The next item of business is a members’ business debate on motion S4M-12938, in the name of Neil Findlay, on expanding coverage of the living wage. The debate will be concluded without any question being put.
Motion debated,
That the Parliament understands that 427,000 Scots earn less than the living wage, which is currently set at £7.85 per hour, including 18% of workers across the Lothian region; considers that low pay and job insecurity are major factors contributing to in-work poverty, and notes calls for the Scottish Government to provide guidance to public sector organisations advising them that they can ensure that the living wage is paid by giving due consideration to pay rates while assessing a company’s general approach to recruitment and staff engagement at the selection stage of any contract.
12:34
More than 414,000 Scots, many of them working in this city and 16,000 of them in my county of West Lothian, are paid below the living wage of £7.85 an hour. That represents 20 per cent of our workforce. For those workers, low pay and job insecurity act like a cancer, eating away at them and impacting on every aspect of their lives, including their health, diet, housing, relationships and general wellbeing, as well as the wellbeing of their family and their community.
When low pay is coupled with zero-hours job insecurity, the situation is made dramatically worse. If someone does not know how many hours they will be working and how much pay they will receive, how on earth can they plan their life and their budget, pay their bills and provide for their family? The combination of low pay, job insecurity and the attack on the benefits safety net has resulted in the growth in payday lenders, food banks and in-work poverty.
Low pay and job insecurity are bad not just for our people but for our economy and the cohesion of wider society. The huge concentration of wealth in so few hands across Scotland and the United Kingdom is even more galling. Only last week, The Sunday Times rich list showed how the very wealthiest in our country have doubled their wealth in the past 10 years while the rest of the people have experienced a real-terms cut in income. As policy makers, the challenge for us is what we do about those things, because at all levels of government there are things that can and should be done. Yes, there are European Union rules, and yes, employment law is reserved, but we in this Parliament are not powerless to act, and we have a duty to act.
The Scottish Government said that it would produce statutory guidance on the living wage when the Procurement Reform (Scotland) Bill was passed in 2014, yet here we are a year later and no statutory guidance has been produced. The Scottish Government continues to hide behind EU advice and new EU directives as a reason to delay issuing that guidance. However, as with any EU advice, it is what we ask and how we ask it that determines what advice is given. If we ask whether we can force companies to pay the living wage in publicly procured contracts, we are likely to get a negative response, but if we ask how we can use public procurement to ensure that the living wage is paid in publicly procured contracts, we are likely to get a very different response. I think that that gets to the nub of the issue.
After eight years, it is my view that, rather than being inventive, enthusiastic and evangelical about extending the living wage, the Scottish Government has had to be forced to act on the issue at every stage.
Is Neil Findlay aware that Labour’s manifesto no longer talks about making the living wage mandatory or about insisting that it is paid, even in procurement contracts? Instead, it says that Labour will try to promote the living wage. Is Labour also cowed by EU advice?
I can assure the minister that there is lots in the Labour manifesto to ensure that the living wage is extended. I will come on to that.
The Scottish Government’s delay—its failure—has affected 39,000 Scots. The Scottish Parliament information centre estimates that 147,000 Scottish jobs are created through Government procurement and that 39,000 of them pay less than the living wage. If the Scottish Government had issued statutory guidance, those 39,000 workers could have been £2,600 a year better off. What a difference that would have made to families struggling to pay their bills.
In February, the Scottish Government issued not statutory guidance but a policy note in which it finally conceded that fair pay can be a consideration in contract weighting. Will the Government now apply that weighting to all its contracts to ensure that fair pay and fair employment practices are given significant weighting in all contract tendering? I hope that the minister will answer that question when he replies to the debate.
Will the Government now fund councils properly to ensure that that weighting can be rolled out across the public sector? Will the Government go back to the EU to ask a different question to see how we can expand the coverage of the living wage? Will the Government make it clear to its agencies that they have to end situations such as that at TerraQuest, a contractor for Disclosure Scotland, which is paying just £7.10 an hour to workers who are held for years on temporary contracts? Will the Government end the use of the so-called “fiddle clause” by management at VisitScotland and National Museums Scotland, which prevents the payment of the full living wage to staff in those organisations?
I have no doubt that the minister will mention the Scottish living wage accreditation scheme, which has accredited 186 employers. I congratulate each and every one of those employers, but there are 335,000 private sector businesses in Scotland, so the accredited employers that are signed up at the moment represent 0.05 per cent of Scottish private sector businesses, which is hardly a revolution in the workplace. Indeed, maybe the minister could boost the total by one by signing up himself.
