Call to help firms pay employees ‘living wage’

The Institute for Public Policy Research (IPPR) and the Resolution Foundation said detailed research had shown how so-called City Deals with major UK cities could be adapted to help private businesses.

Leeds Council has said it is committed to paying the “living wage” and Sheffield Council recently announced that it would pay the rate, £7.45 an hour, to its workers from this year.

Researchers said that when public sector organisations introduce the pay rate the extra money paid to the Treasury in taxes should be used to help private sector employers achieve the same pay levels.

Both Leeds and Sheffield have entered into City Deals with the Government, under which they will be given a greater say on how money raised in their city regions through taxes are used.

The study says that this should include the introduction of “living wage cities” which could lead the way in moving away from low pay across all sectors.

Resolution Foundation chief executive Gavin Kelly said: “We need to encourage employers in every city, in the private as well as the public sector, and large and small, to adopt a living wage.

“Using some of the dividend received by the Exchequer is an innovative way of supporting this – sharing the proceeds of fairness to help cities take the initiative in securing decent pay for more people.

“Given plummeting wages and escalating levels of working poverty, it is crucial that across the political spectrum there is a will to tackle this issue.”

The study also calls on the Government to require listed companies to publish a figure for the proportion of their staff paid below the living wage level.