Living Wage Week
The final item of business is a members’ business debate on motion S4M-04549, in the name of Kezia Dugdale, on living wage week. The debate will be concluded without any question being put. For understandable reasons, Kezia Dugdale is unable to be here today, so I call on John Park to open the debate. Mr Park, you have seven minutes.
Motion debated,
That the Parliament is committed to promoting a society where work pays; finds it unacceptable that in-work poverty continues to be a scourge, perpetuating societal ills such as poor health and child poverty, with six out of 10 children in poverty from families where at least one parent is in work; welcomes recent analysis, which it considers encouraging, by the IPPR and the Resolution Foundation, which estimated for the first time the wage bill for UK companies listed on the London Stock Exchange when paying staff a living wage; acknowledges what it considers the tireless work of the Scottish Living Wage Campaign and the trade union movement to make a living wage a reality for many public sector workers in Scotland; welcomes the advent of the annual Living Wage Week, taking place from 4 to 10 November, and looks forward to events promoting the benefits and ideals of a living wage for all; congratulates those local authorities that have delivered a living wage to their employees and notes the commitment of other councils, including the City of Edinburgh Council, to do so; welcomes the Scottish Government’s commitment to maintaining the relevance of a living wage for staff covered by its pay policy by uprating it; understands that it has committed to continuing to do so and notes the work outstanding to make the living wage a reality for all public sector employees, and hopes that the tide of support for the living wage will set a precedent too strong for private employers to ignore.
17:05
Unfortunately, Kezia Dugdale is unwell and has apparently lost her voice—there is a joke in there that I am not prepared to make—so I will say a bit about Kez’s work. In the Official Report tomorrow, she will have a chance to read all the nice words that I will say about her in the next little while.
If we had had this debate two or three years ago, anyone who was opening the debate would have had to spend some time explaining exactly what the living wage is. It is testament to the Scottish living wage campaign, and perhaps a recognition of the work that we have done here in the Scottish Parliament to advance the issue, that the living wage is now fully understood by people not just in this Parliament but in our communities throughout Scotland. Living wage week is a big part of ensuring that that understanding is acted upon and that it mobilises people in communities and workplaces, as well as here in the Scottish Parliament, to ensure that the living wage—and, indeed, the existence of living wage employers—becomes more prevalent over the coming years.
The campaign has perhaps unparalleled political support. Who would have thought that this week we would see the Scottish Government announce a significant rise in the living wage? The living wage is supported by many local authorities, by Boris Johnson and by Ed Miliband—support for it cuts across the political divide—and even David Cameron has described it as an idea whose time has come.
That support is due not just to the campaign but to the strong and solid business case that sits behind the living wage. Living wage employers now recognise that it is beneficial to their business. Let me quote from work that has been done for the Greater London Authority, which cites:
“• Significantly lower rates of staff turnover
• Substantial cost savings on recruitment and induction training
• Employees more likely to stay with organisation
• Increased tenure of workers and continuity of workforce”.
All those are things that contribute to successful businesses.
More recently, the Trust for London produced an analysis of the London living wage that showed:
“• Over half of employees (54%) felt more positive about their workplace once the LW was introduced and 52% felt more loyal.
• Staff leaving rates fell by 25%.
• Almost a third (32%) of workers felt it benefitted their family life by allowing them to do things like spend more time with family.
• Almost 4 in 10 (38%) workers reported financial benefits such as being able to buy more goods and save more.”
The living wage has brought business benefits, but it has also brought benefits to individuals and made them play a much greater and more significant part in their workplace.
For me, that is the high road to success for businesses here in Scotland. Although those figures come from work that has been done on the London living wage, I feel that it would be beneficial for the Scottish Government to think about how it might analyse the great work that has been done here and the work that will be done over the next few months as the living wage is rolled out across local government. Perhaps the Government could also start to examine how employers in the private sector and the public sector are benefiting from the living wage here in Scotland.
The vast majority of local authorities have now indicated that they will introduce the living wage in some shape or another. Kezia Dugdale’s motion mentions the City of Edinburgh Council’s policy commitment to make that happen. This week, my local authority in Fife announced that more than 2,000 employees would benefit from an increase to ensure that they are paid the living wage.
That will address some of the key issues that people who are in work face when they are struggling to make ends meet and manage family budgets. Such decisions and commitments, which we politicians make in elections and follow through on, can make a huge difference to people. I am very pleased to see that all those commitments that were made in the local government elections are starting to be delivered on.
A main aim of the living wage campaign and one of the main aims of living wage week is to ensure that the campaign will have a next stage. Yes, there are political decisions that can be taken but there are wider resources that could be put into communities and local groups to ensure that there is an understanding and a mobilisation of people who support the living wage.
Another issue is the huge amount of Scottish Government spend: the £9 billion, £10 billion or £11 billion-worth of goods and services that we procure. We have considered that in a couple of debates, and the Local Government and Regeneration Committee has also looked at the opportunities that exist in that regard. Standing in for Kezia Dugdale today, I have the opportunity to talk about my proposals. I hope that there will be the chance for those proposals to be debated properly in the Scottish Parliament.
