Watch: Alison McGovern MP outlines how employment can boost social mobility in the UK

Speech as delivered.

As Justine said, we come at this question of social mobility from different political traditions. 

John, Justine and I are all northerners though, and we have shared some life experience which I’ll reflect on. 

I suppose my 13 years in the House of Commons have shown me that your political views are terribly important, but sometimes things are so important that you have some hope that you might persuade those on the other political side, and that’s where I think we get to make real progress in some of the big challenges that are ahead of us. 

So, I’m pleased to work with you, and with the Purpose Coalition, to try and think new about social mobility, and that’s what I want to set out today. Because, all of the businesses that are part of this Coalition are included in a movement that I have noticed more and more as Shadow Employment Minister: they’re a group of businesses and organisations who are prepared to engage in the conversation about how the United Kingdom should change to make opportunity more widely spread.

In thinking about this question of opportunity, it’s been clear to me that many in industry, outside the world of politics, are ahead of us.  Certainly ahead of the House of Commons, where far too many of the old rules still apply.  On the one hand, that makes me worry if I’m honest for politics, because I don’t think we have changed fast enough. 

But on the other hand, it makes me really hopeful for the next generation: because I think there are people looking out for today’s young people, and who are anxious for a government with the same level of ambition that they have.

So, in support of that attitude, this morning, I want to make an argument for even more ambition. I want to talk about a central mistake in the UK’s labour market policy which I think represents low ambition for our people - which is an anathema to improving life chances. 

I think the low ambition often stems from a low opinion of people which is the consequence of short-sighted policy making, and in the worst case, is a result of class discrimination about the sort of jobs that people do. 

As part of their Deaton review into inequality, the IFS recently reported on new analysis of the social mobility challenge.  They found no evidence of a recovery in social mobility for the latest cohort of UK citizens. They also found that, “differences in educational attainment are not the dominant driving force in the differences in mobility between geographical areas or ethnic groups”. And just yesterday, the Government’s own social mobility commission reported to say that young people’s pay only recovered to the levels seen before the financial crisis - 2008 - in 2021, before falling again in 2022.

So, however you look at it, its chances at work and in pay that matter, just as much as school for social mobility. So that’s why I think that employment policy can do more to provide opportunites, and that ambition for everyone - including those already of working age - is a vital element of Labour’s mission to see the highest sustainable growth rate in the G7.  

We have very big ambitions for children and young people, as Bridget and Keir set out in our Opportunity Mission, and we think that in seeking greater life chances, employers and employment policy have just as much of a role to play in making sure that growth benefits everyone. 

So that’s why as well as targeting the highest growth rate in the G7, we want to see the highest employment rate in the G7.  Yesterday’s jobs figures show a fundamental weakness in this area.  As a country, we are still behind where we were pre-pandemic terms, and that structural weakness that is having an impact on social mobility. 

We want the best possible outcome for Britain, and we know that that’s where as many people that can work, do – and crucially that they’re in good well-paying jobs. Of course, if people are out of work, we want them to have support to get back into work.

But I think there’s a weakness and we need to go further. It may not be the conventional way of thinking about ‘social mobility’, but with - on the face of it, still even despite yesterday’s figures - historic low unemployment, we should ask ourselves whether our economy could be offering people better prospects to move on and move up in work.

And this is my argument about how we can reform employment policy to improve life chances.

We know that, looked at from the macro level, there is a big flaw in our economy - too many people are getting paid too little - and there’s a geography to it. In the North East, 8% of jobs are paid at or near the minimum wage, compared to 4% in the South East.

But at the micro level, this is because the choices that people have are often too narrow: they can’t get on in life because the barriers are too high, that could be childcare, public transport, not being able to work flexibly.

The government has a role in helping people clear these hurdles, but at the moment, I think it is failing to do so because of a low ambition mindset. We are wasting the time and talents of too many of our citizens by failing to get them a good enough job that’s going to help them rise. 

So I think the right mindset requires change at three levels.

First, fix what goes on inside job centres. I don’t know anyone who thinks that right now what DWP is offering is truly ambitious for people. 

It’s also true that - as the Government’s own Social Mobility Commission found and reported on yesterday - geography makes such a difference to life chances that towns and cities need more power and influence to change the postcode lottery for good jobs in the UK. 

Finally, at the UK level we need to use the power of UK legislation to shift public sector culture and practice by bringing into force the legislative duty on public bodies to act against socio-economic discrimination, so that people aren’t held back because of low ambitions made on their behalf.

So, those are the three levels at which we need change: the job centre, the town and city, and the UK level.

I think the current policies of the DWP fail, and we can see it because too many people end up in low paid work. Inside jobcentres, you get a 10-minute appointment, and it’s impossible to give good quality support and advice in that environment - and I think that’s particularly true for young people. We’re seeing a growing problem of young people suffering post-pandemic with a combination of low educational attainment and mental health issues, and I think that’s where the job centre environment has really got to change. 

