Duke of Montrose
Main Page: Duke of Montrose (Conservative - Excepted Hereditary)Enterprise and Regulatory Reform Bill
Duke of Montrose Excerpts
The Duke of Montrose
My Lords, I was most grateful to hear what the noble Lord, Lord Curry of Kirkharle, has been telling us. A particular difficulty for the House has been the shortened consultation period, which left a number of questions not fully answered in our minds.
The noble Lord, Lord Whitty, and agricultural workers who came to brief us this morning are obviously very worried at the Government’s assessment of a loss of £259 million. The noble Lord, Lord Curry, has given us some indication as to how that was achieved. Can the Minister tell us whether that figure includes savings or reductions in monies other than purely wages, where the figure was derived from and on whom is it likely to impact? The agricultural representatives took it that overtime rates will be totally abolished. The question of working hours is well defined, for all workers, by the EU working time directive, so everyone knows how many hours are required in any employment in excess of this figure. Under what guidance or legislation will the rates of payment for these hours be determined?
The noble Lord, Lord Whitty, said that the floor was being removed. As the right reverend Prelate said, that is not quite the picture. The floor is not being removed. At the present rate, it is very slightly diminished by 2p. One of the other factors that the representatives are keen to emphasise is that currently there is a graded system in the rates of remuneration. However, the grades currently in place are built on a system of certified qualifications and experience. Is it not possible for the agricultural workers’ union to produce its own guide to a graded wage structure, which would give its members an indication of what the level should be when they are entering into a new contract? These things could be done by responsible people in their own way and would not necessarily require the retention of the wages board.
Lord Cameron of Dillington
My Lords, first, I declare an interest as a farmer. We have all received much evidence, both for and against, on this amendment. It seemed right to consider all the evidence and facts afresh, including my own knowledge of the industry, and to re-examine the case for and against abolition.
I think everyone acknowledges that agriculture is very different from 60 to 65 years ago when the current Agricultural Wages Board was introduced. I know that some of the work can still be very tedious and repetitive, such as riddling potatoes for hour after hour or even driving up and down a field all day, albeit in an air-conditioned or heated cab, either with or without sat-nav assisted steering. Of course, now no weights are lifted because instead of bags coming in at 1 hundredweight or even 2 hundredweight as they used to, they come in weights of 1 tonne. So you automatically jump into the forklift truck, do things much quicker and save yourself from exposure to the weather.
I admit that some of the work with livestock can be pretty full-time. You are always on call, particularly at certain times of the year, such as during lambing or calving and, even more importantly, when quietly walking up and down your dairy buildings at night to check which cows might be on heat in order to maintain or to avoid your calving index slipping. I also know that work with livestock can sometimes take place in fairly fresh and rugged conditions, both wet and cold. It has always seemed to me that shepherds and dairymen really should be flock or herd managers and paid an annual salary with bonuses paid on targets achieved. As I understand it, that is not specifically allowed under the current rules of the AWB—or at least it does not count.
On our farm, including in our dairy, we do not pay much attention to that or to any Agricultural Wages Board rates. We pay much more than the AWB rate. We would not keep staff very long if we did not. As I have said before, why would one pay a minimum wage to people responsible for operating machinery costing up to £500,000 or more, and whose skill at operating it can sometimes be the difference between profit and loss on the farm?
However, the Agricultural Wages Board is—everyone has mentioned this and I have admitted it before—a very convenient benchmark to use in the annual wage adjustments. On our farm, all wages across the farm go up by the 2%, 3% or whatever the AWB rate is. In addition, we usually round it up. Incidentally, in the consultation evidence I received from Unite, I noted that by far the most common reason—again, it has been repeated in the debate today—from farmers for opposing the abolition was the helpful benchmarking service that the AWB provides. However, as I have also said previously, this is a service quite easily replaced, and indeed promised, by the NFU and others on a non-statutory basis. Therefore, I am afraid that I have to discount all that evidence. I do not think that it is relevant to the debate.
