THE CHILDREN’S Secretary, Ed Balls, last week attacked the concept of a London living wage, which is currently set at £7.45 an hour as the recommended minimum wage needed for survival in the capital.
The idea was introduced by former London Mayor Ken Livingstone in recognition that living costs in the capital – especially housing – are significantly higher than in most other places and that the minimum wage level, which at £5.73 is too low anyway, is totally inadequate in London.
Livingstone’s successor Boris Johnson has also declared his support for the London living wage and has promised it will be paid to all staff employed by the Greater London Authority and Transport for London. It has already led to the promise of a big pay rise for thousands of cleaners on the London underground from next year.
Now Ed Balls is claiming that it would be “artificial, inflationary” and not “necessary or appropriate”.
“An artificial ‘living wage for London’ could distort labour markets and prove poor value for money. Moreover, in seeking to reflect perceptions of the cost of living, this proposal could also raise inflation expectations at a time when increased vigilance is needed on inflationary risks. We do not believe it is necessary or appropriate.”
Ball’s stance has attracted criticism from poverty charities, businesses and unions representing low-paid workers for the government’s stance on the London living wage.
Mark Donne, the director of the Fair Pay Network said: “It is extremely disappointing, particularly from a children’s minister, yet perhaps not entirely surprising that such senior government figures have taken this view on the living wage. “The London living wage is extremely popular with the London electorate and cities such as Oxford, Norwich and Leeds are keen to follow suit.
“In both the moral and business cases, the national minimum wage, and indeed the living wage where implemented have lifted low paid people from poverty and bolstered local economies.”
The network represents charities ranging from Oxfam to the Child Poverty Action Group and the TUC.
Guy Stallard, the director of facilities for the management accountants KPMG, a company that employs more than 123,000 people, said: “We have found that paying the living wage is a smart business move as increasing wages has reduced staff turnover and absenteeism, whilst productivity and professionalism has subsequently increased.”
Dave Prentis, the general secretary of Unison, which represents 1.3million workers in public services, said: “A shocking 40 per cent of London’s children live in poverty, which means that millions of families in the city are struggling to make ends meet. The London living wage is a real opportunity to help these families cope with the high cost of living in the capital – and Ed Balls is only going to make their situation worse with his attack on decent pay.”
A spokesperson for Boris Johnson said: “If the government is serious about tackling the capital’s obscene levels of poverty and deprivation, then it would join me in urging all London employers to accept the London living wage as the basic pay rate.
“London is one of the most expensive cities in the world to live and work and it is not only morally right to pay the living wage but also makes good business sense, contributing to better recruitment and retention of staff, higher productivity and a more loyal workforce with high morale.”