Stephanie Flanders
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When I decided to have my son Stanley, I didn’t expect it to provide a news line for a Newsnight interview with David Cameron. On last Wednesday’s programme, I asked the Conservative leader whether his party would prefer me to be married. Some columnists have suggested my line of questioning betrayed a typical woolly leftie contempt for family values. Alas, the truth is more prosaic.
I don’t have a strong opinion about marriage or the Conservatives’ proposals for boosting it. I’m not married because, like a lot of thirtysomething women, I thought buying a home and starting a family were more pressing issues — not to mention a far greater and more long-term commitment.
As an economist, one thing I feel strongly about is politicians running to the tax system when they want to try to change the way people live. It is tempting to meddle, and it’s not just the Conservatives who get the urge. If anything, it’s more of a Labour trait. Gordon Brown has introduced countless tax breaks since 1997. It’s no accident that the British tax code is now reckoned to be the longest in the world.
Here’s the downside from an economic standpoint. A lot of the cost of any tax break will often end up going to the wrong people. Either they would have done the thing you want them to do anyway, or they’re not the people you were hoping to help.
Take the home computing initiative that Brown launched in 2004. This allowed employees to buy a home computer through their employer tax-free, saving anyone paying the basic rate of tax hundreds of pounds. The idea was to boost computer literacy. But it didn’t take long for people to realise they could use the scheme to buy cheap iPods, PlayStations and plasma TVs — all courtesy of HM Treasury. Brown pressed delete in 2006, having done not a great deal to boost computer literacy.
You might say marriage was a different proposition. But then, that’s rather the point. I asked Cameron whether he had met anyone who would get married for £20 a week, because that’s the question everyone asked themselves when Iain Duncan Smith’s social justice policy group unveiled its married couple’s tax break a few months ago.
If people buy a lot more of something when it gets cheaper, economists say the demand for that thing is highly elastic. Common sense and research from the US suggests demand for a husband or wife — as opposed to a live-in partner — is very inelastic indeed. Especially since the wedding is likely to cost a great deal more than the long-term value of a special tax break.
Other things being equal, the statistics say marriage is good for children. But other things seldom are equal. It may simply be that the kind of people who are committed parents are also the kind who are more likely to get hitched anyway. Marriage and stability correlate. The one does not necessarily cause the other.
As Cameron pointed out last week, he doesn’t want to reward only marriage. The policy group’s other proposals would use the benefit system to help all couples, regardless of their status. After all, cohabiting is often a prelude to marriage — something that John Arlidge, Stanley’s dad, may one day tumble to.
Helping couples raises its own issues for both of the main parties, which I’ll come to in a minute. Suffice to say that the £20 a week for getting married raises the usual problems with tax breaks. The vast bulk of the money will go to people who would have got married anyway, many of them relatively well-off. The less it affects behaviour, the more of this “deadweight loss” there will be. That was what I meant when I asked him whether helping me was a good use of taxpayers’ money.
Now, of course, Cameron would — and did — say it’s not a matter of bribing couples to marry but sending a signal that his party is not neutral about marriage. And it is probably true that if the Tories tend to put too much faith in financial incentives in this area, Labour tends to think about them too little.
It’s a time-old distinction between left and right. Labour tends to look at a single-parent household and see only a family with greater needs and costs — on a per person basis — than a household led by a couple. The benefit system makes allowance for those extra costs by giving the single parent relatively more.
To Labour that extra money is compensation. But to many Conservatives it’s also a reward — not to mention a temptation. And the evidence that the system encourages people to stay single — or at least avoid being seen to be a couple — is fairly clear.
The Institute for Fiscal Studies pointed out recently that there are now about 200,000 more “single parents” receiving tax credits and benefits than there are single parents officially living in the UK.
Economists like the tax system to be neutral about as many things as possible, and it can be neutral about marriage if politicians want it to be. For the moment, I am too. But it can’t be neutral about whether families involve two parents or one.
