Agricultural Wages Board

George Eustice Excerpts

Wednesday 24th April 2013 Commons Chamber

[Mary Creagh]

That was a good effort from the right hon. Lady. The HSE will clearly continue to exist, but I am citing a case that happened last year, not at some other point in time. I ask her whether she thinks that conditions will get worse or better when the AWB is abolished.

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

The Agricultural Wages Board existed when that case came to light, so it clearly did not create the defence that the hon. Lady suggested it might.

[Mary Creagh]

The question for the hon. Gentleman is whether conditions will get worse or better when the provisions are removed. Will they be better or worse for a worker who does not have a bed guaranteed for their sole use? Opposition Members already know of conditions in which people are hot-bedding. Is that what we want to see in our farming industry? I certainly do not, and I am sure that the majority of farmers do not, but there will now be no legal requirement for an individual to have their own bed. I think that that is wrong; does the hon. Gentleman?

The AWB was set up by the Attlee Government in 1948. Even Mrs Thatcher did not abolish it. She understood that if someone’s home comes with their job, they are in a uniquely weak negotiating position with their employer. However, last week’s Bill ended nearly 100 years of protection for farm workers. In the Labour party, we believe that the people who pick the fruit should also be able to buy it in the shops, and not have to rely on food banks to feed themselves and their children. As many farmers themselves have said, in their responses to the consultation, this decision will not secure a stable and prosperous future for the food and farming industry or for those who work in it. The Prime Minister once said that we were all in it together, but time after time, ordinary working people are first in his firing line. If Members want a rural living wage, they should vote with the Labour party this afternoon. If they are happy with poverty pay for their constituents, they should vote with the Government.

--- Later in debate ---

[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.

[Mr Henry Bellingham (North West Norfolk) (Con)]

I want quickly to comment on a point before my hon. Friend moves on. Surely gangs now have that protection. They are totally different from the average farm worker in East Anglia, where very often someone is in charge of £500,000-worth of equipment and on a very high wage, on a farm that 40 years ago might have employed 40 people, but now employs two people who are highly skilled, very responsible and well paid.

[George Eustice]

My hon. Friend is right and underlines my point that the GLA has made the AWB ever more redundant. Those at the bottom on those low incomes have new protections.

One big thing in this debate compared with the last one—it is important to recognise this—is that the National Farmers Union is on the right side. For once, it is saying that we should get rid of the AWB because it is out of date. In 1993, the NFU let down its members. David Naish, the then president, supported the retention of the AWB, and he was wrong to do so. The NFU board of directors at the time was out of touch and behind the curve, but the NFU now recognises that things need to change and fully supports and endorses the abolition of the AWB. If even the NFU supports the abolition of the AWB, it is time to act. Another big change since 1993 is, as many hon. Members have said, the introduction of the minimum wage, which is yet another measure that makes the AWB out of date and no longer necessary.

How does the AWB frustrate rather than improve career development in the agricultural sector? The most important thing is the huge lack of flexibility. The board is based on old-style wage grade rates dating from the ’60s and ’70s, and completely ignores the fact that, in the most progressive farm businesses, many people are paid a salary and have management responsibilities. The best farm businesses have profit shares and payment by results. Piece rates are increasingly used when people earn far in excess of the minimum wage rates. Those modern day pay practices are completely ignored by the agricultural wages order, which can frustrate the development of more progressive pay policies in the farming industry and keep it trapped in a 1950s mindset.

[Grahame M. Morris (Easington) (Lab)]

I am following the hon. Gentleman’s argument closely, but cannot understand why anyone would want to do away with the minimum. He suggests that, in many sectors of the agriculture industry, people are highly skilled and receive higher remuneration than would be set as a minimum by the AWB, but why argue for its abolition if it does not affect those people? Surely the AWB protects a group of people who do not receive such higher remuneration.

