Agricultural Wages Board

Andrew George Excerpts

Wednesday 24th April 2013 Commons Chamber

[Mary Creagh]

That is very interesting. I was just reading some of the responses to the consultation. One farmer said:

“I am a farmer with 3 employees. The annual AWB wage award has been an invaluable tool to help determine wage awards...We are overburdened with enthusiastic government departments issuing guidance rules & legislation...The annual guidance for the level of wage awards is one of the few useful tools”.

[Andrew George (St Ives) (LD)]

It is quite clear that the proposal to abolish the AWB is not driven by a worry that it holds pay back or conditions down.

[Sir James Paice]

Yes, it is.

[Andrew George]

If the Government are arguing that it is being abolished to enhance pay and conditions, we will hear that from the Front Bench in a moment. Does the hon. Lady agree that we do not want simply to go the lowest common denominator?

[Mary Creagh]

I have been making that point repeatedly. The hon. Gentleman has 1,110 people in his constituency who will be affected. I am afraid that we heard some noises off from the right hon. Member for South East Cambridgeshire; he said, “It is,” so it seems that coalition divisions are once more being exposed, as I thought they would be. I look forward to having a chat with the hon. Member for St Ives (Andrew George) in our Lobby during tonight’s vote.

I want to return to the role of the major supermarkets, which have silently supported the abolition of the AWB. Even the farm manager of the Duchy of Cornwall, which supplies Waitrose, responded to the consultation in support of abolition. The Duchy Originals website talks about food that “is good” and “does good” and says that it raises money for charity, but rural workers should not have to rely on charity to feed their families at the end of the week. Today’s figures on food banks, many of which are springing up in rural areas, give the lie to the fact that there is any overpayment in rural areas.

The supermarkets trumpet their commitment to fair trade, but why is that only for workers in developing countries? Why not here? They trumpet their corporate social responsibility programmes in communities, yet are silent when it comes to reducing pay in their own supply chains. I quote again from the responses to the consultation. A vegetable producer in the north-west said:

“We are unfortunately in an industry where we are seeing increasing pressure from retailers to lower prices of supply of produce,”

and added that

“some of our produce price returns are no higher in 2012 than they were over 10 years ago.”

This has real implications for the sustainability of the food supply chain and the UK’s self-sufficiency, which has already fallen to about 55%, making us much more vulnerable to global shocks. The supermarkets have got to start thinking long term. We supported the Government’s creation of the groceries code adjudicator, although we would have preferred an ombudsman. We want fairness in the supply chain, but that does not stop with the horticultural businesses. It has to feed down to the level of the individual workers as well.

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[Mr Paterson]

I have to disappoint the hon. Gentleman by telling him that I do not have an estate, and that I do not have any direct employees who take the agricultural wage.

I shall take up my case again. In addition, I want to give businesses the tools they need to have the confidence to invest, adopt and benefit from innovative technologies and farming practices.

[Andrew George]

Those tools will be extremely helpful, especially for research and development, but in relation to today’s debate, will my right hon. Friend tell me whether he thinks that agricultural wages and conditions will go up or down as a result of the abolition of the AWB?

[Mr Paterson]

As I said earlier, I am absolutely confident that there is a great future for the industry, and that there will be an increase in demand for labour, which will create pressure to drive wages up. Already, under the AWB, the vast majority of people in the industry are paid well above the minimum wage and well above the AWB minimums.

Another key area in growing the economy is the roll-out of superfast broadband to rural areas, and increasingly wider access to 3G and 4G networks will also make it easier for farm and rural businesses to operate.

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[Pat Glass]

I am not the Government, so I cannot respond to that question. Had I been the Government, I would have stuck to their rules and standards for consultation. They did not.

What did the Government do? Did they conform to Cabinet Office standards for consultation? Did they carry out an extensive 12-week consultation, avoiding main holiday periods, and making extensive efforts to ensure that all those affected, as well as all those with an interest, had an opportunity to take part? Did they carefully consider the outcomes of consultation in their final decision? Did they consult the Welsh Government, whose agreement was needed for abolition? They did none of those things; they came up with an extremely shabby plan to get round them.

The Government redefined the Agricultural Wages Board as a “regulatory reform” to avoid the necessity of even trying to get the co-operation of the Welsh Government, and they cobbled together a four-week consultation that failed to meet their own standards on consultations, issued by the Cabinet Office. Even then, 63% of those who responded to that sham and shameful consultation disagreed with abolition, so they were simply ignored.

Having failed to carry out a proper consultation, the Government decided to attach an amendment to the Enterprise and Regulatory Reform Bill and pushed it through the House without debate. When the Government hold something that is clearly a sham consultation over four weeks instead of 12, ignore their own standards, and then ignore the results of the consultation, is it any surprise that people question, and are suspicious of, any public consultation?

