After a term of office, are we any closer to taking the measure of this government? There have been endless task forces and the shelves of every department groan under the weight of thick booklets full of targets set. Yet the charge of inactivity, of a wasted term, persists. The Blair government is afflicted by a kind of reverse gestalt. It all adds up to something, but we don't quite know what.
In one sense, refusing to formulate too clearly a set of grand political objectives is understandable. Old Labour was so cumbersome because it was ideologically glued together. Instead, we have a managerial state which does what works, in an endless series of partnerships with market and third sector organisations. But works to do what, exactly?
The Clinton tenure is a lesson in the danger of politics without a lodestar. Clinton proved himself a first-rate political strategist. But what was his legacy? How far did his administrations change the US? This is a question of which the Blair government seems very much aware. Its four years have been punctuated by fitful striving for intellectual purpose under the rubric of the third way.
But, curiously, although the prime minister now stresses that the third way is "social democracy renewed," there has been little attempt to supply a renewed story about social justice. Meanwhile, the old left continues to conduct a stale argument focused on reducing income equality, which scorns what have been real achievements and wins few converts. The latest British Social Attitudes survey shows that, although 80 per cent of the population agree that the gap is too large between those on high and low incomes, only 37 per cent of people want active government redistribution-a remarkable example of willing the end but not the means.
There is a further problem for a story of justice based on reducing income equality-it is impossible to achieve. The tendency of market economies to distribute rewards unequally has become even more marked recently, as returns to skill and education continue to grow faster than returns to the rest of the population. Between 1979 and 1998/9 the income of the bottom tenth rose by 6 per cent in real terms, while the income of the top tenth rose by 82 per cent. The effect of the government raising income at the bottom-which it has-is that it simply slows the pace at which incomes are growing more unequal.
A realistic centre-left needs a new story about fairness, which takes account of economic realities and public opinion but also connects to a notion of the good society. Where is this story going to come from? It is a commonplace to say that there are no big ideas left in politics. Yet the last 30 years have seen a renaissance in academic political theory. In Thomas Nagel's phrase, John Rawls's A Theory of Justice "changed the subject" when it appeared in 1971. Yet for all the influence it has had on public policy argument in Britain, it might not have been written.
This is not because people in government have no interest in ideas. We have a prime minister who speculates about utilitarianism versus natural law and a famously erudite chancellor. The truth is that most academic political theory and sociology is dry and without regard for political constraint. Even good ideas may not translate into policy. Rawls's famous "difference principle" states that income inequalities are only justified when they improve the lot of people at the bottom of the pile. But how do we know when an income difference will accomplish this?
The silence also reveals something about the New Labour intellectual project. A useful test of any proposition is that if its opposite makes you laugh, then you are saying something banal or absurd. We prefer things which work. As opposed to things which don't? This is just a way of avoiding the force of Isaiah Berlin's dictum that not all good things can be had at once. When the things that we want collide, tough choices occur. Then governments need an intellectual compass.
The refusal to engage in tough philosophical combat means that Blair (indeed, any senior politician) was bound to fall out with the academy. Political theory is, among other things, a quest for definition. If that is one of its weaknesses, it is also the case that nothing sensible can be said until we have arrived at definitions. At its best, political theory operates a sort of clearing house. It can show us that if we commit to so much of this, we can commit to only so much of that. But the breadth of the Blair coalition means that definitions are best left unsharpened. As has been pointed out many times before that New Labour is systematically murky.
This essay seeks to shine some light into the murky hole in New Labour's thinking about equality, poverty and meritocracy, and tries to fit them into a new political narrative. It also looks at what is happening to these concepts, as far as they are measurable, in the real world. It concludes, tentatively, that the government does have a story it can tell, but that its theory needs to catch up with its practice. From a centre-left view, its social policy record has been sound, if not sparkling. The government's true failure has been poetic-New Labour is a republic from which the poets have been banished. Behind the numbers lies no vision of the "good life," even in outline.
