Living Wage
The final item of business is a members' business debate on motion S3M-4063, in the name of Frank McAveety, on supporting the living wage for Scotland.
Motion debated,
That the Parliament welcomes the launch of the Scottish Living Wage Employer Awards being held in Dalmarnock; regrets the fact that there are around 700,000 workers in Scotland, the majority of them women, earning less than the Scottish living wage of £7.00 per hour; is aware that low pay can lock people into poverty and can be damaging for individuals, families, businesses, communities and the wider economy, and recognises the importance of encouraging employers in the public, private and voluntary sectors to ensure that all low-paid workers are paid no less than the Scottish living wage of £7.00 per hour.
I welcome all the members who have stayed behind this evening to hear my contribution and, perhaps, to make a contribution on the subject themselves. There is an emerging and continuing demand that we try to address the scourge of poverty, which not only reaches across Scotland and the United Kingdom, but exists on an international scale.
I want to record my appreciation of the work that Eddie Follan and the Poverty Alliance have done to encourage a debate on the living wage, and the role that the public sector trade unions, and Unison in particular, have played. I congratulate the Scottish Parliament's broadcasting unit on highlighting the debate as one that we should look out for this week, although that accolade was perhaps due to the importance of the subject matter rather than—I say with due modesty—my singular contribution.
The motion makes clear that far too many people in Scotland—women workers in particular—are paid well below £7 an hour, which is a reasonable estimate in present economic circumstances of what can be termed a living wage. I recognise that members from parties in all parts of the chamber have supported the motion, and I continue to encourage members from all parties—particularly the governing party—to support the motion in greater number.
We all know from our experiences in the constituencies that we represent throughout Scotland that there are pressures as a result of the economic recession, but we should recognise that this time of difficulty would be the wrong time to move away from any debate about trying to ensure that those who are on the very lowest economic rung are not disadvantaged by the recession.
I was delighted to be part of the launch of the living wage employer awards, which took place in the Dalmarnock area in the east end of Glasgow, not least because my city council got the recognition that I think it deserves for being one of the major employers in Scotland that is leading the way in encouraging a living wage for its employees.
The awards took place within 100 yards of where the major developments for the 2014 games, which are a shared commitment between Glasgow City Council and the Scottish Government, will begin. Major building work will be undertaken there, on the indoor arena and various other sports facilities. Major developments that involve public and social housing as well as commercial housing are taking place; and there is the opportunity for a substantial care home to be built. There are also wider links around the M74, as well as the gateway project.
It is right and proper that Glasgow City Council received recognition, because recognition shows that public agencies can take the lead, in partnership with the private sector, which will build much of that infrastructure, to try to ensure that those who work on those developments will genuinely see the benefits for themselves and their families. It is a welcome development and it will make a real difference.
I recognise that much of tonight's debate will follow the lines of the debate that took place all those years ago—it seems a long time—on the introduction of a national minimum wage, but the evidence that we have already uncovered indicates that when employers, both public and private, engage in the process, there is a willingness to recognise the benefits that a living wage can bring.
Much of the experience in the very heated economy of London, with all its pressures, has demonstrated that private companies have taken on board the commitment to the living wage because it benefits them by helping them to retain their workforce and increase productivity and efficiency.
On the ethical framework, a debate has emerged in the past 10 years in particular about what work is for, who benefits from it, and how companies can demonstrate their value to their own workforce. Good employers in the private sector and in the public sector can benefit from the debate about the introduction of a living wage.
With regard to the example we set, I refer to my earlier comments about the role of the 2014 Commonwealth games. It will be good for people in my area to see areas of derelict land being invested in and developed for the first time in living memory, but the real benefits will come only when people feel better, not just about themselves but about the opportunities that will arise. The benefit is about setting good new standards for the wider community that we all care about, so it strikes me that it is important to try to develop that.
The other important element of the living wage is simply that it represents a route out of poverty. There is no doubt that many of us were schooled in that debate in our younger days. I recognise that the minister who is to respond to the debate was schooled in the Ayrshire Labour movement; I know that he recognises that movement's values of ensuring that individuals are treated with dignity and respect.
We know that difficult times are ahead for us all. We will have more heated debates, on other occasions, about how we approach that, but the fundamental point is that we should ensure that folk are not left behind, particularly those on the lowest rung of our community. There is concern about the workplaces with the lowest wages, which are in the hotel and restaurant sector or the retail and wholesale sector. In an economic recession, those areas can be pressured. Almost three fifths of the workers in many of those areas are women. We must recognise the impact on them.