I would like all public sector bodies to be able to state in their contracts that if an employer is to benefit from a public sector contract, it should pay its staff the living wage. One of the main asks of the living wage campaign in Scotland, which I want to address in my proposals, is for the Scottish Government to have a duty in place to establish a living wage unit. The examples that I gave of what has happened down south could ensure that the business case for the living wage is recognised as solid. We need a living wage unit in Scotland that would highlight those examples, encourage private sector employers and share best practice across the Scottish employment network. In that way, the living wage could become not only something that people aspire to, but something that could actually be delivered. The Scottish Government should promote the practical examples that are out there and support employers to make that happen.
Finally, I want to mention Kezia Dugdale’s contribution. Not only has she driven forward the living wage since her election in May 2011 and played a key part in ensuring that it has been a priority for the City of Edinburgh Council, but she has done work around paid internships. That is another issue that affects us as employers in the Scottish Parliament and, more widely, affects Scottish society. Those things make a difference to individuals and their families.
Kez is also working on a policy on something that many of us deal with day-to-day as politicians: some of the exorbitant rates of interest that are being forced upon some of the lowest-paid and lowest-income families in Scotland through payday loans, and how people grapple with them. Kez is trying to find ways in which the Scottish Government could make legislative change here; again that would make a huge difference to those families.
Kez is not here today to take the credit for those things, but it is important that I put that credit on the record. It is great that we have had this debate about the living wage week. The week has been a success so far and I am very positive about what the living wage campaign might do in Scotland in the future.
17:14
I join John Park in paying tribute to the work that Kezia Dugdale has done on a range of issues and, for the purposes of this debate, her work on the living wage. She certainly took that up as one of her major campaigning activities when she was elected to Parliament and I recognise the enormous contribution that she has made. I join others in wishing her all the best and I hope that she is back, fully recovered, very soon.
Given that John Park has taken Kezia’s place in the debate, it is also appropriate to pay tribute to the work that he has done. I hope that members will hear more about that as his proposed bill progresses. The idea that he has put forward in the bill, about using procurement as a way of spreading the living wage into the private sector, is one that I support and which I believe is fully compatible with European law. I wish him all the best for his bill as it progresses through the Parliament.
For me, the debate on the living wage is reminiscent of the debates that we had in the House of Commons in the 1990s on the minimum wage. Without being too party political, it is fair to say that the Conservative Party in particular was totally opposed to that proposal from Labour on the grounds that it would lead to more unemployment. However, we know that that has not happened. I welcome the fact that there is now a broader coalition of forces supporting the idea of a living wage than there was in those days supporting the proposal of a minimum wage.
I was particularly struck by an editorial in The Scotsman yesterday, the headline for which was “A living wage is nothing to be afraid of”. If I were to recommend one piece of writing to someone who was not particularly on the left in politics, it would be that editorial. It shows passionate support for a policy that certainly would not have been supported by The Scotsman in the 1990s or even a bit more recently.
John Park gave some reasons for that coalition when he quoted the research from London about the benefits that the London living wage has brought for employers. I will not repeat the details, but the London living wage has reduced staff turnover and improved the morale of workers. Many employers in London and now elsewhere, including in Scotland, will testify to the benefits that the living wage brings them. That is an important part of persuading the wider population to support the policy.
For me, the cornerstone of the policy must be that it helps to combat low pay and poverty. It is a staggering fact that is often forgotten—the motion reminds us of it—that 60 per cent of children living in poverty live in a family in which at least one person is in work. Therefore, we cannot address the issues of child poverty and poverty more generally without doing something about low pay. Apparently, only 12p of any pound of United Kingdom gross domestic product goes to the 50 per cent of people in this country who earn the lowest pay. That is considerably less than a few decades ago. We therefore have a problem with how much income is taken by low-paid people, which leads not only to poverty but to economic problems.
The other argument for a living wage is that it helps to improve demand in local economies, and perhaps the fundamental problem that our economy has faced over the past three or four years is the lack of demand in the economy. The more that the living wage spreads through the public and private sectors, the more it will help people living in poverty, the wider economy and employers.
There is a comprehensive story to be told about the benefits of the living wage and we can support it on a broad basis going forward. I thank Kezia Dugdale and John Park for the work that they have done, and I commend the Scottish living wage campaign and the trade unions Unison and Unite the Union, which have been particularly active in supporting the campaign.
17:18
I welcome the debate and hope that Labour colleagues will pass on to Kezia Dugdale my best wishes for a speedy recovery. There is nothing worse than a politician with no voice, because we all need to use our voices to represent our constituents. I thank John Park for eloquently opening the debate, which is timely during living wage week. It is right to highlight and promote a policy that mitigates the worst ravages of poverty, as Malcolm Chisholm has just explained.
