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Large retailers cost taxpayer £11bn, claims Citizens UK

Retail giants including Next, Tesco and Asda have been named in new research that says large retailers paying below the living wage cost the taxpayer almost £11bn per year.

According to community campaign organisation Citizens UK, Next staff are forced to claim £67m in benefits in order to afford “a basic standard of living”. 

The report published by the charity says more than five million workers are forced to take in-work benefits such as working tax credits. 

The three major supermarkets, Tesco, Asda and Sainsbury’s, which all have clothing lines, are also named, as is Morrisons. 

The result of the wage top-ups, the charity says, is that businesses are being “subsidised” by the Treasury, often by more than they pay in tax.

Each “low waged” worker at Next, of which the report says there are 32,000, costs the taxpayer approximately £2,087. 

Tesco’s “low pay culture” is the biggest offender, supplemented to the tune of £364m. Meanwhile, Asda employees require £221m of support, and Sainsbury’s staff £181m. 

The minimum wage is currently £6.50, it will rise to £6.70 in October. The living wage, calculated by the Living Wage Foundation, is £7.85 or £9.15 in London. 

Citizens UK has launched an open letter to the five chief executives calling for them to pay the living wage. 

The document, addressed to Simon Wolfson (Next), Dave Lewis (Tesco), Andy Clark (Asda), Mike Coupe (Sainsbury’s) and David Potts (Morrisons), says: “It’s a scandal that your companies, including some of the largest and most profitable in the country, count on the public to prop up lousy pay to your workers.”

The letter currently has 147 signatures. It is not yet known if any have responded to any of the claims.


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