Report from Eastleigh: Apathy is the watchword of the doorstep

Rowenna Davis says she's never canvassed anywhere so undecided.

Jim’s face sours as he opens the door. A former lorry driver, his home is now lined with impeccable double glazing, and a proud “Number 47” plaque hangs on his porch. The small lawn outside is neat; the car in the drive is comfortable. This is his castle, but with the pensions squeeze and rising bills, he’s being forced to consider selling up.

“My wife says she won’t move, but every month we chip away at what little savings we have. We worked hard our whole lives for this, and now we’re being punished for it. My neighbour doesn’t have this problem. It’s always the honest people in the middle.”

Jim lives in Fair Oak, a Tory stronghold in Eastleigh where activists have already spent hours campaigning. With its hanging baskets freezing in the February air over neat brick houses, it’s the beating heart of middle England, and a key battleground for the by election. It’s true not even Tony Blair won Eastleigh, but without winning over people like Jim, “One Nation” is just a sound bite. Labour needs southern voters. Knocking on hundreds of doors provides a good opportunity for us to listen.

The people I met were highly aspirational, but anxious about the future. People who had worked their way up were now haunted by what feels like an inevitable pull of decline. People like Nigel, who opened the door telling me how hard he had worked to get his two sons to university, only to find one laden with debt and out of work, whilst the other was facing redundancy from army cuts. “You work hard and you get nothing for it,” he said, with an apathetic smile, “You show me one party that offers anything different.”

But it’s not just materialism that moves people. It’s also compassion. Too many people might be getting benefits in their eyes, but too few are getting the public services that they deserve, be it for young children or ageing parents. One man answered the door in a slightly less affluent part of town in a frayed V-neck sweater. He owned his own home, and his 95-year-old mum was dying next door. After working his whole life, he said he wasn’t getting the support he needed to care for her. He had tears in his eyes as he spoke to a fellow campaigner. “He was desperate,” said the activist, “But he didn’t know who to vote for.”

Apathy is the watchword of the doorstep. Never have I canvassed anywhere so undecided. For all the neat Welcome mats on doorsteps, canvassers of all colours are treated with suspicion. The high UKIP presence is symptomatic of that deep disillusionment with mainstream politics. Anyone who thinks the south is a stronghold for any party is mistaken. The Tories might be leading in the polls, but their support is brittle. For Labour, this means that there is everything to play for.

Underlying almost all of my conversations, there was a sense that a contract had been broken. The deal that says if you work hard, it will pay off. Jim, Nigel and others felt that they had “done their time” and “played by the rules”, but the simple rewards they had been promised – a decent job, a stable home and a little support when things go wrong - were slipping away. With living costs 20 per cent higher in the south, families here are particularly anxious about the news from Mervyn King yesterday that we’re going to feel even poorer for the next two years. Ed Miliband is right to raise it, as is Jon Cruddas in his lecture today.

Of course there are the more thorny issues for Labour too. Immigration. Europe. Welfare. They all come up on the doorstep. But as John Denham, MP for the neighbouring Itchen constituency points out, once you get over the myth of the stereotypical “southern voter”, you can be surprised by the subtleties of people’s attitudes, even on immigration.

The story of one retired railway worker and former UKIP voter surprised me this week. This man owned his own home and said he was seriously concerned about immigration. But it wasn’t that simple. He praised the Indians who invested in Jaguar, and said it was wrong to keep out people who were contributing. A blanket reduction of numbers pursued by the Tories was, in his view, irrational. He was happy with people coming, as long as he knew they made a contribution. Now he didn’t know who to vote for.

Back at the Labour HQ on Leigh Road, campaigners are starting to sense this space for them to win voters round. Irrespective of whether Labour wins this month, their effort, if sustained, could mean a lot for 2015 - particularly if John O'Farrell commits to staying on. Voters need to know that Labour listened, responded, and came back again when the cameras disappeared. If we do that, people like Jim might open the door with a different expression.

John O'Farrell and Harriet Harman on the campaign trail in Eastleigh. Photograph: Getty Images

Rowenna Davis is Labour PPC for Southampton Itchen and a councillor for Peckham

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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.