The trap

On an arctic January morning George Solly, who is 43, sits in his freezing cold kitchen, wearing faded jeans, slippers and a jumper, and contemplates his day. It is subzero outside, the coldest day of the winter so far, but he cannot bring himself to turn on the heating for just one person. The only sound in the house is the tick-tick-tick of the wall-mounted kitchen clock, but he doesn't hear it.

In his pocket he has a shopping list, pounds 10 in loose change, a National Lottery coupon and two stiff bills, neither of which, he scowls to himself, he can afford to pay. They are an overdue council tax bill for pounds 180 and a pounds 30 invoice from the vet, for killing and cremating the family cat.

Normally, George is highly disciplined about his work: he sits at his desk, scans the jobs vacant column of the latest Reading Chronicle, and sends off for yet another vaguely appropriate job application. But sometimes, and it is becoming a habit, he gets sidetracked into reading the insolvency notices. Recently, he recognised the names of a local baker, shoe manufacturer, builder and garage owner.

He likes to see who's gone now, and he thinks of all the misery concealed behind that two-by-three-inch column of text. Then he knows that he is not alone, because he cannot believe that all this has happened just to him - solid, reliable George Solly. He always thought himself the least likely candidate for bankruptcy.

Towards lunch time he drives to Asda, where he pushes a trolley - slowly, bent over - down a near-deserted aisle. His shopping list is a short one: he buys milk, leeks, two parsnips, bread, carrots, courgettes, soup and decongestant tablets (for his wife Kathryn's blocked sinuses). The Sollys used to spend pounds 100 a week on groceries; now they rely on the charity of Kathryn's parents, who buy and deliver pounds 50-worth to their home every Thursday. But by Monday George has always run out of food.

Later, he picks up his four-year-old daughter, Imogen, from the childminder. When she gets home she empties her piggy bank on to the kitchen table. "How much, Dad?" she asks. "Um, pounds 2.14," he says, making to check with his fingers. "It's my money, mine, I'm saving up!" she protests, throwing her arms round the neat little piles. She has reason to be protective. In order to buy food, George and Kathryn sometimes raid the piggy banks of Imogen and their sons Huw and Ralph, aged 11 and 10, who get pounds 1 a week pocket money from their grandparents. There is an IOU in their piggy banks that says George and Kathryn owe them pounds 25. "They understand," says George. "One day, as soon as we've got the money, we'll pay them back."

From the outside, you would never guess that George and Kathryn Solly are a couple under financial siege. They live in a four-bedroom, detached house in Tilehurst, a middle-class suburb in rather well-to-do Reading. A black Volvo Estate station wagon, too long to fit into the garage, graces their shingled driveway. Their home has most mod cons: a Zanussi dishwasher and a microwave oven are fitted into the oak-veneered kitchen; a television set, video and fireplace (with real logs) adorn the pink-carpeted lounge, and a Hewlett-Packard colour-screen computer with CD-Rom and colour printer sits on the desk in the upstairs study. The walls are newly painted - in sienna, beige, light pink - and every room is clean and well-kept. There is little hint of the squalor associated with the run-down lives of the working-class poor.

Add to this the fact that the Solly boys go to a private primary school, and that Kathryn is a deputy head teacher at a state nursery school, earning pounds 23,041 a year, and you begin to wonder how it can be that most days the Sollys walk out of the house with less than a pound in their pockets.

The answer lies in the relentless detail, the blow-by-blow slide of a man from profitable businessman into bankruptcy; of his inability to find subsequent employment, despite 496 job applications; of his wife returning to work but not earning enough to support the family; and of the stress that led first to her hospitalisation, then to his.

This is a story of impoverishment and quiet desperation among the middle classes, one which has become all too familiar in Nineties Britain.

George Solly was a post-War baby, an only child, born in 1952 to a British father who had endured six years in a German prisoner-of-war camp, and a German mother who had worked in a Messerschmidt factory. He grew up in Bournemouth, where the family home was also the family business: a hotel, the Gainsborough, with 2l bedrooms and a bar.

