Water Bill

Lord Whitty Excerpts

Monday 27th January 2014 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I thank the Minister for a very clear, not to say dry, exposition of the terms of the Bill. I particularly thank him and his officials from Defra and Ofwat for making themselves available to so many of us in the run-up to the Bill and trying to explain some of its more obscure aspects.

I do not have the same interests as the Minister, in that I have taken the precaution of living on top of a hill. However, I have form. One or two noble Lords were around when I took the Bill that became the Water Act 2003 through this House. Since then, I am probably the only Member of your Lordships’ House who has served on the boards of both Ofwat and the Environment Agency, albeit rather briefly in the case of Ofwat, so I have some experience of this interesting industry. I am afraid that that experience leads me to conclude that the Bill is not really up to the job of sorting out a strategic future for the sector. However, I can tell the Minister that the Opposition will not fundamentally oppose the main elements of the Bill. We will be vigorously querying them, and will make some propositions, but the real problem I have with the Bill is what it omits.

In one sense, that is slightly surprising. As the Minister said, two years ago, admittedly under a different Secretary of State—one who actually believed that climate change was occurring—the Government produced a very good White Paper, Water for Life. That White Paper dealt holistically with water as a resource, as an environmental force—for good or evil—as an amenity and as an economic and infrastructure system. The White Paper was positively received by the industry, environmental groups, consumer groups, the regulator and politicians of all parties. It was therefore assumed that the Government would produce a Bill which implemented all elements of that strategy. Instead, the Government produced a much thinner Bill—thin in content rather than in volume, I have to say to the noble Lord, Lord Crickhowell. The initial Bill was even thinner and was roundly criticised by the Select Committee in another place under the leadership of the redoubtable Anne McIntosh MP. The Government then produced a slightly better Bill, which is what we now have. It went through the House of Commons fairly quickly and, just before Report, the Government introduced the key element, to which the Minister has referred, on flood insurance. We will be taking quite a rushed job on the Bill, but a number of issues need some pretty thorough examination.

The water system is one massive system, natural and engineered; the water industry is one massive industry, dominated by very large companies. The system has to be managed and regulated in a holistic way, but I am afraid the Bill only tinkers at the edges, important though some of those interventions are. So there are huge gaps in this Bill.

In terms of what is in the Bill, there are three main objectives. First, on flood insurance, as the Minister said, foremost in our mind must be the distress and suffering caused by the recent floods, and their impact on families, farms and businesses. Part 4 of the Bill sets up the Flood Re system, which the Minister described. I congratulate the Government, particularly the Minister’s former colleague, Richard Benyon, on reaching a conclusion with the insurance industry, which I know is not the easiest of negotiators. We will support the overall concept of Flood Re and the contingency provisions under the flood insurance scheme—my noble friend Lord Grantchester will expand on our position on that later on. Noble Lords will be aware that a number of representations are being made by groups that feel excluded from the scheme, and no doubt we will have an interesting time in Committee, but I strongly support the concept.

The second main element of the Bill is retail competition for non-domestic consumers, which is the flagship policy here. We support that objective—indeed, attempts were made to introduce competition in the 2003 Act and in the 2010 Act, but they never really materialised under that regime and only four instances ever occurred. However, in Scotland, where there is a different structure and a state-owned wholesale company, we have seen rapid development of a retail non-domestic market, which is working for the public sector, for businesses and for charities, particularly those which operate on multiple sites. They have seen benefits in terms of bills, water efficiency and customer service. Although only about 5% of non-domestic consumers have switched in Scotland, the very fact of competition has had a beneficial effect on the rest of the market.

However, we must also recognise the limitations involved. Theoretically, 1.2 million customers will now be able to choose alternative retailers, but, in practice, the option is likely to be most attractive to entities such as supermarkets which operate on multiple sites or to public sector bodies such as local authorities and universities which have a lot of bills that they would wish to consolidate. It is unlikely that there will be anything like 1.2 million people taking advantage of the market; the majority of small businesses, for example, are even less likely to switch—as we have seen from the energy market—than are domestic consumers. Although competition is important and puts an edge into the industry, we should not exaggerate the degree to which it is transformational.

Moreover, we have to consider carefully the effect on household consumers. Twenty million household consumers will continue to rely on regulation rather than competition to get them a better deal. We will have to strengthen protections in the Bill to ensure that domestic consumers are not disadvantaged by the fact that part of the non-domestic market is getting a better deal. The Minister gave an assurance to that effect in that Ofwat has the tools, which I think is how he put it, but those need to be strengthened and made clearer in the Bill.

Even where there is effective competition and some choice, the provisions do not fully deliver an effective, functioning market. I shall take just two or three issues. Entry into the market appears to be largely by negotiation with the incumbent company rather than by open and transparent price competition, as would be the case in most markets. Even more surprisingly, there is no provision for exit from the market. Surely provision for exit from the retail market by poorly performing competitors or incumbents is essential for a properly functioning market. Most stakeholders seem to favour providing for it, with safeguards to protect the consumer, so we will be looking at whether we should provide in the Bill for exit from the market. We also need tighter provisions on non-discrimination by incumbent companies to make this work at all. Therefore, we support the direction of travel, but there are a lot of details that we will wish to go into.

Thirdly, there is a resilience duty in the Bill. This caused a little bit of manoeuvring in the Commons and I am not entirely clear that the resilience duty that the Government have come up with goes as far as we would wish. Historically, there has been a dual system of regulation in water, with Ofwat being the economic regulator—sometimes very narrowly defining what that meant—and the Environment Agency being the environment regulator.

Synergy and cohesion have got better in recent years. Since 2003, Ofwat has had a secondary sustainability duty. Nevertheless, the record shows that Ofwat has in its price review tended to give greater priority to things that related solely to the economic side and less to what was needed for the environmental or resource-conservation side. We need to look again at that. That is why I think that green NGOs and many of our colleagues in the Commons were pressing for sustainable development, which is currently a secondary duty, to be elevated to a primary duty.

The resilience duty is, in a sense, the Government’s response to that. Resilience is undoubtedly important, and the Minister said that it will be interpreted in a broad sense, but it is a bit vague. Resilience certainly does not cover the range of subjects that sustainable development does, and it is still criticised by some NGOs. The Government have strengthened the position since they first introduced it into the Bill, and we need to take account of that, but we will still want to probe whether resilience is really the better expression or whether, as I suspect, it could exclude key aspects that are covered by sustainable development—especially, to take an obvious example, social sustainability, which is an important aspect of how the water market works. We intend to probe those issues in Committee.

That covers what is in the Bill, but there are some massive things which are not—two very large elephants in the room. First, there is the bizarre financial structure of the industry, which has been commented on in the press in a timely way in the past few days. Secondly, there is the management and regulation of the physical water system, the movement of water from precipitation right the way through our streams, rivers, culverts and pipes to our taps or to the ocean. We know that it is a huge and risky system—the past few weeks have told us that, and only a few months earlier we were talking about the scarcity of water in certain parts of the country. The existence of scarcity or excess crucially affects our ecology, our agriculture, our way of life and our communities. Those are huge issues; they were addressed in the White Paper, but not really reflected in the Bill.

I shall take the economic structure of the industry first. The Minister says that privatisation has been a success and, in the limited sense that we have had substantial investment, it has—and we do not want to jeopardise that—but this is an odd industry. It is dominated by regional monopolies which are themselves vertically integrated. Some of them have been subject to takeover and they are now mostly owned by overseas-based investment funds. I do not decry that, but it means that their structure for raising finance is odd for a public utility. They are also highly profitable. On some calculations, there has been a return of 17.5% on asset value since privatisation. They are, as the newspapers have pointed out in the past couple of days, very high payers of dividends, with nearly 90% of profits returned as dividends last year.

The sector is very highly geared, for the most part. On average, well over 70% of capital comes from the markets, not from equity sources, as was assumed when we first privatised the industry. The industry also has a fairly poor record on innovation, as some of your Lordships’ Select Committees have pointed out over the past few years. At the far end, over the past 10 years there has been a 55% increase in prices to the consumer. The industry has also been relatively poor, although improving, on customer service. That does not describe either a modern, dynamic, innovative market or an effective delivery mechanism for a general social good. Although delivery of investment has been important, those other aspects need addressing.

