Petrol shortages, an explosion in gas prices, ongoing economic pain from lockdown, a breakdown in logistics infrastructure, continuing difficulties with trade between the UK and the EU, and rising inflation — these are just some of the items on a miserable list of factors that are set to drive the cost of living up for British workers, even as real wage growth has stagnated. In his latest budget Rishi Sunak promised to confront the question of the cost of living, offering to change the Universal Credit “taper rate” so that benefits would be lost more slowly as income increases, whilst also approving a modest boost to the minimum wage.
Although the taper rate will undoubtedly help many of the poorest, the policy largely serves to balance out the removal of the £20-a-week Universal Credit uplift. Even on an optimistic reading the new proposals represent a modest addition to the incomes of those at the very bottom of the pay scale.
Middle class fortunes could easily tip into poverty
For those a little further up the totem pole, there’s nothing but bad news, with a planned freeze on the pay scale rate meaning that many taxpayers will find themselves shifted into higher tax bands, representing a real term increase in income tax that will primarily affect middle class households. This follows a familiar pattern, visible over 10 years ago in the days of the coalition government, whereby an austerity budget is spun as progressive by pointing to tax decreases at the very bottom of the income scale, even as the majority of earners see taxes increase.
Ed Miliband speaking out in 2010 used a wonkish term for this group: he called them the “squeezed middle”. The Chancellor’s budget is a classic example of putting the squeeze on middle income voters. Although the taper rate professes to reduce the ceiling effect of the welfare system, the income scale change has precisely the opposite effect, shifting the tax bands downwards so that as working and lower middle class earners grow their income, they more rapidly fall into higher rates of tax, reversing the gains realised by taking overtime, going after a promotion or increasing the productivity of a small business.
It’s only the latest in a series of shifts that have created a new precarious class that, whilst not qualifying as in poverty, and even including many apparently solidly middle class households, exists in a narrow band of economic habitability, and lacks the ability to save or advance economically. Levels of private debt have soared. Behind the veneer of many suburban lives exist huge mortgages, cars bought on credit and a weekly struggle to pay rising bills.
Whilst those at the very bottom make a naturally sympathetic and logical focus for government assistance seen from the lofty perch of Whitehall, the perspective of many of those who live alongside, but not necessarily in, poverty is very different. Comprising traditional working and lower middle class voters, these are people who have to deal with the very poorest as neighbours, family and friends, and not as supplicants. They are intensely aware of how easily their own fortunes could tip them into poverty as well.
Scarce resources are monopolised by dysfunctional households
Between the prosperous ranks of the property-owning class, and the social democratic safety net of welfare recipients, lies a hazardous no-mans land in which families struggle to overcome a mix of stagnant wages, rising costs and increasing taxes, trying to lift themselves out of the mire of private debt to become asset owners themselves. Some will make it, others will conclude it’s not worth the struggle — most will remain stuck in the middle, fighting just to hang on to what they’ve got.
Ed Miliband aptly identified the sense of economic precariousness, but what he and others like him on the left failed to realise is the degree to which this feeling of insecurity and abandonment by those in authority goes well beyond purely technical economic concerns. It embraces questions of culture, identity, morality and political dignity.
As the old model of social insurance and universal provision in the welfare system has given way to a narrower system of centrally funded benefits, with a shrinkage accelerated by austerity, the remaining resources have been increasingly concentrated on those classified as the most in need. As rational and moral as this may appear, the result is that scarce resources like social housing and various forms of care and financial support become monopolised by the most dysfunctional and troubled households.
Those in authority act with indifference to those who do the right thing
As with the phenomenon of homelessness, poverty today is often more complex than a pure question of economic bad luck and disadvantage. Rather than finding themselves caught in some Dickensian financial misfortune, those in poverty are instead increasingly comprised of individuals who suffer from destructive mental illnesses, drug, alcohol or gambling addictions, family breakdown and various forms of criminality. Those trapped in poverty by the chaos of their lives and habits are of course joined by those cast into poverty by spiralling costs, caring responsibilities, disability or illness. The lines between the two are often not clear cut, with many falling into poverty through no fault of their own but then becoming trapped by the dysfunctions and habits that poverty has helped usher into their lives.
Because of this, there is a growing sense amongst many members of the working poor and the precarious middle classes that they find themselves in no better or even worse circumstances by making the choice to work rather than applying for benefits. The reality is worse than the banal concern over “lazy” individuals taking unemployment. Those who actually live and work alongside the most dysfunctional members of our society unquestionably witness the state rewarding families who neglect or even abuse their children, who behave anti-socially in public, who engage in petty or not-so petty law-breaking, or who bring dangerous drugs and violent individuals into their neighbourhoods and estates.
There is an overall sense that the state does not “back” individuals and communities that embrace personal responsibility, hard work, politeness and generosity. Instead those in authority appear to act with indifference or even hostility to those who do the right thing. This feeling has economic dimensions, but it is no less a phenomenon of social authority, a fact embodied by the actions (or rather the inaction) of modern British cops. There is no confidence that the police will reliably restrain individuals who engage in petty lawbreaking or anti-social behaviour. Public drug taking, vandalism, loud and threatening behaviour and sexual harassment are unchallenged commonplaces in many urban centres.
Social authority seems oppressive to modern elites
Basic norms about how we behave in public cannot be enforced by the police alone; they require a collective sense of social authority whereby anyone can feel confident reminding another person to abide by those norms, and where people would feel frightened to go against these norms for fear of public ridicule and reproach. That atmosphere is shattered, however, when individuals feel the authorities are not on their side, and will not protect them from the retaliation of misbehaving individuals.
Social authority seems oppressive and outdated to our modern elites, most of whom have not had to live alongside people who regularly flout norms of civility and basic decency. One reason so many working class people are social authoritarians (though not necessarily social conservatives) is simply that if you’re poorer, you’re far more likely to encounter disturbed and violent people. The need for social authority is viscerally obvious when you’re forced to confront social breakdown and disorder in your daily life.
The reason the left keeps losing to the right in Britain today is that whilst correctly diagnosing many economic ills, they fail to recognise the central importance of social authority, moral order and hierarchy. Though greater economic equality and stronger state intervention has mass support, working class communities understand that these must come in tandem with a restraint of those who will disrupt, waste and abuse dearly won prosperity. We can never hope to weaken the injustices of increasingly frozen economic hierarchies if we do not impose social and moral hierarchies in their place.
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