Public Bodies Bill [Lords]

Gareth Thomas Excerpts

Tuesday 25th October 2011 Commons Chamber

[Andrew George]

I congratulate the hon. Gentleman on his research, but it must be incorrect because I was not in the House in 1990, so it must have been another date. On the question about the potential weakening of the protections available to agricultural workers, of course, if I thought that the new clause in any way significantly weakened the board’s role in protecting agricultural workers and ensuring that they had a decent baseline and a progression, or in any way jeopardised the terms and conditions that have been secured for them over many years, I would accept what the hon. Gentleman says.

I have had discussions with the Low Pay Commission on the issue. All that it will say is that it is up to Parliament to decide what regulations the commission should adopt, but they need to be enforced. Under the present regulations, the Department for Environment, Food and Rural Affairs clearly has the ultimate responsibility for enforcing those.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

The hon. Gentleman says that he has had discussions with the Low Pay Commission on his proposal. In the interests of transparency, what discussions has he had with the Government on this issue, and will he press the new clause to a vote, or is he simply using up House of Commons time?

[Andrew George]

I see that the demeanour adopted by those on the Back Benches is being adopted by those on the Front Bench, which is regrettable. It is for others to judge, but my concern on the issue has been sustained over a long time. I requested to see the Low Pay Commission and I have discussed the matter with it. Yes, I have had informal chats with Ministers on this issue, because like any other parliamentarian, I wish to clarify what lies behind the Government’s proposals, so naturally I have had discussions, but not formal discussions, and the hon. Gentleman is at liberty to explore the matter in the same way.

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[Andrew George]

I am grateful to the right hon. Gentleman for that comment. I have been too generous in taking interventions, including his, which has taken a great deal of time.

The Government are aware that people are very unhappy at the loss of the independent rural voice. I hope that my argument gets a warm reception, and that I do not need to press the House to a Division on either of the two new clauses because the Government indicate that they will give ground.

[Mr Thomas]

I rise to speak to amendment 32, which is in my name and that of my right hon. and hon. Friends, and to urge the Government to keep the Agricultural Wages Board. Let me say in passing that it is a sad indictment of the modern Conservative party that it can fill its Benches for a debate on Europe, and yet a debate of such considerable significance to the future of the countryside is better attended by Labour Members.

The hon. Member for St Ives (Andrew George) has done the House a service by raising the issues in the way that he did. His new clause 7, on the Agricultural Wages Board, is a positive and constructive one, as are his other proposals, but it is not as clear-cut or positive as the proposal in amendment 32 in my name and that of my right hon. and hon. Friends. However, if he decides that he does not receive a good enough response from the Minister, which I fear will be the outcome, I shall urge my right hon. and hon. Friends to support his new clause. Nevertheless, we hope that when we press our amendment, he will join us, given its greater benefit.

The AWB helps to ensure fair wages, so it will come as no surprise that the Conservative party wants it abolished. It is more surprising, however, that Liberal Democrat Ministers are signing up to the proposal. Like many others, rural workers will find it difficult to believe that this proposal is proof of the Deputy Prime Minister’s claim that he is a brake on the Conservative party. The AWB helps to ensure that people working in the countryside, be they apprentices, farm supervisors or small farmers, get a fair deal. Frankly, it is difficult to see how, without the AWB, farm workers will not inevitably be worse off.

[Mr Kevan Jones]

Does my hon. Friend think it rather ironic that although the Conservative party claims to be the protector of rural communities, only one Conservative Back Bencher and one Conservative Parliamentary Private Secretary are attending this debate? Is it not clear that that party protects certain parts of the countryside, but not others?

[Mr Thomas]

My hon. Friend makes a good point, emphasising the one that I made about how it is surprising that so few Conservative Members are present.

Even Margaret Thatcher decided, in the end, that the AWB was too important to axe. Perhaps it would help the House if I gave two examples of the concerns about abolition that have been put to me. As my hon. Friend the Member for Hemsworth (Jon Trickett) said, had witnesses been invited to give their views on the Bill before the Committee stage, other Members might have had the opportunity to have direct conversations such as those I have had with the following two people. Richard Neville, from near Haywards Heath in Sussex, is on grade 4 of the AWB’s pay scale, reflecting his additional skills and experience—he has a craftsman certificate and a national certificate in agriculture. If the AWB were abolished, however, there would be no guaranteed protection of the extra wages reflecting his skills.

