Is Scotland's workforce walking into a perfect storm?

It perhaps should not have come as a surprise that Nicola Sturgeon seemed happier than Jeremy Hunt to talk about the junior doctors’ strike.

Hunt appears determined to avoid discussing the subject, and so there seems a certain irony in the fact that a petition calling for parliament to debate a vote of no confidence in the health secretary now has more than 300,000 signatures. Jeremy Hunt will not debate junior doctors, so junior doctors have forced the Commons to debate Jeremy Hunt.

Sturgeon, in contrast, was happy to tackle the subject, losing no time in using the row to highlight a perceived difference between how the UK and Scottish governments deal with the public service.

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Speaking on ITV News, the First Minister said: “The Scottish Government has taken the position that we don’t want to impose a new contract on junior doctors, we want to work with junior doctors.

“It’s not for me to pass comment on the actions of another government, but I much prefer an approach to the health service that is collaborative and working together with health professionals.”

Referring to a recruitment campaign in Scotland, she spoke directly to junior doctors in the rest of the UK: “We have got an ambition for the future of health and social care services – come and be part of it.”

The January strike in England and Wales was the first industrial action by doctors since 1975, and the dispute seemed to tap into wider concerns over the Tories’ relationship with the workforce and employment. People generally trust doctors, and there was a clear concern among the Conservatives that the fallout was making them look bad.

The UK Government’s approach to immigration policy, and the issue of post-study work visas too, which allowed overseas graduates to work in Scotland for two years after completing their studies, have drawn real anger from those in the sector. As with junior doctors, the Scottish Government has tried to distance itself from the Tories’ approach to the matter.

In fact, with a recent report from the Scottish Affairs Committee finding that the scheme’s removal had led to an 80 per cent drop in non-EU students remaining in the UK after graduating, there is now cross-party support in Scotland for replacing the post-study work visa, which was scrapped by the coalition government in 2012.

Releasing the report, SNP MP Pete Wishart said: “We currently have a situation where people come to Scotland from around the world to spend three or four years here being educated and becoming settled in our society. Then we raise unnecessary barriers preventing these talented individuals from staying and contributing to our economy.

“There has been an almost universal call for change and the UK Government must give assurances that it will take heed and give proper consideration to reforms.”

It is perhaps no surprise that the SNP would seek to make political hay from criticism of the Tories, and on the face of it at least, the Scottish Government does seem to have avoided some of the acrimony which has festered between the Conservative government and the workforce. Certainly the disputes that do exist seem to have attracted fewer headlines north of the border.

Employment figures in Scotland are positive. Between October and December 2015, Office for National Statistics figures show the overall Scottish employment rate rose to 74.8 per cent, outperforming the overall UK rate. The Scottish Government boasted that the employment level, 2,636,000, was the highest on record.

Unemployment fell a little – 0.2 per cent – to 5.8 per cent, with unemployment falling 5,000 to 162,000 over the same period.

Youth employment, meanwhile, was at its highest level since 2006.

Cabinet Secretary for Fair Work, Skills and Training Roseanna Cunningham said the figures were proof the Scottish economy is “on the right track”.

She said: “Rising employment and falling unemployment are very welcome and an inactivity rate of 20.5 per cent is the lowest on record and the lowest out of the four UK nations. Our youth employment figures continue to be strong, out-performing the UK statistics, showing we are making progress with our commitment to better prepare young people for the jobs’ market.

“However, a number of significant challenges remain beneath these encouraging figures, such as the continuing low price of oil and the effect this is having on the industry and its supply chain. We will continue to work hard to help even more people towards jobs. We want everyone to be able to maximise their potential and that means supporting them into sustainable careers through a variety of paths.

“While the Scottish economy is feeling the effects of global economic conditions, we remain resilient and will continue to use every power at our disposal, including improved employability services from 2017, to ensure unnecessary barriers to the jobs market become a thing of the past.”

But although the statistics look good and, unlike in England, disputes have stayed out of the headlines, the workforce clearly faces challenges. Beyond the effect of the oil price collapse and the ensuing crisis in the sector, concerns remain over skills gaps within some of Scotland’s most critically important industries – from tourism to life sciences.

Skills Development Scotland (SDS) is tasked with working alongside industry to identify and address skills gaps and shortages. As such, it published skills investment plans for each of the 10 key sectors, as defined by the Scottish Government.

