Prime Minister considers tax break for married couples

David Cameron indicated last night that he may bring back tax benefits for married couples as the Conservatives continue to face discontent over cuts to child benefit.

The married couple’s allowance was axed under Labour a decade ago but the Conservative Party promised to reintroduce it for basic-rate taxpayers if they came to power. The allowance would leave households with one partner earning up to £44,000 around £150 better off.

The Conservatives have faced a barrage of criticism since Chancellor George Osborne announced on Monday that child benefit is to be scrapped for higher-rate tax payers earning more than £44,000.

Around 1.2 million families are set to lose their child benefit, worth £1,055 a year for one child and £1,752 for two.

It means that families with only one parent earning around £45,000 will be stripped of the benefit, while households with two parents earning around £80,000 will continue to receive it.

Leslie Hillier, chief executive of Christian Family Concern, said he feared the move would “penalise” families with one stay-at-home parent.

He said: “The Coalition Government has introduced these changes because they believe the current situation requires it. They’ve gone for simplicity.

“But it will affect couples with a mother at home and another parent working and earning £44,000, in a way that it won’t affect couples where both are working and earning £88,000.

“That does not seem entirely equitable.”

Mr Hillier said families on much lower incomes were “struggling the most” in the face of food and fuel inflation and higher living costs.

“We’re more concerned by the impact of changes to housing benefit and how that’s going to affect disadvantaged families. That’s a big issue for us,” he said.

Announcing the change on Monday, Chancellor George Osborne said it was fairer to tax people on higher incomes than those who earn less.

The Prime Minister has been forced to defend the plans, due to come into force in 2013. He is expected to tell the Conservative Party Conference today that higher earners should “shoulder more of the burden” in the face of Britain’s swollen deficit.

He told ITV News: “In the election campaign, both the Conservatives and the Liberal Democrats said there are going to be cuts, there are going to be difficult cuts and we outlined some of those cuts.

“We did not outline all of those cuts. We did not know exactly the situation we were going to inherit. But yes I acknowledge this was not in our manifesto. Of course I’m sorry about that, but I think we need to be clear about why we’re doing what we’re doing.”