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Westminster Hall

Tuesday 26 June 2007

[Mr. Eric Illsley in the Chair]

Social Mobility

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Michael Foster.]

9.30 am

Mr. Alan Milburn (Darlington) (Lab): It is, as always, a huge pleasure to serve under your chairmanship, Mr. Illsley. I am extremely grateful to you, and particularly to the Speaker, for this opportunity to debate an issue that goes to the heart of what a modern Britain should look like.

The issue of social mobility, by which I mean the ability of children to advance relative to their parents, seems to have become more and more salient in recent months. We can hardly switch on the radio, watch the TV or read a newspaper without the issue being raised. I welcome that; it is a source of great hope for the future of our society.

Ministers in this Government have long wanted an open society in which, as the Prime Minister put it all those years ago, people can advance as far as their talents can take them. As I shall argue in a moment or two, the progress made in recent years opens up the prospect of more mobility in future decades, which will follow decades during which there is little doubt that social mobility had slowed down.

Oddly enough, my optimism has been enhanced by the interest that Opposition parties have begun to take in the issue. For example, I read with interest the pamphlet on social mobility published by CentreForum, the Liberal Democrat think-tank. It argued a good case on what needed to be done. I noted with interest, too, what Members from the Conservative party such as the hon. Member for Tunbridge Wells (Greg Clark) and the hon. Member for South-West Surrey (Mr. Hunt) have said about social mobility; I leave aside the hon. Member for Havant (Mr. Willetts), whose speech on grammar schools is famous—or should I say infamous, at least as far as some Conservative Members are concerned.

John Bercow (Buckingham) (Con): Famous!

Mr. Milburn: There might be a division of opinion on that point on the Conservative Benches. All those Conservative Members have argued that social mobility should be the cornerstone, if that is not too factional a word, for modern Conservative thinking inside the Conservative party. I welcome all that, and if we are genuinely about to forge a modern progressive consensus on the issue, that is also to be welcomed.

My purpose in holding this debate is to seek an agreed understanding of what has happened to social mobility in recent decades, of why that has happened and of what we need to do to get social mobility going again in our country. First, let us be clear about why social mobility matters. It matters for three fundamental
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reasons. First, if social mobility is stalled, disadvantage is entrenched; for me, that is a fundamental point. The desire to increase social mobility cannot be a substitute for the desire for a more equal society. In my view, it is no coincidence that countries such as Sweden, the Netherlands, Denmark, Australia and even Japan are both the most socially fluid in the world and the most equal. That is why the Government’s efforts to abolish child poverty are so crucial and why if other parties are serious about creating a society of open opportunity—they say that they are—they need to move beyond expressions of aspiration towards firm commitments that match the Government’s.

Secondly, social mobility matters because our success in a globally competitive economy, which we now have, depends on unlocking the talents of all people, not only some of them. The most important resources of any company or country are no longer their access to raw materials or their geographical location but the skills of their people. In the 21st century, what is right on ethical grounds is also right on economic ones; a knowledge economy needs a mobile society.

The problem is this: technological change is skill-biased. Those with higher skills have seen the largest increases in pay and productivity since the late 1970s, while those with lower skills have found that technological change leads to reduced demand for their labour and lower average earnings, with all the consequences that that has for social cohesion. However, the truth is that we ain’t seen nothing yet. If the recent Leitch report on skills is right, the demand for unskilled labour will fall still more dramatically in the years to come, leaving those without skills stranded economically and perhaps cut off socially from the mainstream, unless we can make social mobility take hold.

Thirdly, social mobility matters because when it slows down, it is not an issue only for those at the very bottom of society. It also matters to those whom President Clinton once famously called “the forgotten middle class”. If the aspirations that the overwhelming majority of hard-working families have for themselves, their children and their communities are thwarted, that undermines both social responsibility and individual endeavour.

A good society rests not only on shared values but on a sense of fair rules—so that when people put something in, they feel that they get something back. As a child, I was certainly brought up to believe that effort got its own reward.

