Britain’s middle classes struggling for survival

Press, 16 September 1976, Page 21

Britain’s middle classes struggling for survival

What is the plight in Britain of that class of people known in some countries as the bourgeoisie, in others, as the white-collar, professional, or executive group, but in Britain as the ‘Middle Classes?” How are the virtuous, thrifty British middle classes — once the pillars of the Empire, the universities, law, medicine, .and the Church — getting along? Extremely badly. Their real income has been going down relatively since the end of the Second World War, but in the last three or four years it has been plummeting. Their first blow came as a result of the sale during the war of most of Britain’s overseas investments. The income from those investments, if they could have been retained, would have helped them directly by finding its way back to the rentiers. It would have helped them indirectly by keeping down the price levels; if Britain could have retained them, it would not have needed to finance an inflationary high level of employment to produce such exports to buy necessary imports, since the imports could have been bought with the income from those overseas investments.

Then came the high taxes to pay for a Welfare State which began big and steadily expanded, followed by the relentlessly rising rate of inflation. The final blow has been

of a psychological kind: the values of the middle class in Britain have become unfashionable. A consumer-orientated society such as Britain is today does not want to practise thrift -even if the savings have been available with which to practise it.

Successive Labour governments have encouraged public spending, have discouraged private spending, on medical, educational and other services; and successive Conservative governments have done little or nothing to reverse this trend, for fear of a political backlash.

In the last three years, the middle class has taken a tremendous extra belting, since the long-term factors above have been supercharged by the inflationary push and, during the last two years, by tough policies from the Labour Government. A remarkable account of their plight, and call for action, has appeared in a book by the British economist, Patrick Hutber, entitled “The Decline and Fall of the Middle Class and How it Can Fight Back”. As he wrote it, the rate of inflation in Britain was 25 per cent. “A price rise which even as recently as 1965-70 took five years now takes one year,” he comments.

This hits everybody, of course, but as he points out, with ample statistics, it hits the middle classes most — and most of all

the self - employed — since the lower-paid, the bluecollar or “workingclasses,” can negotiate wage increases through their powerful unions, and in any case do not pay the steeply ascending .rates of income taxes that the middle classes have to pay.

The rates of income tax ascend in two senses: one, in the se.nse of increasing rapidly every year; the other, of mounting sharply and even more sharply after a moderate level of income is attained.

A revealing glimpse of the plight of the middle classes as a result of the combined onslaught of inflation and high taxation is provided by one of Hutber’s tables which shows how much of an increase in a man’s current year’s income would be necessary to maintain it at the same real level a year from now. A man with a gross income this year of £6OOO (say $12,000) would need a gross income next year of £BOl2, an increment of 33 per cent, and a man with a gross of £15,000 would need a gross income increment of 57 per cent. The British Government now claims to have reduced the 25 per cent rate of inflation to 12J per cent. Even so, Hutber’s point in principle remains. And even if inflation is stabilised at, say, 10 per cent, and even if the working classes, and the lower levels of the middle classes, can take it, it is

obvious that the middle class as a whole can not. Its members will not perish, but as the middle class in the historical sense they will cease to survive. Hutber believes that the ruling Labour Government is out to destory the middle classes because they stand for values and a way of life which are

By

KENNETH HARRIS,

i, of the

“Observer,” London

inimical to an egalitarian socialist society. Can the middle class do anything to preserve itself? Hutber thinks it can, and must, not only for itself, but in the national interest.

The middle classes, he says, must act on their own account, without waiting for the Government to mend its ways. The battle can be fought in and on the local governments, city, town and village. The shock troops must form local taxpayers associations, join committees, and storm into every voluntary body that can influence public life at local level.

They must lobby and protest. They must, for instance, prevent the great Labour Government drive — connived at by previous Conservative governments — to abolish all private schools and institute a State system of schools all run on the same pattern.

They can hold up many important political proceses, he says, by lobbying their Members of Parliament, by forming groups to lobby local councils, and by using the law to thwart or actually stop processes and programmes. Hutber has a whole chapter full of detailed practical suggestions on

how the embattled members of the middle classes can act on their own or in concert to stop the rotHis proposals, and his battle cry, may get a great deal of support. Not only are the individual njembers of the middle classes now galvanised by the swingeing blows of the last three years, but dozens of industrial leaders have gone on the record to warn the country, irrespective of party, of the effects of the tax measures of the last two years on the decline in incentive — and recruitment — in relation to industrial management at all levels.

Will anything of any real importance happen? If it doesn’t it might be said that this was because Hutber’s alarm may have been sounded too late and that the morale of the British middle class has already been lost.

—O.FN.S. Copyright,