 We have the 27th meeting in 2015 of the economy, energy and tourism committee. Can I welcome our witnesses, who I come to in a second, to welcome members and people who are guests in the public gallery, and to remind everyone please to turn off or at least a silent all mobile phones and other electronic devices so that they do not interfere with the sound equipment? Item 1 on the agenda. Can I ask a member our content that we take item 3 in private? Can I also ask members if they are content that we take consideration of our draft report on work wages and wellbeing in private at future meetings? I agree. Great. I agree. That is agreed. Item 2 on the agenda. We are continuing our inquiry into work wages and wellbeing in the Scottish Labour market. Today we have our final evidence session. I would like to welcome from the Scottish Government Roseanna Cunningham, who is Cabinet Secretary for Fair Work, Skills and Training, who is joined today by Joe Griffin, director of fair work, and James Boyce, Labour market statistician, employability and skills analytical services all in the Scottish Government. Welcome to you all. Before we get into questions, minister, do you want to say something by way of an introduction? Yes, just for a couple of minutes. First of all, thank you very much for the invitation to contribute to this inquiry. The link between work wages and wellbeing is pretty much at the heart of my portfolio as Cabinet Secretary for Fair Work, Skills and Training. The Government is trying to lead the way in the encouragement of a culture of fair work in Scotland. This is pretty important because we believe that it makes sense both economically and socially. It is critical to the inclusive growth agenda that was set out in our economic strategy. When the First Minister published the economic strategy, she articulated her view and the view of the Government that a fair and socially just society needs a strong, successful economy. The strategy shows that boosting competitiveness and tackling inequalities are not mutually exclusive but are fundamentally linked. If we want our economy to deliver better-paid jobs for all, we need inclusive and sustainable growth. Inclusive growth is going to be driven by innovation, increased productivity and the relationship between employers and their employees should be at the heart of this. During the course of your inquiry, fair wages, decent conditions and good quality jobs have a positive impact on people's physical and mental health as well as making the whole of the country fairer. We have many employers who are actively embracing these challenges and reaping the benefits. There are now, I think, 380 accredited living wage employers because it goes up quite fast. It may now be slightly more than that. Mackies has just had their accreditation publicised today, so it is a figure that keeps moving. Over 125 employers have signed the Scottish Business Pledge, which is related to the agenda. We are making great progress and we will continue to build on that. Just as a backdrop of the 380 accredited living wage employers in Scotland, the UK figure is about 2,000, so we are punching well above our weight in terms of the accreditation stats. An important aspect of the work that is being done is the setting up and the continued operation of the Fair Work Convention, which we have set up to work independently from us. It was established earlier this year. I think that you have heard evidence from the co-chairs in regard to that. It was established to bring employers and trade unions together to develop a blueprint for what Fair Work should look like in Scotland. That will be completed by March 2016. That is the timescale to which they are working in this initial phase. Obviously, I cannot second-guess what they may recommend, but it is pretty critical that employers and employees are jointly leading the debate about that. Once that blueprint is produced, we will work closely with them to implement any recommendations. Marching aim is to promote a new type of dialogue between Government, employers, employees and trade unions. That is, in our view, a very different approach to the one being taken at Westminster. We will continue to use what levers we have to oppose bad employment practices such as exploitative zero hours contracts and the use of inappropriate umbrella companies. The procurement guidance on Fair Work practices was just published on 8 October. That makes the position very clear. It sets out how, as a Government, we will consider a whole range of progressive workplace practices such as a living wage and workplace equality when awarding Government contracts. While the powers that are potentially coming to Scotland through the Scotland Bill are limited, we will use them to their full potential to support this agenda. For example, we have said that we will abolish fees for employment tribunals. I am only too aware of the health impacts of bad work. I have outlined some key things that we are doing to make workplaces fairer. I think that we would probably, around this table, agree that it would benefit the whole of Scotland if we could continue to raise the bar for as many people as possible. Thank you, minister, for that introductory statement. When I move on to questions, I think that we are going to cover quite a range of the topics that you have already mentioned in your statement. We are going to raise a number of issues that have been reflected in the evidence that we have taken. Can I remind all members that they would keep their questions as short and to the point as possible and answers that are short and to the point that would be helpful? Minister, feel free at your discretion to bring in your officials as and when you feel is appropriate. I wonder if I could just start off on the question of wages, which has been quite an important focus of the inquiry. We have taken quite a lot of evidence around the UK Government's new national living wage coming in from April and the living wage. I think that everybody who has given us evidence would understand that the ambition for all businesses to pay the living wage is something that is widely supported. We have also heard in evidence from some people in business about some of the challenges that they face in paying the living wage. We did have a session with people from the care sector who said that their ambition would be to pay the living wage because the amount of money that they have is constrained by the money that they receive from local authorities. That makes it very difficult for them to do that. Can I ask you to say a bit, Minister, about what more can the Government do through the tools that are available to it to promote the living wage? What mechanisms might you have to assist private businesses who want to pay the living wage but are currently struggling to do that? Right. The last part of your question would lead us into a discussion of subjects like wage subsidies, et cetera, which I don't know whether or not that's where you would want to go. In terms of the impact of the living wage and the national living wage, I just want to be kind of clear because the terminology can confuse people with this new, what I've been calling enhanced minimum wage introduction as of next year rather than calling it a national living wage because I think there's a danger that people begin to get very confused about what it actually means. I think we need to say at the outset that any increase in wages, whatever it is, is going to be welcome to everybody who is in receipt of that increase in wages. I think we need to be just saying that absolutely the outset. The move towards the national living wage for next year therefore is welcome for those people who will obviously get increases out of it. I rather wish the chancellor had chosen a different terminology. I suspect I understand politically why he chose the terminology he did because we need to be clear that whatever rate that is set at, and I think it's 720 from April next year, it does not constitute a living wage, which is now newly set at 8.25 an hour. I do understand, however, that there are challenges, particularly in some key sectors, for paying this. Those challenges don't go away just by changing terminologies. We've got to think in terms of how business indeed can be supported in that. Given however the backdrop of there being less money all round, a discussion that would lead us into things like wage subsidies, which is inevitably where some of that would go, would be a difficult one to have and one that you would have to explore extremely carefully. There are examples of companies in all of those very challenged sectors who are currently paying the living wage. The work that we've been doing to encourage companies to step forward and accredit, although we acknowledge that there are companies that may be paying the living wage that aren't actually stepping up to accreditation, is so that there are good examples in as many sectors of the economy as there possibly can be. There's quite a list of companies, for example in the care sector, who are currently paying the living wage, the true living wage. There are examples of how it can be done. What I would hope to encourage is a conversation more widely, particularly in the most