Frances O’Grady: “Our goal is not just the betterment of workers but the fulfilment of human beings”

The General secretary of the TUC takes the NS Centenary Questionnaire.

What is the most important invention of the past hundred years?
The Pill – one small step for a woman to take control of her own life but a giant step for womankind. And at least as important as the invention that put men on the moon.

What is the most important scientific discovery of the past hundred years?
That global warming is real, and a direct result of our use and abuse of the planet.

What is the most important sporting event of the past hundred years?
The 1968 Mexico Summer Olympics, when the medal-winning athletes Tommie Smith and John Carlos, with Peter Norman’s support, raised black-gloved salutes to protest against racial segregation in the US and South Africa, and racism in sport. Their subsequent vilification by some governments and the Olympic establishment belies the myth that sport can be a politics-free zone.

Which book has had the greatest impact on you?
Socialism Made Easy by James Connolly, a gift from my grandad. The film: Nostalgia for the Light by Patricio Guzmán (2010).

Who is the most influential or significant politician of the past hundred years?
Clement Attlee, for his recognition that the greater the economic difficulties, the greater the need for social justice.

Who is the most significant author or playwright?
Roy Williams, author of the play Sing Yer Heart Out for the Lads, who can transform the audience as well as the stage.

And which artist has had the greatest impact on you?
Francis Bacon, whose brilliance offended the taste of the narrow-minded.

How about anyone in business? With the centenary year of the Dublin Lockout, I will interpret this broadly and give the honour to “Big Jim” Larkin. His promise that new unionism could lead to new hope and inspiration still holds true.

And sportsperson?
The former Arsenal Ladies captain Faye White, who also won 90 caps for England. For the record, she retired because her knees were dodgy – not because she had a baby.

Who is the most influential philanthropist of the past hundred years?
I am struck by research which shows that, as a proportion of income, the more money people have, the less they give. A pinstriped philanthropist is hard to find. But the lifelong dedication to people’s well-being and rights shown by the former president of Ireland Mary Robinson offers a good example of the original meaning of the term.

What is your favourite quotation?
From the poem “London” by William Blake – which explains why we need the power of imagination to free ourselves:

In every cry of every Man,
In every Infant’s cry of fear,
In every voice, in every ban,
The mind-forg’d manacles I hear.

What is your favourite speech?
The Clydeside trade union activist Jimmy Reid’s speech to Glasgow University in 1972, because it serves as a reminder to trade unionists that our ultimate goal is not just the betterment of workers but the fulfilment of human beings.

What do you think will be the most significant change to our lives in the next hundred years?
The development of artificial intelligence. As with any new technology, how it will shape our lives depends on whose interests it is used to serve.

What is your greatest concern about the future?
That unpopular governments will resort to conventional methods of digging themselves out of an economic hole: war.

What will be the most dramatic development in your own field?
There will be a movement for economic democracy in the 21st century akin to the Chartist movement for universal suffrage in the 19th century. The global concentration of power, wealth and capital is unsustainable.

What is the top priority for the future well-being of people and our planet?
Greater equality and democracy. As the book The Spirit Level: Why Equality Is Better for Everyone by Richard Wilkinson and Kate Pickett demonstrated so profoundly, it is our best chance of liberating the human spirit.

This article first appeared in the 15 January 2014 issue of the New Statesman, 1914 to 2014

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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.