In this day and age, it is a travesty that some people who are in full-time work are below the poverty line. Not only is that completely unfair, it is also bad for the economy. John Park made a clear argument and explained very well the impact on the economy of better-paid, happier staff and people having a wee bit more money in their pockets.
I was delighted to hear on Monday that the Scottish Government had raised the living wage to £7.45 an hour for people who work in the Government, its agencies and the national health service. That affects about 6,000 staff members, and it is the second time that the Government has raised the living wage since it introduced it to those agencies more than a year ago. When the Scottish National Party came to power in 2007, the minimum Scottish Government wage was about £5.63 an hour, which means that the wage has jumped by 32 per cent. I am sure that we all agree that that is a great achievement in what are very tough economic circumstances, and that we all support the policy. However, the United Kingdom minimum wage for over 21s is £6.19 an hour, and for 18 to 20-year-olds, it is £4.98 an hour. I am sure that that contrast is not missed by anyone.
This week, Peter Kelly of the Scottish living wage campaign said:
“With the problem of in-work poverty continuing to increase, the Scottish Government’s continued support for the Living Wage must be congratulated. Today’s announcement will ensure that some of the lowest-paid workers in the public sector will receive a wage increase that will provide real help in these difficult times.
We look forward to working with the Scottish Government to ensure that more employees across Scotland can get the benefit of the living wage.”
I am sure that everyone in the chamber could not agree more.
Last year, South Lanarkshire Council stepped up to the plate and implemented the living wage, for which I roundly congratulated it. That policy was supported by all councillors, which just goes to show the breadth of support for it. The policy impacted on 8,000 of the lowest-paid council employees. Of the 1,800 employees who were paid less than £7.20 an hour, 87 per cent were women; of the 8,400 employees who were paid less than £21,000 a year, 76 per cent were women. South Lanarkshire Council’s brave decision to follow the Government in implementing the living wage is very welcome—not least to families in which women are out there as the breadwinners. A number of those women are still fighting equal pay cases.
Not all councils have implemented the living wage, so I urge the rest to follow South Lanarkshire Council’s lead. We have a commitment that all SNP councils will introduce a living wage. If we reach consensus that everyone should do that, I am sure that the whole nation will benefit.
There is nothing more honourable than earning your own crust and supporting your family with dignity. In supporting living wage week, I hope that we have gone a little way towards maintaining that dignity. I congratulate the living wage campaign and everyone across the chamber who has been involved in the campaign.
17:22
I add my good wishes to Kez Dugdale and I congratulate her in her absence on securing the debate. I also congratulate John Park, who has worked tirelessly on the issue for some years and, in particular, on the work on his proposed living wage bill, which we look forward to debating in the chamber.
The real congratulations, when it comes to the living wage, go to campaigners outside Parliament, because this is a grass-roots campaign that was initiated by Citizens UK in London and which has been followed through by bodies in Scotland such as the Poverty Alliance. They are to be congratulated on their persistence in bringing the campaign to the stage that it has reached today.
We have come a long way. Like Malcolm Chisholm, I am old enough to remember the debates about the national minimum wage. It is worth remembering that at that time some workers were paid as little as £1 an hour. I remember instances being discovered of some people working in the security industry for accommodation only and no wage whatever.
There were dire predictions of job losses when the minimum wage came in, but those have been proved to be false. It is so pleasing to see that we have moved beyond the idea of the bare minimum to the idea of a decent quality of life being provided by the living wage.
The policy has been public-sector led. The Scottish Government and the local authorities that have introduced the living wage and made commitments to staff are to be congratulated on that. I am delighted to add to that roll of honour: two weeks ago my council—East Lothian Council—introduced the living wage, and 145 permanent staff and 150 casual or relief staff will benefit. As with Christina McKelvie’s South Lanarkshire Council, most of those staff are women who work part-time. Those numbers might sound small but, for the people concerned, the increase in their wage—which, in some cases, will be as much as 13 per cent—is significant. However, given that they represent only a small proportion of the 500,000 Scots in the public and private sectors who are paid less than the living wage, it is clear that we must do more.
As John Park said, the key task is to push out beyond the public sector and into the private sector by persuasion and procurement. The issue is not just about fairness to individuals; it is about providing a level playing field for people in the third sector. I spent some time chairing an organisation that provides support to people with learning disabilities who live in the community. I am not proud to say that we had to squeeze the conditions of our workforce, because we were bidding for tenders against other organisations that paid the minimum wage and used zero-hour contracts so that they could make lower bids. To me, that seems to be quite pernicious.
In addition, we must be strong on the issue of advice from Europe. I know that the Scottish Government has asked for advice and believes that it is difficult to use procurement to promote the living wage, but I say—without being funny—that the Scottish Government can be quite bullish about European advice when it comes to matters such as minimum unit pricing or even entry to the European Union. If the Government were to be bullish about promotion of the living wage and pushed it through in the procurement bill that is to come before us, that is one area in which we would support it.
