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Budget 2013: One earner families are now under siege

    George Osborne’s reformed ‘modern’ state finds the family on the brink of extinction and one earner couple families under siege argues Kathy Gyngell. 

    Liz Truss’s nanny subsidy policy announcement yesterday (£1200 pound per child for couples earning up to £300,000) put paid to any hope that the Coalition would honour their promise to introduce a transferable tax allowance for one earner married couple families. Today’s budget confirmed the Conservatives have reneged on this pledge. On top of the introduction of the higher rate child benefit tax and plans to deregulate childcare, this is a lethal blow to family choice and autonomy from the state. The family, unrecognized or supported by the tax system, is just a creature of the benefits system 

    Affordable childcare is the issue, David Cameron said yesterday as he stood to be filmed by the BBC in an appropriately sanitised nursery with Nick Clegg hovering in the background; it is so expensive that it stops mothers from returning to work.

    This may be the received wisdom of the Notting Hill set but as today’s front page headlines show many mothers beg to disagree. Lynne Burnham of Mothers At Home Matter said: 'It is completely incongruous for the Government to be paying £1,200 per child for families on joint incomes of £300,000 yet taking away child benefit from single earner couples on £50,000.....Mothers who stay at home are hardworking - the difference is we don't get paid.' 

    But neither Cameron, nor Osborne, nor Truss understand, let alone empathise with, her point of view – or with the needs of small infants, who were never meant to be herded into the group, stranger-provided, care they incentivise.

    The Conservatives’ stance leaves nothing to choose between the anti-family policies of the three main parties in their uncritical pursuit of the holy grail of universal childcare.

    Charles Moore was right to concede the other week that it no longer matters whether Labour, Conservative or Coalition holds office; you cannot detect any difference between them, he said. He might have added that the front bench Tory aspiration primarily seems to be for any endorsement from the liberal left. That’s certainly how their servile facial expressions read when Mr Miliband congratulated them in the House on their late night press restraint concessions earlier this week.

    Today I suppose they must hope that their anti-family childcare policies will win them more opposition plaudits. After all, Liz Truss made a pretty good stand in for Patricia Hewitt yesterday when she set early return to work as the gold standard for aspirational and hardworking mums.

     A political novice would have been hard pressed to say which party she represented.

    The significance of this should not be underestimated. It is deeply disturbing that the state’s embrace of childcare and the mass employment of mothers - a policy once held up as all that was wrong with the Soviet State – seems to be another Conservative Clause 4, detoxifying, moment. The state’s takeover of childcare, in the guise of early intervention, education, breakfast and afterschool clubs, moves ever earlier. Note the only crumb of comfort that Liz Truss threw out to the stay at home mum was to say they would get state school (day-care) for their two year olds. She did not see the irony.

    For the party that has guarded choice and the autonomy of the family against the state, this sits uncomfortably indeed.  No wonder both the Daily Mail and the Telegraph rounded on David Cameron this morning for slurring stay at home mums. As Marie Peacock, also of Mothers at Home Matter, said: “Hard-working families are not just the families with two earners. David Cameron is alienating mothers across Britain. We have been inundated with calls from stay-at-home mums who are puzzled and confused by what Mr Cameron is saying.” 

    They would have been. For lost from Mr Cameron’s modern metropolitan world view, is any sense of the economic or fiscal justice for these families or of their value to society.

    Yet he must be aware that the UK is almost unique amongst OECD countries in having no recognition at all for family responsibilities in the tax system; that the UK is out of line with international convention in not acknowledging marriage and that, among the large developed OECD countries, it is actually alone in not recognising marriage. One can only assume he no longer thinks this matters; nor that, as he thought in opposition, one earner families are particularly hard done by.

    But they are.

    Over the course of the last 6 years or so CARE’s Fiscal Policy Team has conducted an annual evaluation of the way in which the tax burden - defined as income tax plus national insurance, net of benefits - is shared out between those with and without family responsibilities across the OECD area.

