Miliband’s enemies don’t know what to make of him – the trouble is, neither do his friends

Part of the problem is that even Labour MPs find their boss remote.

The Conservative Party is unsure whether Ed Miliband is ridiculous or dangerous. Tory optimists think the Labour leader’s glamourless style breaches some unwritten prime ministerial admissions code, meaning voters will bar his entry to No 10. They expect the opposition’s lead in opinion polls to vanish once the nation seriously contemplates placing a fragile economy in Ed’s buttery fingers.

Conservative pessimists have more respect. They know that belittling Miliband’s manner doesn’t alter the electoral maths that make him the likeliest bet to be prime minister after 2015. If Labour hangs on to disgruntled Lib Dems, and angry Tories continue to side with Ukip – both plausible scenarios – crucial seats in the Midlands and northern England will be unwinnable for David Cameron. A handful of Conservatives even admit that Miliband has played a weak hand with guile, shoring up the unity of the left while the right is divided.

Tory differences over how seriously to take Miliband are inseparable from the question of how easy it will be to woo voters who are currently sojourning with Nigel Farage. Downing Street strategists expect them to come back to Cameron in droves once they realise that their dalliance risks creating a monstrous lefty prime minister. Casual Ukip supporters are supposed to grasp that the things they want – less immigration, benefit cuts, a referendum on Europe – are available only under a Conservative government. Though braced for a strong Ukip performance in the European parliamentary elections in May, senior Tories are quietly confident that the tide will then recede.

This view presumes that Farage’s supporters make rational choices based on a menu of preferred policies. Some Tories doubt it. In their constituencies, they encounter “Kamikaze Ukip” – people who are so filled with hatred of the political class and Cameron in particular that they might swallow the prospect of a Miliband-led government, which they would expect to fail promptly, if that is the price for provoking a purgative Tory crisis.

Ukip’s organisational backbone is built from former Tory activists. They see the Prime Minister as an arrogant, unprincipled toff who has wrecked the party they once loved and whose electoral punishment is a task of moral urgency. There is sure to be a drift back to the Tories in 2015 but it doesn’t take many stubborn Ukippers – perhaps as little as 6 per cent of voters – to rob the Conservatives of power. The calculation that depresses some Tory backbenchers is that the alliance of people who want Cameron out at all costs, though ideologically disparate, is bigger and more motivated than the coalition of people who want to reward him with another term in office.

If that is true, Labour can be the biggest party in the next parliament by default. Yet opposition MPs are reluctant to celebrate this bounty. There is some disbelief that the catastrophic defeat of 2010 can be overcome in a single term. There is also reluctance to credit Miliband with engineering their positional advantage. It feels unearned. A tiny victory delivered by the perverse interaction of a hard-right insurgency and an obsolescent voting system doesn’t exactly make a social-democratic renaissance.

Then there is Miliband’s public image, the source of so much Tory comfort and something that everyone in Labour knows is a problem but only a tiny number of top advisers are authorised to discuss. The shadow cabinet has had many presentations of polling data but none refers to the leader’s personal ratings.

Insiders say the arrival of Spencer Liver­more, a former Downing Street adviser to Gordon Brown who has returned as an election strategist, has brought more focus to the question of how Miliband’s candidacy might best be sold. The preference so far has been for town hall-style meetings in front of live audiences, where he performs well. It is a device that can be pitched as a break from sterile Westminster convention but it can’t replace the mass reach of TV. The discussion now is about the broadcast formats that work for Miliband – what balance to strike between the heavyweight news shows and daytime sofa slots and how to play televised leader debates. Aides insist that Miliband can confound his critics in that arena, going in as the underdog against the famously glossy Cameron and emerging as the more substantial figure.

Miliband’s team recognises that the public still needs to get to know him better. (Tory pollsters say voters have seen enough and aren’t impressed.) But part of the problem is that even Labour MPs find their boss remote. He is wedded to the Mount Sinai model of leadership – disappearing into the clouds for weeks and emerging with new positions on tablets of stone.

He successfully stamped his authority on the shadow cabinet in last autumn’s reshuffle, leaving none in doubt that he can be ruthless. Yet despite having elevated a cadre of young “Milibandite” protégés, the Labour leader still seems isolated. His party backs him because he can win, yet very few people even in the shadow cabinet really know his mind. They can’t anticipate his instincts or claim to speak on his behalf on a range of issues – welfare, education, crime, immigration, Europe. That means they must stick to a narrow script or stay silent for fear of going off-message, which in turn makes it hard for the public to get a rounded sense of what Labour is all about.

So far Miliband’s inscrutability has served him well. After three years, the Tories still don’t have the measure of him, which is why some of them think he can’t possibly win and others say he can’t lose. It is good for Miliband that his enemies don’t know what to make of him. The problem is that neither do his friends.

Ed Miliband visits Standard Life on November, 11, 2013 in Edinburgh, Scotland. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

This article first appeared in the 08 January 2014 issue of the New Statesman, The God Gap

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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.