Consciously or otherwise, politicians of all parties have to make a choice. They can compensate for disadvantage, on the margin, at the risk of rewarding bad choices for children and downright fraud. Or they can reward good choices, at the margin, at the risk of further penalising disadvantaged kids. As last week’s interview demonstrated, it’s not an easy choice to make. Good job I just ask the difficult questions and don’t have to solve them.
Stephanie Flanders is economics editor of BBC2’s Newsnight
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"I asked Cameron whether he had met anyone who would get married for £20 a week".
That's hardly a sensible question for an economist. If you mixed with the common people and understood the marginal concept and incentives, you'd realise that there would be a response to the incentive ... but you don't mix, you're part of a small elite of single thirtysomethings who can afford to buy a house in London. I'd certainly like to see the same degree of hostility towards Labour's tax escalation as is exhibited towards the Tories. I wouldn't even mind hearing it described as the "LURCH to the Left" since 1997. But the BBC don't do that phrase do they ... only "lurch to the right". I write this as a Licence payer in support of a balanced BBC.
John Gibson, Birmingham,
Interesting that Stephanie Flanders uses the slightly wistful comment "After all, cohabiting is often a prelude to marriage â something that John Arlidge, Stanleyâs dad, may one day tumble to." Does she honestly believe that being married would not add to the sense of stability or permanence in her relationship with her child's father. Statistically the chances of them being together in 10 years are much higher if they are married rather than simply living together and this holds across all socio economic groups. Two parents are unequivocally better than one, unless some kind of violence or abuse is involved, which is clearly not the case here. I know I speak from experience as a child raised by one very loving parent who did their best, while the other lived half way across the world. Marriage and a family provides emotional stability for a child and the support that a couple bring to each other and marriage does make people behave differently.
SJPearce, London, England
"When I decided to have my son Stanley..."
Did Stanley's father not have a say in the matter?
An extra £1000 a year might not be much to you but it is to many.
Terry, London,
The interview highlighted to me the selfish liberal left view of the world versus the rest of the world.
I think it showed Cameron up in a much better light than it would otherwise have done if S Flanders had responded to the points Cameron made rather ignoring these and pressing the its all about me and my rights liberal left agenda
David Cartright, Birmingham,
I'm no economist and I have a little time for Ms Flanders unfortunate personal comments on Wednesday Newsnight, which this article is based on, referring to Conservative proposals in the personal tense (I'm sure the point of her comment wasn't 'that ain't going to get me married and votin' for you!') but perhaps it does highlight a couple of interesting points about interviewing people about aspects of benefit and poverty (Ms Flanders also made reference to anyone having assets over £300,000 as being 'rich' and not helping the 'poor' with respect to Death duties -anyone with a house worth £300k?).
Wealth is relative. The UK has never had it so good but the gap between rich and poor is widening. Arguing if £20 a week or lets say £1040 a year (tax free!) is going to get you married isn't the point in the same way child allowance doesn't encourage people to have children. What it might do is perhaps keep a couple together a little longer and so help support the family unit.
John, London, England
It seems like whether we give them money or not, the single parent family is more likely to produce the feral hoodie anyway.
Stephanie - if your argument of propensity is correct, then with or without benefits, parents more likely to bring up a feral child will still do so. On the margin, if every compensating pound produces the same result and therefore the children are no better off, why should I, as a wealth generating tax payer, have to pay for what ultimately are YOUR bad choices? Much as you would like to dress it up, Stephanie, your question on Newsnight just proved how far to the left the BBC has lurched. Your question was not neutral - it was firmly in the camp which believed that the sums we are paying to single parent families are COMPENSATION and not REWARD. However, it is a sign of this growing sense of "entitlement" when an self-declared well-educated female like yourself suggests that we, the tax payer, has to "compensate" you for your selfish choices.
D Woodhouse, Oxford, UK
We are back in the days of Speenhamland Stephanie Flanders. You are employed by a public corporation funded by taxpayers and probably have flexible working; which is fine for a single mother. You think £20/week is paltry so obviously you have no experience of the State Pension, nor Unemployment Pay for the single; nor of any form of benefit. That is good. Single mothers in well-paid jobs can afford independent schools, nannies, and their own home without recourse to Housing Benefit.
On the other hand why should the taxpayer subsidise another man's child ?