The system of regulation needs a pretty fundamental rethink. In the past few months, Ofwat itself has recognised the need to change. The regulator is proposing significant changes in the coming price review and has already implemented a significant improvement in consumer engagement. I welcome that, and the role of the Consumer Council for Water in that. In the price review, however, Ofwat is going to put less emphasis on capital expenditure and have more flexibility between different forms of expenditure, which I welcome. It is taking a longer-term view on investment and more emphasis is likely on interconnection, water efficiency and demand management and on environmental measures. I welcome pretty much all those Ofwat initiatives, but they are within a framework which does not necessarily push them in that way. The initiatives need to be embedded because they will be seriously challenged by some of the operators and undertakers within this industry. The system of regulation needs review and the Government need to be a bit more radical. They need to look at whether there are stronger measures which can ensure that the companies actually deliver, including perhaps addressing fundamental issues such as the proper and full separation of the wholesale from the retail market.

We also have a pretty odd way in which we pay for water, with most domestic consumers still operating on a rateable value which is several years or decades old. The result is that its affordability to our citizens and businesses is very much in question. In the household sector, more than 12% have very serious problems with affordability. The previous Government’s 2010 Act provided for social tariffs to make water more affordable to vulnerable families, but I am afraid that first the regulator and then the industry have been slow in taking them up. The Minister said that they will have them the next year or the year after, but the fact of the matter is that the record at the moment is not very good. If we add all the schemes together, including the WaterSure scheme which the Government promoted for large families or those with serious medical conditions, there are only 70,000 or 80,000 people covered in total. Yet from the figures which I just quoted, we know that there are about 2 million having problems with affordability. Since the companies appear to be so recalcitrant in coming forward, we will be pressing for a stronger move towards social tariffs and for some form of national affordability scheme to be introduced, to set targets for minimum standards and for the way in which companies treat their less well-off consumers.

There are also big problems with the water system itself. There is a huge loss and misdirection of water both in its supposedly natural movement, which is often in practice the result of human land management, and in the engineered part of the system. Inappropriate land management, deforestation at the top of water courses, the changing and dredging of natural watercourses and the loss of natural water meadows and flood soaks all have the effect of pushing more water downstream, just at the time when it should not be. Excessive man-made abstractions of water, currently and historically, threaten the system itself and some of our key geological features. For example, we are destroying our chalk streams from Yorkshire down to Dorset—a landscape and geological feature which is almost unique to England. In economic terms, excessive abstraction means not only not enough storage in the winter to provide for the needs of agriculture and society in the hotter months but that the whole management of the system becomes difficult. Meanwhile in the engineered part of the system, increased floodwater leads to sewage leaks, with their attendant risks, and increased leakage from the clean water system.

All those issues were covered in the White Paper, but they are not in the Bill. However, there is one thing in the Bill which threatens effective achievement of a better system of water management as a whole. That concerns upstream competition being provided for in the Bill before we have properly regulated and introduced a new system of abstraction reform. The present system of abstraction licensing is 50 years old and even then has grandfathered ancient rights. I have been arguing for radical abstraction reform for well over a decade. The Bill rightly ends compensation to water companies for the modification of abstraction licences, which is an issue that the Environment Agency has been trying to modify within the current structure over recent years.

The Bill provides for upstream competition to be introduced. The Government have said that this will not happen before 2020, but nevertheless to introduce upstream competition before we have actually reformed the extraction system is highly dangerous. Abstraction licences are not used to their full; only about 42% of water allowable under such licences is actually abstracted. That means that there is a lot of potential water to be abstracted under the present system. If we introduce competition and the ability to source that water differently, the effect may well be that we create scarcity in those areas where there is not already scarcity. It is already a problem that a majority of our water catchment areas are overextracted. Upstream competition and trading could work if there were a limit on abstractions, but until we get to a proper system I think that the Government are wrong to provide for upstream competition even in the way that it is provided for on a contingency basis in the Bill. It must be clear by the time the Bill leaves this House and goes on to the statute book that upstream competition is dependent on there first being a proper regime for abstraction; otherwise, we will have the worst of both worlds.

I hope that we return to many of these features in Committee and at subsequent stages, and I hope that the Government take note particularly of our concerns over abstraction reform at the top end of the system and affordability at the point where it reaches our homes.

Working Time (Amendment) Regulations 2013

Lord Whitty Excerpts

Monday 22nd July 2013 Grand Committee

[The Deputy Chairman of Committees]

My Lords, I should have said at the beginning of the Committee that, in view of the extreme heat, if anybody wishes to remove their jacket they are welcome to do so.

[Lord Whitty]

My Lords, the noble Lord, Lord De Mauley, might be pleased to hear that I will not remove my jacket.

I have vehemently opposed the whole principle in relation to the agricultural wages board. I am not in essence opposing the provision today because, as the noble Lord said, it is a logical tidying-up measure. However, serious questions arise about its timing and the way in which it has been introduced. He will recall that during the passage of the Enterprise and Regulatory Reform Act there were arguments about the impact assessment produced by the Government at that stage, which Ministers in effect discounted and put to one side. To some extent the Minister has repeated that today. That impact assessment produced for Defra showed a total detriment to agricultural workers of about £250 million over 10 years and a consequential benefit to farmers from that saving in their wages bill. I argued at the time that that was a notional benefit to farmers since, in effect, most of it would end up in the pockets of the supermarkets. Nevertheless, that was the Government’s argument at the time. During the course of deliberations, they disavowed that whole impact assessment.

The noble Lord has repeated today that many employers will improve the terms and conditions of agricultural workers. That, however, is totally contrary to the best expert advice available to the ministry at the time that the amendment to the Enterprise and Regulatory Reform Act was put through. In relation to limits on hours, I suspect there is not a big detriment. There may even be a benefit. However, we do not have another impact assessment. We do not have any indication of there being any analysis by the department as to which way that would work.

Obviously, the Government’s logic is to bring everything in line with general minimum terms and conditions legislation, whether in terms of the minimum wage Act or the working time directive and the legislation stemming from that. I think that that is logical. However, it is perhaps also interesting that Regulation 3 of this very short instrument enshrines the Government’s view that the conditions of the existing workforce, or those who are taken on before 1 October, will not be changed by this enactment. That is, of course, legally correct. However, the current terms and conditions will remain in place only until they are altered, until the employer gives notice of the end of their terms and conditions.

The totality of the Government’s approach here is to change the balance of power between the employee in the agricultural sector and the farmer or other employer. It is hardly worth the paper that it is written on to say that existing terms and conditions will continue to apply to those who are already in the workforce. It may take a few months or a few years for that to change. One of the reasons that the impact assessment was ultimately rejected by Ministers on the Floor of the House was that they recognised there would be a significant disbenefit to workers in the industry: not only new workers but existing workers would be faced with the likelihood of their terms and conditions being changed once the agricultural wages board disappears.

I think the Minister is probably right that this is relatively straightforward and unlikely to cause huge detriment. It is nevertheless part of the overall principle that we have opposed from these Benches. It is part of the attitude towards wages within the agricultural sector that this is being done without any meaningful underpinning even of the terms and conditions of people who are already in the industry.

Having said that, my main concern about the timing of this relates to the way in which it was written. It continues to provide for Scotland to be excluded from this measure because Scotland has always had its own agricultural wages board and still does. That means that it applies in England and Wales. Only last week, however, the Welsh Assembly passed legislation to establish a statutory body within Wales which would have the possibility of retaining the statutory force both of the substance and of the enforcement of the agricultural wages board. There would, therefore, be a new agricultural wages board for Wales.

Surely it would be more sensible to wait to introduce any consequential statutory instruments until it was clear how they would in theory apply to Wales—until it is clear how that new Welsh structure will evolve. The original proposition from Wales was that the legislation would not apply to Wales. They were, therefore, broadly content that the previous way in which the AWB had applied to the Welsh farming workforce would continue. However, we are now chipping away at that for workers in Wales as far as working time is concerned. That shows a serious disrespect for devolution, for the position of the Welsh Assembly and for the attitude that has been taken by the Welsh farming industry and the workers within it.

The timing—less than a week after Wales passed a clear indication that it did not want the changes to apply there—is, to say the least, unfortunate. I hope that the Minister will give us some guarantee that he has consulted with his Welsh colleagues and that this will not apply immediately to Wales, if it is still in the process of establishing its own statutory board as of 1 October.

--- Later in debate ---

[Lord De Mauley]

I thank the noble Lords, Lord Whitty and Lord Knight, for their contributions. As I said earlier, the amendments we are proposing to the Working Time Regulations are necessary technical amendments to the legislation as a result of the end of the agricultural minimum wage regulatory regime on 1 October, as the noble Lord, Lord Knight, was good enough to acknowledge. The amendments have no impact on levels of protection for agricultural workers and I believe that they are, in themselves, relatively uncontentious. However I recognise that, as the noble Lord, Lord Whitty, said, recent developments in Wales raise certain issues in regard to abolition of the agricultural wages board which noble Lords are rightly interested to hear about.

