The campaign for a Living Wage higher than the statutory minimum rate stepped up a gear today when leading politicians and employers backed the drive for better pay.
London mayor Boris Johnson announced that the Living Wage rate in the capital is to increase by 25p an hour to £8.55, worth £4.5 million a year for lower-paid workers.
The rate outside London will also rise by 25p to £7.45, benefiting thousands of workers, and compares with the national minimum wage of £6.19 for adults.
Mr Johnson called for the rate to be paid by all local authorities in London, as well as across Whitehall, saying: "By building motivated, dedicated workforces, the Living Wage helps businesses to boost the bottom line and ensures that hard-working people who contribute to London's success can enjoy a decent standard of living."
A number of Labour-controlled local authorities now pay the Living Wage, but Mr Johnson conceded that no Conservative-run council in London was accredited.
The GMB union said the Tory flagship Wandsworth Council in London had decided not to introduce the Living Wage to its 105 directly-employed staff who are paid less than this.
Labour leader Ed Miliband vowed to address Britain's "living standards crisis" as he met the leaders of Labour local authorities across the UK who are already implementing the pay structure and promised to find ways to help other businesses become living-wage employers.
He said: "There are almost five million people in Britain who aren't earning the living wage: people who got up early this morning, spent hours getting to work - who are putting in all the effort they can - but who often don't get paid enough to look after their families, to heat their homes, feed their kids, care for elderly relatives and plan for the future.
"Too many people in Britain are doing the right thing and doing their bit, helping to build the prosperity on which our country depends, but aren't sharing fairly in the rewards."
Mr Johnson announced that InterContinental had become the first hotel chain to sign up to the Living Wage, adding: "Despite very challenging economic times, it's clear that more employers are waking up to the huge benefits that paying the Living Wage delivers.
"We have a great range of household names on board and I want to see more coming forward."
Since the Living Wage was introduced in 2005, an estimated 11,500 workers have benefited.
A newly-designed trademark that recognises and accredits employers that pay the Living Wage was published today.
The Living Wage Foundation said it hoped the mark would become as recognisable as the Fair Trade logo.
A spokesman for Prime Minister David Cameron said that making the Living Wage a requirement for companies bidding for Government contracts might be illegal under EU procurement rules.
He added: "It is not clear that that would be legal. There are EU procurement laws, and forcing companies to pay a particular wage wouldn't necessarily be consistent with those procurement laws.
"Forcing companies to pay the living wage as a gateway to get a Government contract, we think, could be illegal."
Archbishop of York John Sentamu said it was an "absolute scandal" that one in five people working in the UK are not paid the Living Wage.
Speaking at a launch event for the new rate in York, Dr Sentamu said: "You would think, listening to the rhetoric of some of our elected political representatives, that the problems of poverty in this country are caused by people choosing to be unemployed, choosing to be on benefits and deciding not to contribute to making society stronger.
"Actually, when you look at the figures, you can see that six out of 10 families in the UK living in poverty have at least one adult in paid work."
John Walker, chairman of the Federation of Small Businesses, said: "Small firms want to pay their employees more, and recognise the benefits of doing so. However, they are struggling to manage cash flow in the midst of weak economic demand and increasing energy and fuel costs."
Dave Prentis, general secretary of Unison, said: "The new rates will help families to make ends meet at a time when the cost of basics such as food and fuel have been rising.
"The challenge now is to close the gap between the national minimum wage and the Living Wage."
Rhys Moore, director of the Living Wage Foundation, said the movement was growing as more employers realised the benefits of paying the rate.
"Like Fair Trade, it represents a new standard for responsible business. We hope to see the Living Wage mark and symbol spreading further and further across organisations in the UK."
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