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A middle-class backlash?

Andrew Neil | 09:57 UK time, Monday, 4 October 2010

Goerge Osborne

"We will preserve child benefit" George Osborne told the Tory conference last year. He did not add "except for those in the higher income tax bands." But he will today.

The overwhelmingly middle-class party activists in Birmingham are not quite sure what to make of it.

In principle, they're inclined to agree that it is "bonkers", as Iain Duncan Smith put it, that those earning over £50,000 a year qualify for child benefit. In practice, they're not so sure because they think these are already hard times for the middle class and this is another serious financial blow.

The middle class think they've already borne the brunt of Labour's tax and national insurance rises, which the Tories have no plans to reverse.

More and more are being sucked into the 40% income tax bracket because the level at which it hits has not been raised in line with inflation (again no Tory proposals to change that), the return on their savings has plummeted in the wake of the financial meltdown and in many cases their pensions have been shot to shreds.

Younger affluent couples will also worry about how to cope with the massive rise in university tuition fees coming down the pike. When the Chancellor repeats ad nauseum that "we're all in this together" the middle class can chorus "too right we are".

Then there are the anomalies in what is being proposed. If the family has one wage earner making £50,000 a year then child benefit will be forfeited. But if it has two earners making £40,000 each then child benefit will still be paid because neither earner is in the 40% tax bracket.

The Chancellor says for it to be otherwise would involve complicated means-testing. But since the change won't come in until 2013 many will think he has plenty of time to make the changes more equitable.

Most commentary on deficit reduction has concentrated on the likely response of the public-sector unions, with threats of strikes and demonstrations.

But a Tory-led coalition government might be about to see something much more dangerous to its long-term interests: a middle-class backlash.

At least it casts doubts on the Marxist claim that Tories always act in their own class interests.

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