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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.

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.

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.

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. [Interruption.]

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.

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?

The Scottish Government regularly carries out analysis of the labour market for local authorities areas. On 29 September 2021, the annual national statistics publication “Scotland’s Labour Market: People, Places and Regions” was published. It contains up-to-date employment rate estimates for local authorities, among other measures, for April 2020 to March 2021. Between January to December 2017 and January to December 2020, the gap between the combined employment rate for the three best-performing local authorities and the combined employment rate for the three worst-performing local authorities reduced. There was a gap of 11.8 percentage points in 2020, which was down from 16 percentage points in 2019.

Yes, and that is a point well made. The Scottish Government’s policy continues to be that the UK Government should make appropriate support available and not end supports through the furlough, because it is still a very anxious time for many employers in particular sectors, and they might well require on-going support. At the end of July, 160,500 jobs in Scotland were still supported by the furlough scheme, and many are today as well. That is why the Scottish Government says to the UK Government, “Please make sure that you do not cut off that vital support.”