| 9 | Progress in Tackling Beveridge’s Five Giants |
| The Successes and Limitations of Social Reform |
I started the book by asking how much progress Britain had made over the course of my lifetime in tackling Beveridge’s five giants of Want, Disease, Ignorance, Squalor, and Idleness. I also asked how well Britain’s progress compared with that of peer countries—Canada, France, Germany, Italy, Japan, Sweden, and the USA—and whether progress had been shared across different sections of British society. Had the giants become more selective in whom they threatened so that disadvantaged groups were left behind?
To Beveridge’s five giants I added the sixth giant of unfairness or inequality of opportunity. And I also asked whether, in the pursuit of material progress, Britain might have lost some other strengths which I remember (or perhaps imagined) from my childhood—strengths of social cohesion and a sense of solidarity and belonging. Had these been undermined by rising inequality or increasing ethnic diversity?
In this concluding chapter I aim to draw together the evidence presented throughout the book and to see what answers I can provide to these questions. As I warned at the outset, there are more questions than answers. Some of my answers will be fairly robust while others are much more provisional—the data are often patchy, suspect, or contradictory. The frequent revisions to official statistics, for example, mean that they are not always a solid guide to change over time. Moreover, the operation of Goodhart’s law—that once a measure becomes a target, it ceases to be a good measure—led me to be particularly sceptical about the value of official statistics on examination results for measuring progress in tackling the giant of Ignorance.
In this chapter I shall also put forward some suggestions about the possible reasons for progress, or its absence, in Britain. In particular, what can we learn from the comparisons with peer countries? Did Margaret Thatcher’s reforms in the 1980s, for example, lead us to move closer to the USA and away from countries of continental Europe like Germany and Sweden with their more regulated economies and extensive welfare states?
Britain had started the post-war period with a Labour government which largely shaped Britain’s economy and welfare state for the next thirty years. The 1945–50 Labour government established the National Health Service, provided free secondary education for all, nationalized industries such as coal, railways, electricity and gas, iron and steel, and the Bank of England, initiated a major programme of slum clearance and construction of social housing, introduced an extensive programme of social insurance as recommended by Beveridge, and levied high tax rates in order to pay for public services. Subsequent Labour and Conservative governments up until 1979 maintained this broad framework of a mixed economy and welfare state, although varying some of the details—most notably introducing legislation to outlaw discrimination against women and ethnic minorities and replacing the tripartite system of grammar, technical, and modern schools with comprehensive schools. For these first three decades after the war, the political economy of Britain was much closer to that of our European neighbours than to the free market model of the USA.
Margaret Thatcher’s three administrations between 1979 and 1990 radically reshaped this post-war settlement and moved Britain much closer to the US model. Her administrations gradually privatized a large proportion of the public sector, notably the basic utilities of water, power, and telecoms (substantially weakening the trade unions in the process). Her administrations sold off a large proportion of the social housing stock to tenants. She deregulated the labour market and the private renting sector of housing, and introduced market forces into education and to a lesser extent into the health service. Taxes on the better-off were sharply reduced, contributing to the growth of inequality in the 1980s, while the value of several welfare benefits were reduced relative to average earnings.
Margaret Thatcher’s reforms largely remained in place, or were further extended, under subsequent Conservative and Labour governments. Since the 2007/8 financial crash, austerity measures designed to balance the books further cut back public services and reduced benefit levels for some types of claimant (although hitting the young and those of working age more than pensioners). By the end of the twentieth century political economists such as Peter Hall and David Soskice described Britain as having a liberal market economy similar to those of the USA and Canada in contrast to the coordinated market economies of Germany, Sweden, and Japan.1 Similarly, Britain’s welfare arrangements were moved away from what has been termed the social democratic model of universal, publicly funded provision to a more US-style liberal model with lower benefits, extensive means testing, and greater reliance on market forces.2
However, my judgement is that Margaret Thatcher’s reforms went much further in the economic and housing spheres than they did in the spheres of health and education. There was nothing really equivalent in either health or education to her extensive programme of privatizing public sector utilities. In the case of education, the interventions were fairly limited and, crucially, secondary education remained free and universal up to the age of 16 throughout the post-war period. Margaret Thatcher’s administrations introduced measures to increase competition between schools and to reduce local authority control (for example introducing league tables, increasing parental choice, and setting up grant-maintained schools managed by central rather than by local government). But in other ways her administrations increased regulation as for example with the national curriculum and compulsory testing of schoolchildren throughout their educational careers. Moreover, fees for higher education (plus loans to help students pay for them) were only introduced much later in 1998 by Tony Blair’s New Labour government. Margaret Thatcher’s 1983 government had put forward similar proposals but backed down after a Conservative back-bench rebellion.3
Interventions in health care were even more limited under Margaret Thatcher. The NHS continued to provide universal and largely free health care (apart from charges for dental care, which had been introduced in 1951, and prescription charges, which had been introduced in 1952). The main reform was to move towards an internal market, giving family doctors the power to take control of their own budgets and to buy care under the GP fund-holding scheme.
