26.01.15
Council to cut business rates for businesses that pay living wage
A Labour council in London is set to become the first in the country to offer business rates discounts to companies who agree to pay workers the living wage.
Firms in the borough of Brent will be offered discounts of up to £5,000 off their business rates if they become living wage accredited employers, paying all workers at least £9.15, the living wage rate for London.
Brent will have to fund only 30% of the costs itself because, following coalition changes giving councils more flexibility over business rates, central government will meet half the cost. The Greater London Authority will pay the remaining 20%.
Brent Council Cabinet is due to discuss and vote on the policy at 2pm today and it is widely expected to pass.
Cllr Roxanne Mashari, cabinet member for Employment and Skills at Brent Council, said: “We are committed to championing the living wage and tackling the root causes of poverty in our borough. We know that paying the living wage makes good business sense as it incentivises staff and helps to recruit and retain the best people, whilst reducing absenteeism. Today Brent Council has passed a pro-business policy to make it that much easier for businesses to pay their staff the living wage.”
The largest companies would get the biggest discounts – those with over 500 staff would get a £5,000 reduction in business rates, while the smallest, those with fewer than 10 employees, would get £250 off – with varying discounts in between. It is anticipated that up to 200 businesses and 30% of Brent residents could benefit from the policy.
Rhys Moore, director of the Living Wage Foundation, said: "Brent Council is showing great leadership on the Living Wage. Local government has an important role in supporting businesses to do the right thing and help low paid employees out of in-work poverty."
Greenwich, another Labour council in London, is also expected to adopt the idea, and Rachel Reeves, shadow work and pensions secretary, said Labour would be encouraging all councils to do the same.
“I want councils across the country to follow Brent’s lead by cutting business rates for companies who pay their staff a Living Wage. It’s a brilliant idea to tackle low pay which is good for everyone - workers, employers and taxpayers.”
Brent Council has been a London Living Wage employer itself since November 2013.
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