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26 Jun 2007 : Column 7WH—continued

I shall suggest what some of the key elements of such an holistic approach might be. The first is an economic policy that places renewed emphasis on high skills, not low wages, as the best route to full employment in every region and nation of Britain. The Government’s record on jobs is second to none but, as my right hon. Friend the Secretary of State for Work and Pensions
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has rightly acknowledged, economic inactivity rates remain far too high. The ethnic minority employment rate gap, although closing, remains at 15 per cent.

Of course, some people are unable to work—those with a severe disability, for example. But in an economy with job vacancies and skills shortages, and when we are importing labour from abroad to deal with those problems, policy makers should not be shy of focusing on those in some of our communities who remain work-shy. We need both more carrots and more sticks to deal with that problem: a rising minimum wage, greater conditionality in the benefit system and a new accent on lifelong learning—all will have a part to play.

Lifelong learning is key. In the past ten years educational standards have risen and the number of adults without any qualifications has fallen, but my constituency is not alone in having far too many people who still lack any qualification. According to a recent report by Dr. Tony Chapman of Teesside university, results in local schools have risen sharply in recent years, but more than 20 per cent. of adults in Darlington still do not have any qualifications. Unsurprisingly, Darlington’s core economic problem is no longer high unemployment, which has fallen by 50 per cent. since 1997 as new jobs, businesses and business parks have sprung up all over the town. The problem is low wages, linked to the quality of some of the jobs on offer. That, according to Dr. Chapman, limits social mobility.

That is not just a priority to address locally, although the ever enterprising Darlington partnership is working with the local council, colleges, schools and business to deal with it. It must be the core national economic priority. The generation of the late 1950s, of which I am part, were the beneficiaries of a mobility in society that came about because of a change in the economy: the advent of a more service-based economy and the greater professionalisation of jobs, which created what the academics call “more room at the top.” Likewise, today’s generation can potentially benefit from an even more fundamental change towards a more skilled, less unskilled economy that will once again create new room at the top. Realising that potential means recognising that while economic stability is fundamental, knowledge holds the key to Britain’s future both economically and socially.

Secondly, as the hon. Member for Edinburgh, West (John Barrett) said a moment ago, a knowledge economy means that education will become ever more significant in the future.

Despite the good progress of recent years, if we are honest, the attainment gap remains far too wide. A child who is not on free school meals is twice as likely to get five good GCSEs than a child who is. Just over one third of black Afro-Caribbean boys get five good GCSEs when the national average is two thirds, which some believe is because, in some way, intelligence is unevenly distributed in our society. I have never believed that or that ability is unevenly distributed in society. I have always believed that it is opportunity and, in the end, power that is unevenly distributed. I applaud the Government’s efforts to break the cycle of educational disadvantage and welcome city academies and trust schools, personalised learning for better discipline, a focus on early-years development, and the new focus on the so-called softer social skills, all of which will make a difference. However, I also believe
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that we need to do more to ensure that good schools are just as accessible to poorer parents as to those who are better off. The truth is that the wealthier someone is; the more choice they get. We can see that happening in our education system. Selection by academic ability may have largely gone, with the exception of a few grammar schools and the independent schools, to which my hon. Friend the Member for North-West Leicestershire referred. However, selection by social position still lingers in our school system.

David Taylor: I am grateful to my right hon. Friend for giving way; this is not a grunt, but an intervention. A paraphrase of what he said is that the influence of independent education has almost gone. I cannot for a moment think that he really believes that. If he looks at the various levers that influence the direction and pace of our society and economy, he will find that they are disproportionately in the hands of the 7 per cent. of people who have been independently educated. Does he not agree that even in 2007 the influence of private education is widely pernicious and divisive? It may have lessened a little, but certainly not to the extent that he suggests.

Mr. Milburn: My hon. Friend is right in the sense that people who have a private education—in his country we rather bizarrely call it a public education, which confuses people from abroad—have certain advantages. My point is that, by and large, for the 93 per cent. of children who go to state school, selection has disappeared. That is a good thing. However, the truth is that there is a different and more covert form of selection because if someone is wealthy, they can opt out of the system or buy extra tuition. Alternatively, people can use an indirect market mechanism, such as buying a home near a good school. I am not saying that those are bad things. My point is that if choice is available to some, it should be available to all.

