Boot camp

Internet - Andrew Brown isn't bidding for four Pewter Fairies

If you want the biggest boot sale in the world, go to eBay ( This was the original auction site on the web. It is still by a huge margin the most useful and certainly the most fun. This is despite its largely American bias. Although there is a British site, it is fairly easy to lose it and find yourself wading through acres and acres of junk that is frustratingly unobtainable. What gives it charm is the scruffiness and lack of pretension of most of what is on offer. People sell more or less what you would find in Exchange & Mart, or the classified columns of the local paper. This means that you can not only find lenses for obsolete manual focus SLR cameras (a man in Holland is selling one I have been searching for for years) but also, a little further down the same page, the filters that sit on the end of those lenses, with bidding starting at $5.

You can buy new, shiny and expensive things on eBay if you want to: there have been celebrated cases where people auctioned Van Goghs - bought by a 13 year old, paying with his parents' credit cards. There are celebrated frauds, or jokes among the sellers, too: someone once put the entire UK new media industry on there with opening bids of a dollar. Other people have offered human kidneys and things. These are stamped out quickly when found, but for the most part, eBay, like a real market, relies on a system of self-policing among buyers and sellers to build up reputations.

If you want to buy something, it takes only a click to check on what previous buyers have written about their experiences with the seller. Similar dossiers are maintained on buyers, so it is possible very rapidly to build up a picture of opinion. This works much better, I think, than trying to have a central ratings authority, which would in any case be unworkable with the hundreds of thousands of auctions that run simultaneously on eBay. Above all it supplies what people most want from a computer system: the illusion, and perhaps the fact, of sociability. You don't really get bargains on eBay, any more than you get them in street markets. Although I have bids in at the moment for a hand-built fly rod at $120; a modem card for a laptop at $30 (one of the few things on sale from England); and a computer game involving cats, complete with promotional soft toy, for $11.99, I confidently expect to be outbid on all of them except the stuffed fluffy cat, which I don't really want but bid for because my daughter was watching over my shoulder as I did the research. Consumer electronics or camera lenses are just as expensive on eBay as in specialist second-hand shops, if for no other reason than that it has become a place for the owners of such shops to prowl.

This lack of bargains is even more noticeable on the sites that auction new goods, such as QXL or I have never found anything on any of these that closed at a price that made it worth the extra trouble. Often the auction process results in the price climbing rather higher than you would pay in a shop. The fun is clearly in the bidding, rather than the purchase. And here is where eBay really triumphs over the competition. It is tremendously easy to make a bid, and the auctions appear to be taking place in real time, in between your mouse clicks. This is because the software can be set to bid up by proxy, so that it will automatically raise other people who bid beneath your top price; and they in turn raise you back a dollar or two every time you see a bargain. It has exactly the allure of a really good video game; there is always just one more go before you get what you want.

Nearly as interesting as these are the constant discoveries you make about what other people want: I could not resist the category of "miscellaneous: metaphysical". I don't know what I had hoped to find there. Perhaps a Platonic Ideal or two, unique, absolutely as new, sold as imperfectly seen. In fact there were 47 pages of stuff to give Plato the screaming abdabs, such as four Pewter Fairies, going at present for $12, a Scarab candle for $7 or a "poison pentagram ring" for $5. An industrious journalistic jackdaw could construct a huge lament about the decline of the west from such ridiculous trinkets, but I find it really rather inspiring that one of the very few web businesses to make a profit should do so by constructing a huge junkyard where grown-ups who ought to know better can play like children bargaining over playground trinkets. And nothing for sale on eBay could possibly be as inflated in worth as its shares, currently trading at $136, or more than 594 times earnings. Yes, that's 594: an error in reality, not a glitch in transmission.

This article first appeared in the 17 January 2000 issue of the New Statesman, The plot to keep us puffing

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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.