After Eastleigh, the Tories need to end their UKIP tribute act

When Conservatives, including Cameron, indicate their eagerness to be a little bit more like UKIP, all they do is give Nigel Farage the credit for setting the agenda.

You can always tell by-election veterans by the way they say “GOTV” without feeling the need to explain what it means. The first time I heard it, I momentarily thought of some obscure cable television channel before I decoded the acronym: Get-Out-The-Vote.

The Liberal Democrat victory in Eastleigh belongs to its GOTV operation – keeping up-to-date records of who has supported the party in the past, in which wards, in which streets; making them feel loved, calling them on the day to remind them to vote; offering them lifts to the polling station; keeping activists supplied with tea and cake. When I visited the seat at the start of the campaign I was struck by the confidence of the local Lib Dems, not just in their own local machine but in the absence of an equivalent Tory or Labour operation.

Superficially, the Conservatives got organised early in Eastleigh. They had their candidate selected before any other party, they were scoping out the battleground when Chris Huhne was still the sitting MP and merely in danger of having to resign. The moment Huhne stepped down, Tory boots started hitting the ground. But even then they were too late. The Lib Dems were dug in deep, their trenches fortified over many years of winning and holding council seats. I saw Grant Shapps stalking around Eastleigh like a heavily armed marine commando through a sleepy village in occupied territory – both cocky and nervous, confident of his superior firepower and aerial supremacy, yet doubting their effectiveness against well-trained local guerrillas. (Similarly, I don’t imagine John O’Farrell, Labour’s amiable novelist/comedian/candidate, was much helped by the brightly coloured parachute still trailing behind him as he walked around the constituency.)

The Tories also had a problem with their candidate. Maria Hutchings had already been rejected by the voters of Eastleigh once before, having stood unsuccessfully in 2010. In a high-profile contest like this one it doesn’t look good to be serving up electoral leftovers. Then there is the matter of Hutchings’s UKIP-lite platform – anti-gay marriage; anti-EU etc. I think the most revealing element of that is what it says about the Tory leadership’s inattention to candidate selection and general neglect of so much of what goes on in the party beyond the gates of Downing Street, but I blogged on that theme earlier in the campaign.

Most commentary over the next few days will focus on UKIP's performance, which is both extraordinary – a fringe party pushed the Tories into third place – and entirely consistent with recent by-election results. People were looking to express their anger about all sorts of things, it’s mid-term and the two front-runners both represented governing parties. In fairness to the Tories, the Lib Dems were working incumbency like crazy and it is technically impossible for a Conservative to benefit from any kind of protest vote as long as there is a Conservative Prime Minister in Downing Street.

On that front, there is some cause for Ed Miliband to be worried. Eastleigh was never a winnable seat for Labour but with two governing parties in an unseemly brawl, you might have thought there would be more room for Labour to mop up dissenters and look as if it is representing the obvious alternative. That the angry mob preferred UKIP suggests Miliband’s message isn’t getting through. After all, he is supposed to be the man to rip up the rules, shift the paradigm, change the direction, smash the consensus, unite the nation, end the old era, herald the new … . Miliband sincerely sees himself as the architect of a radical alternative to the coalition; in Eastleigh, Labour is plainly still seen as just another haggard old party.

That would be less of a problem if some senior Labour figures hadn’t been out actively briefing at the start of the campaign that this by-election was an opportunity to prove their competitiveness in the south. It was the wrong place to test that proposition and someone ought to have worked that out sooner.

But that shouldn’t detract from David Cameron’s woes. In the allocation of pain from one electoral episode, the bumper portion plainly goes to the Prime Minister as my colleague George wrote this morning. There will now be another round of sniping between those Tories who think UKIP are channelling the spirit of authentic Conservatism, which Tories should channel louder and clearer, and those who think selling Tory candidates as UKIP tribute acts would be a catastrophe. (Cameron would love to find a way to be the nationalist strongman that Ukippers want in a leader without simultaneously reinforcing all of the mean-spirited cultural stereotypes that make so many non-aligned voters recoil from the Tories – but if he could do that he wouldn’t have been forced into coalition with the Lib Dems in the first place.)

Cameron’s problem with UKIP looks more and more like a rehearsal of the trouble the US Republicans have with the Tea Party. It feeds off grass roots energy, presenting itself as the anti-establishment, anti-politics beating heart of conservatism, which makes it very effective when it comes to local campaigning and disrupting the mainstream. Yet it simply doesn’t reach out to enough people to be a credible national alternative and, with its whiff of racist reaction – yes, all that anti-Islam, anti-EU, anti-immigration stuff has a nasty xenophobic hum to liberal ears – it simultaneously alarms moderates and contaminates the whole right-wing agenda. There are obvious differences, not least in the levels of fundamentalist religiosity in the Tea Party that I don’t detect in UKIP. Crucially, the Tea Party is integral to Republicanism while UKIP is a separate party. But that is precisely why it is toxic for Tories to talk as if they really are two wings of the same movement that should be reunited. That is why it is deadly when Conservatives at all levels, including Cameron himself, say and do things that indicate their eagerness to be a little bit more like UKIP – chasing Europhobes with referendum pledges, for example. All it does is give Nigel Farage the credit for setting the agenda while reinforcing the impression that Tories would like to be more fanatical than they are but daren’t admit as much. It says “Ukip are on to something. We can be UKIP too, only a bit less so.” That invites the Farage response: “why vote for imitation UKIP when you can have the real thing.”

I suspect the Tories can still count on a whole load of UKIP voters coming back in a general election in order to keep Labour out. (And besides, there are plenty of ex-Labour voters backing UKIP too.) But there are two years before a general election. During that time UKIP will continue to eat into the Tory grassroots. It will exert a powerful gravitational pull on local prospective Tory candidates and set the tone for incumbent MPs whose loyalty, as polling day approaches, will go more and more to the people on the ground whose services they must call on for re-election. And in places where there is no Tory incumbency, the Conservative GOTV operation will continue to wither.

By-elections are famously unhelpful as predictors of general election outcomes. The result in Eastleigh says a few interesting things about Lib Dem resilience and the extreme readiness of other voters not to be Labour or Tory. But it isn’t so much the result at the end of the campaign that the parties must examine to learn their lessons, but the state of their machinery and their strategic message at the start.

David Cameron addresses the media at the headquarters of the EU Council on February 8, 2013 in Brussels. Photograph: Getty Images.

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

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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.