How social mobility got stuck

Britain's poor were absolutely and relatively better off until Thatcher was elected in 1979. Since then, the bottom half of society is worse off than it was in 1983.

The best place to look for rubbish written on social class is in the Daily Mail. When the BBC released its Great British Class Survey in April the Mail cited a pundit, the “author and social commentator” Jill Kirby, willing to claim that “there is plenty of social mobility – even the Precariat can escape more easily than the working class of 50 years ago”. In fact, the survey revealed nothing of the kind. The socalled Precariat, the lowest social class in the BBC’s research, is stuck at the bottom.

Class matters and it matters most at the top. The greatest number of social divisions occurs in the top 1 per cent of the population, so, to understand class, you have to spend a great deal of time looking at divisions among the elite. Take the “grocer’s daughter” from Grantham who the Tory party took as coming from the lower orders, because all her father owned was two shops. To have a chance of standing as a Tory MP she had to marry at least a class above herself, and she started high. Margaret Roberts was born in 1925 into the best-off 10 per cent of families in Britain. By the time she went to university her father, Alfred, had risen to be a member (if a lowly one) of the 1 per cent. Margaret joined an even smaller proportion when she went “up” to Oxford, and she married into the 0.1 per cent with Denis and his money. But the grandees of her party were members of the 0.01 per cent, well above the Thatchers.

For Thatcher to become leader of the Conservatives, the party had to be in disarray. This was true even though the importance of class declined fairly steadily from the day she was born to the day in 1979 when she became prime minister. However, since then, right through to her death, the importance of class has soared. Those who won the highest rewards from her victory were among the richest. It is worth looking first at who gained most, before turning to the losers.

In 1945, when Thatcher turned 20, the richest 0.01 per cent people in Britain received 123 times the mean national average income. By the time she turned 40 in 1965 that had halved to 62 times, and the year before she came to power, in 1978, it was at its minimum: just 28 times the average income.

Twin peaks: disparities in welath from the start of Old Labour (1945) to the end of New Labour (2009)

Britain in the 1970s was a very different world from the Britain of the 1940s. Thatcher’s class hated it. The class above her, the one that she joined, loathed the changes even more, and the class above that put its money where its anger was, funding think tanks, newspapers and young politicians to fight back.

If they were very clever they funded the short-lived Social Democratic Party, because it was largely not by the gains of the right, but by the divisions between the left and centre, that the rise in inequality after 1978 became possible. In most other European countries there was greater solidarity on the left.

By the time Thatcher left office in 1990 the annual incomes of the richest 0.01 per cent of society had climbed to 70 times the national mean, and the accelerating effect of her government’s actions multiplied that increase to 99 times the national mean by 1997. It is also well known that Thatcher said her greatest achievement was New Labour. By 2007, the incomes of the best-off 0.01 per cent were at 144 times the national mean average. That top share fell slightly in the 2008 crash, but it is thought to have bounced back since.

Class at the top of British society is fractured. Under Thatcherism and New Labour, the best-off 0.1 per cent benefited from a greater proportionate increase in their wealth than the tiny slice at the very top. The annual incomes of the 0.01 per cent soared to more than 45 times the mean by 2007, but just beneath them the top 1 per cent – the tier most commented on today – did even better. Alfred Roberts, owner of two shops in Grantham, received through his work and assets about seven times the mean adult income in the year 1945. This fell to roughly six by the end of the 1945-50 Labour government but it was restored temporarily on the re-election of the Tories in 1951, only to decline again under their tenure and Labour’s. It wasn’t until his daughter’s government, formed in 1979, that the 1 per cent were not just restored but elevated to nine times the mean.

It can help to personalise class. To picture the richest 0.01 per cent of our society, think of newspaper proprietors such as the Barclay brothers, those extremely wealthy individuals who invited Thatcher to live at the Ritz, their hotel in London, in the months before she died. For the 0.1 per cent, think of people such as Denis and Margaret Thatcher, and for the 1 per cent think of Alfred Roberts. Social class does not depend on income alone; it is about relationships between people. The owner of two shops (the 1 per cent) doffs his cap to the duke (the 0.01 per cent) and between them the businessman (the 0.1 per cent) lobbies for a knighthood. Below all three the clerks (9 per cent) carry out humdrum duties and below all of them the 90 per cent are repeatedly categorised and recategorised by social scientists whose surveys, even if representative, usually do not give enough detail to differentiate well between the few at the top.

