Inequality and Social Mobility

Neil Gray Excerpts

Wednesday 12th June 2019 Commons Chamber

[Amber Rudd]

I want to make some more progress.

We continue to look for ways to help people out of poverty, which is why we have acted to increase the incomes of the poorest in society. My right hon. Friend the Chancellor has injected an extra £10 billion into universal credit since 2016, and that meant we could increase the universal credit work allowance by £1,000 in April, providing extra cash in the pockets of hard-working people in 2.4 million households.

[Neil Gray (Airdrie and Shotts) (SNP)]

While we all accept that the Government have taken some steps—I pay tribute to the Secretary of State for making some changes to universal credit since she has taken office—does she accept that the interventions from the Chancellor at the last Budget do not even make up for the cuts in the 2015 Budget?

[Amber Rudd]

The hon. Gentleman must acknowledge, as I said earlier, that we took on an economic crisis in 2010 that required some reduction in spending, and those changes allowed us to stabilise and grow the economy. There has now been an acknowledgment that some of that money can be put back, and I am pleased that the Chancellor was able to support us in doing that.

This Government introduced the national living wage, providing the biggest pay rise for workers in 20 years, and increased it this year to £8.21 an hour, and we have also increased the personal tax allowance to £12,500. We are acting to increase female employment and economic empowerment, reaching out to marginalised women and trying to eliminate the gender pay gap. We are spending billions to ensure that opportunity and growth are spread throughout the country through our stronger towns fund and our transport investments, but we will not stop there. We have committed to finding new and better ways to analyse and tackle poverty in this country.

The Social Metrics Commission’s “A new measure of poverty for the UK” report, which the hon. Member for Wirral West mentioned, makes a compelling case for why we should look at poverty more broadly to give a more detailed picture of who is poor, their experience of poverty and their future chances of remaining in poverty or falling into it. We are working with the commission and other experts in the field to develop new experimental statistics to measure poverty, which will be published in 2020 and, in the long run, could help us to target support more effectively. It is vital that we have evidence on the effects of poverty in order to tackle it, and in the run-up to the spending review we will examine what more can be done to address poverty, particularly child poverty, and to support social mobility.

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[Neil Gray (Airdrie and Shotts) (SNP)]

I am grateful for the opportunity to take part in this important debate, and I thank the Opposition for moving the motion.

The IFS’s recent report, “Inequalities in the twenty-first century”, which partly prompted today’s motion and debate, states:

“Too often the debate takes place in silos, focusing on just one type of inequality, a specific alleged cause or a specific proposed solution.”

Indeed, looking back at debates in this House over the past few years—when we had the time to divert our attention from the Government’s Brexit shambles—there have been many discussions on issues such as changes to housing benefit, scrapping student nurse bursaries, freezing working-age benefits, the impact of the state pension changes on women born in the 1950s, income tax changes that disproportionately benefit those on the highest incomes, and universal credit, which in itself covers a plethora of issues that could be the focus of this debate—the two-child limit, the five-week wait or the cuts to disability premiums. Although Members can argue back and forth, as they have done and will again, about the merits and demerits of these individual policies and others, what connects these disparate issues is a sense that the UK Government’s priorities are not geared to tackling inequality across these isles. The Secretary of State is right to say that we all came into politics to improve the lives of others, but we differ on the route to improving people’s lives. The evidence shows that the Government are not tackling burning injustices; they are fanning the flames with petrol.

This debate was originally scheduled for 22 May, which would have been apt as that was also the day when Philip Alston, the UN rapporteur on extreme poverty, released his final report on the impact of austerity and human rights in the UK. If anything, however, having the debate today makes it even timelier, given that the UK Government’s denial and abnegation of the report’s findings have been almost as concerning as the report itself. We must remember what Mr Alston actually said:

“The bottom line is that much of the glue that has held British society together since the Second World War has been deliberately removed and replaced with a harsh and uncaring ethos.”

It seems clear that, collated together, the issues I mentioned earlier, and others, have contributed to some of the stark reading contained in the rapporteur’s report. I hoped that, given the time that has now passed in which to reflect on Mr Alston’s findings, the Minister or the Government would offer a clearer outline of what the Government intend to do about the concerns raised, today or in the near future. Sadly, that has not been offered.

