All the cool kids go to McDonalds, according to McDonalds

The ADgenda: nobody tapes their face to dogs.

Since 2008, McDonald's UK has been working on an image overhaul with advertising leaders Leo Burnett, a company whose slogan is, “We don't make brands famous, we make them popular”. The ad agency had a difficult job on its hands; poor old McDonald's had a rough ride with PR in the noughties; first it was linked with political corruption, then SuperSize Me showed a man's body slowly decomposing on a diet of Maccy D's, and all the time those environmentalists kept harping on about that darned rainforest. Leo Burnett's first job was to run a set of ads to show that, contrary to popular belief, McDonalds's is actually one of the UK's leading health and organic food retailers (come on guys, they sell apples).

This health campaign, combined with the crowd-sourced "We All Make The Games" campaign, have acted together to (according to the Leo Burnett website) "double trust" in the brand. But, not content with this, in the past twelve months the Burnett ad team have gone further, launching a raft of adverts aimed to make Maccer's the restaurant de choix for the hip, young professional. Part of this, involves the promotion of McDonald's “freshly ground coffee” range.

"Coffee and Conversation”, which first aired last year, shows us a series of vignettes that demonstrate the kinds of every-day conversations people have round a cup of java à la McDo. For example, the ad begins with a disgruntled thirty-something telling her friend “and then he taped his face to the dog”, ; “I hear ya sister'', the viewer will think, “if I had a penny for every time my Pete taped his face to the dog...”. Another scene shows a sassy London gal with her mates trying desperately to de-code her boyfriend's mindbogglingly cryptic text -"C u l8a". “What does that mean?!”, she cries, her mates are hysterically excited about the whole thing, but also unable to elucidate the mystery.

Indeed, so at home is the young professional in Mcdonald's, that one trendy young man chooses it as the place to start his relationship, and an attractive young blonde, deems it an appropriate place to end hers; we zoom in on a drop of coffee creeping down her cup, as she splutters, “I just feel differently about you now”. The drop of Maccers coffee, in a very contained kind of pathetic fallacy, – I think – is meant to represent the anguish of the young blonde. In an even sadder scene, a dead-eyed thirty-something in a suit tells his indifferent colleagues “I talked about staplers for an hour today”.

Leo Burnett reaches out to the young professional again in 'First Day', an ad in which a young man starts a new job in a funky modern glass building. His new boss bombards him with information and acronyms, she even follows him into the men's toilets to tell him he's drying his hands wrong. Overwhelmed, he hobbles over to McDonalds's on his lunch break, as he orders a Big Mac the world is put to rights; he proceeds to flirt with his burger, before turning his attentions to the colleague he's made sexy eyes with earlier, who also lunches under the Golden Arches. Romance is not dead.

The ad, "He's Happy", again, pushes McDonalds's as a place of sanctuary for the hot young boy- about- town. A plucky twenty-something leaves his city flat and sings a chirpy rendition of 'The street where you live' from My Fair Lady; he smiles at passers-by and winks at foxy florists as he goes. At the end of the ad it is revealed that the cause of his light mood and public singing is not a lovely lady, but a double big mac.

Now, It is not that these situations are so very implausible, romances may have started in McDonald's, people probably do have depressing conversations about their work in the restaurant, and many people on their first day at a new job might choose to eat at McDonalds's, for its grim familiarity if nothing else. But the McDonalds's in question would not be the soft-lit, soft-focus, everyone is under 35 and gorgeous one, created by Burnett's team; in real McDonalds's, the lights are too bright, there is invariably at least one screaming child in the vicinity, and olfactory perception (conveniently absent in a TV ad) is filled with the smell of chip fat mixed with disinfectant. That is the reality; getting dumped in McDonalds's would be hideously depressing, having lunch there every day would give you permanent afternoon indigestion.

Oh, and take note Burnett; nobody tapes their face to dogs.

McDonald's UK has been working on an image overhaul. Photograph: Getty Images
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.