Two statistics will broadly suffice to work out what class you are in: your household income and your family wealth. Often your postcode can reveal a great deal about these. Rather like those charts that plot your height against your weight and tell you if you are overweight, average, underweight or obese, a chart could be produced to determine your class (even though it is unlikely that social researchers could agree on a single chart as yet).

As people’s incomes rise when they get a job, are promoted, meet a better-paid partner and so on, they tend to move out from poorer groups to those less poor – towards average, modest, affluent and occasionally even to wealthy parts of society. This was the story of Alfred Roberts. As their income rises, prudent folk save and usually their wealth as reflected in their standard of living also rises. When incomes first fall, say, through illness or redundancy, accrued wealth maintains its social class for a time, but eventually it falls back down the income/wealth chart towards poverty if nothing intervenes to stop it.

In postwar Britain the intervention that curtailed poverty was the redistribution of income and wealth. When fewer people were allowed to hoard so much of the wealth and claim so much of the nation’s annual income, fewer could be poor. Roberts appeared to become worse off, not because of anything that he did, but because he was not permitted to make ever more sizeable profits out of the people of Grantham. If he did increase his income by charging them an extra penny for bread, then a little more of that penny was taken back off him in taxation towards the common good. Roberts almost certainly hated this.

Between 1945 and 1978, as income (and then wealth) inequalities in Britain continued to fall, social mobility rose. In 1944 the state introduced free secondary education for all and then untiered secondary education was brought in, but only slowly. It was not until 1973 that the proportion of children of secondary age in Britain attending a comprehensive school hit 50 per cent, though that rose rapidly to 80 per cent by 1977. Any increased social mobility brought about by that would not be evident until most of these children reached middle age, after the millennium.

As class divisions in Britain diminished and the income and wealth gaps between people narrowed, the only group that lost out was the richest 1 per cent. The share of national income for the 9 per cent of people just below them remained static between 1945 and 1978, but for the 90 per cent of people below them the share rose. The poor became both absolutely and relatively better off until Margaret Thatcher was elected.

Shortly after she gained power, a survey was conducted on behalf of ITN News and a TV programme called Breadline Britain, which released the results in 1983. Its startling finding was that the spike in unemployment figures that Thatcher had tolerated and the shift in income from poor to rich had resulted in a rapid increase in poverty, so that one in seven people was living in poverty by the early 1980s. This was a sharp rise above levels experienced after the end of the 1960s.

The deepening inequality since 1978 is far more familiar to us than what occurred before it, yet it is still shocking. In its 2013 Poverty and Social Exclusion (PSE) report, published in March to mark the 30th anniversary of that 1983 survey, analysts funded by the Economic and Social Research Council noted: “Today 33 per cent of the UK population suffers from multiple deprivation by the standards set by the public. It was 14 per cent in 1983.”          

The PSE report showed that as the rich became richer in Britain, there was an increase in the numbers of poorer people who had rational fears about money, who were shoddily housed by the standard of their times, who lived in shame and who, at the extreme end of the scale, could not afford to be properly fed. That last rise has been very recent, but it is part of the longer-term trend. This is why 1930s-type soup kitchens have returned to Britain’s towns and cities. The statistics that follow are just a sample of the results of the largest ever systematic study of poverty and social exclusion in Britain, highlighted in a new special edition of Breadline Britain that was broadcast by ITN on 28 March.

The PSE report presents a very different picture of class in Britain today from the one offered by the BBC’s class survey. It has the top 1 per cent and the 9 per cent below it doing all right. Below this tier, the remaining top half of society is getting by on “modest” incomes. But those beneath this are now, in many ways, worse off than they were in 1983.

Of the bottom 50 per cent of people in Britain, all are financially insecure; most (30 per cent) are poorly housed by today’s standards; a large minority (20 per cent) cannot take part in normal social activities; below this minority most cannot now afford to heat their homes properly; and below them, one in every 15 (7 per cent) is poorly fed. The seven classes this produces could be labelled the rich (1 per cent), the affluent (9 per cent), the modest (40 per cent), the insecure (20 per cent), the shamed (10 per cent), the cold (13 per cent) and the hungry (7 per cent).

