Boris calls for more Living Wage

This is 30p more than the benchmark of £7.45 Mayor Boris Johnson has promised the Greater London Authority will pay its contractors.

The Barclays deal was announced last month but Mr Johnson visited Canary Wharf on Monday, July 28, to tell others it makes sense to reward low paid employees.

He said: "London has particular hardships and the gap between rich and poor is big. We have to do something about that.

"Barclays has a beady eye for the bottom line, so if they think it makes business sense then other banks should take note."

Barclays employee relations director Dominic Johnson agreed paying more than the living wage will help recruitment and staff retention.

He said: "We believe people who work for our contractors, whether cleaners, security staff or in other roles, all contribute to our customers' experience.

"Fair pay means motivated staff who stay working at Barclays longer."

However, the news has not been welcomed by all. Dr Helen Hill of the London Chamber of Commerce and Industry said jobs would be lost as a result of meeting the living wage.

She said: "It is easy to agree to pay 35 per cent above the national minimum wage if you are a large global banking group, or if the tax payer is footing the bill, but this is a huge ask for many firms in the capital, especially in the current economic climate."

Dr Hill said switching from the minimum wage to the living wage would cost employers more than £3,000 for each full-time employee.

She said research suggested businesses would have to axe jobs, scrap expansion plans and slash money invested in staff training.

She said: "We are very concerned that the Mayor has chosen to use the GLA’s purchasing power to force businesses to implement inflation-busting pay. This policy will serve as a further barrier to small businesses accessing public contracts.

"While we accept London is an expensive place to live, we do not believe that making the capital a more expensive place to do business is really the answer.

"The Mayor will not be thanked for raising the wages of some workers at the expense of the jobs of others."