The Agricultural Sector (Wales) Bill, passed by the National Assembly for Wales on Wednesday last week, would restore a separate agricultural minimum wage regime in Wales. It might be helpful here if I gave noble Lords some explanation about relevant procedural matters.

Under the Government of Wales Act 2006 there is a recognised procedure for the consideration of whether Bills passed by the National Assembly for Wales are within its legislative competence. Essentially, this provides that the Attorney-General and the Counsel General for Wales—either or both—have four weeks after a Bill is passed by the National Assembly in which to decide whether to refer any question of competence to the Supreme Court. After this period, if no referral is made and the Secretary of State for Wales has indicated that he will not use his powers under the Government of Wales Act to intervene, the Bill is submitted for Royal Assent. This applies to all Bills passed by the National Assembly and this is the stage which we have now reached with the Agricultural Sector (Wales) Bill.

My right honourable friend the Attorney-General is currently assessing the legislation to determine whether its provisions are within the Assembly’s competence, as he does with all legislation passed by the Assembly. It would not be right for me to speculate here what conclusion either the Attorney-General, or indeed the Counsel General, might reach. I will say that, as noble Lords are aware from previous debates on this issue, the UK Government regard the agricultural wages regime as wage-setting and employment law, which are subjects that are not devolved to Wales. However, it is for my right honourable friend the Attorney-General and the Counsel General separately to consider whether or not a reference should be made to the Supreme Court on the question of the competence of the provisions of the Welsh Bill. This is a decision for them which it would not be appropriate for me to second-guess. Should either the Attorney-General or the Counsel General for Wales, or both, decide that such a reference should be made, it will be up to the Supreme Court to consider the Bill and make a judgment.

I hope, therefore, that that makes the position clear. There is a statutory procedure to be followed in the case of all Bills passed by the National Assembly and, quite properly, that procedure is now being followed in relation to the Agricultural Sector (Wales) Bill. The noble Lord, Lord Whitty—

[Lord Whitty]

My Lords—

[Lord De Mauley]

I am now coming on to some of the other points. Perhaps I may proceed, and if I do not cover them the noble Lord can intervene then. Would he like me to try?

[Lord Whitty]

Yes.

--- Later in debate ---

[Lord De Mauley]

The words I used apply to both England and Wales. That is the point. It would leave those coming into agricultural employment in Wales in limbo as well. We do not want them to be left without certainty as to commencement of leave year and the other things we have been referring to here.

[Lord Whitty]

My point is on Wales. Although I recognise the delicacy of the position of the Attorney-General in looking at the question of competence of the Welsh Assembly, in advice going to the Attorney-General presumably the department has made clear the point that I made when the Government made a similar point during the passage of the Enterprise and Regulatory Reform Act: that although the Government have now invented the doctrine that this is employment legislation, since at least 1948, the wages board has been the responsibility of Defra or MAFF, not of whatever department was responsible for employment law. That may not be a clincher for the Attorney-General, but it is an important indication of the approach of previous Governments and in previous legislation—that is, as a matter of agricultural not general employment legislation.

[Lord De Mauley]

The noble Lord has been around for longer than I have in these affairs. I am absolutely certain that that has been done, but I will reiterate it. He makes a perfectly fair point and I will make sure that it is made again.

Perhaps I may continue with the next series of points. The Government’s position, as noble Lords know, is that abolishing the agricultural minimum wage will bring agriculture into line with other sectors in the economy. Allowing farmers to compete fairly in the labour market and for agricultural wages to follow market levels will enhance the competitiveness of the sector and may increase employment. This will in turn encourage long-term prosperity in rural areas.

Having said that, my experience is that workers, often on highly complex machinery and managing animals, which these days is also a pretty technical affair, are highly skilled and that the market for them is highly competitive. We have been quite clear that there is uncertainty about what the actual impact will be. The costs and benefits are made up of a number of elements, including the potential impact on wages for workers and other terms and conditions and the reduction in employment costs paid to government and others. The reality will, as I said, depend on demand, which evidence shows is increasing.

The real benefits will be from allowing farmers and workers the same flexibility to agree terms and conditions as employers and workers in other sectors of the economy, while ensuring the same levels of protection for workers. As I said in my opening remarks, workers with pre-existing contracts will retain those entitlements, and that is enshrined in legislation. I take the noble Lord’s point about that.

The noble Lord, Lord Knight, made a number of points. I acknowledge what he said about what is covered by the agricultural wages board. Of course he is right. Essentially, he asked why we had not done any back-assessment on the regulations. As we discussed, these are minor, technical amendments to the Working Time Regulations as a consequence of abolition of the agricultural wages board. They do not have an impact on the level of protection for workers, nor do we consider that they will have a significant impact on businesses, so an impact assessment has not been carried out.

The noble Lord asked whether we would be working with employers to remind them of their obligations. We have prepared guidance on the changes for agricultural workers and employers, which we have already shared with stakeholders. That guidance will be published on the Defra website shortly.

The Government firmly believe that the end of the separate agricultural minimum wage regime is in the best interests of the industry. The proposed amendments to the Working Time Regulations are a minor piece of the jigsaw to complete a simplified employment regime across all sectors of the economy. This will provide simplification, transparency and greater flexibility, thereby encouraging investment, growth and job opportunities in the sector, which will benefit both workers and employers. A successful agricultural industry will contribute to the growth of the wider rural economy, which is one of my department’s four key objectives. I beg to move.

Horsemeat

Lord Whitty Excerpts

Thursday 14th February 2013 Lords Chamber

[Lord De Mauley]

That is an interesting question. I am sure that countries in the rest of the world have their own problems. I am not aware of this specific problem arising elsewhere.

[Lord Whitty]

My Lords, will the Minister give a proper answer to my noble friend Lady Crawley, who after the previous Statement asked whether the cuts in resources for trading standards and the equivalent Meat Hygiene Service had had any effect on the effectiveness of enforcement? Secondly, in his assurances on health, will he assure me that the issue of people who are allergic to live horses has been covered in the possibilities of people being allergic to dead horsemeat? Thirdly, is his Secretary of State—a rabid anti-European—now convinced that European food chain issues can be resolved only by agreement at European level?

[Lord De Mauley]

That is quite a mouthful, my Lords. On the first point, the FSA oversees a rigorous, risk-based system of checking by local authorities. More than 92,000 tests were carried out in 2011-12. The FSA has assured Ministers that the recent machinery of government changes have not impacted on its surveillance and testing. On the health issue of people being allergic to live horses, I am not aware that this translates into the dead horsemeat arena. I am reliably informed that there are no risks to health unless the meat is contaminated with bute. We covered that issue in connection with the previous Statement. I am amazed at the noble Lord’s suggestion about my right honourable friend’s attitude to Europe. He is in Europe today, discussing the matter with his European colleagues in a very collegiate fashion. The noble Lord can rest assured.

Public Bodies (Abolition of Environment Protection Advisory Committees) Order 2012

Lord Whitty Excerpts

Tuesday 17th July 2012 Grand Committee

[Lord Whitty]

My Lords, I start by declaring an interest as a shortly-to-be-retiring—I regret—member of the board of the Environment Agency. In that context, I thank the Minister very much for his remarks about the performance of the agency staff during the great difficulty of having four or five serious flood instances in different parts of the country at more or less the same time, which is, thank God, a pretty unusual event. I think that the agency delivered.

I also need to inform the Minister that to some extent I am here to represent my noble friend Lord Smith of Finsbury, who is chair of the Environment Agency and who apologises for not being here today. Much of what I say reflects his views although, as I am retiring from the board, I can also make my own remarks.

I welcome the changes. The noble Lord, Lord Greaves, has already referred to the rather lengthy proceedings that the Minister had to undergo in his previous capacity during the passage of the Public Bodies Bill, which he no doubt recalls without great nostalgia. The order concerns the sole part of the Bill to which I did not object. That is because, in this instance, a statutory structure is not necessarily the best way to carry out partnership, share information and mobilise members outside the agency. It is important that the work of the advisory committees is recognised. The people who have served on them have given stalwart service and have tried to represent the interests involved in delivering environmental and fishery outcomes but also to feed back information from the agency to those bodies.

