Social mobility in Britain 'held back by income inequality'

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The Evening Standard
Britain's high level of income inequality means social mobility is worse than in other developed countries, the TUC claimed today.

A study by the union organisation found that half of a child's future earning potential in the UK was determined at birth, compared with 20% in other countries including Canada, Australia, Denmark, Norway and Finland.

The UK had the worst record on this front of any of the countries for which the Organisation for Economic Co-operation and Development has data, also lagging behind the US, Italy, France and Germany, said the TUC.

The study also found that Britain had a large wage premium to growing up in a better-educated family and a similar wage penalty associated with growing up in a less-educated family.

TUC general secretary Brendan Barber said: "The Government is right to identify that social disadvantage in the UK is a problem which is holding people back.

"The evidence shows that social mobility is greatest in societies with low levels of income inequality. For everyone to have an equal chance of success there needs to be a much smaller gap between rich and poor in the first place.

"Inequality rose sharply under the last Conservative government, but since 1997 its rise has slowed. Without the minimum wage and tax credits inequality would have grown even more under Labour, because the incomes of the rich and super-rich continue to outpace those of the rest of us.

"But cuts in public services and social security are almost certainly going to produce reduced levels of social mobility and increased inequality.

"A real programme to reduce inequality and enable social mobility would need higher taxes and fewer tax loopholes for the super-rich and a more highly skilled workforce, stronger unions and higher benefits."