The living wage is supported not just by trade unions and community groups but by church organisations, which are important to the fabric of many of our communities. I remember being taught D H Lawrence's poem "Poverty" as a child. He wrote:
"The only people I ever heard talk about my Lady Poverty
were rich people, or people who imagined themselves rich…
When I look at this pine-tree near the sea…
I want to be like that, to have a natural abundance
and plume forth, and be splendid".
That might be slightly overheated, in the D H Lawrence tradition, but the image that he projected is that we can do better than we do at the moment. We have a responsibility to try to make things better.
Given that the Parliament's noble objective is to ensure that the people of Scotland have a better quality of life, I hope that not just the minister and members who are present but all of us support the agenda that proposes a living wage that makes a difference to ordinary people's lives the length and breadth of our country.
I congratulate Frank McAveety on securing this evening's members' business debate on supporting a living wage for Scotland.
I realise that the emphasis in this type of debate is usually on the consensual, but I am concerned about how £7 an hour became the Scottish living wage in the motion. Nevertheless, I welcome any debate in the chamber that focuses on low pay and poverty. It is shameful that the consequences of poverty, especially the complexities involving aspects of poverty, are still with us in our communities. The factors that drive poverty are more diverse but equally challenging. Progress on tackling poverty, particularly in the past 30 years, has relied on several devices. Governments have hoped that economic growth will trickle down to the poorest people in our communities or that the various welfare-to-work programmes will solve poverty without a change in the incomes of those who are in or out of employment.
The debate about the living wage moved forward in people's minds on 22 May when the mayor of London, Boris Johnson, announced that he was increasing the London living wage by 15p to £7.60 an hour. Since 2005, some 29 organisations across London, including Barclays Bank and the Greater London Assembly itself, have implemented the London living wage, but the Conservative mayor of London has no power to impose the proposed wage on employers or organisations.
The living wage clearly has an impact on the national minimum wage, which is set by the Low Pay Commission and whose current rate of £5.73 is due to rise to £5.80. The measure, which was introduced in 1999 by the United Kingdom Labour Government, deserves a lot of credit as an attempt to alleviate in-work poverty. How the introduction of a living wage would, for example, affect Unison's proposition that the full national minimum wage should apply to all workers aged 16 and over remains unanswered. As for the implementation of the living wage in London, a freedom of information request by the Green Party London Assembly member Darren Johnson showed that only four of the 32 London boroughs have incorporated a requirement to pay the wage into their procurement policies.
Some have argued—and considerable research has shown—that the proposal for a citizen's basic income should be explored more fully, as such a move would reduce the stigma associated with, for example, the take-up of benefits. In an influential article in the Financial Times of 21 April 2009 entitled "Surprising case for basic income", Samuel Brittan noted that support for the idea came from an unusual source—the United States policy analyst and libertarian Charles Murray—and I feel that it would make a vital contribution to achieving economic and social justice for those on low pay.
Given the diverse nature of poverty, the mix of policies to tackle the problem should be flexible but not confused. I have previously cited research on poverty in the chamber. According to Abigail McKnight in her essay "Employment: tackling poverty through ‘work for those who can'" in John Hills and Kitty Stewart's book "A more equal society?: New Labour, poverty, inequality and exclusion", single adults without children are not only the group in deepest poverty but the group with the greatest poverty gap. We as a society have to understand and tackle the problems of poverty, take every possible step and use all the Scottish Parliament's powers to eradicate this blight—and urge the UK Government to raise its game in dealing with some of the root causes.
I welcome the motion and reiterate the Scottish National Party's long-standing commitment to poverty proofing, which dates back to 2000. I look forward to other opportunities to raise people's aspirations and to ensure that they receive a wage that genuinely increases household incomes.
I also want to take this opportunity to thank a number of organisations—
You should be finishing now, Mr Wilson.
Finally, I thank a number of organisations that continue to champion this cause and make useful contributions to the debate. Although I have raised a number of questions in this speech, I hope that we can all unite in demanding an end to the scandal of in-work poverty and encouraging the Low Pay Commission and the UK Government to introduce a national minimum wage that will have a real impact on many people in low-paid employment.
I look forward to the rest of the debate.
I congratulate Frank McAveety on securing this important debate. Even more crucially, I congratulate the Scottish living wage campaign in general, and in particular Eddie Follan, who has been associated with leading it. Three or four weeks ago, I met him and other campaigners at a local meeting in my constituency and was certainly made aware of my constituents' widespread support for the campaign. I am pleased to give it my personal support.
