Our vision for Scotland is based on an idea that is embedded in our values and written in our history as a party and a trade union movement, that is, that Scotland succeeds when working people succeed.
For too many people, the link between the prosperity of Scotland and the prosperity of their family has been broken. Families across Scotland naturally look to their Government for answers rather than more excuses. Labour’s values and vision are about an economy that works for all, a politics in which everyone’s voice is heard and a society that is based on common good.
After eight years of inaction, Scotland needs a Government that is focused on the challenges of the future, such as renewal of the link between economic growth and living standards, and new thinking to build a broad-based productivity economy rather than remain a low-productivity economy. Scotland needs a plan to tackle structural challenges in the economy, not an economic strategy that is bereft of targets.
The solution will require new thinking and big reforms to how we use Government. It does not necessarily require big spending, but it does require boldness and big thinking from the current Government.
It is incumbent on Governments of all colours across developed economies to maximise the benefits of globalisation and technological change. That challenge will require renewed focus from the Scottish Government if it is successfully to be navigated. Failure to rise to the challenge will result in rising inequality, increasing reliance on low-skill work and a lack of economic growth, which no member of this Parliament wants to see.
Rising inequality is nothing new; the challenge for the Parliament is how we work together to tackle it. I would rather look ahead than look back, as the member seems to want to do.
The London School of Economics and Political Science growth commission found that
“An economy that grows at 2 per cent per annum in real terms”— in line with the average growth rate before the financial crisis—
“doubles its material living standards every 35 years.”
However, it is regrettable that the principle that everyone will gain from economic growth is no longer people’s experience in Scotland. As the Resolution Foundation has argued,
“Growth makes rising living standards possible—but it doesn’t guarantee it.”
Indeed, in recent years the link between rising gross domestic product and rising living standards has been broken, with the proceeds of economic growth simply not being passed on in increased earnings for the average worker. Businesses grow, but people get left behind.
The record of the Scottish Government is not good in that regard. Here are the facts: real wages have continued to stagnate throughout this session of Parliament; too many families still work too many hours, with too little to show for it; and the employment rate in Scotland remains 0.9 per cent below the pre-recession level, although the rate across the United Kingdom has rebounded.
Is the member aware that the most recent labour market statistics show that, compared with the UK as a whole, Scotland has a higher employment rate, a lower economic inactivity rate, higher female employment and higher youth employment? Are those not benchmarks that the member welcomes, in that they show steady progress in the Scottish economy?
The minister failed to answer the question that I put to her. I share with her that unemployment in Scotland today, at 5.9 per cent, is higher than the UK average, which is 5.5 per cent. The difference might seem small in percentage terms, but it represents thousands of people.
The proportion of people in poverty who work has risen considerably under the Scottish National Party. More than half of working-age adults in poverty are in working households. In Scotland today, the real-terms drop in income has been accompanied by structural shifts in the labour market that have increased people’s insecurity. The number of workers who earn less than the living wage and who are on zero-hours contracts has increased; the number of those who work part time, because they cannot get the full-time hours that they need, has increased; and the number of those who are in self-employment and temporary employment has increased since 2011.
The SNP Government recognises the problem of inequality, which I absolutely welcome, but it is that recognition that makes its response so inadequate. Earlier this year, the Scottish Government published an analysis of inequality in our country. Here is the stark reality of what it told us. The wealthiest 10 per cent of households own 44 per cent of the wealth. The wealthiest 2 per cent of households alone own 17 per cent of all personal wealth. In contrast, the least wealthy half of households in Scotland own a mere 9 per cent of total wealth.
In that context, I am genuinely confused as to why the SNP blocks opportunities for progress such as extending the living wage through public procurement. A Government that continues to fail to build an economy for all or dedicate its full resources to tackling inequalities should step aside for one that will work every day to secure the jobs of the future for all Scots. We need action, not the trickle-down approach to which the SNP Government—a Government that is committed to cutting tax on corporations and air travel for the few—repeatedly returns.
The pressure that families across our nation face goes beyond those statistics. Even when people work full time, it is harder than it should be to get ahead. That is not just a hangover from the financial crisis. Scotland’s economy will not fulfil its potential until we change course on the stagnation of working people’s jobs and incomes. We must measure our success by something more than our GDP or a Government press release on jobs figures. We must measure whether we are creating meaningful work that gives a sense of purpose, pays a wage and provides a family with security. When working families do not have money to spend, it is harder for our economy to grow, which is why a winner-takes-all system means that our economy cannot truly succeed. That is the central challenge of our times. Every policy that the Government pursues should be aimed at answering that challenge.
We believe that we should work towards jobs for all that are secured in the industries of the future. Building the jobs of the future requires world-class training today. Just as the internet opened the door to new areas of economic activity, new technology will transform how we work in the future. We would welcome a renewed focus from the Scottish Government on connectivity and building a digital economy. In particular, the rapidly growing sharing economy offers a new dynamism that we should ensure serves to empower individuals.
I know that, in that spirit of sharing, those on the Government benches will welcome the appointment of Joseph Stiglitz as an economic adviser to the Labour Party. Members will be familiar with the professor’s conclusion that equal access to education is a solution to tackle inequality. Our economy needs every one of our people to be successful, so this Scottish Government should follow Stiglitz’s advice, as the next Labour Government will.
Education is the single most important investment that we can make in our future. It is our young people, and the schools, colleges and universities that educate them, who will shape the Scottish economy well into the 21st century. How well we do today in ending the attainment gap will set the conditions for working people in the future. I hope that we can unite on that across the chamber.
We have seen huge cuts to colleges, which have cut off the chance at learning that so many need and deprived our employers of the skilled workforce of the future. There are 140,000 fewer students, 93,000 of whom would have been women.
In school, the least deprived pupils are twice as likely to gain one or more highers than their most deprived peers. We need to invest in the classroom to support basic literacy and numeracy. We should all be ashamed that the attainment gap in reading is 12 per cent, in writing it is 21 per cent and in maths it is 24 per cent; and that 6,000 kids are still leaving primary school unable to read properly.
Scottish Labour has committed to use the new tax powers that are being devolved through the Smith process to deliver a 50p top rate of tax to invest in education. The SNP has voted against that. It chooses instead to maintain a Tory tax cut at the expense of children’s education. I hope that that changes.
A Labour Government would take action so that companies such as Starbucks and Amazon pay their fair share of taxes. It speaks very much to the choices made by the SNP Government that a company such as Amazon, which failed to pay a fair share of tax, received more than £10 million in regional selective assistance grants and other public support from Scottish taxpayers. It should hang its head in shame.
We have an SNP Government that has failed to deliver for working people and has been blinded to transforming our economy by an on-going constitutional distraction. It is time for the Scottish Government to take action. Let me offer it some thoughts. Let us bring forward a new industrial strategy that focuses not only on the hi-tech sectors but on supporting those sectors that are big employers, such as retail and social care, so that they can win a race to the top and not get dragged into a race to the bottom. Let us refocus on inward investment, so that the number of jobs that it supports increases, rather than what happened this year, when the number fell. In addition, preparations should be under way to devolve the working programme to local areas, so that we match support back to work with local circumstances.
As an outward-looking nation, Scotland can prosper from free and fair trade. Alongside those opportunities, there is a potential slowdown in the world economy, and the corresponding risk of contagion to our economy is no longer confined to the eurozone but extends to a Chinese slowdown. Both those realities make it all the more important that action is taken now.
My party feels frustration when we hear people say that having a woman in power is an inspiration, as if that by itself is enough to transform the lives of young women in Scotland, because action, not just words, is the Labour way. [Interruption.] SNP members may laugh, but theirs is the party that is good at talking and big on rhetoric but rubbish at taking action.
Although it is not everyone’s bedtime reading, let me remind members what our 1945 manifesto said. [Interruption.] I think that those on the Government front bench should listen. It said:
“It is very easy to set out a list of aims. What matters is whether it is backed up by a genuine workmanlike plan conceived without regard to sectional vested interests and carried through.”
Young women are told in this country, “If you are good enough and work hard enough, you can achieve anything,” but that just is not true in Scotland today. It ignores the barriers to succeeding that woman face in our society, whether that is about access to science and technology skills, about tackling the gendered violence that one in four women will face or about the motherhood penalty, where women lose positions or promotions for simply going on maternity leave.
That brings me to the Government’s record on jobs, particularly for women. Again, those on the front bench seem more interested in talking to each other than listening. The culture of low-paid, low-skilled work is the feature of this SNP Government’s record. The lowest-paid jobs are in the hospitality, retail and care sectors, where women disproportionately work. Those are exactly the sectors that have seen growth since the SNP took power. Around six in 10 of the new jobs over this session are in low-paid sectors—in other words, 42,000 out of the 73,000 total additional jobs are in low-paid sectors
It would benefit the public debate and the lives of women across Scotland if the Government championed high-skilled, well-paid jobs for women and then took the action to make that a reality. Future releases from the Scottish Government should make good on that change. Targets should be not just about headline employment but about secure employment in the jobs of the future, particularly for women trapped in low pay and insecure work.
A job for all—that should be our ambition. When people have decent wages and feel secure at work, they can spend more, and that creates jobs, too. That is what will build a modern, prosperous economy. It should be the central mission that guides the full efforts of our Government, based on the fact that when working families prosper, Scotland prospers, too.
That the Parliament believes that the Scottish Government must ensure that the benefits of economic growth improve the lives of working people and reduce inequalities; believes that the Scottish Government must be more ambitious to improve employment and economic performance; notes with concern that Scotland’s Economic Strategy provides no targets to measure success; notes that the employment rate in Scotland remains 0.9% below pre-recession levels; recognises that, since 2008, the proportion of people in Scotland in full time jobs has fallen, while the proportion of people working part time has increased, along with underemployment; notes that the proportion of those in in-work poverty is increasing; believes that the Work Programme should in future be devolved to give local authorities the ability to find local solutions to get people back to work; welcomes progress in promoting the living wage in the private sector, but believes that the full weight of the Scottish Government should be behind this effort, including through procurement, and believes that the foundation of Scotland’s economic strategy must be a successful education policy and that, therefore, tackling educational inequality must not only be a political priority but also a spending priority.
I see that Corbyn’s new, cuddly, kinder version of Labour has not quite reached Scotland yet. Jackie Baillie gave us an interesting tour of cross-portfolio issues in a speech that sounded a bit more like a belated leadership bid, but at least she said one true thing—she is “genuinely confused”.
The Scottish Government’s programme for government sets out a clear vision for employment in Scotland in which fair work improves people’s lives and strengthens businesses so that everyone shares the benefits of a stronger, growing and more inclusive economy. “Scotland’s Economic Strategy” builds on that vision by showing that tackling inequality and economic growth are not mutually exclusive but fundamentally linked.
The relationship between employers and their employees must be at the heart of that, and I think that we might be one of the first Governments to have made a crystal-clear statement about that linkage. Fair work strengthens businesses and improves people’s lives so that everyone shares the benefits of a stronger, growing and more inclusive economy.
There is growing evidence that delivering sustainable growth and addressing long-standing inequalities are reinforcing rather than competing objectives. Recent work by the Organisation for Economic Co-operation and Development found that rising income inequality in the UK reduced gross domestic product per capita growth by 9 percentage points between 1990 and 2010, and bodies such as Oxfam and the Joseph Rowntree Foundation have shown that good-quality jobs have a positive impact on people’s physical and mental health.
