Meeting of the Parliament 01 March 2012
The Labour Government increased the national minimum wage repeatedly to ensure that it kept up. The fact that we are discussing the living wage now is testament to the campaigning that trade unions have done with us to ensure that the matter is firmly on our agenda. We have a chance to act.
As others have pointed out, the issue affects not only the staff in the public sector, whether they are employed by central Government or local government, but employees of companies that seek to carry out contracts for the public sector. I listened carefully to the minister’s comments, and I welcome the fact that the Scottish Government is investigating the issue with the European Commission. However, the Scottish Government must take a lead. In evidence to the committee, the Greater London Authority made clear that, in its view, the EU’s procurement legislation was not automatically an obstacle to action. Work must be done across the whole country, and the Scottish Government is best placed to do that.
Action on procurement would also address the concern that some have expressed that it should not just be public sector staff who benefit from the living wage. I agree, but I believe that the transformative power of the Scottish Government should be brought to bear in that regard. A living wage unit is important. I welcome the minister’s comments if he is saying that the living wage should be included in the proposed sustainable procurement bill; it would be good to have that confirmed on the record.
In that context, it is important that we consider the voluntary sector. There is huge pressure on the viability of many voluntary sector organisations, particularly those that are bidding for contracts for local authority work. However, it would not be right for local authorities to raise their own staff out of poverty pay while expecting those who carry out work for them to pay their staff less than the authorities would pay their own. That is particularly important for young women with children, who are often paid much less than the living wage.
The Save the Children briefing highlights the fact that 43 per cent of those earning less than £7 an hour are women in part-time employment, and two thirds of all low-paid workers are women. Where the living wage has been implemented, there has been a huge benefit for women. The Scottish Borders Council is not unusual in that 85 per cent of employees who benefited from the introduction of the living wage were women.
One of the most powerful arguments for the living wage is the need to tackle poverty pay and to lift people out of poverty. Given all the comments that have been made so far about the relationship with benefits, it is worth looking at the work by the living wage campaign and the Save the Children campaign, which shows that people with children are still better off and that we should not get sidetracked by the issue of benefits. We need to pursue it, but it should not stop us campaigning for the living wage.
The benefits that Joe FitzPatrick mentioned are wider than simply tackling poverty. There are benefits for employers in terms of recruitment, retention, absenteeism and staff morale, all of which were mentioned by the GLA. There is an opportunity for smart employers to negotiate with their staff to bring benefits to both sides.
South Lanarkshire Council makes the point that employees who earn at the living wage level spend money locally, which goes back into local businesses. That is surely a win-win situation for everyone. I commend the council not only on addressing the living wage but on boosting the wages of staff on modest salaries of £21,000 by £250. Around 76 per cent of those staff are women, which shows us that there is a real gender issue.
It is not only about the public sector; we should also encourage the private sector to introduce a living wage. There are companies that have taken the lead and benefited from the living wage. We need to ensure that we get a positive response from the Scottish Government today. I would like to hear more clarity on the support that the Government will give to implementing the living wage. We need clear leadership, a dedicated living wage unit in the Scottish Government and action on procurement to ensure that the living wage is rolled out across the labour market.