Lord Cavendish of Furness
Main Page: Lord Cavendish of Furness (Conservative - Life peer)Enterprise and Regulatory Reform Bill
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Lord Cavendish of Furness
My Lords, I read carefully the recent debate on this subject in Grand Committee, and I am sorry that I was not there. I declare an interest in that I have beneficial interests in a landed estate based mainly in south Cumbria. The estate’s activities include farming, forestry, leisure, minerals and housebuilding. As a family business we farm modestly on our own account, but the majority of the land is tenanted.
It is not my intention to pretend that the Agricultural Wages Board and its satellite committees represent one of the great evils of our time, but the Government deserve support on this issue, and I am happy to give them mine. I will resist repeating the arguments that the Minister made beyond saying that all of them carry weight. I am not sure that there is much disagreement; some want abolition while others want reform, but all seem to be fairly clear that we need to change.
Stirred by the apparent passions that came through in the Official Report on Grand Committee, I have been to some lengths to canvass opinion in my native Cumbria and a little bit in Lancashire, and have also sought to inform myself better of the facts. On the basis of my findings it is very hard to find any justification whatever for the continued existence of this body. The AWB may not be a great evil but the very best that can be said of it is that it is an obsolete irrelevance and symbolic of the way small businesses continue to be fettered in a way that disadvantages business and inhibits growth.
My canvass extended to farmers on small, medium and large farms, to those who had diversified and those who had not, to tenants and to owner occupiers. Much to my surprise, unlike my noble friend Lord Greaves, I had to go quite far down my list before I found anyone who had even heard of the AWB. It simply did not appear on their radar. One of the local NFU representatives said that he had never had any call to understand the workings of the board, adding wryly that he expected that the sort of committee I was talking about would indeed be a very nice thing to belong to.
I drew a complete blank when it came to finding any evidence to support the claim that the noble Lord, Lord Whitty, appeared to make in Grand Committee, that the handful of workers on smaller farms would be exposed to exploitation in the event of abolition. Not one person I spoke to could bring themselves to say that the board was a force for good. The noble Lord, Lord Whitty, went on to say:
“The abolition of the Agricultural Wages Board is a direct attack on the living standards of 150,000 rural workers”.—[Official Report, 16/1/13; col. GC 258.]
Let us have a look at that claim. In the decade to 2011 the consumer prices index rose by 28% and the retail prices index by 38%. Over the same period, the national minimum wage—almost identically mirrored by the lowest grade of AWB—rose by 64%.
Alternatively, we could approach this from a different angle. The Institute for Public Policy Research confirmed that just 12.3% of agricultural workers earn below two-thirds of median hourly pay. By comparison, hotels and restaurants are nearly 70% below; the wholesale and retail sectors are over 40% below; the situation is much the same in administration; and the arts are about 37% below. The figures for education and health, where the state is predominantly the paymaster, are 18.3% and 14.6% respectively below two-thirds of median hourly pay. Even those workers are paid less than workers in the agricultural sector. I understand that 90% of farm workers are paid at or above grade 2 on the board scale.
Surely the noble Lord, Lord Whitty, and others, understand that all but a tiny minority of employers these days have long since grasped the fact that bad pay always produces bad results. Can he not see that this is especially true in this sector, which has become so much more specialist in recent years? Will he accept that there is now far more legal protection for those who are vulnerable to exploitation?
Low pay among agricultural workers is manifestly a myth, but more important for today’s debate is the demonstrable absurdity of the notion that the AWB is the appropriate vehicle to address rural poverty. I should perhaps stress that I mind very much about rural poverty—it exists and is worthy of debate. However, it is simply not related to the issue under discussion. If, as I have heard suggested, the objection to abolition is to do with terms and conditions of work, I can only say that I found a dearth of convincing arguments that this sector alone should be picked out for special treatment.
The noble Lord, Lord Whitty, said that administration costs would be lower. I do not agree. In this House there is no dearth of people prepared to talk about wages but rather fewer pay them. I speak from experience in this matter. When the Labour Government was introducing the national minimum wage in June 1998, the noble and learned Lord, Lord Falconer, said:
“As I have indicated, the Government do not believe that a multitude of regional, sectoral or other minimum wages is the right approach. It is neither sensible nor justifiable intellectually”.—[Official Report, 11/6/98; col. 1240.]
I do not understand what has changed to invalidate that sensible opinion then held by the party opposite. There is something unattractively patronising about these discriminatory attitudes. They come close to suggesting that people involved with the farmyard must be so primitive as to need their hand held by agencies of the state.
In his opening remarks, the Minister most pertinently pointed out that farmers compete globally these days, not just one with another. It is possible to imagine a future world without the common agricultural policy. It is possible to envisage a future where farmers are vastly more exposed to the marketplace and with many fewer subsidies. Subsidies, after all, are not just handouts by the taxpayer; they disguise all kinds of market distortions on the one hand and, on the other, fund environmental initiatives prescribed by Parliament or the European Union. Nor is it entirely fanciful that, as the right reverend Prelate said, the day might come when we have to take the question of fuel security seriously. These considerations are not necessarily matters to be dreaded; rather they are challenges to be faced. Whatever the future, we must be prepared for change.
As I have said before in your Lordships’ House, SMEs stand ready to lead growth in our economy if only they are allowed to. It is time agriculture was unshackled and allowed to prosper as it is capable of doing. It is time we were treated as a well established, modern industry. Above all, it is time we were treated like everybody else. Our farmers have a huge amount to offer. The abolition of the AWB is a welcome and long overdue measure and the Government must be congratulated on introducing it. It deserves support in your Lordships’ House.