Richard Neville is particularly concerned about what would happen to overtime pay, which is currently paid at time and a half. He has to work one weekend in six and, obviously, considerably longer hours in summer over the harvest period. If he and those like him move jobs, what guarantee can the Minister offer that his new employer would offer him the same level of overtime pay? I would be happy to take an intervention from him, if he wants to get to his feet.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

indicated dissent.

[Mr Thomas]

He does not—perhaps a glaring example of what the reality will look like.

My second example is Steve Leniec, from near Wantage in Oxfordshire, who is paid a craftsman’s rates and whose concerns are about the downward pressure on farm workers’ wages, which abolition of the AWB will drive. The House knows that unemployment is high at the moment, and his perfectly reasonable and understandable fear is that wages will slowly drop when the AWB is abolished.

[David Wright]

My hon. Friend is talking about wages being gradually eroded, but the wages of the 40,000-plus casual workers, who change jobs more rapidly, will fall very quickly indeed. A large proportion of people working in the countryside will quickly take a pay hit if this body is abolished.

[Mr Thomas]

My hon. Friend is absolutely right. That is precisely the concern being expressed by many people.

[Stephen Mosley]

Does the hon. Gentleman agree with the NFU, which has stated:

“Claims that farm workers will suffer lower wages if the Board is abolished are simplistic and ill-founded”?

[Mr Thomas]

On this occasion, I do not agree with the National Farmers Union. As I have said, we consulted widely in preparing our position on this part of the Bill, and we have reached a very different conclusion on the basis of our conversations with farm workers, with small farmers and with other farm workers’ representative bodies, of which more later.

[Mr Frank Field]

Might not the National Farmers Union give a different answer if the Government were to address the question of how we can grow more food to feed our population? We have a huge trade deficit, and the answer must surely be to invest more. If we raise our investment in people, we will raise productivity. The push should be not to lower wages but to raise them and to raise productivity.

[Mr Thomas]

My right hon. Friend is absolutely right. Indeed, I hope that he will catch your eye later, Madam Deputy Speaker, to enable him to make that point in more detail.

I shall return, if I may, to the concerns expressed by Mr Leniec about the abolition of the Agricultural Wages Board. He is also worried about the loss of sick pay that he could suffer. He has never needed it to date, but knows of others who have done so. He also shares Mr Neville’s concern about the loss of protection of the right to overtime if he should move to a different employer.

The Agricultural Wages Board continues to provide an unheralded but important service in helping to protect vulnerable people and their families, who are vital to the rural economy, from seeing their terms and conditions progressively worsen. It helps to regulate basic pay and protection for fruit pickers, farm labourers and other farm workers. It deals with wages, holiday pay, sick pay and overtime, as well as bereavement leave, holiday entitlement and rates for night work. It provides a crucial floor beneath which wages in the agricultural economy cannot fall.

Nearly 150,000 agricultural workers in England and Wales depend on the Agricultural Wages Board. Those workers play a part in maintaining the vibrancy of our rural communities. They are the unsung essential staff who support farmers in helping to keep agricultural businesses thriving. As my right hon. Friend the Member for Birkenhead (Mr Field) has just suggested, they form a vital part of our food production industry, helping to ensure that we and our constituents can all enjoy healthy—and, occasionally, unhealthy—meals.

It is striking that many farmers continue to support the Agricultural Wages Board. Its presence means that they do not have to become employment specialists, and that they can instead concentrate on running their businesses. The deputy director of the Farmers Union of Wales has noted that

“the AWB is considered an important means of avoiding potential conflict and lengthy negotiations with individual staff”.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

To my knowledge, agriculture is the only industrial sector in which there have been no large industrial disputes over the past couple of decades. Is not that testimony to the success of the AWB?

[Mr Thomas]

The hon. Gentleman is undoubtedly right on this occasion. It is also worth noting that many small farmers also rely on providing their skills to other farmers, at Agricultural Wages Board rates, to ensure the viability of their businesses.

The Government made the important claim in Committee that the board’s abolition would not result in workers becoming worse off, and that minimum wage legislation and the European working time directive would protect their terms and conditions. I put it to the Minister, however, that once the Agricultural Wages board has gone, the 42,000 casual workers in the sector will see a drop in their wages as soon as they finish their next job. That point was also made by my hon. Friend the Member for Telford (David Wright). The other 110,000 workers could see their wages and conditions corroded over time.

