The truth about my swimming trunks and the Magic Fingers massage parlour

I feel better now that I've finally told Paul the truth about the half-hour we both spent in a Times Square massage parlour in December 1982. There have been plenty of occasions over the past 16 years when I've thought of coming clean about the incident but it always seemed a pity to spoil the jolly banter which arises whenever we get round to recalling our ten days together in New York. Why mar happy reminiscences about the delights of listening to Elvin Jones and Ahmad Jamal at the Village Vanguard and the night we both got lucky at a singles bar because two women thought we were dead-ringers for Lord Byron and Oscar Wilde with the banal details of what actually occurred at the Magic Fingers club?

But last Saturday in the Pizza Express I realised I could keep quiet no longer. Even as Paul, prompted by the sounds of a fat tenor solo filtering up from the floor below, began to talk once more about our fabulous jazz evenings together, I started blurting out the awful truth.

"You know how we've always gone on about that afternoon in the massage parlour? And I've always laughed along with you about spending half the holiday money in 30 minutes? Well, I've been lying. The fact is I had to make an excuse and go outside and wait for you in reception. Nothing happened. They gave me half my money back."

I could see from the self-destructive way he tipped more chilli oil on his American Hot that he'd already heard enough. But I ploughed on.

"I realise now it was that bloody cubicle. Nothing to do with sex. I can't cope with cubicles. Just being in one makes me feel me uneasy. And in Times Square it was double trouble. Not only you in the next cubicle but my very own cubicle invaded by someone with a tub of baby oil."

He looked up with what I took to be tears in his eyes. "You've never said anything before about cubicles."

"Paul, you've never asked me. If you had, I could have told you about how I've never been able to cope with cocaine because you're always expected to go into a cubicle with someone else to take it, and about how often I've asked doctors if it would be all right if I stripped off in front of them instead of popping into a cubicle, and how at the polling station I always go for the cubicle where the pencil is on the longest piece of string so that I can stand well clear when I cast my vote."

I knew from his streaming eyes that I'd already made my point but I couldn't help throwing in the day when I'd tried to have a passport photograph taken at King's Cross by poking my head into the instant photo cubicle rather than occupying the swivel seat inside, and the innumerable Sunday mornings I'd gone along to the indoor swimming pool in York with only a pair of Speedo bathing trunks beneath my full-length overcoat so I'd need to spend no more than two seconds in a poolside cubicle.

"Have you seen a counsellor about all this?"

"I don't need a counsellor. And anyway, some counsellors have cubicles. No, I've worked it all out for myself. It's a lifetime of guilt coming back to haunt me. I know that some day in a cubicle somewhere I'm going to be confronted by the final reckoning. I'm going to hear the sound of a shutter drawing back, I'll turn to face the wall and there'll be this shadowy face in profile. And I'll hear an Irish voice saying very quietly, 'And how long is it since your last confession?'."

This article first appeared in the 19 February 1999 issue of the New Statesman, We are richer than you think

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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.