Alan Milburn urges Government to tackle low pay

The Social Mobility and Child Poverty Commission recommends the Government make it a priority that work pays for all families to enable them to escape poverty.

In its first report, ‘State of the nation 2013’, the Commission argues that the five million adults and children in working poor households are the forgotten people of Britain.

It goes on to urge the Government to focus on reducing in work-poverty by raising the minimum wage.

According to the Social Mobility and Child Poverty Commission, chaired by Alan Milburn (right), the UK has one of the highest rates of low pay in the developed world, increasing the risks of in-work poverty.

It says that employers need to accept that the taxpayer alone can no longer ‘bridge the gap’ between earnings and prices, and they need to step-up to the plate by providing higher minimum levels of pay and better careers prospects.

The commission also recommends re-allocating Budget 2013 funding for children from higher rate taxpayers to help those on Universal Credit meet more of their childcare costs.

While the report acknowledges that important steps have been taken such as offering more childcare, and the lifting of the income tax threshold, it says that overall it does not pay enough attention to the challenge of in-work poverty and the impact of earnings on the ambition to enable families to escape poverty ‘under their own steam’.

It estimates that a lone parent with two children would need to earn £21,000 a year before tax to escape relative income poverty before housing costs without any support from the state.

To escape poverty after housing costs without state support, the Commission says most parents would need to earn far more, especially if families live in the private rented sector in high-cost areas such as London.

The Commission goes on to warn that the falls in poverty seen over the last 15 years may be reversing, with 2.6 million children now in poverty.

It says that the Government’s target to end child poverty is likely to be missed.

In light of this, the commission recommends using the next child poverty strategy to produce a detailed step-by-step plan for how the Government will meet the 2020 targets.

Mr Milburn said, ‘For decades the focus has been on moving people from welfare to work. A job remains the best safeguard against being poor. But it is not a cure for poverty. Over the last decade earnings growth has been lagging behind prices. More and more people are at risk of poverty as a result.

‘Every citizen who can should be expected to work their way out of poverty by seeking jobs, working enough hours and seizing the opportunities made available to them. The key influencers on children’s life chances are not schools or Governments or careers services. They are parents. We urge the Government to break one of the great taboos of public policy by doing far more to help parents to parent.’

He added, ‘Just as the Government has focused on reducing the country’s financial deficit it now needs to redouble its efforts to reduce our country’s fairness deficit. If Britain is to avoid being a country where all too often birth determines fate we have to do far more to create a level playing field of opportunity. ‘

Alison Garnham, chief executive of the Child Poverty Action Group, said, 'The commission’s verdict is clear, the Coalition’s current child poverty strategy is failing and child poverty is set to rise. The important thing now is to focus on the positive recommendations the commission makes to turn this situation around.

'We need firm action to help families suffering problems like low pay, lack of full-time work and job insecurity. The Government should start by taking up the Commission’s recommendation to increase the National Minimum Wage and to give all low earner families a higher level of childcare support under Universal Credit. The simplest approach of giving the full 85 per cent childcare support to all including the lowest paid would help reduce child poverty and get more second earners and lone parents into paid work.

'Overall, the Commission’s report is a timely reminder that we will not reduce the unacceptable levels of child poverty in Britain unless politicians are prepared to make active choices to help families. This means action to ensure fair pay, fair rents, fair energy prices and affordable childcare.

'The publication of the ‘State of the Nation 2013’ report follows a call by the Trussell Trust for the Prime Minister to launch an urgent inquiry into why increasingly more people are being forced to turn to foodbanks.

According to the Trussell Trust, more than 350,000 people received three days’ emergency food from their foodbanks between April and September 2013, triple the number of people in the same period last year.

Evidence from Trussell Trust foodbanks show that rising living costs and stagnant wages are forcing more people to live on a ‘financial knife edge’ where any change in circumstance can plunge them into poverty. In some cases, people have started giving back food that needs cooking because they cannot afford to turn on the electricity, says the charity.

Chris Mould, executive chairman of The Trussell Trust, said, ‘In April we said that the increasing numbers of people turning to foodbanks should be a wake-up call to the nation, but there has been no policy response and the situation is getting worse.

‘The level of food poverty in the UK is not acceptable. It’s scandalous and it is causing deep distress to thousands of people. The time has come for an official and in depth inquiry into the causes of food poverty and the consequent rise in the usage of foodbanks. As a nation we need to accept that something is wrong and that we need to act now to stop UK hunger getting worse.’