Labour needs to win back middle class voters by ensuring they enjoy better pay and rising living standards, according to senior Birmingham MP Liam Byrne. He spoke to Political Editor Jonathan Walker at Labour’s Manchester conference.

As critics accuse Labour of retreating to the left under Ed Miliband, former Cabinet Minister Liam Byrne is announcing the creation of a new taskforce – to help the middle classes become richer.

Mr Byrne (Lab, Birmingham Hodge Hill), currently the Shadow Chief Secretary to the Treasury, is to chair a new body based on the Americian “Middle Class Task Force” created by US President Barack Obama.

One of its aims will be to find ways of ensuring people who work enjoy better salaries and standards of living, after decades in which incomes have stood still in real terms for many working people.

This could mean revising the minimum wage – so that a new, higher minimum is introduced for skilled workers.

But it will also consider whether benefits should be radically cut for people who could work but choose not to.

It seems a far cry from the left wing agenda Mr Miliband is accused of occupying by Tory critics.

Mr Byrne insists he is merely treading traditional Labour ground by ensuring his party supports aspiration and hard work, and that the new leader is fully on board.

Speaking to The Birmingham Post during Labour’s annual conference in Manchester, he said: “A lot of the things that we began to see in the last year, particularly the squeeze on people’s living standards, need to be front and centre of our political campaigning.

“The truth is that we didn’t talk about those issues a lot over the last ten years.”

This cost Labour votes in May’s general election, he said.

“Many of the people who said they were not going to vote for me were frustrated that they were working just as hard as ever but they just weren’t getting on in life.

“They said, ‘I’m working hard but I’m not going forward, and I can see a lot of newcomers in my neighbourhood, and I can see people who I don’t think are working as hard as me and they seem to be doing okay’.

“What we’ve got to develop is a renewed offer from government to aspirational people that basically shows them how we are going to help them get on and up in life, in an economy that’s very different to the economy of 15 years ago.”

This could involve reforming welfare – something he said he urged colleagues to do when Labour was in office, to no avail.

“I said to Gordon Brown and Alistair Darling that we should have been tougher on welfare reform,” he said.

“I think that could have helped save money and helped deliver a fairer welfare system.

“But we also have to show how we are going to open the doors of college to people who want skills but can’t currently pay their way because they’ve got no way of feeding the family if they take time out and go and study.

"And we’ve got to strike a new bargain with business where we say ‘look, we’ll invest in things that make you more profitable but if your workers help you succeed then you should give them a pay rise’.

"So there’s a pretty comprehensive look we’ve got to take at the way government supports aspirational people who believe in working hard in life and making their own future, but don’t feel they are getting enough back for the tax they pay right now.”

Government had to be willing to get tough with businesses which failed to reward staff properly, Mr Byrne said. “If you look at Australia for example, they have developed an idea there called national minimum wage plus, which means that the minimum wage goes up if people get certain skills that their business needs.

“Or you can look at an issue like the agency workers directive.

“You can talk to people in Shard End about the boom in Jaguar and them taking on more shifts.

“People are pleased Jaguar is doing well but they are also frustrated that a lot of the people Jaguar is taking on are agency workers.

“So there is a grown up conversation to have with business about what government does, like investing in universities, research and development and market access in countries like China – only government can do those things.

“But in return we have to ask the business community, what are they going to do to reward workers who make their businesses successful?”

Winning back middle class voters is crucial to regaining power, Mr Byrne said.

“Labour has got a hard road to walk to get back into office.

“The reality is that in the south, the south east and the east, we only have ten Labour seats.

“If you travel due north from Edmonton in north London, it is Great Grimsby before you get to a Labour seat.

“So there are big parts of the country that haven’t got Labour representatives. If you want to be a one-nation party you’ve got to represent every corner of the country.”

Jonathan Walker: Page 33