Lord Whitty
Main Page: Lord Whitty (Labour - Life peer)
Lord Whitty
“(1) Every agricultural wages committee for an area in England is abolished.
(2) Every agricultural dwelling-house advisory committee for an area in England is abolished and the services formerly provided by such a committee shall instead be provided by the Agricultural Wages Board for England and Wales.
(3) Without prejudice to section 3 of the Agricultural Wages Act 1948, any minimum rate of pay contained, or to be contained, in an Order of the Agricultural Wages Board may, where the Agricultural Wages Board considers it convenient to do so, be fixed by reference to any periods during the currency of employment.”
Lord Whitty
My Lords, my name is on this, as are the names of the noble Lord, Lord Greaves, the right reverend Prelate the Bishop of Hereford and the noble Baroness, Lady Trumpington. I regret to inform the House that the noble Baroness has suffered a fall and will not be with us tonight. I understand that there was no government Whip close to the incident so I am sure that we can pass unanimously our best wishes to the noble Baroness, Lady Trumpington, and wish her a speedy return.
Lord Whitty
My Lords, what the Minister failed to mention is that the Government’s own best estimate, in the only document that they have produced on the effect of abolishing the Agricultural Wages Board, will be a direct cut of £240 million from the income of rural workers.
Our amendments would do some of the things that the Government are after: they would abolish the 31 bodies; they would allow for simplification and modernisation to the wages order; but, crucially, Amendment 83A keeps the legal underpinning of the terms and conditions of those who work in our agricultural sectors.
That figure of £240 million comes directly from Defra’s impact assessment, and it is its best estimate—there is a range, but that is its best estimate. The House is in some difficulty here because it should have more information. We are in a slightly bizarre procedural position because on the face of it the Government had the right to abolish the Agricultural Wages Board under the Public Bodies Bill. But, of course, under that Bill, after long and rather testy debate in this House, there are some very detailed procedures for implementing that abolition. They require much greater information, much clearer arguments, much better figures and much more effective consultation than the Government have coming forward. The Government are trying to cut corners by inserting their amendment into a piece of legislation that had already passed all stages in the House of Commons and which was not accepted in Committee in this House.
There may be good reasons why the Government are trying to change tack. One is that they have problems with the Welsh Government—this is England and Wales legislation. The Welsh Government, like their counterparts in Scotland and Northern Ireland, want to maintain statutory minimum standards in the agriculture sector. Of course, it is also convenient for the Government that they have not been required to come forward with that kind of information. They have not presented us with any alternatives; they have simply come forward with a proposition for abolition. The House would be entitled to say to the Government that we are not prepared to consider this government amendment until the equivalent of Section 11 of the Public Bodies Act is before the House. Clearly, the Government are not prepared to go down that road.
I will say a few words about the nature of the agricultural workforce. Of course, the Minister is right that it has changed since 1917 and 1948, but we are left with an agricultural work structure of a lot of relatively small businesses that employ one, two, three, perhaps six, permanent staff and parts of a sector that employ large numbers of casual workers on a seasonal basis. There is no other sector in the whole of the economy that is like that. There is no other sector, therefore, that requires the kind of legal protection that until very recently all parties in the industry and all parties in the House recognised was important.
Moreover, the Government’s analogy is quite wrong. The Agricultural Wages Board specifies a whole wages structure and a whole career structure for workers in the agricultural sector. It does not simply specify a minimum wage, like the national minimum wage; nor is it the same as most of the old wages councils, which simply specified a basic rate rather than the whole range of conditions required within the agricultural sector, which will be difficult to achieve without some legal underpinning by normal methods of collective bargaining either nationally or by agreements between individual farmers and their own workforce—something that would often be very difficult for both sides to accomplish.
The Minister claims that this is a great removal of burdens on small farm businesses, but the operation of the board has in many cases been of great benefit to small farmers. In the consultation—such as it was; it was only four weeks’ consultation, whereas most people are required to go through three months, and it was only one week in Wales—a significant number of small famers said they wished to retain the Agricultural Wages Board because that meant that once a year they knew what they were going to pay their staff and they did not have to go into embarrassing and lengthy detailed negotiations with their own two or three employees. Therefore, the burden of administration on the farmers is actually less under the Agricultural Wages Board than it will be if the Minister gets his way and it is abolished. In the evidence, there are a large number of small famers saying precisely that, ranging from the West Country to Yorkshire to Norfolk.