However, there are probably better and certainly more flexible ways to do that which are more nimble and able to move with the times. I have some slight sympathy with the view of the noble Lord, Lord Greaves, of the more advanced forms of social media— I am not entirely in front of the curve myself on that—but, in this area, the social media used in their broadest sense are a useful means of communication about flooding but also in more day-to-day environmental problems in mobilising those who are interested from public agencies, private citizens and organisations. The response time for using social media is much faster than with more traditional methods of communication.

When Defra consulted on that, there was not a huge number of responses. Of those who responded, those for and against were more or less in balance. There was a distinct negative balance in the north-west—as the noble Lord, Lord Greaves, will be pleased to hear. That is not necessarily because they are more stroppy in the north-west. The agency has therefore taken steps to address the situation in the north-west, including a proactive use of social media. I think that it is true to say that most organisations in the north-west are now satisfied that the new forms of consultation will be an adequate replacement.

In my own area, which is the same as that of the noble Lord, Lord Knight, the Environment Agency has developed from a situation a few years ago where it was not seen as the most user-friendly organisation to having much more constructive relationships with organisations involved in these fields. For example, people will know that fishermen are not necessarily the easiest people to engage with, particularly if one is from a public body, but the relationship between the agency and the organisations involved in fisheries in the south-west has become very positive on the salmon, trout and coarse fishing side. We have for some time had a fisheries forum. That will be built upon and the relationships at different, more local levels will replace the rather centralised operation of the advisory committees. The situation is similar with the rivers and the river trusts in the area. Indeed, I am aware that in some areas the river trusts are taking on some responsibilities from the agency.

The abolished committees, while they were useful, are likely to be replaced by something more positive that will deliver the environmental outcomes that we all seek, whether it is on the electronic consultation and social media side or, possibly more importantly, the overall engagement. I know that the noble Lord, Lord Greaves, also objects to some of the conceptual terms in there, which I do not entirely dissent from. However, there is a degree of empowerment here. Bodies on the ground are taking responsibility in keeping the agency informed and being guided by the agency in dealing with incidents. For example, on rivers where there are not major flooding incidents, it takes first-line responsibility. That is quite important.

[Lord Greaves]

My Lords, I wish to make it clear that it is not the process that I object to, it is the words used to describe it.

[Lord Whitty]

My Lords, I probably share that view. However, the reality is that it allows more people to be engaged and to take responsibility. To that extent, I share the objectives of the Government. The only note of caution I introduce is that the processes of engagement, empowerment and partnership—all abstract terms but in day-to-day terms they mean talking to people a lot more and in a lot more detail and probably for longer than sending out signals from the centre—are time-consuming and therefore staff resources-consuming and, to some extent, money-consuming.

In other words, the big society—if one was to call it that—is not costless. In some ways, it may be more costly than more centrally directed activities and institutionalised responsibilities. At the worst end under the old system, a member of staff might well worry about the advisory committee a month before it is due to meet and write appropriate papers and probably get a decent outcome. However, this requires a year-long engagement with the bodies that are represented on those committees. So, from the point of view of agency staff resources, this does not really save money. I know its primary aim is not to save money but to come up with a better system but, nevertheless, the Explanatory Note suggests that some of the formal money will be saved. It will not be saved. It will be deployed in a more effective way and there will be, if anything, more pressure on staff than under the old system. Subject to that caveat and the fact that we will at some point review these proceedings and changes to see if they are working, I support the Minister in these orders.

[Lord Knight of Weymouth]

My Lords, I, too, support the orders. As ever, it is a delight to come back to public bodies orders and to reminisce about some of the Minister’s finest moments in the main Chamber working on that Bill. I am sure that he will recall better than I that when these bodies were discussed, my noble friend Lord Grantchester broadly welcomed the move to rationalise the system. At the heart of this is ensuring that stakeholders around fishing are properly engaged. That means not just the professional people and businesses that are dependent upon fishing and angling but the more than 6 million people who over the past two years have indulged in some form of freshwater fishing. This is an important issue for a large number of people.

My questions concern the two key areas. I pay tribute to the Secondary Legislation Scrutiny Committee, whose fourth report of Session I found extremely helpful in getting my head around these orders. I start with the issue of accountability, which, as the Minister said, is the main issue about which the committee had concerns. He reminded us that its recommendation was for the Government to reconsider the need for formal monitoring and evaluation of the successor arrangements, and I welcome what he said about reviews. This is a “big society” approach, replacing a fairly complex set of statutory bodies—regional quangos, if you like—with a different form of engagement with civil society in local communities.

There is a concern that, in the absence of a formal set of structures, there will be reduced accountability, and I am sure that the review will focus on making sure that that has worked well. I would be grateful for a little more detail about how the review might work; who it might be led by, whether that person will be independent of Defra and whether the report will be published and the process transparent so that we can properly scrutinise it here in Parliament. Answers to those sorts of questions now or later would be very helpful in giving us, and the limited numbers who responded to the consultation on these orders, some comfort around the welcome announcement that the Minister made regarding the review and the positive response that he has given to the Committee, which I very much welcome.

On effectiveness, the Explanatory Memorandum talks about the need for effective local stakeholder engagement and partnership. It is clear that the money currently being spent on these sets of bodies—£225,000 and £192,000 respectively—is being reinvested in that engagement. I would be interested to know a little more about how that money might be spent. Perhaps unlike the noble Lord, Lord Greaves, I am quite an enthusiast for communication through social media. Indeed, in the recent flooding incident, one of the things that was quite striking was that these days the telephone is a far less reliable form of communication because most of us no longer just have a telephone that plugs into the wall and is powered off the little bit of power that comes out of the phone line; most of us have wireless phones that depend on mains power. If you are going through a flood, for example, you turn off that mains power and then your phone does not work. One of the advantages of using social media is that for many of us they are run off our smartphones or mobiles. It is difficult for any agency to keep up with the changes that people make to their mobile phone numbers, but engaging with apps, Twitter and even Facebook seems to be quite an effective way of adding a bit of resilience as technology changes.

Agriculture: Animal Feed

Lord Whitty Excerpts

Thursday 8th September 2011 Lords Chamber

[Lord Henley]

My noble friend is right to point to further consequences of feeding animals in this way, in terms of producing the amount of soya used. Again, I stress to her, we should not make any changes unless the scientific evidence assures us that that is right and proper.

[Lord Whitty]

My Lords, would the Minister accept that the Government and the European authorities are right to proceed with caution on this front? I speak both as the Minister who was allegedly in charge during the last stages of food and mouth and as a former consumer champion. The noble Lord, Lord May, has spoken about BSE and we still do not know how the foot and mouth virus entered the chain. While some relaxation may be possible, I advise extreme caution.

[Lord Henley]

My Lords, I am sure that the noble Lord was totally in charge, and not just allegedly. As he puts it, we will proceed only if the scientific evidence is right and proper.

Public Bodies Bill [HL]

Lord Whitty Excerpts

Monday 4th April 2011 Lords Chamber

The answer to the question put by the noble Lord, Lord Soley, is that this clause is important not just, or indeed primarily, for what would happen in court if there were ever to be a challenge; the clause is much more important for the discipline that it imposes upon Ministers and indeed on civil servants when they are considering the exercise of these vital powers. The clause identifies what the Minister should have in the forefront of his mind when he performs this function, and the amendment of the noble Lord, Lord Newton, would help to ensure that Ministers had at the forefront of their mind the vital need to exercise the powers fairly as well as efficiently. I therefore ask the Minister to think again about this matter.

[Lord Whitty]

My Lords, I support the amendments in the name of my noble friend Lady Hayter, specifically Amendment 62. I do not want to dissociate myself from the general praise for the Minister, the noble Lord, Lord Taylor; he has been the most flexible of Ministers that we have yet seen in this coalition Government, and we are all extremely grateful to him, not least for his Amendment 60A. However, it is still slightly lacking; if the Minister is now the Lincolnshire poacher, where does that leave the gamekeeper? Parliament is the gamekeeper, but with the whole of the Bill Parliament is letting go the central principle that primary legislation can be amended only by other primary legislation. If we are to do so—and I understand the logic and the safeguards that are beginning to be built into the Bill—then we need to be quite explicit about how we are letting it go.