In february this year, Tony Blair did offer a picture of his government's good society: "The mission of any second term must be this: to break down the barriers that hold people back, to create real upward mobility, a society that is open and genuinely based on merit and the equal worth of all... Opening up the economy and society to merit and talent is the radical second term agenda." Stakeholding and communitarianism have come and gone, but meritocracy could endure. It is easy to grasp and in theory it is already established as part of the ideology of all market democracies.
Moving from the aspiration of meritocracy to something closer to its reality is a huge task, one which will take several generations and involve complex compromises with other political "goods"-notably liberty (in particular the liberty of the wealthy). Nevertheless, here is a potentially compelling story of a society in which position and opportunity are related to talent, not social origins. This will require a set of policies to meet the two most important requirements of a meritocracy: extensive social mobility in both directions and a high level of provision at the bottom.
Meritocracy is almost, but not quite, synonymous with the more familiar phrase "equality of opportunity." Both are premised on mass democracies with high levels of social provision and low barriers between social groups (whether based on class or ethnicity). Both, conveniently for the left, combine social justice with economic efficiency; it is efficient to get the best people into the right jobs and that requires ladders upwards for bright children from poor homes. But it is possible to believe in equality of opportunity and reject meritocracy-indeed, this is Rawls's position. Meritocracy implies that people should be rewarded according to their talent-the first violinist should get paid more than the second, and so on. Rawls's egalitarianism rejects meritocracy; he argues that the distribution of talent is a "genetic lottery" which does not in itself deserve reward. Yet this offends a common-sense view of justice which includes an idea of merit-a talented footballer or doctor should be paid more than a less talented one (though talent is hard to measure). In fact, we do admire people for qualities they did not create, but inherited. And it is hard to disentangle talent from effort, so by rewarding superior performance we also reward graft.
There is, of course, a darker side to meritocracy, pointed out by Michael Young (in The Rise of the Meritocracy) and others. Those who form the meritocratic elite may claim an even larger slice of the cake than inherited elites, while those at the bottom of the pile may feel even more miserable if they are there on merit. Young's dystopia is a long way off; we can afford to become far more meritocratic before we face a tyranny of the intelligent. Nevertheless, we ought to be reluctant meritocrats, or rather meritocrats for whom a large rump of failures is an impediment to meritocracy, not a necessary consequence of it. As the prime minister said in February: "Meritocracy is not wrong. It is insufficient."
Meritocracy must be accompanied by a universal idea of equality of respect which transcends an individual's ability. Such quasi-religious assertions about human worth often sound pious when repeated in political speeches. In some ways they assert no more than the founding assumption of all liberal democracies: that all citizens have the vote and rights regardless of ability or income, and that all should be equal before the law. In other ways such assertions are plain wrong: we do not all deserve equal respect. There are some bad people out there-those, for example, who kill or rob. The most we can say is that people are due respect until they prove unworthy of it. None the less, the banner of universal respect is an important one-especially in a society with widening income differentials. It reaffirms that there are ways of judging people apart from income. For the effective provision of social support and ladders of opportunity, it is also vital that the agents of the state treat each individual equally and with as much respect as possible.
Here we have the beginnings of a story which might form a "minimum programme" for any centre-left government-a stress on high, universal, social standards (especially of income and education); and a pursuit of meritocracy without abandoning the less successful. The government has made a good deal of progress on this programme through its emphasis on performance in schools, targeted increases in welfare spending and labour market policy.
In the past four years we have seen a mandatory floor set for wages, an unusually active labour market policy and a healthy growth in jobs (although the last two are not necessarily related). The New Deal programmes, the employment zones and the job transition service are all attempts to improve the employability of the least skilled. Moreover, since May 1997, the working families tax credit, the increased threshold for national insurance contributions, and the 10 per cent lower rate of tax, have meant that the working poor have benefited more than any other group as a result of government tax and welfare policies. A family with one working adult has had an average rise in income of ?24 per week. The bottom tenth as a whole, many of whom are not in work, have done less well, although an Institute for Fiscal Studies study has shown that their post-tax income is 8.8 per cent higher on average as a direct result of policy announced since May 1997. This figure would be higher were it not for the regressive changes to indirect taxation in the form of tobacco and fuel duties. Apart from the latter, tax policy has been clearly progressive. Sixteen per cent of the population and 19.9 per cent of children are now classified as poor, using a variation on the definition of an income below half of the average. David Piachaud and Holly Sutherland have subtracted the effects of government policy to show that these numbers would have been 19.1 per cent and 26.3 per cent respectively-840,000 children are in households which are relatively and absolutely better off.
