Agricultural Wages Board

Chris Evans Excerpts

Tuesday 16th October 2012 Westminster Hall

[Chris Evans (Islwyn) (Lab/Co-op)]

I am surprised you called me so early, Mr Caton. I expected to wait a bit.

We are in the American election season, and listening to my hon. Friend the Member for Copeland (Mr Reed) reminded me of what Ronald Reagan said to Jimmy Carter in 1980: “There you go again.” The one thing I have learned since coming to the House is that the Government seem to think that there are simplistic solutions to complex problems. With the most complex problems, it sounds nice to say, “We are cutting red tape by getting rid of the Agricultural Wages Board.” But the problem seems much more complex than that.

I have read this morning’s written ministerial statement, which states that with the introduction of the minimum wage, the Agricultural Wages Board is now obsolete. Again, that is a bit simplistic considering what the Agricultural Wages Board does. Twenty per cent of people are only 2p above the minimum wage. If the Agricultural Wages Board and the setting of wages are abolished, wages might be driven down, rather than up. That means people in the countryside, including farm workers, would be earning less.

I also worry because many of the 12,000 agricultural workers in Wales are of school age, working through their summer holidays. As my hon. Friend says, they are seasonal. They are not entitled to the minimum wage. What is going to happen to them? Are they going to be exploited from an early age?

The other thing I am deeply concerned about is that farmers have it hard. Let us be straight about that. Farming is not easy. It is tough out there. We cannot give farmers the further burden of having to negotiate with staff individually on things such as dog allowances for shepherds, which will go with abolition, and statutory sick pay. I fear that not only are those farmers too small to negotiate, but that this is another extra burden that they do not need. There could be different employment rights in different regions. In some places there might be a good level of statutory sick pay; in others there might not. Some people might have more rights than others.

[Huw Irranca-Davies]

I want to pick up on the points raised by the hon. Member for St Ives (Andrew George) on the transfer of the AWB’s functions to some other organisation. The Low Pay Commission observed, on the abolition of the AWB:

“The level of sick pay will be significantly less than provided for under the Order.”

Unless the Minister stands up and says that all the functions will be transferred to some other organisation to retain the protections, we have failed to do what the hon. Member for St Ives said, which is to protect agricultural workers.

[Chris Evans]

That is interesting. My hon. Friend will know of Hazel Spencer’s letter to the shadow ministerial team for the Department for Environment, Food and Rural Affairs:

“I have been in horticulture for nearly 25 years, working for the same nursery since 1987. During this time, as you can imagine, I have seen many changes. The work is sometimes hard, sometimes repetitive and often carried out in less-than-pleasant conditions.

I initially started as part-time staff, at a time when we had very little right to sick pay, holiday pay and certainly no Bank Holiday pay. Over the years and mainly due to the negotiations carried out by the AWB on behalf of us ordinary workers, conditions within our industry have improved. We have received wages in alignment with those recommended by the AWB: SSP has been supplemented by Agricultural Workers Sick Pay, to bring it in line with a weekly wage during illness, and we received a tax allowance towards providing suitable clothing to cope with the conditions of our workplace.

Basically, what sustains most of the people who work in this industry is the fact that we are earning a fair day’s pay for what we do.”

My concern is that we are asking small farmers to become employment specialists of some sort. Are they going to go to solicitors? Are they going to make mistakes? Are we going to see more people before tribunals? Those are real concerns that the Minister has to address.

If I might be mischievous for a moment, I draw attention to an early-day motion signed by the Minister in 2000 that called for the then Labour Government to

“retain the Agricultural Wages Board as it is currently constituted.”

Does he still think that should be the case?

Ultimately, everyone in the Farmers Union of Wales is opposed to the abolition of the AWB. They are concerned that the removal of the AWB will leave farmers exposed when having to negotiate pay and conditions. The AWB is a very good model that could be used by employers and unions across the board. The model has worked since 1924, and the Attlee Government established the AWB in 1945. Again, as often with the current Government, all we see is a drive for cuts in mythical red tape.

