I remind members of the Covid-related measures that are in place and that face coverings should be worn when moving around the chamber and across the Holyrood campus.
The next item of business is a debate without motion on a progressive approach to sustainable procurement and fair work practices. I invite those members who wish to speak in the debate to press their request-to-speak buttons now. I call Richard Lochhead, Minister for Just Transition, Employment and Fair Work, to open the debate.
I thank the Parliament for the opportunity to discuss the Scottish Government’s fair work policy and our recent announcements, including on mandating the real living wage in our contracts. I have no doubt that today we will discuss not only Scotland’s journey towards becoming a fair work nation by 2025, as our current consultation proposes, but some of the issues that have been to the forefront throughout the Covid pandemic and that relate to people’s employment circumstances and experiences in the workplace. We meet against the backdrop of the
26th United Nations climate change conference of the parties—COP26—and some of those issues are extremely relevant to the just transition and how we make our way towards Scotland’s net zero target of 2045.
Fair work is central to our economic strategy. As employment law is currently reserved to Westminster, the Scottish Government is unable to improve statutory rights and protections for workers directly through legislation. In the absence of those employment powers, we are doing all that we can to promote fairer working practices across the labour market and we are committed to using all the levers that are available, through our public spending and every relevant policy agenda, to promote fair work and to make it the norm to go beyond the minimum statutory employment rights and protections.
We have maintained our fair work focus during the pandemic. We made opposition to fire and rehire and support for flexible working criteria in our fair work first policy, to increase security and opportunities for workers. In August, we launched a living hours accreditation scheme for Scotland, which acknowledges that, in addition to paying the real living wage, it is essential to address the frequency and number of work hours. That is critical to tackling in-work poverty.
In its publication “Fair Work Framework 2016”, the Fair Work Convention said:
“Fair work is work that offers effective voice, opportunity, security, fulfilment and respect; that balances the rights and responsibilities of employers and workers and that can generate benefits for individuals, organisations and society.”
I take this opportunity to thank the convention for its invaluable work in advancing the fair work agenda, which is a priority for the Scottish Government and many members of this Parliament.
We are committed to the framework and have always made clear that the Scottish Government will lead the way on fair work. Our 2019 publication, “Fair Work Action Plan: Boosting productivity by developing Scotland as a world-leading Fair Work Nation”, laid strong foundations for the implementation of our approach and set out the key levers that we have committed to use, to set a clear example as an employer and through our substantial investment in services for the people of Scotland and support for Scotland’s business community.
In the face of significant uncertainty due to Brexit and Covid-19, the Scottish Government is resolute in its commitment to making fair work the norm for workers throughout Scotland and to achieving more inclusive and sustainable growth. We are responding to a number of issues that employers and workers currently face, such as labour shortages. Through the development of a working with business action plan, we are focusing on employability, skills and fair work principles, to address labour shortages.
As I said, we meet against the backdrop of COP26. Key to our strategic approach is a just transition and the aim to create high-quality green jobs across the country as we transition to net zero. COP26 is good opportunity to re-affirm and share our commitment to delivering a greener, fairer economy in Scotland, while learning from the experiences and approaches of many other countries. As minister for a just transition, I will head to COP26 after leaving the chamber today, to participate in my first in-person event on the matter, and I have a full diary over the next two weeks. It is great to see, in Glasgow this week, the interest in fair work and a just transition from across the global community.
Fair work will be central to our new, 10-year national strategy for economic transformation, to put us on the path to meeting our 2030 climate targets and restoring our natural environment while raising workplace standards. We must ensure that the new jobs are good jobs, which comply with high workplace standards and pay fair wages—that is true across the economy and it is especially important in sectors that are vital to the effort to reach net zero, where a lot of public investment will be targeted.
Let me give an example of how fair work can contribute to a just transition. Recently, we announced a £1.8 billion programme of investment in energy efficiency and renewable heat solutions for Scotland’s housing stock, and we will introduce fair work first criteria as a condition of public contracts that relate to the spend, in a way that is relevant and proportionate and that demonstrates how public money can ensure that green jobs are also good jobs.
We were pleased to inform Parliament that, as part of our continued driving forward of action on fair work and with immediate effect from 14 October, the Scottish Government will mandate payment of the real living wage in our contracts. That announcement and our recently extended fair work first criteria support our vision—shared with the Fair Work Convention since 2016—for Scotland to be a leading fair work nation by 2025.
I welcome it as a step forward, but it does not go nearly far enough. I will return to that subject later in my speech or in my closing remarks.
We are now consulting on how we will progress our vision for fair work and we encourage a wide response. People in Scotland have until 23 December to respond to our consultation.
The Scottish Government’s commitment to fair work aligns with the right to just and favourable working conditions, including remuneration, established in the United Nation’s Universal Declaration of Human Rights. Our commitment is demonstrated in our national performance framework and is underpinned by the Fair Work Convention’s framework. It is a testimony to our determination on that that the Scottish Government was the first in the United Kingdom to achieve living wage accreditation.
Fair work is good for business and workers and is good for our economy. In line with the Fair Work Convention, the Fraser of Allander Institute recognised in 2016 that treating workers fairly will help to create more diverse and inclusive workplaces where workers have greater security of pay and contract and can develop their skills and have an effective voice in the workplace. It can improve wellbeing and motivation and enable employers to recruit, grow and retain skilled people. All of that increases productivity and innovation and creates value.
As part of our landmark agreement with the Scottish Green Party, by summer 2022, and within the limits on devolved competence, we will introduce a requirement on public sector grant recipients to pay at least the real living wage and to provide appropriate channels for effective workers’ voices, such as trade union recognition. We will engage with unions, businesses and others to agree the detail of that conditionality to ensure that it is proportionate and effective in delivering the real benefits that we all want to see.
We are working across Government and with industry to embed fair work. We are working with the construction sector to develop a construction accord in line with Scottish Government priorities, which is due to be agreed this year and will comprise a shared vision for the industry, including a strong commitment to fair work practices that will help create more diverse and inclusive workplaces. That shared vision for the industry will include a strong commitment to fair work and will support delivery of our strategy for affordable housing and other key projects.
Members will be aware that significant work is also under way to progress fair work in adult social care. The fair work in social care group has developed a set of recommendations for minimum terms and conditions, reflecting the fair work principles now being taken forward collaboratively with key stakeholders. Since 2016, we have provided funding to ensure that adult social care staff delivering direct care are paid at least the real living wage, which is currently £9.50 per hour and is about to rise. We have already provided £64.5 million for that purpose this year, and last month we committed to provide additional funding of up to £48 million to uplift the hourly rate for those workers to at least £10.02 per hour from 1 December this year. That significant funding in this year alone recognises the incredible contribution of our social care workforce and is a significant step towards delivering our commitment to embed fair work in social care.
I turn to our announcement on mandating the real living wage in our contracts. Not having control over employment legislation, we continue to use public procurement to drive fair pay. Under the Procurement Reform (Scotland) Act 2014, public bodies have been required to demonstrate their living wage policy in procurement strategies and to report on success since 2016. That legislation, supported by guidance and engagement, has helped to ensure that more than 90 per cent of Scottish Government suppliers have committed to paying at least the real living wage in our contracts.
We have established that it is now possible to require payment of the real living wage to workers on public contracts where fair work first practices, including payment of the real living wage, are relevant and proportionate to contract delivery by UK-based workers.
The Scottish Government now mandates payment of the real living wage in our contracts and we encourage the rest of the public sector to follow suit. We believe that business will appreciate that clarity as it levels the playing field for those wishing to bid for public contracts, removing the risk that businesses that pay their workers the real living wage will be undercut by those that do not.
Our legal advice is always being updated. As a result of our agreement with the Greens, we revisited that advice and have been told that we are now able to deliver the policy—that is why we are doing it.
We have made significant progress in Scotland by working with sectors and encouraging the approach over many years. We are now going one step further. I am sure that members from across the chamber support us in that.
