Articles

22 May 2011

Why the 'squeezed middle' is here to stay, Observer

Gavin Kelly, deputy chief of staff in Downing Street from 2007-2010 and now chief executive of the Resolution Foundation, explains why solving the problems of the 'squeezed middle' will change British politics

Sitting in their living room in Mansfield, Karen and Darren put on a brave face about the future. They are phlegmatic about their situation – they know they are doing better than many others. Both work full time, Karen for a children's centre and Darren for a software company, each earning a bit less than the average wage, making for a decent household income. The proud parents of four children, who run them ragged, they nurture high hopes for their futures.

But scratch the surface and there is palpable frustration. Life has not panned out how they thought it would: in their mid-30s, they still can't afford to buy their own home, the cost of running a family is escalating, the constant grind of financial insecurity takes its toll, and – underneath all this – is their entrenched belief that their living standards are flatlining, and will continue to do so. "My mum's and dad's generation saw their wages go up ahead of prices, with us it's the other way around," says Darren.

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It’s rising prices as much as spending cuts that will give the Coalition a political headache, The Independent

Last Wednesday, Bank of England Governor Mervyn King forecast that inflation would remain above its 2% target until at least the end of 2011. British Gas has just announced a 7% price hike, write Gavin Kelly and James Plunkett in The Independent.

It all bodes ill for the Coalition. For now, each day still starts to headlines screaming about cuts. But come 2015, it’s unlikely that cuts will be the defining issue of the election. Instead, the framing will be closer to that of the 1980 Presidential campaign: “ask yourself: are you better off now than you were four years ago?”, as Ronald Reagan put it to the American people.

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