14 June 2012 10:21
Oxfam has urged an increase in the minimum wage to protect low-income workers from a "perfect storm" of benefit cuts, rising living standards and a lack of jobs.
The charity called for the rise as part of a package of measures ahead of today's publication of official figures which they predict will show an increase in the number of working people in poverty.
Already six in every 10 of the 7.9 million working-age adults in poverty are not from jobless households, it said, because austerity measures are "disproportionately impacting" the low-paid.
Thousands more than last year are turning to food banks and other charity facilities as average earnings have shrunk 4.4%, the report noted, while pay of FTSE 100 company directors rose 49%.
Improving that rate, Oxfam said, requires actions such as reversing cuts to working tax credits and reducing the amount of the new Universal Credit people lose when starting a job, from 65% to 55%.
Oxfam's director of UK poverty Chris Johnes said: "Despite the Government's rhetoric about making work pay, having a job is no longer necessarily enough to lift someone out of poverty.
"More working-age adults in poverty now live in working households than in workless ones.
"The Government is justifying huge cuts to welfare support for people on low incomes by saying this will incentivise work, but there simply aren't enough decent jobs available. We need to see income being distributed more fairly if we are to make any impact on reducing levels of poverty.
"If we carry on down this path, the UK will return to levels of inequality not seen since Victorian times."
A DWP spokesman said: "Over the last decade vast sums of money have been poured into the benefits system in an attempt to address poverty - £150 billion was spent on tax credits alone between 2004 and 2010. This approach has failed, with the UK likely to miss its own 2010 child poverty targets.
"We need to address the root causes of poverty including worklessness.
"The universal credit will replace a complex mess of benefits and tax credits and make work pay. It is estimated that universal credit could lift 350,000 children and 550,000 adults out of poverty."