Banks targeted by living wage campaigners

TAXPAYER-BACKED banks which have paid millions of pounds in bonuses to senior staff are to be targeted by religious investors demanding a living wage for all employees.

The coalition of investors, which also includes unions and charities with more than 13 billion invested in UK companies, also intends to attack other major Scottish employers accused of paying some staff, contractors and suppliers at rates below the minimum wage.

Royal Bank of Scotland and Lloyds Banking Group are on the hit list along with Scottish FTSE 100 members such as Cairn Energy, Standard Life and Scottish & Southern Energy.

In a letter sent to the companies today, the investors' campaign urges employers to adopt a living wage of at least 7.20 an hour throughout their organisations (7.85 in London). Among the signatories are a number of cross-faith ethical investment bodies including the Ecumenical Council for Corporate Responsibility - of which the Church of Scotland is an associate member - and the Interfaith Centre on Corporate Responsibility.

The challenge coincides with the launch of the Citizens UK Living Wage Foundation, which proposes giving accreditation to employers who both pay their own workers the living wage and who ensure contractors such as cleaners and security guards also receive it.

The campaign has emerged as feelings continue to run high over bank bonuses. RBS, which is 83 per cent state-owned, is awarding a 7.7 million bonus package to chief executive Stephen Hester. It emerged earlier this that Antonio Horta-Osorio, the new head of Lloyds, in which the taxpayer has a 47 per cent stake, negotiated a package worth up to 9.7m on joining in January.

The campaign is being co-ordinated by the FairPensions organisation, which wants institutional investors such as pension funds to hold companies to account.

Catherine Howarth, chief executive of FairPensions, said: "People are sickened by the ever-growing wage inequality in Britain's biggest firms but we haven't had an effective way to make our voices heard until now. The combination of major religious investors and members of the public working together to bring the remuneration debate down to the shop floor should be irresistible."

Howarth said investors would raise the issue of low pay at company AGMs this summer. "CEOs and chairmen of Britain's biggest companies can expect to be challenged at their AGMs this year. We're very much looking forward to helping shareholders bring the issue of low pay straight to the top of FTSE 100s including Lloyds in only a few weeks."

A spokesman for Lloyds Banking Group said: "We believe our remuneration is appropriately set for all staff at Lloyds Banking Group and this is reviewed through annual benchmarking."

RBS was lobbied by the FairPensions at its AGM in April. A spokesman for the Edinburgh-based bank said: "Attracting and retaining talented, motivated staff is key to the future success of our business. We will only do that by paying fairly and competitively and we continue to review our pay policies with that in mind."

The living wage movement made headlines last week when the Public and Commercial Services Union called for cleaners in the Royal Household to be paid a living wage. It said the cleaners are paid 6.45 an hour, short of the London living wage of 7.85. The cleaners are employed by private contractors but the union claimed the responsibility for ensuring the living wage was met lay with the Royal Household, which receives around 30 million a year from the state purse.

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