In its first year, a Labour Government will, through make work pay contracts, give tax rebates to businesses that have signed up to pay the living wage. It will also require publicly listed companies to report on whether they pay the living wage.
In relation to the demand for the Scottish Government to introduce the living wage, what would raising the national minimum wage to £8 an hour in 2020 do for many low-paid workers? Surely the Labour Party would be more honest to say that the national minimum wage should become the living wage.
I think that Mr Wilson and I absolutely share that ambition.
Alongside many other policies in our manifesto, our proposals will change the lives of working people. For example, we propose an end to zero-hours exploitation; an end to tribunal fees; the establishment of a Scottish hazards centre; the creation of a future fund for young people; the introduction of new legislation on corporate homicide and fatal accident inquiries; an end to agency exploitation; action on umbrella companies; an inquiry into blacklisting; and a commitment to build a fairer deal for the care sector. Alongside the living wage proposals, that is a major package of measures to improve the rights of workers across Scotland. I look forward to support from Mr Wilson and others when the Labour Government introduces all those measures after 7 May.
12:41
I thank Neil Findlay for again raising this very important issue.
I welcome any moves to reduce in-work poverty. Clearly, every employer has a moral duty to pay employees enough for them to live on. I think that we can be encouraged that many more employers are now accredited living wage employers, and I am sure that there are others who are paying the living wage but who have not sought accreditation—that probably includes me.
We can also be encouraged that the public in Scotland seem very aware of the concept of the living wage, with nearly 90 per cent saying that they have heard of it. By comparison, the figure for the United Kingdom is 80 per cent.
I fully support rolling out the living wage as far as we possibly can. There has been significant progress with public contracts. I gather that both the new ScotRail franchise and the Scottish Government’s catering contract ensure that all staff get the living wage, as they should.
Will the member join me in congratulating Labour-led Stirling Council, which this month introduced an £8 minimum wage for all its workers?
I am delighted that councils are taking the lead. Glasgow City Council has certainly taken the lead, too, which is great. However, my main argument is that we need to worry a bit more about the private sector, because it is falling behind.
The motion talks about ensuring that the living wage is paid, and that is where we hit problems. My understanding is that we cannot make payment of the living wage a mandatory requirement in procurement, although in their procurement strategies public bodies will have to make a statement of their general policy on the payment of the living wage.
The living wage is a good concept and I certainly support it, but I wonder whether the motion somewhat overstates its importance, as if it was the only or best answer to the problem of low pay. The reality is that the key piece of legislation on unacceptably low pay is not legislation on the living wage; it is legislation on the statutory minimum wage.
At the end of the day, the living wage will always be a voluntary device, and we have to think of imaginative ways of making this less voluntary and more of a requirement. That is why I lodged my amendment to Mr Findlay’s motion. The motion really deals only with public sector contracts and with who has the power to insist on conditions.
Will the member take an intervention?
I am sorry, but I have taken an intervention already.
Mr Findlay mentioned 335,000 private sector employers, but what about all the employers who do not have public sector contracts and who may never have any interest in them? Is it okay for them to keep on paying less than the living wage? No, it is not.
I am happy to give credit to the Labour Government at Westminster that introduced the statutory minimum wage, but I suspect that Mr Findlay might be somewhat embarrassed that Labour Governments thereafter left it at such a low level. It is in relation to topics such as this one that SNP members of Parliament at Westminster could give a minority Labour Government a bit more backbone. We know that Mr Findlay and many of his colleagues are not happy with how far to the right Labour has moved under Tony Blair and others, and I very much hope that, after next Thursday, we will see a more progressive grouping in London than Labour on its own seems able to offer.
I accept that some smaller employers such as pubs might struggle to pay all staff a living wage, but I think that the answer to that is to target support at those employers—as has been done with the small business bonus scheme—rather than allowing all businesses to pay low wages.
Whether or not Westminster increases the statutory minimum wage, let us have that power transferred here. It seems that there is a greater appetite in the two main parties here to seriously tackle low pay.
I very much support the roll-out of the payment of the living wage on a voluntary basis, but that will always be second best when compared with a decent statutory minimum wage.
12:45
I welcome the opportunity to speak in this short but important debate. I will focus mainly on women and in-work poverty. I hope that there is a broad consensus across Parliament in support of the living wage.
I begin by recognising the progress that has already been made. I am glad that the Scottish Government has reaffirmed its commitment to supporting the living wage in principle through its aim to encourage all public sector bodies to pay their employees at least the living wage.
