Wages

Meeting: 
MQT on 2013-11-20
Session date: 
November 20, 2013
Reference: 
2013/4095
Question By: 
Fiona Twycross
Organisation: 
Labour Group
Asked Of: 
The Mayor

Question

Are you concerned that the cost of living in London is rapidly outstripping pay in the capital?

Answer

Answer for Wages

Answer for Wages

Answered By: 
The Mayor

Fiona, everybody is concerned about this issue, it is that and housing, and they are interrelated, are the two big questions facing Londoners, and of course it is true that at the margin you are seeing some improvements.  You are seeing inflation actually starting to come down a bit, I think about 2.2% say GLA Economics, and if I cannot believe GLA Economics what can I believe?  They tell me that average household incomes will increase this year by, admittedly not much, 2.4%, , so taking into account inflation, in real terms 1.6%.  Then 2.4% next year; 2.7% in 2015, so they are seeing improvements in what is clearly a very tough position for loads of families.  We do what we can to mitigate this, as you know, and we champion things like the London Living Wage, free travel, cutting council tax, and so on.

 

Fiona Twycross (AM):  Thank you.  How do you explain how there are more jobs paid below the London Living Wage now however than in 2007 before you became Mayor?

 

Boris Johnson (Mayor of London):  Actually, there has been a 700% increase in the number of firms paying the London Living Wage since I became Mayor and --

 

Fiona Twycross (AM):  In 2012, 600,000 jobs were paid below the living wage and in 2007 420,000 were.

 

Boris Johnson (Mayor of London):  There is a very simple reason for that.  That is because there are far more jobs now in London, but there has been a simultaneous expansion of the London Living Wage and there are other key things you can do.  I think the London Living Wage is a wonderful campaign that I think is really starting to catch people’s imagination and it will be a real shame if it became excessively politicised.

 

Fiona Twycross (AM):  I am not seeking to politicise it, but I am seeking to ask you to do a bit more on it because at the current rate of progress it will take over 400 years for everyone in London to be paid over the living wage.

 

Boris Johnson (Mayor of London):  It is also true that there has been a big increase in the number of firms paying London Living Wage.  When I came to office there were 27 companies paying the London Living Wage and there are now 214 and nearly 100 in the process of accreditation.  The scheme has put about £60 million into the pockets of the Londoners who need it most.  Yes, I want to see other sectors of the London economy paying this wage and I have been very upfront with the retail sector, with supermarkets, with catering, with all those sectors, which are currently not paying it.  I do not believe that they have a decent enough excuse.  I think that it would be a good thing for their employees - they pay massive dividends, these companies, and it would be a good thing for those companies too.

 

Fiona Twycross (AM):  Yes, I agree that it would be hugely beneficial for their employees to be paid the London Living Wage, but I am trying to establish exactly what you have been doing to promote the London Living Wage and I understand that over the summer you wrote to 100 employers, which in my view seemed quite small, compared to the number of employers in London, and I wondered what response you had to those letters.

 

Boris Johnson (Mayor of London):  As soon as we have a breakdown of what the responses are I would be very happy to give you them, but do not forget some of those employers will be responsible for literally tens of thousands of Londoners on low pay.

 

Fiona Twycross (AM):  How many of these employers have you met?  How many out of the 100 employers have you met as a result of the letter you sent out over the summer?

 

Boris Johnson (Mayor of London):  I do not want to go into my private conversations with chief executives of big London companies about their pay strategies, but you can take it from me that I have raised it repeatedly with the people who run supermarkets, with the people who run hotel chains, with --

 

Fiona Twycross (AM):  Could you check and let us know how many of those 100 employers you have met with and how many of those 100 employers have committed now to introducing the London Living Wage?

 

Boris Johnson (Mayor of London):  I meet everybody and probably we can get you some information about it, but I think what would be more useful really would be, I think what you really want to know is what are they doing, how fast are we getting on with this.

 

Fiona Twycross (AM):  I want to know what you are doing to promote it because I think that it is a good campaign and I agree that it should not be overly politicised.  I think it is very valuable that there is cross-party support on this, but I am afraid that I do not think that 100 letters over the summer is sufficient input, and you have a huge role, I mean I do not really want to admit it, but you have a huge role in promoting this and I think that I would really welcome you doing more on this issue.

 

I would like if I can to go on to ask about the minimum wage while we are talking about pay in London, which was to wait for 400 years for the living wage to get sorted out, is what all too many Londoners have to live on.  Do you support the Centre for London’s proposals for a London minimum wage?

 

Boris Johnson (Mayor of London):  I would rather focus on the London Living Wage if that is OK, Fiona, because I think that is the campaign we have going at the moment. Just to answer your question, I think it would be diverting our energies and confusing my targets - and there are many, by the way I am constantly lobbying business about this, if we then said there is an alternative campaign --

 

Fiona Twycross (AM):  Yes, it is fine.  Maybe you do not want to talk about the London minimum wage, but it would benefit a huge number of Londoners.

 

Boris Johnson (Mayor of London):  We have such a scheme called the London Living Wage.

 

Fiona Twycross (AM):  We do, and I think that should be the ultimate destination, but in the meantime introducing a London minimum wage would benefit around 175,000 of London’s lowest-paid workers giving them, in the short term, a 7% pay rise up to £800 a year and longer‑term the proposal suggests a pay rise of 20% on the current rates could be sustained without affecting employment, which would mean up to £2,300 a year.  Do you not agree that would be a valuable boost to these low-paid workers’ incomes while we are campaigning jointly cross‑party on the London Living Wage?

 

Boris Johnson (Mayor of London):  It would, yes, and I can see where you are coming from.  I will study the proposals from the Centre for London.  My instinctive anxiety is that we would be starting to muddy the waters and there is a clarity, there is a popularity in the idea of the London Living Wage, everybody knows what it is, everybody understands the campaign, everybody hears the arguments about benefitting their companies as well as their employees, everyone understands the arguments about fairness.  I want to keep that as my focus.

 

Fiona Twycross (AM):  I have to say, for the lowest paid workers, I think they would probably understand what a 7% or 20% pay rise would mean and I think that you are not giving Londoners enough due for their intelligence, I think they are a bit more savvy than that to get too confused about the issue, and so I welcome the fact that you will review the proposals. I think we can campaign for more than one thing at a time.  It is a stepping-stone towards the Living Wage and I welcome your response that you will review the proposal, thank you.

 

Boris Johnson (Mayor of London):  I will look at it.