[Andrew George (St Ives) (LD)]

The problem was not just the lack of consultation with the public, but the lack of consultation with the House. Those of us who were engaged in the passage of the Public Bodies Bill expected that there would be a full debate on the abolition of the Agricultural Wages Board in the future but, whether through cock-up or conspiracy, we were denied that opportunity.

[Pat Glass]

I agree with the hon. Gentleman. This is not a decent way for a Government to behave. Hon. Members start to feel superior about foreign Governments that we consider illegitimate when we see them behaving in this way. We criticise such behaviour in others, and it is not what the House and the country expect from our Government.

Why are the Government so desperate to abolish the Agricultural Wages Board that they will breach their own consultation and deny debate in the House? Is the board excessively expensive? Does it act illegally? Is it so far beyond reform that the only way to deal with it is by abolishing it in this high-handed manner? It is a public body that costs very little, yet decides the terms and conditions of agricultural workers. It sets rates for young workers, including those under 16, who are not covered by the minimum wage. It also sets out maximum deductions for tied housing, which affects up to a third of farm workers.

Why are the Government so determined to use whatever means possible to abolish the board? Their only answer is that it is too bureaucratic for farmers, so implementing decent wages and conditions for workers on top of all that form filling to claim EU farm subsidy payments is clearly too bureaucratic. The Government argue that abolishing the Agricultural Wages Board, and hence the agricultural minimum wage regime, will simplify employment practices and remove an unnecessary regulatory burden. The problem for farmers is therefore nothing whatsoever to do with the predatory practices of the supermarkets, but all about the time it takes to read the annual bulletin from the Agricultural Wages Board.

The Government’s impact assessment shows clearly that workers’ wages will fall by up to £34.5 million a year over 10 years as a result of abolition. For new contracts, the change in the value of annual leave, if employers implement statutory terms rather than those under the agricultural workers order, will be up to £13 million a year over 10 years. Farmers’ employment costs that represent transfer payments to the Government and others will fall as wages fall, so the Exchequer will also be hit, and that is before we consider the cost to the public purse of paying the working benefits that agricultural workers will need as their wages fall.

The north-east is the region that has the smallest number of people working in agriculture. That is partly because it is the smallest region and partly because it has the highest rate of unemployment in the country. Nevertheless, 3,360 people in the north-east work on the land. The abolition of the board will have a direct impact on 60 people in my constituency. If we force agricultural workers off the land and cannot attract younger workers, just who do Ministers think will fill these jobs? Let me tell them: it will be people from overseas.

According to the Government’s figures, the abolition of the Agricultural Wages Board will take £260 million out of the rural economy over 10 years. It will take money out of rural communities, village shops, pubs and post offices, and away from everyone who relies on those businesses. Rural communities have already lost local buses, and the Government are set on a national funding formula for schools that has no place for a small schools premium, which will result in the closure of rural schools—hon. Members heard it here first. The abolition of the board will lead to lower wages, poorer rural housing and an increase in the number of immigrant workers on the land. The way in which the Government have brought about the abolition does them no credit whatsoever, yet the real tragedy is not the way this discredited Government have acted, but the real impact that their policy will have on rural communities such as mine throughout the country.

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[Andrew George (St Ives) (LD)]

This is a difficult debate, and I am grateful to the Labour Opposition for having brought it forward. In a point of order after the debate on Lords amendments to the Enterprise and Regulatory Reform Bill last week, I said how strongly I opposed our having had neither a debate or a vote on this significant matter. As I indicated earlier in an intervention, we had only limited opportunities to discuss the abolition of the AWB, among a large number of other measures, in our debates on the Public Bodies Act 2011. We were reassured throughout those debates that the House would have ample opportunity to debate the issue and come to a conclusion on it at a later stage, when a specific proposal was brought forward under the powers in schedule 1 to that Bill. I come at this debate on the basis of a significant disagreement with how the Government have handled the matter and frustration that we are shutting the stable door after the horse has bolted. Nevertheless, it is important to have the debate.

I listened carefully to my right hon. Friend the Secretary of State and did not get the impression that the AWB was being abolished because it was holding back wages and conditions for agricultural workers. In fact, I still have a strong impression that the opposite is true. I know that there has been a lot of speculation about the outcome of the abolition, but I am clear that it is not happening to enhance agricultural workers’ pay and conditions.

