Miliband's Leveson strategy looks crazy. It might just work

The Labour leader has made enemies of the British press. Now he has to present himself as the outsider taking on tabloid bullies.

The path that Ed Miliband has chosen in response to Lord Justice Leveson’s proposals – demanding that they be implemented in law – is not, to put it mildly, risk free. As I noted yesterday, Miliband’s position became much tougher as soon as it became clear that Leveson was not going to land David Cameron or Jeremy Hunt with any substantial charges of malfeasance in their relations with News International.

The report notes the intimacy of politicians with the Murdoch empire, accepts that there was influence and concedes that the public might reasonably come away from the episode with a perception of impropriety. But there is no tangible evidence of an explicit deal in which commercial interests where procured with favourable political coverage. (The anti-Murdoch stalwarts will insist that, like any Mafioso relationship, explicit deals didn’t need to be spelled out because everyone understood the rules of the game – but for corruption allegations to stick in a way that would have seriously damaged the Prime Minister you need something more than a few cosy canters over the Cotswolds.)

So when Cameron stood up in the Commons yesterday he had a little knoll of moral high ground to climb on to. He can’t get too sanctimonious about Leveson’s verdict on his relations with News Corp because Rebekah Brooks and Andy Coulson are still facing serious criminal charges. There is ample potential embarrassment for Number 10 there. In the event of convictions – and they must of course be presumed innocent – Cameron’s judgement would be shredded.

Still, Leveson deposited a bit of political capital in the Bank of Cameron and the PM clearly decided to spend it all at once – rejecting the Lord Justice’s central premise that any new regulatory arrangements need to be underpinned by law. That puts Cameron on the side of the newspapers (a pretty good place to be in politics) but on the wrong side of hacking victims who, reasonably enough, wonder what the point in asking Leveson to come up with a plan was if the plan wasn’t going to be implemented (not such a good place to be).

As a liberal-minded Tory, Cameron’s resistance to “crossing the Rubicon” of statutory involvement in press regulation is doubtless sincere. That taking such a position was sure to make him the toast of newspaper editorial meetings was also no doubt a significant factor in his considerations. If Cameron can hold his current line – and a parliamentary vote would be close given that the Lib Dems look ready to side with Labour – the next election will be fought with the Tories as the party that saved the press from an Ofcom-style regulator.

It doesn’t take a great leap to imagine how tricky that campaign could get for Miliband, and how hard newspaper endorsements will be to secure, if he has a manifesto promising to do to editors the horrible things that Cameron wouldn’t.

In a crude cost-benefit analysis, I’d imagine the anguished cries of hacking victims are worth withstanding for the PM if it procures him a favourable press wind, especially since wider public interest in the whole Leveson issue is low. By 2015 it will be very old news.

So has Miliband blundered or been wrong-footed? Not quite. I don’t think he had much choice but to back Leveson’s plan. To the non-journalist’s eye it is pretty reasonable. There are important arguments as to why any statute that covers newspaper behaviour is morally odious, intrinsically undemocratic, unworkable or all three. As a journalist, I instinctively gravitate towards that view, which has been made well enough elsewhere for me not to have to repeat it here.

It is also worth nothing that Leveson was at great pains to pre-empt those arguments, that other perfectly functional democracies have laws that cover media practice and that, quite obviously, there is no danger of what Miliband is advocating turning into a regime of regulation under which militias of jackbooted Ofcom thugs confiscate presses and lock up columnists. Journalists love to feel like dissidents, especially very well-paid journalists who are really part of the Establishment but want to retain the frisson of being subversive. And no industry ever gladly embraced more regulation.

In other words, Miliband is not setting himself against press freedom, he is setting himself against British newspapers. And while they are powerful, they are not as powerful as they used to be. They might give him a rough ride, but most of them were almost certainly going to do that in the run up to the next election anyway.

British newspaper journalists are also not the most popular bunch of people in the land, rubbing shoulders with politicians down at the bottom of the league of public confidence. Miliband’s whole project is based on the hope that he might position himself as an outsider, a ripper-up-of-rules, a breaker of cosy consensuses etc. It is all pretty fanciful given his Westminster pedigree but it is the best plan he’s got so he has to at least be consistent with it. That means, in this case, being on the side of the victims of appalling intrusion and malpractice. It means framing the forthcoming battle as one in which the leader of the opposition is taking on the tabloid bullies and the Prime Minister is sticking to the old rules, defending his friends and looking out for the powerful few. It’s a long shot. It could work. Rubicon crossed. Alea iacta est.

One final thought. British newspapers have worked themselves up into a right lather over Leveson and his purported threat to press freedom – and not without reason. It is hard to avoid the feeling that some of that froth is displaced anxiety about the obsolescence of the whole newspaper business model. Leveson barely touched on the internet, blogs, Twitter etc. Yet no-one currently working in print media can be confident that ink-on-paper will still be part of their lives in 10 years, let alone 20 or 30. So to a considerable extent the whole Leveson debate feels like a row about how to tidy up the mess in a museum that fewer and fewer people want to visit.

Print journalism is pathologically insecure at the moment; no wonder it doesn’t like the prospect of being restrained further. Ultimately, the questions of whether there are limits to free speech, where they are, and what responsibilities fall on those who publish are all going to have to be decided with reference to what goes on online. Leveson is destined to be remembered as an important chapter in the politics of this parliament, an epitaph for a particularly raucous phase in the life of British newspapers and a mere footnote in the story of 21st Century media.

Ed Miliband with actor Hugh Grant, who has been campaigning for stricter press regulation. Photograph: Getty Images.

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

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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.