Although, as we all recognise, the introduction of a national minimum wage was one of the great achievements of the Labour Government in its early years, and represented a big step forward, we have to look with concern at recent poverty figures and the number of working people who remain in poverty. The fact is that the living wage campaign is driven primarily by social justice and the need to tackle poverty.
I know that outside if not inside the chamber the principal objection to the proposal will probably be that we are coming out of a recession and the economy is still weak. However, if we look back, we can clearly see that this recession has not been driven by the wage costs of the low paid. In fact, excessively unequal income distribution has contributed to the current financial instability and greatly increased the danger of economic breakdown. Indeed, John Maynard Keynes favoured greater redistribution of income to increase what he called the propensity to consume. That has been part of the economic debate on the recession. Targeting wage or benefit increases at those who are the least well off is one of the main ways to stimulate the economy. I therefore argue that the campaign fits with the requirements in the general economic circumstances, rather than being contrary to them.
I referred to the minimum wage debates in the early years of the Labour Government, but I also remember the debates during the period of the previous Government, when the spectre was raised of greatly increased unemployment as a result of a national minimum wage. However, increased unemployment did not happen as a result of the national minimum wage. I do not believe that the policy that we are discussing would increase unemployment either.
Looking ahead, we should reflect on one of the other advantages of the proposals. This week, we have heard a lot from people of various political parties about moving from welfare into work. A living wage would make that a whole lot easier. I therefore hope that the proposals are attractive even to the Conservative party, given Iain Duncan Smith's comments this week
We should all acknowledge Glasgow City Council's achievement. It has been in the vanguard of the campaign and has shown how a living wage can be delivered, even in the current difficult economic circumstances. We should remind ourselves of Frank McAveety's point that more than three quarters of those in the public sector whose wages are below £7 an hour are women. The calls for a living wage are part of the general movement towards equal pay, to which I hope we are all committed.
After the budget statement this afternoon, we all know that the Government faces difficult financial choices. However, it can take action on this issue, and I suggest that it could start with the national health service. From experience, I know that, because of agenda for change, the pay of most health service workers is above the living wage. However, for a small number, it is below it. A relatively small sum of money in the health budget would be required to address the problem. I hope that the Government will show its good faith and good intent by taking early action on that.
I congratulate Frank McAveety on securing the debate and on making a strong and passionate case. I have an enormous amount of sympathy with his objectives. Any attempts to lift people in Scotland out of poverty are to be welcomed and should be examined in detail. However, serious questions must be asked about how practical the proposals are, particularly at present. Malcolm Chisholm alluded to what some of those questions might be. The debate does not take place in a vacuum. A mere two hours ago, we heard in the budget statement from the Cabinet Secretary for Finance and Sustainable Growth how much money will be available to Scotland next year if and when the budget is passed in February or March.
The first question that must be asked and examined in detail is what the cost implications would be for councils, the NHS and the wider public sector. The campaigners have referred to approximately 700,000 workers in Scotland whose pay, they believe, is less than the living wage. What percentage of those 700,000 people are in the public sector? Mr Chisholm said that there would not be a great cost to the NHS, but it is vital for us to know exactly how many people would be affected in the NHS, which seems to have a small increase in its budget. What would be the implications for councils, which we are told—although I have not seen specific figures—will take a big share of the pain from the budget cuts?
In response to a parliamentary question, Nicola Sturgeon helpfully outlined that perhaps 5,000 staff in the NHS are paid below the living wage and that a small sum of money is required—as little as £3 million per annum. I hope that the member agrees that that is affordable.
When the sums of money are small, the argument is definitely stronger and the case is easier to make. However, I am sure that Jackie Baillie accepts that, if a spending commitment of any size that any party wants to make is to happen, there will by definition have to be a cut elsewhere. If parties make sensible suggestions about where cuts might fall, proposals can and should be considered.
What are the cost implications, away from the public sector? What proportion of the 700,000 people are in the private sector, the voluntary sector or are working in commerce and business?
Mr Chisholm talked about how a living wage ties in with an economic strategy, but at the moment many businesses are truly struggling for survival: 31,000 people became unemployed in Scotland in the second quarter of the year, between April and June. The Joseph Rowntree Foundation has outlined sectors in which the times are particularly tough and in which people are underpaid and are earning below the living wage. In particular, the restaurant and hospitality sector is taking more than its fair share of the pain of the recession, and, while the global retail figures are slightly healthier than one might imagine, once we take away food, which has seen the biggest increase in volume, retail as a sector is taking its fair share of the pain as well.
