Summer Budget (Supplementary) [1]

Session date: 
July 15, 2015
Question By: 
Jenny Jones
City Hall Greens
Asked Of: 
The Mayor


Jenny Jones AM:  Thank you, Chair.  Mr Mayor, I want to agree with you that Osborne [Rt Hon George Osbourne MP, Chancellor of the Exchequer] has muddied the waters by calling his Minimum Wage the ‘Living Wage’.  You should go and have a strong word with him about that.

There is a strong argument for the London weighting, do you not think, on this?  The London weighting is on things like a higher pay-to-stay threshold for better-off social housing tenants, higher student loans and so on.  Is that something you are going to make a case about?  You say it is a sensible idea, but could you go a bit further and say, yes, you will support the idea?

Supplementary To: 


Answer for Summer Budget (Supplementary) [1]

Answer for Summer Budget (Supplementary) [1]

Answered By: 
The Mayor

Boris Johnson MP (Mayor of London):  As I have said just now, I will certainly look at what we can do there.  My anxiety is that the waters, to use your metaphor, will become even further muddied if we enter into a great argument about that question when what I want everybody to focus on is the moral need to pay the £9.15.  If we lose sight of that, we will have really lost a very considerable prize.

Jenny Jones AM:  There is the fact as well that there are some people in London who are going to experience a gap.  You are going to set the London Living Wage in November.  In April the Government cuts are going to come in.  There will be people living in London from April to November when you set the Living Wage again who will be experiencing real deprivation.  What you could do is, when you set the London Living Wage this November, you could take into account those cuts next year.  Is that something you are prepared to do?

Boris Johnson MP (Mayor of London):  Just to go over my last point again, I am more than willing to look at a London weighting for the National Living Wage and to try to see what ‑‑

Jenny Jones AM:  No, this ‑‑

Boris Johnson MP (Mayor of London):  On the second point, it is very important that the GLA Economics unit that sets the Living Wage should not be seen to be the tool of the mayoralty in any way and should be able to set that wage independently.  Therefore, I would be reluctant to go down that line.

Jenny Jones AM:  You could point out to them that there is going to be this gap for people.

Boris Johnson MP (Mayor of London):  I am sure that they are more than capable of seeing that themselves.

Jenny Jones AM:  All right.  I will send them the little transcript from this meeting.  Also, you say there is a moral need to pay the London Living Wage for employers, but I have urged you before to make it compulsory.  It is not just a moral need but there is also a financial need because people who are not paying the London Living Wage actually put a burden onto the taxpayer.  Surely it is good Conservative policy to make businesses pay a fair wage so that they are not taking loads of money from the taxpayer in terms of ‑‑

Boris Johnson MP (Mayor of London):  Absolutely.  That is the purpose of what the Chancellor has brought in in the form of the National Living Wage.  He is quite right because what you have is a situation, as you rightly say, in which big corporations are mainlining tax credits in order to subsidise low pay, sometimes to the tune of hundreds of millions of pounds.  I saw that Next is getting about £250 million into its workforce’s pay packets, effectively, out of its bottom line.  That cannot be right.  That cannot be the right way forward.

Jenny Jones AM:  That is outrageous.  Why not make ‑‑

Boris Johnson MP (Mayor of London):  Next is by no means alone: Tesco and all sorts of companies are now in this position.  Really, it is because of the huge growth in tax credits.  The way forward is, as you rightly say, to lift people out of low pay.

The coercive approach that the Living Wage adopts has its risks and has its downsides because there will be businesses that cannot cope and there will be businesses for whom it is simply too high.  I am afraid there will be some companies whose business model does not allow them to do it and the risk is that they will lay off staff.  You saw that in the Chancellor’s statement.  He made a calculation about the numbers that might be laid off.

Jenny Jones AM:  I heard you say this on the radio, but actually we could exclude small businesses from this if they have fewer than ten employees, for example.

Boris Johnson MP (Mayor of London):  That is the sort of thing that is worth discussing, but then you do not have a blanket Living Wage.

Jenny Jones AM:  As a good Conservative, surely you do not support unviable businesses being propped up by the taxpayer?  I simply do not understand why you do not think that a compulsory Living Wage is actually a good Conservative move ‑‑

Boris Johnson MP (Mayor of London):  It is.

Jenny Jones AM:  ‑‑ to make businesses trimmer and more efficient.

Boris Johnson MP (Mayor of London):  I certainly agree - and this is why our campaign has been so successful in London over the last few years - that businesses broadly do accept that if they pay the Living Wage and if they treat their employees with dignity and respect, then they are paid back with loyalty and higher productivity.  They end up with lower human resources (HR) bills, lower staff turnover and better results.

Jenny Jones AM:  I completely agree with you, but there are more people now in London not earning the Living Wage than there were when you came into power seven years ago.

Boris Johnson MP (Mayor of London):  That is because there are now more people in employment in London than ever before and there are more people in London than ever before.

Jenny Jones AM:  For whatever reason, you are not keeping up.

Boris Johnson MP (Mayor of London):  As it happens, there are far more people being paid the Living Wage than there were when I came in and ‑‑

Jenny Jones AM:  You are trying to encourage businesses but you are not making it compulsory, which means more and more people are living on poverty wages.  If you make it compulsory, there would be more people lifted out of poverty.

Boris Johnson MP (Mayor of London):  As you know fine and well, Jenny, we do not have the statutory powers to make it compulsory.  What the Government has done is introduce a National Living Wage, which is compulsory, which will involve some rigidities and which I warmly welcome.  It is a huge step in the right direction.  However, we must not lose sight of the simultaneous campaign for the London Living Wage, which, as everybody appreciates, is £9.15 rather than £7.20, which is the National Living Wage at the moment.

Jenny Jones AM:   Osborne is being very tricky and he is competing with you on this.  Thank you.

Boris Johnson MP (Mayor of London):  I do not mind.  People can steal my clothes as much as they like, as far as I am concerned.  Unprincipled scoundrels, they are!  I am being heckled mercilessly [by John Biggs AM].

Jennette Arnold OBE AM (Chair):  You have been heckled and I have been sent a love note!

Jenny Jones AM:  It is from me.

Tony Arbour AM (Deputy Chairman):  Not from me.

Jennette Arnold OBE AM (Chair):  Whoever loves me, thank you.