House of Commons Debate, Westminster Hall, 26th June 2007

I am very grateful to have this opportunity to debate an issue that I believe 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 up the ladder relative to their parents, I am pleased to say seems to have become more and more politically salient over recent months.  Of course, Ministers in this Government have long been motivated by the desire to make Britain a more open society where, as the PM put it in 1997 people are able to go as far as their natural talents take them.  And as I will argue shortly arising from the Government’s approach over the last decade there are the first hopeful signs that social mobility in future decades may speed up when over previous decades it had slowed down. 

My optimism here has been enhanced by the apparent enthusiasm with which other political parties have started to talk about the issue.  The Liberal thinktank Centreforum recently published an interesting pamphlet on social mobility.  And within the last few weeks the Conservative Party – in the guise of the hon members for South West Surrey and Tunbridge Wells and of course the hon member for Havant in his now famous – or for many of his colleagues infamous speech on grammar schools – have all argued that social mobility should be the cornerstone of modern Conservative thinking.  To them I say welcome to the new progressive concensus.  

My purpose in holding this debate is to seek an agreed understanding about what has happened to social mobility over recent decades, why it has happened and then to explore what is required to get it moving again. Social mobility matters for three fundamental reasons. 

First, if social mobility is stalled disadvantage is entrenched - with all of the consequences that has for social cohesion.  This is a fundamental point:  the desire to increase social mobility can not be a substitute for the desire for a more equal society.  It is no coincidence that countries like Australia, Japan, Sweden and the Netherlands are the most socially fluid in the world – and are also amongst the most equal.  That is why the Government’s efforts to abolish child poverty are so crucial and why other parties if they are serious about an open opportunity society really need to move beyond expressions of aspirations towards firm commitments to match that of the Government.  
Second, our success in a globally competitive economy depends on unlocking the talents of all our people. The most important resource of a company or a country is no longer its raw materials, or its geographical location, but the skills of the whole workforce. What is right on ethical grounds in the 21st century is right on economic grounds too.   A knowledge economy needs a mobile society.   Technological change in the modern world is ‘skill biased’ - those with higher skills have seen the largest increases in productivity and pay since the late 1970s, while those with lower skills have found that technological change leads to a reduced demand for their labour, and lower average earnings. But you ain’t seen nothing yet.  If Lord Leitch’s recent report is right demand for unskilled labour will fall still more dramatically in the years to come leaving those without skills stranded economically and divorced from the mainstream socially – unless we can get mobility to take hold.

Third, a slowing down in social mobility is not just an issue for those at the very bottom of society.  It matters to what President Clinton famously called the ‘forgotten middle class’.  If the aspirations that most hard-working families have for themselves, their children and their communities are thwarted, then social responsibility and individual endeavour are both undermined.   A good society rests not just on shared values but on shared rules, where if people put something in they get something back.  This fairness code is especially strong in British society.  When those rules appear to be transgressed - as I suspect many feel is the case with those who cheat the benefit system or the immigration rules - the balance between rights and responsibilities seems to move too far to the former and away from the latter.  The incentive to work hard and play by the rules is then undermined.  This is why social mobility matters.  When it is present it provides a fair set of easily understood rules - social incentives - that earn rights through responsibilities, and earn advancement through effort.  When it is absent incentives for individual progress are weakened, rules are transgressed and fairness is undermined.  It is then that decent people say what’s the point?  Poverty of aspiration then kicks in, and worse, social resentment festers and grows.   
Perhaps here I should declare an interest.  I am the product of the most socially mobile generation this country has ever seen.  I was lucky to be born into a good family, a strong community and a society that was moving from rigidness to openness.  The 50s and the 60s saw Britain finally emerging from the aftershocks of the war years.  There was of course the most appalling poverty and inequality.  This was not in any sense a golden age.  And yet it was a time of great hope.  Having won a gruelling war in which so many had made such sacrifices, there was a shared determination to win the peace. This determination had found expression in the post war Labour government’s towering achievements.  Full employment.  Universal education.  And a new welfare state.  Together they brought new opportunities to millions of people – the young especially. By 1958 when I was born, the prospect of a more classless society seemed to be so within reach that Michael Young published his book The Rise of the Meritocracy in that year precisely to warn about the downsides of a genuinely meritocratic society.

