In an article in yesterday’s Daily Telegraph, Ed Miliband makes an unashamed appeal to what is often called the “squeezed middle” – people who are working, apparently reasonably-off, but who have been hit hard by austerity. It’s an approach that has caused some consternation on the traditional Left, wary of the legacy of New Labour and calling for caution about abandoning Labour’s core supporters.
I dislike the phrase “squeezed middle” – not least because in US political debate, where the phrase originates, when commentators talk about the middle class they mean precisely that, people on average incomes, whereas “middle class” in England usually means people whose incomes are much higher than the average. But leaving that aside, I’d suggest Ed Miliband is showing a much shrewder understanding of the economic divide in contemporary Britain than his critics suggest.
To understand this, you have to ask the question of who has benefitted from economic activity, both since the crash of 2007-8 and before it (and, yes, I’m including the New Labour years in that question). The facts are overwhelming; real wages have stagnated – and for those on the lowest incomes were stagnating long before the crash – and form a declining proportion of national income; while rentiers have flourished. Of course that process has been hugely accelerated by austerity. But the question that Miliband addresses is a crucial one: who benefits from late capitalism? What is implied by the fact that our economy is increasingly failing to provide those in work with a decent sufficiency, to the point where their income needs to be topped up by the state, while shareholders, landlords and speculators reap the benefits? What is the point of increasing property prices inflating the paper wealth of middle England, when pensions – often in the private sector – are falling and when the costs of old age are soaring?
The point about Miliband’s article is that it looks back to a time when those who worked – who relied on their labour for income – could expect not only a decent sufficiency, but could expect things to improve over time, backed by a benevolent welfare state. The message in more recent years has been – you’re on your own, and you get what you’re given. And that has affected what we call the middle class too – as Miliband points out, decently-paid white-collar employment has been hollowed out by the austerity years. And people who had confidence in their material status have suffered as a result.
So this is an issue about where you see a community of interest. The right has drawn the line between the “hard-working families”, the “strivers”, and the “skivers”, the “something for nothing culture”; but that’s an illusion, and a shameful one, in a society in which for millions hard work doesn’t pay a living wage. It’s a dog-whistle – and one that New Labour was guilty of; Ed Miliband’s Labour, to its immense credit, appears to be growing out of that one (although there’s still the odd lapse). The real divide, it seems to me, is between wage-earners (potential and actual) and rentiers; Ed Miliband’s “squeezed middle” argument seems to me to articulate that divide precisely, and it’s why what he says is seen by both the right and what one might define as the inward-looking newspaper-selling left as a threat.
I saw one leftish critic of Miliband’s article suggest that rather than cultivating the affluent middle class, Ed should spend some time with his father’s books. That’s a cheap and nasty slur. I’d argue that Ed is demonstrating that not only has he understood the legacy of Keynes and Beveridge about politics, economics and stability; but is showing he’s a worthy heir to his astonishing father, and is understanding things that have passed by the more conventional left.