Meeting of the Parliament 18 March 2015
In the programme for government, we set out a range of cross-portfolio policies that were aimed at reducing inequality, including actions on fair work such as our commitment as an employer to pay the living wage and, as a Government, increasing funding to the Poverty Alliance to grow the number of accredited living wage employers. The programme for government also emphasises our commitment to empowering communities by handing over decisions on key issues to them, and to making Government open and accessible through public participation in the decisions we make that affect people. That should also cover the issue that we are discussing this afternoon.
We have committed to poverty proofing all our new policies and legislation through poverty impact assessments whenever we make a change, and we will appoint an independent adviser on poverty and inequality, who will hold public events with the First Minister to raise awareness of the reality of living in poverty, make recommendations to the Government on how collectively we should respond and, indeed, hold the Government to account on its performance. We want the Scottish Government’s work to be more open and accessible, and those measures will go some way towards achieving that. We also want to build on the momentum that has built up as a result of the debate that Scotland has been having over the past few years.
However, a lot needs to be done, and Alison Johnstone has already touched on a great many of the things that we will all no doubt wish to talk about while not necessarily agreeing on the specific ways forward. In 2012-13, 820,000 people in Scotland were living in poverty, and more than half a million of them were living in severe poverty. People tend to assume that those who are in work are okay, but although being in employment remains a protection against poverty, it is no longer a guarantee against it. Indeed, the last decade has seen a steady increase in working poverty.
While the risk of severe poverty increases significantly as household work intensity decreases, even full-time employment is not necessarily a protection against severe poverty. In 2012-13, nearly a third of working-age adults and four in 10 children in severe poverty lived in households with at least one person in full-time employment. Although a higher statutory minimum wage would certainly contribute to reducing in-work poverty, it is important to consider other issues beyond wage levels that drive such poverty.
Tackling in-work poverty is not just about increasing pay levels, although that is clearly one of the most important ways of addressing the issue; it is about ensuring that those in low-skilled work have the opportunity to develop their skills and to progress in employment. Unfortunately, that is not happening in a lot of places.
The First Minister has already called on the UK Government to increase the work allowance on the basis that
“if you receive universal credit, and pay income tax, a £600 increase to the personal allowance in the coming budget”—
she was not arguing against that—
“would boost your income by £42. But the same increase to the work allowance would boost your income by £390.”
That would clearly make a significantly greater difference.
I welcome the increases to the national minimum wage that the United Kingdom Government announced yesterday, of course, particularly the larger-than-recommended increase to the apprentice rate, which will be widely welcomed. However, I am not sure that that goes far enough; it should go a lot further than that. I have written to Vince Cable to reaffirm the Scottish Government’s view that there is no justification for continuing to support the apprenticeship rate of the national minimum wage at £2.73 and to highlight that no one, no matter their age, should be working for less than £3 an hour, which is what has happened. I have also called on the public sector in Scotland to ensure that all modern apprentices are paid at least the UK adult minimum wage or, where affordable, the living wage if they are doing an equivalent job to that of someone on that level of pay. I will continue to press the UK Government to scrap the apprenticeship rate and to address the inequality and unfairness in young people’s pay.
We cannot, of course, ignore the effects of changes to the employment landscape over the past few years. There has been an increase in the use of exploitative zero-hours contracts. Not all zero-hours contracts are unwelcome to the individuals who sign up to them, but there has been a massive increase in the exploitative use of them. We need to look at that and address how we can deal with it.
The qualifying period for making an unfair dismissal claim has been increased from one year to two years, and the introduction of fees for employment tribunals has resulted in a dramatic fall of 65 per cent in the number of cases in Scotland.
A combination of factors is contributing to a culture of fear in too many workplaces. People fear to speak up in case they revert to zero hours that week.