Portly pretensions

Drink - Victoria Moore investigates when to lay down your best vintage

It seemed like the simplest (and most obvious) thing in the world: buying the appropriate bottle of vintage port for a ruby (40th) wedding anniversary. But then I started to worry. 1960 was a good port year - many of the houses declared the vintage, which means that they considered it to be of exceptional quality, worth bottling after only two or three years in wood. I was pretty certain I would be able to find some somewhere. The question was: would it be up to anything after all these years in the bottle (and would we be able to tell)?

Most people seem to be champagne socialists these days (defining themselves as wanting to bring champagne to everyone), and as champagne remains the accepted cultural way of toasting triumph, it inevitably comes the way of all but those with the most gloomy lives at some point or another. But few of us are fortunate enough to have tasted vintage port. We just don't ever get round to it. You might just buy some for a god- daughter's christening (if you're quite posh and not into Bibles and stuff). Let me tell you what will happen to that bottle of port, carefully laid down by responsible parents, when their beloved offspring is too young to grapple with a corkscrew. Because it's too special a thing ever to open, the cork is eventually pulled at the close of a drunken family dinner. By the next day, no one can remember drinking it - let alone what it might have tasted like.

But down to business. First I put in a call to the wine merchants, Roberson, near my house. They didn't have any 1960 vintage port. The last they'd had was in 1997, when it had sold for about £40 (a good price, because they'd bought directly from the producer). They expected a bottle of the same would cost me about £80 by now. Blimey, I thought, forget 16 per cent annual increases in the property market - buying port sounds like quite an investment. So I rushed to the internet site to check some figures.

Nineteen ninety-four was a fantastic (and much-declared) vintage. Prices at madaboutwine are already high (£74 to £123). The wine-merchant Berry Bros (which is also on the web) has a wider selection, and there you can pick up a bottle for around £30 (Croft) or £45 (Warre). I have to sit on my hands to stop reaching for my credit card number (which, thank heavens, I have not allowed myself to memorise). Making money on a port cellar is a delicate business - if you're interested, check out Decanter magazine, which features a vintage port index, a sort of alcoholic FTSE that measures rises and falls in port prices. This index began at a base of 100 in August 1978, and this March was standing at 645.46. But learn a bit before you play the game: like the real stock market, you might make a killing as the number of bottles in the world of a particular vintage becomes scarcer (as impatient owners, or those with wayward teenage daughters, guzzle them). Then again, you might not. Fonseca, Graham and Taylor are generally touted as good ones to buy.

More importantly, I realise that vintage port is definitely something I can afford to drink from time to time, particularly if I'm prepared to put a few bottles under the stairs and forget about them until I'm 40. I'm still worried about the 1960 stuff I eventually bought (Oz Clarke says that the vintage will be tiring by now), though that's a fine reason for suggesting it's opened sooner rather than later. But onwards and upwards. I have my beady eye on the most recent year to be declared - the 1997. How many bottles can I afford?

This article first appeared in the 17 April 2000 issue of the New Statesman, The New Statesman Essay - The rise of the ergonarchy

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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.