The report out yesterday from the Social Mobility Commission deserves a closer look. It says that inequality is entrenched from birth.
Lib Dems have argued for years about equality of opportunity – that some are born into families which provide many more opportunities and better life outcomes, a great many others are born into families stuck in a cycle of poverty, low pay and diminished life chances.
When I read Sir Anthony Atkinson’s book several years ago, Inequality, these points were made and the revered economist gave ideas as to how he thought they could be tackled.
But year in, year out, the rich are getting richer and the poor poorer. The State of the Nation Report 2019 says that “urgent action needs to be taken to help close the privilege gap.”
Being born privileged means you are likely to remain priviledged, whilst being born disavantaged means you may have to overcome barriers to improve you and your children’s social mobility.
Their report says social mobility has stagnated over the last four years and something needs to be done about it. As this is a Government commission, I hope the Government is listening and does take immediate action. Austerity has gone on long enough and the effect is not only immediate but long-term.
Closure of childrens’ centres, cuts in school funding, and overstretched and underfunded Further Education institutions are all listed as factors. The report highlights the difficulty of young people from poorer backgrounds accessing degree apprenticeships and the increased likelihood that they begin working life on low wages. The report calls on Government to lead by example and pay the voluntary living wage to all its staff and contractors.
The report is worth a full read, I can only extract points that resonated with me here. Two key findings stood out to me. Firstly, that only 21% of people living with disability from working class backgrounds enter the highest-paid occupations. The ‘Double Disadvantage’ of class and disability limits life prospects. Secondly, this double-disadvantage also applies to women: “even within professional jobs, women from working class backgrounds are paid 35 per cent less than men from more affluent backgrounds.”
These double-disadvantages worry me – if we are working towards a more equal society, that work needs to be a multi-layered approach of tackling all kinds of inequality in a joined-up way. Just tackling income inequality and ignoring other factors would only solve part of the problem. Having a broader approach which combines factors such as disability, ethnicity and gender with economic social mobility improvements is needed.
Some suggestions from the report include:
- Extending the eligibility of the 30-hours free child care offer by lowering the lower income limit of eligibility
- Introducing a Student Premium for young people aged 16-19 that models the Pupil Premium in schools
- Implementing the Opportunity Areas scheme from the Department for Education, which would provide investment in skills, jobs and infrastructure in areas of low social mobility and low pay
- The Government should equalise adult education funding across FE, degree apprenticeships and universities.
I’m proud Lib Dems have a great track-record in leading here, having introduced the Pupil Premium, fought the gender-pay gap, increased the availability of apprenticeships and championed equality of opportunity amongst many other policies. There is just so much more to do. The fight for all types of equality goes on.
* Kirsten Johnson was the PPC for Oxford East in the 2017 General Election. She is a pianist and composer at www.kirstenjohnsonpiano.com.
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19 Comments
Sam Friedman and Daniel Laurison’s recently published “The Class Ceiling”, (with an illustrative study of the class factors in recruitment to Channel 4 and a number of other organisations) is outstanding on this Kirsten.
“I’m proud Lib Dems have a great track-record in leading here” ????
Errrrr, and which party supported austerity between 2010-15, Kirsten ?
David, just accept it. All Lib Dems are very proud what of what we believe in at the detailed micro level – pupil premium, apprenticeships etc. and we can all add our bit to that list. The problem is that too many can’t accept that what our leaders allowed to happen at the macro level once they got in power totally undermined the good bits. 🙁
Do we really believe, hand on heart, that the worthy measures alluded to above will have more than a marginal effect on levels of social mobility ? Historically this has always been a problem. There was a “golden age” of social mobility after the second world war when the expansion of the public sector created thousands of new professional jobs which could only be filled be “promoting” members of the working class, educated in the new universities and poytechnics. Unfortunately this was a one off event.
While it is impossible to say that austerity has played no part, cultural factors such as a lack of aspiration, short term thinking, etc, are probably more important. Books have been written on the subject so I am wary of easy solutions.
David Raw
Errrrr, and which party supported austerity between 2010-15, Kirsten ?
Here is the definition of “austerity” from the 1992 Oxford Modern English Dictionary:
1) Sternness; moral severity.
2) Severe simplicity e.g. of national economies
3) an austere practice.
In what way could the 2010-2015 government be described as supporting austerity?