My noble friend Lady Hayter’s amendments make it clear that, when the aims and objectives of a particular body are specified in existing primary legislation and when any Minister wants to activate one of these mergers, abolitions or changes in function, then as part of the process the Minister must go specifically through those aims and objectives and explain how they will be achieved in the absence of the body or after the proposed changes to the nature of the body have been made. In the terms of the noble Lord, Lord Pannick, that means a bit more discipline. It requires Ministers to put before this House what the original primary legislation required of the body and how that will now be carried out. If that is to be transferred, that needs to be explicit; if that is to be merged with the requirements of another body, that needs to be explicit; if that is to be transferred to a private body, that needs to be explicit, with the other complications that arise from that; if that is to revert to the Minister, that needs to be explicit; or, if that is to disappear into the ether, Parliament needs to be clear what is happening. When we agree to these safeguards—and the Constitution Committee has now accepted that, broadly speaking, these safeguards meet the criteria—we need to ensure that the process runs through a check of what was set out in the original legislation. My noble friend’s amendment would take us a significant way towards achieving that and exerting that degree of discipline on the future use of this legislation by Ministers.

[Baroness Butler-Sloss]

My Lords, I add my praise to the Minister, which the noble and learned Lord, Lord Woolf, expressed so well. Even so, some tweaks might be provided, as the noble Lord, Lord Pannick, was saying. I entirely agree with him. I speak particularly in relation to Amendment 62 tabled by the noble Baroness, Lady Hayter, because the World Wildlife Fund, which I think the whole House will agree is an extraordinarily sensible organisation, is concerned for the Marine Management Organisation to which she referred. However, she referred to it in the earlier amendment and not Amendment 62. The problem the World Wildlife Fund sees as set out in the briefing I received—I am sure many noble Lords will have received it—requires at least some clear indication by the Minister that the Marine Management Organisation is not at risk. The bodies listed in Schedule 4 could have their funding arrangements changed by secondary legislation and the World Wildlife Fund is concerned that some degree of pressure—for instance, from drilling organisations—might imperil the Marine Management Organisation. It seems to me, if I may respectfully say so to the Minister, that either the amendment of the noble Baroness, Lady Hayter, should be accepted or at least the Minister should give a very clear policy decision that this could not possibly happen.

--- Later in debate ---

[Lord Whitty]

My Lords, I support the amendment in the name of my noble friend Lord Hunt and indeed the one referred to by my noble friend Lord Kennedy but I want to speak specifically to Amendment 66. First, I thank the Minister. At the last stage in this Bill, I moved an amendment relating to TUPE procedures. I had a quite lengthy meeting with the Minister and his officials and received a fairly clear letter, given that this is a complex area of law. Although there is still a bit of a grey area, I will the leave the issue of the exact procedures at that.

Amendment 66 relates to the staff of the public bodies we are referring to here and to the trades unions that represent them. However amicably we deal with the Bill, the Government must recognise that there is a suspicion out there that this Bill, which relates to quangos, is part of a more general attack on public sector employees, their terms and conditions, and their organisations. The Minister may deny that, but pronouncements by some of his colleagues and the media which support the present coalition give at least some justification to that concern. Therefore, a straightforward clause which makes it clear that when we are changing the nature of these bodies, there will be consultation with the staff and their recognised trades unions before the proposal is brought back to Parliament, would be a wise precaution. Like the noble Lord, Lord Pannick, I do not think that the general formulation effectively covers the need to ensure specifically that there is consultation with the employees and their representatives.

--- Later in debate ---

[Lord Adonis]

The case made by my noble friend Lord Hunt in respect of the super-affirmative procedure is extremely strong. There is a fundamental point of principle here: do we take ourselves, the House of Lords, seriously as a legislature? If we do, I do not believe it right that we should delegate the degree of power that we are delegating to the Executive without retaining more of the power of control simply to debate and amend the proposals that come forward in respect of the merger, abolition or reconstitution of public bodies. The critical factor at stake is that all these bodies were established by statute. They are all important bodies—you just need to read the schedules to see the importance of the bodies listed—and they were all subject to lengthy debate in Parliament when they were established. All that my noble friend Lord Hunt is seeking to do, with the full authority of the relevant committee of the House, is to give the House a somewhat larger power to amend orders and to require proper debate and a proper account by the Government to Parliament where they are not minded to take account of that debate and any amendments that are proposed. It seems to me that, if we are not prepared to stand up for the rights and responsibilities of this House to that extent, we are quite wrongly denuding ourselves of our proper responsibility as a legislature.

[Lord Whitty]

I can only agree with what my noble friend Lord Adonis has just said with regards to Amendment 71. However, I rise in the regrettable absence of the noble Lord, Lord Newton of Braintree, to speak to Amendment 69D. This refers to the functions of those bodies that are to be abolished in Schedule 1 and would require the Government to give a clear indication of which functions are to be retained and by whom they are to be carried out.

I draw attention to this and have become active on this Bill because of an interest of mine as the former chair of Consumer Focus. Consumer Focus is still in Schedule 1, but, as I have previously argued, that is probably the wrong place, in that the Government have indicated that they want to transfer its functions rather than to abolish them. While Consumer Focus remains as a body to be abolished, it is right that the legislation should require the Government to specify to whom its functions should be transferred. The Government’s current indication is that they wish to transfer the majority of its functions to Citizens Advice and some of its functions to a body relating to Northern Ireland law, the Consumer Council for Northern Ireland. Citizens Advice is a charity incorporated under English law and separately under Scottish law. It is not at all clear that the Government will actually transfer all those functions to Citizens Advice or, pre-empting an amendment that the Minister will move in the last group, whether Citizens Advice would necessarily agree to take on those responsibilities; as an independent charity, it has a right to refuse to do so.

Developments in Scotland and Wales may well also result in somewhat different arrangements being set up after the forthcoming elections. Indeed, arguments relating to the regulated industries are different from the general run of consumer issues. Given all that uncertainty at this stage when we are passing the primary legislation, it is surely incumbent on Ministers or future Ministers to give a clear indication to Parliament of where the current functions set down in primary legislation are going to go or whether they are going to lapse. The amendment in the name of the noble Lord, Lord Newton, would achieve that objective and therefore I see no reason why the Government should not accept it, if not tonight then at some later stage.

In the mean time, I endorse the general view expressed by my noble friends Lord Adonis and Lord Dubs and by the noble Baroness, Lady Thomas, that at some point we are going to have to look at the way in which we deal with the secondary legislation under this Bill, because the normal form of so doing will not be adequate for many of these changes.

[Lord Blackwell]

My Lords, I am not convinced that the additional procedures set out in Amendment 71 are necessary. I should stress that since I am a member of the Delegated Powers Committee, and a board member of an organisation that is referred to in the Bill, I am speaking in a personal capacity.

Because of the way in which the powers of the Government have been limited as the Bill has passed through the House and the Government have introduced amendments, the proposal that is now set out in the Bill for an enhanced affirmative procedure does what is required. It gives committees the opportunity to state issues and make the House and the Government aware of those issues, and gives the Government the opportunity, which they do not have normally, to amend the order to take account of those concerns. That is an appropriate and proper amendment.

However, I am nervous about transferring more power to any committee for it, of itself, to seek to amend these orders. Moving power from the Floor of the House to those committees would take the role of committees further than it should be taken. As I see it, the role of the committees works well when they are advising the House and they are raising issues. Generally, they deal with such contentious areas—

Public Bodies Bill [HL]

Lord Whitty Excerpts

Wednesday 23rd March 2011 Lords Chamber

[The Earl of Caithness]

My Lords, the noble Lord, Lord Clark, induces me to get to my feet, if only to correct him. He made that lovely, sweeping statement that all those on this side of the House are landowners and farmers, particularly those who spoke on 1 December. If I may correct him, I am not a landowner and I am not a farmer. I was a land agent. I acted for farmers, I acted for landowners, I acted for tenants and I acted for farm workers. Therefore I have no interest to declare and I do not fall into the category in which he sought to portray me.

We are all extremely grateful to see my noble friend Lady Byford back in her place and active again. She adds a great deal of common sense and a huge amount of knowledge to our debates on farming and the environment. I thought what she said was very soundly based, as indeed was what the noble Lord, Lord Cameron, said in Committee. I listened with care to what the noble Baroness, Lady Quin, said. I found nothing new from what she said in Committee, although she did praise the strength of the arguments for those supporting her amendments in Committee. I would only praise the strength of the arguments against.

[Lord Whitty]

My Lords, I apologise to noble Lords that, because the House has made such good progress today, I was not present at the beginning of the debate. However, as my name is attached to the amendment, perhaps I may touch on two issues, neither of which has been mentioned since I have been in the Chamber. If either has already been mentioned, I apologise.

The first point follows on from what my noble friend Lord Clark has just said. The structure that the Agricultural Wages Board sets does recognise skills throughout this sector. The fact that many workers in many parts of the country are paid more than the legal minimum does not take away the need to have that structure. The requirements of agriculture are becoming more and more sophisticated at one end, but less and less sophisticated at another. At the higher end, those skills need to be rewarded. The structure provided by the AWB allowed individual farmers and farm enterprises to base their actual wages on a similar structure.

