The tax and benefit system is basically broken for couples with children

If you wanted to disincentivise work for the poorest, this is how you'd do it.

Last week, this IFS chart showing the effect of the child benefit withdrawal on marginal tax rates made quite an effect:

IFS Chart

I wrote about it myself, arguing that it underemphasised how bad the effect would be on families with lots of children. But the chart also plays down how bad the existing system is. The interplay between benefits, income tax and national insurance results in marginal tax rates which increase and decrease in a haphazard and unpredictable way, and frequently reach astronomic levels.

The IEA's Philip Booth looked at what he calls "the simplest possible case… of a couple with three children not claiming Housing Benefit, Council Tax Benefit or assistance with child-care costs (or a host of other ad hoc benefits that are available)." The figures were compiled in May last year, but are based on the state of affairs this May – so there may be some lags in exact amounts, but the overall picture remains accurate, at least pre-Universal Credit. Here they are charted in the same format as the IFS'

Chart Two

It's clear that for this case, the tax and benefit system is almost entirely backwards. The largest rates are paid at the bottom end of the income scale, progressively declining to 42 per cent, before finally, at the very top end, increasing to a "high" of 47 per cent.

And as Booth says, this is the simplest possible case. For someone in this situation claiming all the benefits they were entitled to, it's highly likely that at least one of the marginal rates would break 100 per cent – and that the tiny patch of 0 per cent at the very poorest end would disappear entirely.

While Bond and I agree on the problem, it's unlikely we would match minds on the solution. To me, the data above illustrates the fundamental folly of thinking that withdrawing benefits can ever really make economic sense. It is, prima facie, a strong argument for a Green-style citizen's income. Remove the conditionality from benefits and you have a system which encourages work at all income levels, rather than stamping on motivation the minute a family is no longer nominally "poor".

Raphaelle and Fabienne pose with one of their three children. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The hidden joy of charity shops

Mary saw her colleagues at the charity shop every day, but she didn't tell them she was sleeping on the 31 bus.

Camden is a bric-a-brac kind of place – market stalls, blaring music, occasional offers of weed. But the back room of the Sue Ryder charity shop on Parkway is immaculate, with hooped petticoats waiting to be steamed and crockery stacked neatly on the shelves. I’ve come to talk to the shop’s manager, Oya, and one of her volunteers, Mary*, and they are waiting for me with milky tea and chocolate-chip cookies.

Mary is nervous. She is afraid of having her real name printed. “It’s shaming to tell you my story but I believe if I tell people at the right time, good things will happen,” she says. Now in her fifties, she arrived in Britain four years ago from Italy, without friends or savings, having left her husband. The jobcentre gave her an Oyster card and told her to volunteer at a charity shop to improve her English. “So we put her on the tills,” says Oya. “That’s what we do with anyone who gets sent to us to learn English.”

But Mary had a secret. She couldn’t find anywhere to live, so every afternoon, when she finished her shift at the shop, she would go to the jobcentre and laugh and joke with the staff there to cover up the reality that she didn’t have anywhere else to go. When the jobcentre closed, she would ride the 31 bus through the night, from White City to Camden and back again. It was the best way to stay warm. Then, every morning, she would arrive at the shop early, brush her teeth in the staff bathroom and change into fresh clothes – washed in a friend’s hostel room. No one else knew.

The charity Crisis calls people such as Mary “the hidden homeless” and says that it is almost impossible to estimate how many of them there are in Britain today. Most homeless people don’t qualify for accommodation in shelters but eke out their time shuttling between friends’ sofas, insecure rented accommodation, bed and breakfasts or sleeping rough on the streets.

Eventually, the shop manager – Oya’s predecessor – asked Mary what was wrong and her story tumbled out. Between them, with help from the jobcentre staff, Mary found a studio flat and moved from volunteering on the tills to working at a nearby convenience store, where she is now a supervisor. Both she and Oya have to stop to reach for tissues while telling me this story. “Sue Ryder is my family,” says Mary. “Sometimes I want to cry but there are no tears left. And Allah would be angry if I dared to cry now, with all that I have.”

Despite having a paid job, Mary still volunteers at the charity shop on Friday mornings. She leaves at 3pm to work the evening shift at the convenience store. She and Oya are firm friends outside work. Mary brings in home-cooked lasagne for Oya and her daughter – “She says, ‘Eat some tonight, freeze the rest for Ella’” – and Oya invites her round and cooks her Turkish food on Friday nights. “She’ll say working here saved her life,” says Oya. “I’ll say I made a friend for life.”

The reason I’m here is a selfish one. Volunteering for a charity is the perfect antidote to a culture that can often feel mercenary, cynical and ruthlessly individualistic. I wish more people did it. I’m also here because in December, I wrote a piece defending charities from accusations that many do not turn every penny of donations into outlay on their projects. But running charity shops requires upfront investment – on electricity, rent and wages – so it’s too simplistic to demand that all the money they receive should go straight back out of the door.

That article prompted the management of Sue Ryder, which operates 457 shops with 12,000 volunteers, to get in touch and invite me in. Some of their volunteers, like Mary, need to learn English and other skills before they can get a paying job; some are serving prison sentences; others are youngsters sent unwillingly by their schools for work experience. (Jackie, who now manages one of the charity’s shops in Aberdeen, had previously been imprisoned three times.)

Not that everything is rosy in the charity shop back room. Oya says that some people use them as a “dumping ground”. I tell her that I once read a story about a donation of tights that had a used sanitary towel still stuck to the crotch and they nod: “We had that.” Oya is very proud, however, that the store “doesn’t smell like a charity shop”.

As well as providing jobs and raising money, stores such as this one provide a useful social barometer. There are around 9,000 charity shops in the UK and their number rose 30 per cent in the five years following the financial crash of 2007. Since then, the economic downturn has increased trade significantly. Last year at the shop in Camden, the number of donation bags increased by 52 per cent and takings went up by 8 per cent, yielding a net profit of £65,000.

In Camden, close to chichi Mornington Crescent and Primrose Hill, the donations can be eyewateringly expensive (recent finds include a £1,200 clarinet and a £980 Prada handbag), while the cheapest brands stocked are Marks & Spencer and Next. “More people are charity shopping,” says Oya. “And not the people you’d expect. They’re suited and booted. Sometimes they’re famous.” Mention is made of an EastEnders actress spotted in the store.

Because of her work, Oya has been invited to a garden party at Buckingham Palace on 12 June and naturally she is taking Mary. A trip to buy hats is coming up and their enthusiasm is infectious. Here in the back room of a north London charity shop, as the three of us – a Turkish-British Muslim, an Eritrean-Italian Muslim and plain old white agnostic me – drink milky tea, I feel the most British I have all year. These guys really love the Queen. And they love being friends. Stepping out into the sunshine, my overwhelming feeling is: maybe we’re all going to be OK.

*Her name has been changed

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 19 May 2016 issue of the New Statesman, The Great Huckster