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Why aren't the British middle-classes staging a revolution?
Why aren't the middle-classes more angry about stories such as the Phones4U collapse, and what will it take to tip us over the edge, asks Alex Proud
A line of riot police make their way through Soho, London in 2013 Photo: ANDY RAIN/EPA
By Alex Proud
8:16AM BST 22 Sep 2014
531 Comments
Why aren’t the middle classes revolting?
Words you probably never thought you’d read in the Telegraph. Words which, as a Gladstonian Liberal, I never thought I’d write. But seriously, why aren’t we seeing scenes reminiscent of Paris in 1968? Moscow in 1917? Boston in 1773?
My current fury is occasioned the Phones4U scandal (and it really is a scandal).
Phones4U was bought by the private equity house, BC Partners, in 2011 for £200m. BC then borrowed £205m and, having saddled the company with vast amounts of debt, paid themselves a dividend of £223m.
Crippled by debt, the company has now collapsed into administration.
The people who crippled it have walked away with nearly £20m million, while 5,600 people face losing their jobs. The taxman may also be stiffed on £90m in unpaid VAT and PAYE. It’s like a version of 1987’s Wall Street on steroids, the difference being that Gordon Gecko wins at the end and everyone shrugs and says, “Well, it’s not ideal, but really we need guys like him.”
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I’m not financially sophisticated enough to understand the labyrinthine ins and outs of private equity deals. But I don’t think I need to be. Here, my relative ignorance is actually a plus. You took a viable company, ran up ridiculous levels of debt, paid yourselves millions and then walked away, leaving unemployment and unpaid tax bills in your wake. What’s to understand? We should be calling for your heads on a plate.
This column is supposed to be a "lifestyle" column, not a "business" column. So, you might ask yourself, why am I writing about conscience-free private equity deals? Well, it’s because, assuming that you’re part of the broad middle class who make up the vast majority of the Telegraph’s readership, this is the most important lifestyle issue you’ll ever face.
Instead of shrugging and saying, “This is the world we live in” you should be on the streets, you should be calling for this sort of thing to be a jailable offence, and you should want to see these guys up in front of parliament (or, better yet, in stocks) explaining why they made around £3,500 for every person they put out of a job. Seriously, Stefano Quadrio Curzio, the managing partner at BC, should be ashamed to show his face in public.
The point is, along with the people who sold phones who are now unemployed, some of Phones4U’s employees, were officer class, just like you.
Their jobs too have gone. It’s just another example of people who build and make nothing gutting businesses, privatising the profits and socialising the losses. Slowly, it makes us all poorer. So, yes, this is a lifestyle issue inasmuch as it’s about ensuring that you and your children will be able to worry about things like Farrow & Ball Paint colours, rather than getting another credit card to pay the rent.
All these guys care about is money. They don’t care about society. They certainly don’t care about jobs and they don’t care about you.
OK, you might say, but this has always been going on. But it hasn’t. This sort of utterly amoral screw-everyone capitalism has become much more prevalent in the last 15 years. Our financial elite is now totally out of control. They learned nothing from the crisis, except that the rest of us were stupid enough to give them a second chance. And, now, having plucked all the “low hanging fruit,” they’re destroying the middle classes for profit.
Our current problems have their roots in the early 80s. While much of what Reagan and Thatcher did was necessary, the trouble is that they set a deregulatory train in motion which, over the last couple of decades has dismantled so much of the legal framework that protected us from greedy scuzzballs.
The middle classes went along with it. We were sick of the Left, tired of powerful unions and, besides, very few us could remember the inequality of the 1920s that gave rise to many of these regulations in the first place. Also, vain fools that we were, we identified upwards. We thought the elite had our interests at heart.
The 0.1% must have found this pretty cute. They knew the truth. We weren’t their pals, we were just at the end of the line for the financial blood-letting.
We had plenty of other distractions too. Booming house prices meant we felt rich while our incomes stagnated. Ditto easy credit and cheap consumer goods.
And the super-rich are much cleverer than they once were. No longer are they Mr Burns types. Rather, they have an army of people doing PR for them in various guises. Perhaps you’re one of them. For years there have been plenty of well-paying middle class jobs, helping the rich asset strip the world while pretending this is for everyone’s benefit.
The reckoning has been a long time coming too. And even now, when we can see the swarm of financial locusts on the horizon, the sun is still shining and we can still (just about) afford the nanny. But for how much longer?
The locusts are already well into the middle middle classes – you know, those poor schmucks who make, say, 40K a year. They may not have reached you yet, in your tastefully decorated detached Victorian house, but they will.