The living wage matters to all of us. This week, we have seen it go up—but we have also seen top executive earnings go up by more than 25 per cent. Why do we still have so much stress, anxiety, addiction and family breakdown in our society when, in general terms, we are better off than we have ever been? I think that the reason is to do with the inequalities that we are discussing. The living wage may be only a small step in addressing those inequalities, but it is an important one, which is why I believe that this is one wheel to which, together, we should all put our shoulders, because it is an idea whose time has come.
17:27
I, too, thank Kezia Dugdale for her energetic campaign and for securing the debate in living wage week.
As the Parliament is an employer with significant spend, I felt that it would be appropriate to put on the record what the Scottish Parliamentary Corporate Body—of which I am a member—is doing so that, rather than our simply judging others, we can be judged by what we are doing in the Parliament. The SPCB recognises that the living wage is a matter of great interest to members. Barely a corporate body question time passes without questions being asked about it. Generally speaking, they are asked by Kezia Dugdale; all credit to her for that. As a result of the views that members have expressed, the corporate body has actively considered the implications for it of adopting the living wage and has taken professional advice—something that Iain Gray alluded to—on the matter. The corporate body is highly supportive of the principles of a living wage and, as an employer that pays the living wage, leads by example.
Can Mary Scanlon give an indication of the corporate body’s advice concerning contract workers in the Parliament?
That is a very good point, to which I am just coming. I thank the member for prompting me to continue with my speech.
All directly employed parliamentary staff, as well as agency staff who are employed by the corporate body on a temporary basis, are paid above the recently published living wage rate. The Parliament can be proud of our responsible purchasing approach to procurement. Our on-going commitment enables us to bring about positive improvements in our contracts. Where relevant, we seek to include ethical and social considerations in our contracts, provided that they are compatible with EU procurement law.
That brings me on to Iain Gray’s point. The European Commission recently confirmed to the Scottish Government that public bodies cannot require contractors to pay their employees a living wage as a condition of participating in a procurement exercise, and that discrimination against suppliers that do not pay the living wage would be in breach of EU treaty principles.
That takes me to the Scottish procurement policy note dated 22 August 2012, which states:
“Public bodies can, if they wish, still encourage contractors to pay their employees a living wage.”
It goes on to state:
If public bodies wish to encourage contractors to pay their employees a living wage through procurement processes, this is still possible, although they cannot treat contractors who say that they will pay employees engaged in the delivery of a contract a living wage any more favourably than those contractors that say that they will not.”
That is quite clear.
The majority of contracted personnel who are dedicated to the delivery of SPCB onsite services are paid above the living wage. However, at present 19 contracted catering staff are paid 30p below the new living wage and seven contracted cleaning staff are also paid below the new living wage. Those rates are an improvement on the average industry rate for similar positions within the Edinburgh market and, of course this is a subject for on-going review.
I realise that I am running out of time, so I will just say that although I have focused on the Scottish Parliament as an employer and on my own responsibility as a member of the corporate body, I appreciate that we are in difficult financial and economic times and I add that what is right and proper for the public sector can, in these difficult times, undoubtedly present challenges for many in the private sector.
Due to the number of members still wishing to speak in the debate, I am minded to accept a motion without notice to extend the debate by up to 30 minutes.
Motion moved,
That, under Rule 8.14.3, the debate be extended by up to 30 minutes.—[John Park.]
Motion agreed to.
17:32
I wish a speedy recovery to Kezia Dugdale and, in her absence, I thank John Park for stepping up to the plate. As we heard earlier, Kezia Dugdale has worked tirelessly on bringing the subject for debate.
The Scottish Labour Party has consistently championed the living wage, first by implementing the changes for our lowest-paid workers in local government and then by arguing for its application across the public, private and voluntary sectors. I am proud of the changes that were made by the Labour administration in Glasgow City Council, which was the first local authority to introduce the living wage of £7.20 per hour—to be increased to £7.50 per hour—for its lowest-paid employees. That wage increase directly affected 5,000 families and more than 160 businesses in the local area. The impact of that salary increase for households on basic incomes will be immeasurable. Too many families are suffering from in-work poverty; increasing basic wages to about £7.20 per hour can be the difference between meeting the monthly bills and putting food on the table, and falling deeper and deeper into debt.
Despite that reality, there are some people who still argue that now is not the time to introduce this change in the basic wages of our lowest-paid staff. They argue that the economy is too fragile and too weak to sustain the added pressure on the public purse, yet it is becoming increasingly clear that low wages for workers mean that families have less to spend, and that lower spending too often results in slow growth in the economy. Therefore, I believe that the living wage is a compelling proposition, not just because of the social benefits or because of the impact that it has on the families who are the hardest hit by the recession, but because it makes economic sense. It is right to support our most vulnerable working people through these tough economic times and it is right that we boost our economy by ensuring that our wealth is in the hands of the many—not of the few.
