Rachel Reeves has a John Lewis problem
Plus: ReformWatch looks at the reaction to the pledge to scrap Indefinite Leave to Remain, The Lead Digest with recommended reads/listens and the latest from The Lead North team
Of all the missteps Boris Johnson made in Number 10, the most politically foolish was one you’ve probably already forgotten. Moving into the prime ministerial residence, he immediately signed off on a £52,000 refurbishment of the flat because he couldn’t stand the previous incumbent’s taste. Theresa May, he said, had left the property a “John Lewis nightmare”. What a stupid and detached thing to say to the British electorate.
More than half a decade on, our economy is in trouble. Most ordinary households in this country would absolutely love to have some spare money to spend in that same British high street institution, a brand that feels both aspirational yet also achievable. But they don’t: the store’s latest figures show losses of £88m. This is what happens when the entire middle class - the genuine middle class, those on middle incomes which have been undermined significantly by inflation - is stripped back financially.
While Westminster has been wittering on about the addition of VAT to private school fees hitting family wealth, there has been a simultaneous gross underestimation of the huge effect relatively modest differences in disposable income have on the country’s wider prospects for growth.
This month the Joseph Rowntree Foundation published its annual calculation of the ‘minimum income standard’, the household income, before tax, that a family needs to take home to sustain itself and be able to participate meaningfully in society. It’s not a subsistence measure - it includes allowances for occasional takeaways and a subscription to Netflix, a family day out at a zoo, and a small spend on Christmas decorations for the home, for example - but it does not stretch to a holiday abroad.
The figure this year is astounding. A couple with two children aged three and seven now need a combined income of £74,000 to meet this basic expected standard of living. That means two people both earning the minimum wage fall well short, while two earning the national median income of £37,430 only just tip over that threshold.
If your eyebrows have just hit the ceiling in astonishment, that’s because you have a better understanding of how things really are for ordinary Brits. Most families do not contain a household with two working parents, both median earners. There are a few ways of calculating it, but the average household combined income is hovering somewhere around £40,000. If your family’s combined pre-tax income is anywhere at all near the figure that the JRF comes up with, you’re doing comparatively very well.
To put it another way: almost everyone is already dreading the cost of Christmas.
When there is so little financial slack for the ordinary middle income household, there is also little prospect for wider growth. But most families are already living well below this standard. In more than two thirds of parliamentary constituencies, one in four children are living in relative poverty after housing costs are taken into account. In the West Midlands, one in every three children is now growing up in poverty.
One of the biggest barriers to reducing child poverty - a moral disaster that shames us, but also drags behind it a very long and damaging economic tail - is the two-child benefit cap. So far the government has resisted scrapping the policy since it took power last year, but may now finally be pushed into it by Labour’s deputy leadership contender Bridget Phillipson.
No wonder the economy is sluggish. During the Covid-19 pandemic, former chancellor Rishi Sunak worried that people would get out of the habit of spending. The ill-advised and ultimately deadly ‘Eat Out to Help Out’ scheme was designed to tackle that inertia. Yet four years later we face, inconceivably, an even bigger economic hurdle: even a takeaway on a Friday night or a nice bottle of wine to share at home has become an extravagance that too few can justify.
A life with fewer frills isn’t a tragedy compared to the struggles of those in true poverty but that doesn’t mean it isn’t important. The constant hum of financial frustration and anxiety is a comfortable space for the manipulations of the far right. How many people on Tommy Robinson’s big British march through the capital had absolutely no idea that he has convictions for assault and has been jailed for using a false passport, but are hyper-aware that their lives were tangibly less joyful than five, or even three, years ago? I’d wager more than half.
The high minimum income we now require to live decently, and John Lewis’s extremely poor returns were revealed in the same week as the latest Office for National Statistics update confirmed that we have entered economic stagnation, with GDP unmoved in July, as had been anticipated by economists. That trinity of figures serve as a reckoning for chancellor Rachel Reeves as she prepares her autumn Budget, due to be delivered on 26 November.
How should Reeves respond? Stripping back welfare is impossible and self-defeating if growth is the primary goal, and dangerous given our genuine poverty levels. Echoing the far right’s obsessions by fiddling around the cost of managing migration trends and disability benefit reform is unproductive noise.
