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Call for living wage change to Procurement Reform Bill Living wage contract move defeated by MSPs
(about 7 hours later)
A fresh attempt to make payment of the living wage a condition of all public sector contracts will be made later. A move to make the hourly £7.65 living wage part of all public sector contracts has been defeated in the Scottish Parliament.
Scottish Labour has proposed last minute amendments to the Procurement Reform Bill being debated at Holyrood. Labour said it would help tackle low pay, but the Scottish government said the policy may breach European law.
The legislation, expected to be passed by MSPs, aims to improve the way the public sector buys goods and services. As an alternative, ministers said firms seeking public contracts would have their willingness and ability to pay the living wage assessed.
But ministers have said European Commission advice prevents them from making the living wage a requirement of public sector contracts. The policy formed part of the government's Procurement Reform Bill.
The Scottish government has proposed its own late changes to the bill. The legislation, which was unanimously passed by MSPs at Holyrood, aims to improve the way the public sector buys goods, works and services, which comes to a cost of about £10bn a year.
It wants companies bidding for public contracts to have their "willingness and ability to pay the living wage assessed" in the process. Labour MSP James Kelly said of his party's proposal: "There is no doubt the living wage is an idea whose time has come.
However, Labour wants ministers to go further and make the living wage a condition of contract. The party said it believed this can be achieved within European law. "The Labour amendment to pay £7.65 across all public contracts would make a massive difference to the 400,000 people who are not on the living wage currently, many thousands of whom would be covered by these public contracts.
But Deputy First Minister Nicola Sturgeon said the EU's internal market commissioner, Michel Barnier, has advised that this is "unlikely" to be possible. "That would give a rise to many of £2,600 a year. 64% 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."
She said this was "disappointing" and that ministers would continue to press the Commission for greater flexibility. The EU's internal market commissioner, Michel Barnier, advised Labour's policy was "unlikely" to be possible, said the government.
A commission source said Mr Barnier had offered "further discussion" on the subject and that Scottish government officials had already met with commission experts on 8 May. Liberal Democrat Tavish Scott, who supported Labour's amendment to the bill, said it seemed there was room for manoeuvre, adding: "It is open to the government to press that particular point so as to see as to whether, even with a limited chance of success, it's possible."
The living wage - which is currently £7.65 an hour - is already guaranteed to many public sector workers in Scotland. Green MSP Patrick Harvie echoed Mr Scott's comments, adding: "Sometimes it is necessary for governments to be willing to test the boundaries of what's allowable.
The Scottish Trades Union Congress (STUC) said it was backing a number of "11th hour" amendments to the Procurement Reform Bill. "I think that's a more articulate means of making the case with colleagues in Europe than simply advocating for an issue."
General secretary, Grahame Smith, said: "The STUC continues to support the amendments proposed by MSPs of various parties, including the living wage amendment tabled by James Kelly MSP, because we continue to dispute the Scottish government's interpretation of the limitations imposed by EU law. But Tory MSP Alex Johnstone said it was unclear how the policy would be paid for, adding: "While I fully commend the Labour party for their long-held objective to achieve the living wage in Scotland, it is, at the same time, an inappropriate place to try and bring in this amendment."
"However, it is our understanding that the Scottish government intends to publish robust guidance on the implementation of the living wage through public contracts; to involve key stakeholders such as trade unions in the production of the guidance; and to ensure that the guidance is followed through appropriate institutional mechanisms. Court 'risk'
"This would certainly go some way towards increasing the incidence of living wage contracts in the future." Deputy First Minister Nicola Sturgeon said the government's own last-minute amendments to the bill meant companies bidding for public contracts would will have their willingness and ability to pay the living wage assessed.
The amending stage of the Procurement Reform Bill, and the final debate on the legislation, can be viewed at BBC Scotland's Democracy Live website from 2.20pm. And she said public bodies would be required to explain their living wage policy in their procurement strategies.
She told MSPs: "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."
Ms Sturgeon added: "We don't disagree with the objective of making payment of the living wage a mandatory requirement of public contracts.
"We're the first Scottish government to adopt the living wage for all of our employers and we encourage all other employers, public private, third sector, to pay their staff the living wage."