TRADE unionists’ hopes were dashed yesterday as the SNP ignored calls to enforce a living wage for tens of thousands working on public-sector contracts.

Campaigners watched with bated breath as MSPs debated the Scottish government’s procurement Bill for a third and final time.

A Labour amendment had called on SNP ministers to require all firms awarded a public-sector contract to pay their staff the semi-official living wage, set at £7.65 an hour in Scotland.

Holyrood has pledged the living wage for all those directly employed by a public body but ministers have refused to enforce it on public contracts, citing fear of EU competition rules.

Instead the government would require procurement panels only to consider contractors’ rates of pay as one of several factors.

Labour MSP James Kelly told MSPs the measure “would make a massive difference” to underpaid care workers, cleaners and others.

But the Deputy First Minister Nicola Sturgeon would not budge, saying the European Commission had advised ministers it would be “unlikely” that the policy would escape legal challenge from would-be contractors.

Green Party MSP Patrick Harvie retorted that ministers had already taken on an expected legal challenge to minimum alcohol pricing from booze firms.

“Sometimes governments must be willing to test the boundaries of what is possible,” he said.

The amendment was rejected by 34 votes to 44.