Viscount Younger of Leckie
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Baroness Brinton
My Lords, I certainly will not rehearse the arguments—in fact I have torn up half of what I was going to say after the excellent opening speech of the noble Baroness, Lady Hayter, on this particular amendment. But I want to report particularly that when the Liberal Democrats debated our policy paper, Decent Homes for All, we heard of some very personal examples from members that I found profoundly shocking. They included one letting agent who had taken on a policy of no single parents at all, even if they were offering a three-month deposit as a guarantee and even if they were happy to provide—which I would not have been—a separate guarantor. This particular letting agent had just decided that single parents, mainly mothers, were no good. This parent, in particular, had no form of redress at all to that.
What is in front of us today is an utterly reasonable way of getting that redress. I am grateful to the noble Baroness, Lady Howe, and the noble Lord, Lord Deben, for making the point that this is actually much more about redress and consumer rights. It is rare to see an amendment that is so widely supported not only from within the House of Lords but also in another place by various people, including Mark Prisk, Annette Brooke and others from the government side. I hope that even if the Minister cannot give us an instant answer today he will be able to engage in discussion with those who have spoken in the debate on this amendment prior to getting to Report stage.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, it may not surprise my noble friend Lord Deben that I do indeed have some speaking notes, but I also hope that I can attempt at least to answer the questions that have been raised this afternoon by noble Lords. I know that these issues have been raised before, and I have considered carefully the amendments, arguments and indeed endorsements of the noble Baroness, Lady Hayter, for regulating the letting sector, particularly the ones that were mentioned this afternoon. She raises a very important issue.
I fully recognise the noble Baroness’s commitment in championing the interests of consumers in this area and take her concerns very seriously. It is helpful that she has brought it up in the context of this Bill. I note and respect the intervention of my noble friend Lord Deben in this respect as well. I know that the Housing Minister is aware of these concerns but I will raise them with him for further consideration. It is clear from the speech from the noble Baroness, Lady Hayter, that he—Mark Prisk, my honourable friend in another place—is aware of the issues that she has mentioned.
The noble Baroness, Lady Hayter, raised the issue in terms of a need for a mandatory redress to protect consumers, particularly those who are the most vulnerable. The Government are indeed keen to promote a greater use of redress but, understandably, want to avoid increased costs which might fall on landlords and tenants which a new mandatory regime would bring. While the Government acknowledge that poor practice exists in some parts of the letting sector, Ministers believe that new regulation would be disproportionate and would drive some businesses from the market. This would increase costs for consumers and reduce the choice and availability of accommodation on offer to tenants.
I can reassure noble Lords that letting and management agents are already subject to consumer protection legislation. For example, the Consumer Protection from Unfair Trading Regulations 2008 protect against giving false or misleading information, not acting with the standard of care and skill that is in accordance with honest market practice or claiming falsely to be a member of a professional body or approved redress scheme. The Unfair Terms in Consumer Contracts Regulations 1999 provide protection against unfair contract clauses, particularly where they are hidden in the small print.
Consumers who are treated unfairly or are charged unreasonable fees by an agent can seek help from their local trading standards officers, who have civil and criminal enforcement powers. The Office of Fair Trading has been investigating practices in the lettings sector and will be producing a report shortly including recommendations on how enforcement bodies can work to raise standards. We look forward to considering its report and recommendations. I hope that this particular point will go some way to reassuring the noble Baroness on the points that she has raised.
In addition to the protection offered by the consumer protection legislation, it is estimated that around half of all agents belong to voluntary schemes which set standards and offer redress if things go wrong. We invited industry bodies to work with us to improve the quality and coverage of self-regulation and in 2010 we endorsed the industry-led SAFEagent scheme. SAFEagent is designed to help consumers understand the benefits of using agents with Client Money Protection, by developing an easy to recognise logo. We are aware of the need for consumer awareness and also the importance of ensuring that vulnerable people are well informed, and indeed are advised as to what to do and where to go for help.
We have also published top tips for both landlords and tenants setting out the benefits of using an agent that belongs to SAFE agent or one of the professional bodies offering the right protections. We will continue to work with Citizens Advice and other bodies to ensure appropriate information is available. Citizens Advice provides help and advice on lettings over the telephone, online and face to face. In the light of these existing schemes and the consumer protection legislation in place, we have no current plans to introduce further statutory regulation. We are, however, keen to do everything possible to ensure that consumers are well informed and empowered to exercise their rights.
I was grateful for the intervention from my noble friend Lady Gardner who spoke most eloquently on the issue of the regulation of managing agents. I am aware that several issues have been brought to the Housing Minister’s attention in relation to letting agencies and residential leasehold and I am certain that managing agents are part of this. I am sure he is aware of your ongoing interest in this matter, but I will also inform him of the comments you made today. These are important issues to raise—as has been pointed out by the noble Baroness, Lady Gardner, there is a shortage of 300,000 houses in the UK. The letting of some of these properties must be effected fairly and consistently.
I hope that the noble Baroness, Lady Hayter, is reassured and will therefore be prepared to withdraw these amendments.
Lord Lucas
My Lords, I recognise a Treasury reply when I see it. I should be most grateful if the noble Lord would justify the first sentence of his reply by writing to me with the evidence on which that statement was based—that having this amendment passed would result in higher costs for consumers and a diminution in respectable firms in the market. That is just Treasury boilerplate. I very much doubt that they have done the work to justify that but I eagerly await the Minister’s letter to show me that I am wrong. In the absence of that, I very much hope that on Report we will deliver to my noble friend his first defeat as a Minister in the House of Lords. As he knows, this will not be a defeat for his department but merely for the Treasury and therefore one in which we shall all rejoice.
