Fighting for a living wage in London

As the distinction between public and private sectors continues to blur, the role of independent ‘civil society’ institutions in holding bodies in both sectors to account for their impacts on society is more important than ever. Sadly, the strength and vitality of local civil society organisations, from congregations to trade unions branches and indeed local branches of political parties, is weaker than ever.

London Citizens, the UK’s largest and most diverse independent alliance of grassroots civil society bodies, is attempting to revive and rethink the role of these precious but vulnerable institutions in the public life of the city. With a growing membership of over 80 churches, mosques, temples, union branches, schools, and community associations, London Citizens has been engaging the leadership of major corporate bodies, in both public and private sectors.

The key issues are labour conditions and wages in low-paid sectors of the London economy, notably cleaning, hotel work and most recently retail. Hence the organisation’s campaign for a London Living Wage.

A common experience for people in manual work has been zero wage growth from year to year; indeed many who moved employers found themselves on lower hourly pay with fewer employment benefits compared to earlier years. At the same time, the costs of housing, childcare and public transport, not to mention council tax, have been rising persistently and irresistibly. The result: a squeeze on people’s standard of living, on the time they could devote to family and the things they were able to do out of work.

The question people were asking was ‘why?’ When London is clearly such an economic powerhouse, when so many are doing so well, why should it be so different for us? There is of course a complex mix of reasons but the collective leadership of London Citizens (then known only as TELCO) chose to focus on major employers who, in outsourcing their support services to ‘lowest price’ contractors, had effectively shrugged off responsibility for the well-being of their most vulnerable workforce. The first target was the biggest employer in East London, the NHS. Later the campaign would move successfully to the financial services industry in the City.

With spending in the tens of billions, the footprint which the NHS leaves socially and environmentally is enormous. Outsourcing of hospital portering, catering, cleaning and security, undertaken for understandable reasons of economic rationalisation, had resulted in a grossly unfair two-tier workforce. Kitchen staff and domestics working side by side, doing exactly the same tasks, were earning very significantly different pay and benefits.

The better-off group, shrinking in size year by year, was composed of longer- standing staff transferred from NHS jobs to the employment of contractors, whose own newly-recruited staff earned the National Minimum Wage. The human impact of this ‘race to the bottom’ was little talked about or understood by NHS senior managers, most of them under heavy pressure to meet targets on waiting times and other important health-based priorities. Powerful testimony from workers which explained the impossibility of making ends meet in London on the National Minimum Wage were critical to shifting the climate.

Whilst London Citizens was gearing up to demand a Living Wage, the Strategic Health Authority for North East London was busy lobbying the Department of Health for additional funds on the basis that healthcare provision was more costly in an area of high deprivation. The irony was that the NHS had become, contract by contract, the largest culprit in the East London economy of poverty pay, exerting downward pressure on wage levels in other sectors which draw on the same pool of manual labour.

Several years of consistent community pressure, media publicity, and union organising led to a three-year pay deal in 2003 covering hundreds of workers in a significant number of East London hospitals, bringing them in time up to the London Living Wage level. Today that stands at £7.05 per hour, a full £2.00 over the National Minimum Wage.

On 1 May 2006, Living Wage Employer Awards were given for the first time to Queen Mary University of London, IPPR, KPMG, and a number of other well-known organisations across the capital. Mayor Livingstone, who has insisted on best practice for City Hall contracts, has proved to be a valuable champion, setting up a Living Wage Unit in GLA Economics which researches and publishes the annual rate of the London Living Wage.

Slowly, a new climate is being created. Major employers in the public and private sectors are successfully being held to a new ethical contracting standard by the civil society institutions whose grass roots base feel and see the impact of London’s chronic wage inequality. There is much, much more to be done, but the real progress to date is filling many with new hope.

Catherine Howarth is Community Organiser, London Citizens. www.londoncitizens.org.uk