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Firms welcome easing of pressure

Companies commit to Living Wage in Holyrood Pledge

Hugh AitkenUpdated at 12.30: Companies have given a cautious commitment to the Living Wage as part of a “pledge” with the Scottish Government to cooperate on measures aimed at boosting productivity and fairness at work.

A new voluntary code unveiled today will commit firms to the best of modern business practices.

Those agreeing to the pledge will pay the Living Wage to all direct employees over 18 and will deliver immediately on at least two of nine other pledges, with a promise to deliver the remainder over time.

First Minister, Nicola Sturgeon, and Deputy First Minister, John Swinney, launched the pledge at Tynecastle, home of Heart of Midlothian FC which has become one of the first companies to make the pledge.

The First Minister told business leaders at the event that it was important for them to work with government for the benefit of all.

“The principle of the pledge is not about putting barriers in the way of business growth,” she said in a wide-ranging speech that committed the government to raising productivity, exports and living standards.

“It seeks to enshrine the idea that just as government will work with business to create a prosperous and strong economy, so too will business play a part in delivering a flourishing and fair society.”

Ms Sturgeon said there would no censure nor penalties for those who declined to sign up to the pledge. There had been concerns, gleaned from earlier briefings, that businesses that refused to comply would be denied access to some government services.

The First Minister said afterwards that the pledge was a voluntary partnership and that there was no plan to legislate on any of the nine core principles which are: innovation, internationalisation, prompt payment of suppliers, payment of the living wage, gender equality, opportunities for young people, workforce engagement, community involvement, and standards on zero hours contracts.

Hugh Aitken (pictured), CBI Scotland director, said that while agreeing to the deal it was also conditional on the government providing the appropriate conditions that allow businesses to thrive.

“Businesses will welcome the collaborative approach that the Scottish Government is taking, through its Business Pledge, to work with employers to boost productivity, competitiveness and growth, especially exports,” he said.

“Scotland’s firms have so much potential and as long as the Scottish Government continues to create a positive environment where businesses can thrive and grow, they will keep rising to the challenge.

“Living wages can be a useful guide for those businesses able to pay more but individual business circumstances vary hugely, so this should be done on a voluntary, aspirational approach.

“We already have an effective universal wage floor, the National Minimum Wage, which enjoys strong support from the business community and is set by the independent Low Pay Commission, which engages with Scottish businesses, trade unions and government every year as part of its work.”

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: “The success of the Scottish Government’s Scottish Business Pledge will be in how it supports those businesses that currently fall short of meeting its criteria.

“Whilst 81% employees in Scotland are already earning the Living Wage or above, there are some businesses which, whilst meeting their legal requirements under the minimum wage, currently cannot afford to pay the higher Living Wage to all staff, based on their existing business models.

“This can be dependent upon the size of the business and the market they are operating in and we need to be careful that this is not mis-interpreted as a lack of commitment on their part.

“The values contained within the Government’s Business Pledge are a broad statement of intent and must be interpreted as such.  We share all of these values and absolutely recognise the need to promote greater moves towards internationalisation, innovation, gender balance and positive workplace practices, to name just a few.

“Businesses are at the heart of communities right across our country and the objective of a prosperous and fair Scotland is, of course, one that we all share but some will need support to realise all of the aspects of the Pledge, including the central commitment to the Living Wage.

“This is not the time for any intervention which could result in an increase in business costs, affecting our competitiveness and potentially reducing employment rather than increasing it; therefore we welcome the voluntary nature of the Pledge.

“However if it is to be a successful and inclusive initiative, then we need to see support aimed at those businesses who need time to develop their business models, ensuring they can continue to employ their existing employees, whilst working towards paying the Living Wage for all.  Perhaps this could be achieved through a commensurate reduction in employers’ national insurance contributions or through targeted additional relief on business rates.”

Ann Budge, owner and chairman of Hearts, said: “By introducing the Living Wage across our business, by investing in youth education and staff education, by engaging fully with the community and by working closely with the Foundation of Hearts to introduce fan ownership, we are the perfect match for this initiative. I am very proud indeed to support the Scottish Business Pledge.”

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