The noble Lord, Lord Henley, will know by now that every farmer you meet will tell you that every cost saving that he makes is immediately recouped by the supermarkets. One of my fears in this is that, once it is known that there is a reduction in the legal minimum, which sets a floor above which voluntary payments by employers stretch to quite high levels for some workers, the supermarkets and the big processors will say, “Your labour costs need to go down by the same degree as the legal minimum goes down”—that is, in proportion to the difference between the wages board minimum and the statutory minimum wage. For the total bill, that is an enormous amount of money and therefore a saving to the supermarkets. I know that the Government intend to address other pressures that the supermarkets put on the agricultural sector, but this will be one more excuse for them to lean on farmers to reduce their prices and therefore to reduce their wages. If the noble Lord wishes to start that process, there will be real dangers, and the skilled force will begin to disappear.

At the other end of the labour force, a lot of agricultural labour, and particularly seasonal labour, depends on migrant labour and is operated by a set of gangmasters. There is nothing wrong with labour providers, provided that they obey the rules. But one of the main ways in which the exploitation by some gangmasters of the workforce is identified is that they are not meeting the legal minimum set out in the Agricultural Wages Board regulations. Once that is seen—and it is a relatively simple thing to establish—all sorts of other abuses over conditions of health and safety, immigration status and tax and national insurance become apparent. As a result, the Gangmasters Licensing Authority has been able to clean up a lot of that end. It has been a very important way in which the authority can do so. If we remove that clear legal minimum, I fear that it is one less lever for us to clean up the supply of labour in what has been, in some parts, a very exploited sector.

There are all sorts of reasons why, historically, there is an attachment on this side of the House and in the Labour movement as a whole to the Agricultural Wages Board. I am a Dorset man myself these days, so I come from a great Tolpuddle tradition, but I am not simply relying on history. I am relying on the effect that the removal of this one remaining legal-minimum, sector-specific wage will have on the quality and quantity of the workforce in agriculture and how it is treated. In the end, if that happens it will be to the detriment of agriculture as well.

[Baroness Butler-Sloss]

My Lords, I had not intended to speak in this part of the debate, and I apologise to the House that I have not spoken about this in Committee, but I take up and endorse a point made by the noble Lord, Lord Whitty. I declare an interest as co-chairman of the All-Party Parliamentary Group on Human Trafficking. One group that is potentially trafficked and has been trafficked in the past comprises agricultural and horticultural workers. I was extremely glad to hear the noble Lord, Lord Whitty, speak about the Gangmasters Licensing Authority, which remains in great danger of being abolished, although Schedule 7, where it appeared, is no longer part of the Bill. I would be very much more concerned about the loss of that authority, which has a specific requirement to look after those exploited in the fields and the horticultural industry, than I am about the loss of the Agricultural Wages Board, which does not specifically deal with that migrant group, part of which is capable of being trafficked.

--- Later in debate ---

[Lord Whitty]

My Lords, as my noble friend Lord Borrie has hinted, I declare a recent interest as a former chair of Consumer Focus. The noble Baroness, Lady Wilcox, is one of my predecessors, as is the noble Baroness, Lady Oppenheim-Barnes, who is here as well. This might seem to be a slightly esoteric debate, but it is not. Consumer Focus, the National Consumer Council and the other bodies that preceded Consumer Focus have done decades of work on behalf of consumers. They have influenced Governments, regulators, business behaviour and behaviour in the public sector. It is important that that role is preserved along with that level of expertise.

Public Bodies Bill [HL]

Lord Whitty Excerpts

Monday 7th March 2011 Lords Chamber

Moved by

[Lord Whitty]

66: Schedule 2, page 18, leave out lines 6 to 8

[Lord Whitty]

My Lords, this is genuinely a probing amendment, and I shall not spend a lot of time on it. I suppose the probe could be distilled to the question: why? The Central Arbitration Committee and the Certification Officer vaguely operate in the same area of life and are indeed serviced by the staff of ACAS, but they do very different jobs. One of them is effectively an arbitrator and the other is a regulator. It is not normal to confuse the two roles. Indeed, confusing the two roles in other fields is generally frowned upon, particularly in the area of regulation where the role of the regulator as against the role of the ombudsman is kept very distinct. They are slightly different in that the CAC acts as an arbitrator between trade unions and employers, in the main, and in some specified statutory functions, whereas the certification officer effectively regulates the internal affairs of trade unions, employers’ associations and other friendly societies.

The fact that they are drawn from two bits of the secretariat of ACAS does not mean that the two secretariats can be merged without causing some difficulties. The cost saving seems to me to be negligible, if it is positive at all. Inside information tells me that it might save one photocopier and possibly a fax machine as well, but that is likely to be offset by the increased cost of having two headings on the notepaper for the new organisation, the name of which has presumably yet to be devised.

My more serious point is that there is a potential conflict of interest here unless the two secretariats remain seriously Chinese-walled. Somebody who is dealing with a dispute between a trade union and an employer should not be the same person who is dealing with an issue between a trade union and one of its members. Unless those two duties are kept separate, there is a potential or apparent conflict of interest. This has worked perfectly well hitherto, and there have been no great hiccups. The two organisations perform different roles, and I do not see the point. Perhaps the Minister can explain. I beg to move.

[Baroness Royall of Blaisdon]

My Lords, I think my noble friend has said it all. I am grateful to him for raising the proposed merger of these two bodies. Here we have two small but very important organisations that deal with related areas of law but are distinct in their functions. As my noble friend said, one is a regulator and one is an arbitrator. It is fair to say that everybody who knows the two organisations, the people involved and their work is bemused about why they are being merged. They wonder whether it is just a paper exercise in order simply to decrease the number of quangos. The cost savings are potentially very small. I will be grateful if the Minister will tell me what costs will be saved. My noble friend made a point about the separation that must exist between the two functions. It is extremely important that there should be walls, be they Chinese or otherwise, and we need to know that they will exist if the two bodies are merged.

[Lord Taylor of Holbeach]

I thank the noble Lord for moving this amendment. He very effectively described the functions of both bodies. They have both existed for many years, and both operate in the sensitive area of trade union and industrial relations law. I stress that the Government value their roles. They are both expert in their respective fields, and they both enjoy solid reputations for impartiality. The similarities do not end there. They both undertake judicial functions, they have a shared understanding of judicial procedures, their officeholders and support staff both possess detailed knowledge of trade unions and of industrial relations more broadly. Both bodies are relatively small and are both housed in the same building. They both receive administrative support from ACAS—the Advisory, Conciliation and Arbitration Service. There is therefore already significant linkage between the two bodies, and the Bill will take that process a stage further by merging them. Some efficiency savings will be produced as a result, but I have to say to the noble Baroness, Lady Royall, that they are not likely to be huge. The total budget costs for both organisations are about £1.25 million, so the efficiency savings will not be huge, but there will be some. In particular, their support staff could be deployed more flexibly to meet the peaks and troughs of case loads.

A merger would also simplify the institutional landscape and avoid any potential confusion in the eyes of users about their respective roles. Therefore, the Government consider that a merger is advantageous to all concerned. A merger will not affect the underlying law which these bodies help to enforce. I should add that the Government have no plans as a consequence of this merger to change the various rights and duties embodied in trade union law. Our intention is to ensure that the merger will not affect the experience of persons, be they individuals, unions or employer groups, who currently use the services of these bodies. In particular, we want to maintain the same procedures which the CAC and the CO currently apply when considering their respective cases. BIS, which has a lead responsibility for these two bodies, has already discussed the potential merger with the CAC, the CO and ACAS, and has sought the views of the TUC and the CBI. We believe that we have reached an understanding on how a workable merger can be achieved.

In summary, there is a strong case for these two small bodies to be merged. We believe that this can be achieved without prejudicing in any way the performance of their important and sensitive duties, and I hope that the noble Lord will feel able to withdraw his amendment.

[Lord Whitty]

Well, my Lords, that was a bit thin. The Government are keeping the functions of the two organisations, which they recognise are distinct. The organisations already have good administrative support and operate quite sensibly, and there is virtually no cost saving, if any. The one point that he made with which I disagree is that the users of those organisations know perfectly well what they are for, and they are distinct. If a member has a complaint about his trade union, he does not want an arbitrator, he wants someone to tell that trade union that it has been acting against its own rules in the way in which it has dealt with him, whereas the CAC is in essence an arbitrator. The Government wish to make this tidier, and BIS wants to cross another organisation off the list. I am not going to make a big point about this, but the reality is that there is no rationalisation, no overlap and no administrative saving. There is, however, a lingering doubt that there might be some conflict of interest when the noble Lord talks about rationalising the role of the two secretariats. That might come back and bite us, although the probability of that happening is fairly low. Nevertheless, it is still there, and the appearance of a Chinese wall will at least be necessary, in which case any administrative rationalisation will be even less. I will not press this amendment tonight and I will not press it again, although I do think that the Government’s argument is a bit thin. I beg leave to withdraw the amendment.

