The gap between the rich and the poor.

The gap between the rich and the poor is supposed to be getting bigger. Guardian and BBC types frequently point to the sky high earnings of city fat cats compared to the scrapings of the underclass.
There will be trouble and social schism they say, often aligning themselves on the side of the poor against the rich, sometimes even imagining themselves to be part of the masses. Social commentators in the Guardian still cheer or quietly support the agitations of the downtrodden. Some see themselves as 'the workers' on the simplistic basis that 'anyone who works is a worker'. Some look forward to a day of reckoning for the rich.
They ought to be careful what they wish for.

The rich are a tiny minority in this country. To most people they are fairly invisible. How many people have seen a millionaire in their average week? The majority of people around the country are unlikely to come across one in their entire lives. Except on the TV.
The underclass, though much talked about, is also fairly invisible. Very few people are aware of conditions in some estates, or see what police and social workers see everyday. The underclass are fragmented and tend to live in small ghettos. Society is able to ignore their problems, or ignore them as a problem, or romanticise them and their problems, because they remain confined to specific areas, from which they rarely venture far from. And as a percentage of the country's population, they are a tiny proportion of the whole.

There is another category of 'rich' person however who is very visible in everyday life. They live in fairly nice houses. They drive fairly nice cars. They wear fairly nice clothes and have fairly nice gadgets. They go on fairly nice holidays. They are the upper middle class - the occupiers of the overlapping circles of the Guardian and the BBC, as well as Channel 4, the Telegraph and the Times. People who don't actually think of themselves as rich and who are mostly unaware that they are on the other side of a line that divides them from another, poorer group - the lower middle class.

The story of who the middle class is these days in Britain is the story of how the working class fractured and apparently disappeared. It was the decline of manufacturing and the start of the credit boom in the eighties that destroyed the working class. Those who couldn't adapt fell down to become the underclass. Those who could grabbed the credit and stepped up to become the lower middle class - skilled tradesmen who suddenly got to live in semis, drive more than one car that wasn't knackered and go on holiday abroad far more frequently than their parents ever managed.
Those who used to be called the middle class were nudged upwards to become the upper middle class.
This is why New Labour moved to the middle. There was nowhere else to go.

Modeling themselves on the US, the majority of people began to identify themselves as middle class. The 'new' middle class became the majority, taking over from the working class. Middle class sensibilities became the norm, no longer challenged by cruder and less politically correct working class ones. The upper middle class, whether they recognised it or not, were the elite - evangelists for the moral narrative of the country: a distinct brand of soft left liberalism. Which is why the Conservatives increasingly embraced a softer, more liberal conservatism. They had no choice.

And the dividing line between the upper and lower middle classes? A university education. The same line that divided the old working classes from the middle classes. A degree remains the gateway to the higher paying careers. The jobs below that line are nowhere near the same level. And surprisingly, given the meritocratic rise of the past forty years, that line is hardening. A teaching assistant earns a lot less than a teacher. Without a degree, it will soon be impossible for a vocationally qualified teaching assistant to become a teacher. And that's just one example. Throughout the spectrum the lower middle classes will find that the upper middle classes have pulled the ladder up.

Lower middle class lifestyles have only been sustained by credit. There has been no massive revolution in manufacturing innovation or a sustained growth in GDP to fuel the affluence of the masses. Massive inflows of investment cash from a surging East Asia since the eighties has allowed more money to slosh about the investment system. Banks felt able to dish it out even to high risk categories. Credit cards used to be jealously hoarded by banks. By the nineties they were simply giving them away. It was the inflow of money and our enjoyment of it that caused the credit bubble. Its burst was inevitable.

Credit is now being squeezed and this means big problems for the lower middle class. It's their debts that are now a burden. It's their lifestyle that is suffering as they fail to afford the things that they'd only just started to take for granted. The credit boom may not come back and they will discover that their new found wealth was not built on solid ground. They will slide.

The growing gap between the rich and the poor is actually between the upper middle class and the lower middle class.

And if the lower middle class fall out of their middle class lifestyles, will they become the working class again? No, because the industry that gave the working class their identity is gone. In the 'information age', in a service economy, the working class has become the servant class, feeding burgers to, tending the material possessions of and minding the children of the better off. They won't see the upper middle classes as 'one of them'. And they will come to resent them, their culture and their attitude. And their liberal moral stance.

Upper middle class types who have preached egalitarianism have recently stoked up the flames of class war in their desire to 'bash the bankers'. They should be very careful about how they fan those flames. They might find that they are standing on petrol-soaked firewood.