Labour must do more for "the real squeezed middle" says John Healey

"We have seen that those people whose incomes have fallen most are those in the middle, not those in the bottom. As we plot the way out of recession, we need to do more to support those who have been squeezed the most", Housing Minister John Healey told a Fabian Society and TUC event on "The Real Middle England" tonight.

"Sometimes we get a distorted view of who the real middle Britain is. If we allow it to be defined only by the metropolitan media, then they are likely to choose Tunbridge Wells as representative of middle England", he said.

Healey noted that the author Julian Baggini who wrote a book based on six months researching and living in the place which statistically most defined the average experience of middle England: "he didn't choose Tunbridge Wells, he chose part of Rotherham as typical of Middle England's income and Middle England's psychology", said Healey.

So who are the 'real' squeezed middle in Britain today?

"Our first focus should be the median income. The median income among households in Britain is £22,000 of households in Britain. So the seven million families that truly, statistically are our middle Britain have household incomes of between £14,500 and £33,500 a year. These are the real squeezed middle in Britain.

Healey said that families in this group would have around a quarter of their income left after housing costs and utility bills. Research from the Resolution Foundation showed their incomes had come under most pressure in the recession.

"That's about £100 per week. For some in the metropolitan middle-classes that might be the price of a good meal out for two at a restaurant in central London around the corner from us here at Congress House", he said, noting that this would have to pay not just for eating out or entertainment, but for children's clothes, nappies or the cost of a washing machine breaking down.

Healey was speaking alongside Paul Nowak of the TUC who argued that "a much clearer message about who the real middle Britain are" could play a crucial role could help to build broad coalitions to support public services and promote social solidarity in tough times, in a debate which drew on the TUC's real middle Britain research and the Fabian Society's evidence in its Solidarity Society report.

Healey set out how several Labour policy changes benefitted this group.

"This is the group that benefits most from tax credits, from the national minimum wage, from free nursery places", said Healey.

Six million families were supported by tax credits which had not existed in 1997.

Healey noted that, in the recession, 400,000 families had seen their working tax credits "flexed up" to reflect a drop in their incomes, helped by an average of an extra £37/week

"That is the system working as it is meant to", he said.

He stressed the importance of housing to this group, and said he wanted to propose a 'new housing offer' which would meet the needs and aspirations of this group.

We could call this "rent plus". This would allow people to have a home that suits them, at level they can afford, and build up savings, or options to part buy, that give them options over time into home ownership

"This would be a way to meet housing needs and aspirations at the same time, giving this real middle Britain a chance of housing that they currently don't have", said Healey.

Healey said that the 'real middle' had experienced increases in prosperity that their parents and grandparents could not have anticipated, but were also under real pressure and that policy-makers needed to respond to this.

"In recent decades we have seen huge economic change. Since the early days of Labour, we have seen many modest and middle earners in this country better off than they have ever been before".

The values of "hard work, fairness and often of proud independence" had not changed, he said.

"It is time that we did more to reflect more in our Labour policies those Labour values that are there at the heart of the real middle Britain", he said.

***

Healey was asked by an audience member whether his argument was compatible with an election which would be decided by swing voters in marginal constituencies.

I have never believed in a core vote strategy. We will win the election only by having a broad appeal. But we will not win the election with a broad appeal if our core vote does not support us.

There are a high proportion of people that say we have better policies than the Tories on housing and social housing, even than on education or health. The problem is that they are less likely to vote.

We have to make clear the choice that faces them, and the consequences that face them at the next election. I see that as a key factor of the campaign. And if you look at the constituencies where the election will be decided, you will find that there will be five, eight or ten times more social tenants than the majority that we have to defend.

UPDATE: More on housing and the election in Paul Sagar's account at the Bad Conscience blog.