The challenges vary, but there are still broad themes cutting across these industries, particularly the need to find new ways of attracting more entrants to the sector, making sure they have the right level of work-readiness, meaning soft skills as well as technical ones, and ensuring the education and skills system is responsive to the needs of industry.

Chris Brodie, lead head of key sector development at SDS, told Holyrood: “One of the key challenges is to align skills provision with the demands of industry, and some good practice is emerging through college regional outcome agreements. SDS has recently appointed regional skills planning leads to work with college and local authority partners to help drive this alignment.

“A further challenge is generating the evidence needed to inform investment. Colleges, universities and local authorities are increasingly requiring more localised and specific sectoral information, but some of the underpinning foundations that produce that information in the shape of the UK Commission for Employment and Skills and Sector Skills Councils is diminishing.

“This could be viewed as an opportunity for Scotland to become more self-reliant in developing its skills evidence, and that would play a part in helping to drive the alignment between skills provision and industry demands.”

But while challenges may vary from industry to industry, and despite the positive employment figures, there are still pressures which transcend sectors.

As Scottish Trades Union Congress (STUC) general secretary Grahame Smith put it when the ONS figures came out: “It is good that the employment rate is now back to around its pre-recession peak but too many jobs created have been low wage and precarious. It is essential that policy at all levels of government focuses on the creation of sustainable, quality employment.”

When it comes to employment, quantity does not always mean quality. Speaking to Holyrood, Ian Tasker, STUC assistant secretary, elaborated on the need to look at wider structural issues in the Scottish economy – specifically, the importance of focusing on inequalities. In youth employment, for example, the figures may look positive, but the STUC remains concerned about exploitation of young people at work.

“Our current concerns are in relation to hospitality, pubs and clubs, we haven’t got as far as hotel chains yet, but we have seen evidence of individuals on zero-hours contracts not knowing when they will be working or if they are called into work, they are sent home early and not paid. So there is just not that security of employment, and if there is not security of employment, how are young people supposed to save for a deposit for a house?”

It is these sorts of concerns that prompted the STUC to launch its Better than Zero campaign last year.

Tasker says: “It seeks to highlight employers out there who are trying to exploit young people in the workplace by using inferior contracts, and by discriminating against them in relation to current national minimum wage levels, whereby people over 21 get paid more than those under – which we think is incredibly unfair, because they are doing the same job. We want to see all national minimum wage differentials removed so people doing the same job are paid the same.”

This remains a significant issue for young workers. While George Osborne has been boasting about the new National Living Wage ‘giving Britain a pay rise’, under-25s will watch on, ineligible for the higher rate. Tasker is sceptical of the Tory National Living Wage plan in general.

“It will not eradicate in-work poverty levels, which is what the real living wage is about. We think the National Living Wage is politically motivated to perhaps reduce the effectiveness of the real living wage campaign and, gladly, it doesn’t appear to have done that; there are a lot of people that are quite clear about the difference between the Tory living wage and what people really require to be lifted out of poverty. It is still going to leave people substantially short of what they need, and whether it ever actually gets to the stage where it reaches £9, we will just need to see.”

Peter Kelly is director of the Poverty Alliance, the body in charge of Living Wage accreditation in Scotland. He says in-work poverty has been on the radar for anti-poverty organisations for a long time.

“We saw progress in tackling low pay in the early part of the last decade. So the introduction of the minimum wage, the introduction of tax credits, they all had an impact, we started to see in-work poverty start to come down somewhat. But really, the emergence of in-work poverty probably started around 2004, 2005, and we have seen a steady increase in the proportion of children and proportion of working-age adults living in in-work poverty – households where someone works but which are still classified low income. So we have seen an increase, with more than half of children living in poverty in a house where someone works.”

The minimum wage, when it was first introduced, had a fairly significant impact on the pay of low paid workers, and particularly women. At first it rose above inflation. But it then started to slip, gradually starting to lose its value in comparison to average earnings. Meanwhile, the value of tax credits began to erode from around 2005 onwards.

Around 440,000 people, one in five employees in Scotland, are low paid, and the proportion is increasing. Kelly says that is partly down to changes in the labour market, echoing Tasker’s concerns over conditions in some areas of service sector employment. The patterns, he says, of those worst affected by in-work poverty remain “depressingly familiar”.