Today that optimism looks hopelessly misplaced.  In the decades since, birth not worth has become more and more a key determinant of life chances.  The Cabinet Office Strategy Unit report on social mobility published in 2001 laid bare statistically what many feared was happening subjectively - steadily decreasing upward mobility from manual occupations to higher status professional and technical occupations.  What seems to have happened is that as prosperity has spread to more people, those without the skills - both hard skills enshrined in qualifications and softer communication and inter-personal skills - needed to cash in on the opportunities available in a society like our own have fallen further behind.  More people have escaped adversity but those still in adversity face a bigger gap to get on the ladder to prosperity.  Recent work by the IPPR shows that in the decade to 1970 personal and social skills became 33 times more important in determining young people’s life chances but while parents who have become better off can purchase activities to enhance their children’s development poorer parents cannot.  This gap between those at the bottom end and the rest is also reflected in recent work by Professor John Hills from the London School of Economics on housing and social mobility when he observes that social tenants nowadays are much more likely to be low income and economically inactive than in previous decades when I was growing up on a council estate.  

Other academic research confirms that the economic status of the cohort of children born, like I was, in 1958 was far less dependent on the economic status of their parents than those born just twelve years later in 1970.   Economic mobility had fallen between the two generations so that it became increasingly likely that if you were born disadvantaged you stayed disadvantaged.  This evidence is sometimes wrongly cited – including by some members of the Conservative Party - to argue that social mobility has fallen under this Government.  With respect that is a dangerous argument for Conservatives to deploy.  In fact the 1970 generation was making the transition from childhood to adulthood during a period of Conservative government which gave Britain the two worst recessions the country has ever seen and according to Professor Hills a dramatic growth in income inequality.   In the last ten years that growth in inequality has slowly begun to be reversed.  Of course the very wealthiest have continued to get even wealthier but the bottom 20% of the population have seen their incomes grow faster than the top 20%. 

An unrivalled period of economic growth, 2.5 million more jobs, almost 2 million more homeowners and new measures such as the minimum wage have all helped spread more prosperity to more people.  The country has seen the biggest decreases in child and pensioner poverty, and the biggest increases in public service investment for decades. And to those who ask whether these resources have made a difference they need to look no further than education – where primary schools in the poorest areas have improved almost twice as fast as those in the most affluent, in secondary schools where city academies are improving results at four times the national rate despite having twice the number of pupils on free school meals and in the top universities where state-educated entrants have risen by over one third since 1997.  Perhaps most critically of all the Government by investing so heavily in early years education has learned the lesson from the Scandinavian countries where universal childcare has enhanced mobility and narrowed inequality.  

So on each of these fronts the progress of recent years lays the foundations for improved social mobility in future years.  Indeed the Sutton Trust reported just yesterday that although social mobility remains at a low level in the UK compared to many other nations nonetheless its long-running decline has now bottomed out.  But here we have to be frank.  The ossification of British society which set in over many decades will take more than one decade to unfreeze.  The glass ceiling has been raised but it has not yet been broken.  Breaking the relationship between class origins and class destinations is a battle for the long term.  And it requires an holistic approach.  As Amartya Sen, the Nobel Prize winner for economics has noted, families and communities can suffer not only economic disadvantage, but social, educational and cultural disadvantage as well.  So the policy agenda has to move beyond the focus of the traditional welfare state on correcting the outcomes of market-driven inequalities - such as low wages and family poverty - retrospectively towards an approach that pro-actively reduces inequality and advances mobility by tacking their roots not their symptoms.  For some, individual advance can only come by getting the State off the backs of communities and citizens.  For others it is more State not less that is the answer.  In actual fact a mobile society requires both an active State and active citizens.  It is only the State that can equalise opportunities throughout life and empower its citizens.  Equally only individual citizens can seize those opportunities and realise their own aspirations to progress.  

Of course tackling inequality and speeding social mobility pervade much of what individual government departments have been doing over the last decade whether that is reforming benefits or building homes.  I particularly commend the new focus in the social exclusion action plan on families who suffer multiple deprivation and simply cannot get a foothold on the ladder into mainstream society.  Family policy in general and these families in particular are rightly a priority for policy.  But with a new Prime Minister and a new administration there is an opportunity not just to give the social mobility agenda renewed momentum but to give it new prominence as the core purpose for the whole of government.  Indeed I believe there is a strong case for consulting widely and then publishing a white paper setting out how the Government intends to really get Britain moving socially over the next ten years.  I now want to briefly suggest what some of the key elements of such an holistic approach might be.  

