The death of a "freeloader": When will we accept the results of austerity?

As an eighteen year old dies trying to flee a ticket inspector in Athens, police in Britain boast of apprehending a mother shoplifting to feed her two children. All across Europe, people are struggling to survive.

“Let’s not get used to death” reads a poster you see on walls around Athens. It’s a simple message: we should never stop being shocked by the death and suffering caused by the choices of European leaders and the Greek government. From suicides to “accidents”, the list of casualties has names added to it daily. From Dimitris Christoulas, the 77-year-old who, in April last year, took his own life in Syntagma square, to Babakar Diaye, the 39-year-old man from Senegal who fell on the train tracks from a great height and died after being chased by the municipal police in downtown Athens, the end result is always the same: loss of human lives.

But sometimes the going gets too much. Sometimes the morning news reads like a page out of Les Misérables. Last night, an 18-year-old died in the streets of Athens. Caught without a ticket on a trolley bus, he tried to escape the inspector who had just stepped on board by pushing the emergency button and jumping out of the door. He lost his balance and hit his head on the curb. After being taken to the hospital, the doctors pronounced him dead.

The scenes described by an eyewitness make the case sound truly appalling. He speaks of how the boy was trying to explain that both he and his parents were unemployed, and that he simply couldn’t afford the ticket or the fine. He speaks of the inspector physically assaulting him and ripping his shirt, and the bus driver joining in before the victim made a desperate attempt to escape. And he speaks of shocking scenes where the other passengers almost mobbed the inspector, shouting at him: “you just took a kid's life for one euro”.

More shocking is the reaction seen by some using Greek social media - commentators, authors, politicians. “The inspector was only doing his job,” they say. “It’s not his fault if a freeloader decided to jump off the bus”. This was the death of a “freeloader”. Not of an unemployed kid with no future, but of a guy who simply didn’t feel like paying his fare. This mirrors the attitude some government officials have shown in the past, such as the newly appointed Minister of Health, Adonis Georgiadis, who took up the post in December last year. “Those that cannot adapt, die,” he has said.

In a tragic parallel that defies borders, almost at the same time as the incident in Greece hit the news, the Cheetham & Crumpsall (Manchester) police station account tweeted:

I don’t know the specifics of the case, but the tone is what gets me. The seemingly unconnected fact that she was trying to steal baby food with two kids in her arms. Just as in the case of the 18-year-old, the subject is disconnected from the cause. Poverty and the inability to pay for transportation or food, does not get in the way of the law. The haves are not supposed to empathise with the have-nots. So the list of victims gets bigger.

In Britain, the criminalisation of squatting cost lives last winter. Cheap housing is non-existent in London, and unused properties are boarded up to keep unwanted no-goods out, while landlords plot how to squeeze every penny out of the poor. Come next winter, train fares are expected to rise by more than four per cent, making commuting work even harder for those displaced to the suburbs. This same thing happened in Greece, making job-seeking impossible for many, even if there were jobs to be had in the nation's ruined job market. What will it come to in Britain?

It's farcical. The inequalities that triggered the Arab spring - whose unravelling we are witnessing today in Egypt - are being repeated in austerity Europe. The social fabric, the welfare state that held it together, is being torn down. If you become unemployed, the chances of you getting back to work get slimmer and slimmer if you don’t have some sort of back-up. In places like Greece, Spain, Portugal and now Britain, this a new, extreme reality. In this new reality, we could all end up being cast as “freeloaders”. And our deaths, be they the result of cold, persecution or despair, will be labelled as a “failure to adapt”.

A homeless man sleeps on a vent outside a closed metro station in the centre of Athens. Photograph: Getty Images.

Yiannis Baboulias is a Greek investigative journalist. His work on politics, economics and Greece, appears in the New Statesman, Vice UK and others.

Show Hide image

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.