The disintegration of the middle class

This week I was talking to a friend about my godson’s business as a private mixologist. I was explaining how he had successfully tapped into a market among the growing young urban middle class who wanted to have glamorous nights out, were not interested in wine and wanted something that made them feel glitzy.

My friend asked me a question that brought me up short. What, he asked, did I mean by middle class?

My immediate reaction was to think in terms of home ownership. In London, however, that doesn’t work. Property is just too expensive. Large parts of the metropolitan middle class are resigned to renting — at great expense — for the foreseeable future.

Then my mind turned to my youth, where the middle classes had dress codes. I am old enough to remember dress codes for dining in most restaurants. Offices, of course, had strict dress codes (one of the other members of my cohort of trainee solicitors was sent home to change because he came into work wearing an olive-coloured suit).

That doesn’t work either. While some offices still have looser but more impenetrable dress codes post-Covid, many jobs that feel middle class have no obvious dress code beyond the requirements of public decency. People doing unnatural things with computers can wear flip-flops, black nail varnish or baby Jane dresses (all three together if they so wish) and that would be ok. They are surely still middle class.

So after fumbling through these and a few other non-starters, I eventually came to the conclusion that nowadays the practical definition of middle class is someone who has a career rather than just a job, realistic prospects for advancement in work as well as a job today that provides enough to live on.

My friend didn’t look too convinced and, you know what, I’m not either. For if this is the definition, the middle class are nothing more than the working class with a high opinion of themselves.

This has consequences. Where is the hope on offer to those who want to aspire? If we aren’t prepared to give them anything meaningful to save for, they’re going to consume more with their disposable income. But there’s only so much avocado toast, or cocktails, that will satisfy an appetite.

Sir Keir Starmer, in a fairly garbled way, seems to have noticed.

“I don’t believe it’s overly sentimental to say I grew up surrounded by hope. There was an atmosphere of security we all took for granted — a sense that hard work would be rewarded in Britain. That, in the end, things would get better for families like ours.

My parents didn’t just believe this, it comforted them. It’s what everyone wants for their family; a story we still tell our children — “work hard and you can achieve anything”. The question now is: do we still believe it? Can you look around your community today and say, with the certainty you deserve, that the future will be better for your children?”

This diagnoses the problem. It’s much less clear whether Labour has a solution. Labour are going to need to find one. They say that the French revolution didn’t start because peasants were starving (peasants had always been starving) but because lawyers were starving. The social ladder hasn’t just been kicked away for those in dead-end jobs, large numbers of young graduates are similarly stuck. Most of the people that Professor Goodwin would label the new elite are long term tenants, paying the old elite through the nose for the privilege and usually paying off student loans at the same time. They’re getting restless.

If you want, you can call it a betrayal of the younger generations (“younger” for these purposes meaning anyone under 40, and you could easily choose a higher age than that if you aren’t as cautious as me). I’m more interested in where we go from here. What do we want future generations to aspire to?

If you think this is just rhetoric, think again. The average age of first time home buyers has risen from 29 in the 1990s to 34 today. Meanwhile, more than half of those first time home buyers get financial help from family, a proportion which has doubled in the same period. These statistics need to be considered together. For every 28 year old getting a leg-up from the Bank of Mum and Dad, there’s a 40 year old who has finally scraped together a deposit. And these are the ones who have got their first foot on the property ladder. If you want to own your own home and you don’t come from a wealthy family, you need to be unusually lucky or unusually talented or you’re usually screwed.

The other obvious form of investment in the future, a non-financial investment but an investment all the same, is children. And here too the trends tell a story. In 1995, the average age of the mother of a first child was 26.1. That had risen to 29.1 by 2020.This is a continuation of a longstanding trend but this is coupled with a reduction in the number of births per woman, which is now estimated to be at 1.5, an all-time low. This is most accentuated among those who have been here longest: as noted in the FT story, two thirds of live births last year involved parents where either one or both were born outside the UK.

So a swathe of the professional classes as well as the traditional working classes is unable or unwilling to invest in their futures. What is to be done?

It is a curiosity that there has been a complete inversion among the two main parties on this subject. A few generations ago, Labour would have wanted people to aspire to a decent standard of living; ownership of assets was a secondary matter so far as the individual was concerned. The Conservatives, meanwhile, right the way up until the 1990s wanted people to be able to save and prosper. John Major wanted to see wealth cascading through the generations. Nowadays, it is Labour who concern themselves with a better future for the nation’s children while the Conservatives through their policies have created a Britain where most people have a comfortable enough day-to-day life, certainly as compared with the past, but who have little hope of long term betterment of their circumstances.

This inversion poses each of the main parties a challenge. The Conservatives have over the last 13 years embedded a system of society that is designed to extract money from the young and poor and give it to the old and rich. That doesn’t sound fair, but it’s worked electorally for them. To date, anyway. The Conservatives need to decide whether they accept that large numbers of people are in practice going to be unable to buy their own homes, being effectively permanently dependent on private landlords and letting agencies. If so, what protections are they going to offer those people? What future are they going to offer such people? At the moment it looks like a big fat nothing.

Labour’s challenge is different. Are they going to tailor policies for the alienated middle classes who feel that all that is on offer for their skills is a mess of pottage? Or are they going to look after poorer voters who have been Labour’s traditional priority? They won’t be able to do both in full: the economy is in far too parlous a state to consider that. In fact, given how bad the economy is, they probably won’t be able to do either very well. Labour have had this dilemma before: in the 2010s Ed Miliband talked about the squeezed middle. Nowadays, however, the squeeze goes well into the upper middle.

Among the wider political ecosystem of thinktanks and wonks, the policy prescriptions have generally been small c conservative, designed to restore the middle classes to their former position in the hierarchy. So, build more houses; invest more in infrastructure; improve education, including nursery education. These are all on their face worthwhile things to do but all of them cost quite a bit of money and entail taking on vested interests.

To date, the political will has been lacking. We haven’t heard anything from any politician that suggests that they are prepared to make hard choices in these areas. Take housing, for example. Both main parties purport to want more houses to be built. But when it comes down to housebuilding proposals at the constituency level, MPs of all parties fight them on the green belts, they fight them on the golf courses, they fight them on the car parks. And their leaders surrender.

So by default we are creating a new idea of the middle class, a middle class with disposable income but no assets, themselves representing an asset of a small wealthy rentier class taking full advantage of them. It’s not an appealing idea. But unless politicians are ready to start dishing out some home truths to the public, it’s a new idea that is only going to become more embedded.