Conservatives set to scale back marriage tax reforms

The Tories look set to limit their plans for easing the tax penalty on married couples while Labour says it has no plans to change the tax system to support marriage.

David Cameron, the Conservative Party leader, is likely to scale back his party’s proposals because they could be too costly in the current economic climate.

Meanwhile, Labour’s Ed Balls admitted in an interview with a Sunday paper that marriage is a “better” basis for family life but refused to back tax reforms which support it.

Speaking on the BBC’s Newsnight Philip Hammond, the Shadow Chief Secretary to the Treasury, announced that the Tories’ proposed transferable tax allowance for all married couples was no longer “affordable” due to the economic climate.

He said: “We are having to look at different ways of introducing a recognition of marriage into the tax system which will not impose the same burden on the public finances.”

The Tories estimate that the original scheme would have cost £3.2 billion per year, though Labour insists the cost would have been closer to £5 billion.

However, former Tory leader Iain Duncan Smith has defended the scheme saying that it would only cost £600 million per year if it was initially restricted to married couples with children under three.

He said: “It’s absolutely affordable and it’s right. David Cameron has said so to me in private.

“The only way we can start tackling our broken society and poverty is through support for marriage.”

However, the Labour Party has refused to back tax reforms to encourage marriage.

During an interview with the Sunday Times Ed Balls, the Secretary of State for Children, Schools and Families, revealed his belief that marriage is a “better” basis for family life than either co habiting or single parenthood.

Mr Balls also admitted that the Labour Party hadn’t placed enough emphasis on the benefits of stable family life.

He said: “Because we knew it was complicated we ended up not talking about families and talking about children instead.

“While supporting children is very important, adult relationships are very important too.”

Labour is due to release a Green Paper on the family this month which Mr Balls claims will change “the direction and face of family policy”.

The paper is expected to contain measures to increase funding for marriage guidance but Mr Balls has made it clear that there are no plans to encourage marriage through the tax system.

The current tax system penalises married couples meaning that many would be financially better off if they were to split up.

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