In the battle royal

<strong>The Lion and the Unicorn: Gladstone vs Disraeli</strong>

Richard Aldous <em>Hutchinson, 38

To the British public in the second half of the 19th century, the feuding politicians Benjamin Disraeli and William Gladstone were celebrities in the modern sense of the word. Their battles in the House of Commons, occasionally spilling over into campaigns outside, attracted as much public attention as the divorce of a pop star or a footballer today. Richard Aldous's study of their rivalry, The Lion and the Unicorn, stresses their mutual loathing. Disraeli thought that Gladstone was increasingly mad as well as unscru pulous, while Gladstone attributed to "Beaconsfieldism" - a derisive reference to Disraeli, who became Earl of Beaconsfield in 1876 - the main blame for the superficiality and immorality he detested in politics.

Their rivalry did not spring from any fundamental difference of principle, or even policy. Certainly Gladstone became a passionate advocate of free trade, whereas Disraeli rallied the Tory forces against the repeal of the protectionist Corn Laws proposed by the Conservative prime minister Robert Peel in 1846. But Disraeli abandoned the protectionist cause as soon as it had done its work of destroying Peel, who resigned over the controversy.

The original difference between the two men lay in their attitudes to Peel. For Gladstone, Peel was the mentor he respected above all other politicians; to Disraeli, he was the man who denied him a job when forming the government in 1841, and who had betrayed his party. For Disraeli as prime minister, there was no question of restoring the Corn Laws, even when in 1879 a flood of American wheat finally began to overwhelm the British grain farmer.

The most bitter clashes between Disraeli and Gladstone came over foreign policy. The Midlothian campaign of 1880, a series of speeches in which Gladstone attacked British support for the Ottoman empire, is often described as the first modern political campaign. In it, Gladstone brought his extraordinary energy and anger to bear not just on the cruelty of the Turks in massacring their Bulgarian subjects, but on the fri volity of the Conservative government in failing to check or even notice such wickedness.

Disraeli's instincts in foreign affairs were those of the romantic showman. His character istic gestures were theatrical - to buy the Suez Canal shares, to deploy the British fleet towards the Dardanelles, to annexe Cyprus at the Congress of Berlin and to make the delighted Queen Victoria empress of India. But in the end, what people remembered when they came to vote after six years of Disraeli were the disastrous wars in Afghanistan and Zululand.

When Gladstone came to power, he found that his professions of an ethical foreign policy were easily contradicted by events: it was under Gladstone that the fleet bombarded Alexandria. Our present prime minister has combined Gladstone's earnestness and Disraeli's love of spin, with exceptionally disastrous results.

The long-running feud between Disraeli and Gladstone occupied the political space between the two passionate principled disputes of 19th-century politics - over the Corn Laws and over Irish home rule. Yet, for these two men, the rivalry was for power rather than a great cause. Their bitterness arose not out of differences of principle, but because the style of each man hugely irritated the other.

Aldous describes the different episodes of the rivalry with novelistic vividness, capturing the particular flavour of 19th-century political and social life. The Lion and the Unicorn crackles with fascinating anecdotes. In an age before antibiotics and paracetamol, both men were often ill, Gladstone with diarrhoea and toothache, Disraeli with gout. Gladstone liked Mrs Disraeli, finding in her the simplicity that was singularly lacking in her husband, and was genuinely sorry when she died. Gladstone was the superior in physical energy, but both men worked extremely hard - Gladstone parading the fact, Disraeli preferring to disguise it. It was this energy and style, more than any concrete achievements, which gave these men the mastery of their political scene and created a legend that is still alive today.

But it is a legend, not an example. The electorate no longer finds excitement in parliamentary jousting. Gladiators are out of fashion. So is Disraeli's dictum that it is the duty of an opposition to oppose. David Cameron has gone back to the principle of constructive opposition that Peel practised in the late 1830s. Political journalists like a good political battle regardless of content, but politicians have discovered that this is a trap to avoid. They would be wise to read about Disraeli and Gladstone for entertainment rather than instruction.

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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.