Progressive Workplace Policies

– in the Scottish Parliament at on 13 August 2014.

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Photo of John Scott John Scott Conservative

The next item of business is a statement by Angela Constance on working together: progressive workplace policies in Scotland. The cabinet secretary will take questions at the end of her statement; there should therefore be no interventions or interruptions.

Photo of Angela Constance Angela Constance Scottish National Party

Over the course of the past two years there has been clear and sustained strengthening in the Scottish economy. In the first quarter of this year the economy moved back to above pre-recession levels, and today’s labour market statistics show that our recovery is continuing to gain momentum. Unemployment is down and employment is at its highest level ever. Female employment continues to increase and is at its highest level since records began, and the female unemployment rate is at its lowest since May to July 2009.

Youth employment has increased and fewer young people are unemployed in Scotland than was the case a year ago. I welcome the drop in youth unemployment that today’s figures show. It is important that all our young people have the chance to get a foothold in the labour market, and we want the unemployment figure to continue to decrease.

The Scottish Government’s aim is to do better than simply return to pre-recession levels of economic performance. Even in the supposed good times before the recession, Scotland’s youth unemployment rate was 13.2 per cent and the United Kingdom’s rate was 14.3 per cent, whereas there were rates of just 5.9 per cent in the Netherlands, 7.4 per cent in Norway and 7.5 per cent in Denmark. We can and must do better.

It will take time, but building a labour market and economy that are resilient, adaptable and responsive to change will be key to ensuring that Scotland’s businesses compete internationally, delivering long-term prosperity and high-quality jobs. We need to ensure that we support the type of growth that reduces inequalities and helps everyone—not just the people who are closest to the labour market—to realise their potential. We need growth that reduces disparities between different parts of Scotland. We need growth that is sustainable and resilient and that focuses on maximising returns from work.

Through existing devolved powers, the Scottish Government has taken forward a range of ambitious initiatives, including opportunities for all, investment in childcare, sustained investment in and reform of education, record numbers of modern apprenticeships, and programmes such as community jobs Scotland and the youth employment Scotland fund, to meet the challenges that we face.

Of course, we will do more. For example, by implementing the recommendations of the commission for developing Scotland’s young workforce we will deliver world-class vocational education and training, to support sustainable employment and boost productivity. I announced £4.5 million of funding in an early response to the recommendations. We share the commission’s aspiration to reduce youth unemployment by 40 per cent by 2020.

Scotland’s economy will achieve its full potential only when we maximise the quality as well as the quantity of work, offering equality of opportunity to grow and apply skills and boost business productivity. We need to embed progressive workplace policies.

I therefore welcome the publication of the report, “Working Together Review: Progressive Workplace Policies in Scotland”. I am grateful to all the members of the review group: Chris Parr, Mary Grant, Sue Bruce, Mary Alexander, Lilian Macer, Grahame Smith and Professor Patricia Findlay. I am particularly grateful to the review group’s chair, Jim Mather.

The review group was asked to review progressive workplace policies in the public and private sectors, to identify opportunities for innovation that would enhance productivity, and to highlight good practice and recommend how we build on it to optimise the relationships that link trade unions, employers and Government.

As expected, the report is substantive.

The recommendation section says:

“Our report provides a great deal of evidence which confirms that many unions, employees and employers are already reaping the benefits of working together to construct their own business or sector specific approaches to modern, co-operative industrial relations. We welcome that evidence and recognise that it is one of Scotland’s existing economic strengths. We are ambitious to build on that success.”

I fully endorse that statement.

The Scottish Government regards trade unions as key social partners that play an important role in sustaining effective democracy in society, particularly in the workplace, and sees the existence of good employment practices as a key contributor to economic competitiveness and social justice. Although some may not share that view, engaging and empowering employees is widely recognised as a key success factor.

The report challenges businesses and employers, trade unions members and officials and Government to learn, adapt and evolve. It identifies four action priorities: building capacity; on-going dialogue; real partnership opportunities; and a willingness to learn from what works.

The Scottish Government will fully consider the report and the recommendations, engaging business and trade unions directly, and will prepare a formal response.

I will highlight elements of the report that resonate with “Scotland’s Future: Your Guide to an Independent Scotland” and “A Jobs Plan for an Independent Scotland”, which was published yesterday.

