From rags to rags (and riches to riches)

Labour came to power with a mission to improve social mobility. But the chances of a bright child fr

Tony Blair once declared that new Labour's mission was "to allow more people to become middle class". His deputy, John Prescott, is a celebrated embodiment of social mobility, even if his parents are uncomfortable with his self- proclaimed social elevation. But had Prescott been born a generation or two later, he would have found his climb up the social ladder much tougher. The cleaner's son is even less likely to become a consultant today than in the 1960s.

More working-class children have become middle-class adults - but only because society has created more middle-class professions and shed manual jobs. The odds of a working-class child making good and earning considerably more than his or her parents have actually worsened. Today's middle classes are consolidating their monopoly on high status and highly paid jobs, and buttressing the safeguards against failure. And now the expansion of the middle class has ground to a halt. We are witnessing what the former cabinet minister Stephen Byers recently called "a silent and secret revolution" where those born into disadvantage and poverty will be condemned to it for the rest of their lives.

There are several reasons for this social paralysis. Principal among them is the widening of wage inequality and income distribution since the 1970s. Between 1979 and 2001, salaries for the top 10 per cent of earners increased at least three times more than for those on lower wages. At the same time, the percentage of households with children in relative poverty increased from 14 per cent to 32 per cent - one of the highest levels in the Organisation for Economic Co-operation and Development (OECD).

The increase in two-earner households as more women have entered the workplace has further widened the gulf between household incomes. Partners tend to come from the same social class and income bracket, so when, for example, a barrister marries a colleague - or the PM, for that matter - their combined income significantly exceeds that of the couple who are bank clerks.

Women still don't earn as much as their male counterparts and only the richest of them can comfortably afford childcare. Many mothers lose a large proportion of their income, work part-time or give up completely. As a result, they often become deskilled or fall behind their male colleagues. New research by Professor Jonathan Gershuny has shown that some women are at greater risk than others of downward social mobility. Childcare problems have polarised the opportunities open to women according to their class, and intensified inequality.

There is now evidence of a robust and growing link between income and educational attainment in the UK. The official statistics are stark. By the age of six, the low-IQ child from the rich family has already overtaken the poor but clever child. By ten, she or he is even further ahead. This is not just about income. High levels of parental, particularly maternal, education create an enriched cultural and linguistic environment that boosts the performance of the privileged child. But money really matters.

New Labour came to power insisting that "poverty is no excuse" for low attainment. For some, this mantra signalled a real commitment to improving the life chances of the poor. But others have interpreted it as a wilful denial of the impact of poverty and disadvantage on a child's ability to succeed. As education secretary, David Blunkett was, in their view, playing to the Tory gallery with his dismissal of woolly liberals. But Estelle Morris, his successor who later resigned, perhaps demoralised by the enormity of the task of overcoming the power of money and class through education, has conceded: "What we have to face up to in the education service is that [the class divide] gets worse as you go through school." A study in 2000 revealed that average educational outcomes in the UK compared well to interna- tional standards. But there is still a long tail of underachievement among those from poorer backgrounds. Moreover, the difference between the educational performance of the top and bottom social groups in the UK was one of the largest in the OECD. After six years of a Labour government, the class divide in educational attainment persists.

The jury is still out on the status of education as a powerful engine for social change. Some schools do appear to achieve better results with a similar pupil intake, and certain education programmes have helped disadvantaged children. It none the less seems possible that the present education system actively entrenches the advantages of the privileged and prevents the poor from ever catching up.

Certainly, the effect of recent policy-making is that the growth in educational opportunities has primarily benefited the middle classes. The expansion of higher education is a good example of this. Creating more places at university may have increased the number of working-class students, but it opened the floodgates to middle-class offspring. Full grants were available throughout the expansion during the 1980s, so finance was unlikely to have been a deterrent. The main reason working-class students failed to exploit the new opportunities was that they simply didn't have the necessary qualifications. The offspring of professionals are more than three times as likely to achieve two or more A-level passes than their peers from less privileged backgrounds. If a working-class student does obtain the two-A-level passport, she or he is highly likely to proceed to university. But the trouble remains that so few continue in education after the age of 16, never mind pass their A-levels.

It is hardly surprising that the proportion of working-class students going to university has remained stubbornly low. In fact, the gap in university participation between the higher and lower social groups has widened since 1979. Most of those who do make it to university attend less prestigious institutions. Many degrees from "humble" universities are desirable in the labour market, but others receive considerably less financial reward than, say, a law degree from Oxford. Yet all universities charge the same flat-rate fee and students receive a similar level of maintenance in the form of a highly subsidised loan. Indeed, Britain's higher education system has historically been one of the most regressive in the world. Low-earning taxpayers with few prospects of ever going to university have been subsidising middle-class students on a grand scale for years. This is why the maligned and misunderstood top-up fees scheme is a much fairer system - it seeks a greater contribution from the well-off and redistributes funds to those in real need. But the 50 per cent target for university participation risks allowing yet more middle-class students to snap up the extra places and so perpetuate educational inequality.

Children of the affluent are in a win-win situation. Research shows that the son of a rich father with modest qualifications will have a higher income than his poorer counterpart. Education, at least in the form of qualifications, has become less important over recent decades - but only for the middle-class child. The top social strata have always had valuable assets in the form of social and cultural capital. They develop sophisticated verbal and interpersonal skills and greater self-esteem at an early age. The value of these assets has increased with the rise of professions where networks and "soft skills" are more instrumental.

But some on the left argue that social mobility is a red herring. A Labour government, they claim, should be focusing on reducing inequality and improving the lot of the poor rather than enabling them to move out of their "class". A perfectly mobile society could be positively undesirable. Michael Young's infamous vision of a meritocracy is of a ruthless struggle for status where the successful monopolise all the rewards and the weaker contenders are disregarded. But this is, in effect, a parody and, as Sweden proves, greater equality is compatible with greater mobility. And it is surely right for a Labour government to be unhappy presiding over a society where some are condemned to languish on the bottom rungs of the social ladder - even if their standards of living are higher than those enjoyed by their parents.

If the Prime Minister is committed to narrowing the gulf in life chances between the richest and poorest in Britain within our lifetime, he will have to outrage the Daily Mail. There are weapons that could be deployed to loosen the tight grip with which the middle classes hang on to their privileges: positive discrimination, restrictions on parental choice in schooling, a more redistributive tax system. These measures are not only politically formidable; they also raise concerns about the balance between social justice, individual freedom and economic prosperity.

Those impatient for change may find it frustrating, but a more incremental approach might be more effective. The government has started to implement policies to promote upward mobility - baby bonds, Sure Start and educational maintenance allowances are among the most promising. The third term should build on these foundations, redistributing more funds to attempt, however modestly, to compensate for disadvantage.

The political stakes are still high. But Tony Blair surprised everyone by his willingness to affront the middle classes over top-up fees. And the current Education Secretary, Charles Clarke, has boldly stated that the most radical and effective way of raising educational standards would be to channel the lion's share of his budget to the under-fives. There is at least some hope that we are witnessing a stiffening resolve to grapple with growing inequality and immobility.

Wendy Piatt is a senior research fellow at the Institute for Public Policy Research

In September, Gordon Brown will host a special IPPR conference on social mobility: www.ippr.org.uk