I welcome the inclusion of a question on workforce matters when procurement contracts for catering on Scottish Government premises are being considered, especially as the majority of those employed in the catering industry are women. That is an encouraging sign and I hope that the Scottish Government will continue to encourage more employers to adopt that approach wherever possible.
I was particularly interested to see the findings of the working together review, which recommended that the Scottish Government work closely with trade unions to achieve fairer employment practices. I hope that the fair work commission will consider that at its first meeting.
However, a lot of work still needs to be done. As my colleague Neil Findlay said, nearly half a million Scots are paid less than the living wage. In Renfrewshire, almost one in five working-age adults are paid less than the living wage. The Scottish Government’s latest report on poverty, which was published last month, showed that 22 per cent of children were in relative poverty in 2012-13. That was the first increase in child poverty after decades of progress in reducing it. There has also been a marked increase in the number of Scots experiencing in-work poverty. We should all be ashamed of those things. If we are serious about attempting to alleviate poverty, promoting the adoption of the living wage will be essential.
Scottish Government research into poverty has also revealed that although relative poverty has decreased, the poverty that remains has become deeper and more entrenched. Young mothers and single parents, of whom a disproportionate number are women, are more likely to be in poverty than the average person in Scotland.
We know that poverty is not caused simply by unemployment. Almost 60 per cent of children in poverty in Scotland live in working households, and 50 per cent live in households where at least one adult is in full-time employment.
The hourly rate of pay, the number of hours worked, the income gained or lost through taxation and welfare reforms have been identified as key factors in influencing in-work poverty. Also important is the ability of families to balance work and caring responsibilities—again, women are disproportionately affected—as families across Scotland struggle to meet the cost of childcare, which continues to rise much faster than take-home pay.
In Scotland, 22.4 per cent of women earn less than the living wage compared with 13.9 per cent of men. The figure rises to as high as 72 per cent in the hospitality sector, and is 43 per cent in the retail sector and 33 per cent in administrative roles—sectors in which, again, there is a disproportionate concentration of women.
Across all sectors in Renfrewshire, a woman working full time can expect to earn on average only 79 per cent of the median full-time earnings for a man. That is simply not fair. Introducing a living wage across all industries in Scotland would go some way to address that gender divide.
To summarise, the scandal of low pay has a direct and measurable impact on the prevalence of child poverty and in-work poverty, which—again—disproportionately affects women. Women are less likely than men to be paid the living wage, and the sectors that are least likely to pay the living wage are those in which the greatest number of working women are concentrated.
The widespread adoption of the living wage is the first step that we need to take in addressing those problems. I hope that the Scottish Government will lead by example, by giving serious consideration to the payment of the living wage when choosing suppliers in public procurement and by encouraging private sector employers to always pay the living wage where possible.
Due to the number of members who have indicated that they would like to speak in the debate, I am minded to accept a motion from Neil Findlay, under rule 8.14.3, 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.—[Neil Findlay.]
Motion agreed to.
12:50
I congratulate Neil Findlay on bringing this debate to the chamber. We have debated the living wage in the chamber a number of times, and I am sure that we will do so again, but today’s debate is slightly different in that Mr Findlay has chosen to focus specifically on the Scottish Government’s procurement guidance to public sector organisations. I will therefore concentrate my remarks on that guidance and address my comments in the main to the cabinet secretary, Keith Brown, who I know has a bit of a reputation for listening to Opposition members. I will attempt to be as constructive as possible with regard to the guidance that has been published and the statutory guidance that I understand will come out later this year.
At present, there is a policy note from February that outlines as best it can to public sector organisations the routes that they ought to follow as and when they include questions on workforce matters and when they intend to use workforce matters as one of the criteria on which to base their procurement contracts. The guidance is fine as far as it goes, but if the statutory guidance is going to work and is to achieve the Scottish Government’s policy objective of increasing the number of contracts that include the living wage, some pretty substantial changes will be needed in future. I understand that a consultation is on-going, and that might well tease out some of those issues.
The guidance is not as clear as it needs to be if it is to bring about specific action. One paragraph in particular jumped out at me. Paragraph 18 states:
“Public bodies are asked to note the advice ... wherever it is legally possible to do so”—
without giving too much of a definition of what is “legally possible”—and then goes on to say:
“If you are in any doubt as to whether adopting the measures proposed are legally possible you should take appropriate legal advice.”
Of course, there is nothing wrong with saying that, but it raises a policy issue. If the risk and the obligation to seek legal advice are passed down the way to other public sector organisations, some of them will not do that and, instead, will either take the risk-free option of not including a question on workforce matters in their procurement exercise or take a very cautious attitude towards the matter. After all, no public sector organisation wants to get this wrong. The bottom line is that, if an organisation gets it wrong, it will probably be sued and end up paying out for legal bills as well as paying compensation and damages, none of which helps with paying the living wage.
