Figures published by the Living Wage Foundation on Monday reveal the cost of living in London has increased by 3.7% in the last year, while the rest of the UK experienced an increase of 2.4%.
Meanwhile, the rate outside of London has increased from £8.25 to £8.45 per hour. The hourly rate is 17% higher than the Government’s so-called ‘National Living Wage’ of just £7.20 per hour, which essentially amounts to little more than a renaming or re-vamped version of the ‘National Minimum Wage’.
The news comes as research published by KPMG over the weekend found 1 in 5 people are still paid less than the real Living Wage, as child poverty campaigners warned low pay has left working families struggling to cope.
Child Poverty Action Group Chief Executive Alison Garnham said: “A London Living Wage rate for 2016-17 of £9.75 is a beacon of good news on a pretty grim horizon for the capital’s families.
“4 in 10 London children live in poverty, over half of these children live in a family where someone is in work so the London Living Wage provides an important mechanism to reduce in-work poverty in London.
“Low pay leaves working families struggling to afford the capital’s higher housing, childcare, and living costs, whilst also deterring mothers in couples from working.
“We know that the causes of child poverty are complex and a package of solutions across different policy areas are needed to tackle it; the London Living Wage is an essential part of that mix of solutions.
“Currently around a fifth of people living in London are paid below the London Living Wage and the number of low-paid jobs in London is on the increase, which is why we would encourage all London local authorities to become accredited Living Wage employers and the London Enterprise Panel to take a leading role in promoting the benefits of the London Living Wage to private sector employers in London.”
However, more than 1,000 businesses have committed to paying employees the real Living Wage in the last year, including over 300 London-based employers. There are now over 1,000 businesses in London paying the real living wage and close to 3,000 across the UK.
The latest businesses to sign the living wage pledge include Everton Football Club and the British Library, joining a range of FTSE 100 companies and small independent businesses. The Living Wage Foundation say this is evidence that employers are willing to pay workers more than the Government’s ‘National Living Wage’, as a way of helping them to meet growing living costs.
Katherine Chapman, Director of the Living Wage Foundation, said (yesterday): “Today’s new Living Wage rates bring a welcome pay rise to thousands of workers across the UK. 1 in 5 people earn less than the wage they need to get by.
“That’s why it’s more important than ever for leading employers to join the growing movement of businesses and organisations that are going further than the government minimum and making sure their employees earn enough to cover the cost of living. As we kick off Living Wage Week today we are celebrating nearly 3000 employers across the UK who lead the way on tackling low pay by paying the real Living Wage.
“The sheer growth of our movement shows that the Living Wage is good for people and good for business.”
Announcing the new rates at the British Museum, the Mayor of London Sadiq Khan welcomed the news that more businesses in the capital were paying a fair wage.
Sadiq Khan said: “It’s great news that London is leading the way in paying the Living Wage and that over 1,000 businesses are now accredited and helping to make this a fairer and more equal city.
“I’m glad to say we’re well on track to see it rise to over £10 an hour during my mayoralty, but we need to go further and for many more businesses and organisations to sign up.
“Our economy continues to grow and for the first time in London’s history we now have over one million businesses based here. It’s essential that hard-working Londoners, who keep this city going, are rewarded for their integral role in this success.
“Paying the London Living Wage is not just the right and moral thing to do, it makes good business sense too. As many employers already accredited know, the benefits are clear – including increased productivity and reduced staff turnover.
“The London Living Wage is a fantastic campaign and I will be working to encourage more businesses across our great city to get involved. This will not only help London become a city where it’s a badge of pride for employers to pay the London Living Wage, but help us become a city where everyone benefits from the capital’s success.”
Roly Keating, CEO of the British Library said: “I’m proud and delighted that the British Library is now fully accredited as a Living Wage Foundation employer.
“Our dedicated staff are at the heart of the Library’s mission to make our intellectual heritage accessible to everyone, and Living Wage accreditation reinforces our commitment to the values of fairness and respect for all.”