The Social Mobility Commission has drawn up a new index, which will monitor actual mobility for the first time by comparing someone’s circumstances at birth with their outcomes in their thirties and fifties. The index provides a richer, systematic and more consistent view of how people are progressing at school, at work and financially compared with their parents and their peers.

The State of the Nation 2022 – A fresh approach to social mobility includes findings from the first phase and shows a mixed picture with both cause for celebration and areas of concern. There are, for example, clear signs that some educational attainment gaps are closing between disadvantaged and advantaged children, particularly at key stages 2 and 4 (ages 11 and 16). However, the analysis in the 150-page report also shows that two-thirds of disadvantaged pupils and more than a third of all other pupils fail to achieve a good pass in English and Maths at GCSE.

More measurements will be added next year including a regional breakdown and data on other characteristics such as sex, ethnicity and disability. This will allow the SMC to analyse the effects of personal characteristics and geographical location on where people end up in terms of the job they do, and how much they earn – invaluable in helping early thinking about policy solutions.

Katharine Birbalsingh, SMC chair, and her deputy, Alun Francis, want any future policy on social mobility to be firmly based on solid evidence. “We want to get at the reasons why social mobility happens, when it happens, and why some people buck the trend,” says Birbalsingh.

“That is why we want to see government, both local and national, placing social mobility at the heart of levelling up by using the findings from our index to inform and evaluate success, and to make sure that their benefits are reaching those who need them most.”

The Commission’s aim is consistency over time so that data can be compared annually – and at longer intervals of 5 or 10 years – to show trends in social mobility. The new metrics were carefully selected with input from experts in economics, sociology and education as well as other stakeholders in government, business and the charity sector.

“The new Social Mobility Index draws on leading international research to provide a game-changing framework for monitoring and understanding how young people’s chances of mobility are evolving,” said Anthony Heath, Emeritus Professor of Sociology at Oxford University, who helped develop the index. “It will provide early signs of barriers that need to be tackled so that we can move towards an equal playing field for all.”

Until now there has been more emphasis on the factors which can enable or hinder social mobility, (referred to in the report as ‘drivers’) such as education and work opportunities for young people. Birbalsingh and Francis argue there has been much less data on actual outcomes in later life such as what occupation someone is in, where they live and what they earn in middle age compared with their parents.

But they point out there are also other important areas that impact on social mobility which are less explored – diversity of talent, family values and culture. They are hard to measure so they are often not given sufficient weight, says Birbalsingh. “Where we can, we want to find ways to measure them.”

Public opinion also matters to the Commission. “We plan to undertake research to get a better understanding of what real people actually think about social mobility, so we can ensure the work of the Commission is aligned to their needs and wants,” says Birbalsingh.

The State of the Nation also sets out the key priorities which the Commission intends to focus on over the next few years. These include:

Education – covering early years, schools and universities, but also other routes to work such as further education and apprenticeships. The SMC is also keen to understand more about how it can help families and parents.

Employment – The SMC will go beyond the large professional firms in the City, many of whom already have plans for more diverse workforces, to look at how small businesses of all types can generate opportunity. It will also look at the impact that certain qualifications – particularly degrees and technical qualifications – can have on social mobility.

Enterprise and the economy – The Commission will look at the creation of opportunities, their geographical spread and the role of enterprise in sometimes challenging social mobility hierarchies – all central to the Government’s levelling up agenda. It will focus on local neighbourhoods where educational and economic opportunities are poor across generations.

The Commission has made the new index one of its first priorities – to better inform policy advice. But it recognises that there are still many gaps in the data that Whitehall holds and a lack of join-up across Departments. It argues that without better data, policy advice often has to rely on elaborate guesswork.

“The government’s Equality Data Programme is a good start, but we believe there are areas where government can go even further,” says Birbalsingh. “For example, in the UK, the tax records of parents and children aren’t linked, as they are in other countries like the USA, making measurement of income mobility much more difficult.” The SMC will outline more specific recommendations for clearer and more joined-up data in the near future.

Other findings from the report:

• There are still more people moving upward, to a higher occupational level than their parents, than people moving downward. But this surplus is smaller than before. This is largely because the professional class has grown in the last 70 years so there are more people already starting at the top, where moving further upwards is not possible.
• The relative chances of people from different occupational backgrounds reaching higher-level jobs have not worsened over the decades, and may even have improved.
• The gap in educational performance between disadvantaged and non-disadvantaged children aged 11 was around 13% smaller in 2019 than in 2011. We will need to monitor how the impact of Covid-19 might affect this in future years.
• However, significant gaps remain. In the 2020 to 2021 academic year, only 31.7% of disadvantaged pupils achieved a grade 5 or above in GCSE English and Maths compared with 59.2% of all other pupils. This also means that two-thirds of disadvantaged pupils and more than a third of all other pupils fail to achieve a strong pass in both English and Maths at GCSE.
• The gaps between professional and working-class backgrounds for both university participation and degree attainment have also narrowed between 2014 and 2021.
• The rate of young people from working-class backgrounds not in employment, education or training (NEET) has decreased since 2014 and was the lowest reported on record in 2021 at 12.4%. The gap between class backgrounds has also narrowed.
• The gap in current occupational levels has also narrowed. In 2014, men aged 25 to 29 from a professional background were 1.9 times more likely to be in a professional job than men from a working-class background. By 2021, this dropped to 1.6 times more likely. For women, the drop was from 2.3 times more likely to 1.6 times more likely.

