Hansard

I declare an interest. Prior to coming into the Parliament in May 2007, I was the director of the Scottish Low Pay Unit. I also served on the Trades Union Congress national minimum wage enforcement group and was part of the initial Scottish living wage campaign.

I pay tribute to the East London Communities Organisation, which is now part of London Citizens and which, in 2001, started the campaign for the living wage.

I welcome the debate in the name of the Local Government and Regeneration Committee on the living wage in Scotland. In fact, any debate that highlights low pay and its connection with poverty should be of interest to all members and people beyond the Parliament. The consequences of poverty—especially its complexities—still blight many of our communities.

The committee’s report clearly shows the context and scope of the various living wage campaigns, which are somewhat diverse in nature. They have clearly had an impact on the national minimum wage rate, which is set by the Low Pay Commission and is currently £6.08 for workers aged 21 and over. The Scottish living wage is currently calculated at £7.20 per hour.

As I have stated previously in the chamber, 29 organisations in London—including the mayor of London Boris Johnson, the Greater London Assembly and Barclays Bank—have fully embraced the implementation of a living wage. Darren Johnson, a Green Party member in the Greater London Assembly, made a freedom of information request, which was published in March 2009. He found that only four London boroughs out of 32 were incorporating the living wage into their procurement policies. However, with the Olympics approaching, things have moved on and many authorities in London are now adopting the living wage as a formula for calculating contracts.

Although the Scottish Government and other public sector employers, such as many local authorities, have endorsed the living wage, it is not enshrined in statute, unlike the national minimum wage.

The committee spent a considerable period of time in its inquiry on procurement issues. Those are critical to the implementation of the living wage because, if it were to be stipulated in procurement contracts, employers would be contractually obliged to pay their employees at that rate or face action for breach of contract.

That brings us to EU procurement law and, as the committee’s report highlights, possible European restrictions on, and challenges to, stipulating that the living wage be incorporated into all public sector contracts. The relevant law—the public sector, or classic, directive 2004/18/EC—was implemented in Scotland by the Public Contracts (Scotland) Regulations 2006. The key principles behind the directive stipulate that EU member states or “contracting authorities” must award contracts on the basis of commercial, non-discriminatory and objective criteria.

I note that the committee’s report refers to the submission by Mr McGuire—a partner in Thompson Solicitors—that payment of the living wage could be included as a contract performance clause. The report further states that the Scottish Government has written to the European Commission on that, and I await with interest the Commission’s response.

The committee recognised that much more needs to be done, although the living wage is to be welcomed as part of a policy mix for tackling in-work poverty that needs to be flexible but not confused.

Promoting a living wage requires better policy co-ordination. That is highlighted in the recommendation that

“the Committee … calls on the Scottish Government to use its experience, expertise and good relationship with COSLA and with local government generally to seek to encourage the further introduction of the living wage”.

As a society, we have to tackle the problem of poverty—particularly in-work poverty—at source, take every step that is necessary to eradicate that blight on Scotland and urge the UK Government to ameliorate some of its excessive policies when dealing with poverty.

As part of my long-standing contribution to the discussion about having a diverse policy mix, I have stated in the chamber previously that it could be argued that due consideration should be given to the idea of a citizen’s basic income, which would reduce the stigma associated with benefit take-up, for example. Moreover, it could be argued that a living wage may fail to tackle poverty. Under the present system, a living wage and consequent increases in workers’ incomes could lead to a reduction in entitlement to working tax credits, housing benefit and council tax benefit, leaving workers again in a poverty trap.

I welcome today’s debate and its focus on advancing approaches to address poverty, particularly in-work poverty. I look forward not only to a day when all public bodies and authorities adopt the living wage for all employees but to a day when the living wage becomes the standard rate throughout the private sector and when we as a society can eradicate in-work poverty and poverty for all citizens in Scotland. I look forward especially to the debate that will take place in the chamber next Thursday evening on a motion that John Park has lodged, which will allow us to advance further arguments and consider the issues around the private sector’s failure to protect not only the pay of its workforce but its pensions and other benefits.