Saying farewell to the News of the Screws

That a trashy tabloid was slain by quality investigative journalism is probably fitting. That hundre

The News of the World is gone - for now. The name is tainted and the brand is toxic, but the reappearance of a News International Sunday publication shouldn't be ruled out, if not a Sun on Sunday then something similar. As Roy Greenslade recently revealed, plans were afoot to co-ordinate production between the weekly and daily operations, the kind of merger that is happening all over the shrinking newspaper industry as revenues fall and profits are maximised.

We don't know the whole extent of the phonehacking, or the payments to police, allegations of which have presaged the demise of the 168-year-old newspaper. A person's number in someone's diary is not the same as their voicemail having definitely been hacked, for example. We don't know what the outcome will be of various investigations, inquiries and hearings, including the one overseen by Brooks herself at News International. But people couldn't wait for all that to unfold: they demanded something be done now. If they jumped the gun and jumped to conclusions based on limited evidence, they were only acting the way they had been taught to by the News of the World itself.

"We will be passing our dossier to the police." Those words appeared at the end of News of the World investigations down the years, implying that readers should infer guilt on the part of whichever ne'er-do-well was being investigated that week, their wrongdoings exposed thanks to secret recording or other "dark arts". It created a culture in which an allegation became proof, a culture in which readers were invited to leap to conclusions. If people have done so this week, the News of the World can hardly condemn such behaviour.

This time there is no dossier to be handed to police; there is just a closure of the country's biggest-selling newspaper. In the end, the pressure on advertisers was too much to bear. This wasn't a faux-outrage confined to a few angry liberals on Twitter or Facebook; this was something that genuinely dismayed ordinary people, including the kind of people who might ordinarily buy the News of the World on the weekend, and the kind of corporations who would not want to see their brands associated with such unpleasant allegations as have surfaced over recent months.

So, will it be enough to satisfy those who have been outraged by the revelations of this week? Rebekah Brooks is safely in her position, and Rupert Murdoch's bid for BSkyB remains under consideration, possibly in an even stronger place than before thanks to the corporation having one fewer publication in its portfolio. Will the axeing of one newspaper make everything all right? Was it really just one newspaper doing this, just a couple of people who were up to no good while the senior figures were on holiday on every single occasion?

As far as the future goes, there is now a gap in the market, and somewhere for two million readers to get their sport, celebrity gossip and occasionally news from now that the much-loved 'News of the Screws' (and many people did love it) has been consigned to history. It would be amazing if News International did not put out a publication to fill that void, but how long that will take to happen remains to be seen. Now is the time for readers to embrace quality journalism, if they want it. But will they, and do they? The 'Screws' had the right formula to attract a huge amount of Sunday readers: celebrity kiss and tells, football transfer rumours and the like. It's naive to imagine they'll all start buying the Sunday Telegraph or the Observer, but it's time for the others to step up to the plate. Will the other Sunday papers reach higher, or aim lower?

I have nothing but sympathy for those hardworking journalists who have been consigned to the scrapheap through no fault of their own, almost all of whom are entirely innocent of any of the breaches of ethics alleged to have taken place at the Screws down the years. It's not their fault, and it's a horrible place out there to try and find work at the moment. Perhaps some will find a place at a new News International Sunday publication; but many won't. They will join an ever growing list of redundant journalists on the scrapheap who are fighting for an ever-diminishing pool of jobs.

So perhaps it's not time to rejoice over the demise of this newspaper, but to remember the human cost of the activities which saw the publication so reviled in the public imagination - not just the journalists who have been left without a job, since the vast majority are deserving of sympathy rather than condemnation; but also those victims of the trashy tabloid tactics that saw a once-thriving newspaper turned into public enemy number one. That it should have had its demise hastened by quality investigative journalism is probably fitting.

Patrolling the murkier waters of the mainstream media
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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.