Israel's policy is an invitation to disaster

The country needs to remember that self-defence is not the same as smart defence.

So much has changed in the Middle East in the last couple of years. But it is uncanny how the events of the last week in Gaza have echoed the last war in Gaza – in 2008. Then, as now, US elections were recently behind us, Israeli elections were on the horizon (then Binyamin Netanyahu was the challenger, though, as now, Ehud Barak was Defence Minister), and the conflict was not predicted by the experts. Then, as now, the debates about "proportionality" were an offence to our intelligence. There is another parallel. After the killing and shelling is over, both Israeli and Hamas leaders will think they have won. In the Middle East, history repeats itself first as tragedy, and then as tragedy.

Labour shadow foreign secretary Douglas Alexander was ahead of the government in the UK in calling for a ceasefire, and for the UN Secretary General to visit the region to broker one. It is an irony that the world is holding its breath for the diplomatic effort – and restraint – of President Morsi in Egypt for the ceasefire that could save lives. The contrast with 2008, when President Mubarak was alleged by Israeli politicians and thinkers to be privately supportive, is striking.

In 2008, the phrase of the moment from the Israeli government in respect of rocket attacks was "intolerable". And if you visit Sderot, and talk to people there, life under the shadow of rocket attacks is miserable. But self-defence is not the same as smart defence. Certainly not if it compounds the problem. And if you believe that the fundamental problem for Israel is the diminishing prospect of an independent, viable, contiguous (West Bank plus Gaza) Palestinian state, whose creation triggers the normalisation of relations with the whole Arab world as per the Arab Peace Initiative, then the resort to war in Gaza is dangerous in at least three ways. The loss of life and property fuels hatred. The bombing marginalises the Palestinian Authority, and its President, who are Israel’s notional negotiating partners. And it entrenches the separate legitimacy, authority and status of the "government of Hamas" (apparently Ehud Barak used this phrase) in Gaza. It only makes sense if a two-state solution is dead and buried.

In 2012, the war probably also complicates the drive to build an effective coalition to heave Assad out of power in Syria, which in turn strengthens Iran. Little wonder a much decorated Israeli military chief, Efraim Halevy, wrote in the Financial Times yesterday about Israel needing a strategy not a war.

The truth is that the policy of "Gaza last" – pretend it doesn’t exist, ignore the political and socioeconomic realities on the ground, wish Hamas away – is an invitation to disaster. The policy of siege has funded Hamas through the tax they impose on the transfer of goods through the tunnels, while it has held back the people from the economic and social fulfillment that so many fervently seek. (In that context, note the promise of $250m for reconstruction from Qatar just a couple of weeks ago). Neither siege nor bombing is going to topple Hamas. In fact, Israel depends on Hamas to exercise security control in Gaza, and control the rockets from Islamic Jihad and other more radical groups. Egypt needs Hamas to control the border into Sinai, where various extreme groups want to mount attacks on Israel.

I sincerely hope that further loss of life is averted. Foreign policy is meant to be about stopping people killing each other. But there needs to be more. Without radical thinking, the two-state ideal will be gone – if we haven’t passed the point of no return already.

That means Palestinian politics needs to be reconstituted, across the West Bank/Gaza divide. The global consensus on what a two-state solution means – 1967 borders etc – needs to become the parameters around which negotiations are structured. The Arab world, led by a newly pivotal Egypt, needs to be played in (it is not properly represented by the Quartet). And to repeat something I tweeted last week (and I noticed John McCain mused about this too), President Obama needs his own Presidential envoy, and who better than Bill Clinton. Some people thought this was frivolous. It is deadly serious.

In January 2009, I spent three days at the UN authoring the peace resolution. Its central promises – stop the flow of arms and open the border crossings – have not been fulfilled. There are no winners from that.

This piece originally appeared on David Miliband's blog.


A Palestinian man inspects a damaged building following overnight Israeli air strikes on the southern Gaza Strip town of Khan Yunis. Photograph: Getty Images.

David Miliband is the  President and CEO of the International Rescue Committee
He was foreign secretary from 2007 until 2010 and MP for South Shields from 2001 until this year. 

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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.