We want Scotland to be an innovative, high-wage and high-productivity economy that competes in international markets and focuses on high-value goods and services. Independence will provide greater opportunities to build a new economic framework that better utilises our unique strengths and delivers a more outward-focused and resilient economy. Under independence, the Scottish Government would have greater access to levers to support the labour market.

I am pleased that the working together review, while adopting a neutral position on the referendum—and rightly so—has, at recommendation 11, endorsed a fair employment framework. I welcome the proposed focus on supporting and encouraging diversity in all its forms in the workplace, particularly for women and young people. I endorse the importance of capturing and applying evidence of what works, and of promoting on-going dialogue at workplace, sectoral and national levels, as detailed in recommendations 19 and 20.

The independent body proposed by the review to lead joint work by unions, employers and Government that boosts productivity and sustainable economic growth adds weight to our plans for a fair work commission and a linked national convention on employment and labour relations. Adopting an inclusive, innovative and holistic approach will promote change for the better—and stronger social partnerships will drive that forward.

Progressive workplace policies can help to improve firms’ productivity and innovation and aid sustainable growth. Well-rewarded and sustained employment is the best route out of poverty and the best way to tackle inequality. That is what I want for Scotland’s future.

I conclude by reiterating that the Scottish Government is most certainly for trade unions, because of all that they contribute to workplaces, to communities across Scotland, to wider civic society and to innovation, productivity and economic growth. It is most certainly for business, because business delivers jobs and the economic growth that underpins opportunities for all. It is most certainly for fair work and good employment practices. Finally, it is most certainly for independence.

Photo of Jenny Marra Jenny Marra Labour

I thank the cabinet secretary for advance sight of her statement. I also thank our colleagues in the trade unions and in industry for their work on the report.

Today’s employment figures are to be welcomed. They show that economic growth in the country is steady as part of the United Kingdom, but all of us in the chamber want the country to do better. I commend the cabinet secretary’s ambition to deliver world-class vocational education, and I reiterate my welcome for the £4.5 million of funding. However, I wonder when the detail on how that money will be spent will be made available for us to scrutinise.

As Labour said in response to the publication of the Wood commission’s report, it is difficult for us to square the Government’s laudable words on vocational education with its funding priorities to date. Colleges have had a raw deal from the Scottish Government. There are 140,000 fewer students at college than there were in 2007, including 80,000 fewer women.

I repeat to the cabinet secretary that a target of reducing youth unemployment by 40 per cent by 2020 is far too modest. Our Government should have a much higher target for tackling the scourge of youth unemployment. How does the 40 per cent target square with the announcement that John Swinney made at the weekend that there would be full employment in an independent Scotland? I am confused about why she is announcing a target of reducing youth unemployment by 40 per cent when John Swinney would find jobs for 100 per cent of our young people in an independent Scotland.

The Deputy Presiding Officer:

And your question is?

Photo of Jenny Marra Jenny Marra Labour

What is the Government’s real target on the vital issue of jobs for our young people?

Photo of Angela Constance Angela Constance Scottish National Party

I was half expecting a question from Ms Marra on the Government’s response to the working together review. I appreciate that the Government has had the report of the review for only a few days, but it is a highly significant report that is the result of six months’ work. It is a 70-page document in which 30 far-reaching recommendations are made.

In relation to the £4.5 million that I announced to make early progress on the work of the commission for developing Scotland’s young workforce, details of that were made available some time ago. Much of that money is to go on things such as foundation apprenticeships, tackling occupational segregation and supporting Education Scotland in its new roles. If Ms Marra would like further detail or has detailed questions on that, we can supply that information to her.

As regards Ms Marra’s swipe at the college system in Scotland, I remind her—before I answer the substantive question about full employment—that we are investing more in further education than any previous Administration, and we now have a funding floor. It is also worth remembering that women are not underrepresented in further education and that the additional funding of £6 million that we supplied for additional part-time places was focused on women returners to the labour market.

For the record, I make it clear that I have campaigned for and believed in full employment all my life, and that I want this Parliament to have job-creating powers that will bring about that full employment.

As far as the recommendation about reducing youth unemployment by 40 per cent by 2020 is concerned, I thought that the Labour Party had been calling for targets for the past two years. I remind Ms Marra that that target came from the commission for developing Scotland’s young workforce. The intention was to move us from being in the top 10 economies when it comes to young people to being in the top five. I hope that there is unanimity in the chamber in supporting full employment. I contend that we would have far greater prospects of achieving full employment in this country if we had a Parliament with full job-creating powers.