The question really is: why should we get rid of the safety net? If most farmers pay no attention to it, does it really matter whether we have it or not? After all, it is only a small cost to the taxpayer in the general scheme of things. It is the last of many wages boards and councils, and therefore has a historic role, if nothing else—the last vestige of post-war socialism. I admit that I have only limited knowledge of the horticultural industry, where it is claimed that the national minimum wage—a full 2p per hour less—would apply if the AWB was not there. Furthermore, the rightly generous overtime rates of the AWB would no longer apply in that industry, which I believe is a valid point. But perhaps that is a fault of the national minimum wage rules rather than a plus point for the AWB.
I paused in my thought processes here. What harm is the AWB doing? After all, agriculture is no longer a poorly paid industry, so it must be being successful. The hourly average pay in agriculture is higher than in hotels, restaurants, shops and even local authority administration. Why dispense with all that gain? I like to think that I care about farming families, both employers and employees. I have spent most of my life trying to promote wider businesses and jobs in the countryside outside farming, because agriculture represents less than 4% of rural employment. Therefore, one of the reasons for my passionate promotion of the wider economy is that many farming families, both employers and employees, depend on having a non-agricultural wage earner in their family to maintain their lifestyle or, if they are the employers, their presence on the land.
I asked myself whether it is helpful to overall employment in agriculture that there should be a state-controlled wage structure over and above the minimum wage which the other 96% of the rural workforce does not enjoy. I asked myself whether the rest of the rural economy was ruined by the abolition of the other 100 or so wage councils. Or is it spoilt now by having a free market in wages, subject of course to the national minimum wage?
Are lorry drivers disadvantaged by not having a lorry drivers’ wages board? I take that as a good equivalent because they, too, spend long hours in cabs, driving up and down—not fields but roads. I thought that they were not disadvantaged. The rural economy is flourishing better than ever before, including lorry drivers. As an aside, obviously any reform of the CAP should put more money into Pillar 2 and less into Pillar 1 but that is not the subject we are debating today.
My next question to myself was whether UK agriculture can adapt and grow better, including providing more overall employment up and down the whole food chain, with or without its own centrally controlled, state-run wage order. All my experience over the past 50 years suggests that state interference in an industry is not very helpful to any of the participants in that industry, apart from the need for a national minimum wage structure and having a strong Health and Safety Executive, in which agriculture is not its finest field.
While I understand the safety net argument, I fear that the AWB is at best somewhat of an irrelevance in this day and age, and at worst is preventing new practices of salaries and well targeted bonuses that could reignite our farming industry as a career path for those who love the countryside and the healthy working life associated with it. I do not always support the Government but on this issue I fear that I must.
Viscount Younger of Leckie
If I may be allowed to finish, prices paid to producers are determined by international markets, not just supermarkets. Supermarkets now recognise that they have their reputations to protect. Since February 2010, all contracts between major food retailers and their direct grocery suppliers must comply with the groceries supply code of practice, the aim of which is to ensure that those who directly supply the large grocery retailers do not have unexpected costs or risks transferred on to them. I finish by saying that the horticultural sector similarly operates in international markets, with imports representing nearly 40% of fresh vegetables and over 90% of fresh fruit sold in the UK.
The right reverend Prelate the Bishop of Hereford also raised the issue of workers who worked in the farming sector who were below the school leaving age, if I understood him correctly. He argued that they would be disadvantaged by the abolition of the Agricultural Wages Board. I would like to reassure him that the National Minimum Wage Act 1998 does not apply to children below compulsory school leaving age. Therefore, following the abolition of the Agricultural Wages Board, no minimum rate would be set for young workers in agriculture in this age group. However, this would leave them in a similar position to children who work in other sectors such as shops, hotels and hairdressing salons. They will continue to be protected by general employment law and by health and safety legislation. Children of school age should be in full-time education and it is not the Government’s policy to encourage them to seek work.
The right reverend Prelate the Bishop of Hereford, in quoting Winston Churchill's words “sweated workers”, raised the question of protection. There is now a raft of protections for all workers under general employment legislation including the national minimum wage, working time regulations, the Employment Rights Act, equal pay and equality legislation and legislation for fixed-term employees, part-time employees and agency workers. If the Agricultural Wages Board were abolished, agricultural workers would enjoy the same protection as workers in all other sectors of the economy. That emphasises how far we have come since 65 years ago. It is interesting that there is quite a long list there.
