Living wage commission rejects calls for legislation

The government needs to adopt the living wage as an “explicit goal” to help lift 1 million workers out of low paid jobs, according to a commission of business leaders and anti-poverty groups set up by the Archbishop of York.

But the living wage commission has refused to support demands for legislation to create a higher minimum wage that in London would add more than £2 an hour to a workers’ pay, reports The Guardian. It said employers should be allowed to make their own judgements about paying a living wage to staff, though ministers could force them to declare whether they pay a living wage to make consumer boycotts easier to organise.

A year in the making, the report is expected to increase the pressure on large employers to increase workers wages after five years of falling average incomes.

The report estimated that 5.2 million people currently earn less than the living wage, which was why the majority of people in poverty are now in working households.

At the weekend Frances O’Grady, TUC general secretary and a member of the commission, added her voice to protests outside the Ritzy cinema in south London, which has come under pressure from staff and a growing number of industry figures, including film director Ken Loach, to pay the London living wage.

The Picturehouse chain, which includes the Ritzy, has come under growing criticism from investors and consumers for paying staff the £6.31 adult minimum wage following its takeover by the much larger Cineworld.

The GMB union attacked high street fashion chain Next during a protest in Liverpool earlier this month for paying £6.33 per hour to those 21 and over and £5.47 to those aged 18 to 20.

A move to a living wage, which is judged to be the minimum needed to secure a basic standard of living, would bring a new minimum of £7.65 outside London and £8.80 in the capital.

David Cameron and Ed Miliband have lent their support to the campaign but both have stopped short of agreeing to legislation that would commit employers to adopting it.

Chuka Umunna, Labour’s shadow business secretary, said the report makes “a powerful and timely case for tacking the growing scandal of low pay”.

He said a Labour government would push for bigger annual rises in the minimum wage to restore its previous value and offer firms a 12-month tax break if they agree to pay the living wage.

Archbishop of York, Dr John Sentamu said a series of pragmatic low-cost measures, building on the economic recovery, could increase the wages of more than 1 million by 2020 to the living wage. Employers could be encouraged to adopt the living wage by consumers, mimicking the way fair trade campaigners have lobbied for coffee and sugar producers to pay fair wages.

Sentamu warned that progress could only be made with the government’s adoption of an explicit goal to increase take-up. In addition it should require all publicly-listed companies to publish the number of people paid below the living wage.

He said: “The campaign for a living wage has been a beacon of hope for the millions of workers on low wages struggling to make ends meet. If the government now commits to making this hope a reality, we can take a major step towards ending the strain on all of our consciences.”

Adam Marshall, director of policy and external affairs at the British Chambers of Commerce, said employers should be encouraged to increase wages “without facing compulsion or regulation, which could lead to job losses and difficulties particularly for younger people entering the labour market”.

The commission agreed that in some sectors, such as retail and hospitality, and for many small firms, the living wage could be unaffordable.

However, Citizens UK, the charity behind the Living Wage Foundation, said at the weekend that the first ever cleaning company gained accreditation as a living wage business.

London-based CTS Cleaning Solutions, which has joined 700 firms compliant firms, said it paid more than £8.80 an hour to its staff and was keen to encourage others to follow suit.

Managing director Peter Cooke, who employs 12 staff, said his clients were bombarded by cheaper offers from rival cleaning companies, but they recognised that they received a better service from staff who remained loyal and more productive.

He said he sacrificed some of his profit to maintain decent staff wages after witnessing his father trapped in low-paid jobs and at the mercy of unscrupulous employers.