I also find it difficult to understand the impression that the Government are giving, given the slogan “We’re all in this together”, which they adopted in their first Budget and which I approve of entirely. One good proposal from the European Commission on the common agricultural policy is to cap the single farm payment at €300,000 and disburse the money saved in different ways. That could have been on the agenda under the previous Administration 10 years ago, but we are where we are. On the one hand, the Government are content to pay cheques of more than £1 million to large farmers who, frankly, usually do not need it. On the other hand, I fear the abolition of the AWB will mean that more public funds need to be deployed to pay the wages of agricultural workers who find their conditions and wages cut, or to pay benefits to those whose standard of living falls below a certain level. In both cases, a lot of public money is involved, in one case enriching large farmers and in the other subsidising poverty in our rural areas. I am not content with that contrast, and I will draw conclusions about it at the end of my comments.

The abolition of the AWB was not in the Liberal Democrat manifesto. It was in the Conservative party manifesto, however, and indeed the NFU made it clear in the lead-up to the last general election that it was very much in favour of the abolition of the AWB. That was certainly the case in my area, so my experience contrasts with that of the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) on that point. One of the NFU’s key asks was the abolition of the AWB, yet when I raised the issue with farmers, I found that a significant number of them were opposed to that policy. They were opposed to it for the reasons the hon. Member for Wakefield (Mary Creagh) has outlined, such as that it would leave them in the position of having to negotiate individually. The collective approach through the AWB provided them with a framework that enabled them to avoid considerable embarrassment and difficulty or having to buy-in human resources consultants to resolve things. My hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) is right: few small-scale farmers employ agricultural workers, but those who do will encounter great difficulties if they have to negotiate these arrangements with their workers.

I have regularly worked with the NFU over many years, not least on the creation of the groceries code adjudicator, on which the Government must be warmly congratulated. I have worked with it on a wide range of issues, and often agree with it and stand shoulder to shoulder with it—but not, I am afraid, on this issue. Regrettably, on matters such as this the NFU tends to resort to becoming a large farmers’ union, rather than an all farmers’ union; I have accused it of that to its face, so I am not saying this behind its back.

Many pertinent issues have already been raised in our debate, and I shall not repeat the concerns expressed about the impact this move will have, and about the Government simply saying, “We have the national minimum wage, so we no longer need an AWB.”

[Mr Spencer]

Can the hon. Gentleman define for me what a large farm is? Is an intensively farmed three-acre poultry farm a large farm? Is a 200-acre dairy farm a large farm?

[Andrew George]

The hon. Gentleman might be drawing me into a different debate, but he knows about standard man days—I do not want that to be interpreted as a sexist term—and the number of jobs a holding generates, or requires in order to be maintained. That is calculated irrespective of the acres covered, because as his question implies, especially in less favoured areas—some of which fall within my constituency—there are geographically very large farms that have low productivity. As the hon. Gentleman rightly says, some farms that are small in acreage are intensively farmed and have high levels of productivity. He makes a good point, but the point I was making about larger farms was in the context of the fact that some—although admittedly very few—receive hundreds of thousands of pounds, or even over £1 million pounds, in public subsidy. He cannot deny that that is the case. Those sums are given to a very few large farms as a result of the arrangements through the single farm payment.

I regret finding myself in this position. I know the Minister of State, my hon. Friend the Member for Somerton and Frome (Mr Heath), has been handed a hospital pass with this issue since taking up his post, and I am enormously grateful to him for the work he is already doing through his conversations and meetings with people in the sector. Despite this regrettable decision, he is working with them to try to identify opportunities for voluntary agreements within the sector. I hope that will serve to provide some of the protections which I fear will be lost to agricultural workers as a result of this Government decision.

There is something further that I regret. Normally, I feel enormously disappointed by Opposition day debates, because they usually degenerate into rather tribal, finger-pointing and teasing events, in which it is not possible to take the Opposition line on an issue because of how the debate has been handled. I regret that on this occasion—partly as a result of how the Government have handled the matter so far, by not giving us an opportunity for a debate or a vote—after a considered debate, I will be voting against the Government in the Division.

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[George Eustice (Camborne and Redruth) (Con)]

I worked in the farming industry for 10 years and was involved in this debate when the issue was last discussed some 20 years ago—I will come back to that in a moment. It is worth noting—this has been alluded to by some, including the Secretary of State—that in the early ’90s, all other remaining wage councils and wages boards were scrapped. There was no rationale for them. Some 26 remained in about 1993, and all were abolished. Many covered sectors such as hotels, catering, retail, hairdressing and clothing manufacturing, but as the Secretary of State said, there were also some rather odd-looking boards such as those for the ostrich and fancy feather industry, or rope and net manufacturers. One has only to read lists of some of the industries to which the boards applied to realise that the whole concept is anachronistic and out of date.

[Andrew George]

I should have said that, like my hon. Friend, I too was an agricultural worker and worked on our farm. He says that the agricultural sector is the one sector that has been left alone, but it is also the sector into which the Gangmasters Licensing Authority was introduced, which demonstrates that it requires some underpinning with regulation.

