Tories plan green taxes to pay for generous marriage tax breaks

Taxes on driving, flying and other environmentally-damaging activities are to be increased by the Conservatives to fund tax breaks for married couples with children, the Daily Telegraph can disclose.

By Andrew Porter and Robert WinnettPublished: 10:00PM GMT 21 Jan 2010
The money raised from “green taxes” will be used for a new “family fund” which will be used to cut income tax for families.
The move will be necessary to make the tax breaks significant and help tackle Britain’s “Broken Society” problems.

David Cameron will today put his plans to heal the “moral” decline of Britain under Labour at the centre of his election campaign.
The plan for green taxes will not be introduced until later in a new Conseravtive government's first term, but it is seen as crucial if the Mr Cameron is to win a second term as prime minister.
The Conseravtive leader has committed to recognising marriage in the tax system but is resigned to it being almost a “symbolic” move until it can be funded better.
Plans to provide a wide-ranging tax break have been halted by the dire state of the nation’s finances.
But it is understood that the Conservatives are considering reintroducing the controversial fuel-duty escalator. This involved petrol duty increasing by several pence more than inflation every year.
However, it was abandoned by Labour following widespread protests over the high cost of petrol.
One Tory insider said: "We could reintroduce the fuel-duty escalator, as long as we were upfront about it. We would say the cost of petrol will rise for the next five years to reduce carbon emissions and fund tax cuts for families.
“In the same way that tobacco taxes were increased as a deliberate policy to improve health, it can be done."
However, the fuel duty escalator may prove too politically controversial and the Conservatives are therefore studying a range of other green taxes which could see new levies on flights and polluting companies.
It is understood that initially all married couples will be offered a small tax break while those with younger children are expected to be given an additional incentive. The tax cut will, in the early years, be funded by spending cuts, but will become more generous by increasing green taxes in the future, a senior Conservative MP involved in the policy confirmed.
The Conservatives are thought to want to allow married couples to transfer their personal tax-free allowances to each other. But that would cost up to £4 billion a year and therefore any initial tax breaks will have be modest.
Instead Mr Cameron is being urged by Iain Duncan Smith, the former Tory leader, to phase in transferable tax allowances that would be targeted at married couples with young children. That method was would cost less – possibly as little as £600m a year if it was applied to couples with children under three – and appears to be the most likely solution.
The party instead has resolved to put in place the system of tax breaks which can then be built on when the country has recovered.
Central to this plan will be a raft of new green taxes.
Mr Cameron will today unveil a major section of the Conservative draft manifesto thatw ill include policie sto make the family stronger.
The Tory leader and George Osborne, the shadow chancellor, are cautious about talking about taxes on flights and petrol after earlier plans backfired. But the pair are still insistent that in time green taxes will be necessary and are considering which green taxes to increase.
A senior Tory MP involved in the decision-making confirmed told the Daily Telegraph that above-inflation increases in fuel duty are being considered.
The MP confirmed: “Green taxes on environmentally-damaging activities and consumption will fund our family policies in the long term. We are committed to them.”
He added: “The marriage tax breaks will be symbolic in many ways in the first term. But what we will do is put in place the structure, with limited tax breaks, and that will enable us to make the benefit of being married greater when the economy allows.”
Mr Cameron has advocated green taxes despite criticism from some MPs and party strategists that it could lose votes. But party insiders also know that money has to be raised to fund planned other targeted tax cuts.
Members of the Conservative Treasury team are ready to put forward their plans when the party leadership decides how much they can afford.
Mr Cameron will make a speech in Kent this morning highlighting the problems of Britain’s “broken society.” He will highlight the case two young children responsible for a sickening attack on two other boys in Doncaster.
The Conservative leader is demanding that the full social services report into the case be released. His attack will focus on Labour’s “moral failure” to address the problems afflicting society.
He will say: “This is the moral failure of Labour’s approach. When parents are rewarded for splitting up; when professionals are told that it’s better to follow rules than do what they think is best; when single parents find they take home less for working more; when young people learn that it pays not to get a job; when the kind-hearted are discouraged from doing good in their community; is it any wonder our society is broken?
“We can’t go on like this. Labour gave us the longest and deepest economic recession since the war – but that is more than matched by the social recession we are stuck in today.
“And though everyone hopes and expects we’re out of economic recession, unless we change the direction of government fundamentally we will never find the path to social recovery.”
Labour is opposed to tax breaks for married couples. In the Commons yesterday Hazel Blears and Jacqui Smith, both former Cabinet ministers rounded on the Conservative plans. And Harriet Harman, the Labour Deputy Leader, attacked the measures saying they would not work to keep couples together.
She told MPs: “Relationships don’t work like that. The point about these tax breaks is they won’t work, but they will penalise and stigmatise.”