BUDGET – A BACKWARD STEP FOR THE FAMILY

News

Amidst all the noise following the Budget last week, you may have missed one unwelcome announcement for families and marriage. Included in the fine print of Rachel Reeves’s financial statement was a decision to reverse the previous government’s commitment to reform family allowances by treating couples as a household rather than as individuals.

In his final budget in March, previous Chancellor Jeremy Hunt announced a consultation on using household rather than individual earnings to determine eligibility for child benefit. This would have eliminated the unfairness of the ‘marriage penalty’ that penalises single-earner households, where one parent, usually the mother, cares for the children, compared to a household with the same income where both parents work.

Ms. Reeves has now pulled the plug on this reform, claiming that the estimated £1.4 billion cost is too high.

This is £1.4 billion that could have gone to support families doing the vital job of raising the next generation. It would also have laid the groundwork for further family- and marriage-friendly reforms by requiring the Government to collect the necessary data.

It couldn’t have come at a worse time. Days earlier, the latest birth statistics for England and Wales were released, showing a new record low of just 1.44 births per woman in 2023. Down from 1.49 in 2022 and continuing a 16-year decline, this is well below the ‘replacement rate’ of 2.1, meaning the country faces an ageing future of rising care bills and too few workers to pay the taxes that fund essential public services.

If the weak birth rate continues, the population can be expected to plummet by around a third in each generation. This is population collapse.

Yet, as C4M reported in September, most women say they want to have more than two children. Often, the reason they miss this goal is because they don’t settle down and get married early enough, according to demographer Lyman Stone. The birth gap is primarily a marriage gap.

There are many reasons for this marriage gap, but the cost of buying a house is certainly a major factor – a cost set to rise further following the Budget according to money expert Martin Lewis.

The Chancellor should be encouraging couples to marry and incentivising having children, not piling more costs onto hardworking families. It’s clear that this Budget was a step – even several steps – backwards for families.

Genuine marriage support is not just about fairness in the tax system; it’s about securing the future well-being of our country. C4M will keep pushing for reforms that treat families as the foundational unit, promoting the long-term stability and prosperity that strong marriages bring to society.