The end of pledge-card politics?

No, but it’s struggling to catch up with the challenge of 2015.

The next election will see a battered electorate in need of economic and social respite confronted by a political elite woefully lacking in resources and public trust. Never in recent times will so much be asked from leaders who have so little to respond with.

The result is starting to pose interesting questions about some of the familiar features of electoral politics – one of these is the entrenched cult of pledge-card politics and the type of statecraft that underpins it.

The art of boiling down an entire election pitch to easily marketed bite-size promises – "short and catchy" as Peter Mandelson used to put it - reached its zenith in the UK in 1997 and has dominated subsequent campaigns even if the pledges have paled over time. Looking back there was an inverse rule between the size of the pledges and what they succeeded in communicating. In 1997, some of the commitments were certainly modest yet still managed to say something significant about the character of the future Blair government (not least by specifying where resources would be found to pay for new spending). By 2005 they were bigger, baggier and blander; communicating far less. As for 2010, there is possibly no-one in the country, including the authors, who could now recount Labour’s key promises.

It would be wrong, of course, to read too much into pledge cards themselves. For some they are simply an essential part of political communications that can be largely divorced from deeper questions of how the state is governed. But like it or not, they are a leitmotif of the nature of politics and reveal something about how our leaders view the relationship between the state, civil society and individuals.

And on that basis, questions are being asked. One query concerns semantics: for a cynical electorate a ‘pledge’ is simply something that is made today in order to be broken tomorrow. The currency has been devalued, if not yet debauched. Another set of doubts concerns the lack of suitability of pledges which reflect a ‘state delivery’ mode of politics (itself rooted in a period of rising public service provision) for an austere era which will be more characterised by taking from, rather than giving to, the public. If 2010 was the first – if largely faux – election campaign in which steady growth was viewed as being a highly uncertain prospect, with the rising tide of public spending likely to recede, then 2015 will be completely dominated by these themes. Just as policy will need to change to reflect new times, so will the appendages of election campaigns.

Others contend the problem with pledge-card politics is structural, not just cyclical. They wish to call time on the whole notion that the primary task of democratic politics is to ‘make offers’ in response to immediate voter demands. Matthew Taylor, author of Labour’s 2005 manifesto and no innocent when it comes to elections, now argues that just as the mood turned against the belief that short-term profit maximisation is the most effective way of running business, so there is growing disillusionment with the idea that elections should be reduced to competing check lists for voter gratification.

Which doesn’t, of course, mean ignoring underlying public sentiment, it just registers scepticism about entirely poll-driven accounts of ‘what the electorate wants’. Over-hyped promises that often aren’t fulfilled, made by leaders you have little faith in, treating you like a passive recipient of central beneficence rather than an agent of change: it hardly captures the post-crisis political sensibility.

Part of this apparent shift in thinking within parts of the centre-left can be attributed to the familiar rhythm of opposition parties temporarily warming to the appeals of localism. And there is a palpable desire to be seen to retreat from the high-water mark of statism that Labour was seen to have reached by the end of its period in office.

But it’s not just about optics. It also reflects serious effort to appraise the strengths and weaknesses of New Labour statecraft. Geoff Mulgan, one of the sharpest observers of the changing nature of government, recently set out for IPPR a hard-hitting assessment of some of the pathologies of the delivery state – all the more telling as it is so balanced and authored by someone who was at the heart of government for so long. It gets past the now standard, already tired, refrain that ‘we relied too heavily on top-down targets’ to consider how, where and why a highly centralised model of public service delivery can corrode trust in the state as well as relationships between public servants and citizens. He recognises, rightly, there will always be many crucial things that the state needs to do for (or indeed to) people but emphasises that the balance has shifted fundamentally towards services that need to be run in concert with them. That’s hardly a new insight. But in an era of diminishing resources it is one that urgently needs to move from the margins to the mainstream of how we think about governing

What all this means for the manner in which the different parties will seek to pitch themselves to the electorate in 2015 is yet to be seen. The demands of governing and the established modes of communicating policy in election campaigns appear to be out of sync. In some respects, David Cameron already tried and failed to break the mould in 2010. Rather than majoring on a populist list of promises he produced a 130 page invitation to join "the Government of Britain". And he’s been paying the price ever since. His unruly backbenchers remind him on a daily basis of his failure to provide them with a convincing ‘retail’ offer – in the ugly argot of Westminster politics - that cut through on the door-step. So safe to say there will be a different tack in 2015. Similarly, Jon Cruddas, Labour’s policy supremo and sceptic–in-chief of top-down delivery politics, has already pencilled in a pledge-card moment into his 2015 timeline.

This isn’t just because pledging is a hard habit to break, though of course it is. It’s also a rule of thumb that low trust politics tend towards the highly contractual; just as austerity politics tends towards the distributional (we’ll fund a commitment for group A by extracting this sum from group B). And both tendencies lend themselves to sharp, pithy commitments. So think 1997, not 2005.

Challenges abound for Labour (as with the other parties) as it contemplates its 2015 version of a "contract with Britain". One is avoiding a patch-work of specific policy promises aimed at different sections of the electorate which fail to add up to a majoritarian agenda with wide appeal. Another pitfall would be to issue an entirely defensive and uninspiring set of pledges centred on areas of spending that would be protected from further cuts. And then there is the risk of feeding expectations of another phase of centrally-driven delivery commitments reliant on an increase in public spending that isn’t going to occur.

The governing and fiscal challenges of the next decade will require fundamental change in how the state operates. Pledge-card politics need to catch up.

John Prescott presents his battered 1997 general election pledge card to the audience as he addresses the Scottish Labour Party conference on March 27, 2010 in Glasgow. Photograph: Getty Images.

Gavin Kelly is chief executive of the Resolution Foundation 

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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.