Taking sides: the dividing lines of British politics

All parties love the easy, polarising rhetoric of “us” against “them” – but how distinct are their ideas? In a new weekly series, Rafael Behr finds out.

There is a reliable way to tell if David Cameron is rattled. When the Prime Minister is on shaky ground, he hurls the charge of being “left-wing” at Ed Miliband as if it were the foulest thing he could say within the bounds of parliamentary protocol. The “Red Ed” label has never been a plausible line of attack but it is a comforting fiction for senior Conservatives who deride the Labour leader’s agenda as a slide into unelectable socialism.

There is a matching obtuseness on the other side. Miliband accuses Cameron of Thatcherism and of “returning to the 1980s”, forgetting that this is not an insult in Tory circles. The idea that Cameron is picking up the ideological crusade where the last Conservative government left off is central to Labour’s image of the political landscape. Partly it is true, just as there is truth to the Tory view that Miliband hankers after more orthodox social-democratic politics.

The distinction between left and right in Britain looks starker now than at any time in the past 20 years. The polarisation inevitably follows the collapse of the economic consensus of the NewLabour years. Tony Blair embraced Britain’s role as a hub for ultra-liberal, globalised capitalism, which viewed intervention by the state in economic activity as reactionary in principle and ineffective in practice. Market forces and private business were deemed the likeliest mechanisms to improve public services. Labour’s historic impulse to direct social change had to be managed by quiet redistribution around the margins. The Blair and Brown administrations intervened all over the place but lacked the will in Blair’s case and the confidence in Gordon Brown’s to assert the government’s moral right to meddle. In opposition, the Tories argued against government policy but no Conservative leader substantially challenged the intellectual basis of the Blair-Brown model or offered a coherent alternative.

It is in the nature of a political consensus that those who are part of it define themselves as pragmatists and paint the dissenters as fanatics. Thus the New Labour position came to be defined as the “centre ground”, with its critics occupying the fringe. The financial crisis has disrupted that geometry. The clear bankruptcy of the existing way of doing things created a demand for more distinctly ideological prescriptions. By the 2010 general election, the left was sick of tagging along with Blairish compromise; the right was brimming with radical intent pent up from 13 years in opposition.

Both sides felt vindicated. The left focused on the role of banks and global markets in the crisis and saw a definitive refutation of rampant market capitalism. The right focused on the Budget deficit and national debt and saw in them proof that Britain had been ruined by the unchecked expansion of government. Everyone thought that the political pendulum was swinging back in their direction.

Within that intellectual rivalry, there is a cruder impulse to settle old scores. Trade union leaders depict the Chancellor’s austerity budgets as a cynical attack on the public sector with the strategic goal of dismantling the welfare state. Meanwhile, some ministers see resistance to the coalition’s reforms as a return to left-wing militancy and proof that the unions are enemies of progress. The muted echo of battle cries from the early 1980s rings around Westminster.

The Debt Collector by Ralph Steadman

The myth that politics can still be defined by competition between two mutually exclusive tribes, one red and one blue, suits Labour and the Tories. They want to cling to a parliamentary duopoly that, judging by voting patterns in the real world, has been in decline since the 1950s. Before 2010, it was the Liberal Democrats who were best placed to scoop up votes from those looking to register a protest with a “none-of-the-above” candidate. Nick Clegg forfeited that position when he went into coalition with the Tories – deliberately so, because he wanted the Lib Dems to graduate in the public’s imagination to the status of a serious party of government.

Clegg still hopes to carve out a niche for his party as the broker of compromise between what he presents as an unrepentant Labour Party and heartless Tories. Yet it is not obvious how his plan translates into distinctive policies. He is trapped as the salesman for technocratic machination at a time when the Westminster machine is mistrusted as the plaything of a self-serving elite.

The vacancy for a candidate who stands for rejection of the conventional parties is being filled by Nigel Farage, leader of the UK Independence Party, whose opinion-poll ratings routinely rival those of the Lib Dems. Though Ukip’s ultra-conservative, populist ideas overlap with the views of more reviled farright organisations, the party is elevated to respectability by the implicit endorsement of a few Conservative MPs who wish Cameron would strike more Faragist poses.

