Enterprise and Regulatory Reform Bill

Earl Cathcart Excerpts

Wednesday 20th March 2013 Lords Chamber

[Lord Whitty]

My Lords, I apologise to the noble Baroness. We almost missed this amendment as well so I quite understand the hurry. This indicates the rigidity of our procedures because my original intention at Third Reading, given that we got a printed copy of the Bill that had the Agricultural Wages Board in it only yesterday, was to insist that an equivalent procedure be written into this Bill for dealing with the implementation of the abolition of the Agricultural Wages Board in the same way as that applied to every single other public body.

That is not in order for Third Reading and, obviously, I accept the advice of the clerks in these matters. I have therefore concentrated on a very narrow area which was not fully debated last time, although we touched on it in some detail. However, there was no amendment before us then that required a further economic assessment from the Government of the impact of the abolition of the Agricultural Wages Board.

The fact of the matter is that there was considerable confusion at the previous stage as to what the economic assessment was. The Government have not produced the kind of Explanatory Memorandum that is required under the Public Bodies Act, but there was a document called the “economic assessment”, which went with the rather curtailed consultation and clearly indicated that the main effect of this Bill would be a significant reduction in the aggregate income of agricultural workers by nearly £0.25 billion over the next 10 years. Those were the figures provided by Defra via the Minister and the impact assessment.

On the day that we last debated this matter, and having queried whether that was still the Government’s position, I received a letter from the Minister which said, “No, no, these figures were all got up”—I paraphrase slightly—“by the consultants”, and that the department did not believe a word of it. He said that the consultants had advised at the top end of the range, whereas the Government thought that the outcome would be at the bottom end of the range. That is not a very satisfactory position in any circumstances and it is certainly not satisfactory when we are abolishing a body which has existed for many years and is the only one in this cull of the quangos which specifically tries to protect the living standards of a group of rural workers.

In the debate that followed, all sorts of interpretations came on to the agenda. I tended to agree, because I am conventional sort of person, that what the department had told us was probably right. Therefore, I agreed with the statisticians who were advising Defra. The Minister had already indicated that he did not really agree with them; others of his supporters said various different things. Some, whom one might characterise, perhaps unfairly, as being of the landowning tendency, said that it would be all right because they already treated their chaps decently, which is fair enough; other people said that the international competitiveness of English agriculture—because the other parts of Britain do something different—was dependent on being able to cut wages. Some of those people were the very same people who argue rather the opposite when it comes to banking, but let us let that pass. Others—I think that the noble Lord, Lord Cavendish, was among them—argued that agricultural wages were excessive already and were greater than those of hotel workers. That seemed rather to prove my point, because the wages councils in the hotel and catering industries were abolished some years ago.

However, it was clear that there was no compatibility between the various interpretations of the best estimate of the outcome as compared with the Government’s own figures and as compared with the Minister’s position and my position. There are four or five different interpretations. That is not good enough.

I am therefore proposing a very modest amendment: the Government should come up with a new economic assessment before they trigger the commencement proceedings on this Bill. Surely everybody who spoke in that debate and everybody who has an interest in this area should be in favour of that, because we want a robust economic assessment. Whatever we may think about the abolition of the board and whatever opinion we may have about the need to raise, reduce or protect wages, we should get a better economic assessment before we do it. That is really all my amendment proposes.

It would have one other benefit for the Government: it would take a bit of time and it would be interesting to know what timetable the Government have in mind for the implementation of abolition. After all, discussions on this year’s round of wages have already started and would normally be for implementation in October. In effect, if the Government let that round go, the Agricultural Wages Board’s underpinning of wages would run until October 2014 at least.

The Government need a bit of time because there are a number of issues which do not relate to wages but are covered by the agricultural system. One of them is the situation relating to Wales, which wants a different outcome. The position on Wales is not resolved by the Government’s clauses as they now stand in the Bill, so they need a bit of time to sort out the Welsh situation. They also need to deal with the non-wage aspects of the agricultural wages order, in particular those aspects that deal with tied cottages for permanent workers and those that deal with adequate accommodation for migrant and seasonal workers. It is only the Agricultural Wages Board which provides that migrant seasonal workers are required to have one bed each rather than 20 of them sharing a six-berth caravan, as was the situation prior to it being regulated by the wages board. So those matters need sorting out. Some protection is needed in law or in regulation once the board goes.

I am doing the Government a favour by putting forward this amendment. The Minister has had a rough day so far, but I am offering him a way out here. So that we no longer argue about this—and subject to what the Commons say, because they have not seen this amendment yet—we need, before the Government implement this clause, a clear economic assessment which the House and another place can debate if necessary. That will also give the Government the time to sort out the other loose ends. I therefore assume that the Government will accept my amendment and that we can then move on and complete this Bill. I beg to move.

[Earl Cathcart]

My Lords, I farm in Norfolk. The noble Lord, Lord Whitty, argues his case well, as he always does. He calls for yet another impact assessment of the effect of the abolition of the Agricultural Wages Board on the agricultural economy and on the wages and conditions of those who work in the sector. I am afraid that I do not agree with his arguments, as I do not see the point of yet another impact assessment for three reasons.

First, average earnings in 2010 for full-time farm workers were 41% above the industry minimums set by the board. More recent data from the Annual Survey of Hours and Earnings, the ASHE, showed that more than 90% of workers employed in agricultural trades received gross pay above the agricultural wages order grade minimums. It is reasonable to conclude that the vast majority of farm workers are paid well above the agricultural wages order minimums already.

Secondly, current contracts will remain the same—that is, 41% above the wages board rates—so we are talking just about new contracts. The latest impact assessment states that if demand remains strong relative to supply, as evidence suggests is likely to be the case, wages are unlikely to be eroded as farmers will need to attract workers. The important point here is that if farmers want to attract workers, they will have to continue to pay at least what the worker might expect from comparable work outside farming, which is several thousand pounds more than the agricultural workers’ rate.

Thirdly, to assist farmers and employers, the National Farmers’ Union has agreed to publish a regular series of comparative indicators to help inform employers undertaking periodic pay reviews. These comparative indicators will take account of factors such as cost-of-living changes, the labour market, comparable industries and farm business conditions. They will also provide an opportunity to focus on regional differences rather than national, one-size-fits-all data, which is in keeping with the flexibility that we need in our industry.

The National Farmers’ Union has agreed to publish regularly all the data that the noble Lord, Lord Whitty, calls for in this amendment. Let us not duplicate the work. I do not see the need for yet another impact assessment.