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The Minister for Agriculture, Fisheries and Food (George Eustice)
It is a pleasure to serve under your chairmanship, Mr Gapes. I welcome the shadow Minister, the hon. Member for Stroud (Dr Drew), back to this place and back to this wonderful brief, DEFRA, where we have so many complex issues to deal with.
I congratulate my hon. Friend the Member for Tiverton and Honiton (Neil Parish) on securing this debate to discuss the important work that the Environment, Food and Rural Affairs Committee has done on migrant labour as it applies to agriculture. It published its report in April, getting it out just before the general election, and it was a pleasure to give evidence to its inquiry earlier this year, alongside the Home Office Minister who is now the Minister of State, Department for Education, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill).
I completely recognise that the Committee has received a number of strong representations from the farming industry. I also understand that, as a number of hon. Members have said, part of the backdrop to the debate is a general apprehension in the farming industry about what might happen once we have left the European Union and what arrangements might be put in place to replace the free movement of labour that it currently enjoys.
My hon. Friend the Member for Tiverton and Honiton will be aware that the Home Office leads on this issue. He will also be aware that I have personal experience in this industry and understand the challenge well. The challenge has been set out by a number of hon. Members, particularly those with fruit producers in their constituencies, including my hon. Friends the Members for Tonbridge and Malling (Tom Tugendhat), for Faversham and Mid Kent (Helen Whately) and for North Herefordshire (Bill Wiggin). All those constituencies rely heavily on migrant labour.
I ran a soft fruit enterprise for the best part of 10 years. We used to employ 250 staff. Our farm in Cornwall was nicknamed locally “the United Nations”, because we had people from many different countries. We had staff from EU countries, but also some staff from Commonwealth countries, such as Australia and New Zealand, who were here on the then holiday work visa scheme. I know what it is like, and I know what it is like to have to close the gate on a field of strawberries that cannot be harvested because there are not enough staff.
As my hon. Friend the Member for Tiverton and Honiton pointed out, the seasonal agricultural workers scheme has been around since 1945. It was brought in after the war to ensure that we could provide our farms with the workers that they needed. However, as the EU expanded, the need for the scheme decreased. From 1990, it was subject to quotas, and in 1990 the quota was set at 5,500 places. It went up to about 25,000 by 2003, was reduced again in 2005 after the big accession of a number of new member states whose people were able to come here and work, and was put back up to 21,250 in 2008.
In 2005, the Home Office announced its intention to phase out, over time, existing quota-based low-skilled migration schemes, including SAWS, because labour needs at low skill levels were deemed to be capable of being met from an expanded EU labour market. From 2008 to 2013, SAWS was open only to nationals of Bulgaria and Romania, while transitional restrictions on their labour market access remained in place. The decision to end SAWS was informed by advice from the Migration Advisory Committee, which considered there to be no immediate shortfall in the supply of seasonal labour, although at the point at which it gave that advice, it conceded that in the medium to long term, which it identified as being possibly sometime after 2017, shortages could arise and we should therefore keep matters under review, which we have.
DEFRA established the SAWS transition working group. That met as recently as 6 March this year and discussed some of these issues of anecdotal reports that things are getting harder. Its conclusion in the March meeting, which I will come on to in more detail, was that this was a challenging situation but not a crisis.
My hon. Friend cast some doubt on the figures used by the former Home Office Minister and suggested they were out of date. That is unfair because the figures are clear and correct. The Office for National Statistics figures for January to March 2017 show that the number of EU nationals working in the UK was up by 171,000 to a total of 2.32 million. We also know that around 350,000 EU nationals work in the food chain.
The figures are right, but I agree and concede that they are migration figures. We are talking about something slightly different—seasonal migration, which does not show up in those figures. Seasonal migration is for those who come here for short periods—typically six months —and then return home for part of the year. Estimates of the number of people who come here as seasonal migrant workers and return home every year range from 67,000 to 80,000.
When the SAWS transition group met on 6 March, it discussed the reason for this anecdotal reporting of a tightening in that labour market, and a number of possible reasons were advanced. First, as a number of hon. Members have pointed out, the weakening of the pound against the euro means that it is less attractive to come here and work, particularly if people are sending money back home. Secondly, it was pointed out that there have been changes to child benefit entitlement in Poland, which means fewer people from Poland are coming to the UK. Thirdly, Bulgaria has been taking steps to encourage its workforce to stay and work there, which is also thought to be a factor. A number of factors may have had an impact on seasonal migrant workers, even though we know that net migration from the EU has continued to rise.