UK Government ministers such as Iain Duncan Smith suggest that moving into work will benefit people but, sadly, that is not the case for everyone. We know that 59 per cent of children in poverty live in households in which at least one person is working. We also know that the impact of poor working conditions and low pay can be just as damaging to people as being unemployed. That is why we want to support businesses to create better jobs in which people feel valued and engaged.
Many employers are actively embracing those challenges and reaping the benefits. They are being recognised through the business pledge, living wage accreditation and investors in young people, and we will build on that progress. The independent fair work convention, which was established earlier this year, brings employers and trade unions together to develop a blueprint for what fair work should look like in Scotland, which will be completed by March 2016. When the convention reports, we will work closely with our partners and the convention to develop an implementation plan that will drive change and promote a new dialogue between Government, employers, employees and trade unions.
Ahead of that, we will continue to do everything that we can to promote good working practices within the powers that are available to us. Our forthcoming procurement guidance on fair work practices has a clear focus on the living wage and sets out how we will consider a whole range of other progressive workplace practices when we award Government contracts.
For our young people, we are building on the firm foundations of curriculum for excellence and the developing the young workforce strategy to raise attainment and develop our young people’s skills. That is an investment that will ensure that all our young people achieve their potential, benefiting individuals, the Scottish economy and society alike.
Earlier this month, I announced £5.8 million of developing the young workforce funding for local authorities for 2015-16. That will help local government to provide increased opportunities for high-quality work-related learning for all young people, and it underlines our spending commitment to help our future workforce.
Although the powers that will potentially come to Scotland through the Scotland Bill are limited, we will use them to their full potential to promote fair work practices. For example, we have made it clear that, as soon as we have the power to do so, we intend to abolish fees for employment tribunals. In relation to the powers that are coming to the Parliament, we are already consulting widely on the replacement for the work programme and work choice. That is a public discussion on how new employment services could work in a modern Scotland. We are speaking to individuals and their families and to communities to design a new approach to replace the discredited work programme with alternative provision that better meets the needs of individuals and delivers for those who need help most.
Local authorities are fully involved in those discussions, but no decisions on delivery options have been made yet, and I am not going to pre-empt the consultation, which closes on 9 October. We will complete the process, listen to the views of everyone involved and consider those views in the context of the best available evidence before we decide on the best mode of delivery. What I can say is that getting the right balance of national standards and local flexibility will need to be at the heart of any model.
Although we have the opportunity to develop a new approach to helping people into the labour market, Scotland also has the opportunity to lead the way in creating a more productive and equal workplace. By working closely with employers and employees, we will show that progressive and fair workplaces can drive the productivity and growth that will be critical to the success of our economy and central to our approach to creating a fairer and more equal society.
I understand the pressures on businesses, and I recognise the desire of the majority to engage positively with the agenda. There are many examples where Scotland-based companies are seeing those approaches deliver real benefits. Earlier this year, I visited CMS Window Systems in Cumbernauld, a company that not only has full-heartedly embraced the living wage’s benefits but prides itself on supporting young people into employment and ensuring that they have the skills and training they need to make a career for themselves. The company is the recipient of a number of awards but, most important, it recognises the real business benefits of an engaged and skilled workforce.
It is great to be able to celebrate such successes, but I conclude by being clear that I do not underestimate the distance that we need to travel to achieve our aims. I recognise many of the challenges that Jackie Baillie has set out today. I agree that the levels of in-work poverty are unacceptable, that there is too much underemployment and that too many people are stuck in low-quality jobs, with low pay, limited security and no prospect of progression. We know that there is still a significant and unacceptable attainment gap both within and between our schools in Scotland; indeed, that is why we have made tackling the attainment gap our top priority.
However, we differ on the answer to some of those problems. Through the Smith process, we sought additional employment, trade union, taxation and welfare powers for the Parliament to allow us to deliver the changes that we need in employment in Scotland and the creation of fairer workplaces. At the time, that call was supported by a range of organisations, not least the Scottish Trades Union Congress.
In contrast, Scottish Labour was
“concerned that devolution of employment law would result in a race to the bottom on worker protection, potentially resulting in the reversal of great advances for workers’ rights, such as the minimum wage, paid leave and flexible working.”
Of course, that is precisely what is happening now under its preferred option of leaving powers at Westminster and in the hands of the Tories. Since the election in May, the Conservative Government has tried to cynically undermine the living wage and, according to independent bodies such as the Resolution Foundation, the removal of tax credits will leave the majority of workers worse off. The devolution of those powers would have meant that Scottish workers would not now be facing an attack on their fundamental rights in the workplace.
I know the depth of feeling that lies across the chamber about those cynical policies, which will erode working conditions in Scotland as they will across the rest of the UK. We believe that there is a different and fairer way to look at work, and we believe that having the full range of powers available and the support of the majority of the chamber would let us take a different approach.
The real answer is to get the powers out of the hands of the Tories and into the hands of this Government and this Parliament. The Scotland Bill offers us a golden opportunity to protect workers and lift people out of poverty in Scotland, which is why I urge members to call for the transfer of more powers on employment to Scotland and to support the amendment in my name. Needless to say, we will not be supporting the Tory amendment today.
I move amendment S4M-14405.2, to leave out from first “the Scottish Government” to end and insert:
“Scotland’s Economic Strategy provides a clear framework for reducing inequalities and promoting sustained economic growth; celebrates the Scottish economy having experienced its longest period of uninterrupted economic growth since 2001; notes that, at 74%, Scotland has a higher employment rate than the UK as a whole and independent forecasters expect growth of around 2.4% in 2015; supports the work of the Fair Work Convention to produce a blueprint for fair work in Scotland that will help to deliver a better deal for workers, recognising that a positive relationship between employers and their employees must be at the heart of this; encourages employers to pay the living wage; calls for the full and swift devolution of powers over employment law to Scotland to ensure the protection and promotion of the rights and responsibilities of workers in Scotland; opposes UK Government plans to further restrict the right to strike, and agrees that this protection should be underpinned by powers to deliver better employment support services for the unemployed and fair access to employment tribunals.”
I thank the Labour Party for bringing this important subject to be debated. After the events of this week, it is encouraging to learn that the Labour Party is able to agree on at least one subject that it is prepared to have a debate on.
This is the first time that we have had a debate in the chamber from Labour in its new Corbynite clothes, and I look forward very much to hearing how the Corbyn approach will be reflected in the Labour speeches this afternoon. Perhaps we had a flavour of that from Jackie Baillie earlier, when she took us back to 1945.
I welcome Jeremy Corbyn’s election. As a Conservative, I am delighted that he is now leader of the Opposition at Westminster. However, I am surprised to see that the new real power in Scottish Labour, and Jeremy Corbyn’s vicar on earth, is missing from the Labour benches. I refer, of course, to my good friend Neil Findlay. He is the true believer in Corbynism on the Labour benches. Unlike Kezia Dugdale, who said that Jeremy Corbyn would leave Labour shouting from the sidelines, Mr Findlay was a true believer from the start. He is the one with the hotline to his boss, and he is the most powerful man in the Scottish Labour Party now. As we speak, he is no doubt down in Brighton plotting his Corbynite purge of the moderates. The Fauldhouse Robespierre will be convening his committee for public safety. If I were Jackie Baillie, I would be very afraid.
It will do Jackie Baillie’s prospects in the Corbyn Labour Party no good at all when I say that I agree with much of her speech. We certainly agree that the Scottish Government needs to be more ambitious if it is to improve employment and economic performance, although we might well differ about the policies that are required to deliver those things.
Jackie Baillie’s speech was sadly lacking in one aspect. She failed to properly attribute success for increasing employment to the Chancellor of the Exchequer, George Osborne, who is the true author of that policy. Our amendment seeks to remedy that deficiency in recognising that employment in Scotland has increased by 175,000 since 2010, not by accident but as a result of the policies pursued by the UK Government. Those policies, of course, have been continually opposed and criticised by the Labour Party.
Do members remember Ed Balls? He is now a figure in the distant mists of Labour memory who was once a significant figure in the Labour Party. Some of us can even remember him claiming that the chancellor’s approach would not work. It was Mr Balls who, in a famous speech to the STUC in 2012, warned:
“we ... risk a lost decade of slow growth and high unemployment which will do long-term damage.”
None of that came to pass, of course. We also remember Labour’s favourite economist, Professor David Blanchflower, claiming that unemployment would go up to 5 million, with widespread social unrest. Both have been proven to be totally wrong. Perhaps an apology from Ms Baillie in her speech would not have been amiss. In fact, we have seen growth in employment, in full-time employment and in the number of hours worked. We have also seen increases in wages, and wages are now rising ahead of inflation.
However, we recognise that there is more to do. In particular, wages among the poorest in society have to be tackled, which is precisely why the UK Government has introduced the national living wage. That will come into effect from next April and rise to £9 an hour by 2020. It is hard to imagine any measure that will have a more positive impact on earnings for the least well-off, and it was no surprise that it was warmly welcomed by the Living Wage Foundation. That is coupled with increases in the tax threshold, which mean that many of the poorest are paying no income tax at all on their incomes.
“We are delighted that the announcement made in the Budget this lunchtime will see over 2.5 million workers receive a much needed pay rise ... We agree with the Chancellor that work should be the surest way out of poverty.”
I would have thought that Kezia Dugdale would agree with that.
No. I have taken two interventions, and I need to make some progress.
I also agree with the Labour Party that education is vital if we are to see a growing economy benefit everyone. Our amendment makes reference to the Scottish Government’s failing record on education, in terms of
“a fall in literacy and numeracy”, with Scotland slipping down the international league tables;
“a failure to close the gap in attainment between the most and least well-off school pupils”; and, on top of all that,
“the cut to 140,000 further education college places.”
To have a truly successful economy, we need an education system that is fit for purpose. Too many of our children are being failed, and the Government appears to have no imagination when it comes to addressing that most serious of issues. Children from better-off families will always do well in school. They get the support that they need at home and their parents can always buy a better education by going for independent schools, by buying in extra hours of tuition or by buying a house in the catchment area of a better-performing school. Those options are not available to those from less well-off backgrounds. I firmly believe that the Scottish Government must level the playing field, not by pulling down those who are doing better but by giving a leg up to those who are falling behind. It is a sad indictment of the Government’s record that, far from improving under its watch, the situation is actually deteriorating.
Perhaps I can close by agreeing with the Labour Party—even the Jeremy Corbyn-led Labour Party—that the Scottish Government’s focus needs to be on improving educational standards. I have pleasure in moving the amendment in my name.
I move amendment S4M-14405.1, to leave out from first “believes” to end and insert:
“recognises the achievement of the UK Government in increasing employment by 175,000 in Scotland since the 2010 General Election; acknowledges that there has been considerable growth in full-time employment and number of hours worked; welcomes that wages continue to rise ahead of inflation and the positive impact on earnings that will be brought about by the national living wage premium announced in the Chancellor’s summer budget; considers that education is one of the most important drivers of economic prosperity, and expresses disappointment with the Scottish Government’s record on education, which has brought about a fall in literacy and numeracy, a failure to close the gap in attainment between the most and least well-off school pupils and the cut to 140,000 further education colleges places.”
The Labour motion states that the
“Scottish Government must be more ambitious to improve employment and economic performance”.
