A make or break moment for Egypt's President Morsi

The first anniversary of the president's inauguration is expected to spark nationwide protests. The grassroots campaign Tamarod aims to secure enough signatures to a vote-of-no-confidence petition to outweigh the 13 million votes that brought Morsi into p

Egypt is steeling itself in the run-up to nationwide protests against beleaguered President Mohamed Morsi on the first anniversary of his inauguration.

Sunday's demonstrations, which organisers claim will "make or break" the Muslim Brotherhood president, are spearheaded by a grassroots campaign Tamarod, meaning "rebel". It aims to secure enough signatures to a vote-of-no-confidence petition to outweigh the 13 million votes that brought Morsi into power.

Tamarod say they have already collected at least 18 million, and will present them to Morsi.

As tensions rise, rumours abound that the army may intervene, just one year after handing power to a civilian chief.  Defense Minster Abdel-Fattah Al-Sisi cryptically said Sunday that the military "stayed out of political matters" but has a duty to "prevent Egypt slipping into a dark tunnel."

Meanwhile the police, historically hostile to the Brotherhood, vowed to protect state institutions but not the group's headquarters, which have recently been targeted in firebomb attacks.

Tamarod spokesperson Eman El-Haghy tells the New Statesman confidently that they will call on the head of the Constituent Assembly to be interim president. "The president has dragged our country backwards… he has not fulfilled the revolution's goals."

Tamarod say political forces will choose a transitional president and technocratic government to draft a constitution before elections: a tough call for an opposition that critics say hasn't united around anything except dislike of the Brotherhood.

Nevertheless the mounting anger against Morsi is significant.

"I don't think it gets more serious than this," says Hisham Hellyer, Cairo-based non-resident fellow at the Brookings Institute.

"He doesn’t have even have a monopoly on the Islamist trend, the different [ultraconservative] Salafi parties are not deserting him but they are getting there. The more left-leaning Islamist parties are joining protests."

Certainly the non-Islamist faction who backed Morsi during elections - largely to block his rival, Mubarak-era minister Ahmed Shafiq - are now organising demonstrations.  The National Salvation Front, Egypt's largest opposition bloc, has meanwhile rejected any dialogue.

Protesters are demanding "bread, freedom and social justice," the same grievances they voiced during the revolution.

Egypt suffers from a flailing economy; bread, water and fuel crises; and a brutal police force which hasn't been held to account. Many say the recently-ratified Constitution was hastily drafted by an Islamist-dominated assembly.

Basic rights continue to be violated.

According to Human Rights Watch, bloggers and journalists are increasingly being prosecuted for "insulting" officials. State torture remains endemic; defamation and blasphemy prosecutions are increasing.

"The economy is not doing well," says Ahmed Galal, Director of Cairo-based Economic Research Forum.  "The budget deficit is growing, and there is sluggish economic growth at a time of growing unemployment."

Continued unrest and no political consensus means foreign investment has dried up, Galal adds. "Most of Egypt's economic problems would be resolved if a political settlement is reached." Something Morsi has yet to do.

Hellyer says the president also picked fights with institutions like the interior ministry and judiciary "without correct political support."

One embarrassing example was when the High Constitutional Court rejected the electoral law last month, meaning Egypt won't have a parliament until 2014, even though the president had already called elections.

Morsi himself faces direct judicial challenges: Shafiq is appealing the results of last year's presidential poll.

Even the Brotherhood admits expectations have not been met.

"The first year has been much more troublesome than we had expected," says Gehad El-Haddad, an advisor to the Brotherhood's Freedom and Justice Party, adding that the government's performance has not been "optimum".

State institutions, El-Haddad says, are the problem. "They are unprofessional and corrupt and actually challenge the president's initiatives."

El-Haddad also maintains that the media distort Morsi's record. Despite the hype, he believes there isn't widespread demand for Morsi's resignation.

Hellyer says Sunday's protests, if successful, are dangerous. "The propensity for violence would increase. It's very bad for the story for Egyptian democracy, as it says that government can be thrown out after a year."

"The only way Morsi leaves is by the military forcing him out, which involves violence and social disorder." Clashes have already broken out in several governorates in the lead up.

Activists maintain they will keep their protests peaceful with marches "with people holding whistles and red cards to signify that it is game over," El-Haghy explains. There will also be protests outside Egyptian embassies in cities around the world - including New York and London.

"We told the world that 30 June, the day we gave him our vote, will be the day we withdraw our confidence."

Whether Morsi will exit the pitch early remains to be seen. 

A protest artist paints Tamarod or "Rebel" graffiti in downtown Cairo ahead of anniversary demos against the president. Photograph: Gregg Carlstrom
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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.