Alan Milburn speech on social mobility

Rt Hon Alan Milburn

Chair of the Social Mobility Foundation

“When politics is weak, society needs to be strong”

Tuesday 7th May 2019

Linklaters LLP, One Silk St, London EC2Y 8HQ

Brexit is the most significant challenge our country has faced since the Second World War.  It is an economic, legal and constitutional nightmare to resolve.  For business it has created massive uncertainty as well as rising costs.  Unsurprisingly it is front and centre of the political discourse today in Britain. Quite what the solution will be it is currently hard to tell.  The one certainty is that the political class is focussed on Brexit almost to the exclusion of all other issues.

How long this single-minded focus will last no-one really knows.  But if Brexit does eventually happen it will not be a single process completed on a single day.  The unravelling of the UK’s relationship with the EU will take years of political effort and the impact on our economy and society will be profound.  Both the causes and consequences of Brexit have huge ramifications for the shape of our country and its politics. It is a story that will run and run.  It will dominate political discourse and consume public policy effort for years to come. What is more, given the political ructions it is causing across the political parties it seems highly likely that even if Britain leaves the EU, the fracture lines will continue to widen and deepen over time.  Anyone who believes there will come a moment when business as usual is resumed seems to me to be barking up the wrong tree. Personally I cannot see how the duopoly of Labour and Conservative that has dominated politics for the best part of a century can survive.  The game of consequences has yet to be played out but I believe the writing is on the wall for the old body politic.

Over decades party loyalties have frayed. Successive crises - the global financial crisis and the expenses scandal in particular - have served to widen the gulf between politics and the public.  This is not something that began with Brexit.   What it has done, however, is to expose the internal divisions within the established political parties and unearthed a diversity of views that are struggling to be contained inside two organisations. 

Arguably a more diverse political landscape would be more representative of modern Britain: though it would it be an enormous irony that just as the UK seeks to leave Europe’s institutions we end up aligning with a more continental political system, with its multiple parties, coalitions and proportional voting methods.

Nor will this be a quick process.  The break-up of the old political order, if it occurs, is likely to be long, slow and painful.  The problem is this: the political class risks a profound fracture with the public mood if the great non-Brexit challenges the country faces are relegated to the bottom of the political and policy agenda. That is where they sit today. Sidelined.   Ignored. Untouched.   That is not sustainable.  Britain is already in the grip of a housing crisis.  Our transport system is creaking and needs more long-term investment.  Our health and social care systems need to be put on a sustainable footing.   So too our welfare and pensions systems to cope with demographic change.  The transition to a more environmentally sustainable economic model will require far-reaching transformation - as will our skills and education system to cope with technological change. 

Above all, the divisions - across regions, generations and classes - that helped give rise to Brexit in the first place require political and public policy focus if they are to be healed. Currently they play second fiddle to Brexit.  The people who are paying the highest price for this political neglect are those in the Brexit-supporting ‘left-behind’ towns and counties of our country.   Of the 65 local authority areas the Social Mobility Commission identified as having the worst prospects for getting a good school, finding a decent job or being able to buy a home all but 5 voted to Leave in the 2016 EU referendum.  By contrast, the vast majority of the 65 best areas for social mobility voted Remain. 

The divisions we face in Britain impact many more people and places than just the bottom decile in society.  Whole tracts of Britain feel left behind because they are.  Whole communities feel the benefits of globalisation have passed them by because they have.  Whole sections of society feel they are not getting a fair chance to succeed because they are not. There is a growing gulf between our country’s great cities - London especially - and the new social mobility coldspots in our country which are concentrated in remote rural or coastal places and in former industrial areas.  These towns and counties are being left behind economically and hollowed out socially.

There is a profound social crisis in Britain today and it is getting worse not better. That it should be shunned by politics is outrageous and it is dangerous.  These are places where the public mood often oscillates between sullen sourness and downright anger.  They are the cousins of rustbelt America.  On both sides of the Atlantic society is polarising - and so are our politics.    It is easy to rail against those who voted for Donald Trump or to leave the EU but the sense of political alienation and social resentment in so many parts of both the UK and the US is grounded in economic and community dislocation.   Across Europe ugly forms of populism are on the march.  If we in the UK are to avoid that fate the deep inequities that scar our nation must become a priority for action. 

