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Learn from history and make peace now

Why the Falklands still matters.

The Falklands war is hugely important. Many try to pretend otherwise, especially those on the left. The episode was an accident, they maintain, a bizarre throwback to colonial impulses, a tragic joke. US support was vital, so all the talk of our "winning it alone" is nonsense. Also, it has nothing
to do with us on the left (true, Labour supported it and, when it finally got to power 15 years later, it fought conflicts in Sierra Leone, Kosovo, Afghanistan and Iraq, and committed itself to renewing Trident and building new aircraft carriers - but, really, Labour is not militaristic).

The list could be lengthened. I'm pretty sure that most New Statesman readers prefer to shrug or sigh, ie repress, rather than embrace the ongoing significance that the Falklands conflict has for politics and power in the UK.

At the time, I argued that the impulse for war emerged from what I called "Churchillism". It was only 36 years since the end of the Second World War and the cabinet had either grown up during the war, like Thatcher, or served in it. The formative moment of 1940 shaped the mentality of British politics, including that of the left - Labour, Liberals, Communists - in its consensus. The NHS was born then, too.

Thatcher turned her Falklands victory into a coup against Churchillism's wide-ranging legacy - crushing its humanity with the bellicosity that was
also part of it.

Today, 30 years after the Falklands war, a slightly younger generation of political leaders has a similar youthful memory of the formative moment of 1982 as Thatcher's generation did of 1940 and 1945.

They may be uneasily conscious of its anachronistic tub-thumping. But they are the bearers of its active legacy. Far from being just a throwback, as it seemed when it was happening, the Falklands conflict became a harbinger, above all because it was a rare victory.

Short fuse

That victory was so close. Had the bombs that hit the Royal Navy been properly fused; had Argentina mined the landing areas; had its army defended slightly better and dragged out the land fighting by a week (the winter arrived the evening of the surrender, with 100mph winds
of hail and sleet, and the British had only two days of ammunition left); or had Leopoldo Galtieri simply delayed the invasion by three months, Thatcher would have been out on her ear.

But luck goes with the grain and the victory was immensely consequential. Mentally and in terms of the military budget, the UK reattached itself to a global role, rather than pulling back to the European theatre as was planned in 1981.

The victory gave birth to the double-headed monster of militarism and market fundamentalism signalled in Thatcher's Cheltenham victory speech, when she proclaimed that she would bring the war home to make it "the real spirit of Britain".

It reforged military intelligence relations between the US and the UK at the level of their, or should I say "our", deep states. It saw the first experience of embedding journalists.

Since then, the apparatus has learned to orchestrate a manipulative militarism, with the cult of soldiers doing their job irrespective of the cause. (In the words of last year's Christmas number one by the Military Wives Choir: "Wherever you are . . . may your courage never cease.")

The Falklands achieved these things because although it was a brief war, it was not at all a low-intensity one of the Northern Irish kind or the colonial-style occupation that we see today in Afghanistan. On the contrary, in a short blast of ferocious fighting, it was a high-technology, full-spectrum clash of arms, pioneering long-range missiles, the use of nuclear submarines, the latest air-to-air armoury - all tested for the first time in actual combat to the delight of the arms industry.

It became a crucial learning experience for the post-cold war interventions of "projecting" force at a distance and cashing in the tabloid popularity at
home. David Cameron captured the script perfectly early on in his premiership, speaking to the troops at Camp Bastion in Helmand Province: "During the first and second world wars and during the Falklands war, there was real support in our country for the military. We want to put you front and centre of our national life again . . ."

To which we should reply: "Make peace in the South Atlantic." The UN Charter stipulates an obligation to protect the "interests" of the Falkland Islanders, not to obey their "wishes". They want the oil being discovered there. We should recognise it as Argentina's black gold, not "defend" it with more British lives.

Anthony Barnett's "Iron Britannia" was a bestseller in 1982. The book is being reissued this month on the Faber Finds imprint (£11), with a new introductory overview on 30 years of militarism

This article first appeared in the 02 April 2012 issue of the New Statesman, France is my enemy

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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.