LEADING ARTICLE : Revolt of the middle classes

A familiar tale. Two big companies - on this occasion, Royal Insurance and Sun Alliance - announce a merger. Shares soar, by 16-17 per cent. Jobs are to be cut, by 5,000 or 11 per cent. One person's job loss is another person's dividend rise. The explanation is predictable. "British insurance companies have been falling behind globally," says one executive. This may well be true. It is equally true that companies which face no competition whatever from abroad, also seize any opportunity for job cuts, just to give the shareholders a bit of extra lolly. They can get away with this because, to an extent unthinkable only 20 years ago, capital is strong, labour enfeebled. This, in turn, is a function of the laws of supply and demand. The possibilities presented by new technology create a hunger for capital investment; human labour, even educated and skilled human labour, is of more limited value. Only now is this truth beginning to dawn on the middle classes, on the sort of soberly-suited, briefcase-carrying executives who work for banks and insurance companies. They thought that the recession of the early 1990s was a temporary blip. Once the economic cycle brought the usual recovery, they expected to resume their steady careers, their annual pay rises, their company pensions, their season tickets. In that simple faith, they voted Tory in 1992. Then they discovered that, even as the economy picked up, their lot failed to improve.

This is why the Tories did so badly in Thursday's local council elections and this is why they are doomed to lose the next election. No fall in unemployment, no tax cuts, no share giveaways, can rescue them. The two fundamentals of middle-class life - the safe house and the safe job - have disappeared. By any standards, John Major's government has been a poor one, plagued by scandal, apt to pass bad laws, generally lacking in simple competence. But it will not be punished for any of that. It will be punished for the loss of the comforts of middle-class existence. The Tories pin their hopes of an 11th-hour triumph on the benefits of economic recovery "coming through". Yet that is precisely where they have least hope. The more they try to convince us that Britain has become the leanest, most competitive, fastest-growing economy in Europe, the more their natural supporters are conscious of the lack of any "feelgood factor". The voters conclude either that the Tories are lying or that somebody else is getting the benefit. Ministers may plausibly argue that the plight of the middle classes is due to forces beyond their control. But they have recklessly extolled the virtues of the free market and tried to extend it to the public sector, so that teachers, academics, civil servants feel a quite new sense of insecurity.

The long decline of the Labour Party has been attributed to the decline of the working class and its traditional supports: employment in heavy industry, trade unions, all-male clubs and pubs. Now, it looks as if something similar is happening to the salaried middle class and its supports. And the decline is probably only just beginning - those who worry about losing their jobs still far exceed the number who have actually lost them. Where it will end is impossible to forecast, though sundry sages and seers may try to convince us otherwise. If everybody, as widely suggested, becomes a sort of freelance, earning their living from a variety of sources,

perhaps we shall all see ourselves as small-business entrepreneurs. That would be Tory heaven. Equally, perhaps the middle classes will come to see themselves much as the working classes have always done: at the mercy of a ruthless and impersonal system, ready to throw them on the scrap- heap at a moment's notice.

No wonder, then, that the Tories seem to be undergoing a collective nervous breakdown. Much of what they say seems without rhyme or reason. Why should people who are convinced of the irresistible primacy of the global free market be so anxious about the protection of national sovereignty? Why should those who advocate promiscuity in working habits be so desperate to preserve monogamy? The answer is that the middle classes have lost their bearings and some Tories want to comfort them with familiar landmarks. But that is no way to govern a country. When Labour lost its natural constituency, it took 15 years to redefine itself. It may take the Tories at least as long.