Outdated tax system ‘makes having children a luxury’ and ‘actively discourages’ couples

Britain’s tax system penalises couples and ‘actively discourages’ them from having children, a Conservative MP has said.

Miriam Cates called on the Government to recognise both the cost and value of raising children by removing the ‘family penalty’.

She also described marriage as a ‘middle-class secret’ as the political class has failed to speak up for the benefits it brings.

Her comments will put Chancellor Jeremy Hunt under fresh pressure as he works on next month’s Budget, as other Tories have already called on him to make childcare more affordable.

Mrs Cates, a married mother-of-three who represents Penistone and Stocksbridge in South Yorkshire, warned in a speech this week that Britain’s historical success as a nation is now ‘under threat’ from declining birth rate.

Miriam Cates called on the Government to recognise both the cost and value of raising children by removing the ‘family penalty’

Her comments will put Chancellor Jeremy Hunt under fresh pressure as he works on next month’s Budget, as other Tories have already called on him to make childcare more affordable

The 40-year-old, who has a degree in genetics from Cambridge and worked as a biology teacher, said that fewer that half of women have a baby before 30.

She listed reasons why it is now ‘extraordinarily difficult’ for young people to have children – from unaffordable housing to the fact that they are less likely than previously to have family nearby.

But she went on: ‘I want to focus on our taxation system, which is where the Government could act to make it easier for couples to have children and to relieve some of the pressures on family life. Our tax system discourages people from having children, it makes it difficult for them to look after their children, and does nothing to support stable couple relationships.’

While marriage rates remain high among the wealthy, they have ‘completely collapsed’ in lower income groups, leaving children facing the additional disadvantage of family breakdown

She told how, unlike elsewhere in the West, the UK taxes people as individuals rather than households. So a single person with no children pays the same amount of tax as a parent supporting a partner and their children.

She claimed that a parent would have to earn a ‘simply unachievable’ £70,000 a year to have a similar standard of living to a single person on £28,000.

Anyone earning above £50,000 a year is seen as ‘wealthy’ by the taxman, but if they are supporting a family they will be far poorer than single people as they pay far higher tax, national insurance and housing costs – and lose child benefit. In Germany, by contrast, couples can be taxed jointly and parents receive ‘significant tax credits’ for each child.

In addition, Mrs Cates wrote in an expanded version of her speech for the PoliticsHome website, the system ‘forces’ many mothers to return to work before they are ready.

Yet high tax rates and benefit withdrawal mean ‘they are missing out on precious time with their children for scant reward’.

‘We have privatised family life. Having children is now seen as a personal choice, a luxury, like buying a Porsche,’ Mrs Cates said.

‘But having children shouldn’t be a luxury. [It] is a societal necessity.’ She acknowledged that housing was another problem that needed fixing but insisted: ‘Reforming taxation to recognise the costs and value of raising children, to remove the ‘family penalty’, would go a long way to removing barriers young people face in starting a family.’

Mrs Cates added that marriage is the ‘best institution that societies have developed for the successful raising of children’, and castigated politicians for not being honest about this.

While marriage rates remain high among the wealthy, they have ‘completely collapsed’ in lower income groups, leaving children facing the additional disadvantage of family breakdown.

‘Marriage has become a middle-class secret and as a political class we have failed to be honest about its advantages for children.’

‘Marriage is a middle-class secret’