To give an example, the new civil engineering framework that is being developed will include the real living wage as a condition of contract. That will be available for use across the public sector and has an expected value of £600 million over four years. Meanwhile, we issued a procurement policy update, clarifying that we expect public bodies to incorporate fair work first into all relevant procurement processes from the financial year 2022-23. Our reporting framework will enable us to monitor implementation progress across the whole sector.
I look forward to members’ comments and support in realising our vision of a fair work nation. I remind members that we have a consultation out and that it is an important opportunity for everyone to come forward with ideas to continue the momentum to ensure that Scotland becomes a fair work nation by 2025.
The past 18 months have been unimaginably difficult for businesses and workers. People have been tested to their limits. Now more than ever, we are looking at how we work and at our financial security.
We have some good news: the United Kingdom economy is recovering more quickly than was expected. As many others were, I was pleased to hear the announcement from the Chancellor of the Exchequer that the national living wage is set to increase by 6.6 per cent, to £9.50 an hour, in 2022. That will give millions of people on low incomes a pay rise of more than £1,000 per year.
However, difficult challenges remain.
As world leaders gather in Glasgow for the United Nations 26th climate conference of the parties—COP26—the implications of climate change loom large for decision makers. For thousands of energy sector workers in North East Scotland, ensuring a fair and managed transition to an integrated energy sector is critical. Yesterday, I met Oil & Gas UK to discuss that further.
As we seek to recover from the Covid-19 pandemic, there is an opportunity for lawmakers and businesses to look at the current landscape and to take stock. What conditions will help to facilitate growth, to remove barriers to employment so that everyone who wants to can work, and to close the persistent gender pay gap, which has widened over the past year? How can we make business practices more sustainable across the whole supply chain? How can we support local economies across Scotland as they reboot, post public health measures?
The Scottish National Party Government has significant powers at its disposal to address those questions, including full powers over education and skills, oversight of business support agencies including Scottish Enterprise, and control of public spending powers through procurement. Global management consultancy McKinsey & Company highlights that
“two-thirds of the average company’s environmental, social, and governance footprint lies with suppliers.”
There is great potential through procurement to address environmental, social and governance issues. In the speeches that will follow, my Conservative colleagues will look at the procurement system in Scotland and at how it can be harnessed effectively to meet some of the challenges. Our approach is underpinned by openness and transparency.
After working at senior level in human resources for 30 years, I often talk about the importance of collaborative working in order to avoid silos. Consultation and engagement on the questions that I have raised are key, but I fear that the voices of businesses are not being heard by the SNP-Green coalition.
Take the hospitality sector. Workers in the sector tend to be younger, and the sector’s workforce has one of the highest proportions of women. The Institute for Public Policy Research Scotland suggests that the hospitality sector will need “ongoing support” to rebuild, following the pandemic.
The Scottish hospitality group has repeatedly warned the Scottish Government about Covid-19’s devastating impact on the sector.
I have one minute left, so I will not take an intervention.
The Scottish National Party refused to give hospitality and leisure businesses a full year of non-domestic rates relief to provide some financial headroom, until the Scottish Conservatives secured a U-turn earlier this year.
Despite already being in a fragile state, the hospitality sector is also dealing with the fall-out from the vaccination passport shambles. The vice-chairman of the Night Time Industries Association Scotland, whose hospitality group owns a number of venues in the north-east, said last week:
“It is utterly bewildering the Scottish Government have completely ignored the warnings from sectoral experts … It has taken just one week for our concerns around market distortion, unfair competition, discrimination and the severe economic impact to be proven true”.
I have made those points because the Scottish Government’s decisions affect the operating environment for the sector. It follows that the decisions affect hospitality workers, who face losing up to £200 a week in wages because of that poorly executed scheme.
The SNP claims that it does not have sufficient levers to promote fair work, but the problem is in the engine room. In the programme for government, the First Minister reiterated her party’s support for a four-day working week as part of a wellbeing economy. That would be a monumental shift in working patterns that would require careful and detailed planning, which is a worrying prospect for many businesses that are already stretched thin and are trying to make ends meet.
When I asked the Cabinet Secretary for Finance and the Economy about the £10 million pilot, no detail was forthcoming; the matter was kicked into the long grass. That is the problem; the SNP seems to be paying lip service to policy ideas without delivering on the detail. It is full of promises, but it does not follow through.
That is not just my view. Earlier this year, the Carnegie UK Trust identified an implementation gap between the Scottish Government’s rhetoric and its delivery on fair work policies. The left-wing Jimmy Reid Foundation has, similarly, criticised the SNP Government of 2016 to 2021 for not matching its rhetoric with its actions, and has highlighted the devolved powers that are already at the Scottish Government’s disposal in the area.
As we learn to live with Covid-19 and recover from the pandemic, we have the opportunity not just to revive our economy but to reset it. We are building back fairer and greener, but during this period of change, we must be mindful as politicians to take people and businesses with us. We need to restore confidence as well as trust.
Today’s debate requires us to consider what role the public sector should play in our economy. For me, the answer is straightforward: it should be a role model for the private sector by pushing standards up and creating minimum thresholds and requirements, while harnessing the huge economic power of the state to drive innovation and sustainability.
The minister proclaimed what an excellent job the Government is doing on fair work and procurement, citing the commitments that were made in the most recent programme for government. My main query is this: why has it taken the Government all this time to commit to that agenda? It has taken 14 years for the Government to recognise that the measures that I have just mentioned would help to improve conditions for workers in Scotland. The Government can hardly claim that it is a pioneer in the area, because those measures have been the norm across Europe for years—although, sadly, not in the case of the British Government under the Conservatives, who have ripped £1,040 a year out of the poorest households in work through their cuts to universal credit. In the context of the UK, we will not take lectures from the Conservatives.
I note Paul Sweeney’s comments about European countries adopting all kinds of fair work measures years ago. Does he recognise that those are independent countries that have employment powers, and that the Scottish Parliament does not have employment powers because they are reserved to the UK Government?
It is interesting that policies are now being adopted in the Government as a result of a new agreement with the Green Party. Over the past decade, my former colleague Neil Findlay moved amendment after amendment in the chamber, calling for payment of the real living wage to be a minimum requirement in public sector procurement contracts, but the Government voted them down every time. With the recent agreement, the Government’s hiding behind lawyers has been exposed as a sham.
There is an element of irony in all this. A few weeks ago, I asked the Minister for Transport to join me in condemning ScotRail for locking its workers out of their depots. He responded by suggesting that I am incapable of being impartial because I am a member of a trade union. We also have cleansing workers on strike in Glasgow during COP26, over a pay dispute with the Convention of Scottish Local Authorities; the minority SNP administration in Glasgow tried to use Tory anti-trade union legislation to break the strike.
How can it be that this Government, which is apparently so committed to workers’ rights, frequently finds itself involved in industrial disputes with those workers? How can it be that a Government that is apparently so committed to trade union rights can include a minister who brazenly disparages members of Parliament in the chamber merely for being members of a trade union?
I note that the Labour Party has not been in government since 2010, but has since adopted, as policy, support for devolution of employment rights as a floor, in order that we can level up. That is a welcome measure. I hope that Maggie Chapman will, as a democrat, welcome that development in our politics, rather than trying to retread history that is long past.
We should look at the context for how the Government is behaving. Many left-wing voters who put their faith in the SNP to uphold their values might be pausing for thought as the true colours of certain ministers shine through.
I welcome many of the measures that were announced in the programme for government—I just do not think that they go far enough. For example, there is still no ban on zero-hours contracts in public procurement. We need only look at the situation that faces thousands of workers in the social care sector, many of whom would be helped by a commitment to ban zero-hours contracts.
We also need to go back to the point that I raised at the outset and ask what role the public sector should play in our economy. Should it actively drive standards up, or passively stifle them? We see the issue playing out across the UK when the Tories discriminate against young people by excluding under-23s from the increase in the minimum wage.
Thank you. I will do my best, Presiding Officer. I have been a bit effusive.
