Mayor announces London Living Wage of Ł7.20

Press Release

Mayor announces London Living Wage of Ł7.20
2-4-2007 205

Mayor of London Ken Livingstone today announced a new Living Wage for London at £7.20 following publication of the Living Wage Unit's third annual report.

The Mayor said:

'The London Living Wage is vital to ensure the capital retains a skilled, committed workforce and this applies to those who provide all the essential services - without which London would grind to a halt - as much as it does to highly paid brokers, bankers or lawyers.

'It is simply unacceptable that about one in seven of London's full-time workers and almost half our part-time workers are paid less than the London Living Wage.

'Since the establishment of a recognised London Living Wage, employers and unions are increasingly using it in negotiations and setting wage rates. They are making a real difference to the London economy. I commend this report to London, and to anyone with the future success of our city at heart.’

Reverend Paul Regan, Trustee of London Citizens and chair of the Living Wage Steering Group added:

'Today, London Citizens welcomes the Mayor's announcement of the new London Living Wage of £7.20 an hour. When employers in this city save money by paying low wages, our communities are forced to pay the real price. The Mayor's leadership on this issue has enabled the London Citizens Living Wage Campaign to lift thousands of families out of working poverty.'

Martin Grant, Domestic and UNISON Shop Steward at Barts and The London Hospital said:

'When we were on £5 an hour, every week was a struggle to make ends meet. Some of us were working other jobs and had little time with the family. Since we won the Living Wage with London Citizens and UNISON, everyone is much happier and can afford things like sending children on school trips and maybe even a holiday. We're also working better at the hospital.'

Steve Hart, T&G Regional Secretary, said:

`Hundreds of thousands of low-paid workers struggle to survive and raise their families in London, one of the most expensive cities in the world. The creation of the London living wage was a bold move by the Mayor and it is the minimum that responsible employers should be paying to keep their workforce out of poverty. It’s now about getting it in practice throughout the public and private sectors. The T&G is determined to continue to organise low-paid workers so that the London living wage is paid everywhere.'

Ravinder Gill, London Regional Officer, UNISON said:

‘UNISON applauds what has been accomplished by the London Living Wage, and recognises the role of the Mayor's leadership and personal commitment, that has led to today's announcement. UNISON has consistently fought against low pay and inequality across the Public Sector in London, which has resulted in achieving greater than the minimum aspirations in many areas. It is hoped that a united campaign will eradicate poverty pay, so that everyone can be proud of living and working in our great city.’

Ian Tew, Head of Workplace at KPMG added:

'KPMG has ensured since March 2006 that all cleaners who, although employed by third parties, work at our London offices have the appropriate London Living Wage employment conditions plus allowance for inflation. Similar Living wage employment conditions were given to all on-site supplier staff such as catering, mailroom and security, from 1 October 2006. KPMG sees paying the Living Wage as a socially responsible business move and supports KPMG's position as being in the Top 3 Sunday Times "Best Big Company to Work for" for the last 3 years.

'KPMG has found that paying the London Living Wage is a smart business move as increasing wages has reduced staff turnover and absenteeism and increased productivity and professionalism.'

The Living Wage for London was calculated at £7.05 an hour in May 2006. The new figure and how it is calculated is outlined in 'A Fairer London: The Living Wage in London' published today. This outlines the methodology used by the Living Wage Unit and shows that anyone earning less than £6.25 an hour is at or below the poverty level in London - even after taking into account tax credits and benefits. This is significantly above the National Minimum Wage level of £5.35, largely because of the high cost of housing in London.

To be a truly living wage, there has to be some margin to ensure people do not fall into poverty because of the kind of unexpected events that better-off people take in their stride. To reflect this, a figure of 15 per cent is added to the poverty level wage, resulting in a London Living Wage figure of £7.20 per hour.

Notes to Editors

The London Living Wage is the amount someone in London needs to be paid in order to ensure they can both maintain a decent standard of living and avoid falling into poverty. The Living Wage Unit's annual reports set out the detailed research and calculations on which the figure is based.
The Living Wage unit was established following a commitment in your last election manifesto in 2004. It published its first report in April 2005, and set out the case for a London Living Wage of £6.70 per hour. Its second report, in May 2006 set a London Living Wage of £7.05 per hour.
The fact that poverty wages in London are significantly above the National Minimum Wage is primarily due to much higher housing costs in London.
The Mayor's recent Women in London's economy report found that 19 per cent of women in London, nearly one in five, are earning less than the previous London Living Wage of £7.05 per hour compared to only 12 per cent of men.
Copies of the report are available at www.london.gov.uk.

For media enquiries for the Mayor call Megan Woithe or Alison McDonald in the Mayor's Press Office on 020 7983 4020/6550.

For out of hours media enquiries please call 020 7983 4000. For public enquiries please call the Public Liaison Unit on 020 7983 4100.