Real living wage Future of scheme in question as BrewDog and Capita bail out

The outsourcing company Capita has become the second high-profile business to inform employees it would be dropping its commitment to the real living wage, the independently calculated rate meant to ensure the lowest-paid can afford the basic necessities of a decent life.

- Heather Stewart

After two years of 10% increases, as inflation has ripped through the economy, Capita has joined the brewer and bar operator BrewDog in telling staff it could no longer afford to pay the real living wage, which increased to £12 an hour. Unions fear more companies may be preparing to follow.

At Capita, the Communications Workers Union (CWU), which represents many of the staff, is consulting its members about the next steps. Tracey Fossey of the CWU said: “It’s sad, these are the lowest earners and it makes a big difference to them. Capita are saying that they can’t continue it, that they don’t have the funds to support it – which we don’t agree with, when the CEO can take home more than £1.7m in 2022.”

A spokesperson for Capita said: “ Our lowest-paid employees will all receive an above-inflation pay rise. We remain committed to our people and will revisit this decision when appropriate, as part of our continuing review of our cost base.”

In 2015, the then chancellor, George Osborne, rebranded the statutory minimum wage, which all companies must pay, as a “national living wage” in a backhanded tribute to the living wage campaign, which had pushed for better wages among other demands, including regular hours and fewer antisocial shifts.