Lord Knight of Weymouth
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Lord Knight of Weymouth Excerpts(11 years, 5 months ago)
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Lord Knight of Weymouth
I hesitate to interrupt the noble Lord, who is such an authority on agriculture in this House, but the figure of £500,000 is not accurate. As a point of information, I think it is about £50,000.
Lord Plumb
I am inclined to agree that the figure is not accurate. I was quoting from the NFU. I am not the NFU. I was, but I am not now. I think the figure is considerably higher than that. If the noble Lord wants to quote that figure, I am very happy for him to quote it. I was merely quoting the cost of running the outfit, not the whole cost of the operation, including the buildings and everything else. If he wants to do that, I ask him please to produce that figure. I shall be delighted to receive it.
One notes that Unite, which represents farm workers on the board, is today campaigning against its abolition, which one understands, and argues that the plans will put thousands of rural and agriculture workers’ pay and conditions in jeopardy. I do not accept that. I know from experience what is being paid at the moment. You can forget your wages board and your minimum wage. If you are going to employ on your farm today someone who is going to sit on a machine that has probably cost £250,000, you are not going to pay them peanuts to try to get them into employment; you are going to pay them a good living wage. I am a great believer in giving these young people an opportunity to get into a share-farming operation. More and more people are inclined to that sort of determination as we look towards the future.
Rather than foster good labour relations, I believe that the present system is a source of friction and could certainly be done away with. The normal pattern is for the employers and the employees to take turns each year in being disgruntled. The board and the councils were established each year, and we had the Wages Council Act 1947. At their height, there were 100 throughout the country. They were progressively abolished, as we well know and have already heard, particularly between 1979 and 1997, leaving the Agricultural Wages Board as the only remaining example. If they were so vital, why did the previous Labour Government not restore them? Why did they not bring them back saying, “Other workers are going to be damaged”, as they propose farm workers are going to be damaged? They have not been, and we have not got wages boards there. We got rid of them, so why not do the same with agriculture?
Earl Cathcart
If I may, I shall come on to that point later. As I was saying, the board cannot set the same rate as the national minimum wage because that would look too simplistic, so the rate is set at 2p more. Last year—surprise, surprise—it was also set at 2p above the national minimum wage. Next year, if the board still exists, I would hazard a guess that the rate will be set at 2p more. This is hardly rocket science.
Recent research shows that the average earnings of full-time farm workers are 40% higher than the rate set by the board and that in 2010 some 90% of farm workers received more than the grade 2 minimum. The conclusion must be that farm workers are paid well over the minimum set by the board. I have talked largely about full-time employees, but what about temporary workers? I would argue that they are and will be protected by the national minimum wage.
Apart from some noble Lords opposite, who does not want to see the abolition of the Agricultural Wages Board? It is the union, Unite, which is deploying scare tactics by saying that without the board farm workers will see reductions in their pay with only the national minimum wage to protect them. That is quite clearly rubbish. Going back to my employee on £16,000 a year, if the board goes, am I really going to reduce his pay to the level of the national minimum wage; that is, £11,300? I am not going to do so because he would not accept a drop in salary of some £4,700 and he would leave. That action would disrupt my business because I would have to interview new applicants, train the new person, and probably have to pay the new worker £16,000 to entice him to move from his existing job. It is highly likely that all existing employment terms and conditions will remain exactly the same as my noble friend the Minister has said, in spite of—
Lord Knight of Weymouth
Can the noble Earl square his estimation that no agricultural worker will lose any pay with the Government’s own economic impact assessment which states:
“Research suggests that workers’ wages may fall by £0-34.5m”,
A year, and that its best estimate is £32.5 million? Where is that £32.5 million going to come from if it is not from agricultural workers?
Earl Cathcart
I am not absolutely sure why—I can only give you my case—I would want to reduce their pay at all. As far as I am concerned, the system is working perfectly well. I am happy with their pay, and so are they. I do not know where those figures come from. My view is that it is highly likely that all existing employment terms and conditions will remain exactly the same, as the Minister has just confirmed.