My concern is that as those businesses try to recover, money that could have been put into trying to create employment and take people off benefits and back into work might be spent on current employees. There is a genuine debate to be had about what is a better use of public and company resources.
I congratulate Frank McAveety. There can be few more important debates. Is it not to our lasting shame that in a nation of such wealth there is such poverty? Make no mistake: the wealth exists. Professor Sikka of the University of Essex estimates that offshore tax havens cost the UK between £25 billion and £80 billion a year. End the tax evasion and we have the money to end poverty. We heard about £3 million for the NHS in Scotland. That would easily be covered by ending tax evasion.
In May, The Guardian reported that Britain today
"is a more unequal country than at any time since … the 1960s".
Since 2005, the incomes of the poor have fallen, while at the same time those of the rich have risen. According to the Department for Work and Pensions, deprivation and inequality in the UK rose for the third successive year in 2007-08. Also according to the DWP, after accounting for inflation, the poorest 10 per cent of households have seen weekly incomes fall by £9 a week to £147, while those in the richest 10 per cent of homes have enjoyed a £45-a-week increase to £1,033. Of course, some may argue that we do not need a living wage, a citizens income or any other means of wealth redistribution. Some may yet subscribe to the bizarre concept of the trickle-down effect—the idea that as long as the economy grows, somehow, even as the rich grow richer, miraculously, without any effort whatsoever, the poor will also grow richer. Were that true, we would have no poverty by now; it would have been wiped out by growth in national wealth. However, it is not true in the UK any more than it is true in any other part of the world.
Some may argue that income and wealth inequality do not matter. In case they are in any doubt, let us remind ourselves why they do matter, not only to the individual trapped in poverty but to society in general. Richard Wilkinson, a professor of social epidemiology, has collected a vast amount of evidence demonstrating the damage that inequality does. He has proven that however rich a country is, it will still be dysfunctional, violent, sick and sad if the gap between social classes and between the rich and the poor grows too wide. Poorer countries with fairer wealth distribution are healthier, happier and less violent than richer, more unequal nations.
A recent United Nations Children's Fund report found that children in the US and the UK do worse on a variety of indicators than do children in any of the other rich countries. It is no coincidence that the US and the UK also have more children in relative poverty. The crucial point, however, is that British and American children who are not—I emphasise not—poor also suffer compared with other countries. The problem is not limited merely to those who are living in poverty. An ethos that tolerates high inequality produces other evils, and even the relatively affluent cannot escape.
According to a review of a book by Professor Wilkinson,
"Greece, with half the GDP per head, has longer life expectancy than the US, the richest and most unequal country with the lowest life expectancy in the developed world. The people of Harlem live shorter lives than the people of Bangladesh. When you take out the violence and drugs, two-thirds of the reason is heart disease. Is that bad diet? No, says Wilkinson, it is mainly stress, the stress of living at the bottom of the pecking order, on the lowest rung, the stress of disrespect and lack of esteem."
A poor diet is less damaging than the depression caused by inequality.
There is an inescapable logic to a minimum wage and a living wage. There is an inescapable logic to a social security system that eradicates poverty. The inescapable logic is simple: we all benefit. Rich or poor, we all benefit. In unequal societies, even the rich suffer.
If such simple logic is not enough, consider the economic benefits. As Malcolm Chisholm said, the economic benefits of redistributing wealth and ensuring a fair wage will give this economy a shot in the arm. The poor spend more of their income than the rich. If we want to boost spending within our economy, we should boost the income of the poor.
Let us hear no claims that high taxes will discourage the wealthy from working. There is no evidence of that. Indeed, J K Galbraith long ago laid such claims to rest by observing that, even under the extremely high taxes levied by the USA during the post-war years, the wealthy did not cease to seek wealth.
I did not concentrate on the details of a living wage, because they will be discussed by many others. I preferred instead to explore why a fair and just society is vital to all our wellbeing. At the heart of a fair and just society is freedom from poverty and a determination to ensure a just division of wealth. How can that be achieved without a living wage?
I start by congratulating Frank McAveety on securing the debate and by thanking the Poverty Alliance for leading the campaign in Scotland. I can think of few things more important than ensuring that people have opportunities to work and that they are paid a living wage for that work.
Others have defined the living wage. I will not repeat that, but it is worth repeating the benefits of moving to a living wage. We know that it helps tackle low pay. It also has the potential to lift thousands of low-paid workers and their families out of poverty, and it recognises and values those who do essential jobs for us in the public and private sectors. In strict economic terms, it is the right thing to do, because it leads to increasing productivity and decreasing staff turnover. There are benefits to the employer, as well as the employee.
