The ‘Squeezed Middle’ Returns: Could Labour’s Policies Backfire?
Over 15 years ago, British politics began grappling with a phenomenon that has only intensified: the “squeezed middle.” Triggered by the 2008 financial crisis, this concept highlighted the vulnerability of households that, while outwardly comfortable, were particularly sensitive to economic shocks. Gordon Brown captured it succinctly during his 2009 Labour conference speech: “When markets falter and banks fail, it’s the jobs and the homes and the security of the squeezed middle that are hit the hardest.”
Today, this issue is more relevant than ever. Middle-income families—those not classified as wealthy but far from struggling—are facing stagnant wages, rising living costs, and a growing sense of economic insecurity. This group often includes nurses, teachers, police officers, and public sector employees, many of whom now feel their stability eroding.
The Budget and Its Impact
Last week’s budget has done little to ease these anxieties. Measures such as the freeze on income tax thresholds disproportionately affect middle-income earners. The Office for Budget Responsibility forecasts that average household disposable income will grow by only 0.5% per year until 2030. For households earning around £50,000 a year, this translates into more of their earnings being taxed at the higher 40% rate over time. Ruth Curtice, chief executive of the Resolution Foundation, warns: “All but the top 10% of the income distribution are worse off because of opting for threshold freezes over [income tax] rate rises.”
For many, this slow squeeze is felt in daily life: careful budgeting at the supermarket, canceled holidays, and the financial strain of providing children with opportunities in an increasingly competitive society. The long-term consequences suggest that the middle class is not only being financially constrained but also socially and psychologically pressured.
A Complicated Tax Picture
The budget’s “smorgasbord” of tax measures is also raising concern. Reforms such as taxing salary sacrifice pension contributions and lowering the tax ceiling on cash ISAs threaten to make previously secure financial planning more challenging. While these measures may appear technical, millions of middle-income earners may feel targeted, eroding confidence in Labour’s economic management.
Public Services and the Middle Class
The squeeze is not only financial. Cuts to local councils and public services disproportionately affect middle-class families, who are frequent users of amenities like the NHS, public transport, libraries, swimming pools, and parks. Yet political discourse often overlooks these issues, focusing instead on topics like immigration and industrial nostalgia, leaving middle-income households feeling ignored and undervalued.
Special Educational Needs and Social Equity
Education policy highlights another tension. The government faces a projected £6bn funding gap in the special educational needs (SEN) system, and proposals to limit families’ rights of redress could anger parents accustomed to fighting for their children’s access to education. For middle-income families with children requiring additional support, this represents a potential turning point, raising questions about whether Labour understands their needs.
The Political Risk for Labour
Labour’s focus on winning over so-called “red wall” constituencies risks alienating its traditional middle-class supporters, who see themselves as socially responsible, economically prudent, and reliant on a functional public realm. Historical Labour figures like Herbert Morrison understood this demographic’s importance, representing suburbs filled with clerks, teachers, civil servants, and small business owners. Ignoring their concerns could be politically costly.
Middle-income families today are anxious not only about their finances but also about whether politicians will defend the public services they rely on and ensure fairness in education and other systems. Labour risks sending a message that these voters’ concerns are secondary, potentially undermining its support among a key electoral group.
Conclusion
The “squeezed middle” is not a fleeting concern—it is a growing demographic with distinct anxieties and expectations. Policies that appear to overlook the pressures on middle-income families, particularly around taxation, public services, and education, could erode Labour’s support. For a party that historically relied on this group alongside working-class voters, understanding and addressing their concerns is not optional—it is essential for future electoral success.
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