Public Bodies Bill [Lords]

Huw Irranca-Davies Excerpts

Tuesday 25th October 2011 Commons Chamber

[Andrew George]

It is up to the hon. Gentleman and his colleagues on the very Back Bench of the Labour party to consider the demeanour they wish to adopt in this debate. Given that we share concerns about a relatively small and vulnerable group of about 150,000 isolated rural workers, many of whom are working on the lowest wages possible in that sector, I should have thought that a better demeanour would be to try and build bridges and find ways forward where we can adopt common ground in order to protect those workers, rather than making what I am sorry to say are rather cheap party political points.

[Huw Irranca-Davies (Ogmore) (Lab)]

As a compromise, does new clause 7 weaken in any way the protections for agricultural workers? If so, is that not completely contrary not only to the Liberal Democrats’ historical position on the Agricultural Wages Board, but to an early-day motion tabled in 1990 when the last attempt was made to abolish the board? Not only the hon. Gentleman but every Liberal Democrat Member was a signatory to that motion, which stressed that we did not want any weakening of the board whatsoever.

[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.

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[Huw Irranca-Davies]

The hon. Gentleman rightly corrected me: it was in 2000, but I was completely accurate in what I was saying. So may I ask him one more time? If the Minister is unable to reassure him that, in whatever compromise new clause is brought forward, not simply will basic pay be protected, but so will holidays and sick pay, overtime and bereavement leave, rent protection and security of tenure in farm cottages, as they are under the Agricultural Wages Board provisions, will he support the Opposition’s amendment, not his new clause?

[Andrew George]

I agree. I am grateful to the hon. Gentleman for his correction. I was here then and it is for the hon. Gentleman and his party to reflect on why we thought at that stage that the board might have been under threat. I entirely agree with him about the full raft of protections that should be available to agricultural workers. If I thought those protections were being significantly undermined, I would certainly not pursue the new clause in this manner. I emphasise that I do not feel precious about a particular quango; it is the protections I am most concerned about. I hope to hold out an olive branch to Ministers and say to them, “I agree with the principle underlying the Bill, which is to try to rationalise, amalgamate and abolish where that is necessary. Here is an example where we want the protections, but the small quangos that have proliferated can be amalgamated.” I am meeting them halfway and saying, “Let’s keep these protections.”

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[Andrew George]

I am grateful to the hon. Gentleman. I must admit that I am not fully aware of such surveys. As I said in response to an earlier intervention, the view is not universally held across all agricultural employers, some of whom have privately explained to me that they find that the framework that the AWB provides creates inefficiency in how they negotiate and establish agreements, sometimes admittedly verbal, with their work force.

[Huw Irranca-Davies]

I agree with the hon. Gentleman that many farmers welcome the stability that is given them in their relationships, as they can avoid doing individual farm-by-farm, person-by-person negotiations. As my right hon. Friend the Member for Delyn (Mr Hanson) said, that is the view of the Farmers Union of Wales. The hon. Gentleman may be interested to know that it is also the view of the Welsh Government. The Minister will be able to confirm later that the Welsh Government have been in correspondence with DEFRA seeking to avoid today’s scenario of the abolition of the Agricultural Wages Board because they want to retain its functions within Wales.

[Andrew George]

I am grateful to the hon. Gentleman for making that important point. We are part of a United Kingdom and, in spite of some hon. Members, a European Union in which the work force can migrate. The protections that an Agricultural Wages Board provides, which may be lost from England and Wales—and, I emphasise, from Cornwall—will not be lost in Scotland and Northern Ireland as a result of the Bill. Those who support the Bill’s measures on behalf of the agricultural sector argue that agricultural workers are highly prized. If the Agricultural Wages Board is withdrawn, there is a risk, certainly in the north of England, that agricultural workers will migrate north of the border, where their pay and conditions might be rather better. That will happen over time. The Minister looks at me in a rather quizzical and critical manner. Although it is true that the pay grades and terms and conditions of agricultural workers will not immediately be withdrawn as a result of the abolition of the board, for new entrants to agriculture the only protection similar to the regulations that will be jettisoned will be the application of the national minimum wage.

[Andrew George]

I am grateful to the right hon. Gentleman for making that point. The initial defence that Ministers gave for their proposal was that it is okay because there is a national minimum wage. The last Conservative Government did not consider such a proposal because there was no national minimum wage, but now that there is, they say that there is no fear because it provides a safety net for agricultural workers.