Although the focus of my speech will be the public sector, we have to remember that the living wage applies equally to the private sector, which I hope will accept the evidence that there are sound and robust economic reasons for paying its employees a living wage.
Does the member agree that, if we are demanding the living wage, the demand should be made to the Low Pay Commission and the UK Government to introduce that wage, instead of the paltry £5.80 that will be introduced for many workers in two weeks' time?
The members will recognise that the national minimum wage is of course a legal minimum, which has protected many people at the extremes of low pay. Many members will recall that £1 an hour was often quoted as a wage for some people who were working in security, for example. I have no doubt that more needs to be done, but I hope that the member will join me in encouraging the Scottish Government not to wait but to take action now.
I turn first to the Scottish Government. I asked a number of parliamentary questions to seek information on rates of pay for public sector employees in agencies and non-departmental public bodies that are covered by the Government's pay policy. I asked whether anyone was paid less than £7 an hour and what it would cost to ensure that the living wage was implemented. Despite the fact that the Government provides the funding for those bodies—after all, we are talking about the Government's agencies and NDPBs and the Government's pay policy—it could not, or perhaps would not, tell me the answers. I was told that the information was not collected centrally—that, of course, was the answer from John Swinney.
Nicola Sturgeon was much more helpful. From her answers to parliamentary questions, we now know that 5,000 staff in the NHS are on pay rates that are lower than £7 an hour. To be fair, they are not lower by much: the lowest hourly rate is £6.76. For a relatively small amount of money—£3 million, which is a tiny fraction of our substantial £30 billion budget—we could move to a living wage, which could also act as an economic stimulus.
I say to Gavin Brown that I understand that Mr Salmond has halved his personal advertising budget. Perhaps we could get the £3 million from there.
I sound a note of caution to Alex Neil, who I discovered for the first time is indeed fallible. He was asked how much it would cost to implement a living wage. In the true pantomime style that we so love, he threw up his hands in horror and said, "We can't possibly do this. It will cost at least £100 million a year." It is clear that he made that figure up.
We should not let the facts stand in the way of a good story, but I say to Alex Neil that this is a serious issue. It is a question of recognising and valuing workers in the NHS, and I am sure that he shares that objective. I would welcome a commitment from him today, on behalf of the Government, to identify all those staff covered by the public sector pay policy and even those directly employed in the Government who get less than £7 an hour and to act to change that.
I will finish by telling members a tale about West Dunbartonshire Council. Glasgow City Council is to be congratulated on what it is doing, and I would like the same to be done in West Dunbartonshire. Politics is about priorities, and let me tell members about a choice that West Dunbartonshire Council faces. Its most senior official wanted to walk away from the council with a package in excess of £300,000—I believe that the figure is understated. Contrast that with 300 workers in West Dunbartonshire who earn less than £7 an hour; the total cost of putting them on a living wage would be in the region of £300,000. The choice is therefore clear: £300,000 on one man to feather-bed his retirement 10 years early or on 300 of the council's lowest-paid workers to ensure that they receive a living wage. As the Americans would say, it is a no-brainer.
I am minded to accept a motion without notice to extend the debate by up to 30 minutes, although we will not need 30 minutes.
Motion moved,
That, under Rule 8.14.3, the debate be extended by up to 30 minutes.—[Mr Frank McAveety.]
Motion agreed to.
I thank Frank McAveety for using his members' business debate for this important issue. As other members have done, I pay tribute to the work of the Scottish living wage campaign and the Poverty Alliance.
The living wage is an idea whose time has come. It is notorious that, while in recent times the number of people in employment has been at record levels—before the current recession, I hasten to say—and average incomes and wealth have been growing, there has been a huge and growing gap between the top and the bottom. A huge number of people bump along the bottom and are more prone to periodic unemployment, are dependent on an ever more complex benefit system and are existing, however it is defined, in a state of poverty. I agree with John Wilson's comment that poverty is about more than the financial aspect but, my goodness, the financial aspect is important.
A report published yesterday, I think, identified that the victims of the current financial crisis and recession are not the high-fliers whose greed and bonus culture contributed so much to the bubble bursting but the people who work in construction, manufacturing or support services. Broadly speaking, the lower down the line they are, the more likely they are to be affected by the adverse fallout of the recession and the financial problems. If ever there was a demonstration that the wage costs of the low paid did not drive the recession, the financial crisis was it.