The Solly family tree can be traced back 500 years, or 15 generations, to Peter Solly, a moderately wealthy farmer from Thanet in Kent. Subsequent Solly generations were "land owners and entrepreneurs, all Conservative voters", George says, some of whom demonstrated a civic inclination. "Florence Nightingale was a great-aunt on my father's side, and the Mayor of Sandwich, Richard Solly, was a great-uncle." A print of a regal-looking Richard Solly - in wig, braided jacket and baggy sleeves - graces the mantelpiece.

George went to Bloxham Boarding School, near Banbury in Oxfordshire, where he was regarded as studious rather than gifted - his nickname was "Mr Efficiency" - but he did well enough to go on and study economics and social history at Kent University. In 1973 a family connection got him a job at the Arnould- Taylor Organisation, a company selling physical and beauty therapy equipment, on a starting salary of pounds 2,000 a year.

In 1979, the year that Margaret Thatcher took centre stage, George Solly achieved a personal ambition: he bought his own business. He had no capital, but he agreed a formula whereby he would pay his former boss 7 per cent of turnover over ten years. He then set about modernising the business, updating catalogues and bringing in new products. The annual turnover of the renamed George Solly Organisation jumped from pounds 100,000 to pounds 360,000.

That year he also met Kathryn, a primary school teacher, daughter of a police inspector and a librarian, who had just returned from a two-year stint as a VSO worker in Papua, New Guinea. He was 27, she was 25, and they hit it off immediately. On a holiday in the Far East, on the Pearl River in China, George got down on his knees and popped the question. "Of course," she replied. "What took you so long?"

When George first told Kathryn what he did, she thought he was "some kind of poofy hairdresser"; but she soon learned that "it was love me, love my business". The beauty and alternative therapy business sector expanded enormously in the Eighties, and George became one of three top players in the country. He sold chiropractor couches, infrared and ultraviolet lamps, and machines for hair removal. His customers included the new "health hydros", technical colleges and high street beauty salons. Through good fortune and hard graft, George benefited from the "cult of the body" that was sweeping the UK. "I placed myself at the quality end of the market. I was like the John Lewis of the health and beauty therapy business," he recalls.

In 1982, George and Kathryn bought a four-storey Edwardian house near the Thames in an exclusive part of Oxfordshire for pounds 59,000 (a significant sum for the time). They paid pounds 19,000 in cash, took out a mortgage of pounds 40,000, and still had pounds 10,000 spare to do the place up. Their neighbours were young professionals - accountants, architects, engineers. George ploughed most of his profits back into the business, but still brought home pounds 25,000 to pounds 30,000 in salary. He had a pension, two cars (including an pounds 8,000 Audi with electric windows), personal insurance, a chauffeur plan, private health insurance and savings of at least pounds 10,000 in shares and unit trusts. He wasn't just an entrepreneur. Like his forebears, he involved himself in civic duties - the local Twinning Association, which links British and foreign towns - and at one point his name was put forward as mayor.

The Sollys' lifestyle was never extravagant, but there were two foreign holidays a year (Thailand, Sri Lanka, Austria, the Caribbean), and they dined out at restaurants once a week. Their circle of upwardly mobile friends meant a constant merry-go-round of dinner parties which stopped at the Sollys' home once a month. The booming house market was a favourite topic of conversation. "It was a golden age," recalls Kathryn.

Then came the recession, and it hit George Solly hard. The hype about beauty therapy being "the market of the future" had attracted too many players, some with big capital backing, and they responded to the recession by viciously slashing prices. George, trapped at the quality end of the market, was slow to respond to the challenge. In 1989, his turnover plummeted to pounds 150,000, and he struggled to pay his creditors. He says now, "I had survived two recessions, so I had no reason to think I wouldn't survive a third." He doubled the mortgage on his house to pounds 90,000, took out a pounds 60,000 business development loan, and upped his business overdraft to pounds 25,000 in an attempt to bolster cash flow. His debt quadrupled from pounds 45,000 to pounds 175,000, but he took heart from government assurances that recovery was just around the corner.

