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Power of the “girl effect”

Two years ago, women from the Democratic Republic of Congo and Rwanda joined together on the bridge uniting their two countries to show that women can build bridges of peace and hope for the future. A global movement was born. Now, each year, thousands of people show their support
for women in conflict-affected countries by meeting on bridges around the world.

London is no exception. On 8 March - International Women's Day - the Millennium Bridge is playing host to a show of solidarity for those in countries less secure than our own.

I will be showing my support by joining the rally and speaking alongside figures such as the descendants of Emmeline Pankhurst and the head girl of a school in Tower Hamlets.

Ever since I first became my party's spokesman on international development in 2005, it has been clear to me that you can't understand deep poverty without understanding the issues faced by girls and women in the world's poorest countries. Now that I have the honour of being the secretary of state responsible for the government's work on global poverty, I'm relieved that this has become widely understood.

Investing in girls and women produces a transformational impact, whether it's girls going to school rather than becoming child brides or women being able to access microfinance and then reinvesting in their families' health and education. This "girl effect" is a virtuous circle and we instinctively recognise and understand its value.

At this point, I should declare an interest. As the father of two daughters, I know only too well that women can be strong and feisty agitators, unafraid to challenge the status quo or to argue with those who may foolishly think they hold positions of authority. The situations faced by my daughters, however, are a million miles away from those of girls such as Immaculate, whom I met last year on a visit to drought-ridden northern Uganda.

A question of choice

Sitting up against the wall of the family hut with her elderly grandmother, Immaculate told me her story. Her father had died when she was younger and she had been forced to leave school to look after the family. Undeterred, she'd refused to give up and, with the help of a small scholarship funded through British aid, she managed to continue her education, walking for hours each day to reach her school.

Now 16, Immaculate is utterly determined to realise her dream of becoming a teacher so that she can give something back to her community. Her story, told in fluent English thanks to the education she'd received, really touched me. I only wish more people could see the good use to which British aid is being put.

Through the Girls' Education Challenge Fund, we are helping more girls like Immaculate, getting up to a million of them into school in some of the poorest and most remote places in the world. We're looking for fresh ideas, for innovation, for new partners to test exciting and creative solutions in areas where more conventional responses have failed.

One of our top priorities this year will be to rally a renewed global emphasis on that most crucial issue: women's choice over whether and when to have children. It's simply unacceptable that hundreds of millions of women in our world today want access to family planning but do not have it. So, the government, along with the Bill and Melinda Gates Foundation and others, will host a global, high-level event on women's choice this summer to generate new political energy and resources to meet demand among poor women for family planning.

More immediately, in the days and weeks ahead, we will be celebrating women and the huge difference they can make in breaking the cycle of poverty. In doing so, let us spare a thought for Immaculate and the countless other inspirational women who have refused to accept the hand life dealt them.

I am immensely proud that British aid is doing so much to help these women and, through them, generations to come.

Andrew Mitchell is Secretary of State for International Development

This article first appeared in the 12 March 2012 issue of the New Statesman, The weaker sex

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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.