Enterprise and Regulatory Reform Bill

Lord Myners Excerpts

Wednesday 16th January 2013 Grand Committee

[Earl Cathcart]

I am sure that the noble Lord will be interested to hear what the Minister says when he winds up.

I am happy to say that since employing new workers, my business has prospered. It may not be the norm, but the decision I have to make is not by how much I should reduce my employees’ salaries, but rather whether I should give them a bonus, a pay rise or a combination of both. It is a decision I shall make in spite of, not because of, the Agricultural Wages Board and contrary to the scare tactics that I suggest are being used by Unite.

If I wanted to expand my business beyond packing and selling my own farm produce by taking in produce from other farmers for packing and resale, any new workers for that expansion would not be classed as farm workers and would not come under the Agricultural Wages Board’s umbrella, so we would have the absurd situation of two people who are doing exactly the same job being paid at different rates—and all for 2 pence, which is a ridiculous complication. It is further complicated because I am told that if my expanded business had a busy period, say, before Christmas, under the Agricultural Wages Board’s rules I would have to pay time and a half to the agricultural workers packing my farm produce if they work more than eight hours a day or 39 hours a week. The workers packing my neighbouring farmers’ produce would be subject to the national minimum wage and paid the minimum rate regardless of the number of hours they work. What a dog’s dinner. I believe that the board is irrelevant in today’s employment market and an unnecessary cost to the taxpayer. It is outdated because it works on hourly wage rates, not salaries. Those who need an hourly rate are protected by the national minimum wage, and if the Agricultural Wages Board—

[Lord Myners]

I sense that the noble Earl is coming to the close of his comments. I want to remind him that he said he would answer the point raised by my noble friend Lord Hunt of Kings Heath; namely, that the higher grades are not protected by the national minimum wage. The noble Earl said he had an answer, and I think that the Committee is looking forward to hearing it.

[Lord Hunt of Kings Heath]

Perhaps I can help my noble friend. I am referring to grades 1 to 6: grade 6 is the farm management grade and the rate is £14.10 an hour; grade 5, which is the supervisory grade, is £13.05 an hour; and grade 4, the craft grade, which I suspect is the grade that the noble Lord has in mind, is £12.32 an hour, which on a 37-hour week comes to £22,000 a year. I really do not understand what he is saying.

[Earl Cathcart]

The noble Lord did raise a question and I did say that I would come back to it. This is all about the competitive market. I said before that one has to attract people with skills into farming and to pay a higher rate according to those skills, and that is exactly where I am; you have to pay a higher rate of salary—not a higher rate per hour—to the person with the greatest skills, and it is the competitive market that determines that price, which is normally higher than the Agricultural Wages Board rates.

I said that the board is irrelevant to today’s employment markets. It is outdated, working in hourly wage rates not salaries. Those who need an hourly rate are protected by the national minimum wage, and if the Agricultural Wages Board disappeared tomorrow I do not believe that most employers and employees would notice. Those who did would, I believe, breathe a sigh of relief as it would reduce the administrative burden on farmers and their advisers.

The noble Lords opposite have all argued strongly for the board’s retention, but they had 13 years in office to change, modernise and bring the Agricultural Wages Board into the 21st century. They chose to do nothing.

[Lord Myners]

My Lords, I welcome the Minister to his new role, although I feel rather sad for him that his debut is in promoting a Bill that most Members of the Committee will now recognise is a misrepresentation in its reference to the promotion of enterprise. I can say without any doubt after a career in business, including chairing a number of major public companies, that almost nothing in this Bill will have any beneficial impact on economic activity or on the growth of the economy.

This is a rather tawdry Bill, and we are now being asked to look at rather a shabby amendment. It must have been very clear to Members of the Committee that the Minister’s predecessor, the noble Lord, Lord Marland, did not really have his heart in the Bill at all. It was quite clear that he would much rather keep up his suntan overseas than put through legislation that will have such little economic impact.

The amendment has come about as the result of wholly inadequate consultation that is supported by evidence which is thin in the extreme, and the Minister will need to explain to the Committee why it is being proposed now. Why was it not incorporated into the original Bill? Why was it not mentioned, debated or discussed in the other place? Is it an afterthought? Was it overlooked when the Government were drafting not only the Public Bodies Bill but this Bill? If that is the case, those who work in the rural economy will have grounds for extreme grievance at the behaviour of a Government who can approach this issue, which is of great importance to them, in such a superficial and callous manner. My noble friend Lord Hunt of Kings Heath has already pointed out that by putting this amendment into this Bill, a number of procedures and processes that Parliament approved in the Public Bodies Bill will be avoided.