No doubt swifter progress could have been made and some of the improvement is the result of an unusually strong economy. But this surely represents a few shuffling steps towards a better, fairer, society. Not so, says the left and much of the social policy establishment-what matters is what has happened to income inequality. Here the story is less good. It seems the rich are still getting richer. Assuming constant earnings, the richest 30 per cent have experienced, as a direct result of government policy, a fall of 0.7 per cent in their average household income. But this drop has been more than counterbalanced by the growth in private sector earnings for higher earners of around 7 per cent per year. So income inequality has increased, notwithstanding a fair amount of progressive policy. If we are to judge the government on progress towards income equality, then it has failed.
Raymond Plant has written that the left and the right differ crucially on these questions: the right wing position is that poverty is alleviated as soon as the income of the poor rises in absolute terms, and the left-wing stance is that it is the gap between the rich and the poor which really matters. This is a classic case of the best being the enemy of the good. To say that improving life chances for the least-well-off represents failure because of a surge in bonuses in the City of London is absurd. A residual utopian pathology of the left seems to be kindled into life by this issue. The good may not be the best, but neither does it represent betrayal.
That is not to say that we should be completely satisfied with that minimum programme of a high social floor plus meritocracy. We need a "maximum programme" too-one which seeks to narrow the gap between rich and poor, which wants to challenge concentrations of private privilege in health and education, and even challenge market outcomes. One reason for this is that if the gap in income and life-style between top and bottom grows too wide, it could undermine the possibility of meritocracy. (John Goldthorpe has shown that the societies with least income inequality, such as Sweden and Norway, tend to have the most mobility. The US has a myth of mobility, but in reality less than Britain.) The maximum programme by definition will not be fully achievable, especially given the nature of the modern international economy, but it represents an aspiration. The important political point is that it should be seen as an evolution from the minimum programme, not a contradiction of it. I now want to examine how minimum and maximum might converse with one another, by considering poverty and social mobility.
First, the poverty debate. Taking the official definition of poverty as living on less than half of average income, you would expect that with a reasonably uniform spread of income, about 25 per cent of households would fall into this category. This is indeed the case. For a childless couple it means a weekly income of about ?130.
We need to be aware, though, that the official definition is measuring not poverty but income dispersal and can lead to notable absurdities. A strict apostle of income equality will currently be wishing for a further plunge in world stock markets. A recession, during which national income falls, closes the gap between rich and poor and thus, strictly speaking, reduces poverty even though everyone is worse off. The opposite also occurs. Poverty increased in the late 1980s when average income shot up. So a government could significantly raise incomes for the losers from the market economy and still see official poverty rise, because the winners did even better.
However, if the definition of poverty as inequality seems to miss out something important about poverty, then the claim from the right, that the label of "poor" should be reserved strictly for the destitute, seems to define poverty out of existence altogether. Poverty is, indeed, a partly relative experience. The set of goods which constitute poverty in any given society is inescapably relative to the expectations reasonable in that society at that moment in history. Humans are the only species whose needs have a history. The definition of poverty is rightly different now from what it was for Charles Booth. Poverty in Britain is different from poverty in Ghana.
