Sprats and mackerels

Are poverty alleviation and human rights work worth the carbon cost?

Just back from a return visit to Sierra Leone. I was working once again with MAPCO, the indigenous organisation engaged in poverty alleviation and human rights work that I spent time with in March. This time, I was helping them develop efficient monitoring and evaluation systems, to better enable them to track the impact of their work.

This feels like good and valuable work. And yet, how does this kind of activity sit with the whole carbon crisis? I pondered this on the flight out, while pouring over Mark Lynas’ excellent piece on the protest camp at Heathrow (In fact, when I had first seen the dates of my trip to Sierra Leone, I had been excited at the prospect of spending time at the camp. However, the more I read about the camp, the more difficult I realised it could be to move freely in and out – so, having signed a contract for the work, I prioritised the trip).

I have far more questions than answers on this whole question. Work like that I was up to in Sierra Leone is about building the capacity of pro-poor organisations and helping them develop tools for promoting the economic wellbeing and resilience of the poor through small enterprise development. I am one of many to have made a career out of this kind of work.

In addition, I am one of a number of people from within the global ecovillage family to have created a sustainability curriculum drawn from ecovillage experience – what we have called the Ecovillage Design Education (EDE). This training programme, that has been embraced by UNESCO as part of the UN Decade of Education for Sustainable Development, transfers life skills that will be of the essence as we head down the energy descent curve.

At present, the core EDE faculty finds itself doing a fair amount of international travel as we build the capacity of trainers in different places to deliver this educational programme. ‘Using a sprat to catch a mackerel’ is the analogy I have heard used to justify the use of carbon in this way to leverage a greater long-term benefit.

The issue of air travel poses a major dilemma to the ecovillage movement as a whole – certainly to the Findhorn ecovillage. On the one hand, a significant portion of our income derives from participants coming on our courses. The proportion of those coming from the UK has risen steadily over the years and now stands at about 50 percent. Sill, a good number of those continue to come through Inverness airport.

The sprat-mackerel analogy, however, still holds good here; many leave transformed, refreshed and better equipped to get stuck into good community development work of many shades and varieties when they get back home.

On the other hand, we are a highly international community. At any one time, between 15 and 25 nationalities are represented in our resident community. This generates a lot of what George Monbiot has memorably called ‘love miles’ – travel to meet up with friends and family on other continents. My wife is a New Yorker – I understand the dilemma.

The Findhorn community’s ecological footprint analysis gave us record low scores on most consumption categories (food 32 percent of the national average, home and heating 21 percent, car mileage six percent and so on). In one category alone, air travel, did we exceed the national average – by a factor of two and a half.

It is clear that government policy needs to change: a halt to new airport development; removal of taxes on aviation fuel and other externalities associated with flying; inclusion of air travel emissions in greenhouse gas emissions targets. Our top priority needs to be campaigns towards these ends. The time is rapidly approaching for us to decide where we want to call home and to sink our roots there.

In the meantime, as we effectively use our sprats to catch mackerels, is there not a case for continuing to undertake strategic international work – made possible by air travel – to strengthen the capacity, spread the skills and build the networks we will all need in the low-carbon world that is opening up before us?

The world of business shows little inclination to restrain its appetite for air travel. In this context, should those of us engaged in sustainability and global justice work unilaterally forgo the many advantages that continuing (at least in the short-term) access to air travel provides?

As I said at the beginning, more questions than answers.

Jonathan Dawson is a sustainability educator based at the Findhorn Foundation in Scotland. He is seeking to weave some of the wisdom accrued in 20 years of working in Africa into more sustainable and joyful ways of living here in Europe. Jonathan is also a gardener and a story-teller and is President of the Global Ecovillage Network.
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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.