In 2019, the Fair Work Convention looked at the experiences of workers in the social care sector, and it is fair to say that its findings made for grim reading. The convention described the tender methods that were being used as “untenable” in direct response to the use of zero-hours, low-hours and seasonal contracts, all of which undermine job security.
On the question how we would pay for an increase in pay in the social care sector, I will give an example of how we could raise wages. The Feeley report highlighted that every £1 that is spent in the social care sector creates a multiplier effect of £2 of gross domestic product in the wider economy. My question for the minister is simple. When will we ban zero-hours contracts and pay Scotland’s social care workers the £15 an hour that they deserve?
I believe that the Government is being short-sighted. Rather than looking at wages of £15 an hour as a way of reinvesting and pump priming our economy’s recovery from the biggest recession in history, it sees them as expenditure that would somehow be lost. Let us be clear that the workers would not siphon the money off into offshore bank accounts; they would spend it in their local communities, thereby driving up economic growth and tax revenues.
I am a firm believer in the role of the circular economy and the importance of community wealth building, which we see in the economic model in North Ayrshire Council, where the Labour council leader, Joe Cullinane, is using the power of the public sector to invest in local community-owned energy generation, social housing and sustainable businesses. That is often described as radical, but I argue that it is not radical at all; it is entirely reasonable and is increasingly essential, if we are to improve living standards.
There is undoubtedly more that the Government can do to drive that agenda. That is why I am committed, along with my Scottish Labour colleagues, to prioritising local communities and enterprise with a “local first” approach. Although there is much to welcome in the Scottish Government’s public procurement plans, it has taken—
I am at my peroration, Presiding Officer.
It has taken far too long to get to where we are today, and it is still too far short of where we need to be. Progress has been painfully slow; we should have been doing it long ago. We need less self-congratulatory rhetoric and more ambition, firmer commitments and quicker action.
Yesterday, I visited the old paper mill at Guardbridge. It used to be a paper mill but has been transformed into the Eden campus by the University of St Andrews. The campus is home to an award-winning biomass energy centre that provides heat to 43 buildings in St Andrews as well as more than 2,500 student rooms. It is also home to a new solar photovoltaic field that delivers electricity to the whole campus. Soon, it will be home to a centre for energy storage and conversion as well as—the first of its kind in Scotland—a centre for battery development. There will be facilities for carbon capture to convert carbon into a range of usable and valuable fuels and products.
That is all part of the university’s plans to be carbon net zero by 2035. It is a great partnership between Fife Council, the Scottish Government and the UK Government and is also part of the Tay cities deal.
Many people were highly sceptical that the plans for the campus would ever be possible, but they have been delivered and at speed. That is an important first lesson when we consider procurement, grants and Government support. We need people who deliver at speed because the climate emergency is an emergency. It is all well and fine to have great plans for the future, but we need to deliver fast. That is why we need to look to institutions such as the University of St Andrews, which has done so incredibly well.
I give credit to the Government for eventually listening. Week in, week out, I and others badgered the previous and current First Minister about Amazon, for example. It received millions of pounds of Government support for very little in return. It was paying its staff low wages and its working conditions were widely criticised, but the Government was happy to give out millions of pounds of support. The measures that are finally being put in place will at last support workers such as those at Amazon. Hiding behind lawyers for years has not helped thousands of workers who were desperate for their Government to stand up for them. The minister would do well to reflect on the pathetic excuse that he rolled out this afternoon.
I like to be fair and I will be fair to Amazon. It is slowly improving pay and working conditions in its centres. It has some way to go, but the feedback that I have received is that it has changed for the better. Other companies should use that as a signal that they too should improve their working conditions and pay. It would help if they paid a little bit more tax but, nevertheless, we must give them credit where it is due.
However, the Scottish Government is squeezing out small businesses from its procurement budget. The share for small and medium-sized enterprises has fallen to just 5 per cent and 200,000 fewer businesses are now getting a share of the Government’s massive procurement budget. If we wish to improve our local economies and cut the unnecessary transport of food and goods, we must improve SME access to those funds. We have been banging on about that for years, but the Government seems to be going in the wrong direction on it. I see the training programmes and I understand the information sessions that are held for businesses, but they are not delivering the change that we need for businesses in our communities.
I referred earlier to the Eden campus in Guardbridge, where a biomass plant and district heating system has been developed within sight of a new housing development. What will power the homes in that development? Gas. The houses are being constructed right now and the opportunity was there for them to hook up to the district heating system. However, for whatever reason—and I have my suspicions—
I will. For whatever reason, the Government and the local council are not imposing restrictions on the housing developers to ensure that they adopt the best possible renewables practices in those houses. They need to change that approach if we are going to make a difference for the climate.
Given that the debate is being held during COP26, I will raise a point regarding our net zero and climate change ambitions. The Scottish Government has published some excellent guidance on many aspects of procurement that will effectively influence our future direction and enable judgment to be applied when awarding public sector contracts. Invitation-to-tender documents specify the criteria—such as price—to be used in the award of contracts and the weighting to be given to those criteria. I simply note here that there is varying practice on the criteria when aligned to net zero ambitions. For some contracts clear criteria and weightings are sought, but that is not consistently applied. It is my opinion that all our actions in the award of public sector contracts should contribute to reaching net zero. With that in mind, will the minister consider reviewing contract award criteria to ensure that minimum criteria are applied consistently across the board? I do not underestimate the work required to make public procurement fit for a net zero purpose or to ensure fair work, but that is vital, for there can be no fair work if we destroy the prospects for work.
As was mentioned earlier, I am confident that there is wide agreement across the chamber that, as we come out of the pandemic, we will not revert to business as usual. We need to build a future for new circumstances. One of the key requirements will be to encourage much more innovation and entrepreneurial activity in Scotland. We need the development of new, more resilient local supply chains, all of which will have implications for procurement policy and our fair work agenda. We need to ensure that new entrants to the marketplace are not disadvantaged because they lack a long track record. Willie Rennie brought that matter up earlier, and this is one of the few occasions when I agree with what he said. We need to prioritise opportunities for innovation and new thinking that help us meet our obligations to current and future generations and we need to hear new voices that are not thirled to the ways in which things have aye been.
We need to ensure that fairness goes beyond traditional patterns of employment and we need to break down continuing barriers faced by women in business, from those in part-time employment to entrepreneurs. A matter of particular concern to me is the lack of systematic impact analysis by sex from many business-related organisations. In fairness, that should apply to other characteristics, to encourage diversity generally. Does the minister agree that the more evidence that we have, the better the chance of subsequently developing policies that tackle barriers to participation? Will he consider looking at conditionality in procurement contract awards to increase diversity, which leads to greater economic contributions?
It is to the great credit of the Scottish Government that it has been addressing for some time the need for better procurement policies and the need to develop policies regarding fair work. The recent expansion of the fair work criteria from five to seven demonstrates the ambition to keep updating and developing forward-looking policies. In many respects, although much progress has been made, we will never reach the end of our journey. In a world with faster and faster rates of technological, social, labour market and environmental change, we are all challenged—all of us here—to ensure that our policy frameworks remain relevant to the world that we are in by shaping by our actions to fit.
The scale of public sector spending in Scotland’s economy is stupendous and yet, as my friend Tess White was at pains to point out, the Government is reluctant to use that spend to bring about positive change. Edmund Burke said:
“If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.”
The Parliament must see to it that the Government uses taxpayers’ hard-earned cash to deliver value for money and sustainable benefit to Scotland. Leaving the European Union affords us an opportunity for more of our Government’s spending to end up with Scotland’s small and medium-sized businesses, which are the backbone of our economy.
We must put Scotland first. Whatever excuses have been given in the past for the lack of anything approaching a level playing field for Scotland’s SMEs, they are no longer valid. We should use our new flexibilities to give Scotland’s SMEs a much fairer and more equal opportunity to win business in the public sector.
