Broke: Who Killed the Middle Classes?

Dedication

For William

Contents

Title Page

Copyright

Dedication

Prologue

1. The scene of the crime

2. The first clue: the staggering house-price escalator

3. The second clue: the strange case of the disappearing banks

4. The third clue: the corrosive explosion of finance

5. The fourth clue: the dog that didn’t bark

6. The fifth clue: the great education panic

7. The sixth clue: the strange case of the disappearing professionals

8. Following the clues, unmasking the villains

Afterword to the Paperback Edition – The Year Everything Changed: 2013

Keep Reading

Notes

Acknowledgements

About the Author

By the Same Author

About the Publisher

Prologue

‘By the people, I mean the middle classes, the wealth and intelligence of the country, the glory of the British name.’

Henry, Lord Brougham, 1831

I was born in a corner of central London that wraps itself around a great grey-green greasy stretch of water called the Regent’s Canal. It was and is known as Little Venice.

As anyone familiar with Little Venice will know, this defines me inescapably as middle-class. Not just slightly middle-class, but staggeringly, swelteringly, stratospherically middle-class, as middle as you can get. And not just by the broad American definition (average income) either, but by the specific British definitions which are harder to pin down, but which seem to be about attitudes and upbringing, culture and prejudices.

But there are many kinds of middle class, even in the UK, and I hope this book will strike a chord with all of them. From the first-generation middle classes who followed the entrepreneurial path set out by Margaret Thatcher right through to the crustiest scion of the landed gentry. From the brand-new estate outside Bishop’s Stortford to the tumbledown off-grid eco-cottage outside Totnes. I mention Little Venice because anyone reading this book deserves to know about the niche in the class system I am writing from, but I am only too aware that there is more than one way of being middle-class.

In my case, I am also middle-class because my parents are. Both my grandfathers were in the services, one rising to be a colonel in the army and the other to be a captain in the navy. Their service pensions and various modest pots of inherited money and property gave them relatively comfortable retirements. I owe my grandparents a great deal for their resources of love and care, but also perhaps for placing me so unambiguously in such a recognizable spot in the class system.

Neither set of grandparents approved very much when my newly married parents moved into a run-down rented flat in Little Venice, which was not in those days quite what it has become. The canal stank of drowned cats, and was divided from the road by a tall brick wall, like a scene from Love on the Dole. All those coloured barges sheltering artists and musicians (and later Richard Branson) were still a decade away.

The flat was in the least respectable half of Randolph Avenue, bending down towards the canal, with peeling white stucco columns and flaking black front doors which looked like the portals of some medieval fortress. But the family disapproval also touched the street’s reputation. Only ten years before, this end of the thoroughfare had sported the name ‘Portland Road’, which had been such a notorious red-light district that the council decided to change it.

Downstairs from our flat was a fearsome Alf Garnett figure, string-vested and with a fluent and foul-mouthed command of the language, who would hammer on the ceiling at the slightest provocation. My uncle had a heavier tread than most (submariners tend to be larger than the rest of us), and he could set off the hammering and oaths just by walking across the room.

We moved closer to the canal, to another rented flat, when I was only about three, and we left Randolph Avenue behind. I never lived there again, though I have wandered down the street many times, and watched the slow transformation of the red-light district, first into respectability, and then into luxury. I ran into a couple at a dinner party a few years ago who lived in a tiny flat at the very top of the very building where I started out. They told me that our flat – which had so shocked my grandparents’ families – was now inhabited by the head of Benetton Europe. It had become, through the strange metamorphosis of gentrification, a fitting home for the new class of ultra-rich.

I tell this story to show how, during my lifetime – even my adult lifetime – my contemporaries and I have witnessed an extraordinary revolution in the fortunes of the middle classes, from the widespread doubts in the mid-1970s whether they could survive at all, through to their recent apotheosis under Margaret Thatcher a decade later. It was a revolution that began with DIY and was carried forward – leaping and out of control – into staggering house-price inflation, as previously careful and respectable middle-class investors began to cream off the rewards of the next property bubble. Public policy, under all the prime ministers during that period, has been intended, if often quite wrong-headedly, to promote the middle-class life ever since.

So here is the question at the heart of this book. Given that extraordinary shift in fortunes – and that cascade of money through property and financial services known as Big Bang – why is it that the middle classes feel so threatened? Why have they been sidelined by a new and aggressive international class of mega-rich? Why have their homes and way of life and retirements become virtually unaffordable, with home ownership falling steadily, and now lower than in Romania and Bulgaria? Why are they in such a panic about their children’s education? Why has their professional judgement been shunned? And why have they allowed their hard-working duty to career, family and salary to be so futile – given that, however successful they become, there is a banker half their age whose bonus makes them look ridiculous? In short, why are we wondering again whether the distinctive lifestyles of the English middle classes can survive?

