Alan Milburn outlines an agenda to tackle the plight of the middle class and expand its numbers
It is in Britain’s DNA that everyone should have a fair chance in life. Yet too often demography is destiny. Over decades we have become a wealthier society but we have struggled to become a fairer one. The global financial crisis has brought matters to a head. In its wake a new public consensus is emerging that unearned wealth for a few at the top, growing insecurity for many in the middle, and stalled life chances for those at the bottom, is not a viable social proposition for Britain.
Within that equation, however, there are different problems that require different solutions. Tackling entrenched poverty has to be a priority. But poverty is not a club with a permanent group of members. It touches almost half of Britain’s citizens at some point over a nine-year period. Transient poverty, growing insecurity and stalling mobility are far more widespread than politicians, employers and educators have so far recognised.
Today child poverty is overwhelmingly a problem facing working families, not the workless or the work-shy. There is a growing cohort of low- and middle-income families squeezed between falling earnings and rising house prices, university fees and youth unemployment, who fear their children will be worse off than they have been. The proportion of 25-34-year-olds owning their own home has fallen from around 60 per cent to 40 per cent in a decade. When they grow up, many of today’s children face the prospect of having lower living standards than their parents. A society where opportunities are frozen rather than fluid hurts more than those at the very bottom. It hurts the people Bill Clinton once famously called the ‘forgotten middle class’.
It is sometimes suggested that we have to choose between an economic-led or an opportunity-led agenda to social justice. The truth is both are needed. The trick is to avoid confusion between them. When that happens the result is not only poor public policy, it can also result in poor politics with the needs of lower-income families seemingly in conflict with the needs of middle-class ones. Beating child poverty and improving social mobility rely on a broad coalition of support being built.
The global evidence suggests that there are five big levers that unlock progress. They open the door to an expanded middle-class in our country.
First, early years education. Globally, child poverty is lowest and social mobility is highest where parents can rely on universal, quality and affordable childcare and early learning services. Early education packs a double punch. It positively impacts upon children’s development and it enables more parents to work. Thanks to the priority New Labour gave to childcare, across Britain today all three- and four-year-olds now have access to some free early education provision. In England it is being gradually extended to the 40 per cent most disadvantaged two-year-olds. But we are a long way from childcare being affordable or universal or of high enough quality – or from having a clear long-term plan for how to get there.
Second, closing the attainment gap between better-off and less well-off children in schools. Today just 36 per cent of children on free school meals get good exam results aged 16 compared to 63 per cent of other children. The most deprived parts of the country still have 30 per cent fewer good schools than the least deprived. Nonetheless, under New Labour educational inequality narrowed. Academies improved at a faster rate than other state schools. Progress has been most startling in London where pupils on free school meals now do 50 per cent better at age 16 than elsewhere. London used to have the worst state schools in the country; today they are among the best. That not did happen by chance – a decade of effort to raise standards, reform schools and recruit good teachers paid off. The same needs to happen in every part of the country. The best teachers should have better incentives, including higher pay, to teach in the worst schools.
Third, the most mobile societies ease young people’s transition into work. In Britain we face twin challenges – unequal access to higher education and the low priority accorded to vocational education. Today, despite New Labour’s success in closing the gap between high and low participation areas, there remains a strong correlation between someone’s social class and their likelihood of going to university generally and to a top university in particular. The most advantaged 20 per cent of young people are seven times more likely to attend university than the 40 per cent most disadvantaged. Universities need to throw open their doors to a wider pool of talent by using contextual data in deciding who to admit, running more summer schools and creating more foundation degrees.
Today one million youngsters are not in education, employment or training. Long-term joblessness among the young is at a 20-year high. We need a new ambition for our country: to abolish long-term youth unemployment by providing new job guarantees and by helping half of all employers to provide work experience or apprenticeships. The decades-long neglect of vocational education – today 1.5 million learners are in provision rated less than good – has to end. In future, colleges should be paid according to the outcomes students achieve rather than simply the numbers they recruit.
Fourth, ensuring the right incentives to work. A job remains the best safeguard against being poor. But it is not a cure for poverty. For 10 years earnings growth has been lagging behind prices. Earnings were stagnating before the recession, even when the economy was growing. Since then the annual earnings of the bottom 20 per cent have fallen by 13 per cent in real terms. More and more people fall into poverty as a result. Today, despite the minimum wage’s success in beating extreme poverty pay, the UK has one of the highest rates of low pay in the developed world. Five million workers, mainly women, earn less than the living wage. The working poor are the forgotten people of Britain. They need a new deal. The minimum wage is worth £1,000 less in real terms today than it did in 2008. It should be increased.
Fifth, fair access to a career in the professions. The upsurge in professional employment in the middle of the last century created unprecedented opportunities for millions of women and men to move up and get on. In the next decade, the professions will account for approximately 83 per cent of all new jobs in Britain. This growth in professional employment is not yet creating a new social mobility dividend for our country. At the top especially, the professions remain dominated by a social elite. Nearly one-third of MPs, more than half of top journalists, and 70 per cent of high court judges went to independent schools, though only seven per cent of the population do so. This is social engineering on a grand scale.
The consequence is that too many able children from average-income and middle-class families are losing out in the race for professional jobs. Take internships, the new rung on the professional career ladder. They tend to go to young people on the basis of who, not what, you know. Most internships are also unpaid, so disadvantaging those from less affluent backgrounds who cannot afford to work for free. That is why professions – from law to medicine, politics to journalism – should end the practice of unpaid internships.
A far bigger national effort will be needed if progress is to be made on reducing poverty and improving mobility. Despite the tough climate for doing so progress can – and must – be made. If Britain is to avoid being a country where all too often birth determines fate we have to do far more to create more of a level playing field of opportunity. That has to become core business for our nation.
Alan Milburn is chair of the social mobility and child poverty commission and a former secretary of state for health
Progressive centre-ground Labour politics does not come for free.
Our work depends on you.