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23% of jobs outside London 'pay less than the Living Wage'

Published 12/10/2015

The voluntary rates of £7.85 an hour outside London and £9.15 in the capital are due to be uprated next month
The voluntary rates of £7.85 an hour outside London and £9.15 in the capital are due to be uprated next month

The proportion of jobs outside London paying less than the Living Wage has increased to almost one in four, official figures have shown.

The figure for the capital has increased by 6% to 19% - well below the rest of the UK.

The Office for National Statistics (ONS) reported that the proportion of jobs paying less than the Living Wage outside London rose from 21% to 23% between April 2012 and April 2014.

The voluntary rates of £7.85 an hour outside London and £9.15 in the capital are due to be uprated next month.

Around 200 firms have agreed to pay the national Living Wage in recent months, with more expected to sign up before a new rate is set next month.

There are now more than 1,800 accredited Living Wage employers, ranging from leading banks such as Barclays, RBS and HSBC to small organisations employing a handful of staff.

The Living Wage Foundation sets the rate.

Accredited employers commit to paying staff at least the UK and London rates, as well as sub-contractors working on their premises.

New rates will be announced on November 2 at the start of Living Wage Week, likely to see the UK rate edge towards £8 an hour.

The figures are higher than the national Minimum Wage, which increased by 20p an hour to £6.70 this month, and compared with the national living wage announced by the Government of £7.20 which will come into force for over 25-year-olds next April.

Outside London, the area with the most jobs below the Living Wage was West Somerset (a total of 41.9%). The area with the fewest was Runnymede (8.5%).

Harrow had the highest number of jobs below the Living Wage in London (41.8%). The City of London had the fewest - just 5.2%.

The ONS report showed there were six million jobs in the UK paying less than the Living Wage in 2014, over half being part-time positions.

In the two years to April 2010 the proportion of jobs paying less than the Living Wage in London was stable at around 13%, but it rose to almost one in five by April 2014.

A spokesman for the Living Wage Foundation said: "Despite significant progress in many sectors, more jobs than ever are below the voluntary Living Wage rates that we recommend.

"These figures demonstrate that while the economy may be recovering as a whole, there is a real problem with ensuring everyone benefits, and low pay in still prevalent in Britain today.

"The best employers are not waiting for government to act. Around 1,800 responsible employers already pay the Living Wage to their staff. The Living Wage offers great benefits to business including reduction in turnover and higher productivity, while 70% of consumers say they would prefer to shop with a Living Wage employer."

The TUC said one of the main findings of the ONS study was that across the UK 18% of male employees, and 29% of female employees, are paid less than the Living Wage.

Recent TUC research found that in some parts of the UK more than three-quarters of part-time women workers earn less than the Living Wage

TUC general secretary Frances O'Grady said: "Everybody deserves a fair day's pay for an honest day's work. But with more and more jobs paying less than the Living Wage, it is clear that millions of workers are not getting their fair share from the economic recovery.

"It's particularly shocking that so many more women than men are denied the Living Wage. We need to value women's work more. And we need employers in sectors with large female workforces, such as care services, retail and hospitality, to give their staff fairer pay.

"The Government's Trade Union Bill will make it even harder for people to get fair wages. It will shift the balance of power in the workplace towards employers, making it harder to bring poverty-pay bosses to the negotiating table. If the Government really wanted to deliver fairer pay it would be working with trade unions not against them."

Unite assistant general secretary Steve Turner said: "The Living Wage needs to be made compulsory and should be £10 an hour - and Britain's companies, with strong cash reserves, can well afford to pay it.

"Not only are bosses failing to pay the Living Wage, but these workers are the very people who will be hit by the savage cuts to the working tax credits.

"Three million low-waged families could lose £1,000-a-year or, in some cases, up to £1,700 when the cuts to the tax credits come into force next April.

"The dismal failure of employers to pay the Living Wage disproportionately hits those in low-paid, insecure work and also women.

"The phoney national living wage of £7.20, coming into force for the over 25-year-olds next April, is already inadequate in providing a decent income."

Resolution Foundation chief economist Matthew Whittaker said: "The raising of the wage floor via the introduction of a new national living wage will have a welcome impact on low pay, but it's unlikely to reverse the rising number earning less than a Living Wage.

"The proportion of employees below this threshold is likely to have roughly doubled between 2010 and 2020, with around three in 10 workers paid below the Living Wage by the end of the decade.

"It's important that pay is considered alongside other drivers of living standards - including employment, productivity gains and state support.

"The Government is showing great ambition on the former, but the £13 billion of cuts to working-age benefits will have a detrimental impact on many families, and make it far harder for people to work their way out of poverty."

Emily Thornberry, shadow employment minister, said: "With six million jobs paying less than enough to live on, now is exactly the wrong time for a multibillion-pound cut to working people's tax credits. The Government's approach is completely wrong and needs an urgent rethink.

"That is why Labour has tabled amendments to the Welfare Reform and Work Bill, revoking the tax credit cuts, creating a new opportunity to reverse changes that would be so damaging to the incomes of low and middle paid families."

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