I noted the Minister’s strong endorsement of the national minimum wage and I declare my past role as chairman of the Low Pay Commission. However, as I listened to him I felt, as he advanced his arguments for the abolition of the Agricultural Wages Board, that one could have made the same speech and inserted the words “Low Pay Commission”. What is it about the Agricultural Wages Board that is different from the Low Pay Commission? His arguments about freeing up the economy, allowing the market to operate and establishing a market clearing rate apply to the whole economy. I ask myself whether we are seeing this shabby amendment incorporated into this Bill at such a late hour as a precursor for a deeper and more fundamental attack on the concept of the national minimum wage.

--- Later in debate ---

[Baroness Buscombe]

My Lords, I am grateful to the Minister. I have been sitting here and slowly thinking to myself that I cannot continue to listen to the noble Lord, Lord Whitty, making this incredible, disingenuous argument. I am going to go back down memory lane briefly. I remember when the noble Lord, Lord Whitty, was Minister for Agriculture and we had the Burns report.

[Lord Myners]

I am grateful to the noble Baroness for giving way. The Chairman has already read from the guidance on participation in debates. The noble Baroness was not here at the beginning of the debate and in that circumstance—

[Baroness Buscombe]

Excuse me, I was here.

[Lord Myners]

Then I apologise.

[Baroness Buscombe]

Good.

I remember so well that when the noble Lord, Lord Whitty, was in government, the Burns report looked into the future of hunting. The report came back saying that if we lost hunting, the lives of a huge number of people in rural areas would be affected. They would lose their jobs and that would have a massive impact on the rural economy. I remember the noble Lord standing at the Dispatch Box saying “I do not like hunting. I am not interested in what the Burns report says. We are going to get rid of it anyway”. Here is the noble Lord, Lord Whitty, talking so much about the need for consultation as if he really cares what the result might be. This is all about dogma. What has been going on this afternoon has been vacuous and disingenuous, and I hope that the Minister will feel strong in his argument and ignore these disingenuous requests to remove the amendment.

--- Later in debate ---

[Lord Myners]

My Lords, the Minister made what I thought was a rather unnecessary remark about the fact that I was absent from the Committee for not more than five minutes—in a debate that has run for two and a half hours, and I was here for about an hour before that. I will not explain to noble Lords why I chose to leave the Room for five minutes, but for the Minister to make a point on that shows how desperate he is to keep the faith of his supporters.

On the subject of people leaving the Committee, the noble Lord, Lord Cameron of Dillington, who is no longer in his place, asserted his view that he did not think that the benefits would be passed on to supermarkets. I question that given that in their evidence to the consultation the supermarkets have been hugely supportive. One wonders why they are supportive of this proposal if they do not expect to benefit. If that is also the view of the Government, can the noble Viscount explain to us in very simple terms that if you have a transferred benefit here—taking £250 million out of the rural economy—where is that £250 million going? There has to be an equal and off-setting amount. Where does the Government believe the benefit will accrue?

[Viscount Younger of Leckie]

First, I apologise to the noble Lord. There was absolutely no derogatory comment intended.

I do not believe that the money will be taken out of the agricultural economy. The whole point of making this change and abolishing the Agricultural Wages Board is to create a more flexible environment and to enable farmers to recruit new workers.

[Lord Myners]

There is nothing in the Agricultural Wages Board that in any way prevents a farmer from paying more, as indeed the noble Earl explained to us. This is “flexibility” used as a euphemism. It is a flexibility that only moves in one direction. The Minister’s argument simply does not withstand any close and critical examination.

[Viscount Younger of Leckie]

I think I should repeat to the noble Lord that the Agricultural Wages Board has been in existence for 65 years. I realise that that is not necessarily a reason for changing but there are still some great anachronisms within the system. Secondly, part of the point is to release farmers from the administrative burden of the two-tier, dual system. So I stick by my view that this is long overdue and it is right that we should take this step.

The key priority for this Government is to encourage economic growth. The Government firmly believe that the abolition of the Agricultural Wages Board and the agricultural minimum wage regime is in the long-term interests of all those within the industry. It will enable the sector to meet the challenges of increasing domestic food production and help secure its long-term prosperity. The abolition of the related Agricultural Wages Committees and Agriculture Dwelling House Advisory Committees in England will also contribute to the Government’s public body reform programme and will remove a number of redundant bodies, as mentioned earlier. I hope that the Committee will accept the amendment.