challenged sectors, as to how it is that some companies are able to do this and others can't. That's a big conversation around business models, which we can be part of, but I don't think that we can absolutely dictate. We certainly can't dictate with the powers that we currently have. That's an interesting answer, but where are we with that conversation? Is this already happening or is it something that you aspire to have? I mean, I'm already having these conversations. In fact, some of the conversations have been going on for quite a while. The purpose of our continued focus on the living wage and fair work is to generate that conversation, not just a two-way conversation between Government and business, but also to generate a conversation between business and business. Those businesses that have taken this step and will tell you how beneficial it's been, I want to try to get a situation that develops where those businesses can talk to the others who aren't so keen or believe that there are barriers. I do hear about barriers. I hear a lot about barriers. Then maybe an institution or a company in that same sector will pop up as accredited living wage employer. The issue then becomes how have they overcome those barriers, and if they can overcome those barriers, then others can as well. That, in a sense, is a conversation that is on-going, both in a formal and informal way, and will also be part of the fair work convention work. Maybe I can just go back to my original question about mechanisms. One thing that we've looked at in the course of the inquiry is this question of conditionality. For example, people have been asked to sign up to the business by general members who will come on and ask about that in more detail, but there's no advantage to you as a business to sign up in terms of support from the public sector because businesses that are all treated the same. What does the Scottish Government view on whether, for example, businesses paying the living wage should be treated in a more favourable way by the public sector to get more assistance, or for example, look at something like a reduction in business rates for businesses getting the living wage, because that might then assist those who are struggling to pay it, give them that little bit of extra help financially to allow them to cross the threshold. Is that something that is being looked at? There are conversations about whether or not there are more specific things that can be done through mechanisms such as you've suggested. We wanted to get these things up and running, though, in the first place. There was an early conversation about conditionality around the business pledge decision taken at that point not to impose any conditionality on it. We had robust conversations with the STEC who were very keen that it should be conditional. At its early outset, we didn't want to do that. We wanted to see how it would run on the purely voluntary basis. You would have to recognise quite a lot of nervousness out there among some companies about attaching conditionality to many of these things for obvious reasons. However, there are potential mechanisms through which the Government can explore a reward, if you like, for these things. No final decisions have been made, and I wouldn't want to pre-empt any decisions that might come to. However, it would be wrong to pretend that we weren't having a look at these things and considering whether there are things, for example, through the small business bonus scheme that could be enhanced. I think that most small businesses would welcome the small business bonus scheme in its present form, but there may be ways in which it could be enhanced and there may be other mechanisms through which we could think about these things. Those are conversations that we have all the time, and this is a very evolving process. John Lamont caught my eye. Is this on the wages issue? I was interested in what you said about the small business bonus scheme because it feels that that would be a very good area to explore conditionality, given that it is particularly small businesses that would suggest there is a pressure on living wage, and so it would be interesting to know at what point you would come to conclusion on that, and there would be a discussion on that. I want to ask a slightly different question. One of the bits of evidence that we got on the living wage and being accredited as a living wage employer was an example of someone who had moved from a minimum wage with one employer to a living wage with another, but under terms and conditions, which were a great deal worse, that is, there was more pressure at work, he was being expected to do far more. Although he did an increase in his wages, in fact, his working life was a great deal more stressful. I wonder whether you have a view on whether, in accrediting a living wage employer, there is something that is looking behind that badge, which is a good badge to have if, in fact, you have got the badge, but the working conditions that people are operating on are very stressful. I think that's quite an important aspect of everything here, because it can almost be turned on, it said, and I do have conversations with people that say that living wage has become quite iconic, but good work isn't always just about wages, and I think that's where you're getting to. I've actually been in to visit premises where they're not paying the living wage, but what they've introduced is working conditions which are very good, and staff wouldn't easily want to move elsewhere. Even for individuals, it isn't always about just the wages. Living wage, we want to make totemic, because there isn't any doubt that putting more money in people's pockets does help, but I'm very clear that fair work isn't just about the living wage, and I think that there can be, and because money is often for people, there can be a sense in which the conversation about fair work becomes dominated by the issue of wages, and one ignores the issues that are behind it. To a certain extent, that's what the Scottish Business Pledge was to try and bring on board a much wider range of things that people would be signing up to. I do go to employers who... I mean, I haven't come across employers who, where they're paying the living wage, but everything else is unfair, if you see what I mean, and I'm not sure quite... I'd be curious to go to some of these companies, because mostly what I go to are companies... I often go to companies where they're not paying the living wage, but there are other things that are going on in that company that are very good, and I can have a conversation with them then about the living wage. I'm not sure I've ever been in a situation where I've seen a company that is doing the living wage part, but not doing anything of the others. I mean, there might be more information that you can... I think that one of the suggestions would be useful, or I would ask you what dialogue you have directly with unions, particularly representative workers, in those very pressured areas like retail and care sector particularly, because I think that there will obviously be lots of case histories of precisely that situation. I'm certainly not advocating to somebody who shouldn't be a living wage employer. I'm worrying if we give credit to an employer who is under-resourcing the workplace. People are doing more work but they have a living wage, but actually their circumstances are quite difficult. I would have thought that that might be a useful area to explore. It is. We do have regular conversations. I am... I don't want to name names of companies because I don't think that that would be fair, but I'm conscious that there are some big companies that do pay quite good wages, but I understand that the pressures on workers, for example at check-outs, are extremely difficult, and the wage alone wouldn't necessarily compensate for some of those pressures. I think that those are things that we would have to constantly keep under review, constantly be considering. If there was concrete evidence that there was an issue in and around that, then we would want to take it a good deal further. Have you taken evidence from the Poverty Alliance? I'm not quite sure in terms of the... The evidence that it came from was from a short workers union last week that did indicate that they had only had very limited conversations around the fair work conventions and so on, but I do think that there is a resource there where people are maybe not able to speak publicly in their workplace, but through their union are given information. I don't know whether it's something that you will be willing to do to have direct contact or meetings with these particular unions who are so centrally involved in these particular sessions. I'm happy to talk to anybody. I have had meetings with a variety of unions as well as directly with the STEC. Of course, the fair work convention, half of the members come from the union side. I will double check to see whether or not the fair work convention is actually discussing some of this, because some of this kind of conversation will be taking place through that mechanism. It is a fair point to make because it's the difference between an argument about the living wage alone and an argument about