I say this whenever we talk about employees’ rights: happy workers are the best workers. The real issue that has to be addressed in society, whether in the countryside or in the urban world of banking and finance, is fear of job insecurity, which is the thing most people worry about. When employment rights are taken away, people are less secure, less productive and do not perform as they should.

I know we are going through a consultation process, but if the Government do not put something in place, we will start to drive wages to the bottom. Yes, as the written ministerial statement highlights, farming has massive opportunities because of the growing world population, but those opportunities will only be fulfilled with productive workers.

[Andrew George]

The hon. Member for Copeland (Mr Reed) and the hon. Gentleman have both quoted the farming unions. The hon. Gentleman has particularly emphasised the difficulties that abolition of the AWB might cause small farmers. My impression is that although, without question, the National Farmers Union is phenomenally good and very effective, one of its weaknesses is that it is primarily a large farmers’ union. I do not think that small farmers necessarily have their voices represented through the NFU as effectively as possible. If I had heard from farmers that the AWB needs to be abolished because it constrains them from being more progressive in their treatment of workers, I might have considered that a stronger case for the abolition of the regulations and the AWB.

[Chris Evans]

As we heard from the Minister this morning, it is important that small farmers are involved in the ongoing consultation. My concern is still for the small farmer. If he or she gets into bother with employment law and finds themselves in front of a tribunal simply because they do not know the law—they have done nothing wrong—or something like that, it would be an extra burden that they do not need. They also do not need the extra burden of negotiating things such as SSP, which we have talked about, wages and certain allowances. Those people do not need further burdens.

We have already heard from the Government and the Secretary of State for Business, Innovation and Skills that they do not want to burden employers further, but all I can see is the driving down of wages and the burdening of employers. The AWB takes away that burden, and I hope the Minister sees the sense of my argument: first, we do not want to drive down wages; and, secondly, we do not want small farmers to face further burdens by being tied up with red tape. If the small farmer has to negotiate and is concerned about employment rights, first, they are not going to employ more people and, secondly, they might exit the business altogether, which would be a tragedy.

I hope the Minister will say something about what will be put in place to ensure that wages stay at the higher standard, rather than falling. What is he going to do? If the Government go ahead with the abolition of the AWB, what support will be available for small farmers on things such as employment rights?

[Huw Irranca-Davies]

There is one other part of the AWB jigsaw puzzle that has not been mentioned yet. I am sure my hon. Friend is aware of upland farmers in his area; many small farmers use the provisions of the AWB when they tender their services to other farms. The AWB provides set agreements and set rates without individual negotiation; everyone knows the code and the agreement. Without the AWB there will be many individual, complex and time-consuming negotiations and a lot of additional bureaucracy. That is why we want to preserve the functions of the AWB.

[Chris Evans]

Quite simply, a lot of my farmers will not bother with it. The practice will end because they will not be interested in getting down to the nitty-gritty of the code. There is a code in place.

I wonder what the Minister’s thoughts were when he signed that EDM 12 years ago, and what has changed. There is no argument for abolishing the AWB as it stands: it works for farmers and for workers, too. When he responds to the debate, I hope he will tell us what was going through his mind when he signed the EDM all those years ago, and what has changed significantly in the past 12 years to make him change his mind. I look forward to that.

--- Later in debate ---

[Mr Heath]

In that case, I shall not tempt the hon. Gentleman further down that road, but the reason why I raised those other, perhaps flippant cases—I do not think that anyone would seriously suggest that those councils were relevant now—is that other wages councils that were abolished at the time had an effect on industries that would certainly be described as current industries and that are not entirely dissimilar to agriculture. I am thinking of the Licensed Non-residential Establishment Wages Council, the Licensed Residential Establishment and Licensed Restaurant Wages Council and the Hairdressing Undertakings Wages Council. Those were dealing with business that was often carried out by small enterprises, where many of the arguments that the hon. Gentleman and his hon. Friends have advanced today would have applied and where I do not think that a disbenefit from the abolition has been apparent in terms of comparative performance with other areas of industry. It is important that we recognise that.

