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  1. ITV Report

Newcastle first council to introduce 'Living Wage'

More than 2000 council workers in Newcastle have received a bigger pay packet this month, because the council has introduced a 'living wage'.

Their wages are rising to £7.20 per hour - about a pound more than the national minimum wage - which is the amount an independent panel decided it costs for a reasonable standard of living.

It means full-time workers will receive about £1,100 extra per year. One of those, Marlene Brownlee, has worked as a cleaner for the council for 15 years.

"It is a big difference," she said. "Where a lot of people work 7 days a week, now we can turn around and say, well, we'll work 6 days a week. We'll take one off. So everyone is just so pleased with it."

The pay rise will cost the council an extra £980,000 per year - at a time when it has already made hundreds of job cuts - and plans more.

However, they think the living wage is important.

Joyce McCarty, the deputy leader of Newcastle City Council, said: "We have a duty to look after the least well paid in our communities and we know they have been hit hard by the costs rises in fuel, and food and looking after their children.

"So we think this is the right thing to do, even though these are tough times."

The council has also written to hundreds of businesses in the city, asking them to consider the living wage for their staff.

"I would like to do it, but it's unaffordable."

– Hani Sulaiman, sandwich shop owner

Across the road from the council's Civic Centre, in the city centre, Hani Sulaiman runs a sandwich shop, where he said margins were increasingly tight.

"We would like to increase wages if we could afford it," he said. "But the problem, is, we are squeezed.

"Our profits are going down. The costs are going high. The taxes are going higher, with the VAT and the rest of it. It's unaffordable, that is the only reason."

Unions say there are benefits for employers who pay their workers more: they are less likely to take time off sick and more likely to remain with the company.

At Unison's annual conference in Durham, they hope more councils will follow Newcastle's lead.