If poverty became absolute rather than relative would life be less Pareto-optimal ? We means-test everything and ration medication, yet we spray money at child-rich families when children are the biggest single CAUSE of poverty and the more children you have the poorer you will be.
Only the rich investment banker and the benefit-annuitant can today afford large families - those in-between are too busy paying for the system
Cynical Voter, Halifax, England
It seems most of you missed the point.
"Statistics show that a child brought up under one parent only is more likely to cause disruptive behaviour at home and in the classroom and in adulthood more prone to getting into trouble. "
Correlation or causation.
Does staying together make you better parents, or does being a good parents make you more likely to stay together?
Dominic, Manchester, UK
As an economist, how can you not see that bringing a child up with two parents is better for them than one? Statistics show that a child brought up under one parent only is more likely to cause disruptive behaviour at home and in the classroom and in adulthood more prone to getting into trouble.
These problems bring an extra burden (and cost) to our public services. Children brought up with two parents are the more likely to live a worthier live and be less of a financial burden on the public services.
Please don't use your single parenthood as a badge of honour as you do yourself no favours.
T McCall, Argyll
T McCall, Argyll, Scotland
flanders completely misses the point. The idea of the proposed allowance is not to incentivise people to get married but to give those who have already decided to get married some help in staying married.
In other words, it's an attack on the divorce rate not an encouragement for the marriage rate.
flanders also misses the point that whereas £20 pw is of no interest to her, it is proportionately more helpful to couples on lower incomes.
gordon-bennett, DEAL, Kent
If I were Cameron I'd want you in my Shadow Cabinet.
John , London, UK
Newsflash Ms Flanders, for a couple on benefits or in low paid work £20 a week extra makes a huge difference. At the moment the system rewards parents for staying apart. Thus huge numbers of children are being brought into this world and then growing up in single parent families. However estimable, hard working and dedicated those single parents may be, they are still going to struggle to compensate for an absent parent. Economics Editors whether married or cohabiting and working for one of this country's more generous and forward looking employers are not the problem as I'm sure you know very well. Many parents do not have your advantages thus your questions to Cameron were based on a false premise.
Paul Owen, Birmingham , Uk
Itâs interesting that itâs taken a Tory proposal for the BBC to wake up to the simple concept of deadweight losses. Strangely, the BBC has largely ignored deadweight losses for all Labourâs actual policies. For instance, the R&D tax credit has done little or nothing to increase research and development spending, but has offered a generous tax break to larger firms sophisticated enough to take advantage of it. Similarly, the child tax credit and working tax credit tend to be claimed by those that need them least â the middle class and literate â because the complicated forms put off those in real need.
David Boycott, London,
Poor old Stephanie - you may run rings around me with your economic prowess - but see if you can put these words in order ....wood the can't trees the see for ......
D Rich, Kettering/Northants, England
Well, Stephanie,
£ 20 a week may not seem very much to you - but it means quite a lot to people on the bottom rungs of the ladder.
And it's not £20 a week.
A couple that separate will receive £7,000 a year, or £130 a week, more in reduced tax and in benefits than if they stay together. If you don't believe me, ask Frank Field. If you do believe me, that's even more reason to talk to Frank Field.
You rightly mention the dilemma between compensating for disadvantage and rewarding bad choices.
But, when we reward bad behaviour, we are encouraging people into a life style which has no real loves and affections.
You, like me, will have passed many times by the woman in the supermarket who is shouting at and abusing her children. Both the woman and her children are the victims of our current social policies.
James Strachan, Cambridge, UK
SF has got it wrong!
The proposed allowance is not intended as an incentive to couples to marry, it is an incentive to couples already married to stay together. £20 pw may be of little consequence to flanders on her income but it will help to ease the financial pressure on lower income families.
Simply, it is an attack on the divorce rate and not a prop to the marriage rate.
gordon-bennett, Deal, Kent, UK
This article is merely an attempt at self-justification.
In the interview with David Cameron, you to turned this into an emotive and personal issue, and revealed your feminist bias against the Conservatives.
Simple as that, really.
Chris, Wokingham, England