The area of welfare where Margaret Thatcher’s administrations did undertake major reforms was social insurance, which had of course been Beveridge’s key concern. While the principle of social insurance itself was retained, eligibility for young people was restricted and the value of a number of benefits, such as unemployment benefits, relative to the value of real wages was sharply reduced. In the 1960s and 1970s the value of unemployment benefits in Britain had been much more generous than in the USA, but the 1980s reforms reduced the relative value of benefits bringing them much closer to those in the USA.4 In this sense the welfare state did move much closer to the US model.
What this suggests is that the 1980s might have been something of a watershed in the case of Want, Squalor, and Idleness but less so in the case of Ignorance and Disease. Since the aims of Margaret Thatcher’s reforms were to promote competition and efficiency, the crucial question therefore is whether Britain moved closer to the USA after the 1980s not only with respect to policies but also with respect to outcomes such as rates of economic growth and unemployment. I would not expect to see the same convergence with the USA, and divergence from Europe, with respect to health or education, where Margaret Thatcher’s reforms had been much less radical and should not be expected to have had a major impact on Britain’s trajectory.
It is perhaps also worth considering what our expectations might be in the case of inequality of opportunity and social corrosion. The 1944 Education Act had been expected to improve equality of opportunity between the social classes, and similar hopes were held out for Labour’s policy of comprehensive reorganization from 1965 onwards. In contrast, subsequent reforms such as the introduction of competition between schools were intended more to drive up standards than to promote equality of opportunity. Indeed, some critics suspected that these reforms, and even more so the reintroduction of tuition fees for university education, might have the opposite effect of reducing equality of opportunity. The growth of income inequality during the 1980s was also expected to have adverse side effects on equality of opportunity and social mobility. So on balance one might expect initial progress towards equality of opportunity immediately after the war to be followed by a reversal towards the end of the century.
The growth of income inequality was also widely expected to have negative side effects on social cohesion. Other social changes, too, such as increasing immigration and ethnic diversity, were feared to bring similar negative side effects. Direct interventions designed to improve social cohesion, however, were rare. Margaret Thatcher had notoriously claimed that there was no such thing as society, although she was certainly aware of the challenges of social conflict when she entered office in the aftermath of the Winter of Discontent. On the steps of Downing Street she quoted St Francis of Assisi’s words ‘Where there is discord, may we bring harmony.’5 I suspect her hope was that improved economic performance would have knock-on beneficial consequences for tackling the giant of Discord. Perhaps the most notable direct intervention to foster social cohesion, however, was David Cameron’s Big Society initiative and the establishment of the National Citizen Service in 2010, but these came so late in our period that it is hard to detect their consequences for social cohesion from the data available at the time of writing.6
In short, then, the central question for this chapter is whether the 1980s reform package improved Britain’s economic and labour market performance without entailing unwanted side effects in the form of exacerbated inequality of opportunity and social corrosion.
The difficulty of carrying out real-world experiments means that definitive explanations of social change or progress can rarely be given. A major natural experiment like Margaret Thatcher’s is probably the next best thing to a rigorously controlled field experiment. As with a standard experiment, one needs to carry out before and after measurements in order to see whether the intervention made a difference, and one needs to compare results in the test case with those in a comparison group where there was no intervention. This we can do by looking at the record of social progress in Britain and in peer countries, checking whether Britain’s trajectory differed from that of the peer countries after the intervention. There are bound to be a host of caveats with any natural experiment. We only have a small number of comparators—our seven peer countries—and all of these will have been undertaking their own programmes of reform. However, Britain’s reform package in the 1980s was, I would argue, more radical and extensive than any undertaken at the same time in the peer countries. A comparison of Britain’s trajectory with those of the seven peer countries can thus potentially provide us with pointers as to the consequences, and side effects, of the shift away from the post-war settlement towards an economy and welfare system organized more along US free market lines.
