TORY welfare and economic policies will condemn millions to grinding poverty in a “permanently divided nation,” a top government adviser confirmed yesterday.

Britain’s slave-wage scandal was laid bare in Con-Dem social mobility tsar Alan Milburn’s State of the Nation report.

The social mobility and child poverty commission chair said that despite Tory boasts of Britain bouncing back from the 2008 banking collapse, “there are clear signs that the economic recovery is not being matched by a social recovery.

“Young people are on the wrong side of the divide that is opening up in British society,” he warned.

The commission found that a 2020 target to end child poverty is now mere fantasy due to the country’s “endemic low pay problem” and the high cost of housing.

And barriers in education and the jobs market mean that a growing army of working poor will raise a new generation with no hope of improving their economic situation, it added.

It urged politicians to commit to deliver a universal living wage within a decade, regulate the private rental sector, tear down education barriers, launch a massive apprenticeship programme and protect children from the impact of welfare cuts.

Trade Union Congress general secretary Frances O’Grady said the commission’s warning “must not go unheeded by ministers” and demanded drastic action.

“The report rightly highlights that in-work poverty is a significant and growing problem,” she said.

“It makes clear that if we want to improve social mobility we need to see both fair pay rises and a strong social security safety net.”

Charity Child Poverty Action Group chief Alison Garnham warned that politicians must not turn their back on the goal of ending child poverty.

“There will be nearly a million more poor children in the UK by 2020 as a result of policies introduced in recent years,” she warned.

“We must not accept that failing to meet the targets by 2020 means that they can never be achieved.

“With the right policies, the right timeframe, and the right level of political will we can eradicate child poverty in the UK just as other countries have.”