Public Bodies Bill [HL]

Lord Whitty Excerpts

Wednesday 1st December 2010 Lords Chamber

[Lord Newton of Braintree]

My Lords, I rather rashly intervene to express my general support for the thrust of the amendment moved by the noble Lord, Lord Greaves. I declare an indirect interest as my wife is a member of the planning authority in the area in which we live—Braintree in Essex—and I know that some of these problems occasionally land up with that committee. I am not an expert, but I think what the noble Lord, Lord Greaves, said about the need for some kind of expert advice in areas where the issue is whether there is an agricultural need is important. I hope that my noble friends on the Front Bench can meet it.

[Lord Whitty]

My Lords, I agree with the general thrust of the approach by the noble Lord, Lord Greaves. I am certainly not arguing for the status quo, although this body has helped to solve a number of acute cases for individual retired farm workers, farmers who desperately need the accommodation to attract further labour and local authorities faced with the housing crunch to which my noble friend Lord Clark referred, so it has been a useful institution. The demand is diminishing, but it is important that we know what will replace this body.

I will make an additional point to the Minister because it goes to the heart of the way in which we are dealing with the Bill. In Schedule 1—and the same will apply to some extent to other schedules—each body has a particular situation to deal with and the Government appear to envisage different consequences of the abolition of those bodies. It is important that this House knows what is in the Government’s mind to replace what has hitherto been an important, if diminishing, function. It is important that we have this in writing, not simply as a reply in the debate. Some of us argued for a Select Committee procedure that would have allowed that to happen away from the Floor of the House, if necessary, and on a different basis of consideration. In this, as in so many other areas, we need to know the total picture. I make a plea to the noble Lords, Lord Henley and Lord Taylor, that as we go through the stages of this Bill, and it looks as though it will be quite a lengthy process, they provide us with that kind of information so that we can have a more rational debate. I make the point on this institution because it is one about which I do not disagree with the Government, but we need to know in all cases what is intended to replace these bodies.

[The Earl of Caithness]

My Lords, like the noble Lord, Lord Clark of Windermere, I remember the 1976 Bill coming through Parliament. I was on the Benches that he is sitting on now. I thought it was a bad Bill then, and it has remained a bad Act, in particular with regard to ADHACs. The noble Lord, Lord Greaves, said that this body is necessary. If it had been necessary, it would have been compulsory to have consulted an ADHAC. As it is, it is a purely voluntary agreement that an ADHAC can be used for consultation with the housing authority if necessary. The vast majority of cases are dealt with directly with the local housing association, so “necessary” was not the right word to use in this instance.

The noble Lord, Lord Greaves, said that there are 40 to 50 cases a year. I question that. My information is that the number is almost in single figures now. Sixteen ADHACs have some 10 cases a year in total. That means that half of them are not doing anything at all. It is high time we got rid of them, and I thoroughly support my noble friend in this. Could I just ask him whether, when we come to the follow-up legislation, he will propose to get rid of all 16 ADHACs at once, rather than one by one?

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[Lord Whitty]

My Lords, I support the noble Lord, Lord Greaves, in his argument and agree with pretty much everything that he said. I caution the coalition Ministers that they will frequently find that propositions that have been put to successive Governments and their Ministers get dusted off and re-presented to new Ministers. Sometimes—I do not wish to impugn the noble Lord—Ministers are credulous enough to accept them, even though their predecessors have rightly looked at and rejected them. To my knowledge, the proposition of abolishing the agricultural wages board has continued for the past 40 years. It has come less from officials in MAFF or Defra than from pressure from the dead hand of the Treasury and the free labour marketeers in what is now BIS. That pressure is evident here. Certainly that pressure was put on Mrs Thatcher’s Ministers, who rightly resisted it. It was put on John Major’s Ministers, who also rightly resisted it. To my certain knowledge, every Secretary of State and junior Minister for Agriculture in the previous Administration was under such pressure and we rightly rejected it.

