Strenuous liberty

Party leaders come face to face with participatory democracy.

Many years ago, the American political philosopher Michael Walzer wrote a lovely little essay entitled "A Day in the Life of a Socialist Citizen". In it, he imagines a man who "hunts in the morning, fishes in the afternoon, rears cattle in the evening, and plays the critic after dinner" -- a beguiling portrait" he borrows from Marx's German Ideology.

Crucially, however, it's a picture that requires some elaboration (bear in mind that Walzer was writing in 1968, at the height of New Left enthusiasm for "participatory democracy"). For before he goes hunting in the morning, Walzer writes, this "unalienated man of the future is likely to attend a meeting of the Council on Animal Life, where he will be required to vote on important matters relating to the stocking of the forests".

And so on, through a special session of the Fishermen's Council and sundry other debates and disputations, with the result that "citizens will have to rush through dinner in order to assume their role as critics".

Behind Marx's huntin', shootin' and fishin' man, then, looms another figure: "the busy citizen attending his endless meetings". Socialism and participatory democracy, Walzer concludes, will demand "an extraordinary willingness to attend meetings, and a public spirit and sense of responsibility that will make attendance dependable and activity consistent and sustained". The problem with this, as Milton observed a few hundred years before Walzer wrote his essay, is that people often prefer "bondage with ease" to "strenuous liberty".

I was reminded of Walzer's observations today when I attended the General Election Assembly at Methodist Central Hall in Westminster held under the auspices of Citizens UK, which describes itself as "the national home of community organising, and the largest coalition of civil society organisations in the UK".

Today's assembly, at which Citizens UK presented its "general election manifesto" to the leaders of the three main parties, was itself the product of 12 months of meetings at which the body's member organisations (churches, mosques, synagogues, schools, charities, etc) had deliberated on a range of policies, preferences and aspirations that were ultimately distilled, in one huge exercise in participatory democracy, into six demands -- as follows:

* Recognise civil society and agree to an annual meeting with Citizens UK.
* Adopt the living wage in the public sector and champion it across the country.
* Create a 20 per cent interest-rate cap on all unsecured money loans and bring access to affordable credit to local communities.
* End the detention of children in immigration centres.
* Facilitate affordable owner-occupied housing through community land trusts.
* Introduce a one-off, conditional, "earned regularisation" for long-term irregular migrants (ie, a so-called amnesty).

That Methodist Central Hall (site of the first-ever General Assembly of the United Nations in 1946) was packed to the rafters with more than 2,500 delegates from member institutions (themselves representing countless thousands more) suggests that the people's taste for "strenuous liberty" -- the "extraordinary willingness to attend meetings" that Walzer said genuine participatory democracy, not to mention socialism, would depend upon -- is indeed growing.

And David Cameron, Nick Clegg and Gordon Brown, who addressed the Assembly in turn this afternoon, each made a point of praising the sheer dedication of those present: Cameron by co-opting them into his "big society" ("I talk about the big society," he said; "you are the big society"), Brown by inviting those who "say people are apathetic and indifferent" to take a look at Citizens UK. (Clegg, for his part, flattered the audience by offering a rather refined summary of his liberal commitment to the "dispersal of power" -- a relief to those of us who find that his "plague-on-both-your-houses"/"there-you-go-again" schtick is beginning to pall somewhat.)

The leaders were right to be lavish in their praise: Citizens UK is a reminder that civic participation tends to cultivate a sense of the common good. That's why John Stuart Mill, for instance, regarded it as desirable. For all its stirring, revivalist fervour (which is partly a function of the affliations of participants in Citizens UK, the overwhelming majority of whom come from faith-based groups of some kind), the event was also a reminder (and this is implied in what Walzer says in his essay) that political organisations, of whatever kind -- even heterogeneous, extra-parliamentary agglomerations like this one -- have a tendency to make a fetish of their own procedures.

There was lots of shouting out to delegates (I'm not sure, in fact, if this is the right term) from various London boroughs and, more unsettlingly, mass recitations of the manifesto pledges, which were flashed up on a large video screen, all of which delayed the leaders' speeches.

But when the moment for the speeches did finally arrive, it was, as my colleague James Macintyre has already observed, Gordon Brown who, for once, best matched his rhetoric to the occasion (though, in fact, he appeared to endorse fewer of the policies in the Citizens UK manifesto than either Cameron or Clegg). Where he usually bulldozes or bludgeons, here Brown soared, ending with a peroration that played Demosthenes off against Cicero ("neoclassical endogenous growth theory" this wasn't):

When Cicero spoke to the crowds in ancient Rome, people turned to each other when he had finished and said: "Great speech." But when Demosthenes spoke to the crowds in ancient Greece, people turned to each other and said: "Let's march!"

Jonathan Derbyshire is Managing Editor of Prospect. He was formerly Culture Editor of the New Statesman.

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.