The PSE survey finds that most people in Britain agree that financial insecurity includes not being able to afford to save at least £20 a month for a rainy day (having to pay, for instance, to fix a boiler – a bill of, say, £500). It includes not being able to afford to make pension payments or have household insurance.

Inadequate housing includes cold housing. The PSE survey found that one in three people cannot afford to heat their home adequately in winter. A third of adults consider themselves to be truly poor “all the time” or “sometimes”. The report explained that “a quarter of adults said their incomes were below the level needed to avoid poverty and 22 per cent had felt embarrassed by their low income”.

In 1983, 5 per cent of households were unable to heat their home to keep it adequately warm; today that proportion is 9 per cent. Some 6 per cent of households in Britain in 1983 could not afford to live in damp-free housing; today that proportion is 10 per cent. When the rich take more, the poor become poorer – and now they are becoming absolutely poorer.

Social divisions of poverty and welath among people in Britain by status (2013)

Social activities that most of the people surveyed now see as necessities are having a cheap hobby, taking part in celebrations on special occasions, attending a wedding or funeral or similar functions, being able to make hospital or other such visits, and being able to take part in sport and exercise. In 1999 one-fifth of adults could not afford to take part in these activities. When the same set of questions was asked in 2012 the researchers found it was one-third of all adults.

The broadly agreed definitions of well fed are that children need three meals a day, fresh fruit and vegetables every day and meat, fish or a vegetarian equivalent at least once a day. Every adult should be able to consume two meals a day, fresh fruit and vegetables every day and meat, fish or a vegetarian equivalent every other day. Using these definitions, the PSE survey found that well over half a million children (4 per cent) live in families that cannot afford to feed them properly and over three and a half million adults (8 per cent) cannot afford to eat properly in Britain today – that is, one in every 17 people in the country.

A fraction of the income of the top 1 per cent would provide enough money to allow all who are going hungry to be fed adequately. But today the man who owns two grocer’s shops is richer than ever, because he charges more for his goods and pays less tax. And many more people will not be able to afford many of the basic items he sells.

Danny Dorling is a professor of human geography at the University of Sheffield. He is the author most recently of “The 32 Stops” (Particular Books, £4.99) and “Unequal Health” (Policy Press, £24.99) For more details of the Poverty and Social Exclusion project visit: poverty.ac.uk

Tough at the top: the greatest number of social divisions occurs in the wealthiest 1 per cent of the British population. Photograph: Getty Images.

This article first appeared in the 13 May 2013 issue of the New Statesman, Eton Mess

GETTY
Show Hide image

North Yorkshire has approved the UK’s first fracking tests in five years. What does this mean?

Is fracking the answer to the UK's energy future? Or a serious risk to the environment?

Shale gas operation has been approved in North Yorkshire, the first since a ban introduced after two minor earthquakes in 2011 were shown to be caused by fracking in the area. On Tuesday night, after two days of heated debate, North Yorkshire councillors finally granted an application to frack in the North York Moors National Park.

The vote by the Tory-dominated council was passed by seven votes to four, and sets an important precedent for the scores of other applications still awaiting decision across the country. It also gives a much-needed boost to David Cameron’s 2014 promise to “go all out for shale”. But with regional authorities pitted against local communities, and national government in dispute with global NGOs, what is the wider verdict on the industry?

What is fracking?

Fracking, or “hydraulic fracturing”, is the extraction of shale gas from deep underground. A mixture of water, sand and chemicals is pumped into the earth at such high pressure that it literally fractures the rocks and releases the gas trapped inside.

Opponents claim that the side effects include earthquakes, polluted ground water, and noise and traffic pollution. The image the industry would least like you to associate with the process is this clip of a man setting fire to a running tap, from the 2010 US documentary Gasland

Advocates dispute the above criticisms, and instead argue that shale gas extraction will create jobs, help the UK transition to a carbon-neutral world, reduce reliance on imports and boost tax revenues.

So do these claims stands up? Let’s take each in turn...

Will it create jobs? Yes, but mostly in the short-term.

Industry experts imply that job creation in the UK could reflect that seen in the US, while the medium-sized production company Cuadrilla claims that shale gas production would create 1,700 jobs in Lancashire alone.