It is not easy for many of Scotland’s SMEs to engage with the public sector—doing so is complex and expensive. Many SMEs do not get involved because they cannot afford to. That must change. If ministers listened to businesses, they would know about the excessive burden of red tape and about how difficult it is to get on to certain frameworks. That will not change if the Government complacently sits back and does nothing.
I am grateful that Michelle Thomson is delighted to hear me speaking in the chamber—I do quite a bit of that. I take her point, which I will come on to discuss. Let us see whether we can meet somewhere between the two points that we have raised.
When contracts are awarded, we need to stop thinking about procurement in a solely financial or legalistic way and to think about it in a way that accords with our values and with supporting our businesses. What is the Government doing to make opportunities more equal for Scotland’s SMEs? What is the Government’s ambition for Scotland’s SMEs? What proportion of public spending—not the number of contracts but the money—will the Government ensure is spent with SMEs by the end of the parliamentary session?
The single biggest drag on economic activity and growth in this country is probably the late payment of invoices. The degree to which large organisations manage their cash flow at the expense of smaller businesses by withholding payments is incredible. That is not clever or fair. What will the Government do to make its tier 1 contractors pay their suppliers’ invoices in full, on time and within a reasonable number of days?
As my friends in the Conservative Party have said and will keep saying, we need far more openness and transparency from the Government. To give only one example of many, I have been asking questions for six months about the contractual relationship between NHS Scotland and ServiceNow of Santa Clara in California, and I have had a succession of non-answers from ministers. It is incredible how secretive the Government is; Audit Scotland has repeatedly referred to a deliberate lack of transparency.
It is the Parliament’s responsibility to scrutinise the Executive and to ask questions—
It seems to many of us that ministers do not agree that that is the Parliament’s responsibility; they seem to think that it is none of our business to ask questions. They might not be used to it and they might not like it, but it is our business, and the questions will not go away.
We all want Scotland to be the best place in which to live, work, invest and do business. Scotland can make strides in fair work that will underpin our economic success as well as the wellbeing and prosperity that we all seek for our people, communities and businesses. Fair work will drive productivity and inspire innovation, which will add value to jobs and to businesses, which will, in turn, create stronger, more sustainable and inclusive growth. It is at the heart of a wellbeing economy.
Increasing the quality of jobs can improve outcomes for the people of Scotland. Fair work is also crucial to our ambition of eradicating child poverty by supporting families with children to gain more income through employment and by providing flexible job opportunities that respect caring responsibilities and other commitments that workers may already have.
The current pandemic has impacted significantly on the economy and has highlighted inequalities. We need to embed fair work principles that will help Scotland to respond to the challenges caused by the pandemic as well as other issues that we face such as an ageing population, climate change, which has been mentioned, automation, the shift to home working, Brexit and changes in the patterns of global trade.
As we have heard, fair work is based on seven criteria. It offers effective voice, security, opportunity, fulfilment and respect. It balances the rights and responsibilities of employers and workers, and it generates benefits for individuals and society. I will touch on those principles later in my speech.
The Scottish Government wants to use every opportunity to promote fair working and ensure that people are paid at least the living wage. As we have heard, the Scottish Government is making payment of the real living wage a condition of winning Government contracts, and it will engage widely to encourage that. This morning, the Local Government, Housing and Planning Committee talked about how local authorities can access opportunities through procurement.
We must acknowledge the valuable work that others, such as the Fair Work Convention and the Poverty Alliance, have undertaken in the area. By using procurement powers to ensure that bidders pay the real living wage, the Scottish Government is leading by example in helping to influence employment practices and embed fair work principles. We all have a part to play in encouraging organisations—regardless of their size, sector or location—to adopt the Scottish Government’s progressive fair work approach. Everybody should have the opportunity to access secure and stable employment that offers a proper wage while affording staff the flexibility to balance their life and work.
Through the fair work first criteria, the Scottish Government will incorporate the seven key criteria of fair work. Those include an effective voice, including trade union recognition, which is vital; opportunity, with investment in workforce development; security, with payment of the real living wage and no use of unfair fire-and-rehire practices; respect, including action to tackle the gender pay gap and create a more diverse and inclusive workforce; and fulfilment, with investment in workforce development and support for family-friendly and flexible working practices.
The Scottish Government will, as the cabinet secretary mentioned, consult on its ambition to be a fair work nation by 2025. An agreed vision, an action plan and milestones for delivery and monitoring will be produced by early 2022. The Scottish Government has committed to several initiatives—we have heard about the Scottish business pledge, the promotion of the living wage, the workplace equality fund and support for the Fair Work Convention, to name but a few. The Scottish Government has also established a £10 million fund to allow companies to pilot and explore the benefits of a four-day working week. The Scottish Government will use the learning from that pilot to consider a more general shift to a four-day working week as and when Scotland gains full control of employment rights.
In conclusion, the next few years are critical if we are to make the progress that is needed to achieve that vision and meet the changing needs of our economy and our workers.
I refer members to my entry in the register of members’ interests.
I should really begin by thanking the Scottish Government for finally coming around to the labour movement’s way of thinking. That the award of £13 billion of public money every year—around a third of all devolved public expenditure—for procuring goods and services by the Scottish Government and its agencies will now be subject to the new fair work conditions and minimum labour standards is, on the face of it, welcome, although it is a pity that it did not come sooner. If it is legal now, was it illegal in 2016?
Because of Government havering, big public contracts such as the £80 million awarded for the construction of the V&A in Dundee went to BAM, a company that is up to its neck in the construction industry blacklisting scandal going back decades. I have raised before in Parliament the anti-union activity by another blacklister, Laing O’Rourke, on the construction site of the new Dumfries and Galloway royal infirmary, in which £275 million of public money was invested.
On the Aberdeen western peripheral route, which was built with £754 million of public money, workers were liable for both employees’ and employers’ national insurance contributions and were charged for the privilege of being paid their own wages by an umbrella company. It was a scandal of wage exploitation, cost cutting and tax dodging, which all went on with public money and in our name.
Those are all important cases that illustrate a more general problem—a systematic failure—and all occurred under the gaze of a Government that was not prepared to act. None of this is ancient history. The Dumfries and Galloway royal infirmary became operational only in December 2017, the V&A opened its doors only in September 2018, and the western peripheral route in Aberdeen was opened to traffic only in February 2019. Over £1 billion of public money was spent on those three contracts alone, and all were in the lifetime of the previous session of this Parliament.
So I say to the Government that we welcome its late conversion. We hope that it heralds a new era, that robust governance arrangements will now be put in place, that there will be not only contract monitoring but contract compliance—with tough penalty clauses to boot—and that ministers and principal accountable officers will be transparent and open to scrutiny by Parliament, its committees and the people.
In the Labour Party, we have a wider vision of public procurement that is based on a community wealth-building model pioneered by Labour councils such as North Ayrshire Council. That means ensuring that the award of public contracts does not give rise to massive leakages of investment and profits out of local economies but rather strengthens local businesses, democratic ownership, local workers and the social fabric of local communities. It is a vision that also demands action to take on and take out tax avoiders from public procurement approved lists, not least in the provision of residential care for the elderly.
Although I know that the Government is currently talking about ethical commissioning and ethical procurement in care when it comes to the creation of a national care service, I would make the more profound argument that those services should not be outsourced to the private sector and marketised at all—no more than national health service services and treatments should be outsourced and marketised. They should be run locally, in house, and should be democratically accountable, and the staff should be properly valued. That really would be the dawning of a new era. That really would be progressive and sustainable, and that really would be fair.
Although Scotland has a proud tradition of progressive procurement, the twin challenges of climate change and Covid recovery mean that Scotland once again looks to reform how we procure.
The Scottish Government, recognising this pivotal moment for Scotland, must be commended for quickly resetting the procurement dial to ensure that we harness the power in procurement for such unparalleled times. With an annual public procurement spend in excess of £12 billion, the scope to enhance the life of employees and marginalised and vulnerable groups, as well as to protect our precious environment, is considerable. Public procurement has the ability to influence change across the business world for the betterment of people and places.
