April 26, 2012 • 4:00 pm

“[In London] one in ten full-time workers and two in every five part-time workers are paid less than they need to secure a minimum acceptable quality of life”

Jenny Jones, London 2012 Manifesto

“Only five of the 32 London Boroughs pay at least the London Living Wage”

Brian Paddick, London 2012 Manifesto

“not a single Tory-controlled council has currently signed up [to the Living Wage]“

Ken Livingstone, London 2012 Manifesto


With all the hype around issues such as crime and transport, it is easy to forget the full range of topics that are under debate in the run-up to the 2012 Mayoral election.

All four major candidates for Mayor have made pledges to work towards expanding the London Living Wage – a wage rate that is higher than the minimum wage and aims to account for the cost of living in an area. In London it is currently £8.30 per hour, up from £7.85 in 2010.

Green Candidate Jenny Jones highlights the plight of some in London who earn less than the minimum wage – claiming it stands at around 10 per cent of full-time workers and around 40 per cent of part-time workers.

Meanwhile, Brian Paddick paints a stark picture claiming that only five London Borough councils “pay at least” the Living Wage to their workers. Ken Livingstone adds to this claiming that no Tory councils do so.

So can we support the claims?

Analysis

Relevant figures on the London Living Wage can be found in a report from the Greater London Authority Living Wage Unit in 2011 which sets out the calculations used to set the wage and the progress in implementing it across London.

The Living Wage is defined in the document as:

“a wage that achieves an adequate level of warmth and shelter, a healthy palatable diet, social integration and avoidance of chronic stress for earners and their dependents”.

The London Living Wage is set according to two calculation methods – ‘Basic Living Costs’ and ‘Income Distribution’. 

The ‘Basic Living Costs’ approach makes estimates of living costs for various different types of household (those with and without children, for instance), according to costs of ‘housing’, ‘council tax’, ‘transport’, ‘childcare’ and all other costs (a ‘regular shopping basket’).

All of these factors go into calculating a ‘low cost but acceptable’ standard of living for the average family, and thus works out what hourly rate needs to be paid to finance these. The Living Wage Unit places this hourly rate at £6.85 per hour.

The ‘Income Distribution’ calculation is designed to determine the average wage a family needs to earn for them to achieve 60 per cent of ‘median income’, after all benefits have been claimed. The Living Wage Unit puts this amount at £7.65 per hour. All the calculations behind this are contained within the report.

By taking the average of these two hourly rates (£7.25 per hour) – termed the ‘poverty threshold wage’ – and adding a 15 per cent margin against poverty, the Living Wage Unit reach the rate of £8.30 an hour.

Jenny Jones’s claim

The Green Party candidate’s figures can be found in the same report. The Living Wage Unit use data from the Office for National Statistics Annual Survey of Hours and Earnings which provide estimates on how many people are paid certain hourly rates. 

They are thus able to provide this table which breaks down the proportion of London workers who fall into each income category:

Jenny Jones’s figures are highlighted in yellow. The ONS data reveals that 9.7 per cent of full-time workers are paid less than £8.30 an hour, compared to 40.7 per cent of part-time workers. This is where the Green candidate gets her “one in ten” and “two in five”.

Set aside the definition provided by the Living Wage Unit, this seems like a reasonable basis for saying that this many workers “fall below a minimum acceptable quality of life”.

The data also provides a breakdown on those rates by sex. These show that, among full-time workers, slightly more women (11 per cent) than men (9 per cent) earn beneath the Living Wage. However, among part-time workers, more men (46 per cent) than women (38.5 per cent) fall below the threshold.

Brian Paddick’s and Ken Livingstone’s claims

Mr Paddick’s claim states that only five London Boroughs currently pay at least the Living Wage. On its own the claim lacks detail, but it is likely to be taken from a Freedom of Information Request submitted by the Green Party to London borough councils last year.

Full Fact was unable to access the details of the request, but the London Green Party directed us to a press release that reports the findings of the request.

The findings show that four councils: Ealing, Lewisham, Tower Hamlets and Islington had paid at least the Living Wage to workers sub-contracted to deliver various services. Two more – Southwark and Haringey, had introduced the policy but had not implemented it in any contracts.

So, as at 3 May last year, evidence suggests that six councils had Living Wage policies for their sub-contracted services, four of which had actually set in place contracts to that effect. However four councils at the time failed to respond to the requests.

In order to acquire more recent data, Full Fact contacted the Citizens UK group who campaign for the expansion of the Living Wage across the UK. They were able to confirm the status of a number of councils based on their own data:

Two councils – Islington and Lewisham – had ‘complete’ policies on the Living Wage, meaning that they have formally accredited status with the Living Wage Foundation.

A further four councils – Tower Hamlets, Southwark, Ealing and Hounslow – had passed policies on the Living Wage and had showed ‘evidence’ of implementing the policies.

Full Fact was also able to find evidence of positive overtures from Haringey Borough Council, who stated via a Freedom of Information Request in December last year:

“The Council will support the social principles of the London Living Wage and will promote these principles and the recommended hourly pay rate through our tendering and our contractual relationships with our Direct Suppliers; being conscious of the need to comply with the Public Contract Regulations and specifically with regards the need to treat all suppliers equally and fairly, avoiding any discrimination on the grounds of nationality or locality”

So putting together the evidence from the Green Party’s research and information provided by Citizens UK, we can identify that there are up to seven borough councils in London that have shown evidence of adopting Living Wage policies, and up to six who have shown evidence of actually implementing the policy.

None are under Conservative control, lending some credence to Ken’s claim, although without a comprehensive review of all the councils today, we cannot be certain that not a single other council has any policy on the matter.

Conclusion

Jenny Jones’s figures on the extent of the Living Wage are supported by the data provided from the Annual Survey of Hours and Earnings.

While the definite source of Brian Paddick’s claim is unclear, if we understand his claim to refer to councils whose sub-contracted workers are paid at least the Living Wage – five seems to be a very good estimate. However, evidence suggests there may be one or two more that ought to factor into Mr Paddick’s calculation.

In any case, none of the councils brought to Full Fact’s attention were under Conservative control.

Share this article:
By • 4:00 pm
A non-profit company (no. 6975984) limited by guarantee and registered in England and Wales. © Copyright 2010 - 2014 Full Fact