Photo of Murdo Fraser Murdo Fraser Conservative

I thank the cabinet secretary for advance sight of her statement, and I commend the members of the review group for their work.

All of us support the aim of improving industrial relations, although it is fair to say that, with a few high-profile exceptions, we in Scotland generally have a good record in that area in recent years. It is disappointing that the cabinet secretary chose to use her announcement to seek to further the case for independence—that is perhaps not surprising, at this point—but it would have been better if she had just tried to build some consensus.

I have three brief questions. First, the review proposes the establishment of a new independent body to lead joint work by unions, employers and Government. Although that idea may have some merit, do we really need another quango to progress that work?

Secondly, recommendation 21 of the review group asks the Scottish Government to use procurement rules to promote a living wage. I thought that we had had that debate during consideration of the Procurement Reform (Scotland) Bill, and I thought that the Government had told us that it would not be legal to do that. I wonder why no one seems to have told the review group.

Thirdly, recommendation 24 asks the Scottish Government to legislate to ensure that there is worker representation on the boards of all public sector bodies. If the Government is to consider that, I suggest that it should also consider the issue of representation on such boards of consumers or service users.

Photo of Angela Constance Angela Constance Scottish National Party

It will of course come as no surprise to Mr Fraser that I and this Government are proponents of independence, but what I find very interesting is his articulation of the need to seek consensus. We in this Government very much believe in social partnership and in paying tribute and credit to the trade union movement, which has made a massive contribution to this country’s economy as well as wider civic gains.

Our approach to social partnership and industrial relations can be contrasted very positively with the approach of the UK Government. The Carr review seems to have stumbled and failed, and it is interesting to note that, because of what has been called the very febrile atmosphere in the run-up to the UK general election, it will now produce a much briefer report that will make no recommendations.

Despite the fact that we have all been engaged in the most historic campaign leading up to the vote on 18 September, this Government and this country have still been able to support a body of work that is all about finding consensus and a way forward and about building a real, lasting and meaningful social partnership that must involve not only trade unions but employers. We can stand proudly by our record.

I am very sympathetic to the creation of a stakeholder body. I see it not as another quango but as an essential forum for creating a win-win situation for employers and workers the length and breadth of the country. Anyone who believes in social justice and sustainable economic growth must see social partnership and an on-going dialogue and working together between bodies as part of such a vision.

With regard to procurement and recommendation 21, I am sure that Mr Fraser is aware that we are consulting on statutory guidance that will be issued as a result of the Procurement Reform (Scotland) Act 2014. That part of the legislation is indeed welcome and will allow us to consider as part of the procurement process wider workforce issues such as people’s terms and conditions and their pay. That will be very important for the standards of living of people who are struggling with the rising costs of living, and it will also benefit our economy and business.

My final point is that, on my travels as part of this and my previous portfolio, I have met many progressive employers. Indeed, most employers recognise the importance of progressive workplace policies to the success of their businesses.

The Deputy Presiding Officer:

As many members wish to ask questions this afternoon, succinct questions and answers will be welcome.

Photo of Annabelle Ewing Annabelle Ewing Scottish National Party

The cabinet secretary will be aware that in the wake of the banking crash Westminster froze the minimum wage, which forced some of Scotland’s hardest pressed families to bear the burden of Westminster’s economic mismanagement. Is she able to confirm that any future independent Scottish Government of which she is a part will ensure that the minimum wage always keeps pace with inflation?

Photo of Angela Constance Angela Constance Scottish National Party

Yes. Ensuring that the minimum wage is uprated by the retail prices index and keeps pace with the cost of living would be a key priority and indeed a key plank of the work that would be taken forward by a fair work commission.

It is worth noting that, come October, 150,000 people in Scotland will be on the living wage, 100,000 of whom are women. If the minimum wage had kept pace with the cost of living, those 100,000 women would be nearly £700 better off. I see fair pay as a mark of a civic society and something on which we could build and make a lot of progress.

Photo of Iain Gray Iain Gray Labour

In her statement, the cabinet secretary said:

“Scotland’s economy will achieve its full potential only when we maximise the quality as well as the quantity of work”.

