The case for a Living Wage Unit in Scotland, for Scotland

The case for a Living Wage Unit in Scotland, for Scotland

Last Thursday the Scottish Living Wage campaign and Scottish trade unions held a brief lobby outside of the Scottish Parliament.  Its purpose was to ask MSPs to sign up to a Living Wage pledge.  The full detail of the pledge is here.

In period of less than an hour, we had secured 35 signatures and a number of emails and tweets from MSPs who were otherwise detained pledged their support.

Who were they? Almost every Labour MSP, Patrick Harvie MSP from the Green Party, Independent MSPs John Finnie and Jean Urquhart and SNP backbenchers John Mason MSP and John Wilson MSP.

Two of the four points within the pledge relate to the Procurement Reform Bill.  The background to this is that the Scottish Living Wage Campaign, STUC, SCVO and many others, remain of the view that there are no clear legal impediments to the Scottish Government legislating to ensure that the Living Wage is included in contract performance clauses as part of contracts procured by Scottish councils, the NHS and others in areas such as social care.  The Scottish Government takes the opposite view and seeks to evidence this by a letter it has received from the EU.

This was a position repeated by Local Government and Planning Minister Derek MacKay to a major roundtable conference of social care providers hosted by STUC and Unison Scotland last Friday.  He also indicated, and this gave some grounds for optimism amongst the assembled audience, that Scottish Government continued to explore all potential options short of including a clause in the Bill, to maximise the Living Wage impact of Scotland’s £11 billion annual procurement budget.

So, to return to the pledge.  Neither of the procurement points we asked MSPs to support brought them into conflict with the Scottish Government’s position.  Indeed it can be argued that they are as close to what Derek MacKay was arguing as they could be (given that neither he, nor we, has communicated about such matters in advance).

So, on the presumption that this is the case, the reason that no more than two SNP MSPs felt able to sign the pledge must relate to one of the other two points.  Either that a summit between COSLA and the Scottish Government on paying the Living Wage is a bad idea or that they  continue to oppose the creation of a Scottish Living Wage Unit.  It is difficult to imagine that the first is a problem.  Surely if one doesn’t think that the Living Wage can be guaranteed through the Procurement Reform Bill, it would be a good idea to get together with Scottish local authorities to work out what can be done?  Even if I’m wrong on that, let it be said now, we will drop that request if it is causing an impediment to Scottish MSPs signing the pledge.

Which leaves us with fourth part of the pledge ‘the creation of a Scottish Living Wage Unit’.

A bit of background is necessary here.

The Living Wage in London is calculated by a specific unit, created by the Greater London Authority under Ken Livingstone in 2005.  The unit researches low pay issues and sets the London Living Wage annually.  It also promotes the Living Wage in London to employers.  The Living Wage for the rest of the UK is set by the Living Wage Foundation, an arm of Citizens UK.  The Scottish Living Wage Campaign has a representative on this body.  The Living Wage Foundation does excellent work, has some important business sponsors and can rely on the work of the Joseph Rowntree Foundation's work on the Minimum Income Standard.

The UK rate is set annually as the same figure across the UK.  At present its level is reasonably fairly applicable to Scotland given the general convergence of Scottish and UK employment and cost of living trends.

So what’s the problem with the current set-up?

I’d suggest that there are four reasons why the Scottish Government should want to create a Living Wage Unit here in Scotland.

1)    Annually, the Scottish Government sets its pay policy as part of the Scottish Budget process.  This includes the monies which must be set aside to meet the Government’s (welcome) commitment to paying the Living Wage and relates to employees of the Scottish Government, NDPBs and NHS Scotland.  It also impacts on local authority budgets given that all councils are now Living Wage employers.  It is not a satisfactory situation that the Cabinet Secretary of Finance sets his pay policy with no advanced knowledge of what the UK Living Wage will be and with no guarantee that Scottish data and political circumstances play a part in that calculation.

2)    The London Living Wage is different from the UK’s because of additional costs related to living in the capital.  Should the Scottish Government be content that there is no way in which it can take a similar view about whether costs might be different in Scotland or across Scotland?

3)    Because the Living Wage is voluntary it relies on promotion.  Companies are (preferably) persuaded by the positive case for the Living Wage, or else embarrassed into action by the positive actions of others.  The persuasive impact of a Scottish Living Wage Unit, backed by the Scottish Government would make a difference.

4)    The extent to which the Living Wage can be effectively promoted depends, to a degree, to the political discourse that surrounds it.  For example, a strong political view that ‘women’s’ work (such as in the care sector) is undervalued to the detriment of fairness and sustainable economic growth could have an impact.  Or a particular piece of research on, say, rural poverty in Scotland, might provide a particular focus for tackling low wages in the farming, food processing or hospitality sectors.  If it is accepted that the political discourse is different in Scotland, why not maximise its effect by creating a Living Wage Unit to reflect different priorities?

As a proportion of the overall monies spent by the Scottish Government on economic research and promoting income equality, the cost of the creation of a Scottish Living Wage Unit would be financially insignificant and would probably, to a very large extent, simply involve the refocusing of the activities of civil servants currently employed on related activities.  As a low cost means of income maximisation, it’s a no-brainer.

It is to be hoped that this isn’t a question of party politics.  The proposal for a Living Wage Unit was initially brought forward by the Scottish Living Wage Campaign but was introduced to Parliamentary discourse by then Labour MSP, John Park and now features in the Living Wage Bill which was picked up initially by Kezia Dugdale MSP and now Mary Fee MSP.

Having been pressed by various MSPs to support a Living Wage Unit, the Scottish Government is on record a number of times as not being persuaded on the case for a Living Wage Unit.  But I can’t track down any substantive reason given for why this is the case.  The latest question in Parliament was put down by Neil Bibby MSP to Cabinet Secretary for Finance John Swinney MSP, and he simply ignored that part of the question.

Neither the Scottish Living Wage Campaign, nor the STUC, nor the many other voluntary, equality and anti-poverty organisations which support a Living Wage Unit have the remotest interest in political point scoring over this issue. 

We just want a Living Wage in Scotland, for Scotland.

Dave Moxham
11th November 2013