Tower Hamlets Labour Party

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We need a statutory Living Wage for London

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Local London Assembly Member John Biggs today called for the London Living Wage (LLW) to be placed on a statutory footing in the capital. It was announced that the LLW will rise next year to £8.80 from its current rate of £8.55. There have been fears that introducing a statutory living wage would lead to unemployment. However, a new report out today challenges this.

The report, commissioned by Unison, analyses the economic impact of a nation-wide living wage on jobs and growth. It finds that £3.26 billion extra would be generated for the Treasury and a £3.15 billion boost to the economy. These would support jobs and “…aggregate job gains in excess of 7,000 are the most likely outcome of a statutory living wage.”

New research shows that a resident, living in a two bed home, earning the National Minimum Wage and commuting to work in central London from Newham has to spend an estimated 21.14 % of their pay on travel, compared with 8.4% in 2008. Residents in Newham and Tower Hamlets have also suffered with travel costs as a proportion of their pay increasing to 14.53% from 5.81% in 2008

Local Labour London Assembly Member John Biggs said:

“The London Living Wage has been successful in ensuring thousands of workers in London receive a fair days pay for a fair days work. Today’s report shows that introducing a statutory living wage could lead to an increase in jobs rather than a reduction. I am delighted that there are now plans to introduce measures to encourage more employers to pay a Living Wage through tax incentives.

“The Mayor must do more to encourage employers to pay the London Living Wage and he can start by making the institutions he is responsible for accredited London Living Wage employers. At the current rate of progress it will take 450 years for all workers to be paid a living wage in London. Londoners are struggling and the Mayor’s inflation-busting fare increases mean that residents earning the National Minimum Wage and travelling to work in zone one now have to spend a much higher percentage of their earnings.

“Introducing a statutory living wage could be phased in to help smaller businesses and give people time to prepare. Poverty pay is unacceptable, as is expecting the taxpayer to plug the gap through the benefits system. As today’s report states this policy would lead to an economic win-win, by boosting demand and economic growth, reducing the extent to which benefits prop up poverty pay and reduce earnings inequality. This is a policy whose time has come.”

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