We contrast what we hear in the report about the UK Government’s issues with Mr Alston’s conclusions about the devolved Administrations. He said:

“Devolved administrations have tried to mitigate the worst impacts of austerity, despite experiencing significant reductions in block grant funding and constitutional limits on their ability to raise revenue. Scotland and Northern Ireland each report spending some £125 million per year to protect people from the worst impacts of austerity and, unlike the United Kingdom Government, the three devolved administrations all provide welfare funds for emergencies and hardships.

But mitigation comes at a price, and is not sustainable. The Scottish Government said it had reached the limit of what it can afford to mitigate, because every pound spent on offsetting cuts means reducing vital services.”

Those are Mr Alston’s conclusions.

So many factors can directly and indirectly determine a person’s life chances, including family income, status and health. Although Governments cannot override or entirely supersede all these factors, they can and must try to put in place measures that at the very least do not widen or exacerbate them. Unfortunately, the UK Government’s record in the areas that can determine this appears to show that many of their measures would appear to do just that. Page 6 of the IFS report shows that there has been a sharp rise in the incomes of the highest earners, with the incomes going to the top 1%—the richest in this country—now being 8% of the total incomes, which represents an increase from 3% in 1970. The average pay for a chief executive officer in a FTSE 100 company is now 145 times higher than that of the average worker in those same companies—increasing from 47 times higher in 1998—while household earnings have stagnated at the bottom end of the income distribution. After adjusting for inflation, the lowest earning households today can earn little more than their counterparts did in the mid-1990s.

No one policy can end inequality or progress social mobility, which is why it is essential that all these areas—taxation, income distribution, social security, education, childcare and other policy areas—are looked at collectively and cognisance is taken of how interconnected and crucial a role they play in ensuring that future generations are more equal.

I wish, therefore, to focus on education, social security and tax changes, and policies directly about or impacting the state pension, as I believe that it is only by ensuring that those starting out have the opportunity to achieve all they can, that those who find themselves falling behind have a safety net that they can rely on and that those who have worked hard and contributed to the system throughout their lives are duly rewarded can we address inequality and stagnant social mobility.

Education is clearly key to tackling poverty, which is why the Scottish National party in government has made closing the attainment gap its absolutely priority. This has led to recent statistics showing a record high for school leavers going to positive destinations. For those who have chosen the destination of higher education, there are free tuition fees, which the Social Mobility Commission “State of the Nation” report acknowledges have

“Contributed to the increased number of disadvantaged people attending university.”

However, for those who have chosen instead to enter the world of work straight from school, the UK Government’s age-discrimination policies in respect of national living wage entitlement make life more difficult, as many find themselves doing the same job as their colleagues but for far less pay.

The Scottish Government’s “Every child, every chance: tackling child poverty delivery plan” contains a detailed and ambitious plan for reducing child poverty rates and places education at the forefront of this effort by addressing some of the issues that directly and indirectly affect a child’s chances of getting the best start in life, through initiatives such as a new minimum school clothing grant payment to help low-income families to have more money for school uniforms and £1 million of new practical support for children who experience food insecurity during the school holidays. The Social Mobility Commission acknowledges that these plans are made more difficult in Scotland due to “UK-wide benefit changes”. It is to some of those changes that I shall now turn.

The 2015 Budget announced some of the most punitive cuts to social security in recent memory. We are now starting to see those cuts actively reverse previous reductions in child poverty. The Budget saw the removal of the ESA work-related activity group and the cuts to universal credit work allowances, and the introduction of the two-child policy and a harsher benefit cap, as well as the benefits freeze. The freezing of benefits has made it almost impossible for those already struggling the most to focus on long-term advancements and improvements in their job prospects, their life chances, or their family’s wellbeing. Instead, they have to focus on month-to-month survival, with no certainty about whether they will have enough for the bare essentials.

[Alison Thewliss (Glasgow Central) (SNP)]

My hon. Friend is making a good point. Does he agree with the Church of England analysis that a single parent with three children who works 16 hours at the Government’s pretendy living wage would now need to work 45 hours just to make up the cuts from the two-child cap?

