Real living wage should be compulsory for public contracts, says Richard Leonard

Scottish Labour leader Richard Leonard has warned that the real living wage and trade union rights will be made compulsory obligations for any firm carrying out public sector work or hoping to win government contracts if Labour wins at the next Holyrood elections.

Scottish Labour leader Richard Leonard has said he would make the real living wage and trade union rights compulsory for the awarding of public contracts.
Scottish Labour leader Richard Leonard has said he would make the real living wage and trade union rights compulsory for the awarding of public contracts.

Addressing the Scottish Trades Union Congress, Mr Leonard said he wanted to lead a government that will bring about a “real shift in power” in Scotland, with greater trade union representation and labour standards for all workers.

And he kick-started his party’s campaign for the 2021 Holyrood elections by laying out his vision of a post-Brexit planned economy with government, business and trade unions working together, while also demanding the devolution of employment laws to deal with the potential economic fall-out of the UK’s departure from the EU.

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However his speech was criticised as both “perplexing” and “out of touch” by SNP and Tory politicians.

Mr Leonard has come under sustained criticism for backing Brexit despite the majority of Scots, and Scottish Labour members, voting to remain in the European Union. His desire for a more hands-on managed economy has also come under fire as only being possible outside the EU.

Yesterday he said: “We will stand on a manifesto in 2021 that makes the real living wage and labour standards, including trade union rights, not a voluntary arrangement or an optional extra in public procurement and public assistance - we will make it a compulsory requirement and an inescapable obligation.

“So that if you deploy tax avoidance and tax evasion measures like those umbrella companies so rife in the construction industry then you will not win public procurement contracts and you will not receive governmental support.”

He said that Brexit had shown the need for a “new framework for social dialogue in Scotland” and added that a future Scottish Labour government, would establish both “sectoral collective bargaining” and “sectoral industrial and economic planning”.

“My aim as the leader is not to simply lead a better management team than the SNP. It is to lead a Scottish Labour government worthy of the name, committed to bringing about a real shift in power and wealth including an extension of industrial and economic democracy,” he said.

A Scottish Labour government would also appoint a Cabinet Secretary for Labour and “protect and strengthen workers’ rights by seeking the devolution of employment law in which we will set a pre-Brexit floor to ensure that workers in Scotland are not caught up in a race to the bottom.”

However, the SNP MSP Tom Arthur said: “This was a perplexing speech, in which Richard Leonard tried to pretend he’s not a Brexiteer like Nigel Farage. The fact is that he’s happy to lay waste to Scottish jobs by crashing our economy out of the EU and its single market, which is eight times the size of the UK alone.

“The SNP will always welcome support for further devolution of key powers to Holyrood – but it’s hard to understand why Labour want to stop at employment law when transferring all economic levers to Scotland could truly help us to transform our economy, stop the damage of Brexit and create jobs.”

And Scottish Conservative shadow finance secretary Murdo Fraser MSP said: “Unfortunately none of the ideas outlined by Richard Leonard in his speech will provide the help our economy needs. It shows once again just how out of touch he and his party are when it comes to the important issues facing Scotland.”

A Scottish Labour Party spokesperson denied that Mr Leonard’s economic plans were only possible outside the EU. “EU membership is not a block on making fair work compulsory in public contracts. It’s a case of political will. Labour tried to make changes to procurement law in 2014 to extend the living wage. These proposals were blocked by SNP and Tory MSPs.”

In his speech, Mr Leonard also reiterated his opposition to private finance in public services, and called for an end to PFI, PPP and NPD, adding: “The profit motive, the shareholder dividend, and the ill-fitting values of capitalism should be rooted out of our public services once and for all and in that I include our railways, our buses and the Royal Mail as well."

And in an attempt to answer his critics about the cost of his policies - including free bus travel for all - he said: “How do you think bus passenger transport services in Scotland are paid for now? Over forty per cent from public subsidy, the rest from rising passenger fares. How are our railways are paid for? Here in Scotland two thirds of rail funding comes from public spending.

“And as the new Unison Jimmy Reid Foundation report just published points out - ‘approaching half of all Council Tax revenues are devoted to servicing the interest on borrowing and PFI/PPP loans’. It is time that this came to an end.”

Scottish Labour has previously called for the SNP to meet its 2007 manifesto pledge to scrap Council Tax and the party has suggested replacing it with a property and land tax.