Baroness Gardner of Parkes
My Lords, we would all like to see that reply and I hope that it will be made readily available to everyone.
Viscount Younger of Leckie
Not only will I be very pleased indeed to reply to a letter that I might receive but I would be delighted to meet to discuss these matters fairly and fully.
Baroness Hayter of Kentish Town
The Minister will not be surprised to know that the lady is not reassured. I thank the noble Lords who have spoken for their support, not only the noble Lord, Lord Lucas, but also the noble Lord, Lord Sharkey, the noble Baroness, Lady Brinton and the noble Lord, Lord Deben, whose ministerial experience I am very grateful for, as well as the noble Baronesses, Lady Gardner and Lady Howe.
The problem with the voluntary scheme is that only the good agents belong. They are the members of the Association of Residential Letting Agents, which does not just get you in there—it educates you, awards certificates and does training. Very interestingly, ARLA also gets feedback from the ombudsman scheme to know what is going wrong and help them maintain their standards. The problem with the idea of using unfair contract terms is first that the consumer—whether it is a landlord or a tenant—simply does not know to go to them. Secondly, if an individual trading officer deals with something they will probably just deal with that one letting agent and there will be no feedback or ongoing case. I do not agree that this cost is disproportionate. The noble Baroness, Lady Gardner of Parkes, gave the figure of £150 to belong to a scheme: this is not going to put any letting agents out of business. The Minister also seemed to suggest that if any letting agents did go out of business—and they will only go out if they are bad and run off with clients’ money—this would somehow lead to less property. It will not: they will just go to a decent agency. It does not affect the number of properties on offer to tenants.
“Abolition of Agricultural Wages Board and related English bodies
(1) The Agricultural Wages Board for England and Wales is abolished.
(2) Every agricultural wages committee for an area in England is abolished.
(3) Every agricultural dwelling-house advisory committee for an area in England is abolished.
(4) Schedule (Abolition of Agricultural Wages Board and related English bodies: consequential provision) (abolition of Agricultural Wages Board and related English bodies: consequential provision) has effect.”
Viscount Younger of Leckie
The Agricultural Wages Board and Agricultural Wages Committees were set up in their current form nearly 65 years ago. The board was established at a time when there was little statutory employment protection for workers. Today the situation is very different and all workers are protected by the National Minimum Wage Act and working time regulations. Before I proceed any further, I want to reassure noble Lords that this Government firmly support the national minimum wage.
The Agricultural Wages Board is the only remaining sector wage council—all others have now been abolished. There is now no compelling reason why the agriculture sector alone should continue to be subject to a separate statutory employment regime. Let me explain why.
The agriculture industry today is very different. First, such businesses are often not just dependent on agriculture. Technological developments and increased mechanisation mean that there is no longer such dependency on manual labour in order to carry out agricultural functions. This has enabled businesses to expand and take on other, complementary work. The sectors within agriculture are therefore becoming increasingly diverse and many farm businesses now carry out non-agricultural activities alongside more traditional farming enterprises—for example bed and breakfast, and farm shops, where workers would not necessarily be covered by the agricultural wages order.
The agricultural wages order, which is made each year by the Agricultural Wages Board, takes no account of these changes within the agriculture industry. The process is one of “one size fits all” and this imposes a rigid and no longer appropriate structure on what are in reality nowadays myriad businesses that come under the umbrella term of “the agriculture sector”. The order is overly complicated and its provisions are wide-ranging and restrictive, hampering the ability of the industry to offer more flexible, modern employment packages. These amendments will end the separate statutory employment regime for agricultural workers in England and Wales and make amendments to the National Minimum Wage Act to bring the agricultural industry within the scope of the national minimum wage. The Government will also make amendments to secondary legislation to ensure that agricultural workers are adequately protected by the working time regulations.
The abolition of the Agricultural Wages Board and the associated agricultural minimum wage regime will enable farmers to offer terms and conditions for new workers that suit their particular circumstances and take account of the requirements of the specific farming sector. They will also be able to agree more flexible terms with existing workers by mutual consent. It will make it easier for farm businesses to employ workers, including taking on new workers, and encourage longer-term employment, thereby boosting growth and creating job opportunities.
The abolition of the Agricultural Wages Board will also mean that a single employment regime applies to all types of activities. This will bring transparency for both employers and workers, which is increasingly important given the diversity of farm businesses, not least in the interests of fairness and as the distinction between agricultural and non-agricultural activities becomes blurred. Even within the agricultural sector there can be confusion as to whether activities are covered by the agricultural wages order. For example, where a business packs and trims salad produce that is both grown on the farm and bought in, the packing of the home-grown produce is covered by the agricultural wages order, whereas the packing of the bought-in produce may not necessarily be. There are similar examples of confusion in the dairy and livestock sectors. Abolition will lift administrative and regulatory burdens from farm businesses and enable them to focus on their core business activity. It should encourage farmers to offer more in the way of longer-term employment, including the payment of annual salaries. All of this will encourage the development of a sustainable and prosperous industry for the future.