Last week, I had the privilege of listening to South Lanarkshire students about what they expect me to do to ensure that we protect our planet and their future, and a number of the pupils’ suggestions are certainly deliverable with more progressive procurement. For example, why does so much of what is delivered into schools still come in plastic packaging? Why do school meals include so few vegetarian and vegan options? Why are single-use face coverings used on school campuses? Those are questions for all public sector procurement staff to consider now. We need to reflect on, rethink and reset what we procure.
Sustainable procurement also means growing our indigenous supply chains. We need look no further than the Scottish personal protective equipment supply base, which the Government has successfully expanded during the pandemic. That not only provides Scottish jobs and security of supply; it delivers significant environmental benefits through reduced carbon footprint.
A reset of how we procure would deliver substantial environmental benefits. A reformed procurement approach will also support enhanced fair work practices across Scotland.
I was delighted by the recent Government announcement that the payment of the real living wage will be a condition of securing future Scottish public sector contracts. Those contracts support a lot of Scottish jobs—around 110,000 of them. That is way more people than the whole population of my Uddingston and Bellshill constituency. Affirmative action by the Government on the payment of the real living wage across the public sector is a transformative action, and I would encourage private sector organisations to follow suit.
Using procurement to drive fair work practices across the economy will reduce in-work poverty and societal inequalities. Government initiatives such as fair work first and the Scottish business pledge are incrementally changing employment practices across Scotland. Such redress cannot come quickly enough—the Tory Westminster policies are hitting hardest the pockets of the lowest paid
As well as increasing pay, embedding fair work practices in public sector procurement has the real potential to increase opportunities. That includes enabling family flexible working, reducing the gender pay gap, eliminating inappropriate use of zero-hours contracts and increasing worker representation in company decision making. Those life enhancing improvements to fair work practices are particularly needed in sectors such as construction and social care, in which job insecurity, low pay and/or gender imbalance are more prevalent. Given that those two sectors account for around 25 per cent of public sector spend, it is clear that procurement could be a real enabler for sectors that are crying out for positive change.
For many years, the Scottish approach to procurement has been admired and replicated by other nations. In recent years, procurement has enabled Scotland to secure five times as many accredited living wage employers as the rest of the UK. I am confident that we can once again show global leadership. A more progressive approach to sustainable procurement provides us with an exciting opportunity to reimagine the country that we want Scotland to be: a fair work nation.
In conclusion, I am delighted to welcome NHS Lanarkshire’s announcement today that the new University hospital Monklands, which is just 14 miles from the 26th UN climate change conference of the parties—COP26—will be fully net zero at the build and operation phases. That is some achievement.
Thatcherism featured many crimes, but perhaps one of the greatest was to hand over the budget of public bodies for predation by private profiteers. Compulsory competitive tendering was a fantastic way to transfer wealth from communities to the balance sheets of corporations, very often reducing the quality of services and leaving the more complex, and therefore more expensive, services for local authorities and other public services to deal with. That made the public sector look less efficient, and, as the fair work convention found, led to downward pressures on public services’ budgets.
We need a root-and-branch approach to eliminate that attitude to our public services. Our public spending should support public bodies’ aims, not the aims of people interested only in plunder and profit.
I am delighted to see the rise of community wealth-building approaches that use public spending to create better communities and more employment, and which do so in a way that does not undermine the shared aims of fairness, equality and social justice.
Procurement has been my guilty pleasure across my public service. One of the first things that I did when elected as a councillor many moons ago was to identify ways in which local authorities could use their spending to better effect.
In 2008, I joined the calls for a living wage—the first Scottish politician to do so. I am pleased that we have won that argument, even if, at the time, some of my colleagues thought that it was not worth the hassle, or could not see the difference between a living wage and a minimum wage.
I am proud of the commitments that the Greens secured in the co-operation deal with the Scottish Government on the living wage, and that we have already seen action on that. Requiring all Government procurement contracts to pay the living wage will make a big impact on driving up pay and improving people’s lives, embedding the fair work agenda in Scotland’s economy more than ever before.
I will not name any names, but some of those same colleagues, 15 years ago, thought that they were doing such a good job on three-year funding that they refused calls to move to five-year funding for the voluntary sector. Instead, they regressed to single-year funding—a disaster for the third sector and something that must end. We must renew our relationship with the voluntary sector, with sustainable funding relationships. We need to update the Scottish compact that, some 20 years ago, gave hope to so many.
What I was doing then has now been wrapped up into community wealth building, which is an approach that can transform our public services and deliver for our communities. Sustainable procurement is key to that—procurement that means that public kitchens, including school canteens, source food provided by local businesses and organic producers, and which bases decisions about public sector capital and revenue funding on targeted social, economic and environmental outcomes.
The debate is not just about procurement, however; it is about treating workers with dignity and respect, and compensating them accordingly. Fair work principles must be the norm: payment of a real living wage, no precarious contracts, decent conditions, democratic engagement, including trade union recognition, and transparent, supportive management. All procured services should be centred on ethical commissioning and fair work, which will be quality and individual outcome focused, collaborative, person centred and human rights based.
We must also acknowledge the global impact of our commissioning and procurement activities. Our supply chains too often include child labour, slavery and actions that drive climate breakdown. In the worst cases, such as in the illegal occupation of the West Bank, they support human rights abuses. Purchasing goods and services made in the illegal settlements in Palestine supports the illegal occupation, and no Scottish public body should be acting in support of that. I would welcome a statement from Scottish ministers on what actions are being taken to ensure that such purchasing ends.
By pursuing community benefit, human rights and community wealth building, we can transform our communities. I sincerely hope that in this session of Parliament we can abandon the legacy and mindset of Thatcherism in public services and embrace community wealth building, because that way lies social and economic justice.
I am grateful for the opportunity to speak in today’s debate. It is my desire that we should see Scotland’s economy growing, so that there are more resources to share around, more tax can be paid and we can have more and better public services. However, economic growth comes in different forms. If all the benefits go to very few people, that is not acceptable and not good for the country. Therefore, along with growth in GDP and other similar measures, we need to see increasing fairness and sustainability, which is why it is important that we have this debate.
It is true that we have seen progress in some areas in recent years. At least women are now paid the same as men for doing the same job. However, it was only relatively recently that there was a breakthrough in Glasgow for men and women doing work of equal value, after years of Labour inaction and collusion. In some sectors, such as the police and solicitors, more women are entering the profession but they are still not always being promoted into senior positions in the numbers that I, for one, consider they should be.
We need to use whatever powers we have in an imaginative way, which certainly includes in relation to the conditions that are attached to procurement exercises and any grants that are made. Other countries have tried different approaches. For example, France has tried breaking large contracts down into smaller chunks in order to support smaller local businesses—so the EU did not hold us back.
Part of the debate is about where employment law should lie. I would prefer it to lie in Scotland, whether under devolution or independence. However, we have to accept that, even with independence, we would face constraints, given that we compete internationally. Any movement to fairer work practices needs to have an international element to it. Just as we need COP26 and international agreement on climate change, so we need international agreement on fair work practices.
I remain incredibly disappointed that we left the EU through Brexit. We got some good work practices from the EU, including a limit on the maximum number of working hours per week—apart from for MSPs, of course. As EU members, we were quite restricted in the conditions that we could impose when procuring goods and services, but we will still be limited by the United Kingdom Internal Market Act 2020 and possibly by trade agreements that the UK enters into. I hope that we will push the boundaries on that as far as we can and that, whether by using public procurement or by making grants, we do as much as we can to ensure that decent pay and fair work practices are required.
The closure of the Tollcross branch of McVitie’s, which is in my constituency, now seems almost inevitable, bringing the question of ownership into the debate. We have become used to the idea of big multinational corporations as almost the sole and best model for enterprise, but we also need to focus on other models, including co-operatives and employee ownership. In such models, there is likely to be more commitment to the local area, more links to the local community and more fair work practices. We need to do more to fend off the takeover of growing Scottish companies by big multinationals, wherever they are based. [
Do I have time for an intervention, Presiding Officer?
