Mayor confirms increase to London Living Wage as businesses sign up

03 November 2014

• London Living Wage to increase to £9.15 per hour

• Number of accredited companies paying London Living Wage has doubled over the past 12 months to exceed 400.

At the start of National Living Wage Week the Mayor of London, Boris Johnson has announced that the number of employers paying the London Living Wage in the capital has doubled in the last 12 months. He also confirmed a four per cent increase in the London Living Wage, taking the hourly rate from £8.80 to £9.15 per hour.

Major brands such as ITV, Nationwide and Google have all become accredited as London Living Wage employers over the last year and over 400 companies are now signed up. Many smaller businesses have also committed to the Living Wage including CTS cleaning solutions (the first accredited cleaning company), Stepney City Farm and the East London Liquor Company.

However, more than one in five employed Londoners earned less than the new rate in 2013 and today (3 November) the Mayor announced a renewed focus on encouraging businesses in the hospitality and retail sectors to sign up to the scheme, when he visited Kaffeine, the first coffee shop in the capital to become accredited.

The Mayor of London Boris Johnson said: “It is extremely encouraging to see companies both large and small recognising the benefits of fair remuneration. The London Living Wage rewards hard working Londoners for their valuable contribution to the productivity and growth of this city’s economy. It is a win-win scenario for the workforce and employers alike. Importantly, this isn’t just about economic dividends, but the immeasurable improvement to quality of life and workplace morale. In excess of 400 businesses have made the commitment, but we need even more converts, particularly in the retail and hospitality sectors. I hope that even more organisations this year will decide to do the right thing.”

Paying the London Living Wage delivers benefits for individuals and companies. Research published by academics at Queen Mary University on the costs and benefits of paying the London Living Wage found that over half the number of people earning the Living Wage who were interviewed for a study felt more positive about their workplace after it was introduced. A similar proportion felt more loyal towards their employer. The research also estimated that moving London’s low paid workers onto the LLW would save the Treasury an estimated £823 million a year in increased taxes and reduced benefit payments. • A previous study commissioned by the GLA and conducted by London Economics found that the “most significant impact noted was recruitment and retention, improved worker morale, motivation, productivity and [the] reputational impacts of being an ethical employer”. The study also found that more than 80 per cent of employers believed that the living wage had increased the quality of the work.

The owner of Kaffeine, Peter Dore-Smith, said: “Fair pay for fair work benefits everyone. It is because of my staff that this business is a success and it is because of my staff that it will continue to be. It is only fair and decent that they be paid a fair and decent wage. I know what it is like to work in a great place that rewards your efforts, it makes you work harder and have more passion for your work. I am incredibly proud that Kaffeine is the first coffee shop in London to pay the Living Wage and I would urge other business owners to sign up.”

Rhys Moore, Director, Living Wage Foundation said: “London is leading the way in championing the Living Wage, and the leadership shown by the Mayor of London has been key to this success. As the recovery continues it’s vital that the proceeds of growth are properly shared. The London Living Wage reflects the unique challenges of working and living in one of the world’s most expensive cities.

“Those businesses that can should follow the example of Nestle and Nationwide, as well as hundreds of smaller, independent businesses like Kaffeine, London’s first accredited coffee shop, and CTS Cleaning, the capital’s first Living Wage cleaning company. These businesses recognise that clinging to the minimum wage isn’t good for business or the communities in which they work. “Low pay costs the taxpayer money – firms that pay the minimum wage are seeing their workers’ pay topped up through the benefits system. So it’s right that we recognise and celebrate those employers who are voluntarily signing up to the higher Living Wage, and saving the taxpayer money in the process. “The London Living Wage reflects the real cost of living, rewarding a hard day’s work with a fair day’s pay.”

Notes to editors

• The London Living Wage has risen by four per cent from £8.80 to £9.15.

• Accredited Living Wage Employers alone have now provided over 20,000 workers in London with the benefits of the living wage since 2011.

• The Living Wage Foundation supports both the London and National Living Wage campaigns by providing ‘accreditation’ to those Living Wage employers who want it.

• The accreditation process is administered by the Foundation, which is part of Citizens UK. ‘Accreditation’ entitles an employer to use the Living Wage mark. In addition accredited employers undertake to meet announced rises in the Living Wage within six months.

• There are over 400 London employers accredited. This compares with just 27 employers who offered the Living Wage in 2008.

• Over the past year there have been new living wage employers from every sector including private sector companies in finance and retail, third sector charities, schools, colleges and the public sector.

• Key sign-ups in the private sector in the past year include well-known brands such as Nationwide, Foster & Partners, ITV and HSBC. Recent sign-ups in the public sector include MOPAC, the House of Commons and the House of Lords.

• Queen Mary University of London ‘The costs and benefits of the London living wage’ can be found here http://www.geog.qmul.ac.uk/livingwage/pdf/Livingwagecostsandbenefits.pdf

• GLA Economics ‘An independent study of the business benefits of implementing a Living Wage policy in London’ can be found here http://www.london.gov.uk/mayor/economic_unit/docs/living-wage-benefits-report.pdf