Policymaking in the coalition is caught in a three-way haggle. The Lib Dems try to assert their identity by foiling Tory radicalism; backbench Conservative MPs view Cameron’s accommodations with Clegg as proof that his conservative impulses are inadequate and the Prime Minister, lacking a recognisable creed, seems driven mostly by tactical improvisations – witness the current contortions over a referendum on membership of the EU – and the patrician self-belief of a man groomed for power by high birth and an expensive education.

Cameron once defined his governing purpose as creating the “big society”. When the inadequacy of that idea for wooing sceptical voters (including Tories) became clear, he changed tack. He now says his premiership is about readying Britain for the “global race”, a rubric just as vague but more amenable to the deregulating, pro-commerce sentiment that animates his party. There is no sign yet that it resonates with the public.

The Labour Party is not much further advanced. Miliband does not have anything resembling an agenda for government. His allies contend that this is a natural state of affairs for the opposition a mere two years after a crushing defeat and a full two years away from polling day. Instead, Miliband has a theme – one nation. It is an offer to reweave the social fabric that, in the Labour analysis, is being unpicked by the government’s Budget savagery. It is also supposed to be the answer to the question of what comes after New Labour if it is not, as the Tories imagine, a drift back to Old Labour. What that means in manifesto terms is unclear.

Miliband’s dilemma is that his core vote is galvanised by attacking austerity, while a realistic appraisal of what he might achieve as prime minister requires admitting that a Labour government would also inflict Budget pain. An honest account of how state largesse would be rationed risks igniting the civil war in Labour that many predicted would be a necessary feature of its time in opposition. Party opinion is divided as to whether Mili - band’s avoidance of internecine strife reflects strategic nous or deferral of mature choices.

Politics, therefore, looks ill-equipped to respond to a crisis that is much more profound than a mere imbalance in the public finances. Many of the problems were in gestation long before the financial bubble burst in 2007- 2008. Wages for most workers have been stagnant since 2003, raising the cost of living in real terms for most households. An ageing population promises a relentless increase in the burden on the NHS and social care services. It is questionable whether British schools are equipping young people with the skills that will guarantee them work in a globalised labour market. There is a huge housing shortage. Rising inequality, stalled social mobility and resentment of mass migration are increasing a sense of dislocation and eroding our sense of communal purpose, making it hard for any party to assemble a coalition of voters capable of delivering a parliamentary majority, let alone a confident mandate for change.

The good news is that, behind the childish frenzy of daily political combat, there are people in all parties striving to come to terms with these challenges. Sometimes they work within predetermined ideological parameters; sometimes they follow the evidence regardless of where that may lead. There are think tanks and non-governmental organisations looking at policy solutions beyond the myopic perspective of the electoral cycle. There are MPs who listen.

Over coming weeks, I will look at some of the problems facing Britain and try to decode what the different sides might have to offer by the next election. Sometimes the divergence is stark; often there is more agreement than anyone likes to admit.

Westminster is obsessed with the delineation of dividing lines – the tactical approach to an issue that seeks to define it in crude, binary terms, with the enemy caricatured as holding a view inimical to mainstream opinion. “They” destroy public services; “we” invest. “They” want to spend your money on feckless scroungers; “we” reward hard-working strivers. It is the very substance of modern politics, and the rhetorical dishonesty, that make politics dangerously insubstantial. It makes Westminster look like a game between teams that differ only in the colour of the strip they wear. The evidence from rising levels of voter abstention and defection to fringe parties suggests it does not make a great spectator sport, still less invite participation.

The most corrosive force in democracy is the assumption that none of the mainstream candidates deserves endorsement because “they are all the same”. In the weeks to come, we will consider whether that lament is justified in Britain today. Given the scale of the challenge, we must hope it is not.

A detail from "The Debt Collector" by Ralph Steadman. (Full size below)

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

This article first appeared in the 28 January 2013 issue of the New Statesman, After Chavez

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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.