THE Archbishop of York, Dr Sentamu, has called for a "living wage" to replace the national minimum wage, to address what he said was the scandal of low pay in the UK (News, 9 November 2012).

He is to chair a year-long commission into the living wage. Women are the most affected by low pay, he said.

"The scale of low pay in the UK is a national scandal. Around five million people, the majority of them women, aren't paid a wage high enough to provide a basic but acceptable standard of living. In too many workplaces, the basic moral imperative that workers be paid enough to live on has been lost in the pursuit of profit.

"The living wage offers us hope. It is a simple idea with profound implications for the lives of millions. Yet, for too many people, the notion of being paid enough to live on remains an abstract concept. I am honoured to be chairing a Commission that will investigate how to build a strong future by paying the Living Wage to workers and, in so doing, build a fair and just society."

Just 45,000 people in 284 businesses have had their pay changed as a result of the living-wage campaign, which started up in the early 2000s, although the debate around it has become much more mainstream in recent years.

Before the last election, David Cameron described it as a "good and attractive idea"; and Ed Miliband has also said that it is "an idea whose time has come".

But Dr Sentamu said that successive governments had just been applying a "sticking plaster" over the issue of low pay in the UK. Many companies, he said, were now convinced of the benefits of paying a living wage.

"Companies themselves are convinced that showing their employees that they value them, and treating them fairly, has benefits not only to the workforce, but to the company itself. Treating people fairly improves morale, loyalty, and commitment. If this were not the case, more than 100 organisations would not have signed up to become accredited living-wage employers. The local economy benefits when the spending power of people living in poverty increases."

The Treasury would also benefit, by increased taxes, and paying less in top-up benefits to low earners.

The living wage is currently set at £7.45 an hour outside London, and £8.55 in the capital, compared with the current minimum wage of £6.19 for adults, and £4.98 for 18-to-20-year-olds.

But the director general of the CBI and a founder member of the low pay commission, John Cridland, criticised suggestions by Labour that it could make the living wage compulsory for all companies who win Whitehall contracts.

He said that Labour's idea to make the pay floor a condition of public procurement contracts was a "poor idea", pointing out that contracts often went to small businesses that would not be able to afford to afford such measures.