Your family’s social status still determines yours

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Social mobility

Two weeks ago, I wrote about how  four broken promises are fuelling young people’s frustration. Come with me as I dig deeper into one aspect: the breakdown of social mobility in Europe.

Julius E. O. Fintelmann


Work hard, get a degree, buy a house. For young Europeans, the recipe for a better life is falling apart.

France, Germany, Portugal, the Netherlands, Italy, and beyond. Young people were once again on the streets across Europe last Saturday. These protests had different triggers, for instance anger over school conditions in France, or opposition to the potential return of conscription in Germany.

But there’s one shared, underlying frustration: many young people feel that they won’t have a better life than their parents. And there are reasons for that feeling.

A decades-long development is coming to a head: social mobility has stalled across much of Europe. It refers to the ability to move up – or down – the social and economic ladder – a core promise of liberal democracy.

It’s mainly measured by occupation, income, and education level. Can someone whose parents never went to university get a degree? Can they find a job that pays better than their parents’ work does?

Increasingly, the answer to both questions is no. In an “average OECD country”, it takes around four to five generations for children from the poorest 10% of households to reach the mean income levels, according to the organisation itself.

The OECD also found that upward mobility for people with less-educated parents increased for those born up until 1975. It then stalled for those born after that year.

A working paper by three German economists in 2025 found that intergenerational income mobility has fallen sharply. West Germans born in the 1980s were much more likely to end up in a similar position on the income ladder to their parents than people born around ten years earlier. Depending on the measure, the link between parents’ and children’s incomes roughly doubled in that time span.

Germany, long seen as far more mobile than the US, is now about as unequal in terms of opportunity, the paper found.

Part of the explanation for this, according to the paper, is education. Not because degrees have become less valuable, but because access to them is unequal.

As access to university widened, the share of graduates among children from the poorest quarter of households barely changed. Among better-off families, it roughly doubled.

The authors suggest cuts to Germany’s student grant system may be partly to blame. By 1998, only one in eight students was receiving support. It’s worse now: by 2024, it had slipped further. Only around one in nine students received it.

What adds to the perception that young people’s futures are being pushed down the political priority list is the massive surge in defence spending at the same time – no matter how justified given Europe’s deteriorating security situation.

And it’s not just Germany. Across 23 countries, including outside of Europe, people whose parents didn’t graduate university were almost half as likely to become top earners than their more privileged peers.

The reverse is also true: lower levels of education lead to more poverty. In Europe, those with university-educated parents have a significantly lower at-risk-of-poverty rate (8.5%) than those with less-educated parents (19.1%).

But it’s not equally bad everywhere. The Nordics, with their ingrained social democratic economic model, still show stronger social mobility than other parts of Europe. Whether your parents went to university matters least there – and most in countries like Italy, Portugal, and Poland.

The difficulty with social mobility statistics is that they can only assess a generation once it reaches middle age. Today’s 25-year-olds therefore won’t appear in traditional data for another 15 to 20 years – meaning their frustration is more anticipatory. But current conditions offer little reason to believe that their situation will be any better than those of people born in the 1980s.

Take housing, for instance, a key driver of social inequality. Across the EU, house prices rose over 55% between 2010 and 2024 – far outpacing income and inflation.

And famously, to buy a house, you need savings. But the median net wealth of 16- to 34-year-olds in the euro area is just over €24,000, less than a fifth of the overall median.

That means young people increasingly need help from their families to buy a house. For many young people, owning a decent home is becoming ever more out of reach.

Education, housing, wealth: each problem feeds the next. Without family money, it’s harder to study. Without a degree, it’s harder to earn well. Without savings, it’s harder to buy a home – and without that, there’s little wealth to pass on.

Addressing the stagnation of social mobility in Europe wouldn’t just make societies fairer. It would also make economic sense: the consultancy giant McKinsey, of all organisations, wrote that improving social mobility could boost Europe’s GDP by up to 9%.

The European Correspondent

Trump’s billionaire backers are looking beyond America

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Money can’t buy me love, nor democracy, it seems. Donald Trump’s billionaire backers have just discovered that, even with extraordinary financial firepower behind them, they cannot always buy electoral success. The US midterms delivered a bruising rejection of the president and his wealthy political allies.

