Social Mobility and the Economy

Mel Stride Excerpts

Wednesday 28th March 2018 Westminster Hall

[The Financial Secretary to the Treasury (Mel Stride)]

It is a pleasure to serve under your chairmanship again, Mr Davies.

May I say how grateful we all are that my right hon. Friend the Member for Putney (Justine Greening) secured this debate? She has done so on the back of an outstanding record in government, including at the highest level. She brings to our debates a burning strength within her as to the importance of social mobility.

During this debate a number of Members have referred to their backgrounds, which have informed in many ways the views they have reached on social mobility and their desire to do something about it. My parents left school at the ages of 15 and 14 because of economic hardship, and the thought of them ever having become a doctor or a scientist, or even having gone to university, is about as fanciful as any one of us stepping on the surface of the moon. It would have been entirely and utterly impossible. My great break in life was when I got a free place at the grammar school, and I took that opportunity and never looked back. I therefore share with many of those present the burning drive to do something about the issues that we have discussed.

We can all agree that far. The question is, how do we approach these issues? As has been evident in the debate, many different strands are involved. The hon. Member for West Ham (Lyn Brown) mentioned housing, for example, which is one component. There are of course many other components, but I will focus on a couple of key areas, if I may, because they relate to the worthy and outstanding initiative launched today by my right hon. Friend the Member for Putney: educational skills, and the economy and business.

We should not overlook the progress we have made, in particular on education and skills, some of it on my right hon. Friend’s watch. We now have 1.9 million more children in good and outstanding schools than we had in 2010, and a record number of young people in education and training. We have more disabled and disadvantaged young people going to university than at any time in our history. We have driven up standards right across the piece. There is no point in getting people into education and training unless we give them good education and training that will be useful to get them work in future. We are achieving that: the EBacc is driving up standards and we have opened up access, particularly in the case of our great universities.

We recognise that we need to do more, so we recently invested £72 million in the 12 opportunity areas across the country, with £50 million allocated to early language and literature skills and £250 million to technical education. We have delivered £406 million for education and skills within the industrial strategy, particularly focusing on maths, digital skills and technology. My right hon. Friend mentioned apprenticeships and T-levels; there have been 3 million new apprenticeship starts since 2010 and 1.2 million since 2005.

My hon. Friend the Member for Ochil and South Perthshire (Luke Graham) mentioned the importance of not writing people off early in their career and the idea of lifelong learning. We are launching our national retraining scheme to ensure that we have upskilling at the centre of our offer. He mentioned the economy, and there is no doubt that providing a strong economy and employment is the best way to get people moving up in society and, in particular, avoiding poverty.

[Peter Kyle]

There are a lot of things I would like to comment on, but the Minister mentions the economy; is it not true that we live in a world where if someone is born into a family that has assets, they are almost certain to succeed in life, but if they are talent-rich but asset-poor they are not? What will the Minister do to restructure the economy so that those born into families who do not own property and do not have savings have a much better chance of success?

--- Later in debate ---

[Mel Stride]

On the specific issue of wealth, the hon. Gentleman will find that income inequality is at its lowest level for about 30 years. If he looks at the tax system, which includes property and assets, as he will know, the top 1% of earners in this country pay 28% of income tax. He will know that the national living wage is being increased by 4.4% as of this month with the start of a new tax year, and he will know that the very lowest-paid in our country have had a real-terms pay increase of 7% since 2015. I hope Members will recognise that the Government are on the side of the poorest in our society and are actively engaged in dealing with those issues.

[David Linden]

Will the Minister put on the record once again that the national living wage does not extend to under-25s?

[Mel Stride]

The hon. Gentleman and I have been in several debates where he has raised exactly that point time after time, and I am grateful to him for raising it again. There is an element of affordability to that; there is also the fact that there is a minimum wage, which we are increasing through time, for those who are under 25. We have been able to provide the above-inflation increase to the national living wage because our stewardship of the economy has allowed us to. The problem with some of the prescriptions that we hear is that they are big on spending and borrowing money and increasing taxation, and I am afraid that is just not a recipe for being able to make the kind of progress on the national living wage that this Government have been making.