Amendment 66 withdrawn.

Public Bodies Bill [HL]

Lord Whitty Excerpts

Tuesday 11th January 2011 Lords Chamber

[Lord Phillips of Sudbury]

My Lords, I support this amendment and have little to add to what the noble Lords, Lord Faulkner of Worcester and Lord Berkeley, have stated. The inland waterways of this country are one of its glories and, in the present age, the public resort to and benefit from the inland waterways can only increase. We as a Parliament have for too long done things which were well intentioned but which, in the event, proved to be counterproductive. One of the great problems of the present age is that the public are so confused about different bodies, particularly in the voluntary sphere, that a great deal of the good will and potential effect of a body such as the Inland Waterways Advisory Council can be inadvertently lost by chopping and changing. As all Members of the House will know, the inland waterways are covered by a wonderfully diverse mix of mainly charities—I am patron of the charity that looks after the River Stour, for example, but there are hundreds of them. To have a competent, known, well regarded advisory body taking a valuable overview and bringing together the often conflicting demands and interests of the individual charities with their different responsibilities seems indispensable. If that is right, then for mercy’s sake let us leave this body alone and not at some future date have to resurrect it with a loss of public identity and continuity in the mean time.

[Lord Whitty]

My Lords, I will pick up from where the noble Lord, Lord Phillips, has just left off. I have a past interest as a Waterways Minister, which is a fantastic job. I cannot remember if it is part of the portfolio of the noble Lord, Lord Henley, but if not, that is regrettable, because it provides a welcome relief from most of the rest of what one has to do. I also have a present interest as a member of the board of the Environment Agency. British Waterways is the dominant organisation for canals and the Environment Agency is the dominant organisation for rivers. An amendment recently tabled by the noble Lord, Lord Taylor, points the way that the Government are thinking of going in handing over British Waterways to a trust in the third sector and transferring the Environment Agency’s navigation and waterways responsibilities to that body.

I am, broadly speaking, subject to a few caveats, in favour of that sense of direction. Eighty to 90 per cent of British Waterways will probably be covered by that new organisation, which will make it a very dominant organisation. All the small navigation authorities to which the noble Lord, Lord Phillips, referred, supported by volunteers, charities and local efforts for relatively small stretches of canal and river, look to this body for technical advice and for a forum where they can sit and be treated equally with the representatives of British Waterways and the Environment Agency. They will be the people who will most miss out as a result of the abolition of this body. British Waterways, including the Environment Agency’s navigation aspects, will take care of itself, and the charitable status, I hope, will ensure that it does a good job for the public and the environment. However, the smaller navigation authorities need this body and we should seek to retain it for them, certainly for a significant period beyond any transformation of the status of British Waterways, as my noble friend Lord Berkeley suggested.

[Lord Grantchester]

My Lords, I compliment the speakers this evening on giving their thoughts on the Inland Waterways Advisory Council. I suggest that this body has been included in this part of the Bill to add some weight, but the timing has not been properly considered. In rural areas, the inland waterways are a thriving enterprise for a lot of people. Volunteers undertake restoration and development work, which offers enjoyment to many people along the waterways, reconstructing our industrial heritage and providing diversification opportunities in rural areas. I tease the Minister when I say that we are not looking at a dead parrot. This situation is working extremely well. I ask him to consider the thoughts of all the noble Lords who have spoken tonight, to clarify some of the background as to why British Waterways is one of only nine bodies in the Public Bodies Bill being made into a charity, to expand the Government’s thoughts on why they think that British Waterways is best suited to charitable status and to say how, given its activities, it is likely to be able to raise the funds necessary to continue to provide all these excellent opportunities in development and restoration in rural areas for our wonderful waterways.

Public Bodies Bill [HL]

Lord Whitty Excerpts

Wednesday 1st December 2010 Lords Chamber

[Lord Newton of Braintree]

My Lords, I rather rashly intervene to express my general support for the thrust of the amendment moved by the noble Lord, Lord Greaves. I declare an indirect interest as my wife is a member of the planning authority in the area in which we live—Braintree in Essex—and I know that some of these problems occasionally land up with that committee. I am not an expert, but I think what the noble Lord, Lord Greaves, said about the need for some kind of expert advice in areas where the issue is whether there is an agricultural need is important. I hope that my noble friends on the Front Bench can meet it.

[Lord Whitty]

My Lords, I agree with the general thrust of the approach by the noble Lord, Lord Greaves. I am certainly not arguing for the status quo, although this body has helped to solve a number of acute cases for individual retired farm workers, farmers who desperately need the accommodation to attract further labour and local authorities faced with the housing crunch to which my noble friend Lord Clark referred, so it has been a useful institution. The demand is diminishing, but it is important that we know what will replace this body.

I will make an additional point to the Minister because it goes to the heart of the way in which we are dealing with the Bill. In Schedule 1—and the same will apply to some extent to other schedules—each body has a particular situation to deal with and the Government appear to envisage different consequences of the abolition of those bodies. It is important that this House knows what is in the Government’s mind to replace what has hitherto been an important, if diminishing, function. It is important that we have this in writing, not simply as a reply in the debate. Some of us argued for a Select Committee procedure that would have allowed that to happen away from the Floor of the House, if necessary, and on a different basis of consideration. In this, as in so many other areas, we need to know the total picture. I make a plea to the noble Lords, Lord Henley and Lord Taylor, that as we go through the stages of this Bill, and it looks as though it will be quite a lengthy process, they provide us with that kind of information so that we can have a more rational debate. I make the point on this institution because it is one about which I do not disagree with the Government, but we need to know in all cases what is intended to replace these bodies.

[The Earl of Caithness]

My Lords, like the noble Lord, Lord Clark of Windermere, I remember the 1976 Bill coming through Parliament. I was on the Benches that he is sitting on now. I thought it was a bad Bill then, and it has remained a bad Act, in particular with regard to ADHACs. The noble Lord, Lord Greaves, said that this body is necessary. If it had been necessary, it would have been compulsory to have consulted an ADHAC. As it is, it is a purely voluntary agreement that an ADHAC can be used for consultation with the housing authority if necessary. The vast majority of cases are dealt with directly with the local housing association, so “necessary” was not the right word to use in this instance.

The noble Lord, Lord Greaves, said that there are 40 to 50 cases a year. I question that. My information is that the number is almost in single figures now. Sixteen ADHACs have some 10 cases a year in total. That means that half of them are not doing anything at all. It is high time we got rid of them, and I thoroughly support my noble friend in this. Could I just ask him whether, when we come to the follow-up legislation, he will propose to get rid of all 16 ADHACs at once, rather than one by one?

--- Later in debate ---

[Lord Whitty]

My Lords, I support the noble Lord, Lord Greaves, in his argument and agree with pretty much everything that he said. I caution the coalition Ministers that they will frequently find that propositions that have been put to successive Governments and their Ministers get dusted off and re-presented to new Ministers. Sometimes—I do not wish to impugn the noble Lord—Ministers are credulous enough to accept them, even though their predecessors have rightly looked at and rejected them. To my knowledge, the proposition of abolishing the agricultural wages board has continued for the past 40 years. It has come less from officials in MAFF or Defra than from pressure from the dead hand of the Treasury and the free labour marketeers in what is now BIS. That pressure is evident here. Certainly that pressure was put on Mrs Thatcher’s Ministers, who rightly resisted it. It was put on John Major’s Ministers, who also rightly resisted it. To my certain knowledge, every Secretary of State and junior Minister for Agriculture in the previous Administration was under such pressure and we rightly rejected it.

