Politicians should be clear about who is really struggling. It’s not those who have been forced to kick their Waitrose habits
Paul Deighton doesn’t like the term “successful”, which is awkward, it being the obvious word for a multimillionaire headhunted from organising the Olympics into a plum ministerial job. The Treasury’s newest hire prefers to call himself “lucky” instead. But presumably anything’s better than “rich”, a word the English still hate to use about themselves. One is merely fortunate, or comfortably off – or even uncomfortably off, like the anonymous businesswoman quoted in the Guardian last weekend, complaining that “I just barely get by” on an annual household income of £1m.
She missed the private jet and Bentley that came with her first marriage, apparently, a timely reminder that the “politics of envy” lambasted by the new business minister Michael Fallon isn’t just for the great unwashed. Millionaires envy multimillionaires, who curse billionaires in turn, and a quarter of American millionaires in one survey said they didn’t even feel rich. The “real” wealthy – the ones everyone vaguely thinks should pay more tax – somehow always seem to be defined as just that little bit wealthier than you.
It’s easy to mock deluded millionaires, of course, but they’re not the only ones hopelessly confused about what it means to be rich, poor or stuck in the infamously “squeezed middle”. We’re riding into a storm over the creation and distribution of wealth, with the party conferences dominated by arguments about tax and spending, yet most Britons still have only a vague idea of where they fit in the national picture.
Attitudes to the poor are hardening, but based on fundamental misunderstandings about who the poor actually are. Today’s British Social Attitudes Survey showed sympathy for the unemployed dwindling, on the assumption that they should just get jobs – never mind the forgotten hordes in jobs that don’t pay enough to escape poverty. And while attitudes to the rich have hardened too, we’re hazier than previously about who they really are.
Survey after survey shows most people reckon themselves roughly in the middle of the income scale: they think they’re average because they feel no richer than their friends, forgetting that their friends are from similar backgrounds. The result is a large, politically awkward class of “imaginary middles” – perhaps best defined as the kind of people who definitely think the richest 10% of Britons should pay more tax – until they realise that means anyone earning just over £46,000 a year, themselves included.
They’re a long way above the “squeezed middle”, since they earn two or three times the median salary, but they feel the label fits and it’s a brave politician who would argue. Why be specific about what constitutes rich or poor, fat cat or striver, when keeping things vague draws in so many more voters?
So this week’s Liberal Democrat conference will channel grassroots anger at the scrapping of the 50p tax rate into debating a motion that tax burdens should rest on the “broadest shoulders”, without defining quite how broad. Millionaire-sized? Headteacher-sized? Busy plumber-sized? Take your pick.
Labour, meanwhile, is busy separating the deserving from the undeserving rich. Ed Miliband’s suggestion last week that it’s fine to be loaded “if you make it the hard way” sounds initially like a horribly impractical basis for a tax system: are 18-hour days on a City trading floor hard enough to justify earning squillions? Where does hard work that still leaves you poor, like cleaning toilets, fit in?
But it shouldn’t be underestimated, this distinction between “easy” money – inherited, or piled up in a property bubble – and “hard” money earned through entrepreneurship or graft.
It leads naturally into a tentative new area of Lib-Lab mutual interest, the shift towards taxing accumulated wealth (or “luck”) rather than the income associated with success. Somewhere in here lurks an embryonic idea for capitalising on the revived enthusiasm for more spending, funded by higher taxes, also identified by the survey. But there’s still no ducking the awkward question of exactly how much luck should attract the taxman, and no chance of a serious conversation about the responsibility of the comparatively rich towards the comparatively poor without some home truths about who belongs where.
It’s not easy to pin a precise salary on the genuinely squeezed middle because what’s reasonable for a young singleton in the northeast won’t cover raising three children in London. Yet it’s not impossible for politicians to explain that if your idea of economising is to stop shopping at Waitrose you’re imaginary middle, but being forced to put things back at the checkout is squeezed middle. Swapping the 4×4 for something less thirsty is imaginary middle; choosing which set of grandparents to see this Christmas, because petrol’s too expensive to visit both, is squeezed middle. Everyone feels the pinch, but some hurt more than others.
The imaginary middle do, of course, still deserve help and sympathy from politicians: professional job insecurity is rife for them, home ownership still elusive in some areas and even surprisingly high earners find work doesn’t pay once childcare costs are factored in. But to go along with the myth that we’re all part of one huge, equally suffering middle is frankly dishonest, merely fuelling self-righteous hostility towards imaginary wastrels at both ends of the income scale. It may be vulgar to talk about money, but it’s a lot more offensive in the long term to keep quiet.
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