Hansard

On behalf of the Economy, Energy and Tourism Committee, I express our gratitude for the opportunity to debate what for us has been an extensive, exciting and compelling inquiry into work, wages and wellbeing in the Scottish labour market.

At the outset, I thank all those who gave the committee evidence in writing or in person. I want to thank in particular the members of the public who contributed to our online survey, about which I will say a bit more, shortly. I also thank the members of the public and the employers who came to the Parliament day meeting that we held in Paisley. It was a useful means of reaching a range of opinions that might not otherwise have been available to the committee. I think that the opportunity to participate was appreciated and enjoyed by the people who attended.

I also record my thanks to our team of clerks for their assistance, our colleagues in the Scottish Parliament information centre, and my fellow committee members for their co-operative approach. As this is probably the final chance that I will have in this session to say it in the chamber as the committee’s convener, I would like to thank my fellow committee members for all their support, enthusiasm and general good behaviour over the past five years.

In introducing the debate on behalf of the committee, I will begin by explaining what we knew at the start of our inquiry, before I share how we engaged with Scotland’s workforce and some of the inquiry’s findings. We knew that Scotland was emerging from the recession that began in 2008, we knew that employment in Scotland was at its highest since before the recession, and we knew that it had continued to increase steadily since 2010. However, we knew, too, that part-time working, the use of zero-hours contracts and temporary employment were also on the increase. The inquiry that the committee carried out into underemployment in 2013 highlighted those trends. In it, we concluded that underemployment should be considered alongside unemployment as being detrimental to a productive economy. We wanted to explore what lay behind the recent promising employment figures.

In its health inequalities report, which was published just over a year ago, the Health and Sport Committee found that socioeconomic status and work quality are key contributors to health outcomes. It suggested that simply encouraging economic growth in itself might not reduce health inequalities. As a result, one of our key aims was to explore the effect of poor-quality work on health and wellbeing. First, we had to address this question: what is poor-quality work? Academics’ and professionals’ definitions varied, but members of the public, whom we invited to share their experiences using an online form, seemed to be clear that low pay, poor management and insecure hours make for poor-quality work.

Although most of the 600 people who responded described their job as good—thankfully—the majority also reported that their job had affected their health. Most people felt that their job had deteriorated in the past five years, and many people described poor progression opportunities and increased workloads.

I have already thanked all the witnesses and all the people who met us, wrote to us and contributed to the inquiry. The scale of the response illustrates how important fair work is to the people of Scotland. One person, sharing their experience of zero-hours contracts, put it quite simply:

“I can't live like this, not knowing how much money I'm earning to keep my family.”

At the Parliament day in Paisley in September, we spoke to local workers, employers and support services and heard similar stories. However, we also heard that good management, secure employment and a say in how the workplace is run can make all the difference. It is clearly not all about pay.

In informal evidence, and more recently, in work that the committee carried out on social enterprises, employee-owned businesses and co-operatives, we heard that employee engagement can bolster a happy, healthy and more productive workforce. It became clear that fair working practices could be the answer to ensuring worker wellbeing and improving labour productivity.

Professor Chris Warhurst introduced us to the concept of high-road and low-road economies: an economy can lean towards high skills and high wages or towards low skills and low wages. Evidence suggests that Scotland has a recent history of favouring the low road. The committee was struck by the need, as described by Professor Warhurst, for “paving the high road” and “blocking ... the low road”. “Taking the High Road—Work, Wages and Wellbeing in the Scottish Labour Market”, is the title of our report and highlights the message that underpins all our recommendations. Members who have long memories will recall a Scottish soap opera of a similar name—although perhaps that is something for our creative industries inquiry, instead.

We are pleased to see that the Scottish Government is already lining up the cobblestones to pave the high road. We welcome the establishment of the fair work convention and I hope that the session 5 Economy, Energy and Tourism Committee—in whatever guise—will take a keen interest in both the outcomes of the convention and the future policy impacts of its work. As the cabinet secretary said in evidence to the committee, Scotland is already punching above its weight in encouraging businesses to sign up to the living wage. The public sector in particular has taken the message to heart. That is promising.

However, we heard concerns about whether private businesses that fulfil public sector contracts can meet the challenge. We heard powerful evidence from people who work in the care sector that they would like to pay more—the living wage—but cannot make the sums add up because of the amount of money that they are paid by public agencies and local authorities for care services. I know that in the recent budget the Scottish Government announced additional funding to help to promote the living wage in the care sector. I would be interested to hear more from the Scottish Government about how that agenda can be progressed and how we will square that circle for the businesses that have the ambition to pay more but currently feel that they are constrained by the amount of money that is coming from the public sector.

In general, we would like to hear more from the Scottish Government about how the living wage and other fair working practices can be passed down through the public-procurement chain. That would help to pave the high road.

The committee also welcomed the Scottish business pledge. However, we cannot ignore the fact that businesses have not been falling over themselves to sign up to it. We are concerned that the language that is used to describe the pledge is not clear. That brings us to the question of blocking the low road. We would like to see a definition of exploitative zero-hours contracts that makes it clear that such contracts are not welcome in a fair work Scotland, and that businesses that use such contracts will not gain business-pledge accreditation.

In evidence, it was obvious that the definition of an exploitative zero-hours contract is not clear. I raised the issue with the First Minister when she came to the Conveners Group meeting. She could not give me a definitive answer at that point, but subsequently wrote to me in my capacity as convener of the committee. We welcome that clarity, but there was a period before that when we were asking businesses to sign up to the business pledge when we were not clear and they could not have been clear what the definition was. It is important that such clarity is obtained and that such confusion does not arise again in any similar or related matter.

We know that the business pledge is being actively promoted by the enterprise agencies, but we have further concerns that the low road is far from being blocked there. We have all heard in recent years the negative press about alleged poor working conditions at Amazon’s Scottish sites. That firm received significant regional selective assistance grant funding through Scottish Enterprise when it was establishing itself in Scotland. The question that we must therefore ask is this: what expectation now lies on Amazon to use fair work practices? For example, do we expect it to reject the use of zero-hours contracts, with which it has become so notoriously associated?

The committee would like the Scottish Government to review the process for awarding those big-ticket grants. We want funding to go to employers that will not only create jobs, but that will create fair, appropriately paid and secure jobs.

In conclusion, the committee would like fair work principles to be embedded across policies that cover employment practices, procurement and business support. We firmly believe that, in doing that, we can encourage a more productive and resilient economy for Scotland. We hope to see a commitment to those aims being reflected in the Scotland performs national performance framework.

I look forward to hearing the cabinet secretary’s response to what I hope will be a lively debate that holds the wellbeing of the Scottish workforce at its heart.

I move,

That the Parliament notes the conclusions and recommendations in the Economy, Energy and Tourism Committee’s 1st Report 2016 (Session 4), Taking the High Road—Work, Wages and Wellbeing in the Scottish Labour Market (SP Paper 874).