Seasonal Agricultural Workers Scheme

Mark Spencer Excerpts

Wednesday 20th June 2012 Westminster Hall

[Mr Mark Spencer (Sherwood) (Con)]

I congratulate my hon. Friend on securing the debate. I hope he recognises that we are not talking about unskilled labour. The dexterity and speed with which some of those people can operate machinery and harvest shows great skill, and such skills would enable people to go on to employment later in their lives.

[Gordon Henderson]

Absolutely right—and training prisoners to become agricultural workers might encourage them to work on the land when they leave prison, which would solve another problem. One of the problems with getting prisoners to work, however, is that unemployed people who are not in prison resent inmates being given jobs that might otherwise go to them. Encouraging prisoners to take jobs that other domestic workers have turned their backs on, such as those jobs in agriculture, would solve that particular problem.

I have spoken to the governor of one of my three local prisons and he was keen to trial such a scheme. Cynics may say that prisoners would not want to work on farms, but until relatively recently Standford Hill open prison on Sheppey, in my constituency, operated a farm that supplied produce to the prison estate. The workers on the farm were, in the main, inmates and they were bitterly disappointed when the previous Government decided to close the farm down.

Even if such schemes were successful, there would still be a need for more labour than the domestic labour force could or would supply. As I said earlier, the present SAWS arrangements finish in 2013, but the Government have not yet made it clear whether they intend to introduce a successor scheme. I urge Ministers in the Department for Environment, Food and Rural Affairs to press the Home Office to deal with the problem as a matter of urgency, bearing in mind that we are already in 2012. Farmers in my constituency are keen to see a replacement for SAWS in place before the end of this year. They want any new scheme not only to recognise the continued need for a certain number of overseas workers, but to maximise the potential use of local labour.

The National Farmers Union has put together a proposal that includes the following criteria, which it believes are critical to the overall architecture of a new SAWS scheme. Any new scheme should be overseen by the Home Office, as SAWS is now, and be managed by licensed operators, again as now, with an annual quota decided by the Home Office and the Migration Advisory Committee. A new scheme should include a robust system for checking arrivals, departures and return to the home country. It should go back to the origins of the original scheme, as a youth work experience programme. It should require operators to continue to recruit from the European Union in preference to non-EU applicants. However, a new scheme should be available to university-level students of agriculture or agriculture-related subjects from any country, with return arrangements with the UK.

To be consistent with Government policy, the new scheme should be contained within tier 5 of the points-based temporary workers and youth mobility system. As such, it could meet the UK’s cultural and international objectives. It should have a specific set of standards that are subject to an accreditation scheme managed by SAWS operators. Permission to work and to remain in the UK should be via a work card or specific visa category, and restricted to the dates on the work card, with a maximum period of six months.

Under the previous SAWS programme, agriculture students were often set assignments to complete during their placement. That should be encouraged under a new scheme. A more robust educational element could include, for example, the provision of English language lessons and on-the-job training. Growers should be encouraged to provide cultural activities in the local area to enable the community and the workers to experience each other’s culture.

In addition, the Government should try to encourage British citizens to work in the agriculture industry. Changing perceptions and improving the career development and progression opportunities in the horticulture sector are an important part of achieving success. The Government should consider adapting the UK benefits system to allow those on benefits not to lose their entitlement while undertaking work on a daily call basis. I am convinced that that would encourage inactive citizens to take on seasonal work.

Understandably, the employment of prisoners and ex-prisoners is a touchy subject, and employers approach it with a certain amount of caution. I believe that an offer of financial support for employers to train and mentor prisoners and ex-prisoners might encourage more widespread take-up under the scheme. Consideration should be given to a summer programme carrying vocational and academic credits in addition to cash pay. Hopefully, that would attract more students to work in the industry.

I turn to two issues of concern to my local farmers that will have an impact on the future prospects of employment in the agriculture industry in my area. First, reforms to the common agricultural policy are being discussed, and farmers are worried about the way in which the Department for Environment, Food and Rural Affairs seems to be trying to divert funds from pillar 1 direct payments to pillar 2 rural development funding. In particular, the greening component, which represents 30% of the value of direct payments, is conditional on additional environmental action on their land. That includes cultivating a minimum of three crops every year, retaining areas of permanent pasture, and ensuring that 7% of arable land is an environmental focus area.

