A union has called on London boroughs to follow the lead of Brent Council by developing a business rate scheme which incentivises employers to pay a living wage.

In 2015 Brent Council began offering firms in the borough up to £5,000 off their business rates if they paid employees the London Living Wage.

The agreement saw the lowest-paid workers in the borough receive pay rises of around £2.50 an hour.

Lewisham, Ealing and Greenwich councils have also taken up the scheme.

The union GMB is now calling on all London boroughs to adopt similar approaches.

‘We commend the work being done in Brent, Lewisham, Ealing and Greenwich, but feel this scheme of offering business rate discounts as an incentive to pay London Living Wage should be used all across London,’ said Warren Kenny, GMB regional secretary.

Mr Kenny emphasised that the Living Wage was essential in London because of the high cost of living.

‘The London Living Wage reflects the real cost of living in London, and rewards the city’s residents for a hard day’s work, with a fair day’s pay,’ he said.

‘High rents in London are here to stay. So too are younger workers living for longer in private sector rental accommodation.

‘As a direct consequence, employers must be prepared to pay much higher wages to staff to enable them to afford London’s high rents.

‘If employers don't respond with higher pay they will face staff shortages as workers, especially younger people, are priced out of housing market.’

‘To make up for the current shortage of homes for rent at reasonable rents and to house this growing population is one of the most pressing challenges facing London,’ Mr Kenny continued.

‘Higher pay especially for younger workers is now one essential part of the solution.’