Lord Whitty
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Lord Whitty Excerpts
Lord Whitty
“(5) Prior to the commencement, under section 98(3), of this section and Schedule 20, the Secretary of State shall publish and lay before both Houses of Parliament an updated impact assessment of the effect of the abolition of the Agricultural Wages Board on the agricultural economy and on the wages and conditions of those who work in that sector.”
Lord Whitty
My Lords, I make no apologies for returning to this subject. We have left the Agricultural Wages Board in a very difficult position. The substance of the matter was carried on 7 March and clearly the Government have the primary authority to abolish the board. In fact, they already had because it was in the Public Bodies Act. The difference is that the Public Bodies Act required a stringent and enhanced system of scrutiny to be followed before abolition could be implemented. We are now in the ludicrous position, after a very late amendment to the Bill, in which the only public body that is not subject to an enhanced scrutiny process—which this House insisted, after some very difficult and bitter debates, must apply to all public bodies—is the Agricultural Wages Board.
I am not sure if it is in order to cede the ground to the noble Baroness, Lady Gardner of Parkes. Clearly, her amendment preceded mine. I am getting a shake of the head from the Clerk at the Table. That is the procedure, I am afraid. I am sorry.
Baroness Gardner of Parkes
I thank the noble Lord for that. Unfortunately I had to wait for the lift and I got stuck getting here. Apparently there is no way we can go back to my amendments. Is that correct? Perhaps the Minister or someone else will answer. I had every intention—I had waited here all day specifically—to move these amendments.
Baroness Garden of Frognal
I am sorry to say to my noble friend that her amendments were called and not moved, so I am afraid that we have now moved on to Amendment 7.
Lord Whitty
My Lords, I apologise to the noble Baroness. We almost missed this amendment as well so I quite understand the hurry. This indicates the rigidity of our procedures because my original intention at Third Reading, given that we got a printed copy of the Bill that had the Agricultural Wages Board in it only yesterday, was to insist that an equivalent procedure be written into this Bill for dealing with the implementation of the abolition of the Agricultural Wages Board in the same way as that applied to every single other public body.
That is not in order for Third Reading and, obviously, I accept the advice of the clerks in these matters. I have therefore concentrated on a very narrow area which was not fully debated last time, although we touched on it in some detail. However, there was no amendment before us then that required a further economic assessment from the Government of the impact of the abolition of the Agricultural Wages Board.
The fact of the matter is that there was considerable confusion at the previous stage as to what the economic assessment was. The Government have not produced the kind of Explanatory Memorandum that is required under the Public Bodies Act, but there was a document called the “economic assessment”, which went with the rather curtailed consultation and clearly indicated that the main effect of this Bill would be a significant reduction in the aggregate income of agricultural workers by nearly £0.25 billion over the next 10 years. Those were the figures provided by Defra via the Minister and the impact assessment.
On the day that we last debated this matter, and having queried whether that was still the Government’s position, I received a letter from the Minister which said, “No, no, these figures were all got up”—I paraphrase slightly—“by the consultants”, and that the department did not believe a word of it. He said that the consultants had advised at the top end of the range, whereas the Government thought that the outcome would be at the bottom end of the range. That is not a very satisfactory position in any circumstances and it is certainly not satisfactory when we are abolishing a body which has existed for many years and is the only one in this cull of the quangos which specifically tries to protect the living standards of a group of rural workers.
In the debate that followed, all sorts of interpretations came on to the agenda. I tended to agree, because I am conventional sort of person, that what the department had told us was probably right. Therefore, I agreed with the statisticians who were advising Defra. The Minister had already indicated that he did not really agree with them; others of his supporters said various different things. Some, whom one might characterise, perhaps unfairly, as being of the landowning tendency, said that it would be all right because they already treated their chaps decently, which is fair enough; other people said that the international competitiveness of English agriculture—because the other parts of Britain do something different—was dependent on being able to cut wages. Some of those people were the very same people who argue rather the opposite when it comes to banking, but let us let that pass. Others—I think that the noble Lord, Lord Cavendish, was among them—argued that agricultural wages were excessive already and were greater than those of hotel workers. That seemed rather to prove my point, because the wages councils in the hotel and catering industries were abolished some years ago.
However, it was clear that there was no compatibility between the various interpretations of the best estimate of the outcome as compared with the Government’s own figures and as compared with the Minister’s position and my position. There are four or five different interpretations. That is not good enough.
