Question

To ask the Secretary of State for Energy and Climate Change, what assessment his Department made of the implications for his decision to pay subcontracted staff in his Department the living wage of the EU public procurement regime as set out in Directive 2004/18/EC and 2004/17/EC.

My rt. hon. Friend the Secretary of State announced back in April that the department would pay all of its employees the Living Wage from 1 April 2014. Legal advice was sought during consideration and implementation of this policy. At the time no implications in respect of the EU public procurement regime were identified.

Payment of the Living Wage may fall foul of European Community law, in particular the Posted Workers Directive (PWD). This point rests on whether payment of the Living Wage is mandated, in which case there is a risk of being in breach of the PWD, or achieved through voluntary agreement. Since from a contractual perspective the changes needed mutual consent, there was no option for DECC other than to negotiate with suppliers to gain their agreement. We are satisfied therefore that this policy is compliant with EC law.