John Sentamu: Working poor are a stain on all our consciences

A LITTLE over a century ago, Winston Churchill gave a speech, as President of the Board of Trade, saying: “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.”

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

The Minimum Wage, introduced 15 years ago, was a small step in the right direction, but it has been clear for some time that this is inadequate, and many people in work are experiencing increasing poverty.

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That is why I am committed to urging all those who can to pay their workers a Living Wage. When I launched the Living Wage Commission on July 19 last year, 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.

Our research revealed the dire state of affairs of low pay in the UK, and this has been confirmed in a recent report form KPMG:

• 5.28 million people are still 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. This is particularly noticeable amongst part-time workers, where 43 per cent earn less than the Living Wage.

• For the first time, the majority of people in poverty in the UK live in a working household.

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• There is a double squeeze on working households as wages stagnate and living costs rise.

We heard from a great many low-paid workers who made submissions to us. Paul, a care worker, spoke of his and his wife’s experience: “We have no luxuries, we have not been on 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 16-year-old daughter misses us both greatly. We did not even have a day out together as a family in 2013.”

We heard from a great many others who were struggling to make ends meet, unable to replace basic household goods after they break, or to pay utility bills; parents who had to tell their children that they weren’t allowed to go to their friend’s birthday party because they could not afford it.

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The truth is we all lose out from the inequity of 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 Over 1,000 employers – from local councils, to small and large private businesses – are now accredited by the Living Wage Foundation.

The number of Living Wage Employers in the FTSE 100 has risen from four to 18.

The other good news we heard recently is that the Living Wage has now been increased by 2.6 per cent, in line with the actual cost of living.

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But there is still a long way to go. Recent research shows that there are a number of groups who are suffering disproportionately:

• More than 40 years after the first Sex Discrimination Act, the research shows that 25 per cent of women earn less than the benchmark, compared with 16 per cent of men;

• The group most likely to be caught in the poverty trap are younger workers – with 72 per cent earning less than the Living Wage;

• There has been a rise in the demand for unsecured credit, with many people reporting an increase in their need to borrow, which is only likely to get worse in the winter months;

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• A recent report from Unicef suggested that a quarter of children in Britain are living in poverty.

Britain is at risk of becoming a place where the ‘haves’ and the ‘have nots’ live in separate parallel worlds; where the ‘Common Good’ has become a pious platitude rather than a genuine believable aspiration.

We must find both the political and economic will to create a society which is fair for all rather than fair for a small few.

Income inequality is a stain on all our consciences.

There is a strong role for government and business to support the Living Wage.

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UK Government is a major employer, and just as importantly, they can take leadership on low pay.

Businesses can also demonstrate the benefits of paying their employees justly.

Let us make the paying of the Living Wage the litmus test for a fair recovery and let us help our country become a place where the wellsprings of solidarity, of a new, undivided society, can begin to spring up.

Income inequality is the giant of our time, which we must slay.

• John Sentamu is the Archbishop of York. This is an edited version of his keynote address to the CBI.

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