Some leadership from the Scottish Government is needed on this matter, partly because it is the central Government but, more important, because it has more experience of contracting than many public sector bodies, and it can pass that experience on to those bodies. In addition, because the Scottish Government has a greater legal resource and greater budgets for seeking legal advice, it is in a stronger position to get as much legal advice as possible compared with one of the smaller councils or public sector bodies, which will want to follow the guidance but might fear the consequences of doing so.
The statutory guidance that is to be published must be as clear as possible. It is good that the example in relation to the catering contract is set out in annex A of the policy note, but we need to see not just one example of a Scottish Government contract, but as many as possible, because those examples will enable public sector organisations to have a clear focus on the sorts of questions that they are entitled to ask—the ones that are completely legally safe—so that they can have a simple idea of how workforce matters can be weighted. We know that, for catering contracts, the weighting is 10 per cent, but that is just one example, and a greater spread of advice in that respect would be helpful to public sector organisations. It would also be helpful if the Scottish Government could provide a definition of the phrase
“wherever it can be deemed relevant”
through an illustrative—if not exhaustive—list of examples. We need a list of as many definitions as possible, including what is meant by “proportionate” and “place of ... performance”.
As my time is up, I will end my comments there. I hope that the Government will take what I have said on board to ensure that the policy objective is more likely to be achieved when the statutory guidance is published.
12:55
The living wage is about dignity and security—on that I agree with Neil Findlay. I thank him for bringing this debate to the chamber, because it gives us another opportunity to expose Labour’s position on the living wage. I will follow that up in a minute.
Only action that is both promised and delivered will make the difference. The number of accredited living wage employers now stands at more than 180, with a target of 500. In fact, I am one of those employers.
Given all the commitments that we have heard from Labour today, I have to ask why the Labour Party did not support the devolution of all employment laws and rights in the Smith commission. It did not do that—and that baffles me. Time after time, it comes back to the Scottish Parliament to have the same debate and make the same commitments, but when the chance comes up to make a real commitment, the Labour Party does not take it.
The previous Executive did nothing in eight years to encourage or implement the living wage, whereas the current Scottish Government has implemented the living wage in all of its departments and agencies and is working hard with public contractors and employers through the living wage accreditation scheme, which is something that Neil Findlay would rather talk down than talk up. The Scottish Government is also establishing a fair work convention, and is working with the Scottish Trades Union Congress to realise its aspiration of decent work and dignified lives. The Government will issue the statutory guidance that is being called for, which is something that the Labour Executive never did. At this point, I must thank Alex Thomson from “Channel 4 News” for exposing the rank hypocrisy of a party that promises everything in campaigns, but delivers nothing in government.
What the people of Scotland have to decide now is whom they trust. Do they trust those who do not take the opportunity provided by the Smith commission to devolve employment rights and laws to Scotland? Do they trust a party that promises everything on zero-hours contracts but does not deliver?
That brings me back to Alex Thomson of “Channel 4 News”, who interviewed Ed Balls and Jim Murphy last week. Both were surrounded by young people with placards behind them saying “Ban ... zero hour contracts”. I agree with that, but those young people—the technicians involved in the event in question—were on zero-hours contracts themselves. They were working on the Labour Party’s campaign on zero-hours contracts, but it seemed that the two leaders—Ed Balls and Jim Murphy—had absolutely no idea.
Let us deal with the facts: Labour is a party that says one thing in a campaign but does not deliver and then has the audacity to do interviews while surrounded by young people on exploitative zero-hours contracts. If there are zero-hours contracts, are they exploitative or not exploitative? Which zero-hours contracts are good and which are bad? Labour is absolutely confused on this issue.
I come back to the issue of trust and the question of whom we trust. Who will the Scottish people trust when they go to the polls next week? Do they trust talk or obfuscation? Do they trust Ed Balls, who can stand there surrounded by young people on zero-hours contracts, or do they trust the SNP to deliver their voice to Westminster and, in turn, bring these rights to the Scottish Parliament and ensure that we do the right thing for the people of Scotland?
Neil Findlay and I agree that Scotland should have the power over such matters. He just does not agree that Scotland has the ability to take that power.
13:00
Just a few moments ago, we heard the First Minister criticise the Labour Party for a lack of positive ideas, but the speech that we have just heard might count as one of the most negative ever made in a members’ business debate.
