London Living Wage boroughs ‘may create ripple effect’ on local employers

by Dave Hill

London businesses may be more likely to pay their workers the London Living Wage (LLW) if their local authority is itself an accredited living wage employer, according to two leading anti-poverty organisations.

Figures for the capital compiled by the Child Poverty Action Group and the Living Wage Foundation, which promotes and campaigns for the living wage nationally, show that all but one of the 13 boroughs containing the highest numbers of LLW employers, plus the City of London, themselves pay all their own workers at least the LLW.

By contrast, almost all the boroughs containing the smallest numbers of LLW employers are among the 17 out of London’s 33 local authorities which have yet to attain LLW accreditation. The most striking exception is Westminster City Council, which contains the highest number of LLW employers of all, 132, though this is likely to reflect the high number of employers overall in a borough which contains most of the West End.

The second highest number of LLW business was found in Islington with 117, followed by Camden, which covers the rest of the West End, with 114, Southwark (99), the City of London (95), Greenwich (86), Tower Hamlets (71), Lambeth (64), Hackney (59), Lewisham (30), Brent (25), Croydon (22), Hammersmith and Fulham (19) and Ealing (19). All of these authorities except the City are Labour-run. The local authorities with the lowest proportions (as opposed to absolute numbers) of jobs paying less than the LLW are found to be Tower Hamlets, Islington, Southwark, Camden and Conservative-run Westminster.

The next highest numbers are in three boroughs that are yet to achieve LLW accreditation: Labour-run Haringey (16), Conservative Kensington and Chelsea (15) and Labour Newham (13). Then come LLW-accredited Hounslow (Labour, 11), non-accredited Wandsworth (Conservative, 10), accredited Waltham Forest (Labour, 9), non-accredited Merton (Labour, 8), accredited Enfield (Labour, 7) and non-accredited Barnet (Conservative, 7).

Bexley, Richmond, Bromley, Kingston, Havering, Hillingdon (all Conservative-run), Redbridge, Harrow and Barking and Dagenham (all Labour) and Sutton (Liberal Democrat) all contain five or fewer LLW employers and are all non-accredited. Bexley, Harrow, Enfield, Sutton and Waltham Forest contain the smallest proportions of LLW employers.

The figures are likely to partly reflect the greater numbers of employers, including larger ones, located in Central and Inner London compared with Outer London areas and the need for more centrally-located businesses to pay higher wages to cover higher living costs among their workers, such as higher rents for those who live locally or travel costs for those who don’t.

But Child Poverty Action Group chief executive Alison Garnham believes the figures indicate that “there may be a ripple effect when local authorities get accredited as Living Wage employers. So our message to boroughs who aren’t yet on board is ‘lead by example’.”

Living Wage Foundation director Katherine Chapman urged more London boroughs to secure accreditation, recognising that “times are tough” for local authorities but stressing that “with inflation rising, the need to protect frontline workers such as care staff, cleaners and refuse collectors is hard to ignore.”

An estimated 30% of jobs in some Outer London boroughs and 15% in some in Inner London pay less than the LLW, which currently stands at £9.75 per hour. This is substantially higher than the current statutory National Living Wage of £7.50 per hour, reflecting the higher cost of living in the capital. About 20% of jobs across Greater London fail to meet the LLW threshold.

The child poverty rate across the metropolis is 37%, and Garnham said that “spreading the LLW has to be part of the solution” to this. Rates in Inner London have fallen in recent years but remained fairly constant in Outer London. The absolute number of children in poverty in Outer London is put at 440,000 and in Inner London at 250,000. A decade, when London’s population was lower, ago these numbers were 350,000 and 260,000 respectively.

Photograph shows headquarters of Harrow Council –  not yet a London Living wage employer.

1 Comment

  1. London is going through a lot right now economically speaking. Taxpayers and people working hard on living wage should be getting more benefits instead of the big cat corporations who don’t pay their fair share in taxes.

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