One, an economic policy which 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 Rt Hon friend the Secretary of State for Work & Pensions knows economic activity rates are still too low.  The ethnic minority employment rate gap, although closing, still stands at 15%.  Of course some people are unable to work - people who are severely disabled for example - but in an economy where there are job vacancies and skill shortages we should not be shy of focussing on those who seem to be work shy.  We need both more carrots and some new sticks to address this problem.  A rising minimum wage, greater conditionality in the benefits system and a new accent on lifelong learning all have a part to play. The latter is key.  Over the last ten years educational standards have risen and the number of adults without any qualifications has fallen.  But my constituency is not alone in having too many people still lacking any qualification at all. According to a recent report by Dr Tony Chapman from Teesside University results in local schools have risen sharply in recent years but over 20% of adults in Darlington still do not have any qualifications.  Unsurprisingly Darlington’s core economic problem is not high unemployment – it has fallen by over 50% since 1997 as new jobs, new businesses and new 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 in turn according to Dr Chapman limits social mobility.  This is not just a local priority to address – under the auspices of the ever-enterprising Darlington Partnership the local council, colleges, schools and businesses are seeking to do just that.  It must become our core national economic priority.  The generation of the late 1950s of which I’m part were the beneficiaries of a mobility in society that came about because of a change in the economy – the advent of a service economy and the professionalisation of jobs – so creating more room at the top.  Likewise today’s generation can potentially benefit from even more fundamental change towards a more skilled and less unskilled economy that will once again create new room at the top.  Realising that potential means recognising that while economic stability is fundamental it is knowledge that holds the key to Britain’s future success both economically and socially.  

Two, a knowledge economy means education will become ever more the motor of mobility.  But despite the good progress of recent years the attainment gap remains far too wide.  A child not on free school meals is twice as likely to get five good GCSEs as one who is.  Just over one third of black afro-caribbean boys get five good GCSEs but the national average is closer to two thirds.  I have never believed that it is ability that is unevenly distributed in society.  It is opportunity – and it is also power.   I applaud the Government’s efforts to break the cycle of educational disadvantage.  City academies and trust schools, personalised learning and better discipline, a focus on early years development and softer social skills will all make a difference.  But I believe we need to do more still to ensure that good schools are just as accessible to poorer parents as better-off ones.  The truth is that the more wealthy you are the more choice you get - through indirect market mechanisms most notably the buying of homes near good schools.  When affluence still buys attainment it restricts mobility.  For some the answer lies in academic selection – and a return to grammar schools.  But there is precious little evidence that schools selecting pupils does anything to close the attainment gap.  The evidence from countries as diverse as Denmark, Sweden and the USA is that it is not schools selecting pupils but parents being able to choose schools that raises standards generally and helps the most disadvantaged particularly.  That is why I believe parents with children in badly performing schools - invariably in the poorest areas - should be given a new right to choose an alternative state school.  I have proposed that such parents could choose an Education Credit weighted to be worth perhaps 150% of the cost of educating the child in their current school so giving a positive incentive to the alternative school to take them and to expand their intake numbers.  I know there will be objections and concerns about such a proposal but it is simply nor right – and we should no longer tolerate – the fact that too many disadvantaged children are still let down by the schools system.  Correcting that injustice means shifting the balance of power to put more choice in the hands of parents who the system currently disempowers.  