There are six grades of pay, from grade 1, which is only 2p above the national minimum wage, up to grade 6 which is—I do not have the figure in front of me, but I am sure the Minister will tell me it—about £8.80 an hour. Grade 6 is paid to farm managers and equivalent positions. I do not think that that is a lot to pay a farm manager. It is important to acknowledge that as little as 20% of the agricultural work force are paid at the grade 1 level. Therefore, 80% are paid above the grade 1 level. That helps to emphasise the point that it is vital to retain those grades.

It is not only the grades that are vital, but the conditions on holidays, sick pay, retention to be available on duty, standing pay, payment for the retention of a dog, and tied accommodation. About 30% of agricultural workers have tied accommodation. The regulations that apply to that are important because once somebody is in tied accommodation, they have a rather different relationship with their employer.

[Huw Irranca-Davies]

The hon. Gentleman is actually making some good points in defence of Labour’s amendment 32, not his new clause per se, because it will be not only new employees who are affected but contracted employees and casual workers renegotiating their contracts. I understand that 32,000 of those workers are in England and Wales. Does he agree with the point that I made earlier that if the view of both the Farmers Union of Wales and the Welsh Government is that the Agricultural Wages Board should be retained in Wales, it is inappropriate under the current devolution settlement to outlaw, abandon and abolish it? The Bill provides the people of Wales with no facility whatever to exercise their democratic legitimacy and retain it, let alone the people of Cornwall; we have not even moved on to devolution for Cornwall yet.

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[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 Anderson]

Does my hon. Friend also agree that the hon. Gentleman was correct when he was quoted on 11 November last year in the Farmers Guardian as saying:

“If I thought that by following this policy farm workers would be better paid or have better conditions then I’d support it. But, I think we all know that the opposite is the most likely consequence”?

He was right then, and he is wrong tonight.

[Huw Irranca-Davies]

I agree with my hon. Friend, and I also agree with the hon. Gentleman, as his peroration was, in fact, an argument in favour of our amendment, not his new clause. I therefore say to him that he should by all means press his new clause to a Division, as if he does so the Government Front-Bench team will have to consider whether it supports him. However, if he is not minded to do so, I urge him to support our amendment, as it will do exactly what he has previously argued is right for poor rural farm workers.

[Andrew George]

The purpose of my new clause is to achieve the Government objective of saving money by doing away with unnecessary quangos and other NDPBs, while also retaining the protections for agricultural workers. It therefore achieves exactly the same outcome as the hon. Gentleman is claiming to want, while also saving public money.

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[Huw Irranca-Davies]

The hon. Gentleman’s comments highlight the difference between our positions, as I do not think his new clause does anything of the sort. Instead, it weakens and threatens not only pay, but all the other terms and conditions of service that should be protected. His proposal is not an absolute guarantee; rather it is, in effect, a “maybe.” He and his colleagues have to consider tonight whether they are happy with the much more opaque and vague assurances that may come from the Government Front-Bench team.

As I said, the rural working class is watching, and so are people in Wales. The Farmers Union of Wales does not want the functions of the AWB to disappear, noting among its strengths the fact that, operating with few staff,

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

As I mentioned, the Minister will doubtless want to confirm today that the Welsh Assembly Government have also indicated their desire to retain the functions of the AWB in Wales and are awaiting a response from the Department for Environment, Food and Rural Affairs. So may I suggest to him that today is not the day to draw a shroud over the AWB, not least when to do so would be a clear rejection of the legitimate democratic voice of the Welsh people?

Finally, I draw the attention of the Minister and of Conservative Back Benchers—both of them—to the American poet, philosopher and polymath Henry David Thoreau, who asserted:

“Farmers are respectable and interesting to me in proportion as they are poor.”

Farm workers are going to be a whole lot more respectable, a whole lot more interesting and a darn sight poorer if the Government carry out this threat to abolish the AWB.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

I rise to speak to amendments 32 and 39, and I do so as a rural trade unionist and a rural Labour MP. The AWB is not a quango; it involves the Secretary of State, independents, workers in the industry and employers meeting to negotiate pay, and terms and conditions. Its destruction undoes the rightful and valuable recognition of skilled labour in the food manufacturing sector. Its destruction only creates a disincentive to young workers to enter the industry by reducing skilled labour to the level of the national minimum wage. That is a general wage for general work and it should not be used as a general means for conducting pay negotiations across a whole industry.

