To lose one prime minister

Pakistan’s military are doing their damndest to prevent a civilian government reaching an unprecedented full-term.

On many levels the Zardari government, now less than a year away from full-term, has been doing quite well - with no will to solve the energy crisis but passing significant legislation that protects democracy, as opposed to military rule, in Pakistan.

The literal reporting by the international press of Pakistan’s prime ministerial woes – Yousuf Raza Gilani, after the longest PM-ship ever in Pakistan’s history was forced to stand down for refusing to write to the Swiss authorities over corruption charges relating to Zardari, his initial replacement Makhdoom Shahabuddin was blown straight out of the water when a judge ordered his arrest on illegal drug imports, but Raja Pervaiz Ashraf has now been appointed – has done nothing to tell the real story. 

For that you will have to read Mohammed Hanif in the Guardian, about the only voice of clarity available to UK readers. 

To lose one prime minister may be regarded as a misfortune but to have two headed off  looks like the military have been up to their old tricks. Caretaker governments were the stuff of military intervention after they had despatched civilian governments in what Musharraf called in his memoirs “that dreadful decade of democracy”. This is not quite a caretaker government, but as Hanif describes, the military are behind a revitalised supreme court that in the last six months has been in the business of attacking the Zardari government, while leaving military wrong-doings, such as questions over the assassination of Salmaan Taseer, governor of Punjab, and of Shahbaz Bhatti, Christian minister for minorities, and the death of journalist Saleem Shahzad, on the back burner.

In mid-June the judicial commission tasked with looking into Memogate, the “documentation” provided by nude wrestling adjudicator  Mansoor Ijaz that the Zardari government through its civilian ambassador to Washington Husain Haqqani had tried to move against the military upheld Ijaz’s spurious claims.

It is not a coincidence that a week before the commission was due to announce its findings Asma Jahangir, Pakistan’s leading human rights barrister, chief counsel for Husain Haqqani and contributor to the New Statesman, was made aware of a plan to assassinate her.

The background to memogate is here, Mansoor Ijaz’s track record of contributions to the Financial Times here.

Pakistan’s leading liberal daily, Tribune, ran the following editorial in mid-June:

It is in the nature of those [the military] opposed to civilian rule to change the subject from their misdeeds. In this case, the distraction was memogate and the scapegoat was Husain Haqqani.

Twittersphere followed up: “Shame on a country which declares its doctors, diplomats, poets and scholars as traitors, and garlands jihadist killers and eulogises them”. “Husain Haqqani is not a traitor he is a patriotic Pakistani. Real traitors are those acquit jihadis and penalise liberals”.

That, at present and until it does its proper job and brings the military under the rule of law too, looks like the supreme court. 


Yousuf Raza Gilani, the former Prime Minister of Pakistan who was ousted in April 2012. Photo: Getty Images
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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.