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18 January 2019
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For the Living Wage the only way is up

24 April 2015

In 2010, the political manifestos generally remained silent on Living Wage. Not surprisingly, given that KPMG research has found that 5.2 million people (20 per cent of the workforce) earn less than Living Wage, blogs Guy Stallard

This time around most of the political parties are referring positively to the Living Wage. 

A voluntary Living Wage has resonated with responsible business and there are now more than 1,400 employers accredited by the Living Wage Foundation and approaching 40 recognised Living Wage service providers. Listed companies have readily embraced it and soon 25 per cent of FTSE100 companies will be accredited, with many more actively considering it. The FM sector was understandably initially nervous about the Living Wage; would clients be interested in listening to why it would be sensible to move from paying the national minimum wage to paying a Living Wage? 

As quality, productivity and motivation benefits have been seen service providers have felt empowered to have Living Wage discussions. I am extremely proud of the leadership shown by service providers who are recognised by the Living Wage Foundation.  They pay the Living Wage to all head office staff and always submit a Living Wage bid.  It is a customer’s decision whether to move to a Living Wage arrangement, but someone must start the customer or supplier debate.

The past five years have seen political leadership, with Welsh Assembly, Scottish Parliament, the House of Commons and the House of Lords all becoming accredited Living Wage employers.  Political parties have realised that the cost of in-work benefits or tax credits to the Treasury is too high.

The Conservative manifesto says: “We also support the Living Wage and will continue to encourage businesses and other organisations to pay it whenever they can afford it.” 

This mirrors what Mayor Boris Johnson has done in London, where he has personally written to all major businesses encouraging them to pay the Living Wage.  

The Liberal Democrats, who have learnt through being in government about the consequences of in-work poverty, say they “would pay Living Wage in all central government departments and their agencies from April 2016, and encourage other public sector employers to do likewise". This is a creditable commitment, given that the Department for Environment and Climate Change became an accredited Living Wage employer under Ed Davey’s leadership.  The Liberal Democrats would also require companies with more than 250 staff to publish by 2020 the number of people paid less than the Living Wage and the ratio between top and median pay.  

The Labour Party manifesto similarly pledges that if it wins power it would require publicly listed companies to report on whether or not they pay the Living Wage.  I am sure this would include on-site contractor staff.  In addition, Labour’s manifesto states: “We will support employers to pay more by using government procurement to promote the Living Wage, alongside wider social impact considerations.” 

This is particularly interesting for the facilities management/business services sector as it is likely that future government outsourcing or re-tendering would require the Living Wage to be paid. Although not explicitly stated, it could also indicate an inclination by the government to outsource only to Living Wage-recognised service providers.  

Labour’s manifesto promise on the Living Wage builds on the recent Brent Council initiative, whereby employers who are Living Wage-accredited receive a one-year reduction in business rates. The Labour manifesto proposes “Make Work Pay” contracts, which would give tax rebates to businesses who sign up to paying the Living Wage in the first year of a Labour Government. 

Given the likely political situation after 7 May, the views of the other parties are also relevant. 

The SNP says it would support measures to extend the Living Wage across the UK. To quote: “The Scottish Government already pays the Living Wage to all of its own employees and to those covered by its pay policy and the SNP wants UK government to adopt as well. SNP MPs will work with Scottish ministers to help ensure 500 organisations are signed up to the Living Wage Accreditation Scheme within the next year by becoming local Living Wage champions in their constituency. And through guidance on procurement, the SNP will work to ensure all suppliers to the Scottish Government also pay the Living Wage.”

Plaid Cymru and the Greens also have supportive statements on the Living Wage in their manifestos.   

Many of us envisage detailed discussions around the establishment of a coalition government after the election. The Living Wage is one area where it is relatively easy to identify a consensus position that would be good for workers in the FM sector. 

Boris Johnson said last year that he envisaged London being a Living Wage City by 2020; the party manifestos make this more likely.  This may be optimistic, but it can be said with confidence that the number of people not receiving a Living Wage in 2020 will be significantly lower than the current 5.2 million.

Guy Stallard is head of facilities at KPMG UK