UK charity says taxpayers subsidise big business by around £11bn a year

By

Cajsa Lykke Carlson

Published
Apr 13, 2015

Citizens UK, the community organising charity, says the low pay culture in the UK is costing taxpayers £11bn annually. The country has 5.24m people but 22% of all employees earn less than the living wage.

This means that the UK Treasury has to top up incomes with in-work benefits, Citizens UK says. According to new research, businesses are benefiting more from the Treasury in wage top-ups than they are paying in tax. If companies paid employees a living wage, tax payers would save huge sums. If just Tesco did so, tax payers could save £92m a year.

The Rev Karen Rooms, Area Dean for Nottingham South and member of the Citizens UK Council said: "The figures revealed by this research are shocking, as the true scale of the subsidy of big business becomes clear."

"The huge profits made by some of these high street names are made off the back of poverty-wages. In some instances the amount of tax they pay doesn’t even cover the wage top-ups we all have to chip-in and help with through the Treasury."

If all four major retailers (Asda, Morrison’s, Sainsbury’s and Tesco) would adopt the Living Wage, the Treasury would save £200m, Citizens UK said.