The rising cost of living and shortages of labour means London's workers now have more industrial power.
On the face of it the issue of London weighting payments is not all that thrilling. Nevertheless, it has helped add a bit more spice to the recent upsurge of rank and file militancy which has managed to send the mainstream press into such a lather. As many as 40,000 teachers in London were involved in strike action over the issue just before Easter, and in May something like 85,000 local authority workers employed in London boroughs will be taking part in a ballot for strike action, the target being an across the board payment of £4,000 to cover the additional costs of living in the capital.
At one level the issue of London weighting is simply about the extra costs faced by workers in the capital, notably for housing and travel. Housing costs alone are around 56 percent higher and it is estimated that a salary of £40,000 is needed to afford even a small one-bedroom flat in London. For those who assume that everyone who lives in London must be loaded, it may be a surprise to learn that the average salary in London is about £25,000 before tax. This means that it takes the combined income of two people with full time jobs to afford even the very cheapest mortgage. On top of that, travel costs and the time people spend getting to and from work are typically three to four times higher in London than elsewhere.
These facts alone would justify tacking at least a few grand on to pay rates which, in most parts of the public sector, are still negotiated nationally and--apart from the extra for London--are otherwise no different in Newcastle or Southampton. But they don't explain why London weighting has suddenly become such an issue.
The most immediate reason is that, around about the middle of last year, the level of allowance paid to police officers working in London was lifted to £6,000 in an attempt to deal with acute recruitment and retention difficulties. Within no time at all, other workers in the public sector were looking at this £6,000 and wondering how long it would be before they were getting the same.
Shortages of teachers and nurses in London schools and hospitals are far more serious than the Met has ever had to deal with, and the main public sector union, Unison, estimates that in at least three of the London boroughs social worker vacancy rates have reached 50 percent. Unison also says that 40 percent of councils have reported difficulties recruiting home care staff.
Much as New Labour would like to believe that these problems are largely confined to a relatively small number of 'key' areas, the problem is rife throughout the public sector, and is pretty much the same in the private sector (albeit most acute in parts which have only fairly recently been privatised). For example, service engineers employed by British Gas have also taken strike action over London weighting in recent months because their allowance had not been uprated for ages. As a result of huge staff shortages on London buses, the Greater London Authority was last year forced to introduce an additional pay supplement for bus drivers in the capital, and the latest pay deal at Railtrack includes a huge increase to the special allowances paid for signalling staff working in the London area for the same reason. One of the leading bus companies in London has even introduced a scheme whereby the company will pay for bed and breakfast accommodation for drivers recruited from 'up north', so that they can work in London for three or four days and then go back home for the rest of the week.
Generally speaking the problems are more acute in the public sector because, until the pressure got too much in the last year or so, the wages of public sector employees had been systematically held back by successive Tory and New Labour governments. And that has been the case inside and outside London. But what workers in both the public and private sectors in London have in common is that the relative value of their London weighting payments has been steadily eroded in the past 20 years--and this is the other key factor fuelling the current unrest. That, and the fact that means there has been almost no new council housing built in the past 20 years, there is virtually nowhere affordable to live.
In the early 1970s workers in London fought for, and won, a commitment that not only was extra money needed to cover the cost of living in London, but that the amount paid would be uprated annually. Even though the figure finally arrived at was substantially below what was needed, it was based on a serious investigation of the estimated extra costs for housing and travel in London. The Pay Board of the time also introduced a London weighting index as a guide for negotiators, and this was used right through until 1982 when it was summarily abolished by Norman Tebbit.
As you might expect, Tebbit's main reason for doing this was that he regarded London weighting as just one more burden on the bosses and precisely the kind of issue which, in the wrong hands, could lead to untold agitation. Because the government is not only the sole employer in the public sector but also employs far more people in London than any private firm, its removal would perform the useful dual function of further disarming the unions and saving the government a very large amount of money.
Since 1982 the uprating of London weighting payments has proceeded in a piecemeal fashion, if at all. Apart from a short period in the late 1980s, when lots of banks and major retailers were forced to improve their London weighting payments during the Lawson 'boom', the extra paid for working in London has not increased by very much at all, and in lots of cases has barely changed for most of the past decade. Most workers get in the region of an extra £2,500 to £3,000, which puts them in real terms between 30 and 40 percent lower, relative to average earnings, than the figure agreed by the Pay Board in 1974.
This is one of the reasons that the Greater London Authority is currently undertaking a major review of London weighting, with submissions currently being taken from employers and union representatives in all the main sectors. They are worried that, unless something is done, key workers will simply leave the capital in droves. Just as Tebbit feared, the resurrection of this issue also provides an ideal opportunity to demand--as the train drivers have been doing so successfully--that the bosses stump up the cash to deal with staff shortages, or else find that the workers who are currently working overtime and rest days to plug the gaps won't do it any more.