Tony Blair rightly identified Mondeo Man without as such referring to the old idea of class. Now Ed Milliband is talking about helping the ‘middle classes’ and middle Britain. Writing in the Telegraph recently, he set out the problem:

“In the post-war years, more people from different backgrounds went to university and most people expected to find a steady and well-paid job. Families saw that if they saved, they would be able to buy a home in which to raise their children. And our parents could look forward to retiring in security with a decent pension.

“But today, the British middle class is being squeezed by a cost-of-living crisis as never before – and people grafting to join it find that the obstacles in their way are getting bigger. The motors that once drove and sustained it are no longer firing as they used to. Access to further education and training, good quality jobs with reliable incomes, affordable housing, stable savings, secure pensions: they have all been undermined.”

So who is Miliband referring to when he talks about the middle classes?

Janet Daily, a columnist for the Telegraph had a shot at defining such people as:

“…those who have always expected to own their own homes, to have secure financial futures, to see their children through higher education, and to have those children do at least as well as they did, professionally and economically.

“Those who come into the Milliband category of disenchanted New Strugglers will be earning roughly between £41,000 and £60,000 – enough to have been pulled into the higher rate tax band and probably to have lost at least half, if not all, their child benefit.”

Now, according to Janet’s first paragraph above, my father was middle class, but as my children never did progress to university or technical college and have not done as well as myself either professionally or economically, then maybe I am not.

When I worked for a period in the 1970’s as a Design Technician in the South African Post Office I was highly respected by members of the public and neighbours.  Indeed, we lived in one of the most expensive parts of Pretoria and I was considered a professional on a par with Doctors, Bankers, Lawyers, etc.  Definitely upper middle class.

On returning to the UK I worked for a couple of prestigious companies as a Design Engineer, and then in 1981 decided that ‘if I can do it for them, then I can do it for me’ and went self employed in partnership with my wife. Our business has survived now 33 years and is still doing well, but we have never earned enough to pay the higher rate tax band. By being thrifty and frugal and doing lots of DIY we have been quite comfortable.

My wife is the daughter of a semi-skilled fitter and turner, who was also a shop steward for the union, and she still thinks of herself as working class.  My father was a senior scientist with the admiralty and I am a qualified engineer, but one still very hands-on.  So even though I make electronic equipment I don’t consider myself working class.

Is class, then, all about money?

A questioner on Question Time last Thursday previously had a well-paid job and had considered himself middle class, or at least ‘Mondeo Man’.  But since losing his job, and having been unable to find employment as well paid as previously, now considers himself working class.  Is that true?  Is it all about the money?

What’s the point in being ‘middle class’ and having to work all hours to keep from sliding back down the slippery pole? Working unsociable hours just to pay household bills, pay extortionate amounts for rail tickets and petrol and parking fees. Being able to afford to send the kids to university and have a car good enough to maintain street credibility.

Frankly, whatever you earn, if you have lived to your financial limits and run up credit card and mortgage debts during the boom times, you will be struggling now.  You can be sure that immediately after the 2015 election the Bank of England will start raising interest rates.  Regardless of who gets into power, how are you then going to cope?

So, if it is so difficult to define what ‘middle class’ is, who exactly is Ed Miliband talking to, and what is he going to do to help the New Strugglers? The answer is: no-one is sure. In his Telegraph article quoted above, Milliband set out the problems, but none of the solutions.

We know that Labour wants to put the top rate of tax back up to 50p, but this has been proved time and again to result in less tax revenue as high earners can employ good accountants to find holes in our complex tax laws to avoid paying too much. Indeed, when the top rate was dropped to 45p, the take by HRMC increased by £1.3billion in the first month alone.

Remember it is the enterprising people who drive our small and medium size businesses who are the wealth creators of the nation.  Maybe they are the new ‘middle class’, but they are the ones Labour will target with higher rate taxes.  Punitive taxes on these people will have negative effects on reinvestment in their businesses.  It will be case of killing the golden geese.  

It is worth reminding people that it was Labour that, in a stroke of genius, transferred the control of bank rate to the Bank of England, thereby removing the brake successive governments had used to control the housing market.  What happened then was the greatest house price inflation ever, putting ownership of a house way beyond the reach of most young couples, in part ultimately led to the banking crisis.

It was Labour that squandered the budget surplus from north-sea oil and gas instead of investing it in infrastructure.  It was also Labour that started the £5b per annum raid on private pensions, thereby denying self employed people in the baby-boom generation worthwhile pensions.  It was Labour who overspent in the last two years of their government, increasing the structural deficit by £122b leading to the present austerity.

So Ed, it seems that your party and Shadow Chancellor doesn’t have an answer for how to reduce the deficit, how to encourage the wealth creators, and no one from whom to take the money required to give to the New Strugglers to make them feel happy again. Promising people that you can save them a few hundred pounds a year by freezing fuel prices just doesn’t do it.  You don’t get my vote, whether I am middle class or not!

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