Till the pips squeak! How the hardworking middle class is being squeezed by New Labour


Last updated at 23:42 18 May 2007

The mega-rich are laughing under New Labour.

The real victims are the millions of ordinary, hardworking middle-class people on whom Britain's wealth and character are really built

Last month on this page, I

offered a pretty brutal

assessment of the impact

of Tony Blair’s ten years on


Last week, a friend

told me that he strongly


"It’s been a fantastic decade!" he

enthused. ‘We are wealthier than we ever

dreamed possible. The money pours in.

"The economy is looking great. The good

times look like going on and on."

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I suggested to my friend, a lifelong

Tory, that his own view might possibly

be influenced by the fact that he is very

rich. His business is booming.

Inheritance law on private companies has

allowed him to transfer ownership to

his son tax-free.

Inflation means

nothing to him, because a stately home and

splendid lifestyle cost much less than

flows monthly into his bank account.

An amazing number of people out

there are prospering as he is.


friend who owns a yacht brokerage tells

me that he can’t get boats built big

enough and fast enough to meet


His top broker last year

earned £3 million in commission. We all

know about City bonuses and chief

executives’ salaries.

For some people, the Blair decade has

been wonderful: investment bankers;

football and TV stars; executives

running businesses.

Start a private

company and sell it after one year, you pay

20 per cent tax; after two

years, just 10 per cent.

Lower down the scale, New

Labour has also been good to


The disabled enjoy

better facilities than they

could have dreamed of a

generation ago, from user-friendly

pavements to lifts in almost

every public-access building.

Advisers and counsellors

crowd town halls, pointing the

poor and disadvantaged to all

manner of "special needs"

grants and allowances.

Newcomers to Britain are amazed

by the lavish state hand-outs

pressed into their hands.

The Left continues to

proclaim the plight of the poor, of

those who have not shared the

gold rush. In truth, however, in

Britain today there is only

relative poverty.

To be sure, there are still

some people who live abject

lives in the inner cities, but

they are the victims of lack of

education, discipline and

motivation, rather than of

material deprivation imposed

upon them.

We live in a society

incomparably richer

than most of us

imagined conceivable a

generation ago.


has come about mostly thanks

to Margaret Thatcher, the

microchip and global markets

rather than Blair or Brown,

but at least they have not

killed the goose.

There is just one problem.

Amid all the new wealth, the

Porsches and polo, yachts and

champagne, booming

restaurants and orgy of retail

spending, one group is missing out.

The salaried middle class,

millions of British people, has

never been invited to Tony’s

and Gordon’s party.

A host of hard-working,

lawabiding employees feel ever

more beleaguered, indeed

embittered, by their financial


To be sure, their

earnings have risen. But all the

things that matter most to

them — housing, education,

child and health care — have

soared in cost infinitely faster.

A new survey this week

shows that middle-class

inflation is galloping ahead of

increases in income.

In the

past year, the cost of domestic

help has risen by 5.3 per cent,

health insurance by 6.7 per

cent, private education by a

stunning 14 per cent.

Mortgages are about to go

up for the fifth time in 12

months. Inflation, including

housing costs, has risen by

4.5 per cent, earnings by just

3 per cent.

It is hard to overstate the

anger and resentment this

provokes among those who

find themselves trapped in a

spiral of relentlessly increasing

demands on their cash, yet

cannot boost their incomes to

keep pace.

Many people are irked by the

contrast between the wealth

cascading down upon

entrepreneurs and City traders, and

the strain on the pockets of


Gordon Brown regards

£34,600 a year as affluence.

That is the level at which

income tax and national

insurance kick in at the top

combined rate of 41 per cent.

Yet this definition of "wealth"

provokes a bitter laugh in any

household near that level.

Those attempting to send two

children to private day schools

need £40,000 of pre-tax income

to pay the fees.

This becomes at

least £70,000 if those children

attend top boarding schools.

These are terrifying

numbers for any save the

highest earners, even in

two-income families.

Yet, so fearful are middle-class parents of the

damage which a state education

can inflict upon their children

that they continue to borrow

and beggar themselves to

preserve them from it.

I have the account books of my

own family from the 1890s.


great-grandfather was a

solicitor’s clerk, whose total income

never exceeded £419 a year (the

equivalent of £26,925 today).

He had 11 children, yet was

able to keep a nanny and send

all his five sons to public school

— fortunately, they were spaced

so that never more than two

were away at once.

Fees were £15-a-term apiece.

The family occupied a

relatively spacious London house

in Trinity Square, Borough,

which they rented for £45 a


They somehow afforded

six weeks’ annual holiday in

the Channel Islands.

To be sure, money was

always tight. But that huge

family — they called

themselves "the tribe" — sustained

gentility on their humble

income, never ran into debt,

and paid just £10 a year in

income tax.