Lord Deben
My Lords, I declare an interest as the owner of a very small amount of agricultural land. I am also a former Minister of State for Agriculture. My only surprise is that it has taken so long to get to this point. It is unacceptable to say that the only people in the entire country who have to have a wages council after all the others have been abolished are we rural people. Actually, the insult is to us. The suggestion that there is only one group of people in the entire nation who need a wages board—because otherwise they will behave in a way that is wholly unacceptable—is offensive. It is offensive to my neighbours, it is offensive to rural people and it is not acceptable. That is the first thing.
Secondly, earlier I was rather tough with the Minister about what he may have written down. I could have written all the speeches on the other side quite simply because they have been said for the past 50 years. It is always the same thing—this argument that somehow or other people are out to do people down in an industry that is the most co-operative industry we have. You cannot run a farming enterprise—I do not run one but I see them all around me, and I was Minister for Agriculture and deputy Minister for the longest period of anybody—unless farmer and farm worker work together.
Thirdly, it is incredible to see the ignorance of what is happening in the industry, to hear speeches that assume that the industry today is like it was 50 years ago. Most people involved in the industry, by any proper measure, do not find themselves subject to the Agricultural Wages Board because the way farming is now organised and run is wholly different. Have we had a great campaign from Unite to say that the board has to be extended? Have we had trade unionists stamping in the street? Of course not, because they know perfectly well that this is an out-of-date mechanism which they do not want to bring back in any of the areas where it has been abolished. The previous Government had 13 years to do something, but they did not.
Lord Knight of Weymouth
I would like to revisit history very briefly. As I understand it, the wages councils for every other sector were abolished in 1993, the same year that the noble Lord finished being Minister of State for Agriculture. He must have been part of the discussions held then as to whether or not the Agricultural Wages Board should be abolished along with the others. Can he explain why he chose not to abolish it then?
Baroness Donaghy
My Lords, I was a member of the Low Pay Commission when it was first established, although I did not have the pleasure of serving under my noble friend Lord Myners. We set the first statutory national minimum wage, which was applied to thousands of farm workers who were not covered by the Agricultural Wages Board. It did not render the AWB irrelevant, because the AWB dealt, and deals, with a wide range of other issues relating to the grading structure, pay above the grade 1 level, training, and other important terms and conditions.
Although I am aware that abolition has the support of the supermarkets, the horticultural industry and, regrettably, the NFU, I believe that the country will suffer and that we will come to regret this move if it is carried out. We know about the sorry process, so I will not repeat it. May I ask whether the proposal has the support of the Welsh Assembly Government? Will similar measures follow in Northern Ireland and in Scotland? In other words, have they been asked for their view in Northern Ireland and in Scotland?
The proposal will have a detrimental effect on most agricultural workers. Recruitment is already difficult, and the Agricultural Wages Board has been particularly strong on building a career structure for farm workers, strongly supported by the NFU, I should say. Farms with between one and four employees will find it impossible to resist the relentless pressure on pricing, and I have to disagree with my noble friend who has just spoken; the pricing issue will bring enormous pressures to bear on bringing down the cost in many farms. Their standard of living is already comparatively low, and the wages board was to an extent protection against that downward pressure. Small farms will also have to carry out their own negotiations on pay. That might be perfectly possible—of course, they are not stupid; I would not dream of saying that they are— but it is an extra bit of work on top of a heavy workload.
The most recent impact assessment has revealed a much greater detrimental impact than the first one, and I ask the Minister why there is that difference between the two impact statements. Does he have any assessment of how many small farms will go to the wall as a result of abolition? We know what will happen in horticulture; the staff will all be temporary, all immigrants, and all on grade 1, which is the equivalent of the statutory national minimum wage. To rely just on the minimum wage and the working time directive is to throw out the baby with the bath water. That is not to say that the board itself does not recognise the need for change and the need to give its constitution more flexibility. It has said so itself.