I congratulate Neil Findlay on bringing this motion for debate and especially for doing so at such a critical time. Next week, voters in Scotland will decide what kind of Government they want for the wider United Kingdom, and it is on issues such as the living wage that there are choices to be made. It is easy to forget that it is only 20 years since the very idea of putting general wage levels into statute was novel and controversial. Indeed, it was opposed by some and not supported by others.
Over the years, progressive Governments had imposed wage regulation in sectors such as agriculture, where too many employers paid poverty wages and blocked trade union efforts to represent working people, but the wider attacks on trade union organisation and free collective bargaining by Conservative Governments in the 1980s showed that that limited form of intervention was no longer enough. Labour recognised the need for a national minimum wage. In fact, it was one of our first priorities—one of the first things that we did—after we turfed out the Conservative Government in 1997.
Does Lewis Macdonald accept that the national minimum wage was not a new concept in Europe and that several European countries had adopted the national minimum wage at higher rates than the Labour Party introduced in 1999?
We have just heard a speech from a Scottish National Party member saying that Labour does nothing when it has the chance. The national minimum wage is absolute proof that the opposite is true and that it is Labour that does not talk but actually does. It was a Labour Government that was the first in Britain to introduce the national minimum wage, and it is right that a top priority for Labour if it wins next week’s election will be to build on that policy.
Although the national minimum wage has not ended poverty, it has made a huge difference to the lives of millions of people. Along with tax credits for the low-paid, it has helped many working people escape the poverty trap. Wage regulation can do so again, if that is what people vote for next week. We have rightly gone beyond the national minimum wage to make the case for a living wage and to seek to roll that out as widely as possible. Again, it will not solve every problem, but it makes ending poverty and the need for food banks that much easier to achieve.
I am delighted that, in 2012, Aberdeen City Council in my region adopted the living wage as a minimum hourly rate not just for hundreds of permanent staff who had previously been paid less but for those employed on an occasional basis. Sport Aberdeen and Bon Accord Care have followed that good example, and Aberdeenshire Council decided to bring in the living wage in 2013, backdating it to 1 April 2012, which gave a very welcome lump sum to the lowest paid. The difference for the lowest-paid staff in Aberdeen City Council as a result of the introduction of the living wage three years ago is equivalent to an additional £1,400 a year for a full-time employee.
However, introducing a living wage for public sector workers alone misses part of the point of wage intervention, which is to support those most in need of legal protection, because of the jobs they do or the lack of trade union organisation in their sectors. Enlightened employers in the third sector also pay the living wage. For example, Aberdeen YMCA does so, because it is ethically the right thing to do, and so, too, do highly competitive commercial concerns such as BrewDog and Aberdeen Asset Management. They, too, know that well-paid staff are ultimately good for the bottom line.
Imposing the living wage as a condition of public sector contracts is not an add-on to a policy for public sector workers; it brings the living wage to bear where it can help the most. If it is good enough for public services and the best employers in the private sector, it should be good enough right across the economy. That is why Neil Findlay is right to press the Scottish Government to do more to ensure that private firms that seek public money meet the test of fair employment and fair pay—and to do that more quickly. I hope that the cabinet secretary will respond positively to the case that has been made for that today.
13:04
I, too, thank Neil Findlay for giving us the opportunity to debate this important topic.
There is general agreement that the minimum wage has been a progressive step, despite the dire predictions that were made when it was introduced. However, it is set at too low a level. Surely a minimum wage should not be below the level of a wage that someone can live on. Often people on the minimum wage require help from the state to meet living costs and subsidies to help meet housing rents, and in effect, we make up the difference by subsidising high rents when pay is too low.
The Greens want the minimum wage to be raised to the level of the living wage, which is £7.85 an hour at present, and then raised to £10 per hour over a five-year period—although that might need to be revised, depending on what happens to average wages and living costs. According to the minimum income standards that have been calculated by Loughborough University, £9.20 an hour is the current figure for a socially acceptable standard of living in the UK.
A living wage will benefit those on low incomes and reduce dependence on loan sharks and payday lenders. After all, we need to bear in mind that the poorest people typically pay the highest interest charges, even though they are least able to afford them. Most of that increase in pay will be spent back into the economy, because, as we know, people on low pay spend a higher proportion of their income. Sadly, they have little choice, as saving seems a distant dream.
State funding would be freed up for other uses when it was no longer required to subsidise employers who pay poor wages. Does it really make sense for shareholders to benefit from profits, when the companies’ employees, who are so often responsible for making those profits, have not been paid a living wage? As well as practical action, we need a cultural shift, and I suggest that those shareholders who share our concerns should not accept their dividend if they do not know whether employees have been paid a living wage.