What is the position in Scotland? The Chartered Institute of Personnel and Development stated recently in written evidence to the Economy, Energy and Tourism Committee that
“Scotland’s economy is generally performing well, with high levels of employment and low levels of unemployment. In ‘Old European’ terms, we are streets ahead of others in ... labour market engagement.”
In its written evidence for the committee’s inquiry on work, wages and wellbeing in the Scottish labour market, Unison highlighted that
“In Scotland almost all public sector employers pay the Scottish Living Wage and have a mechanism for uprating it. This is a significantly better position than the rest of the UK.”
The Scottish labour force survey shows that Scotland has the highest employment rate and the lowest inactivity rate of the four UK nations; the Scottish employment rate is 74 per cent, which is higher than that of any other UK nation. In Scotland over the past year, the employment level has increased and the unemployment rate has reduced, while youth employment in Scotland is at its highest level since 2005. The same survey identifies that the Scottish female employment rate is higher than the UK’s, and Eurostat figures that cover the period from January to March 2015 show that Scotland had the second-highest rate of female employment across Europe.
No, thanks. I want to get through all this.
The levels of positive school-leaver destinations, both initial and sustained, are at an all-time high, with the percentage of 2013-14 school leavers who were in a sustained positive destination in March 2015 reaching 92 per cent. Overall, the proportion of 16 to 64-year-olds who are economically active is higher in Scotland than the UK figure and higher than that of any other UK nation, and the number of young people who are not in education, employment or training is at its lowest level since 2004.
That does not mean that there is not more to do. In its written evidence to the Economy, Energy and Tourism Committee, Citizens Advice Scotland identified that
“18% of employees in Scotland are paid less than the Living Wage, equivalent to 418,000 individuals.”
That figure is far too high, but Scotland now has the lowest proportion of workers who are paid below the living wage of any UK nation. The Citizens Advice evidence also highlighted that a Joseph Rowntree Foundation report on a minimum income standard found that people who were being paid
“the National Minimum Wage and taking up all in-work benefit entitlements were short of a basic income as determined by members of the public” of between £110 and £197 per week, which depended on their individual circumstances.
The Scottish Government does not have powers to adjust the national minimum wage or in-work social security benefits, and employment law is reserved to Westminster. Devolution of those powers is something that Unite called for in its response to the Smith commission, and it is something that the Labour Party failed to support.
What the Scottish Government can do until it gets legislative powers is influence public and private sector employers with a number of initiatives. The Scottish procurement policy note that was issued in February provides information on how and when employment practices and workforce matters, including payment of the living wage, should be considered in a public procurement exercise, as a key driver of service quality and contract delivery. A key point in the policy note states:
“Fair pay, including payment of the living wage, is one of the ways a bidder can demonstrate that it takes a positive approach to its workforce”.
“The Scottish Government considers the payment of the living wage to be a significant indicator of employer commitment in this regard.”
We also have the Scottish business pledge, which is a partnership between the Scottish Government and business with the goal of boosting productivity, competitiveness, employment, fair work and workforce engagement and development. The pledge asks that employers pay the living wage, meet at least two of the other elements and have a longer-term commitment to meet all nine—paying the living wage, not using exploitative zero-hours contracts, supporting progressive workforce engagement, investing in youth, making progress on diversity and gender balance, committing to an innovation programme, pursuing international business opportunities, playing an active role in the community and committing to prompt payment.
Then there is the Scottish Government’s support for the Living Wage Foundation. The Government has set an example to other employers by receiving accreditation as a living wage employer. Independent research on employers that have introduced the living wage has shown that it increases employee productivity and improves morale, motivation and commitment from staff, and it can be a cost-saving opportunity for companies because of higher staff retention rates and reduced sickness absence levels.
“wanted to raise the legal minimum wage to a full statutory living wage”.
However, in the same article, Labour’s shadow business secretary was reported as stating that
“George Osborne’s significant increase in the minimum wage should have been done more slowly”.
Given that a major discount supermarket is paying a higher minimum wage today than Labour wanted to introduce by 2020, it would be helpful to know what the Opposition policy actually is.
Improving the lives of working people and reducing inequalities are—rightly—at the centre of the debate. They are key to transforming the Scottish economy’s productivity and translating economic growth into prosperity for all, and of course they are what the Labour and trade union movement is—and always has been—all about.
It is important to recognise the scale of the challenge that we face. In comparison with seven years ago, employment rates have fallen and full-time work levels have gone down, while part-time working and underemployment levels have gone up. Real wages have fallen and in-work poverty has increased. Those problems affect men, and especially women, across the Scottish economy.
As we have just heard, the Economy, Energy and Tourism Committee is inquiring into work, wages and wellbeing in the Scottish labour market, and the committee heard more evidence this morning about the prevalence of poorly paid, low-quality jobs in parts of the economy and about the poverty and insecurity that they bring. Dave Watson of Unison Scotland described some of the “ugly” ways in which the worst employers in the care sector exploit their dedicated workers. Liz Cairns of Unite showed how commitments on paying the living wage can be and are avoided by employers subcontracting the work. Rob Gowans of Citizens Advice Scotland reported that half those who are awarded compensation by employment tribunals for unfair dismissal or other reasons are never paid in full, and that is not to mention all those who cannot afford the tribunal fee to bring their case in the first place.
Even in parts of the Scottish economy with high-quality, well-paid jobs, these are challenging times. In recent years, average salaries in the oil and gas industry in the north-east have been much higher than those across the economy as a whole but, in the past few months, that relative advantage has gone into reverse. Far from enjoying uninterrupted economic growth, the north-east regional economy is suffering its sharpest downturn in many years. Aberdeen and Grampian Chamber of Commerce describes that as a recession in confidence in the oil and gas supply chain.
The scale of the effect is not clear, because neither the Scottish Government nor the UK Government has yet seen fit to measure it. The industry has estimated that as many as 65,000 jobs have been lost across the UK supply chain in the past few months, but no public agency has yet attempted to measure what that means by country, region or sub-sector. It is time that they did so.
The impact of such a major downturn is not confined to the north-east. Thousands of jobs across the Scottish economy depend directly or indirectly on spending by oil and gas companies and their major contractors. Members from every part of Scotland will have seen jobs lost in their areas.
The Scottish Government needs to act now to quantify the numbers of jobs that have been lost in Scotland and to assess the impact on local and regional economies. Earlier this month, Fergus Ewing made a ministerial statement in response to calls from the Labour Party for him to do so. If employment and productivity in the Scottish economy are to be protected, we need his words to be followed by action.
One of Scottish Labour’s proposals in today’s debate is for devolution of the work programme to local authorities. I listened carefully to what Roseanna Cunningham said, and she is entitled to say that she will listen to and consider the evidence. However, it would be useful to know what ministers’ instinct is. Is their instinct to devolve the work programme to the lowest level that is practically possible or is it to keep control at the centre?
I am always in favour of an evidence-based approach, but I have never yet met a politician whose political instincts were confined to listening to what other people had to say.
To allow local authorities to do their job, the work programme should be devolved. The powers could be used to help people get back to work, and local authorities could achieve that in ways that are informed by detailed knowledge of the local economy.
Ministers could start today by asking Scottish Enterprise and Highlands and Islands Enterprise to assess the impact of the oil jobs crisis council by council. That would allow councils to work with the enterprise agencies to address the loss of high-value jobs and to identify opportunities for diversification—for example, from offshore oil and gas to marine renewable energy.
Loss of high-value jobs is most critical in parts of the country where low-paid jobs are more prevalent. In the north-east, hundreds of jobs are set to go at Young’s in Fraserburgh, and many of those who will be affected by those job losses might struggle to find good-quality jobs in the local economy.
Across the country, the growth in part-time jobs, zero-hours contracts and low-paid jobs affects disabled people in particular, women more than men and young people more than over-25s. Recent migrants are also more likely to be exploited, underemployed and underpaid.
Cracking down on criminal employment practices is essential, but it is only part of what is required. There is also a need to tackle employment practices that are lawful but dishonest, whether we are talking about multinational corporations that are avoiding tax or businesses that are taking unfair advantage of zero-hours contracts.
There has to be support for positive employment practices. The next Scottish Government will have new opportunities to develop a social security system to help people into meaningful employment, but there is no need to wait for new powers to take forward new initiatives. Ministers can do more to use the Scottish Government’s purchasing power as leverage for promoting the living wage and to use existing procurement rules that the previous Scottish Executive put in place to set a higher bar across the public sector.
We need ministers to take action to promote positive employment policies, and that action can be taken now without waiting for the next raft of powers to be devolved from Westminster. We need urgent action to address the impact of the oil jobs crisis across the Scottish economy, before it is too late for the Government to make a difference.
Employment is fundamentally about empowerment and about people having the right opportunities to fulfil their ambitions, make a decent income and contribute to overall prosperity throughout their lives. Securing someone’s life’s ambition is not really about getting the maximum number of people into any available work as quickly as possible. It is time to think differently when we debate the employability landscape in Scotland.
We need to pull back from the immediate situation and take a long, hard look at what the Government can do, what civil society can contribute and how we can best develop the relationships between employers and employability. We are recognising that, and the Scottish Government has made significant changes that are having a positive impact on those seeking entry into the workplace. That involves people learning and developing new skills, and continuing in and returning to education, plus the provision of apprenticeships and close attention to the equality agenda in terms of sex equality and equality for disadvantaged people and those with disabilities.
I am proud to have been one of the first members of the Scottish Parliament to be an accredited living wage employer. It was not that difficult—I already paid my staff the living wage, so it was quite easy to live up to that standard. I have spent a long time in my constituency, through many forums, encouraging businesses and organisations to do exactly the same. A living wage is not only good for the recipients; it is good for employers, too. Evidence shows that sick leave is reduced, profits are enhanced and staff take pride in their work when they feel that they are being paid properly.
Employment levels are better than they have ever been in Scotland and they are now running above those in the rest of the UK. The number of young people who are not in employment or education is at its lowest level since 2004 and the Scottish Government has committed £28.6 million between 2012 and 2016 to drive action on targets.
On that point, we have completely shifted the narrative and the culture of doing down all those young people. We do not use some of the very negative terms that we used to use; we have a much more positive way of describing our young people, talking them up, giving them opportunities and telling them that they can achieve. That is the type of thing that we should be proud of. We have created modern apprenticeships across the piece, dealing with some of the gender issues and with the underrepresentation of people from minority ethnic communities and improving the positive destinations for looked-after children.
However—I agree with Jackie Baillie on this, which does not happen often—that is where we can do more. We need more powers in this place over employment to make the changes that people in Scotland need. A pick ’n’ mix devolution disnae work. Although the Government will have some powers—for example, over the work programme—we need a more complete portfolio to be able to act effectively.
Although the work programme and work choice will be devolved, the access to work scheme will not be devolved. Many people need that extra one-to-one support or an extra piece of equipment to make their workplace viable for them, so not devolving that scheme seems stupid. It seems ludicrous that that level of support is not being devolved along with the work programme and work choice.
We do not want to simply replicate all the problems and barriers of existing models. It will be possible for Scotland to meet the needs of its workforce only if we have the complete package of powers, so I ask the Labour Party—in the spirit of kind, straight-talking politics—to support the full devolution of employment laws and powers. In addition, let us work together to completely and utterly reject the Trade Union Bill in all its forms.
