Jim Lambie, artist: 'I like the idea that people would be inside this kind of permanent installation'

Bright spot: poetry club owner and space artist Jim Lambie

Jim Lambie welcomes me to his poetry club by announcing: "This is an artwork. It is also my studio, for today, at least." The space, open for two years, sits underneath the Glasgow railway arches and hosts a series of events – music, literary, film and poetry. "It is a private-public space. I get to make this piece of sculpture and people come and hang out inside," he says,

It was a collaborative effort for Lambie and friends to remove the debris, revealing the homely space. It is a work in progress; recently two washing machines painted in day-glow colours have appeared as good places to rest drinks or bottoms. Knowing Lambie's sculptural works, often in glaring primary shades, the punchy hues are not surprising.

"It's really just what best describes the work and if colour is gonna open up a better dialogue with the work then I'll use that," he says. Lambie, born in 1964 in Glasgow, is part of the group of artists including Simon Starling, David Shrigley, Richard Wright and Douglas Gordon that graduated from the city's School of Art.

Lambie was nominated for the Turner Prize in 2005, the year that Starling won. He is best known for his gridded psychedelic floors, the first of which he did in 1999. "It was done with duct tape and it transformed the dynamic of the space. I did not know that it would pulsate and set up a rhythm in the room."

Lambie prefers to make his site-specific shows without pre-prepared works. "I would sit for hours and hours in the space and sort of marinate on things." This strategy misfired when he arrived to make a work in a museum in the south of France. "My trawling of junk shops was non-productive."

It was a very wealthy place and he could not find anything to make into a work.

He did have one thing in abundance, duty-free cigarettes, so on the day he drilled cigarette-sized holes in the wall and the curator lit them in the other room and he smoked the cigarettes into the room. The audience loved the piece. "They started talking about Jean Genet and when he was in prison, when they would burrow holes through the wall to each other and take a piece of straw from the mattress, put it through the hole, and share cigarettes. It was unknown to me, at that time, but the work had tapped into that, and that was a really great moment for me."

Lambie's poetry club reflects the relaxed atmosphere of Glasgow.

"I guess there's a bit of social sculpture involved in it. I like the idea that people would come and be inside this kind of permanent installation.

"It's great being able to do what I do and to sustain myself through that, but it's also good to put something back in."

Jim Lambie, Fruitmarket Gallery, Edinburgh (0131 225 2383) 27 June to 19 October, the exhibition is part of Edinburgh Art Festival 2014 and GENERATION, a Scotland-wide celebration of 25 years of contemporary art

Jim Lambie: Answer Machine is at Sadie Coles, Kingly Street, London W1 (020 7493 8611) to 15 August