Before discussing the results of Margaret Thatcher’s natural experiment, I will summarize my findings on Britain’s record in tackling the giants. I will first look at overall progress in tackling the five giants—not an unreasonable approach in a democracy—before turning to the progress experienced by disadvantaged groups. I will summarize the evidence, beginning with the cases where the evidence is strongest—and therefore starting with the giant of Disease rather than with Want. After looking at overall progress, I will turn to disadvantaged groups within society and ask whether they had shared in the general progress or had slipped backwards.
The giant of Disease. The fight against the giant of Disease was largely a success. There was great progress in combatting infectious diseases, in reducing infant mortality, and in extending length of life, although progress in extending disability-free life expectancy appeared to stall after 2010.
The giant of Squalor. Great progress was made against the giant of Squalor in the decades immediately after the war. The success in tackling the immediate post-war housing crisis was one of Britain’s greatest post-war welfare achievements. There was also continued progress in improving the quality of housing but progress in providing more living space stalled after 2001.
The giant of Want. There was great progress in raising material prosperity and average living standards, although progress stalled for the average person after the 2007/8 financial crash. Harold Macmillan was probably justified in boasting in 1959 that ‘most of our people have never had it so good’, and subsequent prime ministers such as Margaret Thatcher, when she was forced out of office by her own party in 1990, and Tony Blair when he stepped down in 2007 just before the financial crash, could justifiably have made the same boast, but David Cameron could not have made such a boast when he left office following his referendum debacle in 2016.
The giant of Idleness. There was great progress compared with the pre-war period in tackling the giant of Idleness, with full employment throughout the 1950s and well into the 1960s, contrasting with the mass unemployment of the 1930s. Thereafter, Idleness made a comeback, with very high unemployment in the recessions of the early 1980s and 1990s. However, the giant was subsequently forced on to the back foot once more, with a return towards full employment after 2010.
The giant of Unfairness. Increasing room at the top in the decades after the war provided greater opportunities for upward social mobility, but progress stalled in the twenty-first century. There were improved opportunities for women in education and in the labour market, too, and a narrowing of the gender pay gap, but no progress in reducing racial discrimination, ethnic inequalities in the labour market, or social class inequalities of opportunity.
The giant of Ignorance. There was great progress in increasing participation in upper secondary and tertiary education. Succeeding generations became much better qualified although I expressed considerable doubts in Chapter 4 as to whether the progress in securing GCSE passes was translated into similar progress in improving skills and competencies. Ignorance is the giant who appears to have been the most challenging of the five. But the giant did retreat a bit, and at least he did not advance in the way that some critics had claimed.
The giant of Discord. There was little sign of the anticipated social corrosion that I had expected to find. Back in the 1950s, Britain was probably not nearly as cohesive as I had imagined. Some new cracks in the social glue emerged but many weaknesses (and some strengths) appear to be endemic to Britain. Benjamin Disraeli’s worries about the Two Nations of Britain appear never to have been fully addressed or resolved.
The typical story, then, of which the fights against Squalor, Want, and Disease are the clearest examples, is one of great initial progress in the decades immediately after the war followed by slowing down and then stalling in the twenty-first century. But I must emphasize that there are some quite important deviations from this typical story, as in the case of Idleness, as well as considerable uncertainty around the giant of Ignorance, whose position is rather obscure in the fog of battle. Reports from the frontline lack clarity and precision. I would be a very worried general if I had to rely on such poor reconnaissance reports.
To what extent does this story of substantial initial progress followed by a slowdown apply to disadvantaged groups? Perhaps the best test of whether governments have been successful in creating ‘One Nation at home’7 is whether disadvantaged groups have been catching up with the majority or have been allowed to fall by the wayside.