More than 28,900 UK businesses went to the wall in 1990 (a 60 per cent rise on the previous year, according to Dun & Bradstreet, the business information company). In 1991, 47,777 businesses failed; in 1992, the number was 62,767, the highest since recordings began. The situation in the UK was far bleaker than in the rest of Europe. In Germany, for example, only 11,000 businesses went bankrupt in 1992, in Spain only 5,000.

George hung on grimly. He worked seven days a week, trying to raise exports and diversify. "Life changed insidiously," he says. "The stress and the debt piled up. I felt under pressure from everyone - suppliers, the bank, my wife. In Germany and the rest of Europe, banks take a more paternalistic and lenient view. I couldn't stop talking about my problems and what a balls-up the government was making. I became withdrawn. I started to hate going into the office and having to lie to creditors, some of whom had become personal friends."

George's turnover continued to slide by 10 per cent a year. He started to sell his shares and unit trusts. When his uncle died and left him pounds 20,000, he put it straight into the business. It wasn't enough. He disposed of the family heirlooms one by one - a painting, a half-hunter gold watch, gold sovereigns, numerous objets d'art - and ploughed the pounds 15,000 proceeds into the business. Again, it wasn't enough. The Sollys' house, which at the height of the boom had been valued at pounds 250,000, was placed on the market.

In the meantime, family expenses were rising. With the birth of their sons Huw and Ralph, in 1984 and 1985, Kathryn had quit work to become a full-time mother. The family was entirely reliant on George's dwindling income and the boys needed to be clothed and educated, preferably privately. Gradually, the children's pocket money, music lessons and treats at Burger King fell away. In August 1993, after a year on the market, the Sollys' house was sold for pounds 160,000 and a smaller house, 20-odd miles away at a less exclusive address, was purchased for pounds 135,000. By maintaining the mortgage at pounds 88,000 - "amazingly, despite knowing of my difficulties, the bank offered to lend me even more" - George was able to fund the move and release pounds 15,000 in equity, all of which he fed down the bottomless chute in a desperate, ultimately fruitless attempt to pay his creditors and survive.

But on 6 December, 1993, the insolvency of the George Solly Organisation was posted in the London Gazette and a meeting of his creditors was announced. He was one of the last of 55,733 businessmen to go bankrupt in the UK that year.

"It was a pretty grim day," he remembers. "I was very nervous about meeting my creditors. In the end, only one of them came - a friend whom I owed pounds 12,000. I felt terrible. Terrible. I had known his family for 15 years. I knew what my failure meant to them. I felt like a criminal. There was a lot of shame. My whole life's work had come to nothing."

The day George went to sign on at the dole office in Reading, he was dazed and incredulous. "I couldn't relate to the people there - scruffy individuals drinking Special Brew, who had let their appearance go. I still felt that there had been a big mistake and that they would tell me, `Oh, don't worry, Mr Solly, with your qualifications and skills it won't take long to get a job.' Then they'd give me my pounds 45 dole money every week."

But George was not eligible for unemployment benefit. In an honourable but misguided attempt to stave off his creditors, he had stopped paying himself a salary, and for the last six months he had also made the mistake of missing his national insurance contributions. "The state dumped me when I needed it most. Never mind that I had paid national insurance and income tax for 20 years. It counted for nothing."

"I cried when George went bankrupt," says Kathryn, "but I was also immensely relieved. I thought, `Good riddance. We can start again, with less stress, and re-evaluate our lives'." Things could only get better, it seemed. George thought he'd have a new job within three months, no problem.

At 5.45pm one Tuesday in January this year, Kathryn Solly arrives home from work at Norcot state nursery school to an empty house. George has taken Imogen to fetch the boys. She kicks off her boots, goes to the washing machine to take out a load, dumps the clothes in a basket, and chucks the basket angrily against the wall. "Just venting my frustration," she growls. "People have been telling me I look stressed. Well, that's because I am." The momentary outburst makes her feel better. She eyes the small lettuce and tomato salad George has prepared, slides a frozen chicken pizza into the oven ("Feeds the family for pounds 1.99"), and begins folding away the boys' school uniforms.