How many people now seriously oppose the minimum wage? When it was introduced, concerns were expressed that businesses would close down, employment would fall and so on, but it is now recognised that there are many advantages to having a better-paid workforce. Employers retain more staff, who feel motivated and valued, and productivity, which is a serious issue for this country, improves. We harm positive working relationships when people feel undervalued.
If we still believe that a particular sector needs or should benefit from public subsidy, we should look at that and perhaps provide direct financial assistance. In any case, I do not believe that Amazon needs public subsidy, and I would like to see that cash transferred into hundreds of thousands of small businesses, which could then take on an apprentice or pay their staff more. We need Amazon’s taxes—and we need them in full—to contribute to a living wage. I suggest that, if the survival of a business depends on paying poverty wages, that business is not sustainable.
We need to examine whether there are companies in receipt of Government grants that do not pay a living wage and whether there are companies declaring big profits and sharing them out among a few shareholders when their staff are not being paid a living wage. Taxpayers in this country want to contribute to the good of society, not top up private profits, and all employees deserve the dignity of a living wage.
13:08
As other members have done, I thank Neil Findlay for his motion and for giving members the opportunity to take part in a debate that not only promotes the living wage but explores how it can be extended by Government and private companies.
As Neil Findlay said, 414,000 Scots are not being paid the living wage and there is no doubt that people in many communities, including my constituency, are struggling with the cost-of-living crisis. That struggle is even greater if people are not being paid a proper wage. As Mary Fee outlined, unfortunately many women—more than 60 per cent of women—are not being paid the living wage. They have been hit harder.
There is an onus on us all—on Government, councils and businesses—to promote and try to extend the living wage. There is no doubt that there are twin advantages to that: it has advantages for individuals and businesses. People who are paid the living wage are taken up to a more adequate level of household income. Many people who are not in receipt of the living wage work in the retail sector, and are also living in some of our poorest accommodation. It becomes more difficult to bring up children and to ensure that they have a sound and solid education when there is not enough money coming into the house and people are not able to feed their family properly or heat their homes. We need to tackle those issues, so there is a need for leadership from businesses.
There are advantages to businesses that pay employees properly. Those employees will be more loyal to the company and more motivated, which brings reward in the shape of a more stable workforce. That, in turn, benefits the business by enabling it to operate more effectively. That is why, even in the football sphere, we have seen Heart of Midlothian Football Club taking the lead in Scotland by ensuring that all its employees will be paid the living wage. It is to be congratulated on that.
The Scottish Government could do more. Clearly, everyone who is covered by the public sector pay policy is paid the living wage, and that is welcome, but there are people working in Scottish Government locations including prisons who are not being paid the living wage. The cabinet secretary should commit to a review of all Scottish Government employees to explore where they are not being paid the living wage and to ensure that the living wage is extended.
The Procurement Reform (Scotland) Act 2014 was passed, but it is regrettable that more than a year down the line we still do not have statutory guidance. The Government has to show more political will; it is not good enough simply to hide behind European Union legal advice. We should look at what has been done in London; the living wage can be paid and there is a way of doing it by linking it to the performance of contracts.
Does James Kelly acknowledge, as seems now to be acknowledged in the Labour Party manifesto, that the living wage cannot be mandated and that the London boroughs to which I think he is referring have also admitted, when questioned, that they cannot insist on the living wage under EU law? Does he accept that position?
Every time the issue has been debated, the minister and his predecessors have hidden behind the legal advice. What I would like you to do, minister, is explore how you can take that legal position to the limit—because there is legal advice that shows you how to do it—and try to explore how to link the living wage to contracts. Even leaving aside the legal issue, you have not done enough, in my opinion, to make the contracts more robust: you have not implemented the statutory guidance.
I shall finish on this point, Presiding Officer. I genuinely believe that the Government needs to do more to promote the living wage and that it needs to look not just at the statutory guidance but at the contracts that are issued, so that we can get more of those 414,000 people on to the living wage and a decent standard of living.
I remind members to speak through the chair and also to speak into their microphones, or the official reporters will be unable to pick up their remarks.
13:13
I congratulate Neil Findlay on securing the debate. It is always a timely reminder to have a debate on the living wage or on the national minimum wage because, as I said in my earlier intervention, the national minimum wage should be the living wage and not a false ceiling on what we intend to pay employees, no matter where they are employed. As James Kelly said, the 414,000 workers in Scotland who are not on the living wage also deserve that.