I am sorry; I will continue.
Another angle is international fair trade. I absolutely want fair work practices, flexible working, a proper living wage and a reduced gender pay gap for workers in Scotland, but I do not want that for Scottish workers alone. I want workers in Malawi and Rwanda to get a living wage; I want women in Zambia and Pakistan to be paid the same as men in those countries. Fair trade has made great inroads on those issues, but we need to go further so that, when we buy clothes from Bangladesh or coffee from Ghana, we pay a high enough price so that the workers in those countries have a decent standard of living.
Sustainable procurement and fair work practices can mean many things, but, in the coming years, we need to keep our focus on them and not just on GDP and other figures that are easier to measure.
I will concentrate on the public procurement angle, because having the right public procurement will go a long way to ensure that we have fair work practices.
I hope that there is one thing that can unite the Parliament in these difficult times: the drive to ensure that we get better value for public money and that we do so as openly and transparently as possible. The public deserves no less. They surely have a right to know exactly where their money goes and why elected members of the Scottish Parliament make certain choices, particularly when it comes to jobs and fair work. We must be held fully accountable for every decision that we make, especially on public finance. The Finance and Public Administration Committee, several members of which are in the chamber, certainly sees its scrutiny role as absolutely paramount in all its activities; so, too, does Audit Scotland.
In 2018, the then Auditor General, Caroline Gardner, strongly criticised the Scottish Government for the limited information that was made publicly available to enable scrutiny of the financial support that is given to several private companies. It is quite clear that, at Ferguson Marine, Burntisland Fabrications and Prestwick airport, transparency has not been as good as it should be.
On the request for openness and transparency, it is important that there is a proper structure around the Scottish Government consolidated accounts. A serious problem with Ferguson Marine was that, although it was a fully Government-owned company with Scottish ministers as the only shareholders, it did not fall into the Scottish Government consolidated accounts.
Caroline Gardner was absolutely correct when she said that, to deliver best value, we need good governance structures and effective management—she said that persistently during her time in office, and her successor is doing the same. That is what is required of local authorities and it should be the same for the Scottish Government.
In his speech, the minister mentioned the Procurement Reform (Scotland) Act 2014, which demands that public bodies consider not only the economic outcomes of procurement but what would enhance social and environmental wellbeing, which several members have referred to. This is a good week to talk about the additional concerns of social and environmental wellbeing.
The Federation of Small Businesses has made two very strong points on that front. First, it would be very good for a much higher percentage of procurement funding to go to smaller firms to help local jobs and local investment. We must bear in mind that many smaller firms have been the bedrock of our communities during Covid. Secondly, it is true that Covid has not made things easy when it comes to tracking the money, but that should not be used as an excuse.
I finish on what I think is a very important point: not only are openness and transparency good practice in measuring best value for taxpayers’ money, but they are essential if there is to be renewed trust between Government and the public. There is much in the media about how politics—and maybe even politicians—has lost its integrity when it comes to that transparency and openness. That is not good for society, it is not good for where our public money is going, and it is certainly not good for rebuilding Scotland after Covid.
The debate is about how public money is spent, but it is also about the kind of world that we want to live in.
The fair work first guidelines describe themselves as a
“flagship policy for driving high quality and fair work across the labour market”.
In those guidelines, the Scottish Government asks employers to adopt fair working practices. One of the issues is to what extent those guidelines are mandatory, to what extent they are voluntary and to what extent they are criteria that have to be taken into account when decisions are made.
For example, one of the principles that is laid out is about having
“appropriate channels for an effective voice, such as trade union recognition”.
However, trade union recognition is not a requirement in the tendering process. In the recent past, the Scottish Government awarded Amazon a £4.7 million contract for web services. That was last year. The year before, Amazon was awarded £45,272 in a contract. In 2018-19, it was awarded £2.5 million in a contract. Amazon was also awarded £15 million through a tender for web services. That is despite the fact that not a single Amazon warehouse in the whole of the UK is unionised. Even Amnesty International has commented that Amazon has repeatedly issued legal notices to trade union organisers who even attempt to talk to Amazon workers outside Amazon facilities in the UK.
When I was a constituency member of Parliament, I was repeatedly approached by workers who lived in Ayrshire and travelled to the Amazon warehouse in Inverclyde and who, when they got there, were told that, even though they had a contract, there was no work or that hours were very limited. Amazon has said that it does not operate zero-hours contracts. However, according to Amazon workers— and indeed to a fairly recent ITV documentary on the subject—the reality is that the contracts operate as zero-hours contracts. Another provision in the guidelines is that there should be
“no inappropriate use of zero hours contracts”.
Therefore, in relation to the fair work guidelines and the business pledge through which the Scottish Government asks contractors to commit to incorporating those principles, I ask the minister to clarify how many successful contractors have signed the business pledge.
The minister indicated that companies will be mandated to pay the living wage. To what extent does the Government accept that it is only when a company is mandated to adhere to certain principles that those are actually effective? At the moment, companies such as Serco have ended up running asylum accommodation, and PricewaterhouseCoopers was only very recently awarded the £100,000 contract to design the new national care service.
I ask the Scottish Government to outline how it believes that that is consistent with the principles that are being set before Parliament today.
Taxpayers have the right to expect that the public purse is used to support green jobs that are well paid. I welcome today’s debate, what the Scottish Government has said and—indeed—the contributions from the different political parties across the chamber.
Our role in this Parliament is to ensure that those warm words become a reality. I hope that the Parliament will commit itself to doing that over the coming weeks.
I will begin my speech in this short debate on sustainable procurement and fair work by discussing ageism. Much has been made of the UK Government’s announcement that the minimum wage will increase to £9.50 from April next year. I am sure that the real living wage will also consequently increase further in the next few weeks. However, the rate for 21 and 22-year-olds will be £9.18, not £9.50; for 18 to 20-year-olds, it will be £6.83; and for 16 to 17-year-olds, it will be £4.81.
I know only too well about the use and abuse of those national minimum wages in the hospitality sector, and I know of some particularly bad practitioners. I hope that members across the chamber can join in saying that that is simply wrong. Although it might be permissible, it is wrong, and I am sure that the chamber will want to come together to oppose such an unfair, divisive and discriminatory approach to the UK minimum wage. I ask the Scottish Government what representations it has made or will make to the UK Government to make the case to end such ageism in employment.
I welcome the fact that the real living wage will now be a prerequisite to securing any Scottish Government contracts. That is of course just one element of a wider fair work first programme, which makes the adoption of fair work practices part of the criteria for securing public contracts and grants.
I very much enjoyed Katy Clark’s challenges to Government. Although I will not say too much more about fair work first in relation to that, she made some pertinent points, and I think that I should put that on the record. Not only does the Scottish Government have to ensure that no ageism exists in fair work first; we also have to make sure that companies are much more consistently compliant across the range of contracts and grants that they may secure from the Scottish Government.
I am the convener of the Scottish Parliament’s cross-party group on palliative care. Our members have a great interest in the development of a national social care system and in improving the pay and support of the social care workforce. That workforce must be at the centre of any fair work agenda. I welcome the fact that, last month, the Scottish Government introduced a £300 million package of measures to help health and social care staff. That included ensuring a pay rise of more than 5 per cent for all adult social care staff who are currently paid the real living wage. That is a welcome start, but it is just a start.
I am minded of the words of the independent review of adult social care, which spoke about having to carry out job evaluations to ensure
“equitable assessment of terms and conditions” and of the “skills, qualifications, responsibilities” and contributions made by social care staff. It also spoke of national minimum terms and conditions, of raising, not lowering, standards within commissioning—whatever that may look like—and of a
“national forum comprised of workforce representation, employers, Integration Joint Boards and the Scottish Government” at the heart of it; in other words, a national, sector-level collective bargaining structure. That must be at the heart of any reform to adult social care. We should not pretend that national collective bargaining will immediately transform social care or that it will be easy—it will not be. However, it is a key component, and it is also a key component of fair work.