For the past two years, Kathryn has been the family breadwinner. "My sadness," she says, "is that I had to give up being mum to my two-year- old daughter. Most people don't realise that nursery teaching is the hardest there is. There is no let-up. It's physically and mentally exhausting."

A typical day starts at 6am. She showers, does last-minute lesson preparation, wolfs down the cornflakes and coffee served by her "house husband", kisses the children, pecks George on his bald patch, and is out of the door by 7.15am. She arrives an hour before her colleagues, ostensibly to organise the play activities but also, she admits, because of a tendency to want to "forget the problems at home and drown myself in work".

She always takes work home, which she tries to complete between 8 and 9pm, and thereafter she collapses on the old sofa in front of the television set and loses herself in "real life" programmes such as Casualty, "where other people's problems seem worse than my own".

George calls her a "natural born teacher", and is proud of the awards she has won for her school. Last year, Norcot, which is in the rougher part of Reading, won the prestigious Times Educational Supplement Award for Community Action. Kathryn, who had secured the sponsorship, went to visit Kindergarten No 2 in Tirana, Albania. "It was a humbling experience," she recalls. "But it was beyond their belief that my husband had no job and that our family couldn't afford clothes or food. For them, England is where the grass is supposed to be greener."

Kathryn thinks she has been a supportive wife to George, but there have been times in the past two years when she has threatened him with divorce. "He tried to keep his pain to himself, but it made him distant. I could not stand it. Sometimes, I'd storm out to the car. But where do you go? I'd think of staying at a hotel for the night, but with what money? It just reinforces how trapped you feel. It's hopeless.

"The worst part was watching someone I loved deteriorate. He never lost his work ethic, but he became increasingly withdrawn, and aged before my very eyes. He also got rattier with me and the children, and I'd snap, too. One thing that narked me was that everybody felt so sorry for `poor George'. What about poor me? Nobody extended their sympathy to me. I got to dread the postman coming. You're up, you're down, subject to the whim of what's in that envelope."

George Solly's strategy at the beginning of 1994 was to find a job with his former competitors in the beauty therapy business. When that came to nought, he energetically set about marketing himself. In one year he made 350 job applications, an average of one a day. In that time he received only a dozen interviews, a success rate of 2 per cent. Every time he was rejected, he dealt with the disappointment by losing himself in the next application.

He also took on whatever freelance work he could find - as plumber's mate, bookkeeper, and project co-ordinator for the charity Feed The Children. His income was erratic, roughly pounds 300 a month. It went to pay "whatever bill was pressing".

The Sollys tried to remain optimistic. Reading, with a population of 150,000, had become a thriving, high-tech hub, recording the highest growth rate of any European city. In January 1995, unemployment in the Thames Valley fell to just 5.5 per cent, half the figure for the rest of the country. Multinationals such as Hewlett Packard, Rank Xerox, Siemens Nixdorf and Porsche set up their UK headquarters in or near Reading, and there were many jobs to be had. George was still convinced he would get one soon.

He almost became fund-raising manager for West Middlesex Hospital (salary: pounds 25,000); and he almost became export manager for Vickers Medical (salary: pounds 35,000). But he was always pipped. Ageism, he reckoned. "I was only halfway through my working life, but to them I was the wrong side of 40."

He was not alone. Three friends - a chartered surveyor, a civil engineer and a personnel manager, all university-educated and 40-something - had joined him in the dole queue. "The civil engineer got a job spray-painting cars. He hated every minute of it."

By January 1995, when John Major announced that unemployment had fallen to 2,500,000 and the recession was over, George Solly had been out of work for more than a year. But he knew that the Home Office statistic understated the true picture, as did the figure of 927,000 for long-term jobless: he, for one, was not included. Only those "unemployed and claiming benefit" were counted. "Yet what was I, if not unemployed?"

