The next item of business is a debate on motion S4M-11398, in the name of James Kelly, on the living wage. I invite members who wish to speak in the debate to press their request-to-speak buttons now.
15:52
It gives me great delight to open this debate on the living wage on behalf of the Labour Party. Labour wants to use this debate to promote living wage week, to welcome the new rate of £7.85 an hour and to enable the Parliament to discuss how we can take forward this issue so that we can ensure that more people in Scotland are paid the living wage.
The report that was produced by KPMG at the start of this week details the fact that 413,000 people in Scotland are not currently paid the living wage—they are paid the minimum wage or greater, but not the living wage. That shows that we have some way to go in order to lift those people out of property. The £7.85 living wage is what is reckoned to be required to allow a family to be provided for decently and adequately. We need to strive to do more. Some 64 per cent of those 413,000 people are women. More than 250,000 women are not paid the living wage, 150,000 of whom are between the ages of 16 and 24. Those are key groups in our society.
The issue is not just about statistics; it is about real people—the cleaner in Cambuslang, the care worker in Carnoustie—who are struggling to bring up their families with the added burden of rising food and energy prices, and who are trying to get by on a wage that is not adequate.
The focus of this debate must be on what we can do to move the situation forward. I will begin with the Scottish Government. The Scottish Government has put itself forward as an enthusiastic supporter of the living wage. However, earlier in the year, when it was given the opportunity through the Procurement Reform (Scotland) Bill to extend the living wage to everyone on public contracts, SNP members voted that down. That was a hammer blow to the over 400,000 people who are not paid the living wage. It was a missed opportunity given the £10 billion purchasing power of the Scottish Government, which means that it can influence companies to pay the living wage.
The reality now is that, as well as some of the companies to which the Scottish Government awards contracts not paying the living wage in Scottish Government locations, cleaners at Atlantic Quay and in Scottish prisons are not being paid the living wage. The Scottish Government must address that issue. If it wants to brand itself as a serious supporter of the living wage, it needs to ensure that everyone in Scottish Government locations is paid the living wage. That should be an absolute priority.
Earlier in the year, we heard that that was not possible because it would be subject to a legal challenge. I said at the time that, frankly, that was a smokescreen, and the more the issue develops, the more that is becoming clear. Only last week, the Department of Energy and Climate Change announced that all its workers and—crucially—all its subcontractors will be paid the living wage. We are always hearing from the SNP about big, bad Westminster but I question why a big, bad Westminster department has been able to do what the Scottish Government is unable to do and pledge that all its subcontractors will be paid the living wage.
Why are the SNP and the Scottish Government so timid on this issue while people like Boris Johnson are able to be more committed on the living wage? If Angela Constance is serious about it, she should do something about it using the powers in her remit. Angela Constance is one of the contestants in the SNP deputy leadership contest and there seems to be very little to differentiate between the candidates. In recent television appearances Angela Constance has been keen to support the idea of cutting corporation tax, but on the issue of the living wage the silence has been deafening.
Will the member give way?
Let me develop this point, and I will let Mr McDonald in.
I will give Angela Constance a bit of free advice in the context of the deputy leadership contest. Why does she not look for something that is a bit different from what the other candidates support and say that she is committed to the living wage and wants to see all the subcontractors and people on public contracts being paid the living wage? That would set her apart from the other candidates, and I think that that would appeal to a lot of SNP members. That is a real opportunity for her.
I note that the member is one of the brains trust behind Jim Murphy’s Labour leadership campaign, which already calls into question Mr Murphy’s judgment. Nonetheless, does he accept that one way in which what he proposes could be taken forward would be through minimum wage powers coming to the Scottish Parliament? That would allow us to ensure that anybody could be paid the living wage, not just those who are covered by the public sector and public sector contracts.
I think that Mark McDonald should be a bit more cautious in calling for minimum wage powers when the Government cannot even use the powers that it has to give Scottish Government cleaners and subcontractors working in Scottish Government locations the living wage. The Government should use those powers first, before asking for more powers.
One of the disappointing things about the Scottish Government’s attitude is that it is not providing proper leadership. One of the big challenges is that 93 per cent of the people who are not on the living wage are in the private sector. If we are going to encourage private sector organisations to pay the living wage, we need more leadership from the Government and we need the Government to be more aggressive in promoting the living wage. We saw in the referendum campaign that the SNP was quite aggressive in promoting independence. Why do we not see the same energy and aggression around the issue of the living wage?
In sectors such as retailing and catering, workers need the support of the living wage, but the momentum is building on it. Only last week, Heart of Midlothian Football Club declared that it would pay the living wage. Organisations such as KPMG have also said that they would pay the living wage. Paying the living wage has real advantages for businesses in terms of falling absenteeism, staff retention and increased recruitment. All that means an improved bottom line and improved performance for the business. There are real opportunities, but the Government should be doing more and be more up front about the living wage.
What is required to take the issue forward is a proper living wage unit that will monitor wage levels in the country and the sectors that need attention. We need a living wage strategy from the Government that it can bring to the chamber for debate; we need proper consultation on it, and regular updates to Parliament.
It is absolutely right that people are entitled to fair wages. It is time that this Government got serious about the living wage. The Government needs to take on its responsibilities and provide leadership. The living wage is an idea whose time has come, but let us see the Scottish Government play its part in its delivery; let us see the Scottish Government stand up and be counted; and let us see the Scottish Government roll out its activities so that we can see some of the 400,000 people who are currently not on the living wage being taken out of the poverty trap and taken forward on to decent wages.
