Leader: Support the people’s revolt and stop selling arms to tyrants

Cameron's support for reform was undermined by his defence of arms sales.

For more than 60 years, dictators and despots have held sway over the Middle East. Aided and abetted by the west, they have denied fundamental political and economic rights with little fear of reprisal. But, as the inspiring protests of recent weeks show, time is running out for the strongmen of the Arab world. Since the fall of the former Egyptian president Hosni Mubarak, the Bahraini royal family has agreed to formal talks with the opposition; Morocco and Algeria have been forced to suppress pro-democracy rallies; and Iran's courageous Green Movement has held its largest protests since the rigged election of 2009. Most dramatically, in a final effort to prop up his crumbling regime, the Libyan dictator, Muammar Gaddafi, turned mercenaries on defenceless civilians with terrifying and uncertain consequences.

In each country, the revolt against autocracy has taken a distinctive form but, as Olivier Roy, one of the world's leading scholars of the Muslim and Arab worlds, writes on page 24, the protesters share several characteristics. They are non-violent, pluralist, nationalist and, above all, democratic. The protests are a challenge not just to the region's despots but also to those western governments that have courted the Middle East's tyrants in a cynical attempt to promote "stability" over democracy. The west's Faustian pact with Colonel Gaddafi was not based on any improvement in his human rights record. On the contrary, the man to whom Tony Blair offered the "hand of friendship" in 2004 only increased his persecution of the Libyan opposition.

We concede that a purely altruistic foreign policy is neither possible nor desirable. Few recall that the former Labour foreign secretary Robin Cook spoke not of an "ethical foreign policy" but of a foreign policy with an "ethical dimension". Yet too often Britain has failed even this modest test. It is one thing to maintain diplomatic relations with dictatorships; it is another to embrace them altogether.

The coalition government has been surprised by events in the Middle East. To date, its foreign policy has been based on little more than the objective of promoting trade - an approach accurately described by the former foreign secretary David Miliband as "low-grade mercantilism". Mr Miliband was impressive in the role and, before Labour's election defeat, was at least evolving a credibly post-Blair, pro-Europe and multilateralist foreign policy. His repeated references to a global "civilian surge", based on the desire for people to "shape their own lives", were prescient.

His successor, William Hague, hitherto regarded as one of the more able Conservative politicians, has struggled to achieve such coherence. He used his first major speech as Foreign Secretary to speak of the coalition's efforts to "elevate links with the Gulf" and of "strengthening our ties across the board". There was no reference to the need for democratic reform in the Arab world or to the denial of human rights.

In his speech to the Kuwaiti National Assembly on 22 February, David Cameron appeared to acknowledge the limits of the policy so far when he declared that "denying people their basic rights does not preserve stability, rather the reverse". But the Prime Minister's laudable words were undermined by his decision to travel to the region with eight of Britain's leading arms manufacturers. To his critics, Mr Cameron replied: "A properly regulated trade in defence is nothing we should be ashamed of." Yet the presence of Gerald Howarth, a defence minister, at an arms fair in Abu Dhabi - where British companies sold tear gas, stun grenades and rubber bullets for the purposes of "crowd control" - was something to be ashamed of. Rather than delaying action until the moment governments open fire on their own people, as happened in Bahrain and Libya, ministers should declare an immediate arms embargo.

By giving long-standing support to the region's dictatorships, Britain has accumulated enormous obligations to the people of the Middle East. If it is to avoid being caught on the wrong side of history, our government must side unambiguously with those fighting for long-repressed democratic freedoms.

This article first appeared in the 28 February 2011 issue of the New Statesman, Toppling the tyrants

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.