CHURCH leaders and campaigners have urged the Government to adopt a more generous, voluntary “real living wage” to improve the lives of the poorest in the UK, despite increases to the national minimums announced in the Budget last week.
The Chancellor, Philip Hammond, announced last week that the National Minimum Wage, which applies only to school-leavers, is to increase from £7.38 to £7.70 an hour for 21- to 25-year-olds; from £5.90 to £6.15 for 18- to 20-year-olds; from £4.20 to £4.35 for children under 18; and from £3.70 to £3.90 for apprentices.
A separate National Living Wage, introduced by the Government in 2016 for over-25s, will rise from £7.83 an hour to £8.21 an hour next April (News, 30 October).
Both minimums are compulsory.
The Living Wage Foundation, however, a project of Citizens UK, is calling on the Government to adopt instead the Foundation’s higher “real” living wage — a voluntary pay-rate adopted by more than 4700 employers — which increased on Monday to £9 an hour in the UK, and £10.55 in London.
It is calculated annually based on the cost of living (roughly in line with inflation), and applies to employees of all ages.
Matthew Bolton, the newly appointed executive director of Citizens UK, said: “The Government used the same name to introduce something not quite as good, which is why we are now calling ours the ‘real’ living wage. The National Living Wage is not a real living wage in so far as it is not calculated based on the cost of living.
“It should be called the ‘minimum wage for over-25s’.”
Mr Bolton acknowledged that the Government’s decision to increase the national minimums last week was a “big step” in the right direction. The move had increased salaries for some of the poorest in the UK, and boosted the real living wage campaign: the number of employers adopting the real living wage has doubled since 2016.
Ultimately, however, enforcing national minimums was not fair for smaller companies or services struggling to pay staffing costs, he warned. “When the Government increase their Living Wage, employers are forced to pay, whereas ours is voluntary, so that those who can afford to adopt our living wage, should.
“We are not forcing anyone to pay: we are not going to put football clubs paying staff £200,000 a week out of business; we are talking about people who are struggling to provide for their families working for £8 an hour.
“I can understand why care-providers say that, every time the Government increase this legal minimum, that piles the pressure on: the answer to that is that there should be more money in the care system.”
CITIZENS UKThe Director of the Centre for Theology and Community, the Revd Angus Ritchie, alongside community leaders from Newham Citizens, celebrate the Mayor of London’s commitment to 50 per cent affordable housing on future developments in the area, in September
This week, Allied Healthcare, which provides care at home for about 13,500 people in 150 local authorities around the UK, partly blamed its financial difficulties on the increase in the national minimum wage, the Financial Times reported. This had added £65,000 per week to the payroll of its 8700 employees.
The Care Quality Commission warned local authorities to prepare to shoulder the burden of Allied Healthcare’s imminent collapse.
The real living wage movement, which had its origins in east London in the 1990s, has been backed by religious leaders. A group that included several C of E bishops wrote in a letter to The Sunday Times this week that the harm caused by poverty in the UK “should be a source of national shame.
“There are now millions of people who work every day but are unable to afford even the basics. This is damaging family life, and robbing future generations of a secure and stable home. . . One solution is the living wage.”
This week is National Living Wage week. Speaking at a celebration in London on Monday, one of the signatories, the Area Bishop of Barking, the Rt Revd Peter Hill, said that the real living wage was “simply the best route” out of poverty.
“Yes, our churches, mosques, synagogues, temples, and community organisations can provide foodbanks and more, but a far better solution would be to catch people before they fall — by paying a real living wage.”
The Bishop of Durham, the Rt Revd Paul Butler, said that campaign had the potential to pull 1.7 million people who are already working full-time out of poverty: “Those of us on middle and higher incomes simply do not grasp the significance of the [living wage] increase,” he wrote in The Guardian on Monday.
The director of the Living Wage Foundation, Tess Lanning, wrote in The Times on Tuesday that Government could also benefit, “with the Treasury pocketing an extra £350 million in increased tax receipts and benefit savings”.