Lord Curry of Kirkharle
My Lords, I fully support the Government’s desire to abolish the Agricultural Wages Board. I declare an interest as a tenant farmer in Northumberland. I started my business in 1971, employed two young people who had left school, and built up the business until I employed six. Though I no longer employ staff, I have done so for most of my professional life. As a contrast, I also chair the Leckford estate for Waitrose, where we employ 170 staff. My key interest in this debate, however, is as chair of the Better Regulation Executive—and this is an important deregulation measure. I consider myself to be firmly embedded in the agricultural community. I know lots of farmers and I know no farmer who rewards their staff at Agricultural Wages Board rates. The NFU has 70% farmer membership and most of those who are not members do not employ staff.
The Agricultural Wages Board is a relic of the past. In 2002, in a report for which I was responsible, commissioned by the previous Administration, I recommended that its future be reconsidered. The noble Lord, Lord Whitty, and I had interesting conversations about the wages board at the time. No other industrial sector has a wages board. We do not have one in construction or in transport: why in agriculture? The perception seems to be of a sector stuck in a Lark Rise to Candleford era where employees are exploited by unscrupulous employers who resemble the mill owners of the 19th century. Nothing could be further from the truth. The agricultural sector is now a highly professional industry. Today’s employees have to be skilled to cope with the technological changes that are taking place at an unparalleled rate. The cab of a modern tractor is now like the cockpit of an aircraft.
Lord Whitty
My Lords, I thank the Minister and everyone who has participated in the debate, particularly those who supported my amendments. Those who objected to my amendments, including the Minister, seem to have two points—that we have to get rid of archaic bureaucracy and that this will not have any effect because wages will be paid well above the rate and that farmers as employers will not notice the disappearance of the Agricultural Wages Board.
As for bureaucracy, most of us are on the same page. We are happy to see the abolition of the 31 bodies. Our amendments would allow significant modernisation and simplification of the procedures and substance of the Agricultural Wages Board. To answer the noble Baroness, Lady Byford, that is why that form of phrasing is there—to move to annual salaries and so forth.
Indeed, when I was Minister, as the noble Lord, Lord Curry, will recall, I tried to get a lot of modernisation through on the Agricultural Wages Board but to retain essentially the legal underpinning which is needed in this unique industry for an isolated, sometimes exploited workforce. We have had a benign picture of the way that farming operates, but actually we know that in large parts of farming and probably most obviously within horticulture, there is still some serious exploitation of workers in all their terms and conditions including their minimum wage. The Government have not answered my points regarding amendment and reform of the Agricultural Wages Board rather than abolition.
On the point about wages, we are facing a serious dilemma. By abandoning the Public Bodies Act route, the Government have not presented to the House detailed information. The impact assessment to which we have all referred is an authoritative document. It says that the Government’s best estimate—not the most extreme case, not the worst case, not the lowest case, and not the highest case either—is that in aggregate £240 million will be taken out of the pockets of current and future workers within the agricultural sector. That is the view and best estimate, not of the Minister’s department, but of the department of the noble Lord, Lord de Mauley, of what is going to happen. Obviously, there is a range of probabilities, but the Government’s best estimate is that this measure will lead to a reduction in wages in the agricultural sector by £250 million. That is the bare fact of this.
No doubt, in many of the enterprises of the noble Lords, Lord Cavendish, Lord Cameron and Lord Curry—I am sorry to fall out with him, but at least we are both being consistent on this issue—there will be better pay and little impact. But all the Government’s statisticians, agronomists and economists are looking at the total situation and saying, “The net effect of all this in aggregate across the whole of the agricultural and horticultural sector will be a loss of wages of that order”. That is their best estimate and that is at odds with the noble Lord, Lord Cavendish, and the circle of farmers in which he moves. Although clearly they are in the same geographical area, they are a different lot from those among whom the noble Lord, Lord Greaves, moves. But, even if he is right for all those farmers, the Government’s view is that is not the total effect on the sector. Either the Government’s impact assessment is utterly wrong, or the anecdotal evidence from those who are close to land-owning interests in this House is not accurate.
Lord Cavendish of Furness
My Lords, I gave statistics showing that the way farm workers were paid was overwhelmingly higher. Those are the statistics that matter. I am not in a position to defend an impact assessment with its huge range, which seems to me entirely meaningless, but I gave the statistics that are irrefutable.
Lord Whitty
My Lords, nobody is disputing that, at present, after years of operation of the Agricultural Wages Board and the economics of the industry, a lot of agricultural workers are paid above the minimum rate and above rates in some other industries. To that extent, I agree with him. My point is that the Government have refused to do what the House asked them to do under the Public Bodies Bill and present us with a full explanatory memorandum with arguments for the abolition and arguments against any other alternatives. They have tried to cut corners on this, but their own experts tell them that the net effect of this will be a substantial cut in rural workers’ incomes.
If the House votes for the Government’s amendment and defeats my amendment to that amendment, that is what they are voting for tonight and they had better recognise it. That is the message they will be sending out to rural areas. I am looking perhaps particularly to people on the Liberal Democrat Benches who were not committed by their manifesto to this abolition, as the noble Lord, Lord Greaves, said. I do believe that the Government have got this wrong. We could have had a more coherent debate had we gone down the route of the Public Bodies Bill and the Government had produced their range of statistics and we could have had a sensible argument. Instead, we have a minimalist consultation, minimalist information and the Government sticking to an ideological position, supported by some elements of the farming industry but by no means all, and prepared to try and push through something which has an impact on the incomes of a lot of rural workers and their families. My amendment would allow a better way forward, a modernising way forward, and a reduction of bureaucracy, but it would retain the central protection that those agricultural workers have had and which they deserve to retain.