In the fight against Disease and mortality, disadvantaged social classes made considerable gains at first—greater indeed than those of more advantaged classes in the case of infant mortality. But this progress was not maintained and infant mortality rates among disadvantaged classes appear to have plateaued in the twenty-first century.
In the fight against Squalor, disadvantaged groups made substantial progress at first but for the most disadvantaged progress seemed to stall during the 1980s (at least with respect to living space). Overcrowding among those renting their homes in the social and private sectors clearly became worse after 1995. Homelessness, affecting the most vulnerable members of society, appears to have increased in the twenty-first century. The data are not as robust as I would wish, but significant numbers of British citizens appear to be, almost literally, falling by the wayside.
In the case of Want, I distinguished relative poverty from subsistence poverty: subsistence poverty is measured against a fixed yardstick whereas relative poverty is measured against a moving yardstick tracking average household income. Progress in tackling relative poverty came to a halt after the mid-1980s: in 2016, more people were in relative poverty than had been thirty years earlier in 1987. Furthermore, while the evidence is not nearly as strong as I would wish, the balance of the evidence suggests that progress in tackling subsistence poverty also stalled, with a rise in food insecurity after 2010.
In the case of Idleness, young people and those with low qualifications were only slightly behind their peers in the 1950s and 1960s, but they later fell well behind their better-educated peers. In 2015, their risks of unemployment were much higher than they had been in previous periods of fullish employment. Beveridge had argued that pre-war youth unemployment was one of the worst blots on Britain’s record. I fear that in the twenty-first century this judgement may once again have considerable force.
In the fight against Ignorance, the evidence is mixed. Additional analyses suggest that young people from disadvantaged backgrounds actually caught up at GCSE, but fell behind in the competition for university degrees in the post-war period.8 Overall, inequalities in education were probably somewhat lower post-war than they had been pre-war.
In the case of social cohesion, too, the evidence is rather mixed. Socio-economic inequalities in civic engagement and empowerment are long-standing and there is little evidence that disadvantaged groups fell further behind—except in the important case of electoral participation. Here it is true that young people and those with lower levels of education fell behind, with potential implications for the representativeness and legitimacy of the British political system.
So, in summary, disadvantaged sections of society made substantial gains in the first decades after the war, perhaps as in the case of infant mortality even greater gains than the overall ones. However, in the cases of Want, Idleness, and Squalor, the situation of disadvantaged groups, compared with that of their more advantaged peers, appears to have deteriorated in the twenty-first century; there are indications, for example, of increased food insecurity, overcrowding, homelessness, and youth unemployment, all of which impact most directly on the most disadvantaged sections of society. While in each particular case the evidence is not as strong as I would like, the recurring pattern is striking, with younger people, particularly those with few or no qualifications or those who have been in care, as well as the members of some (but not all) ethnic minority groups being the most vulnerable.
There appears, then, to be a pattern that, when overall progress stalls, the situation of the most disadvantaged deteriorates. Housing is a good illustration of this: in the twenty-first century, the average number of rooms per person stopped increasing but overcrowding in the social and private renting sectors actually became worse. One possible interpretation is that, where allocation is driven largely along market lines, increasing competition from the more affluent members of society will make things tougher for the less affluent if the overall supply fails to grow. In effect, distribution of opportunities becomes a zero-sum game. In contrast, where allocation is organized along non-market principles (as is predominantly the case in health and school education), absence of growth will not necessarily be accompanied by a deterioration in the position of more disadvantaged sections of society.
In many respects, overall trends in Britain parallel trends in the peer countries. Like Britain, peer countries exhibited great progress in extending life expectancy, in increasing material prosperity, and in increasing educational participation. Peer countries were also similar to Britain in the transformation of their occupational structures, with increasing rates of upwards mobility,9 increasing participation of women in the labour force, and narrowing gender pay gaps.10 The increase in economic inequality after the 1980s was also apparent in most peer countries, although the changes were more dramatic in Britain than in the peer countries (Figure 2.2).