Over the past few weeks, the Welfare Reform Committee has heard from many organisations about issues with the work programme. As Lynn Williams put it in her briefing to us all today:
“The failure of the current approach, our changing demographic patterns and our politically advantageous times mean we need to be bold. At the heart of this must be a re-framing that focuses our attention on people’s contribution to society rather than solely the ultimate goal of employment. We must also recognise that an individual’s form of contribution, or employability needs, may change over time.”
We define work rigidly. Is a mother who is at home with two small children working? Is someone who is looking after an elderly relative with dementia working? Is a volunteer in a charity shop working, or a retired person who does some gardening for their neighbours? All those people are working and contributing, yet we want to push everyone into the short-term goal of getting into work in the conventional way, as defined by the UK Government.
The mood has become intolerant. Society seems unwilling to accept that some people are not in a position to work in the ordinary sense, although they are contributing in definable, cost-effective ways. Is it not about time that we recognised that? Is it not about time that we stopped calling people benefit scroungers? Is it not about time that we had a social security and work programme system in Scotland that actually supports people?
We all know that financial resources are limited and we have no idea what George Osborne has coming down the line for us. We need to grow from a single view of employment and start drawing in different kinds of work, different circumstances and different situations, so that we build a more all-embracing economy as a result.
Just plugging people into jobs does not achieve that. Square pegs do not fit in round holes. Barnardo’s Scotland points that out clearly when it says:
“Back to work programmes are failing to meet the needs of disadvantaged young people who are furthest from the labour market. 68% of young people return to Jobcentre Plus after two years on the Work Programme having not found sustained work for 6 months.”
The work-first approach does not offer those young people the support that they need. We should provide that support with tailored services rather than simply relying on generic programmes. In my constituency, I have seen the hugely positive impact of bespoke services that are provided by many organisations, including Rathbone Training and South Lanarkshire Council. People’s lives have been transformed. We need a more structured service.
The SNP has always argued that higher education should be about the ability to learn and not the ability to pay. Let us now apply the same criteria to our employment resources, which should be based on capability and not always on the pre-structured format of one size fits all, because one size does not fit all. If we work together to give the Scottish Parliament the power to make the difference, we might be able to encourage possible future Labour Governments to follow our plans.
Christina McKelvie said that she was surprised that she agreed with Jackie Baillie on one thing; I am surprised that I agree with Christina McKelvie on three things. It must be the first time that that has ever happened.
I agree that employment is about empowerment. It is about giving people the life chances to get up, get on and achieve more for themselves and their families. It is about the combination of social justice and economic discipline that we need to create the jobs of the future to give our families prosperity and to give our neighbours, friends and communities the opportunity to get up and get on as well.
I am surprised that I agree with Christina McKelvie on a second point: I am also an accredited living wage employer. That was not difficult because I was already doing it but, nevertheless, it is important to show the way to other employers, who should also pay the living wage.
Even though the Liberal Democrats are no longer in government, I do not wish to disassociate myself from the economic progress that we have made in the United Kingdom in recent years. We got the economy back on track with 175,000 extra jobs since 2010 and 2.4 million private sector jobs in the UK as a whole, 85 per cent of which were in full-time employment. Now, with the United Kingdom, we are managing to compete with some of the best in the G7 countries.
That is good progress and the progress that we made was a direct result of some of the measures that were taken, such as cutting tax for people on low and middle incomes to make work pay and creating the £2,000 national insurance allowance to help smaller employers in particular to take on more apprentices and other employees. The deficit reduction programme also gave confidence to the wider economy that Britain was a good place to do business. Combined with that, the lower rates on corporation tax encouraged businesses to employ more people here and to recruit from, and grow their businesses within, the United Kingdom.
Although we are no longer in power, there is a record to stand on for the progress that we made in that period of government.
I am always amused when SNP ministers boast about the differentials between the employment growth in Scotland and that in the rest of the United Kingdom and then, in the next breath, complain bitterly about the lack of economic powers for the Scottish Parliament. I am not sure how the two can be said in the same paragraph. I am not sure how they can claim that all the progress is a result of their measures but that they cannot take any measures to make progress. Some squaring of that circle from the SNP Government would be helpful.
We need to consider some of the levers that the SNP Government is currently not using to try to advance the economy in Scotland. One of the key levers about which I hear from small businesses in particular is the procurement budget. It is an enormous budget and an economic development tool that the Government should use to encourage more smaller businesses to employ more people locally. The complexity of the system still drives out too many small businesses, as the Federation of Small Businesses agrees.
I urge the Scottish Government to use that lever. We have had the Procurement Reform (Scotland) Act 2014, but the system is still not working. Far too many small businesses find it particularly difficult to get access to that budget. That in itself could be a good economic generator for the local community and local economic development.
I am particularly keen on nursery education. Expanding nursery education not only helps people get back to work, but improves life chances, particularly for those from disadvantaged backgrounds. Children who get that early education have a better chance in later life. In Scotland we still lag behind the performance of the rest of the UK in that area.
The colleges are a big area in which the Scottish Government could have a massive impact in improving the skills of young people—and older people, as well. Older people seem to be excluded from the Government’s plans, which put emphasis on the younger age groups.
The minister again completely ignores the fact that 140,000 places have been cut in Scottish colleges. Ministers continue to deny the problem. They cannot keep focusing on one aspect of college courses; they need to look at the bigger whole. The reality is that they are prepared to look only at statistics that help their case.
The big problem is that 140,000 college places have been cut and that is on the SNP Government’s record. I urge the Scottish Government to finally change tack and make good the cuts that it has imposed on Scottish colleges.
In my final 30 seconds, I want to give a bit of warning to the Conservatives. I urge them to try to persuade their Government to change tack on a number of areas. The impact that the Conservative Government is having on the Scottish renewables sector will have an impact on Scottish jobs. The Trade Union Bill is so misguided—it is trying to create divisions in the workforce that do not exist now. The industrial record of the past few years has been good. It is as if the Conservatives are intent on stirring that up with the trade union movement. I urge them to back down.
Finally, I urge the Conservatives not to flirt with exit from the European Union. Above all else, that would have a dramatic effect on employment rates in Scotland. We would all be poorer if we go anywhere near exit from the European Union. That is my final plea to the Conservatives today.
I welcome this afternoon’s debate on an issue that is important for the whole country. Employment and unemployment are everybody’s business and every politician needs to treat the matter seriously.
In the past when we have debated this issue, the debate has tended to be heated. One or two contributions so far have had a bit of passion to them and I am sure that, as we go on with the debate, today will be no different from what has happened in the past.
However, by the time that the debate is over, I hope that we will all be able to agree on a few points: first, that the Scottish employment rate, at 74 per cent, is higher than that of any other UK nation; secondly, that youth employment, at 61 per cent, is at its highest level since 2005; thirdly, that the number of people not in education, employment or training is at its lowest level since 2004—down to 21,000; fourthly, that improving educational attainment is crucial to improving the life chances of our population; and, finally, that there is always more that we can do.
We have already heard about labour market statistics across Scotland. I believe that we should welcome the “Labour Force Survey”, which indicates that the Scottish employment rate is at 74 per cent and is higher than those of the other nations in the UK.
We have come through a tough economic period. The fact that the economy is improving, albeit slowly, ought to be welcomed. I do not want the economy to crash and burn as it did in 2008—I do not think that anyone would want that to happen again. Sustainability and manufacturing are key to moving the economy and the employment situation forward. The days of boom and bust should be long gone: a thing of the past.
Last week the Greenock Telegraph published an article entitled, “Fewer people out of work in Greenock”. The story highlighted that unemployment in Greenock is going down, although it is increasing slightly in Port Glasgow. There will be many factors behind that slight increase, but I am hopeful that the Port Glasgow figures will soon join the Greenock figures as Ferguson Marine Engineering in Port Glasgow starts to build for the future.
As members will know, Ferguson Marine has been awarded preferred bidder status for the £97 million order for two Caledonian Marine Assets Ltd ferries. Ferguson Marine has an ambitious set of proposals and plans for the yard. There is an initial £12 million investment for yard expansion, and the plan is to grow the yard to employ approximately 1,300 skilled workers by 2020. That will include a total of 150 apprentices, with the employment of 30 apprentices per year up to 2020.
The CMAL contracts for those two ferries will allow the yard to expand to around 400 workers. The facility that Ferguson Marine is currently building will, although it does not affect current production capabilities, enable four to six similar ships to be built at the same time and will have additional capacity for specialised offshore fabrication and renewables. It is planned that the facility will be ready by May next year.
Thinking back to the summer of 2014 when Ferguson Marine went into administration, we have to admire the hugely ambitious plans for the yard and for Port Glasgow and Inverclyde. In one year, Ferguson Marine has gone from employing seven people to employing 157, including 15 apprentices who have been hired for 2015. That number is only going to grow.
A further positive of the yard is the company’s payment of the living wage. With the exception of apprentices, who begin on the living wage, the company is currently paying all its employees well above the living wage. Management were not previously aware of the living wage accreditation scheme until I mentioned it to them. They are now looking into the scheme so that they can introduce it to the yard.
The training that will be on offer will be first class, and the reindustrialisation of the lower Clyde is beginning. I am sure that MSPs who represent Inverclyde in the future will receive complaints about the noise coming from the yard. If I am around at that time I will be delighted, because I will know that many people are working, building ships and contributing to the town and the economy.
I have focused my latter remarks on one company, but that was deliberate. As I mentioned, the company has grown from seven employees to 157 at present. It will grow to almost 400 if the two CMAL ferries contracts are ratified, with a target of 1,300 eventually. The yard can play a huge part in reducing unemployment in Port Glasgow, Inverclyde and the west of Scotland in general. It can help with training and with the whole economy.
Just before the yard closed last year, it employed one female apprentice out of six: the first female apprentice on the tools doing that particular aspect of the job. The yard still has one female apprentice, but the new owners want more. They want both sexes to consider shipbuilding as a career choice.
Jackie Baillie spoke about jobs for the future, but unfortunately she did not mention any industrial trades. If she does not think that shipbuilding is a job for the future, I am disappointed. The content of contributions from members on all sides of the chamber in today’s debate has not been surprising, but the debate has not been as heated, certainly in some respects. However, any politician who thinks that we have nothing more to do is deluded, and anybody who talks down the achievements of the past few quarters talks themselves, and Scotland, down too.
We in the Labour Party recognise the importance of having a growing and vibrant economy, but that matters little if we do not focus that growth to benefit the everyday lives of our constituents. Part of our motion focuses on the powers that are coming to Scotland. With powers over the work programme and other areas of welfare, we are presented with a real opportunity to offer help to the most vulnerable in our society.
We can show a better and more compassionate way of helping people into the workforce. The starting assumption of any devolved work programme should be that the vast majority of people want to work. Currently, the programme’s funding structure does not take into account the progress that jobseekers have made. That can be particularly problematic for the provision of help for people with mental health conditions. The approach has led to service providers negating the needs of unemployed people with complex conditions and focusing on the so-called easier cases. The programme needs to be structured in such a way that it does not simply come down to the question of whether someone is in work. Providers should be incentivised to work with all those who are on the programme to help them to reach their aspirations.
