Enterprise and Regulatory Reform Bill

Lord Cameron of Dillington Excerpts

Wednesday 6th March 2013 Lords Chamber

[The Duke of Montrose]

My Lords, I was most grateful to hear what the noble Lord, Lord Curry of Kirkharle, has been telling us. A particular difficulty for the House has been the shortened consultation period, which left a number of questions not fully answered in our minds.

The noble Lord, Lord Whitty, and agricultural workers who came to brief us this morning are obviously very worried at the Government’s assessment of a loss of £259 million. The noble Lord, Lord Curry, has given us some indication as to how that was achieved. Can the Minister tell us whether that figure includes savings or reductions in monies other than purely wages, where the figure was derived from and on whom is it likely to impact? The agricultural representatives took it that overtime rates will be totally abolished. The question of working hours is well defined, for all workers, by the EU working time directive, so everyone knows how many hours are required in any employment in excess of this figure. Under what guidance or legislation will the rates of payment for these hours be determined?

The noble Lord, Lord Whitty, said that the floor was being removed. As the right reverend Prelate said, that is not quite the picture. The floor is not being removed. At the present rate, it is very slightly diminished by 2p. One of the other factors that the representatives are keen to emphasise is that currently there is a graded system in the rates of remuneration. However, the grades currently in place are built on a system of certified qualifications and experience. Is it not possible for the agricultural workers’ union to produce its own guide to a graded wage structure, which would give its members an indication of what the level should be when they are entering into a new contract? These things could be done by responsible people in their own way and would not necessarily require the retention of the wages board.

[Lord Cameron of Dillington]

My Lords, first, I declare an interest as a farmer. We have all received much evidence, both for and against, on this amendment. It seemed right to consider all the evidence and facts afresh, including my own knowledge of the industry, and to re-examine the case for and against abolition.

I think everyone acknowledges that agriculture is very different from 60 to 65 years ago when the current Agricultural Wages Board was introduced. I know that some of the work can still be very tedious and repetitive, such as riddling potatoes for hour after hour or even driving up and down a field all day, albeit in an air-conditioned or heated cab, either with or without sat-nav assisted steering. Of course, now no weights are lifted because instead of bags coming in at 1 hundredweight or even 2 hundredweight as they used to, they come in weights of 1 tonne. So you automatically jump into the forklift truck, do things much quicker and save yourself from exposure to the weather.

I admit that some of the work with livestock can be pretty full-time. You are always on call, particularly at certain times of the year, such as during lambing or calving and, even more importantly, when quietly walking up and down your dairy buildings at night to check which cows might be on heat in order to maintain or to avoid your calving index slipping. I also know that work with livestock can sometimes take place in fairly fresh and rugged conditions, both wet and cold. It has always seemed to me that shepherds and dairymen really should be flock or herd managers and paid an annual salary with bonuses paid on targets achieved. As I understand it, that is not specifically allowed under the current rules of the AWB—or at least it does not count.

On our farm, including in our dairy, we do not pay much attention to that or to any Agricultural Wages Board rates. We pay much more than the AWB rate. We would not keep staff very long if we did not. As I have said before, why would one pay a minimum wage to people responsible for operating machinery costing up to £500,000 or more, and whose skill at operating it can sometimes be the difference between profit and loss on the farm?

However, the Agricultural Wages Board is—everyone has mentioned this and I have admitted it before—a very convenient benchmark to use in the annual wage adjustments. On our farm, all wages across the farm go up by the 2%, 3% or whatever the AWB rate is. In addition, we usually round it up. Incidentally, in the consultation evidence I received from Unite, I noted that by far the most common reason—again, it has been repeated in the debate today—from farmers for opposing the abolition was the helpful benchmarking service that the AWB provides. However, as I have also said previously, this is a service quite easily replaced, and indeed promised, by the NFU and others on a non-statutory basis. Therefore, I am afraid that I have to discount all that evidence. I do not think that it is relevant to the debate.