It is time to recognise that Britain cannot continue as a society fractured, not just by income or class, gender or race but between generations and geographies.  The growing gulf between the haves and the have-nots is multi-dimensional in its nature.  Over the last 40 years only 10% of national economic growth went to the bottom half of the income distribution.  Two-fifths went to the top 10%.  Meanwhile 5 million workers - mainly women - earn less than the Living Wage. Poverty, once the preserve of the workless, is now concentrated in working families.  Just one in six people who were low paid in 2006 had managed to escape the low pay trap by 2016. Britain has a higher proportion of people in low paid employment and a higher incidence of low skills than other comparable nations and to compound the problem real wages are lower today than they were before the global financial crisis.

These divisions, however, are not just the product of a few years of austerity.   The truth about Britain is that over decades we have become a wealthier society but we have struggled to become a fairer one.  The twentieth century expectation that each generation would be better off than the preceding one is no longer being met.  It is the young people of our country who are paying the price.  Those born in the 1980s are the first post-war cohort not to start their working years with higher incomes than their immediate predecessors. Home ownership, the aspiration of successive generations of ordinary people, is in sharp decline, among the young especially. Today only one in eight children from low income backgrounds is likely to become a high income earner as an adult. 

A country where too often demography still determines destiny sits uneasily with the core British value that everyone should have a fair chance in life.

My instinct is that people in Britain are uncomfortable with these divisions and they would like to see them healed. After years of austerity there are signs of change – most people now want more public spending and more wealth redistribution. In 2010 more than half the public backed spending cuts to restore public finances.  Now fewer than one-fifth do. Today over 6 in 10 people support tax rises.

There is a fertile soil in which the politics of equity can grow. And it is welcome that a Britain which is less elitist and more equal is now the notional approach of all the main political parties.   Getting Britain moving again socially should be the priority for our politics.  But it is not.  And if I am right it will probably not be for many years to come.  There is a vacuum and currently no-one seems able to fill it. I do not believe that is a sustainable situation.   There is a mood for change in the nation.  And change is increasingly being led from within civil society.  Across the world social movements are springing up on issues as diverse as environmental protection and sexual abuse.  These are movements that are not just protesting.  They are changing the public discourse and - critically - they are impacting what is happening in society.

In a very quiet way, the same thing is happening with the growing efforts we have seen over recent years by schools and universities, employers and professions, councils and charities to address Britain’s profound social mobility problem. Take universities. There is not a university in the country today that does not have a programme to widen participation and improve fair access.  Of course some are more successful than others. The pace of change can be frustratingly slow.  But progress is being achieved.  There are more working class youngsters in higher education than ever before and the gap between those parts of the country that send most to university and those that send least has narrowed.  That is because social mobility has moved from being marginal to being mainstream business for universities.

Organisations like the Social Mobility Foundation have played a catalytic role in helping institutions in civil society to embrace the social mobility challenge.  One of the reasons I am so proud to have become the SMF’s new chair is because it is successfully changing the life chances of thousands of young people from disadvantaged backgrounds by providing practical programmes to help them realise their potential. Around 65% of the young people we help each year enter a leading university and there are now over 150 employers that employ SMF alumni including Linklaters, J.P Morgan, KPMG and the Civil Service. They are there wholly on merit, but they needed to be given the opportunities to shine that they were not otherwise getting.

Because of course it takes two to tango.  The SMF’s focus on helping able low income youngsters to realise their potential relies on the active engagement of employers and universities.  We have been heartened by the number who are embracing the social mobility challenge and devising their own means of tackling it. From the BBC to the Civil Service employers have ignored the siren voices arguing that to record data on the social backgrounds of their workforce would lead to ‘social engineering. Instead they’ve pressed ahead and found it shines a much-needed spotlight on how their organisations recruit and what they need to do to have a more diverse workforce. It was deemed a risk when employers such as PWC or Grant Thornton changed their recruitment process to remove the emphasis on academic grades, but they found when they did so they didn’t just find people who were as good as their previous hires, they found people who were better.