The noble Lord will say that things have changed. He has some justification because two things have changed slightly. First, for most of that period most farmers were in favour of maintaining the wages board. That is no longer entirely true. The upper echelons of the NFU have started voting with the workers rather than the farmers, who have taken a rather more jaundiced view of the wages board, even though it has meant a fairly balanced result for both sides in the long run. Many others, who are not necessarily in the top echelons of the NFU, are still favourably inclined towards the wages board because it saves small farmers a lot of work in trying to establish the appropriate rate for a skill and all the other terms and conditions. They would otherwise have to go through all that themselves. Indeed, some farmers’ organisations are still in favour of the wages board. The Famers’ Union of Wales, for example, is in favour of retaining it and opposes this proposition, as do the Welsh Government. We are talking about a body that covers England and Wales; there are devolution issues here. As far as I am aware, the proposition in Scotland is entirely separate. The noble Duke, the Duke of Montrose, who I am sure is one of the more benevolent employers north of the border, will find that there are Scottish farmers who still wish to retain the process. It is not true to say that all farmers, as employers, are now opposed to the continuation of the board.

Secondly, although we now have the national minimum wage, it deals only with the absolute minimum, as my noble friend Lady Prosser pointed out. There are differences of only a few pence in that area. The whole structure of skill rates and different time rates and the whole issue of non-wage benefits, which were dealt with by the wages board, are not dealt with by having a minimum wage. The whole grading structure is in peril if this board is abolished.

As the noble Lord, Lord Greaves, said, that is not to argue that the present structure could not be hugely simplified. Indeed, the previous Government looked at bringing forward a legislative reform order that would have reduced the number of committees, simplified the process and, to some degree, made the process for the agricultural minimum wage equivalent to that for the minimum wage. That was a sensible proposal, which would have had to follow the procedure of the Regulatory Reform Act. At the time, some noble Lords were concerned that the Act was moving towards the Henry VIII end of the spectrum. However, compared to this Bill, it was an absolute doddle for those who wished to preserve parliamentary privilege. It is probably more like a Henry III Bill in that Henry III had to compromise with Parliament. I believe that on some of these issues the Government will have to compromise with Parliament. The process that is being proposed in the Bill, as I have said several times, needs to be addressed.

The agricultural labour force of more than 150,000 in England and Wales—and others who use the wages board as an analogy to avoid engaging in separate bargaining with their employees or their unions—is still an important feature. I hope that the noble Lord can answer the question asked by the noble Lord, Lord Greaves: what will replace the board? Is there any role for the Low Pay Commission to look at aspects of this—at the particular rates and situations that apply to agriculture? Is there really any prospect of collective bargaining if it is not underwritten by the law? Under the legislative reform order that we contemplated, it would have been possible to have moved the agricultural wages board to a more bilateral structure but still with the legal underwriting. That would probably have been a sensible move. I was certainly in favour of it. We could have moved towards it.

If we leave this entirely to collective bargaining, as applies in other sectors, there is, as my noble friend Lady Prosser indicated, the difficulty of organising in this area. I do not have to declare an interest since I am not a member of Unite, although I have some family connections to it. These days I am a resident of Dorset, which is still a major focus of agricultural workers. There, the union’s ability to organise is a little better than it was at the time of the Tolpuddle martyrs, but it is not easy. In so far as the wages and conditions of agricultural workers in Dorset have dramatically improved since those days, they owe a lot to the 100-year operation of the agricultural wages board, rather than the benevolence of employers or the state. It is unlikely that it will be easy to move to a normal situation of collective bargaining in this area.

Perhaps this is not so much a West Country issue. The people who are pressing most for this are horticultural employers, who have a very odd workforce structure. The work is hugely seasonal for obvious reasons. Much of the workforce is made up of migrants, many of whom are very vulnerable. Employers tend to try to pay the minimum rate, if not less. In the horticultural sector, a lot of the seasonal workers, many of whom have skills and qualifications in their own countries, will be pushed down to the minimum rate. The only legally binding rate will be the minimum wage. That, I can see, is desirable for the more ruthless employers in the horticultural sector. However, it is not the equivalent of a situation where you are a permanent employee in a major area of agriculture.

The other question is: who will now enforce the minimum wage in agriculture? It is difficult if we are talking about farms with two or three workers or farms where there are many seasonal workers who move on after a couple of weeks. The agricultural wages board had a rather minimal inspectorate attached to it, but who will now do its work? The Revenue imposes and enforces the minimum wage, but it is unlikely to tramp up and down every farm to find out how much every worker is paid. Enforcement is also an issue.