And that brings me to my third point.  Social mobility will not advance if we think it is only wealth that is unevenly distributed in our society.  It is also power.  When you are poor you have little power.  The sense of hopelessness that clouds the poorest communities in our country grows out of disempowerment.  If Britain is to get moving again socially, people need to be able not just to get a job or training or childcare but also to enjoy greater control and to have a bigger say in how they lead their lives. Of course beating crime, creating jobs, rebuilding estates can help.  But I have come to believe that this cloud of despondency can only be dispelled through a modern participatory politics which allows both local communities and individual citizens to more evenly and directly share in power, a point I am pleased to say my rt hon friend the Chancellor of the Exchequer has properly recognised.   The new principle at the heart of our governance as the philosopher David Marquand has argued should be one of subsidiarity: where power is located at the lowest possible level consistent with the wider public good.  So where individual citizens can exercise control – such as over health and education – that should be the norm.  And where it is less easy for individual citizens to exercise such direct control – most people are hardly in a position to choose their own police officers for instance – power should be located at the next level: in the local community.  Where services are failing communities should have the legal right to have them replaced.  Where communities can directly run local services like children’s centres, estates and parks they should be helped to do so.  And in other services – most notably the local police and health services – the community should be given a bigger say by making them subject to direct election at the ballot box.  Doing things to people doesn’t really work.  It is doing things with them that holds the key to fighting crime, improving health, regenerating communities.  So we need to move from a top down approach to governance towards a bottom up one that gives citizens and communities far more of a stake.  
That brings me to the final area of policy that I believe could make the biggest contribution to social mobility: giving individuals and families a stake in the future by establishing Britain as an asset-owning democracy. Financial asset holding improves individual and social outcomes over and above factors such as educational attainment. Evidence from the National Child Development Survey of a cohort of children born in 1958 demonstrates a positive link between asset holding at age 23 and welfare outcomes later in life. Those with assets tend to spend less time unemployed and enjoy better health.  Research from the US shows that homeowners are more active in local politics and neighbourhood organisations.  Ownership works.  As Larry Summers once famously said: no-one ever washed a rental car.  It is ownership that encourages people to act responsibly and independently.   Spreading asset ownership is also crucial to tackling inequality and speeding mobility.  The most substantial inequalities in modern society are not simply between income groups, but between those who own shares, pensions and housing on the one hand and those who rely solely on wages and benefits on the other.  That is why I favour employee share ownership and think we should be doing far more to encourage it.  It is also why I want us to do more to encourage home ownership.  And here as the Chancellor said in his speech to the Labour Conference on Sunday there is a need for urgent action. Changes in the housing market threaten to make inequality wider and impede social mobility. You can see that in London.  The child of home-owning parents stands to inherit around over £330,000 on average. The classmate whose family rents stands to inherit nothing.  Of course home ownership has grown sharply in the last decade and the Government has ambitious plans to increase it still further but escalating house prices mean that getting onto the housing ladder is becoming more difficult.  And not just in London and the South East.  So the Government is right to increase housing supply.  

Of course Britain needs more social housing but, as two recent reports for the DCLG suggest, given a choice, most people would choose to buy not rent.  Well over 1.5 social tenants aspire to home ownership and while it is welcome that 80,000 households have been helped to do so through shared ownership schemes much more needs to be done.  With fewer people able to afford to buy outright, more young families dependent on their parents for financial help and with just 5% of tenants currently given the opportunity to buy through the Government’s Social Homebuy scheme further reforms are needed.  First to remove the minimum share a tenant is expected to take in their home from the current 25% to something far more affordable – say 5%.  Second, to give every social tenant a right to own a share in their property.  Third to ensure the geographical distribution of resources under Government low cost home ownership programmes is properly targeted at those regions with the lowest owner-occupier levels such as London and the North East.  My region needs to get its fair share.  Fourth to develop new ways of helping people onto the housing ladder in addition to shared equity schemes such as community land trusts, mutual housing and developer-led co-housing.  And fifth to work with mortgage-lenders to promote more flexible forms of borrowing which in the USA have helped millions more from low and moderate income families into home ownership.  
In a country as wealthy as our own – now the fourth richest on the planet – it is surely a realisable ambition to make ours a genuinely fair shares society because we have a high and ever growing proportion of people owning homes and owning shares and so owning a real stake in the future. In my view these are some of the steps towards a Britain that is genuinely socially mobile.  They are all about levelling up not down.  They are all about not just beating poverty but unleashing aspiration.  And in each case they all require not less State – as some mistakenly believe is what the modern world demands.  But a different sort of State.  One that empowers not controls.  The changes we have made in the last decade lay the foundations for a Britain in which people can go as far they have the talent to go, where prosperity and opportunity are widely shared.  But unlocking our country so that it is open to aspiration and effort requires a new drive to fundamentally change the distribution of power in our society.  We have made good progress in the last ten years.  I hope we can make even better progress in the next ten.