fair work in general. The living wage does become quite totemic, but the living wage does not, in and of itself, define the whole of fair work. I think that that's an important part of this whole thing. Good morning, cabinet secretary. You mentioned the fair work convention in your opening and you referred to it just now. Obviously, it was set up on the back of Jim Mather's report working together. When we're looking at that framework, and I know that the report is due in March, bringing people together from the different sectors, are they working to the same definition of fair work? I think that you would probably find a great many definitions of fair work. It may very well be that one of the early conversations that the fair work convention had would be to try and develop a definition for themselves. I've seen myself a variety of definitions. Some of them are very bureaucratically defined. I think that's my question. I don't particularly like any of the definitions I've seen. I tend to say that I could tell you what I think a good job is, but that would be an entirely subjective assessment of it. I would turn it on its head, however, and say that it's much more easy to see a bad job when you see it, then provide a hard and fast definition of a good job or fair work that most lawyers will tell you when you start to try to precisely define things, the bits that are left out become the big problems. In general terms too, the fair work convention must have a reasonable definition that they're trying to bring both parties together. They will be working and developing a sense of how they are seeing it. I've tried to stay as hands-off as I possibly can on that. I've occasionally met with the chairs, but I'm not directing their work and I'm not involved in their meetings. The point about them is that they remain independent and that when the blueprint is reported to us come March that it's genuinely not something that I've been instrumental in guiding or drafting. I think that would compromise it. You're confirming what the co-chairs said to us, that they're really quite autonomous. One of the things that they did say as well was that they're trying not to be too prescriptive in some respects, but one of the frustrating things we found, well certainly I found during our session with the co-chairs was that they kept referring to their enlistning mode. It was very difficult to tease out any specifics because they just kept referring to themselves as being in listening mode, and that's fine. However, what I'm wondering is who are they actually listening to and what is the message coming across. One of the things that surprised me when I was looking down the themes if we were looking at this particular area that we're working at just now within the committee is that wellbeing in itself didn't appear as a theme or I didn't notice it as a theme. I'm just wondering, do you see that as just an integral part of all the other themes or should it actually be a specific theme so we can actually try and ensure that wellbeing of people at work is a separate theme I'm taking on? I'm not quite sure what you're asking me there. Wellbeing, I suppose could grow to almost draw in just about everything right across the board of almost every Government portfolio. Is it physical wellbeing? Is it mental health wellbeing? What are we actually talking about with wellbeing? I think that's my actual point. Is the wellbeing the thread that's going through all the themes to try and ensure that when we're looking at any specifics, whether it be the living wage that actually ensures a wellbeing because in some respects we've just heard that it may not. I'm just wondering, is the wellbeing a thread that you would see or would hope to see going through all aspects of the themes within the Fear Work Convention? Well, to a certain extent, yes, but it's very difficult to define that so the wellbeing that we're talking about, I spoke just a few minutes ago about I could give you a subjective definition of what I thought good work is and probably that definition wouldn't necessarily have used, my subjective definition wouldn't necessarily have used the word wellbeing, I'm just slightly uncertain how you can, it's not such a specific term that you can make it a specific thread it will underlie a great deal of what's being discussed, I understand that and there are some very specific references and I think you've heard some of them in any case from the health side that talk about how important the workplace is to people's mental and physical wellbeing but if wellbeing is going to be drawn as something much wider than that then arguably it is almost presumed in a lot of things that are being talked about without itself becoming a very specific thread I mean, wellbeing I think in terms of the way government works it is an interesting cross-portfolio observation to have and we do have these discussions but in terms of this kind of thread very specifically it would be hard to pin it down I know that the Deputy First Minister has always said in terms of the things that equality goes across all portfolios and I'm just probably trying to just ascertain because we're looking at a report here on the work wages and wellbeing and if we're looking at wellbeing the other factors is to try and ensure that employees and employers have a sense of wellbeing regardless of where they are so within that workplace whether it be the physical aspect or indeed mental and probably mental health is extremely important and I'm just wondering when the convention are meeting and looking at their themes as to whether or not they've got this aspect when they're in their discussions to try and ensure that in their discussions part of that discussion with trade union and with the employers and business to try and ensure that we've got a very healthy workforce going forward because that in all aspects I would think would increase your productivity and increase sustainability and develop the areas that Government are actually trying to the pathways that Government are going down at the moment I think that I said in an earlier answer it's hard for me to answer a question which effectively is one for the fair work convention I mean I genuinely am not sitting in on their meetings I'm not specifically trying to direct or help them draft or in any way be part of their consideration so I would be surprised if the broader definition of wellbeing was not a consistent part of what we're looking at but I don't want to be putting words in their mouths when I'm really not in a position to be able to do so I just remind everybody that half of the members of that convention are drawn from the trade union side and I would think that this would be a very strong part of what they would want to ensure was on the table wellbeing I guess if you just rephrase it as being comfortable with themselves and having a pretty reasonable state of health not feeling constantly pressured and stretched and constrained because they haven't got enough money to do things or they're not in a position that to me I suppose is what wellbeing is and in that sense yes it does under pin pretty much all of the fair work portfolio but simply because the word wellbeing isn't used doesn't necessarily mean that it isn't there underpinning everything Good is a favourable outcome are you confident that the stage 1 report will be available and ready in March? The phase 1 report well the blueprint well yes that's the timetable they're working to if it's not ready in March I'd be worried but I will go away as a result of the doubt you've now raised in my mind Mr Robinson and absolutely ensure that we can we can look forward to it you know I absolutely genuinely do not ride on the back of the fair work convention I have set them up and trusted them to do what I've asked them to do in the timescale I've asked them to do it and I have had no reason to assume that they will not deliver That's lovely, thanks very much Thank you Thank you very much I wanted to think I wanted to raise the issue that you had touched on earlier of the business pledge and conditionality and we've taken quite a lot of evidence from for example Scottish Enterprise who confirmed that there wasn't any conditionality in terms of the business pledge obviously in the pledge itself there's one element of the conditionality and that you don't get to sign the pledge unless you pay the living wage but I was interested in what you said about the conversations you had at an early stage about the business pledge you gave a hint that it was a kind of work in progress and that you were keeping a watching brief on it, is that the case? The business pledge doesn't sit directly within my portfolio I should say it sits across both my portfolio and the portfolio There were early conversations about it because the STUC raised the issue of conditionality so we had a conversation directly with the STUC about it The decision was made early on that conditionality wouldn't attach to it although I think I'm right in saying there's actually two things on the business pledge that need to be ticked definitely and that's the living wage and not using the exploited at zero hours contracts The others people have to sign up to working towards they've got to basically