This bungalow heaven, echoing with empire and Gracie Fields

This is where the millennium runs into the sea. A stumpy white obelisk, with a green globe on top, marks where the Greenwich meridian line plunges over the chalk cliffs of Sussex, outside Brighton, and swims off Euro-wards. The Ordnance Survey has just announced that, for the first time ever, in honour of the millennium, it will mark the meridian on its maps. A green line cutting north and south through the grid squares.

I reach the obelisk down a row of redbrick bungalows. The seafront is a strip of grass on the clifftop. A woman walks her poodle. A photographer from the Evening Argus hovers around the obelisk, taking shots of the chairman of the Peacehaven residents' association. He has plans for the millennium: dances, garden parties, even lasers.

John Livings and his wife used to have a caravan near here. They liked it so much that he sold his business in London. Almost a quarter of the 13,000 people who live in Peacehaven are retired.

Peacehaven is bungalow heaven. To come here is to visit yesterday's future. E J Hobsbawm wrote: "To write about this country without also saying something about the West Indies and India, about Argentina and Australia, is unreal." The obelisk gives distances not only to Greenwich (48 miles), but also to every corner of the empire: Hong Kong, Wellington, Valetta, Rangoon, Belize, Aden. The first stone was laid - to mark the silver jubilee of George V's "beneficent and illustrious reign" - by Charles Neville, the man who invented Peacehaven. He bought the land from 1915 on. He had been a land speculator in Saskatchewan and Australia.

There were bungalows in England before. (The first was built in north Kent in the 1860s.) But Peacehaven between the two world wars, with its scattering of cheap homes for heroes, was something new. If any single place was responsible for the first town and country planning legislation, it was Peacehaven. It symbolised how control of the land had slipped through the fingers of the hereditary landlords. Something had to be done.

The odd thing is that Neville, in the photograph I see in Peacehaven library, looks just like one of the first politicians to take up the rural protection cause, Stanley Baldwin. Neville sits solidly on his chair, cigar in hand, heavy-faced, a watch-chain across his waistcoat.

Even now, Peacehaven is almost all bungalows. I stand on the pavement outside No 182a Arundel Road (which has a little sign to say it is an Avon Collection Point). I see a long low ripple of rooftops.

Peacehaven is the little man's empire. Neville ran a newspaper competition to choose a name. The judges plumped for New Anzac on Sea. But he switched within six months. Memories of Gallipoli weren't the best selling point for his 25-by-100-foot plots, laid out on a simple gridiron.

Bungalows are an imperial invention. They began as the banggolo, a Bengali peasant hut. Public works departments across India mass-produced a solider version: cheap, cool and untiring (because stairless). When the captains and engineers retired back to Blighty (Hindi bilayati), they took the bungalow style with them.

And then it skittered down the social gradient. At least, in England. In America, the bungalow kept its Californian charm. Bix Beiderbecke recorded his own tribute with RKO as Wall Street crashed: "Our little love nest/Beside a stream/Where red, red roses grow/Our bungalow of dreams."

The social history of the bungalow has been written by Anthony D King. "In the first half of the 20th century," he argues, "the bungalow was the most revolutionary building type established in Britain." It was, and remains, far more popular than the multi-storey flats architects thought were just the job for the working classes. Bungalows came off the peg from builders, not off the drawing board from architects. There are no roses this January afternoon, outside Peacehaven's bungalow of dreams. There are battered hydrangeas and fancy heathers.

The Rochdale singer Gracie Fields bought a Peacehaven bungalow for her mother, Sarah Stansfield, and stayed in Peacehaven sometimes between variety shows or films. Peacehaven, then, had a pale extension of Brighton's theatrical tradition. Flora Robson made her first public appearance at the Rosemary Tea Rooms. In her brief first career as an actress, Elizabeth David played the summer season at the Peacehaven Theatre. The tea rooms and the theatre have been demolished. Peacehaven didn't linger over its past. The future was the thing.

But imperial history rolls on. Bengalis and Kashmiris now live in cotton town terraces like those the Stansfields abandoned for a bungalow by the sea. (Peacehaven, meanwhile, is 98.6 per cent white.) And the dream rolls on, also. It has just followed the meridian line due south.

In the window of the estate agent's next to the Peacehaven bus stop, they advertise "A place where dreams come true". This is Costa Azahar, the "Orange Blossom Coast," between Valencia and Barcelona. Here you can "live the difference" on an "unspoilt" coastline. So buy your "freehold house in the sun" today.

Yesterday's future isn't dead. Peacehaven lives again - in Spain.

Paul Barker is group automotive editor at

This article first appeared in the 15 January 1999 issue of the New Statesman, A slight and delicate minister?

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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.