If there’s a buck to made jacking up your mortgage, or asset-stripping the company you work for, privatising some local service you rely on or selling a publicly-owned amenity you enjoy, they won’t think twice. In fact, they won’t even think once. If they could figure out a way to sell your body from under you, they would.
Then they’d get some business school shill to write an op-ed in the Wall Street Journal about how this was inevitable – and how, really, you should be grateful.
If I were a member of the working classes who’d been laid off in the '80s or '90s, I might be laughing at the middle classes right now. Because we’ve duped and screwed by the elite just as the lower orders were. The only differences are that, with us, the con was longer, and in many places we played an active part in our downfall; plenty of us were “useful idiots.”
So, why aren’t the middle classes revolting? I think there are a number of reasons. The first is simply that it’s not that bad, yet. It takes a long time to undo all the good that was done between the end of World War II and the mid 70s.
Living standards are still high and genuine poverty still feels a long way off. Plus we have plenty of entertaining distractions, although people in their 30s are starting to notice that you can’t spend all those Facebook likes on a decent house.
It was Troksky who originally said that all revolutions were impossible until they became inevitable and I think is the position we’re in right now.
Everyone keeps telling us that scandals like Phones4U are just the way things are and that, sorry, you can’t have a pay rise this year. You’re used to it. But if we continue like this, there will come a point when the middle classes really do snap.
We had a foretaste of this with London riots, a howl of anguish from those who enjoy no share in London’s much vaunted wealth.
At the time, the middle classes were mostly safely locked in their homes. But I know people - nice, well-educated, well-spoken people - who weren’t entirely unsympathetic to the rioters. And its when the middle classes start identifying downwards, rather than upwards that when elites really need to start watching their backs.
Phones4U makes me think that this snapping point might be sooner rather than later. The 0.1% have abandoned any sense of restraint. They now appear incapable of even enlightened self-interest; it’s all naked self-interest. They want everything, they want it now and they want from it from you.
So, perhaps next time London riots, it’ll be Kensington, Mayfair and Notting Hill in flames, not Hackney and Croydon. And the people on ordinary incomes won’t be hiding their homes, they’ll be joining in or at least cheering from the sidelines.
I hope we can rebalance our society before this has to happen, but I rather fear we’ve passed that point.
Why aren't the middle-classes more angry about stories such as the Phones4U collapse, and what will it take to tip us over the edge, asks Alex Proud
A line of riot police make their way through Soho, London in 2013 Photo: ANDY RAIN/EPA By Alex Proud
8:16AM BST 22 Sep 2014
531 Comments Why aren’t the middle classes revolting?
Words you probably never thought you’d read in the Telegraph. Words which, as a Gladstonian Liberal, I never thought I’d write. But seriously, why aren’t we seeing scenes reminiscent of Paris in 1968? Moscow in 1917? Boston in 1773?
My current fury is occasioned the Phones4U scandal (and it really is a scandal).
Phones4U was bought by the private equity house, BC Partners, in 2011 for £200m. BC then borrowed £205m and, having saddled the company with vast amounts of debt, paid themselves a dividend of £223m.
Crippled by debt, the company has now collapsed into administration.
The people who crippled it have walked away with nearly £20m million, while 5,600 people face losing their jobs. The taxman may also be stiffed on £90m in unpaid VAT and PAYE. It’s like a version of 1987’s Wall Street on steroids, the difference being that Gordon Gecko wins at the end and everyone shrugs and says, “Well, it’s not ideal, but really we need guys like him.”
Related Articles
- Phones 4U break-up looms as debt-for-equity bid is rejected
18 Sep 2014 - Phones 4U creditors propose 11th-hour rescue
17 Sep 2014 - Phones 4U collapse - what it means for the high street
15 Sep 2014
I’m not financially sophisticated enough to understand the labyrinthine ins and outs of private equity deals. But I don’t think I need to be. Here, my relative ignorance is actually a plus. You took a viable company, ran up ridiculous levels of debt, paid yourselves millions and then walked away, leaving unemployment and unpaid tax bills in your wake. What’s to understand? We should be calling for your heads on a plate.
This column is supposed to be a "lifestyle" column, not a "business" column. So, you might ask yourself, why am I writing about conscience-free private equity deals? Well, it’s because, assuming that you’re part of the broad middle class who make up the vast majority of the Telegraph’s readership, this is the most important lifestyle issue you’ll ever face.
Instead of shrugging and saying, “This is the world we live in” you should be on the streets, you should be calling for this sort of thing to be a jailable offence, and you should want to see these guys up in front of parliament (or, better yet, in stocks) explaining why they made around £3,500 for every person they put out of a job. Seriously, Stefano Quadrio Curzio, the managing partner at BC, should be ashamed to show his face in public.