David Taylor (North-West Leicestershire) (Lab/Co-op): My right hon. Friend is making an important contribution. As I mentioned before the start of the debate, we have a common background. Given that 7 per cent. of young people in this country are educated independently and that about 25 per cent. of young people in the 1950s, 1960s and 1970s were brought up on council estates, would my right hon. Friend say that the make-up of Labour Cabinets in the past 10 years has been emblematic of the kind of social progress that he would like to see?

Mr. Milburn: I am grateful to my hon. Friend for his comments; he takes a keen interest in debates of this nature. I have said elsewhere that regrettably, and perhaps rather shamefully for modern society, I cannot envisage a child growing up today as I did—on a
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reasonably disadvantaged council estate—ending up in the Cabinet 20 years hence; I shall come to the reasons why in a moment. That is a matter of huge regret for our country and a matter of shame for a country as wealthy as ours. We have to be able to explain why that has happened; more importantly, we have to be able to do something about it. Education is critical to that, and I shall address that issue in a moment.

There is a difference, in that I believe that the answer lies not in taking things away from people but in opening up opportunities to some people so that they are available to all. The truth is that good education is available to some people; a very good education is available to a small minority of people, because they can afford to pay for it. We have to make those opportunities—and, dare I say it, those choices—available according not to where people come from, their backgrounds or circumstances, but to their needs.

Bob Spink (Castle Point) (Con): We are all grateful to the right hon. Gentleman for bringing this most important subject to the House. I am also grateful to him for his initial approach in recognising that the issue is not party political and that we need a consensus to deal with it; the problem is too important to play politics with.

The right hon. Gentleman has talked about various issues of social mobility, such as education and housing, and he will tackle those. Children’s mobility is largely predicted by their parents’ circumstances. Will he tackle the issue of lone mothers, and the fact that when they try to go into work, they often lose more in benefits, tax and child care than they gain in wages? Reform of the benefits system would enable young lone parents to work; they could then set an example for their children and bring them up as they wanted. Would that help social mobility?

Mr. Milburn: I agree, and I am grateful for the hon. Gentleman’s intervention. When I hear the words “lone parent”, I always react slightly adversely—partly because I was brought up by one. I have heard members of his party take a rather pejorative and even punitive attitude to lone mothers, and although he is not taking that attitude, my reaction to it is, as I have said, an adverse one.

The hon. Gentleman makes a good point, and it is worth considering what has happened to lone-parent employment during the past few years. My hon. Friend the Member for Bradford, North (Mr. Rooney) knows more than me, but it has dramatically increased—by more than a third of a million, I believe. Nevertheless, there is a real issue, and work-life balance is very topical; it is not a chattering-class matter. It bites hardest at the bottom end; particularly for working lone parents, because in order to make ends meet they have to balance their caring responsibilities with sometimes one or two jobs. For them, it is not just the operation of the tax and benefits system, to which the hon. Gentleman referred, that is critical, but whether affordable child care is available. That is one of the keys that unlocks a more mobile society. There has been much progress, but there is a lot more to do.

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Before the hon. Gentleman intervened, I was talking about what I call the “fairness code” in British society, a code that I believe is very strong. When rules appear to be transgressed, which I suspect many feel to be true in the case of people who cheat the benefits system or who flout the immigration rules, the balance between rights and responsibilities seems to move too far towards rights and away from responsibilities. At that point, the incentive to work hard and play by the rules is undermined, which is why social mobility matters so fundamentally. When it is present, it provides a fair set of easily understood rules—we might call them social incentives—that earn rights through responsibilities and advancement through effort. When it is absent, incentives for individual progress are weakened, rules are transgressed, and people feel that fairness has been undermined. It is then that decent people ask, “What is the point?” Poverty of aspiration kicks in, and, which is worse, social resentment festers and grows, sometimes with ugly consequences in our politics.

I should at this point declare an interest. I am the product of the most socially mobile generation that this country has ever seen, Mr. Illsley, as I suspect you might be also. I was lucky; I was born into a good family and a strong community, and into a society that was moving from rigidness to openness. The 1950s and 1960s saw Britain finally emerge from the aftershocks of the war years. There was the most appalling poverty and inequality, so no one should ever view those years as some sort of golden age, because they were not. Oddly enough, however, the fact that people had gone through that gruelling war and made such huge sacrifice meant that there was a shared national determination to win the peace.

