Scottish Labour’s Make Work Pay scheme would see nearly £26 million made available for businesses in Glasgow who support the living wage for their staff. The plans for a living wage for all will boost local businesses too, says Glasgow Labour MSP Anne McTaggart.
Under Scottish Labour plans, employers would receive a tax rebate of up to £1000 for every low paid worker who gets a pay rise.
The average rebate would be £445, meaning that if every low paid worker across Scotland was given the living wage, business would get a windfall of over £180 million.
Ms McTaggart highlighted the positive effects of implementing a living wage for Scottish businesses. Citing research that shows a living wage leads to:
- 25% fall in absenteeism.
- 80% of employers believing the living wage has enhanced the quality of the work of their staff.
- 66% of employers reporting a significant impact on recruitment and retention within their organisation.
Over 400,000 Scots are paid less than the living wage with an estimated 58,000 in Glasgow alone.
Scottish Labour believes the living wage is best for business and best for fairness.
The SNP have previously voted with the Tories against Scottish Labour plans to extend the living wage to the private sector.
Ms McTaggart said “Low pay is moral scandal in our country and it is also holding our economy back.
“Scottish Labour’s plan to extend the living wage could lift thousands of Scots out of low pay. We could give a pay rise to as many as 58,000 workers in Glasgow alone.
“Local businesses will see a bonus too, with £25.8 million available for businesses in Glasgow.
“The research shows that absenteeism and staff turnover go down whilst performance and morale go up. It means a happier, more efficient workplace.
“A lot of businesses in Scotland aren’t turning over millions. They are on the sharp end budgeting month to month, they might want to give a pay rise to their staff but the conditions aren’t right.
“That is why Scottish Labour has a plan to convince these businesses to pay the living wage. We will use make work pay contracts to incentivise better pay for staff – and better performance for business.
“When Scottish Labour tried to extend the living wage before the SNP Government in Edinburgh voted with the Tories to block our plans. The SNP were wrong to deny thousands of Scots a pay rise. Scottish Labour will not let these Scots down.
“In May Scotland can decide the general election. We can deliver a Labour Government that will make work pay; we can deliver a government which delivers a living wage.”
The average rebate to business would be £445
The estimated number of people working for less than the minimum wage in Glasgow is 58,000.
58,000 x £445 = £25.8 million.
List of living wage benefits from the Poverty Alliance available here:
The SNP has consistently voted against Scottish Labour’s call for the Living Wage to be included in the procurement process. Most notably in Stage 3 of the Procurement Reform (Scotland) Act, details found here:
These contracts will mean that, in return for paying the living wage within the first year of a Labour Government, businesses will receive back 12-months’ worth of the resulting increased tax and National Insurance revenues received by the Government.
If the Government introduced this now, firms could receive a 12-month tax rebate of up to £1,000 – and an average of £445 – for every low paid worker who is moved onto a living wage.
For every extra pound employers pay to raise workers from the National Minimum Wage to the living wage, the Treasury saves on average 49p in the form of lower social security payments and higher tax revenues.
Labour’s Make Work Pay contracts would mean that employers could claim back the entire increase in tax revenue – an average of 32p in the pound – for the first year.
Although the bulk of the money in the first year would be paid back to employers, the Government would still see a net saving through lower social security and tax credit payments, and increased tax revenues in future years.
We will also require listed companies to report on whether or not they pay the living wage.