The government should be laser focused on what really matters now: demonstrating that its efforts to reboot the economy will turn around the fortunes of the genuine middle class, as well as those living in poverty. That middle class isn’t those bleating about private school fees rising to absorb higher VAT, but the overwhelming majority of citizens who feel extremely lucky to have jobs that keep them earning a combined household income of somewhere between £50,000 and about £90,000 a year.
They want to feel better about their prospects and confident about their financial future. They want to be able to save so the idea of a retirement doesn’t sound like historical fiction. They want to plan a holiday with their children.
Most of all they want to buy a set of four well-made ceramic mugs or a pair of autumn boots from John Lewis without having to worry about it for the rest of the year. ■
About the author: Hannah Fearn is a freelance journalist specialising in social affairs. She was comment editor of The Independent for seven years, and has previously worked for The Guardian, Times Higher Education and Inside Housing. She has a special interest in inequality, poverty, housing, education and life chances.
The Lead is keeping an eye on Reform UK and their fellow travellers. Get in touch on X, Bluesky and Instagram or email ella@thelead.uk with tips and stories. We especially want to hear from readers whose local council is now run by Farage’s followers.
Nigel Farage has been roundly condemned for his policy plan to abolish Indefinite Leave to Remain, which would see hundreds of thousands of legal migrants deported. The plan has been criticised by the likes of chancellor Rachel Reeves, who said it had “no basis in reality,” Liberal Democrat Ed Davey and shadow home secretary Chris Philp, who said it was “half-baked and unworkable”.
Reform has also said it plans to bar anyone other than British citizens from accessing welfare. Farage’s claim that it would save the country £230 billion is, however, based on erroneous figures. He also didn’t back up his claim that most migrants rely on benefits. Obviously.
Meanwhile, the Reform mayor of Hull and East Yorkshire appears to have gone against Reform’s “net-stupid-zero” line by saying he is "all for" cleaner air and green energy. "Who doesn't like cleaner air and green energy?" he asked. We don’t need to answer that one.
According to a Guardian investigation, Reform UK took £100,000 in donations from a company that was threatened with insolvency by HMRC. It was originally set up in 2013 by a British Virgin Islands-based company of the same name and its owner is listed as a British company director. The interior design company uses stock images on its website to show work completed in the UK. Reform said it “carried out all required checks and confirmed that the donor was a permissible source being a UK registered company carrying out business in the UK.”
In further dodgy dealings, a Reform councillor in Doncaster has lost his committee positions after attempting to create a business, which would have dealt directly with the council to help manage Doncaster Sheffield Airport, for "financial gain".
And, finally, Reform councillor John Allen, of Northumberland County Council, has been suspended over alleged online comments about wanting to shoot Keir Starmer, thanks to an investigation by Hope Not Hate. It comes after Nigel Farage recently challenged police to arrest social media users who he said had been using TikTok to call for him to be shot.
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Exclusive invitation: Join the fight against the far right at Labour Party Conference
For readers of The Lead we have the opportunity to join a powerful Labour Party Conference fringe event (no pass is required to access) with Britain’s leading anti-fascist organisation HOPE not hate.
Hosted by Tigerlily Productions and Marking Films Ltd - creators of the BAFTA-nominated documentary UNDERCOVER: Exposing the Far Right - the event will expose the tactics of far right campaigners and explore what can be done to fight back.
Southport MP Patrick Hurley, who witnessed first-hand the unrest sparked by far right mobilisation during last summer’s riots, will also join the panel to reflect on the lessons learnt for communities and campaigners across the UK.
The event Exposing the far right: using the media to counter hate and disinformation takes place on Monday 29 September from 12pm-1pm at Camp and Furnace, 67 Greenland Street, Liverpool, L1 0BY.
During the event, exclusive clips and insights from UNDERCOVER, a documentary so powerful it was pulled from the London Film Festival over safety concerns, will be shared as it follows HOPE not hate’s undercover investigations into far-right extremist networks. You can discover more about the documentary with The Lead’s interview with director Havana Marking who joins the panel, chaired by The Lead’s Zoë Grünewald, along with Director of research at HOPE not hate, Joe Mulhall.