The impact assessment also says that the effect on farmers’ incomes will be a significant improvement. In fact, it has that down as the reciprocal of the cut in the agricultural workers’ wages. But the reality is that a lot of those famers will never see that money, or will only see it temporarily. The wage cut for workers will almost certainly end up being of benefit to the supermarkets. It is very interesting that in the consultation nearly 40% of the replies are from the horticultural sector, which employs the mass amount of casual, unskilled labour and which deals directly with the supermarkets. Even more tellingly, the strongest supporters in the rest of the food chain are the Fresh Produce Consortium, whose dominant members happen to be Tesco, Morrisons, Asda and Marks & Spencer.
The reality is that once the supermarket buyers hear that the Agricultural Wages Board and the minimum rates have been abolished, they will go back to their farmers and suppliers and say, “We want a cut in the prices that we are giving you”. The reality is that whatever burdens the Minister claims will be removed from small employers, many of whom do not accept that, the money will not come out of the pockets of farm workers and into the pockets of the farmers, it will go out of the rural community entirely and into the pockets of the supermarkets.
This is a very dangerous move and one that we certainly could not support. There is little in what the Minister said tonight with which I can agree. There is little in what his supporters in Committee, who were in the minority, brought to bear. They said, “In my area, on my own estate, on my own farm, people I know pay a lot more than the minimum wage”. Of course they do. It is a wages structure. A lot of employers pay more than the minimum. But once you abolish the floor, the whole wages structure starts coming down. The impact assessment which the advisers of the department of the noble Lord, Lord De Mauley, Defra, and BIS had before them makes it quite clear that the best estimate is that this will be nearly £250 million out of the pockets of relatively low-paid agricultural workers. It is a disgrace, frankly, that the Government are proposing this. It is a disgrace, in some ways, that the NFU has changed what has historically been its position in support of the board to pressing for its abolition and, in so doing, does not represent the views of many small farmers.
Our amendment would allow simplification and modernisation. It would allow the abolition of the 31 quangos to which the Minister has referred, which would give Defra a few brownie points on the Cabinet Office’s scorecard of the quango cull. The abolition of the wages board, however, is a different matter. It will bring distress to rural communities, a cut in income to rural workers and will do nothing for the farmers and the agricultural sector of this country. I beg to move our amendment to the Government’s amendment.
The Lord Bishop of Hereford
My Lords, I thank the noble Lord, Lord Whitty, for his clear and eloquent statement on why it is essential not to abolish the Agricultural Wages Board, and why it is therefore vital that as a House we support this amendment of the Government’s amendment.
It is noteworthy that the wages councils were established by Winston Churchill in 1909, and he spoke of the need for them in these words:
“It is a serious national evil that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions … where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst; the worker, whose whole livelihood depends upon the industry, is undersold by the worker who only takes the trade up as a second string … where those conditions prevail you have not a condition of progress, but a condition of progressive degeneration”.—[Official Report, Commons, 28/4/1909; col. 388.]
That may not be quite the language that we would use today. It is language from 100 years ago, but they are still salient points. Indeed, these underlying principles and thinking have led to a minimum wage and then a living wage.
When other wages councils were abolished in the 1980s, the Government chose to keep the Agricultural Wages Board on the grounds that the industry required some central oversight to prevent wages being driven down unacceptably. In order to consolidate and build upon the progress achieved in terms and conditions during the past 30 years, we need to retain and further develop, and update, the Agricultural Wages Board, not abolish it.
The NFU has criticised the cost and provision of the AWB claiming that it is a,
“bureaucratic irrelevance since the advent of the Minimum Wage”,
and pointing out that the gap between the national minimum wage and the basic agricultural wages order minimum is only tuppence. However, the AWO also, of course, lists six different grades, to which we have heard reference made, with levels to be paid according to responsibilities, qualifications and the nature of the work in question: a salary structure.
Viscount Younger of Leckie
I thank my noble friend for his comment. I understand that the code adjudicator is called in in this particular case. But I owe my noble friend a full answer to his question and I will follow up after this debate.
Lord Whitty
My Lords, I thank the Minister and everyone who has participated in the debate, particularly those who supported my amendments. Those who objected to my amendments, including the Minister, seem to have two points—that we have to get rid of archaic bureaucracy and that this will not have any effect because wages will be paid well above the rate and that farmers as employers will not notice the disappearance of the Agricultural Wages Board.
As for bureaucracy, most of us are on the same page. We are happy to see the abolition of the 31 bodies. Our amendments would allow significant modernisation and simplification of the procedures and substance of the Agricultural Wages Board. To answer the noble Baroness, Lady Byford, that is why that form of phrasing is there—to move to annual salaries and so forth.