Some things also remained unchanged in peer countries just as they did in Britain. Schoolchildren’s scores in maths and literacy showed glacial improvement in peer countries, with remarkable stability in countries’ rankings over time. Sentiments of national belonging and trust seemed fairly stable too in peer countries just as in Britain.11 There is also evidence that risks of racial discrimination remained constant in the USA where a time series of field experiments like the British one is available.12
These similarities suggest that some of the drivers of social progress, or its lack, are likely to be ones common to developed democracies—they are likely to be the results of general processes rather than of specific policy interventions. Examples of these processes include technical progress (both in health care and the economy), the shift from a manufacturing to a service economy, and globalization, all of which will have impacted on open, highly developed democracies in much the same way. Governments always like to take credit for social progress that occurs on their watch (as Harold Macmillan did) and to blame factors out of their control such as world economic conditions for failures. My view is that governments should be less inclined to take credit for shared successes, although it is fair enough to try to avoid blame for shared failures. Governments around the world do tend to copy each other’s policy interventions, as many did with their austerity policies after the 2007/8 financial crash, and the European Union imposes common regulations and directives on its member states. I cannot therefore rule out political causes for shared experiences. But deviations from shared trends give stronger pointers to the success or failure of major policy interventions such as Margaret Thatcher’s natural experiment in the 1980s.
So let me focus, then, on Britain’s deviations from the general trends, starting with material prosperity. In 1950 Britain was an average performer. (But remember my caveat about the bench line—Sweden, for example, stayed neutral during the war and must have avoided much of the devastation that the combatants suffered). Britain then gradually slipped to the back of the pack in the 1970s, before catching up once again in the 1980s and 1990s, although Britain does not appear to have recovered quite as well as peer countries from the 2007/8 financial crash.
The consensus among economists is that the recovery was due to the free market reforms of Margaret Thatcher. The economists may well be right, although Figure 2.1 shows that the improvement in Britain’s growth rate occurred some time later, in the mid-1990s. More surprisingly, I can see no evidence in Figure 2.1 that growth rates of liberal market economies such as the USA and Canada were faster than those of coordinated market economies such as Germany, Japan, and Sweden. So I am somewhat sceptical as to whether moving from one type of economy to another in itself makes much difference. It simply is not the case that the coordinated market economies as a whole grew more slowly in the first decades after the war than the liberal market economies. The problem of slow growth in the post-war decades seemed to be specific to Britain, not something intrinsic to coordinated market economies.
One should therefore perhaps consider alternative explanations for Britain’s relatively poor rate of growth after the war and the improvement towards the end of the century. I wonder whether Britain’s low levels of investment in research and development after the war might have been a factor in slow growth. Britain certainly allowed technical education to wither in the post-war period and the tripartite system of secondary schooling slowly transformed into a bipartite system of grammar schools and secondary modern schools. In the case of the subsequent improved rate of growth of the British economy, I wonder whether this was due to the Big Bang deregulation of the stock market in 1987, which enabled Britain’s financial services sector to thrive—at least up until the financial crash of 2007/8. This was to be sure a major example of Margaret Thatcher’s programme of deregulation, but I am not sure that deregulation in other sectors of the economy had similar effects on growth.
Unemployment represents another important deviation from the trajectory of peer countries (Figure 6.1). From being one of the best performers in the 1960s and 1970s, Britain became one of the worst performers in the 1980s and 1990s. Unemployment rates increased in all the peer countries at more or less the same times, but Britain experienced the biggest increase of all in the early 1980s recession. (In the early 1990s recession it was Sweden which experienced the greatest increase—and it may well be relevant that Sweden also undertook measures to liberalize the labour market around this time.)
Increased risks of unemployment, then, may well have been the downside of Margaret Thatcher’s free market reforms, an important reminder that reforms may achieve one objective but have unpleasant side effects as well. Nevertheless, Britain’s unemployment rate recovered in the twenty-first century. It is not entirely clear why this happened—it may have been a result of Margaret Thatcher’s reforms making self-employment more attractive, or it may have been due to low interest rates, which remained at historically low levels, around 5 per cent, from the mid-1990s until the financial crash, and then became lower still. Probably both factors were important.
Housing is the third area where Margaret Thatcher’s administrations made radical reforms, with the sale of council housing to their tenants at discounted prices. Unfortunately, I have not been able to find good data on trends in housing space or overcrowding for the peer countries. Nevertheless, it is striking that overcrowding showed no improvement after 1987 and that even progress in providing more space on average came to a halt after 2001. It is a plausible hypothesis that the extension of market forces in the allocation of housing is connected with the failure to overcome overcrowding.
