Living Wage (Public Sector Procurement)

– in the Scottish Parliament at on 19 June 2013.

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Photo of Anne McTaggart Anne McTaggart Labour

5. To ask the Scottish Government whether the proposed procurement reform bill will seek to ensure that public sector contracts should be awarded only to companies that pay the living wage. (S4O-02266)

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

The European Commission has confirmed that any requirement on contractors, as part of a procurement process or public contract, to pay their employees a living wage that is set higher than the United Kingdom’s national minimum wage, is unlikely to be compatible with European Union law.

The consultation on the procurement reform bill sought stakeholders’ views on the impact and implications of promoting payment of the living wage through procurement activity. We are analysing those responses, along with other evidence, to develop our position on the issue in the light of our strong support for the principle of the living wage. Obviously, it is important to stress that it will not be possible to pursue in the bill any measures that would contravene our obligations under European law.

Photo of Anne McTaggart Anne McTaggart Labour

As the cabinet secretary has explained, the forthcoming procurement reform bill provides an opportunity to amend the Public Contracts (Scotland) Regulations 2012 to enable local authorities to promote payment of the living wage among organisations that are in receipt of public funding through local authority internal procurement processes. Can the cabinet secretary confirm that she has considered that proposal and that she will seek to include such an amendment within the delayed procurement reform bill?

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

As I said in my original answer, obviously the procurement reform bill must be compliant with our obligations under European law on this and any other issue. The European Commission has given its views on what it considers to be the applicability under European law of a requirement on contractors to pay the living wage, which I set out in my original answer.

That said, the Government is strongly supportive of the principle of the living wage—in fact, we have led by example in paying our employees the living wage—so we are keen to explore all opportunities to promote that further, and encourage other public authorities to do likewise. We are considering all options at the moment.

The public procurement reform bill will be introduced to Parliament soon after the summer recess.