The next item of business is a members’ business debate on motion S4M-11325, in the name of John Mason, on equal pay. The debate will be concluded without any question being put.
Motion debated,
That the Parliament notes the recent report from the Resolution Foundation, which suggests that a record five million people in the UK are stuck in low-paid jobs, including in Glasgow Shettleston; believes that the statutory UK national minimum wage of £6.50 per hour is too low to counterbalance the ever increasing cost of living; understands that the living wage of £7.65 is only a voluntary scheme and is not statutory, therefore does not ensure equal pay protection to all workers in the public, private or voluntary sectors, and notes the belief that the only way to ensure that genuine pay equality is achieved would be to make the living wage a statutory scheme for all employers.
12:32
I thank the members who signed the motion and thereby allowed the debate to go ahead. They include Neil Findlay, John Finnie—who is not well—and Jean Urquhart.
I should start by noting that the figures in the motion are now slightly out of date. The statutory minimum wage is still £6.50 per hour but, as of 3 November, the living wage has increased to £7.85, whereas it was £7.65 in October, when I wrote the motion.
I will make three main points, the first of which is that the voluntary living wage is good. I first became familiar with the concept of the living wage while I was in London, where there was an active campaign to expand its adoption. There, the gap between the living wage and the statutory minimum wage is even wider, as the living wage in London is currently £9.15.
The Living Wage Foundation tells us that more than 1,000 employers throughout the United Kingdom have signed up to the living wage, 70 of which are in Scotland, and I am sure that there are other employers, including me, who pay the living wage but have not formally signed up to the campaign.
The foundation also tells us that 5.28 million workers in the United Kingdom are being paid less than the living wage, some 400,000 of whom are in Scotland. Of those, 150,000 are on the minimum wage. Many of those employees are in the retail, catering and care sectors.
As the member knows, the support that the Scottish Government provided in 2011 to put public sector workers on the living wage was crucial. The Labour Administration that preceded us did not manage to provide that. It is also crucial that large companies in Scotland such as SSE and Abellio have signed up to the living wage.
Does John Mason welcome the fact that, this morning, Keenan Recycling near New Deer, which is a small company in rural Aberdeenshire, became the latest signatory to the living wage campaign? Does he agree that it is particularly important that smaller employers in Scotland sign up to what is an incredibly important campaign?
Yes—I absolutely welcome that. I will say something now that I was going to say later. Paying the living wage is a huge benefit for a company. It says a lot about a company and its social responsibility and says that it has a conscience. Obviously, there are economic factors. The company must be able to pay the living wage, but it is positive if it makes that commitment.
John Mason mentioned the care sector, which is one of the sectors in which there are problems with low pay. Does he agree that one of the main issues is that local authority budgets have been driven down and that contracts that have been externalised have ended up being based on price competition rather than the quality of the service that is paid for, so largely the only place to take money from to get the price down is the workers who deliver the service, which is increasingly poor?
I will reimburse John Mason’s time for the interventions.
That is very generous, Presiding Officer—thank you.
I broadly agree with the point that has been made. I am certainly not happy with the outsourcing that has gone on in councils such as Glasgow City Council. That has been a way of getting around providing proper pay and conditions, which a lot of councils seek to adhere to.
Will the member take an intervention?
No, not again. I am sorry. The member can make a speech if he wants to.
The key factor is that employers should pay their employees enough to live on. There is something far wrong in someone working full time and not being able to live on that. Their wage or salary has to be topped up with tax credits or other benefits. I very much welcome the system of tax credits, which tops up wages to a level that folk can live on—obviously, that is good for the individual and the family—but they are in effect a subsidy by the state to employers that, for whatever reason, do not pay a proper wage. It also holds good, of course, that if employers paid a living wage, the state would save the money that is used for tax credits and could use it for other purposes.
As I said, there are also business benefits from paying the living wage, including a higher employee retention rate and better productivity.
My first point was that the voluntary living wage is good; my second point is about what is wrong with it. The main problem is that it is voluntary. We as a Parliament, a Government or individual MSPs can all ensure that we pay it, other parts of the public sector and the voluntary sector often pay it, and we can encourage other employers to pay it. At this stage, I mention James Kelly’s amendment to my motion, which seeks to help workers who are on public sector contracts. The Government advice is that that is not within our legal powers. I think that my colleague Nigel Don will touch on that.
If we can expand the use of the living wage, I would absolutely welcome that, but the underlying problem is still that it is voluntary and it helps only workers in the public sector or workers who are on public sector contracts. Are we just going to give up on all the other workers? What about the workers in the private sector and the voluntary sector? Do we not care about them?