I move,
That the Parliament welcomes the rise in the living wage to £7.85 per hour; believes that payment of the living wage should be the expectation, not the exception, and notes that more than 400,000 workers in Scotland still earn less than the living wage; recognises the benefits to both businesses and their staff of paying the living wage; believes that the payment of the living wage in the private sector should be supported and actively promoted; welcomes the pledge from the Department of Energy and Climate Change that all of its staff, including sub-contracted staff, will be paid at least the living wage, and calls on the Scottish Government to pledge the same and extend the payment of the living wage to all public sector contractors.
16:02
I was looking forward to a nice consensual debate this afternoon. I was very interested that Mr Kelly wants a living wage strategy and a living wage unit, but of course he and his party have ruled out the devolution of employment powers to this Parliament, which is very interesting indeed.
The Scottish Government welcomes the opportunity to participate in this debate, particularly during living wage week. Indeed, I welcome every opportunity that this Parliament has to make its voice heard on tackling poverty and inequality, and I recognise how crucial that is to achieving our vision of a successful and fair Scotland.
I begin by stating unequivocally here today that in this Government’s view paying the living wage should be the expectation and not the exception. Given that it is living wage week, I note the very clear call from the major third sector organisations for more powers in Scotland to address the issues around pay and conditions, in particular the devolution of the national minimum wage to ensure fairness at work for all.
Will the cabinet secretary take an intervention?
Not just now, thanks. I will make progress.
I suggest that it is Mr Kelly and his colleagues who are rather timid.
In the Scottish Government’s draft budget, Mr Swinney focused on three key goals: to make Scotland a more prosperous country; to tackle inequalities; and to protect and reform public services He also set out commitments to tackle the poverty and inequality that can cripple our society. Those commitments included increasing spending on welfare reform mitigation; providing additional investment in housing, with a strong focus on affordable and social housing; and, crucially, confirming our commitment to the living wage and the wider social wage.
We recognise the real difference that the living wage makes to people in Scotland. That was reiterated on Monday, when Mr Swinney supported the announcement of the new, increased living wage rate for 2015-16 of £7.85 an hour.
The cabinet secretary mentioned the Government’s commitment to the living wage in the Scottish budget. Does she accept that there are workers at Scottish Government locations who are not being paid the living wage? What action will be taken in the forthcoming budget to address that issue?
That leads me neatly on to my next point. A plank of this Government’s success is our public sector pay policy, which has at its heart tackling inequality and low pay. Our commitment to implementing the living wage is long-standing. To answer Mr Kelly’s point directly, we are the first and only Government in the United Kingdom to make the living wage an integral part of our public sector pay policy, and we have done so for five successive years.
The guarantee that we will support the living wage in the public sector pay policy for the duration of this session of Parliament provides a decisive, long-term commitment to people on the lowest incomes, and it truly sets us apart, because it goes well beyond any measures that the UK Government has put in place for the lower paid.
Does the cabinet secretary accept that the workers I was talking about are not covered by the public sector pay policy, nor are the subcontractors? What action does she intend to take to address that deficiency?
Where we have the power to act, we act. Unlike Mr Kelly, this Government will not participate in gesture politics. I am pig sick of the Labour Party always asking this Government—on procurement, for example—to do things that it is illegal for us to do. [Interruption.]
Order.
Labour members need to stop being mischievous and misleading. Where we have the power to act, we act. Our record compares very well with that of the previous Government because, unlike that Labour Government, we have implemented the living wage as part of our pay policy. We practise what we preach.
Will the minister take an intervention?
No, thanks—I am running out of time.
We want to go further, because we believe that employers should reward their staff fairly. That is why we are calling on all companies across Scotland to follow the Scottish Government’s lead and introduce the living wage. As well as setting an example in our pay policy, we have funded a pilot by the Poverty Alliance to promote take-up of the accreditation scheme and increase the number of employers who pay the living wage in all sectors in Scotland. That campaign is being rolled out over 2014-15, and I was delighted to hear the Poverty Alliance announce yesterday that the number of accredited living wage employers in Scotland has tripled.
In addition, we are using our powers on procurement to encourage the payment of the living wage. The Procurement Reform (Scotland) Act 2014 demonstrates our clear intention to use our powers to put the living wage into public contracts while acting within European Union law. The 2014 act will require public bodies to outline their living wage policy in their procurement strategies. It will also see Scottish ministers publish statutory guidance on the fact that workforce matters, including the living wage, should be a factor when bidders for a contract are selected. That will be the first time that statutory guidance has been put in place to address that issue.
In addition to that legislation, we are conducting a pilot project on Scottish Government contracts, which encourages bidders to take a positive approach to their workforce package, including the living wage and—importantly—other terms and conditions. Those measures clearly show that this Government is already doing substantially more than has been done by the current UK Government and previous Labour Administrations in Holyrood and at Westminster.
Following the publication of the “Working Together Review: Progressive Workplace Policies in Scotland”, the First Minister announced the establishment of a fair work convention, which will provide leadership on industrial relations and encourage dialogue between unions, employers, public sector bodies and Government. The convention will exert greater Scottish influence over the minimum wage while championing other aspects of good industrial relations, including payment of the living wage. It will be a powerful advocate of a partnership approach to industrial relations in Scotland.