British farmers believe that such a proposal would put them at a disadvantage because many of them have already adopted additional environmental measures on their farms through agri-environment schemes, and it would be difficult for them to set aside more land to comply with the greening proposal. Farmers believe that greening will reduce their overall competitiveness, making them more rather than less dependent on direct payments. I would welcome the Minister’s acknowledgement of those concerns, and an assurance that they are being addressed.

Finally, my local farmers are worried about the delay in abolishing the Agricultural Wages Board, which they maintain restricts employers by demanding that they pay full wages for 16-year-olds, and which makes it difficult for agricultural workers to get a mortgage because they do not receive a salary. I would welcome an indication from the Minister of the proposed timetable for scrapping the board.

--- Later in debate ---

[Huw Irranca-Davies]

The hon. Gentleman knows the area well, and an advantage of the devolution of administration and powers is that we can, and should, learn lessons about differential applications across the UK. We need to do more within the joint committees that bring the devolved Administrations together and in discussions between Ministers, so that those lessons can be learned. He makes a good point. We should not always try to work from a completely blank sheet of paper, but look at what works well elsewhere.

Will the Minister provide us with the timetable for changes to the GLA? His written statement of 24 May was not clear on the consultation timetable or process. Is he in a position to provide us with that now? Will he confirm that the GLA will have the necessary resources to tackle worker exploitation in the relevant sectors, even under the new approach? We all want the GLA, in its revised form, to be lean, mean and effective, but that requires resourcing, so I seek assurances on that. Will he also provide information on how he intends the GLA to work more collaboratively with other organisations, including the Serious Organised Crime Agency?

I want briefly to talk about the abolition of the Agricultural Wages Board, which I have discussed on several occasions with the Minister and other hon. Members. He knows how strongly I and the Labour party feel on the issue. That strength of feeling is shared by some of the farming unions, such as the Farmers Union of Wales, and by farm workers and the Welsh Government. The AWB protects 152,000 farm workers in England and Wales and has mirror effects on others in the sector. It ensures that people working in the countryside, from apprentices to farm managers, get a fair deal. In its 62-year history, it has provided basic pay and protection for fruit pickers, farm labourers and foresters. That covered wages, but also holidays, sick pay, overtime and bereavement leave.

The Minister will no doubt say—we have had this discussion many times—that many farmers pay well above the agreed wage rates; and I do not disagree. He may also say that there is a national minimum wage—so what is the fuss? However, the AWB does far more than set pay minimums, and when it is gone, the pay and other terms and conditions are threatened. The wages of 42,000 casual workers could drop as soon as those workers finish their next job, once the AWB is gone. It is probable that the wages of the remaining 110,000 will be eroded over time. Ministers have said in the past that farm workers will be protected by the minimum wage, but only 20% cent of farm workers are on grade 1 of the AWB. The rest earn considerably more than the minimum wage. The downward pressure on higher grades in economically difficult times will be high. Children who do summer jobs or part-time jobs currently receive just over £3 per hour, but they are not covered at all by the national minimum wage. They will have no wage protection—unless the Minister wants to correct me on that—when they do holiday work, as has been mentioned, or weekend work, after the board is abolished.

[Mr Spencer]

Does the shadow Minister recognise that agriculture has changed dramatically in the past 20 years? A combine harvester costs £250,000 and no farmer will put an unskilled member of staff in charge of machinery of that value. We have heard from my hon. Friend the Member for West Worcestershire (Harriett Baldwin) about laser machinery for measuring asparagus. The salaries that are now attracted in agriculture are far above those provided for under the Agricultural Wages Board. I wonder whether times have moved on and it is no longer necessary.

[Huw Irranca-Davies]

Time will tell if we abolish the board. However, not only has the Farmers Union of Wales welcomed its retention in Wales—and discussions are ongoing to see how that can take effect if the AWB is abolished in England; it has said it welcomes the clarity that the board gives on a range of conditions for agricultural workers. That is particularly true for small farmers who do not want to get into endless discussions about individual contracts, with different people on different wages for essentially the same job, and consequent disputes. The AWB provides a very good service for an industry that is often fragmented and disparate. The point that the hon. Member for Sherwood (Mr Spencer) makes about modern technology and food processing is valid for many parts of the industry, but things are not uniformly like that. That is why the Labour party sees the AWB as providing a safety blanket, to ensure that all workers’ terms and conditions are properly protected.