[Neil Gray]

I absolutely agree, and that is clearly impossible. Policies such as the two-child limit, on which my hon. Friend has been a doughty campaigner—she has led the campaign against that pernicious policy—affect the life chances of all members of the family. For the parents, it may mean increased focus only on finding the bare essentials, which for the children means less money and less time for sports, travelling, holidays, extracurricular activities and other factors that play an often unacknowledged or underplayed role in equipping children with the skills and experiences that will prove useful later in life. Often, the focus in these debates is solely on the income side of the equation, and less attention is given to those extracurricular activities and the often-ignored life-chances elements, but it is worth noting that the Child Poverty Action Group’s most recent report said that the removal of the two-child limit or the benefit freeze would be the best way to stop any increased rises in child poverty.

Housing costs have become the biggest worry for many up and down these isles, which is why the Scottish Government have embarked on an ambitious programme of council house building. Since 2007, some 86,000 affordable homes have been built and 59,000 homes have been built for social rent, and they are on course to reach their target of 50,000 in the lifetime of this Holyrood Parliament. The Scottish Government have also ensured that discretionary housing payments are available for those impacted by the bedroom tax and that the housing element of universal credit can be paid direct to the landlord. Although that is beneficial for those who choose that option, one problem I have been made aware of from recent casework is that when the landlord is the local authority, the Department for Work and Pensions takes no cognisance of when the rent is due to the council, meaning that housing payments are often made after the rent was due, leading to constituents being threatened with eviction proceedings by the landlord. I have raised that issue previously and hope that Ministers will look into it.

If we look at those approaching retirement age, or who are already there, we see that the Government’s recent announcement of changes to pension credit entitlement mean that some couples could lose out on up to £7,000 a year, because if one partner is under 65 they will have to claim universal credit instead. The longest running issue in this policy area, and on which the Government have shown little sign of wishing to help, is that of women born in the 1950s and the delays and changes, with little or no notice, to their pension entitlement. The issue has been debated many times in the Chamber already, and I do not wish to go over that ground in any great detail, but such policies mean that inequality is being exacerbated for people at a time of their life when they are least able or likely to be able to rely on work or education to assist them. I hope that we will have a chance to discuss Mr Alston’s report in more detail, but it would have been remiss of me not to highlight some of the aspects I have raised today.

[Vicky Ford (Chelmsford) (Con)]

On the Alston report, the UN special rapporteur spent exactly 11 days in the UK. Is that enough to get a clear picture of our country?

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[Neil Gray]

I think it is; Mr Alston’s report was comprehensive and spoke to the issues that we see in our surgeries daily. I invite the hon. Lady to Glasgow, where Mr Alston spent much of his time, and to which he dedicated much of his report, to see the impact of the problems I mentioned.

[Amber Rudd]

Mr Alston, of course, spent two days in Scotland, to follow up on the point made by my hon. Friend the Member for Chelmsford (Vicky Ford). I refer the hon. Member for Airdrie and Shotts (Neil Gray) to the leader in The Times of 25 May, which said:

“The failings of Mr Alston’s report are legion.”

It referred to his report as “nonsense”, and said:

“The government is vulnerable to many criticisms in economic and welfare policy”—

a point that the hon. Gentleman often throws at me—

“Yet poverty in this sense does not exist in Britain in the 21st century.”

I urge him to get a copy and read it later.

[Neil Gray]

The Secretary of State needs to look at the report and realise why Mr Alston was able to come to his conclusions on the evidence that he found during his visit to this country, rather than doing what she and her colleagues have done up to now: report personal attacks against a UN rapporteur who visited this country to draw conclusions about poverty and human rights.

[Chris Stephens (Glasgow South West) (SNP)]

rose—

[Neil Gray]

I will take a last intervention.

[Chris Stephens]

I thank my hon. Friend for being most generous in giving way. Would he be surprised to hear that this morning, in the Select Committee on Work and Pensions, a Minister stated that the Department’s policy is now that it regrets the inflammatory language in its response to the rapporteur’s report and is taking that report seriously?

[Neil Gray]

I would be very interested to see the transcript, because that directly contradicts what the Secretary of State just did to me in her intervention. I would be very interested to see what was said in more detail.

