Andy Burnham has said the new National Living Wage should be extended to include people below the age of 25, as all four Labour leadership candidates came out against freeze in public sector pay rises.
Yesterday the chancellor said he wanted to create a "higher wage, lower tax, lower welfare" country. The flagship announcement was a surprise introduction of a new National Living Wage that will reach £9 an hour by 2020.
However the new rate is restricted to those above the age of 25. Burnham, the frontrunner in the Labour leadership contest, said in a video posted on YouTube on Thursday afternoon that it should apply to everyone.
"What possible justification can there be for excluding those aged under 25 from the National Living Wage? It is already much harder for young people to make their way in the world than it was for our generation," he said.
The shadow health secretary said "an entire generation is being cut adrift" by the chancellor and said he backed a "true national living wage for everyone". Burnham added: "Let's raise the wage for every age."
Earlier today, the Institute for Fiscal Studies (IFS) think-tank concluded that Osborne's Budget was "regressive" and hurt the poor more than the rich.
Burnham also joined the other Labour leadership candidates in attacking George Osborne's five-year 1% pay freeze for public sector workers, a move the Institute for Fiscal Studies claimed would see it fall by a record amount compared to private sector wages.
Interim shadow chancellor Chris Leslie yesterday refused to say Labour would fight the plan, stating only that 'pay restraint' would be preferable to job losses.
But Yvette Cooper became the first of the contenders to say she would oppose the chancellor's plan if she became leader.
"I will not support this five year 1% cap, and I believe Labour must have the confidence to stand up for what is right for our public services and fair for hard working people," she said.
Burnham preferred instead to say that he would reinstate the Independent Pay Review Bodies that the Tories have bypassed.
"People who work in our schools, hospitals and police forces are waking up to the grim reality of a decade of pay cuts," he said.
"Osborne should reinstate the Independent Pay Review Bodies that he stood down and find a settlement that's fair to public sector workers and affordable to the taxpayer. He should have cut the pay bill by reducing reliance on agency and contract staff, not punishing the permanent workforce."
Liz Kendall told The Huffington Post she would oppose the 1% pay freeze, because NHS staff needed 'some reward' for finding efficiencies and even NHS chief executive Simon Stevens had said he wanted to improve pay rates.
She stressed that Labour had to show how it would pay for the pay hikes, and suggested a review of £100bn in business reliefs would deliver savings to help both public sector pay and curb tax credits cuts.
“There is going to be a huge problem with public sector workers with a pay freeze or what for many will be a pay cut essentially over a decade, particularly in the health service.
"Simon Stevens said last year when he produced his five-year forward view that in the medium term we have to look at improving pay for NHS workers because we are losing staff to work in other sectors.
"And also if we are asking NHS staff to make the equivalent of 5%productivity gains year on year - no country in the world has done that in one year let alone five years - there has to be a proper deal here between the changes that staff put in place, because we do need big reforms in our public sector, but also that they get some reward for that.
“Part of why I have announced this review of tax reliefs today [worth £100bn, where we are spending ever increasing amounts, is that I think we need a different approach.
"To be a credible opposition you have to say different choices that you would make. And part of the reason I’ve asked Margaret [Hodge] to look at this is to bring savings so that we can deal with issues like public sector pay and the tax credits.
"It’s not just enough for us to oppose, we have to put forward an alternative and I think this is a good place to start.”