Clegg can’t increase social mobility without reducing inequality

The Deputy PM needs to remember that the most socially mobile countries are the most equal.

For Nick Clegg, the ultimate test of the success or failure of the coalition is whether it increases social mobility. Indeed, he has previously declared that increasing mobility, not reducing income inequality, should be the "ultimate goal" of progressives (obviously a false dichotomy, as I'll explain below). Today, with the publication of the government's social mobility strategy, he has a chance to explain how the coalition will succeed where Labour failed.

Clegg's plans to "open up" internships, which, as he says, "rig the market in favour of those who already have opportunities", are previewed in this morning's papers. Ministers will reportedly warn firms that they must pay young interns, or risk a legal challenge under the National Minimum Wage legislation.

In addition, the Conservative Party chairman, Sayeeda Warsi, will announce that the civil service will end informal internships by 2012 and that all vacancies will be advertised on a central website. Progressive stuff from the party that auctioned off City internships to raise funds at its Black and White Ball.

In their joint op-ed piece for the Daily Telegraph, Clegg and Iain Duncan Smith, the Work and Pensions Secretary, write:

Labour couldn't make up its mind on what goal it was chasing. Social exclusion? Income poverty? Inequality? Social mobility? Lacking a clear agenda, it fixated on just one measure of fairness - the poverty line, defined as 60 per cent of median income. This is a necessary part of the equation, but it is very far from sufficient.

Labour deserves to be criticised, but not for the reasons that Clegg and Duncan Smith suggest. It was the Blair government's unwillingness to address runaway inequality that meant social mobility remained stagnant. As I have repeatedly pointed out, all the international evidence we have suggests that the most socially mobile countries are also the most equal.

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As the graph above (from the excellent book The Spirit Level, by Richard Wilkinson and Kate Pickett) shows, countries such as Sweden, Norway, Denmark and Canada, where income inequality is low, have far higher levels of social mobility than the United States and the UK, where income inequality is high. This is hardly surprising: greater inequalities of outcome make it easier for rich parents to pass on their advantages to their children.

As Will Hutton's recent report on public-sector pay for the coalition government noted: "There is now good evidence that income inequality can become entrenched across generations, as elites monopolise top jobs regardless of their talent, gaining preferential access to capital and opportunities. This harms social mobility."

To suggest, based on just 13 years of Labour government, that redistribution failed is wilfully naïve. It took decades of centre-left government in Scandinavia to create the most equal societies the world has known. I hope that I will be proved wrong, but all the evidence we have suggests that the coalition's cuts will increase inequality and, consequently, reduce social mobility.

George Eaton is political editor of the New Statesman.

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What Jeremy Corbyn gets right about the single market

Technically, you can be outside the EU but inside the single market. Philosophically, you're still in the EU. 

I’ve been trying to work out what bothers me about the response to Jeremy Corbyn’s interview on the Andrew Marr programme.

What bothers me about Corbyn’s interview is obvious: the use of the phrase “wholesale importation” to describe people coming from Eastern Europe to the United Kingdom makes them sound like boxes of sugar rather than people. Adding to that, by suggesting that this “importation” had “destroy[ed] conditions”, rather than laying the blame on Britain’s under-enforced and under-regulated labour market, his words were more appropriate to a politician who believes that immigrants are objects to be scapegoated, not people to be served. (Though perhaps that is appropriate for the leader of the Labour Party if recent history is any guide.)

But I’m bothered, too, by the reaction to another part of his interview, in which the Labour leader said that Britain must leave the single market as it leaves the European Union. The response to this, which is technically correct, has been to attack Corbyn as Liechtenstein, Switzerland, Norway and Iceland are members of the single market but not the European Union.

In my view, leaving the single market will make Britain poorer in the short and long term, will immediately render much of Labour’s 2017 manifesto moot and will, in the long run, be a far bigger victory for right-wing politics than any mere election. Corbyn’s view, that the benefits of freeing a British government from the rules of the single market will outweigh the costs, doesn’t seem very likely to me. So why do I feel so uneasy about the claim that you can be a member of the single market and not the European Union?

I think it’s because the difficult truth is that these countries are, de facto, in the European Union in any meaningful sense. By any estimation, the three pillars of Britain’s “Out” vote were, firstly, control over Britain’s borders, aka the end of the free movement of people, secondly, more money for the public realm aka £350m a week for the NHS, and thirdly control over Britain’s own laws. It’s hard to see how, if the United Kingdom continues to be subject to the free movement of people, continues to pay large sums towards the European Union, and continues to have its laws set elsewhere, we have “honoured the referendum result”.

None of which changes my view that leaving the single market would be a catastrophe for the United Kingdom. But retaining Britain’s single market membership starts with making the argument for single market membership, not hiding behind rhetorical tricks about whether or not single market membership was on the ballot last June, when it quite clearly was. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.