Competition - Win vouchers to spend at any Tesco store

Competition No 3696

Set by George Cowley on 27 August

Wendy Holden, in the NS diary, wrote of annoying pop tunes popping into one's consciousness at inopportune moments. We asked for a piece of serious journalism interspersed with snatches of song.

Report by Ms de Meaner

I was a little surprised at the choice of annoying pop tunes that "popped" into the text of some of your entries. I did feel that there should have been some sort of trigger for the song - a word, an idea, a thought. Not that they were selected by you seemingly entirely at random. Here is the opening line of one entry, which was not untypical: "It is expected that the resolution to be put to the BMA's annual conference . . . to change the basis upon which delegates are elected with a view to perfecting ways of making sealing wax possibly obtaining a better balance between doo wha diddy, diddy dum diddy doo and a puppet on a string general practitioners and hospital doctors will be strenuously opposed." Perhaps the author could take me through this? £20 to the winners. The vouchers go to Will Bellenger.

The contest for the leadership of the Conservative Party and I'll cry if I want to may well turn out to be the longest murder note ever written. Internecine the first cut is the deepest baby I know does not do adequate justice to the various backstabbers the backstabbers they smile in your face participating in the process. John Major Tom to ground control and Margaret Thatcher brand-new combine harvester laid into each other with such venom I'm talking 'bout the midnight rambler that Liberal Democrats may be chuckling their way to the ballot boxes little boxes and they're all made out of ticky-tacky, while as for the protagonists, their huff and puff the magic dragon lived by the sea will be remembered sweet sweet the memories you gave me only by the politically illiterate and lovers of the little by little facts and figures which are the stuff of occasional journalism. Neither was big enough for his boots were made for walking and guaranteed that their various opponents would move up up and away in the polls and that's the way I like it aha aha.

Will Bellenger

Dr Michael Ancram, sitting in his nowhere land, making all his nowhere plans for nobody, is deluding himself when he says the future's bright for the Tories. Following Margaret Thatcher's criticisms of Ken Clarke, get back, get back to where you once belonged, it seems likely that the relatively unknown Duncan Smith - he is the egg man - will be elected leader. If this happens, it is likely the party will split over Europe sont les mots qui vont tres bien ensemble, tres bien ensemble. Undoubtedly William Hague, day after day alone on the hill, will be delighted finally to leave office - baby, you can drive my car! However, Europe is not the only problem brewing. Michael Portillo - I once had a girl, or should I say she once had me - has turned his back on a number of key Tory policies here, there and everywhere, from Section 28 to the legalisation of cannabis. On top of this, Ann Widdecombe, lady Madonna, continues her battle with sanity; Lord Archer, paperback writer, has finally been banged up; and the Hamiltons are embroiled in their usual media circus - here comes the Sun. However, we should all bear in mind that politics is a strange old business. Tomorrow never knows.

Hamish Wilson

The violence at Genoa last month was totally deplorable . . . I love the sound of breaking glass . . . in no circumstances can such behaviour be justified . . . the time has come for fighting in the street. Responsible world leaders . . . scary monsters and supercreeps . . . selfless men of integrity . . . I wanna be elected . . . were confronting issues of importance . . . money, money, money, in a rich man's world . . . such as improvements in education . . . school's been blown to pieces . . . and social services . . . the lunatics have taken over the asylum . . . where real progress is being made . . . the rich get rich and the poor get poorer. It is ludicrous to suggest that the news encouraged the violence . . . crash bang wallop, what a picture, what a photograph . . . when sole responsibility lies with the demonstrators . . . if you're looking for trouble . . . and the subversive literature circulating among them . . .

Lenin's on sale again. Doubtless similar scenes will mar this year's Labour Party conference . . . Old Macdonald had a farm . . . at Brighton . . . I do like to be beside the seaside . . . but the so-called anti-globalisation movement is doomed to fizzle out in futility . . . nothing's gonna stop us now . . .

Ian Birchall

No 3699 Set by John O'Byrne

Since 1982, the English department at San Jose State University has sponsored the Bulwer-Lytton fiction contest that challenges entrants from around the world to compose the worst possible opening sentence of a novel.

The winner in 2000 in the romance category was Kevin Ruston of Barnet, Herts. His winning entry begins: "Theirs was a love that transcended time, ran roughshod over moral dogmas, guffawed in the face of adversity, rent asunder the shackles of social convention and took a sledgehammer to the crumbling walls of religious doctrine . . ." We would like you to provide the purple-prose opening sentences to a bad science-fiction, detective or romantic novel.

Max 200 words, to be in by 27 September

(to appear in issue dated 8 October)


This article first appeared in the 17 September 2001 issue of the New Statesman, The end of the open society?

Show Hide image

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.