For those who require additional support, that person-centred approach to welfare has been shown to be more successful than the current Government work programme. The work choice scheme is specifically designed to help disabled people back into work, and its success outstrips that of the work programme. In the Scottish Association for Mental Health’s work choice programme, 38 per cent of starts achieve job outcomes, compared with a figure of just 21 per cent for the work programme. That shows the merits of a person-centred approach and of including specialist organisations that have experience of working with specific groups in seeking to bring people into the workforce.
SAMH is a good example of that. It has delivered an employment support model for those with mental health conditions that has delivered high success rates at low costs. However, as of May, the SAMH programme was not available through the work programme. By drawing on expertise and showing the compassion for those who are in need that I am sure is shared across party lines, we can find a better way of doing things.
Our motion also mentions support for devolving the work programme to local authorities. As a member for Central Scotland, I can attest to the positive programmes that are in place across the council areas of Falkirk, North Lanarkshire and South Lanarkshire and which are helping people back into work. Programmes such as North Lanarkshire’s working have shown positive results and have really demonstrated the merits of trusting our local authorities to meet the needs of their areas.
During the summer recess, I had the opportunity to visit successful employment programmes in Central Scotland, namely Routes to Work in North Lanarkshire and the new future employability and training centre in Falkirk, which is run by the Salvation Army. Such initiatives have a proven track record when it comes to delivering employment opportunities in our communities. Since August 2014, the Salvation Army in Falkirk has delivered 335 courses and, of the 925 registrations, nearly 200 service users have moved into employment. Routes to Work, a not-for-profit social enterprise that has existed since late 2002, has supported upwards of 30,000 local residents to progress their employability aspirations and has assisted more than 13,000 local residents into work, including around 1,500 in the operational year that ended 31 March 2015. Members from across Scotland will be able to give similar examples of good practice in employment services. It is vital that we use those services and move away from the Department for Work and Pensions model of employability service to a more person-centred and caring approach.
Of course, employment does not solve all problems. Members from across the chamber will be concerned that in-work poverty is increasing. I do not doubt the sincerity of the commitment to tackle it from members on all sides. We must acknowledge that, although work can be the best way to lift people out of poverty, it is by no means a guaranteed route out. According to the living wage commission, 66 per cent of children who live in poverty are found in households with at least one adult in work. The Social Mobility and Child Poverty Commission found that, in 2014, 200,000 Scottish children were living in poverty, which equates to 20 per cent of all children. That is why it is so important that we ensure that the jobs that we create are secure and pay a decent wage.
Earlier this year, the Office for National Statistics released a report entitled “Poverty and Employment Transitions in the UK and EU, 2007-2012”, which demonstrated that 70 per cent of those who escaped in-work poverty did so only after their hourly rate of pay was increased. Our motion rightly welcomes some of the Scottish Government’s efforts in promoting the living wage. However, as colleagues have stated, the Government does not have a particularly stellar record on the matter. It voted down our proposals to make paying the living wage a requirement of companies that seek public sector contracts. Those proposals would have benefited the poorest staff working on contracts from the Parliament.
We should continue to recognise the efforts of groups such as the Poverty Alliance and of trade unions such as mine, the GMB, in the area, but it is important for parliamentarians to consider how we can most effectively assist them. I hope that the Government takes the opportunity to think again on the issue and will consider how it can use the power of the Parliament to promote the living wage and cajole companies into paying it.
I do not accept that. I have consistently said in this chamber and in many of the debates on employment that the advice that I have been given through trade unions’ solicitors and other solicitors is that we can do this. It is about action. It is about the Government taking the lead. The Scottish Government has taken the lead on many other issues on which it did not have legal advice when it thought that doing so was the right thing to do. Why not do it on the living wage?
In closing, I return to my original point. Broadly speaking, growth benefits all sectors of a society. However, it does not benefit all sectors equally. Our poorest communities do not see a thriving Scotland when they hear people say, “This percentage point is up” or, “That figure is looking better”. Those who are in work only know that their wages in work are low and stagnating, and those who are out of work only know that they are not receiving the help that they require to get back into the workplace. The Government has taken some steps to alleviate the problems that I have mentioned and we welcome them, but it can and should do so much more.
I would like to start by addressing the point that has just been raised about the living wage in public contracts. The Economy, Energy and Tourism Committee went to Labour-controlled Renfrewshire Council last week to discuss how it is encouraging, through negotiation, home care companies to pay the living wage. The council’s head of procurement was very specific: she said that the council cannot legally mandate the living wage, which is why it is negotiating with those employers. That is a Labour council.
No, it did not say that; the head of procurement was very specific that the council could not legally mandate the living wage. That is also the view of the Welsh Assembly Government, which is controlled by Labour and which I do not think takes its advice from the Scottish Government.
My colleague John Mason put it to Jackie Baillie that the Institute for Fiscal Studies figures show that from 1997 to 2010, when Labour had full control and all the tools in the box to tackle income inequality, income inequality increased. In reply, Jackie Baillie said that she prefers to look forward rather than back. I am not surprised that she does not want to look back, because Labour’s record is so poor. Between 1997 and 2010, when it had the opportunity to tackle inequality and improve workers’ rights, it failed to do so.
Labour set the minimum wage far too low when it introduced it. The veteran Labour MP Michael Meacher explained why in his blog. He said:
“The minimum wage was never meant to be as low as it is ... The original intention of Rodney Bickerstaffe, the former general secretary of Unison and main architect of its introduction in 1998, was that it should be fixed at half of the male median wage and then progressively raised to two-thirds.
It didn’t happen. Blair appointed a Low Pay Commission headed by a CBI big-wig in order to ensure it started at far too low a level, £3.60, and it has never been increased at a rate slightly above the rise in average wages, as was intended”.
On Labour’s record, I also point out that the Economy, Energy and Tourism Committee has taken a lot of evidence that says that, as well as Government regulation, the way to improve pay and conditions in workplaces is by encouraging trade union organisation. In all the time that Labour was in power, it did not reverse one single anti-trade-union law that had been introduced by the Tories. For Jackie Baillie to come to Parliament and lecture the Scottish Government on what it can do with very limited tools is really a bit of a cheek, when we look at what Labour failed to do when it had all the tools.
We do not have to look back very far to see Labour failing to grasp the opportunities—we do not have to look back to the days of Tony Blair. As the cabinet secretary previously pointed out, Labour had the opportunity to get powers over the minimum wage, employment law and working benefits into the hands of this Parliament. That is what trade unions and anti-poverty charities called for, and it is what was the Smith commission called for. I will quote from the statement that Unite put out in response to the commission on the day that the Smith report came out. Unite said:
“Unite firmly believes that key arguments made by trade unions to tackle income and workplace inequalities have been largely ignored.
Unite Scottish secretary Pat Rafferty said:
‘We would have wanted more definitive powers over employment law, including the power to replace the statutory minimum wage with the Scottish Living Wage, and this omission is a missed opportunity’”.
It is not too late to change that, as the cabinet secretary said. The opportunity was missed because Labour preferred to leave those powers in the hands of the Tories. However, even under Jeremy Corbyn’s supposedly shiny new leadership, I have yet to hear a single proposal from Labour that would undo the mistakes that Labour made in the Smith commission. Why is that? If Labour wanted to look to the future and take the chance to show that it has changed in Scotland, it would call for a change in approach on those powers.
No. I am sorry—I do not have much time left.
The Scottish Government does not have all the tools that it would like to have to tackle in-work poverty. However, as members have said, by appointing a cabinet secretary with responsibility for fair work and by establishing the fair work convention, the Government has made a clear and powerful statement of its priorities.
In evidence to the EET Committee this morning, Dr John McGurk of the Chartered Institute of Personnel and Development Scotland praised the Scottish Government’s initiative, and when Unison’s witness, Dave Watson, said that he had seen the draft regulations on public procurement—which the cabinet secretary mentioned—I have to say that he seemed to be very pleased with them and to think that they are strong. It is a matter of ensuring that regulations are properly enforced. I think that all members support that.
I am not often accused of being a ray of sunshine, but after those six minutes of utter misery I think that my remarks will be a beacon of consensus and positivity.
As Lewis Macdonald made clear, Labour members are always keen to debate what we can do about employment. The clue is in our party’s name: the opportunity to create, through work, a full and fulfilling life for ourselves and our families is at the heart of what we stand for.
This is an opportune moment to debate employment. We face a number of significant opportunities around which there is, I think, a degree of consensus. Most of them have come up in one form or another during the debate. There is a degree of consensus around devolution of the work programme and work choice programme through Smith and the subsequent Scotland Bill, around the Wood report, and around the need to make closing the attainment gap a priority for Parliament and the Scottish Government. All three areas will bring opportunities for us—if we can grasp them—to create a better future, especially for young people.
On devolution of the work programme, the important point is the degree to which we are prepared to devolve. It is clear to us that devolution of the programme simply to Scottish national level is not enough. Whatever replaces the current approach must be delivered at local level. We suggest that local authorities should lead on that; there might be other views. That is simply because when it comes to helping people into work, the more individualised and personalised the support, the more effective it is likely to be. Siobhan McMahon spoke eloquently about that.
The work choice programme, which is rather better than the work programme, has something like a 40 per cent success rate, even though its recipients are disabled and therefore further than many other people are from the labour market. That compares with a success rate of about 15 per cent for people in the work programme. That success is because of the personalised support that people on the work choice programme get. At local level, it is easier to pool the efforts of all the necessary partners—schools, colleges, the higher education sector and the voluntary sector—through projects such as those that members have talked about. An example from my constituency is the highly successful academies programme, on which schools in East Lothian, Queen Margaret University and Edinburgh College work together.
The work choice programme also allows support to be sensitive to the labour market. An example of that is in East Lothian, where 10,000 houses are being constructed. East Lothian Council and Edinburgh College are working together to put in place a construction academy so that local young people can benefit from the construction of those houses.
Earlier this year, a report from the Co-operative Councils Innovation Network suggested that local delivery of the work programme in the UK could save as much as £5 million, because it would be more effective and efficient. We must be prepared for that further devolution. Many of the partners are working to implement the Wood report’s recommendations, which is another great opportunity to do not just something small, but something big. It would not be enough if, as a result of the Wood report, each secondary school began a partnership with its nearest college. We have an opportunity to reinvent the whole senior phase of school with our colleges, and to create many more new pathways for young people to find the skills that will stand them in good stead in future employment.
When implementing the Wood report recommendations we must not lose sight of the role of businesses, which too often complain about the quality of skills and the employability of young people who leave our schools and colleges, but do not do enough to change those things. Only 27 per cent of employers offer any work experience at all, and that which is offered tends to be relatively low quality. Many more of our young people—in fact, all our young people—must have work experience as the norm, rather than as something exceptional or extra.
If there is a gap in attainment and achievement by the time a child goes to school at the age of five , how difficult will it be to ask agencies to work with the child when they are 16, 17 or 18, and furthest from achievement, attainment and the labour market, to try to put that right? Closing the attainment gap is such an important part of the issue.
My message is that we dare not be half-hearted about any of those opportunities. We have made it clear—Jackie Baillie made it clear again today—that £25 million a year towards cutting the attainment gap is simply not enough. We have suggested that increasing that investment is more important than, for example, cutting air passenger duty or avoiding reintroduction of a 50p tax rate. We must be prepared to increase that investment if we are going to seize the opportunities that we have to provide a better future for our young people. Jackie Baillie summed it up well when she said that we need boldness and big thinking. If we are bold and think big, we can ensure that, in this nation, no one is left behind.