Members have already mentioned that the living wage (Scotland) bill that has been proposed by my colleague John Park MSP would be an important step forward in extending the living wage beyond the boundaries of local government and the public sector. It would also serve to change the destructive culture among some businesses of paying staff as little as possible in order to maximise profit.
Alongside other key measures, the living wage has already provided working families in Scotland with financial security in difficult times, and it will continue to do so. It can be a significant contributing factor in tackling the root causes of poverty and disadvantage in our society.
17:35
I thank Kezia Dugdale for lodging the motion and John Park for stepping in. I know his long history of promoting the issue, and look forward to working with him on his member’s bill.
Over the years, members and committees of the Parliament have initiated various debates on the living wage. The motion refers to the Institute for Public Policy Research and Resolution Foundation report, which highlights that the
“UK stands out as having one of the highest incidences of low-wage work”
among advanced economies.
The factors that drive poverty are diverse but are still nevertheless more challenging. For far too long, we have relied on hoping that economic growth will trickle down to the poorest in our society or that the various welfare-to-work schemes will solve working-age poverty without a change to the incomes of those who are in or out of employment. The living wage is to be welcomed as part of a policy mix that needs to be flexible but not confused in tackling in-work poverty. As the Local Government and Regeneration Committee stated in its report on the living wage in Scotland in February this year,
“it is not, in itself, a panacea and will not be sufficient, on its own”.
The living wage requires better co-ordination. The fact that the Scottish Government is committed to paying those on low incomes a living wage of £7.45 an hour from April next year has to be welcomed as a first step to having a living wage adopted by all employers in Scotland. That is of great assistance to the campaign.
Although some could well have described the public sector’s record on the living wage as patchy, the private sector has a real job of work to catch up with the agenda that has been set. The Institute for Public Policy Research and Resolution Foundation report clearly highlights that few companies in retail or food services have been committed to becoming living wage employers. It is worth highlighting that new research by Incomes Data Services suggests that bosses of the FTSE 100 companies made an average of £4 million a year in the 12 months to June this year.
I have stated on numerous occasions in the chamber that there is a requirement that we seriously assess what a citizens or basic income should be. That issue needs to be examined more fully and progressed, as the living wage may not always address the fundamental problems of the economy and individual households.
It is ironic that while the Mayor of London, Boris Johnson, made his intention clear in his announcement—which must be welcomed in some respects—that the living wage will be introduced and uprated in London, very few of the London boroughs in which Conservatives are in control have signed up to the living wage. I look forward to the Conservatives signing up to the campaign in London and elsewhere.
That takes us to the essential point that private sector employers—or employers more generally—do not have to endorse the living wage because, unlike the national minimum wage, it has no legal status behind it. Members have debated that in the chamber in the past. If we are serious about a living wage, we must ensure that forcing employers to pay it becomes a legitimate imposition on them. In fact, there is now confusion about the living wage and the national minimum wage and about why the figures vary so much. My colleague Christina McKelvie referred to the uprating of the national minimum wage on 1 October this year, but she did not say that the upratings for 18 to 20-year-olds and for those under 18 never happened; the uprating was only for those over 21.
In welcoming this debate, I take the opportunity to thank the Scottish living wage campaign, among other organisations, and Peter Kelly, who is in the public gallery, for their tireless work on the issue. Peter has been involved for more years than he would probably care to remember in campaigning on low-wage issues and for the living wage. I look forward to being involved in the wider debate and, as I said earlier, in the debate on John Park’s proposed bill when he introduces it to Parliament.
Finally, I have a question for the minister. When looking at Scottish Government contracts, can the minister check with his colleagues on what can be done to uprate the Scottish Agricultural Wages Board’s rates of pay? The Government has some responsibility for that body, which currently does not pay the living wage.
I thank the members involved for this debate and I look forward to future debates on the issue.
17:40
I, too, thank my colleague Kezia Dugdale for securing this debate on the living wage and I commend the work that both she and John Park have done on the issue.
I am proud to come from the party that introduced the minimum wage, which brought about fundamental change in our society and how we value the workforce in the UK. For many, the minimum wage enhanced living standards, wellbeing and the idea of being a valued member of the workplace. However, the minimum wage only goes so far and, to some extent, it is discriminatory because of the different pay brackets for different ages. Why should a 16 or 17-year-old who does the same job as a 22-year-old colleague be paid less? That situation is why the living wage rightly goes further.
The living wage is not only about improving the standards of living of the lowest-paid workers. It also ensures that they are treated equally and fairly in the workplace. In its inquiry into the living wage in Scotland this year, the Local Government and Regeneration Committee discovered that, where the living wage was introduced by local authorities, more women than men benefited from the change. For example, in East Renfrewshire, 76 per cent of women were affected, of whom 84 per cent were in part-time employment. However, it must be accepted that East Renfrewshire does not have the same socioeconomic problems as parts of Glasgow and other parts of west Scotland.