For the avoidance of any doubt, let me offer some further reassurance. Agricultural workers who have contractual rights reflecting the terms of the agricultural wages order at the time of the abolition of the board will continue to have those rights until such time as the contract might be varied by agreement between the employer and the worker or until the contract comes to an end. Moving forward, it is important to bear in mind that if agriculture-based businesses want to retain and attract able and well qualified people, they need to offer remuneration packages that are competitive. We know that the majority of workers in the agriculture sector already benefit from terms and conditions that are above the agricultural minimum wage rates. Currently, about 60% of permanent agricultural workers over the age of 22 are paid above the agriculture wages order minima. There is no reason why they should find themselves in a worse position in the absence of the board. The Government have asked the Low Pay Commission to include agricultural workers in its considerations when providing recommendations for all of the elements of the national minimum wage in order to achieve the smooth integration of agricultural workers in England and Wales.
Most of the functions of the 15 Agricultural Wages Committees in England have now lapsed in practice or been replaced by wider legislation. Their only remaining active function is to appoint members of the 16 Agricultural Dwelling House Advisory Committees in England, which are sometimes known as the ADHACs. The committees were established under the Rent (Agriculture) Act 1976 and their function is to give advice to local authorities on rehousing agricultural workers. As a result of changes in housing legislation, the number of requests for advice from ADHACs has declined significantly, to fewer than 10 in each of the last two years. There is no statutory requirement to consult an ADHAC and many local authorities happily take decisions on rehousing without such advice. I hope the Committee agrees that these 31 regional committees in England are now effectively defunct bodies and their continued existence at public expense cannot be justified. With regard to the abolition of the ADHACs in England, I want to assure noble Lords that there are no plans to change the provisions in the Rent (Agriculture) Act 1976 which give security of tenure to protected tenants, and therefore the amendments will not in any way jeopardise the position of tenants with protected tenancies under the 1976 legislation.
In summary, these amendments will bring employment practices in the agricultural industry into the 21st century, enabling sustainable growth for the future. They will also remove a number of obsolete public bodies and contribute to the Government’s wider programme of public body reform. I hope that, in the light of my remarks, noble Lords will accept them. I beg to move Amendment 28ZK.
Lord Whitty
My Lords, the Minister must realise that this is a bit of a controversial item. That is not surprising because in their latest impact assessment of the outcome of this measure the Government’s own best estimate is a cut in the living standards of rural workers in England by £236 million over the next decade.
Before I get on to the substantive points, of which I have many, I need to make a procedural point. I am not clear why we are debating the abolition of the Agricultural Wages Board in this Bill on this occasion. The amendments were put down two days before Christmas, without any prior warning. The Bill has been through the House of Commons. There was no indication in the House of Commons that the Government were going to come forward with this amendment in the House of Lords, which is very unusual, and, of course, everybody in the industry—on both sides of the industry and in Parliament—thought that the wages board was dealt with at primary-legislation level under the Public Bodies Act well over a year ago.
To implement that, the Government have to follow Section 11 of the Public Bodies Act, which lays down certain stipulations for bringing forward secondary legislation. It requires a full explanation to both Houses, a proper consultation period, the consideration of alternatives and a special memorandum to be laid before the House before it considers it. Why is this before us today when a procedure is already laid out and it appeared that the Government were prepared to go along that road until very recently? There was no explanation in the letter we got from the noble Viscount’s predecessor nor has there been any explanation from the Minister today. I can think of a couple of procedural reasons why the Government are in a bit of bother on this one. One of them is the Delegated Legislation Committee and the other one can be summarised by saying “Wales”.
Under the Public Bodies Act, the Government are already in serious trouble on a range of ways in which they have tried to bring forward the secondary legislation. The report of the Secondary Legislation Scrutiny Committee indicates that the Act requires a proper 12-week consultation, not the four-week consultation that Defra has sprung on us, and a full impact assessment followed by a government response to that consultation and a memorandum to Parliament. The Government seemed to start down that track, but the Secondary Legislation Scrutiny Committee criticises their behaviour in relation to other public bodies on a number of grounds: the lack of robustness of the government case; inadequate evidence; an inadequate approach to consultation with stakeholders; a failure to consider alternatives; and a lack of arrangements for future monitoring of the outcome. On pretty well all those counts, Defra and the Government are failing in the implementation of the Public Bodies Act in relation to the Agricultural Wages Board, so it must have occurred to the Government that it might be a bit easier to slip it into another piece of legislation, almost when nobody was looking over Christmas.
However, probably the biggest reason relates to Wales. This is, of course, an England and Wales body. As I understand it, the Welsh Government object to its abolition. The Welsh Government would like to see a continuation of statutory provision in agriculture which the Scottish and Northern Irish Governments have decided to have in relation to their own agricultural sector. Of course there is confusion here. If this was dealt with under agricultural legislation, and as agricultural policy is devolved, the Welsh Government would have equal rights to the Westminster Government and we would have to reach agreement with them on this.
Lord Knight of Weymouth
The important thing to remember is that these legal entitlements for the agricultural sector apply regardless of whether your wages are at or above the minimum level set by the Agricultural Wages Board. These entitlements—for one and a half the usual rate for overtime, for example—are there regardless of what you are paid. That is an entitlement in law and we should protect it. I think that it is a good thing for us as parliamentarians to protect these minimum standards for workers, which would go if the Government were successful with their amendment to abolish the Agricultural Wages Board.
Unfortunately, some people do not act as responsibly as the noble Lords who have spoken and declared their interests as farmers. I point to the case of Chris Blakeney of Marden Management Ltd, who has just recently been in court in Swindon, where he changed his plea to guilty in respect of his activities as a gangmaster supplying 500 workers to farms across the country from his base in Calne. There are bad people around exploiting workers. When this protection goes, that exploitation is likely to grow.