What is the Social Mobility Index?

‘Social mobility’ refers to the link between our starting point in life, and where we end up. The new Index will be able to measure this, in terms of occupation, income, education and other outcomes. We’ll be able to compare this across the UK by geographical regions, sex, ethnicity, disability.

• Drivers – conditions that make social mobility easier, such as the availability of good education and work opportunities for young people. Drivers tell us about nationwide background conditions that can affect social mobility.
• Early life (intermediate) outcomes – the progress that people make from their start point in life to where they are in their 20s and 30s, such as in employment, or educational attainment at 16. This is broken down by people’s socio-economic background.
• Mobility outcomes – progress to a later end point in life, such as employment or income when people are in their 50s. We have only included a few illustrative measures of mobility outcomes this year, but will add more in future.

The new index builds on the Commission’s earlier index which introduced the idea of social mobility ‘cold’ and ‘hot’ spots and, with next year’s regional analysis, will give those working on social mobility even richer insights to inform their work. At the time of its publication, the Commission itself acknowledged that by necessity the old index was imperfect and looked more at measures of disadvantage than social mobility outcomes.

About the Social Mobility Commission

The Social Mobility Commission is an independent advisory non-departmental public body established under the Life Chances Act 2010 as modified by the Welfare Reform and Work Act 2016. It has a duty to assess progress in improving social mobility in the UK and to promote social mobility in England.

The Commission board comprises:

Katharine Birbalsingh CBE is the Chair of the Social Mobility Commission and Headmistress and co-founder of Michaela Community School in Wembley, London.

Alun Francis OBE is the Deputy Chair of the Social Mobility Commission and Principal and Chief Executive of Oldham College since 2010.

The Chair and Deputy Chair will both be available for broadcast and radio interviews.

Contact

Jill Sherman, SMC Head of Communications: jill.sherman@socialmobilitycommission.gov.uk or 07384 870965

Statistics published today (23 June 2022) by HM Revenue and Customs (HMRC) reveal the estimated tax gap for the 2020 to 2021 tax year is 5.1% – the second lowest recorded percentage – and is unchanged from the previous year.

The annual Measuring Tax Gaps publication estimates the difference between the total amount of tax expected to be paid and the total amount of tax actually paid during the financial year. The majority of taxpayers pay the tax that is owed.

In monetary terms, the tax gap for the 2020 to 2021 tax year is £32 billion. At 5.1%, there has been no change in the percentage tax gap compared to the previous year, although the monetary value has fallen by £2 billion from £34 billion in the 2019 to 2020 tax year.

The total tax due to be paid fell from £672 billion in 2019 to 2020 to £635 billion in 2020 to 2021 due to the economic impact of COVID-19.

Jonathan Athow, HMRC’s Director General for Customer Strategy and Tax Design, said:

The vast majority of taxpayers and businesses paid the correct amount of tax owed. We want to help everyone to get their tax right as the revenue we raise helps fund our vital public services.

The estimate for the 2020 to 2021 tax gap is the best assessment based on the evidence available at this time. There is some uncertainty for the tax gap estimates for the first year of the pandemic and estimates could be subject to revisions in future years.

HMRC has published tax gap estimates since the 2005 to 2006 tax year. There has been a long-term reduction in the overall tax gap from 7.5% in 2005 to 2006, to 5.1% in the 2020 to 2021 tax year. The reduction is a result of the government’s action to help taxpayers get their tax right first time, whilst bearing down on the small minority who are deliberately non-compliant.