As a society, we have progressed from the post-war era when women stayed at home to look after house and home, to a society that actively promotes women seeking employment. However, women still face the same barriers as they did then, because they are generally seen as the primary caregivers for their families and they often have to juggle going to work with looking after their families.
Childcare is a large expense for some families and its cost can negate the income received if both parents work, so a family can be better off if only one parent works while the other stays at home to care for the children, which often comes down to the woman staying at home. The Joseph Rowntree Foundation’s 2011 report on a minimum income standard in the UK showed that, on average, couples with two children aged between two years and primary school age pay around £205 a week for childcare. That means that women working part time with the current minimum wage would have to work 32 hours just to pay for their weekly childcare costs.
When we look at the sectors that are usually low paid, such as catering, clerical, cleaning and childcare, a pattern emerges: it is primarily women who fill positions in those sectors. Given that many private sector companies are involved in those sectors, it is to be hoped that, as the motion indicates, more public sector employees receiving the benefits of the living wage will mean that the living wage becomes the norm rather than the exception in the private sector.
The fact that women are far more likely to be in low-paid jobs than their male counterparts highlights another key issue, which is child poverty. A Scottish Government report on poverty figures shows that around 23 per cent of single working-age women with children live below the poverty line before they even pay for their housing costs; some will be able to claim state benefits alongside their income, but what of those who are not entitled to anything from the state?
The only way to tackle child poverty and improve living standards is by ensuring that women and other low-paid workers are paid at a rate that is beneficial to society—that is, the living wage. I acknowledge that the minimum wage is a starting point on the way to the living wage, but if we are to have fairness and equality in society for the lowest-paid workers, we must ensure that the living wage becomes the new national minimum wage.
I commend the work of the living wage campaign and the work that takes place in living wage week to raise awareness of the issues that affect people in low-paid work, with the aim of improving their living standards and lifestyles.
17:45
Given the role reversal that has happened today, I should thank Kezia Park—or is it John Dugdale?—for introducing the debate. I support the work of both members on the campaign.
The living wage campaign is evidence that campaigns can start very small but grow until they are part of mainstream consciousness. I pay tribute to the activists in east London who started the campaign and have stuck with it all the way. They are the pioneers and visionaries; we are merely followers, but that is no bad thing.
The campaign for a living wage is not radical or extreme. It does not ask the impossible. It is a campaign for fairness and justice that seeks dignity for all. If it is successful, the state will no longer have to subsidise rotten low pay. At its most basic level, the campaign will enable families to provide for themselves. I hope that everyone supports the campaign and—more important—takes action on the living wage.
The campaign has gained widespread support, from charities, churches and all the major trade unions, such as Unite, Unison, the GMB, the Public and Commercial Services Union, RMT, ASLEF and the Union of Construction, Allied Trades and Technicians. We can be sure of one thing. Wherever there are campaigns for social justice, the UK’s trade unions will be there, agitating, organising, educating their members and encouraging them to help to bring about progressive change. Let no one say that trade unions are irrelevant; in these days of austerity they are more important than ever. Of course, the living wage is a central plank of the Scottish Trades Union Congress’s better way campaign, which offers a practical alternative to austerity.
Like Malcolm Chisholm, I remember debates during the 1997 election campaign, when Labour promised to introduce a national minimum wage. I remember the scare stories about how the minimum wage would be a disaster for business, costing jobs and being bad for competitiveness. At the time, as Iain Gray said, security guards and cleaners were earning £1 or £1.50 an hour. If that is what people mean by competitiveness, they can keep it.
I also remember that during the election campaign some people, including Cilla Black, Jim Davidson and Paul Daniels, said that they would leave the country if Labour won the election and introduced such policies. After Labour’s win, I wrote to them, to offer to run them to the airport if they wanted to keep their promise. It is unfortunate for us all that none of them took me up on my offer.
We have come some way since the introduction of a £3.60 per hour minimum wage in 1998. The rate is now £6.19. Major employers, such as the GLA, Glasgow City Council and KPMG, as well as solicitors, plant hire companies and colleges, have signed up to the living wage. I pay tribute to those employers and encourage others to follow.
We are not asking for the revolution—we might ask for that tomorrow. The living wage rate would deliver an annual salary of about £13,000. I hope that through the forthcoming procurement reform bill and John Park’s proposed living wage bill we can deliver genuine progress on the issue in Scotland and begin to lead the way. The living wage will not eradicate poverty and injustice, but it will deliver cash into the pockets of many of my constituents, who desperately need help.
I do not know about you, Presiding Officer, but I want to live in a society in which people have access to skills and education and a good standard of living. I want to live in a society in which there is decency and equality. I hope that all members support the living wage and a better way.
17:50
Like other members, I thank Kezia Dugdale for lodging this motion and John Park for opening the debate. I have been happy to support their long-standing efforts on this issue on many occasions, and I look forward to continuing to do so.