There are countless examples of employers doing their bit but their collective efforts are not yet commensurate with the scale of the social challenge the country faces.  The absence of politics and public policy from the battlefield merely highlights the yawning chasm that needs to be filled if the promise of a brighter fairer future for Britain is to be realised.  At a time when politics is weak society needs to be strong.  I do not say that purely because I believe there is a responsibility on employers, educators and local leaders to step into the space created by the retreat of politics.   Nor am I naive enough to believe that a groundswell for change amongst institutions in civil society can replace what national politics at its best can do.  What I do believe however is that we cannot stand idly by and let this social crisis envelope our nation. And perhaps more importantly I believe that alongside the responsibility to act there is an opportunity to change how these institutions are seen.

The biggest opportunity resides with employers.  The recent Edelman Trust Barometer reveals that across the globe "my employer" is significantly more trusted by the public than NGOs, business, government and media. But there is a catch.  Trust in employers has to be earned.  It is not a free good.  According to Edelman almost 3 in 4 people believe that employers should be taking actions that both increase profits and improve economic and social conditions in the community where they operate. Employers that do are rewarded with greater commitment (83 percent), advocacy (78 percent) and loyalty (74 percent) from their employees.

When, since the global financial crisis, confidence in business to do the right thing has fallen there is an opportunity to change how it is seen in civil society.  But that requires employers to embrace the new rules of the trust game - to be successful economically and to do good socially. The adoption of this contract is the key to restoring public faith not just in individual employers but in the ability of a market-based economy to foster greater social justice.  Social mobility can be a rallying point to prove that modern capitalist economies like our own are capable of creating better, fairer and more inclusive societies. It is the best antidote to the growth of political populism, both of Right and Left, we are witnessing across the world. In my view it is the defining issue of our age. 

The employers who have entered the Social Mobility Employer Index in the last two years are leading the charge. They collectively employ 1.4 million people across 18 different sectors, from law and banking to engineering and retail. The Index has quickly become the means of assessing which employers are doing the most to improve social mobility in our country.  While it is true that Britain remains a deeply elitist nation where the chance of getting a well-paid job in a top profession is still strongly correlated with social background, these employers - in financial and professional services, in law and in medicine, in government and in the public sector - have come to the realisation that a different mindset and a different set of processes are needed if they are to make their intakes more representative of the public they serve.  They are making these changes both because they see the social need to do so and because they recognise the business benefit that greater diversity can bring.  This year’s Index is now open for employers to enter and I hope many will do so by 28th May.

The question, then, is what should be done if you are an employer or a profession which wants to make a positive contribution to improving social mobility in our country?  There is no point trying to boil the ocean. The starting point is to focus on the things that we know have the biggest impact.  There are five practical steps that employers and professions can take.  Together they form part of a new agenda for social mobility in our country powered, not by political action, but by societal action.    

First, changing recruitment practice.   When top professional services firms give seven in ten job offers to graduates who had been educated at a selective or fee-paying school that is not the natural order of things:  it is the perpetuation of elitism by custom and practice.  The same happens when recruiters for our country’s top firms overly focus their attention on a small number of selective universities. Or when a young person at a selection board fails because of the accent they have, the places they have travelled, even the clothes or shoes that they wear. While these barriers remain in place too many talented young people will be shut out. Thankfully some firms have introduced new recruitment processes to ensure they’re judging potential rather than simply past academic performance and polish. They’re removing grade requirements because they’ve found grades at school do not predict how well you’ll do the job. They’re removing the name and the university of candidates so that it doesn’t impact whether they get shortlisted or not. Some have even introduced games to their selection process that they think better predict whether or not you’ll have the skills to succeed in their environment. The results of doing so are promising.  More employers now need to achieve a better balance in where they recruit.  Too many still look for candidates in places and at universities where less advantaged young people are under-represented.  That needs to change.

Second, opening up new routes for advancement into their organisations.  Some employers are opening up non-graduate routes into employment. There is untapped potential here - for example through the use of higher level apprenticeships to provide new opportunities for less advantaged youngsters.  More firms are ensuring that internships are openly advertised and fairly paid. All need to do so.  Other are broadening their work experience programmes beyond friends and family to young people who do not have these connections but do have potential. Such broadening is especially welcome when it also reaches schools and colleges outside London.  While the Capital benefits from a plethora of initiatives, the picture is much more patchy in the regions. Large professional employers in particular have the opportunity to correct that imbalance.