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The Lead Digest
Here at The Lead, we like to consume just as much as we create, which is why we spend a little time each week rounding up our favourite stories, books, podcasts and films to offer our readers a sample of the work that informs our world.
Zoë strongly recommends this August episode of Origin Story, "Rivers of Blood - How Enoch Powell poisoned Britain," about the most controversial and explosive political speech in British history, the history of Powell himself, and how he essentially mainstreamed far-right anti-immigration sentiment. Not only was it incredibly well-researched and fascinating, but frightening too. You don't have to look far to see political history repeating itself.
Padraig liked James O’Malley’s recent Substack article about reasserting anti-racist norms (which it sounds like Starmer might be hinting at with his new progressive sounding speech).
Ella is very pleased to see David Hillier’s new substack publication What Are You On, which fills a vital gap in sensible (and sometimes not-so-sensible) reporting on drug culture in a post-VICE era. His recent interview with King’s College researcher Caroline Copeland on the gap in the UK’s opioid death figures, was brilliant.
Ed has been reading Gareth E Rees Unofficial Britain: Journeys Through Unexpected Places, it's a collection of random stories and tales about the urban places which we pass by each day and make towns and cities what they are.
And finally, do have a read of Zoë in The i about the fracturing of Your Party and what's next for the Left.
At The Lead we have dedicated journalists and titles in Blackpool, Lancashire, Calderdale, Teesside and Southport bringing in-depth news and features twice-a-week to those communities. Do consider subscribing to support our vital award-winning local journalism.
We start in Teesside where Leigh Jones reports on the announcement of an AI Growth Zone, but it wasn’t on the Tees. Despite Mayor Houchen’s proclamations it appears those up the A19 in the North East had stolen a march.
Is Lancashire’s only Conservative MP eyeing a defection? Andrew Snowden has been accused of ‘flirting with Reform’ after signing a petition calling for mass deportations.
And in Southport, Jamie Lopez reports on how witnesses speaking at the Southport Inquiry will not have any evidence being used against them for future prosecutions.
Today’s edition included ReformWatch, The Lead Digest and the latest from The Lead North team as we will be running a special two-part story in Thursday and our weekend newsletter as our Westminster Editor Zoë Grünewald considers what Rachel Reeves should be doing in the budget and the question of tax. We’ll hear from a range of different views and options and we’ll ensure it’s not too taxing on the brain too as we explore this crucial issue ahead of Labour Party Conference getting going. Make sure you’re signed up to receive it direct to your inbox.
Thanks as always for reading and take a subscription to support us in bringing you writing beyond the mainstream and independent journalism that is nuanced and covering the people, places and policies affecting the UK right now four times-a-week.
Ed, Natalie, Zoë, Luke, Ella, Padraig, and The Lead team.
Ironically, a significant number of the issues facing today’s government are exactly the legacy of the feckless, oafish and utterly incompetent Boris Johnson.
My husband and I are, technically, retired although we are both fortunate enough to get occasional paid employment. I have a state pension, private pension and a very small one from a previous employer. We are mortgage-free and can not only afford food, days out, theatre visits and the occasional holiday. We are avid readers & book collectors but have discovered a number of ways to save money on these treasures.
We both voted Remain in the EU membership referendum and continue to believe that Brexit was a huge mistake. We have family members living in Spain (the adults moved there before Brexit) and that family now includes grand-children and great-grandchildren (all the great-grand-children have dual nationality).
We have been Labour voters for most of our adult lives - although I admit to voting Tory on one (very misguided) occasion. Never again!
We stood in Parliament Square and loudly applauded Keir Starmer as he demanded a second referendum. He has been something of a disappointment since getting into Downing Street but we both still believe that only Labour can be trusted to look after the ordinary people of this country. The Tories are interested only in looking after their immensely wealthy supporters.
The sooner we rejoin the EU the better. We belong in the EU and nothing anyone says will change our minds. The far-right, hate-filled racists are anti-EU and that means that they must never, ever be allowed any position of power in the UK.