[Mr. Eric Illsley in the Chair] — Social Mobility

– in Westminster Hall at 12:00 am on 26th June 2007.

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

Photo of Alan Milburn Alan Milburn Labour, Darlington 9:30 am, 26th June 2007

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 Greg Clark and Mr. Hunt have said about social mobility; I leave aside Mr. Willetts, whose speech on grammar schools is famous—or should I say infamous, at least as far as some Conservative Members are concerned.

Photo of Alan Milburn Alan Milburn Labour, Darlington

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 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.

Photo of David Taylor David Taylor Labour, North West Leicestershire

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?

Photo of Alan Milburn Alan Milburn Labour, Darlington

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 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.

Photo of Bob Spink Bob Spink Conservative, Castle Point

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?

Photo of Alan Milburn Alan Milburn Labour, Darlington

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 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.

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.

Photo of John Barrett John Barrett Shadow Minister, Scotland, Shadow Minister, International Development

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.

Photo of Alan Milburn Alan Milburn Labour, Darlington

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.

Photo of Greg Clark Greg Clark Shadow Minister for Charities, Voluntary Bodies and Social Enterprise

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:

"Those on the very lowest incomes have seen the lowest rates of income growth. The very bottom 5 per cent. of incomes have increased by around 1 per cent. per year in real terms between 1996-97 and 2004-05, compared with annual increases of between 2 and 3 per cent. for the rest of the population."

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

Photo of Alan Milburn Alan Milburn Labour, Darlington

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.

Photo of Greg Clark Greg Clark Shadow Minister for Charities, Voluntary Bodies and Social Enterprise

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.

Photo of Alan Milburn Alan Milburn Labour, Darlington

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 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 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.

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 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 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 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.

Photo of David Taylor David Taylor Labour, North West Leicestershire

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.

Photo of Alan Milburn Alan Milburn Labour, Darlington

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.

Photo of Terry Rooney Terry Rooney Labour, Bradford North

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?

Photo of Alan Milburn Alan Milburn Labour, Darlington

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 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 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.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster 10:16 am, 26th June 2007

It is a pleasure to serve under your chairmanship, Mr. Illsley, once again. I congratulate 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.

Photo of Alan Milburn Alan Milburn Labour, Darlington

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.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

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.

Photo of Alan Milburn Alan Milburn Labour, Darlington

A Government of all the talents.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

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 the whole of the political spectrum. I look forward to hearing the remarks of 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.

Photo of John Barrett John Barrett Shadow Minister, Scotland, Shadow Minister, International Development

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?

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

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.

The current pattern of social mobility that is presented in the research cannot necessarily be attributed solely to the efforts—or lack of effort—of the current Government. It has been influenced by previous Governments. The right hon. Member for Darlington eloquently described his childhood. I remember growing up and the damaging social impact of many of the policies that were pursued in the 1980s and early 1990s. In many cases, the effect was felt no more harshly than in parts of Scotland and, indeed, remote rural parts of Scotland. The right hon. Gentleman represents an urban constituency and, perhaps quite naturally, did not dwell on the problems of social mobility in rural areas. In some cases, the problems are different, but they are just as great, if not sometimes greater, than in urban areas. He discussed difficulties in accessing services. It may be easier to provide services in cities and towns such as his. It can sometimes be very difficult to provide them in rural areas, which is something that often gets lost in the debate. In fact, it sometimes gets lost in the Government's approach to these policy areas. We must not forget the rural dimension.

We must also consider inequality. There is an equation between rising inequality and falling social mobility. Anyone who has studied the work of Professor Richard Wilkinson will know that there is a huge amount of evidence dealing with different aspects of life that countries that are more unequal tend to have a greater degree of social differentiation and a wider range of barriers that people must overcome. Indeed, differences in concentration of power occur not just between the top and the bottom—there is a much finer degree of gradation right through the social scale. The evidence suggests that, the more unequal the society is, the more competition there is for small advances in position. They take precedence over the larger improvement in position that we are discussing in this debate.

The larger gap between the richer and poorer in the UK is one of the factors in making it harder to move from one income group to another. The right hon. Gentleman made a point about incomes, but we must also consider the role of tax. It is a shameful fact that, in the UK today, the poorest 20 per cent. of people pay a greater share of their income in tax than the richest 20 per cent do. He said that the debate is not about taking away from one group to give to another but, if we are considering the state's role in enhancing the position of those at the bottom and assisting them, the tax system is important, nowhere more so than in the recent debate about the taxation of wealth.

The hon. Member for Tunbridge Wells mentioned the social exclusion taskforce report. It showed that incomes for the poorest 2.5 per cent. of the population have actually fallen. Incomes may have risen among all the other groups, but for the poorest 2.5 per cent.—the most deprived 2.5 per cent.—they have fallen. That important fact partly explains why the measures of inequality—the Gini coefficient, to those who are in the know—show that income inequality in 2005-06 reached its highest level since 2001-02. Statistically, it is significantly higher than it was when this Government came to power.

There are two areas of policy that I wish briefly to dwell on in response to the huge range of the right hon. Gentleman's contribution. The first is in relation to work. As he said, it is critical that we direct our work and welfare policy to the objective of getting people into work, but it is also important to help people progress in work, and to move on and up—especially those groups that are most disadvantaged in employment. I refer particularly to disabled people and lone parents—I agreed with his comments about how that group is sometimes discussed pejoratively; none the less, it is a critically important group in the context of employment—but also workless households. At the bottom level of households, there is an increasing number of two-parent households in which neither parent is in work. That creates an intergenerational phenomenon that entrenches the lack of ability that he described.

The right hon. Gentleman referred to the tax credit system. There is no doubt that it has played a role despite all the administrative problems, which are beyond the scope of this debate. It clearly played a role in helping to make work pay, to use the Government's slogan, but, equally, the high withdrawal rates that then kick in have hindered the ability of people to move on in work, in some cases. There is some evidence to suggest that a withdrawal rate combined with a tax and benefits system of 70 or 80 per cent. is a disincentive. That is something that must be considered in the context of work.

There is also some indication—for example, as provided by the Joseph Rowntree Foundation—that work-related policies help to get people into work, but those entries are not necessarily permanent. Therefore, the exits from poverty that they create are not necessarily permanent, either. People may be moving back and forth across the poverty line in a way that is not actually helping to create the social mobility that the right hon. Gentleman and I want. Job retention and progression are critical to ensuring that employment leads to genuine progression up the social ladder and to real mobility, rather than to people continually moving above and below the poverty line.

It is most important that the intergenerational issues are tackled. It is not an individual's abilities or skills that determine their educational attainment and future earning potential. Sadly, in this country at present, it is their parents' life circumstances. Improving educational outcomes and the aspirations of children and young people are the most important factors in breaking the intergenerational cycles of poverty that are the defining feature of the lack of social mobility that the right hon. Gentleman described.

In that context, I place a great deal of emphasis on the early years. There is evidence that educational disadvantages emerge very early in life. For example, the millennium cohort study by the Centre for Longitudinal Studies at the Institute of Education published a report earlier this month that revealed that children from disadvantaged families are already lagging a full year behind their middle-class counterparts in social and educational development by the age of three.

Early years education must be a top priority, and that should be reflected in spending decisions. It is interesting to note that some of the Government's investment—for example, in Sure Start—has not always reached the groups that are hardest to help. I think of disabled children, for example. It is not always easy for a low-income family to take up entitlements such as 12 and a half hours of pre-school education a week.

With regard to the pupil premium, the Nordic countries are much more effective at allocating resources to schools—to the most deprived areas and to the most deprived pupils—whereas in the UK and certainly in England and Wales, the existing methods for distributing deprivation-related funding are opaque and inconsistent. That is why Liberal Democrat Members have proposed a pupil premium that would attach additional funding directly to pupils who are identified as disadvantaged, which would follow them through the primary and secondary education system.

It is important to say that the impact of disadvantage on a child's life can be seen even before school age—almost from birth, sometimes. That is why we need to focus not just on policies throughout the education system. There was a bit of a debate earlier about the private education system. By the time that a child is ready to attend a secondary school in my constituency or, for that matter, Eton, the advantage or disadvantage of their family circumstances has already had an impact. We need to consider how we can ensure that at the ages of one, two, three and four, we are helping children to beat their circumstances; we must not wait until secondary school age.

I have taken up a great deal of time, but there is a great deal more to say. I hope that there will be a future opportunity to do so, because I hope that the debate will continue, that there will be discussions between parties and that the Government will take up the idea of the action plan for social mobility that the right hon. Member for Darlington described.

Photo of Greg Clark Greg Clark Shadow Minister for Charities, Voluntary Bodies and Social Enterprise 10:31 am, 26th June 2007

It is a pleasure to serve under your chairmanship, Mr. Illsley, and to participate in a hugely important debate. The House owes a great debt of gratitude to Mr. Milburn for initiating it and not least for his brilliant speech. He counts as one of the dwindling number of true progressives in his party today. I say that advisedly, because to be progressive is not just to aspire to progress and to look for improvement, but to be prepared to tackle some received nostrums that may be difficult and to break out of those. That is the mark of a progressive.

Some of the right hon. Gentleman's remarks may have proved uncomfortable for some of his colleagues—from some of the grunting that we heard earlier, I think that that might be the case—but that is necessary in all parties if we are to tackle deep-seated problems that have defeated us in the past. Sometimes, hearing such remarks is uncomfortable, so the right hon. Gentleman's willingness to address the issues rigorously and clear-sightedly is to his credit and is certainly welcomed by Opposition Members.

The right hon. Gentleman's suggestion of an action plan on social mobility is excellent. I hope that, as he suggests, that can be a cross-party endeavour. The particular suggestions that he made as part of that are radical. When it comes to school choice, my party is absolutely behind him on that. It is essential that parents and pupils are given the ability to act on their aspirations. It is not true that, as Mr. Rooney said, the level of aspiration is so shot to pieces in our society that there would be no takers for that school choice. We need only look at the proportion of parents who, on behalf of their children, appeal against school admissions decisions, even in our most deprived communities, to see that there is a great pent-up demand and great frustration that that enthusiasm cannot find an outlet in terms of the school that the people want, so we should not patronise parents in any of our communities by suggesting that they are not able to exercise choice on behalf of their children.

The remarks by the right hon. Member for Darlington on subsidiarity will, as he would expect, strike a chord with Conservative Members. We have proposed a radical approach to policing, which is one of the areas that he rightly suggests cannot be left to individual choice in the way that the choice of school can be put in the hands of parents and pupils. I think that our proposal for elected police commissioners is a step in exactly the direction that the right hon. Gentleman recommends. If he does share our goal, as his speech seemed to suggest, I am sure that my right hon. and hon. Friends, in progressing our policy and fine-tuning it, would benefit from his suggestions and advice.

The right hon. Gentleman also spoke in favour of the importance of asset ownership. "Ownership works" was his phrase, and what he said is absolutely the case. It must be one of the imperatives that across all parties we should work to implement over the next few years. The right hon. Gentleman's ideas are very substantial contributions to the debate, and the House should be grateful to him.

I am not sure that I share entirely the right hon. Gentleman's more sanguine view that things may be a bit better in the future than they have been in recent years. Certainly I think that we have some way to go to achieve the ambition that his own party's Commission on Social Justice recommended just 13 years ago. In its final report, it recommended that we

"transform the welfare state from a safety net...to a springboard for economic opportunity".

That is a noble ambition, but for too many people it has not happened.

Let us take just one area of social opportunity or social mobility—income. First, it would be churlish to deny that there has been some progress, especially at the middle levels of poverty. I am referring to the people around the Government's preferred definition of poverty—60 per cent. of the median. A lot of people have been moved from just below that poverty line to just above it, and I do not in any way underestimate the importance of that for the lives of those people. However, as we have discussed, at the same time as there have been decreases in poverty measured at that level, there has been, over the past 10 years, an increase in the number of people whose income is less than 40 per cent. of the median—an increase in the number of people in severe poverty. That is a shocking statistic, a shocking finding to discover, and it suggests that the springboard to economic opportunity is at least leaving those people behind.

Photo of Eric Joyce Eric Joyce PPS (Rt Hon John Hutton, Secretary of State), Department for Work and Pensions

Will the hon. Gentleman recognise that the effect of labour mobility in Europe, which we all welcome, has been to bring into the UK highly able workers and that, to a certain extent, that has displaced some of the least skilled in society, so we need to focus ever more on those least well-off?

Photo of Greg Clark Greg Clark Shadow Minister for Charities, Voluntary Bodies and Social Enterprise

I agree with the hon. Gentleman's point that a number of pressures are making things more difficult for people without skills. The right hon. Member for Darlington mentioned the fact that there will not be the same number of jobs available for people without skills; he mentioned the number in his own constituency. A number of causes result in the pressure on people at the bottom end, which must be our priority.

The issue is not just that the number of people in severe poverty is increasing. As Danny Alexander mentioned, their income in absolute terms is falling. The issue is not just the bottom 10 per cent., although last year their income fell from an average of £91 a week to £89 a week—a 2.2 per cent. fall. With regard to income deciles, last year the incomes of people in the bottom 30 per cent. of income groups were falling in real terms. I cited, to some controversy, Polly Toynbee's image of society as a caravan train moving through the desert. We are finding that the people at the back of the caravan train are becoming detached from the mainstream.

We cannot accept that situation; we need to do something about it. It is the very opposite of social mobility—it is social mobility in the wrong direction—yet the Government refuse to recognise the central importance of that. They persist with the measure of poverty on which their policy is focused: the 60 per cent. level. They refuse even to publish statistics for poverty at the 40 per cent. level, which I think is very important to inform the debate. Save the Children has not recommended that that should replace the 60 per cent. child poverty target, which Opposition Members share, but we do need a more nuanced approach to the issue than the Government seem willing to take.

The right hon. Member for Darlington was right to quote Professor Amartya Sen, who says that merely correcting family income after the event through transfers of cash will never solve the problems that result in that poverty in the first place. He is wise to draw our attention to that.

As all hon. Members have mentioned, education is clearly a motor for social mobility. In some ways, I share a background with the right hon. Gentleman, because he went to a comprehensive school in Stokesley and I went to one in South Bank. There was probably 10 miles between them, although I went to school 10 years later than he did. Stokesley is in a much more affluent area than South Bank, and that should not make a difference, but the sad fact is that it does. One thing that we know from recent studies is that the chances of attending university are very much determined by the affluence of the area in which one's school is found. Since the 1980s, for example, the richest fifth of the population has increased its participation in university education from 9 per cent. to 46 per cent., which is a fantastic increase, but the poorest fifth of the population has increased its participation from 6 per cent. to only 9 per cent.—a pathetic increase. Therefore, 90 per cent. of children from the poorest 20 per cent. of our homes do not go to university, and we must address that.

As the hon. Member for Inverness, Nairn, Badenoch and Strathspey said, the further back we go from university, the more entrenched educational disadvantage becomes. What happens in the education system before the age of 10 is twice as significant as what happens afterwards, according to Blandon, Gregg and Machin. Indeed, I have seen that for myself in my own constituency. I was shocked when I spent a day in one of my local schools observing the behaviour of children in the reception class. If I saw a child who seemed to be sluggish and who was not responding terribly well to the tuition, I would say to the teacher, "Tell me a bit about that child." Nine times out of 10, the teacher would say, "Oh well, you should understand the child's home life" and add that the family had real problems with drug addiction or alcohol abuse. I would then see a child who seemed to be bright, lively and alert and who was responding to the tuition, and I would say, "Tell me a bit about that child." The teachers would say, "Oh well, his mother and father work in the local hospital. They come from a professional background." I was shocked by that determinism and by the way in which the professional background of a four or five-year-old's family determined, in a way that was already visible to a complete layman, that child's ability to progress in education. We must do something about the early years because, as Professor Feinstein has noted, poor children who display high ability at 22 and 40 months are overtaken by children from affluent backgrounds by the age of six, which shows how important the early years are.

Photo of Alan Milburn Alan Milburn Labour, Darlington

I am very taken by the hon. Gentleman's remarks about the sad inevitability with which children who are born into poverty will stay in poverty. Does he agree, however, that the eradication of child poverty is one of the vital stepping stones on the way towards a more socially mobile society and breaking the cycle of disadvantage and inevitability? Will he clarify his party's position on that? I noted with interest that, in a debate in this Chamber on 6 March, Mrs. Miller, who is the shadow Minister with responsibility for family welfare, said that the Conservative party viewed the realisation of the child poverty target as an "aspiration" rather than a firm commitment. If the hon. Gentleman and his party are as serious as they say they are about eradicating child poverty, will they now commit themselves to what the Government are already committed to?

Photo of Greg Clark Greg Clark Shadow Minister for Charities, Voluntary Bodies and Social Enterprise

My party has made its position absolutely clear. The chairman of our policy review, my right hon. Friend Mr. Letwin, has said in terms that we are committed to the goal of abolishing child poverty, as defined in the Government's way. However, we want to extend that definition and to look at aspects of social exclusion that are not covered, such as poverty at the 40 per cent. level. The right hon. Gentleman is right to suggest that these issues are multifaceted, and poverty solutions are a question not just of financial transfers, but of getting under the skin of the problems, whether by helping with the early years or bringing in effective voluntary organisations, which have a fantastic record on helping to cure some of the problems that put people into poverty. Financial poverty is often as much a symptom of other aspects of social exclusion as a cause—it works both ways. If I am critical of the Government, it is because they are inclined to think of poverty exclusively in financial terms—at least when it comes to the target—and we need to take a more multifaceted view.

I am conscious of the fact that I need to leave the Minister time to respond, but I want first to echo some of the remarks that have been made about the importance of work incentives. In my experience, no one chooses to be poor. People want to help themselves and they are as keen to help themselves progress as they are to help their families progress. However, when 1.7 million people are facing withdrawal rates of between 60 and 70 per cent.—the figure has gone up from 760,000 since 1997 and will increase again as a result of last year's Budget—we are not providing the necessary incentives.

What do we need to do? I suggest that four principles should be part of an approach to curing and reversing the decline in social mobility. First, we must help to equip people with the ability to help themselves. Let us not tie people up in the benefits system and withdrawal rates, with disincentives to work and prosper. Let us get rid of some of the complexity of benefits, which are a great disincentive to people trying out different ways of getting back into the labour market. For example, people might fear that their housing benefit will be withdrawn, and the fuss of reapplying for it makes looking for work not worth while.

Let us recognise that money is not the only dimension of poverty and that people who become trapped in poverty, particularly severe poverty, face multiple aspects of social deprivation, which need sensitive handling and which are not all susceptible to the cure of financial transfers.

Let us look not just to the state, but to local communities, in the way that the right hon. Gentleman suggested. Let us apply the subsidiarity principle and bring in local charities and voluntary groups, which often have a personalised approach that it is difficult for the state to recognise. I was disturbed to read that the Parliamentary Secretary, Cabinet Office, Edward Miliband, who has responsibility for the third sector, had given an assurance to Dave Prentis, the general secretary of Unison, that voluntary organisations would be limited to the role of supporting the state and would not be able to substitute for it. In some cases, it is appropriate for voluntary organisations to substitute in the delivery of a service if they are better placed to do so. It constrains our ability to tackle social exclusion if we artificially constrain the sector.

Finally, I entirely endorse what the right hon. Gentleman said about assets. It must be part of our agenda to allow people to build up a buffer of savings and financial assets to protect them through the ups and downs that we all face in our lives. They must also be able to build up assets that are substantial enough to allow them to own their own homes and to be prosperous not only in work, but in retirement. We need to address that.

I hope that progressive politics will be a matter of consensus between the parties over the weeks ahead. As I said at the beginning of my remarks, being progressive is not just about having aspirations, and the right hon. Gentleman made some very practical suggestions in that regard, to which I hope that the Minister will able to respond positively. More importantly, I hope that the new Prime Minister will be able to respond positively, so perhaps the right hon. Member for Darlington should sit by his phone tomorrow to see whether the Prime Minister is willing to take up his suggestions.

Photo of Paddy Tipping Paddy Tipping Parliamentary Secretary 10:48 am, 26th June 2007

I begin by congratulating my right hon. Friend Mr. Milburn on his robust speech, which was designed to provoke and to bring about change and action. I have had the benefit of reading the speeches that he has been making for a couple of years now, including the Deborah Leon memorial lecture of November 2003 and last month's 2020 vision for British Government lecture at the university of Durham, and I should say how impressed I was with his account of Government policy failure in Benwell in west Newcastle. There is a lot to be learned from having stable, long-term policies. There was a lot of substance in my right hon. Friend's speech. He has never been accused of spin, but I note that the "Today" programme is running a series of features on social mobility this week, and I am sure that it is coincidental that only yesterday the Sutton Trust produced its report on social immobility in schools, and the failure of schools, which has been discussed, to tackle the greatest disadvantage. His speech had substance, was timely and topical, and was designed to encourage wider debate.

I confess that I am here in a jobbing role today. My colleagues in Government with responsibility for the matters in question have shown their own mobility. I apologise for that, but it gives me an opportunity—not to talk about the detail of policy, but to pick up some of the wider issues. I want to say from the outset that I am a child of the same times as my right hon. Friend. I, too, come from a family with strengths and weaknesses. We lived on a council estate. I was the first person in my family to get a degree and the first to have a professional career; it has gone downhill since then.

