Former Minister calls for increased minimum wage

Benefits should be cut for wealthy pensioners and the minimum wage pushed up to improve living standards for hard-pressed workers, according to a Government report.

The coalition’s social mobility tsar Alan Milburn warned that the low-paid were the “forgotten people of Britain”, and insisted older people had to bear more of the burden of austerity.

The comments came as the former Labour Minister published his first annual report commissioned by Deputy Prime Minister Nick Clegg.

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Mr Milburn said the economic recovery was “unlikely to end a decade-long trend of the top half of society prospering and the bottom half stagnating”.

Problems were particularly stark for the bottom 10 per cent, who had seen real wages fall significantly since 2008. The low-paid are the “forgotten people of Britain”, he said.

“Today child poverty is a problem for working families rather than the workless or the workshy,” Mr Milburn said.

“Two-thirds of kids officially deemed poor in this country are in a family where someone is in work.”

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Mr Milburn said work was no longer a “cure for poverty” and Government and employers both had to address the question of how to “make work pay”.

“I think it is a job for both (Government and companies). Tax credits have got a part to play... but employers have to look again at the wages they pay and the career opportunities they provide.”

Even before the report was officially published, Liberal Democrat leader Mr Clegg made clear that he did not support significant benefit cuts for pensioners.

In a newspaper article, he said: “It (the report) has many powerful recommendations, such as the need to ensure childcare funding makes work pay even for families on low incomes, and the need to do more on vocational education.

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“But it also makes some more debatable assertions, about the appropriate balance of fiscal consolidation between different age groups, for example – punishing pensioners isn’t going to help a single child achieve more in life.”

Mr Milburn added: “I think Nick is right to say that it would be wrong to punish pensioners. I think the question is: is it right that at a time when working families are seeing their wages stagnating and their public services being cut that wealthy pensioners have their benefits protected? I think there is a strong case for looking again at things like the winter fuel allowance or free TV licences, particularly for better-off pensioners in order that we ensure there is a fairer sharing of the burden.”

Labour MP Frank Field said: “Anyone – like an MP – who works with talented young graduates for a decade or more knows that they will achieve far less in respect of material possessions than established MPs have already achieved.

“When I left university I expected to get a job, be a member of a generous pension scheme, acquire savings and buy at least one home. The young people working with me know they’re lucky if they’re able to achieve just one of these objectives.”