We have only made it worse

As the New Statesman goes to press, the Russian prime minister, Yevgeny Primakov, concludes "fruitful" talks in Belgrade. It is just possible that, by the weekend, he will broker some kind of truce or even peace for Kosovo. Both sides will then claim victory, and that is how wars usually end. But the arguments against Nato's involvement will remain unaltered.

Let us first dispose of the weak arguments against intervention. The first, favoured mainly on the left, is that it is wrong to fight for the human rights of minorities in Yugoslavia if we do not also fight for them in Turkey, China, the Middle East, Indonesia and a host of other countries round the world. And certainly, if western governments wish to be taken seriously in what John Lloyd (page 9) calls their "militant humanitarianism", they must look more carefully at the trade agreements they make and the arms they sell to such regimes - in other words, they must consider genuine altruism, which involves real economic sacrifice. But that is not itself a reason why those who truly care for human rights should oppose intervention in Kosovo.

The second weak argument, favoured particularly on the Tory side, is that no direct British interests are at stake. This is the true analogy to 1930s appeasement, an isolationist position which argues that we should keep well clear of quarrelsome and unpredictable foreigners. It is the same amorality that once tolerated apartheid and all but supported Franco. It is easily countered by the old story of the man who, when the Nazis came in turn for Jews, communists and homosexuals, didn't worry because he wasn't himself a Jew, communist or homosexual. When they came for him, the story concludes, there was nobody left to worry. Democracy and respect for human rights are not so firmly and so universally established (far from it) that we can afford to ignore even localised threats to their survival. A world where people like the Kosovar Albanians are safe is a world safer for all of us.

When these two anti-intervention views - both Utopian in their way - are dismissed, the remaining arguments against the bombing look all the stronger. First, it strengthens precisely the people we wish to weaken. President Milosevic, who faced significant democratic opposition, can now pose as a defender of the Serbs' national integrity; the extreme nationalists and superannuated communists in Russia can portray Nato's actions as evidence of the west's arrogance and determination to humiliate their country. Second, Nato, a regional and defensive alliance, has set itself above the UN as an arbiter of right and wrong, disregarding both its own and the UN charter. True, Russia and China would veto any action in Kosovo; but, equally, attempts to create an international criminal court to deal with genocide, torture and so on are obstructed because the US vetoes any idea that its own servicemen could be tried overseas. Great powers, which have less need of international law than weaker ones, are apt to put their own interests first. That is why international law remains in its infancy. But the west should think carefully before it tramples on such a tender growth.

By far the most important argument against the bombing, however, is that it has exactly the opposite effect to the one intended. Far from deterring the slaughter and expulsion of Albanians from Kosovo, it has apparently caused the Serbs to step up their campaign to levels far exceeding even the barbarities of Bosnia. If, as the British and American governments argue, all this was planned long before the bombings, why were Nato and the aid agencies unprepared for the flood of refugees? The start of the present wave of brutality actually coincided with the departure of the 1,400 international observers (whose presence had some restraining influence even on Serb paramilitaries) in anticipation of the war.

Very well, then, reply the more militant elements of the war party, let us move directly against the slaughter by putting in ground troops. Do these people know what they are talking about? Even if the US Congress were to countenance such a move, it would take weeks, perhaps months, to build up the necessary forces. The troops would enter Kosovo from Macedonia through a narrow mountain pass, probably mined by the Serbs. And the destabilising effects on Macedonia itself, with its substantial Serb and Greek minorities, hardly bears thinking about. Whether those who advocate a ground offensive have relatives in the services - or whether they would countenance the conscription that might be required to sustain a long conflict - is unknown. But the world has never been short of those willing to send other people's sons to war.

This article first appeared in the 02 April 1999 issue of the New Statesman, How the doves turned hawkish

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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.