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Jim Murphy: "Lazy Labour" risks losing the next election

The shadow defence secretary warns that parts of the party are drifting along with “a sense of entitlement to win”.

Jim Murphy is not often lost for words. The shadow defence secretary is seen as one of the ablest communicators on the Labour front bench but his fluid Glasgow patter runs dry as he tries to express the anger among voters that he thinks will shape politics in years to come. It is not, says Murphy, the kind of ideological sloganeering rage that might be diverted down the usual leftwing channels.

“These are people who are angry who will never go on a demonstration. They’re not going to march behind a banner or wave a placard. They’re quiet people who work bloody hard and see their lives stagnating or getting worse. It’s a modest, understated, British, non-revolutionary kind of . . . nnnrgh.” The words run out, leaving only a fist-clenching, teeth-grinding, strained guttural moan – think exasperated Scottish Chewbacca – to express the cry of impotent fury rising up from squeezed Britain.

The established parties, he says, are illequipped to deal with this feeling. There are parts of the country where Labour is losing contact with the electorate. “Parts of the party are stagnating,” says Murphy. We are talking in his parliamentary office with its lofty view of Big Ben but his mind is on the voters he meets on the doorstep, who are ever more alienated from this rarefied world. Their disengagement, he says, is expressing itself with new force. “People say, ‘I don’t vote and let me tell you why. It’s not because I don’t care. Here’s my long list of reasons.’ It’s a kind of chest-thumping, contorted civic pride: militant apathy.”

This challenge is uppermost in many Westminster minds after the Eastleigh byelection, where the UK Independence Party came a close second to the Liberal Democrats, rubbing Labour and Tory noses in public contempt. Ukip’s rise has provoked a noisy public debate among Conservatives about the best strategy for dealing with populist insurgency; Labour’s response has until now been muted. Murphy is the most senior figure to concede that his party is failing to engage with millions of voters.

“If you don’t knock on people’s doors between now and polling day you deserve what you get,” he says. “They’ll say, ‘Where were you when I was struggling, when my husband lost his job, when my hours were cut, when I needed you? . . .’

“It’s not an Eastleigh problem, it’s a wider problem. It’s Lazy Labour.”

There are parts of the party, Murphy warns, that drift along with “a sense of entitlement to win”. It is a complacency that goes without scrutiny in party structures and in constituencies where Labour is historically unchallenged; it is not particular to any wing or ideology. “New Labour, Old Labour, left or right – you pay your money, you make your choice. There’s honesty and sincerity about all of them. It’s Lazy Labour we don’t talk about.”

Murphy is quick to praise diligent activists and MPs across the country. His point is that economic crisis and the collapse of trust in so many establishment institutions in recent years have changed the terms of political combat, leaving no seat, no matter how safe it looks, inoculated from the disruptive forces being unleashed.

That raises a question of whether Labour’s machine is equal to the task of turning Ed Miliband’s unifying “one-nation” vision into a winning formula. Murphy plainly has his doubts. He warns against the temptations of “segmentation” – of picking off interest groups and slices of amenable voters without crafting a clear message for the whole country.

“You’ve got to have a one-nation electoral strategy alongside your one-nation values. You don’t get to one-nation politics [by] segmenting the voters. You could get an electoral jigsaw and somehow force all the pieces together so it would give you a picture of a Labour victory – [but] that’s a pretty small view of the world.”

He has a particular rebuke for those in the party who see victory falling into place as target seats tumble when the Lib Dem vote collapses. “For a lot of people it’s fun to kick the Liberals, but if you want a big one-nation mandate it’s pretty fruitless just to do that. Winning 2010 Tory voters is much harder but much more important. We could scrape over the finishing line with Labour voters plus some ex-Liberals, but given the scale of the problems we’d have to deal with, we don’t want to just scrape over the finish line. We want a decent mandate.”

There is, Murphy adds, a longer-term danger for Labour in failing to reach out to parts of southern England. The party risks irrelevance in some areas, equivalent to the cultural expunging of Conservatism from Scotland and some northern English cities.

“I don’t want it to become countercultural for people to vote Labour, the way it has become countercultural for people to vote Tory in Scotland. There are youngsters who weren’t born when Mrs Thatcher was around who still would never vote Tory because of Thatcher . . . That’s not a journey we can afford to take in the south.”

It was Tony Blair who famously overcame Labour’s electoral “southern discomfort” in the mid-1990s. Talk of a recurrence of the syndrome risks reinforcing the suspicion on the left that Murphy is one of what Unite’s general secretary, Len McCluskey, and others have called “Blairite zombies”: acolytes of the former prime minister obstructing the party’s path to socialist virtue.

“It’s no bad thing to have led the party to three remarkable victories,” Murphy says of Blair. “New Labour is part of our heritage . . . But I’m not a Blairite and I’m not a zombie – so I can’t be both.”

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

This article first appeared in the 11 March 2013 issue of the New Statesman, The audacity of popes

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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.