Last year was the worst the Sollys have ever experienced. It began bizarrely, when their elderly neighbour failed to arrive for a New Year's Day tea and George, popping round to check on her, was confronted by a gruesome sight. "There she was, slumped out in her underclothes, decomposing in front of a gas fire. She'd been dead about two weeks, but the worst part was that her cat had been trapped in the room with her and had only survived by feeding on the flesh. The cat reeked of human flesh. It was horrific. And it haunted me for weeks. I felt things were conspiring against us. I spoke to my GP friend, who suggested counselling, but I never took it up."

A few months earlier, Kathryn had had to spend time in hospital after a slipped disc had put her out of action. Now it was George's turn. Kathryn noticed that one of his eyes had started to close. Each day it got worse. "He wouldn't go to the doctor - you know how men are. He said he couldn't afford the pounds 5.25 to pay for the prescription. I thought, `My goodness, he hasn't lost his work ethic but he's lost the will to live.' Eventually, he went, and was immediately admitted as an emergency. I thought he'd had a stroke. I started to face the possibility that he might never work again. I even joked that, if he did become disabled, he might stand a better chance. I got very depressed. This was the bottom of the tube for me."

The liner of George's carotid artery had split, blocking blood flow. A few hours' further delay, doctors considered, could have lost him the sight of his eye. They prescribed Warfarin, a blood thinner, and he was home after a week. "I thought Kathryn would be pleased I was better, but she was withdrawn and offhand. She cried a lot, blamed me for what had come to pass, and threatened divorce. All her resentments at my bankruptcy spilled out: that she hadn't wanted to move to Reading, that she had lost all her friends, that she worked so hard but still couldn't afford to buy herself clothes. Our relationship took a real dip."

She vented her anger that the family had no money for groceries, clothes, eating out, books, music, films, swimming, holidays or even birthday presents. If the television set broke down, they could not replace it. George sold their second car, an F-registered Golf, to pay Ralph's school fees of pounds 3,300.

The Sollys say it is unremittingly "boring" surviving without money for entertainment, exercise or new clothes. But some hardships seem self-imposed. Why keep Ralph in a private school? Why not trade in the Volvo for a cheaper car? And why not sell the house and buy a more modest one, thereby reducing the pounds 88,000 mortgage to manageable proportions? A recent TSB survey reports that last year home-buyers spent an average of pounds 30 on a mortgage for every pounds 100 of their take-home income. The Sollys exceeded the norm by 65 per cent.

"You work on the basis that you're not going to be unemployed for ever," George explains. "OK, taking on such a large mortgage was a mistake, in retrospect. But it would be unfair to pull Ralph out of private school and let Huw stay [Huw, who has an immune deficiency, has his schooling paid for by charity]. As for the Volvo, it is almost paid for, and there are stiff penalties for reneging on a hire purchase contract. The house, the school and the car - they're really all we have left.

"I blame myself for what has happened, but I also feel angry at the government. The Conservatives are supposed to be the party of the entrepreneurial middle class. I don't feel middle class any more. If they cannot address the problems of the thousands of people like me, there can never be a feel-good factor. I am fed up with the propaganda they peddle. This myth of the recession being over. Why has it gone on so long? Why has it been deeper here than anywhere else? Why is it acceptable that millions of people are unemployed? Their attitude seems to be that a certain level of unemployment keeps down wage inflation, that some people are expendable."

Neither George nor Kathryn has ever voted Conservative (George is a Liberal Democrat, Kathryn won't say), but both Kathryn's parents were dyed-in- the-wool Tories. "Through observing our experience, their attitude has changed. They are completely disgusted and disillusioned with this government," George says.

The Sollys have considered selling up and making a fresh start elsewhere. "We have toyed with the idea of Canada or Germany - George is fluent in German - countries where there is a decent standard of living and reward for hard work." If George did decide to emigrate, he would be the first in his family to do so for 500 years.

But this prospect is far from his mind on the evening of 12 February. Wearing a suit, he strides through the front door, brand-new briefcase in hand, a smile on his face. He has reason to celebrate. Not only is it his 44th birthday, but - finally, unbelievably, after 496 applications - he has been offered a job. A private girls' school in Reading, which interviewed him last year, has offered him pounds 20,000 to be their marketing manager. The Sollys' monthly take-home pay will rise by pounds 1,200. "My head is already thinking of my first payday," he exults. "Money, money, money!"