Problems are also created if one employer pays the living wage and another does not. The unethical employer will be able to undercut the ethical one—I think that Mr Findlay made that point—and the public sector can be made to look artificially expensive compared with much of the private sector. The living wage is only a halfway house—a stepping stone to something better.
My third point is that the real answer is in the statutory minimum wage. To give credit where it is due, Labour did well to introduce the statutory minimum wage for the whole UK at Westminster. I remember that, before that, security staff—certainly in the east end of Glasgow—were paid £1 an hour. Even allowing for inflation, that was total exploitation.
That statutory minimum wage was a good start, but it always needed to be increased by more than just wage inflation in order to get to a decent level—that is, the living wage. Sadly, successive Labour and Conservative Governments at Westminster have failed to do that. I accept that, when the statutory minimum wage was introduced, there was a lot of scaremongering from some employers that it would lead to a huge loss of jobs. That has proved not to be the case, so the argument for the low introductory rate for the statutory minimum wage no longer exists.
What disappoints me most about James Kelly’s amendment is that it would drop from my motion the statement that the
“UK national minimum wage of £6.50 per hour is too low”.
As Mr Kelly is not here, I would be delighted to hear from any of his colleagues that a future Labour Government at Westminster would bring the statutory minimum wage up to the full £7.85 as quickly as possible. To be fair, I would also like to hear from the Scottish Government that, if the Scottish National Party were ever to support a minority UK Government, increasing the statutory minimum wage would be a priority.
I must say that I was very disappointed that paragraph 59 of the Smith commission report said that the national minimum wage should remain reserved. I hope that the power can still be devolved. I believe that there would be an appetite here from at least two parties to increase the minimum wage further than a Westminster Government might do.
We could touch on a range of other issues, including whether younger workers should get the same wage as others who do the same job and whether the living wage should be the same throughout the country. I will not go into those matters today. However, I hope that I have made clear my fundamental point: although having a voluntary living wage is a good thing, it will always be second best, and the answer must be a proper statutory minimum wage.
12:40
I congratulate John Mason on securing a debate that deals with an important economic and social issue.
Poverty and low pay eat away at people. They put strains on family relationships and impact on children’s education, nutrition, wellbeing and happiness. They also have a huge impact on the health of individuals and whole communities. Dr Gerry McCartney, a public health expert, recently said that the living wage is the policy that would impact most on health inequalities. Putting money into the pockets of the lowest paid is the best way to reduce health inequalities; it also stimulates the local economy.
I agree with John Mason that the statutory minimum wage is far too low. In my county of West Lothian, 16,000 people are earning less than the £7.85 an hour living wage. There are 427,000 people across Scotland in the same position.
We have witnessed the gap widen between top earners and those at the bottom of the earnings scale. Under the coalition Government, we have seen tax cuts for the rich and pay and benefit cuts for the poor. We should not be surprised by that, as that is central to the political ideology and ethos of Gavin Brown and Murdo Fraser’s party. Furthermore, the gender pay gap is still evident—women workers in Scotland earn around 17 per cent less than their male colleagues.
Only today, the UK Government has named and shamed 37 employers, including some in Scotland, that failed to pay the minimum wage. I am surprised that the UK Government did that, although I congratulate it on doing so. The employers include the multinational fashion chain H&M. It claims to be an ethical retailer, yet it did not pay the minimum wage to some of its staff. In 2012, that company earned $400 million in profit in one quarter.
All of us across the Scottish body politic have a responsibility for policy in this area. The UK Government has responsibility for the national minimum wage, while the Scottish Government has responsibility for a host of policies, including spending a £10 billion procurement budget. Local government and many public agencies have responsibility for pay policy and contracting. All those bodies can take decisions to increase the level of pay if they have the political will to do so.
Mr Mason is wrong about Glasgow City Council and Cordia, which pay the living wage to their care staff. It would be good for him to make a correction on the record.
It was unforgivable that, when we had the opportunity in this Parliament to use our powers to ensure that under public sector contracts all contractors are paid the living wage, the Government failed to take it. What a missed opportunity that was to improve the lives of people in Shettleston and West Lothian and across Scotland.
Under the Scottish Government’s watch, we see a dispute at National Museums Scotland. Although the lowest-paid workers are paid the living wage, the removal of weekend allowances will mean that they will lose around £3,000 a year from their pay packet. The dispute has gone on for a year. I hope that Mr Mason agrees that the Cabinet Secretary for Culture, Europe and External Affairs needs to resolve the dispute immediately.
