Rebuild Our Middle Class

Ed Miliband writes:

If there was a single undisputed truth in Britain in the decades after the Second World War, it was that there was going to be a rising middle class.

This view was fuelled by a sense of optimism and fulfilled aspiration in our country: a belief that if our children worked hard they could have a better life than we enjoyed.

It was the Promise of Britain. And it is a promise that is in danger of being broken as we come to the end of a long period during which the middle class grew stronger and larger.

In the post-war years, more people from different backgrounds went to university and most people expected to find a steady and well-paid job.

Families saw that if they saved, they would be able to buy a home in which to raise their children. And our parents could look forward to retiring in security with a decent pension.

But today, the British middle class is being squeezed by a cost-of-living crisis as never before – and people grafting to join it find that the obstacles in their way are getting bigger.

The motors that once drove and sustained it are no longer firing as they used to. Access to further education and training, good quality jobs with reliable incomes, affordable housing, stable savings, secure pensions: they have all been undermined.

In recent months, Labour has been setting out how, as the next government, it would immediately tackle the cost-of-living crisis with measures ranging from a freeze on energy prices to a cut in business rates for small firms.

But this is a task that would also require serious long-term changes being made to our economy, so Labour is producing specific proposals for how we would earn and grow our way to higher standards of living for everyone.

Our programme is rooted in an understanding that this crisis began before the Tory-led government came to power. There has been a hollowing-out of those white-collar professions that used to keep the middle class strong.

According to Government figures, the occupations that have suffered the largest falls in employment over the past 30 years are all in the middle.

But under David Cameron, life is getting tougher still. In the past three years, getting on for half of the new jobs created have been in low-pay industries and the average worker is now £1,600 worse off than before the election.

University tuition fees have trebled but even graduates often cannot find decent jobs. Parents now have new worries as children leave college to take up insecure and unrewarding work.

One in three graduates has had to take a job, according to recent research, that used to be done by people who hadn’t gone to university. Three quarters of those who started out in low-paid work a decade ago have been unable to move into permanently well-paid work – while middle-class incomes have been harder hit than any other group during the recession, with wages declining by 10 per cent.

And the dream of home ownership seems more distant than at any time since the war: it now takes 22 years for an average earner to save a deposit for a first home, compared with just three years at the end of the last century.

So many families feel a gnawing anxiety about what the future holds. Middle-income earners in their thirties and forties already know their pension entitlements are set to be less than those of the previous generation. More people are worried about losing their job than at any point since records began.

Fully half of British employees are worried about being downgraded. The current cost-of-living crisis is not just about people on tax credits, zero-hours contracts and the minimum wage. It is about millions of middle-class families who never dreamt that life would be such a struggle.

No one saw this protracted squeeze on the middle coming. My own party’s politics changed in the Nineties to surf a wave of aspirational self-confidence.

But the task facing the next Labour government will be far different from the one we faced in 1997. Indeed, the greatest challenge for our generation is how to tackle a crisis in living standards that has now become a crisis of confidence for middle-class families.

I know our country cannot succeed and become collectively better off without a strong and vibrant middle class. And so we must equip ourselves to compete with countries such as China, India and Brazil – all of whom have a rapidly expanding middle class – in order to win that race to the top.

Later this week I will be setting out the next steps of our plan to build a One Nation economy by reforming finance, skills and wages while paying down the deficit.

Only Labour will create more and better-paid jobs, tackle insecurity at work, and build the homes we need for the future. Yesterday, Emma Reynolds explained how we will increase the supply of new homes.

Tomorrow, Tristram Hunt will talk about raising standards of teaching. On Monday, Rachel Reeves will show how we can ensure more people are in decent jobs while our social security system rewards work and contribution.

Together we will demonstrate how Britain can deal with the cost-of-living crisis and rebuild our middle class.