Tories still haven't got a clue

According to this evening's London Lite, the Tories are going to allow non-working spouses to transfer their personal allowance to working spouse to save up to £1,000 tax a year.

Well whoopi-f***ing-doo!

It was the Tories who got rid of joint taxation about twenty years ago, that was a terrible thing to do. So they can start off by apologising for that.

And, as I have gone to great lengths to explain, as a result of the way our tax/welfare/tax credits system works, a couple with children can boost its benefits income by £9,000 or £11,000 a year by pretending to live apart.

Further, an unemployed single woman improves her net weekly income after housing costs by £67 for the first baby and another £49 for the second. This compares with an extra £20 and an extra £4 for a single-earner couple, where the working partner is on an average wage.

So this is a nice gesture, but absolutely meaningless in the grander scheme of things*.

The only thing that will sort this out is a Citizen's Income/flat tax system (for political reasons I'd give people a choice between claiming the Citizen's income or having a much higher personal allowance, but that's just fine-tuning). If we moved to that system (which is broadly fiscally neutral), a single-earner couple with one partner on an average salary and two children would be about £6,000 a year better off.

* Even more ironic, this will have to be paid for by increasing taxes elsewhere. But as single, unemployed parents, the real villains of the piece, don't pay tax, the people who will have to pay for this are single working parents and people without children, so this is totally unfair and misses the point.

** It's on the BBC website now. I like the idea of front-loading child benefit - did they lift this from my Bow Group report, Proposal 6? The other suggestions are pretty crap though.