I move amendment S4M-11398.2, to leave out from “welcomes the pledge” to end and insert:
“welcomes the fact that the Scottish Government is the first government in the UK to pay the living wage to all staff and those covered by its pay policy, including the NHS; notes the efforts of the Scottish Government to engage with the European Commission on including the living wage as a condition of procurement; further notes that neither the Department of Energy and Climate Change nor the London Assembly includes the living wage as part of commercial tenders; welcomes the success of the Scottish Government in securing the payment of the living wage in public contracts as demonstrated in both the new ScotRail contract and the Scottish Government catering contract, which will benefit 50 staff who were previously paid the national minimum wage; further welcomes the report of the Working Together Review, which was commissioned by the Scottish Government, and the announcement by the First Minister of the establishment of the Fair Work Convention; notes that the Scottish Government is producing new guidance that will help all public bodies focus on how workforce-related matters, including the living wage, can be included in contracts, and shares the concern of the Joseph Rowntree Foundation about the Labour Party’s inappropriate announcement of a minimum wage level for 2020 and that the Labour proposals will, based on estimates of inflation, not even meet living costs in 2020.”
16:09
Many in the media have been saying that politics in Scotland is changing; after listening to the opening speeches, I think that that much is clear. We have had the Labour Party advising Scottish National Party candidates on their leadership bids and the Labour Party praising the Tory Boris Johnson. We also have the Conservative Party agreeing with the Labour Party’s motion and the SNP amendment. In fact, I had to read the motion and the amendment a few times; when I found myself agreeing with most of what they said, I went along the corridor to my friend Alex Johnstone. I had assumed that I would get a huge amount of disagreement, but even he agreed with most of the motion and the amendment. I hope, therefore, that in my five minutes I will be a bit more consensual than the previous two speakers.
I thank the Labour Party very much for bringing to the chamber this debate on the living wage, and we commend the contribution that the Scottish living wage campaign has made to the lives of thousands of individuals and families in Scotland. We, too, welcome the rise in the living wage to £7.85 per hour from April next year.
However, I want to return to a point that I have been raising since about May 1999 about the Government’s subcontracting to the care home and childcare sectors. After all, whenever we in this Parliament talk about low wages, we tend to talk about care workers and childcare workers. For too long now, people have been highlighting the low pay in these sectors, and I think that, alongside that, there is a lack of valuing the people who work in them.
At a meeting that I attended prior to the referendum, I heard that private nursery providers can be paid as low as £2.71 per hour per child to provide childcare. The person who made that point came from Aberdeen and was highlighting the difficulties in recruiting and retaining staff, not just because of oil jobs but because they themselves were limited in the amount that they could pay. I thought that that was untrue, so I asked the Scottish Parliament information centre for a briefing.
According to SPICe, the National Day Nurseries Association Scotland has stated that
“nurseries are making a big loss on local authority funded childcare places, losing on average £1,032 per child, per year on funded places for three and four-year-olds”
and
“there is currently not a level playing field on per child cost allocations between public and private provision.”
In her speech, the cabinet secretary said that where the SNP has power to act it will act. I simply highlight that because the National Day Nurseries Association Scotland went on to say:
“Inadequate funding for nursery partner providers for three and four year old places is getting worse and varies widely across the 32 local authorities - the lowest rate recorded being £2.71 per hour per child. The knock on effect is a rise in the cost of parent paid for hours as nurseries are forced to make up the losses they incur”.
I understand that the costings for the current expansion of pre-school provision to 600 hours include an assumption, based on a particular recommendation, that partner providers will be paid £4.09 per child per hour.
As well as that sector, I want to highlight the situation in the care home sector. I saw Richard Simpson nodding when I mentioned the issue earlier—I know that he, too, has raised it in the past. The independent and voluntary care home sector is limited in the amount that it can pay care workers because of the funding that it gets from Government. When, some months ago, I made a freedom of information request, I found that many councils still fund council care home places at a significantly higher rate than they pay the independent and voluntary sector. Some in the independent sector received about £480 per person per week, while the figure for a council care home place was over £800.
My point is that we can all agree that it is right to pay employees the living wage.
Will the member take an intervention?
I have less than 20 seconds left.
However, when that wage depends on public funding, the funding should be at a level to allow the operators to pay the living wage as well as meet the quality training standards, care inspections, health and safety, and staff-to-patient ratio requirements.
You should draw to a close, please.
I am pleased that I have had the chance to speak in the debate. I am four seconds over my time, so I will leave it there.
I move amendment S4M-11398.1 to leave out from first “believes” to end and insert:
“encourages businesses and the public sector to recognise the economic and social value of paying the living wage to employees and sub-contracted staff; supports organisations that choose to pay the living wage but also acknowledges pressures to keep costs down and to remain competitive; understands that over 400,000 people in Scotland still earn less than the living wage, but commends the work of the independent Low Pay Commission and the UK Government in bringing the first real-terms increase in the national minimum wage since 2008 while overseeing historic levels of employment.”
We now move to the open debate. We are very tight for time. Members have up to four minutes, please.
16:15
I listened to James Kelly with a growing sense of bemusement, because Labour has no credibility whatsoever on the issue of the living wage. The simple way to ensure that everyone gets the living wage is for the national Government, which has the responsibility for employment policy, to set the minimum wage at the level of the living wage. Labour did not just fail to do that; it set the minimum wage too low in the first place and failed to protect it by increasing it in line with inflation for three out of the last four years in which it was in government in Westminster. If the minimum wage had kept pace with inflation under both Labour and its Conservative allies, it would already be £7.48 per hour rather than £6.31.
By contrast, the Scottish Government—again unlike Labour in office—has an excellent record on the living wage. As the minister said, all staff who are covered by public sector pay policy are paid at least the living wage, as well as having the no compulsory redundancy policy as part of the social wage, which also helps low-paid families with things such as free prescriptions and free tuition at university. The Labour Party has also opposed those kinds of policies from time to time in the Parliament and suggested that they were something for nothing.
