Labour is unlikely to scrap PCCs, so here's how it can reform them

Police and Crime Commissioners should become 'ministers for the local criminal justice system' with the political power to set the agenda.

Despite all the talk about a lack of policy detail, there is one area where Labour will certainly be doing some pretty hard thinking over the next few months. The party’s Policing Review, led by former Met Commissioner Lord Stevens, might be long delayed but is still expected to be published in the autumn and may provide some much-needed thinking on crime and justice issues.

Taking advantage of front-line police dissatisfaction at the government’s policing agenda, the review is likely to contain various pro-police measures on issues like perks and pay, and is also likely to include promises to reverse certain elements of Theresa May’s wide-ranging reforms.

It is rumoured that it will once again float the idea of mandatory police force mergers and a move towards regional police forces – an idea that is popular with some senior police leaders, but was comprehensively rejected by just about everybody else back in 2006. But as well as looking at structural changes and crowd-pleasing measures, the review will also need to address the party’s position on Police and Crime Commissioners (PCCs), who will mark their one year anniversary in November.

On the face of it, PCCs have made an inauspicious start. Poor turnout at last year’s elections, some early high-profile blunders and a media fixation on expenses and personnel have all helped to create a negative impression. But the reality on the ground will take longer to evaluate and there is emerging evidence that PCCs are bringing real clarity of leadership and proving far more effective than Police Authorities ever were at holding forces to account and improving their crime-fighting performance. Despite this, Labour could decide to make a premature call and scrap PCCs before they’ve really had a chance to get started.

If Labour was to decide to change the model of police governance again, emergency legislation would need to be passed by a new government upon taking office in order to cancel the next set of PCC elections in May 2016. Scrapping PCCs would not only need to be the first priority for Ed Miliband if he makes it into 10 Downing Street, it would also extinguish the progress made by a number of influential former Labour ministers who are thriving as PCCs of large police forces in the north and the midlands. For both of these reasons, the smart money is on PCCs remaining in place and being given the time to demonstrate their significant potential.

The report we have published today is an attempt to look to the future of PCCs, rather than continue to quibble about their introduction. In it, we outline a vision for a deliberate and steady decentralisation of the criminal justice system, with PCCs the recipients of a range of new responsibilities and powers, implemented in a way designed to command the confidence of central government departments.

Our contention is that while PCCs have a valuable suite of powers in the policing realm, they do not yet have the right tools for effecting change in the wider criminal justice system. We set out a series of steps which would see PCCs increasingly assume a role similar to that of a 'minister for the local criminal justice system' – with the political power to set the agenda, hold agencies within his/her purview to account for delivery of that agenda and drive forward reforms to ensure a more efficient and effective system at the local level.

The aim should be to create a system where, instead of local criminal justice leaders looking upwards and inwards to Whitehall for direction and validation, they increasingly look outwards to each other and downwards to the citizens they serve.

The process of decentralisation we envisage starts with giving PCCs the power to influence the people, agendas, performance and coordination of the criminal justice system at both a national and local level. Once they are given the tools to allow them to work effectively within the wider ecosystem and have successfully got to grips with their new powers, the strategy would see them becoming more financially responsible for the wider system – both for holding and commissioning with specific criminal justice budgets, and for the levels of demand created within their local areas.

As PCCs develop, whichever party is in government might also begin to ask questions about their longer-term future. These reforms have created a new set of local politicians with considerable powers (over the police, at least) – representing an entirely new infrastructure for local democracy. In this new report, we argue that policymakers should build on this by deliberately facilitating the expansion of PCCs’ powers and remit in the justice space. But it is not impossible that future governments might decide to go even further. For example, in the wake of the rejection of City Mayors in last year’s referenda, where attempts were made to introduce powerful Mayors in a 'big bang' fashion, it may make sense for PCCs to be reformed more fundamentally over time – gradually accruing powers over other areas of public policy.

The election of Police and Crime Commissioners was a once in a generation opportunity to reform policing and criminal justice, and reverse decades of ineffective policies. And there are now three choices facing policymakers: reverse, stand still or go forward. Going forward, by accelerating the expansion of PCCs’ powers and responsibilities, will give these new figures every chance of being successful in their jobs, maximising reductions in crime and meeting the significant expectations around their role. And that’s the best way of ensuring that the narrative.

Max Chambers is head of crime and justice at Policy Exchange

Labour will need to address the party’s position on Police and Crime Commissioners (PCCs), who will mark their one year anniversary in November. Photograph: Getty Images.
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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.