Labour market Inequality

Meeting: 
MQT on 2014-11-19
Session date: 
November 19, 2014
Reference: 
2014/4308
Question By: 
Fiona Twycross
Organisation: 
Labour Group
Asked Of: 
The Mayor

Question

Why are there now more people in London being paid less than the equivalent of the London Living Wage than when you took office?

Answer

Answer for Labour market Inequality

Answer for Labour market Inequality

Answered By: 
The Mayor

Boris Johnson (Mayor of London):  Thank you, Fiona.  You are asking why there are now more people in London being paid less than the equivalent of the London Living Wage than when I took office.  More people are now being paid more than the London Living Wage than when I took office, basically, because there are more people in employment.  London actually has the lowest proportion of workers on less than the Living Wage of any region in the country.  We have more people as a proportion of the population in London on Living Wage incomes even allowing for the London Living Wage, which is set at higher level, as you know, than the rest of the country.

 

Fiona Twycross AM:  There is an issue about how the statistics are used in relation to your record on the Living Wage.  If you look at what GLA Economics reports, it says that over 20% of jobs in London pay less than the Living Wage now.  In 2012 this was 17% of jobs, and in 2007, just before you came into office, this was 13% of all jobs.  Do bear with me.  It is actually going the other way to what you suggest.  The truth is that the London Living Wage rate is not really worth the paper of your press release announcing the new rate unless there are more people being paid it.  It is about the money in people’s pockets.

 

Boris Johnson (Mayor of London):  More people are now being paid it, as I said.

 

Fiona Twycross AM:  Yes, but more people are not. 

 

Boris Johnson (Mayor of London):  No, more people are being paid it.

 

Fiona Twycross AM:  If we go to the proportion of people who are not, the proportion of people who are paid below the Living Wage has gone up and the actual number of people who are paid below the Living Wage has also gone up.  You can argue that more people are paid it, but actually more people are not paid it as well.  

 

Boris Johnson (Mayor of London):  The more-people figure.

 

Fiona Twycross AM:  It is about which figure you want to concentrate on.  The number of people who are not being paid it or the number of people who are not.

 

Boris Johnson (Mayor of London):  There are now more people, yes. I understand the point you make, Fiona.  It is also true that the proportion of people in London, as I said, who earn less than the Living Wage is lower than the rest of the country, even allowing for the fact that the Living Wage in this city is higher than in the rest of the country.  It is 17% in London who are paid less than the Living Wage and 22% of the rest of the country are paid less than ‑‑

 

Fiona Twycross AM:  No, it is over 20% of jobs in London that pay less than the Living Wage.

 

Boris Johnson (Mayor of London):  It is 17%.

 

Fiona Twycross AM:  No, it was 17% in 2012.  The latest figure for London is 20% of jobs in London pay less than the Living Wage. 

 

Boris Johnson (Mayor of London):  The figure I have here is 17%.

 

Fiona Twycross AM:  ‑What percentage of jobs in London paid below the Living Wage are there going to be next year?  Is it going to be higher or lower?  What percentage is it going to be next year, higher or lower?

 

Boris Johnson (Mayor of London):  The figure I have is 17%.

 

Fiona Twycross AM:  I have a figure of 20%.

 

Roger Evans AM (Chairman):  You are out of date, Boris.

 

Fiona Twycross AM:  Your figures are out of date because the 17% is from 2012.  Over half of all working-age adults and children in poverty in London actually live in a household where somebody is working.  Poverty pay is a massive issue in London.  Unless people are paid and get a rate that pays for their work, it is difficult to see how people can get on in a high-cost city such as this.  Data from the Office of National Statistics shows the average pay in London in real terms has fallen by £87 a week - that is in real terms - for the average Londoner since 2009.  Another failure on your watch is that in real terms the average pay has gone down.  The scandal of poverty pay is getting worse and not better.

 

Boris Johnson (Mayor of London):  Hang on.  Do you know by how much the number of jobs in London has increased since I have been Mayor?  It has gone up from 4.94 million to 5.6 million.  That is more than 500,000 people more in work.  That is an extraordinary expansion.

 

Fiona Twycross AM:  How many of those are on poverty pay?

 

Boris Johnson (Mayor of London):  That is why there are more people being paid the Living Wage

 

Fiona Twycross AM:  Work should pay.  If people are in work it should pay.