I can only agree with those fine words. However, Murdo Fraser is right: we could have taken a real step in that direction by guaranteeing, not guiding, the introduction of the living wage and banning zero-hours contracts for all workers on publicly funded contracts. Why on earth would the cabinet secretary and her colleagues not work together with us and the trade unions to make that happen?

Photo of Angela Constance Angela Constance Scottish National Party

It is unfortunate that Mr Gray seems to have a short memory. My recollection is that he and trade union colleagues of all of us worked very closely with the Government. Although there was a disagreement about what was and was not possible under European Union legislation, considerable progress was made under the procurement legislation and in the fact that the Deputy First Minister’s proposed amendments included the living wage.

Of course we all live with the difficulty that we have a national minimum wage that is enforceable in law that is much lower than the living wage, which is not enforceable in law.

Photo of Jenny Marra Jenny Marra Labour

The SNP did not vote for the minimum wage when Labour made it law.

Photo of Angela Constance Angela Constance Scottish National Party

There was very clear guidance on that from Commissioner Barnier.

It is a shame that we cannot recognise where progress has been made. Procurement must be used as a power of good and to improve the working conditions for people throughout this country.

The debate has moved forward. We will always look to see what more we can do, and the consultation on the statutory guidance is very important.

Photo of Christina McKelvie Christina McKelvie Scottish National Party

The report by the Jimmy Reid Foundation entitled “Working Together: A vision for industrial democracy in a Common Weal economy” tells us:

“The country with the strongest worker participation rate according to the”

EU participation index

“is Denmark ... The high levels of worker-participation in Denmark can be attributed to three factors: the strength of trade-union rights and collective bargaining agreements, the co-operation committees of employers and employees and worker participation on management boards.”

Can the cabinet secretary reassure me and the workers of an independent Scotland that that commonweal approach, along with the measures that are outlined in today’s report, will be looked at very closely as a possible model for the highest standards of employee-employer relations?

Photo of Angela Constance Angela Constance Scottish National Party

In the interests of the Presiding Officer’s patience and of brevity, I simply concur with the tone and tenor of Ms McKelvie’s question. When people get a chance to the read the report in-depth, they will see for themselves the evidence—not just international evidence, but evidence from across Scotland—that speaks of the strength of things such as collective bargaining and partnership working.

Photo of Drew Smith Drew Smith Labour

As a former board member of Scottish union learning, I am particularly interested in and thankful for the review group’s recommendations on workplace learning. Union learning is a great example of how trade unions add value to work in Scotland.

Industrial relations require two to tango, of course, and there are good and less interested employers in Scotland. Why does the cabinet secretary believe that business in Scotland will be more likely to support workplace learning after independence? If that is not automatic, what specific steps would she intend to take to encourage engagement from business to meet its skills obligations?

Photo of Angela Constance Angela Constance Scottish National Party

Mr Smith is right to say that there is nothing inevitable about the relationships and the conduct between people and interested parties, but it is important to recognise the considerable achievements of not only the trade union movement but employers throughout Scotland. I firmly believe from consulting a whole host of stakeholders that there is a real appetite in Scotland for a social partnership framework and taking things forward.

I am very pleased that Drew Smith has shown an interest in Scottish union learning, for which I have a particular portfolio responsibility. Scottish union learning has certainly thrived under the Government, and we remain very committed to it.

Photo of Willie Coffey Willie Coffey Scottish National Party

In an independent Scotland, will the Scottish Government give a commitment to end current UK employment practices that see people—in particular, young people—being exploited through low wages and poor conditions of service?

Photo of Angela Constance Angela Constance Scottish National Party

I very much regret that employment law remains reserved to the UK. I know that Willie Coffey has written to me about the experiences of one of his young constituents, whose experience was very similar to that of a young constituent of mine. Both were subjected to exploitative practices and extremely poor pay.

Although employment law is currently not devolved to this Parliament, I have taken action with Skills Development Scotland to ensure that young people can access better employment advice. I pay tribute to the youth committee of the Scottish Trades Union Congress and all the work that it has done in that regard.

Fair work for all, irrespective of age, will be a key plank of the work that a fair work commission takes forward.

Photo of Jim Hume Jim Hume Liberal Democrat

Recommendation 24 of the report is to keep in mind in particular

“the need to increase the number of women on the Boards of public sector bodies.”

