Paul Routledge

Let's be a bit serious just for a moment. The royal baby is welcome. Bringing the next generation into the world is our greatest responsibility - and joy. But let's not get carried away with it, either. Jeffrey Archer's greatest contribution to politics was to knock the Blair babe off the front pages.

There is some some quiet hilarity in the Gordon Brown camp over inspired leaks suggesting that he will be obliged to move out of No 10, having never lived in No 11. It would be quite unnecessary. The Chancellor's flat, inhabited by the Blairs at Cherie's insistence since May 1997 (she had a secret pre-election tour of the premises), has five bedrooms and is perfectly sufficient for their needs. Moreover, it is a long hike to the hereditament next door. So any talk of eviction is based on empire building, not need.

In any event, Ir'n Broon has a comfy pad in Great George Street, which he bought years ago as part of prudence with a purpose. Basically, it's a bookshop with sofas. His home in Fife is much the same. When I paid a visit with his big brother, I asked when Gordie moved in. Last month? Last week? No, eight years ago, he confessed, he just hadn't finished unpacking. No wonder his mother threw out a bin bag containing his collected speeches.

AlI of which permits the retelling of the best Brown flat story. Broon's old home in Edinburgh was burgled. Superintendent Elphinstone Dalgleish, or one of his minions, surveyed the wreckage of Brown's study, which looked as if Typhoon Beryl had been through, and apologised for the vandalism. "No," said Gordon, "they haven't been in here."

Lord Liar must have known that his downfall was only a matter of time for the best part of three weeks before he finally confessed to William Hague. But that didn't stop him attending a Conservative Central Office cheerleading session for Tory staff at Westminster on 18 November, shortly before he quit. He bored the pants off assembled party workers and MPs' assistants with a characteristically self-important election speech.

The undisgraced Northern Ireland Secretary has done nothing to quell speculation that his time at Stormont is merely a brief colonial interlude before he returns in triumph to become foreign secretary in Tony Blair's next reshuffle. Mandelson's calculation depends on the IRA handing over their weapons on schedule by next May. He describes their assurances as "dependable", though he may come to appreciate that things are not always what they seem in Ulster. Still, if he does come back in record time, Mandy will not have to mix overmuch with his political underlings in Belfast. When he took over the job, officials at No 10 asked the big borrower if he would like to meet his junior ministers. "Do I have to?" he asked. His hauteur may explain the fixed frown on the face of Adam Ingram, the security minister, when Mandy took departmental questions in the Commons.

Janet Street-Porter's presence at the editor's desk of the Independent on Sunday bodes well for gossip writers everywhere. She hurled down a feature article about the lifestyles of gay men in Britain and the US, snarling contemptuously: "This isn't what I want. I want men in swimming trunks and buggery!"

Just when the new Labour boss class thought the debacle of the Welsh Assembly leadership election was forgotten, along comes bad-boy MP Paul Flynn with a seditious book, Dragons Led by Poodles. It records in detail the inside story of Alun Michael's victory over Rhodri Morgan, and is dedicated to "all those whose lives were damaged by the Stitch-ups". Flynn has resurrected Blair's patronising remark that "the Welsh must put aside their dark, despairing Celtic side" as a prologue to some doggerel by Rupert Blair, including the verse:

To save you from mad kith and kin
I have sent you little Alun
Your Celtic thoughts are dark and mixed
So his election I have fixed

The writer is chief political commentator for the "Mirror"

This article first appeared in the 29 November 1999 issue of the New Statesman, An explosion of puffery

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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.