Interpretations of these patterns are bound to be controversial. The prevalent view is that the failure to build more houses, especially affordable houses, in areas of the country where demand was greatest is the main culprit, and that the failure to build more houses was due to restrictive planning regulations (especially restrictions on building in the green belt). In essence, this explanation suggests that the solution is to deregulate and to extend the operation of market forces in the housing market. An alternative view, which was put forward most forcefully by the 2014 Redfern Report, is that increasing supply on its own would do very little to ease the housing crisis. The core of the report’s argument was that falls in the incomes of typical first-time buyers had had a bigger impact on declining levels of homeownership than constraints in the supply of new housing, and that increased building would have only a marginal effect on price levels.13
One also needs to remember that the problem of first-time buyers getting onto the housing ladder is somewhat different from the problems of overcrowding and homelessness which affect the most vulnerable sections of society (although they will be related). My interpretation is that the overcrowding and homelessness crises are in part unintended consequences of the declining availability and affordability of social housing for those on low incomes. However, I would not claim that this is as clear cut as the case of unemployment.
What about spheres such as education, life expectancy, equality of opportunity, and social cohesion where Margaret Thatcher’s programme of free market reforms did not impact to the same extent, at least not directly? The most striking example is that of life expectancy. In 1950 Britain was one of the leaders in life expectancy and in infant mortality, alongside Sweden and the USA. Compared with other countries, Britain fell back gradually over the next fifty years from the front towards the back of the pack, although not as badly as the USA did. However, it is rather unlikely that this relative decline had much to do with reforms. The evidence suggests that it was in fact the very high levels of wartime smoking in Britain and the USA that left a legacy of excess mortality due to smoking-related cancers twenty or thirty years later.
What is particularly striking is that throughout the whole of the post-war period Britain more closely resembled Canada and the USA in health-related lifestyles than Japan or the European countries. Even though Britain had throughout a very different health-care system from that of the USA, British levels of smoking and obesity were more similar to those of North America than to those of continental Europe. In the case of health, then, it does begin to look a bit as though enduring cultural factors might be more important than the nature of the health-care system. It is conceivable that the widening inequalities in life expectancy and infant mortality which I reported in Chapter 3 might be linked in some way to the widening economic inequalities of the 1980s, but the timing of the changes does not fit at all well with this interpretation. Britain’s poor record on five-year cancer survival rates raises some major questions about the organization of British health care, but I have not come across any evidence linking low cancer survival rates to the internal market-oriented reforms of the NHS.
Education is another sphere where enduring cultural differences are clearly important, with Britain lagging some way behind Japan both in the very earliest international comparison of educational performance and in the most recent. As John Jerrim has pointed out, children of East Asian descent also score very highly when they attend schools in the average-performing educational system of Australia (and my research indicates that the same holds true of children with an East Asian background in Britain, Canada, Sweden, and the USA).14 Culture and home environment seem to be key. It is also striking that the stream of educational reforms in Britain, from comprehensive reorganization to the more recent introduction of academies and free schools, seems to have had very little impact on educational performance, at least as measured by rigorous independent international studies such as those conducted by the OECD.
Why were reforms apparently so ineffective in education whereas in the cases of material prosperity, housing, and unemployment they appear to have had major impacts (if not always the intended impacts)? Part of the explanation is likely to be that, as in the case of the NHS, the reform agenda left intact the principle of universal provision of health care, free at the point of access. Similarly, access to education (until late in the period with the introduction of fees for university education) was not subject to the operation of market forces in the way that increasingly held true in the case of housing from the 1980s onwards. There has always been a highly influential private sector in British education but there were no major attempts to increase the scope of the private sector in secondary education (and very limited attempts in tertiary education).15
In the cases of inequality of opportunity and social corrosion, major reform programmes were not directly attempted in the post-war period. Here my expectation was that one might find indirect consequences of Margaret Thatcher’s reform programme, with increasing economic inequality leading to reduced equality of opportunity and to reduced social cohesion. The evidence from Britain does not really support this expectation, however, with inequality of opportunity in education and the labour market changing little throughout the post-war period. Unfortunately, I was unable to provide good long-term evidence on inequality of opportunity or social corrosion in other countries, so it might be wisest to return a ‘not proven’ verdict. True, rates of upwards mobility declined towards the end of the period, but this probably should be attributed to the fact that the size of the professional and managerial class was not expanding as fast as it had been in earlier decades. Social divisions over Europe grew larger, but other social divisions appeared to decline. In neither case is it safe to conclude that increased economic inequality had adverse side effects on social relations.