A number of hon. Members, including the shadow Minister, asked what research we are doing. The EFRA Committee’s report asked us to review things before the end of the year. I have asked officials to continue to monitor the situation closely, given the reports we are getting. In fact, they have a meeting tomorrow with some of the employment providers and the NFU. The purpose of the meeting is to establish what data we need to come back from the industry and under what timescale they are able to provide it. Having established that, we have at the earliest opportunity to convene another formal meeting of the SAWS transition group to review the data. It is very important that we are able to review the data across the whole of 2017.
Neil Parish
I thank the Minister very much for that thoughtful and good response. We can collect all these data, but if we see a tightening in the labour market, are we able to put a SAWS arrangement in place for next year? This is the bit I worry about. The Government say they can act fast, but some of the previous fast actions have taken longer than six months—dare I say?—and I am a little concerned. I hope we can be swift of foot. I am not making a party political point, just a point for the Government.
George Eustice
My hon. Friend will be aware that the Home Office leads on this area. He will also be aware that our colleague, the then Immigration Minister, said that he believed it could stand up a SAWS scheme within five to six months. I understand that it would require a statutory instrument, because it is not the case that the SAWS scheme is dormant and reduced to zero. In secondary legislation, the SAWS scheme was discontinued when we passed the legislation allowing the accession and ending of the transitional arrangements for Romania and Bulgaria. I believe it needs secondary legislation, and it would be a matter for the Home Office. My hon. Friend’s Committee heard what the Home Office Minister had to say on that.
There is a difference across the year and between sectors. A number of hon. Members have used the term “peak strawberry”. We know that the third quarter—that is, from July to September—is always the period when demand for seasonal labour is highest and the most important quarter to watch. In other parts of the year the pressure is lower, which can mean that different sectors are affected differently. It means, for instance, that the soft fruit sector reports the greatest problems.
Earlier today I spoke to a farmer I know, a daffodil grower in Cornwall, who employs more than 1,200 seasonal staff, predominantly from Romania and Bulgaria. They reported to me that they did not have any problems at all and actually want to increase the number of seasonal staff. They are looking at Bulgaria, a very large country, and working with jobcentres there. They are not reporting any difficulty in getting the staff they need. Of course, this is the daffodil industry during the first quarter, when competition for labour tends to be low, so I appreciate that it is different for some others. I also mentioned exchange rates, and they pointed out that it is not a big issue for them because although the exchange rate is down, it is roughly back to the levels it was in 2010-11. Exchange rates do go up and down and businesses have to plan for that.
I want to talk a bit about the context of the EU, which the hon. Member for Perth and North Perthshire (Pete Wishart) raised. Obviously, while we are in the EU, nothing changes. We still have free movement. I understand, however, that people want clarity about what will happen after we leave, and that is part of the backdrop, which the Government understand. While we want to have controlled migration, we are very clear that we are not pulling up the drawbridge. The shadow Minister, the hon. Member for Stroud (Dr Drew), asked about research. In addition to the work being done by the SAWS transition group convened by DEFRA, the Home Office intends to commission the Migration Advisory Committee to look at the UK labour market and our reliance on EU migrant labour across sectors. That will include looking at the SAWS.
George Eustice
I am sorry but I am running out time and I want to give my hon. Friend the Member for Tiverton and Honiton time to respond.
Finally, I want to touch on some of the points made in the debate. My right hon. Friend the Member for North Shropshire (Mr Paterson) raised the New Zealand and Australian schemes. I will indeed read Professor Alan Winters’s report, which he highlighted. We have been told by Concordia, one of the labour providers, that it has managed to improve recruitment rates by offering travel and transport to help people to get here.
The hon. Member for Strangford (Jim Shannon) has a lot of agriculture in his constituency and I take his points on board. The Northern Ireland poultry sector is very large. It is less about seasonal labour there, and more often about permanent labour. I hope the Prime Minister’s words about settled status will therefore give him reassurance.
My hon. Friends the Members for Faversham and Mid Kent (Helen Whately) and for Tonbridge and Malling (Tom Tugendhat) talked about a number of growers in their constituencies that I know and remember from my time in the industry. Coming back to the point raised, it is the case that there is an opportunity in the soft fruit sector. It has managed to spread the season with polytunnels to stagger the crop so that there are fewer peaks. A lot of very good work has been done on plant breeding so that they can increase the average size of the fruit, reducing their picking costs. A new variety called Centenary, which is just on market, is much more consistent in the size of the fruit. As someone who ran a soft fruit operation, I know that the overall size of the fruit is the key determinant of the cost of picking.
In conclusion, we have had a very interesting debate. These are very important issues. I reassure the House that our SAWS transition group is looking closely at all of them, and that the Home Office intends to commission the Migration Advisory Committee to do a major piece of work in this area.