The middle-class fightback

The middle classes need to mobilise politically before it's too late
June 19, 2013

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"Playing the housing market was thrilling and lucrative, right up to the point at which it became impossible"© Joe Partridge/ Rex Features

A generation ago, the financial journalist Patrick Hutber declared that no class had ever been “so complicit in its own demise” as the middle class. In the 1970s, the middle classes were battling against high inflation and punitive levels of taxation. Since then, successive governments have claimed to act on their behalf. Yet today they find themselves priced out of the suburbs they grew up in, their children desperately competing for places in a shrinking global elite, their pensions dissolving and their efforts made to look ridiculous by each successive round of bankers’ bonuses.

This is partly the fault of the middle classes themselves. They failed to grasp, until it was too late, that policies they supposed would benefit middle-class families and reward hard work were actually enriching a new financial elite—at their expense.

Whoever is to blame, something has to happen if we are to preserve the possibility of middle-class life for the next generation. Here are five simple proposals. Were we to achieve these aims, the middle classes may survive. If we don’t, the downward spiral is likely to be terminal.

1. Claw back an economic reason for their existence

The key problem is that the middle classes no longer have an economic underpinning. This is partly about technology. Professional skills are being replaced by software around the world as fast as computer code can be written. And it is partly about globalisation. There are now around 150m university students around the world. By 2025, there will be 260m. No wonder the middle classes fall into a state of panic when choosing a school for their children.

Nobody is going to go out of their way to provide the middle classes with a reason for their existence. They will have to claw one back for themselves by building the kind of economy that can support them. The middle classes should put themselves at the heart of a movement which uses local assets—land, energy and people—to rebuild local production. The economic future of this country depends on the building of sustainable businesses to support people’s lives, and not on the creative destruction of City speculators who happen to pay heavy taxes for the privilege.

2. Make the corporate world pay

It is impossible to imagine a large and comfortable middle class if it takes on the task of paying for the infrastructure we all depend upon with its taxes, while the corporate world and the global elite do not. The middle classes need to use their political muscle to persuade government to close the tax havens; but they should also use their economic muscle against the growing power of monopoly.

3. Demand political support

We have been brought up to believe that the right represents the middle classes and the left represents the working classes. It is now clear that neither right nor left, in mainstream politics at any rate, represents the interests of either. The middle class, said George Bernard Shaw, is “so clever in industry, so stupid in politics.” That is going to have to change.

Recreating the conditions of the last property bubble is about as far as most Whitehall policymakers’ imaginations will take them. Emergency measures, such as the recent “Help to Buy” scheme, have been taken by the current government to help people afford homes; but politicians seem unable to grasp that short-term help like this can only push prices up further for the next generation.

4. Bring down house prices

It is crazy that my modest semi in suburban south London is worth nearly half a million pounds. Playing the housing market was thrilling and lucrative, right up to the point at which it became impossible and home ownership levels in the UK fell below those of Bulgaria and Romania.

Since home ownership underpins and promotes independence, I would make it universal, subject to the condition that 99-year leases are sold at nominal sums on the understanding that they could only be exchanged for the same amount. In the short term, we could also limit speculation in homes with rent controls and restrictive covenants to limit ownership to owner-occupiers. Both measures would dampen house prices, rebalance the economy and calm speculation.

5. Demand smaller schools

Research by the charity Family Lives has shown that parents are often suspicious of results-based league tables, but are desperate for information on other aspects of schooling that they value, such as “confidence, self-esteem, respect for others...and even an understanding of nutrition, cookery and managing a budget.” This is a key problem for the middle classes, and it matters because state education at secondary level has been organised into increasingly large institutions.

Educational research carried out over the past generation has challenged the idea that schools are better when they are bigger. Unfortunately, successive education secretaries have ignored these findings. “Talk to the children, if you can,” one school volunteer I know was told by the headteacher on their first visit. “Nobody talks to them these days.”