Pakistan warns Grieve's "divisive" remarks may damage bilateral relations

The country's High Commission attacks the Attorney General's comments on ethnic "corruption".

A clue to Dominic Grieve sudden U-turn yesterday has emerged as The High Commission for Pakistan warns UK that his comments regarding Britain’s Pakistani community are "offensive and divisive", "may have repercussions on Pakistan-UK bilateral relations, and damage Pakistani Community’s support to the Conservative Party." Slamming the remarks as "immature" and "bizarre" – language not normally used by diplomats – Pakistan is making clear the high degree of anger felt by the regime.

Grieve had said in an interview with the Daily Telegraph that some immigrants - particularly British Pakistanis - "come from backgrounds where corruption is endemic", "have been brought up to believe you can only get certain things through a favour culture", and are "mainly responsible for electoral corruption."

In a statement, the Pakistan High Commission said: "The High Commission for Pakistan brands the views of Attorney General Dominic Grieve MP as offensive and divisive which may have repercussions on Pakistan-UK bilateral relations and Pakistan Community’s support to the Conservative Party.

"This is with reference to an interview by Attorney General Dominic Grieve MP to the Telegraph published on 22 November 2013 in which he labelled the Pakistani community living in the UK as 'corrupt' and that they support a 'favour culture.'

"The High Commission for Pakistan to the UK finds these remarks by Mr. Grieve MP as offensive and unfounded towards the strong Pakistani Diaspora in the UK. These remarks are contrary to British Prime Minister David Cameron’s repeated appreciation of the constructive role played by Pakistani Diaspora in the economy, culture, politics and society of the UK.

"The Pakistani Diaspora in UK is deeply disturbed by these unfounded and offensive comments made against them. Ever since the publication of this interview, the High Commission has been approached by thousands of Diaspora members who have expressed their disgust towards Dominic Grieve’s remarks.

"Bizarrely, Mr. Grieve’s immature remarks are based on one incident of electoral fraud which was dealt by British Court’s soon after it happened. It is extremely convenient to pass judgements on singular incidents, but it is important to emphasize that the Diaspora may also make their judgement about the Conservative Party and British government on this singular but divisive comment by the British Attorney General.

"It is important to emphasize that Pakistan-UK relations, which had taken on a constructive and meaningful path with the signing of the Enhanced Strategic Dialogue may be affected by such remarks from senior MPs of the British government.

"Pakistan does not accept such unfounded allegations against its own People and maintains that it is against the spirit of friendship. It condemns these views in the strongest possible terms.

"Pakistan does not accept such unfounded allegations against its own People and maintains that it is against the spirit of friendship. It condemns these views in the strongest possible terms."

It is not the first time Tories have sparked a furious diplomatic row between London and Islamabad. Soon after becoming prime minister in July 2010, David Cameron accused divisions of the Pakistani state of exporting terror and "looking both ways" by tolerating terrorism yet demanding respect as a democracy. At the time, Wajid Shamsul Hasan, Pakistan's high commissioner, commented: "One would have wished that the prime minister would have considered Pakistan's enormous role in the war on terror and the sacrifices it has rendered since 9/11.”

As recently as June this year, Cameron pledged to "stand together" with Pakistan in the fight against terrorism following consultations with Prime Minister Nawaz Sharif. He said the relationship would increase opportunities for trade and investment. Islamabad has repeatedly made efforts to demonstrate bi-lateral cooperation not just against terrorism, but also in trade and finance. Earlier this year, the Pakistani high commissioner opened trading on the London markets at London Stock Exchange to mark the second Pakistan Capital Markets Day.

The latest announcement from Pakistan’s diplomats, however, suggests Dominic Grieve’s "apology" may not, on its own, be enough to get the relationship back on track.  

Imran Khan was a Conservative councillor (2008-12). He campaigns on citizenship issues.

Pakistan prime minister Nawaz Sharif speaks with Indian external affairs minister Salman Kurshid before a working session at the Commonwealth Heads of Government Meeting. 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.