It seems to me that true austerity would mean taxing the rich by a large amount in order to stop people living lives of luxury and in order to be a severe government that takes strong control.
However, if like most people now you used the word “austerity” to mean the opposite of what until a few years ago it meant, the government of 2010-15 was put together on the basis that the Labervatives support the electoral system we have: it pushes up the representation of the biggest party so that it can form a government even if it has nowhere near actual majority support.
The 2010 election did just what the Labervatives said the system should do: give the Conservatives control because they got the most votes. O.k, this time they did not get an actual majority. That was because the electoral system doesn’t cut out small parties whose votes are concentrated in small areas, only those who votes are spread out evenly. However, it did enough in 2010 to make only a Conservative government possible.
The distortion supported by the Labour and Conservative parties meant that a Labour-LibDem coalition was not viable. So with the LibDems reduced to having just one fifth of the number of MPs of the Conservatives, despite having two-third of their votes, the only viable government was one that was five-sixths Conservative. Given that they formed just one sixth of the government and could not play one party off against the other by choosing which to form a coalition with, the Liberal Democrats were not in a position to be able to force the Conservatives to drop their main electoral pledge: to keep taxes low especially for the rich.
So why is is that people talk about the 2010-15 government as if it was a LibDem one, or as if the LibDems could have got whatever they wanted out if it?
Matthew Huntbach
I think in your very intelligent comments you have put a sensible question.
Matthew the answer is because unlike Arlene and co, the Liberal Democrats from Rose Garden to Deputy PM and several cabinet positions, these few, but significant, an impression was given of shared power.
The frequent tv promotion by our party stalwarts in support of government policy they did agree on, gave little traction to elements , several, though it might be true, in fact, where they disagreed.
A certain Chief secretary in constant defence of a certain and unpopular chancellor, did real damage to any notion, true though it is, that our party was very junior partner.
It means that good done was forgotten in the post coalition narrative that it was a bad government.
One now, only need see what followed, in an era of supposed post crash ,or crisis in economics, to see in this era of Brexit, the coalition was far better , than the Conservatives alone, whatever rights or wrongs of formation of that government.
Matthew
Virtually everyone was calling it austerity at the time , including ministers. But if you prefer it was a government noted for the “swingeing cuts” of Osborne’s ridiculous pantomime “emergency” budget. Also I would point out that the DUP with less seats manages a confidence and supply arrangement. The choice to form the coalition was just that, a choice. IMO, an obviously very bad choice and one that backfired spectacularly.
If these four proposals are copied directly into our manifesto, then we would at least have a strategy for improving social mobility. I take the view that the vast proportion of the so called disadvantage are just as capable as those who presently fill our top jobs. Motivation is a big decider and often those escaping disadvantage have this in spades.
@ Matthew Huntbach,
“In what way could the 2010-2015 government be described as supporting austerity?”
Yes it can also mean someone sitting in a freezing cold room with sufficient money to switch on the heating but who chooses not to. That’s not in dispute.
According to Wikipedia, ‘Austerity’ when used in the context of under discussion is a political-economic term referring to policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both.
So and as Glenn points out that is why “virtually everyone was calling it austerity at the time , including ministers”.
Incidentally, it can’t ever work. Because all Government spending comes back as taxes eventually. So a Government cutting its own spending is also cutting its own income. The time to put on the brakes, in a fiscal sense, is if the economy is overheating and inflation is the main issue.
It clearly wasn’t during the time of the coalition. The Lib Dems as the party of Keynes should have known that.
Peter Martin: It was the conventional wisdom at the time.
If all Government spending comes back to the Government as taxes there would be nothing left for people to live on.
We know that the Government is responsible for the money supply. I suppose the clue is that the face of the ruler appeared on coins and still does in some countries.
These are solid and practical suggestions from the Social Mobility Commission. The link to the Late Sir Anthony Atkinson’s proposals for addressing inequality is also worth revisiting, in particular:
– offering guaranteed public employment at the minimum wage to those who seek it.
– a statutory minimum wage set at a living wage
– via national savings bonds a guaranteed positive real rate of interest on savings, with a maximum holding per person.
– a capital endowment (minimum inheritance) paid to all at adulthood.
– A public Investment Authority, operating a sovereign wealth fund with the aim of building up the net worth of the state by holding investments in companies and in property.