A good argument has been made on this side of the Committee for the retention of the Agricultural Wages Board. What about the arguments against? I looked at the letter from the noble Lord, Lord Marland, the noble Viscount’s predecessor, to my noble friend Lord Stevenson on 19 December, when this amendment was announced. I note the manuscript amendment to the letter written by the noble Lord, Lord Marland, in which he said, “I reluctantly agreed to this—decision above my unpaid grade!”. That clearly suggests that the noble Viscount’s predecessor thought that this was all a bit dodgy. I would be interested to know whether the noble Viscount agrees with his predecessor about the dodginess of this amendment.
I then looked at the letter from the noble Lord, Lord De Mauley, whom I am pleased to see in his place. I think that we have answered most of the questions. The noble Viscount repeated the notion that this will improve employment but, as we have said, the impact assessment—on page 19, in paragraph ii, headed “Employment”—says:
“This effect is highly uncertain, and may therefore not be significantly different from zero”.
The Government anticipate no employment effect at all.
We have heard the arguments around whether agriculture is unique—people take different views on that. We have also heard the concerns about consultation. The lack of consultation on the amendment is truly shocking, given that 154,000 workers are directly covered by it. Four weeks’ consultation is completely inadequate for such a measure. There is then the problem of the number of people who were not included in the list of consultees. Action with Communities in Rural England was excluded. The various training organisations, such as Lantra, were not included. Housing bodies, such as the National Housing Federation and Shelter, were not included, even though the housing committees are being abolished. Even the Arthur Rank Centre was not included, despite the important role that we know the church plays in rural communities.
The consultation has been shocking. The procedure has been ignored. I would have welcomed a four-week consultation if it had been for the ash trees, for which we had an eight-week consultation; that matter was urgent. There was a really good reason for a short consultation on ash tree disease and four weeks would have been great; but we chose to go for eight weeks where there is an urgent need but four weeks to get rid of something that has been in existence since 1917. That makes no sense to me. The proposal is then brought here to Grand Committee where issues debated are supposed to be non-controversial, and we have a big row about whether the board should be abolished.
There is principled opposition and the noble Viscount should now tell us that he will withdraw his amendment and go away and reflect on it. He can then choose to bring it back on Report but it is not appropriate for the Grand Committee.
Viscount Younger of Leckie
My Lords, this has been a helpful and somewhat lengthy debate, which has included some passionate speeches from all sides of the Committee. I thank all noble Lords for their contributions.
I will clarify a couple of points. First, in relation to a point that was made by my noble friend Lord Plumb and led to a mini-debate concerning the figures in relation to retaining the Agricultural Wages Board, my noble friend is right to highlight the cost of the board. I have been advised that over recent years, the annual cost of running it has been around £180,000 and, for the ADHACs and the AWCs, the cost is around £20,000. That is just for the record. Secondly, the noble Lord, Lord Hunt, brought up the issue of rates of pay for farm managers. He quoted a rate of £14.10 per hour. I should like to clarify, and I hope he will agree, that he quoted the overtime rates, not the basic rates. The minimum hourly wage rate is £9.40 and the overtime rate is £14.10.
I will address directly some of the procedural issues that have been raised by noble Lords. The first issue was the question of whether the Agricultural Wages Board met the requirements of the Public Bodies Act procedures. This was raised by the noble Lord, Lord Whitty, my noble friend Lord Plumb, and the noble Lord, Lord Hunt of Kings Health. The Public Bodies Act is only one legislative route open to the Government to abolish the board. It is not the only route and it is perfectly open to the Government to decide upon another legislative option.
It would be politic to explain a little more about this. The Public Bodies Act created a specific set of arrangements for the reform of a wide range of public bodies by means of secondary legislation, which included the consent of Welsh Ministers, even where they exercised only minor functions. Welsh Ministers have specific, minor functions under agricultural wages legislation, for example in relation to the appointment of members of the Agricultural Wages Board, and ministerial consent was therefore needed to the proposal to abolish the board under the Public Bodies Act. The Welsh Government refused to give consent without powers to set agricultural wages and other terms and conditions being transferred to the Welsh Ministers. The Government could not agree to this for two main reasons. First, we regard this as a non-devolved matter relating to employment and, secondly, this would involve using the Public Bodies Act to extend devolution in a way that was never intended. I hope that that goes some way to explain why the Agricultural Wages Board stood out on its own.
Lord Howarth of Newport
Will the Minister also be good enough to explain to the Committee why it is acceptable for the Government to use the Bill to alter the effect of the Public Bodies Act, whereas it is not acceptable for the Opposition to use the Electoral Registration and Administration Bill to alter the effect of the Parliamentary Voting System and Constituencies Act?
Viscount Younger of Leckie
I note the point that the noble Lord is making but I was addressing purely the issues relating to the Agricultural Wages Board. I do not want to address or make a comparison with any other issue.
Lord Whitty
I am grateful to the Minister for confirming that one of the reasons for the change of tack by the Government is the Welsh situation but he is surely wrong in his remarks on devolution.
