Last week, the Chancellor gave 2.5 million workers a pay rise, by legislating for a “national living wage.” We should not underestimate the scale of this achievement, but there are big questions to ask about the level of what George Osborne calls the “national living wage.”
In November, Boris Johnson unveiled the figure for the 2015 London Living Wage. It is £9.15. Across the UK, but especially in London, workers cannot be expected to believe that £9 an hour will be enough to live on - especially given the swingeing cuts in tax credits.
Yesterday, Boris entered the fray again. He told Citizens UK that “we congratulate the government but we can't let the wind be taken out of the sails of the Living Wage campaign.” He is right: loose language on this issue is dangerous.
Words do not mean whatever we want them to. Terms like “Living Wage” and “affordable housing” have a meaning independent of the will of politicians and spin doctors. The reality is that the “national living wage,” though very welcome, will not be enough to live on.
The rate of the statutory minimum wage is rightly limited by its impact on jobs, and so Citizens UK will continue to urge employers who can afford it to pay a truly Living Wage. We hope the Chancellor will join both Boris Johnson and David Cameron in supporting our work on this, so that his statutory changes and our voluntary campaigning can pull together - forming a joined-up strategy to tackle in-work poverty.
In Graphics: Budget 2015 analysis
The budget signals an important change in Tory rhetoric - one that needs to be followed through into reality. Instead of using the welfare budget to pay for market failure, this Government says it wants to change the pre-tax distribution of income, moving to what David Cameron calls a “high wage, low welfare” economy. (This is precisely what Conservative political philosopher Phillip Blond argued for in his much-discussed book Red Tory on the eve of the 2010 election. More recently Ed Miliband was much mocked for arguing for the very same thing under the ugly title of ‘predistribution.’) A truly Living Wage would help to make that happen, both cutting the welfare budget and benefitting the poorest workers.
If low pay is one cause of in-work poverty, another is the soaring cost of housing. Just as the words “Living Wage” need to actually mean “a wage you can live on” so “affordable housing” needs to mean “housing you can actually afford.” That's why we are also calling for affordable housing to be defined in relation to the Living Wage - and for a major increase in its supply. Like a Living Wage, genuinely affordable housing will be good news for workers and for the Treasury alike, as it will drastically reduce the Housing Benefit bill.
Truly affordable housing, like a truly Living Wage, is vital to tackling both poverty and the budget deficit. In recent decades, the record of all governments on this issue has been pretty dismal. That's why we are not be resting on our laurels.
The Living Wage Campaign has shown how the fight for social justice can be prophetic and pragmatic, winning real change under governments of all stripes. This week's news can be a springboard for an even more transformative campaign - for a wage that workers can really live on, and more housing that they can truly afford.
Canon Dr Angus Ritchie is the Director of the Centre for Theology & Community and one of the founding leaders of Citizens UK's Living Wage Campaign.