If I were still chair of ACAS and were asked what I would do to replace it, I would have supported the idea of a joint industry council with an independent chair and a conciliation and arbitration mechanism where there is a failure to agree. The parties involved in the AWB have already called for this. The Minister in the other place has called for salaries and not just wages to be paid, something to which the noble Earl, Lord Cathcart, referred. Again, this could be done without abolishing the board. It seems to me that the Government are hell-bent on abolition. Presumably if they do not get their way in this Bill, they will begin again in another Bill whose subject matter overlaps with half a dozen other Bills, which seems to be the coalition Government’s theme.
As the Minister knows, a lot of overtime is worked in the industry. At present, that is paid at the rate of time and a half. I thought it was 39.5 hours, but somebody said 39 hours, and I stand to be corrected. This will be in jeopardy, and workers may face an 80- to 90-hour week in an industry which is the second most dangerous after the construction industry. The workers might put themselves at risk simply to make up for lost income in order to feed their families. Have the Government assessed the impact on health and safety if pay levels fall and excessive overtime is worked?
The Minister in the other place, David Heath, has recognised the skills shortages and the importance of “rewarding well paid careers”. Amen to that, but the future of farming must take account of the needs of small farmers, not just agribusiness, if we are to protect our food supply for our country. Have the Government given up on small farmers? The industry is a special case because it enjoys a £3.4 billion taxpayer subsidy. In 2011, these payments accounted for around 60% of total farm incomes, so they are practically in the public sector. Farmers and farm workers are special because they help to feed the nation. I ask the Minister: if he succeeds in abolishing the Agricultural Wages Board, which will be a sad day for this country, what will he put in its place?
Lord Knight of Weymouth
My Lords, we have had an excellent debate and heard the arguments very well put on both sides. I shall start my comments with reading to your Lordships some of an Early Day Motion that was put down in the other place in June 2000. It said,
“this House notes that … the Agricultural Wages Board also sets a series of rates of pay to reflect the varying qualifications and experience of farm workers, thus providing a visible career structure for recruits going into agricultural work and is used as a benchmark for other rural employment; is nonetheless concerned that average earnings in rural areas are considerably lower than in urban areas; believes that any weakening of the Agricultural Wages Board or its abolition would further impoverish the rural working class, exacerbating social deprivation and the undesirable indicators associated with social exclusion; and therefore calls on the Government at the conclusion of the current review, to retain the Agricultural Wages Board as it is currently constituted”.
I read that out partly because it summarises the argument that I want to make but also because among the names of those who signed the Motion are some who are now Members of your Lordships’ House; for example, the noble Lords, Lord Clark of Windermere, Lord Campbell-Savours, Lord Taylor of Goss Moor, Lord Tyler and Lord Jones of Cheltenham. The name David Heath stands out. He is the Liberal Democrat Minister responsible for abolishing the Agricultural Wages Board now, so I wonder what has changed in the intervening 12 and a half years for Mr Heath. I think there are very important principles at stake here.
I pause at this moment to correct something in the intervention I made on the authoritative noble Lord, Lord Plumb, about getting the facts right. I checked the Government’s impact assessment, which has been very helpful to us during this debate. It says that the cost of running the board over 10 years is £800,000— £0.8 million—which equates to about £80,000 a year, so I was wrong and the NFU was wrong. I apologise to your Lordships if I corrected the noble Lord incorrectly.
The principle of a rural living wage is important. If you are poor in rural areas, it is a particular struggle. The quality of life in rural areas attracts asset-rich retirees and second-home owners, pushing up house prices, and local shops are a long way from distribution centres and competition is limited because of the geography, meaning that prices are higher than average. In its 2010 report, the Joseph Rowntree Foundation said that it costs 10% to 20% more to live in rural areas.
Average wages are relatively low for the working population, with the predominant sectors being cleaning, care, hospitality and working in micro-businesses. If you are lucky, you will get a job in the public sector. Where I live in Dorset the largest employer is the local council, where you will have decent job security and a reasonable wage—if you can get a job there. But of course rural councils are in turn underfunded, and I am happy to be part of a group being led by Graham Stuart in the other place that is campaigning to get better funding out of this Government for councils in rural areas. Of course, the best way out of poverty is work, but only if work pays. Topping up low pay through the tax system by means of tax credits is one good way of achieving that, but better still is for employers to pay decent wages. That is why we should be campaigning for a rural living wage and why we should be retaining the Agricultural Wages Board.
