Does Cameron want war with China and Russia?

Once again, the Tory leader reveals that he's a foreign-affairs lightweight.

So tell me again, Dave, why it is that you think Britain should renew Trident?

Are we really happy to say that we'd give up our independent nuclear deterrent when we don't know what is going to happen with Iran, we can't be certain of the future in China?

China?? Does David Cameron really believe that the People's Republic of China is a threat to the United Kingdom? That the Chinese, in the midst of supplying our high-street stores with much of their clothing lines, have prepared military plans to either invade and occupy the British Isles or nuke us to smithereens from afar? And, even if they had, does he think the UK's four Trident-armed nuclear submarines would protect his "big society" from the People's Liberation Army, backed up by 400 Chinese nuclear warheads? It'd be like the Na'vi versus the humans in Avatar - only without a happy ending for the Na'vi.

Random movie references aside, I do, however, have a serious point to make. Cameron is not qualified to be prime minister. The self-professed "heir to Blair", like Tony Blair before him, edges towards Downing Street with little knowledge of the world beyond the white cliffs of Dover. He is, as President Obama is alleged to have remarked, a "lightweight". Labour strategists have smiles on their faces. The Foreign Secretary David Miliband was quick to say that the Leader of the Opposition had issued "an insult to a fellow permanent member of the UN security council and to a country with whom we have just announced a close strategic relationship," adding: "David Cameron should withdraw this slur now."

Brown is fond of remarking that this is no time for novices. Given the state of the economy, and the "fragile recovery", he argues, we have to stick with an experienced leader who can handle crises and has proven judgement. The same applies on the international stage, where uncertainties, threats and conflicts abound.

Can we trust Cameron to handle Britain's foreign policy? He might do more damage than Blair ever did.

This, after all, is not his first gaffe. Last night, he suggested nuclear confrontation with China. In 2008, he implied that Britain, via Nato, would go to war with Russia over Georgia. As I wrote in my column in the magazine, back in January:

Nothing has better illustrated Cameron's inexperience and lack of judgement than his intervention in the South Ossetia conflict in 2008, when he rushed to Tbilisi to declare his support for embattled Georgia, which, he wrongly claimed, had been "illegally invaded" by Russia. However, as the former Tory foreign secretary Malcolm Rifkind pointed out at the time, "Britain, France and Germany are not going to go to war with Russia over South Ossetia", adding that it was "totally unconvincing" to claim that the conflict wouldn't have happened had Georgia been in Nato.

As my colleague James Macintyre and I have long argued, Cameron has been given a pass by the press. But, I'd add, nowhere has that lack of scrutiny been more evident than on the Tories' foreign policy - both in Europe and beyond. Let's see if that changes next week, in the "foreign affairs" leaders' debate on Sky News.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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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.