The point is, along with the people who sold phones who are now unemployed, some of Phones4U’s employees, were officer class, just like you.
Their jobs too have gone. It’s just another example of people who build and make nothing gutting businesses, privatising the profits and socialising the losses. Slowly, it makes us all poorer. So, yes, this is a lifestyle issue inasmuch as it’s about ensuring that you and your children will be able to worry about things like Farrow & Ball Paint colours, rather than getting another credit card to pay the rent.
All these guys care about is money. They don’t care about society. They certainly don’t care about jobs and they don’t care about you.
OK, you might say, but this has always been going on. But it hasn’t. This sort of utterly amoral screw-everyone capitalism has become much more prevalent in the last 15 years. Our financial elite is now totally out of control. They learned nothing from the crisis, except that the rest of us were stupid enough to give them a second chance. And, now, having plucked all the “low hanging fruit,” they’re destroying the middle classes for profit.
Our current problems have their roots in the early 80s. While much of what Reagan and Thatcher did was necessary, the trouble is that they set a deregulatory train in motion which, over the last couple of decades has dismantled so much of the legal framework that protected us from greedy scuzzballs.
The middle classes went along with it. We were sick of the Left, tired of powerful unions and, besides, very few us could remember the inequality of the 1920s that gave rise to many of these regulations in the first place. Also, vain fools that we were, we identified upwards. We thought the elite had our interests at heart.
The 0.1% must have found this pretty cute. They knew the truth. We weren’t their pals, we were just at the end of the line for the financial blood-letting.
We had plenty of other distractions too. Booming house prices meant we felt rich while our incomes stagnated. Ditto easy credit and cheap consumer goods.
And the super-rich are much cleverer than they once were. No longer are they Mr Burns types. Rather, they have an army of people doing PR for them in various guises. Perhaps you’re one of them. For years there have been plenty of well-paying middle class jobs, helping the rich asset strip the world while pretending this is for everyone’s benefit.
The reckoning has been a long time coming too. And even now, when we can see the swarm of financial locusts on the horizon, the sun is still shining and we can still (just about) afford the nanny. But for how much longer?
The locusts are already well into the middle middle classes – you know, those poor schmucks who make, say, 40K a year. They may not have reached you yet, in your tastefully decorated detached Victorian house, but they will.
If there’s a buck to made jacking up your mortgage, or asset-stripping the company you work for, privatising some local service you rely on or selling a publicly-owned amenity you enjoy, they won’t think twice. In fact, they won’t even think once. If they could figure out a way to sell your body from under you, they would.
Then they’d get some business school shill to write an op-ed in the Wall Street Journal about how this was inevitable – and how, really, you should be grateful.
If I were a member of the working classes who’d been laid off in the '80s or '90s, I might be laughing at the middle classes right now. Because we’ve duped and screwed by the elite just as the lower orders were. The only differences are that, with us, the con was longer, and in many places we played an active part in our downfall; plenty of us were “useful idiots.”
So, why aren’t the middle classes revolting? I think there are a number of reasons. The first is simply that it’s not that bad, yet. It takes a long time to undo all the good that was done between the end of World War II and the mid 70s.
Living standards are still high and genuine poverty still feels a long way off. Plus we have plenty of entertaining distractions, although people in their 30s are starting to notice that you can’t spend all those Facebook likes on a decent house.
It was Troksky who originally said that all revolutions were impossible until they became inevitable and I think is the position we’re in right now.
Everyone keeps telling us that scandals like Phones4U are just the way things are and that, sorry, you can’t have a pay rise this year. You’re used to it. But if we continue like this, there will come a point when the middle classes really do snap.
We had a foretaste of this with London riots, a howl of anguish from those who enjoy no share in London’s much vaunted wealth.
At the time, the middle classes were mostly safely locked in their homes. But I know people - nice, well-educated, well-spoken people - who weren’t entirely unsympathetic to the rioters. And its when the middle classes start identifying downwards, rather than upwards that when elites really need to start watching their backs.
Phones4U makes me think that this snapping point might be sooner rather than later. The 0.1% have abandoned any sense of restraint. They now appear incapable of even enlightened self-interest; it’s all naked self-interest. They want everything, they want it now and they want from it from you.
So, perhaps next time London riots, it’ll be Kensington, Mayfair and Notting Hill in flames, not Hackney and Croydon. And the people on ordinary incomes won’t be hiding their homes, they’ll be joining in or at least cheering from the sidelines.
I hope we can rebalance our society before this has to happen, but I rather fear we’ve passed that point.
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