agree that they're signing up to it as a work in progress but there are aspects all through the business pledge that some businesses have flagged up to us that maybe give us a bit of an issue I don't know whether or not Joe wants to come in but my recollection is for example the internationalisation one there are some companies which by the nature of what they do they are barred from going cross-border I think things like credit unions and things like that so there are one or two where by definition of who and what they do can't tick or can't say that they are working towards some of these pledges so in that sense yes it has to be a bit of a work in progress we have to continually make sure that the business pledge has work in terms of maximising the likely sign up but at the moment it is what it is and these are the kinds of things that you would constantly keep under review though I don't think there's anything that you would just set so far in stone that you wouldn't want to continually be looking at it Joe, I don't know if you want to say something about the business pledge The concept really is to engage the business in a relationship and in a dialogue going forward saying that they pay the living wage and signing the business pledge and two others from the criteria that are available there's then a discussion that ensues and it may be that government agencies or indeed others with expertise that are able to come forward and help them to work towards another aspect of the pledge so for example the institute directors have been very proactive and very visible on 50-50 aims in boardrooms to find the pledge they would like to move towards 50-50 they're finding it difficult we can actually signpost them towards the institute of directors for a deeper dialogue on that particular aspect but the idea is to engage that relationship so that there's then talk about all the aspects of the pledge rather than just the ones at entry point I think the zero hours contracts is one of the a range that you could select from the living wage is conditional but the zero hours contract the minister is saying that the business pledge doesn't fall into her her remit so so I think the zero hours contract is something that you can choose it's not mandatory but just to to go on in terms of the pledge in terms of building up a dialogue with business if there isn't any conditionality in the sense of Scottish Enterprise grants and so on what's in it for business signing the pledge what is the carrot if you like well that goes back to the conditionality thing we're not at the moment giving rewards for it the reward is the recognition that this is a business which is genuinely committed to a range of actions which are going to mark that business out as being one where you could expect there to be a very good working environment those businesses that sign up to the business pledge will often say to you that they don't understand why others don't because it makes they just think it basically speaks for itself why would you not want to but at this stage it's the other side of the conditionality argument at this stage there are neither carrots nor sticks unless you take on board the support and help that businesses that are signed up to the pledge might get in their exploration of other aspects of it to get them to begin to start ticking off some of the other things this area is at the moment about using as much of the soft power of government as you possibly can it's about encouraging it's about generating debate and a conversation I've used the words living wage community because I begin to see and sense that way in which those companies which are stepping up to a credit to sign on to the business pledge begin to see themselves as part of something better and it is quite subjective in that sense without more powers it's hard to attach a lot of conditionality to a lot of this kind of thing so we do what we can within the powers that we have available and explorations of conditionality may continue to be part of the conversation but at this point we are effectively testing the water to see how widespread the take up is likely to be one of the things that the people can sign up to which you've alluded to is the balanced workforce at the business and parliament conference at the weekend was a number of women that raised the issue of how you monitor that because one of the things that's come out in this committee inquiry is the quality of data generally so in terms of outcomes for the economy as a whole if we're putting a big emphasis on balanced workforce and gender if it's not monitored as part of the Government's outcomes how do you know how successful the policy's been I realise this may be one for your officials but it was raised by a couple of people at the conference they were very pleased with what the Government was doing but they wondered if the mechanism was there to reflect outcomes I mean I'm conscious that there is a just an issue about what the stats tell us how much we can mine from the stats and yes I will bring James in shortly I just wanted to kind of this is what effectively we get each month this is a labour market stats and that's effectively a very broad brush set of stats that give you the headline results for the whole of the UK in terms of employment unemployment inactivity and for Scotland but this is all done through the ONS this is not done by us specifically this has come from the much bigger survey that the ONS do every month on the reverse side you get the youth rates and levels the female rates and levels and some of the main labour market outcomes so basically it's quite broad brush so it could tell us for example from tracking this every month over the last year the increases in the employment levels in Scotland tended to be driven by increased numbers of women in the workforce going into almost like a company by company sector by sector look at that is a much harder business that for Scotland this basically surveys about housing and housing and the difficulty with it is that you only have to have quite small shifts for it to then reflect quite significantly in terms of the figures which tends to explain some of the fluctuations up and down and is it a level of frustration I'll bring James in and he can tell you how our conversations tend to go when we are demanding to know much more information about localised geographical areas and things like that that you're talking about and his frustration in trying to explain to us that what we're asking for at the moment is not really statistically easily replied. James, do you want to get geeky? Of course, I mean there's been much discussion about credible Scottish labour market data one of the key things I would flag up is there's currently a review of the national indicator set for the Scottish Government's national performance framework there's a working group being chaired by the chief statistician and there's a number of bodies feeding into that including STUC and Oxfam Scotland one of the key areas they've identified for improvement is around work and employment specifically job security job fulfilment and job satisfaction they're looking at a whole host of indicators just now and one of the indicators they are considering from official statistics is women-led business gender equal boards that review is due to publish in early 2016 and there's going to be another meeting of stakeholders including STUC in November so that's something that's actively being considered just now. As for the broader point about labour market statistics the labour market statistics are gathered by ONS there is variability but the Scottish Government pays a significant sum of money every year to produce the samples in the labour force survey to get disaggregated data Labour force survey isn't the only source of information in the labour market so I think the idea of not having credible data is too broad brushed a statement there are various sources of labour market data from the labour force survey from the UK commission for employment and skills and from the Wales survey but looking at all these sources together and saying what's the overall narrative there's no one single source that gives you the answer in terms of the data Is this an issue of powers? Obviously the STUC have been critical of the labour market data in Scotland is it an issue of powers or is it an issue of resources that we have to accept the figures that the ONS give us is it could we build our own but that would cost more what is the problem really? On the STUC's point the ONS conducted a review of the labour force survey in 2014 and the STUC were looking for monthly estimates rather than the quarterly data that we get just now and the ONS concluded that without a significant input of funding it's just not possible to do that so the issue is around resources right thank you very much we basically have two we have this one that's monthly and then we fund a bigger boost for the annual population survey to make sure that there's strong enough data from Scotland in the annual population survey to give us something that's of use the difficulty is not just these measurements but what it measures because when I first started doing this job and first had the conversations I was slightly