UNIONS have welcomed a U-turn by Ikea on May Day, after the Swedish flat-pack giant bowed to pressure and rowed back on its decision to drop the “real” living wage.

The transnational said over the weekend that it would now honour the minimum hourly rate of £10.85 in London and £9.50 in the rest of the country from May Day — the deadline for implementation set by the Living Wage Foundation (LWF).

Ikea sparked fury in November when it told workers that it would not pay the 20p hourly increase set by the LWF, citing a “challenging” retail environment — but continued displaying the foundation’s plaques on its sites.

The LWF’s rate, intended to reflect the cost of living, is appreciably higher than the legal minimum wage of £8.91 for adults over the age of 23.

The GMB union raised Ikea’s non-compliance directly with the LWF, whose website had the company’s logo displayed as a “principal partner” along with a statement from the firm declaring the living wage “a worthwhile investment in our people.”

GMB regional organiser David Shamma said: “This is a real win for all Ikea staff on International Workers’ Day — they will really feel the difference in their pockets. 

“With dark economic clouds circling, there’s never been a better time to join a union.” 

Retail union Usdaw also welcomed Ikea’s about-face and emphasised its “new deal” campaign to establish a £10 minimum, regardless of age, across the industry.

National officer Dave Gill noted that Ikea was “one of a few retail employers who pay the real living wage.”

He said: “While we welcomed the latest increase in living wage rates, Usdaw continues to campaign for a new deal for workers with a minimum wage of at least £10 per hour and an end to insecure employment.”