Further to yesterday’s tribunal ruling on the long-standing equal pay debacle, will the member be calling on his North Lanarkshire Council colleagues not to proceed with an appeal, to ensure that the people who are entitled to the pay that they should have received years ago now get it?
I think that equal pay claims, including that long-standing issue, should be settled as quickly as possible. That does not get us away from the fact that, on the Scottish Government’s watch, the lowest-paid people are going to lose £3,000 unless the cabinet secretary gets her act together.
Next week, we in the Parliament will be only too aware of pay policy issues, when staff in this very building go on strike as part of a rolling programme of action by Scottish Government staff protesting against pay policy. We all have a role to play in addressing low pay issues, and no person or party has a monopoly of compassion on or interest in the issue. I know that Mr Mason’s concern is genuine, but low pay and poverty are not inevitable. It is up to us all to work to eradicate them, but that will take political will and commitment.
12:45
I congratulate John Mason on securing the debate, and I note his consistency and persistence in pursuing the issue. It is easy to agree with elements of his motion and, in particular, with elements of his speech, but I disagree with and take a different view on other elements.
On the areas where we agree, I think that it is right to welcome the progress that has been made over the past couple of years, and I am prepared to acknowledge the efforts of the Scottish Government and other levels of government on that. Progress has been and will continue to be made.
We should also acknowledge and welcome the improvements that business has made. Mr Mason gave the statistics and referred to 1,000 employers across the UK, with a certain number—I do not remember whether he said 70 or 80—in Scotland. We support any initiatives to encourage improvements in pay conditions and to drive the living wage forward, but we in the Conservatives certainly prefer more carrot than stick and prefer the voluntary approach to any kind of statutory approach.
Like John Mason, I am interested to hear what the Scottish Government has to say to his closing question whether it will demand a statutory living wage in any negotiations or discussions. The white paper contains no commitment to a statutory living wage; it contains a commitment to increase the national minimum wage in line with inflation but says nothing about a statutory commitment to a living wage. I am interested to hear whether that position remains the same or has changed since the white paper’s publication and the referendum.
My party and I take a different view from Mr Mason on the proposal to make the living wage mandatory and statutory. Every year, I look at the reports that the Low Pay Commission lays in the UK and think carefully about what they say. The commission has to look at the effect of any increase in the minimum wage on low-paid workers and their employment prospects; in other words, it has to perform a balancing act. It has to look not just at improving those workers’ standard of living through what they are paid but at the effect on jobs and employment prospects. The commission performs that balancing act pretty effectively.
It is important to look at the make-up of the Low Pay Commission. It is not an employers forum where only one side of the argument is put forward. Among the current commissioners—or at least those who were involved in the most recent report—we see a strong balance between employers, members of trade unions, local government representatives and academics. All factors and all parts of the matrix come into play, and the commissioners collectively agree an increase in the minimum wage that they think can help people without damaging the economy and employment prospects.
There are other issues to consider. After all, increasing pay by too much, too quickly will at some point—there will be disagreement in the chamber about where that point is—have a damaging effect on the economy. The Low Pay Commission takes a view on where that point ought to be, and the UK Government follows that recommendation, but I accept that others will take a different view.
We have to think carefully about the impact on smaller companies. I think that everyone will welcome Alex Salmond’s comments about the employer that, I presume, is in his constituency, but for many smaller businesses, the issue is more troubling and difficult. In particular sectors—John Mason mentioned some of them—companies and businesses have tighter margins, and the objective is far more difficult to achieve.
We welcome the debate, and again I congratulate John Mason on securing it. However, we part company with him about making the living wage statutory.
Mr Don, your request-to-speak button seems to have gone off. Will you confirm whether you still want to speak?
12:50
I do, Presiding Officer—thank you. I think I just moved some heavy paperwork and it did the rest for me.
I am grateful to John Mason for securing the debate. I am also grateful to Neil Findlay for representing Labour Party members, who otherwise did not seem to want even to debate their own amendment. I will address the issues that were in the amendment and explain why I think they did not want to debate it.
I start by considering Gavin Brown’s contribution. I listened carefully to every word that he said. He feels that the living wage should be a voluntary code because if we increase wages too quickly there will be other effects. Undoubtedly, that is an economic fact.
