Enterprise and Regulatory Reform Bill

Debate between Lord Knight of Weymouth and Earl Cathcart

Wednesday 16th January 2013 Grand Committee

[Earl Cathcart]

If I may, I shall come on to that point later. As I was saying, the board cannot set the same rate as the national minimum wage because that would look too simplistic, so the rate is set at 2p more. Last year—surprise, surprise—it was also set at 2p above the national minimum wage. Next year, if the board still exists, I would hazard a guess that the rate will be set at 2p more. This is hardly rocket science.

Recent research shows that the average earnings of full-time farm workers are 40% higher than the rate set by the board and that in 2010 some 90% of farm workers received more than the grade 2 minimum. The conclusion must be that farm workers are paid well over the minimum set by the board. I have talked largely about full-time employees, but what about temporary workers? I would argue that they are and will be protected by the national minimum wage.

Apart from some noble Lords opposite, who does not want to see the abolition of the Agricultural Wages Board? It is the union, Unite, which is deploying scare tactics by saying that without the board farm workers will see reductions in their pay with only the national minimum wage to protect them. That is quite clearly rubbish. Going back to my employee on £16,000 a year, if the board goes, am I really going to reduce his pay to the level of the national minimum wage; that is, £11,300? I am not going to do so because he would not accept a drop in salary of some £4,700 and he would leave. That action would disrupt my business because I would have to interview new applicants, train the new person, and probably have to pay the new worker £16,000 to entice him to move from his existing job. It is highly likely that all existing employment terms and conditions will remain exactly the same as my noble friend the Minister has said, in spite of—

[Lord Knight of Weymouth]

Can the noble Earl square his estimation that no agricultural worker will lose any pay with the Government’s own economic impact assessment which states:

“Research suggests that workers’ wages may fall by £0-34.5m”,

A year, and that its best estimate is £32.5 million? Where is that £32.5 million going to come from if it is not from agricultural workers?

[Earl Cathcart]

I am not absolutely sure why—I can only give you my case—I would want to reduce their pay at all. As far as I am concerned, the system is working perfectly well. I am happy with their pay, and so are they. I do not know where those figures come from. My view is that it is highly likely that all existing employment terms and conditions will remain exactly the same, as the Minister has just confirmed.

--- Later in debate ---

[Lord Knight of Weymouth]

I mentioned agricultural colleges because I am not aware of another sector that has a specific network of colleges for its training. There is something different and unique about agriculture, which is very important. There may be others that other noble Lords want to mention. Maybe if I racked my brains I could come up with them, but I think there is something unique about agriculture.

Other benefits are attached to the Agricultural Wages Board. For example, there is the entitlement to rest breaks, overtime, paid holidays and even the allowance of £7.63 per week for working dogs. There is an on-call and night allowance. All these things are negotiated. They are all part of the reason why agriculture can be regarded as a special case.

[Earl Cathcart]

I am not very good at employment law; I have to be frank about that. Are you saying that my man to whom I am paying £16,000, which is nothing to do with the wages board or that side of it, does not have holidays, sick pay or all the other entitlements that any other employee in every other walk of life has? Of course he does. In my view it is not the wages board that is protecting him. He has normal employment rules and regulations, enjoyments and privileges.

[Lord Knight of Weymouth]

I am most grateful to the noble Earl and his helpful intervention.

Under the national minimum wage legislation, there is no minimum statutory level of overtime. Under that legislation, you have an entitlement to 28 days’ paid holiday as opposed to 31 days under the Agricultural Wages Board. There is also a maximum of 38 days for workers working more than six days a week under the Agricultural Wages Board, with no additional entitlement under minimum wage legislation. In terms of rest breaks, under the Agricultural Wages Board you are entitled to not less than 30 minutes where the daily working time is more than five and a half hours, whereas under the minimum wage legislation—

[Lord Knight of Weymouth]

The noble Lord makes a good point. He quotes evidence and I do not need to add to it.

