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Married Couples (Taxation)

Volume 131: debated on Thursday 14 April 1988

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14.

To ask the Chancellor of the Exchequer what representations he has received since the Budget about his proposals for separate taxation of married couples.

Will the proposals end the iniquitous tax on marriage and ensure that a married couple pay no more tax than two single people? Will it also stop the taxation of a wife's savings income at her husband's marginal rate of tax? If it will do those things, has my right hon. Friend received the congratulations of the Opposition Front Bench, or are the Opposition embarrassed about not having done that when they had the chance?

We have not received any representations from the Opposition on this matter. My hon. Friend is right. The significance of this change is that it ends a 180-year anomaly whereby a married woman's income is aggregated with that of her husband and she does not fill in her own tax return. That is obviously wholly wrong and wholly inappropriate today.

Will the Minister recognise that the only thing that this has done is ensure that women can fill in their own forms? As for gaining any benefit, that is much less likely. Will he confirm that it is still the Government's intention that what used to be the married man's allowance is, in effect, still going to be the married man's allowance because it will be paid to the husband irrespective of the wishes or the earnings of the wife?

On the second point, no, I do not accept that because, as the hon. Lady knows, since she participated in the debate on the Budget, it is possible for the husband to transfer the unused portion of the allowance to the wife. Secondly, when the hon. Lady says that it is far from certain that these changes will be of benefit to people, she is way off the mark: 1·6 million women will pay less tax. Half of those are elderly people, and 165,000 elderly couples will be taken out of tax completely. I do not call that a rather marginal change. I think that it is a major change.

Will my hon. Friend give some attention to the proposal whereby the basic tax allowance for a mother could be transferred, in the case of a non-working mother, to the husband, as an encouragement to those mothers who stay at home to look after their children?

I shall look at the point that my hon. Friend makes, but I think that I have partly answered that in the reply that I gave to the hon. Member for Durham, North-West (Ms. Armstrong). In most cases what we propose via the transfer will ensure the right result and that the allowances are used in the way that most benefits the married couple.

Can the Minister tell the House how many super-rich couples will benefit as a result of these proposals and by how much per week, in cash terms, on their unearned income, if they arrange their tax affairs to the best of their ability?

The hon. Gentleman, like the Opposition in general, is obsessed by the super-rich. The significance of this change is that 1·6million women will pay less tax. The Opposition make the wrong assumption, namely, that the only people who have any savings are rich people, whereas all married women with savings who at the moment have their tax aggregated with their husband's will benefit very significantly from this reform