Work That Pays: The Final Report of the Living Wage Commission

24/06/2014

Speech given by the Most Revd & Rt Hon Dr John Sentamu, Archbishop of York, Chair of the Living Wage Commission

 

Good afternoon. It is great to be here today in Westminster Hub to launch the final report from the Living Wage Commission, which I have had the pleasure of chairing over the last year.

A little over a century ago and just a few minutes' walk from here, Winston Churchill gave a speech as President of the Board of Trade that said,

"It is a serious national evil that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions."

(Speech to the House of Commons, 28 April 1909).

Much has changed since then, but the principle that Churchill spoke to remains as strong as ever in our national life.

Work must pay. 

When I launched the Living Wage Commission, I said that we would be speaking to people in low pay, to businesses and to experts to establish the scale of the problem of low pay in the UK.

In this way, we would set about finding solutions to what has become a blight on our society. This is what we have done.

Our interim report, published in February, set out in full view the dire state of affairs of low pay in the UK.

  1. 5 million people paid less than a Living Wage - the basic but socially acceptable level of income that allows people in work to meet the rising cost of living.
  2. For the first time, the majority of people in poverty in the UK live in a working household.
  3. A double squeeze on working households as wages stagnate and living costs rise.
  4. 'Make work pay' has fast become an empty slogan.

Over the last year the Commission has heard from over one hundred low paid workers who made submissions to us.

One low-paid worker, Paul, a care worker in the North West of England, spoke of his experience and his wife’s:

"We have no luxuries, we have not been holiday and we do not socialise. We work, eat and sleep...We often spend days apart...We can only communicate through rushed text messages and leaving voicemails for each other.

Our sixteen year old daughter misses us both greatly. We did not even have a day out together as a family in 2013."

Paul's story was not isolated.

We heard from a great many people struggling to make ends meet, unable to replace basic household goods after they break.

We heard of others unable to pay utility bills and having to tell their children that they weren't allowed to go to their friend's birthday party because they could not afford it.

It is not just Paul and the millions of other workers in low pay that pay the price for this.  Their stories are powerful and challenging. We have published many of them on our website and you can read them there. But the truth is we all lose out from low pay. Billions of pounds are spent each year on topping up the incomes of low paid workers at a time when public finances are very tight.

Demand is sucked out of the economy by the lack of spending power of a fifth of the workforce. And where inequality grows, we all become diminished. It makes us all poorer.

But amidst this darkness, some light has begun to shine through.

Just over a decade ago, The East London Communities Organisation picked up the idea of the Living Wage and saw it as the answer to many of the problems in their community. With the support of UNISON they established the first Living Wage rate - an hourly sum calculated as the rate needed to enjoy the basic amenities that many of us take for granted. 

Things such as a family day out every now and then, presents at birthdays and Christmas, and crucially, the time to pursue a social and family life.

The community organisers London Citizens took this principle across London and before long Citizens UK established the Living Wage Foundation alongside the national Living Wage rate.

Their progress has been an inspiration. Today over 700 employers are accredited with the Living Wage Foundation. And the list is growing by the day. We have some here with us today - Linklaters, KPMG, Nationwide, and of course Aviva, who I know are making a difference in York.

I would like to thank you, and the other organisations here that not only support work on the Living Wage but are also accredited themselves. You are leading the way for responsible employers.

A  year ago the Living Wage Commission came together, bringing together leading figures from business, trades unions and civil society to look at how we could take inspiration from these brilliant local campaigns to create a new vision for the UK; how we can tackle the blight of low pay. We looked closely and objectively at the case for the Living Wage, as well as whether the timing and conditions are right for a significant extension of coverage.

 The evidence pointed to the Living Wage being good for employees, good for business, good for the economy and good for society.

Employers adopting a Living Wage policy had lifted thousands of people out of working poverty; the Exchequer could gain up to £4.2 billion a year in increased tax revenues and reduced expenditure on tax credits; and businesses were reporting productivity increases and improved morale in the workplace.

The economic recovery provides the perfect opportunity for us to ensure many more people are paid a Living Wage. But we also recognised that not everybody may be able to pay the Living Wage right now. Many small businesses and some businesses in certain industries - such as retail and hospitality - may find it difficult to afford. So we did not recommend compulsion.

But this is not to say there is not a strong role for government to support the Living Wage campaign. UK Government is a major employer, and just as importantly, they can take leadership on low pay.

This is why we are calling today on the leaders of the main political parties to support our target for lifting one million people out of low pay, and up to a Living Wage, by 2020. 

Our report demonstrates why this is possible without any adverse effect in the economy and it is possible right now.

Let us make the paying of the Living Wage the litmus test for a fair recovery.

I would like to thank everybody that has helped us in the lead up to this final report. Our core funders, the Joseph Rowntree Charitable Trust have made this possible and many other organisations gave their time, support, advice and funds to support this important project. Especially I would like to thank Compass, the Smith Institute, DHA Communications, KPMG and the TUC for their support.

I would also like to pay tribute to the brilliant people that have been a part of the Living Wage campaign in the last decade. Thanks are due especially to Citizens UK who kicked it off, and the Living Wage Foundation who took it forward; to the Joseph Rowntree Foundation, and the Trust for London, for their invaluable support. We are also grateful to the Resolution Foundation, Queen Mary University and the Joseph Rowntree Foundation, on whose research we draw in our report.

I would like to thank my fellow Commissioners, and Cameron Tait, who has spearheaded much of the work, for his invaluable support. Thanks to all your work the message has become crystal clear – we must press on to make sure all people are paid a living wage.

I want to leave you with the story that a young man called Godfrey told me, which is included in the report. He works in the post room at KPMG.

Godfrey told me that he used to leave for work from his home in Portsmouth at four in the morning to get the coach to London.

On a good day he would return home at 10.30pm, but often later. He said, "The Living Wage put a stop to that and enabled me to move to London permanently while giving me spare time to spend with family friends...I don't think I would have been able to cope with having three children without the Living Wage. That little extra has helped me to take them on short trips to the zoo, animal farms, and play spaces."

His story is one of hope, and optimism. I hope that from the stories of Godfrey and the thousands of others that have been brought up to a Living Wage, the wellsprings of solidarity, of a new, better society can begin to spring up.

Let us help them grow.

And let us end the grasping giant of Income Inequality.

Let us do it. And let us do it now.

Thank you for listening.