I would ask all the businesses and organisations here today, ‘Do you think we can do better than that?’ Because I do. 

Do you think that it’s good for our economy to expect people to apply for jobs for the sake of it? Or would we all be better off if we took a little more care to set people on a path that they wanted to be on, and that we know would grow their skills? 

What Labour has proposed is better employment support, getting people into the best possible job, in line with their ambitions.

I think the DWP have mistaken the current state of the UK economy. In a tight labour market, there are more opportunities to help people. 

I think our job centres, unfortunately, are suffering from this low ambition, and I think we see the consequence of this policy mistake in the fact that - as Ruby McGregor-Smith found - only one in six low-paid workers ever truly escape low pay, and that has got to change. 

When we fail to see the potential of that employment support, help and advice, we’re hampering the ability of a well-functioning labour market to make best use of people’s time and talent. It’s not just about public services, it’s about making the market for people’s labour work as it should. 

Quickly on geography. As I said, as we three know, the place you grow up in does a lot to shape life’s experiences. Lots of people in the UK know what it means to grow up somewhere with limited job opportunities. No one can expect every single career to be open to them wherever they are, but the imbalances in the UK mean that economic clusters in London and the South East have a disproportionate effect on social mobility. 

That’s why we need a coherent plan for every single place in our country that will make it more likely that future generations aren’t limited by geography.

The postcode lottery for work in the UK is holding people back, and I think we need to change that with a better plan for our places. 

Finally, I just want to touch on this idea of the public sector duty to prevent socio-economic discrimination.

I don’t think it’s an inarguable case that such a duty would really make a difference, but I think it’s clear the UK has long-standing problems of poverty and inequality. And these consequences are not short-term, low incomes have a wide ramification for overall life chances. 

I think more broadly, if you speak with an accent we know - and I know this from my experiences in the House of Commons - assumptions are made about you. 

If you come from a certain postcode in the country, assumptions are also made. If your school, your clothes, your experiences or anything else gives you away as being from a 'lower' class of society, I think assumptions are made about people. 

Whilst it’s complicated, we know socio-economic discrimination when we see it. That feeling of being looked down upon comes from a real imbalance of power. 

The Equality Act 2010 intended to place a duty on public authorities to try to tackle this form of discrimination, and whilst many in the private sector are already doing this, taking active steps, doing fantastic work to provide apprenticeships and more diverse routes into work, I think public bodies do need to have due regard to tackle this kind of discrimination, just as they do with racism, sexism and discrimination of all other kinds. 

Labour will bring that socio-economic duty to tackle inequality into force, requiring the Government to reform itself. 

You’ll have also heard yesterday my colleague Angela Rayner setting out our commitments to support people’s better life chances at work. 

So, in summary, to help people move on and move up, we'll target the highest employment rate in the G7 but, for it to be sustainable, we will change Job Centres and improve the quality of employment support, help people get into the right jobs, and break the cycle of low-paid work with little progression. 

We want to support people looking for work to develop their learning and skills, improving people’s choice of jobs and thus Britain’s productivity, and we’ll do a lot to fix access to work. Recruiting more mental health workers, tackling one of the biggest problems in our society.

Taking a towns and cities approach - as I’ve said - we will reform employment support so that local labour markets benefit from local expertise.  Where we have devolved institutions already in place - and I’m sure many of you will have worked with them in Greater Manchester, in Merseyside and elsewhere - many of these bodies already want to take more of a leading role in tackling social mobility inequality and getting people better jobs to support local labour markets, and we want to help them do so. 

Our green investment pledge will bring better jobs to places that need them, then we can employ job centres to help people get those new, good jobs - and end the culture of ‘any old job will do’. 

When it comes to the national picture, I do think that Clause 1 of the Equality Act will be crucial. 

As I’ve said, the government must reform itself, DWP can play a much fuller role in developing national data for different regions to making sure that we make progress, and Justine and I are both geeks on the data for progress front, so I trust that in the Q&A we will get into a new vision for DWP in investigating the reality of local labour markets and providing that data on what works to really help people. I think DWP could then really live out its mission as a department to really improve people’s life at work. 

Business has a huge role to play.  Where companies can open up opportunities across the country they can provide a path upwards to better skilled, better paid work.  And I know that those organisations, like many in this audience, have already been giving this idea a huge amount of thought, and putting it into practice.

My final thought, to conclude. 

In the United Kingdom, people are in school for 14 years of their life. My generation will work for 50 years. So, I think it’s absurd to think that all the work of tackling inequality and giving opportunities and life chances should be done by just the 14 and not the 50.  The best businesses already understand that.

What I am proposing - overall - is a changed attitude in government that doesn’t see entry into work as the end.  It is not beyond us to work collectively so that the 50 years we spend in work are equally time for learning, self-progression, development and change as the 14 we spend in school.  

I think those values of progress are shared by very many people in the British business community and I look forward to working together in pursuit of our shared goal.