It should be unarguable, in our wealthy society, that the exchange of work for a wage implies a basic minimum, acceptable, liveable standard. The idea that poverty pay still continues to keep people in a position in which they are in effect being subsidised by the taxpayer because they are dependent on in-work benefits is extraordinary. Other members have mentioned how extreme the situation is with regard to poverty pay, even with the existence of the minimum wage. The rate that has not been mentioned is that for 16 and 17-year-olds, which, in nearly a decade, has gone from £3 an hour to only £3.68. Of course, the real minimum minimum wage, for apprentices, is more than £1 below that.
The idea that a working week should allow a basic, acceptable standard of living should be such a little thing to ask for. It should be seen as a modest proposal, and a decent society should ensure that that happens. However, sadly, it is regarded by some as something inflammatory. Some of those who will argue that market conditions do not allow us to have the living wage are the same people who say that market conditions imply that they, on six or seven-figure incomes, should get a little bit more every year—and a little bit more, and a little bit more.
I was struck by Ian Bell’s comments on the living wage in today’s Herald, although the headline might have been a bit disappointing to some of the campaigners. In the piece, he says that the living wage
“encourages some employers to do the least they can get away with, and then boast of the fact”.
I think that he is arguing that the living wage is necessary, but not sufficient. He is quite right to say that, if we want a more equal society, we need to look at pay at the top end, not just eliminate poverty pay at the bottom end.
Some of the same people who tell us that a living wage is unaffordable are those who have awarded themselves 27 per cent increases on already inflated incomes. To argue that market decisions make that a necessity and dictate those choices for them is breathtaking hypocrisy.
Margaret Thatcher once said that there is no such thing as society. Some have defended her by saying that what she meant was that society is made up of individuals and individual choices. Well, so are markets. There is no such thing as market forces; there are only the decisions of—in this instance—individual employers. For some of the most major employers in our country to argue that market forces determine that there must be inflated salaries at the top and poverty pay at the bottom, while their decisions are the decisions that set those market conditions, is breathtaking hypocrisy, and we should have none of it.
As well as addressing top pay and the living wage, we must go further, as John Wilson says, and consider our entire welfare state, including out-of-work benefits. If the living wage is necessary in order to achieve the basic acceptable standard of living, we must recognise that people on out-of-work benefits are living in breathtaking poverty and, in the current circumstances, do not have the ability to do much about it.
I thank John Park and Kezia Dugdale once again for making this an issue that will come back to the chamber time and again.
17:54
I congratulate Kezia Dugdale on securing the debate. I am sorry that she cannot be here this evening and I wish her a speedy recovery. There is no doubt that John Park ably deputised for her in putting across the case in such an articulate manner.
As Neil Findlay said, the campaign for the living wage grew from the actions of two parents in London who were on the minimum wage and found that they were working so many hours that they did not have any family time.
The momentum has built across the United Kingdom, particularly in Scotland, where the living wage has been a success. As Christina McKelvie said, that has been demonstrated in my local area by South Lanarkshire Council, which has delivered a living wage that benefits nearly half of its 16,000 employees. As Mary Fee and Christina McKelvie said, the beneficiaries of the policy are often women. That increases the focus and the impetus to make progress on the issue.
A living wage has three direct benefits. First and foremost, it puts more money into people’s pockets. Increasingly, families are struggling—on average, families have become £1,200 less well off in the past year. There are rising fuel bills and other challenges for families. At lunch time, I was talking to people from the co-operative retail sector, who said that, from the footfall in their shops, they can see that people are struggling to make ends meet and even to make basic food purchases. Although the living wage does not address all those issues, at least it makes a contribution.
Allied to that, there is an economic benefit. If we put money into people’s pockets and they spend it in local shops and businesses, that will boost the economy. That is particularly true when the money goes to those who are lower paid and who need to spend it. To be mildly controversial for a minute, if for example we pass the benefits of free prescription charges to those on six-figure salaries, the cash benefit to them is more likely to lie sleeping in bank accounts than to make its way into the local economy.
The final benefit is to business itself. Patrick Harvie is right that there are still those who say that the living wage is not a good idea because it raises business costs, affects the bottom line and undermines value to the shareholder. However, the statistics that John Park and Malcolm Chisholm gave from two studies in London show that, if a business recognises the worth of an employee by paying them more, they are more likely to be motivated to stay with the company and less likely to be off sick, and the business will operate more efficiently and effectively as a result. There are therefore benefits to businesses from the living wage.
I again congratulate Kezia Dugdale. I look forward to working with John Park on his proposed bill on the issue. The campaign has grown, but the fight must continue so that we can provide a real benefit and make a real difference to families and individuals throughout the country.
17:58
The debate has been constructive and helpful, and it is unfortunate that Kezia Dugdale cannot be here. I pass on my best wishes to her.
Only last week, we talked about the debate and I informed Kezia Dugdale that I was to respond on behalf of the Government. She said that it would feel like déjà vu and that there would perhaps be nothing new to add but, actually, there is. That is because of the uprating issue that members have mentioned, which has raised the profile of the issue once again. If this debate does nothing else, it puts in the public domain the issue of the living wage in a helpful and constructive way.
