Hansard

I start by thanking the committee clerks for their diligent work during the inquiry, which resulted in the important report—“Report on the Living Wage in Scotland”—that we are discussing today. I also recognise the input of Kezia Dugdale and Mark Griffin, who are no longer members of the committee but were involved in the early stages of the inquiry.

Our short-term inquiry into the living wage was held in December and January and we published our report on 3 February. We worked hard as a committee to achieve consensus, and I hope that our report helps to move the agenda forward in an informed way.

Usually, we would wait until we had received the Government’s response before we brought a debate on a committee report to the chamber, but we hope that today’s debate will feed into the Government’s response, as part of the Presiding Officer’s programme for change. Although we look forward to hearing what the minister has to say, we understand that that will not be the Government’s final response.

The aim of our inquiry was to consider the benefits of a living wage for individuals, families and communities. We looked at the introduction of the living wage by local authorities and explored the extent to which procurement can include criteria that are linked to payment of the living wage.

The living wage is intended to address in-work poverty by providing an income level that enables households to adequately provide for themselves. It is set at £7.20 per hour, which is £1.12 above the United Kingdom’s national minimum wage of £6.08 per hour for adults. The figure of £7.20 per hour, which equates to about £14,000 a year, is not an arbitrary figure that was plucked out of thin air. The committee received evidence from Donald Hirsch of the centre for research in social policy at Loughborough University, who explained that the living wage is based on a calculation of the minimum income standard for the United Kingdom.

The minimum income standard is an estimate of the minimum income that households need in order to have a minimum acceptable standard of living as defined by members of the public. It is based on regular research on what the public think, and it is supported by expert knowledge. It is important to note that the standard covers needs and not wants. It is largely made up of necessities such as food and shelter, and not luxuries. However, it is also about people having what they need in order to have the opportunities and choices that are necessary to participate in society. Good examples are swimming lessons and birthday presents for children. Technically, they are not essential, but they are included in the calculation as the public consider them necessary for the normal upbringing of a child, and it could be argued that their absence is detrimental to a child’s development.

Some 550,000 adult employees in Scotland are paid less than the living wage. That is a lot of people who would benefit if the living wage was adopted. Although our inquiry focused on local government, it revealed that a higher percentage of employees in the private sector earn less than £7.20 per hour—the figure is 28.1 per cent—compared with employees in the public sector, where the figure is 3.9 per cent. We also identified a disparity between men and women, with 22.6 per cent of women earning less than £7.20 per hour compared with 14.6 per cent of men.

The committee heard that those 550,000 Scots largely work in sales and customer service positions or as labourers, cleaners or catering assistants. The Scottish Government has been at the forefront of implementing the living wage, and all Government staff, agency staff and national health service staff already receive it. About 15,000 private sector workers have already benefited from the adoption of the living wage, but that leaves about 18,000 directly employed staff in local government who earn less than £7.20 per hour.

We heard that a number of local authorities are actively considering joining, or have recently made the decision to join, the seven councils that are already paying a living wage. I was pleased to learn that Dundee’s Scottish National Party administration has asked officers to examine its implementation in Dundee City Council.

As part of our inquiry, the committee also took evidence from the private sector, which, as I have said, employs the majority of those who are paid less than the living wage. It is fair to say that the witnesses were largely apprehensive about the living wage and raised concerns over its impact on jobs and over businesses becoming less competitive. The Confederation of British Industry Scotland went considerably further, claiming that the living wage would have a longer-term impact on local labour markets and on the affordability of service provision, and that it would have a disproportionately negative effect on young people. The committee was keen to hear the evidence base for that, but CBI Scotland did not accept the invitation to appear before the committee to answer questions on its written submission.