“We’ve just proved that all the money in the world is no match for the people of Texas,” declared James Talarico, celebrating his historic win over Republican Ken Paxton in the Texas Senate race.

For all the money, influence and political machinery available to America’s wealthiest individuals, voters still have the final say.

But while Trump’s political project has suffered a setback at home, its financial backers and ideological allies are looking beyond America’s borders. Millions of US dollars have already flowed into British right-wing think tanks, political networks and organisations seeking to reshape the country’s political landscape.

The question is how much influence this money is buying, who stands to benefit and whether Britain’s democratic safeguards are strong enough to withstand it.

The billions behind America’s political battle

The scale of spending in the US midterms was extraordinary.

Federal Election Commission filings showed that more than $9.5 billion had been spent during the midterm election cycle.

The result is a political landscape in which a handful of extraordinarily wealthy individuals can spend sums beyond the reach of ordinary voters.

And there was a pronounced Republican and technology-sector bias among the biggest spenders, as New York Times analysis showed.

Musk’s $445 million spending spree

Leading the billionaire donor rankings was Elon Musk, whose spending on Republican candidates, political action committees and outside spending organisations exceeded $445 million, according to OpenSecrets.

The Texas Senate contest was a particular focus, with Musk throwing his financial weight behind Republican candidate Ken Paxton.

It was money on an almost unimaginable scale. Yet it was not enough to prevent Talarico’s victory.

Shipping supply billionaire Richard Uihlein and his wife, Elizabeth, were another major source of Republican funding, contributing $147.3 million to Republican causes.

Trading billionaire and early ByteDance investor Jeff Yass was the third-largest spender, directing more than $110 million towards Republicans, largely through Super PACs.

Yass has also been linked to more than $16 million in funding for anti-Muslim and pro-Israel organisations advocating hawkish policies in the Middle East, according to investigations by the Guardian and Responsible Statecraft.

As Hope not Hate chief executive Nick Lowles observed, the ability of one individual to wield such enormous financial power over an election makes a mockery of the principle that every vote should carry equal weight.

Yet the implications of this billionaire-backed political machinery extend well beyond America’s borders.

American money flowing into UK politics

Trump’s domestic political fortunes may have suffered a spectacular reversal, but the MAGA movement’s international ambitions have not necessarily disappeared with them.

Journalists Sam Bright and Max Colbert argue, authoritarian political influence can extend beyond national borders in an attempt to preserve its power even as domestic popularity wanes.

Britain has become an important part of that picture.

In 2025, it emerged that a Reform-linked think tank was attempting to raise more than £25 million to help make Nigel Farage prime minister by 2029, seeking financial backing from donors in both Britain and the United States.

The Centre for a Better Britain (CBB) intended to channel the money into developing radical policies, drafting legislation, polling, and selecting and training parliamentary candidates.

According to the Times, the organisation had also established a presence in Dallas, registering a US entity with the Internal Revenue Service in an attempt to attract inspiration, and millions of dollars, from the MAGA movement that twice propelled Trump to the White House.

This isn’t just a question of American donors supporting British political causes. It’s about the potential importation of an entire political playbook, complete with its ideological priorities, campaign tactics and networks of influence.

Consider Elon Musk.

In December 2024, Farage revealed that Musk, whose wealth fluctuates above and below $1 trillion, was giving “serious thought” to donating to Reform UK. Reports suggested the sum could reach $100m.

Musk later denied plans to bankroll Farage, but the prospect exposed serious weaknesses in Britain’s political funding rules, and intensified pressure on the government to tighten safeguards against foreign money entering UK politics.

Although foreign political donations are banned in Britain, loopholes have allowed overseas money to find its way into the system.

George Havenhand, senior legal researcher at Spotlight on Corruption, warned in early 2025, the rules contain “a series of loopholes and problems” that leave British democracy exposed to foreign influence and dirty money.

Labour pledged in its 2024 manifesto to “protect democracy by strengthening the rules on donations”. In March 2026, the government introduced tighter restrictions on overseas donors, followed by further safeguards in July, including a £100,000 annual cap on donations and loans from overseas voters and a ban on cryptocurrency donations.

