later, when it becomes inconvenient, break them. This was a solemn commitment. So when this new clause was promoted this afternoon there were all sorts of shufflings offstage to try to prevent its debate. I am not going to stand here and allow a solemn pledge not to be debated on the Floor of the House of Commons. It is about restoring faith in British politics. We made this pledge and many in this party will hold the Government to account on it. Of course, some will respond by blaming the previous Administration's economic mismanagement and the debt crisis—we do have a debt crisis—saying that the Government intend to make these changes but first have to deal with the debt crisis left by the previous Administration. I am sure that we will be told that this afternoon, but I do not accept it. Even if challenging times require a country to cut spending and increase tax, that does not mean that the way it shares out its bigger tax burden has to increase the already disproportionately negative effect on one same family type. We are all in this together, are we not? We are all in it together when dealing with this debt crisis, so why should we tax disproportionately heavily a particular type of one-earner family? The need to increase the total tax take should be used as an opportunity for redistribution in the tax system—this may appeal to Labour Members—so that it is shared out more fairly between families and single people, even as it increases overall. I might even take Labour Members that far, for do they not agree with fairness among all family types? Interestingly, the tax burden in the UK on one-earner married families with children is on average 73% of that on single people on the same wage with no dependants. I have nothing against single people with no dependants, but what we are doing at the moment is manifestly unfair. Our system is disproportionate compared with the arrangements in other countries—our figure is 73% whereas the OECD average is 52%, so other countries are at least trying to address this state of affairs. Moreover, the tax burden on single people in the UK has fallen steadily since 2007, such that it is now lower than the OECD average. That is great—I have nothing against that—but we should not unfairly discriminate against other people. How can we allow the tax burden on one-earner married couples who have two children and are on an average wage to rise from 73% of that on a single person on the same wage to more than 80%? That is why I said to the Minister that this situation is getting worse and worse with every month and year that we delay taking action on a solemn manifesto pledge. The ongoing arguments for recognising marriage in the tax system have been greatly enhanced by the fact that, other things being equal, the tax burden placed in this country on one-earner married couples on an average wage with two children will rise to more than 50% of the OECD average. We need a swift recognition of marriage in the tax system—the case is overwhelming. It will also probably take Her Majesty's Revenue and Customs two or three years to make the necessary changes. Depressingly, even if the Minister were suddenly to announce today that he was going to do this, it might take two or three years for it to happen, so it is even more important to act. This is even more important than raising the personal allowance to £10,000. That Lib Dem policy concentrates on individuals, rather than families and, thus, favours two-income couples, rather than single-earner couples. The Government's policy is actually making the situation even worse. With that, I rest my case and just plead with the Minister to try to recognise a solemn manifesto pledge.