NUS Scotland response to Living Wage (Scotland) Bill consultation

Introduction
NUS Scotland welcomes the opportunity to provide a consultation response to the proposed Living Wage (Scotland) Bill. Its important that employers and Government address the effect that low pay has on workers throughout Scotland, to encourage more organisations and companies to adopt a living wage. NUS Scotland has supported the Living Wage campaigns of the Scottish Labour Party and the STUC and SYPs One Fair Wage, which are working to ensure more people can benefit from a living wage and to reduce in-work poverty in Scotland.

We support the aims of the proposed bill, which we believe can help deliver a living wage to more workers in Scotland through public sector procurement and through encouragement to all employers to pay, at minimum, a living wage to their lowest-paid employees.

We are supportive of the Scottish Governments decision to increase the wages of low-paid Scottish public sector employees from next year, to bring them in line with the Scottish Living Wage Campaign and the Living Wage Foundations recommendations for a living wage of 7.45 an hour. We also welcome moves by some local authorities to pay a living wage to their employees.

NUS Scotland believes that the private sector should ensure that their employees, as well as their interns and trainees, receive a living wage, in order to create a society where work pays and in-work poverty is eliminated, and to improve social mobility and access to professional jobs. We also believe that universities and colleges should use contract performance clauses to deliver a Living Wage.

As part of our response last month to the Procurement Reform Bill consultation, NUS Scotland outlined our view that the Scottish Government can encourage private sector companies to adopt the living wage through the public procurement process, by ensuring that consideration is given to fair employment practices, in addition to cost and other factors, in choosing public contractors.

We restate our support for this view in this consultation response, as we are keen for the Scottish Government to encourage all private contractors to pay employees a living wage, and to consider stipulating a living wage minimum within all public contracts as part of this bill through the use of contact performance clauses.

NUS Scotland also supports the proposed Bills aim of ensuring the Scottish Government is promoting the benefits of a living wage, consults on its plans for promoting a living wage with trade unions, business and Third Sector organisations, and is transparent in reporting back the success of those efforts to Parliament. We also want to see the Bill confirm that interns and trainees will also see the benefits of a living wage.

Living wage through procurement

NUS Scotland supports the use of public procurement to ensure contractors are chosen not based on costs alone, but for ethical employment practices and fair terms and conditions for workers. Crucially, we believe this must include ensuring employees are paid a living wage. UNISON Scotlands briefing Uniting for Growth: Boosting the economy by tackling poverty pay1 outlines the number of employers paying a living wage in the UK, and the benefits of higher wages for Scottish society.

The Scottish Government, in its Procurement Reform Bill consultation document, outlined the advice it has received from the European Commissioner regarding the idea of stipulating a living wage minimum within all public contracts. As explained in the Procurement Reform Bill consultation document and the Living Wage (Scotland) consultation, the Scottish Government believes that this may not be possible due to case law.

However, at the very least there seems to be divided legal opinion on this matter, with, for example, UNISON citing its own legal advice, which seems to disagree with the Scottish Governments advice.

We would urge the Scottish Government to not only encourage contractors to pay a living wage at all stages of the procurement process, and with every mechanism possible, but to also seek out legal views from UNISON and other experts, and make the case for the inclusion of a living wage requirement of Procurement to the relevant European bodies. We believe that the Scottish Government should look again at this matter, and ensure that it has exhausted every legal avenue before ruling this prospect out.

Uniting for Growth: Boosting the economy by tackling poverty pay, 2012, UNISON http://bit.ly/YXQdsW

NUS Scotland also agrees with the consultation document that separate advice on the proposals contained in any proposed legislation should be sought from the European Commission (Q2).

Universities and Colleges

NUS Scotland believes that universities and colleges should be among the public sector bodies that should use contract performance clauses to deliver a Living Wage (Q4). Scotlands education institutions are by their very nature progressive organisations that should be leading the way when it comes to ending in-work poverty. Colleges and universities play a huge role in the economic well-being of communities both large and small across Scotland. They need to make sure the standard is set high for the rest of the surrounding community by ensuring their lowest paid employees are paid a living wage.