I thank Gavin Brown for his speech, which was one of the most positive Conservative Party contributions that I have heard in my time in Parliament. I hope that it is a welcome sign that the Conservative Party is moving towards accepting that the living wage should be advanced and supported. Employers sometimes cry out through the Confederation of British Industry against interventions such as the living wage, so I hope that his contribution will tell the CBI that it is a good and positive move to promote the living wage.
I am not sure whether Lewis Macdonald will consider this to be a negative contribution, but I have to remind members that the living wage is only part of an overall scheme of measures that can benefit people and raise them out of in-work poverty. While we talk about raising the living wage, there has been no mention of the tax credits and other benefits that workers rely on to survive—and they are only surviving. To raise their pay to the living wage now might result in many of those workers being penalised at the end of the year by removal of the tax credits and benefits that they receive. When we talk about a living income, we have to bear in mind the other benefits that employees receive in relation to their survival.
John Wilson will recall that I mentioned precisely that point in my speech. The combination of the minimum wage, the living wage and tax credit support is critical. A Government that actually wants to achieve the desired objectives will make all the difference.
I accept that Lewis Macdonald agrees with my analysis.
While we talk about tax credits and other benefits, we must also consider the hours that employees are being offered. At present, when we talk about zero-hours contracts or short-term working contracts, we must remember that there are many workers in Scotland who are on five-hours-a-week contracts, 12-hours-a-week contracts and 16-hours-a-week contracts. The introduction of the living wage would not significantly raise weekly income levels for many of those employees. We also have to ensure that there is security of employment and that there is work for people to do.
On Government and local government contracts, I welcome the opportunity to consider what local authorities are doing throughout Scotland—especially the ones that have set up arm’s-length external organisations. We should examine what those ALEOs are doing in relation to the living wage—whether they are encompassing the ideals that Neil Findlay has espoused today and ensuring that workers who want them are on full-time contracts and are being paid the living wage, as other council employees are. ALEOs should not be seen as a shorthand way to reduce the income levels of staff who are transferred to them.
I welcome the debate. I hope that we can move the overall debate forward and get to a situation in which the living wage is the national minimum wage and we can introduce a living wage that benefits everyone in society and takes people out of poverty, including in-work poverty.
13:18
I, too, congratulate Neil Findlay on securing the debate, which seeks to tackle low pay and job insecurity. Dealing with those issues is crucial to securing the Scottish Government’s vision of a successful Scotland.
To that end, this morning, the Cabinet Secretary for Fair Work, Skills and Training attended the first meeting of the fair work convention, which is an independent body that will develop a blueprint for fair work best practices in Scotland, and will publish a fair work framework early next year.
We are already 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.
James Kelly made a number of good points, especially in relation to why paying a living wage is in the interests of the employer in terms of recruitment, retention and productivity. An employer who pays a wage that people can live on will get more out of those people.
However, James Kelly also alleged that the Government has “hidden behind” the EU legislation. Let us look at who else has “hidden behind” the EU legislation. Glasgow City Council said:
“EU regulations do not allow the living wage as a mandatory requirement within our contracts”.
In response to freedom of information requests, Renfrewshire Council, West Lothian Council and Inverclyde Council all said that their contracts do not include a mandatory requirement that suppliers pay the living wage.
The London boroughs, which James Kelly mentioned,
“claim to ‘mandate’ the ... living wage”,
but they also say that
“procurement could potentially be of cross border interest [i.e. where either the EU procurement directives or EU Treaty principles apply] … the requirement for LLW [London Living Wage] should not be made a pre-condition at the tender stage”.
There is a lot of such evidence, the most compelling of which is the fact that, despite many Labour spokespeople having been saying for quite some time that the EU legislation is a fig leaf to cover the fact that we do not want to pay the living wage—I suppose that that is the allegation—Labour’s own manifesto talks about promoting and not about mandating the living wage. Labour members should reconcile some of the rhetoric that we have heard today with that position, which we agree with and are doing a great deal to try to achieve.
Despite the imposition by London of pretty sharp reductions in the Scottish budget, we have taken steps to protect the pay of our lowest-earning public sector workers, which has included a commitment to support the living wage through our pay policy for the duration of this session of Parliament. Somebody mentioned the Abellio contract, which is the biggest contract that the Scottish Government lets, involving £8 billion of public money. Not just everybody who is directly employed under that contract but every employee who is subcontracted for cleaning, catering or whatever is guaranteed to be paid the living wage.
