Wednesday, January 20, 2010

Matthew d'Ancona - kissing arse, and doing it badly

So, having let Josh have his 150-200 words, it's time to give some less sparing comment on what did Matthew d'Ancona actually wrote. To be honest, especially as Matthew seems so keen on not being so, I am astounded by the astonishing chutzpah that he calls upon in writing it. If Dylan Jones is a rather embarrassing cheerleader for 'Project Cameron', then Mr d'Ancona is equally guilty of donning the tight sweater, short skirt and pompoms in support of his man.

The first paragraph is an clear indication of the intellectual rigour that we can expect...

No less than Tony Blair, his occasional role model, David Cameron has an “irreducible core” of beliefs: convictions so close to his heart that they are non-negotiable. And none is more deeply-felt than his faith in marriage as the cornerstone of society. His belief in the institution is neither aggressive in character or puritanical in origin. But it is the hard kernel of his politics.

So deeply felt that he was one of the team who started the process of reducing the impact of the married couples allowance in the 1993 Budget - Chancellor of the Exchequer Norman Lamont, Special Advisor David Cameron. Did he indicate his disapproval then? Like hell he did...

So for Ed Balls to attack the Tory leader's plan to recognise marriage in the tax system as “hugely expensive and unfair”, as he did in yesterday's Sunday Telegraph, was an act of typically brazen aggression. The Secretary of State for Children, Schools and Families was ridiculing a policy that is as dear to Mr Cameron's heart as it is controversial: the Tory plan, Mr Balls said, was “designed to say that some types of families are first class, and other types of families are second class”.

I'm no friend of Ed Balls but on this occasion, he's right. If Conservatives believe that a family headed by a married couple is the ideal, then anything else is less than that. It isn't brazen aggression, it's a valid opinion. Or perhaps it is only acceptable for Conservatives to ridicule their opponents?

This week, the Government will publish its own green paper on family policy, while the Conservatives unveil the section of their draft manifesto on repairing the Broken Society. And in this case, the ideological “dividing lines” of which Mr Balls is so fond will be clear and unambiguous.

You'd better believe it, kid...

There are two quite separate questions to be posed about Mr Cameron's plan: would it work, and is it the right thing to do? Let us say that the tax break amounts to a £20 weekly boost for married couples. This sum is derided by those who forget how poor the poor truly are: the least affluent 10 per cent have a disposable income of less than £90 a week. So, for them, an additional £20 would be no small windfall.

No, they aren't separate questions at all. If the plan works, it is evidently the right thing to do. If it doesn't, it's the wrong thing to do. Since when was it right to waste billions of pounds to make a statement? At least this demonstrates that Matthew is less capable of running than the economy than George Osborne. Unfortunately, there are still too many people who are more so. 

£20 per week? What he means by disposable income can only be speculated at, but if you earn £4,500 per annum, you would fall below the income tax and NIC thresholds. Accordingly, the married couple's allowance wouldn't help you at all. And for it to be worth £20 per week, the allowance for a basic rate taxpayer would have to be £5,200. At its abolition in 1999/2000, it was worth £1,970 (at 10%, remember), or less than £4 per week. That represents about £6 per week now. Anyone would think that Matthew was plucking a figure out of the air. And of course, they'd be right, he is.

But let us be realistic: a tax break of this sort is not, in and of itself, going to drive millions of young people to church or the nearest registry office to tie the knot. That, indeed, would not be its purpose. Would it “incentivise” marriage? Possibly, though it would rarely, one imagines, be the clinching argument (“He married me for my tax break”). Instead, it would alter the message which claimants are given as they wander through the impenetrable thickets of the welfare system, encountering a series of signals and symbols freighted with meaning.

But surely the whole point is that it would influence behaviour? So, what is its purpose? What is worth spending so much money regardless of whether it justifies the expenditure?

At present, the message they take away is that the state is at best neutral and at worst actively hostile to marriage. The Married Couple's Allowance introduced by Nigel Lawson in the 1988 Budget was restricted in scope by Norman Lamont and Kenneth Clarke and finally abolished by Gordon Brown in 1999, replaced by an elaborate system of tax credits. And the perverse consequence of the credit structure has been the so-called “couple's penalty” — the price a couple pays for staying together.

And, lest we forget, David Cameron. If you're such a fan of young Dave, why don't you bother to find out what he was doing in 1993? Oh yes, I forget, you're a fan. But don't worry, I did the research for you. It took less than five minutes but you're probably paid by the word rather than by the hour, so I perfectly understand why you didn't.

