7. Member Debate under Standing Order 11.21(iv): Living Wage

Part of the debate – in the Senedd at 4:22 pm on 12 December 2018.

Alert me about debates like this

Photo of Ken Skates Ken Skates Labour 4:22, 12 December 2018

More than happy to do that because, as the Member said, it's more prevalent in certain industries and in certain sectors, and I'm pleased that we will be reviewing all of the guidelines, and I think that segregation is a key feature that we must take a closer look at. I'm also pleased to say that the work of the Fair Work Commission looking at the definition of fair work is reaching a conclusion. It will conclude in the spring of next year, and we'll be looking at how we can take this agenda further.

To support the implementation and adoption of the real living wage, we're going to look at options that include using our own powers and levers to achieve the goals that I think everybody has supported today in the wider workforce, and Professor Edmund Heery, the main author of the Cardiff University report that we have discussed today, is, I'm pleased to say, a member of that commission.

The code of practice on ethical employment in supply chains now includes a commitment to consider paying the living wage to all staff, and encouraging suppliers to do the same. So far, 150 organisations have now signed up to the code, including all of our police forces, health boards and universities; 14 local authorities have signed up and others are expected to do so soon; 84 private businesses in a wide range of sectors and 17 charities are also on board. It's a good start, but we wish to see that number rise dramatically. I think it's encouraging to hear about Cardiff council's ambition to be one of the UK's first living wage cities, and it's not only larger public bodies that are becoming accredited—Barry and Brecon town councils are also doing so, and that's a huge credit to them. 

I'm also pleased that the code of practice has been of great interest outside of Wales as well. For example, the UK director of labour market enforcement included a recommendation on the Welsh code in his last annual report. He could see the benefit of using public expenditure as a lever to address non-compliance with labour laws and minimum wages. So, I think that we are ahead of the rest of the UK in many respects and certainly in asking public bodies and smaller businesses and charities to publish anti-slavery statements as part of their commitment to this code. Only large businesses are obliged to do this under the Modern Slavery Act 2015. But, we shouldn't just look at wages in isolation from other aspects of fair and lawful work. This is something that Helen Mary Jones talked about in relation to sex discrimination, and it's also something that Julie Morgan touched on in relation to age discrimination, and, in particular, the challenge that many young people face.

We've covered a spectrum of practices in the code from criminal through unlawful, unethical and on to the positive practice of paying the living wage. There are no clear cut-offs between these categories, and the important thing is that we carry out more due diligence. If you don't know, for example, how workers are supplied in your supply chain, how do you know that no-one is being exploited? An organisation is not doing the right thing if it pays the living wage but funds this by cutting other benefits or by moving people to less secure contracts.

So, as I said earlier, there is undoubtedly more that we can do and more that we should do through the economic action plan and the code of practice. They represent, I think, a big departure from our previous approach to dealing with business. We're already committed to reviewing the effectiveness of the code early next year, and we've accepted the UK director of labour market enforcement's recommendation that we will review it. All of the code's commitments, including the one on the living wage, will be reviewed. We'll look at the impact it's already having and what is needed to promote it and to encourage organisations to follow through on their commitments. We'll also look at whether it needs to be strengthened in places, and we will do this in partnership with public sector employers, with businesses and with trade unions.

I'll be looking hard, if returned to this role, to where the economic contract can go next and which partner organisations we can ask to start using it, because it was always my intention when I penned the economic contract to roll it out eventually across all public, private and third sector organisations in receipt of public support, and to incorporate—subject to the recommendations, of course, of the Fair Work Commission—the living wage into the economic contract. A living wage Wales is not an aspiration, it's a destination that we will get to. I have no doubt that the commitment shown in this Chamber today will help us along the way. Diolch yn fawr iawn.