On public procurement, it is very clear that the Scottish Government has gone as far as it legally can with its existing powers to deliver fair wages to contractors. That was most recently demonstrated in the award of the ScotRail contract to Abellio. Instead of welcoming that, Labour condemned it.
The Scottish Government has, of course, explored the possibility of making the living wage a legally enforceable aspect of every public contract. It went as far as to write to the European Union Commissioner for Internal Market and Services, Michel Barnier, who replied that, in his view,
“a contractual condition to pay a living wage set at a higher level than the general minimum wage is unlikely to meet the requirement not to go beyond the mandatory protection provided for in the [Posting of Workers] Directive”.
There is also case law from the Court of Justice of the European Union to back up that position.
Can Joan McAlpine explain why the Department of Energy and Climate Change at Westminster is able to ensure that all its workers and subcontractors will be paid the living wage, but the Scottish Government is not able to do that?
That is not done through procurement—but I will address those issues.
It is not just the Scottish Government, the EU commissioner and the Court of Justice of the European Union that take that view. The Labour-run Welsh Assembly takes the same view, and it does not pay the living wage as part of its employment policy. Labour-run councils in Scotland, including Glasgow City Council, Renfrewshire Council, West Lothian Council and Inverclyde Council, have responded to FOI requests stating that their contracts do not include a mandatory requirement that suppliers pay the living wage. They have also said in response to their FOI requests that that is for legal reasons. Glasgow City Council’s 2014 reply to an FOI request said:
“at present the EU regulations do not allow the living wage as a mandatory requirement”.
That was said by Labour-run Glasgow City Council.
Will the member give way?
I am in my final minute, and I have already taken an intervention. Please sit down.
The member is in her final minute.
That advice gives me no pleasure. For that reason, I echo the minister and very much hope that the Smith commission will heed calls from enlightened voices in the third sector—not from Labour, of course, as it did not ask for this—for employment policy to be devolved so that we can set this thing to rest.
I remind members that it is only the Presiding Officer’s prerogative to invite members to sit down; members can refuse interventions freely, but other actions are for the Presiding Officer to dictate.
16:19
Presiding Officer, I suspect that, like me and most other members here, you walked past the Child Poverty Action Group display in the hall outside the chamber. I also suspect that most of us will have stopped to talk to those on the stall and, whatever our political party, will have shared a common anxiety about the issue that CPAG flags up: the prospect of rising poverty. It is to our communal shame that about 220,000 children in Scotland live in poverty. However, according to the Institute for Fiscal Studies, the figure could increase by as much as 100,000 over the next five or six years. The question for us is what we are going to do about that.
I argue that at least part of the answer must lie in the living wage. Like many others in the chamber, I have long believed in the power of work—in making sure that people have a job so that they can look after themselves and those they care for. However, the nature of employment has changed so much in recent years that a job does not always guarantee a route out of poverty. In its recent report “A Fair Start for Every Child. Why we must act now to tackle child poverty in the UK”, Save the Children estimates that 125,000 children in Scotland are living in families in which their parents or carers earned below the living wage.
I accept that in-work poverty is a complex issue. In fact, in some ways, the problem of increased underemployment has left as damaging a legacy as the joblessness caused by the recession of 2008 onwards. We have huge numbers of people working part-time who would rather have a full-time job, thousands of Scots have been forced to take on work with no security and with no prospect of advancement, more than 130,000 Scots work without any permanent contract and the number of workers with second jobs is on the rise.
Will the member give way?
I will in a second.
In his work on the national performance framework, I am aware that the Cabinet Secretary for Finance, Employment and Sustainable Growth has outlined the importance that he places not just on creating jobs but on creating good, sustainable jobs. Labour colleagues will back him in that task—just as we want him and the SNP to back us in promoting the living wage, using procurement or any other tools at our disposal.
The member has just gone where I was about to ask him to go. Surely what is required is not only a sustainable job and the living wage but a full-time job, because those working part time are simply losing money.
I hope that Mr Don will join me in supporting the Scottish Trades Union Congress’s decent work campaign, which is crucial if we are to end exploitative conditions of employment, including zero-hours contracts and other issues that this Government could do something about.
An excellent report that came out last week and which I endorse to all colleagues is Oxfam’s “Even it up. Time to end extreme inequality”. The report argues that inequality is not just damaging to the poorest among us but damaging to the very fabric of our society. Among the many findings that it highlights it reports that, in 2014, the top 100 United Kingdom executives took home 131 times as much pay as their average employee, yet only 15 of those executives’ companies are committed to paying their employees a living wage. Such reports remind us that poverty and inequality are not inevitable; rather, they are the result of policy choices that we make here in the Scottish Parliament.
Yesterday was equal pay day, the day in the year when, because of the gender pay gap, women stop earning relative to men. The gap in pay between men and women is not narrowing—it has been widening in Scotland since 2010. That is yet again an issue which we can do something about.
Save the Children highlighted that, as well as supporting the living wage, we could use childcare policies to develop affordable and accessible routes back to the labour market. Children 1st has pointed to the impact of high housing costs in creating more relative poverty in households with children. Whether it is housing, childcare, health, social services or wages and pay policies, we have the tools at our disposal here in the Scottish Parliament to make a real difference.
16:24
Such debates would be improved a lot if we started from the premise of, first, recognising that it was this Government that introduced the living wage—and I pay tribute to those who campaigned for its introduction and brought the issue to the fore. Secondly, it should be recognised that that this Government has continued to increase the living wage—I welcome the latest announced increase—and is doing everything that it can to promote the living wage within the powers that are available to it.
