I'm looking to get Kharjo as a follower. He wears Steel Plate armour. Am I right in thinking he won't wear amour that has less of an effect than the one he's already wearing? I really want him to wear hide armour. Console player so no mods.

You are right. The only way I know of on console to trick a follower into wearing something with less armor rating than default is that you marry the follower and use their shop to buy their default armor (after giving them something better). But since Kharjo isn't available for marriage, you're out of luck, I'm afraid.

give him better armour. tell him to leave your service. pickpocket the steel plate (exept for boots). ask him to follow you. take your armor back. then give him hide armour.

you dont need the perk to take clothes of people.

You could always improve a lot the armor with craft skills, but it must be pretty good for him to change it.