Tories plot marriage tax benefits

Radical plans to restructure support for the disadvantaged around a system of
transferable tax allowances are being actively considered by senior
Conservatives.

Former party leader Iain Duncan Smith is said to have won the support of new
leader David Cameron for the approach which would involve a major departure from
the existing tax credits system.

The Social Justice Policy Group headed by Duncan Smith issued an interim
report this week claiming the means testing approach of tax credits has trapped
large numbers of families in low pay with high marginal tax rates. The group
blame the breakdown of marriage for a large proportion of existing poverty.

The idea, which is not yet party policy, is that wives who have to remain at
home to look after young children, should be able to transfer their personal
allowances to their husbands, taking a huge amount of their income out of tax
altogether. Part-time working wives would be able to transfer unused allowances.