“Women are far more likely to be in low-paid employment than men, though a growing proportion of men have low-paid jobs. Young workers are particularly vulnerable to low paid employment, though that is partly because of the structure of the minimum wage that allows young workers to be in those kind of jobs, and it is also about the kind of experience young workers have.

“But it is also important to remember, we often talk about low pay being a phenomenon associated with young workers, and it is, but it is also a phenomenon that goes right throughout some people’s careers. If you are in a low-paid job in your late thirties, then it is likely you will find it very difficult to move out of low-paid employment. That is something that will follow you for the rest of your working life.”

He adds: “So the idea that low-paid jobs act as a ladder onto something better is not always the case. That is a significant challenge for the labour market, and for labour market policy.”

Kelly adds: “What the UK has done in creating the National Minimum Wage was a great political move, but it is not the Living Wage as we would define it. I think that move shows the importance and the understanding that the need to address in-work poverty has gained over the last nine years. We launched the Living Wage campaign in 2007 and let’s just say it was not embraced with open arms by all parts of the policy-making community. We had a lot of challenges to make this work and to get people onside. I think it was when employers started to see the benefits of the Living Wage that maybe some of the policy people followed suit.

“So the fact it is on the policy agenda is positive and the fact we have more than 2,000 employers across the UK now signed up to that voluntary living wage and who talk about the benefits of addressing low pay for their own employees. They see the benefits in terms of recruitment and retention, we are starting to see some evidence around productivity and staff engagement in the company.”

However, Kelly sees challenges on the horizon for the workforce.

“I think that as universal credit rolls out and tax credits are gradually removed, that will prove very challenging for a lot of workers who have relied on them to make ends meet and may well not receive the same sort of support through universal credit. We know the UK Government has said no one will be worse off when they are in work than out of work, but I don’t know if the evidence backs that up. We have real concerns over lone parents who are in employment, most of whom will rely on tax credits and now on universal credit, they may well lose out from that.”

But while in-work poverty clearly continues to haunt Scotland’s workforce, there also seems to be a perception that the issue is at least back on the agenda. Kelly welcomes the fact there is a cabinet secretary tasked with promoting fair pay.

“It is important because the fair work agenda in Scotland is not just about creating more jobs, it is about how we can create better jobs. That is crucially important. The government economic strategy, the idea that a growing economy is needed to reduce inequality, but that we need to reduce inequality to have a growing economy, that is a really strong message.”

Again, the contrasting attitudes of those residing in Downing Street and Bute House become evident.

Tasker said: “We don’t know what the Scottish Government report (on fair work) will say when it comes out, but I think there is a distinct difference between what is happening in Scotland and what is happening in the rest of the UK.”

In terms of what is happening across the UK, unions remain particularly incensed by the Trade Union Bill. Tasker calls it “the biggest attack on workers’ rights in many decades”. It will increase the period of notice required before a strike from seven days to 14, while allowing employers to bring in agency workers to replace striking workers.

Meanwhile, unions remain concerned that local authorities could have the right to issue anti-social behaviour orders to picketline participants or protesters.

Beyond that, it is probably the changes to strike voting thresholds that have sparked the most anger, with some public service workers (including in health, education and transport) now needing 50 per cent of members to turn out to vote and 40 per cent of the entire membership to back action before it can go forward.

The Trade Union Bill has given impetus to calls for the legislation to be devolved. In fact, it was one of the STUC’s demands during the Smith Agreement – Tasker calls it a “missed trick”.

The future health of Scotland’s workforce, then, is clearly tied up with countless other issues, and unpicking it is not easy. Strands relating to poverty, education, health, welfare and, indeed, when it comes to the debate over immigration, justice, run through it. They form a tangled mass – a mixture of causes and results too interconnected to understand and address in isolation.

So employment stats may be positive, but between changes to universal credit, the persistence of in-work poverty, and the looming Trade Union Bill, parts of the workforce may feel they are walking into a perfect storm.

Nonetheless, there is a sense that workers’ prospects – through the eyes of trade unions at least – are brighter in Scotland. The very fact that a ministry exists to focus on fair work seems to suggest as much.

But still, in-work poverty persists, and there is something deeply troubling about the fact someone can have job in a developed economy and fail to make enough money to feed their family.