Mr Kelly said that the Department of Energy and Climate Change has secured the living wage for its subcontractors. That was probably done through exactly the same method by which ScotRail employees will receive the living wage as part of the Abellio contract—that is, it was not bundled up in the procurement clauses but will have been reached as a result of discussions that took place and a guarantee from the employer on that basis.
That is the spirit in which we can move forward within the limited powers that we have, until such time as we receive clarification or a change of decision from Europe or we get to a position where this Parliament has powers over employment policy, such as the minimum wage, as has been proposed in some of the submissions to the Smith commission.
Will the member give way?
I want to make some progress, if Ms Marra will allow me to do so.
The minimum wage has not kept up with the cost of living. Otherwise, it would be about £7.48 per hour, as Joan McAlpine said, if it had kept in line with inflation, or it would be at the living wage level if it had been established as a living wage in legislation at Westminster.
The problem that I have with the Labour Party’s approach is that it says that it is advocating a minimum wage of £8 an hour, but that level would be reached only by 2020. The living wage in 2014 is £7.85 an hour, which suggests to me that it would need to be significantly higher than £8 an hour by 2020 if we simply factor in inflation. The Labour Party needs to look carefully at what it is proposing for the minimum wage and how that tallies with the commitment that it says it has to a living wage.
Ken Macintosh, in his usual way, brought some interesting points to the debate. The issue is about more than just paying the living wage, because there are people out there who do not have work. We have to find ways to create jobs for those people to go into, but when those jobs are created, those people have to be paid an appropriate wage. That is why the minimum wage is the important factor. We talk in the chamber about using procurement and the powers that we have to ensure that those in the public sector are paid the living wage, but we can lose sight of the fact that a whole range of people are employed outside those spheres who will not be captured by that. Until such time as the minimum wage catches up, that will continue to be the case.
We can hope that the powers that be at Westminster will do something radical with the minimum wage, but we can probably conclude that even the policy that the Labour Party has put forward will not get us to that standard. Alternatively, we will have the opportunity to do something radical if the powers are transferred here, alongside the fair work commission that this Government is establishing.
I was interested in Mary Scanlon’s point about those poor companies in the independent care sector. All that I would say is that I find it difficult to accept their claim that they cannot afford to pay their staff a living wage, because they do not seem to have any trouble paying their chief executives a decent salary. Perhaps they need to take a look at how they are distributing the funding that they receive and ensure that it goes to the front-line staff, who are doing a fantastic job in many parts of Scotland.
16:28
The concept of a realistic living wage is not too difficult to grasp. Surely it is obvious that no one should be expected to carry out a job that does not offer enough money to live on. The living wage is about fairness and equality. It is about the human right to the vital services that each of us needs for our health, our homes, our children, our elderly relatives and people with special needs, whether they are disabled or have a learning disability. The living wage is about the right for people to earn enough money to support themselves and their families at a reasonable level of comfort and security.
Why is it so difficult for Westminster to understand that? Is it really so much to ask that Ed Miliband does a bit more than drop 2p into a homeless person’s paper cup when he realises that the cameras are on him? David Cameron admits that he has no idea of the price of a loaf of bread. “I have a bread maker,” he says. He uses Cotswold crunch flour at £30 a kilo. That works out at £1.88 per loaf. Let us say that someone has a family of four or five. That means a cost of £8 a week just for bread, but never mind the cost, because he has a bread maker. For us normal people, a loaf costs around 50p, depending on what offers are available, and that is the normal reality. I would say, “Get real, Westminster.”
The brutal gap between the rich and the poor stares us in the face. It is not so much a gap as a chasm. Do members know that the richest 25 families in the United Kingdom own as much as is owned by 12 million ordinary folk?
The Living Wage Foundation says that about 60 Scotland-based companies have signed up to the living wage, including Standard Life, RBS and the Scottish Exhibition and Conference Centre, all of which are accredited employers. That is not enough. We need to do more—much more—to prove that work is the surest way out of poverty and to win the buy-in of many more companies. Research shows clearly that the living wage is good for business. The quality of work is enhanced, absenteeism is reduced and recruitment and retention work better.
For families, a living wage can mean the difference between being able to feed the kids and running up debts that they can never repay. The living wage is an important component of this Scottish Government’s determination to create a fairer, more prosperous and more equal society—a Scotland that begins to close the gap between the rich and the poor, and a Scotland that values its entire workforce.
Let us compare the Scottish Government’s approach with that of Labour. James Kelly has yet to tell us what Labour’s plans are for the living wage. A wage of £8 by 2020? That is not bold and it is certainly not courageous. In February 2012, the Labour administration at Midlothian Council rejected the SNP proposal for a living wage. Workers had to wait until an SNP administration came into power—when that happened, the first decision that the administration took was to introduce the living wage.
Labour whines from the sidelines with fake concern for workers and did nothing when it was in government; the SNP Government implemented the living wage for 180,000 workers in Government, its agencies and the national health service. Meanwhile, Labour voted for welfare caps. Labour whines from the sidelines about illegal amendments; the SNP Government ensured that the living wage is paid to all workers at all levels of the ScotRail franchise. I have yet to hear a Labour Party member, especially Mr Kelly, welcome that.
Labour supports the Tories to run Scotland and could not even ensure that its submission to the Smith commission went as far as to give this Parliament power over the minimum wage, the living wage or any employment policy. We will take no lessons from Labour’s Scottish branch office on supporting Scottish workers. This SNP Government puts workers first and will always do so. We will have a living wage, with or without Labour’s fake concern.
16:32
I was going to start by welcoming the opportunity to speak in the debate, but after that speech I really wonder. I must ask Christina McKelvie where she gets her 50p loaf, because it is not from the world that I live in. A 50p loaf would be brilliant—
Two for £1 at Morrisons.