concerned to find out that even one or two hours a week working registers you on this as working so you're looking at a measure which is quite a crude measure because I'm not sure all of us would think that one or two hours a week in work would register but it does and that's why I'm just sort of around all of these figures there are quite substantial underpinning issues that I suspect only very large amounts of money my figure would have to it's also an issue like the Scottish Government's priorities and where we are going in Scotland is in a different direction from what the ONS is recording and you don't really have the powers to direct it to measure what we don't have the powers to direct and yes, clearly we pay more money to get a better annual survey for Scotland's purposes these figures are extracted for Scotland from the ONS figures that they would just do every month and yes, it does mean that you have to disregard these figures with a little bit of caution because they don't give us a stage that you might be looking for James is right there are other issues Clément Count, for example, is another measure that you might want to go and look at to see what's happening and that might give you some better ideas because the problem for me is this treats Scotland as if it's a single region, a single unit when we know that the variety of labour markets across Scotland is quite fast you can't say that the labour market in Shetland or the north-east of Scotland is going to be the same as the labour market in Fife or Ayrshire and that's the difficulty that we grapple with trying to establish to our satisfaction that those regional labour markets within Scotland are as understood as well as they can be and we're trying to do some work in government on a labour market strategy that would work for Scotland we're not finished that piece of work yet Thanks very much On the topic of the business pledge and the zero hours contract I've got three members Gordon MacDonald, Lewis MacDonald and Patrick Harvie You mentioned that the business pledge is about paying 11 wage and working towards other aspects of it and one of the other elements that's being listed is investing in youth that's quite a wide statement what does that actually mean? Is it just about providing work experience or is it about providing employment or modern apprenticeships? What is investing in youth actually related to in terms of business pledge? Well it would relate to a whole range of things and that would include work experience but all the way up to providing modern apprenticeships you would be looking at what a company was doing to bring on young people the investing in youth part would cover all of those it's not prescriptive as to numbers of MAs for example it's not prescriptive to any one part of it so it would cover that whole range of things from providing work experience opportunities providing paid internships might be part of that actively recruiting young people looking at what they're doing modern apprenticeships there are other ways to do the training and skills not all companies that do apprenticeships are buying into the modern apprenticeship model so we're not being prescriptive about how they do it as long as they are doing it across the board When Professor Chris Warhurst was here on 30 September he spoke about a high road and a low road in relation to job quality and by high road he was moving into high value added innovative product markets which would raise the pay and skill levels of employees what is the Scottish Government doing in order to provide that high skilled workforce in order that we can achieve the high road economy that Professor Warhurst was referring to a lot of that is directed through the modern apprenticeship system and the work we're trying to do is to shift the balance much more in favour of the STEM subjects where some of the biggest skills gaps currently are so that is one part of what we're doing the careers the reformed careers advice in schools will be pushing towards that as well to try and encourage as many young people as possible to choose careers that will have the capacity to give them effectively life long well paid work instead of falling into areas out of almost like a default we make sure that young people have as much information as they can possibly have supporting and trying to work with some industry sectors where they are flagging up skills gaps we are conscious of that being skills gaps in some areas not every intervention needs necessarily be purely government intervention I think that there has to be a challenge to employers and to training boards and industry itself that they have to think more long term about what they're doing and we are constantly in dialogue with employers themselves and training providers about how they can best move this we didn't get to where we are overnight we're not going to change it overnight either what we are trying to do is indeed to move Scotland towards that highly skilled and by definition higher paid economy but that can't be done that's not something you can do without also looking at those who are on the bottom end of the system and trying to improve things for them as well so I guess you're trying to do both together in order to achieve the outcome that you're looking for in order to move to that high road economy we need good standard and modern apprenticeships and it was a recent off-stead report that covered apprenticeships in England and Wales and a couple of their key findings was that the quality of apprenticeship provision reviewed during this survey was too variable and often poor and the growth in apprenticeships especially on the sectors with skill shortages I realise this is a report relating to England and Wales but what assurances can you give that that isn't being replicated here? I think that our apprenticeship system is quite different to the one that's been in place down south and I'm not an expert in the system that is in operation down south so I wouldn't want to be drawn too far into a discussion of it or indeed criticism of it I am aware of the off-stead report I did see it, it came across my desk what we are trying to do in Scotland is move the apprenticeship system in a very different direction our apprenticeships are actual jobs they are not basically attaching the label apprenticeship to something that isn't an actual job which I think was one of the criticisms that off-stead had that these apprenticeships weren't truly jobs whereas what we are doing the apprenticeship is a job and I think that's an important driver in Scotland it means we're investing in quality and although we want to increase the numbers as well I don't want to just be talking about an increase in numbers without a consideration of quality at the same time and I would be a little skeptical that some of the numbers I've seen suggested for England and Wales would deliver the quality that we would expect to see I mean we're looking at apprenticeships which range from foundation apprenticeships where people are still spending part of their time in school and part of their time in college and beginning to look at at that level but we're also talking right the way through to graduate apprenticeships so our system is quite different The last point I wanted to ask was going back to Professor Warhurst's evidence on 30 September you've mentioned a couple of times that we have to invest in quality and I know procurement doesn't fall within your remit but what he suggested was and I'm just interested in your view he said one small thing that we could do is to attach public procurement contract to our public procurement contracts a clause that requires a company that wins a contract to report on their job quality and I'm just wondering what you felt about that I don't think it's unreasonable I'm not sure if it's in the new guidance I can report back but what the new guidance that's only just been published is basically indicating that effectively fair work is something that should be looked at objectively by those who are doing the contracting so I guess that probably would cover because unless you get some indication of what's going on in companies you couldn't possibly know what the precise mechanism that would then entail I can certainly establish and get back to you or ask Keith Brown to do so directly if that would help Thank you very much You said a few minutes ago in response to a question that there were two requirements on a company that wanted to sign the Scottish business pledge first that they would have to pay the living wage and second that they should not use exploitative zero hours contracts now looking at the published version of the pledge and the requirements upon it zero hours contracts does not appear in the published version to be a requirement can you clarify what the position is and what you meant by your remark I thought it was but this may be a function of the fact that it's not emanating from my portfolio Joe do you, I thought that zero hours exploitative zero hours contracts was one of two things that we were asking people to sign up to The mandatory thing is that companies pay the living wage and that they enter into a commitment to work towards all other nine aspects and that they pursue they have