The Spirit of '45 reminds us of the importance of political myths

Tales of what might have been and what may be to come are a powerful and resonant part of the left's appeal.

In his book Election ’45: Reflections on the revolution in Britain, which marked the 50th anniversary of the 1945 Labour government, Austin Mitchell recounts an anecdote about a 20 year-old Tony Benn. Too young to actually vote, he instead spent the campaign driving a Labour candidate around central London. On bumping into a taxi one day, Benn, never knowingly without something to say, took to the loudhailer. "You have just been struck by the Labour candidate," he announced, "and everybody cheered – they were so excited."

Such are the tales, myths even, surrounding Labour and 1945, as a grateful Britain apparently flocked to the polls to vote for socialism. Ken Loach is the latest teller of this tale in his new film, The Spirit of ‘45, recounting the massive achievements of the post-war Labour government, which included the creation of the NHS, welfare stateand full employment.

However, the polemical documentary has come in for criticism over Loach’s tendency to be economical with the facts. The historian Steven Fielding upbraided him in the Guardian last week for offering a rose-tinted version of history: "Described as a 'celebration', Loach uses his vision of the past to make blatantly contemporary political points…I fear that Loach's version of 1945 is more imagined than real: it is, for want of a better word, propaganda", he wrote.

Elected on a wave of popular enthusiasm for social and economic change, 1945 was always a chimera. In as much as it was a call for Labour measures (heavily influenced, of course, by the work of avowed liberals John Maynard Keynes and Sir William Beveridge) it was also a call for Tory men, with many hoping Churchill would remain as Prime Minister after the war.

The timeline is also instructive here. Swept to power with a majority of 145 in 1945, Labour only just held on in 1950 with a majority of five, before succumbing to the Tories just a year later. The spirit of ‘45 might have seen lasting social and economic changes, but it certainly did not usher in an age of political dominance for Labour and the left: the party was out of office for the next 13 years.

As Fielding puts it: "Loach's film should therefore be better called The Myth of '45, for it peddles a fantasy, albeit one that provides comfort during these hard times for some on the left."

None of this is to deprecate Loach’s fine film, far less the massive achievements of the Labour government, both real and embellished. Myths play an important part in our politics, serving as shorthand for big, ungainly ideas; helping inspire, provoke and, crucially, motivate voters. The promise of a better tomorrow remains essential in galvanising the voting public behind a cause.

And the left likes it myths; from the Attlee government’s pledge to build a "New Jerusalem" through to Tony Blair’s promise of "New Labour, New Britain". Grandiose claims abound, whether it was Harold Wilson boasting in 1965 that Labour had become "the natural party of government" or Gordon Brown’s oft-repeated promise of "no more boom and bust". Myths can also serve as powerful warnings too. How may variants have there been on the "1000 days/ one month/ 24 hours to save the NHS" theme?

But it’s the governing bit that usually causes problems for the left’s myth-makers."You campaign in poetry, you govern in prose" as former New York Governor Mario Cuomo famously put it. When things don’t quite live up to the romantic billing, the left has a problem sustaining itself in power, as even the sainted Attlee found out.

Labour’s 1974 manifesto, which pledged to enact a "fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families" was abandoned after just two years when IMF-imposed austerity measures, (amid the chaos of 1970’s economic stagflation) scuttled the government’s lofty ambitions. But the killing of a political dream quickly darkens into cries of betrayal. A sense that Labour had capitulated in the face of economic orthodoxy led directly to the fratricidal mayhem of the early 1980s when the party’s myth-making soared to stratospheric heights of implausibility.

It’s not just the preserve of the left though. Scottish, Welsh and Irish nationalism hold to their enduring myths too. Tales of what might have been and what may be to come are a powerful and resonant part of their appeal to voters’ emotions. As, indeed, is UKIP’s retro island myth of sepia-toned Great Britain bestriding the globe as a sovereign power. Chancellor George Osborne’s own myth-making prowess was on display in the Budget as he breezily accounted for the continued failure of his 'expansionary fiscal contraction' model.

For Ed Miliband, the risk in meeting the public’s desire for a better tomorrow is that it becomes a casual promise that it will be delivered. The most dangerous mythfor him is that a Labour government would not be taking an axe to public spending right now. It would - although the party’s framing of its own approach remains a work in (painfully slow) progress. However the big problem for Labour begins after it wins in 2015; with another three years of austerity already pencilled in. Ambiguity now may lead to howls of anguish later as dreams go unfulfilled.

Governing in prose, it turns out, is not much fun.

Clement Attlee waves to well-wishers outside Transport House in London after the Labour Party's victory in the 1945 general election. Photograph: Getty Images.

Kevin Meagher is associate editor of Labour Uncut.

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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.