The Agricultural Wages Board has always been dealt with by the agriculture department. Well before political devolution, there was a separate devolution to the Scottish agriculture department. There is a separate arrangement in Northern Ireland. The employment issue falls to the United Kingdom. There is no difference in agriculture between Wales, Scotland and Northern Ireland, so why is the Minister prepared to accept that there should be devolution to Scotland and Northern Ireland, quite rightly, but to deny Welsh Ministers’ request, in the light of the decision in relation to England, to have a devolved body in Wales?
Viscount Younger of Leckie
My Lords, it is not for me to say it is only that. This is an historical fact, and I was just setting out the background to this. This is why the Agricultural Wages Board has remained separate. Now, in this Bill, we are looking to sort this out.
Lord Elis-Thomas
I apologise; I have been unable to follow the whole debate, as I have been sitting in the National Assembly in Cardiff.
Is the Minister aware of the statement issued yesterday by the Counsel General for Wales in which he proposes to refer the whole matter to the Supreme Court if the Minister persists with the current policy?
The Deputy Chairman of Committees (Lord Faulkner of Worcester)
It might be for the convenience of the Committee if I remind the Committee that the Companion says:
“Members of the House who are taking part in a debate are expected to attend the greater part of the debate. It is considered discourteous for Members not to be present for the opening speeches, or at least the speech before and that following their own, and for the winding-up speeches”.
Viscount Younger of Leckie
I will move on to the issues that have been raised about the consultation period. Several noble Lords raised this issue, including the noble Lords, Lord Whitty, Lord Howarth of Newport and, indeed, Lord Knight of Weymouth.
The policy on the abolition of the AWB and related committees was first announced in July 2010, so there has been plenty of time for stakeholders and interested parties to make their views known. In particular, key stakeholders had the opportunity to do so during meetings of the Agricultural Wages Board and the Agricultural Wages Committees. The department felt that a four-week consultation period was proportionate and realistic, given the length of time that the policy had already been in the public domain. This is also in line with the Government’s new consultation principles.
In this respect I will address a point raised by the noble Lord, Lord Hunt, when he expressed concerns about those principles. The new principles allow for a tailored approach to the circumstances and needs of a particular case. Twelve weeks is not necessary in every case. The principles say that the timeframes for consultation should be “proportionate and realistic”. The department considers that the timeframe for this consultation was appropriate, given that the policy had been known for some time, as I explained a little earlier.
As mentioned, we also sent the consultation document to 13,000 bodies and held six meetings throughout the country to enable views to be heard. This very much involved Defra, which was also very much involved in disseminating information to those bodies and to many businesses to make them aware of the launch of the consultation.
Lord Howarth of Newport
I apologise for troubling the Minister again, but would he also explain, because I think people in Wales would be very interested to know his account of this, why one week’s consultation was good enough for Wales when four weeks was allowed for England?
Viscount Younger of Leckie
I have to say that it was news to me—I have heard it today for the first time—that there was one week’s consultation. It is my clear indication that it was not one week. It was a lot longer than that. I do hope that it was at least four weeks, but I will certainly get back to the noble Lord to clarify this, as it is important.
The noble Lord, Lord Whitty, in expressing concerns about the consultation responses, also stated that he wanted clarification. On the question of where the consultation responses are, all the responses are publicly available in the Defra library. Moreover, Defra officials specifically alerted the former Unite leader to the availability of the responses.
On the content of the responses, it is worth pointing out to noble Lords that there were 939 respondees, of which 345—37%—agreed with the proposal to abolish the Agricultural Wages Board; some 575—61%—were against, and 2% were “don’t knows”. The main point I want to make is that of the 575 against, 242 came from the same website.
Lord Hunt of Kings Heath
With the greatest respect, I imagine that some of those people represented about 157,000 workers, so it seems to me that that is not at all unreasonable.
Viscount Younger of Leckie
If the noble Lord prefers, I can get back to him—I will, indeed, get back to him—with more details concerning this response. I was purely expressing some facts concerning the response.
Lord Hunt of Kings Heath
With respect, it is not unusual for organisations to send notes to their members detailing changes that are going to be made and their implications. The noble Viscount seems to be saying that because these figures came through websites—I think he mentioned five websites—somehow they should be discounted. Surely that cannot be right. Is the Government’s new approach to consultation to make judgments about who they are going to listen to and to discount those responses that they do not like?
Viscount Younger of Leckie
With respect to the noble Lord, I did not say that I was discounting them. I was just producing some facts. However, it is strange that such a high number of responses came from the same website. I hope that that is a reasonable view to express. As I say, I shall be delighted to get back to the noble Lord with some clear figures and a response to that.
The noble Baroness, Lady Donaghy, raised the question of whether Northern Ireland or Scotland had been asked for a view on the abolition of the Agricultural Wages Board. I should clarify that the Agricultural Wages Board in Northern Ireland and the Agricultural Wages Board in Scotland constitute separate bodies and it is for their respective devolved Governments to take a view on their future.
The noble Lord, Lord Whitty, asked about the terms and conditions of farmers and their pay and sick pay under the current regime. Having two systems which may apply on the same site for the same organisation is not ideal. This measure obviously covers agricultural workers and will cover others who fall into the non-agricultural sector. Surely it is more confusing and difficult to operate such a system. As I said in my opening speech, farm businesses are increasingly diverse and carry out non-agricultural activities.
The noble Baroness, Lady Donaghy, asked why there was a difference between the first and second impact assessments. The first impact assessment was informed by independent research which compared the agricultural sector with the forestry and fisheries sector in order to assess the effect of the Agricultural Wages Board minimum wages. However, this did not allow for the fact that forestry is covered by an agricultural wages order. Since the consultation, the contractors have revised the analysis to correct this.