[George Eustice]

Equally, we could say that the introduction of the Gangmasters Licensing Authority deals with some of the working conditions problems that Opposition Members have highlighted in a way that makes the AWB ever more redundant.

To return to the 1993 debate, the then Minister for Agriculture, Fisheries and Food, Gillian Shephard, held a consultation. A small number of us in the farming industry said that the AWB should go; that it was out of date and anachronistic; that farming should not be treated as a special case; and that the AWB read like something from the 1950s. It tended to be the larger, more forward-thinking farmers who took that view, led by a large salads company, the G’s group, which was run by Guy Shropshire. It was not one of my most successful campaigns. The Government had some 3,500 responses to the consultation, of which only 11 were in favour of abolition. I was one of those 11. That highlights the massive swing in opinion. Opposition Members have highlighted the current consultation, but 40% of people who responded to it have said that abolition is the right thing to do.

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[Jack Dromey]

We have an atomised work force. There has been a progressive change in employment patterns from what was typically the case 50 years ago to smaller, more flexible work forces with a lot of contract labour and very few people being permanently employed on farms. Having said that, the statistics show that the majority of those covered by the AWB still need the minimum standards that the board lays down. I will come to that point in a moment.

I do not accept that the board is an historical anachronism—far from it—not least because half the work force is aged 55 and over and we still need to recruit and retain people to work on the land. Nor is it true to suggest that the board was set in aspic and never changed. Over the years, as a consequence of some very good dialogue, a modernisation process took place.

The proposal for the AWB’s abolition is fundamentally wrong for four reasons. The first involves fair treatment. This is not just about minimum standards. Crucially, it is also about other conditions of employment, which really matter. The simple reality is that the difference between the statutory arrangements and the board’s arrangements will be that, in future, it will be possible for a farmer to pay someone who is off sick £81.60 a week less. Farming is a dangerous occupation for some, and we often see high levels of sickness as a consequence of the work.

Secondly, abolishing the AWB is an inefficient way of proceeding. I asked the House of Commons Library to research the costs of the board, and I was surprised by the answer. I knew that it was lean and effective, but even I was surprised to learn that its administrative costs were £179,000 a year and its enforcement costs were £150,000. That fully functioning Agricultural Wages Board therefore cost a grand total of £329,000.

Now, however, we shall see tens of thousands of negotiations taking place throughout the agriculture sector. I accept that, depending on the nature of the employment pattern, people can often get paid more than the level strictly laid down by the AWB. That happens all the time, as a result of a demand for a particular skill. However, the hon. Member for St Ives (Andrew George) was right to say that, other than in circumstances of exceptional demand, it is convenient for farmers to use the framework laid down by the board. Farmers have said that to me, too. In future, however, we shall see negotiation after negotiation consuming the time and effort of our farmers.

[Andrew George]

My hon. Friend the Member for Camborne and Redruth (George Eustice) suggested earlier that farmers were used to sitting down and negotiating with suppliers of feed, seeds and so on, but there is of course a framework involved in those cases as well, and those farmers know what the framework is when they commence their negotiations. If there is a total free-for-all, we run the risk of creating a race to the bottom.

[Jack Dromey]

The hon. Gentleman is absolutely right to be concerned about a race to the bottom. There are tens of millions of people on the continent who are desperate for work, and the last thing we want to see as a consequence of these proposals is a race to the bottom. My experience suggests that even where farmers depart from the AWB rates of pay—and they often do—it is helpful to have a clear framework and starting point, varied as appropriate in particular circumstances, depending on the skill level required, for example. Something very similar to that was put to me.

My third concern is the impact on local economies. There is no question but that we run the risk of taking out badly needed spending power from our hard-pressed local economies. It is interesting to note the Department’s impact assessment of the costs over a 10-year period: £260 million was, I think, the figure referred to.

Fourthly, we have heard time and again that “other wages councils have been abolished, have they not, and have not been reinstated”. This board is, however, unique in terms of its scope—including, crucially, the issue of tied accommodation. I repeat what my hon. Friend the Member for Wakefield (Mary Creagh) said earlier about the criteria: fit for human habitation, safe and secure, a bed for sole use, drinking water and sanitation. Some might say that all that sounds a bit 19th century, particularly the idea of a bed for one’s own use. They would not say that if they had seen the sort of places I saw when I was deputy general secretary of the old T and G and then of Unite. I saw some of the most shameful accommodation—and not just for those employed by gangmasters, as it was sometimes for those employed by farmers. The great thing about the Agricultural Wages Board is that it lays down very clear basic minimum standards for the kind of accommodation that I hope we would all like to see agricultural workers occupying in our countryside.