There has been an emphasis in the public debate on doing away with the bonus culture—there has not been too much progress, but there has been a lot of debate about it—and there ought to be an equal debate about the implications at the other end of the scale of the low-wage culture, which has existed for far too long in our society.
In this morning's debate on Diageo, one thread that united all the strands was that large global companies have, and ought to have, responsibilities that go beyond consideration of the bottom line. In fairness to the better companies, many good companies recognise that that is the case. The point was made previously that good employers develop good employment practices. That obviously lifts living standards for many and, as Jackie Baillie said, it increases their productivity and reduces staff turnover and absenteeism. In short, a happier workforce is likely to be better for everybody. It is against that background that the campaign for a living wage—currently of £7 an hour—has resonance.
It is important to distinguish the living wage from the minimum wage. As has been said, the minimum wage is a legal minimum. It has been moderately successful in that context, although there are issues about how far it can be taken without having adverse effects, and the debate about that continues. The living wage is, in a sense, a voluntary arrangement—"voluntary but with compulsion with drivers" is probably the right way to put it. It has implications in the public sector, and a number of members have spoken about how it might pan out in the health service, in local councils and so on.
The leading efforts made by London and Glasgow have been important, but Glasgow is dealing with a fairly small number of workers. The big gains are there to be got in the private sector, because leading firms that pay a living wage would act as market leaders and set a benchmark that others would be encouraged and compelled to follow. All being well, that would start a virtuous circle. We must look in some detail at where the living wage would impact, although we know that its impact would work through in the hotel and restaurant trade, the retail and wholesale sectors, the construction industry to some extent and a number of other sectors. If we can get the whole thing going in the right direction, it should become not a cost on business but something in which it is in business's interest to invest.
Malcolm Chisholm mentioned Keynes in reference to redistribution and the good uses to which money can be put. In that context, it is also worth while to mention William Beveridge—incidentally, both Keynes and Beveridge were good Liberals—and the founding of the welfare state. The need to tackle poverty was seen not only as an equality issue but as one of basic liberty. People who do not have an income to sustain themselves and their families do not have liberty: they do not have the opportunity to play their fullest part in the society in which they live.
I turn to the economy and the ways in which it works. What do people on £2 million or £3 million spend their money on? I think that no one in the chamber can quite put themselves in that category. I know for certain that the question is quite different for those on £15,000 or £20,000 a year, or below.
The debate is an important one. There is a lot of mileage in it and a direction of travel needs to be taken forward. Many issues for both the public and private sector are involved. Implementing the living wage could have a significant and radical effect on the balance in our society and the way in which we work, including on the economics of the country. Implementation would achieve all of that, in addition to the obvious effect on the standard of living of many people in our society who are left behind by current trends. I have great pleasure in supporting the motion in Frank McAveety's name.
I, too, congratulate Frank McAveety on securing the debate. I totally applaud the work that he and others are doing in trying to drive forward and improve the pay of low-paid workers. It is vital that we do that.
It is especially pleasing to speak as another woman in the debate. When I looked round the chamber this evening, my first thought was, "We must not let the men have it all their own way." For many years, women have been up there campaigning and fighting hard to get better pay for women. I say that having been a member of the GMB for 46 years. In fact, the origins of the GMB include the National Federation of Women Workers, the first trade union for women way back in the year 19 dot—I cannot remember the precise date. For that reason as well as many others, I am glad to be taking part in the debate.
I take slight issue with SNP members saying that implementing the living wage can be done only at national level. The Scottish Parliament has driven forward many areas of policy ahead of policy in other parts of the country. Free personal care for the elderly is one such example. Indeed, the present Scottish Government has done things differently from other parts of the UK. Clearly, the Scottish Government can do something about the living wage; it can support it. I, too, congratulate Glasgow City Council on what it has done. Its actions are eminently admirable and it deserves our plaudits.
When I was in local government, I sat on a variety of committees and, at one point, I was deputy leader of Fife Council. I remember looking with some surprise, dismay and bewilderment at the severance packages that were offered to chief officials—and not just chief executives but all the way down the management scale. In the main, it was male employees who enjoyed those good severance schemes, but some female employees did, too. Those severance packages amounted to five or 10 times the pay of local government manual workers at the time.
When Westminster passed the minimum wage, I recollect that not a single SNP MP was in the lobbies—I know that SNP members have heard that ad nauseam. The SNP could atone for that by ensuring that it brings forward a commitment on the living wage for all low-paid workers in Scotland.