already delivered on two of the nine sorry that's not very clear they must pay the living wage they must do two other aspects of the nine criteria and they must sign a commitment to work towards all of them so the position is then that a company which does use exploitative zero hours contracts can still cheerfully sign the Scottish business pledge as long as it makes an unlimited an unspecified commitment to work towards removing or ceasing to use exploitative zero hours contracts at some unspecified point in the future I think that expressing it in that way is probably unfair on the companies that are signing up to the business pledge because they are committing themselves very strongly to a broad range of fair work practices and I doubt in those circumstances whether you could characterise somebody as signing up cheerfully to the business pledge when they're not doing a whole lot of the other things that we were asking them to do I think that would be an unfair characterisation of those companies that have signed up to the business pledge I mean, I have to say if there is evidence, if you have evidence that there are companies that are doing that then I would be interested to know that and I would certainly flag it up to officials but I'm not aware of it I did wonder if the reason you mentioned it as a condition when it's not normally such whether the reason for that might be that you think personally that it should have been a condition well, you know we can all think that perhaps every single one of these things could be a condition but we're not in a position to be able to demand that every single hoop be jumped through right at the start what we're trying to do is to just encourage companies to sign up to this and they themselves then are undertaking to begin to go through those hoops themselves if they're not already there and I think I've already indicated that some companies for whom some of the hoops may be things that they are precluded from doing within the context of the particular sector that they're in and that's a conversation that needs to be had as well now that doesn't apply to zero hours contracts personally I would I would not wish to see any company using zero hours contracts in a way which is exploiting workers and there are different ways which they can be used to exploit workers but equally and this is a definition that has bedeviled for many many years but equally there are rare occasions or some occasions in which a zero hours contract does work for people and that's why nobody says van zero hours contracts outright because there are occasions when it does work for people you said earlier that after robust conversations with the STC it was decided to attach no conditionality to the business page other than the one reference was that a decision taken by your department by the business department where did that decision go? That wasn't a conversation that I was initially involved in I am aware of the difference of opinion because of the the Scottish Government STC meetings that have taken place it you know you'll appreciate that there are over a range of portfolios in and around this area I understand the problems that might have emanated from attaching too much conditionality to something like the business pledge equally it has been something over a range of different policy issues that this Government has tried to pursue things initially on a voluntary basis you know although it's got no relevance to this the plastic bag initiative and all the rest of it we tried to do what we could on a voluntary basis before resorting to anything that did involve you know kind of reward slash risk for companies so I think what we are trying to do is to shift the debate and get business into a place where they are part of something that is better than where we are just now but you know conditionality is a big issue it is Cabinet Secretary and would it be reasonable to conclude from what you've said and that you were not involved in those discussions that that decision would have been made by Cabinet on the recommendation of Mr Swinney I couldn't tell you precisely how that was done I mean I think that the business pledge came to Cabinet but that would have been those decisions would have been entered into a different level but not in the fair work the business pledge didn't emanate from my portfolio but that doesn't mean to say that I don't have an active involvement in in doing it, pursuing it it's the same as I guess it's like procurement doesn't emanate from my portfolio but it doesn't mean to say that I haven't also got an interest in it it's one of the hallmarks of this particular portfolio that it is very leaky around the edges and those are not the only two other portfolios where there is a bit of an overlap of education as well so there's a big broad area around the edge of this portfolio that does impact on other portfolios or other portfolios impact on us I understood to focus on on zero-hours contracts and as you say there it's important to distinguish and to recognise when a zero-hours contract is an exploitative one and I think as Mr Griffin has described the terms of the business pledge it is that it's working towards removal of exploitative zero-hours contracts from any existing practice one of the difficulties we've had as a committee is getting any public body to define when a zero-hours contract becomes exploitative and I wonder if you can help us in any way with that I have come across examples and I suppose what happens here is again it's often easier to see when it is exploitative rather than a condition that describes it but for example I have come across a situation where people who are on zero-hours contracts come into work spend money travelling to work to arrive at work to be told there is no work and they need to come back in four hours or six hours or tomorrow so they're spending scarce resources on transport to and from a workplace and that's an absolutely obvious example of exploitative use of zero-hours contracts equally I know companies where they would make a very robust defence of a use of zero-hours contract because they only need occasional labour for very specific days and they want to be able to go back to the same individuals because that gives them the comfort of knowing that people are experienced and that wouldn't be exploitative because both sides it suits both sides in those circumstances so a definition I think would have to centre around the use of zero-hours contracts in a way where all the detriment applied to the employee and not to the employer just for clarity point out the First Minister has given us a definition of exploitative is this what I raised at the convener's group a few weeks ago and subsequent to that the First Minister wrote to me and we share this with the committee with a definition so there is one out there deny workers regular or insufficient working hours or unfairly penalised workers for being unavailable for work or not accepting office of work I think that's fair enough I guess I I would you would have to endorse that because clearly that is a definition although I'm not sure which one the situation that I described would fall into in those circumstances I think there's a couple of points with reference to the First Minister's letter I think it's important to put in record the First Minister's letter says the same thing that the cabinet secretary said in different words well it says explicitly all businesses who sign up to the Scottish business pledge are exploitative or very low hours contracts now that is what the cabinet secretary said so I think there is a clear need for some clarifications can we take that back and double check that that would be very helpful First Minister and I are at one on our understanding so perhaps we better check with the DFM whether or not we're at one with the DFM you may be both wrong well if we're both wrong then I'm in good company from the point of view of a business which wishes to sign this pledge first of all there's a clear need to be clear about that but also if a business comes to the Government to seek advice as to what is an exploitative zero hours contract the First Minister's definition in this letter continues to include words which are relative so for example insufficient working hours or unfairly penalising workers none of that appears to me to be a definition that a company can rely on to demonstrate that it has or has not met the criteria this is back to me being a lawyer again which is just that there are I'm afraid situations that you will never be able to precisely define to encompass every single potential occasion when something might be described in that way which is why in both legislation and in the law you will frequently find the word reasonable used because it's a fairly well settled understanding and I think that most reasonable employers are going to know what is reasonable in terms of zero hours contracts and they are a tool they did come out of oddly enough professional employment when professional people wanted to work on a very flexible and fluid basis and of course at that point arguably all the balance of power was in the hands of the professional who wanted to work that way the problem has arisen because they've become to