By Keith Aitken in Edinburgh | 14 May 2014
The Scottish Parliament has rejected a Labour move to enforce payment of the Living Wage on all firms undertaking public contracts in Scotland, after Deputy First Minister Nicola Sturgeon said the move was likely to be against European Union law.
Instead, Sturgeon introduced amendments at the final stages of the Scottish Government’s own Procurement Reform Bill to provide that all firms tendering for public contracts would be assessed on their readiness to pay the Living Wage, currently set at £7.65 per hour, but without enforcement.
‘We don't disagree with the objective of making payment of the Living Wage a mandatory requirement of public contracts,’ Sturgeon said.
But she admitted: ‘I want to ensure we abide by the law and that we don't put our public bodies at that risk of being taken to court.’
Labour, backed by the Liberal Democrats and Greens, wanted to make Living Wage compliance a condition of public contracts under the Bill, which seeks to align Scotland’s £10bn annual public procurement spending more closely with Scottish social, economic and public service objectives. MSPs later unanimously voted the Bill into law.
Infrastructure spokesman James Kelly said the Living Wage was an idea whose time had come, and that Labour’s amendment would make ‘a massive difference’ to some 400,000 Scots paid at below the Living Wage rate, many thousands of them working on public contracts.
‘That would give a rise to many of £2,600 a year,’ Kelly said. ‘Sixty-four per cent of these people are women, so this is an opportunity not only to help women but an opportunity to tackle low pay in public contracts.’
He was supported by former Scottish Liberal Democrat leader Tavish Scott, who urged ministers at least to test the idea against EU restrictions, and by the Greens’ Patrick Harvie, who said: ‘Sometimes it is necessary for governments to be willing to test the boundaries of what's allowable.’
Sturgeon said the present Scottish Government had, for the first time, undertaken to pay all its own employees at or above Living Wage. But she said the advice from EU internal market commissioner Michel Barnier was that a mandatory requirement on contractors was unlikely to be permissible.
Kelly claimed later that Sturgeon had been ‘dragged kicking and screaming’ to put a Living Wage provision in the Bill.
‘The provisions the Scottish Government have added are not as strong as the ones I proposed, and do not guarantee a fair day’s pay to cleaners, caterers and retail staff on public contracts,’ he said.
