Britain’s middle class is not just squeezed but deceived

Multinational corporations have always been favoured by Government at the cost of the little man - but the situation has deteriorated since the banking crash

Share

A few weeks ago, the post brought a nasty surprise: a form letter to my husband from the taxman saying that his return had not been received in time and he was being fined £100 – a sum on which interest would be charged if payment was not received within four weeks.

There were a lot of reasons to feel cross about this, beyond the demand for £100, the first being that I had posted the return, if not exactly in good time, then in time for it to arrive by the deadline. The second was that there appeared to have been a delay of at least a week between the date of the letter and the date it was posted, leaving less than two weeks to appeal or pay up (they advise you to do both). But the third was the contrast between the speed with which HMRC issues its penalty notices and the time we had spent on hold, trying to obtain answers to our questions. You feel that all their staff are waiting to pounce on one-minute late-filers, even as the phones ring and ring.

As The Independent reported earlier this week, people trying to pay their taxes are routinely kept on hold, on a paid-for line, for more than five minutes. In our case, the average was more than 15 minutes. Add together the cost of the call and our time, and an argument could be made that we are due almost as much from HMRC as it is claiming from us. Except, of course, that the world does not work like that. In reality, the authorities always have the upper hand and the citizen – the taxpayer in this instance – is ever the supplicant.

Unfairness

While the odds have always been weighted against the “little people”, however, I have the distinct impression that the disparity in power has grown since the banking crisis. Or perhaps the truth is less that it has grown, than that long-standing injustices have been forced into the open by the inquest into the banking crisis and its aftermath. Either way, the upshot is that this country treats many of its citizens less fairly than we were inclined to believe. And that the unfairness relates especially to that elastic swathe of the population felicitously dubbed by Ed Miliband as “the squeezed middle”.

To continue the tax theme. While lowly officials at HMRC are sending letters to the likes of my husband, their bosses are lunching with the super-rich, trying to negotiate an amicable settlement, and their lawyers are scrutinising the small print of UK tax legislation to find out how, or even whether, they can extract some revenue from global giants who pay scarcely a penny. We sort of knew there was one law for the very big or very rich and another for the rest of us, but to see it spelt out like this, with the sums avoided by, say, Amazon or Starbucks – not even evaded, for heaven’s sake – estimated at enough to fund all manner of services that supposedly cannot be afforded, from maternity units to dementia care, then it is clear that we have been told less than the truth. It is not that the country cannot afford these services, but that its laws are framed in such a way as to favour something else.

At best, that something else might be presented as jobs, consumer provision and private enterprise. But the last, Labour, government introduced another distortion when it dreamt up working tax credits. These are, in effect, a subsidy to employers, allowing them to pay wages below benefit levels. You can argue that without this ballooning buffer there would have been more labour unrest and fewer jobs. But the system encourages a deceit: it allows what is in many respects a low-wage, low-productivity country to boast of having a thoroughly advanced economy providing decent living standards for all.

Nor is it just tax. The swingeing fine imposed on the Swiss bank, UBS, by international regulators this week was a reminder that it was not just when the banks threatened to fail that they had the whip hand over us. Whether it was corrupt individuals or the system, or both, that made possible the rigging of the London Inter-Bank Offered Rate (Libor) by Barclays, UBS and others, there were losers. And those losers were everyone who was placed at a disadvantage by an interest rate, on their debt or their credit, on which something had essentially been creamed off first.

Whether, as forecast, aggrieved customers will sue and thus finally bring the offending banks low scarcely matters, for the damage, in terms of distorted financial calculations and lost confidence, has been done. The fines so far have been mere pinpricks in the banks’ balance sheets. Meanwhile, interest rates remain too low for ordinary pensioner-savers to rely on and banks’ assets too scarce for ordinary businesses and house-buyers to obtain loans. Yet still the Government tells us we should work longer and save much more for our retirement – in funds depleted by management fees and ravaged by the vagaries of the stock market. As though, in the end, it will make much difference.

A cynical deception

The big secret that this Government, like the last, is unlikely to divulge is that those at the very top are largely insulated from the vicissitudes of the economy, whether they have contributed to its success or been complicit in its failures. Their capital is in safe havens, they treat tax as negotiable, they take gold-plated pensions early, they opt out of the NHS and they receive housing allowances on top of their pay – and there are more of them than there used to be. The other half of this secret is that the poorest, too, have been protected – at quite a different level, of course. The safety net remains; benefits are (or were) inflation-proofed, housing is subsidised and, once in the social sector, people tend to remain there, graduating to free social care that those with houses and jobs must pay for.

And in between, a huge swathe, are the rest of us, cajoled, chided and browbeaten into obeying rules that, as we learnt when it was too late, apply only to us. Together, we constitute an enormous middle, which is less squeezed than cynically deceived. I hope – and the Government should fear – that the middle of the next generation will see through the artifice and be less cooperative and more demanding.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
iJobs Job Widget
iJobs General

Guru Careers: Account Manager / Membership Manager

£35 - 38k + Benefits & Bonus: Guru Careers: We are seeking an Account Manager ...

Recruitment Genius: Customer Services Advisor / Administrator

£16000 - £19000 per annum: Recruitment Genius: This position will in the main ...

Recruitment Genius: Ecommerce Assistant

£25000 - £30000 per annum: Recruitment Genius: One of the top Cosmeceutical br...

Guru Careers: Software Developer / Web Developer

£350 p/d (Contract): Guru Careers: A Software Developer / Web Developer (PHP /...

Day In a Page

Read Next
The UCAS clearing house call centre in Cheltenham, England  

Ucas should share its data on students from poor backgrounds so we can get a clearer picture of social mobility

Conor Ryan
A study of 16 young women performing light office work showed that they were at risk of being over-chilled by air conditioning in summer  

It's not just air conditioning that's guilty of camouflage sexism

Mollie Goodfellow
Giants Club: After wholesale butchery of Idi Amin's regime, Uganda’s giants flourish once again

Uganda's giants are flourishing once again

After the wholesale butchery of Idi Amin's regime, elephant populations are finally recovering
The London: After 350 years, the riddle of Britain's exploding fleet is finally solved

After 350 years, the riddle of Britain's exploding fleet is finally solved

Archaeologists will recover a crucial item from the wreck of the London which could help shed more light on what happened in the vessel's final seconds
Airbus has patented a jet that could fly from London to New York in one hour

Airbus has patented a jet that could fly from London to New York in one hour

The invention involves turbojets and ramjets - a type of jet engine - and a rocket motor
10 best sun creams for kids

10 best sun creams for kids

Protect delicate and sensitive skin with products specially formulated for little ones
Tate Sensorium: New exhibition at Tate Britain invites art lovers to taste, smell and hear art

Tate Sensorium

New exhibition at Tate Britain invites art lovers to taste, smell and hear art
Ashes 2015: Nice guy Steven Finn is making up for lost time – and quickly

Nice guy Finn is making up for lost time – and quickly

He was man-of-the-match in the third Test following his recall to the England side
Ashes 2015: Remember Ashton Agar? The No 11 that nearly toppled England

Remember Ashton Agar?

The No 11 that nearly toppled England
Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks