Government's social mobility adviser says problems of inequality are 'decades in the making' and cannot be blamed on one party
A shocking lack of social mobility in the UK is the consequence of decades of entrenched elitism and likely to worsen because of a breakdown in the link between economic growth and the wages of most workers, Alan Milburn, the government's adviser on social mobility, has said.
He said Sir John Major, the former Conservative prime minister, was right in his intervention this week to be shocked by entrenched elitism in the UK, but wrong to "argue this is the consequence of the actions of any one government".
He said "deep-rooted inequality and flatlining mobility have been decades in the making", and accused all the political parties of being on a carousel of short-termism that prevents them from addressing the deep-rooted causes of inequality and social immobility in the UK. He said: "Amongst all parties I see lots of tactics, and lots of short-termism, and I see far less strategy and far less long-termism."
Milburn urged the government to recognise that major trends, notably the decoupling of earnings growth and economic growth, required a level of labour market intervention not sanctioned by any government for 30 years, or else the UK would follow America into deep social division.
He said: "The shocking lack of social mobility is entrenched in British society. There is a glass ceiling in British society – and more and more people are hitting it. Whether it is law or medicine or journalism or politics, the upper echelons of Britain are dominated by a social elite.
"One-third of MPs, half of senior doctors and over two-thirds of high court judges all hail from the private schools that educate just 7% of our country's children. The data is so stark, the story so consistent, that it has all the hallmarks of social engineering. Sir John Major is right to be shocked."
He warned: "Economic recovery is unlikely to halt the trend of the last decade, where the top part of society prospers and the bottom part stagnates. A recovery that sees national wealth rise might be an economic success but if earnings fall it will be a social failure."
Milburn said: "In most developed countries there has been a declining share of economic growth going to labour (and a higher share to capital) at the same time as there has been growing wage inequality.
"In the UK, the share of national income going to wages of workers in the bottom half of the earnings distribution decreased by a quarter between 1979 and 2009. The problem is that the answers that the political parties are reaching for – whether caps on gas bills or more competition in the energy market – can, at best, provide only short-term respite. What is lacking – across the political spectrum – is a long-term answer about how the gap between earnings and prices can be closed."
He suggested: "It should be a new and explicit objective of government policy to re-forge the link that has been broken between economic growth and earnings growth."
Milburn proposes the coalition introduce laws to require firms to publish pay ratios as well as the number of staff earning below particular hourly pay benchmarks. Jobcentre Plus and Work Programme providers should be incentivised so that they are rewarded for the earnings people they help receive, not just the jobs they are found."
He said he hoped there were some trade unionists willing to have a grownup discussion about the trade-offs that would be required to introduce a higher minimum wage.
He added there was a "tidal wave of concern from parents and grandparents about what is liable to happen to the opportunities of their children and grandchildren".
"I cannot see how it is tolerable to protect wealthy pensioner benefits – be it bus passes or winter fuel allowances – whilst wages are falling in real terms, youth unemployment is rising and the poorest people in the country are having their benefits capped. That seems to be unfair," he said.
He said the £1.4bn saved could be used to introduce the Education Maintenance Allowance and offer better childcare support.
Beyond the labour market, Milburn also set out five long-term goals:
• Spending more on childcare rather than tax credits, saying: "Child poverty is lowest and social mobility is highest where parents can rely on universal, quality and affordable childcare. Early education packs a double punch. It positively impacts children's development and it enables more parents to work."
• Doing more to help the less affluent with parenting, even if this requires "taking on the Daily Mail argument about the nanny state".
• Raising educational standards and closing attainment gaps, including incentivising the best teachers to teach in the worst schools.
• Opening up universities and prioritising vocational education. He said: "Four private schools and one college send more students to Oxbridge every year than 2,000 state secondaries. It is obvious that schools and universities need to do far more to ensure doors are open to a wider pool of talent."
• Ending the domination of the professions by a social elite by ending unpaid internships and tackling closed shops.