This Monday, I will have the pleasure of presenting awards to 119 modern apprentices who will have completed their learning at ITCA Training in my constituency in disciplines including mechanical engineering, fabrication, welding, logistics operation management, and business and administration. This Government’s commitment to modern apprenticeships goes without saying, given that more than 25,000 a year are being delivered, and that there is a new target of 30,000 a year by 2020. If we look within the figures, we see that 80 per cent of modern apprenticeship starts in 2014-15 were people aged 16 to 24. It is predominately young people who are being given those opportunities to develop skills and access employment.
Locally in Aberdeen, The Press and Journal has launched a campaign to create 100 apprentices in 100 days. I was advised by ITCA that it is about to graduate 119 apprentices in one day, but the newspaper campaign is an important one. It is about highlighting the value of apprenticeships across the north-east’s economy and giving companies the opportunity to reflect on what they can do to support more young people through apprenticeships.
A view that is often held about the north-east is that it is an area of high employment and low unemployment, and the statistics bear that out. However, some individuals require support to access employment opportunities. A past difficulty, which is to some extent still current, has been that having a buoyant industry that can afford to pay a higher rate than other sectors means that some of those other sectors face recruitment difficulties.
With that in mind, over the past couple of years I have held two jobs fairs in the constituency. One was a general jobs fair, which had employers from across a range of sectors. The other, which took place just last week, focused specifically on the care sector, which has been mentioned a lot in the debate. The difference in attendance levels at the two events was interesting. Although the organisations that attended were positive about the events, attendance levels at the care sector jobs fair were noticeably lower. Part of that comes down to perception. We need to consider carefully how we get around that. There is often a misconception about what working in the care sector involves and the type and quality of work that is available. A job of work needs to be done to ensure that such sectors are given the opportunity to promote the valuable work that is available and the strong opportunities that exist.
I have met local companies to discuss living wage accreditation. I hear from my colleagues about their efforts to become accredited living wage employers. I had better get my act together and lead by example by becoming an accredited living wage employer, too. I noted in a Scottish Government response to a parliamentary question that we have many accredited living wage employers. Although that is absolutely fantastic, if we look at the percentage of the population who it is assumed are being paid above that rate, it shows that many companies have not yet taken the step to become accredited living wage employers. I want to promote to those companies the benefits that come from becoming an accredited living wage employer and the message that that sends out to their current and potential workforce.
On other employment issues in the north-east, the Wood commission report “Education Working For All! Commission for Developing Scotland’s Young Workforce Final Report” has been mentioned. Aberdeen and the north-east have been early adopters. The developing young workforce team is being led by Aberdeen and Grampian Chamber of Commerce, alongside Aberdeen City Council and Aberdeenshire Council and North East Scotland College. The work is designed specifically to look at how we can make easier young people’s transitions through the education system and into the workforce. It takes very much the approach that Iain Gray highlighted. I do not think that we would necessarily be reinventing the wheel. A lot of councils are looking carefully at the senior phase of school and how it can be redesigned to complement better what young people will go on to, whether it is further education or higher education. The councils are trying to make those transitions and links a little bit more seamless.
Another area in which we face a difficulty in the north-east is the teaching workforce. A teaching summit is taking place today to talk about how we can attract more teachers to locate there. Perhaps we could look at the work of the energy jobs task force, because a number of people in the oil and gas sector who are facing redundancy will have science, technology, engineering, and mathematics qualifications and may be suitable for retraining into the teaching profession and could take on STEM teaching roles that are proving to be difficult to fill.
I agree with the idea of trying to get people to retrain as STEM teachers, but it remains the case that, if someone chooses to retrain as a physics teacher in England, they will receive £25,000 in a tax-free bursary. That is not available in Scotland. Would not it be a good thing if it was?
Committing to such things is way above my pay grade, but in fairness I think that we need to look very carefully at the opportunities that are made available for individuals to retrain in teaching. Something that often puts people off retraining is the possibility of a year without pay. We need to look at making that transition better for people. Some local authorities are considering offering part-time teacher-training courses, which would allow people to train without necessarily having to give up work. There are a number of measures that we need to look at to improve the uptake of teacher training.
I will leave it at that. Some of the allegations that Opposition members have made probably merit closer examination but, on the whole, it has been a fairly consensual debate, and I would hate to ruin that tone. All that I will say is that the Scottish Government should be commended for the work that it is doing on apprenticeships and the living wage, and that we need to talk up more the work that is being done to boost employment opportunities and employment performance in Scotland.
I am very pleased that we have the opportunity to debate employment. The Labour motion covers a lot of ground, a lot of which has been covered in the debate, and it makes a number of points that I and many others would be able to agree with. I want to focus on just some of those points.
The motion refers to the fact that
“the benefits of economic growth improve the lives of working people and reduce inequalities”.
For me, that is a key theme and one that I completely agree with, but I agree slightly less with the previous words, which state that
“the Scottish Government must ensure” that the benefits of economic growth do that. Frankly, I do not believe that the Scottish Government has the ability and the powers to ensure what the motion says it should ensure, if we take the word “ensure” literally.
We should remember that most of the levers over the economy and redistribution continue to lie at Westminster. As I suggested in my intervention on Jackie Baillie, we should also remember that between 1997 and 2010 inequality in the UK as measured by the Gini coefficient grew to the highest point since the 1970s. Especially in Labour’s third term, there was a sharp rise in income inequality, as well as a fall in the incomes of the poorest fifth of the population.
The motion also mentions in-work poverty and the living wage. That is another key area as far as I am concerned. If people are working but are not earning enough for them and their families to live on, there must be something fundamentally wrong. Every employer has a moral duty to pay their employees sufficient wages for them to live on. In my opinion, that also needs to be a legal duty or it will not work. The voluntary living wage is okay up to a point and I welcome it being rolled out as much as possible, but it will always be limited by the fact that it is voluntary. The statutory minimum wage is the long-term sustainable answer, and it should at least be at the level of the living wage, which is currently £7.85 per hour.
I have some sympathy for smaller employers who are struggling and are not sure whether they can afford to pay the living wage to every employee, including the owner. We can look at targeted support for the likes of those employers, such as the support that the small business bonus scheme provides. However, I have no sympathy for large profitable companies that pay their chief executives several million pounds but do not pay their staff enough to live on.
Most members are familiar with the book, “The Spirit Level”, which has often been mentioned in debates in the chamber. It argues that more equal societies do better as a whole than do less equal societies. On Friday evening, I had the privilege of seeing the new film, “The Divide”, which was inspired by “The Spirit Level”. It was directed by Katharine Round, who took questions at the end of the film. I was really impressed by it, and I very much hope that at some stage we can get it shown here in the Parliament. Whereas the book goes into lot of facts and figures and can be a bit heavy, the film focuses on seven individual real-life stories primarily from the United States and England, with one story coming from Scotland. I will give the chamber a flavour of three of them.
The first story was about an American woman who worked for Walmart, which she said had been quite a good employer when she started and had looked after its staff. However, policies had changed, and the pressure on staff had increased. The woman was heavily in debt, very stressed out and on the verge of being evicted from her very modest home.
The second story was about another American woman, who worked for Kentucky Fried Chicken. She had turned her life around from a somewhat messed-up earlier life, and she was now working regular solid hours in a pretty pressurised job. However, she too was heavily in debt, and she talked about how the pressure that she was under had encouraged her to turn to alcohol to get a break from her struggle.
The third story was set in England and was about the care sector, which Mark McDonald and others have highlighted. Although the woman in question was doing an incredibly important job visiting vulnerable people, she was under huge pressure and not well paid.
For all three people, their work and their income were absolutely central to how their lives were going. The stress that they were all experiencing—and, for some, the resulting addiction problems—were very much linked to their low income.
It all leads me to wonder whether it is possible for Governments to reduce the disparity between the high and the low paid, especially in the private sector, or whether that is just how markets work. The best solution would be for people to be not so greedy and self-centred, which would mean that, even if a business did well, it would be not just those at the top who would benefit from a pay increase. However, if that is not likely to happen—and clearly it is not—surely we have to consider a cap on top wages.
The argument against such an approach tends to be that companies, councils or whatever need the best people to run them, but it is clear that the best people were not running the banks in 2008 and have not been running Volkswagen in 2015. They might have been technically able, but they were certainly not the wisest, the most prudent, the most honest or those who took the longest-term view, all of which strike me as important attributes both for individual organisations and for the good of the whole economy.
I believe that, just as there is no such thing as victimless crime, there is no such thing as victimless high pay. Let us consider a few figures. If one person who earned £1 million could get by perfectly well on £200,000, one has to ask: what is happening with that extra £800,000? It is being taken away from people who deserve it. It could give 80 employees £10,000 more each or give 40 people without employment a job at £20,000 each. It seems to me that the two issues are very much linked.
In the film “The Divide”, people who were much better off were also interviewed. In America, that meant a focus on gated communities where people had paid a lot for their homes, had security at the gate and apparently felt a lot safer. To be fair, those who were interviewed came across as decent people who just wanted the best for their kids and their families. For many of them, it did not seem to cross their minds that they were taking too much from the system and that, as a result, others were getting too little.
To me, that proves that the free market is not working. We as a Parliament and Parliaments more generally have a responsibility to work to ensure a fairer sharing-out of the rewards of employment—and I should say in passing that that includes the developing world: if that does not happen, it should come as no surprise to us that people from other countries will come here.
I believe that there is enough money for full employment and decent wages for every person. The problem is how all of that is shared out.
In speaking in support of Jackie Baillie’s motion, I want to explore three employment issues, all of which merit further help from the Scottish Government and action from colleges, universities and employers.
The first relates to action to support the just transition framework for workers and communities with regard to the shift to a low-carbon economy. Last night, I was delighted to attend a reception for Scotland's colleges that was hosted by lain Gray and at which I met lecturers, students, apprentices and a local employer who is a plumbers merchant. The collective enthusiasm of the partnership, which is working to take forward the opportunities offered by emerging renewable technologies, was palpable.
Initially, these courses were financially supported by European Union money from the centre for renewable energy and sustainable technologies—or CREST—funding stream, which I had never heard of until last night. Transferable skills courses for experienced engineers are also being offered in solar thermal systems, heat pump systems and biomass installation and maintenance. All those will enable engineers to offer those new technologies to off-grid domestic customers, tackle fuel poverty and bring local employment to remote and rural Dumfries and Galloway.
There has been significant support through the energy skills partnership. In her closing remarks, will the cabinet secretary tell members how much that excellent initiative is spread out across Scotland and is being developed and what plans there are to support it in the future?
I turn to the urban context. Yesterday, I was at the launch of the Edinburgh Community Solar Co-operative share offer. In a recent speech on Scotland’s agriculture, I asked the Scottish Government about its commitment to developing co-operative models. They are relevant to the energy sector and across the sectors.
The community solar project is a really exciting adventure in co-operative working. In partnership with the City of Edinburgh Council—which is, incidentally, a co-operative council—and with strong community involvement, the co-operative has secured space and planning permission on 25 municipal roofs just in time before the ill-fated and badly thought out Tory axing of the UK-wide feed-in tariff scheme arrangements for solar energy. That co-operative will bring local jobs and, equally important, a vision, and it is a fine model for other local authorities and communities.
