Published:

Kevin Hollinrake is MP for Thirsk & Malton.

As the cost of living continues to rise, the Government’s ambition to move towards a high-wage economy has never been more important. Employers who can afford to should turbo-charge those efforts by paying their workers the real Living Wage.

As the Prime Minister made clear in his speech at Conservative Party Conference, this is a government determined to deal with the biggest underlying issues of our society. Low pay is one of them, and the recent announcement that from April 2022 the National Living Wage will rise to £9.50 an hour is a significant step towards tackling it.

This increase represents a 6.6 per cent wage increase for workers over 23 at the bottom of the pay scale, and millions are set to benefit.

As the Chair of the All-Party Parliamentary Group on Poverty I know only too well that despite this vital intervention, low pay will remain a problem for many. Speaking at our recent consultation on in-work poverty, the Living Wage Foundation reported that 4.8 million UK jobs (17.1 per cent of the total) are still paid below the real Living Wage, struggling to keep their heads above water.

To combat low pay, the Living Wage Foundation advocates a voluntary, independently calculated rate based on the cost of living – the real Living Wage – which this week rose to £9.90 in the UK and £11.05 in London.

It’s heartening to see that the campaign continues to flourish: nearly 9,000 employers are now accredited Living Wage employers, a record 3,000 of whom have signed up since the start of the pandemic. Together, they set a new moral code for responsible business in Britain.

Encouraging those who can to pay a wage that meets everyday needs will be crucial in the coming months. Living costs are on the rise; the Bank of England’s new chief economist Huw Pill has warned that inflation is likely to hit or surpass five per cent by early 2022 amid increasing energy prices and supply chain disruption. With households sure to feel the squeeze, it’s a context that makes the movement for the Living Wage more pertinent than ever.

But the case for paying the Living Wage is not just a moral one. Cardiff Business School’s survey of accredited Living Wage Employers showed that one of the biggest beneficiaries of paying the Living Wage is employers themselves. In fact, an overwhelming 93 per cent agreed that paying the real Living Wage has made their business stronger.

From boosting retention rates to improving an organisation’s reputation, the evidence is clear: the Living Wage is good for business.

Beyond individual businesses, wider adoption of the real Living Wage would benefit Britain, boosting our recovery from the pandemic, levelling up the country and accelerating our journey to the Prime Minister’s high-wage vision of the future. Research by the Smith Institute found that if just 25 per cent of all below Living Wage jobs in the UK were raised onto the real Living Wage, the UK economy would enjoy a £1.5 billion boost.

And given that average hourly pay in towns belonging to the former ‘Red Wall’ is around 14 per cent lower than the UK average, it’s clear that the rate can also support the Government’s efforts to make sure it’s not just those in London and the South East that enjoy the opportunity to find good employment.

The pandemic brought our nation together in hardship: it’s time for some good news. I urge those employers who are able to accredit with the Living Wage Foundation to do so. They have the opportunity to help the Government pave the way to the brighter future Britons deserve.