25 Conservative MPs, including four former Cabinet Ministers, have called for reform of the current tax system to make it fairer for families.
In a letter to the Chancellor ahead of the Budget, MPs have asked for a “commission on family taxation” to be set up with the aim of reducing the tax burden on families and making the overall system fairer.
The letter from Catholic Union President, Sir Edward Leigh, has gained the support of 24 other Conservative MPs, including former Home Secretary Priti Patel and the Chairman of the Conservative Party’s influential 1922 Committee, Sir Graham Brady.
Miriam Cates and Danny Kruger, the founders of the New Social Covenant Unit, have also backed the call for a commission, building on their work to create a tax system that supports family life.
The letter comes as Jeremy Hunt prepares for his first Budget as Chancellor on 15 March, and with recent news from the ONS that the Exchequer received a surplus of £5.4 billion in January this year.
With a General Election expected next year, the MPs have called for easing the tax burden on families to be a priority for the rest of this Parliament. They point out that “research shows that the UK tax system penalises families much more heavily than those of other countries.”
The Catholic Union has consistently made the case for reform of the tax system, which is unfair to households where one parent works part time in order to take on caring responsibilities. It is hoped that a new commission would allow options for reform of the current system to be properly explored.
Rt Hon Sir Edward Leigh MP, comments: “Reducing the tax burden on families is something all MPs should be able to support. The best way of supporting people with the cost of living is surely to help households keep more of the money they earn. We need to look at the whole way we structure the tax system in this country. It cannot be right that a household with two earners currently pays less proportionately in tax than a household with one earner. I hope the Chancellor will look carefully at our proposal for a commission. We have a clear manifesto commitment to support family life in this country; we need to deliver on it.”
Miriam Cates MP, comments: “Our tax system actively discourages people from having children, it makes it difficult for them to look after their children, and it does nothing to support stable couple relationships. In the UK, unlike in many comparable Western nations, our unit of taxation is the individual and not the household. So if you are a single person with no dependents earning £40 000 per year you pay the same amount of tax as a parent earning £40 000 supporting a partner and three children, even though your outgoings are significantly lower.
“If we care about the success of our nation, we should be doing everything we can to encourage young people to have children, and to support them through our tax system as they seek to do a good job of raising the next generation. A commission on family taxation should consider scrapping the two child cap on universal credit and working tax credits, and raising the income threshold at which families lose their child benefit. The New Social Covenant Unit will be setting out in more detail the changes we need to see later this year.”
Nigel Parker, Director of the Catholic Union, comments: “Reforming the tax system to make it fairer for families is long overdue. The Prime Minister and the Chancellor have spoken about the importance of families, but we need to see those words turned into action. There is clearly strong support on the Government’s own benches for reforms to the tax system. The Chancellor should avoid the temptation to tinker and should instead be bold and ambitious in his first Budget. Launching a commission would send a clear message that the Government wants to introduce lasting reforms that will help families. The Catholic Union will continue to work with all political parties to secure the changes we need.”