The connection with Gylemuir primary school is also significant. There is a school project that is linked with the co-op launch in which pupils have made models of their renewables inventions: a solar-powered bike and a pair of solar-powered trainers—I could well do with them—to make people go faster, to be used with caution in combination with a solar-powered mowing machine. There are many budding inventors, designers and manufacturers—both girls and boys—there and across Scotland at the primary school level.
I turn to support for women, which Jackie Baillie particularly emphasised in her motion and her speech. It is important that we have high-skilled jobs in the renewables sector and other sectors of the labour market that women can be trained for and can go into. The developing renewables sector is a significant opportunity to stabilise the gender imbalance. Without the barrier of entrenched inequality in a long-standing industry, women are making a valuable contribution to ensuring that our emerging renewables industry is globally competitive.
I was pleased to see that the Scottish Government committed to ensuring that policy delivery is adapted to helping women to reach their full potential in those roles. Continued research and monitoring are essential and key to fair funding and skills development opportunities for women, particularly women in rural areas who are starting their own businesses or community energy projects.
Another difficult transition that the Scottish Government must continue to consider and act on with great care is that of looked-after teens and young people who are leaving care. As we all know, the Children and Young People (Scotland) Act 2014 entitles young people to support up to the age of 26 in some circumstances. That was a considerable step towards providing the stability that is so valuable in moving towards an independent life.
As we all know but must keep on remembering, care leavers face on entering the labour market a number of irrefutably linked barriers that must be tackled. Poorer attainment and higher exclusion rates in school, homelessness and mental health problems are all more prevalent among those who are leaving or are in care. Those barriers, along with the stigma of care, which can very much affect self-esteem, mean that young people need flexible and holistic support in sustaining training and stable employment.
Without a continuum of support, looked-after young people are additionally at risk of sinking into a cycle of offending. Sadly, the figures for 2009, which are the latest that I could find, show that 50 per cent of prisoners in Scotland identified as having been in care at some point in their life. Securing employment that is considerate of a person’s individual circumstances can be a stabilising and motivating force. Support is needed to maintain that. We as corporate parents owe it to those who are disadvantaged from the start to address those issues.
As the Scottish Government consults on a devolved work programme, I urge the cabinet secretary to consider tailoring an approach for vulnerable young people. Currently, 68 per cent of all young people return to Jobcentre Plus after two years on the work programme. I thank Barnardo’s for its valuable briefing and I hope that the Scottish Government will take it into account and bear in mind the comments from Labour members about supporting individual needs at a local level, which Iain Gray stressed.
Finally, in relation to Jackie Baillie’s argument about in-work poverty, the national performance framework must be used to judge what the economic recovery really means for working people. The Scottish Government continues to fail to build the economy for the many and to tackle inequality for the people of Scotland. We need clear action by the Scottish Government now.
I thank the Labour Party for bringing this debate to the chamber today.
Scotland, like the rest of the UK, felt the effects of the recession, and this is a welcome opportunity to discuss the progress of Scotland and its Government in improving employment. As it stands, Scotland has the highest employment rate—at 74 per cent—of the four nations of the United Kingdom. The Labour motion states that the rate is “0.9% below pre-recession levels”. However, every nation felt the effects of the recession, and Scotland’s employment rate being 0.5 per cent higher than the UK average and 2.8 per cent higher than the rate for Labour-run Wales shows that we are making good progress.
One group feeling the effects of the improvement is our young people, because the youth employment rate of 61 per cent is the highest since 2005 and a staggering 7.2 per cent higher than the UK average. Equally, the number of NEET 16 to 19-year-olds olds in 2014 was 21,000, which was down 8,000 over the year and the lowest NEET figures since comparable records began in 2004.
Paying the living wage is the core commitment of the Scottish business pledge, which is a partnership between the Government and business to promote the shared ambitions of fairness, equality and sustainable economic growth. Signing the pledge is far beyond the signing of a piece of paper with empty promises, as with the better together vow. Businesses that sign the pledge demonstrate their commitment to the values of the pledge and to deliver through actions and future plans, such as not employing people on exploitative zero-hours contracts but paying the living wage. Businesses must meet two other pledge elements: investing in youth and making progress on diversity and gender balance. They must also show a longer-term commitment to meet a further five elements of the pledge.
Over 100 Scottish businesses have signed the pledge, but the commitment in signing up to the living wage does not end with the private sector. Since 2011, the Scottish Government has required bodies subject to its pay policy to pay at least the living wage. That is just part of the Scottish Government’s commitment to promote the living wage and, equally, to commit to having 500 Scots-based living wage accredited employers by 2016. Further, the Scottish Government has worked with the Poverty Alliance and the Living Wage Foundation to explore models to boost public and third sector uptake of living wage accreditation.
As it stands, there are 300 accredited living wage employers in Scotland, which represents 18 per cent or so of the 1,700 such employers across the UK and is well above Scotland’s population share. Of course, the Scottish Government itself became a living wage employer on 3 June 2015—we should certainly be proud of that record.
The Labour Party must believe that rabbits come out of hats, because it also believes that the Scottish Government is invincible, beyond scrutiny and above the law. The Labour motion
“welcomes progress in promoting the living wage in the private sector, but believes that the full weight of the Scottish Government should be behind this effort”, which, from the evidence that I have stated, the Scottish Government certainly is. However, Labour also says that it wants effort made through procurement. I am sorry to tell Labour that the Scottish Parliament and the Scottish Government are not invincible and they cannot do whatever they wish. Like the rest of the UK, we are subject to EU law, and the current law means that it is not possible for the Scottish Government to require contractors to pay the living wage.
I must be feeling a bit unwell this afternoon, because I welcome another statement that Labour makes in its motion:
“the foundation of Scotland’s economic strategy must be a successful education policy”.
I certainly agree with that, and the Scottish Government understands it. That is why it is committing £1.5 million per year to the read, write, count campaign, which encourages parents and families to help children in primaries 1 to 3 to improve their literacy and numeracy skills, and investing £100 million in the attainment Scotland fund over four years. I am pleased to say that, of that, £1 million in the first year, rising to £1.3 million in the second year, is going to schools in West Dunbartonshire, which includes Clydebank in my constituency.
The fact that the Scottish attainment challenge is targeting primary schools in Scotland’s most disadvantaged communities demonstrates the Scottish Government’s clear commitment to reducing inequality in our communities and the important role that it sees for education in improving our economy.
Colleagues who spoke before me outlined many other positive statistics and wide-ranging programmes and measures that have been put in place to create and secure jobs. I commend the Scottish Government for its efforts and its commitment to improving Scotland’s educational attainment, employment and the overall economy. I commend the cabinet secretary’s amendment to the Parliament.
I, too, thank the Labour Party for using its debating time to discuss employment. I put on the record the excellent reception that Iain Gray hosted last night for Colleges Scotland. There was barely room to move, but it was wonderful to go round and see the excellent work that the colleges are doing—and particularly West Highland College, whose graduation ceremony I attended last week. It is based in Fort William and has 10 outreach centres from Portree to Ullapool. It is a tremendously successful college and, to be honest, the Conservatives, Labour and the SNP can all take credit for its success. Let us not battle among ourselves; we have all played a part in the success of West Highland College.
With some predictable notable exceptions, the debate has been positive and constructive. In particular, Lewis Macdonald and Mark McDonald made good points about the oil industry. More needs to be done on that, and we need to think about the future of that important industry.
We can agree with Labour when it states that
“the Scottish Government must ensure that the benefits of economic growth improve the lives of working people” and that the nationalist Government
“must be more ambitious to improve employment and economic performance”.
To be honest, the statistical difference across the UK is not huge, so I will not look at that too much. The main point is that there is positive economic growth thanks to the UK Government, which has taken tough decisions to get our economy back on track. With a GDP growth rate more than 1 percentage point above the European average and unemployment at 5.5 per cent, which is half the European average, we compare very favourably with all the major trading nations in the EU. The OECD has predicted that we will be the fastest growing economy this year, and the public sector borrowing requirement, which was more than 10 per cent of GDP, is now half of that.
That has been done not just through efficiency savings and reform but by tackling fraud, error and uncollected debt. We should all welcome that, although there is more to do. In 2010, the structural deficit was £150 billion and it is down to almost half that this year. To reduce debt repayments, we need to tackle the structural deficit so that more money can be spent on public services—we can all agree on that—rather than on servicing the interest on our growing debt.
The Labour motion also mentions the work programme. The Scotland Bill’s devolution of the work programme will give Parliament the flexibility to change and adapt the framework of support for the long-term unemployed. What matters is not necessarily devolving the work programme further to local authorities but local authorities and the Scottish Government working together with bodies such as Skills Development Scotland to promote work at all levels of government as well as harnessing local skills and knowledge. I listened to Roseanna Cunningham and thought that she made a good point on that. I hope that the Government continues to pursue the inclusive approach with all stakeholders in rolling out the work programme. That was very positive.
The main issue with the work programme is that it continues to succeed and provide up to two years of support for those people who are hard to reach. I particularly relate to those who have mental ill health. It should not just be a case of, “You’ve got a job; that’s us finished.” People need to be supported for up to two years when they are in the job and it is important that that support continues.
On promoting the living wage, this morning I was pleased to hear that Costa and Morrisons, which has 90,000 employees, announced their commitment to paying staff above the living wage. That is good for business and everyone else, as Christina McKelvie said.
Labour is also right to say that the foundation of Scotland’s economic strategy must be education. It must also be a skills policy with workforce planning to ensure that opportunities in schools fit with places at colleges, universities and apprenticeships, and that they, in turn, fit with the jobs market. With underemployment about 1 per cent higher in Scotland, more needs to be done to fit skills and qualifications to the jobs market.
Annabelle Ewing intervened on Willie Rennie with figures from 2007. The figure of a loss of almost 150,000 part-time college places is from an Audit Scotland report and covers the time between 2008-09 and 2013-14. The report is checked off by the Government; it can be factually corrected by the Government if necessary. There is no argument that there are 150,000 fewer part-time places and that there has been a cut of 74,000, or 41 per cent, in the number of over-25s at college.
A successful education policy should not just address inequality among students; it should also address inequality among lecturers. The SNP promised that there would be national pay bargaining for further education college lecturers following the merger process. It would be unacceptable for a teacher to be paid up to £5,000 less in salary for working in the Highlands and Islands, but that is what happens in colleges in the University of the Highlands and Islands network that deliver further and higher education. The SNP made that promise and it has a £40 million price tag. It has had plenty of time to fulfil that promise, but it appears that very little is happening. If the UHI further education colleges want to continue to attract the best students and staff, surely it is reasonable for us to request that they are valued and remunerated for the wonderful, innovative work that they do. We would not think that it was acceptable for a doctor, nurse or teacher in Shetland, Orkney or the Western Isles to be paid £5,000 less than they would be in Edinburgh, and it should be the same for lecturers.
I am getting that look from the Presiding Officer so I will finish there.
In the debate, we have heard a range of views on a number of issues, many of which go beyond the scope of the fair work, skills and training portfolio, so forgive me if I do not pick up on all those points. However, I am sure that if members wish to pursue those points, they will take them up with the relevant cabinet secretaries and ministers.
I think that it would be useful to put some emphasis on the context to the challenges that we face. Of course there are challenges but, as has been said during the debate, we can set those against a backdrop of strong economic performance in Scotland. The latest state of the economy report from the Scottish Government’s chief economist highlights that the Scottish economy has now experienced 11 consecutive quarters of growth—its longest period of uninterrupted economic growth since 2001.