Is it not spurious for Ministers to claim that farm workers will be protected by the minimum wage? As the hon. Member for St Ives (Andrew George) said, only 20% of farm workers are on the Agricultural Wages Board’s grade 1, which is virtually equivalent to the current minimum wage. The rest earn considerably more than the minimum wage and will not enjoy the same protection as the board offers them now. Is it not true, too, that once the Agricultural Wages Board is abolished the right to overtime pay at current rates will disappear when a worker moves job? Is it not true, too, that once the board is abolished the right to sick pay will be at a substantially lower rate than at present for agricultural workers when they move jobs? Then there are children who do summer jobs or part-time work on the land; they usually live in rural villages themselves and often have aspirations to work on the land for a career once they are old enough to do so. They currently receive £3.05 an hour. They are not covered by the national minimum wage, so—if, indeed, the board is abolished—they will have no wage protection when they do holiday or weekend work.

Poverty in the countryside rarely receives the coverage or attention it should. Indeed, the extra costs of living and working in the countryside do not get the attention they should, so the work of the Joseph Rowntree Foundation, in highlighting the extra 10% to 20% living costs that those in rural areas typically need to spend on everyday requirements in comparison with those living in urban areas, is surely significant. It should further challenge us to do more to combat low pay and poverty in the countryside and it surely poses the question of how the abolition of the Agricultural Wages Board can possibly help in that important task. The board is also an important counterweight to the pressures from the food industry, particularly those from the supermarket chains, for ever lower costs of production to increase profitability.

I read through the comments that the Minister made in Committee. He cited how the Agricultural Wages Board's existence discourages the payment of annual salaries and the confusion with non-agricultural work that can occur. Those may or may not be genuine concerns. If they are—I take the Minister at his word—one would have thought that a reform agenda could explore those issues. Instead, the Government want to throw the proverbial baby out with the bathwater, not thinking through the consequences for rural wages of the abolition of the Agricultural Wages Board. With rural workers already facing a huge squeeze on their finances from higher energy prices, the increase in VAT and an economy that is being badly mismanaged by the Conservatives, the Government now want to risk rural workers’ wages.

We know from a leaked impact assessment on the abolition of the board that the impact of the loss of entitlement to agricultural sick pay compared with the lower-in-value statutory sick pay that will remain will be a

“transfer, a benefit to farmers and a cost to workers.”

The impact assessment estimates that the reduction in earnings for farm workers as a result of that measure alone will be some £9 million—£9 million out of the rural high street in lost earnings by workers. All those villages shops—vulnerable now because of the Government’s mishandling of the economy—are hardly going to be helped by yet another squeeze on the finances of those they want as their consumers.

If there is any doubt that the abolition of the Agricultural Wages Board will damage the pay of rural workers, let us look at what happened in other parts of our economy when their wages councils were abolished. In evidence published as far back as September 1995, three in 10 jobs were paying less than they would have done if wages councils in the relevant sectors had not been abolished. The fall in pay in shops was particularly severe. A follow-up study one year later showed that half of all vacancies were paying below what they would have done if the wage councils had still existed. The situation had got worse. Such evidence explains why the Labour Government not only brought in the minimum wage, but reformed collective bargaining arrangements. It is also why we will tonight oppose the abolition of the Agricultural Wages Board and why I will seek your leave, Madam Deputy Speaker, to divide the House.

Lastly, I draw attention to amendment 39, which was tabled by my hon. Friend the Member for Wakefield (Mary Creagh) and other hon. Friends and which deals with the Commission for Rural Communities. The abolition of the CRC will leave rural communities without an independent voice, as the Government scrapped the Rural Advocate post last year. It raises the question of whether the Government are really committed to rural proofing Government policies. Indeed, the abolition of the CRC, along with—crucially—the abolition of the Agricultural Wages Board, following on from the Government’s attempts to sell off the nation’s forests, is surely proof that the countryside is being let down by the coalition Government parties.

[Huw Irranca-Davies]

Thank you for calling me, Madam Deputy Speaker. I did not expect to be called so soon—I expected a Government Member to be called next—but, in the absence of any speakers on the Government Benches, I shall proceed with my speech.

This morning there was a very good lobby of agricultural workers, during which members of Unite, other union workers and MPs gathered outside Parliament to protest against the abolition of the Agricultural Wages Board. Amendments 32 and 39, to which my name is attached, are intended to secure a fair deal for 152,000 farm workers in England and Wales, apprentices and farm managers alike. The amendments are intended to protect their basic pay, holidays, sick pay, overtime, bereavement leave, rent, and security of tenure in farm cottages. They are also intended to protect the compact between Government and farm workers that has existed for decades, since the Attlee Government of 1948, and which—here I echo the sentiments of the hon. Member for St Ives (Andrew George)—has recognised the enduring need to provide reasonable recompense for arduous and dangerous agricultural work, to promote food security, and to contribute to the tackling of rural poverty.

