By . Steve Doughty . PUBLISHED: . 19:17 EST, 9 September 2013 . | . UPDATED: . 02:07 EST, 10 September 2013 . Support: Former Chancellor of the Exchequer Lord Nigel Lawson backs tax breaks for married couples . Introducing a generous tax break for married couples would be the most cost-effective way to help families, a former Tory Chancellor said yesterday. Nigel Lawson backed the idea of a transferable tax allowance that would give married people extra money. But he said the Prime Minister’s plans for a tax break worth an extra £150 a year is ‘very limited’ and should be ‘much more generous’. The intervention from Lord Lawson, who was Chancellor in Margaret Thatcher’s government,  comes as backbenchers continue to push David Cameron and George Osborne to carry out their pledge to give married couples a tax break. Mr Cameron promised the transferable allowance worth £150 before the election in 2010. The prospect was raised again this summer. Lord Lawson backed transferable tax allowances – which mean a stay-at-home mother can shift her own income tax-free allowance to her husband – in a report on how to help families from the charity Care. He said: ‘The case for transferable tax allowances remains as strong as ever. ‘They are not only family friendly but provide a far more cost-effective means of reducing the tax burden on low-income households than can be achieved by an across-the-board increase in personal allowances.’ Lord Lawson was the Chancellor who first proposed independent taxation of husbands and wives 25 years ago. Yesterday’s report said that the benefits of separate taxation were undermined by the failure to include transferable allowances. The Care report said: ‘Since 1990 income tax rates have come down. In 1990 the basic rate was 25 per cent; in 2013 it is 20 per cent. 'The tax threshold for single people has risen significantly, with the result that the burden on such individuals has fallen. ‘By contrast, the tax threshold for families is scarcely higher in real terms than it was in 1990, with the result that, even though the basic rate is lower, the income tax burden on some families is much the same as it was then.’ Nearly there: Although the former Chancellor supports David Cameron's tax break, he does not think £150-a-year is generous enough . The report said that the tax system rewards individuals but shows ‘insensitivity to family responsibility’. It added: ‘Independent taxation was intended to give married women privacy over their tax affairs but the two million couples with children who have to claim tax credits, or, in future, Universal Credit, have no privacy. ‘One-earner families face more fiscal discrimination in 2013 than they did in 1990 and marginal tax rates that apply to families are much higher than they were in 1990.’ The report said the unfairness had been worsened by changes to Child Benefit, which have deprived higher-income one-earner families of the benefit while two-earner families on the same family income have kept theirs. The pressure group for stay-at-home mothers, Mothers At Home Matter, welcomed Lord Lawson’s comments. Spokesman Anne Fennell said: ‘Unlike our current Chancellor, Lord Lawson clearly appreciates the injustice in the current tax system towards stay-at-home parents. ‘We welcome his initiative 25 years later to remedy the injustice caused by a tax system which does not recognise the family unit. Many more couples face a “couple penalty” today if they choose to live together as husband and wife than they did 25 years ago and this falls largely in the poorer half of the population.’
Ex-Chancellor Nigel Lawson backs tax break for married couples .
Said it is a cost-effective way to help, but current allowance is not enough .
Lord Lawson branded Cameron's suggested £150-a-year 'very limited'
By . Steve Doughty . PUBLISHED: . 19:17 EST, 9 September 2013 . | . UPDATED: . 02:07 EST, 10 September 2013 . Support: Former Chancellor of the Exchequer Lord Nigel Lawson backs tax breaks for married couples . Introducing a generous tax break for married couples would be the most cost-effective way to help families, a former Tory Chancellor said yesterday. Nigel Lawson backed the idea of a transferable tax allowance that would give married people extra money. But he said the Prime Minister’s plans for a tax break worth an extra £150 a year is ‘very limited’ and should be ‘much more generous’. The intervention from Lord Lawson, who was Chancellor in Margaret Thatcher’s government,  comes as backbenchers continue to push David Cameron and George Osborne to carry out their pledge to give married couples a tax break. Mr Cameron promised the transferable allowance worth £150 before the election in 2010. The prospect was raised again this summer. Lord Lawson backed transferable tax allowances – which mean a stay-at-home mother can shift her own income tax-free allowance to her husband – in a report on how to help families from the charity Care. He said: ‘The case for transferable tax allowances remains as strong as ever. ‘They are not only family friendly but provide a far more cost-effective means of reducing the tax burden on low-income households than can be achieved by an across-the-board increase in personal allowances.’ Lord Lawson was the Chancellor who first proposed independent taxation of husbands and wives 25 years ago. Yesterday’s report said that the benefits of separate taxation were undermined by the failure to include transferable allowances. The Care report said: ‘Since 1990 income tax rates have come down. In 1990 the basic rate was 25 per cent; in 2013 it is 20 per cent. 'The tax threshold for single people has risen significantly, with the result that the burden on such individuals has fallen. ‘By contrast, the tax threshold for families is scarcely higher in real terms than it was in 1990, with the result that, even though the basic rate is lower, the income tax burden on some families is much the same as it was then.’ Nearly there: Although the former Chancellor supports David Cameron's tax break, he does not think £150-a-year is generous enough . The report said that the tax system rewards individuals but shows ‘insensitivity to family responsibility’. It added: ‘Independent taxation was intended to give married women privacy over their tax affairs but the two million couples with children who have to claim tax credits, or, in future, Universal Credit, have no privacy. ‘One-earner families face more fiscal discrimination in 2013 than they did in 1990 and marginal tax rates that apply to families are much higher than they were in 1990.’ The report said the unfairness had been worsened by changes to Child Benefit, which have deprived higher-income one-earner families of the benefit while two-earner families on the same family income have kept theirs. The pressure group for stay-at-home mothers, Mothers At Home Matter, welcomed Lord Lawson’s comments. Spokesman Anne Fennell said: ‘Unlike our current Chancellor, Lord Lawson clearly appreciates the injustice in the current tax system towards stay-at-home parents. ‘We welcome his initiative 25 years later to remedy the injustice caused by a tax system which does not recognise the family unit. Many more couples face a “couple penalty” today if they choose to live together as husband and wife than they did 25 years ago and this falls largely in the poorer half of the population.’
the Exchequer Lord Nigel Lawson backs tax breaks break for married couples would be the most cost-effective way to help families, a former