However, I would ask myself why on earth we have a minimum wage in the first place, because nobody seems to dispute that we need one. The answer is that it sets the norm. As John Mason has pointed out, if it is too low, Government has to top it up with benefits of one sort or another. That means that the Government is subsidising the inefficient employers who apparently have such poor margins that they cannot pay the appropriate minimum wage, which is actually the living wage. Gavin Brown might like to consider the economics of his argument. Quite frankly, we would not be having this debate if the minimum wage was set at something that was recognisably the living wage. It is because it has fallen behind that we are here.
The Labour Party has argued many times that we missed an opportunity in the Procurement Reform (Scotland) Act 2014. I take the opportunity to put it clearly on the record, in the context of the debate, that we did not have an opportunity in the act to demand that contractors and businesses pay the living wage. That is quite simply because all the legal advice that we got said that we should not.
Time does not allow for me to refer to the response that we got from the European Union. The Local Government and Regeneration Committee’s report in 2012 on the living wage noted that East Renfrewshire Council, which I think Hugh Henry mentioned in a debate not so long ago,
“advised that it had no preconditions on its tenders for contractors to pay the living wage and added that it would have ‘some unease’ about such a rule, including concerns over its legality.”
Even local councils, which the Labour Party prays in aid in terms of the missed opportunity, recognised that we could not do it. I, for one, would be extremely grateful if the Labour Party stopped suggesting that we should.
Mr Don will be aware that it all depends on who we ask for that legal opinion and what legal opinion we get back.
The legal opinion that we get back is couched in terms that say that it is unlikely that the rules that Mr Findlay’s party wanted would have been consistent with European law. When we are advised that something is inconsistent with law, we do not do it.
If I have half a moment, I would suggest that Mr Findlay looks up—
Neil Findlay rose—
No, just a moment—please listen for a while. I would suggest that Mr Findlay looks up Clay Cross Urban District Council. Unfortunately, I cannot give the member my old administrative law casebook, because I have thrown it out; one never should. If he cares to go and look it up, he will discover that councillors have a fiduciary duty. The wise ones remember that and do not do things when the legal advisers tell them that they should not.
I make no comment on the validity of it, but why press ahead with minimum unit pricing then?
There is a very different legal basis for that and it is somewhat of a stretch from where we are now.
Presiding Officer, I am conscious that my time is gone. This is a very interesting debate and there are numerous other things that I might have said.
Mr Don, I will reimburse you for interventions.
Thank you. In that case, the last point that I want to make is simply to suggest to anybody watching or listening that “The Spirit Level”, a recent book by Richard Wilkinson and Kate Pickett, ought to be compulsory reading for anybody who can read because, quite simply, it discusses the economic justification for doing everything that we can to remove financial inequalities from society. Curious though it may seem—the Tories manifestly do not believe it—it is even better for those at the top of the economic pile, as well as those at the bottom. I encourage everybody to be familiar with what is in that book; we will have much better debates as a result.
12:55
I, too, congratulate my colleague John Mason on securing the debate. I know that he has a strong track record of working to tackle poverty and low pay for his constituents in Glasgow Shettleston.
I stress at the outset that the Scottish Government takes the issue of low pay very seriously indeed. Moreover, addressing low pay features prominently in the Scottish Government’s programme for government, in which we recognise the real difference that the living wage makes to the people of Scotland and the real difference—to deal with one of Mr Brown’s points—that progressive employment and social policies make to the long-term success of business and the wider community. Indeed, Alex Salmond helpfully advised us of a small business in his constituency, in New Deer, that has just become a living wage accredited employer. That shows the desire on the part of employers across Scotland—whether they are small, medium-sized or large businesses—to recognise that progressive employment policies are the future for sustainable, long-term success in business.
As the chamber will be aware, the Scottish Government is leading the way by doing all that we can within the powers that we have to ensure that as many people as possible benefit from the living wage. For example, despite the sharp reductions imposed on the Scottish budget by the UK Government that we heard the First Minister talking about in First Minister’s questions today, we have nonetheless been able to incorporate a number of distinct measures within our pay policy to protect the pay of our lowest-earning public sector workers, including a commitment to support the Scottish living wage for the duration of this session of Parliament—in fact, we are the first Scottish Government to do so.
Of course, absent statutory powers for Scotland over pay and employment law, that Scottish Government commitment can, by definition, only cover those workers who are covered by our own pay policy, not the wider public sector or private sector. At the same time, however, we are absolutely determined to do what we can to ensure that the inequalities of low pay are tackled in Scotland.
I do not know whether the minister is aware of just how serious the situation is with regard to the minimum wage not keeping pace with inflation. I have some figures from the Scottish Parliament information centre that show us that, in two out of the four years from 2007, the minimum wage did not keep pace with either rate of inflation and that for the three years after that—2011, 2012 and 2013—the minimum wage did not keep pace with either the consumer prices index or the retail prices index. Is it not astonishing that, over all those years, the statutory minimum wage did not even keep pace with inflation?
