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Government Departments: London Living Wage

Volume 706: debated on Monday 8 December 2008

Question

Asked By

To ask Her Majesty’s Government whether they will encourage all government departments to follow the example of the Department for Children, Schools and Families by paying all staff and sub-contracted staff at least the London living wage from April 2009, currently £7.45 per hour.

My Lords, decisions on public sector pay are for individual departments and agencies. Pay awards must reflect recruitment and retention, be affordable, represent value for money and be consistent with achievement of the 2 per cent inflation target. There is no set level for any individual work force. A number of recent pay awards—for example, at the NHS, DWP, DCSF and the coastguards—have specifically targeted pay towards those on the lowest incomes. Additionally, London weighting is paid to many public sector workers in London.

My Lords, I thank the Minister for his reply. Is he is aware that the previous Mayor of London and the present one, Boris Johnson, strongly support the London living wage, as do a growing number of companies in London? Is it not the role of government to support good practice wherever it may be found, in particular, the good practice shown in this instance by the Department for Children, Schools and Families?

My Lords, I thank the noble and right reverend Lord for his observation. The Government at all times seek to be a responsible employer and set high standards in respect of their arrangements with their employees for childcare, flexible working and so on. We also have an overriding obligation to deliver value for money. Accordingly, we set remuneration levels to meet our requirements in that respect. I appreciate the work done by London Citizens, which I met in my previous capacity as chairman of the Low Pay Commission; but the London living wage is not equivalent to the national minimum wage that is produced by the independent Low Pay Commission, which publishes reports and evidence supporting its recommendations. The London living wage is the recommendation of a group which is not transparent in its processes and, of course, does not take into account other forms of benefit and support available to those on low incomes.

My Lords, is not the Minister aware that the research has been based on close studies commissioned by the Joseph Rowntree trust with the Centre for Research in Social Policy at the University of Loughborough and the Family Budget Unit at the University of York? Will he not look at this again very closely, particularly in view of the Cabinet Office’s self-proclaimed responsibility for ensuring equality of treatment of all civil servants?

My Lords, I assure noble Lords that the Government are very aware of those obligations. By way of further explanation, I do not believe that the agreement that the Department for Children, Schools and Families has reached will mean that its total employment costs will be significantly different from those of any other government department.

My Lords, from the Minister’s response to the noble and right reverend Lord, Lord Harries, it was not clear to me whether he thought that the Department for Children, Schools and Families had been right to pay the recommended rates of the London living wage. Does he agree that it was right to pay those levels and, if it was, would it be right for equivalent salary levels to be paid to those doing equivalent work elsewhere across the public sector?

My Lords, it is absolutely right that the department has the flexibility to make that determination, and I believe that my Answer to the Question shows that there is no misalignment between compensation for employees of the Department for Children, Schools and Families and other major government departments.