The scrapping of the AWB will have significant consequences for the rent relationships of workers at their place of work. Furthermore, it will undermine overtime pay arrangements, as the national minimum wage carries no overtime rates. Without the AWB, agricultural workers will have no mechanism to pursue collective bargaining to improve their pay and terms and conditions, and thus pursue their aspirations and improve their lot, not only for themselves, but for their families and their communities—they can only just about afford to live in those. If the AWB is scrapped, they will no longer be able to pursue those things.

The destruction of the AWB is only one part of this Government’s attack on the countryside. If it were not for the national minimum wage, the AWB’s removal would definitely take industrial relations in the fields of our nation back to an appalling condition not seen since the time of the Tolpuddle martyrs. For many on the Government Benches, “The Hired Man” is not merely a fictional account based on our social history of more than 100 years ago, but an economic vision for the future, exploiting the worker in the field. The Conservatives and Liberal Democrats cannot claim to be the parties of rural communities when the only part of rural society they want to talk to is the affluent one. The AWB provides a proper and efficient means for workers and employers to resolve human resources and industrial matters quickly. Its destruction only disfranchises workers—they will not have the right to negotiate a day’s pay—and complicates matters of negotiation. The move is divisive and will undoubtedly divide rural communities between employer and employee.

The destruction of the AWB has a cynical kernel at its heart. It implies that because of record levels of unemployment employers can drive down terms, conditions and pay on the assumption that people will simply be grateful for a job. In that sense, it is intended precisely to let the rural rich exploit the very rural working class who provide the food we eat and feed our families with.

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[Mr Paice]

The hon. Gentleman knows full well that that is not what I said. This group of amendments deals with not only the Agricultural Wages Board, but the Commission for Rural Communities.

[Huw Irranca-Davies]

Will the Minister give way?

[Mr Paice]

I will give way to the hon. Gentleman because I respect his integrity and his contribution on these issues in the past, although I did not agree with everything that he said.

As the hon. Members for St Ives (Andrew George) and for North Durham (Mr Jones) said, new clause 7 would transfer the Agricultural Wages Board’s powers to the Low Pay Commission and establish an advisory board of employees and employers to advise the commission. Clearly, amendment 32 would strike the whole issue from the Bill. Both provisions would continue the separate minimum wage regime for agricultural workers, although the mechanism would be different.

[Huw Irranca-Davies]

I want to shed some light, rather than heat. Of course, one of the Agricultural Wages Board’s functions relates to sick pay. How much is the statutory sick pay for grade 1 and grade 2 workers? How much would it be if the board were not there?

[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.

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[Gavin Shuker]

rose—

[Huw Irranca-Davies]

Will the Minister give way?

[Mr Paice]

I will give way, but I will make a little progress first.

I need to emphasise that this is not some secretive plot, as some people would suggest—[Interruption]—or even an open one. Let us not be pedantic. It is not some plot to drive down wages or conditions for agricultural workers; quite the reverse. For many years, there has been widespread employment protection for workers in other sectors of the economy through the national minimum wage regime and working time regulations. Agriculture remains the only sector with a separate employment regime. The terms and conditions and the way that it operates are outdated and gold-plate the provisions of the national minimum wage legislation and working time regulations. There is, therefore, a heavy regulatory burden on employers, and we believe that it is hampering the industry from creating jobs and damaging long-term prosperity and sustainability.

The regime that we seek to abolish dates back to the bygone era that I referred to. It does not relate to today’s widespread legal protections. It no longer reflects modern employment practices. As has been mentioned, it discourages the payment of annual salaries, which is difficult for workers because they have no control over their own financial planning. By contrast, the national minimum wage legislation provides for the payment of annual salaries. I emphasise that all our evidence shows that the vast majority of agricultural workers are paid above the level dictated by their Agricultural Wages Board grades.

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[Mr Paice]

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

[Huw Irranca-Davies]

The Minister is being generous in giving way, but may I probe him again on my previous question, because he did not address those who change contracts? Can he confirm that most people are entitled to statutory sick pay of £81.60? Under AWB grade 1, the figure is £153.30. Under grade 2, it is £274.86. If we abolish the AWB and people go on to new contracts on those terms—I can pull out other examples—they will have substantially diminished terms and conditions. That is the reality that the Minister is painting for us.

[Mr Paice]

The hon. Gentleman does not seem to grasp that, if someone decides to change their job in the future, they will obviously want to take into account what terms and conditions the alternative is offering them. I will not dispute his figures, because they are the ones laid down at the moment, but anyone changing jobs will want to consider the options available to them.