The lack of a living wage, underemployment, which Ken Macintosh mentioned, and zero-hours contracts are terms that we should strive to banish to the history books. How can it be that so many hard-working people are either living on the breadline due to their employers’ failure to pay a living wage or are finding that they have to take on multiple jobs?
It is appalling that a fifth of the Scottish working population are paid less than £7.85 an hour. It can come as no surprise that many of the lowest-paid staff are having to rely on food banks all too often. Some 20 per cent of referrals to the Trussell Trust last year were people on low pay. We can no longer accept that men and women who go out to do hard graft can find themselves almost immediately after pay day struggling to keep their heads above the water and resorting to payday loans and worse.
Many of my constituents will have shared my delight at Creative Scotland’s awarding of £100 million of taxpayers’ money in grants to arts organisations across the whole of Scotland, including the Macrobert Arts Centre in my area, which has been awarded a grant of £1.2 million over three years. When public money is awarded, what safeguards do the Scottish Government and the bodies that it funds to distribute public money put in place to ensure that companies and organisations are responsible employers, who pay a living wage to all their staff?
Many hundreds of organisations are in receipt of public money from Creative Scotland; I wonder whether the minister shares my deep concern that such organisations are not paying their staff the living wage. I thought that the minister would intervene then, but she has not done so. Why has the Scottish Government not taken action to prevent that from happening? I hope that my constituents will question such organisations about the living wage. I hope that they will ask the person who sells them their ticket or ushers them to their seat whether they are being paid £7.85 an hour. If they are not being paid at that rate, I hope that people will press the management on that.
All cultural bodies are subject to, and must comply fully with, the Scottish Government’s public sector pay policy, which includes payment of the Scottish living wage as a minimum for all staff.
In that case, my questions are particularly pertinent because the information that I have is that that is not happening. It would be interesting to see whether that is the case. We will have to get the Scottish Parliament information centre to check that out for us.
I want to move on to talk about social care, in the time that remains to me. Mary Scanlon is right that we have long been interested in that; we debated it during the first Parliament session. Unless we value our staff, and part of that valuation is their wages, we will never improve the social care contract, which is absolutely vital to our future. Stirling Council is encouraging all its providers to sign up to the Unison ethical care charter, and we are examining aspects of that charter to see what can be delivered now.
As other members have said, there is no doubt that the living wage boosts morale. In East Renfrewshire, all independent care providers pay the living wage and absenteeism has dropped, the requirement for agency staff has dropped, and the need to recruit new staff has dropped because retention rates are better. Those reductions all offset the cost of the living wage.
In conclusion, I commend Stirling Council, which backdated the living wage last year. Christina McKelvie cited an SNP group that did not get the living wage introduced in West Lothian, and it was not the SNP group in Stirling that introduced it: it took a Labour group to introduce it. We can all cite areas where it is not working. Of the people who were newly paid the living wage in Stirling, 86 per cent were women. That is a critical fact in the promotion of the living wage.
16:36
I want to follow up what Ken Macintosh said earlier, but I need to start with what Richard Simpson said. My constituency has—as, I fear, do all our constituencies—food banks. I ask myself why and when I get the answer, I get quite cross, and there is not much that can make me cross.
However, I am sorry to note that Richard Simpson failed to pick up on the point that almost half the food banks that were researched by the Trussell Trust did not mention low income specifically: they mentioned benefit payments. We cannot talk about the living wage and poverty in our society without recognising that a great many of the problems that present themselves immediately to food banks are due to the way in which the benefits system has been messed around with. It is still not working.
I want to reflect on that and go back to thinking about what that means. If someone cannot feed their children, what do they do about heating their house or buying clothes? Food is quite high up the list. People who are without food are in a seriously bad place and their children are in a very bad place. It then gets to the point at which they turn to payday loans. That now really does mean the never-never, because those loans will largely never be repaid. Yes—we need to sort wages, but we need to sort benefits, and on the way through, we need to do something about housing quality.
I would like to look further afield at the research that has been done more widely. When he was introducing the budget, John Swinney commented on what Adam Smith had to say, and I note that “The Wealth of Nations” says that
“No society can surely be flourishing and happy of which by far the greater part of the numbers are poor and miserable.”
Even then, Adam Smith knew that equality was important.
I do not often bring a visual aid to the chamber but the book that I am holding, “The Spirit Level” should be familiar to absolutely everybody, and I say that as a challenge. If members have not read it and do not know what it says, they really should. It is world-leading research that was done relatively recently because the data only recently became available. It compares most of the developed nations on the planet and all the American states. It takes comparable social data and demonstrates beyond any debate worth having that a more equal society is better for absolutely everybody, be they the poorest or the richest member of that society. It is incumbent on everyone to understand that and to act. Why would a Government not act? The only reason that I can see is that the members of that Government believe that it would be in their personal interests not to act. It might just be that Governments whose members—the Westminster Government is certainly one of them—have sufficient wealth themselves might say that that is not the way to act, but they would still be wrong. What is in “The Spirit Level” should be understood by everyone.
In the remaining time I would like to pick up on Ken Macintosh’s point about Oxfam’s “Even It Up” report, which is a brilliant piece of work. I commend it—even just its executive summary—to everyone who has not yet read it. Trickle-down economics do not work. What we need is international public policy, particularly on taxation.
I leave members with a quotation from the United Nations Research Institute for Social Development, which stated:
“without deliberate policy interventions, high levels of inequality tend to be self-perpetuating. They lead to the development of political and economic institutions that work to maintain the political, economic and social privileges of the elite.”