 

Boris Johnson (Mayor of London):  Above all, what you are seeing is that the number of employers signed up to the Living Wage has doubled just in the last 12 months.  As you know very well, we are taking all sorts of other measures to help people on low pay.  Cutting council tax, making sure that people continue to have access to cut-price travel for those --

 

Fiona Twycross AM:  The overall costs for Londoners are increasing out of all proportion.  In real terms, average pay has fallen by £87 a week.  At the same time, FTSE 100 directors’ pay increased by 21% over the past year alone to an average of a staggering £2.4 million annually, which is about 120 times the average worker’s.  What is your message to Londoners on low pay about the message this sends?

 

Boris Johnson (Mayor of London):  My message to Londoners is that this is an administration that cares deeply about trying to ensure that they have the Living Wage.  We have expanded it, as I say, massively, by about 1,500 times or whatever it is, since I was elected. 

 

Fiona Twycross AM:  Still the number of people paid less than the Living Wage is going up and as a proportion.

 

Boris Johnson (Mayor of London):  No, the number of people who are being paid more than the Living Wage is also going up. 

 

Fiona Twycross AM:  But the proportion is going up.  The proportion is going up and that matters. Do you agree?

 

Boris Johnson (Mayor of London):  That is because there has been a massive increase in jobs.  That is a good thing.  What you are really comparing, if I may so, Fiona ‑‑

 

Fiona Twycross AM:  But the proportion is a massive increase in low-paid jobs and people cannot afford to eat.

 

Boris Johnson (Mayor of London):  What you are comparing is people who have no job and people who are in work. --

Fiona Twycross AM:  However, they cannot afford to eat, cannot afford to pay their bills, cannot afford the rent and cannot afford to live in London.

 

Boris Johnson (Mayor of London):  ‑‑ and whom we are helping through cutting council tax, as we have done every year.

 

Fiona Twycross AM:  Do you agree?

 

Boris Johnson (Mayor of London):  Your policy and what you would rather have is everybody on the dole.

 

Fiona Twycross AM:  That is absolutely patently not true.  I welcome the fact that the Conservatives recognise the value of incentives, which has actually been Labour policy for some time. 

 

However, I want to talk briefly about how you have said before that you think that where people can afford to pay, they should.  Do you agree with Arsenal’s position on the Living Wage or do you think they should listen to campaigners such as Fair Play Fair Pay and recognise that as Arsenal and other Premier League clubs clearly can afford to pay the Living Wage, they should do so?

 

Boris Johnson (Mayor of London):  I do.

 

Fiona Twycross AM:  You do?

 

Boris Johnson (Mayor of London):  I agree that companies who can pay it should pay and many of them are now.  The movement is building.  It is a great thing to watch.  We have had an interesting discussion with Tony [Tony Arbour AM] already about his proposal to try to encourage companies to pay it, particularly small businesses.  It is not always easy for everybody to pay it, but big companies who have big cost bases can certainly do it.  They can do it without detriment to their shareholders.  In fact, it would be positive for their shareholders because they get their higher productivity, lower human resources (HR) costs and more loyalty in their staff and they should do it.

 

Fiona Twycross AM:  Yet many of the jobs at the football ground, as you will be aware, will be part-time.  Almost half the jobs paid below the Living Wage in London are part-time jobs, compared to less than 13% of full-time jobs.  Do you believe that part-time work is effectively second-class work?

 

Boris Johnson (Mayor of London):  No.  We believe in supporting everybody on low incomes in London and making sure that the maximum possible receive the Living Wage and ensuring that we do what we can to help people on low incomes through cut-price travel for those in search of work and for a 24-hour Freedom Pass.  We have now concessions for apprentices in addition to all of the other concessions that you know of on the transport network.

 

Fiona Twycross AM:  Will you have a specific focus on take-up on part-time jobs?

 

Boris Johnson (Mayor of London):  The tax that absolutely everybody, every homeowner and every householder has to pay in London is the council tax, of which we have cut our share by 24%.

 

Fiona Twycross AM:  Yes, but will you have a particular drive on increase of Living Wage among part-time workers?

 

Boris Johnson (Mayor of London):  I do not know whether you were listening to my opening statement, but we have just helped part-time workers with an effective cut in their annual travel cost of about £200, £300 and £600 depending on what their route is.

 

Fiona Twycross AM:  That is of minimal comparison to getting a decent pay.  It would be much better if you just made sure everybody had a decent level of pay.  It is very well for him but--

Boris Johnson (Mayor of London):  That will be of substantial benefit. 

 

Fiona Twycross AM:  Thank you.