My noble friend Lord Whitty talked about the position of Wales in his excellent opening speech. We have heard from some speakers who support this abolition that farmers are united in their agreement that the Agricultural Wages Board is irrelevant and does not serve any purpose. However, the Farmers’ Union of Wales cites three good reasons for retaining it, saying that it reflects the unique labour requirements of the agricultural industry and that to abolish it would be a retrograde step for an industry which in recent years has been struggling to attract new skills and expertise. The three reasons are, first, that the economic climate in the agricultural industry has made it a less attractive option for young people. In the union’s view,
“rewarding skills, qualifications and level of responsibility is a vital means of persuading high calibre people to remain in or enter the industry”.
Here I pay tribute to the noble Lord, Lord Plumb, for the foundation that he has set up and I was pleased to be able to attend its launch. The union goes on to say that,
“reliance on a single national minimum wage will inevitably result in an erosion of talent and skills from farming as more lucrative and less physically challenging professions are taken up”.
The second reason given is that:
“Agricultural workers are required to be flexible in their working arrangements to cover busy periods, fine weather and unsocial hours which are not covered by general employment law provision”.
The union believes that there is a still a vital role for additional minimum rates of pay across the six grades for agricultural workers. The final reason given is that it is an,
“important means of avoiding potential conflict and lengthy negotiations with individual staff”.
People do not want the burden of negotiation that abolition would bring. That is the view of the Farmers’ Union of Wales. It tells noble Lords that not all farmers are by any means agreed that abolition is a good thing.
We have been privileged to hear from the noble Lord, Lord Plumb, who is a former member of the Agricultural Wages Board for England and Wales, but I want to repeat a short passage from a letter written by a gentleman called Barry Salmon, a member of the board who is just about to retire. He is particularly concerned about training and attracting young people—a common theme when I researched this issue. He states in his letter to the right honourable Owen Patterson, the Secretary of State, that if he proposes that the board must go, things like training and a proper wage structure will be lost:
“Come and work in the farming industry, a rewarding industry to work in, one that requires skilled employees, high skill levels will be required and training can be given, a willingness to continue to train to meet new demands is essential, workers must be able to work on their own initiatives and take day to day responsibility for what they do. At busy and demanding times long hours are worked for which overtime rates are paid”,
which, incidentally, is not guaranteed in the minimum wage structure but is guaranteed, whatever you are paid, in the Agricultural Wages Board structure.
“All of which is true but the rewards don’t look likely to encourage new trainees into farming, no pensions, no sick pay, no entitlement to time off for such things as bereavements and worst of all the National Minimum pay scale applies with no formal structure above that to reward training. I cannot believe schools are going to encourage pupils with the good practical skills needed to take up a career in farming”.
He starts to point out some of the other benefits—
Lord Deben
First, I hope that the noble Lord will explain to the Committee that there is a distinction between the Farmers’ Union of Wales and the National Farmers Union of Wales, which of course voted in the opposite direction. There is a disagreement.
On the point that the noble Lord just raised, all those elements are in every other industry to which teachers might encourage people to move. Why would they not ask them to go into farming if there were no Agricultural Wages Board but would ask them to go into all these other industries that do not have a wages board? That does not stand up.
Lord Knight of Weymouth
I am afraid that I disagree with the noble Lord about the unique nature of agriculture. It is right that we have agricultural colleges giving specific training, specifically feeding an industry with the skills that are needed. People need to have that training and understanding of the unique way of life, in terms of working very anti-social hours at times and having to be highly flexible in the way that they work. Some 30% of farm workers have a boss who is also their landlord. There are a number of unique things about agriculture—he disagrees and I respect his disagreement—that I do not know of in other sectors.
Baroness Byford
I apologise—too many years in opposition. I take the noble Lord up on the agricultural colleges and universities—because two of them have become universities recently. I do not think that that has anything to do with what my noble friend was saying. The agricultural colleges are hugely important. They have an important role in encouraging young people to come into the farming industry. But it is a very different industry from what has been described by several colleagues on the other side.