That determination found its expression in the post-war Labour Government and in its truly towering achievements: universal education, a new welfare state, and full employment. Those achievements provided millions of people, particularly the young—the post-war baby boom generation, with opportunities that had never been available before. They opened up the prospect of a more classless society. Indeed, Anthony Crosland spoke about that as a very realisable objective. In 1958, the year of my birth, Michael Young published his book, “The Rise of the Meritocracy”, precisely to warn against the downsides of a genuinely meritocratic society. If we are honest, that optimism now looks pretty misplaced.

The nature of inequality might have changed, but it is still present. In the decades since that time, birth, not worth, has become more and more a key determinant of life chances. The Cabinet Office report on social mobility that was published in 2001, which I commend to hon. Members, laid statistically bare what many of us had subjectively feared. It highlighted the fact that there had been steadily decreasing upward mobility of manual occupations toward higher status, professional and technical occupations.

It seems that, as prosperity spread to more people, there was a falling further behind of those without skills—whether hard skills expressed in terms of qualifications, or softer, personal and communications skills that are so necessary to cash in on the opportunities that are available in a modern society such as ours.

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John Barrett (Edinburgh, West) (LD): I am sure that the right hon. Gentleman will deal later with the fact that education is the key. It is the single most important factor in determining income later in life, but income later in life is probably also the most important factor in determining the education of the children of high earners.

Mr. Milburn: The hon. Gentleman is right. To coin a phrase, there is direct correlation between “the amount you learn and the amount you earn”. I think that it was the academic, Michael Sheridan, who said that people rarely spend their way out of poverty. That is self-evident, and we have to give people the tools to “enable” them out of poverty. That means giving them opportunities through higher wages, tax credits and the like, but it also means dealing with the root causes of the problem, by providing education, a stake in society, and a feeling that they have some control in their lives—a point to which I shall come in a moment. In a knowledge economy, education is among the most important of those factors as the motor of mobility.

More people have escaped adversity, but those still in adversity face a bigger gap in getting on the ladder to prosperity. That gap between those at the bottom end and the rest is reflected in recent work by Professor John Hills of the London School of Economics on housing and social mobility. He observes that, nowadays, social tenants are much more likely to be on low incomes and to be economically inactive than in previous decades, and certainly than in the period when I was growing up on a council estate that was pretty mixed in social background.

Other academic research confirms that the economic status of the cohort of children born, as I was, in 1958, was far less dependent on the economic status of their parents than those born just 12 years later, in 1970. Between the two generations, economic mobility had fallen, so that it became increasingly likely that if someone was born disadvantaged, he or she would stay disadvantaged.

Such evidence is sometimes wrongly cited, including, on occasions, by Opposition Members, to argue that social mobility has actually fallen under the present Government. That is a lazy assumption, and in my view a wrong one. It is also a dangerous one for Conservative Members to make. In fact, the 1970 generation was making the transition from childhood to adulthood during a period of Conservative Government, which happened to give Britain the two worst recessions it had ever seen, as well as, according to Professor Hill, a dramatic growth in income inequality.

In the past 10 years, that growth in inequality has slowly begun to be reversed. The very wealthiest have of course continued to get wealthier, but the bottom 20 per cent. have seen their incomes grow at a faster rate than the top 20 per cent. There has been an unrivalled period of economic growth, 2.5 million jobs have been created, and there are almost 2 million more home owners. New measures, such as the minimum wage, have helped to spread more prosperity to more people. The country has seen the biggest increases in public service investment, and the biggest decreases in child and pensioner poverty for decades.

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Greg Clark (Tunbridge Wells) (Con): I think that I am correct in saying that the right hon. Gentleman referred to the incomes of the most prosperous in society having increased more slowly than those at the bottom. That does not tie up with the Government’s own action plan on social exclusion, which is very candid and says that:

How does he square the Government’s statistics with his own gloss?