We are now engaging in a consultation that will allow stakeholders and interested parties the opportunity to make their views known on the future of the Agricultural Wages Board before we make a final decision. I want to make it clear—because I genuinely think that this is the case—that the aim of the proposal to abolish the Agricultural Wages Board is to secure the prosperity of the agricultural industry for the future by encouraging growth and employment. I think that it will do that. I think that it will benefit all those who work in the industry, both employers and workers, as well as the wider rural economy.

[Chris Evans]

Will the Minister give a guarantee that this is not a fait accompli and that if the consultation comes back with the view that the Agricultural Wages Board should be saved, the Government will follow that, rather than just proceeding with the plans for abolition anyway?

[Mr Heath]

The job of Ministers when responding to a consultation is to listen to all the voices that are raised, to try to understand the points that are put forward and then to make a decision on whether to introduce appropriate legislation. It is then for the House to decide whether it supports that legislation, so let us be clear about the process. It cannot have come as any great surprise that we were going to go ahead with the consultation. Indeed, the hon. Member for Ogmore chided me gently for not having brought it forward earlier. I say to him that I would have brought it forward slightly earlier if there had not been a recess, but we are now ready to consult and ready to listen.

An impact assessment of the abolition of the Agricultural Wages Board has been published as part of the consultation package. I hope that hon. Members will take the opportunity to consider it carefully and to comment on the document and provide their own evidence on the likely impact for both individuals and the industry as a whole. The impact assessment suggests that abolition of the Agricultural Wages Board could lead to increased employment, which would have potential ripple-effect benefits for the wider rural economy.

Let me deal with some of the specific issues that were raised. A lot of hon. Members were understandably concerned that the proposal might mean workers losing their existing rights. Of course, that is not the case. Anyone in permanent employment will be protected by their contract. They will have exactly the same rights after the day on which the legislation is passed as they had before. They do not lose any of their contractual rights and the employer loses none of their contractual obligations simply by the passage of the measure. Of course, it would apply to new entrants and new contracts being negotiated, but it would not apply to anyone who was already in employment. It is very important that people understand that. Let us also recognise that permanent workers constitute about two thirds of agricultural workers, so for the vast majority of workers, there will be no change in terms and conditions as a result of the board’s abolition.

For new contracts, yes, I accept that there may be an impact. That is reflected in the estimates in the impact assessment. However, it is difficult to assess what that impact will be until we see it in action. My feeling is that there is a high level of competition for skilled workers in some sectors of the agricultural industry, and it is important that people attract workers who have both the necessary certification and the necessary skills, given that they are operating, as one hon. Member said, incredibly expensive bits of machinery, let alone dealing with livestock, which requires husbandry skills. It is important that people attract and retain the best workers. Therefore, I am clear that we shall not see a drift towards the national minimum wage in contracts in the agricultural industry. In addition, new entrants to the industry will have exactly the same levels of employment protection as workers in all other sectors of the economy.

In fact, there are potentially some direct benefits from abolition of the rigid structures of the Agricultural Wages Board, let alone the bureaucracy, in terms of what is permitted under contract. One example involves annual salaries. It is extraordinary that at the moment it is difficult to provide an annual salary basis for a contract under the rather rigid systems in place. In today’s employment market and particularly because I am optimistic about agriculture—we have a growing sector and there is huge potential in agriculture—farmers need to offer attractive remuneration packages that are competitive with those in other rural sectors if they want to retain skilled and well-qualified staff. I would be very surprised if employers did not recognise that they had to pay appropriately for skills and experience. That is already reflected, of course, in the banding in the Agricultural Wages Board system. The majority are paid above agricultural minimum wage rates. In 2010, about half of workers were paid more than 10p above the agricultural minimum wage. I do not see any reason why that should change in the absence of the board.

Of course, there are other protections as well. The gangmasters licensing legislation is both relevant and important in this debate. The hon. Member for Copeland talked about the Agricultural Wages Board specifically providing protection for migrant and seasonal workers, but he will find that it is the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 that provide such protection—passed by a Government that he, of course, supported. I recall supporting those regulations too. They will continue to provide protection, and it is important to know that that is the case.