The funding must of course follow the support for any national care service, not just because it is the right thing to do, but because of the equalities agenda—because of the gender and BME aspects, with women and black and minority ethnic workers much more heavily represented in that sector.
I note that the Scottish Government and COSLA are discussing a fiscal framework for local government. Depending on the outcome of the consultation on a national care service, and on who picks up the tab for the aspiration to see the fair work agenda in that, at the heart of this we will have to make sure that we fully fund the sector as we progress.
I declare an interest as a member of the GMB union, Unite the union and the cross-party group on the RMT—the National Union of Rail, Maritime and Transport Workers. Presiding Officer, in case any SNP member repeats the recent comments of the transport minister, who suggested that being a union member was a problem for an MSP, let me say that I am proud to declare those interests.
It really is the very definition of irony that the Scottish Government brought this debate on fair work at a time when refuse collectors and cleaners—thousands of council workers—are taking to the streets, not to collect our bins but to strike for fair pay, and when we have just had Britain’s longest industrial dispute on our railways. The Government showed little interest in resolving those two disputes until ministers realised that their COP26 selfies might be photobombed by striking rail and council workers.
Meanwhile, our nurses are balloting on industrial action because of the health secretary’s inaction since the pay offer was rejected, and last week the Government snubbed retail workers by rejecting the Union of Shop, Distributive and Allied Workers’ call for large shops to close on new year’s day.
It is disappointing that we are witnessing anti-trade union rhetoric from some Scottish ministers, which means that industrial relations between the Scottish Government and our key workers have plummeted to an all-time low. As Paul Sweeney said when he opened this debate for Labour, how can it be that this Government, which appears to be so committed to workers’ rights, frequently finds itself involved in industrial disputes with those same workers?
The reality is that the SNP’s record on fair work is, sadly, all too often not as progressive as it is reluctant. That has been the case for years. Positive steps are welcome but take too long and, more often than not, do not go far enough. As Richard Leonard said, we welcome the SNP coming round to the Labour movement’s way of thinking when it comes to payment of the living wage, including in the context of the award of more than £13 billion of public money every year for procuring goods and services, but it is a pity that that did not come sooner.
When I was a councillor in Dumfries and Galloway Council, before I was elected to this Parliament, I recall being worried, even then, that we would face a recruitment crisis in social care because cuts to council budgets were driving an agenda of outsourcing care for no other reason than that it was cheaper to commission private and third sector care firms than to use council staff. I proposed that the council should seek a commitment from firms to pay the living wage as part of any council care commissioning, and that we should work in partnership with firms to pay a fair price for fair pay. My proposal was booted out by the Tory-SNP coalition that ran the council for most of the decade that I was a councillor. SNP councillors waved letters from SNP ministers that said that they could not support fair pay because it was illegal.
It took the SNP nearly a decade to U-turn on a mechanism for paying the living wage to adult care workers—by updating its legal advice, as the minister described it.
We know that the whole system of commissioning—that race to the bottom that is competitive tendering—as opposed to co-production is a broken model. Two years ago, the Fair Work Convention report, “Fair Work in Scotland’s Social Care Sector 2019” said that the procurement model was not delivering fair work and indeed was a barrier to it, because it was responsible for zero-hours, low-hours and seasonal contracts, thereby undermining job security. The approach was used to manage the savage cuts that Green and SNP budgets imposed on councils and led, in part, to the social care recruitment crisis that we still face, with staff being lost to sectors that offer better terms and conditions.
In last year’s budget, the SNP made no provision for an increase in social care pay. We need wholesale reform of social care, which replaces competitive tendering with genuine collaboration. Reform needs to start with a commitment to tackle poverty pay by adopting the GMB union’s call for a minimum £15 an hour in social care.
Jamie Halcro Johnston asked whether we can afford to do that. The reality is that we cannot afford not to do it. We currently spend hundreds of millions of pounds on delayed discharge, keeping people in hospital because poor wages mean that we cannot attract social care staff to deliver the care packages that would enable people to leave hospital. We need to stop believing that paying poor wages is good for the economy and that low pay does not come with costs.
I have highlighted the fact that Labour supports that £15 per hour wage for social care workers as a way of tackling the challenges that we face, particularly in social work. I hope that Jamie Halcro Johnston will back our campaign and that of the trade unions.
As Paul Sweeney said in his response to Mr Halcro Johnston, the Feeley report was clear: every £1 spent on social care generates £2 for the wider economy. Fair pay not only delivers for the workforce—the majority of whom are women—but delivers a stronger economy.
It is vital that a stronger economy is a more inclusive one. Willie Rennie was correct to say that our present procurement processes squeeze out small businesses. He rightly noted that only 5 per cent of the Scottish public sector’s almost £14 billion procurement budget is spent on firms with fewer than 10 employees, despite those firms accounting for 94 per cent of businesses in Scotland.
The value of procurement contracts won by smaller firms has been in decline in Scotland since 2016, which is why Labour has consistently called for a local-first approach to all procurement. It is why we want to see the commitment that we secured in the legislation establishing the South of Scotland Enterprise Agency—one that embeds fair work in all grants to businesses—strengthened and extended to Highlands and Islands Enterprise and Scottish Enterprise. It is also why, as Katy Clark said, we want conditionality in grants to businesses to go beyond the living wage and vague commitments to fair work and to better mandate companies in areas such as collective bargaining. It is why Labour will always call not only for a stronger economy but for one that is more equal and inclusive and is fairer for all.
Scotland’s workforce has faced unprecedented challenges in the past
18 months. The nature of work has changed or, more accurately, change that was already taking place has been accelerated.
The effects have fallen on employer and employee alike. While businesses were shuttered, employment seemed more precarious. Some businesses stopped trading, while others limped on as their customer base collapsed under the weight of the public health emergency. Many enterprises survived; some, regrettably, were lost. Key workers had to manage and adapt to risk, ensuring that vital services could continue. The pressures placed on them have been immense and in too many cases are still on-going.
It is therefore a welcome step that we are discussing fair work and sustainability in procurement today. I hope that we can all recognise the need to drive forward positive change and to continue or even redouble our efforts, despite the impact of recent times.
We must also recognise that the nature of work is evolving and must evolve if we are to meet the challenges of tomorrow. There is an important role for this Parliament and the Scottish Government in responding to those changes by adapting, leading by example and ensuring that fairness is promoted.
Many of the worst possible outcomes of the pandemic have been averted. Thanks to the furlough scheme and other support mechanisms, our economy carried on and many jobs and livelihoods were protected. UK growth projections look increasingly solid and the threat of huge rises in unemployment has been averted. We should all welcome that legacy.
Moves have gone further. Despite challenges, the UK Government last year surpassed the SNP’s ambition of an £8.70 per hour minimum wage by 2020. Next spring, as announced by the chancellor in last week’s budget, the national living wage will rise to meet the Living Wage Foundation’s recommendation of £9.50 an hour.
Good, fair work involves fair pay but goes beyond that too. In relation to procurement, there is an opportunity to expand the promotion of skills and retraining, an aspiration that the Scottish Government has said is a priority. Part of that, as colleagues have observed, is about including support for apprenticeships, but it should also recognise the parallel needs for reskilling and upskilling, building bases of expertise and providing the support for transition. The Procurement Reform (Scotland) Act 2014 also recognised the merits of sustainability. This week in particular, environmental sustainability should be at the forefront of our minds.
We should also recognise the need for an inclusive approach in pursuing those aspirations. It would be easy to use procurement to drive those ambitions forward, but in a way that was exclusionary and created a narrow door through which only the few could enter. Avoiding that outcome was another principle of the 2014 act and is one that we should take seriously in turning principle into action. It is no great stretch to see how an outcome that limits potential sources of procurement limits the utility of the measures that we are discussing. It would also, just as importantly, strike at the very fundamentals of Government procurement, which involve finding value for the money that the public has entrusted us to spend.
