This is Money Blog

The hitch with marriage tax break

Statistics suggest marriage is well and truly out of fashion with numbers falling every year. So it will be with my usual crazy, non-conformist style that on Sunday 22 July I will tie the knot with my boyfriend up in Yorkshire.

And if Mr Cameron had his way my new husband and I would be rewarded for this brave move with a tax break worth up to £1,000 a year (that won’t make much of a dent in the disgusting five-figure sum we’ve just shelled out for the wedding, but still it is better than a kick in the teeth).

But though I am shortly to become a 'Mrs' I am sceptical of the Tory leader’s proposals on a number of levels.

Gordon Brown has said it is not the place of politicians to moralise on people’s relationships – and I agree. It is wrong to suggest that just because a couple have a piece of paper to say they are married they are automatically in a stronger, more stable relationship, than say a couple who have lived together for 20 or 30 years. I know people who have got married after knowing someone for less than six months. There is of course nothing wrong with this either, but that is just the point – Government should not be judging which relationships are more deserving.

More marriages break down now than ever before – and I’m guessing a £20 per month incentive to stay together isn’t going to stop those in unhappy or abusive relationships getting out, nor should it.

And what about single parents who find themselves alone because a spouse leaves them, or those who are widowed? Should they be penalised for their circumstances? Afterall they were married once, and for all Cameron knows they did try to make their marriages work.

Cameron claims the tax break is designed to protect the institution of marriage, which should in turn be better for children and reduce anti-social behaviour among the young. But there are surely 100 other better ways to tackle this problem, such as investment in services for young people, than some half-baked cash incentive to their parents to remain under the same roof.

Basically this is a regressive tax policy, one which would assist those who are probably already well-off at the expense of the most in need of help. Ironic then, given that the whole idea is meant to be about mending a broken society.

Don’t get me wrong, I value what marriage stands for. But I don’t want a tax break at the expense of my co-habiting neighbours, who have probably been together just as long as my husband and I and are just as likely to remain a couple.

Wedding dresses, cakes and flowers to be tax deductible on the other hand – now there’s a policy I could back…

- Jo Thornhill, Financial Mail

The fallout from reclaiming bank charges

Consumers should be encouraged to fight against excessive, unfair bank overdraft charges. But it would seem success in taking on the big banks will be a Phyrric victory. The bank backlash cannot be far away. Whatever happens you can be sure that ultimately bank customers will pay.

First Direct has already begun charging some of its customers £10 a month on their current account and Nationwide, the largest building society, has said fee charging cannot be ruled out. Others banks will almost certainly follow in time.

It is typical and very convenient for the banks to start deflecting the furore over their staggeringly high charges by hinting that if more consumers take action to reclaim them it will lead to the end of free banking for all.

The big banks are clearly rattled by the large numbers of consumers taking action to reclaim charges – estimated at more than half a million to date. But they are unlikely to take it lying down. Bank bosses will not easily give up the billions in revenue the charges generate.

Account fees and interest rates have already risen in the credit card market since the Office of Fair Trading told card providers to cut penalty charges imposed on customers who miss repayments. The OFT is due to report on unauthorised overdraft charges in March and if it does recommend similar cuts in these fees then the banks are likely to react in a similar way – by introducing monthly account fees and upping interest rates.

So what should consumers do? They certainly should not be deterred from reclaiming bank charges if they think they have been treated unfairly.

It is about time the banks charged a reasonable fee – one that fairly reflects the costs incurred for unauthorised borrowing. Research suggests the cost to the banks of a customer exceeding their overdraft is about £4.50 – not the typical £30 fee charged currently. If these fees are not being used as a profit stream, as the banks insist, then why not prove in the courts why it costs £30 when someone slips a few pounds over their overdraft.

A bit of honesty and transparency from the big banks over their charging would make a refreshing change but it is not likely to happen any time soon.

- Jo Thornhill, Financial Mail on Sunday

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Selfish drivers must shove up and share

[N.B. Jo is a new blogger for the Money Blog - read her biog]

I've been sharing my friend Laura’s car for a couple of years now along with another friend of ours. It’s a great arrangement that saves us all cash and we feel like we’re doing a bit to reduce our carbon footprint.

Ours is more of a car pool arrangement, meaning we share the car but not journeys. It’s convenient because Laura only lives about a ten minute bus journey from my flat, but even so I only tend to use the car about once every couple of weeks.

In truth, in my case it is an arrangement that benefits me much more than Laura since she actually owns the car and has the hassle of parking it, insuring it and maintaining it. She added me to her insurance policy because as a new driver her premium was high. I’ve been driving a lot longer so my clean driving record brought the insurance cost down. But in any case, it has stopped me being tempted to buy my own car, which is the main point.

Car sharing is slightly different. This is where colleagues or people living in the same town share lifts to work. The idea is growing in popularity but still too few drivers are willing to get involved. A survey by the Energy Saving Trust shows that less than ten per cent of drivers would be prepared to share a car in order to reduce carbon emissions.

I find it depressing to read about people signing up to petitions to stop the Government’s new road pricing schemes, which will charge drivers who want to use the busiest roads at busiest times. It is clear something needs to be done to reduce emissions but sadly too many people are tied to their cars and are unwilling to change habits.

Clearly in London and other big towns and cities people don't have to rely so heavily on cars because public transport networks are better. Motorists in rural areas who argue that public transport is less reliable probably do have a point. But I think all car owners have a responsibility to be a bit more imaginative or thoughtful in the way they use their cars. If more drivers accepted that their motoring habits have to change then it would make a big difference. The websites Liftshare.org and Carplus.org.uk have more information about the benefits of car sharing and how to find other people in your area keen to share lifts.

- Jo Thornhill, Financial Mail on Sunday

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