If affluence still buys attainment in our school system, that inevitably restricts mobility. For some, the answer lies in more academic selection and a return to grammar schools, but there is precious little evidence that the selection of pupils by schools does anything to close the attainment gap. The evidence from countries as diverse as Denmark, Sweden and the United States points in a different direction: it does not help if schools select pupils; it is parents being able to choose schools that raises standards generally and helps disadvantaged children particularly. That is why I believe that parents with children in badly performing schools, which are invariably in the poorest areas, should be given a new right to choose an alternative state school. I propose that such parents should be able to choose what I have called an education credit, which would be worth perhaps 150 per cent. of the cost of educating the child in their current school. That would give a positive incentive to the alternative school—the better one—to the take the child and expand the intake numbers.

I know that whenever such proposals are floated, there are sometimes legitimate concerns and objections, but it is simply not right that we should tolerate so many disadvantaged children still being let down by the schools system. Correcting that injustice means shifting the balance of power to put more choice in the hands of those parents that the system currently disempowers.

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Mr. Terry Rooney (Bradford, North) (Lab): Does my right hon. Friend accept that we have identifiable areas of extreme deprivation and poverty in all our towns and cities, which is where poor schools are located? The issue is one of poverty of aspiration—primarily of teachers, but also of parents. Although I understand why he has made the comments that he has, are we not surrendering to that poverty of aspiration by saying, “Well, let people move out”? Is it not time to root out the desperate lack of aspiration for children in the teaching profession?

Mr. Milburn: There is sometimes a poverty of aspiration, but we must try to understand what that is and how it has arisen. I think that it has arisen because of a sense of disempowerment in the system. The truth is, if someone is poor, they do not have much power. If someone lives in a poor community, they feel that the world is against them and actually it often is. The school and police system does not seem to work for such people; they bang on the door and are not heard and we must address that. I am not saying that education standards, systems of inspection or rooting out bad teachers do not have a part to play. I believe that they do. Getting the organisational autonomy of the school right has a huge part to play, which is why, like my hon. Friend the Member for North-West Leicestershire, I welcome the city academies and trust schools.

In the end, we must find a way to change the accountability of the system and to give more power to parents who feel that they have no power in the system. Conversely, if someone is better off, they feel that they do have some power because they can exercise some leverage and control in their lives. That is a good thing, not a bad thing. Power should not be taken away from people, but should be given to more people, which is why, in my view, my proposal has merit as an addition to and not a substitute for all the other things that are being done to tackle precisely the issue to which my hon. Friend the Member for Bradford, North referred.

My third point is that if we think that it is only wealth that is unevenly distributed in society, social mobility will not advance. That is not the case; it is also a matter of power. If Britain is to get moving again socially, people need to be able to get not just a job, training or child care, but to enjoy greater control and have a bigger say in how they run their lives. Of course, beating crime, creating jobs and regenerating estates can all help, but in my experience the cloud of despondency that hangs over some of the poorest communities will only ever be dispelled if we allow individual citizens and local communities to share more directly and evenly in how those communities are run. I am pleased that my right hon. Friend the Chancellor has properly recognised that point.

That is why I argue for a new principle at the heart of our governance, for which David Marquand and others have also argued. The principle is one of subsidiarity, where power is located at the lowest possible level consistent with the wider public good. If it is possible for people to exercise power individually—people can do so by choosing a hospital or school that is right for them—that is where power should be located. When it is not possible for people to exercise power individually—for example most of us would have some
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difficulty in choosing our own police officer—power should be located at the next possible level, which is in the local community. Where services are failing, communities should have the legal right to have them replaced; where communities can run their own services—whether children’s centres, housing estates and local parks—they should be helped to do so. The community should be given a bigger say over other services, most notably local police and health services, by making them subject to direct election at the ballot box.