Lord Knight of Weymouth
I mentioned agricultural colleges because I am not aware of another sector that has a specific network of colleges for its training. There is something different and unique about agriculture, which is very important. There may be others that other noble Lords want to mention. Maybe if I racked my brains I could come up with them, but I think there is something unique about agriculture.
Other benefits are attached to the Agricultural Wages Board. For example, there is the entitlement to rest breaks, overtime, paid holidays and even the allowance of £7.63 per week for working dogs. There is an on-call and night allowance. All these things are negotiated. They are all part of the reason why agriculture can be regarded as a special case.
Earl Cathcart
I am not very good at employment law; I have to be frank about that. Are you saying that my man to whom I am paying £16,000, which is nothing to do with the wages board or that side of it, does not have holidays, sick pay or all the other entitlements that any other employee in every other walk of life has? Of course he does. In my view it is not the wages board that is protecting him. He has normal employment rules and regulations, enjoyments and privileges.
Lord Knight of Weymouth
I am most grateful to the noble Earl and his helpful intervention.
Under the national minimum wage legislation, there is no minimum statutory level of overtime. Under that legislation, you have an entitlement to 28 days’ paid holiday as opposed to 31 days under the Agricultural Wages Board. There is also a maximum of 38 days for workers working more than six days a week under the Agricultural Wages Board, with no additional entitlement under minimum wage legislation. In terms of rest breaks, under the Agricultural Wages Board you are entitled to not less than 30 minutes where the daily working time is more than five and a half hours, whereas under the minimum wage legislation—
Lord Hunt of Kings Heath
Will my noble friend give way? I remind him of some of the evidence that came from the Duchy of Cornwall Nursery. The manager wrote in to say that he supports the abolition of the AWB and that “overtime rates are ridiculous”. Does that not give a clue to how some people in the industry will act if the AWB protections are abolished?
Lord Knight of Weymouth
The noble Lord makes a good point. He quotes evidence and I do not need to add to it.
I could go on to help the noble Earl. The final point, which I think is most striking, is the entitlement to paid sick leave and the level of sick pay received. Under the Agricultural Wages Board, all workers, whether or not they are paid the minimum, are entitled to 13 to 26 weeks on full pay after one year’s continuous employment, after which statutory sick pay applies. Under minimum wage legislation, statutory sick pay—currently £85.85 a week—applies where a worker has been sick for at least four days or more and has average earnings of more than the lower earnings limit, which is now £107 a week.
Earl Cathcart
I thought that it had been established that 90% of farm workers are paid above grade 2 in the scales—£6.50 rather than whatever the level is under the AWB. They are not being paid as minimum wage earners. They are getting a proper wage like anybody else who might be employed is getting a wage. I concede that temporary workers are paid the minimum wage, but normal salaried farm workers are paid well above that.
Lord Knight of Weymouth
The important thing to remember is that these legal entitlements for the agricultural sector apply regardless of whether your wages are at or above the minimum level set by the Agricultural Wages Board. These entitlements—for one and a half the usual rate for overtime, for example—are there regardless of what you are paid. That is an entitlement in law and we should protect it. I think that it is a good thing for us as parliamentarians to protect these minimum standards for workers, which would go if the Government were successful with their amendment to abolish the Agricultural Wages Board.
Unfortunately, some people do not act as responsibly as the noble Lords who have spoken and declared their interests as farmers. I point to the case of Chris Blakeney of Marden Management Ltd, who has just recently been in court in Swindon, where he changed his plea to guilty in respect of his activities as a gangmaster supplying 500 workers to farms across the country from his base in Calne. There are bad people around exploiting workers. When this protection goes, that exploitation is likely to grow.
A good argument has been made on this side of the Committee for the retention of the Agricultural Wages Board. What about the arguments against? I looked at the letter from the noble Lord, Lord Marland, the noble Viscount’s predecessor, to my noble friend Lord Stevenson on 19 December, when this amendment was announced. I note the manuscript amendment to the letter written by the noble Lord, Lord Marland, in which he said, “I reluctantly agreed to this—decision above my unpaid grade!”. That clearly suggests that the noble Viscount’s predecessor thought that this was all a bit dodgy. I would be interested to know whether the noble Viscount agrees with his predecessor about the dodginess of this amendment.