There is no doubt but that the Institute for Fiscal Studies has blown a rather wide hole in the Tory rhetoric around inequality in the United Kingdom. Its report can be complemented by so many others—from the Trussell Trust, the Joseph Rowntree Foundation and the Child Poverty Action Group, to name just a few of the expert charities highlighting how the UK Government’s policies are impoverishing people across the UK. That is why we support the motion. I hope that the Government will finally wake up to the social destruction that they are causing, will act, and will no longer take their path of austerity.

[Several hon. Members rose—]

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[The Parliamentary Under-Secretary of State for Education (Nadhim Zahawi)]

I welcome the opportunity to respond on behalf of the Government. I was sorry to hear the hon. Member for West Ham (Lyn Brown) accuse the Government of not responding to the report of the UN rapporteur. That is not true; we have responded. I was also sorry to hear her exploit Allie, an 18-year-old, in an attempt to weaponise this issue, when we have heard really thoughtful contributions from other colleagues. Labour employs the politics of division; it was sad to see that today.

I thank colleagues who have spoken, including the hon. Member for Airdrie and Shotts (Neil Gray), my right hon. Friend the Member for Putney (Justine Greening), the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), my hon. Friend the Member for Chichester (Gillian Keegan), the hon. Member for Bradford South (Judith Cummins), my hon. Friend the Member for Chelmsford (Vicky Ford), and the hon. Members for Birmingham, Edgbaston (Preet Kaur Gill), for Leigh (Jo Platt), for Battersea (Marsha De Cordova), for Oldham East and Saddleworth (Debbie Abrahams), for Glasgow North East (Mr Sweeney), for Mitcham and Morden (Siobhain McDonagh), for Bedford (Mohammad Yasin), for Glasgow East (David Linden), and for Ellesmere Port and Neston (Justin Madders).

Many of the contributions this afternoon were about the long-term issue of delivering social mobility. As Under-Secretary of State with responsibility for children and families, I will naturally focus in my speech primarily on the work of my Department. You will not be surprised to hear, Madam Deputy Speaker, that I believe that one of the most effective means of reducing inequality is education. As someone who came to these shores unable to speak a word of English, I know at first hand how education can change lives and truly open doors. Everyone has the right to a good education, regardless of their circumstances.

Social mobility, tackling inequality and social justice are rightly critical priorities for my Department and of course my Government as a whole. That is why, for the Social Mobility Commission, we have recruited a fantastic chair in Dame Martina Milburn, along with a board of commissioners each with a unique experience of social mobility. I will say a few words about their vital work.

At the end of April, the commission published a comprehensive “State of the Nation” report which shines a light on where the Government, businesses and employers can continue to raise the bar for everyone living in this country.

[Neil Gray]

Will the Minister give way?

[Nadhim Zahawi]

If I have time at the end, I will happily take an intervention.

We welcome the commission’s thorough analysis and its efforts to promote social mobility and social justice across the United Kingdom, and we have therefore awarded it £2 million to undertake further work on that agenda. Indeed, despite some claims to the contrary, social justice is already an intrinsic part of the commission’s role. It is already concerned to help the most disadvantaged in society and to ensure that someone’s background does not determine future chances in life.

This Government share the view that everyone should have the chance to fulfil their potential. That is why we are taking action across the whole Government in order to make real progress.

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[Nadhim Zahawi]

I will try to take some interventions at the end. I want to get through my remarks and to address some of the questions asked of me.

In 2014, we extended benefits-related free meals to cover further education—not something that the Labour party had contemplated—and introduced universal infant free school meals, benefiting a further 1.5 million infant pupils. In 2018, we introduced new eligibility under universal credit, and we estimate that by 2022 more children will benefit from free school meals than under the previous benefits system. Such efforts are targeted at the root causes of poverty and disadvantage.

Improving this country’s education system starts in the early years—Martina Milburn focused on that in her report. We have already made progress in closing the gap that emerges between disadvantaged children and their peers: 71.5% of children achieved a “good level of development” in 2018, up from 51.7% in 2013. Despite that very encouraging progress, far too many children still start school behind their peers, in particular in language development, which a number of colleagues mentioned. We have set out an important ambition to halve, by 2028, the proportion of children finishing their reception year without the communication and reading skills that they need.

