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Sarah Wollaston: Doctor Sharp Eyes

An MP David Cameron should find space for in his magic circle.

If David Cameron wanted an MP able to remove any prejudices that voters might have about “the nasty party”, he could not have designed one better than Sarah Wollaston. Softly spoken and unfailingly polite, the former GP displays the kind of warmth and empathy rarely associated with the Tory tribe.

But then it is often easy to forget that Wollaston is a Conservative at all. Elected in Totnes in 2010, after becoming Britain’s first parliamentary candidate to be selected through a full open primary, she has cited her additional mandate as justification for her sharp criticisms of the government, most recently over its decision to abandon minimum alcohol pricing. “I’m going to keep banging on about this,” she tells me when we meet at her office in Westminster.

When I ask Wollaston what lies behind Cameron’s change of heart, she replies unhesitatingly: “It’s lobbying. And to those who think that lobbying doesn’t work, well, if it didn’t work they wouldn’t be doing it.” The Tories, she adds, must resist the temptation to “try and compete with Nigel Farage by looking like the party of booze and fags”.

The abandonment of minimum pricing for alcohol, plain cigarette packaging and a register of lobbyists have all coincided with the arrival of Lynton Crosby as the Tories’ campaign manager. Wollaston is troubled by the influence of the man whose company Crosby Textor has lucrative ties to the alcohol and tobacco industries. “For someone giving direct advice at the heart of the government to have such close links with the industry internationally – I think that’s something that we should all be aware of,” she tells me.

Would she like to see Crosby removed? “It’s probably not sensible for me to be calling for somebody’s removal, because I don’t know enough about what else he’s doing – he may be having some very positive effects of which I’m not aware,” Wollaston replies, laughing in recognition of the lukewarm endorsement. When I quote Crosby’s reported advice to Cameron to “scrape the barnacles off the boat” and focus on the “core issues” of the economy, immigration and welfare reform, she rolls her eyes. “Well, I’m sorry. Actually if you look at the Health and Social Care Act, the one area that was left with government was public health. In fact, [Andrew] Lansley at one point wanted to call it the Department of Public Health. So public health is core government business.”

Back in March, Wollaston warned Cameron that his inner circle looked “too white, male and privileged”. After the appointment of two more Old Etonians – Jo Johnson and Jesse Norman – to prominent policy positions, does she feel that the situation has got even worse?

“I don’t think, genuinely, that anyone minds where any individual person went to school; I really don’t think it matters. But, you know, I went to excellent state schools – but I bet you that there are not five people from my two state secondary schools at the heart of government right now.”

She speaks of “a kind of blindness to how this looks to other people and why it matters to other people . . . It’s not just the message, it’s the messenger.” Shaking her head, she concludes: “This is something that they obviously don’t see; they don’t see something that, to me, seems pretty obvious.”

Wollaston is too modest to say so, but if Cameron wants to show that the Conservative Party is more than the political wing of the public school elite, he should find room for her in his magic circle.

George Eaton is political editor of the New Statesman.

This article first appeared in the 20 May 2013 issue of the New Statesman, The Dream Ticket

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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.