Budget and Spending Review 2021 representation

Our tax system has long been in need of reform to make it fairer for families. As we recover from the pandemic, there has never been a better time to ensure that the tax system does not discriminate against single-earner families who forsake a wage to look after their children or elderly parents. This, in turn, requires that we put the family unit at the heart of our tax system as happens in much of continental Europe. We are calling for the Treasury to move towards fully transferable tax allowances and bands. This is not only equitable, but, in the long term, it could also save taxpayers money as the annual cost of family breakdown is estimated at over £50 billion. The way our current tax system interacts with the Universal Credit system discourages family formation. This arises because, at present, benefits are allocated on the basis of household income whereas tax is calculated on individual income. This imbalance needs to be corrected. This Budget and Spending Review is an opportunity to help deliver on the Conservative’s manifesto commitment to make Britain the greatest place in the world to start a family: it is currently far from being so. Ending the uplift in welfare payments and the increase in National Insurance means it’s even more important that the Treasury delivers a tax system that supports families. We propose that the first move towards this proposal is made immediately by Increasing the amount of the personal allowance that can be transferred to spouses.