Lord Whitty
My Lords, does that mean that the Government stand by the second impact assessment? If it does, it undermines everything that has been said in favour of abolition of the wages board and the argument that that will make no difference, given that the second impact assessment says very clearly that over the next 10 years agricultural workers will lose £250 million worth of employment income. Let us be absolutely clear: if the Government, the noble Viscount’s department and Defra—the noble Lord, Lord De Mauley, is present—stand by the assessment, the removal of the Agricultural Wages Board will clearly lead to a serious reduction in wages in the agricultural sector.
Viscount Younger of Leckie
The intervention of the noble Lord allows me to move on to focus on the impact assessment. I do not recognise the figure that he has brought up. The impact will be between nought and £150 million.
Lord Whitty
To clarify, there is a range, but I am using a figure close to the best estimate which amounts to about £250 million.
Lord Whitty
I am quite happy to have another debate about hunting. I understand, however, that the Prime Minister is not prepared to pursue it. I have not seen the devastation in jobs in hunting since the hunting Act was passed, but let us put that to one side. All I was asking the Minister was whether he stood by his own department’s calculations of the effect on wages in the agricultural sector of abolishing the board. It is a straightforward question on which I would like a clear answer: if he does still accept it then everything we have been saying on this side is correct and there will be a serious detrimental effect. If he wishes to change it, however, I suggest he produces a different impact assessment before we reach Report.
Viscount Younger of Leckie
I will do my best to answer the noble Lord’s question. Our figures tell us that the impact assessment for new workers will be from nought to a worst-case scenario of £150 million. However, as I mentioned in my opening speech, there is no reason to suppose that the 60% of workers who are currently on a contract will not remain on their existing contract. Noble Lords will know that, if you are an employer, you cannot suddenly change or reduce a contract between two people.
The reality will depend on how farmers use the increased flexibility that will result from the abolition of the Agricultural Wages Board. Many workers are already paid above the agricultural minimum wage, so there is no reason why there should be a change. Moreover, the underlying labour market conditions suggest that workers will be in demand and farmers will need to offer competitive packages to attract and retain skilled and qualified staff. I am afraid that the evidence is against the noble Baroness, Lady Donaghy, who was claiming that the jobs would not be available and farm workers would be leaving the sector. I do not believe at all that that will be the case.
I am also grateful for the intervention from my noble friend Lord Plumb. It is encouraging to note his comments and all the efforts that he has been making in encouraging new workers into farming. I am also grateful for the intervention from my noble friend Lady Byford who, quite rightly, pointed out the importance of ensuring that there were some good working practices that will be retained within the agricultural sector.
The noble Lord, Lord Myners—who is now back in his place—spoke about the difference between the Low Pay Commission and the Agricultural Wages Board. This is exactly the point: there is no need for two different bodies both assessing low pay issues. That plays into our hands as to why we believe that it is right to abolish the Agricultural Wages Board.
Lord Myners
My Lords, the Minister made what I thought was a rather unnecessary remark about the fact that I was absent from the Committee for not more than five minutes—in a debate that has run for two and a half hours, and I was here for about an hour before that. I will not explain to noble Lords why I chose to leave the Room for five minutes, but for the Minister to make a point on that shows how desperate he is to keep the faith of his supporters.
On the subject of people leaving the Committee, the noble Lord, Lord Cameron of Dillington, who is no longer in his place, asserted his view that he did not think that the benefits would be passed on to supermarkets. I question that given that in their evidence to the consultation the supermarkets have been hugely supportive. One wonders why they are supportive of this proposal if they do not expect to benefit. If that is also the view of the Government, can the noble Viscount explain to us in very simple terms that if you have a transferred benefit here—taking £250 million out of the rural economy—where is that £250 million going? There has to be an equal and off-setting amount. Where does the Government believe the benefit will accrue?
Viscount Younger of Leckie
First, I apologise to the noble Lord. There was absolutely no derogatory comment intended.
I do not believe that the money will be taken out of the agricultural economy. The whole point of making this change and abolishing the Agricultural Wages Board is to create a more flexible environment and to enable farmers to recruit new workers.
Lord Myners
There is nothing in the Agricultural Wages Board that in any way prevents a farmer from paying more, as indeed the noble Earl explained to us. This is “flexibility” used as a euphemism. It is a flexibility that only moves in one direction. The Minister’s argument simply does not withstand any close and critical examination.
Viscount Younger of Leckie
I think I should repeat to the noble Lord that the Agricultural Wages Board has been in existence for 65 years. I realise that that is not necessarily a reason for changing but there are still some great anachronisms within the system. Secondly, part of the point is to release farmers from the administrative burden of the two-tier, dual system. So I stick by my view that this is long overdue and it is right that we should take this step.
The key priority for this Government is to encourage economic growth. The Government firmly believe that the abolition of the Agricultural Wages Board and the agricultural minimum wage regime is in the long-term interests of all those within the industry. It will enable the sector to meet the challenges of increasing domestic food production and help secure its long-term prosperity. The abolition of the related Agricultural Wages Committees and Agriculture Dwelling House Advisory Committees in England will also contribute to the Government’s public body reform programme and will remove a number of redundant bodies, as mentioned earlier. I hope that the Committee will accept the amendment.
The Deputy Chairman of Committees
The Question is that Amendment 28ZK be agreed to. As many are of that opinion will say “Content”.