I whole-heartedly agree with that, of course. Given that recommendation, can the cabinet secretary explain why the nominations to the Scottish Government’s fiscal commission did not support the policy that women should make up 40 per cent of the membership of public boards?

Photo of Angela Constance Angela Constance Scottish National Party

This Government is certainly leading by example, and has 40 per cent female representation in the Cabinet. It would be fair to say that the Cabinet is Scotland’s company board. I am glad to see that the UK Government has followed where we have led and has increased the number of women at very senior level in the UK Government.

I must apologise because I did not answer part of Murdo Fraser’s question in relation to recommendation 24, but I will sweep that up now in my reply to Jim Hume. Recommendation 24 states:

The Scottish Government should legislate to ensure that there is effective worker representation (from representative trade unions) on the board of every public sector body”.

We will certainly take a close look at that recommendation. We will take it seriously and investigate it because it chimes very clearly with our aspirations and plans to increase representation of women on boards in Scotland. We have laid out our intentions, and our ability and desire to legislate, should we be required to do so.

Photo of Christian Allard Christian Allard Scottish National Party

The UK Government’s austerity policies and welfare cuts are hitting women hardest. Does the cabinet secretary agree that Scotland would see clear economic benefits from increasing participation by women in the workplace, and from reducing the gender pay gap that exists in some professions?

Photo of Angela Constance Angela Constance Scottish National Party

The Joseph Rowntree Foundation and the “Working Together Review” report have made a very salient point about inequality. When we debate inequality, we often talk about it in terms of welfare reform, cuts or tax policies—rightly so—but we must not forget to say that well rewarded, high-quality work is actually the best route out of poverty.

Photo of Kenneth Macintosh Kenneth Macintosh Labour

I thank the cabinet secretary for her statement and for the direction of travel that she has indicated in terms of progressive and sustainable employment. The concept of decent work is one that we can unite around, although I observe that it stands in contrast to the Government support that is given to union-avoiding and tax-avoiding companies such as Amazon. Will the minister introduce progressive policies that are supported by Labour, such as wage ratios and minimising the salary differentials between the highest and the lowest paid people?

Photo of Angela Constance Angela Constance Scottish National Party

I will look at the detail of any recommendations that Ken Macintosh wishes to forward to me. On a note of consensus, perhaps I will unite with Mr Macintosh and say that I agree that everybody should pay their tax and that sometimes tax enforcement is as much an issue as disagreements about tax policy.

Photo of Maureen Watt Maureen Watt Scottish National Party

Public sector workers have been under sustained attack from Westminster Governments over recent years, whether on their pay or their pensions. I think that that can be halted only by independence. However, does the cabinet secretary agree that by putting public employee representatives on all public sector boards we could give workers a real voice, and give the public improved services?

Photo of Angela Constance Angela Constance Scottish National Party

One of the gains of devolution and, indeed, of the trade union movement in this country is the fact that we have a no compulsory redundancies policy in the public sector. To directly answer Maureen Watt’s question, employee representation at director level and non-executive level in national health service boards has proved to be very successful, not just in terms of there being a more collegiate workforce, but in managing change and communicating with the workforce. I believe that it has also delivered benefits to patients.

Photo of Patrick Harvie Patrick Harvie Green

I thank the minister for her statement, which acknowledged the importance of sustaining democracy in the workplace, as does recommendation 17 in the report, which seeks to give the proposed new body a role in increasing democracy in the workplace. Is it a policy objective of the Scottish Government to increase workplace democracy? If so, how will that be integrated into the range of business support services and grant schemes, such as regional selective assistance, given the notorious track record of a company like Amazon, for example?

Photo of Angela Constance Angela Constance Scottish National Party

We have a policy position of supporting workplace democracy and participation. As a Government we have, of course, to reply to the detail of the extensive report. I add that recommendation 17 is very much linked to recommendation 10, in relation to how we get the infrastructure for social partnership.

I leave Patrick Harvie with a quotation, from page 11 of the report, that I believe is hugely significant. It states:

“A number of recent initiatives undertaken by the Scottish Government and others suggest that there is a growing appreciation that what happens in the workplace is as important, in its influence on economic activity, performance, growth, and inequality, as macro-economic factors”

It adds that that gives us

“greater scope for intervention in workplace practice” that will make a difference to working lives.

Photo of Elaine Smith Elaine Smith Labour

That concludes the statement on “Working Together Review: Progressive Workplace Policies in Scotland”.