Third, helping people get on as well as get in. We have growing evidence that even where employers are recruiting a more diverse workforce the culture of the workplace can prevent new lower income recruits from progressing  They can feel they need to dress differently, speak differently and pretend to understand cultural references they’re not familiar with. They sometimes hide their background as they feel embarrassed by it. And where data is available it often suggests such people are not promoted at the same rate as their more advantaged peers and they leave their organisations earlier than others do. People from working class backgrounds who get a professional job are paid around £7,000 a year less on than colleagues from more affluent backgrounds. Employers have worked hard to make their cultures more welcoming to women, ethnic minorities and those who are LGBT. They now need to make sure they’re equally welcoming to those who are not from a middle class background. Data here is key – employers need to both know who they’re recruiting and then how they progress once they’re in. Similarly all large employers should be developing strategies to provide their low-skilled workforces with better opportunities for career progression by continually reskilling people so they are better able to cope with the challenge of change. And when only one in six low paid workers in 2006 had made their way out of the low pay trap a decade later - meaning millions - women especially - have got jobs but don’t have careers every large employer - especially those in the public sector - should sign up to paying the real Living Wage as a step towards eradicating working poverty in our country.

Fourth, employers can help address another key imbalance - in regional employment.  Large employers can play a part in ending the seemingly inexorable drift of the best job opportunities to London and the south east. In London, the number of professional jobs has increased by 700,000 in the last ten years or so, but only by 140,000 in the West Midlands and in the North East by less than 60,000.  Limited education and employment opportunities in many urban and rural communities have forced aspirational youngsters to get on their bikes in order to get ahead.  In particular the lack of professional job opportunities for locally born graduates is causing a brain drain which is hollowing-out too many towns and counties.  In the process it is creating a new geography of disadvantage in Britain that transcends a simple North:South divide. A less divided Britain will require a more redistributive approach to spreading education and employment prospects across our country. Here local councils, mayors and development agencies need to provide the right incentives to achieve better balanced economic growth across the regions of our country. And employers need to think about geographical diversity not just social diversity when it comes to their locational decisions.  

Finally, they need to advocate for the changes they’re making, both to their own people and to other organisations they can influence. It is no easy feat to change the way things have always been done, particularly when you’re going to be the first in your sphere to do so. But those that have taken the leap of faith have found it pays off. Senior leadership is crucial here. Significant change rarely happens unless those making it have backing from the leadership of their organisation. Senior leaders need to advocate the rationale for why the organisation is making the changes it is – to help them access all of the country’s talent – so that their staff support the changes made. Those senior leaders also need to use their platforms to encourage their clients, their suppliers and their peer organisations to make similar changes. Many more are willing to consider adjusting their approach if they see it has worked elsewhere and those with a great story to tell have a responsibility to tell it.  There is an opportunity in particular for employers to ally with schools, colleges, universities, councils and so on to lead the development of local social mobility action plans that align local efforts and resources behind programmes for change.  

None of these things are impossible to do.  Some employers and professions are already doing them.  But a far bigger national effort will be needed to crack Britain’s social mobility problem.  In the next few months the SMF will be launching a new arm of the organisation intended to galvanise the nation to action.  Its will seek to create a coalition of the willing - employers, educators, decision-makers - to do more to tackle our country’s lamentable track record on social mobility.  

Of course it is no easy task. But the good news is this.  There is enough evidence globally – and in our country’s own history – to know that with the right approach the transmission of disadvantage from one generation to the next can be broken.  That will require councils and communities, schools and universities, alongside employers and professions, in all parts of our country to up their game.  The prize on offer could not be greater.  A nation at ease with itself.  A society where aspiration and ability not birth or background dictate progress in life.  A Britain with a level playing field of opportunity. 

Our country is calling for change.  Politics may not be heeding that call but organisations in civil society have the opportunity to do so.   If they do, they can help make Britain fairer and stronger.   This is the time to step up to the plate and be part of a movement for social change.  I hope you will join it.