Indeed, when I was Minister, as the noble Lord, Lord Curry, will recall, I tried to get a lot of modernisation through on the Agricultural Wages Board but to retain essentially the legal underpinning which is needed in this unique industry for an isolated, sometimes exploited workforce. We have had a benign picture of the way that farming operates, but actually we know that in large parts of farming and probably most obviously within horticulture, there is still some serious exploitation of workers in all their terms and conditions including their minimum wage. The Government have not answered my points regarding amendment and reform of the Agricultural Wages Board rather than abolition.
On the point about wages, we are facing a serious dilemma. By abandoning the Public Bodies Act route, the Government have not presented to the House detailed information. The impact assessment to which we have all referred is an authoritative document. It says that the Government’s best estimate—not the most extreme case, not the worst case, not the lowest case, and not the highest case either—is that in aggregate £240 million will be taken out of the pockets of current and future workers within the agricultural sector. That is the view and best estimate, not of the Minister’s department, but of the department of the noble Lord, Lord de Mauley, of what is going to happen. Obviously, there is a range of probabilities, but the Government’s best estimate is that this measure will lead to a reduction in wages in the agricultural sector by £250 million. That is the bare fact of this.
No doubt, in many of the enterprises of the noble Lords, Lord Cavendish, Lord Cameron and Lord Curry—I am sorry to fall out with him, but at least we are both being consistent on this issue—there will be better pay and little impact. But all the Government’s statisticians, agronomists and economists are looking at the total situation and saying, “The net effect of all this in aggregate across the whole of the agricultural and horticultural sector will be a loss of wages of that order”. That is their best estimate and that is at odds with the noble Lord, Lord Cavendish, and the circle of farmers in which he moves. Although clearly they are in the same geographical area, they are a different lot from those among whom the noble Lord, Lord Greaves, moves. But, even if he is right for all those farmers, the Government’s view is that is not the total effect on the sector. Either the Government’s impact assessment is utterly wrong, or the anecdotal evidence from those who are close to land-owning interests in this House is not accurate.
Lord Cavendish of Furness
My Lords, I gave statistics showing that the way farm workers were paid was overwhelmingly higher. Those are the statistics that matter. I am not in a position to defend an impact assessment with its huge range, which seems to me entirely meaningless, but I gave the statistics that are irrefutable.
Lord Whitty
My Lords, nobody is disputing that, at present, after years of operation of the Agricultural Wages Board and the economics of the industry, a lot of agricultural workers are paid above the minimum rate and above rates in some other industries. To that extent, I agree with him. My point is that the Government have refused to do what the House asked them to do under the Public Bodies Bill and present us with a full explanatory memorandum with arguments for the abolition and arguments against any other alternatives. They have tried to cut corners on this, but their own experts tell them that the net effect of this will be a substantial cut in rural workers’ incomes.
If the House votes for the Government’s amendment and defeats my amendment to that amendment, that is what they are voting for tonight and they had better recognise it. That is the message they will be sending out to rural areas. I am looking perhaps particularly to people on the Liberal Democrat Benches who were not committed by their manifesto to this abolition, as the noble Lord, Lord Greaves, said. I do believe that the Government have got this wrong. We could have had a more coherent debate had we gone down the route of the Public Bodies Bill and the Government had produced their range of statistics and we could have had a sensible argument. Instead, we have a minimalist consultation, minimalist information and the Government sticking to an ideological position, supported by some elements of the farming industry but by no means all, and prepared to try and push through something which has an impact on the incomes of a lot of rural workers and their families. My amendment would allow a better way forward, a modernising way forward, and a reduction of bureaucracy, but it would retain the central protection that those agricultural workers have had and which they deserve to retain.
Baroness Byford
My Lords. I will be very brief. Three times the noble Lord, Lord Whitty, has referred to the rural workforce. This is nothing to do with the rural workforce; it is to do with the Agricultural Wages Board and he is misleading colleagues if he keeps using that phrase.
Lord Whitty
My Lords, the right reverend Prelate said two things. First, the agriculture workforce is a smaller proportion of the rural workforce than it used to be, but also the Agricultural Wages Board is taken, either in its substance or in the rate of increase, to a lot of other rural workers, so it does affect a wider range than those who are legally entitled to Agricultural Wages Board rates. It is not the whole of the rural workforce, but it is nevertheless taking £250 million out of the rural economy, ostensibly giving it to the farmers, but actually giving it to the supermarkets. If that is what the House wishes to vote for tonight, they had better be clear that that is what they are doing.