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Press Release

London Living Wage is now 7.05
18-5-2006   259

Mayor of London Ken Livingstone today publishes figures calculating this year’s Living Wage for London at £7.05 an hour which reflects the fact that annual inflation has hit poorer people much harder due to significant rises in utility costs such as gas and electricity.

The Living Wage for London was first calculated at £6.70 in April 2005 and the new figure is unveiled in the second annual report of the Mayor’s Living Wage Unit which finds that any wage below around £6.15 an hour results in an income at or below the poverty line level in London - even when benefits are taken into account. The hourly income necessary to receive an above poverty wage in London is therefore significantly above the national minimum wage of £5.05 an hour. This difference is largely accounted for by the higher cost of housing in London.

Around one in seven of London employees receive less than £6.15 per hour and effectively living on poverty level wages. But a Living Wage must include a secure margin to ensure that London employees do not fall into poverty as a result of unexpected expenses. To achieve this a figure of 15 per cent has been added to the poverty level wage.

The second Living Wage Unit report A Fairer London – The Living Wage in London deals with both the living wage and the youth/apprentice living wage which it sets at £6.00.

Ken Livingstone, Mayor of London, said:

‘Low paid workers in London have been affected by inflation and particularly the high gas and electricity price rises. This year the calculation shows that the Living Wage in London has risen to £7.05, a figure that accurately reflects the needs of Londoners living on poverty wages. The living wage is not just a matter of welfare or social justice. London’s economy thrives because it is highly productive and creative. This means making the most of all the resources available, particularly its people, which I believe is impossible if Londoners’ pay is below the poverty threshold.’

The report also outlines the work of implementing the Living Wage throughout the Greater London Authority Group ensuring that all direct employees are paid above Living Wage rates as well as developing a programme seeking to roll out the Living Wage to GLA Group contracts wherever appropriate.

Mick Connolly, Regional Secretary, Southern and Eastern Regional Council said:

‘This scandal of low wages and in-work poverty that exists for so many working people is often overlooked in London. This report highlights the fact that tens of thousands of workers in this apparently wealthy city earn wages that fall below the poverty line, the majority of whom are women and black and minority ethnic workers, often working in part time employment. And it makes a clear case for employers in the region to pay a living wage, going beyond the national minimum wage requirements to take London's workers out of the poverty that contributes to social exclusion, ill health and exploitation.

‘We very much welcome the Mayor's commitment to enforcing living wages through public contracts awarded by the Greater London Authority and we would urge other local authorities and public bodies to do likewise.

‘Trade unions in the region have gained some major successes in recent months for low paid service workers and we will continue to take the case to employers and to work with the Mayor to highlight the need for a living wage for all of London's workers.’

Deborah Littman, Co Chair of LONDON CITIZENS Living Wage Campaign said:

‘London Citizen’s welcomes today's announcement by the Mayor of the 2006 Living Wage for London. He has set a powerful example in implementing this pay rate in the GLA group and across its contractors. The London Living Wage has already made a material difference to thousands of London’s low paid workers, and this in turn is helping communities across the capital. Supported by the GLA’s example, London Citizens and trade unions have convinced an ever-growing number of employers to pay their workers a living wage and to ensure their contractors also match this standard. The Mayor’s commitment to the living wage sets an ethical standard for other cities and authorities across the UK. London Citizens will work to spread this good practice to all public authorities, voluntary and private sector employers in the capital.’


Notes to Editors

1. The Living Wage unit was established following a commitment in the Mayor’s election manifesto in 2004. It is part of the Greater London Authority’s economics unit 'GLA Economics’ which provides authoritative and expert analysis of London's economy for policy development and decision making by the Greater London Authority.

For media enquiries for the Mayor call Richard Brookes in the Mayor's Press Office on 020 7983 6550.

For out of hours media enquiries please call 020 7983 4000. For public enquiries please call the Public Liaison Unit on 020 7983 4100.

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