Living wage through promotion

NUS Scotland supports the Bills proposals on placing a duty of Scottish Ministers to promote the living wage. Working to end to in-work poverty should be just as much part of Scotlands economic strategic planning as encouraging growth and supporting SMEs.

In order to ensure the Scottish Government places a priority on promoting the adoption of the Living Wage across all sectors, we agree with the consultation that relevant stakeholders should feed into the Governments strategic plans, and that these plans should be laid before Parliament. We believe that stakeholders should include representatives of trade unions, businesses, and third sector organisations (Q5).

NUS Scotland also agrees with the Bills proposal that progress reports are made to Parliament once a year, to allow scrutiny of the Governments Living Wage promotion strategic plan, and that these reports include at minimum low-pay mapping and delivery statistics. These reports will not only increase transparency of the Governments work, but allow progress to be measured, and new ideas to be introduced, to help keep the living wage promotion campaign on a successful path towards increasing uptake.

Living wage for interns and trainees

We believe that all elements of Scottish society should receive at minimum a living wage - including interns and trainees (Q9). We know that internships are often essential for graduates to access many professions.

NUS Scotland believes that interns and trainees should be paid a living wage, to ensure opportunities to enter these professions are open to all.

Research on internship quality conducted by the European Youth Forum found that just over half of all interns they surveyed had been paid. Additionally, 41% of those who were compensated found that pay levels were insufficient to cover daily expenses. In total, 65% of those surveyed relied on external financial assistance.2

We believe that unpaid and underpaid internships entrench privilege. When only small groups of people can afford to take up work experience, opportunities are limited for those from less affluent backgrounds to move into employment. The 2009 report by the Panel on Fair Access to the Professions3 found that those in the professions were increasingly from better-off than average families, and suggested that this may be in part due to barriers to entry to these jobs, such as requirements for extra-curricular activities, including internships.

NUS Scotland believes that access to education and training opportunities should be based on individuals talents and potential, not their background or financial circumstances. We believe that internships which do not pay a living wage restrict social mobility by creating barriers to entering certain professions for those without the means to work for free or for low wages.

In this way, internships which do not pay a living wage also risk missing out on the most talented individuals by offering opportunities only to those who can afford to take them, rather than those with the greatest potential. Providing a living wage for professional internships would allow organisations to take advantage of the most talented individuals, rather than the most well-resourced.

We know that young people who work as interns and trainees put in long hours to get a foot on the career ladder. By ensuring that interns and trainees are not only paid, but receive a living wage, we can ensure that opportunities are available to graduates based on their abilities and that we all benefit from the most talented workforce and professions which are more reflective of society.

2 3

Why internships are bad for young people, Intern Aware http://bit.ly/U8L7oB Unleashing Aspiration: The Final Report of the Panel on Fair Access to the Professions, 2009, BIS http://bit.ly/PWCqTj

Conclusion
NUS Scotland welcomes the proposed legislations aims of increasing the number of workers in Scotland who are paid a living wage. In-work poverty has a huge negative impact on Scotlands people and our society. We believe that this bill address the problem of low pay by increasing the number of workers in Scotland receiving a minimum of a living wage.

We are supportive of the rise in the living wage for the lowest paid public sector workers in Scotland, and the Governments support for these increases. However, we also believe more can be done.

We are keen for the Scottish Government to consider action which they could take to encourage greater adoption of the living wage through public procurement and through a duty to Ministers to prepare a strategic plan to promote the living wage. We want to see private sector companies adopt a living wage for their employees, including interns and trainees, and we would like to see the Scottish Government take action to encourage this.

For more information on any of the issues in this response, contact Mike Heffron | Press and Policy Officer|mike.heffron@nus-scotland.org.uk | 07554 451 941 |