Mr. Milburn: The hon. Gentleman is quite right about the social exclusion action plan. As he points out, there is a particular issue for people at the very bottom end of society, just as there is for people at the very top end. We can compare the top 1 per cent. and the bottom 1 per cent. if that is what he wants to do, but I was actually talking about the bottom and top 20 per cent.

It is worth restating for the record that, unlike in the 1980s and 1990s, when child poverty was rising faster here than anywhere else in Europe and we ended up with the highest rates, we now have the fastest-decreasing rates in Europe. Huge progress has been made. The hon. Gentleman is right to point to a continuing gap, but we are making progress not just on incomes but on many other fronts.

Greg Clark: The right hon. Gentleman mentioned the bottom 1 per cent., who are clearly falling behind. Is he not aware that in the most recent year for which we have records, real income fell for those in the bottom three deciles of the income range, in not just relative but absolute terms? That is the bottom 30 per cent.

Mr. Milburn: I am aware of the latest figures, and I am also aware of the position over the past decade. Income has risen across the deciles, particularly for the bottom 20 per cent. All the measures that have been put in place, such as the minimum wage and tax credits, have made a real difference.

It is not just on income that a difference has been made. People sometimes say—I am sure that the hon. Gentleman is tempted to say it on occasions—“Well, we might have seen a lot of money going to the public services, but what difference has it made?” Well, take education. The primary schools in the most disadvantaged areas of the country have improved almost twice as fast as those in the most affluent areas. City academies, to which I know the hon. Gentleman is a convert—[Interruption.] Perhaps my hon. Friend the Member for North-West Leicestershire (David Taylor) is not, as he is grunting again. Their results are improving at four times the national rate despite their having twice the number of kids on free school meals. The number of state school entrants to the top universities has increased by more than a third since 1997.

Perhaps most critically of all, at least for the long term, the Government have done something that no previous Government have done: invested heavily in child care and early years development, learning
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lessons from the Scandinavian countries, which have managed to use universal child care as a weapon to both tackle inequality and speed up social mobility. On each of those fronts, the progress of recent years has laid the foundation for increased social mobility in future years. Indeed, I noted with interest a publication yesterday by the Sutton Trust arguing that although social mobility remains too low compared with other countries, its decline over many decades has finally bottomed out.

Here I must be candid. The ossification of British society, which set in over many decades, will take more than one decade to unfreeze. It is true that the glass ceiling has been raised; it is equally true that we have not yet broken through it. Breaking the relationship between class origin and class destination is a battle for the long term and requires a holistic approach.

I was taken by the comments of the winner of the Nobel prize for economics, Amartya Sen, who rightly said that families could suffer not only economic but cultural, social, housing and educational disadvantage. That points us to the policy agenda that is needed: one that moves beyond the focus of the traditional welfare state on correcting the outcomes of market-driven inequalities such as low wages and family poverty retrospectively, and towards an approach that proactively reduces inequality and advances mobility by tackling the roots of the problems, not just dealing with their symptoms.

It is assumed by some, even in the House, that individual advance can come only through the state getting off the back of the individual citizen or local community. For others in the House a bigger role for the state is the answer. In fact, a mobile society requires two things: an active state and active citizens. Only the state can equalise opportunities throughout life and empower its citizens. Equally, only individual citizens can seize those opportunities and realise their aspirations to progress.

Tackling inequality and speeding up social mobility have pervaded much of what Government Departments have done in the past decade, whether reforming benefits or building houses. I commend the new focus in the social exclusion action plan on families who suffer multiple deprivation and struggle to get a foothold on the ladder into mainstream society. Family policy in general, and those families in particular, are rightly a priority. With a new Prime Minister and a new Administration just around the corner, there is an opportunity to give the social mobility agenda renewed momentum and new prominence as the core purpose for the whole of Government. There is a strong case for consulting widely and then publishing a White Paper, an action plan on social mobility to parallel our action plan on social exclusion, to set out how the Government intend to get Britain moving socially in the next 10 years.

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