Win vouchers to spend at any Tesco store

Competition No 3767

Set by Leonora Casement, 3 February

We asked you for thank you letters for ghastly Christmas presents that you have to pretend you found a "use" for and are delighted with . . . but not so delighted that you get another/part two/more next year.

Report by Ms de Meaner

Well done. Especially well done to Jack Walsh, who can have yet another hon mensh (sorry, Jack), this time for the thank you letter to his nan: "I've often seen the New Statesman in Smith's when I fetched my FHM and my Loaded, but never realised how interesting it could be." I'm afraid, though, that the rest didn't quite live up to this simply stunning opening.

A second hon mensh goes to Anne Du Croz's wincing wail of agony: "Surprise, surprise, indeed! No, I hadn't already bought The Young at Heart Collection. I'm sorry Friends Reunited 'didn't come up trumps'. How did you get my address?"

The winners can have the usual £20, while Adrian Fry is the overall champion and also gets the vouchers.

Thank you very much for the dramatic antique fox fur you sent us for Christmas. Whatever one thinks of the continuing debate on the ethical niceties or otherwise of blood sports (and you know where we stand!), it is an extraordinary memento to possess. Any self-respecting and stylish individual would parade it fearlessly to teach all social hypocrites a lesson they would be reluctant to forget, and only the age of the children will prevent us from taking it on a more public display in the immediate future (the demonstrations are so loud and aggressive in this neck of the urban woods).

Instead, we have decided that its most effective place is in the wardrobe, where a sudden revelation will elicit very loud, very satisfying and very rewarding gasps in response. It is very important indeed to us to have a singular item of such tremendous symbolism; it could never be rivalled.

We hope to invite you round as soon as possible, the better to appreciate our thanks. We will cook one of those marvellous vegetarian dishes in the compendium we sent you ourselves, and drink a toast to countryside, old and new.

Bill Greenwell

Rarely does an Xmas present reduce me to speechless wonder. How can I possibly do justice to your idiosyncratic generosity and my complex feelings on discovering what you'd sent me? My first thought was: who else but Rufus and Harriet? I can think of no one besides your good selves who would send me enlarged colour photographs of their family pets: the five golden retrievers, the hamster, the guinea pig, the flying squirrels, the pony, the geese, the canaries, the three cats, the monitor lizard - each accompanied by a short poem. And how clever of you to write them all in the style of William McGonagall. But, really, you shouldn't. Presents should not be a burden. Your thoughtfulness puts to shame my humble gift of 30-year-old malt whisky. And I simply can't allow you to spend so much time and effort beyond the call of duty. So can we agree a moratorium? No exchange of presents next year. No vintage claret from me, and from you - well, I won't even attempt to second-guess your wilder flights of fancy. Just remember - it's the thought that counts.

Watson Weeks

Dear Aunt Flo,

Sorry to be so late thanking you for your present, but I was simply stunned by it. Fancy you remembering those distant days of my childhood - I'd almost managed to forget them - when I was constantly teased for sharing my Christian name and age with Sue Townsend's Adrian Mole. How right you were, guessing that in all these years I never so much as picked up The Secret Diary of Adrian Mole Aged 133/4. Thanks to you, I've no excuse for not reading it now.

Disturbingly, just gripping the book in my hands brings it all back: the childish chants of "Moley", the girls sniggering and asking if I'd measured my "thing". Now I'll be able to discover what it was all about. Older and wiser, I might even end up agreeing with your inscription that Mole is a pale imitation of my adolescent self. Though I know you'd never be so unoriginal as to give me the inferior sequels to Mole for birthdays and Christmases to come, I've taken the liberty of saving you time and disappointment by establishing that they're just as difficult to obtain as the Samuel Beckett books I prefer.

Adrian Fry

Thank you so much for sending our daughter Daphne a copy of My First Creationist Bible. Your kind gesture was particularly unexpected because, as I'm sure you don't need reminding, we haven't celebrated the birth of the so-called Son of Man since Daphne discovered the dead body of her much-loved baby sister Mary on that awful Christmas morning five years ago.

Oddly enough, Daphne's first remark on opening your gift concerned the similarity between the angel on the cover and the festive ornament on which Mary choked to death. What were the odds of that? Well, apparently 124,326,791 to 1, according to Professor Davies from our local humanist society.

Which reminds me - what fun we had reading through the book at the last meeting! You may recall that Sally has been studying archaeology with the Open University, and she did this absolutely brilliant skit based on the dinosaur chapters! The whole group was weeping with laughter by the end of it. Daphne's psychiatrist says he's hopeful that even she will soon see the funny side, once we've dealt with her recent relapse into nightmares. Oh, and no - we won't be at home over Easter.

R Ewing

No 3770 Set by John O'Byrne

Lisa Allardice, in her New Statesman review (17 February) of Sophie Dahl's The Man with the Dancing Eyes, stated that "her last square meal seems to have been the Dictionary of Cliches ('whisper of a smile'; 'waltzed off into the night'; 'sing from the rooftops')". Could we have an extract from a review of a book, play or film that is full of hackneyed and overused phrases. Just the comp to get your juices flowing.

Max 200 words by 7 March (to appear in issue dated 17 March). E-mail:

This article first appeared in the 24 February 2003 issue of the New Statesman, Can Blair survive?

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.