To conclude on the issues that the right reverend Prelate the Bishop of Hereford raised, he made the point that there should be a defined living wage. I support that and in fact the Government support the concept of a living wage and encourage employers to take it up where possible. But the decision on what wages to set is one for employers and workers.
My noble friend Lord Greaves raised the issue of the consultation and much discussion was had in Grand Committee on that. The noble Lord, Lord Whitty, also raised this matter concerning Wales. I believe that I wrote quite a long letter to the noble Lord, Lord Stevenson, and copied it to a number of other noble Lords to address this matter.
The policy of the abolition of the Agricultural Wages Board and related committees was first announced in July 2010 so stakeholder and interested parties have had plenty of time to consider the matter. During this time, key stakeholders also had the opportunity to make their views known to Defra during meetings of the Agricultural Wages Board and 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.
The noble Lord, Lord Whitty, raised the issue—which, again, I believe was raised in Grand Committee—over the lack of use of the Public Bodies Act. To address this directly, the Public Bodies Act was only one method by which the Agricultural Wages Board could have been abolished. The Government are perfectly free to bring forward primary legislation to abolish the board.
The removal of the board will provide simplification and greater flexibility and allow the agricultural sector to compete on a level playing field with all other sectors of the economy, encouraging employment and competitiveness which will benefit all those in the industry. The noble Lord’s amendments would retain the Agricultural Wages Board and the separate employment regime for agriculture. This would continue the dual regulatory burden for farm businesses. The proposal that the board should be able to fix minimum pay rates by reference to any periods of the employment is intended, we presume, to make it easier for the board to provide for annual salaries. We are not convinced that the amendment would serve its purpose.
The provisions on the enforcement of the agricultural minimum wage are derived from the National Minimum Wage Act, which dissuades farm businesses from offering annual salaries. Moreover, the introduction of salaries would not be enough in itself to bring employment in agriculture into the 21st century. If the amendment were accepted, the opportunity for the agricultural industry to move forward and modernise would be lost. Instead, agriculture would be stuck in the past with an antiquated system of statutory wage fixing and prescriptive regulation of employment practices.
The Duke of Montrose
My Lords, I wonder whether my noble friend could also answer the point that I raised earlier. Does he know of any form, format or regulation that will deal with the question of what payment rates should be for work over and above the minimum hourly rate?
Viscount Younger of Leckie
I thank my noble friend the Duke of Montrose for that question. It is best that I get back to him in writing after the debate.
While I welcome that the amendment acknowledges the need to abolish the 15 agricultural wages committees and 16 agricultural dwelling house advisory committees in England, we do not consider that there is a need to retain any of the functions. The amendment tabled by the noble Lord provides the Agricultural Wages Board itself to take over the functions of the ADHACs in England. The Government are committed to growing the rural economy. A key part of that would be to ensure a dynamic and prosperous future for the agriculture industry.
We are already taking forward the recommendations of the Farming Regulation Task Force which will remove a range of unnecessary regulatory burdens from farm businesses. We are improving access to superfast broadband and the mobile network coverage in rural areas, which will make it easier for farm and rural businesses to operate. We have provided almost £57 million to the Welsh Government to ensure that broadband access is available to homes and businesses including the hardest to reach areas in Wales.
Some £100 million is being invested from the Rural Development Programme for England, which will help small rural businesses to improve their skills, facilities and competitiveness. We have also introduced a pilot of rural growth networks to share lessons learnt to stimulate sustainable economic rural growth.
This whole package of measures, together with the ending of a separate agricultural minimum wage, will support the agriculture industry in having a successful and competitive future, which will benefit all those who work in agriculture and the rural economy.
The abolition of the Agricultural Wages Board is supported by industry bodies, including the National Farmers’ Union, the Country Land and Business Association, the Tenant Farmers Association and the Association of Labour Providers. It is supported by independent professional advisers, such as the Central Association of Agricultural Valuers and the Agricultural Law Association. In view of the above, I hope that the noble Lord will feel able to withdraw his amendment and I commend the government amendments to the House.