[George Eustice]

The group of people the hon. Gentleman is concerned about are protected by the minimum wage. That is already there and is set at roughly the same level as a grade 1 agricultural worker, so I do not think that that is an argument at all. What I am saying is that being too rigid can actually frustrate the development of more progressive pay policies.

The other point, which the Secretary of State touched on earlier—we had this in our farm business where some of the work was in pack houses—is that someone could be running a conveyor belt packing strawberries one minute and working in the field the next, with totally different wages rates applying. We ran a farm shop, in which different rates applied, even though there were sometimes shared staff.

[Yasmin Qureshi]

The hon. Gentleman states that this is a progressive pay policy. In the past 30 years, have a Conservative Government ever passed any legislation that has helped the working person, whether in terms of payment, work and conditions, or equality? Conservative Governments have never, ever advocated and voted for the rights of the working person.

[George Eustice]

I do not want this debate to get distracted, but even in the current Parliament the coalition Government have changed tax thresholds that help all working people, especially those on the lowest income.

Another problem with the rigid pay structure is that, as currently structured, it can discourage training and career development in small farm businesses. I will explain why. A small farmer might have two or three employees. He might not be able to afford to employ someone on grade 2, grade 3 or grade 4. He might not really have a need for those staff to be trained to those grades, but might nevertheless take the view that to aid the career development of a new employee—perhaps someone who has just left school and joined their business—he will give them time off work and support them in proficiency tests and training. At the moment, if they do that, the next thing that happens is that they suddenly have to pay that person more money. Is it not better if that person can develop and train, and has a farmer who wants to facilitate that, so that maybe, when a neighbouring farm needs somebody who has the proficiency test skills and a different type of skill set, they are able to progress and take a job that is higher paid in that neighbouring farm? The farmer will want that to happen; he will be happy to encourage somebody and see a career develop. At the moment, however, we are in a situation where the rigid grade structure discourages farmers from wanting to have their employees seek further training.

We have heard a lot in this debate, both from my hon. Friend the Member for St Ives (Andrew George) from my neighbouring constituency—we take different views on this, as people will have noticed—and others, about how difficult it is for farmers to negotiate with their staff, as if it is something that is dreadfully embarrassing and they cannot possibly do it. I reject that idea completely. Farmers, if they are still in business today, have to do all sorts of challenging things: they have to negotiate with people day in, day out; they have huge amounts of paperwork to deal with; and they have to negotiate and fight over the costs of their feeds, fuel bills and all sorts of things. The idea that they cannot sit down with the people they work with every day and have an intelligent conversation about their pay review is, frankly, ludicrous.

Farm businesses are no different from any other businesses. Even if they do not have to have discussions with their employees about pay rates, one can guarantee that there will still be times when they have to have discussions about people turning up for work late and staff who have problems at home and need some time off—all those sorts of issues. There is nothing different about farming. I was in the young farmers club in Cornwall with many of the farmers in my hon. Friend’s constituency. I know many of them and I can tell him that they are perfectly capable of having those conversations with their employees.

[Neil Carmichael]

I endorse what my hon. Friend is saying. I, too, was a farmer in the 1990s, and know that farmers can easily negotiate. It is also important to recognise that agriculture today is a modern industry that is moving forward, with added value products, retail sectors and so on. All of that is happening to farms, so we cannot anchor them down to something as archaic as the AWB. It is not just a floor, but potentially a ceiling—something to which my hon. Friend has referred.

[George Eustice]

My hon. Friend makes an incredibly good point. Farming has changed.

The biggest farm employer in St Ives is a firm called Winchester Growers, which does not receive subsidies like the large farmers and tends to rent land and employ lots of people. Quite often, young men who would have had farms themselves become managers and supervisors within such businesses and have a proper career structure, with profit options, share options—all sorts of things. It is very important that we modernise and move on. The AWB is a relic of the past. It is full of “bosses versus workers” rhetoric that is frankly 40 years out of date. It is right that it should go.