Shakespeare’s Globe

We all wanted to hold hands with Peter Mandelson. Alas, it was not to be

Is Big Son about to meet Big Brother? Richard Blair, adopted son of George Orwell, tells me that he is intending to write to the Russian prime minister, Vladimir Putin, to ask him to release government files
on his father.

“They did surface some years ago, then disappeared back into oblivion,” Richard told me at the Orwell Prize awards ceremony at the Foreign Press Association.

“I am sure they would have something to say about Nineteen Eighty-Four. It would probably be superficial, but it would be of interest to know what they say.”

The Russian files would make fascinating reading, for historians and literary critics alike. Orwell used pigs to satirise the Soviet state in Animal Farm, and Nineteen Eighty-Four introduced us to the concept of Big Brother.

Adopted by George and his wife, Eileen, in 1945, Richard was brought up first in London and then on the Isle of Jura. When Richard once asked his father why he made pigs the villains in Animal Farm, Orwell replied that it was because he didn’t like pigs.

Perhaps, if Putin does not respond to his overtures, Mr Blair could ask Lord Lloyd-Webber to intervene. The composer struck up an unlikely friendship with the Russian prime minister after being invited to his dacha to discuss an end to the eastern bloc vote in the Eurovision Song Contest. Putin even promised his personal vote for the British entry. If Andrew Lloyd Webber can swing it for Jade Ewen, surely he can swing it for Richard Blair.

To the launch of Tristram Hunt’s biography of Friedrich Engels, The Frock-Coated Communist. In attendance were Lord Mandelson, Virginia Bottomley and Ed Miliband. “I have dedicated this book to my one-year-old son because I hope he will be the first member of my family to read one of my books,” joked the historian. Except he wasn’t joking. His wife conceded that she found his books heavy and unwieldy.

The author’s publisher, Stuart Proffitt, added that it was appropriate for the launch party to be held on the eve of International Workers’ Day and suggested that his guests should hold hands and sing a rousing chorus of “The Internationale”. The prospect of holding hands with Peter Mandelson delighted everyone.

Alas, it was not to be. In the spirit of journalistic inquiry, I asked the Business Secretary if he thought Engels a good egg or bad. Engels deplored homosexuality and rode with one of the poshest hunts, the Cheshire (alongside Earls Grosvenor, Cholmondeley and Crewe). In other words, not terribly New Labour. “And who the hell are you?” was Peter’s response. So: good or bad? “I’ll let you know when I have read the book.” I’m still waiting, Peter.

When the minister for international development Simon Foster announces in In the Loop that war is unforeseeable, the spin doctor Malcolm Tucker explodes: “He might have said unforeseeable, but he didn’t say it.” I had my Malcolm Tucker moment at the world premiere of State of Play. Before the screening at the Empire, Leicester Square, the director Kevin Macdonald thanked his producer, Working Title’s Eric Fellner, which mysteriously prompted a few boos in the audience.

I reported this the next day, saying that such bad manners were “disgraceful”. Next I received a call from Freud, the PR company handling the film’s publicity. “Your reporter might have heard booing, but there wasn’t any booing,” I was told. “Working Title drew up the guest list for the premiere, so nobody would have booed. Please can you correct it.” A second call came requesting an apology and explaining that Eric Fellner would be upset by the story. I explained that I had heard the booing, and conceded it might not have been malicious, but done in a spirit of jollity. Later that same afternoon Freud PR called back. Yes, there had been booing, agreed the spokesman. Eric Fellner’s 16-year-old son, Raf, was booing as a joke. I didn’t request an apology from Freud PR. Nor did I point out that Raf wasn’t the only one booing in the audience.

The pressure is on the new Poet Laureate, Carol Ann Duffy, to produce her first poem. Will it be on swine flu? The local elections? How about who stole all the sherry? Hearing how Andrew Motion never received his traditional “butt of sack” (which translates as 600 bottles of sherry), she is demanding hers up front. Good for her. Imagine the Poet Laureate going on strike for not receiving her dues.

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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.