Further findings for the 2020 to 2021 tax gap publication show:

• the tax gap for Income Tax, National Insurance contributions and Capital Gains Tax is 3.5% (£12.7 billion), representing 39.5% of the total tax gap by type of tax
• the VAT gap shows a strong downward trend falling from 14.1% in 2005 to 2006 to 7.0% in 2020 to 2021
• the Corporation Tax gap reduced from 11.5% in 2005 to 2006, to 9.2% in 2020 to 2021, reaching a low of 6.5% in 2011 to 2012, remaining broadly stable since 2014 to 2015
• at 48% (£15.6 billion), small businesses represent the largest proportion of the tax gap by customer group, followed by criminals at 16% (£5.2 billion)
• individuals account for 8% (£2.5 billion) of the overall tax gap and, at 5% (£1.5 billion), wealthy individuals have the smallest tax gap by customer group
• failure to take reasonable care (19%), criminal attacks (16%), non-payment (15%) and evasion (15%) are the main reasons for the tax gap by behaviour

HMRC publishes the tax gap because it believes it is important to be transparent in its work. The data helps build trust in HMRC’s ability to support taxpayers in meeting their obligations and pay the tax they owe. It also helps inform the future work and priorities for HMRC, and where it can make the greater difference for taxpayers.

HMRC is the only tax authority in the world that measures and publishes an annual tax gap in such a comprehensive way – covering a single tax year for all the taxes, levies and duties it administers.

Each year, HMRC estimates the tax gap for direct and indirect taxes based on the latest available information. HMRC may revise previous years’ tax gaps as more data becomes available in order to show the long-term trend.

The Measuring Tax Gaps 2022 publication was published on 23 June 2022.

HMRC’s tax gap estimates are official statistics produced in accordance with the Code of Practice for Statistics, which assures objectivity and integrity. Tax gap estimates are reviewed each year to reflect updated data and methodologies.

Thank you, Mr Chair. The Russian government has miscalculated in Ukraine on several counts. Firstly, they have underestimated the resolve and heroism of the Ukrainian people, who successfully defended their capital and forced Russian invaders into retreat. Secondly, they have underestimated the resolve of the international community; the result of this aggression has been to unite the free world in support of Ukraine, bolstering international cooperation and isolating Russia politically and economically. And finally, they have underestimated the strength of the principle of sovereignty in the 21st century; President Putin’s actions have only brought into sharper focus the right of all countries to determine their own foreign, defence and security policy.

As we enter a new phase of the war, characterised by a slow and brutal campaign of attrition by Russia in eastern Ukraine, the Kremlin has committed yet another catastrophic error of judgment. For President Putin thinks that if he draws out the brutality for long enough, the rest of the world will tire of supporting Ukraine. Let me be clear: we will never tire of defending freedom and democracy. As my Prime Minister said during his visit to Kyiv last week: (Ukraine), the UK is with you, and we will be with you until you ultimately prevail.

Mr Chair, the framework of this organisation is founded on the recognition that security is comprehensive and comprises resilience across a broad spectrum of elements. Indeed, this was the basis of the PCU’s highly successful multi-dimensional approach. UK support to Ukraine will continue to reflect these principles. We will help Ukraine to be victorious on the battlefield; to address the humanitarian impact of Russian crimes and hold perpetrators to account; and to rebuild what the Russian government and Russian military has destroyed.

The immediate priority is maintaining our military aid. We and our partners will continue to supply weapons, equipment and ammunition to counter the Russian Armed Forces as they relentlessly bombard towns and cities in the east of Ukraine, including Sieverodonetsk. Ukraine should not be pressured into ceding territory; instead, we must act to strengthen its hand. Last week my Prime Minister announced an offer of military expertise-building that will enable Ukraine to continue to defend itself – throughout its internationally recognised territory – until Putin has been categorically disabused of his imperial delusions.

Sadly, the Russian military’s urban warfare tactics, which are reliant on heavy use of artillery, have generated extensive destruction. With every day that passes, evidence grows of the unspeakable savagery of President Putin’s war of choice. This Organisation has played, and will continue to play, a pivotal role in fact-finding efforts, including through the Moscow Mechanism. Credible evidence of systematic rape, torture, abduction and butchery of innocent Ukrainian civilians by Russian Armed Forces is an affront to humanity. The international community has made clear that we will not rest until those responsible for atrocities are brought to justice – however long it takes.

Last Friday, the UK signed a Memorandum of Understanding with Ukraine to take forward future co-operation on reconstruction. Next month, the Ukraine Recovery Conference in Lugano will consolidate the international reconstruction effort. In this Council, we have had the privilege of being addressed by some of the courageous local Ukrainian officials who will oversee implementation of these efforts. We will continue to work on new investment into those towns and cities that have been liberated from the Russian government and the Russian military’s campaign of destruction. And together, we will demonstrate to President Putin that his attempts to subjugate Ukraine through unspeakable violence will only lead to it building back stronger and even more resilient. This is what victory in Ukraine will look like.

Mr Chair, each week in this Council, my distinguished colleagues and I speak with one voice in wholehearted support for Ukraine. And each week, my Russian colleague’s statement reinforces his country’s isolation. The UK and the international community remains, and will continue to remain, firmly with Ukraine. Time is not a constraint. Thank you, Mr Chair.