Chavs: The Demonization of the Working Class

by Owen Jones

As Howe puts it, the Conservatives had ‘to find the resources with which to reduce the burden of direct taxes’. So they put up VAT, a tax on consumer goods. The poorer you are, the more of your income goes on VAT. But it was springtime for the rich. By the end of the Tories’ reign, in 1996, the richest 10 per cent of families with three children were over £21,000 a year richer on average than when Thatcher had come to power.13 The wealthiest decile’s incomes shot up by 65 per cent for each married couple. Their taxes went from over half to just above a third of their income.14 Film director Stephen Frears remembers when Lawson cut the top rate to 40 per cent. ‘It was as if Lord Lawson knocked on my door and said, “Well, we’ll give you a cheque for fifty grand!”’ For everyone else, taxes went from 31.1 per cent of their income in 1979 to 37.7 per cent by the end of 1996, courtesy of the ‘party of low taxes’. The real income of the poorest tenth collapsed by nearly a fifth after housing costs.15 The slice of the nation’s wealth they owned nearly halved.16 A family with three children in the bottom 10 per cent of the population was £625 a year poorer in 1996 than when Thatcher arrived in No. 10. There were five million people in poverty in 1979; by 1992, the number was closer to fourteen million. And while the top 1 per cent saw income growth of just under 4 per cent a year under the Conservatives, if you were on a median income it went up by an average of only 1.6 per cent.17