Cross-party harmony has broken out on the London Assembly over the issue of low pay, at least up to a point. On Tuesday, a motion asking the government to properly enforce the national minimum wage (NMW) and urging Boris Johnson to come up with ways to help this happen in the capital was passed unanimously.
The motion was proposed by Labour’s Fiona Twycross, who called on the mayor to “stand up” to companies who don’t cough up. It was seconded by Conservative Andrew Boff, who said his investigation into human trafficking disclosed a link between “people earning less than the legal minimum wage and modern day slavery”. He’s pledged to work closely with the mayor to ensure that offending companies are “named, shamed and fined”.
Amazingly, only nine UK employers have been prosecuted for failing to pay the NMW since its introduction in 1999. Regional data is scarce but a Centre for London study suspects that, despite wages in London being generally higher than in the rest of the country, the situation here might be worse than elsewhere. We have a lot of migrant workers, and they’re more likely than others to be paid less than the law requires. We have plenty of industries where low pay is common, most notoriously the hotel trade.
The political consensus over the need to enforce the NMW also applies to support for the substantially higher but non-compulsory London living wage. Calculated by City Hall economists with London’s high cost of living in mind, this has just been raised to £9.15 an hour compared with the NMW’s top rate of £6.50. Johnson has pledged to make the living wage the norm across the capital by 2020 and claims a high rate of success. The number of London employers paying it has doubled to 400 in the last year, with ITV, Nationwide and Google signing up along with many smaller businesses. This easily exceeds his 20212 manifesto commitment to bring the number up to 250.
The Tory mayor has undoubtedly given the London living wage a high profile as part of what he has termed his “progressive agenda”, which, in that Victorian revivalist way of his, also includes voluntarism, mentoring, public transport fare concessions and cultural philanthropy. I’ve heard a leading London light of Citizens UK, the community campaigners who’ve fought the living wage fight since 2001, say publicly that Johnson has done more for it than Ken Livingstone, another supporter, did.
There is, though, more than one way to look at this picture. Fiona Twycross thinks it not as pretty as the mayor paints it. She points out that though the number of employers in London paying the living wage has risen, the numbers and percentage of London jobs that don’t pay it have risen too.
London’s Poverty Profile shows that between 2005 and 2010 around 13% of London jobs paid less than the respective living wage rates for those years but that by 2013 this had reached 18%. The number of jobs these percentages represented were 640,000 in 2013 compared with 420,000 in 2007, the year before Johnson became mayor. As Twycross points out, City Hall’s latest living wage report, published last month, says (on page 21) that 79.5% of London’s full-time and part-time workers earn more than the living wage, leaving 20.5% who don’t.
At last month’s mayor’s question time Twycross asked Johnson to account for this upward trend. He was able to respond that although a greater number of London workers aren’t being paid the living wage than were when he took office, it is also true that a greater number are being paid it. Twycross did not dispute this, because it’s true. There’s no contradiction because, as Johnson observed, there are more people in employment altogether - up by 4.9 million to 5.6 million, he said. Better a low paid job than no job at all, he felt.
But Twycross’s concern is the growing number of workers and the increasing proportion of the overall workforce for whom the living wage glass is half empty at a time when living costs are rising faster than pay and 57% of adults and children in poverty are members of households where someone has a job. What is to be done?
This, of course, is where Labour and the Conservatives differ. Labour wants Johnson to try harder and argues that if he fails to improve progress towards making the living wage “the norm” he should ask the government to make the London living wage compulsory, with the national minimum wage increased for the capital as an intermediate step. In line with the Centre for London, they believe that a special London minimum wage is economically practical. The Tories disagree. Their man Tony Arbour argues that the cost of this would be counter-productive and that cutting VAT in the hospitality sector and giving smaller firms relief from business rates would be a better way to get the full living wage paid more widely.
But while the parties choose different fiscal carrots and statutory sticks, there is at least consensus that low pay in London is undesirable. No Tory publicly doubts that the benefits of the living wage outweigh the costs or disputes Johnson’s long-expressed view that businesses able to pay it benefit. It is good that London politicians should lead the way in insisting that the NMW, a basic legal right, is not criminally denied in the nation’s capital. But Twycross’s central issue with the current mayor still holds. Has he really been trying hard enough?