The thing that I learned most during my time in government was that government can do much, but there are limits. Doing things to people does not really work; it is doing things with them that is the key—whether that is improving health, fighting crime or regenerating communities. We must move from a top-down to a bottom-up approach towards governance and give citizens and communities far more of a stake in the future.

That brings me to the final area of policy that I believe can make the biggest contribution to social mobility—giving individuals and families a stake in the future by establishing Britain as a democratic, asset-owning democracy. There is compelling evidence that financial asset-holding improves individual and social outcomes over and above factors such as educational attainment. Certainly, the evidence from the national child development study of a cohort of children born in 1958—incidentally, that seems to have been a good year for surveys—demonstrates a positive link between asset-holding at the age of 23 and welfare outcomes later in life. Those with assets tended to spend less time unemployed and enjoy better health. There is similar evidence from the United States where, for example, home owners are more active in local politics and neighbourhood organisations than non-home owners.

Ownership works. Larry Summers once famously observed that no one ever washed a rental car. He was right. It is ownership that encourages people to act responsibly and behave independently. Spreading asset ownership is crucial, therefore, to tackling inequality and speeding social mobility. The most substantial inequity in a modern society such as our own is no longer between income groups, but between those who have a pension, and own shares or a house and those who rely purely on benefits and wages. That is why I favour employee share ownership, which I want us to do much more to encourage.

That is also why I want us to do much more to encourage home ownership, where, as the Chancellor said to the Labour conference on Sunday, there is a need for urgent action. Changes in the housing market threaten to make inequality wider and further impede social mobility. We can see that in London where a child of home-owning parents stands to inherit an asset worth an average of £330,000. A class mate whose family rents stands to inherit nothing. The housing market, therefore, threatens to impede social mobility, rather than enhance it. Of course, in recent decades, home ownership has grown sharply and the Government have ambitious plans to expand it further. However, escalating house prices mean that getting on to the housing ladder is becoming more difficult, which
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is not an issue for London and the south-east only; it is an issue in virtually every constituency in every part of the country.

The Government are right, therefore, to address the issue of housing supply—we need to build more housing and social housing. That is a priority. However, as two recent reports by the Department of Communities and Local Government suggest, given a choice, most people would prefer to buy, not rent. Well over 1.5 million social tenants still aspire to home ownership and although it is welcome that 80,000 households have been helped to do so through Government shared ownership schemes, again much more needs to be done. With fewer people able to afford to buy outright, more first-time buyers and young families are dependent on parents for financial help and with just five per cent. of tenants given the opportunity to buy through the Government’s “Social HomeBuy” scheme, further reforms are needed.

The Government and the new Prime Minister, of course, will want to consider what reforms are necessary, but these are my suggestions: first, remove the minimum share a tenant is expected to take in their home from 25 per cent. to something far more affordable, such as five per cent. in order to get them on the first rung of the housing ladder. Secondly, we should ensure that every social tenant—not just some—has a right to own a share in their own property. Thirdly, we should ensure that the geographical distribution of resources under Government low-cost home ownership programmes is targeted properly to the regions with the lowest owner-occupier levels, including London and my own region, the north-east, which, incidentally, needs its fair share.

Fourthly, we must develop new ways of helping people on to the housing ladder. In addition to shared equity schemes, which the Government are doing a lot about, we should at least explore community land trusts, mutual housing and developer-led co-housing schemes, which have shown remarkable success in other parts of the world. Fifthly, we should work with mortgage lenders to promote more flexible forms of borrowing, which in the United States, at least, have helped millions more from low and middle-income families into home ownership. In a country as wealthy as our own—we are now the fourth richest on the planet—making ours a genuinely fair shares society is a realisable ambition, because we have a high and growing proportion of people owning homes and shares, and so owning a real stake in the future of our country.

Those are some of the steps that we need to take towards a genuinely socially mobile Britain. They are all about levelling-up, not levelling-down and not just beating poverty, but unleashing aspiration, and they all require, not less of a role for the state, as some mistakenly believe is what the modern world demands, but a different sort of state—one that empowers rather than controls. In my view, the changes that this Government have made in the last decade have laid the foundations for a Britain in which prosperity and opportunity are shared widely. However, unlocking our country so that it is open to aspiration and effort requires a new drive to change fundamentally the distribution of power in our society. I believe that we have made good progress in the last 10 years; I hope that we can make even more in the next 10.