I then looked at the letter from the noble Lord, Lord De Mauley, whom I am pleased to see in his place. I think that we have answered most of the questions. The noble Viscount repeated the notion that this will improve employment but, as we have said, the impact assessment—on page 19, in paragraph ii, headed “Employment”—says:
“This effect is highly uncertain, and may therefore not be significantly different from zero”.
The Government anticipate no employment effect at all.
We have heard the arguments around whether agriculture is unique—people take different views on that. We have also heard the concerns about consultation. The lack of consultation on the amendment is truly shocking, given that 154,000 workers are directly covered by it. Four weeks’ consultation is completely inadequate for such a measure. There is then the problem of the number of people who were not included in the list of consultees. Action with Communities in Rural England was excluded. The various training organisations, such as Lantra, were not included. Housing bodies, such as the National Housing Federation and Shelter, were not included, even though the housing committees are being abolished. Even the Arthur Rank Centre was not included, despite the important role that we know the church plays in rural communities.
The consultation has been shocking. The procedure has been ignored. I would have welcomed a four-week consultation if it had been for the ash trees, for which we had an eight-week consultation; that matter was urgent. There was a really good reason for a short consultation on ash tree disease and four weeks would have been great; but we chose to go for eight weeks where there is an urgent need but four weeks to get rid of something that has been in existence since 1917. That makes no sense to me. The proposal is then brought here to Grand Committee where issues debated are supposed to be non-controversial, and we have a big row about whether the board should be abolished.
There is principled opposition and the noble Viscount should now tell us that he will withdraw his amendment and go away and reflect on it. He can then choose to bring it back on Report but it is not appropriate for the Grand Committee.
Viscount Younger of Leckie
My Lords, this has been a helpful and somewhat lengthy debate, which has included some passionate speeches from all sides of the Committee. I thank all noble Lords for their contributions.
I will clarify a couple of points. First, in relation to a point that was made by my noble friend Lord Plumb and led to a mini-debate concerning the figures in relation to retaining the Agricultural Wages Board, my noble friend is right to highlight the cost of the board. I have been advised that over recent years, the annual cost of running it has been around £180,000 and, for the ADHACs and the AWCs, the cost is around £20,000. That is just for the record. Secondly, the noble Lord, Lord Hunt, brought up the issue of rates of pay for farm managers. He quoted a rate of £14.10 per hour. I should like to clarify, and I hope he will agree, that he quoted the overtime rates, not the basic rates. The minimum hourly wage rate is £9.40 and the overtime rate is £14.10.
I will address directly some of the procedural issues that have been raised by noble Lords. The first issue was the question of whether the Agricultural Wages Board met the requirements of the Public Bodies Act procedures. This was raised by the noble Lord, Lord Whitty, my noble friend Lord Plumb, and the noble Lord, Lord Hunt of Kings Health. The Public Bodies Act is only one legislative route open to the Government to abolish the board. It is not the only route and it is perfectly open to the Government to decide upon another legislative option.
It would be politic to explain a little more about this. The Public Bodies Act created a specific set of arrangements for the reform of a wide range of public bodies by means of secondary legislation, which included the consent of Welsh Ministers, even where they exercised only minor functions. Welsh Ministers have specific, minor functions under agricultural wages legislation, for example in relation to the appointment of members of the Agricultural Wages Board, and ministerial consent was therefore needed to the proposal to abolish the board under the Public Bodies Act. The Welsh Government refused to give consent without powers to set agricultural wages and other terms and conditions being transferred to the Welsh Ministers. The Government could not agree to this for two main reasons. First, we regard this as a non-devolved matter relating to employment and, secondly, this would involve using the Public Bodies Act to extend devolution in a way that was never intended. I hope that that goes some way to explain why the Agricultural Wages Board stood out on its own.