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Buying a better economy

This opinion piece is about 7 years old
 

Ken Macintosh MSP argues why the procurement bill can still ensure the creation of a moral economy for Scotland

Ken MacIntosh
Ken MacIntosh

Government procurement may not strike people as the most radical reforming agenda, but it gives us the opportunity to use public contracting as an engine for social and economic change. If we want to promote the living wage, equal pay, tax transparency or ending the use of zero-hours contracts, we have a new route to do so and to achieve a moral economy.

In parliament I moved three specific amendments to the procurement bill. The first would encourage firms to learn from the Mittelstand in Germany: medium-sized companies which rode out the worst of the recession through long-term planning, commitment to their local communities and the use of practices such as work-sharing. The International Labour Organisation estimated work-sharing not only helps workers to keep their jobs, it helps businesses ride out a crisis, retaining the collective workforce experience and putting them in a good position to take advantage of any upturn in the economy.

Demanding social responsibility from companies large and small will not scare away good employers but will provide the backbone for a more sustainable, long-term approach to Scotland’s economy

I have repeatedly told Scottish ministers I believe it is quite wrong to award government grants to companies such as Amazon which refuse to recognise trade unions. So why not actively encourage public contractors to recognise trade unions? Improved health and safety would be one of the benefits, as evidence shows workplaces that recognise trade unions are safer. Here is an opportunity for the Scottish Government to nail its colours firmly to the mast through promoting the role of trade unions in building a more sustainable economy.

The final proposal I put to parliament came directly from the voluntary sector and I am grateful to Oxfam and other organisations for their efforts in promoting the whole concept of decent work. Wage ratios would allow the Scottish Government to promote equality. In 2012, the average chief executive of a FTSE 100 company was paid £4.8 million a year, or 185 times the average salary. That has risen from £1.2m in 1999 and comes at a time when wages for most people have been stagnating or worse.

According to the Equality Trust, wage ratios in the voluntary sector are estimated to be around 10:1, in the public sector they are roughly 15:1, but in FTSE 100 companies they are approximately 262:1. In other words, it is clear that earnings inequality in the private sector will have to be tackled in order to create a more equal society. That radical voice for social justice, the International Monetary Fund, recently highlighted the benefits of lower levels of inequality and even David Cameron has suggested that no one in a public sector organisation should earn more than 20 times more than their lowest-paid colleague.

Despite positive moves from the Scottish Government, the deputy first minister refused to accept any of the amendments. I have accepted her offer of further discussions and we can only hope that can be translated into firm proposals before stage three of the bill. I hope the Scottish Government shares my belief that an economy based primarily on market forces, shareholder return and promoting greed and competitiveness simply leads to an overly greedy and competitive society. Demanding social responsibility from companies large and small will not scare away good employers but will provide the backbone for a more sustainable, long-term approach to Scotland’s economy.

 

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