We have it from the top. We have an international problem, but of course we have to solve it locally.
Many thanks. We now move to closing speeches.
16:40
My old friend David McLetchie will be whirling in his grave tonight, because the Conservatives propose to abstain on both the Labour motion and the Government amendment. Worse still, the reason why we are going to abstain on both is that we pretty much agree with both of them and do not want to take sides.
However, we have a position that we have to make clear. We have grave concerns about where we could go if we get the issue of the living wage wrong. It is vital that we pay appropriate attention to making sure that we do not drive up wages in certain sectors of the economy and leave other sectors behind. A divide in our economy is something that serves no purpose and that we should avoid. I commend the Government for its very strong stance during the passage of the Procurement Reform (Scotland) Bill earlier this year to ensure that it did not have that effect.
The Labour Party says in its motion:
“the living wage in the private sector should be supported and actively promoted”.
I fully agree with that, but I was concerned that if Labour had got its will and forced a section into the bill that required payment of the living wage, many companies in Scotland would have been excluded from public contracts. I would not wish to see that happen.
There was a difference in opinion perhaps because there was a failure to understand the true nature of some parts of the Scottish economy. I would like to take the opportunity to say a few words about the tens of thousands of Scots, many of whom work within Scotland’s small businesses and microbusinesses, who will never achieve the living wage and probably never achieve the minimum wage, and are working for less than that today. They are the proprietors.
Many of Scotland’s small businesses operate on a model that allows people to work for significantly less than what we would call the minimum wage. Many of them are in our rural economy, many of them are in our towns, in retail and catering, many of them are family businesses, and many of those are run by members of our ethnic minority communities. The people who work for those businesses are people who struggle to make a living today. Where they employ others, it is necessary for them to control their wages.
That is why we have to dig deep. We have to avoid inequality by going to the very bottom of our economy and working our way back to the top. It is essential that we focus our efforts—ideally, on a cross-party basis that does not lead to political slagging matches across the chamber—to work together here, and across the United Kingdom, to push up wages at the low end of the wage scale. We must ensure that we deliver results for the least well off in society—the working poor—and that we deliver them across the board.
The Conservatives are saying that we are not against that effort. We support the priority and we will look for ways to achieve it. However, we will bring to the discussion our understanding of how the economy operates and a desire to ensure that, whatever happens, nobody is left behind.
16:44
Nigel Don and Ken Macintosh usefully made speeches that lowered the temperature of the debate by rightly focusing on the impact of low pay on children and families.
With that in mind, I highlight the briefing that Children 1st sent to us all, which eloquently said that we need to ensure that parents are better paid and have less of a need to work longer hours to make work pay because that puts a real strain on relationships and parents struggle to spend any meaningful time with their children.
We also know that low pay results in poor access to mainstream financial services, which in turn results in reliance on services such as payday loans. That causes issues with debt and further depresses already low incomes.
People in low-paid work are also increasingly suffering from food poverty, as many members mentioned, and have to rely on food banks to feed their families. We know that the cost of heating and lighting bills is also pushing far too many families into poverty.
We are all agreed that work is the best way out of poverty. A few members rightly made the connection between the living wage and equal pay. As the women’s employment minister, I very much want to see the resolution of equal pay cases in the public and private sectors. As a Government, we have offered the facility of a consent to borrow—in other words, capitalisation—to assist our partners in local government with settling equal pay claims.
Will the cabinet secretary give way?
Not just now.
I also notice that the second-largest retailer in the UK, Asda, is now facing a massive legal action—the largest of its kind. Therefore, as an employment minister, I call on all the organisations concerned, whether in the public or private sector, to get the matter sorted.
I hope that, through the good work of the fair work commission, we will be able to build a consensus between employers and trade unions and pursue the vision of increased employability while tackling inequality in the workplace. However, I bitterly regret the fact that the Parliament does not have the powers to make it happen.
In his opening speech, Mr Kelly spoke about DECC. I understand what that UK Government department is doing and why it is doing it, but I also understand what it is not doing: it is not making it mandatory to pay the living wage as part of procurement. It is one small part of the UK Government, and the UK Government does not pay all its staff the living wage. The Scottish Government is the first and only Government in the UK that pays all its staff the living wage.
Will the cabinet secretary take an intervention?
Maybe later.
We have 3,000 staff who have benefited from the living wage increase, and 30 per cent of Scottish Government staff will benefit from the minimum increase of £300. After ensuring that all of our staff are paid the living wage, as part of our public pay policy we are now considering all of our contracts through pilots on the living wage through procurement. That is having positive results and will help us to move forward. It will help to inform statutory guidance, which key figures welcomed.
I was interested in the fact that none of the Labour members mentioned Ed Miliband’s proposal to increase the national minimum wage to £8 by the year 2020. I wonder whether that is because Ed Miliband is now more unpopular than David Cameron in Scotland. Of course, we know that 65 per cent of Labour supporters no longer feel that Labour represents them. It is salutary that the former Labour minister Alan Milburn, who chairs the Social Mobility and Child Poverty Commission, described Ed Miliband’s proposal as
“not at all ambitious as it implies a slower rate of increase between 2014 and 2020 than there was between 1999 and 2014.”
The shameful part of the UK Government’s record—whether it is the Tory or Labour Government—is that the national minimum wage has not increased in real terms for a decade. If it had, 63,000 people in Scotland would have earned £600 a year more over the past five years.
The problem with everything that we have tried to do in procurement is that the national minimum wage is set in law and it is at a lower rate than the living wage, which is not set in law.