But claims about employment may be exaggerated. A US study overseen by Penn State University showed that only one in seven of the jobs projected in an industry forecast actually materialised. In the UK, a Friends of the Earth report contends that the majority of jobs to be created by fracking in Lancashire would only be short-term – with under 200 surviving the initial construction burst.

Environmentalists, in contrast, point to evidence that green energy creates more jobs than similar-sized fossil fuel investments.  And it’s not just climate campaigners who don’t buy the employment promise. Trade union members also have their doubts. Ian Gallagher, Secretary of Blackburn and District Trade Unions Council, told Friends of the Earth that: “Investment in the areas identified by the Million Climate Jobs Campaign [...] is a far more certain way of addressing both climate change and economic growth than drilling for shale gas.”

Will it deliver cleaner energy? Not as completely as renewables would.

America’s “shale revolution” has been credited with reversing the country’s reliance on dirty coal and helping them lead the world in carbon-emissions reduction. Thanks to the relatively low carbon dioxide content of natural gas (emitting half the amount of coal to generate the same amount of electricity), fracking helped the US reduce its annual emissions of carbon dioxide by 556 million metric tons between 2007 and 2014. Banning it, advocates argue, would “immediately increase the use of coal”.

Yet a new report from the Royal Society for the Protection of Birds (previously known for its opposition to wind farm applications), has laid out a number of ways that the UK government can meet its target of 80 per cent emissions reduction by 2050 without necessarily introducing fracking and without harming the natural world. Renewable, home-produced, energy, they argue, could in theory cover the UK’s energy needs three times over. They’ve even included some handy maps:


Map of UK land available for renewable technologies. Source: RSPB’s 2050 Energy Vision.

Will it deliver secure energy? Yes, up to a point.

For energy to be “sustainable” it also has to be secure; it has to be available on demand and not threatened by international upheaval. Gas-fired “peaking” plants can be used to even-out input into the electricity grid when the sun doesn’t shine or the wind is not so blowy. The government thus claims that natural gas is an essential part of the UK’s future “energy mix”, which, if produced domestically through fracking, will also free us from reliance on imports tarnished by volatile Russian politics.

But, time is running out. Recent analysis by Carbon Brief suggests that we only have five years left of current CO2 emission levels before we blow the carbon budget and risk breaching the climate’s crucial 1.5°C tipping point. Whichever energy choices we make now need to starting brining down the carbon over-spend immediately.

Will it help stablise the wider economy? Yes, but not forever.

With so many “Yes, buts...” in the above list, you might wonder why the government is still pressing so hard for fracking’s expansion? Part of the answer may lie in their vested interest in supporting the wider industry.

Tax revenues from UK oil and gas generate a large portion of the government’s income. In 2013-14, the revenue from license fees, petroleum revenue tax, corporation tax and the supplementary charge accounted for nearly £5bn of UK exchequer receipts. The Treasury cannot afford to lose these, as evidenced in the last budget when George Osborne further subsidied North Sea oil operations through increased tax breaks.

The more that the Conservatives support the industry, the more they can tax it. In 2012 DECC said it wanted to “guarantee... every last economic drop of oil and gas is produced for the benefit of the UK”. This sentiment was repeated yesterday by energy minister Andrea Leadsom, when she welcomed the North Yorkshire decision and described fracking as a “fantastic opportunity”.

Dependence on finite domestic fuel reserves, however, is not a long-term economic solution. Not least because they will either run out or force us to exceed international emissions treaties: “Pensions already have enough stranded assets as they are,” says Danielle Pafford from 350.org.

Is it worth it? Most European countries have decided it’s not.

There is currently no commercial shale-gas drilling in Europe. Sustained protests against the industry in Romania, combined with poor exploration results, have already caused energy giant Chevron to pull out of the country. Total has also abandonned explorations in Denmark, Poland is being referred to the European Court of Justice for failing to adequately assess fracking’s impact, and, in Germany, brewers have launched special bottle-caps with the slogan “Nein! Zu Fracking” to warn against the threat to their water supply.

Back in the UK, the government's latest survey of public attitudes to fracking found that 44 per cent neither supported nor opposed the practice, but also that opinion is gradually shifting out of favour. If the government doesn't come up with arguments that hold water soon, it seems likely that the UK's fracking future could still be blasted apart.

India Bourke is the New Statesman's editorial assistant.