Enterprise and Regulatory Reform Bill

Debate between Earl Cathcart and Lord Myners

Wednesday 16th January 2013 Grand Committee

[Earl Cathcart]

I am sure that the noble Lord will be interested to hear what the Minister says when he winds up.

I am happy to say that since employing new workers, my business has prospered. It may not be the norm, but the decision I have to make is not by how much I should reduce my employees’ salaries, but rather whether I should give them a bonus, a pay rise or a combination of both. It is a decision I shall make in spite of, not because of, the Agricultural Wages Board and contrary to the scare tactics that I suggest are being used by Unite.

If I wanted to expand my business beyond packing and selling my own farm produce by taking in produce from other farmers for packing and resale, any new workers for that expansion would not be classed as farm workers and would not come under the Agricultural Wages Board’s umbrella, so we would have the absurd situation of two people who are doing exactly the same job being paid at different rates—and all for 2 pence, which is a ridiculous complication. It is further complicated because I am told that if my expanded business had a busy period, say, before Christmas, under the Agricultural Wages Board’s rules I would have to pay time and a half to the agricultural workers packing my farm produce if they work more than eight hours a day or 39 hours a week. The workers packing my neighbouring farmers’ produce would be subject to the national minimum wage and paid the minimum rate regardless of the number of hours they work. What a dog’s dinner. I believe that the board is irrelevant in today’s employment market and an unnecessary cost to the taxpayer. It is outdated because it works on hourly wage rates, not salaries. Those who need an hourly rate are protected by the national minimum wage, and if the Agricultural Wages Board—

[Lord Myners]

I sense that the noble Earl is coming to the close of his comments. I want to remind him that he said he would answer the point raised by my noble friend Lord Hunt of Kings Heath; namely, that the higher grades are not protected by the national minimum wage. The noble Earl said he had an answer, and I think that the Committee is looking forward to hearing it.

[Lord Hunt of Kings Heath]

Perhaps I can help my noble friend. I am referring to grades 1 to 6: grade 6 is the farm management grade and the rate is £14.10 an hour; grade 5, which is the supervisory grade, is £13.05 an hour; and grade 4, the craft grade, which I suspect is the grade that the noble Lord has in mind, is £12.32 an hour, which on a 37-hour week comes to £22,000 a year. I really do not understand what he is saying.

[Earl Cathcart]

The noble Lord did raise a question and I did say that I would come back to it. This is all about the competitive market. I said before that one has to attract people with skills into farming and to pay a higher rate according to those skills, and that is exactly where I am; you have to pay a higher rate of salary—not a higher rate per hour—to the person with the greatest skills, and it is the competitive market that determines that price, which is normally higher than the Agricultural Wages Board rates.

I said that the board is irrelevant to today’s employment markets. It is outdated, working in hourly wage rates not salaries. Those who need an hourly rate are protected by the national minimum wage, and if the Agricultural Wages Board disappeared tomorrow I do not believe that most employers and employees would notice. Those who did would, I believe, breathe a sigh of relief as it would reduce the administrative burden on farmers and their advisers.

The noble Lords opposite have all argued strongly for the board’s retention, but they had 13 years in office to change, modernise and bring the Agricultural Wages Board into the 21st century. They chose to do nothing.

[Lord Myners]

My Lords, I welcome the Minister to his new role, although I feel rather sad for him that his debut is in promoting a Bill that most Members of the Committee will now recognise is a misrepresentation in its reference to the promotion of enterprise. I can say without any doubt after a career in business, including chairing a number of major public companies, that almost nothing in this Bill will have any beneficial impact on economic activity or on the growth of the economy.

This is a rather tawdry Bill, and we are now being asked to look at rather a shabby amendment. It must have been very clear to Members of the Committee that the Minister’s predecessor, the noble Lord, Lord Marland, did not really have his heart in the Bill at all. It was quite clear that he would much rather keep up his suntan overseas than put through legislation that will have such little economic impact.

The amendment has come about as the result of wholly inadequate consultation that is supported by evidence which is thin in the extreme, and the Minister will need to explain to the Committee why it is being proposed now. Why was it not incorporated into the original Bill? Why was it not mentioned, debated or discussed in the other place? Is it an afterthought? Was it overlooked when the Government were drafting not only the Public Bodies Bill but this Bill? If that is the case, those who work in the rural economy will have grounds for extreme grievance at the behaviour of a Government who can approach this issue, which is of great importance to them, in such a superficial and callous manner. My noble friend Lord Hunt of Kings Heath has already pointed out that by putting this amendment into this Bill, a number of procedures and processes that Parliament approved in the Public Bodies Bill will be avoided.

I noted the Minister’s strong endorsement of the national minimum wage and I declare my past role as chairman of the Low Pay Commission. However, as I listened to him I felt, as he advanced his arguments for the abolition of the Agricultural Wages Board, that one could have made the same speech and inserted the words “Low Pay Commission”. What is it about the Agricultural Wages Board that is different from the Low Pay Commission? His arguments about freeing up the economy, allowing the market to operate and establishing a market clearing rate apply to the whole economy. I ask myself whether we are seeing this shabby amendment incorporated into this Bill at such a late hour as a precursor for a deeper and more fundamental attack on the concept of the national minimum wage.