DEFRA’s own figures suggest that the abolition of the AWB will take £9 million a year out of the rural high street through holiday and sick pay alone—that will be £9 million coming out of the rural economy, because it is not going into people’s pockets in one way or another. That is not an insignificant figure, and it is worthy of further consideration. In the 18 months or so since the Government announced their intention to abolish the AWB, a lot has changed. The economy has gone into a double dip recession. The cost of living has risen dramatically. Food and fuel prices have risen well above inflation. Overall unemployment is up, and youth unemployment is chillingly high at more than 1 million. As we watch developments on the continent unfold day by day, it appears there will be no improvement in people’s circumstances for some time yet. A study commissioned by The Guardian and published this week showed that almost 7 million working-age adults are living in extreme financial stress, from pay cheque to pay cheque, one push from penury, despite being in employment and largely independent of state support. Many of those will be agricultural workers in rural communities.

I ask the Minister to think again. Why, against that backdrop, do the Government insist on pressing ahead with the policy, taking money out of the rural economy and the pockets of rural agricultural workers, and making things harder for people, many of whose wages will fall as a result? Those in rural areas already face significant challenges in housing, transport and access to schools. The abolition of the AWB may prove another difficult hurdle to overcome. However, if the Minister is determined to press ahead, I want to ask some additional questions. We are all awaiting an announcement on when the AWB will be abolished, but we have not had that clarity yet. Yesterday evening, I met with the farmers unions—and some farmers unions, of course, support the abolition. They were asking when there would be clarity and a timetable: when will it happen? When does the Minister intend to lay an order before the House abolishing the AWB? Farmers’ patience is being stretched. In the mean time, can he confirm that negotiations with the AWB for the year ahead have been concluded? Will the pending abolition affect those? Has he asked his Department to reassess the proposals in the light of current economic circumstances? If not, why not?

I recently submitted a freedom of information request to the Minister’s Department for the impact assessment of the abolition of the AWB. It was rejected. No doubt he will explain why, and give the normal Whitehall reasons, but his response implied that the assessment would be published soon, so when will we see it? We want to get behind the detail, to see what the effect will be on rural communities. In the absence of the impact assessment, will the Minister guarantee that, on the abolition of the AWB, children will not be paid below the minimum wage, that the wages of workers in AWB pay bands will not be depressed, that rents on farm cottages will not rapidly escalate to full market value, or tenants be turfed out because they cannot afford them, and that when new recruits are taken on it will not be on inferior terms, creating a two-tier work force for the same jobs?

If the Minister doubts that that might happen, and thinks it is only I who say it, I refer him to the Incomes Data Services report for the Low Pay Commission, “The implications for the National Minimum Wage of the abolition of the Agricultural Wages Board in England and Wales”. What does the change mean for the national minimum wage, where the Government’s defence lies— “Don’t worry, the NMW will take care of this”? The report states:

“Once abolished, many of the provisions of the Order will either be only partially covered by other statutory employment legislation, or not at all. Employment legislation does not make any provision for specific rates of pay linked to skills, specific rates of pay for overtime, a minimum rate of pay for workers of compulsory school age, rights to paid training, standby duty and night allowances, entitlement to paid bereavement leave, a birth or adoption grant”

and so on. It also states that

“abolition removes protection for young workers of compulsory school age”

and that

“the statutory minimum rates for both workers aged 16 to 20 and apprentices will be significantly less under the NMW than they currently are under the Agricultural Wages Order.”

Hon. Members have spoken passionately about the need to enhance skills and training in the agricultural sector, but the report states clearly that the wages of apprentices and those learning their skills will be depressed.

The report states:

“There may also be issues around the accommodation offset, whereby in some cases agricultural workers may be worse off under the NMW rules”,

and it explains why:

“There is no such threshold under the NMW”

for workers’ accommodation. It also states:

“The NMW rules on accommodation offset allow deductions to be made even if the worker could have lived elsewhere. This could mean that agricultural workers who are not currently subject to the accommodation offset…could be subject to it in future.”

It continues:

“On piece work, agricultural piece workers are currently guaranteed to get at least the minimum rate appropriate to their grade.”

That is more favourable than the national minimum wage approach,

“where slower workers can earn less than NMW if a properly assessed ‘fair’ piece rate is applied.”

It is not true to say that the abolition of the AWB is not a problem because the national minimum wage will deal with the issues. There is far more to the AWB’s terms and conditions than that, which is why I am asking the Minister to think again.

I thank the hon. Member for Sittingbourne and Sheppey for raising this important debate, and thank all hon. Members for some very good contributions. We want to see a rural economy that works for all working people. It should be fair across the board, as these are tough times for all those who work in agriculture. I look forward to the Minister’s response.