Miliband's big opportunity is to unite the middle and working class

By promising fundamental changes to the economy, the Labour leader can carve out a new coalition which quietly puts to bed the old battle lines of the 1980s.

Goldman Sachs will kick off the controversial bonus season today when they announce their results. That is presumably one reason why Ed Miliband chose this week to launch his challenge to the government around banks. If it hadn’t been for the looming Miliband speech, there would be the usual hand-wringing about bonuses, the usual debate about equality – and the response about how much the City earns for UK plc. In short, the same old stuff. But thanks to the Labour leader's linking of the issues, there is at least an implication that bonuses need to be an issue for the middle classes. 

This is uncharted territory because we have become so used to the idea that the middle classes benefit from the success of the City that we forget that bonuses tend to get recycled into property. which feed into house prices and rents, and slowly prices everyone else out. We haven’t seen how bonus culture – and the extreme salary packets of bankers – are the cuckoo in the nest which feeds into inflation for everyone else. And how they corrode what used to be known as middle class values, morally and economically. We don’t see how the values of financial services are driving out the traditional values of thrift and deferred gratification.

This is important politically because we are, in some ways, still stuck in the Thatcher era when it seemed to be obvious that the interests of the working classes and the middle classes were diametrically opposed. Since then, the economic underpinnings of working class life has been kicked away by global competition. But you only have to look at London to see that the middle classes seem to be on the same track – no middle management, and priced out of the neighbourhoods where they grew up, and their children likely to be priced out of the neighbourhoods they are living in now.

My own small three-bedroomed home in north Croydon is worth £500,000, which will effectively exclude my own children from the area – unless they go into financial services, of course (if I see any of the money, it will replace my non-existent pension and social care insurance).They will live in a landlord-dominated city, paying extortionate rents to the agents of the Far Eastern investors and speculators who chose to rent out their homes, rather than keeping them empty for tax reasons.

No proper pension provision, panic about schooling, their jobs disappearing and their salaries corroding, the middle is being squeezed.  If these trends continue – and there seems to be no reason why they shouldn’t – there will be no middle class in a generation, just a tiny elite and a vast, dependent proletariat, which is what the Miliband intervention implied but did not spell out.

It is, of course, partly their own fault. The middle classes misunderstood the emerging financial services sector, assuming it was on their side , when, as it turned out, it wasn’t (as the Lloyd’s Scandal showed in the early 1990s, the failure to learn the lessons of which led to the 2008 banking crisis). They cheered rising house prices without realising they would eventually throttle their children.

So this is also a dangerous moment politically because the beleaguered middle classes are beginning to wake up to the fact that they are heading in the same direction as the working class – precarious, dependent and timed when they go to the toilet at work. They feel excluded by the mainstream parties, which claim to support them but actually don’t, and are flirting with what Jean Marie le Pen used to call the "anti-technocratic" right.

This is an opportunity for Miliband to broaden his own appeal, if that is the main objective, but there is also a much broader opportunity, if he has the nerve. It is to redraw the political battle lines and carve out a new coalition which quietly puts to bed the old battle lines of the 1980s, and begins to work for the beleaguered majority. But that is going to require bold change, and some consensus across the political divide, and will need something much more fundamental than more childcare, a few more banks and raising school standards.

David Boyle is the author of Broke: How to Survive the Middle Class Crisis (Fourth Estate, published 16 Jan)

Ed Miliband speaks at the Labour conference in Brighton last year. Photograph: Getty Images.
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Keir Starmer's Brexit diary: Why doesn't David Davis want to answer my questions?

The shadow Brexit secretary on the resignation of Sir Ivan Rogers, the Prime Minister's speech and tracking down his opposite in government. 

My Brexit diary starts with a week of frustration and anticipation. 

Following the resignation of Sir Ivan Rogers, I asked that David Davis come to Parliament on the first day back after recess to make a statement. My concern was not so much the fact of Ivan’s resignation, but the basis – his concern that the government still had not agreed negotiating terms and so the UKRep team in Brussels was under-prepared for the challenge ahead. Davis refused to account, and I was deprived of the opportunity to question him. 

However, concerns about the state of affairs described by Rogers did prompt the Prime Minister to promise a speech setting out more detail of her approach to Brexit. Good, we’ve had precious little so far! The speech is now scheduled for Tuesday. Whether she will deliver clarity and reassurance remains to be seen. 

The theme of the week was certainly the single market; the question being what the PM intends to give up on membership, as she hinted in her otherwise uninformative Sophy Ridge interview. If she does so in her speech on Tuesday, she needs to set out in detail what she sees the alternative being, that safeguards jobs and the economy. 

For my part, I’ve had the usual week of busy meetings in and out of Parliament, including an insightful roundtable with a large number of well-informed experts organised by my friend and neighbour Charles Grant, who directs the Centre for European Reform. I also travelled to Derby and Wakefield to speak to businesses, trade unions, and local representatives, as I have been doing across the country in the last 3 months. 

Meanwhile, no word yet on when the Supreme Court will give its judgement in the Article 50 case. What we do know is that when it happens things will begin to move very fast! 

More next week. 

Keir