Those are the questions I have set out to answer, and finding the solution is a kind of detective story. There were the middle classes – successful, privileged. What flung them into such desperate straits? What were the crucial moments that were to spell disaster, the decisions that went so terribly wrong? Who was responsible?

It is next to impossible to pin down the first cause for this intense crisis, because you can happily follow the strands back generations to find it, perhaps even to the beginnings of the modern middle classes in the 1820s. So I have followed the recent clues as best I can, and pinpointed six critical moments of decision – six moments, all within recent history, when disaster could perhaps have been averted. This is a whodunnit, after all. There are clues and suspects and red herrings. There are motives to be weighed and witnesses to be questioned. By the end, I hope we can begin to agree who struck the fatal blow, and work out whether the victim has any hope of rebirth – and, if so, how.

But before we set out with our deerstalkers and magnifying glasses, there is just a little more I need to say about myself. Because this can never be an objective study, and I don’t want to claim that it is. As in the best detective stories, the narrator of this one is involved in the action. I am complicit because I am middle-class myself. I live in a small detached home with a lawn. I have an allotment. I shop at Waitrose, at least when I can afford it. I buy olive oil and have bizarre food allergies. Any detective needs to know how far they can trust the evidence I bring.

There is also something peculiar going on when people talk about the middle classes. In the course of writing this book I carried out a huge number of conversations with friends and acquaintances, and some people I had never met before, about being middle-class. Many of them would ‘admit’ to it, ‘confess’ to it, or even apologize at the outset. Yes, they would say, I am middle-class – ‘I’m afraid’, as if they were confessing to alcoholism. It happened so often that I came to expect it.

In the course of writing the book, I thought a great deal about this. I don’t believe it is anything new. A generation ago, when the financial journalist Patrick Hutber wrote his book The Decline and Fall of the Middle Class, he said that no class in history had been quite so complicit in its own demise. So I have been asking myself this question too: why do we have to apologize? It isn’t a rhetorical question but a genuine one, and it seems to me that there are three reasons.

The first is that the term ‘middle-class’ sounds like ‘middle-aged’ or ‘middlebrow’. It sounds miserably ordinary, and there is a vague implication of smugness about it – as if we don’t care how ordinary we are. I think we can discard this one: many of the best artists, sportspeople, scientists, writers, teachers and leaders have been middle-class. It is just silly to write the lot of us off as ‘suburban’, as if sub-urban meant that we were somehow sub-human. I reject the charge.

The second reason is that saying ‘I am middle-class’ may seem somehow to embrace all the disapproval and prejudice peddled by middle-class people in all generations. That may be so, and I will return to this later in the book.

The third reason also has some merit. It is the implication that, when we say we are middle-class, we are admitting that we are privileged. It is the same for me. I am a self-employed writer so I am hardly wealthy (I am probably the only person to conduct an independent review for the government on tax credits). But I went to independent school in Bristol, in the days when we still called them ‘public schools’, and was constantly told that I was privileged – without being told what that might imply. Yet this only matters if we are exclusively self-interested as well as privileged. By writing about the plight of the middle classes, I am not implying that nobody else is suffering – quite the reverse. I don’t want the middle classes to survive at the expense of anyone else, but I do want them to survive.

Even so, this book is bound to be dismissed by some people as special pleading by the privileged, and it is true that the middle classes have the huge advantages of capital, inheritance, confidence and political influence. Yet none of those privileges look like providing their next generation with a roof over their heads. I am certainly not suggesting that the plight of the middle classes is anything like the plight of the working classes. If middle-class professionals have suffered from new, narrow forms of efficiency, then the working classes are oppressed all the more by the same forces, timed and regimented, targeted and manipulated, often for a miserable pittance that still keeps them dependent on the state. If the middle-class jobs have been disappearing – and they have – working-class jobs have all but disappeared.

What this amounts to is that I don’t apologize for writing about the middle classes or for being middle-class. I am not denying that anybody else is in trouble. I am certainly not saying that the middle classes are sinless, or wholly innocent of their own demise. But I make no apology for defending them, or assuming that they are worth defending, because – despite the disapproval and the reserve – I believe there is something about middle-class life in the UK that is worth preserving. Not the privilege, not the snobbery, but the right of everyone to live the kind of independent life that I was brought up with and which I struggle to provide for my own family.

So yes, I am middle-class, ‘I’m afraid’ – but I’m not really ashamed of it. Because somewhere in this whodunnit are the clues that might prevent us all from sinking into a new proletarian semi-slavery. So in the best traditions of Miss Marple, the most middle-class detective of them all, bring your knitting and your notebook and help me piece together the evidence.

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