Boris raises London Living Wage to £7.45

28/07/2008

Boris Johnson has urged businesses to pay their workers a higher wage so they can meet the rising costs of everyday life in the capital.

The Mayor said a London Living Wage of £7.45 an hour would enable low-paid employees to have a higher quality of life. He added that the plans made ‘good business sense’, and would encourage staff retention and contribute to better recruitment.

“If you pay a living wage it is easier to recruit and retain people,” he said. “People take greater pride if they are working under a fair wage.”

Johnson said although the increased wage would not be compulsory for businesses in the capital, the Greater London Authority (GLA) would make sure all its contractors implement the higher wage.

However, a survey by the London Chambers of Commerce and Industry (LCCI) said the increased wages would force businesses to ‘axe jobs, reduce investment, and slash training budgets’.

More than 40% of businesses said they would have to cut jobs if forced to pay staff the higher wage, while almost half said they would cut back on expansion plans.

Dr Helen Hill, LCCI policy director, said the group was ‘very concerned’ about how businesses would meet the increased costs.

“It is easy to agree to pay 35% above the national minimum wage if you are a large global banking group, or if the taxpayer is footing the bill, but this is a huge ask for many firms in the capital, especially in the current economic climate,” she said.

“We are very concerned the mayor has chosen to use the GLA’s purchasing power to force businesses to implement inflation-busting pay. This policy will serve as a further barrier to small businesses accessing public contracts.”