Public Bodies Bill [Lords]

Debate between Gareth Thomas and Jonathan Edwards

Tuesday 25th October 2011 Commons Chamber

[Mr Thomas]

My right hon. Friend is absolutely right. Indeed, I hope that he will catch your eye later, Madam Deputy Speaker, to enable him to make that point in more detail.

I shall return, if I may, to the concerns expressed by Mr Leniec about the abolition of the Agricultural Wages Board. He is also worried about the loss of sick pay that he could suffer. He has never needed it to date, but knows of others who have done so. He also shares Mr Neville’s concern about the loss of protection of the right to overtime if he should move to a different employer.

The Agricultural Wages Board continues to provide an unheralded but important service in helping to protect vulnerable people and their families, who are vital to the rural economy, from seeing their terms and conditions progressively worsen. It helps to regulate basic pay and protection for fruit pickers, farm labourers and other farm workers. It deals with wages, holiday pay, sick pay and overtime, as well as bereavement leave, holiday entitlement and rates for night work. It provides a crucial floor beneath which wages in the agricultural economy cannot fall.

Nearly 150,000 agricultural workers in England and Wales depend on the Agricultural Wages Board. Those workers play a part in maintaining the vibrancy of our rural communities. They are the unsung essential staff who support farmers in helping to keep agricultural businesses thriving. As my right hon. Friend the Member for Birkenhead (Mr Field) has just suggested, they form a vital part of our food production industry, helping to ensure that we and our constituents can all enjoy healthy—and, occasionally, unhealthy—meals.

It is striking that many farmers continue to support the Agricultural Wages Board. Its presence means that they do not have to become employment specialists, and that they can instead concentrate on running their businesses. The deputy director of the Farmers Union of Wales has noted that

“the AWB is considered an important means of avoiding potential conflict and lengthy negotiations with individual staff”.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

To my knowledge, agriculture is the only industrial sector in which there have been no large industrial disputes over the past couple of decades. Is not that testimony to the success of the AWB?

[Mr Thomas]

The hon. Gentleman is undoubtedly right on this occasion. It is also worth noting that many small farmers also rely on providing their skills to other farmers, at Agricultural Wages Board rates, to ensure the viability of their businesses.

The Government made the important claim in Committee that the board’s abolition would not result in workers becoming worse off, and that minimum wage legislation and the European working time directive would protect their terms and conditions. I put it to the Minister, however, that once the Agricultural Wages board has gone, the 42,000 casual workers in the sector will see a drop in their wages as soon as they finish their next job. That point was also made by my hon. Friend the Member for Telford (David Wright). The other 110,000 workers could see their wages and conditions corroded over time.

Is it not spurious for Ministers to claim that farm workers will be protected by the minimum wage? As the hon. Member for St Ives (Andrew George) said, only 20% of farm workers are on the Agricultural Wages Board’s grade 1, which is virtually equivalent to the current minimum wage. The rest earn considerably more than the minimum wage and will not enjoy the same protection as the board offers them now. Is it not true, too, that once the Agricultural Wages Board is abolished the right to overtime pay at current rates will disappear when a worker moves job? Is it not true, too, that once the board is abolished the right to sick pay will be at a substantially lower rate than at present for agricultural workers when they move jobs? Then there are children who do summer jobs or part-time work on the land; they usually live in rural villages themselves and often have aspirations to work on the land for a career once they are old enough to do so. They currently receive £3.05 an hour. They are not covered by the national minimum wage, so—if, indeed, the board is abolished—they will have no wage protection when they do holiday or weekend work.

Poverty in the countryside rarely receives the coverage or attention it should. Indeed, the extra costs of living and working in the countryside do not get the attention they should, so the work of the Joseph Rowntree Foundation, in highlighting the extra 10% to 20% living costs that those in rural areas typically need to spend on everyday requirements in comparison with those living in urban areas, is surely significant. It should further challenge us to do more to combat low pay and poverty in the countryside and it surely poses the question of how the abolition of the Agricultural Wages Board can possibly help in that important task. The board is also an important counterweight to the pressures from the food industry, particularly those from the supermarket chains, for ever lower costs of production to increase profitability.

I read through the comments that the Minister made in Committee. He cited how the Agricultural Wages Board's existence discourages the payment of annual salaries and the confusion with non-agricultural work that can occur. Those may or may not be genuine concerns. If they are—I take the Minister at his word—one would have thought that a reform agenda could explore those issues. Instead, the Government want to throw the proverbial baby out with the bathwater, not thinking through the consequences for rural wages of the abolition of the Agricultural Wages Board. With rural workers already facing a huge squeeze on their finances from higher energy prices, the increase in VAT and an economy that is being badly mismanaged by the Conservatives, the Government now want to risk rural workers’ wages.

We know from a leaked impact assessment on the abolition of the board that the impact of the loss of entitlement to agricultural sick pay compared with the lower-in-value statutory sick pay that will remain will be a

“transfer, a benefit to farmers and a cost to workers.”

The impact assessment estimates that the reduction in earnings for farm workers as a result of that measure alone will be some £9 million—£9 million out of the rural high street in lost earnings by workers. All those villages shops—vulnerable now because of the Government’s mishandling of the economy—are hardly going to be helped by yet another squeeze on the finances of those they want as their consumers.

If there is any doubt that the abolition of the Agricultural Wages Board will damage the pay of rural workers, let us look at what happened in other parts of our economy when their wages councils were abolished. In evidence published as far back as September 1995, three in 10 jobs were paying less than they would have done if wages councils in the relevant sectors had not been abolished. The fall in pay in shops was particularly severe. A follow-up study one year later showed that half of all vacancies were paying below what they would have done if the wage councils had still existed. The situation had got worse. Such evidence explains why the Labour Government not only brought in the minimum wage, but reformed collective bargaining arrangements. It is also why we will tonight oppose the abolition of the Agricultural Wages Board and why I will seek your leave, Madam Deputy Speaker, to divide the House.

Lastly, I draw attention to amendment 39, which was tabled by my hon. Friend the Member for Wakefield (Mary Creagh) and other hon. Friends and which deals with the Commission for Rural Communities. The abolition of the CRC will leave rural communities without an independent voice, as the Government scrapped the Rural Advocate post last year. It raises the question of whether the Government are really committed to rural proofing Government policies. Indeed, the abolition of the CRC, along with—crucially—the abolition of the Agricultural Wages Board, following on from the Government’s attempts to sell off the nation’s forests, is surely proof that the countryside is being let down by the coalition Government parties.