That was what the

middle- class could expect a

century ago.

In a just society, that is what

they should be able to do

today: pay their way; enjoy a

respectable lifestyle; and,

above all, provide education.

The characteristic that has

defined the middle class

throughout history is that

they invest in the future.


are committed to giving their

children the chance to do as

well as, or better than,


They do not throw away

whatever money they possess

on the pleasures of today. They

spend much, even most of

their income, on the next


This is such a decent,

indeed noble, objective that

most of us are disgusted when

New Labour at every turn

seeks to frustrate it.

Over the past decade, the

independent school

population has soared.

Parents and

grandparents go to desperate

financial lengths to save

children from the indiscipline and

low standards which prevail in

thousands of secondary


Yet the Government

pressures top universities to

respond with ever-more

ruthless measures to exclude

independent school pupils,

because they are supposedly


Council tax bears

ever more heavily on the middle class, especially if they are

reckless enough to improve their

own homes and expose

themselves to rebanding.

Yet these are the people who, by

definition, cost local authorities


Street lighting and rubbish

collection are the principal

facilities they use and we now see the

second of these under threat.

At every turn, they face

new burdens. They must

pay for their own dentistry,

because NHS dental care

is almost moribund.

Motoring taxes rise relentlessly.

Insurance premiums soar partly

to meet the cost of accidents

involving the estimated two

million people, overwhelmingly from

the underclass, who drive

without licences, while banned or

without insurance.

The penalty for driving without

insurance is currently only six

penalty points on a licence. Once

again, the law-abiding pay.

Willingness to save is a dominant

middle-class characteristic, but

most families can now do this only

through housing equity.


prospects have shrunk

dramatically for all except Labour’s vast

privileged payroll vote of state


Most young couples I know in

their 20s and 30s cannot afford

pension contributions on anything

like the scale they will need for

their old age.

Instead, they look to

luck and inheritances — though of

course Gordon Brown confiscates

40 per cent of legacies above

£300,000 from all but the rich, who

can sidestep the tax.

A fair society means one in which

effort and prudence are rewarded.

Denis Healey, in his heyday as an

old Labour standard-bearer,

threatened to squeeze the rich "until the pips squeak".

All that,

thank goodness, is now forgotten.

What is going so wretchedly

wrong under this Government,

however, is that instead of

oppressing the wealthiest people

in Britain, it is bleeding some of

the most vulnerable.

Every recent

study shows that the middle class

now bears a much higher

proportionate share of the tax burden

than do City millionaires.

Nobody sensible suggests

persecuting the rich. That would wreck

Britain’s wealth-creating machine,

which is now one of the most

successful in the world.

But there

must be recognition of the grossly

unjust burden falling upon

millions of families with incomes

above £34,000 a year.

The heart of the problem lies in

the cost of education, which has

become a punitive tax on the best

parents, those who care most

about their children.

The only credible way out lies in

the introduction of education


Every family in the land

should be given an entitlement to

a fixed sum, to spend on

educating its children however and

wherever it wants.

Gordon Brown expects soon to

be spending £6,600 per pupil on

schools. At least 40 per cent of this

money is wasted on


We all finance the failure of

the state system through our

taxes, yet millions also pay out of

taxed income to enable their

children to escape its


The fact that this state of affairs

has persisted for decades does not

make it less monstrous.

If every child’s parents were

given a voucher for £6,600 to spend

at their own discretion, the impact

would be revolutionary.


penny would go straight into

schools. The class distinction

between state and private education-would vanish overnight.

The socialist Swedes do it — and

it works. No Labour government

will show the courage to introduce

a voucher scheme, but David

Cameron should place it at the

heart of his agenda.

The Tories

have just disappointed a great

many people by proclaiming that

they will not reinforce grammar

schools. They think the politics of

selection too dangerous.

Yet somehow they must offer the

prospect that the respect will be

restored to middle- class family

values — I mean here financial

rather than moral ones — which

they are denied by New Labour.

Most of us can look

without dismay or envy on

Russian oligarchs buying

yachts and football clubs,

corporate bosses paying

themselves millions, City traders

squandering bonuses on

conspicuous consumption — if less

fortunate people enjoy their share of

national success and do not bear

an unjust share of taxation.

Today, instead, Britain’s middle

class has become Gordon Brown’s

beast of burden.

It receives

rewards inadequate to preserve its

traditional standards, while bent

under costs and taxes far beyond

its due.

Any Government which wants to

win a General Election, never

mind deserves to, must address

this fundamental injustice.

Minorities of all kinds have

been showered with good things

by New Labour.

It is now time to

heed the needs and rights of the

majority, that part of the British

people which does most of the

work and represents values that

should properly be recognised as

the very foundations of our