Investors back call for UK firms to support low-paid workers

3:10 pm Wednesday, November 23rd, 2022

By Simon Jessop

LONDON (Reuters) – A group of 17 investors managing 3.2 trillion pounds ($3.82 trillion) have called on Britain’s biggest listed employers to offer more support to low-paid workers as inflation drives a sharp rise in the cost of living.

Among those to sign an investor statement on the issue were Aviva Investors, Legal & General Investment Management and the Brunel Pension Partnership, according to CCLA Investment Management, which convened the coalition.

The statement is based on a letter sent by CCLA and the Church Investors Group to 100 companies in September and calls for them to prioritise support for the lowest-paid by raising pay and providing one-off cost-of-living support.

It also suggests they consider paying the Real Living Wage, which is higher than that set by the government; to work in good faith with workers and unions over pay claims; and ensure support for third-party contractors.

CCLA said it had so-far received just 48 “substantive” responses to its letter, the majority of which showed “insufficient support”. Just 25 companies were accredited as providing the Real Living Wage.

“While we appreciate there are many pressures on companies, it is absolutely imperative they do more to support their lowest-paid workers,” CCLA Chief Executive Peter Hugh Smith said in Wednesday’s statement.

“Healthy financial markets depend on healthy communities that can afford to purchase the everyday products and services businesses produce.”

In his budget plan announced last week, British finance minister Jeremy Hunt said the minimum wage would be increased by 9.7% to 10.42 pounds ($12.45) per hour from April next year.

The voluntary Real Living Wage, as determined by the Living Wage Foundation, backed by philanthropies, businesses and others, was raised to 10.90 pounds per hour across the UK and to 11.95 pounds in more expensive London in September.

Earlier this week, main opposition Labour party leader Keir Starmer told business leaders “the days of low pay and cheap labour” must end, amid calls from some bosses for looser immigration rules in response to workers shortages.

CCLA said it planned to write again to the companies in March 2023 to seek an update and to monitor progress made.

“We are well aware that people on low incomes are particularly impacted by the effects of inflation and are likelier than those on higher incomes to suffer the consequences of the cost of living crisis,” said Angeli Benham, senior global ESG manager, Legal & General Investment Management.

“That is why LGIM expects the companies in which we invest to continue to act responsibly, be innovative in their approach, and take any additional steps where financially feasible to support people.”

($1 = 0.8370 pounds)

(Reporting by Simon Jessop; Editing by Mark Heinrich)