That demonstrates the underlying resilience of the Scottish economy as set against the continued difficult external and domestic challenges that we have seen during that period. As I stated in an intervention earlier, our employment rate is above that of the UK, while youth unemployment is at its lowest level since May to July 2008. Our performance also ranks favourably in a European context, and we have the second highest female employment rate and the third highest youth employment rate in the European Union.
Therefore, although I very much welcome the opportunity to discuss the key issue of employment and to highlight the challenges that we continue to face, it would be instructive to place the discussion in the context of the improving picture for Scotland’s economy.
I listened carefully to Jackie Baillie’s speech. The Deputy First Minister, in response to a similar speech by Jackie Baillie in the debate on Scotland’s economic strategy on 8 September, made the point that it was not until about six minutes or so into the speech—I am sure that Jackie Baillie will remember this—that we got to a positive outlook. I am not entirely sure that we reached that moment of positivity in the 14 minutes of her speech today.
Ms Baillie wanted to look back to the 1945 Labour manifesto—
This debate is about employment. I ask the minister to take a little bit of time later on to look at the Official Report of this debate, because she will then see that, from my very first sentence, I set out Labour’s values and vision. It was about a positive agenda for employment, which was something that I had hoped we could work on together, although clearly I have been disappointed in that regard.
Of course, on the issue of Trident renewal, if we were not going to waste £100 billion on weapons of mass destruction, we would have more money to spend on the important issue of workers’ rights and pay levels.
Picking up on some of the issues that various members have raised, I note that Murdo Fraser let the cat out of the bag when he said that he could agree with much of Jackie Baillie’s speech. That statement speaks volumes for the political climate we operate in in Scotland. [Interruption.]
Gordon MacDonald gave a detailed overview of the range of actions being taken by the Scottish Government to promote economic performance and, at the same time, to tackle inequality. Christina McKelvie focused on the importance of the living wage and the work that she is doing locally to promote its take-up. She also mentioned the illogicalities that inevitably arise from what she termed the pick’n’mix devolution approach thus far to the devolution of employment law powers to this Parliament.
Willie Rennie and Mary Scanlon spoke about the importance of colleges, and quite rightly so. We heard again the misuse of statistics, whereby the number of courses is looked at, not the head count. Even more important, figures were mentioned that do not reflect what I hope we are all trying to do, which is to ensure that college courses lead to jobs of progression. Surely that should be the priority for all of us, rather than short courses—of, for example, five hours—that do not lead to a job for a young person or to any kind of progression.
I am afraid that I have to make a bit of progress.
Stuart McMillan spoke passionately about the Ferguson Marine yard in Port Glasgow and the very positive outlook that that yard and its workforce now have, as well as the commitment on the part of the yard employers to pay not just the living wage but well above it. I agree with Stuart McMillan that that success story in Port Glasgow is likely to have a significant economic impact on inequality in Inverclyde.
Siobhan McMahon spoke about the importance of employment support services, in particular for people with a disability. I would say to her that that is precisely why we are seeking to involve as many people as possible in the consultation on the devolution of employment support services. It is important to say to Lewis Macdonald and Iain Gray—albeit that I recognise that Iain Gray’s tone was softer—that we should not seek to pre-empt the outcome of that consultation. We are here to listen to the views of all the people who have sought to make their voices heard. I urge all members to make a submission if they feel strongly about the issue.
Joan McAlpine made a cogent case for the devolution of full employment powers to the Parliament. Mark McDonald spoke about the importance of the care sector in the north-east and the importance of promoting the strong opportunities that exist within it. John Mason and Gil Paterson spoke about the importance of the living wage to lifting people out of poverty.
Claudia Beamish made comments on the work programme. I urge her to set out her proposals in the submission that she might wish to make to the consultation.
I really wish to make some progress.
It is clear that in-work poverty is unacceptable. Work should be a route out of poverty and should not leave people trapped in cycles of deprivation and unable to make ends meet. We must recognise that the proposed Tory welfare cuts will simply exacerbate an already difficult situation. Therefore, it is a great pity that the Labour Party in the House of Commons sat on its hands at the second reading of the Tory Welfare Reform and Work Bill in July. What an abdication of responsibility to the most vulnerable members of our society that was.
A number of important points have been made in the debate. As ever, we will go away and consider the debate closely.
Scotland’s economy is growing. We are leading the way with our fair work agenda and taking businesses with us in that. We recognise the importance of ensuring opportunities for all young people and of closing the attainment gap. However, without the devolution of full employment powers, we will not be able to do all that we wish to do on the matter. Therefore, I urge all members to support the full devolution of those powers to the Parliament, as does, for example, the STUC.
We brought the debate to the chamber because we believe that we must be ambitious and support all Scots to succeed, reach their full potential and live a life free from poverty. To achieve that aspiration, we must ensure that everyone in Scotland who can work has the opportunity of a secure job with decent pay and decent terms and conditions and we must make full employment Scotland’s number 1 priority.
Throughout my political life, jobs have been a key issue. As a trade unionist, the leader of Fife Council and, now, the MSP for Cowdenbeath, when I have talked to people, I have found that their biggest concern is the lack, loss and undervaluing of jobs and the shortage of good-quality jobs.
Creating skilled and secure jobs for all and tackling unemployment and underemployment are the most pressing challenges that face Scotland. I want everyone to have the chance of a life in work, not a life on benefits. Jobs, not social security benefits, will increase living standards. What matters most to people is the dignity of having a good, secure job in which they can take pride.
The combined impact of globalisation and technological change has destroyed many traditional jobs so quickly that it has transformed the occupational structure of our country. Manufacturing, mining and heavy industry once made up 40 per cent of Scotland’s economy; today, they represent only 8 per cent of our workforce and the figure is still falling. The traditional manual industries have declined and, although the number of service jobs has risen, the rewards of lower pay, less security and, often, zero-hours contracts are not acceptable in a modern economy.
The SNP Government’s record on tackling unemployment, low wages and work insecurity has not been good enough. That is why we will not agree to the SNP amendment. It takes a rose-tinted view that ignores the reality of unemployment, massive skills gaps, workforce shortages and skilled workforce shortages, and it ignores the Government’s failure to tackle the deep-rooted social deprivation and exclusion that exist in communities up and down Scotland.
Last year, 170,000 people were unemployed in Scotland—that was an increase of almost 40,000 since 2008—and the unemployment rate accounted for 6.2 per cent of the working-age population. To put that in context, there are more unemployed people in Scotland than there are people living in Dundee. A population the size of that of the fourth-biggest city in Scotland is being denied the opportunity of work and the associated income.
The unemployment situation in Scotland is not improving fast enough. Statistics for the beginning of this year show the Scottish unemployment rate at 5.9 per cent, which is higher than the UK rate of 5.5 per cent, with 163,000 people in Scotland unemployed. Of those people, 59,000 were aged between 16 and 24, which is nearly 15 per cent of that age group. The number of 16 to 19-year-olds who are not in education, employment or training stood at 21,000 in 2014. Those 21,000 lost and forgotten young adults represent a population that is comparable to that of a town the size of Bathgate. Research has shown that young people are hit particularly hard by the economic and emotional effects of unemployment, so tackling youth unemployment must be a priority for the Government and Parliament.
However, for many people, even being in work is not a safeguard against poverty. A recent report from the Joseph Rowntree Foundation showed that, in the three years up to 2012-13, on average 41 per cent of the 920,000 people who were living in poverty in Scotland were working-age adults or children from working families. The report highlighted the scale of low pay in Scotland and said that 600,000 people were paid below the living wage in 2013-14—250,000 men and 350,000 women. Those numbers represent 23 per cent of male employees and 31 per cent of female employees.
I therefore say to the Government that we should sit down together and examine how to use the procurement processes in the public sector to give hundreds of thousands more Scots a living wage. Mary Scanlon named supermarkets that announced this morning that they are introducing the living wage. I suggest that the care sector in Scotland is in danger of not being able to recruit enough workers because the pay is so low. In the majority of cases, it is the minimum wage. That is no longer acceptable. I appeal to the Government to get its act together and start to do something about that.
Willie Rennie made a point about how we can use the procurement system to support small and medium-sized enterprises and create more jobs.
I certainly will come to that point.
In Scotland today, underemployment is an issue. Substantial numbers of Scots are in work but would prefer to work more hours than they do. More than 215,000 people in Scotland in 2014 were deemed to be underemployed. Although the rate had decreased slightly from the previous year, 8.6 per cent of the workforce were still affected.
Although the Scottish Government holds no official records on the numbers of people who are employed on zero-hours contracts, it is estimated that 80,000 workers in Scotland suffer under those contracts.
Zero-hours contracts are a huge problem in Scotland, and they are used a great deal in the cultural sector. Is the member aware that many of the workers at T in the Park are on zero-hours contracts? Does he think that we should be funding a festival that does that to its workers?
One of the main reasons why we will not support the Government’s amendment is that it does not recognise that such issues and problems exist in Scotland. If we are to tackle those problems, we must start by acknowledging that they exist and taking off the rose-tinted glasses. It is vital that we continue to focus on in-work poverty alongside tackling unemployment and associated poverty.
I turn to the rest of the SNP’s amendment. On Saturday I campaigned against the Trade Union Bill in the town of Galashiels, where I spoke to many people from all over the Scottish Borders and from Berwick and Carlisle. People were queueing up to sign the petition. The SNP amendment calls for
“full and swift devolution of powers over employment law”.
Along with trade union colleagues in Scotland, I am keen to explore that further. We are clear that devolution is a journey and that, when there is a case for further powers to be devolved in areas such as employment law, we will work with trade unions and others to achieve that. We continue to examine such matters.
I suggest to the minister that she should take a lead. There is a consensus in the Parliament—excepting one party—in opposition to the Trade Union Bill. She should take the lead, pull together the parties in the Parliament and join the trade unions across Scotland to build an all-Scotland campaign that rejects the bill absolutely. I lay down to her a challenge to get involved.
We must talk about the powers that we have in Scotland. Will the Government commit to using the powers of the legislative consent process to block the key points of the Tories’ Trade Union Bill and prevent it from affecting Scottish public services and employees? We must sit down and work together to look at how we can do that. I ask the minister whether she will line up with Labour and local authorities across Scotland by making it clear that, if the bill is passed into law at Westminster, the Scottish Government will not—I repeat, will not—enact any changes that would be detrimental to industrial relations with Scottish Government staff. Those steps are the best way for us in this Parliament and in Scotland to proceed in response to the bill, which is an attack on workers, public services and democracy.
I draw attention to the Barnardo’s briefing that was sent to members earlier today. If we are serious about tackling inequality and poverty, we must recognise the many people who are furthest from the labour market. Part of the briefing focuses on young people and the future of employability support, and it emphasises that the work programme cannot focus, as it currently does, simply on helping those who are closest to the labour market.
We must be able to move beyond ticking boxes. We need a policy in place that recognises that there are throughout Scotland thousands upon thousands of people who are not at the point of being able to qualify and get a job. There are hundreds of thousands of people in Scotland who do not have the qualifications or the skills for life. We need a focused programme that involves working with local authorities to give those people the best opportunities in life. I believe that full employment gives everybody the best chance in life, and we need to ensure that people have the skills and the opportunities to be able to participate.