Intercontinental Hotels accused of breaching living wage pledge
London Mayor Sadiq Khan has accused the Intercontinental Hotels group, which owns the Holiday Inn and Crowne Plaza chains, of backtracking on a pledge to pay staff in the capital the living wage. The group made the commitment in order to become official hotels provider to the 2012 London Olympics. Khan said that it was unlikely he would endorse any further partnerships between the company and the Greater London Authority unless the pledge was implemented. The group’s new CEO, Keith Barr, said that rising employment costs since 2012 had stopped the company paying the £10.20 ($13.5) rate.
 

The mayor of London, Sadiq Khan, has accused the owner of the Holiday Inn and Crowne Plaza hotel chains of reneging on a commitment to pay the living wage to staff in the capital.

Intercontinental Hotels pledged to pay the higher wage rate to secure the title of official hotels provider to the 2012 London Olympics.

Khan said he was shocked at the breach of trust by the hotel group, which has refused to honour a commitment made in 2012 to pay the living wage within the next five years.



The mayor warned the company it was unlikely he would endorse any future partnerships with the Greater London Authority without a change of policy.

Officials from City Hall had hoped this week to hear from Intercontinental Hotels (IHG) that it was ready to make good on its pledge.

However, the group’s new chief executive, Keith Barr, said that since 2012, employment costs had increased dramatically, preventing it from paying the £10.20 an hour rate to all staff.

Mayor of London Sadiq Khan. Photograph: Dominic Lipinski/PA

Khan said in a letter to Barr that he understood that businesses faced rising costs, including higher rents and business rates, but “given the ongoing success and profitability of IHG, I believe your business has the ability and responsibility to keep the promise you made both to Londoners and to your own staff”.

An IHG spokesperson said: “Over the past five years there have been several valuable changes to UK pay and benefits legislation, including the introduction of a national living wage, pension auto-enrolment, higher national insurance and the apprenticeship levy.



“We won’t be moving forward with gaining the voluntary London living wage accreditation, but remain focused on hospitality as a great career, as well as the associated pay and benefits, to ensure we remain an employer of choice.”



The row comes at the end of a week of events to publicise the living wage that kicked off on Monday with the announcement of rise in the voluntary minimum to £10.20 in London and £8.75 per hour in the rest of the country.



The Living Wage Foundation, which grew out of a campaign started in 2001 by the community group Citizens UK, sets new rates each year to reflect the wage a worker needs to sustain a decent quality of life. More than 3,600 companies are signatories and pay their employees the higher rate.

Khan said: “To truly tackle the scourge of in-work poverty in London I need businesses such as yours to take the responsible step, especially when you have already committed to do so.”



Citizens UK’s executive director, Neil Jameson, said: “Back in 2012 IHG, the owners of Holiday Inn promised they would pay a London living wage to hotel staff in the capital but, five years on, hardworking staff are still waiting for this pay rise.



“It is deeply disappointing that IHG have let down workers and customers by not paying the London living wage after saying they would. We would urge IHG to meet with workers and urgently agree a timetable towards paying the London living wage and accreditation with the Living Wage Foundation.”



In April 2016, the government introduced a new £7.50 national living wage to supplement the minimum wage, though just for workers aged 25 years and older.

IHG added: “We have made good progress in increasing the pay and benefits of managed hotel colleagues over the past five years, including going beyond legislative requirements for national living wage by paying the 19% of our workforce under 25 years old the new rate.

“Nearly 90% of colleagues are now paid more than the national living wage rate. Through our IHG academy programme we have also helped to train and upskill more than 500 local people.”