Enterprise and Regulatory Reform Bill

Duke of Montrose Excerpts

Wednesday 20th March 2013 Lords Chamber

[Lord Deben]

My Lords, I took part in the earlier discussions. I apologise to the noble Lord, Lord Whitty, for missing the first of his lambent sentences. I am concerned about what he asks for. The noble Baroness wanted it because she felt that somehow or other this would be a patronising view. The National Farmers’ Union is not being patronising; all it will do is produce the figures. There is nothing patronising in that. You cannot have a negotiation to produce the figures. They are the figures, they will be the figures and we shall know what they are. Rather like speeches I have heard from the noble Baroness on this sort of subject before, she talked about a world that, if it ever existed, has long passed.

It is that that concerns me about the proposals of the noble Lord, Lord Whitty. I live in the country and own some land there—not much, but around the house in which I live—and I know the farmers round about. I find it insulting that farmers are the only group of the population that cannot be allowed to run their labour relations within the general context of the national system. As a countryman, I find great annoyance at the way in which urban people talk about farming as if it was so alien to the normal practices of life, so divorced from the normal issues of the marketplace and so unconcerned with the future, comfort and family life of its workers that it needs a special arrangement that no one else needs and that everyone else has shuffled off as being part of a historic circumstance. Yet the farmer has to be left with it and I find that insulting. That is also an indication that the party opposite does not understand the countryside at all, wishing to impress upon it things that have nothing to do with our knowledge in the countryside.

In the countryside today, good farmers are extremely difficult to get hold of. They are significantly better paid than the minima produced by the Agricultural Wages Board. No farmer worth his salt trying to compete in the modern world is unwilling to pay a proper wage to somebody doing what is an increasingly technical and difficult job. The Agricultural Wages Board was set up at a time when there was a wholly different farming structure. I admit that when I was Minister of Agriculture I would have liked to have got rid of the Agricultural Wages Board—even then—but since then the arguments for it have become even less pertinent. Agriculture is not like it was even 20 years ago. It certainly is not like it was when the Agricultural Wages Board was set up. I very much hope that the Minister will refuse to ask for yet another investigation.

To end, the noble Lord, Lord Whitty, very charmingly suggested that he was helping the Government and very charmingly suggested that he was only doing them a favour. I very charmingly suggest that he is actually trying to put this off again. This is another mechanism within the rules of the House to try to revisit this particular subject. Frankly, when the Agricultural Wages Board has gone, nobody will remember that it ever existed because life in farms will continue. We will have rid ourselves of an unnecessary burden, an additional cost and something that is a hangover from the past. Now, I am a great believer in tradition. I love the traditions of this House and am very keen on conventions of that sort but this is a tradition that we can do without. It is not necessary. I hope that my noble friend will not give this any shrift whatever.

[The Duke of Montrose]

My Lords, I apologise for having missed the first few words spoken by the noble Lord, Lord Whitty, but I know where he was coming from. I cannot fully agree with my noble friend Lord Deben: I think it is actually the other way round. I employ a couple of agricultural workers and know the set-up as it now occurs up north. Of course, that is miles away from the historical situation that we used to have there, whereby agricultural workers had no security whatever. They had what the Scots termed a seeking-on day. If the farmer did not come and see you on your seeking-on day, you knew that you were leaving. That happened every six months.

The Agricultural Wages Board and other things came in and have satisfied that element. It has also covered a great many other things. The complaint on the other side should be that not enough agricultural workers have joined the union because the agricultural workers will be in a strong position when this is introduced. Admittedly, you get the awkward position, if there is a farmer who employs only one employee, that he could terminate his contract and immediately bring in something entirely new.

The Minister gave me a very good answer to my questions, which he was not able to provide in the debate, stating that there will be, on a new contract, no automatic right to special rates of pay, but if you sacked the only worker you had, you would immediately destroy any chance of an amicable way of working in future. Not only that, if you had to renegotiate the contract, the other side could say, “I’m going to get my union representative along, and he will make sure that you comply”. Presumably, the union will also produce its own rates of pay. Of course, we now have these various certificates that you can gain, and from that you can develop a hierarchy of pay. So I should have thought that the fear of loss, while looking obvious initially, will, as the noble Lord, Lord Curry, said, work out the other way round.

[Viscount Younger of Leckie]

My Lords, the amendment of the noble Lord, Lord Whitty, would require Ministers to publish and lay before both Houses of Parliament an updated impact assessment of the abolition of the Agricultural Wages Board prior to the commencement of the provision to abolish the board. The House has already debated the impact of the abolition of the Agricultural Wages Board at considerable length both in Grand Committee and at Report, and has voted in favour of abolition.

The best estimate of £250 million over 10 years, which includes the potential impact on wages, sick pay and annual leave, is based on empirical academic research, which looked at wage levels in the past.

As I have made clear previously, the impact on wages, which is the largest cost, would account for only 1% of the total agricultural wages bill over the 10-year period. However, the impact assessment makes clear that there is and will remain considerable uncertainty about the impact and that in fact there may be no reduction in workers’ wages or other benefits. That is because the reality of the impact will depend on the behaviour of employers of farm workers and a range of other factors, such as relative strength of supply and demand for agricultural workers and the need to be competitive with other employers in the same area—points made most eloquently by my noble friends Lord Deben and the Duke of Montrose.

Moreover, there are a number of reasons why the impact is likely to be smaller than that suggested by the external research. A majority of workers already receive terms and conditions above the agricultural minimum wage rates, so it is probable that their wages would not be affected if the board were abolished. The underlying market conditions suggest that there will be a sustained demand for agricultural workers. Research indicates that there is a shortage of workers with relevant skills in the agricultural sector, and that that shortage is higher than comparable shortages in other areas of the economy. The agricultural workforce is also ageing, with 55% of the sector workforce aged over 45, which, again, is higher than in other sectors of the economy.

Moreover, agriculture is a huge industry, with tremendous potential for growth to meet the challenges of feeding the world’s growing population. As I said in the debate on Report, £250 million over 10 years assumes that every agricultural worker would see a relative fall in their wages compared with what they would have been due. We think that that is a highly unlikely scenario given the evidence of the demand for workers—a point made most eloquently by the noble Lord, Lord Curry. However, we deliberately decided to adopt a cautious approach in the impact assessment, given that there is some uncertainty.