The noble Lord will say that things have changed. He has some justification because two things have changed slightly. First, for most of that period most farmers were in favour of maintaining the wages board. That is no longer entirely true. The upper echelons of the NFU have started voting with the workers rather than the farmers, who have taken a rather more jaundiced view of the wages board, even though it has meant a fairly balanced result for both sides in the long run. Many others, who are not necessarily in the top echelons of the NFU, are still favourably inclined towards the wages board because it saves small farmers a lot of work in trying to establish the appropriate rate for a skill and all the other terms and conditions. They would otherwise have to go through all that themselves. Indeed, some farmers’ organisations are still in favour of the wages board. The Famers’ Union of Wales, for example, is in favour of retaining it and opposes this proposition, as do the Welsh Government. We are talking about a body that covers England and Wales; there are devolution issues here. As far as I am aware, the proposition in Scotland is entirely separate. The noble Duke, the Duke of Montrose, who I am sure is one of the more benevolent employers north of the border, will find that there are Scottish farmers who still wish to retain the process. It is not true to say that all farmers, as employers, are now opposed to the continuation of the board.

Secondly, although we now have the national minimum wage, it deals only with the absolute minimum, as my noble friend Lady Prosser pointed out. There are differences of only a few pence in that area. The whole structure of skill rates and different time rates and the whole issue of non-wage benefits, which were dealt with by the wages board, are not dealt with by having a minimum wage. The whole grading structure is in peril if this board is abolished.

As the noble Lord, Lord Greaves, said, that is not to argue that the present structure could not be hugely simplified. Indeed, the previous Government looked at bringing forward a legislative reform order that would have reduced the number of committees, simplified the process and, to some degree, made the process for the agricultural minimum wage equivalent to that for the minimum wage. That was a sensible proposal, which would have had to follow the procedure of the Regulatory Reform Act. At the time, some noble Lords were concerned that the Act was moving towards the Henry VIII end of the spectrum. However, compared to this Bill, it was an absolute doddle for those who wished to preserve parliamentary privilege. It is probably more like a Henry III Bill in that Henry III had to compromise with Parliament. I believe that on some of these issues the Government will have to compromise with Parliament. The process that is being proposed in the Bill, as I have said several times, needs to be addressed.

The agricultural labour force of more than 150,000 in England and Wales—and others who use the wages board as an analogy to avoid engaging in separate bargaining with their employees or their unions—is still an important feature. I hope that the noble Lord can answer the question asked by the noble Lord, Lord Greaves: what will replace the board? Is there any role for the Low Pay Commission to look at aspects of this—at the particular rates and situations that apply to agriculture? Is there really any prospect of collective bargaining if it is not underwritten by the law? Under the legislative reform order that we contemplated, it would have been possible to have moved the agricultural wages board to a more bilateral structure but still with the legal underwriting. That would probably have been a sensible move. I was certainly in favour of it. We could have moved towards it.

If we leave this entirely to collective bargaining, as applies in other sectors, there is, as my noble friend Lady Prosser indicated, the difficulty of organising in this area. I do not have to declare an interest since I am not a member of Unite, although I have some family connections to it. These days I am a resident of Dorset, which is still a major focus of agricultural workers. There, the union’s ability to organise is a little better than it was at the time of the Tolpuddle martyrs, but it is not easy. In so far as the wages and conditions of agricultural workers in Dorset have dramatically improved since those days, they owe a lot to the 100-year operation of the agricultural wages board, rather than the benevolence of employers or the state. It is unlikely that it will be easy to move to a normal situation of collective bargaining in this area.

Perhaps this is not so much a West Country issue. The people who are pressing most for this are horticultural employers, who have a very odd workforce structure. The work is hugely seasonal for obvious reasons. Much of the workforce is made up of migrants, many of whom are very vulnerable. Employers tend to try to pay the minimum rate, if not less. In the horticultural sector, a lot of the seasonal workers, many of whom have skills and qualifications in their own countries, will be pushed down to the minimum rate. The only legally binding rate will be the minimum wage. That, I can see, is desirable for the more ruthless employers in the horticultural sector. However, it is not the equivalent of a situation where you are a permanent employee in a major area of agriculture.

The other question is: who will now enforce the minimum wage in agriculture? It is difficult if we are talking about farms with two or three workers or farms where there are many seasonal workers who move on after a couple of weeks. The agricultural wages board had a rather minimal inspectorate attached to it, but who will now do its work? The Revenue imposes and enforces the minimum wage, but it is unlikely to tramp up and down every farm to find out how much every worker is paid. Enforcement is also an issue.

The question to those of us who oppose the dropping of the wages board is: why is agriculture so different from other areas that it requires a continuing minimum standing wage? The fact is that every other wages board was abolished. The wages councils were abolished in the 1980s and 1990s and the average wage in those sectors dropped significantly. If this is a blatant wage-cutting exercise, we should be told. If, however, it is more that we want to develop a skilled, effective and competitive workforce in agriculture, people must recognise that there are several difficulties in this sector beyond those that have already been referred to.

I shall mention some in particular. My noble friend Lady Prosser referred to the rather close relationship that agricultural workers inevitably have with their farmer employer, particularly on small and medium-sized farms where there are only two or three employees. That is fine while it is good. As soon as it breaks down, however, the power relationship between the employer and the individual farm worker is incredibly imbalanced and the worker is incredibly isolated—literally, in geographical terms—because there are no workmates in the same situation.

The other dimension is that the farmer himself or herself is under severe pressure, to a degree that many other small businesses are not. The noble Lord, Lord Greaves, made reference to the role of the food chain in pressuring farm costs, particularly in relation to the supermarkets. I am glad that this Government have decided that they will take up with slightly more enthusiasm than the last Government the proposition for an ombudsman who will look at the contractual relationships between the farming industry and other small providers of food and the grocery chain. I very much commend them for that. However, this is moving in the opposite direction. Within a week or two of the legally binding minimum wages disappearing from horticulture and agriculture, the buyer from the supermarkets will say, “You now do not need to pay the wages that you have previously paid. You can lower your costs and your price to us and provide a significantly lower rate”. The cost benefit, therefore, of cutting wages does not go to the farmer. The employees will lose their living standards and the profit from the whole process will go up the chain to the big processors and supermarkets. If that is what the Government want, it is not in the interests of the agricultural sector. Indeed, it is a downward spiral in the agricultural sector and something that they have recognised needs to be counted in other respects.

Another nefarious dimension of the labour conditions in the agricultural labour market relates to the seasonal and migrant workers operating in many parts of agriculture but particularly in horticulture and in the larger-scale vegetable sector. I was grateful to hear on Second Reading the noble and learned Baroness, Lady Butler-Sloss, ask why the Gangmasters Licensing Authority was in this Bill at all. Speaking as the ex-Minister who brought in that piece of legislation, I am glad that she and others have recognised what a successful operation that is beginning to be. However, it is an uphill struggle because, in this sector, the conditions of the workers are open to the widest exploitation. The Gangmasters Licensing Authority has to check on a number of things. It clearly has to check on health and safety at work and in housing. It checks on the employment and migration status, tax and national insurance of the workers—and rightly so. The abuses in all those areas tend to be cumulative.

Another area—one that is absolutely essential in triggering the Gangmasters Licensing Authority’s interest—is whether the Agricultural Wages Board provisions are being followed. If the legal basis for that disappears entirely, the Gangmasters Licensing Authority’s ability to check whether appropriate wages and conditions are being paid by employers—many of whom will push their situation to the limits if they possibly can—is removed and a whole section of agricultural workers will lose one of their most important protections. These are just some reasons why agriculture, particularly the seasonal dimension of agriculture, drives us to think that a legal minimum ought to be retained.

I seriously ask the Government to reconsider this. I am not against the simplification of the wages board. I am not actually against the abolition of the wages committees. However, a basic minimum level of remuneration in agriculture would potentially avoid pretty substantial abuses, which I am sure that all parties in this House wish to avoid. I ask the Government to think again.

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[Lord Whitty]

Apologies if the Minister was moving on to this point, but do the Government have an impact assessment of the effect of the abolition of the legal minimum on wage rates, given that when each of the other wages boards was abolished the rate in that sector fell? Clearly, there are always some who are paid more than the minimum, but have the Government done that calculation? If so, I think that we should know.

[Lord Henley]

I do not think that it is necessary for that work to have been done. As I said, we believe that with the abolition of the board the industry will be able to operate more flexibly, which would lead to more job creation and better opportunities. What the noble Lord and others have been asking us to do is describe what picture, as they put it, we see for the future. I believe that it is one where it is open to the industry to come together to set up its own system. Again, I was grateful to the noble Lord, Lord Cameron, who said that the NFU ought to be out there seeking to put something together. What I did not hear from the representatives of Unite or Unite’s predecessor, the Transport and General Workers’ Union, was whether they were prepared to come together with the NFU and put something together. I do not see why the NFU, Unite and other industry representatives cannot come together and create their own advisory committee to discuss these matters. We do not think that it is necessarily a matter for the Government.