The question to those of us who oppose the dropping of the wages board is: why is agriculture so different from other areas that it requires a continuing minimum standing wage? The fact is that every other wages board was abolished. The wages councils were abolished in the 1980s and 1990s and the average wage in those sectors dropped significantly. If this is a blatant wage-cutting exercise, we should be told. If, however, it is more that we want to develop a skilled, effective and competitive workforce in agriculture, people must recognise that there are several difficulties in this sector beyond those that have already been referred to.

I shall mention some in particular. My noble friend Lady Prosser referred to the rather close relationship that agricultural workers inevitably have with their farmer employer, particularly on small and medium-sized farms where there are only two or three employees. That is fine while it is good. As soon as it breaks down, however, the power relationship between the employer and the individual farm worker is incredibly imbalanced and the worker is incredibly isolated—literally, in geographical terms—because there are no workmates in the same situation.

The other dimension is that the farmer himself or herself is under severe pressure, to a degree that many other small businesses are not. The noble Lord, Lord Greaves, made reference to the role of the food chain in pressuring farm costs, particularly in relation to the supermarkets. I am glad that this Government have decided that they will take up with slightly more enthusiasm than the last Government the proposition for an ombudsman who will look at the contractual relationships between the farming industry and other small providers of food and the grocery chain. I very much commend them for that. However, this is moving in the opposite direction. Within a week or two of the legally binding minimum wages disappearing from horticulture and agriculture, the buyer from the supermarkets will say, “You now do not need to pay the wages that you have previously paid. You can lower your costs and your price to us and provide a significantly lower rate”. The cost benefit, therefore, of cutting wages does not go to the farmer. The employees will lose their living standards and the profit from the whole process will go up the chain to the big processors and supermarkets. If that is what the Government want, it is not in the interests of the agricultural sector. Indeed, it is a downward spiral in the agricultural sector and something that they have recognised needs to be counted in other respects.

Another nefarious dimension of the labour conditions in the agricultural labour market relates to the seasonal and migrant workers operating in many parts of agriculture but particularly in horticulture and in the larger-scale vegetable sector. I was grateful to hear on Second Reading the noble and learned Baroness, Lady Butler-Sloss, ask why the Gangmasters Licensing Authority was in this Bill at all. Speaking as the ex-Minister who brought in that piece of legislation, I am glad that she and others have recognised what a successful operation that is beginning to be. However, it is an uphill struggle because, in this sector, the conditions of the workers are open to the widest exploitation. The Gangmasters Licensing Authority has to check on a number of things. It clearly has to check on health and safety at work and in housing. It checks on the employment and migration status, tax and national insurance of the workers—and rightly so. The abuses in all those areas tend to be cumulative.

Another area—one that is absolutely essential in triggering the Gangmasters Licensing Authority’s interest—is whether the Agricultural Wages Board provisions are being followed. If the legal basis for that disappears entirely, the Gangmasters Licensing Authority’s ability to check whether appropriate wages and conditions are being paid by employers—many of whom will push their situation to the limits if they possibly can—is removed and a whole section of agricultural workers will lose one of their most important protections. These are just some reasons why agriculture, particularly the seasonal dimension of agriculture, drives us to think that a legal minimum ought to be retained.

I seriously ask the Government to reconsider this. I am not against the simplification of the wages board. I am not actually against the abolition of the wages committees. However, a basic minimum level of remuneration in agriculture would potentially avoid pretty substantial abuses, which I am sure that all parties in this House wish to avoid. I ask the Government to think again.

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[Lord Whitty]

Apologies if the Minister was moving on to this point, but do the Government have an impact assessment of the effect of the abolition of the legal minimum on wage rates, given that when each of the other wages boards was abolished the rate in that sector fell? Clearly, there are always some who are paid more than the minimum, but have the Government done that calculation? If so, I think that we should know.

[Lord Henley]

I do not think that it is necessary for that work to have been done. As I said, we believe that with the abolition of the board the industry will be able to operate more flexibly, which would lead to more job creation and better opportunities. What the noble Lord and others have been asking us to do is describe what picture, as they put it, we see for the future. I believe that it is one where it is open to the industry to come together to set up its own system. Again, I was grateful to the noble Lord, Lord Cameron, who said that the NFU ought to be out there seeking to put something together. What I did not hear from the representatives of Unite or Unite’s predecessor, the Transport and General Workers’ Union, was whether they were prepared to come together with the NFU and put something together. I do not see why the NFU, Unite and other industry representatives cannot come together and create their own advisory committee to discuss these matters. We do not think that it is necessarily a matter for the Government.