Why It Adds Up To Pay The London Living Wage

By Cllr. Peter Carpenter

The London Living Wage is an independently set level of pay designed to reflect the substantially higher costs of living in London than in the country as a whole. Currently it stands at £8.55 per hour compared with £6.19 per hour for the national minimum wage. Peter Carpenter

Labour believes that there are substantial benefits to be derived for both the Council and the economy as a whole from the incorporation of the London Living Wage into its pay policy.

From an economic viewpoint one of the best ways of reducing in-work benefits is to increase in working wages. For every additional pound in wages a low paid worker receives, the state receives:

• 12p in Employer’s National Insurance
• 12p in Employee’s National Insurance
• 20p in Standard Rate Income Tax
• 20p in VAT as low paid employees will of necessity spend most of their income – that’s 64p

And if the worker receives in-work benefits, such as housing benefit – as most of them do – the state will benefit from a withdrawal rate of some 65p in the pound. That’s a total of £1.29 for every extra pound earned. Or to put it another way, for every extra billion that is paid to the low paid, the deficit is reduced by some £1.3 billion.

There are those who say that they support the London Living Wage, but that at a time of austerity we cannot afford to introduce it. Quite the reverse is true. At a time of austerity we need to get growth into the economy. Growth is driven by consumption, and if we increase the wages of the low paid, they will spend it.

Increasing the wages of the low paid also provides an incentive for business to drive up productivity, and productivity growth leads to growth in the economy as a whole.

Turning specifically to Wandsworth Council, our lowest paid employee is currently paid just over £15,000 per annum, only slightly below the London Living Wage. So the costs of implementing the London Living Wage are relatively modest – something over £100,000. This could be accommodated within the current 1% provision for salary increases in 2013/14, by skewing increases towards the lowest paid.

For the Council’s contracted-out services, the costs are more substantial, estimated at over £6 million per year.

However, most of our contracts are multi-year, so our proposal is to include the payment of the London Living Wage as one of the non-financial factors in future Most Economically Attractive contract evaluations as contracts come up for renewal. This approach means that any costs of introducing the London Living wage will be spread over a number of years.

For those contracts where hourly payments are currently substantially below the London Living Wage, it would also be possible to phase in the London Living Wage over several years, to mitigate any cost impact.

We estimate that the combination of these two approaches will result in contracts that at re-tender are no more expensive than current contracts.

The London Living Wage is increasingly being adopted by both public and private sector organisations across London. I do not think that the Mayor of London has adopted the London Living Wage because he is a revolutionary socialist, nor, I suspect, is the Big Four accountancy firm KPMG.

The reason they have adopted it, is because it makes economic sense for them. KPMG has said specifically that the costs of introducing the London Living Wage to its contracted out services, like messengers, security and cleaning, have been offset by the benefits of lower absenteeism, and lower staff turnover, resulting in lower training costs.

Wandsworth Council should introduce the London Living Wage.

  • It will help reduce the deficit and grow the economy.
  • It will lift some of our most poorly paid workers out of poverty.
  • It will demonstrate that the Council is a socially responsible employer – and it need not cost the Council a penny in new money.

Boris – The Do Nothing Mayor

Boris walks away from angry residents in Clapham Junction after the riots last summer….


Ken Comes To Tooting

Ken Livingstone and Leonie Cooper at Tooting Broadway

Wandsworth: Better Off With Ken

Ken with Labour's GLA Candidate Leonie Cooper

Ken Livingstone promised people in Wandsworth they will be £1,000 richer if they vote him in May.

He pledged to reverse cuts to the police and to freeze transport fares for commuters in Wandsworth.

Mr Livingstone also said he would bring back the Educational Maintenance Allowance (EMA) for youngsters in higher education.

The mayoral candidate hoping for a third term in City Hall was launching his Better Off With Ken campaign outside Tooting Broadway station yesterday, delivering his manifesto while standing on a soapbox.