The question really is: why should we get rid of the safety net? If most farmers pay no attention to it, does it really matter whether we have it or not? After all, it is only a small cost to the taxpayer in the general scheme of things. It is the last of many wages boards and councils, and therefore has a historic role, if nothing else—the last vestige of post-war socialism. I admit that I have only limited knowledge of the horticultural industry, where it is claimed that the national minimum wage—a full 2p per hour less—would apply if the AWB was not there. Furthermore, the rightly generous overtime rates of the AWB would no longer apply in that industry, which I believe is a valid point. But perhaps that is a fault of the national minimum wage rules rather than a plus point for the AWB.

I paused in my thought processes here. What harm is the AWB doing? After all, agriculture is no longer a poorly paid industry, so it must be being successful. The hourly average pay in agriculture is higher than in hotels, restaurants, shops and even local authority administration. Why dispense with all that gain? I like to think that I care about farming families, both employers and employees. I have spent most of my life trying to promote wider businesses and jobs in the countryside outside farming, because agriculture represents less than 4% of rural employment. Therefore, one of the reasons for my passionate promotion of the wider economy is that many farming families, both employers and employees, depend on having a non-agricultural wage earner in their family to maintain their lifestyle or, if they are the employers, their presence on the land.

I asked myself whether it is helpful to overall employment in agriculture that there should be a state-controlled wage structure over and above the minimum wage which the other 96% of the rural workforce does not enjoy. I asked myself whether the rest of the rural economy was ruined by the abolition of the other 100 or so wage councils. Or is it spoilt now by having a free market in wages, subject of course to the national minimum wage?

Are lorry drivers disadvantaged by not having a lorry drivers’ wages board? I take that as a good equivalent because they, too, spend long hours in cabs, driving up and down—not fields but roads. I thought that they were not disadvantaged. The rural economy is flourishing better than ever before, including lorry drivers. As an aside, obviously any reform of the CAP should put more money into Pillar 2 and less into Pillar 1 but that is not the subject we are debating today.

My next question to myself was whether UK agriculture can adapt and grow better, including providing more overall employment up and down the whole food chain, with or without its own centrally controlled, state-run wage order. All my experience over the past 50 years suggests that state interference in an industry is not very helpful to any of the participants in that industry, apart from the need for a national minimum wage structure and having a strong Health and Safety Executive, in which agriculture is not its finest field.

While I understand the safety net argument, I fear that the AWB is at best somewhat of an irrelevance in this day and age, and at worst is preventing new practices of salaries and well targeted bonuses that could reignite our farming industry as a career path for those who love the countryside and the healthy working life associated with it. I do not always support the Government but on this issue I fear that I must.

[Baroness Byford]

My Lords, in Committee we had a long discussion about whether the Agricultural Wages Board should be continued. Although the noble Lord, Lord Whitty, implied that a majority was in favour of retaining it, that is not quite a true reflection of those of us who took part.

Tonight, we have had the extra bonus of looking at Amendment 83A in the name of the noble Lord, Lord Whitty. It is within that context that I want to pose one or two questions. Amendment 83A proposes that,

“every agricultural wages committee … in England is abolished”.

However, it adds the requirement that “the services formerly provided” should be transferred to,

“the Agricultural Wages Board for England and Wales”.

I hope that the noble Lord will explain to the House what is involved and what he expects the board to do. Perhaps he might also tell us what caused so many of those committees to cease to function. Were they no longer needed or were they being dealt with in a different way? His amendment requires detailed examination.

Subsection (3) of Amendment 83A proposes that,

“any minimum rate of pay contained, or to be contained, in an Order of the Agricultural Wages Board may”—

I repeat, “may”—

“where the Agricultural Wages Board considers it convenient to do so, be fixed by reference to any periods during the currency of employment”.

Therefore my question to the noble Lord is: will he please tell us what “convenient” means, or how it is defined, or how it would work? It seems a very unusual way for an amendment to be expressed.