I was a GMB trade union official for 12 years and I remember making use of schedule 11 to the Employment Protection Act 1975 and the fair wages resolution, which helped to drive up pay rates in the private sector. I remember going to arbitration with GMB members who worked for a private school and were earning pathetic wages. We won the case against the Queen's counsels based on what was being paid in local authorities. The private sector was forced to raise its wages to the wage level in the public sector. Doing something right in the public sector can be enormously helpful to those in the private sector. I have always been proud of that case. I do not know what happened to the fair wages resolution or to schedule 11 to the Employment Protection Act 1975—it is 20 years since I stopped being a union official, so perhaps others can enlighten me—but such matters need to be re-examined, because there were some good practices.
I have some concerns about the Scottish Government's bonfire of the quangos. Under the Public Services Reform (Scotland) Bill that is before the Parliament, the pensions of predominantly women workers will be shifted down a scale, as their civil service pensions will be changed to local government pensions. That is outrageous and will happen to about 800 employees of the Scottish Commission for the Regulation of Care when they become part of the new health care improvement Scotland. That is wrong. The minister should not allow it to happen, should take the proposal back to the Cabinet and should ensure that the pay and pensions of care commission workers are not adjusted in that way. We need only look at what is happening in the Crown Office, where people's terms and conditions are being cut back retrospectively. That is monstrous. I hope that the minister will take the points that I have made back to the Cabinet Secretary for Health and Wellbeing.
I suppose that it was a bit much to expect complete freedom from party-political point scoring even in a members' business debate. We should recognise Frank McAveety for bringing the debate to the chamber, the many organisations to which members have referred that have campaigned on the issue, and the track record of the UK Government in introducing the minimum wage in the first place. Regardless of who was there to vote for it, we can all now agree that it was an important, necessary step and that none of us would wish to go back to the levels of exploitation that existed before the measure was introduced.
However, the minimum wage is clearly not enough. We still have significant levels of low pay and poverty among working people, and we need to look at what we can do to reduce those. Members need take only the briefest of glances at the papers that have been circulated by the organisations that are campaigning on the issue. A two-child couple paid at the minimum wage would need to work 58 hours a week to lift them out of poverty. How much time would be left for the couple to spend with those two children? Twenty per cent of directly employed staff in the public sector earn less than the £7 an hour living wage. Although that is a lower proportion than in sectors such as retail and hospitality and catering, the gender gap—the difference between the proportion of men and women who earn less than the £7 an hour living wage—is starker in the public sector than anywhere else. We have a responsibility to take steps to address the issue, looking at its impact on women workers, young workers and casual workers, and to try to eradicate poverty among working people. I congratulate the living wage campaign on taking forward this progressive agenda and on its emphasis on public sector leadership.
The other side of the entirely non-party-political point that I was going to make is that, over the decades, we have seen inequality between rich and poor continue to increase, as Bill Wilson pointed out. Despite successfully pushing, as they rightly did, for the minimum wage, successive UK and Scottish Governments have simultaneously fêted the super-rich. Who can forget the words of Lord Mandelson, who described himself as intensely comfortable with the idea of people becoming very rich? I am not intensely comfortable with that idea, at a time when the evidence is overwhelming—it has never been stronger—that a more equal society is a healthier, a happier, a safer and even a more sustainable society.
Malcolm Chisholm rightly said that the levels of ordinary people's wages supposedly becoming too high is not part of what has led to the recession.
There is not only a moral responsibility in relation to high pay but a demand for political leadership for a more equal society. We need to consider both aspects—the low wages and the high wages—if we want that more equal society. We absolutely want public leadership on a living wage. That public leadership should say that we do not think that the situation is acceptable in the public sector, and we are going to advocate for progress in the private sector, too.
Let us all use the budget debates that have started as of this afternoon to press the Scottish Government to adopt that position, and not wait for the UK Government. Whether my good friends in the Labour Party would wish to admit it or not, the chances are that it will be a Tory UK Government in not a very long time, and such a Government will not take that step. We are therefore right to push the Scottish Government to act.
What comes after that? We must not rest on our laurels even after we have a living wage. There are ideas such as the one that John Wilson discussed, about the citizen's income, which would sweep away tax and benefits complexity, or that of a maximum wage ratio between what the highest and lowest-paid people in a single organisation may be paid. Pushing for ideas like that to be adopted would leave the next generation of Scots with a fundamentally equal society, and they would have cause to thank us for that.
I, too, congratulate Frank McAveety on securing this important debate. The debate has included some philosophical speeches, but some have been perhaps a bit more political or—dare I say it?—party political. I intend to follow Frank's example and to rise above party politics, as is our custom.
