Starbucks offers its UK staff interest-free loans and living wage to boost brand image

Starbucks will begin paying its UK staff a living wage and has announced plans to offer them interest-free loans to help buy homes.

The coffee chain will offer staff in the UK interest free loans over a 12 month period in order to help them put a deposit down on a house. It has also announced that it will increase pay for all its baristas to £7.20 an hour from November as well as upping supervisors pay too.

The changes come after the company polled its staff on the issues which they felt affected them the most and housing was revealed to be the main concern. These common worries will have been intensified following The Royal Institution of Chartered Surveyors prediction that house prices in the UK will rise by 6 per cent, double that of their previous forecast.

Speaking to the Financial Times, Kris Engskov, president of Starbucks in Europe, the Middle East and Africa said staffs’ concerns came as "no surprise. People are working in cities and not being able to afford housing close to where they work."

Starbucks’s decision to roll-out the national living wage goes beyond the legislative recommendations, which only include over 25s and says nothing about a pay rise for those already earning above it.

Controversial tax strategies have damaged the company’s brand image over the last few years and the current measures will help to address this. The US company came under fire in 2012 after it emerged that it had been telling investors its British operations were highly profitable while saying to authorities that it was making a loss in order to avoid tax liability.

For the past three years Engskov has worked to turn around the damaged reputation, however some of the measures have still be highly criticised. Starbucks’ pledge to pay £20m in British corporation tax in 2013 and 2014 regardless of its profits was an attempt to appease public anger however it was criticised as an ignorant and desperate attempt to deflect public anger.

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