According to calculations based on figures published by the Department for Work and Pensions, for instance, a family earning about £35,000 a year would be better off by £186 a week if the parents split up.

Is this figure as reliable as the £20 per week you quoted earlier? The calculation is based on figures published by the DWP? Did you get someone to hold the calculator for you?

There is no shortage of studies and anecdotal evidence suggesting a surge in divorce among the lower-paid since the new credit system was introduced. What is beyond dispute is that the present structure is antagonistic to marriage and incentivises separation: a status quo that is scarcely defensible. True, the old Married Man's Allowance, introduced in 1918, and the Married Couple's Allowance that replaced it 70 years later did not thwart the onward march of divorce. No single policy could possibly do that. But, since the MCA began to wither on the vine in the early Nineties, the process of social breakdown, particularly among the poorest in the inner cities, has gathered pace to a frightening extent. In such a context, it seems bizarre, to say the least, that the institution of marriage has no voice whatsoever in the system. Indeed, as far as the tax structure is concerned, marriage is invisible and irrelevant.

So, what does this tell you? That tax credits are damaging to social cohesion? Possibly, but so is a recession, changes in divorce law, the influence of celebrity divorces, the introduction of Independent Taxation in 1990... when for the first time, for tax purposes, a woman ceased to be considered a chattel of her husband. But seriously, if the gradual reduction in the value of the Married Couples Allowance is, as implied, linked to the process of social breakdown, that would be the fault of the people who cut it, right? So it's David Cameron's fault, correct? No? Should we review your statement again, or do you see the contradiction now?

But does that mean it is appropriate to reward marriage? “I have no desire to make windows into men's souls,” Queen Elizabeth I declared, and there is part of the British character that recoils from such measures as an invasion of privacy: some of Mr Cameron's closest colleagues feel similar qualms. Would the Tory plan be, as Mr Balls claimed yesterday, an improper attempt “to socially engineer family life”?

Improper? Not necessarily, if that is the sort of society you wish to promote. Social engineering has been at the heart of tax and benefit policy pretty much since taxes were first levied on an unwilling populace. So, what's the underlying principle, Matthew? What do you and David hope to achieve? 

To which the answer is: no more than every other nudge, wink and prod. The tax and benefits system is, by definition and intrinsically, a moral system, bristling with moral judgments and moral messages. Mr Brown's tax credit structure, for instance, has favoured work and lone parenthood. Thanks to a reform in 2005, gay civil partners may now claim the Married Couple's Allowance (as could heterosexuals already) provided one or more partners was born before 6 April 1935. In this instance, the system favours older gay couples over younger straights. No more or less than Mr Cameron's proposal, that reflects a moral position translated into a policy. If the Tory leader is, as Mr Balls claims, a “social engineer”, then so is he, the Prime Minister and every other member of this Government.

I agree, the tax and benefits system is a morals-based one. In the case of the Labour Party, the aim is to redistribute from those that have money, to those who do not, using heavily bureaucratic systems which take money away in tax, only to return the money in the form of credits. Matthew also likes to make tax fairness look bad, comparing young straight couples with old gay ones. Perhaps a fairer comparison is that of older couples against younger ones. The same allowance is available to all couples over the age of 65, so it isn't gender that is the 'discriminating factor', it's age. Older people have higher costs to bear, heating and utilities, personal care etc. Society has accepted that old people need to be protected, a fact that costs.

David Cameron was a Cabinet adviser during the “back to basics” debacle in 1993. He knows full well that all this is political kryptonite. A government that takes a stand on the desirability of marriage and rewards it in the tax structure is opening itself up to the most pitiless scrutiny. If his reform goes ahead, it will be quite legitimate for the media to ask deeply personal questions of Cabinet ministers that would presently be off-limits. Indeed, it is a measure of quite how much Cameron believes in this that he is willing to take that risk, to persist with what is going to be one of the biggest political rows of the coming years. Brace yourself for trouble and strife.

Oh yes, remind me again, who was he working for?... 

I'm sorry, but whilst I'm sure that David believes in it now, he also believes in winning, and without a price tag (come on George, you might not have that long to answer this one!), this smacks of populism without principle. Given that his colleagues are already rowing away from the sort of allowance that would genuinely make a difference, it's all just a pretty soundbite. And for those Conservative MPs with a skeleton in their closet, don't worry, you can only be thrown to the wolves once, unless of course you're a mate, in which case don't get caught next time...

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