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Scots firms may have to pay staff living wage if they take on Scottish Government contracts
Daily Record

December 21, 2011
View the Original Article

FIRMS taking on Scottish Government contracts could face requirements to pay their staff the living wage, if it is permissible under EU regulations.

Finance Secretary John Swinney said the Government was seeking advice on whether it can introduce the measure to the public procurement process.

The Scottish Government has already introduced the living wage for its own staff through its 2011 public sector pay policy, with the rate being set at £7.20 from April 2012. It is also encouraging local authorities and other organisations to adopt the measure.

Mr Swinney said the Government was also keen to pursue the living wage as a condition of its procurement process, however EU law, which sets out the parameters of procurement regulations, was not "sufficiently clear".

Speaking at the Local Government Committee in Holyrood today, Mr Swinney said: "We should not lose sight of the fact that there are wider implications of using public procurement as a means of promoting the living wage, that go beyond employment issues, such as the cost and practical implications for private and third sector organisations competing for public sector contracts.

"EU law limits the extent to which public bodies can require contractors to pay their staff a living wage as part of the procurement process."

He added: "I think there is undoubtedly a legislative vehicle that can be used to require contractors who are responsible for public sector contracts to pay a living wage.

"What we would have to be confident about, in terms of the scrutiny of procurement by the European Union, is that the approach would be deemed to be consistent with our EU procurement obligations. The statements from the EU Commission to date have not given us that clarity."

Mr Swinney said Alex Neil, the Infrastructure Secretary, had written to the European Commission and was awaiting a response.

Earlier, the committee heard evidence on the same issue from law firm Thompson's Solicitors.

In evidence to the committee, partner Patrick McGuire said: "We strongly believe that there is sufficient legal scope to introduce a living wage through procurement legislation.

"There is a real opportunity to ensure this is a performance clause in public procurement contracts. In our view, the law offers clear possibilities for the Scottish Government to deliver this if it so wishes.

"It's important that the Scottish Government uses the full powers at its disposal to show the way on this matter."