Sarah Teather attacks the Government's treatment of immigrants

In a major interview with the Guardian, the former minister for children and families speaks out over the anti-immigrant rhetoric of the Government.

Former Lib Dem minister Sarah Teather has given a major interview to the Guardian newspaper, in which she bemoans the government's monolithic anti-immigration attitude. Speaking to Decca Aitkenhead, Teather attacks the policies which have sprung from the "inter-ministerial group on migrants' access to benefits and public services" – formerly known as the "hostile environment working group" – on which she used to sit.

One of the proposals the group made was to force landlords to check the immigration status of potential tenants. Of that, Teather said:

It's quite an extraordinary change in the relationship between the citizen and the state, isn't it? To expect a private individual to police our immigration system – what's the difference between that and saying you're not allowed to buy a piece of fruit from Sainsbury's without proving you're not an illegal immigrant? Because as a private landlord you are a private individual who is effectively selling a product, and we're saying you're not allowed to sell to this person who can't prove their status.

…It's completely unworkable. I wonder whether or not the people who've designed this policy actually have any idea what Home Office regulations are.

Teather also attacked proposals to force GPs to make the same checks:

If you stop people going to the GP, they'll go to A&E instead, because A&E is not included in this. What have we spent the last 15 years doing? Trying to get primary care to take responsibility, to prevent people turning up at A&E… Do the maths. It's not going to save any money.

On the government's decision, introduced last year, to split up families where the British spouse earns less than £18,600, Teather says:

It's just a disaster… Lots of British citizens who never expected to be caught up in the immigration system are about to see their families split up. You may have tens of thousands in savings, you may have extremely rich grandparents, your spouse may be a high earner – a whole set of things that would clearly demonstrate that you meet the criteria whereby you'd be no burden on the taxpayer – and yet you're still not allowed to bring your spouse here, because we want to demonstrate that we are bringing numbers down.

Teather points to Tory ignorance as the source of some of the problems, citing beliefs that unemployed people wouldn't be hurt by the new seven-day wait to claim benefits because they would have redundancy payments as an example of how her coalition partners are out of touch. But she also argues that there's an element of maliciousness to the policies:

What alarms me is that the immigration proposals feel as if they're hewn from the same rock as welfare earlier in the year, where a lot of that again was about setting up political dividing lines, and trying to create and define an enemy. It's got to a stage where it's almost unacceptable to say anything else, and it bothers me that there is a consensus among the three party leaders that they are all making, well not quite the same speech – there are differences, significant differences – but there's a consensus. It's stifling the rest of the debate, making people afraid to speak. If you get to a stage where there is no alternative voice, eventually democracy's just going to break down.

Vince Cable, the business minister, has since spoken out in support of Teather, saying:

I salute Sarah Teather's comments. We need principled economically literate immigration policy.

But it must be remembered that the undercurrent of the interview with Aitkenhead is party political. The important question to ask over the coming weeks is whether this is a genuine attempt to soften government policy – or just an attempt to put some space between the Tories and Lib Dems in the minds of the public.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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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.