I could go on to help the noble Earl. The final point, which I think is most striking, is the entitlement to paid sick leave and the level of sick pay received. Under the Agricultural Wages Board, all workers, whether or not they are paid the minimum, are entitled to 13 to 26 weeks on full pay after one year’s continuous employment, after which statutory sick pay applies. Under minimum wage legislation, statutory sick pay—currently £85.85 a week—applies where a worker has been sick for at least four days or more and has average earnings of more than the lower earnings limit, which is now £107 a week.

[Earl Cathcart]

I thought that it had been established that 90% of farm workers are paid above grade 2 in the scales—£6.50 rather than whatever the level is under the AWB. They are not being paid as minimum wage earners. They are getting a proper wage like anybody else who might be employed is getting a wage. I concede that temporary workers are paid the minimum wage, but normal salaried farm workers are paid well above that.

[Lord Knight of Weymouth]

The important thing to remember is that these legal entitlements for the agricultural sector apply regardless of whether your wages are at or above the minimum level set by the Agricultural Wages Board. These entitlements—for one and a half the usual rate for overtime, for example—are there regardless of what you are paid. That is an entitlement in law and we should protect it. I think that it is a good thing for us as parliamentarians to protect these minimum standards for workers, which would go if the Government were successful with their amendment to abolish the Agricultural Wages Board.

Unfortunately, some people do not act as responsibly as the noble Lords who have spoken and declared their interests as farmers. I point to the case of Chris Blakeney of Marden Management Ltd, who has just recently been in court in Swindon, where he changed his plea to guilty in respect of his activities as a gangmaster supplying 500 workers to farms across the country from his base in Calne. There are bad people around exploiting workers. When this protection goes, that exploitation is likely to grow.

A good argument has been made on this side of the Committee for the retention of the Agricultural Wages Board. What about the arguments against? I looked at the letter from the noble Lord, Lord Marland, the noble Viscount’s predecessor, to my noble friend Lord Stevenson on 19 December, when this amendment was announced. I note the manuscript amendment to the letter written by the noble Lord, Lord Marland, in which he said, “I reluctantly agreed to this—decision above my unpaid grade!”. That clearly suggests that the noble Viscount’s predecessor thought that this was all a bit dodgy. I would be interested to know whether the noble Viscount agrees with his predecessor about the dodginess of this amendment.

I then looked at the letter from the noble Lord, Lord De Mauley, whom I am pleased to see in his place. I think that we have answered most of the questions. The noble Viscount repeated the notion that this will improve employment but, as we have said, the impact assessment—on page 19, in paragraph ii, headed “Employment”—says:

“This effect is highly uncertain, and may therefore not be significantly different from zero”.

The Government anticipate no employment effect at all.

We have heard the arguments around whether agriculture is unique—people take different views on that. We have also heard the concerns about consultation. The lack of consultation on the amendment is truly shocking, given that 154,000 workers are directly covered by it. Four weeks’ consultation is completely inadequate for such a measure. There is then the problem of the number of people who were not included in the list of consultees. Action with Communities in Rural England was excluded. The various training organisations, such as Lantra, were not included. Housing bodies, such as the National Housing Federation and Shelter, were not included, even though the housing committees are being abolished. Even the Arthur Rank Centre was not included, despite the important role that we know the church plays in rural communities.

The consultation has been shocking. The procedure has been ignored. I would have welcomed a four-week consultation if it had been for the ash trees, for which we had an eight-week consultation; that matter was urgent. There was a really good reason for a short consultation on ash tree disease and four weeks would have been great; but we chose to go for eight weeks where there is an urgent need but four weeks to get rid of something that has been in existence since 1917. That makes no sense to me. The proposal is then brought here to Grand Committee where issues debated are supposed to be non-controversial, and we have a big row about whether the board should be abolished.

There is principled opposition and the noble Viscount should now tell us that he will withdraw his amendment and go away and reflect on it. He can then choose to bring it back on Report but it is not appropriate for the Grand Committee.