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10.16 am

Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): It is a pleasure to serve under your chairmanship, Mr. Illsley, once again. I congratulate the right hon. Member for Darlington (Mr. Milburn) on securing a debate on this very important subject. Indeed, in the breadth of his speech, which in the time available I cannot hope to match, and in the range of issues on which he touched, he has shown how social mobility and the need to address it touch on almost every aspect of social policy and how we as politicians, Members of Parliament and, from the Minister’s point of view, as a Government, can focus our efforts on tackling this hugely important problem. He is to be congratulated.

Although the Opposition do not necessarily agree with all the prescriptions that the right hon. Gentleman offered—I suspect that there are those on all Benches that do not agree with all of them—in opening up the breadth and range of issues, he has performed a very important service. I congratulate him also on his work on ensuring that these issues are brought to wider attention through the media. Those of us who wake up early enough in the morning were pleased to hear him talking on the “Today” programme this morning. That also is important in bringing these issues to much wider attention.

The right hon. Gentleman said that he cannot imagine a child from a background such as his own achieving the same high office that he achieved as a member of the Cabinet. That is a staggeringly sad comment on where we have come to. If social mobility was progressing, he should be able to foresee, in 10, 15 or 20 years’ time, a Cabinet full of people from backgrounds similar to his own.

Mr. Milburn: Actually, I can envisage that down the line; my point was that I cannot envisage it today. We have got to be a bit careful on this whole issue. People often say that mobility has stagnated and that it has not got any better, but as I pointed out, and as the Sutton trust report yesterday pointed out, to measure whether social mobility is advancing or retreating takes many decades. What we must do, which is what I was trying to do in my speech, is to look at the factors most likely to give rise to social mobility. Actually, I am rather more optimistic about the future than the hon. Gentleman might suggest.

Danny Alexander: I am grateful for that intervention. Given that the right hon. Gentleman came from the 1958 cohort, and that I am nearer to the 1970 cohort—I was born in 1972—I can say only that I hope that he is right.

Mr. Milburn: A Government of all the talents.

Danny Alexander: Indeed. We shall see.

The point that the right hon. Gentleman makes is an interesting one. If we are to achieve the progressive consensus, for which he expressed a wish at the beginning, it must be built around a shared understanding of the facts. I do not believe that anyone on either side of the House would deny the importance of social mobility, nor would they deny that equality of opportunity is a critically important aspiration across
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the whole of the political spectrum. I look forward to hearing the remarks of the hon. Member for Tunbridge Wells (Greg Clark) on that point.

Social mobility is especially important to Liberal principles of freedom and fairness, because a lack of it implies a lack of opportunity—an inequality of opportunity—and a fair and liberal society is one that makes the best use of the talents of everyone in that society. Social cohesion and inclusion are more likely to be achieved when people believe that they can improve the quality of life that they enjoy through their own abilities and efforts. The right hon. Member for Darlington made that point.

We like to think of this country as a meritocracy. None the less, even taking into account the right hon. Gentleman’s comments, the facts suggest that, at the very least, Britain has over the past few decades become less socially mobile rather than more. Taking his comments at face value, it is perhaps too early to tell precisely what impact this Government’s policies have had on social mobility, given the length of time that it takes to research such matters, but the evidence from, for example, my constituency and the academic reports that we have all studied is that there are arguments on both sides about how this Government’s policies have affected social mobility. There is at least as much evidence that some of their policies have damaged social mobility more than they have improved it.

John Barrett: An issue that the right hon. Member for Darlington touched on was access to education. When my hon. Friend discusses the importance of education, will he touch on the barrier that high tuition fees present to those who are from less affluent backgrounds?

Danny Alexander: I am grateful to my hon. Friend for that intervention. He makes an important point. I wish to dwell on education, but my view is that education in the very earliest years of a child’s life makes the most difference to social mobility. He makes an important point, and one with which I agree, but we must consider the entire education system if we are to work out how educational intervention can promote social mobility.

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