I’m not sure why I’m bothering: the whole blogosphere seems to be consumed by Nick Griffin being on Question Time. Liberal Conspiracy has 6 posts in the last couple of days, including one where Sunny H shoves the whole of the Right in with the BNP (‘the right actually believe and perpetuate many of the lies that have fulled the BNP’s rise’) and takes some of the credit for killing multiculturalism. Momentous.
Our own Dom thinks they should be let on QT to be hoist by their own petard. The BNP a’re wrong: stop being scared of them. So I won’t put too much thought into this one. Or the next.
Whenever you ask anyone remotely left of centre How we will pay for the Deficit, they tend to find numerous clever ways to hit the richer-than-middle. Of course. The poorer-than-middle are, well, poor. Even Reform, no bunch of Lefties, are onto that: they call for the End of Entitlements. Meaning, I suppose, no benefits for those above-poverty. Their language is wonderfully florid:
Responsibility has drained away from the British welfare state, leaving a poisonous blend of entitlement and apathy. Middle and high earners, who could and should be independent of public welfare, instead use their political weight to extract “their fair share” from government, through universal benefits and near-free higher education.
Stirring stuff. The huge proliferation of footnotes does not disguise some pretty superficial analysis: you know what I mean, “we spend £XXXX (huge scary number) and yet we have terrible YYYY (chose favourite society in decline figure). ” Causality, well that’s for wimps in universities. And forget the fact that over on the Left they do the same, except they put ‘only’ in front of £XXXX. Britain’s benefits are tiny as a replacement ratio, some other blog is writing right now.
But they reach ENORMOUS figures for savings. £14bn immediately to be taken off the “middle class”. Great, eh? You know, those middle classes, all those Range Rovers, private schools, holidays in Dubai . . .
Trouble is, ‘middle’ is rather different from Britain’s usual wrongheaded understanding of Middle, best defined by the Telegraph’s utterly comic “coping class“, who seem to have about £90k each (yes, read the article). In Reform’s case, we are – admirably – talking about the real middle:
a basic definition of middle class where every adult in the household has at least £15,000 in income and every child £5,000.
This true middle is much poorer than our standard image of “middle class”, as the TUC discussed at length (see their blog). And Dillow has looked at it too. Salaries of £50k – our normal understanding of where Middle Class might start – are actually top 10%.
So, these are the Median Class Britain, on perhaps £40k as a household with 2 adults and one kid, a bit above poverty – perhaps 50% above – but not miles above. And what does Reform think can be done, easy as Pie? Well, remove some £14bn from these people. Example: family of 2, 2 kids, £50k income, would have £3k less child benefit, so have a hit to their incomes of 6%. That is about twice what has happenned in this last recession.
Then there’s Winter Fuel Allowance (£1bn), bus fares, TV licences, all big chunky items.
I can’t go through all the ideas. Reform are, well, brave: except they are not in power and don’t have to worry about backlashes and politics and silly things like that. But in comparison to most think tanks they have really put their balls on the line, or at least the balls of the ‘middle class’.
What bothers me is that they are getting away with a rhetorical trick. Written on the tin is “middle class welfare” and we all think of those Coping people the Telegraph moans about. But they are not: they are people from just above poverty to just below comfortable. This fiscal squeeze will be painful. Reform have crudely added up some of the pain-numbers. But their spin is attrocious – and, of course, they have utterly dodged the macroeconomic consequences (see last post).
Even the IEA is nervous:
“having had 12 years of dramatically expanding means-tested welfare provision and provision for those not working and relatively badly off, there is a danger that taking away universal benefits (or raising taxes on the middle class) will simply reduce further the net returns to working, to education and so on.”
And Megan over in the US has identified another problem with getting all your revenues from those wicked people, the Rich: those sorts of revenues, things like Capital Gains Tax, Stamp Duty, Yacht excise, Truffle fees and so forth are highly volatile. And that matters: volatility means some chump will spend it all when it’s good, and then find us pitched into a crisis when it’s bad.
Note to Reform: thanks for doing so much fiscal maths. But don’t try tricking anyone into thinking this is easy.