– More progressive rate structure for the personal income tax accompanied by a broadening of the tax base.
– Receipts of inheritance and gifts inter vivos should be taxed under a progressive lifetime capital receipts tax.
– There should be a proportional, or progressive, property tax based on up-to-date property assessments.
– Child Benefit should be paid for all children at a substantial rate
– A participation income should be introduced at a national level, complementing existing social protection.
These are real policies that could make a big difference, but they must be costed and current non-investment spending funded with realistic tax proposals endorsed by a broad swathe of the voting public. Macroeconomic debate is fine of itself, but when it comes to political campaigning clear messages are needed along the lines of Mrs. Thatcher’s dictum “The problem with socialism is that you eventually run out of other people’s money.”
@ nvelope2003,
I did say ‘eventually’. I remember JoeB saying that there was a time lag of 5 years or more between what had been spent out and when it was received back. On the basis of the Govt debt to GDP ratio being close to 100% and a public sector of about 40%, I would have said more like 2-3 years.
So we have 2-3 years of Govt spending out there at the moment.
@Joseph Burke,
“The problem with socialism is that you eventually run out of other people’s money.”
The problem with people who say this kind of thing, and repeat the quote with some approval, besides being too right wing, is that they don’t understand where money comes from. The Govt creates it when it spends and destroys it when taxes.
So to that extent it can’t ever run out. That doesn’t mean it should spend for the sake of it, or not bother collecting taxes. For reasons of controlling inflation and reducing inequality it should do both of those things.
Glenn
The choice to form the coalition was just that, a choice. IMO, an obviously very bad choice and one that backfired spectacularly.
OK, but the problem we are getting is that people are giving the impression that a government with a completely different economic policy could have been formed, and therefore that it is all down to the Liberal Democrats that the government that was formed was formed.
That is nonsense. There were not enough Labour MPs to form an alternative Labour-LibDem coalition, and Labour didn’t want to either. Labour was very happy for a Conservative-LibDem coalition to be formed as the only possible viable government, as then they could use that to attack and destroy the LibDems and return to the cosy two-party system, with the Conservatives dominating rural and the south of England and Labour dominating urban and the north.
The LibDems weren’t in the position to be able to force the Conservatives to completely drop their main policy and take on something very different. They would have been able to force much more had a Labour-LibDem coalition been viable and Labour and Conservatives competing to form a coalition with the LibDems. But that wasn’t happening.
If the LibDems has not agreed to the Coalition, we would have had a minority Conservative government, that would have blamed the LibDems for anything that went wrong due to there not being a stable government, and after a year or so called for another election to get rid of the LibDems to enable one to be formed.
Now, I very much blame the right-wing leadership of the LibDems at the time for not not making it clear that the LibDems had only a very limited input to the Coalition, that a five-sixth Conservative government was very much not what a 100% LibDem government would be like, that the fact we had this sort of government was due to the disproportional electoral system supported by the Labervatives, and that we reluctantly agreed to the Coalition only because a stable government was needed and that was the only possible one.
I dropped out of active involvement with the LibDems because of the way it was so badly led then. However, I still think the party could and should recover by pointing out what I have said. As we have seen, it has not pointed that out, and for that reason it has stayed low in support.
Peter Martin,
At present (excluding debt held by the BofE as a consequence of open market operations) the national debt is equivalent to the deficits that have accumulated since the early 2000’s i.e. around 18 years of deficits. Debt incurred before the turn of the century has effectively been retired by a combination of taxes and inflation and debt service costs paid from current taxes.
Hobson based much of his economic analysis on what was termed ‘underconsumption’ and was a strong advocate of a national living wage and progressive taxation to address industrial unemployment after WW1. His contemporary C H Douglas also saw underconsumption as the principle problem with the working of the economy but placed the fault with financiers tight money policies advocating ‘social credit’ (a precursor to Universal basic income) as the solution.
Keynes general theory put the issue of unemployment in terms of effective demand and placed emphasis on investment and rekindling of animal spirits to spur investment rather than redistribution or increased levels of general state spending.
Any economic model that ignores the role of banks and other financial institutions in supplying credit to the economy and financing investment will be inherently flawed.