I am therefore proposing a very modest amendment: the Government should come up with a new economic assessment before they trigger the commencement proceedings on this Bill. Surely everybody who spoke in that debate and everybody who has an interest in this area should be in favour of that, because we want a robust economic assessment. Whatever we may think about the abolition of the board and whatever opinion we may have about the need to raise, reduce or protect wages, we should get a better economic assessment before we do it. That is really all my amendment proposes.
It would have one other benefit for the Government: it would take a bit of time and it would be interesting to know what timetable the Government have in mind for the implementation of abolition. After all, discussions on this year’s round of wages have already started and would normally be for implementation in October. In effect, if the Government let that round go, the Agricultural Wages Board’s underpinning of wages would run until October 2014 at least.
The Government need a bit of time because there are a number of issues which do not relate to wages but are covered by the agricultural system. One of them is the situation relating to Wales, which wants a different outcome. The position on Wales is not resolved by the Government’s clauses as they now stand in the Bill, so they need a bit of time to sort out the Welsh situation. They also need to deal with the non-wage aspects of the agricultural wages order, in particular those aspects that deal with tied cottages for permanent workers and those that deal with adequate accommodation for migrant and seasonal workers. It is only the Agricultural Wages Board which provides that migrant seasonal workers are required to have one bed each rather than 20 of them sharing a six-berth caravan, as was the situation prior to it being regulated by the wages board. So those matters need sorting out. Some protection is needed in law or in regulation once the board goes.
I am doing the Government a favour by putting forward this amendment. The Minister has had a rough day so far, but I am offering him a way out here. So that we no longer argue about this—and subject to what the Commons say, because they have not seen this amendment yet—we need, before the Government implement this clause, a clear economic assessment which the House and another place can debate if necessary. That will also give the Government the time to sort out the other loose ends. I therefore assume that the Government will accept my amendment and that we can then move on and complete this Bill. I beg to move.
Earl Cathcart
My Lords, I farm in Norfolk. The noble Lord, Lord Whitty, argues his case well, as he always does. He calls for yet another impact assessment of the effect of the abolition of the Agricultural Wages Board on the agricultural economy and on the wages and conditions of those who work in the sector. I am afraid that I do not agree with his arguments, as I do not see the point of yet another impact assessment for three reasons.
First, average earnings in 2010 for full-time farm workers were 41% above the industry minimums set by the board. More recent data from the Annual Survey of Hours and Earnings, the ASHE, showed that more than 90% of workers employed in agricultural trades received gross pay above the agricultural wages order grade minimums. It is reasonable to conclude that the vast majority of farm workers are paid well above the agricultural wages order minimums already.
Secondly, current contracts will remain the same—that is, 41% above the wages board rates—so we are talking just about new contracts. The latest impact assessment states that if demand remains strong relative to supply, as evidence suggests is likely to be the case, wages are unlikely to be eroded as farmers will need to attract workers. The important point here is that if farmers want to attract workers, they will have to continue to pay at least what the worker might expect from comparable work outside farming, which is several thousand pounds more than the agricultural workers’ rate.
Thirdly, to assist farmers and employers, the National Farmers’ Union has agreed to publish a regular series of comparative indicators to help inform employers undertaking periodic pay reviews. These comparative indicators will take account of factors such as cost-of-living changes, the labour market, comparable industries and farm business conditions. They will also provide an opportunity to focus on regional differences rather than national, one-size-fits-all data, which is in keeping with the flexibility that we need in our industry.
The National Farmers’ Union has agreed to publish regularly all the data that the noble Lord, Lord Whitty, calls for in this amendment. Let us not duplicate the work. I do not see the need for yet another impact assessment.
Lord Whitty
No, my Lords, my assertion was that the Minister clearly did not agree with the independent research.
Viscount Younger of Leckie
My understanding was that the noble Lord was querying the letter that I wrote and I just want to clarify what I said in the letter. I said that,
“it did not take account of other factors which would have an effect on wages … for example, the supply and demand for labour, prevailing economic conditions and so forth”,
which are points that I have already made.
The noble Lord, Lord Whitty, questioned the position regarding Wales, which was also debated at some length in Committee and earlier. We have been clear throughout that we regard agricultural wages as a non-devolved matter tied to employment and wage setting. Wales Office and Defra ministers have had regular discussions with Welsh Ministers on the issue since the abolition was first proposed in July 2010. Those discussions will continue so that the transition from the Agricultural Wages Board is as seamless as possible for workers and farmers in Wales. I hope that, in part, that answers the question raised by the noble Baroness, Lady Donaghy, which concerns the need to look after the interests of farm workers during the transition.