But the reforms haven’t been without criticism. Transparency International UK welcomed tougher checks on foreign money but argued that the government was tackling the wrong end of the problem: restricting who can donate without limiting how much they can give.

Wealthy overseas donors could simply relocate to Britain, meet the qualifying requirements and resume making enormous political donations from within the UK.

So what happens if, heaven forbid, Elon Musk decides to move to Britain and bankroll Reform UK after all? The rules might stop foreign money entering our politics, but they do little to stop a billionaire buying an extraordinary amount of influence once they are here.

The Tufton Street bigshots

American money has also been finding its way into Britain’s network of right-wing think tanks, particularly those clustered around Tufton Street in Westminster.

Organisations including the Institute of Economic Affairs (IEA) and the Global Warming Policy Foundation are notorious for their lack of transparency around funding sources.

US election and corporate filings examined by Left Foot Forward showed at least 15 individuals and companies that have donated to Tufton Street organisations have also contributed $45.5 million to Trump’s campaigns, Trump-supporting political committees and Republican candidates in state races over the past decade.

Research has also exposed vast US funding to British right-wing think tanks since 2024, led by Policy Exchange, which received $1.1m, the Henry Jackson Society with $955,000, and the Institute of Economic Affairs with $609,000. The Global Warming Policy Foundation also received $222,000 from US donors.

And these connections are not merely financial. The IEA and other Tufton Street affiliates were vocal supporters of Liz Truss during her brief premiership, when her disastrous economic agenda sent financial markets into turmoil, triggering a crisis with far-reaching consequences.

British politicians and the MAGA circuit

The connections aren’t confined to think tanks.

A number of prominent British politicians, including Kemi Badenoch and Nigel Farage, have collectively accepted £335,000 for attending official Trump events, donor meetings and gatherings organised by right-wing American groups.

Reform MP Suella Braverman, who defected from the Conservatives in January, received £23,664 in expenses for attending four US events. These included a January 2025 speech at the Heritage Foundation, the organisation behind Project 2025, the radical right-wing blueprint for Trump’s second term.

Then there is Reform UK’s record-breaking £72 million in donations, coming from two cryptocurrency billionaires, Ben Delo and Christopher Harborne.

Harborne has financial connections to the White House, while Delo was pardoned by Trump last year after previously pleading guilty to violating the US Bank Secrecy Act.

Britain has a democratic warning to heed

These connections raise serious questions about the extent to which American political money and influence are becoming embedded in Britain’s right-wing political landscape.

Yet there is also a contradiction at the heart of this political project.

Trump and his MAGA allies may have enjoyed the backing of some of the world’s wealthiest individuals, but their politics remain deeply unpopular in Britain.

A YouGov poll in September found 83% of UK adults viewed Trump unfavourably, compared with just 13% who held a favourable opinion. His net favourability rating stood at minus 70.

The US midterms have shown that even hundreds of millions of dollars cannot guarantee electoral success. Musk failed to secure victory for his man in Texas, while the wider Republican spending machine could not prevent a Democratic electoral landslide.

But authoritarian political influence doesn’t stop at national borders. As its domestic popularity wanes, its networks, money and ambitions can be exported elsewhere in an attempt to preserve and extend its power.

That should be a warning to Britain, where who is funding our political organisations and what influence they are seeking to buy, needs to be scrutinised. Our democracy must not become a vehicle for someone else’s authoritarian ambitions.

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Revealed: Nationalisation of utilities would save the UK billions, according to new report

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UK households would save £7.8 billion a year if water, energy grids, and Royal Mail were nationalised, according to a new report by the University of Greenwich for We Own It.

Households would be £142 better off a year on average as a result of nationalising energy grids, and £113 better off if English water companies were nationalised.

This is after compensating for returning shareholders’ investment under nationalisation, which would cost £49.7 billion.

This figure is significantly lower than the £200 billion quoted by the Confederation of British Industry (CBI) as it would only repay shareholders the money they invested, rather than paying ‘market values’, which would result in excessive returns at the expense of UK households.

There is no legal obligation for the government to pay market value when nationalising industries. Both Labour and Conservative governments have nationalised without paying full compensation.

For example, Labour nationalised Railtrack in 2002 for £500 million, a sum the courts accepted as lawful.