I kindly remind my colleagues on the Labour benches that it was they, not I, who stood with the Tories to campaign against this Parliament having all the powers over employment. My challenge to them is this: will they join us now in seeking all the powers to tackle low pay in this country and in equipping the Scottish Parliament with all the powers to create more jobs, to tackle inequality and to protect public services? Will they, like us, join the major voices and the major third sector organisations that are calling for the devolution of the national minimum wage, key welfare policies and significant tax powers, reflecting the broad consensus that exists in Scotland that we need to be setting our own direction? We have an opportunity to act where Westminster has failed.
16:51
Labour is delighted to hold this debate in living wage week.
I say to the cabinet secretary that she makes her first mistake today—one that she makes in her whole political career and her deputy leadership campaign—by confusing power with political will to make change happen. All her colleagues today have confused the two, believing that, if power is vested in one place, change—and change for the better—will happen.
I want to correct the cabinet secretary on that. There needs to be political will and economic and social analysis, which her party does not have, to raise wages and make social change. Power is not exactly a direct answer to that.
Will the member give way?
Will the member give way? [Interruption.]
I will take interventions later.
James Kelly had three asks in his opening speech. The first was that the Scottish Government uses the power that it has in its hands and uses its procurement to give the living wage to contractors. His second ask was for a living wage unit in Government—an easy thing for Angela Constance to commit to this afternoon. His third ask was for—
Will the member give way?
I will give way in a minute.
James Kelly’s third ask was for the Government to put together a living wage strategy. [Interruption.] I will give way later.
On the first point about procurement and a living wage for contractors, the SNP has said that it does not have the legal power. That is simply not true. It becomes clearer by the day and by the hour that the SNP does have the power in its hands. We came to the chamber for a debate six months ago and I said to Nicola Sturgeon that she had the power. She said that she did not but that Alex Salmond was going off to Brussels that Monday to ask for it. Well, he went to Brussels and he was told by the EU that there was no European law in place—[Interruption.]. He cited European law.
Alex Salmond was told that there was no European law in place that would prevent the Scottish Government from going ahead with its proposal to give the living wage to contractors—there was no reason at all. That was reported in the press. [Interruption.] I will give way in a minute.
Then, just this week—[Interruption.] I will give way later. Just this week, the Department of Energy and Climate Change gave the living wage to all employees, including third-party contractors. Will the cabinet secretary accept that cleaners down in Westminster, in DECC, will get the living wage but the cleaners for our Government down in Atlantic Quay will not get the living wage?
I wonder whether Ms Marra would find it in her hard heart to welcome the announcement made by the First Minister last week about a fair work convention, which is about how we can move forward together on many of the issues raised by Mr Kelly.
Will Jenny Marra also accept some facts? The correspondence from Commissioner Barnier, the Posting of Workers Directive and the European Court of Justice case law all identify the problem as being that our national minimum wage is set in law and is lower than the living wage. Surely to goodness she can accept that the real issue is the need for this Parliament to have power over the national minimum wage. How do we effect change if we do not have the power to do so?
I do not accept what the cabinet secretary just said. Of course we welcome the fair work convention—that is a very good thing. However, the ECJ’s decision was not about contractors or mandatory legislation but about collective agreement—a completely different issue. The Deputy First Minister cited the decision in a debate six months ago, but it is not relevant to the point. If it was, why would the Department of Energy and Climate Change go ahead and award the living wage to its contractors?
Will Jenny Marra accept that the agreement that was reached by the Department of Energy and Climate Change, like the agreement that the Scottish Government reached on the ScotRail contract, was not about procurement? The point has been made to her repeatedly during the debate that the agreement was not part of the procurement process.
The Department of Energy and Climate Change is awarding the living wage to all its employees, including third-party contractors. If DECC can do that, the Scottish Government can do it too—[Interruption.]
The SNP members keep on shouting for more powers, but they will not use the powers in their own hands.
Just last week, I argued that the Scottish Government should award contracts to sheltered workplaces in Scotland using the precious procurement powers in its hands. It refused to do so, and simply issued guidance. Again, the cabinet secretary says today that she is prepared to go only as far as issuing guidance to contractors that they should pay the living wage. She is not prepared, in the face of legal evidence, to actually go ahead and make it happen.
I want to clarify some points for the Scottish Parliament record. Much has been said this afternoon about the Labour Party’s record on the issue. In 1997 the Labour Party won a majority across this United Kingdom. In the face of opposition from the Conservatives, business—including the Confederation of British Industry—and many other quarters, we marched through the lobbies of the House of Commons that night to support the minimum wage. Where was the SNP?
That night—[Interruption.]
Order.
That night, when we voted on the most ground-breaking anti-poverty wage-related legislation that we have seen in this country in decades, the SNP members of Parliament were asleep in their beds. I will take no lessons from the cabinet secretary or any of her back benchers on our record on the issue.
For nine years—[Interruption.]
Order.
For nine years—
Will the member give way?
Yes.
Can Jenny Marra advise members in the chamber whether Tony Blair voted in that very same division? I seem to recall that he was absent from it.
If that is the best that the member can come up with, I am very disappointed, given the amount of votes that Mr Salmond is not present for.
Here we are again: the legal case on the matter is absolutely clear, and it became even clearer following the actions of the Department of Energy and Climate Change this week.
Despite that, the SNP still refuses to use the generous powers that it has on procurement to raise wages in this country for people who are cleaning the SNP’s own offices in Edinburgh. The SNP says that it needs more powers, but it is not even using the powers that it has to address the important issue of poverty wages in this country. That is an absolute disgrace, and I think that SNP members should vote for the Labour motion this evening.
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