be used so widespread and in some places of employment the balance of power has gone completely the other way and I guess that's really where you find that bit in the middle that ensures that you're not in a situation where an individual is forced into this and has no ability to to maximise their use of it and it's all on the employer side to do so definitions of some of this I don't think you will ever be in a position to be able to absolutely define it and I think you will look in vain for any use of the phrase exploitative zero hours contracts is generally not then followed up with a very precise definition the definition the First Minister has given is useful but she too is a lawyer and we would always know that you will always find things that fall outside definitions and that is the danger of defining too closely useful but not definitive well but in this area there probably is no way to be utterly definitive about any aspect of it and I think that's a bigger conversation and I appreciate that the committee can't go there but I think that is a reality often where we have to operate in these areas of policy Good morning I think it might be fair just to say that we're all even the First Minister working toward a shared understanding of where we can go with these issues and it's not a useless conversation simply because we're not 100% definitive I wanted to explore a little bit more broadly about this agenda of conditionality and in reference to the evidence from Professor Warhurst which I think Gordon MacDonald referred to earlier this image of the high road and the low road it's come out quite frequently during the inquiry and it's not just a question of this being a choice between do we want to be on the high road or do we want to be on the low road I don't think anyone has criticised the idea that encouragement in terms of celebrating the living wage community whether in terms of developing the skills agenda that encouragement, that paving the high road approach has got a great deal of value in relation to some employers who are keen, open minded or who just need a bit of support to get there but I think Professor Warhurst was also very clearly saying that there are also employers out there who quite openly and directly repeating on low cost labour are quite happy to continue very exploitative practices because they find it profitable, they find it attractive they have no intention of changing so you need to block the low road it's not just about encouragement so I put this to the First Minister last week in the chamber that we need to place as much emphasis on job quality as on job numbers in a range of government funded business support services through the enterprise agencies and grant schemes I'll give you one example the application form for the regional selective assistance grants has one question about youth employment but obviously it's talking about young people up to the age of 25 so they won't all be getting even the higher age bands of the minimum wage and there's nothing about employers going above that basic minimum requirement there's nothing about pay ratios about secure hours about union recognition worker participation the use of tax havens, gender and age equality so I suggested to the First Minister that we should be placing a wider emphasis on job quality on those wide range of support services and grant schemes she said that was a fair argument to make and I hope that the cabinet secretary will answer on that as well one could argue that the creation of this portfolio is in a sense one answer to that because job quality is what this is about and many of the things we do are around that there are however issues that would need to be explored about some wider aspects of conditionality and you only have to listen to the debate around what is and is not possible through the procurement system to understand that it isn't as straightforward as it might first appear so those are things that we would want to look at my my I would agree with the First Minister that these are all the kinds of things that you're talking about are all things we should be exploring and are part and parcel of what this portfolio will be doing it's only been in existence now for slightly less than a year so we've done a great deal have we done absolutely everything that we could be doing well obviously not and we are going to continue to do that and I'm looking forward to getting the Fair Work Convention blueprint in March because I suspect that that may deal with some of these issues as well and we are also right now going through a process of thinking forward as to what else we need to do and we are going to have to give some thought to some of these other parts of the equation having started out with the encouragement are there other things that we can do to make it slightly more directed I recognise that the acknowledgement that there's always more that can be done I'm not about to sit here and accuse the government of doing nothing so is the government actively exploring at present the option of how much conditionality can be attached to government support services and grant schemes and underlying that is there a principled intention to block the low road well blocking the low road as far as I understand it wouldn't be entirely within our to whatever extent to whatever extent I think there is we are looking at what might be possible in certain areas whether or not I'm not going to be drawn at this stage because there is a process of decision making within government which I'm not going to pre-empt what I'm telling you is these are considerations that we keep under review and are part of conversations which we do have and there will be an active look I use the words job quality constantly because just looking at the numbers doesn't give you enough confidence that the job quality is there and I talked about how one or two hours work a week can have that registered as somebody in employment well you have to look behind these numbers but looking behind these numbers does then throw up a whole set of considerations that you need to take into account not least of which whether you are legally able to do some of the things that you might choose to do or might want to do I recognise that and I think all of us welcome the fact that the Scottish Government places emphasis on job quality and takes this issue seriously at the same time we're still providing support services and opening the door to applications for grant schemes to businesses that aren't listening to that language is it the intention of the government within whatever scope is legally possible to find ways of blocking the low road of closing down those forms of support to companies that wish to continue exploitative and low-waged practices? These are conversations that we have within Government all the time and when there are specific proposals we will bring them forward Thank you Maybe I could just ask a follow-up question to Mr Harvey's question because one example that's been kicked around in the committee in the course of this inquiry is that of Amazon who were supported by I think £10 million worth of grants in public funds regional selective assistance and other funds that came when they came to Scotland and our company I think it's fair to say that it's been in the spotlight shall we say in terms of employment practices if Amazon came today with a proposal for another plant in Scotland would the Scottish Government's view be different to what it was historically? Well I they wouldn't come to me it wouldn't be me that would make that decision The Scottish Government would I can't answer that I mean I'm not in a position to be able to answer that there would be I would imagine a fairly robust internal discussion about that Okay, briefly Joi Llyw It would be the case though whoever in the Cabinet is responsible for that would be obliged to consult with your department on your view whether it is within the principled view of fair work given the commitment and I recognise that that post would it not be extraordinary if they made that decision without referring to your department and to you but your views about I suspect more than just myself would be involved in that conversation it wouldn't just be me It would at least be you I would expect so I wonder if I can just move discussion on a bit One of the phrases that will be aligned with this committee is the good, the bad and the ugly it doesn't affect the report, hopefully but we did talk about management and the training of management clearly managers play a big role in work and the wellbeing and the job qualities I wonder if you can tell us Cabinet Secretary what the Government can do to ensure that there's more management training provision this was an issue that was raised during the visit to Paisley the issue was raised yesterday in the education committee with SDS and I think we generally feel there might be a challenge in front of us so I wonder if you can enlighten us as to what the Government plans to do in terms of management training, particularly for SMEs Well I suppose the first response I would have to that is that while I suppose I come from the direction that says Government should have a wide ranging role in many aspects of employment I don't absolutely