Members have repeatedly covered the benefits of the living wage. I was struck by Patrick Harvie’s comment that the living wage is not the ceiling or the top level at which people should be paid, but the minimum, the floor or the starting position for a fair wage and fair recompense for work. I do not think that I have ever heard Mr Findlay be so reasonable, in calling for something that is not the revolution, but that is absolutely the right approach to take, as agreed by members across the chamber.
Mary Scanlon deployed a useful tactic that should perhaps be encouraged—she could be the reasonable face of conservatism in the future. She spent more time talking about her role as a Scottish Parliamentary Corporate Body member than she did saying as a Conservative that the living wage is unaffordable.
We must be cognisant of advice and of the European Commission’s view on the applicability of the living wage to procurement. Further work can be done in relation to the procurement bill and John Park’s bill. I commend his bill and his speech in leading today’s debate.
Many members—particularly Mary Fee and Christina McKelvie—covered the gender issues, as was appropriate. Mary Fee also covered the geographic issue. The benefit in dealing with geographic inequality is well worth considering.
John Wilson posed a question—or rather, made a comment—on the Scottish Agricultural Wages Board, which I will take up with the relevant minister. He made the appropriate tie with the minimum wage, which is in some ways the more effective policy to ensure full private sector compliance with paying reasonable wages. I am also familiar with the campaign for the minimum wage not to be based on age.
Malcolm Chisholm made clear arguments for the living wage, as did Iain Gray, who made an important point about the power of persuasion and the culture of expectation for public sector contracts, third sector partners and others. The Government has tried to achieve what was suggested.
What is the Government doing on the issue? In line with the Living Wage Foundation rate, we will uprate the living wage from £7.20 to £7.45 from 1 April 2013, as recommended. Through our pay policy, we are targeting pay uplifts to the least well paid in the core Scottish Government staff. We are encouraging partners and the private sector to deliver the living wage, and we are looking at what other devolved Administrations and public sector bodies can do.
As well as debating how far we can go through procurement, can the Government do other things with the private sector? For example, the Government could say to the bosses of the likes of Amazon and Diageo, “Yes—you can apply for a regional selective assistance grant, but only if you ensure that the people who clean your offices and serve your dinners in the canteen are paid the living wage.”
That is a helpful suggestion. We are talking about raising awareness, working through the options that are available through procurement and dealing with the culture of expectation. We can study the analysis of the procurement consultation, which has closed, to see what other mechanisms we can use to encourage the private sector to comply. The member’s helpful suggestion relates not necessarily to procurement but to the conditions of grants, which are well worth exploring.
Substantial progress has been made in local government. Seventeen local authorities pay the living wage and a further 12 plan to introduce it or have stated an intention to do so.
What does the minister say to those in local government who have argued that it does not make sense to upgrade to the living wage because, if that was done, all that would happen is that low-paid people’s benefits would be removed?
As a first point of principle, is it not better to give employees a proper wage for the job that they do? However, I understand the point that resources that are given to people with one hand are sometimes taken away with the other. That is why we need an integrated approach to welfare benefits and pay, to ensure that it pays to work. By delivering a proper minimum wage and a living wage, we can achieve that.
I encourage the local authorities that have not yet delivered the living wage to do so. In my visits to local government and in meetings with the Convention of Scottish Local Authorities, I have raised the living wage. I am delighted that the pace of implementation has improved.
I will ask about something that I did not mention in my speech. Does the minister encourage every MSP from every party in the Parliament to ensure that they pay their employees the living wage?
I am sure that opportunities are given through volunteering and so on, but I certainly suspect that the living wage should be delivered for paid staff, if we are debating that in the chamber.
Neil Findlay rose—
I have about one minute left to cover the Government’s response and I have taken three interventions.
You can take more time, if you wish.
To be helpful to members, I say that I will want to seek assurance on local authority compliance. It is not good enough just to say, “We are delivering the living wage,” and leave it at that. I must return to local government to ensure that it delivers the uprated level and to ensure that the policy is consistent and is not delivered with a one-off tick-box mentality. However, my view is that local government, as independent corporate organisations, recognises the importance of the living wage and has stepped up to the plate.
The Government has been able to intervene on the inequality agenda, whether by protecting those affected by the UK welfare changes; in our pay policy, on which I believe that we are leading by example; or by preserving a number of universal benefits, which has protected some of the least well-off. I think that our finding the resources to fill the gap—in the Scottish welfare fund—will also be welcomed as it will help to protect some of the most vulnerable people in Scotland.
I am sure that we can build an expectation around implementation of the living wage, keep up the pace of policy commitment and ensure that we use every tool in the box to tackle the inequality, low pay and poverty that exist in our country. Frankly, in a country as rich as Scotland, they are unacceptable.
Meeting closed at 18:06.