Dear Nick, In delivering the Hugo Young memorial lecture, you raised the challenges that progressives face in times of fiscal constraint. We share your view that these are timely and important issues to discuss. We also found much in your lecture that we agree with. In particular, we welcome your commitments to localism, civil liberties and political pluralism. We are, however, concerned that some of the statements you made may be odds with the both the values and agreed policies of the Liberal Democrats. In your speech you make it clear that you view increased social mobility – not reduced income inequality, or the elimination of poverty – as the goal we should aim for as a society. In your own words, you wished to see, a “shift, from a static, income-based definition of fairness to an approach focused on mobility and life chances.” We cannot agree. Social mobility is indeed important, but so are poverty reduction and reducing the gap between rich and poor. Poverty causes suffering. The gap between rich and poor causes misery, social tension and intolerable inequalities of political influence. We need to tackle poverty, inequality and lack of mobility – not just focus on one to the exclusion of others. The preamble to the Liberal Democrat constitution states that we aim to create a society “in which no-one shall be enslaved by poverty, ignorance or conformity.” And when we say “no-one shall be enslaved by poverty”, we mean exactly that, no-one. We urge you to ensure, that in focussing on the social mobility, you do not forget about those who are not upwardly mobile. The idea that social mobility should replace the notion of “lifting people out of poverty” is, in our opinion, ill-conceived. The concepts should augment each other not replace each other. On its own, social mobility does not remove the suffering of poverty, it merely changes who is poor. Social mobility implies that people can fall as well as rise; and when they do fall, they need the assistance of a robust welfare state. Providing a decent life to those who, for whatever reason, find themselves on the bottom of the pile should be absolutely sacrosanct. We believe that a well-designed welfare state promotes social mobility and ensures everyone is provided with a decent life, free from poverty. It isn’t a choice of one or the other; progressives have, in our memory, always argued for both – and so should that continue. This is why we support, in principle, the Coalition’s policy for a ‘universal credit’. The policy should, if properly designed, give proper protection to those out of work and provide a humane incentive to get back into work. It is also why we oppose changes to Housing Benefit that may exacerbate overcrowding and homelessness. You are right to imply that the last Government’s strategy for raising people who are slightly below the poverty line to slightly above was far from ideal. We share this view, if only because the strategy lacked the ambition to help the very worst off, or help lift people even higher. Although you make light of the goal of lifting people’s income to that of “poverty plus a pound”, we must point out that poverty plus a pound would certainly be helpful to someone substantially below the poverty threshold. We also agree that to take into account peoples’ capability to live a fulfilling life, poverty of income should indeed be considered as instrumental to their life chances alongside ‘the non-financial, dimensions of poverty, particularly in terms of access to services;’ this is why we were concerned to the the Treasury’s own analysis showing that the budget (let alone the CSR) would reduce the incomes of many of the poorest people in the country. On inequality, you unambiguously dismiss the notion that inequality matters in and of itself. You state that, “Social mobility is what characterises a fair society, rather than a particular level of income equality.” Again, we cannot agree. Before the election you told the Equality Trust that you would agree to a ‘fairness test’ which stated that policies should be judged in terms of whether they would increase or decrease inequality (your response to the Equality Trust can be found here – this requirement has now been discarded by the Coalition. Crucially, at both the Special Conference in May and at our annual Conference in September, the party agreed that Liberal Democrats will, over the course of this Parliament, work to reduce the gap between rich and poor. Evidence shows that socio-economic inequality matters for people’s outcomes and is a factor in preventing the very social mobility that you (and we) wish to promote. There is a great deal of data to show that unequal societies are less happy, have greater incidence of mental illness, violence and drug use. This is not just a factor of social mobility, but the strain inequality puts on those at the bottom end of the scale. Inequality also hampers social mobility, as those with money have access to the means to create more money enhancing their advantage over time – precisely the concentration of power that liberals stand firmly against. We urge you, in the strongest possible terms, to recognise that both poverty reduction and closing the gap between rich and poor are important in and of themselves – in a way that is at least as important as promoting social mobility. We also draw your attention to the fact that those countries with the highest levels of social mobility, lowest levels of poverty and most equal distribution of income, tend to be the countries where the State takes an active role to generously fund public services, redistribute income and actively help people find jobs. We look forward to hearing your thoughts on the above and to a continued dialogue on how to make our government’s policy as fair as possible. Yours, David Hall-Matthews, Chair, Social Liberal Forum Prateek Buch Cllr Paula Keaveney, Liverpool City Council Geoff Payne, Hackney Lib Dems events organiser Naomi Smith Charles Marquand Members of the Social Liberal Forum Council

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