buy into the argument that it should thereby displace all responsibility for these things to industry itself and one of the interesting things about the wood commission and this is not a diversion from the response on the young workforce was his concern that employers themselves hadn't really been stepping up to the plate on youth workers I would say that if there is a SMEs about the quality of the management that they have I would expect to hear from SMEs some indication of what they thought could be done and achieved I have not had any representations made to me and I'm not conscious of any being made to it would probably go directly to Fergus Ewing that would be requests for Government to be involved in more specific management training than is currently conducted through the normal processes where managers become trained I appreciate in SMEs managers tend to evolve rather than necessarily become trained but I wonder the extent to which Government can be expected to step into into that particular breach of what the specifics of the evidence were that you got in Paisley but I would want to have a conversation with businesses themselves about what they are doing in terms of management training there is a finite limit to what Government can be expected to do in some of these areas I think that's a period answer but one of the issues raised yesterday and again at a breakfast meeting with Donald McCrae of the Bank of Scotland when we were talking about part of the Government's strategy is increasing internationalism our hopes for exports and internationalisation we've discussed internationalisation here and I agree that the Government can do everything but the question is whether or not that discussion that you just mentioned with SMEs and indeed discussions with other companies regarding the need to support the Government's strategy is of a high enough profile that you know it is actually taking effect well I mean there's a range of advice and support on offer you know through SDI through Scottish Enterprise these organisations that companies can make an initial approach to and I would always encourage companies to do so and I think you heard about the business pledge that one of the benefits that there might be for those companies that are wanting to improve aspects of their own business practices will get help and directed to those areas where that will be the most forthcoming I mean there are areas in which Government has been specifically involved in setting up I mean I'm not talking about management advice now at the moment of specific management practices but you know there are in existence already some mechanisms for which advice can be got there is perhaps a question mark over how particularly with the smaller end of SMEs how aware they are of what might be out there what might be available and you know on a range of issues SMEs can present a challenge simply because we are talking in some cases about businesses with very small numbers of people so trying to get for example modern apprentices out into very small businesses that takes a good deal of support but the SDS for example to support them if that's something they want to go down they will have a conversation with SDS about that I suppose this might boil down to how much very small businesses understand about what is already available and whether or not there is a view out of business that there needs to be something separately set up I've not had that expressed to me either by FSB or the Chambers of Commerce so I think it's something that we would have to look at more carefully to see I think that that would be helpful because as part of business pledge of course there is one of the items that is pursuing international business opportunities but I wonder about I can then go on to the Mather review and the Scottish Government reiterated his belief that trade unions are key social and economic partners that play an important role in sustaining effective democracy in society that's true in terms of particularly in the sectoral the approach to various business sectors I just wonder though in terms of democracy in the workplace have there been any discussions or do you have any plans for discussions to talk about equity participation in the workplace, decision making sharing in the workplace where you work councils in Germany has there been any conversation along those lines in relation to wellbeing and job quality in the workplace well yes of course because that's part and parcel I guess of what we're doing in terms of this portfolio so I frequently have meetings with the STC and these are aspects of what we talk about the discussions that are going around the trade union bill at the moment are part of that and yes I think we would want to try and move us towards a model where both employees and employers felt that they were equal partners in this but we're dealing with a business culture which is pretty strongly embedded and will not be turned around overnight and the benefits of it have got to be showed and the point about things like living wage accreditation the business pledge and the other things that we're doing is about getting those businesses who the light bulb has switched on is what's important to that I don't deny that there are other businesses out there for whom this is of peripheral interest we've tended not to want to point the finger at the bad businesses but at the moment we're trying to pull up businesses by the use of exemplars which is effectively what the schemes currently are about okay okay, I'll brief somebody please from Lewis MacDonald on this issue of I think there's been plenty of evidence of the benefits of trade union membership for people particularly in low pay and insecure work the trade union bill is coming down the track it is likely to be passed by the House of Commons what steps will the Scottish Government take to mitigate the impacts of that particularly on those in insecure or low paid work take every step that is possible to ensure that the good industrial relations record that we have achieved in Scotland is maintained and we are actively looking at and exploring every aspect of what that might be and that would include for example issues around check off and time off for work it will include absolutely everything okay yes, thank you there are actually two of the questions that I was going to ask both of the members I've asked them but I would like to explore further the point that Lewis MacDonald was going on we have a company which is paying the living wage and we know this company who came out and said, you know, be the first grocery company to pay the living wage and hopefully they aren't encouraging people to join a trade union within their firm in the 60s, I remember the 60s, Harold Wilson used to say that he brought the unions in for beer and sandwiches in the 80s and 90s the Tories actively sorry, convener, actively discouraged trade unionism what steps I heard you saying that you're encouraging a discussion with the STUC but what further discussions are you having with trade unions on the whole in order to ensure that we are having a good working relationship or you are having a good working relationship with trade unions in order to promote the living wage, promote good working conditions and also encourage other companies to have discussions with the STUC in the other trade unions in order to ensure that they are giving a good work well, I mean these conversations are being had all the time and you know, both formally and informally they are part and parcel of what we do you know, the fair work convention no-one to sound constantly repetitive but the fair work convention, the membership is made up, you know, half from the trade union side, which is which I think was an important pointer to how we wanted these things to proceed it's my personal view as well as my you know, government view that the better the relationship between trade unions and employers the better for everybody in the long run and it makes sense for employers to be talking to trade unions, I've spoken to employers it's much easier for employers to deal with situations in their business if they have active trade unions you know, I I regret some of the things in the trade union bill because I think they will you know, they will have a negative impact on those good workings which we encourage all employers to be part of my dialogue with trade unions however has got to be matched with the dialogue that trade unions have to have with businesses too again, that goes back to why the fair work convention is important you know, we can't we can't emphasise the dialogue that is between government and trade unions and think that somehow this third part, this third key part of the equation isn't equally as important and that is you know, and that is part and parcel of what this is all about as well okay, thank you, okay and that's the end of our time cabinet secretary, thank you to you and your officials for coming along and we now have the job of reducing a report it's always helpful because you know we understand that definitions are difficult we understand that there is a wide-ranging reach for all of these aspects so look forward to your report and we will suspend briefly and go into private session