    For the latest year’s figures, 2011, they found tax burden in the UK on one-earner married couples with two children on average wage was 42% greater than the OECD average; that UK single earner couples were more penalised than in any other OECD country; that the tax threshold for the married couple today is 21% lower than it was in 1991

    The startling example they give is of a one earner couple on £60,000 paying a £5,182 more in tax than a dual earner couple earning £30,000 each. This is a 59% hike. Since the introduction of the new higher income child benefit charge the one earner couple now pays 79% more in tax than his dual earner neighbours.

    This latest £1,200 tax break per child is set to make this inequity even worse.

    As CARE’s Dan Boucher has pointed out, this was the last opportunity the Government had to begin to rectify these inequities by introducing a transferable tax allowance to, “be confident that (it) can be operational and making a difference before May 2015 and the next election.”

    But far from this what the Chancellor has done is to bring forward increasing the personal income tax threshold to £10,000, though this will disproportionately benefit those in the top half of the income bracket, and render our tax system even more individualistic and insensitive to family responsibility.  

    Transferable allowances would have helped those in the bottom half. They would have gone some way to compensating for the ending of married couples allowance in 2000, thereby underlining, once more, the public policy benefits of marriage – benefits that no sociologist or politician today can deny.

    This was not to be. What we have witnessed today is the extraordinary spectacle  of nominally Conservative politicians presiding over the demise of the family – the once backbone of our society –  making no attempt to support the great social (and economic) aspiration for marriage that still exists, so in the thrall of modernism they are.

    Introducing a transferable tax allowance would have gone some way to rectifying the state’s punitive treatment of marriage and one earner families. But channelling the hard earned taxes of one earner families into nanny subsidies for the well-heeled politicians and their working wives that represent the Coalition has made matters profoundly worse.

    Kathy Gyngell has a first class honours degree in social anthropology from Cambridge and an Oxford M.Phil. in sociology. She has worked for the former ITV companies, LWT and TV-am as a producer and senior programme executive. A full time mother after the birth of her second son, she founded the voluntary organization Full Time Mothers.

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    Anonymous - About 1828 days ago

    Thank you Kathy Gyngell for writing this article, and also the one you wrote for the Daily Mail in November criticizing the government's obsession with subsidised childcare for pre school children. There is such a blind spot in this country that refuses to listen to expert's research that shows that young children need to be with their parents at a young age in order to build strong attachments. The emotional cost in our society of nursery raised babies and young children will be seen in the future, and the government will have to pick up the tab when society has to deal with the problems that these children may have in the future. Why are parents being offered money to send their children to daycare, in a time when we are in economic difficulty, and yet are not being allowed to use that money to stay at home instead? Thanks for speaking out for parents who believe in parenting their children at home. I often feel like the government doesn't trust me to raise my own children, and thinks they will fare better in nursery care and that I am damaging their education by keeping them at home - aged 2!!

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    Anonymous - About 1140 days ago

    I don't know anybody from a single earner family who is planning to vote Conservative this time around. I just do not understand why my family has to pay so much more tax than dual earner households and lose child benefit as well. So much so that I am seriously considering emigrating to give my family a better life.

    The policy is particularly short sighted because the time families have a stay at home payment is probably no more than a fifth of their working life. Why are we so desperate to force them to work in this window when unemployment is high anyway?

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    Jon McEnery - About 1129 days ago

    "I just do not understand why my family has to pay so much more tax than dual earner households and lose child benefit as well"

    Because this is happening is a tiny tiny fraction of cases.

    The policy was around removing child benefit for the top 10% of earners or the top 25% of households. Surely it is right that families in the top 25% should shoulder some more of the burden than the other 75%?

    This article seems to be about splitting hairs between the wealthiest households. yes, there may be some things that are unfair but no policy is going to be simple and things like this will happen. Just think more of the vast majority who are worse off than you.

    (In case its relevant I am a high earner who has lost out significantly through recent policies but accept teh country is in a difficult position and makes sense that those more fortunate help out more)