It's that time of year when little messages reveal just how important you are (or aren't)

I never quite know what to do about Christmas cards. Some years I send them, some years I don't. The result is a strange sort of fractured, dislocated correspondence from year to year. People cross me off their Christmas card lists ("well, he didn't send us one"). Then suddenly they get one from me and either I get this rushed card back the following day or, more likely, they put me back on the list for next year, by which time I've opted out again.

It's never quite emotionally satisfactory. A piece of paper with somebody's signature on it (sometimes, even, a signature you don't recognise) and no message except the implicit one: we haven't seen you since the last time we sent you a piece of paper with our signature on, we have nothing to say to you except that you are in our address book. And a happy new year as well.

Then there are the people who went to all the trouble back in the summer to have specially taken photographs showing their children dressed up as Santa's elves or decorating the tree. Worse still are those parents (eg, Tony Blair, Prince Charles) who are there with their children, grinning and cuddling away. Not just that, but they send the result to dozens of people in the expectation that they will be delighted to put this image on their mantelpiece and keep it there throughout Christmas. Family touchy-feeliness is like those men who have their scrotums nailed to wooden boards: enjoyable for those who like that sort of thing, but they induce symptoms of nausea in onlookers, and so should be carried on in the privacy of the home with the blinds drawn. Or they send you those round-robin accounts of what they've been up to, to show 1) that they are so important that you will want to know every detail of their lives and 2) you are so unimportant that you don't deserve an individual letter. You know the sort of thing: "Cindy was awfully good as Goneril in the school play, Juliet got second prize in the country gymkhana and they switched off Clive's life-support machine."

Except that they don't have that last bit. It's all about how wonderfully their children have done. Paul Theroux has a bit of that in his extraordinary new book about V S Naipaul. He describes a scene in which one of Theroux's young sons tells Naipaul that for his homework he is reading a biography of Ivan the Terrible in French in order to write an essay in Russian. It's as if Theroux, having tried to make you hate both Naipaul and Naipaul's dead brother, Shiva, and having established himself in most readers' minds as the most unsympathetic author since the New York Times published the manifesto of the Unabomber, now wants to make you loathe his sons as well.

But stay, this is meant to be a festive time. I always plan in advance to do something special for the Christmas issue. A parodic pantomime perhaps, or a crossword of my own devising, an amusing Christmas carol containing incongruous satirical elements ("Hark the herald spin-doctors sing . . .", something like that), but I never quite get around to it.

Instead, I'll do what I did last year, which is to pose a brief yuletide quiz.

First an easy one. I'm going to drive twice around a mile-long circular racetrack. I drive the first circuit at a steady 30 miles an hour. How fast do I have to drive on the second circuit so that my average speed for the two circuits is 60 miles an hour?

Second: I have bought lots and lots of sheets of stamps to send out my Christmas parcels, but unfortunately I have only two kinds: 5p stamps and 17p stamps. What is the largest postage that I won't be able to manage exactly with a combination of those two stamps?

And finally: what is the smallest number expressible as the sum of two cubes in two different ways? And who described that number as "rather dull"? And who described it as "very interesting"?

Answers can either be sent via the Statesman or straight to my e-mail address: The first couple of correct answers may even get a prize. We've been clearing out in preparation for moving and have found boxes of remaindered copies of old books of mine . . . I mean, valuable modern first editions, some of which I may deign to share with a couple of lucky readers. And I'll sign them, so you can't even take them out and sell them.

This article first appeared in the 18 December 1998 issue of the New Statesman, A time for unadulterated tradition

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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.