The birthday meal is still modest: takeaway cod and chips for pounds 8.70, washed down with beer. But Kathryn lays her head on George's lap and rubs his bald patch. "The only thing that's improved in the last two years is our sex life," she reflects. "It's called home entertainment," says George. "The only sort we've been able to afford."

Huw and Ralph, both football fans, liken the family's situation to that of Reading Football Club. "Compared to Premier League clubs, Reading's ground is patchy and run-down. But Reading are building a new stadium, and we have hope, too. With Dad's new job, we can move back into the Premier Division."

George's first few weeks pass busily. There is a spring in his step, a lift to his voice. Even his back feels "released" after a long-overdue visit to the chiropractor. His task is to increase the school's membership, which has fallen from 400 to 320 pupils, and he thinks he's doing well. He has got the school mentioned on Radio Berkshire and in local newspapers. He tells everyone that it's good to be wanted for his skills and experience once again. "George has been pretty ebullient, pretty bouncy," says Kathryn, "and I'm not the only one who's said that."

On his first payday, the Sollys do something they haven't been able to do for a long time: they get a babysitter and go out for dinner, just the two of them, to a Chinese restaurant in nearby Henley. It costs pounds 42.55. "It's nice not to worry about the pennies any more," says George." Hopefully, it's something we can do regularly."

But their optimism proves to be short-lived. At the beginning of March, the Sollys receive bad news. They learn that the nursery voucher scheme which the Government are about to introduce for four-year-olds will cause a funding shortfall at Kathryn's school. Kathryn is concerned that next year Norcot will have to close, or else make redundancies. "The deputy head is always one of the first to go," she sighs. "I've already started looking for a new job."

Once again, the Sollys have started to wonder: will they ever recover? How the Sollys spend money According to the Central Statistical Office, the Sollys cannot be called poor. Kathryn Solly earned pounds 23,041 last year, a salary of pounds 1,920 per month. Seventy per cent of the UK adult population, and 65 per cent of 40- to 49-year-olds, earned l ess than that last year. In addition, the State paid the Sollys pounds 101pcm child benefit and a pounds 130pcm special needs allowance for their son Huw, who suffers from an immune deficiency. These benefits raised their gross monthly income to pounds 2 ,151. This is where the money went every month: pounds Income tax 338 National insurance contributions 162 Compulsory pension fund 115 Mortgage (22 years to run) 662 Hire purchase on car 270 Life insurance on mortgage 44 Home contents insurance 37 Car insurance ("with full no-claims bonus") 29 Insurance on washing machine 13 Life insurance on Kathryn (pounds 25,000) 23 Electricity 45 Gas 30 TV licence 14 Water 15 Telephone 23 Union fees to National Association of Head Teachers 9 Road tax, battery, brakes, tyres 47 Petrol 60 Public transport (for Huw's check-up in London) 15 Council tax 60 Interest (on overdraft and credit cards) 40 Childminder 350 Postage and stationery 24 Newspapers and journals 10 Family haircuts (by a friend) 10 Children's video rental 2 National Lottery 4 Food 120 Total expenditure 2,571 Income 2,151 Shortfall 420

Apart from running up credit card debt and a bank overdraft of pounds 2,400, and selling a car to pay school fees, this is how the Sollys got by: Kathryn's father Roy, finishing off his working life at the Atomic Energy Authority, works past retirement to support them. He and Kathryn's mother, Irene, buy groceries and deliver them - so "at least they are eating". They also help with children's shoes, clothes, birthday presents and pocket money. At Christmas they paid for a "stress relief" visit toGeor ge's relatives in Germany for a week. George says that at first it was embarrassing to take their money, but their generosity is so unconditional that he didn't feel that way for long. George's father is dead. His mother, Ingeborg, helps out with the occasional bill, but, he admits, "she hasn't quite grasped the severity of our situatio n". George estimates it costs his in-laws at least pounds 300 a month to support the family.