Show Hide image

How to stop the pirates?

It seems absurd that modern day pirates can board and overpower huge tankers and merchant ships and

Tens of thousands of merchant ships travel yearly in the Gulf of Aden off the Somali coast to gain access to the Suez Canal and because the boats are typically unarmed and can command high ransoms, they've become targets for pirate attacks.

When the ships are laden, the deck is only a few metres above the water line making it easy for pirates to climb aboard, says John Burnett, who worked on merchant ships and wrote Dangerous Waters about maritime piracy.

Somalia's weak transitional government is unable to govern its maritime waters. The country's poor economy and lack of oversight have created an environment ripe for pirates.

Ship owners and the international community are struggling to protect the ships and their crews. Besides increasing the vigilance of crew members and outfitting the decks with halogen lights and high pressure water hoses to deter pirates, there are two high tech - and costly - options to repel pirates.

Long range acoustic devices, or LRADs, emit sound waves loud enough to cause pain and permanent damage that could be directed towards the pirates. The device, which costs between 30,000 – 50,000 dollars, was employed by the Seabourn Spirit to fight off pirates that attacked the luxury yacht on November 5, 2005.

Ships carrying non-flammable materials can be surrounded by a non-lethal 9,000-volt electric device to deter pirates from climbing over the rails.

The most controversial anti-piracy method is to arm the ships, either through outfitting the crew with weapons or hiring security contractors. Some have suggested that crews are not qualified to carry guns and that having weapons aboard could simply put them in more danger.

Security companies may be ill-equipped to deal with pirates; when a Liberian ship was attacked recently, three British security contractors reportedly jumped overboard. Others see the guards as dangerous. Maritime policy analyst Mark Valencia says he opposes “armed guards and armed resistance for commercial vessels because of the dangers to ship and crew involved”.

The EU hopes that providing ships to patrol the waters and escort merchant ships will reduce pirate attacks. On 10 November it approved 12-month operation “Atalanta” which will assist in the protection of vessels carrying aid from the World Food Programme and of “vulnerable vessels cruising off the Somali coast, and the deterrence, prevention and repression of acts of piracy and armed robbery off the Somali coast.” The operation is expected to begin in early December.

Indeed, the escorts – provided currently by the Netherlands and NATO though other countries have assisted in the past - have deterred pirates from attacking the WFP ships. “Since NATO has been been helping us out, not a single ship has been hijacked” said Greg Barrow, the global media coordinator at WFP.

Many countries have sent ships to patrol the waters. Russian, Indian and British frigates have recently defended ships under pirate attack and Denmark and the US also have provided assistance in the gulf.

Burnett is sceptical that ocean patrols will solve the problem. “Additional military might curb piracy, but it won't stop it,” he says. “The area is 1.2 million square miles. The pirates will avoid them and attack ships that are outside the areas.”

Aerial support has been used to improve information and security in the Gulf of Aden. The method helped to decrease pirate attacks in the Straits of Malacca three years ago in an operation called “Eye in the Sky.” Spanish military aircraft launched a patrol operation that is planned to continue through the end of December.

The most effective long-term plan may be to address the root of the problem, that is to stabilize Somalia and help establish an effective government. “Ultimately the decisive battle against maritime piracy is to be won on land, not at sea. Intervention at sea is still defensive and reactive, and we may not always get to the perpetrators in time,” wrote piracy scholar Graham Gerard Ong-Webb. “We must attack pirates at source. That is, we must identify their bases of operations and dismantle them.”

Though security forces in the Gulf of Aden are being augmented, several shipping companies have considered changing their routes to avoid the dangerous area. Instead they will go around the southern tip of Africa, increasing the time and cost of delivering goods.

Maritime piracy has ramifications not only for the crews held at ransom but for the economies that rely on the timely delivery of goods via merchant ships. “This isn't an African problem” says Burnett. “This is the interruption of the global supply chain. This is our problem.”

Show Hide image

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.