Tax breaks for married couples will not be part of next month’s Budget, a senior Government source has said.
The news is likely to upset many Conservative backbenchers who have suggested the change should be included in Chancellor George Osborne’s next Budget in return for their supporting plans to introduce gay marriage.
The Conservative general election manifesto pledged to introduce a marriage tax break, and the commitment was included in the coalition agreement.
It is expected that one member of a married couple or civil partnership would be allowed to transfer £750 of their tax-free personal allowance to their partner, reducing their tax bill. This would be worth around £150 a year to basic-rate taxpayers.
But the senior Government source flatly rejected the idea of a “quid pro quo” deal, and ruled out a marriage tax break featuring in the Budget.
“It won’t be in the Budget but it will be in this Parliament,” the source said. “This Budget obviously, with all that has happened in recent weeks and months, will be very much focused on growth in the economy”.
Mr Cameron views the introduction of same-sex marriage – which is expected to split his MPs when it is put to a Commons vote next week – as the “Conservative Party delivering the promise it made”.
“This is a difficult issue for some in the Conservative Party and he understands the strong feelings that people have, and of course it’s a free vote,” the source said.
“He is proud of the fact that it’s a coalition Government with strong Conservative participation that is bringing forward a modern and progressive change.
“It is good to encourage people to come together and stay together.”
The source also said Mr Osborne had the “full confidence” of the Prime Minister – insisting he will still be Chancellor at the 2015 general election.
It came as some MPs are said to be circulating a letter demanding that Mr Osborne is replaced as the economy continues to falter.
“He is an extremely successful Chancellor. He is battling very difficult economic circumstances,” the source said.
“George Osborne will be Chancellor at the next general election.”
The issue of gay marriage is causing Conservative party members to quit in significant numbers, according to The Times.
Backbenchers insist the issue has sparked “serious unrest” among the party’s rank and file and are claiming some constituencies have lost as many as 100 card-carrying Tories each.
Conservative headquarters, however, does not hold up-to-date membership records, the newspaper said.
Tory MP David Burrowes told The Times: “There’s serious unrest in the grassroots. You cannot avoid the fact that the troops are unhappy. People are drifting away.”