This argument is not the impasse it seems. We simply need to supplement the relative definition of poverty with another, based on the extent to which people have access to certain goods. Last year, David Gordon and others produced just such a list for the Joseph Rowntree Foundation. This supplementary conception of poverty, which owes a great deal to Amartya Sen's work on capability deprivation, informs one of the government's most successful initiatives, the social exclusion unit. The very term "social exclusion" moves the argument away from the zero-sum game of income inequality on to life chances-what people need to lead a fuller life. It acknowledges that inequality is an arithmetical property rather than an experience: the hunger of the hungry, may be exacerbated by the fact that, somewhere near by, others are fed, but it is not the hunger itself.
If we think about poverty as in part an absolute condition, then this government has a story it can tell with some pride. The New Policy Institute has tracked 50 indicators of social exclusion for the Joseph Rowntree Foundation. They reported that, over the last year, 24 of the indicators were steady and 17 had improved. Overcrowding and low income households without central heating have fallen by a third in the last five years and there was a 28 per cent drop in rough sleeping in 1999. The minimum wage meant that 1.5m people, mostly women, saw their pay increase significantly. Further, the incidence of 11-year- olds failing to achieve level 4 at key stage 2 in English and Maths has fallen by a quarter since 1996. Three quarters of all New Deal employees are still in work. A higher platform for the poor is gradually being constructed. This progressive picture should not be lost-or even denounced-because private sector earnings growth is at the top of the cycle.
The second keystone of the minimum programme is meritocracy softened by a universal equality of respect. Meritocracy is a shop-soiled idea, but taking it seriously would make Britain more just and efficient and it would be popular. So how open a society is Britain now? There is a huge amount of data on this-much of it hard to interpret. Forty-two per cent of men and 36 per cent of women born between 1950 and 1959 have been upwardly mobile, although that is partly because the salariat has grown and the manual working class has shrunk. There is a much larger middle-class than there used to be. Hence, 73 per cent of men whose fathers were in the salariat have remained there during a period of considerable mobility from below. Further down the scale there is also a fair amount of mobility, but people move only short distances. Since 1991, researchers at the department of social security have tracked the British Household Panel survey to analyse income mobility. The data shows that although half of those in the bottom fifth of the income scale in 1991 had escaped by 1998, the movement was within a short range. Of that group, less than a quarter had made it into the top 60 per cent seven years later. A more optimistic picture is painted by Social Trends, which records that only 55 per cent of adults who were in the top fifth of the income table in 1991 were still there in 1998 and 49 per cent of those in the bottom fifth were there in both years.
The more telling measure is the likelihood of a person born in a low social class making it into a higher bracket. John Goldthorpe and Colin Mills, using the General Household Survey data for 1973-1992, found no significant changes in relative social mobility during the last 30 years. The verdict seems to be that the middle class has grown but that relative social mobility is stable. The chances of a talented child from a poor background making it through to the top has changed little over the past 100 years.
There is both a strong and a weak version of the politics of meritocracy-corresponding with the minimum and maximum programmes described earlier. The weak version acknowledges that a meritocracy must coexist with a wide spread of incomes and that people will be able to pass on advantage to their children. The strong version wants to narrow the income gap and close off some opportunities to pass on advantage. The two most serious obstacles to equal life chances are the ability to purchase educational advantage and the right to pass on wealth. These two advantages equip people with skills and resources to take to the labour market and diminish the consequences of failure. But no Labour government has ever seriously considered closing private schools. The official policy remains as it ever was: to improve the state sector so that the rationale of going private disappears. But as long as half of the places at the top universities go to the 7 per cent of children educated privately, a real meritocracy is inconceivable.
A weaker, but more appealing option than trying to close private schools is to work vigilantly on access to higher education and try to build bridges between the public and private sectors-as Peter Lampl's foundations are trying. The facilities of some private schools are increasingly being made available to state pupils, with the active sponsorship of the DfEE, especially in preparation for university. In the state sector itself, resources should be concentrated in two areas: on the talented child from a poor background and on "early years" education. This government has stressed the importance of life-long access to education but the brutal truth is that the earlier the intervention, the greater the effect. A realistic meritocrat will argue for a radical reordering of spending priorities throughout the life cycle. The pattern of education spending in Britain is concentrated on the later years when, in most cases, the damage has already been done. (An egalitarian will object to any concentration of resources on able children, preferring a small improvement for all to ladders upwards for some. This is a false dichotomy.)
