Dubcek's terrible bargain

The Warsaw Pact's occupation of Czechoslovakia from 21 August 1968 shocked many in the west who had

The New Statesman

6 September 1968

In their optimistic moments, the people of Prague believe that the Russian invasion of their country has been a colossal mistake, and that victory now belongs to the Czechs. But Slav optimism has a quality such as would count for pessimism anywhere else, and in the next moment they begin packing their things for the last trip to Vienna. "Wait until the students return," older Czechs say hopefully, conjuring visions of a guerrilla movement beginning promptly on October 1. Then they remember: "This is a country of old people."

In every way it is an ambiguous occupation. The Russian tanks pulled out of the main streets and squares of Prague and the other major cities more than a week ago, and they remain in discreet quarters just out of sight; near Pilsen they hide in the pine forests and a few Russian soldiers patrol the sidewalks in front of occupied buildings, but they too are harder to find. Each night, during the unofficial curfew never ordered hut universally observed, more materiel is moved out of town and more locations are de-occupied.

The slogans and scrawled posters which covered every patch of wall space are rubbing off, washing away, or being torn down. In the middle of a busy road in the old quarter of Mala Strana, near Prague Castle, a section of pavement is marked off by chalk lines and decorated with flowers and cup-candles. There, in the first week of occupation, a young mother was gunned down by a Russian tank crew as punishment for sticking her tongue out at a soldier. People hurrying to change trams - as she had been doing - stop for a moment at the ceremonial spot.

Only at the base of the great equestrian statue of the sainted King Wenceslas can a casual visitor see a striking symbol of the occupation and the resistance to it. Beside an enormous bank of flowers, with candles, black bunting and various funeral tokens all around, an honour guard stands in tribute to the first martyr of the invasion, a 14-year-old boy killed "resisting" the Russian tanks. The guard, like the boy, is usually composed of long-haired, rather scruffy huligani, the kids who used to mill about the squares of downtown Prague at night. The Russian soldiers call them "Mensheviks", and think they believe in God. Before August, the Praguers had an unkinder opinion. Now the kids are called the "Children of Jan Hus".

After the first few days of horn-blowing, bell-ringing, wall-scribbling and general larking by the population, the expression of resistance has been internalised. There is no question that the entire population - to a degree perhaps unequalled in similar situations in this era of ideological invasions - is united against the occupation.

Despite the ambiguities of the leadership's position - or perhaps because of them - many Czechs are taking no chances. Most of the leading intellectuals are gone or going: one prominent scientist is helping the entire Czech scientific Establishment leave the country. "I consider myself Minister of Escape," he said. Every foreigner is stopped by strangers on the street and asked to write letters from abroad "inviting" a Czech to come immediately for some emergency or another. Presumably, the letter could help with an exit visa. But in fact, the Czech authorities - even the secret police - are clearing almost everyone who applies. Having averted a bloodbath in the summer, the government does not want one in the autumn.

As it seems to have happened, both the Russians and the Czech leadership have made more than anyone could have predicted of a terrible bargain. Rhetoric aside, the Russians never saw the Czech economic reform as the major issue: rather they were afraid that Dubcek's reforms might lead to political neutrality or association with Western European institutions. The occupation certainly forestalls any Czech strategic defection from the Russian imperial defence system.

For whatever short-term strategic gain, Russia has sacrificed its fondest dream of establishing a unified communist community in Europe under its leadership. The arrogance of imperial power takes its toll. Praguers are slightly (if grimly) amused to hear the words of support from the West: like everything else, they are too reminiscent of the events of 30 years ago. I was walking with a Czech this week when we saw "England supports Dubcek" in English, written on a wall. "Yes," he sighed, "with words."

If the diplomatic toing and froing of the past two weeks has done anything it has turned many Czechs - especially the youth - from a certain mindless pro-Americanism they used to affect. It was based mainly on fantasies of sports cars, rock and roll and pot, but it also fixed on to the promises of personal freedom which, until January, Czechs could not know in their own country. Now there are posters everywhere: "USA - Vietnam aggressor: USSR - Czechoslovakia aggressor." For the rest of Europe the lessons may be a lot harder. What is real now and too clear is that there can be no détente until the "German problem" is out of the way, until Nato ceases to terrify Russia, until the American "Atlanticists" stop insisting that their Europe must be in Washington's orbit just as the Russians insist their Europe must revolve around Moscow.

Selected by Robert Taylor

This article first appeared in the 25 August 2008 issue of the New Statesman, How to survive the recession

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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.