As minister, I pay tribute not just to the organisations that have worked on this campaign, but to those that have campaigned effectively against poverty down the years, including the Poverty Alliance, the Child Poverty Action Group and international organisations such as those that Frank McAveety mentioned that also campaign against poverty.
It is fair to say that philosophically—with the possible exception of Gavin Brown—members are fairly unanimous about the need to create a fairer society, to tackle the root causes of poverty and deprivation, and to use the tax system, employment law and other mechanisms to achieve a more equal society.
I just want to make it clear that philosophically I am absolutely with what Mr McAveety and others are trying to achieve. There are, however, disagreements about how best that should be achieved.
We thank Mr Brown for explaining that, and we welcome the new Tory party to the debate.
It might be useful if I give some figures to underline many of the points that members have made. In 2008, 454,000 people in Scotland were earning less than £7 an hour. Of them, 63 per cent were women. That underlines the point that Helen Eadie, in particular, made about the gender pay gap. We must press for change and improvement in that in everything we do, both at United Kingdom level and at Scotland level. It is unacceptable as it is that people are in low pay, and it is unacceptable that women are at such a disadvantage, not just in having a much higher share of low pay but in having a much lower share of high pay.
As has been mentioned, some sectors fare worse than others: for example, 70 per cent of people who work in the hotel and restaurant sector earn less than £7 an hour, and about three fifths of those, or 58 per cent, are women; 51 per cent of people who work in the retail and wholesale sector earn less than £7 an hour, and just over three fifths of them, or 62 per cent, are women; and 9 per cent of people who work in the public sector, compared with 29 per cent of people who work in the private sector, earn under £7 an hour.
As far as Scottish Government policy is concerned, I say unashamedly that we have spelled out—for example, in evidence that John Swinney gave to the Finance Committee a few months ago and in documents such as "Achieving our Potential: a Framework to tackle poverty and income inequality in Scotland"—that we are keen to try to increase general pay levels in Scotland and to ensure that people have a decent wage. Later this year we will publish an analysis of the impact that a living wage across the public sector would have on income inequality in Scotland, which will take into account the interaction with the tax and benefits system. When we publish that analysis, I hope that Jackie Baillie will find all the information that she seeks and that she will be satisfied that we have nothing to hide.
I thank the minister for that information and I look forward to receiving the analysis. In that spirit, may I encourage him to announce that the Scottish Government will back the campaign for a living wage for all its employees?
I will make two points. First, a three-year pay deal, which runs from 1 April 2008 to 31 March 2011, is in place in the NHS, which Malcolm Chisholm mentioned. Under the terms of the deal, the lowest-paid workers will receive £6.98 per hour from 1 April 2010. The general pay increase from 1 April 2010 will be 2.25 per cent, but the lowest-paid workers will receive a higher increase, which equates to 3.17 per cent. The larger increase demonstrates our commitment to increasing salary levels for the lowest-paid workers in the NHS. The material impact of the approach is that it is unlikely that from 1 April 2011 any pay point in the NHS in Scotland will be below £7 per hour. I am sure that members of all parties will welcome that development.
Secondly, in the Scottish Government's document, "Public Sector Pay Policy for Staff Pay Remits 2009-10", we set out our four key pay policy priorities, one of which is "addressing low pay". We are encouraging public bodies specifically to consider their lowest-paid staff groups, and we have made it clear that policies should take into account delivery of the solidarity target. The Scottish Government's recent pay award makes an important contribution to tackling low pay, particularly in the NHS. I therefore accept the challenge from Patrick Harvie and others that we should take the lead in this important area—as we are doing, by implementing our policies.
I welcome the minister's words, and we all look forward to the action. Will he accept a further challenge? Will he consider the power of public procurement as a means of putting pressure on the private sector? Improvements in the public sector alone are wonderful, but it would be fantastic if we could use our leadership and leverage to ensure that we achieve the same improvements in the private sector. Will he take up that cause with the Cabinet Secretary for Finance and Sustainable Growth, when the cabinet secretary considers the new procurement guidance?
Minister, you must keep your eye on the time.
I will, indeed. First, I thank Patrick Harvie for describing the Scottish Government as "wonderful" in this policy area. I will pass on his suggestion to Mr Swinney, who is the cabinet secretary who has responsibility for public procurement.
The debate is part of a wider debate about poverty in society. The Scottish Government remains committed to using much of the social wage, as well as the incomes for which we are responsible, in trying to do everything we can to create not only a stronger, safer and wealthier Scotland, but a fairer Scotland.
Meeting closed at 17:59.