Farage isn't the first leader to promise tax breaks for couples. They all failed

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28-05-2025

For decades, British politicians have tried and failed to solve the same essential problem: how do we make a fairer tax system for families?
Nigel Farage on Tuesday claimed he had the answer. The Reform UK leader promised sweeping tax breaks for married couples in a bid to boost birth rates and make family 'a more important element in British life'. Estimates suggest it would save the average couple almost £2,500 a year in tax.
Currently, workers pay 20pc income tax on earnings between £12,570 and £50,270. Under Reform's plans, one spouse would be spared from paying tax on the first £25,000 of income. It means a worker earning £50,000 would save about £2,500 in income tax.
The party has already vowed to raise the tax-free allowance from £12,571 to £20,000, which estimates suggest could cost as much as £80bn. On top of this, it has promised to raise the higher rate threshold from £50,270 to £70,000, to release the millions more workers being dragged by stealth into the top rate band, shown in the chart below.
If Reform delivered on all three promises, a worker earning £70,000 would be better off by almost £6,500.
Such promises have predictably attracted backlash. Yesterday, the Conservatives accused Reform of 'fantasy economics' while the Liberal Democrats said the party was making 'huge unfunded spending pledges'.
Yet, some economists welcomed reform to the UK's tax system, which they claim punishes single-income couples and makes it harder to start a family.
Tom Clougherty, executive director at the Institute of Economic Affairs, said: 'I do think it is good tax policy. As things stand, two households with the same overall income can pay wildly different amounts of tax based on how that income is distributed between partners. That seems unjust.'
Currently, families where one parent stays at home can pay thousands more in extra tax. This is because the breadwinner will pay a higher tax rate compared to a dual-income couple, where each spouse enjoys a tax-free allowance and the full benefit of each tax band.
The think tank Policy Exchange has said that the UK has 'one of the least family-friendly' tax systems in Europe. It has called for families to be taxed on a household basis rather than on individual income.
Ben Ramanauskas, of the think tank, said: 'This would be both fairer for families and make it easier for couples to have the number of children they wish to have, something that is increasingly important given our ageing population.'
Various Conservative chancellors and prime ministers have tried and failed to launch bigger tax breaks for families. Ahead of the general election in 2024, the Tories pledged to raise the income cap to qualify for child benefit from £60,000 to £120,000 and said it would change the rules to assess household income, not individuals' income.
Before that, Liz Truss wanted couples to be able to transfer their personal allowance – worth £12,570 – to avoid penalising families where one spouse stayed at home.
Years earlier, in 1988, Nigel Lawson suggested giving couples a transferable allowance – but the proposal was shot down by Margaret Thatcher, then prime minister.
In 2015, then-prime minister David Cameron introduced a marriage allowance letting one spouse transfer £1,260 of their personal allowance to the other, although this is not a significant tax break – saving only up to £252 in tax per year. To claim the benefit, the lower earner must have an income below the personal allowance and the higher earner must be a basic-rate taxpayer.
Across the Atlantic, Donald Trump has promised a $1,000 'baby bonus' in the hope of boosting the birth rate. But such policies have had mixed success. Some experts question whether financial giveaways are the best way to support young families, although other countries such as South Korea and Hungary have successfully used tax reforms to increase the birth rate.
Jason Hollands, of the stockbroker Bestinvest, said: 'Bolstering the tax benefits of being married might play a part in addressing this but needs to be considered against other options to help people have larger families, such as making childcare more affordable.'
He added that there was no need to link the tax break to marital status if the goal was to encourage couples to have more children.
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