When it comes to spending restraint, there is an obvious need for it at times to bring current spending in line with desired levels of taxation as this article argues https://www.bloomberg.com/opinion/articles/2019-03-22/the-case-against-both-paul-krugman-and-modern-monetary-theory-mmt. The key is timing or knowing when to bring an expansionary fiscal policy to an end and when to contract. That, in turn, is dependent on what level global interest rates are at. As Paul Krugman argues in this article https://www.nytimes.com/2019/02/12/opinion/whats-wrong-with-functional-finance-wonkish.html “political tradeoffs determine taxes and spending, and monetary policy adjusts the interest rate to achieve full employment without inflation.” He concludes “You don’t have to be a deficit scold or debt-worrier to believe that really big progressive programs will require major new revenue source.”
This is the crux of the social mobility/inequality argument – major new revenue sources that don’t lead to what Mrs Thatcher described as “running out of other people’s money.”
Matthew
I agree that the Lib Dems only had limited input at best , if any really. This is why, I think, confidence and supply would have been a better choice. People talk about the centre left and the centre right, but British politicians of the time were of an orthodoxy steeped in the Clinton influenced notion of the Third Way. The Lib Dem leadership went into government equipped to fight the pre-banking collapse political war. I’m not saying they were bad people for joining the coalition, but it was clearly a huge blunder in terms of its effect on the Lib Dems. However, what happened is what happened. Essentially, we’re just arguing over possible interpretation of something that can’t be altered.
Glenn
You say that confidence and supply would have been a better choice than agreeing to a coalition, but consider what confidence and supply actually means. The “supply” part means the LibDems would be forced to vote for Conservative economic policy in order to supply the government with money. The “confidence” part means that the LibDems could be forced to vote for any particularly unpopular things proposed by the Conservatives, because the vote for them would be turned into a confidence vote – of course Labour would have loved to do that, forcing LibDems to vote for right-wing Conservative policy due to the vote being a supply or confidence one, and then making out that the LibDems voted that way because they actually supported the policy.
By being in the coalition the LibDems did have a small influence which they would not have had if it was a pure Conservative government they were forced to vote for. The small influence really was just being able to swing things a bit our way if the Conservatives themselves were fairly evenly divided.
The problem did come down to the LibDem leadership not coming out clearly, stating that this was the issue, and stating clearly that being a small part of a coalition dominated by another party is certainly not a wonderful thing to get into. And I mean not just the leadership at the time, but also the leadership after the Coalition. So they let Labour get away with the claim that the LibDems supported enthusiastically everything the Coalition did.
Democratic government does mean making compromises and having to vote for something that is not your ideal because you could not get a majority to agree to what is your ideal. That needed to be clearly stated, it wasn’t. It could be clearly stated now, since we have an excellent case dominating. Brexit has not happened since Brexiteers would not agree to vote for a compromise form. Instead those who wanted a hard Brexit voted against a soft Brexit, those who wanted a soft Brexit voted against a hard Brexit, and both joined together to vote against the compromise that was proposed and was actually about as best somewhere in between hard and soft that could actually be achieved.
@ JoeB,
I don’t want to get bogged down in a discussion about how exactly many years of deficits are still out there. But I’d just make the point that the smaller each years deficit, the more years there are for any given level of total debt. The total debt is just the sum of all previous deficits and it will all come back to government in taxes eventually .
It perhaps be argued I should say nearly all. If a Bullingdon boy burns a £50 note in front of a homeless person, you could say that the £50 is lost forever. However, as the taxman burns or deletes his income, the Bullingdon boy is effectively paying taxes anyway.
“Any economic model that ignores the role of banks and other financial institutions in supplying credit to the economy and financing investment will be inherently flawed”
MMT and other PK economists have been saying exactly this for a long time now. It does cause some people problems. Banks don’t have magical powers to ‘create money’. But the lending is nearly always to people who do want to spend. Its the change in the spending that matters. If one wealthy person were to lend another wealthy person a smallish sum of money it wouldn’t have any effect at all. But why would they want to?
It could well be that social mobility is actually in reverse rather than just stagnating.
“The number of children living in absolute poverty across the UK has increased by 200,000 in a year – to a total of 3.7 million.”
PS Does anyone need another explanation of just what austerity economics actually means?
https://www.independent.co.uk/news/uk/home-news/child-poverty-absolute-uk-housing-crisis-costs-austerity-conservatives-a8843381.html