Scotland has an incredible diversity of innovative and inventive SMEs that are trailblazers in new areas and drive competition in others. That is particularly true in regions such as mine, the Highlands and Islands, where smaller enterprises are the life-blood of our economy, and where Government procurement can make a great deal of difference. We know that there are barriers of access for smaller businesses already, as other members have pointed out, but we must be in the business of lowering rather than raising those walls.
There have been a range of useful contributions from around the chamber today. My colleague Tess White spoke of this as a time to take stock and to ask ourselves the sometimes difficult questions about what we as a state and a society can do to improve. Sustainability is an often-used term but is one that encompasses a great deal, and it depends both on clarity of purpose and an understanding of the effects of our interventions.
Tess White highlighted the importance of suppliers to an organisation’s overall social and environmental footprint, as well as emphasising the importance of education and innovation. She also spoke about the importance of engagement. We know all too well the consequences of a failure to engage, as can be seen in this Government’s anti-business approach and the problems that that has created. Attempts at making positive change must be on the basis of working with employers and other organisations, not against them.
Liz Smith spoke about the issues that have been raised by committees of this Parliament, as well as the Auditor General, in relation to the transparency of procurement. Among other things, she mentioned the current issues that are faced at Ferguson Marine on the Clyde, which were brought up in detail in my members’ business debate on ferries just last week. Although we recognise the issues around commercial sensitivity, it is clear that there remains a lack of openness on important and high-value procurement and support for businesses from the Scottish Government. As Liz Smith pointed out, openness in that regard is a vital part of good governance and effective management.
Liz Smith also touched on the issue of support for small businesses, a point that was also raised by Willie Rennie and my colleague Stephen Kerr, who highlighted some of the challenges that are faced by small businesses and operations in accessing public procurement.
That is a surprise.
The member is talking about the need to support small businesses. Does he share my view that the increase in VAT from 5 per cent to 7.5 per cent for the hospitality sector on 1 October, imposed by the UK Government, is anything but business friendly? The hospitality sector was the first to shut down and the last to open and is being brutalised by a lack of staff because of the lack of free movement of people. Does the member stand by that rise in VAT?
I am sorry if my letting the member intervene surprised him. He tried to intervene on me, so I am surprised by his reaction.
The UK Government has supported business and, if the member goes out into communities, he will hear businesses saying how important that UK Government support has been. He will also hear them say how difficult it has been to access some of the Scottish Government support, how there has been a lack of clarity and delays in getting that support through and how there have been far too many different pots of money, which has made everything much harder. I am sure that the member will have heard that message himself.
There is an important role for this Parliament in promoting sustainability and positive employment practices in a changing world, but it must be an approach that is collaborative and responsive to change. Without those key requirements, the influence that the Scottish Parliament and the Scottish Government has will be greatly diminished.
In furthering the principles of sustainable recruitment, we should look to the future and to the coming needs of wider society and consider whether, in the round, public authorities in Scotland are making a positive contribution.
I thank all members for their contributions to this debate, which is an important one. It is a debate that affects every working Scot and every Scottish employer. It takes place against the backdrop that we have all witnessed of the impact of Covid, which has exposed and highlighted many of the unacceptable features of our economy and of some people’s working lives. Further, of course, it takes place against the backdrop of Brexit and, as we look ahead, with COP26 taking place, the economic transformation that our country will have to go through in the coming decades to meet our 2045 net zero targets, which, again, will have an impact on every working Scot and every business in this country. Further, as Katy Clark said, it is also a debate about the kind of country that we want to build.
I will refer to some of the powerful contributions that members have made and answer some of their questions if I can. I start with Jamie Halcro Johnston saying in response to Jim Fairlie’s excellent intervention that the Conservative Party is pro-business. I recall that the Conservative Prime Minister Boris Johnson was not very complimentary about business. He said the word “business” preceded by a four-letter expletive that I will not say because I like to adhere to the standards of the Scottish Parliament.
It is ironic that I was about to refer to some businesses in my constituency and the rest of Scotland, because I was also intrigued by Tess White’s comments when she had the audacity to say that the SNP Government does not listen to the hospitality sector. I speak to the hospitality sector in my Moray constituency and to other organisations in my ministerial role. Their number 1 concern is the impact of Brexit on Scotland’s hospitality sector, and I put it to Tess White that it is not SNP or Green ministers who are not listening to the hospitality sector but her colleagues in the Conservative UK Government in London.
I was also intrigued that Tess White said that the Scottish Government has to be careful about the impact of our fair work criteria on business and then immediately afterwards—in the same breath—that we should listen to the recommendations of the “left-wing Jimmy Reid Foundation”. I am sure that the Jimmy Reid Foundation will be delighted that a Conservative MSP supports it.
I turn to comments made by other members. Michelle Thomson spoke about sustainable procurement and many other members explored other issues around procurement, which is just one of the windows into the fair work agenda. We have been pushing the boundaries of what is permissible in public procurement in Scotland for the past two decades in the Parliament. There is a major focus on ensuring that public procurement contributes to a green and inclusive recovery, and I give Michelle Thomson that assurance.
Maggie Chapman referred to issues around procurement and Government contracts in relation to the occupied territories. I again say that the Scottish Government takes the issue of human rights very seriously and believes that those we contract with should take a robust approach to preventing human rights violations in any part of their business, including their supply chain. That is reflected in much of the procurement legislation.
I am embarrassed to find myself agreeing with Stephen Kerr on one particular issue. I will come back to that later, because I want to address a point that he made that I do not agree with. He referred, as others did, to the recent rise in the national living wage which, although welcome, is not nearly as generous as it sounds, as others such as Bob Doris pointed out. It does not support workers under the age of 23, who are one of the groups most affected by the recession, does not compensate for the £20-a-week cut to universal credit and will soon be woefully short of the new real living wage rate that will increase on 15 November, during living wage week 2021. I read in the newspapers this week that the UK chancellor is the richest elected politician in the UK, so I do not think that anyone was surprised that he missed the opportunity to do more for low-paid people.
The issue that Stephen Kerr and other members raised on which I agree with him is the need to do more to ensure that small to medium-sized businesses and their local economies benefit from procurement and the spending of the public pound. I hope that there is cross-party support for community wealth building as part of the agenda of the Government and the Parliament.
People will be aware that there are five pillars to the community wealth building agenda. Those include
“making financial power work for local places”,
“fair employment and just labour markets” and
“socially productive use of land and property”.
What would help us to deal with the challenges that face working people in Scotland is to have employment powers devolved to this Parliament. We have no competence to legislate on reserved matters such as the setting of the minimum wage, trade union law, employment rights, protections against discrimination or enforcement action. Many members who spoke in the debate made the case for those powers to be devolved to this Parliament when they called for action to be taken that we do not have the legislative power to take in this Parliament.
I ask all members to get behind the Government’s efforts to get legislative powers over employment devolved to Scotland’s Parliament. [
Do I have time to take an intervention, Presiding Officer?
Over the past few years, this Government has achieved so much on the fair work agenda, in the absence of legislative powers over employment. Through our fair work first criteria, public sector grants and procurement, we have asked employers to commit to appropriate channels and effective voices for staff, such as trade union recognition; investment in workforce development; no inappropriate use of zero-hours contracts; action to tackle the gender pay gap and create a more diverse and inclusive workplace; and payment of the living wage. I remind members that more people are paid the living wage in Scotland than in other parts of the UK.
From October, two additional criteria have been added to the fair work agenda. Employers have been asked to offer flexible and family-friendly working practices for all workers and to oppose fire and rehire practices. Over and above that are the other issues that we have discussed today to do with conditionality through public grants and procurement.
I urge everyone to submit to the Scottish Government’s consultation on making Scotland a fair work nation by 2025. Under the SNP’s leadership and with the support of the Green Party, we are making fantastic progress towards that.