My right hon. Friend was right to stress the post-war achievements of the Labour Government—universal health provision, full employment, the welfare state and full-time education until the age of 15. That period broke down the social class system, there was greater consumer choice and there were opportunities for people to go further. As he said, the children of the '70s have suffered. One suggestion to come out of the recent report was that that decline has now finished: that we have levelled up and could go forward. Of course, the Government have things to be proud of, such as the fact that 600,000 children have been taken out of poverty, and 1 million pensioner households have been taken out of relative poverty. More people than ever are in work. We have already discussed the point about the incomes of the 20 per cent. of people on the lowest income rising faster than those in the top 20 per cent. Greg Clark was right to counsel that studying the lowest percentage group reveals problems; that is why the social exclusion task force has been commissioned to study the problem and make proposals for change. We need to be honest; meeting our child poverty targets will not be easy. Taking people out of energy poverty when energy prices are going up is quite challenging. I am struck by Government's willingness these days to acknowledge the problem, and not to try to spin it away, but to present new proposals to deal with the change.

I want to focus on four aspects of the matter raised by my right hon. Friend. The first is the importance of employment in tackling social mobility. Unemployment in May 1997 was 1.6 million and today it is 890,000—a 45 per cent. reduction. In Darlington, unemployment has been reduced by 52 per cent. In my constituency of Sherwood it has halved. In Tunbridge Wells, it is down by 56 per cent. However, it is important, as has been stressed in the debate, to focus on groups of people who are presently unemployed. We have talked about the needs of black and Asian people. We need to consider the kind of work that they are undertaking, its value and the pay that they receive. We also need to pay attention, as has been said, to the people who are not in work, and the number on incapacity benefit. We must show real determination to lift 1 million people from incapacity benefit and back into work. We need to work on the pathfinder model. It is expensive, but in the long term, if we are successful, savings can be made down the line. I want to reinforce the old Beveridge tradition, which has been a strand in the debate: work for those who can, security for those who cannot.

My right hon. Friend also talked about the big skills agenda. We live in a global world. As the Leitch report says, unless we skill and reskill, we shall be economically disadvantaged. I find it astonishing that there is a variable pattern in the creation of new businesses across the country. In Wokingham, there are four times more new business start-ups than in Worksop in the Nottinghamshire coalfield. One of the things that we must do is encourage entrepreneurial behaviour, whether in business or in the wider social setting—a point already made by my right hon. Friend. We must persuade ordinary working-class people to have wider perspectives and higher aspirations.

To come to the second issue that my right hon. Friend raised, we have all talked about the value of early years education. All three and four-year-olds who want a nursery place have one. The Sure Start scheme is a flagship project, and there will be a children's centre in every community. As well as providing universal services Sure Start needs to ensure that those who are most disadvantaged will benefit from those services. That will take subtlety and skill. We can take things further with nurse family partnerships and the incredible years programme. We need to focus on children and their families.

Thirdly, we need to make sure that people really have the assets that my right hon. Friend has talked about. I know that there are problems with child trust funds, or baby bonds, as they are called, but they are a vehicle—an example of investing in young people—that will provide long-term solutions. It is also important to provide decent housing for all. It cannot be right that young entrants are dependent on help from their parents to acquire property. We need to build more houses. We need to be clear, as the hon. Member for Tunbridge Wells knows, about where we should build those houses; and we need to build the right kind of houses, which will meet people's needs. They need to be smaller, more sustainable houses, near urban centres, not big, ranch-style houses in the countryside.

Fourthly, we need to transfer power. I am struck, as I go round the country, by the fact that people know the problems in their community, and often know the solutions, too. We should listen to those people and trust them. That requires a radical devolution of resources and decision making. Like my right hon. Friend, I have closely studied what the Chancellor, the next Prime Minister, is saying about those issues. It must be right that people in Darlington can provide different services from those provided in, say, Devizes; and that those in Nottingham can provide different ones from those in Newcastle. We must trust people, consider grass roots experience, identify and develop good practice, and give public services back to local people. Public services will survive only if they are owned by local people. That is a big challenge and we should take it forward.

There are tests for the Conservative Opposition in what I have said. There has been consensus in the debate, but there are tests, too. The hon. Member for Tunbridge Wells needs to commit himself to full employment, flexible policies for families, universal child care and its costs, and education for all rather than selection for a few in grammar schools—looking to the future, not the past. The debate has provided a platform for further discussion of the issue of an action plan on social mobility. I cannot promise it, but at least it is on the agenda. This discussion is about not just policies and priorities, but politics. People from the coalfield communities that I represent have always aspired to better for their children and grandchildren. It is a universal sentiment. We must be ambitious and aspirational. Politics, for all parties, will survive only if we are in a position to promise for the future, not look to the past, and to present policies for the many, not the few.