I will move on to the overall economic progress that we have made as a Government. We have a near record level of employment in our country; we have more women in work than at any time in our history; and we have virtually the lowest level of unemployment for 45 years—youth unemployment is down by 40% since 2010. We have had five years of continuous growth, and the deficit and the debt are both falling.

[Sarah Champion]

I recognise the things that the Minister mentions, and of course they are to be welcomed, but we are talking about young people’s aspiration not just to get a part-time job in the corner shop but to become an MP, a judge or a surgeon. Surely that is what we are lacking, and that is why I hope he supports the pledge of the right hon. Member for Putney.

[Mel Stride]

I do not disagree with the hon. Lady, but my point is that unless there is a successful economy, with jobs, growth and all the things that this Government are delivering, it becomes more and more difficult to provide social mobility. This Government are providing all the things that I have outlined, and that is driving social mobility.

The way that the economy is managed has an important impact on poverty, which, as we know, is one of the greatest evils that hold people back. Since 2010 we have a million fewer people in absolute low income—a record low. The hon. Member for Mitcham and Morden (Siobhain McDonagh) raised the issue of child poverty; we have 300,000 fewer children in absolute low income. There are 200,000 fewer pensioners in absolute income poverty and 500,000 fewer adults of working age in absolute low income since 2010. In fact, of the 28 EU member states, our country has the fifth lowest level of persistent poverty. That is not the same as saying that where we are is acceptable or that we do not have to do more, but we should recognise that progress is being made.

Doing more is right at the heart of what my right hon. Friend the Member for Putney suggests. The Government warmly welcome her initiative; she rightly said that a lack of social mobility leads to talent going to waste. I totally endorse that. She referred to the important link between productivity and social mobility, a point that my hon. Friend the Member for Chichester (Gillian Keegan) also raised. It is a simple fact that living standards can increase dramatically if we get productivity right. In fact, if we had the same level of productivity in our country as there is in Germany, our economy would be 30% larger than it is. I am wholeheartedly with her on that.

My right hon. Friend the Member for Putney also raised the issue of Brexit and talked about the freedoms that will come with it as a moment for change. That was an apposite and far-sighted point to make. She urged companies to engage in her social mobility pledge, focusing on partnerships with schools and work experience. My right hon. Friend the Member for Bexleyheath and Crayford (David Evennett) spoke passionately about his work experience when he was a younger man—or should I say an even younger man—than he is today.

On companies’ recruitment practices, my right hon. Friend the Member for Putney raised the issue of name-blind applications and the work that Clifford Chance has done, as well as the contextual recruitment carried out by Deloitte, Linklaters and others, which takes into account applicants’ backgrounds as well as the contents of their curriculum vitae. If I may paraphrase her, it is a case of employers being blind to everything but someone’s suitability to do the job. We can all unite around that. She also raised the important matter of degree apprenticeships and made an interesting point about how the apprenticeship levy is used and whether it could be directed in ways that may be more helpful to the issues that we are debating.

My right hon. Friend raised the important point of how we measure social mobility and human capital. Personally, I think that is an area that would be worthy of greater attention. I do not believe that the Office for National Statistics or any other such bodies produce such statistics, and it may well be worth us looking at that more closely. She raised the importance of working with others, such as companies in our constituencies and organisations such as the CBI, the FSB and the others that she has already brought on board, for which I give her huge credit.

It may be impossible to discuss such a deep and important issue as social mobility without being partisan, and almost inevitably there have been elements of partisanship in the debate. But my right hon. Friend should be congratulated on at least uniting us in spirit on an issue that we are all determined to confront. She left us with a powerful legacy from her time as Secretary of State for Education. I have a feeling that there is far more to come from her; that she is far from finished in her drive for a fairer and better world, with social mobility beating alive, loud and whole at its heart, and I thank her for bringing forward this debate.