To tackle that, this year alone the Government will spend about £3.5 billion—yes, Mr Deputy Speaker, you heard me right—on early education entitlements, which is more than any previous Government have spent. Our early years social mobility programme, backed by more than £100 million of investment, includes a professional development programme for early years practitioners, who will shape those little ones to make the most of their lives as they become adults; and work with Public Health England to train 1,000 health visitors to identify speech, language and communication in families who need that additional help. We will soon launch a home learning environment campaign, because what happens in the home in the earliest years has a huge impact, and there are many opportunities to help parents to support their children to learn—to have the confidence to help their children to learn better and faster. I look forward to working with hon. Members across this House to ensure that we make the most of the very significant potential of that campaign to help disadvantaged children.

This Government have focused on raising school standards because we know that what happens in our classrooms is critical to reducing inequality. There is nothing moral or decent about crashing an economy and leaving the most vulnerable people behind. That is why we are targeting extra support at the areas of greatest challenge and least opportunity, to raise standards and attract great teachers to our primary and secondary schools. This has helped to ensure that, as of December of last year, there are 1.9 million more children in good and outstanding schools compared with when we came into office in 2010, representing 85% of children, compared with just 66% in 2010. That is partly down to our reforms.

I am pleased to say that this Government have also made significant progress in closing the opportunity gap with regard to education. The difference in attainment between disadvantaged pupils and their peers has fallen across all stages of education. Commenting on the changes we have made to the system, including the pupil premium, the Institute for Fiscal Studies, which has been mentioned a number of times today, said:

“A system that was substantially skewed…towards the better off is now, if anything, skewed towards the least well off.”

It also said:

“Reforms since 2010 are likely to have increased total funding in favour of pupils from poorer backgrounds.”

Our efforts do not stop there, when school comes to an end. To tackle inequality, everyone must have the right level of ongoing support to help them on a path to a skilled job, whether via university or a more practical, technical path. That is why widening access in higher education to ensure that an academic route is open to all is a priority for this Government, as shown in the recent report by Philip Augar.

[Neil Gray]

Will the Minister give way?

[Nadhim Zahawi]

I have said that I will at the end when I have a bit of time.

In 2018, 18-year-olds from disadvantaged backgrounds were proportionally 52% more likely to go to university than they were in 2009. Higher education providers have committed to spend £860 million in 2019-20 on measures to improve access—up significantly from £404 million; in fact, this is more than a doubling since 2009. This Government have also embarked on a long-overdue overhaul of technical education, backed by significant investment. Over 1.7 million people have started an apprenticeship since May 2015. Alongside this, we are introducing T-levels, which will offer a rigorous technical alternative to academic education, available to all.

On children’s social care, this Government take the view that all children, no matter where they live, should have access to the support they need to keep them safe, provide them with a stable and nurturing home, and overcome their challenges to achieve their potential. This Government are committed to improving outcomes for children in need of help and protection. That is why, owing to the work of my Department, my officials and all our teams, and of course all the brilliant social workers on the frontline, our children’s social care reform programme is working to deliver a highly capable, highly skilled social work workforce, with high-performing services everywhere and a national system of excellent and innovative practice.

It is both an economic and moral imperative that we ensure that the skills system works for all—my right hon. Friend the Member for Putney spoke eloquently about why the system really matters—and that it does so up and down the country. That is why we are taking action in every region, at every stage of a young person’s life, to close the opportunity gap. We are targeting extra support at some of the poorest areas of the country through our £72 million opportunity area programme and £24 million for Opportunity North East.

Members made a number of points that I would like to address. The hon. Member for Mitcham and Morden asked how many academies are in debt. I will be happy to respond to her question in writing, but I can say that the reforms of the last eight years show that autonomy and freedom have allowed the best leaders and teachers to make the right decisions for their pupils to reach their full potential.

The hon. Member for Glasgow East rightly held us to account for our own behaviour in this place. There really should not be any unpaid internships. I remind colleagues of the care leaver covenant, which all Departments have signed up to, meaning that we offer 12-month paid internships to those most vulnerable children who, through no fault of their own, have had to be taken into care.

The hon. Members for Mitcham and Morden and for Bradford South attacked the Government about what steps they would be taking to support children who live in food insecurity. I remind them that we are supporting more than 1 million children with free school meals and investing up to £26 million in school breakfast clubs, providing approximately 2.3 million children aged four to six with a portion of fresh fruit or vegetables each day.