The coalition will boost social mobility by focusing on helping children from deprived backgrounds, Nick Clegg has said.
The deputy prime minister promised a "more rounded approach" than under Labour, whose investment of "huge sums" had made "little discernible impact".
Mr Clegg said he wanted to use education to "improve people's lives".
But Labour leadership contender David Miliband said the coalition's policies would damage social mobility.
The debate comes as the coalition marks its 100th day in power.
Speaking at an event organised by the Centre Forum think-tank, Mr Clegg confirmed that former Labour minister Alan Milburn has been appointed as the government's independent reviewer on social mobility.
He said: "Under Labour huge sums of money were spent pushing low-income households just above the statistically defined level of household income - sometimes by just a few pounds a week - but with no discernible impact on the real life chances of the next generation.
"Tackling poverty of opportunity requires a more rounded approach. Welfare reform, for example, should be based on the need to improve people's lives, not just raise their incomes."
Mr Clegg, who is overseeing the government's policy on social mobility, said making improvements would be "like turning the wheel on an oil tanker", but promised towards them over the long term.
He said: "Fairness means everyone having the chance to do well, irrespective of their beginnings.
"Fairness means that no one is held back by the circumstances of their birth. Fairness demands that what counts is not the school you went to or the jobs your parents did, but your ability and your ambition.
"In other words, fairness means social mobility."
But, he argued that this had, at best "flatlined" over recent decades, with "inter-generational" poverty still common.
Questioned about his own background, Mr Clegg, who was educated at public school and Cambridge University, said: "The evidence is absolutely overwhelming that the circumstances of birth on what a person will be... is far, far too great."
The deputy prime minister said the coalition would tackle "social segregation" and had begun to do so by taking many of the lowest earners out of paying income tax.
In education, resources would be focused on the most disadvantaged, during early years and schooling.
Mr Clegg added that the Sure Start programme set up under Labour would go "back to its original purpose of early intervention, increasing its focus on the neediest families".
Mr Miliband told BBC News: "Anyone who cares about social mobility can't believe anything they hear from a government who expect the poor to take the greatest burden."
He added that the coalition's tax policies would "hit social mobility, rather than help it".
Mr Miliband also said he was "proud" of Labour's record on social mobility but "not satisfied".