We have provided further funding to the Poverty Alliance to promote take-up of the living wage accreditation initiative in every sector. Last month, the First Minister announced a new target for the Poverty Alliance of 500 accredited living wage employers by the end of March 2016. That follows the achievement of the target of 150 such employers eight months ahead of schedule. I understand that there are now more than 180 Scotland-based living wage accredited employers. That is a sign that employers are recognising the benefits that the living wage can bring to their staff and businesses. Consultants KPMG published a report on Monday that showed that Scotland is the most living wage aware region of the UK, with nine out of 10 people here having heard of the living wage. The report also confirms that Scotland has one of the highest proportions in the UK of earners who are paid above the living wage.
I agree with John Wilson that Gavin Brown made a very constructive point, which I undertake to look into. However, I do not think that we can give guidance on all eventualities in respect of the myriad of contracts that are let by public authorities, especially local authorities. Local authorities have legal teams, although I accept that they will not be as extensive as the Scottish Government’s legal resources. Councils are autonomous bodies and will, in certain circumstances, have to take legal advice to ensure that they are observing legal requirements. Nevertheless, I undertake to look into the matter.
Minister, when you turn away from your microphone it is difficult for the chamber to hear you.
I apologise, Presiding Officer.
Members mentioned public procurement. In my view, promoting the living wage through public procurement is a weak alternative to having the powers over employment law that we asked the Smith commission to deliver—a plea that was not supported by other parties and which was vehemently and specifically opposed by the Labour Party. Nonetheless, it is right for us to expect that delivery of services to be of the highest quality, and that the people who deliver those services should offer their employees fair and equitable employment terms. As I said in an intervention on James Kelly’s speech, I believe that employees who are treated fairly will, in turn, deliver higher-quality service. As we implement the Procurement Reform (Scotland) Act 2014 and the EU procurement directives, we are focusing on using procurement as a lever for economic growth by supporting a fairer Scotland, streamlining the public sector’s dealings with business and adopting more efficient practices to secure best value for the public purse.
Will it now be standard practice for the Scottish Government to use contract weighting in every applicable contract in order to drive up fair pay?
I will address two other points, since I have the opportunity to do so. Will the minister look into the issue of TerraQuest, which is operating at Disclosure Scotland, paying poverty pay, and will he look at the “fiddle clause” that is being used by National Museums Scotland and VisitScotland?
I ask Neil Findlay to write to me on those last two points, and I will respond specifically on them.
On his first point, as a number of members have asked us to do, we are pursuing every avenue that we can to achieve that. We have already had some success in our current contracts—I mentioned Abellio. We are looking at ways to say to people that we see workforce wellbeing as a very important part of the sustainability of a contract and that they should address that. We can do that in a number of ways. We do not want to be too prescriptive, but if it achieves the result that we want—which is not just payment of the living wage, as John Wilson said, but other aspects of employee wellbeing—we will take that opportunity.
Since February, we have been consulting on changes to the public procurement rules. The deadline for responses is today. As part of the process, we have sought views on the content of the statutory guidance that has been mentioned. In advance of that, we have published guidance on workforce matters in procurement, which shares the lessons from an approach that we piloted to encourage the living wage in our own contract for catering services. That offers practical guidance to purchasers on how and when workforce matters, including—to return to Neil Findlay’s point—payment of the living wage, should be considered in the course of a public procurement exercise. That will inform the development of statutory guidance, which will—to respond to Gavin Brown’s point—give as much surety, certainty and assurance as possible to other public procurers when they seek to do the same thing.
We have engaged key stakeholders on the published guidance note. I have spoken to the STUC, and we will engage further with it and others as we work to fast-track the guidance, so that we have it in place by the autumn.
I agree with the many other members who said that we must tackle low pay and job insecurity in Scotland as a key priority.
Council funding was raised by, I think, Neil Findlay. I did not see any amendment to our proposed budget or to the Local Government Finance (Scotland) Order 2014 on how much more we should pay local government. Had we seen such an amendment, perhaps we would have attached more importance to the point that was made. I do not see a Labour manifesto commitment mandating a living wage, although I think that everyone expected that to come, given the rhetoric.
I do not think that we should forget that the change is due to the people. It is not just because of the SNP Government, but because times have changed and people are much more aware of how damaging low pay can be.
We could deal with the situation now, were the UK willing to give us not just the responsibility, but the power to take action. If it is willing to give us the power over the minimum wage, that would be the sole quickest way to deal with the scourge of low pay. That has been refused up until now. Despite that, I encourage public and private sector organisations to follow our lead, pay the living the wage to their staff and consider how they can maximise the opportunities in their procurement exercises to promote fair employment practices and workforce matters, including the living wage in all relevant contracts.
13:26 Meeting suspended.Previous
First Minister’s Question Time