Viscount Younger of Leckie
My Lords, the amendments seek to extend the role of the adjudicator introduced by Clause 63 of the Bill. Noble Lords will be aware that the reforms to the debtor-initiated bankruptcy process remove the order-making function from the court, and replace it with a new administrative process. This provides an opportunity to introduce a modern, electronic and more efficient application process, and was indeed first consulted on by the previous Government. A similar process has been successfully operated in Scotland since 2008, as the noble Lord, Lord Stevenson, has already mentioned. The adjudicator will be required to consider each application and decide on an objective basis whether or not the criteria for making a bankruptcy order are met. If they are, the adjudicator must make a bankruptcy order.
The first four of these amendments seek to impose a requirement on the adjudicator to consider whether bankruptcy is the right option for the applicant, and whether an alternative debt solution may be more appropriate. The proposal is that the adjudicator should have a discretion to hold off making a bankruptcy order for a period if he or she feels the debtor may benefit from taking further advice.
The amendments may be motivated by a power that the court presently has to refer a debtor who has presented a bankruptcy petition to an insolvency practitioner in a case where an individual voluntary arrangement may be a viable alternative to bankruptcy. I understand, however, that the courts very rarely make use of this power.
I reassure noble Lords that before making their bankruptcy application, applicants will be strongly encouraged to take independent debt advice to ensure that bankruptcy is really the right option for them. My officials will work with the Money Advice Service and providers within the debt advice sector to ensure that applicants have the information they need to make an informed decision. Furthermore, within the electronic application process itself, we propose to include a series of warnings to ensure that applicants are made fully aware of the serious implications of bankruptcy before they make their application. We will also ensure that the process flags up any alternative debt remedies that may better suit their circumstances.
The Government consider that these safeguards are sufficient to ensure that debtors are empowered to make an informed decision as to whether or not bankruptcy is the right option for them before they take the serious step of making a bankruptcy application. The Government believe that these amendments would unnecessarily complicate the process by requiring the adjudicator to exercise discretion on a case-by-case basis. That would increase administration costs with an impact on the application fee. It would also delay access to debt relief for the debtor, who would have elected for bankruptcy in full knowledge of their other options.
Amendment 28ZKE seeks to give the adjudicator power to apply to the court for directions in relation to any matter arising in connection with the bankruptcy application. The policy intention is to ensure that the system delivers better outcomes by focusing the court’s role and resources on matters of dispute that rightly require judicial intervention and expertise. The onus will be on the debtor to show that he or she meets the relevant criteria. However, the application process will be designed to help the debtor and to ensure that the adjudicator has all the information needed to reach a decision. The adjudicator will also be able to request such additional information from the debtor as he or she considers necessary for determining whether a bankruptcy order should be made.
The Government recognise that complex issues may arise in a small minority of cases, especially around the jurisdictional criteria and where the debtor’s centre of main interests is located in England and Wales. However, persons appointed as adjudicators will have the skills they need to do the job without the need for recourse to the court. It is acknowledged that the court still has a role to play. Where the adjudicator refuses to make a bankruptcy order because the criteria are not met, the debtor will have the right to appeal to the court. That provides a route to court in those cases where it is needed. The court will also continue to determine creditor-initiated bankruptcy petitions, which are more likely to be complex and contentious.
For these reasons, the Government consider that this amendment would confer an unnecessary discretionary power on the adjudicator. In the light of these reassurances about the application process and the recourse to court for debtors, I hope that the noble Lord will agree to withdraw the amendment.
Lord Stevenson of Balmacara
I thank the Minister for that response. I sense within what he has said that he shares some of my aims in tabling these amendments, and I welcome that. However, I am still a bit perplexed. If you are prepared to go down the route of ensuring that those responsible in these processes flag up the options that are available to people—as I tried to explain in my opening remarks, there are many people for whom bankruptcy is the wrong solution; in the rather overused phrase, it is the nuclear option—and you are going to ensure that appropriate warnings are put on to the application forms, we are very close indeed on this point. It therefore boils down to a question of whether there is a bit more discretion in the system than perhaps the Minister is prepared to admit. I find that puzzling.
I tried to explain in my opening remarks that there is an awful gap for a debtor who is attempting to resolve a crisis because the only two options are to trust an adjudicator, and if the decision goes against the debtor, to find, finance and pay fees for an appeal to the court. As the noble Viscount has said, there are areas where the court will be better placed to make these decisions. The other point he made was the need to make sure that, in the first instance, there is sufficient discretion in the appointment of adjudicators who have the sensibility to make sure that people are involved. The noble Viscount has hinted that further discussions may take place between his officials and the appropriate authorities. I would urge that they involve the main bodies that are actually involved in direct dealing with those who have debt problems and not with the Money Advice Service. Obviously it will have an interest in this, but I think we need to speak to the experts in this matter. Perhaps we could have a side exchange on how those discussions go and whether the right people are being consulted. I would then be less concerned about them.
We may have to come back to this issue because to me it feels too tight, but perhaps further experience will be sufficient. On that basis, I shall withdraw the amendment.
“ In section 293 (summoning of meeting to appoint first trustee), in subsections (2) and (3) for “court” substitute “prescribed person”.
In section 295 (failure of meeting to appoint trustee), in subsection (3) for “court” substitute “prescribed person”.”