I thank the member for his intervention. I agree—I think that it is an absolute disgrace and it is a real kick in the teeth to workers across Scotland and indeed the UK. In my research for today’s debate, I noted a comment from Michael Meacher on the minimum wage, made on his website on 5 November 2012, where he said:
“Blair appointed a Low Pay Commission headed by a CBI big-wig in order to ensure it started at far too low a level, £3.60, and it has never been increased at a rate slightly above the rise in average wages, as was intended, so that it would grow slowly but steadily towards the two-thirds target.”
I think that, in this instance, Michael Meacher sums up the situation very well in terms of Westminster’s failure to act in the interests of the workers.
The minister quoted Michael Meacher. At least Michael Meacher and Tony Blair turned up to vote for the minimum wage, unlike some people.
I say gently to Mr Findlay that I am looking at the voting record and I helpfully suggest that he might want to look at it himself—it is in Hansard. I believe that Tony Blair missed all four Commons votes; Jim Murphy missed the vote on second reading; and 33 of 56 Scottish Labour MPs missed another vote. It would be helpful if Mr Findlay went to look at the Hansard record himself.
The Scottish Government has provided further funding to the Poverty Alliance to promote take-up of the living wage accreditation initiative, and it has set a target for at least 150 accredited employers by the end of 2015. That will help to increase the number of employers who are paying the living wage in all sectors throughout Scotland, and thereby help to make decent pay the standard in our country. As at 30 December 2014, the number of accredited employers had increased to 90—slightly higher than the figure that John Mason quoted—so we are evidently making good progress in that regard.
Although the Scottish Government is not able to set pay levels in the private sector or in the wider public sector in Scotland, we are doing all that we can to encourage all organisations to ensure that all staff on lower incomes receive a fair level of pay. We stated in our programme for Government that we will introduce a Scottish business pledge. We will make it clear that we want companies, in return for support from the Scottish Government and its agencies, such as Scottish Enterprise and Highlands and Islands Enterprise, to commit to paying the living wage and to fair work, among other things.
The key problem, as we know, is that power over pay is still held in London.
Will the member give way?
I will take a very brief intervention.
John Mason asked a question that deserves an answer. A statutory living wage was rejected in the white paper. What is the Scottish Government’s current position on that issue?
It should be noted that the white paper set out that we would consider carefully the recommendations of the expert working group on welfare. We intend that, further to that work, the fair work convention will look at issues of pay.
It is no secret that the Scottish Government has shown by its deeds that it is very supportive of the living wage, and we have tried to go as far as we can with the powers that we currently have to ensure that workers in Scotland get a fair day’s pay for a fair day’s work.
With regard to procurement, it is important for me to reply to the points that have been raised in the debate. I appreciate that I am going a wee bit beyond time, Presiding Officer, but I have taken some interventions.
Yes—I confirm that I can give you extra time.
Thank you, Presiding Officer.
It is important that we recognise the key problem, which is that this Parliament does not have power over pay. That power is still held in Westminster, which is a position that the Westminster unionist parties wish to maintain.
Of course, the alternative would have been to ensure that we in Scotland could get power over pay, but, again, the Westminster unionist parties did not seek that power during the Smith commission process. Indeed, it appears that the Labour Party would rather have a Tory Government at Westminster than a Scottish Government here in Scotland in charge of pay for Scottish workers. As we look to the months ahead, with the Westminster election looming, the voters of Scotland will find that increasingly difficult to understand.
In addition to our work on statutory guidance for procurement, we will hold a summit with business leaders to see what further work we can do to ensure that the living wage becomes the norm for pay policy in Scotland. I referred to the fair work convention, which we will set up to look at workforce matters further to the publication of the report, “Working Together Review: Progressive Workplace Policies in Scotland”.
I had many other things to say today, Presiding Officer, including on the important issue of the pay gap and female employment, so I hope that there will be another opportunity at hand. I remind members that I am always happy to come to the chamber to speak about the important issues of fair work, fair pay and gender equality in the workplace.
I thank John Mason for bringing this important debate to the chamber today. The way forward is to ensure that we in Scotland have the pay and employment powers that are necessary to tackle inequality in our country. At present, we operate with our hands tied behind our back. As I said, the voters of Scotland will, in the months ahead, give some thought to where they wish those powers to lie.
13:04 Meeting suspended.