Members should be in no doubt about the fact that if the Government axe the Agricultural Wages Board, there will be severe repercussions. According to the Government’s own figures, £9 million will be removed from the rural economy every year, at a time when the Government are presiding over what is effectively a zero-growth economy. The Minister did his best on the radio today, saying that he did not expect any of those bad things to happen as a result of the board’s abolition. I did not expect Wales to go out of the semi-final of the rugby world cup, and the Government did not expect to see 80-odd of their Back Benchers in open rebellion last night, only 18 months into a new Administration, but, as the old saying goes, farmyard slurry happens.

More than 40,000 casual workers will experience a drop in their wages when their current jobs finish, and the wages of a further 110,000 will be eroded over time. My hon. Friend the Member for Harrow West (Mr Thomas) has told us what happens when wages councils disappear, and has described the pattern of the effect on wages and salaries over a sustained period. What assessment has the Minister made of the cost to the taxpayer of the additional claim on that taxpayer through payments of child tax credit and other support for farm workers and their families when their wages and entitlements wither on the vine?

The House has a very long memory, and some Members have been here for many years longer than I have, but I do not think that any Member who is present today was present for the original debates on this subject in 1947 and 1948. Nevertheless, there is a strange echo down the years of the debates that took place both here and in the other place. Archer Baldwin, Conservative spokesman for agriculture, argued in defence of a policy of minimalist—not minimum—wage protection, remarking of the previous pitiful agricultural wages:

“The reason for those low wages was the low prices paid to the farmer, and we want to relate prices to wages.”—[Official Report, 22 January 1947; Vol. 432, c. 251.]

He wanted to relate farm gate prices to wages, rather than ensuring the farmer was given a proper price for his produce and was paid a proper living wage.

I remind Liberal Democrat Members who—again—are wondering which way to turn now that their Conservative bedfellows have once more stolen the duvet that, as I remarked earlier, there was a time when they were wholly against the proposal with which we are dealing today. It was the last time there was a review of the Agricultural Wages Board—not a threat to abolish it, just a review. The Government of the day did not proceed with any proposals to abolish, change, or transfer any functions from the board, because they were faced with a powerful combined front of Labour, Liberal Democrat and assorted other Members who opposed any proposal to change it.

I suggest to the hon. Member for St Ives, who has tried his hardest to make a good fist of putting forward an alternative compromise, that there is a danger that notwithstanding what was a very principled stance on that occasion, the Liberal Democrats will tonight go over to the dark side, or at least put one foot in both sides of the bed. Regardless of which side of the bed they are on—strong Liberal or weak Tory—that is what is proposed, in particular by new clause 7 tabled by the hon. Member for St Ives. I respect the hon. Gentleman. He is trying to do the right thing: he is trying not to upset his party’s coalition partners too much, and he is looking for a neat Lib Dem compromise, but it is a compromise. His proposals are a weak and unsatisfying brew compared with our full-strength amendment, which would truly protect the AWB.

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[Mr Paice]

All workers will have exactly the same entitlements as they currently have. Other hon. Members have made the point—I was going to make it later, but I emphasise it now, because there are a lot of myths about—that the Bill will not affect anyone in their current employment. They will be protected by their current terms and contract of employment, whether in relation to rates or conditions of pay.

[Mr Thomas]

Will the Minister clarify something that he said? If an existing worker moves to a different job after the Agricultural Wages Board has been disestablished, what protection will there be for his overtime rates of pay?

[Mr Paice]

Clearly, the worker will negotiate with his putative new employer. [Interruption.] I will be more objective: the real world says that that worker is unlikely to move to someone who will pay him less than the job that he is leaving. That is the reality.

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[Mr Thomas]

The Minister says that there is a whole series of new, modern employment protections. I ask him again to draw the House’s attention to which one of them will protect workers’ overtime pay in the situation that I described in my previous intervention.

[Mr Paice]

Anyone in a post at the moment is protected by their contract of employment. Anyone who changes jobs—and whose contract therefore is no longer valid—will have to negotiate, just like in any other sector of the economy, and the hon. Gentleman was part of the Government who did not change that system.

[Mr Thomas]

Pay will go down.

[Mr Paice]

It will not necessarily go down; it will react to the state of affairs.