Professor David Hall, co-author of the report, said “nationalisation would pay for itself in less than seven years”.

Meanwhile, the £3.6 billion takeover of Royal Mail by Czech billionaire Daniel Křetínský is due to complete later this month.

Renationalising water companies

Public ownership of water companies would reduce water bills by £3–5bn a year.

The report finds 35p of every £1 on English water bills goes to shareholders. In Scotland, just 8p in every £1 goes to shareholders, and bills are £113 lower.

“We’re all paying a 35% ‘privatisation tax’ on our water bills,” said Matthew Topham, lead campaigner at We Own It. “By ditching private shareholders and bringing water back into public ownership, we will save up to £5 billion a year.”

The government has previously claimed it would cost up to £100 billion to renationalise water.

The figure has been widely debunked, with Labour MP Clive Lewis calling it “a smokescreen by private companies” to protect private ownership.

Topham added: “By refusing to take water into public ownership, the government is starving our water sector of billions of investment every single year – they must act now before the entire system collapses.”

The Guardian view on Britain’s broken economy: ‘That’s your bloody GDP, not ours’

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Editorial

Despite growth in 2024, living standards fell. Inequality, weak public investment and government cuts threaten prosperity. Labour must offer voters something different.

The picture painted by official data for the UK economy in 2024 reveals a country broken by 14 years of Conservative party rule. True, the economy grew – somewhat unexpectedly – but GDP per head fell, showing prosperity didn’t reach most people. There are a few reasons for this decline but none suggests a healthy society. One is runaway wealth inequality, with gains hoarded at the top. Another is stark regional disparities, with some areas falling further behind despite national GDP rising. A third is rising immigration without enough job creation – more workers, but not enough well-paying positions.

A growing economy means little if it doesn’t improve living standards. In 2024, it didn’t. This political reality has shaped recent years, and not in a good way. It’s worth recalling a Newcastle woman’s tart response to the political scientist Anand Menon in 2016 when he warned that Brexit would hit GDP: “That’s your bloody GDP, not ours.” That continuing frustration explains the current backlash against mainstream politicians. No wonder Sir Keir Starmer wants his party to be one of disruption.

Thursday’s growth figures offer the prime minister a chance to break the mould of British politics. Unfortunately, he seems reluctant to act. What’s clear from the statistics is that, in 2024, government spending drove growth – boosted by rising wages, especially in the public sector – rather than business investment or net trade. Labour could challenge the status quo with a new economic vision centred on the state. Instead, unfortunately, the government promotes the idea that growth depends on government inaction in the face of unfettered capitalism.

Statistics often disguise the state’s role, framing public services as just another economic input rather than the engine of demand they are. This distortion makes the economy look more market-driven than reality, reinforcing neoliberal myths. The chancellor, Rachel Reeves, unfortunately, seems more eager to conform to these narratives than challenge them. She plans to cut public sector net borrowing from March 2025 to meet fiscal rules – austerity by another name. The last time this happened, post-2010, it led to a decade of weak growth and stagnant wages. The justice secretary, Shabana Mahmood, gets it. This week, she called out austerity’s role in wrecking probation services. If she was trying to change the chancellor’s mind, she deserves thanks. Britain can’t afford years of cuts.

One of John Maynard Keynes’ sharpest insights was what’s good for society isn’t always good for profits. That’s why the Green Alliance, a thinktank, is right – injecting £3bn into discounting rail fares to boost passenger miles by 22% is smart economics. It’s a win for regional growth, for the climate and for cleaner air. The state has the power to make capitalism work for the public – if it chooses to use it. But Labour’s delay on releasing its industrial strategy is a worrying sign.

The UK must move away from a debt-driven, low-wage, financialised economic model. Public investment in infrastructure – especially in underserved regions – and in skills and industry is needed to stimulate demand and create high-quality jobs. Raising wages and reducing inequality will ensure broad-based prosperity, not just asset bubbles. The belief that “markets know best” has prevented bold action on Britain’s yawning economic divides and the climate emergency. After 40 years of weakening the state and rewarding rentier capitalism, reform is urgent. Labour must build a system that delivers it.

Guardian 13/02/2025

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