London Living Wage

Meeting: 
MQT on 2015-10-21
Session date: 
October 21, 2015
Reference: 
2015/3322
Question By: 
Fiona Twycross
Organisation: 
Labour Group
Asked Of: 
Fiona Twycross

Question

Given the changes to tax credits that are due to take effect in April 2016, will the new rate of the London Living Wage take into account next year's benefit changes for working people?

Answer

Answer for London Living Wage

Answer for London Living Wage

Answered By: 
Fiona Twycross

Boris Johnson MP (Mayor of London):  Thank you very much, Fiona.  It is a very good question and the answer is that we will not be changing the methodology to calculate the Living Wage this time round because it is very important that the process should be independent or independent of me as a politician.  It calculates the income individuals will receive after taxes, benefits and tax credits for the year in which the Living Wage is set.  That is how it works.  That is how the calculation for 2015 will take place and that is going to be announced in the next couple of weeks --

Fiona Twycross AM:  I am actually staggered.  I thought you were going to say, “Yes, of course it will be.”

Boris Johnson MP (Mayor of London):  If you will just allow me to complete the answer.  When the changes that have been announced in the summer budget come through, those changes, along with any other changes to the tax and benefit system will, of course, be taken into account for the 2016 London Living Wage calculation.

Fiona Twycross AM:  Can I just raise something quite important?  Obviously these changes are likely unless people like you actually start voting against the Government.  I understand you voted for the latest reading of the Welfare Bill last night.  These changes are going to come in next April and, therefore, we are going to have quite a long period of time for those people who are on the Living Wage to be struggling to get by.  What would you say to those people who find themselves with a shortfall because of the tax credit cuts in April and then a greater shortfall?  We all know those anticipated cuts are going to come in because they are a two‑phase cut.

Boris Johnson MP (Mayor of London):  Hang on.  Whoa.

Fiona Twycross AM:  No, those are two-phased cuts.  What will you say to those people?

Boris Johnson MP (Mayor of London):  What I would say to them and to everybody who employs people in London that they should pay the London Living Wage and they should pay the rate we are about to announce, which will be a substantial increase and it will be the right rate to pay.  I want firms across this city to join the 600 or so that have now signed up.  We have many tens of thousands of Londoners now benefitting from the Living Wage.

Fiona Twycross AM:  We can go through the list of successes --

Boris Johnson MP (Mayor of London):  You should.

Fiona Twycross AM:  What steps are you taking to lobby the Chancellor to get his reforms right - as you say, they need to be amended to get them right - and to help mitigate the impact of the policy on tax credits?

Boris Johnson MP (Mayor of London):  What I am doing is campaigning, as I hope you are, for the wider take‑up of the London Living Wage, which, as I say ‑‑

Fiona Twycross AM:  What are you doing on tax credits?  You have been publicly praised for criticising the Chancellor on it.  What are you doing on tax credits?

Boris Johnson MP (Mayor of London):  I have not.  I am interested in raising people’s wages.  If you seriously think we can go on with a system of tax credits that means that people are consistently finding themselves in the misery of having to repay the authorities for overpayment of tax credits, they are finding themselves unable to work longer per week because of the risk of ‑‑

Fiona Twycross AM:  You should be ashamed of the vote of the Government last night.

Boris Johnson MP (Mayor of London):  You think it should be changed, do you?  You are right.

Fiona Twycross AM:  You should be ashamed of the vote of the Government last night.

Boris Johnson MP (Mayor of London):  You should be ashamed of yourself if you support a system that introduces such serious disadvantages, such cliffs and such poverty traps into people’s lives.

Fiona Twycross AM:  I am out of time, Chair.  He is out of touch and so I effectively ‑‑

Boris Johnson MP (Mayor of London):  If it really is the policy of the Labour Party to continue with that system unreformed, then you are completely out of your minds.

Fiona Twycross AM:  You are completely out of touch.

Boris Johnson MP (Mayor of London):  No, actually, it is you who are out of touch.

Jennette Arnold OBE AM (Chair):  OK.  Mr Mayor.

Boris Johnson MP (Mayor of London):  What I want to do is I want to raise people’s wages with the London Living Wage and that is by far the best way forward.