It may well be that, with better and more up-to-date data than that currently available to me, the hypothesis that increasing inequality has deleterious effects on inequality of opportunity and social cohesion will be confirmed. However, there are some theoretical reasons too for reserving judgement. With respect to inequality of opportunity I suspect that, in contemporary Britain, culture and home environment play a more important role than do purely material resources.16 Greater material resources may give improved access to better-quality state and private schools, but the evidence is that the quality of school one attends is much less important (perhaps only a tenth as important) as the nature of the home environment. This contrasts with the case of housing, where material resources provide direct access to larger and better-quality houses.
So I would certainly not want to argue that increasing material inequality has no impact on other aspects of social progress. My argument, rather, is that the impacts of economic inequality are likely to be the most immediate and direct on commodities such as housing which are predominantly allocated through the market nowadays. In the cases of health and education, the impacts are likely to be more indirect and muted.
In the case of social cohesion and corrosion, too, it seems that some of the biggest challenges are not material ones but cultural and political ones. Scottish nationalism, for example, is unlikely to have much to do with increasing economic inequality, for example, while social divisions in trust, feelings of efficacy, and political objectives all precede the 1980s increase in economic inequality.
The overall story which the evidence supports is in many ways an encouraging one of continuing social progress, or in the cases of equality of opportunity and social cohesion a story of little long-term change. Following the principle that the best guide to the future is the recent past, I would anticipate that future decades will exhibit continuing progress in extending length of life (though perhaps less progress with respect to disability-free life expectancy), in raising median real household income, in increasing educational participation, and, much more modestly, in increasing skills and capacities. There may also be continued progress in narrowing gender gaps, although the past evidence is less optimistic about future prospects of narrowing social class and ethnic gaps. In all these respects I expect Britain to remain fairly similar to peer countries, just as it has in the past.
In contrast, the bumpy ride which unemployment has travelled in the past makes me very uncertain about future prospects for tackling the giant of Idleness. The evidence does not allow us to be confident that the low unemployment rates at the time of writing will be sustained in the longer term. As a rule of thumb, I would suggest that, the greater have been Britain’s past deviations from the trajectories of peer countries, the less confident one should be about extrapolating past trends into the future. My concern is that unpredictable political changes of direction, perhaps as a consequence of Brexit, could change Britain’s trajectory, just as it was changed in the 1980s by Margaret Thatcher’s revolution.
The same applies to some extent to material prosperity, where we have seen unpredictable changes of trajectory in the past. While it would be very surprising if economic growth were to come to a long-term halt, the uncertainty around Brexit, and the political decisions which future governments might choose, makes it hazardous to predict whether Britain will keep up with peer countries or fall behind.
On the other hand, recent trends suggest that there may be social regress rather than progress for the most vulnerable and disadvantaged sections of society. Rather than progress, the evidence on balance indicates that, in the twenty-first century, life has been getting worse not better for some groups. The evidence is not nearly as robust as one would wish, but we need to take very seriously the likelihood that poverty and food insecurity, overcrowding and homelessness, obesity, and youth unemployment (for those with low qualifications) have been deteriorating and will continue to deteriorate. The worry is that Britain may be moving on a trajectory which will take it closer to the USA’s exceptionally high rates of poverty and exceptionally low life expectancy (as benchmarked against the performance of peer countries).
These are relatively recent new challenges—and some of them could potentially be linked to what are hopefully temporary issues such as the austerity measures which different governments have pursued with varying vigour and success since the financial crash of 2007/8. On the other hand, the roots of these problems appear to go back earlier than the financial crash. The challenge for future governments will be to develop a new Beveridge plan for tackling these giant evils and to emulate the successes of the 1945–50 Labour government in achieving social progress for all sections of society.