In the land of the free, a fascist stench

Is America becoming a fascist state? Before you think I have regressed to the cliches and nihilistic political vocabulary so beloved by many of my fellow Essex University students of the seventies, let me explain why I pose such a question. If you watched the entire 11 hours of the "testimony" given by Keyhole Ken to the House Judiciary Committee last week - and I seem to be the only person I can find who actually did - you would know that it was a much more ugly spectacle than has been reported, raising issues and allegations that should shock any genuine lover of freedom and liberty.

I'll return to Ken Starr, the "independent prosecutor" in the Clinton case, in a moment. It was a conversation I had with a postman last weekend that further convinced me that something rather unpleasant is happening here. In the area of Washington where I live, all the US Mail vans have been equipped with flashing beacons. With a militaristic flair that would make Senor Pinochet bristle with pride, the US post office now flashes its way through Washington streets as we ordinary motorists scuttle to the side to let them pass. "They say it's a 'safety measure', but we hate it," the postman told me. "Most of the carriers [postmen] think they're tracking devices and they're watching where we go."

They're watching. My postman friend is a perfectly normal chap who exhibits no signs of paranoia. But here was this man - and, according to him, most of his colleagues - who genuinely believes Big Brother is tracking his movements. That these men and women should think their flashing beacons are sinister is truly worrying: has trust between the people and authority broken down somewhere along the way?

Keyhole Ken's appearance did not lend itself well to sound-bites, so few managed to absorb the nasty flavour consistent with this new authoritarianism I am detecting in America. He entered the Rayburn building surrounded by an entirely unnecessary phalanx of secret servicemen and sat on a briefcase for an entire day and evening to make himself appear taller. I found myself recalling what Ken's mother Vannie, 90, says was Ken's great hobby as a teenager: polishing shoes. There he sat, the impeccably mannered Washington lawyer, his voice resonating with quiet reasonableness as he argued his case in carefully prissy legalese.

The reality, though, is that Starr is the respectable front for a $40 million operation which, if not literally fascistic, is certainly one of unspeakable vengefulness. We heard that besides employing scores of lawyers, he has employed 78 FBI agents to do his dirty work for him. We heard how these FBI men pressured and terrorised people into giving evidence for the prosecution of Bill Clinton. A woman who is a friend of Kathleen Willey (who says she was groped by Clinton) found that the FBI had demanded to see the papers concerning her adoption of an eight-year-old boy from Romania - just to make sure it was in accordance with US immigration laws, you understand.

This poor mother, apparently, has been terrified ever since that her little son will be taken away from her. We heard how Starr's men had swooped on a school to "interview" a 16-year-old boy - presumably in order to apply leverage on his parents. I happen myself to know that the university account records of the son of Webb Hubbell - a friend of Clinton's whom Starr had jailed for 19 months and whom he has just indicted a third time - were subpoenaed by Starr's men three times, presumably in an (unsuccessful) effort to find out that his college fees were paid by friends of Clinton.

You will get the flavour by now, I hope - though I saw little if any of this reported. What was most chilling was Starr's response: unemotional, deadpan, robotic. He was only doing his job, was the gist of his self-justification. (His actual words: "We are professionals and we were trying to get the relevant facts, the full story . . . that was our task.") If there was a particularly unsavoury allegation, he would explain that he did not personally supervise each operation and every FBI man; indeed, he agreed he had never actually met Monica Lewinsky or most of the players in the tawdry little drama he has orchestrated.

Everything that in reality was nasty and vicious was cloaked in Starr's own measured, self-insulating jargon. Linda Tripp, for example, did not wiretap her "friend" Monica. What went on was "consensual monitoring" by Tripp and Starr's team - so that was OK, then. He took the same line in an interview recorded for broadcast last Wednesday. Asked whether his 454-page report was "demented pornography," he replied, patronisingly: "Diane - don't fault career professionals for telling the truth."

Is there not at least a stench of fascism here? A totally innocent woman terrified her child would be taken away from her if she did not "co-operate"? A 16 year old hauled out of a classroom for questioning? I learnt in my Essex University days that one definition of fascism is the attempt by a powerful elite to inflame the masses with a superficially persuasive, but actually undemocratic, political agenda. Is this not exactly what Starr's testimony was seeking to do, however much it may have been cloaked in that prissy legalese?

The only consolation is that while Starr may have ruined many lives, he has failed in his main mission to bring down a political foe. He will, I'm told, resign early next year - and Americans will begin to breathe a little more easily again. But those damned US Mail vans will doubtless continue to flash away through the streets of the nation's capital, and that prospect still leaves me a little uneasy.

Andrew Stephen was appointed US Editor of the New Statesman in 2001, having been its Washington correspondent and weekly columnist since 1998. He is a regular contributor to BBC news programs and to The Sunday Times Magazine. He has also written for a variety of US newspapers including The New York Times Op-Ed pages. He came to the US in 1989 to be Washington Bureau Chief of The Observer and in 1992 was made Foreign Correspondent of the Year by the American Overseas Press Club for his coverage.

This article first appeared in the 27 November 1998 issue of the New Statesman, How the left hijacked the family

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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.