Viscount Younger of Leckie
My Lords, these amendments make minor and technical changes to the Insolvency Act 1986 and relate to the reforms to the debtor bankruptcy petition process introduced by Clause 63. The reforms will remove the existing requirement for the indebted individual to present a bankruptcy petition to court and replace it with a new administrative process. Presently, certain statutory notices are required to be filed at court during the course of a bankruptcy. Most of these requirements are presently set out in the Insolvency Rules. However, a small number of requirements are contained in the Insolvency Act and are the subject of these amendments.
The proposed amendments would ensure that Ministers, in consultation with stakeholders, are able to modernise and make more efficient all of the filing and document inspection processes governing both debtor and creditor-initiated bankruptcies without the need to amend the Act in the foreseeable future. It is anticipated that, where the bankruptcy is commenced by way of the debtor making an application to the adjudicator, documents generated will not necessarily be routinely filed at court. While the Government have no intention at present to change the current policy of filing notices at court in relation to creditor-initiated bankruptcies, it is possible that in the future the Government may be minded to extend some or all of the filing efficiencies introduced in relation to debtor-initiated bankruptcies to creditor-initiated bankruptcies.
The strong policy preference is that such detailed procedural requirements, including those relating to filing, should be in the rules and not in the Act. This is in line with a wider government agenda to consider the overall structure of insolvency legislation with a view to ensuring consistency in what is contained within the primary and secondary legislation. One of our aims is to remove detailed prescriptive requirements from the primary legislation wherever possible. The amendments also make other minor and technical changes that are consequential to the reform of the debtor petition process. I beg to move.
Lord Stevenson of Balmacara
My Lords, I have listened carefully to the Minister. I find that these proposals are in keeping with the general approach that has been taken and I have no particular objection to them. I mentioned in my contribution on the earlier amendments that I was much taken by the experience in Scotland; I was trying to suggest that there are lessons to be learnt from there. I make this point, which I think would be worth reflecting on. The new bankruptcy Bill that is about to go through the Scottish Parliament, which I am sure officials are well briefed about, seems to take as its starting point a slightly different perspective to those with debt problems from the one that we are taking in England and Wales. I slightly regret that. I am not overstating it when I say that there is an ambition north of the border—is there not always an ambition north of the border?—to create what is called there, possibly in correspondence rather than in the main line, a financial health service. Perhaps the Minister could reflect on whether there is some element of that in what is being proposed in the totality of the amendments that we have been considering today.
The point that I am driving at is that, if we focus only on the processes when people are already facing imminent bankruptcy or worse, we are not picking up the sensibility that I think is infusing the thinking by the Accountant in Bankruptcy and in the Scottish Parliament on these matters, which is that far greater attention should be placed on the role for public involvement in the borrowing and lending processes that affect individuals. Too many people find it very easy to borrow and extremely hard to save. That balance is completely wrong. We should have a much more balanced approach to how these things operate and how we regulate in a space within which people extend credit in order to provide the sort of services that they wish to use during their lives but at the same time acquire debts that have to be serviced and eventually repaid.
There is a bigger and better conversation to be had around whether the 19th-century and 20th-century notions of debt are as appropriate as they should be in the 21st century to the way in which people operate. At one level—I do not want to extend this debate, but I think that this is an important point to put on the record—there are many instances where we see behaviour in the marketplace that is counterintuitive and absurd. I am thinking particularly of payday lenders. The problems relate to the flow of credit to those who need it and the pressures under which they operate. The fact that people are prepared to take out these ridiculous loans at absurd interest rates and on impossible repayment terms is not a reflection of iniquity on the part of the lenders; it is a reflection of something that is going on in society. We are not tapping into that in the proposals that we are hearing today. Yes, it is sensible to take away the courts’ role as a primary source for all these bankruptcy applications but only, I would argue, if we are also aware of and alert to the other ways in which people can be assessed for indebtedness and helped to find an appropriate way forward. On that basis, I find this general approach right but possibly lacking context. I wonder whether, in his closing remarks, the Minister could make a few comments on that area.
Viscount Younger of Leckie
I listened carefully to the noble Lord, Lord Stevenson, and I am very grateful to him for his full response. I very much take note of the issues that he raised concerning the need to provide better help to those who unfortunately get into debt. I think that the best thing to do is to follow up his suggestion to take this further in discussion outside this Committee.
“ In section 298 (removal of trustee and vacation of office), in subsections (7) and (8) for “court” substitute “prescribed person”.
(1) Section 299 (release of trustee) is amended as follows.
(2) In subsection (1)(a) for “to the court” substitute “under this paragraph to the prescribed person”.
(3) In subsection (3)(a) for “court” substitute “prescribed person”.”
Viscount Younger of Leckie
My Lords, it is fair to say that, as a Scotsman, I do not do Christmas presents after Christmas. Nevertheless, I am grateful to my noble friend Lord Lucas for initiating these amendments. Before I continue, I cannot yet confirm the dates for the extended Committee work, but we will make sure that noble Lords hear in good time.
The amendments aim to allow consumers to do more with copyright materials that they have already bought. Amendment 28A seeks to ensure that personal licenses to use copyright can be resold or passed on to another person. This would apply, for example, to those licences that accompany e-books or computer software. This is an important area and one of which the Government are keenly aware. However, the law in this area is still developing. The extent to which resale of licences is already allowed under European law is not yet clear. The cases that have been considered have dealt with specific limited circumstances. I note the comment from my noble friend Lord Clement-Jones who described the proposal as incredibly sweeping. Perhaps it is not surprising that I would say that there should be careful consideration before action is taken.