The noble Lord, Lord Whitty, raised the issue of seasonal or migrant workers, who he stated would lose protection with the abolition of the Agricultural Wages Board. I remind him that it is the gangmasters licensing legislation that specifically protects migrant workers from exploitation, not the agricultural wages regime. General employment law provides for a high level of protection for all workers.
The noble Lord raised another issue which has been raised in the past which has no particular relevance to impact assessments. That is the issue of tied cottages. Workers in tied cottages will continue to be protected by the terms of their tenancy agreements and tenancy legislation. The Bill’s provisions will not alter the status of protected tenancies under the Rent (Agriculture) Act 1976.
We therefore do not see what purpose it would serve to publish yet another impact assessment. That point was made by my noble friends Lord Cathcart and Lord Deben. Therefore, I hope that the noble Lord, Lord Whitty, will feel able to withdraw his amendment.
Lord Whitty
My Lords, with due respect to the Minister, it might have been better had a Defra Minister replied to the debate, because some of the information that he has just given is not accurate—for example, on tied cottages and the provisions for migrant workers. The requirements under the agricultural wages order and related matters were set by the board. They are enforced by the gangmasters authority these days if they involve gangmaster labour. I think that the noble Lord needs to get back to Defra to clarify some of those things.
However, let us get to the main point. The noble Lord, Lord Deben, said that he thought that I was pushing the traditions of the House. One of the problems with this is that Ministers collectively have ignored what the House clearly decided in debate on the Public Bodies Bill only in relation to this quango. Whether we agree with its abolition or not, the Government have ignored what was clearly laid down two years ago after, as I said, bitter debate in this House and have not provided the House with adequate information or time to discuss this issue, as they have on all other quangos that they are abolishing, or else there has been a bit of new primary legislation.
That is why there is such a hoo-hah about the assessment; it is not good enough. The Minister has said that he does not agree with it. The assessment itself says that the estimate it contains was the best estimate, not, as the noble Lord, Lord Curry, and the Minister have said, the worst estimate. If we accept that Ministers have signed off on an impact assessment—this was all signed by the Minister—Ministers cannot then come to the House and say that they do not believe a word of it.
We have to start from that point. If the Government had gone through the normal procedure, we would have had a detailed Explanatory Memorandum and it would have gone through the enhanced scrutiny procedure under Section 11 of the Public Bodies Act. Instead, they have tried to cut corners. That is the problem.
That is why I do not apologise for raising the issue again. Yes, we are going over some old ground, but we are also hearing some of the old arguments. Under that procedure, what my noble friend Lady Donaghy has asked for—namely, a monitoring process so that when abolition occurs we can see what actually happens to agricultural wages—is required for other bodies that are being abolished, but it is not required here.
I find it difficult to understand those who argue that after this body disappears, nothing will happen to wages and no one will notice, as the noble Lord, Lord Deben, says. The noble Lord, Lord Curry, says that wages will probably increase. However, the only document that we have had says that although some people’s wages will go up, on average and on aggregate they will fall. That is why we need a better assessment.
This is a very minimal requirement. If we had gone down the route that the House agreed, the Minister would have been subject to far more detailed requirements and debates. He would have had to explain himself far more convincingly than he has today. All I am asking is that before we implement this measure, we get a document from the Government that does what they are required to do for every other body apart from the one that protects some rural workers.
That does not seem to be a position that the House of Lords ought to be taking in the 21st century, and it may be seen that way. Although the noble Lord, Lord Deben, says that no one will notice, there are some people who will. The noble Lord obviously has conversations with the grain barons of East Anglia and maybe they would not notice, but a lot of small farmers have objected to the abolition—in the West Country, the north and Wales—saying that this was a bigger problem. They will notice because they will have to engage in rather difficult negotiations with their one or two staff.
The people who will really notice, though, will be those who are employed relatively casually and seasonally by the element of the agricultural sector that is really pushing for this change—that is, horticulture. The people who will notice are probably not so much those who are paid above the minimum rate but those who are on the lowest wages, at the minimum rate or even below it. Those at the bottom end of the agricultural labour market are going to notice. If the Minister persists in resisting this today, we will not even be able to assess properly whether I or the Government were right. That does not seem to be a sensible position to adopt in the tradition of this House.
Although it is late at night and I do not expect to win it, I think that I need to test the position of the House so that it is quite clear and our Commons colleagues can at least look again at the arguments, because the other way in which we are breaking with tradition is that this measure has come in on Report and the House of Commons has not even had a look at it yet. I will test the opinion of the House, for what that is worth.