Karen Allen

I fought South Shields at the May 2010 General Election for the Conservatives, gaining a 6.4% swing which was a 4% vote increase. The Conservatives polled 7,886 up from 5,207 in 2005. I was born in the North East and grew up in South Shields. I currently live in London and am employed as a Director at Lloyd's Broker Howden International.

Sunday, April 18, 2010

Marriage and Civil Partnerships Tax Credit

We want to make Britain the most family friendly country in Europe. This policy will help us achieve that because it is:

- Progressive: because the lowest earners benefit the most

- Mainstream: because most European countries recognize marriage in the tax system

- Realistic: because it is affordable and fully funded

- Fair: because it is funded by a levy on risky borrowing by banks

Couples who make a commitment to each other are the building blocks of a strong society – whether in a marriage or a civil partnership.

Our policy will take the form of a partially transferable personal allowance for all married couples and civil partnerships.

- One member of an eligible couple will be able to transfer £750 of their tax free personal allowance to their partner in order to reduce their partner’s income tax bill. This will be limited to basic rate taxpayers and is therefore worth up to £150 a year per couple at the 20% rate of tax. In 1999, its final year before it was abolished for all but pensioner couples, the Married Couples Allowance was worth £197 per couple per year.

- The additional transferable allowance will be tapered away at incomes above £42,500 so that no higher rate taxpayer earning £44,000 or more will benefit.

- Eligible couples where one partner is not using all of their tax free personal allowance and the other earns between £6,600 and £44,000 will be up to £150 a year better off.

- The full benefit of £150 goes to eligible couples where the main earner earns between £7,300 and £42,500.

The independent Institute for Fiscal Studies estimate that this will cost about £550 million. This will paid for using some of the revenues from a levy on banks that will raise more than £1 billion. The remaining revenues will be used to reduce the deficit.

This is a progressive tax measure, with two thirds of the benefits going to families in the lower half of the income distribution. The biggest gains as a percentage of income go to households in the third decile of the income distribution.

4 million out of a total 12.3 million married couples will benefit.

All these gains will be additional to the gains from stopping Labour’s jobs tax.

The rest of this email gives you some examples of what our policy would mean in practice; how we will make Britain the most family friendly country in Europe; and the bank levy.


1) A married couple where one partner does not work and the other works full time earning £20,000 a year.

- The non working partner pays no tax but they can transfer £750 of their unused personal allowance to their partner.

- Their partner would pay £2,680 in income tax under the current tax system. Under our plans they would pay only £2,530, saving £150 a year.

2) A couple in a civil partnership where one partner works part time earning £5,000 a year and the other works full time earning £15,000 a year.

- The part time worker pays no tax because they earn less than the £6,600 personal allowance.

- They can transfer £750 of the unused part of their personal allowance to their partner.

- Their partner would pay £1,680 in income tax under the current tax system. Under our plans they would pay only £1,530, saving £150 a year.

3) A married couple where one partner does not work and the other works full time earning £70,000 a year.

- The non working partner pays no tax but they can transfer £750 of their unused personal allowance to their partner.

- However, this additional personal allowance is tapered away to zero for all higher rate taxpayers (all incomes above £44,000), so this couple do not gain from the policy.

Recognising marriage in the tax system

David Cameron has set out a clear ambition to make modern Britain the most family friendly society in Europe. We have proposed a range of reforms to achieve this, including:

· Ending the couple penalty in the tax credits system

· Supporting families with young children with 4,200 additional health visitors

· The right to request flexible working for every parent with a child under 18

· Improving Sure Start by focusing it on early intervention and increasing its focus on the neediest families

· A new system of flexible parental leave that will let parents share maternity leave between them, including taking some of the leave simultaneously

· Cracking down on manipulative marketing targeted at children

· Ending the culture of fear of litigation in children’s activities

Now we are setting out our plans for backing marriage and civil partnerships in the tax system. Each family is different and some marriages and civil partnerships fail. We are not passing judgement on individual circumstances. But as institutions, marriage and civil partnerships promote responsibility, commitment and family solidity, and backing them sends an important signal that as a society, we value the commitment people make when they get married or form a civil partnership.

It means more help for people on top of our pledges to stop Labour’s National Insurance rise and to help local authorities freeze council tax for two years.


Blogger Rogue Economist said...

What a great incentive Karen! I fully support traditional values, I myself am married with 2 children and it saddens me to see teenage single parents, or single parents of any age really.

I can't comment on the effects it has on the child but I feel a child needs both parents in a supportive relationship and marriage certainly strengthens those bonds!!

It probably seems old fashioned to get married nowadays but I see marriage in Britain as the first rung to recovery of 'Great Britain'.



9:43 pm  
Blogger McMurdo said...

This is a *very small* step in the right direction.

We are a very traditional family with 3 children. My wife has been a full time mum for much of the time we have brought up children simply because it works best. The research supports what we do as well. And it fits with our Christian principles.

The family is the building block of society. No civilisation in history has ever survived the degree of marital and family breakdown we are currently seeing in the Western world.

I have found it very frustrating to see the tax system work against us.

The vast majority of working mothers would stay home and bring their own children up full time if they could afford it. But no politician would remind you of this. Big business and big government don't want it!

My only comment would be - forget the army of health visitors! Just cut taxes for married people further and let us bring our own children up in our own families free from state institutions. It has worked fine for thousands of years.

8:17 pm  
Blogger david j said...

Hi karen,
nice to see you in king street on saturday did'nt get to ask you a question.
just like to say all the best on may 6th i'll be voting conservative (1st time)& hopefuly theres a lot more voters like me!
anyway good luck karen.
your going to need all the luck in south shields! david j

2:59 pm  
Blogger Karen Allen said...

Many thanks, David. Quite a few people have said they're voting Conservative for the first time - which is great. Who knows what might happen!

4:45 pm  

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