There is plenty we can do within the bounds of possibility. That is not to say that even a minimum programme of meritocratic policy will be easy to implement. Meritocracy has losers-the downwardly mobile-and they will try to hang on to what they have. Opening up private schools also has its limits. The parents of children at fee-paying schools will complain that they are paying for education three times over: once for state schools through the tax system, second, for their own children's school fees and third, for the state school children who are now sharing private school facilities.
Education policy will remain central to a meritocratic government. But there are other ways of rising apart from going to university-one of them is in business. A string of business and enterprise schools has just been announced. Perhaps more important, an attempt is being made to reform the insolvency laws, to remove the stigma of bankruptcy which is higher in Britain than in most comparable countries. This is no use without access to capital. The social investment task force is experimenting with the provision of capital for high risk ventures in deprived areas.
This also connects to the broader issue of government intervention on accumulated wealth. Wealth alters the burden of risk. It provides capital to fund a good idea, insurance against hard times, or a route into the generation of more wealth, through equities or housing. As the Fabian Society document Paying for Progress points out, the distribution of wealth is even more unequal than the distribution of income. The wealthiest 10 per cent own 52 per cent of the nation's wealth-up from 49 per cent in 1982. This is likely to worsen. The use of share options is opening a gap between the public and the private sector workforce. Rising house prices add to the wealth of owners, who are outstripping renters. Britain currently has ?381 billion of unmortgaged housing assets and a second generation is now inheriting the houses bequeathed by their parents. At the bottom of the scale, the proportion of households with no savings or capital at all has risen to 10 per cent from 5 per cent 20 years ago. One option to dampen this trend is a wealth tax. The Fabians rejected a wealth tax and proposed an ingenious transformation of inheritance tax into a capital receipts tax, in which the rate declines as the legacy is more widely spread. This is a good, though weaker, option. It raises less revenue and does less to address the trickle-down of privilege, but it is a bridge between aspiration and reality.
Another bridge between the strong and the weak conceptions of a meritocracy bears on the idea of equalising risk across the population. The main reason that the poor are so risk-averse is that the consequences of failure are so much greater because they are protected less by financial insurance. We could add to the capacity for risk, and therefore reward, at the bottom of the income pile, by government loans to the poor and by a judicious use of asset-based initiatives-perhaps paid for out of cutting back the still extensive middle-class welfare state. The "baby bond" suggested by Gavin Kelly and Rachel Lissauer of the IPPR think-tank, and the "capital grant" suggested by Julian Le Grand and David Nissan for the Fabian Society, are ways of altering the burden of risk of the poorest. This argument might even be pushed into the family of "citizen's income" proposals. The purpose of all these policies is that they provide a platform for the least well off to capitalise on an idea, to turn income into wealth, to soften a fall.
This government has been surprisingly reticent about social justice. It has undersold its own successes, especially in raising the social "floor"-fearing, perhaps, the anti-welfare sections of the electorate as well as the left's obsession with reducing income inequality. A second term should see further progress in raising the floor, but also several new initiatives to promote meritocracy. An open, socially mobile society with a high floor of social provision is not an original aspiration; it was broadly the aim of the new liberals in Edwardian days-but it remains far from achieved. It is a realistic, measurable, goal; unlike vague rhetoric about solidarity or community. The idea of "high floor plus meritocracy" gathers together many of the strands of existing government policy and presents a clear, popular, case about what is wrong with the country. It must be complemented by an equality of respect for all those citizens who cannot, or do not wish, to compete. Furthermore, meritocracy requires that we do not abandon completely the aspirations contained in the "maximum programme." A realistic centre-left should worry less about the income gap than about the life chances of those at the bottom, but it should not disregard the gap entirely-if it becomes too wide, it makes meritocracy even harder to achieve. The dialogue between "minimum" and "maximum" must continue-and in that dialogue lies our outline of the good society.