Labour’s GLA Candidate Turns The Tories Over

GLA candidate Cllr. Leonie Cooper turned the tables on the Tories during a live debate at Roehampton University between local politicians about who should be elected as London’s next Mayor in May.

The MP for Battersea, Jane Ellison (CON) spoke on behalf of the ‘Back Boris’ campaign, whilst local Councillor and candidate for the London Assembly, Leonie Cooper (LAB), put the case for the ‘Ken for London’ team.

Jane Ellison took the floor first and offered a personal touch, stating that both she and Boris have known each other since University. “Boris has been Boris for as long as I can remember,” she said. She went on to state that she believes that the Mayor has put the interests of his city ahead of his political party, that he has to see the sense in keeping the major banks within London: concluding with the tagline: “London needs a Mayor who believes that this city’s best days are ahead of it, not behind it”.

Councillor Cooper then spoke about Ken Livingstone’s achievements when in office, his proposals for changes in policy, and how these might benefit students and others on low income, before finishing with the challenge, “If you want to have an approach that is fair for all Londoners, you need to be voting for Ken Livingstone”.

Students cross-questioned both speakers about their candidates’ policies on transport, affordable housing, and, of course, Higher Education. There was even a debate sparked around the question of why the city needs a Mayor at all.

But the biggest surprise of the session was the dramatic change in students’ voting preferences after hearing the debate. Anonymous electronic voters used before and after the session showed that the percentage of students who would vote for Ken Livingstone jumped from 17% to 54%. Most of these ‘swing’ voters had previously been committed to voting for another candidate altogether, or didn’t know which way they would vote. The percentage of those who said they would vote for Boris Johnson would be their pick declined slightly from 38% to 31%.


Labour Wins Cross-Party Agreement On London Police Funding

Wandsworth Tories  joined with the Labour Group at a Special Council meeting last week to ask the Mayor of London and the Government to look again at police funding for London. The following motion was agreed by both parties:

“This Council notes:-

(a) the successful implementation of Safer Neighbourhood Teams across Wandsworth;

 (b) that Police numbers have been the subject of much political debate, with both the majority party and the minority party supporting full strength Safer Neighbourhood Teams, and adequate Metropolitan Police being allocated to the Borough;

 (c) the Metropolitan Police’s settlement under the Comprehensive Spending Review was very tight thanks to the financial conditions in response to which the former Commissioner was forced to suspend recruitment;

(d) that on the night of 8th August 2011 there were insufficient officers stationed in the Borough to maintain order, leading to uncontrolled crime and disorder for several hours in the Clapham Junction area, and further notes that any further reduction in police numbers will give comfort to criminals, and reduce local ability to cope with any further disturbances;

(e) that in what was a rapidly changing situation with disorders across the entire capital, the Metropolitan Police Service took difficult operational decisions and, when they were able to, deployed additional resources to restore order across the Borough; and

(f) that although Police numbers are important there are many other factors that are also important – for example, numbers of officers trained to appropriate standards to cope with widespread public disorder, the accuracy of intelligence and effective managerial deployment of a finite resource;

This Council therefore:-

(i) deplores the widespread criminality of 8th August, and supports the Police and the criminal justice agencies in ensuring swift and appropriate punishment;

 (ii) calls on the Mayor of London to rethink the proposals for reduction in the Metropolitan Police budget, and supports the Mayor of London in asking the Government relook at the issue of Police numbers, but recognises the Government would need to redirect spending from elsewhere to support the greater level of need in the capital;

 iii) calls for more local Police to receive training in dealing with riots and street disorder, to ensure the events of the 8th August are not repeated, and that law-abiding local citizens and businesses can remain safe; and

iv) commits itself to an energetic and methodical approach to rebuilding in this post disorder period in order that business and local residents are fully supported , and the statutory agencies reflect , learn and ensure that their policies and programmes address both the short and long-term implications of the disorder.”