Agricultural Wages Board

Mary Creagh Excerpts

Wednesday 24th April 2013 Commons Chamber

[Mary Creagh (Wakefield) (Lab)]

I beg to move,

That this House notes that the Agricultural Wages Board (AWB) was set up in 1948 to provide a fair wage and skills structure for agricultural workers; recognises that it is used as a benchmark for other employment in the food industry and that it was the only wages council not to be scrapped in the 1980s; further notes that around a quarter of agricultural workers live in tied accommodation and that casual seasonal workers may move around the country; regrets that the Welsh Government’s wish to retain the AWB has been ignored by the Government; condemns the Government for its abolition of the AWB, which took place after just four weeks consultation and will take £260 million out of the rural economy over the next 10 years, lead to a race to the bottom on wages in rural areas, reduce living standards and impoverish rural workers, exacerbating social deprivation and harming social inclusion; further regrets that hon. Members could not debate that issue as part of the Enterprise and Regulatory Reform Bill; and calls on the Government to drop its plans to abolish the AWB.

Last week, the House abolished the Agricultural Wages Board without debate and without a vote. The AWB sets the pay and conditions for 152,000 farm workers in England and Wales. That shoddy little manoeuvre was the result of Government desperation to force through the board’s abolition in the teeth of opposition from my colleagues in the Welsh Assembly Government, workers’ representatives and many farmers. Perhaps it was also the result of a fear of another coalition split or Back-Bench revolt. Today, the Opposition are allowing Back Benchers the chance to debate and vote on that abolition—a vote the Government denied them last week.

Like today’s debate, other debates on the subject have been sparsely attended by Government Back Benchers. Perhaps they flinch from defending an ideological decision that will impoverish hundreds, and in some cases thousands, of their hard-working constituents who work the land. We know that the Secretary of State for Environment, Food and Rural Affairs traps squirrels on his estate. His Liberal Democrat colleagues should beware the political traps that he enjoys setting for his coalition partners. In opposition, the Minister of State supported a motion that warned that abolishing the AWB would

“impoverish the rural working class”.

Today, he and his colleagues once again act as midwives to Tory dogma that will make thousands of people in their constituencies worse off—1,020 people in the Minister’s constituency and 1,120 people in the Secretary of State’s constituency.

The abolition of the AWB is wrong on three counts. First, it will take money out of workers’ pockets and out of rural high streets at a time when the economy needs it most. The abolition does nothing to reduce the deficit; it could even increase the deficit by adding to the welfare bill, because workers pushed into poverty pay will claim more in-work benefits and lose the incentive to gain new skills. Secondly, the abolition is bad for our food industry. A race to the bottom on pay will not help to attract the new recruits the industry needs. Thirdly, the abolition is bad regulatory reform because, paradoxically, it will increase the burden of employment regulation on small farmers, meaning that many more of them could end up in employment tribunals. Ministers’ incompetence will result in lower pay, higher welfare spending and more regulation, and it will deepen the recession in the rural high streets they represent.

First, let us look at how the measure will take money off low-paid workers. The AWB protects pay and conditions for 152,000 farm workers in England and Wales.

[Andy Sawford (Corby) (Lab/Co-op)]

Does my hon. Friend share my concern that among those working on the land are people like me and many others in Northamptonshire whose first experience of work, under the age of 16, was picking fruit on the farms in rural Northamptonshire? This will have a particular impact on them because they are not covered by the minimum wage.

[Mary Creagh]

Absolutely. With the abolition of the AWB, there will be no minimum wage for children under the age of 16 who are picking fruit or driving tractors at weekends and in the summer holidays. When one thinks about the amount of money a tractor is worth, and how such work could become a route into farming for some young people, it will certainly cap their access to that employment.

As well as the 152,000 who are directly covered by the board, a similar number have their wages set against the AWB benchmark, including equestrian workers in the racing and leisure industries, estate workers and gamekeepers. Nearly every constituency in the country has some people who will be affected, including more than 50 people in Wakefield. The board sets fair wages, holiday pay, sick pay and overtime. It has six grades, and the lowest grade is just 2p an hour more than the national minimum wage.

[Yasmin Qureshi (Bolton South East) (Lab)]

Does my hon. Friend agree that this is another pernicious, shoddy little policy by the Government, who are ideologically driven to cut the wages of ordinary working people?

[Mary Creagh]

They are certainly driven by ideology, although the ideology of the Minister of State seems to have changed from when he was a Back Bencher, now that he enjoys the privilege of a Government car. I do not know what has changed for him.

Without the AWB, farm workers will be worse off. As my hon. Friend the Member for Corby (Andy Sawford) said, there will be no minimum wage for children under 16. Seasonal workers will lose their entitlement to their own bed, which is currently guaranteed by the board. The cap on the amount employers can charge workers for tied accommodation, currently £4.82 a day for a caravan, will be removed. Some 42,000 casual workers will see their pay cut to the minimum wage as soon as they finish their current job. The rest will see their wages eroded over time.

[Sir James Paice (South East Cambridgeshire) (Con)]

What evidence does the hon. Lady have for her statement that all those casual workers will see their pay cut immediately at the end of their contracts? Farmers are desperate to get casual workers, and that is why they are keen for us to continue the schemes to bring them in from eastern Europe. They will not be able to get the staff if, as she suggests, they cut their pay.

[Mary Creagh]

I will be talking in detail about the seasonal agricultural workers scheme. I just say to the right hon. Gentleman that 1,610 people in his constituency will be affected by the reduction in pay. I do not know whether he has read the Department for Environment, Food and Rural Affairs impact assessment that was conducted when he was the Minister; I certainly have. It states that 42,000 casual workers are likely to see their pay default to the national minimum wage when their current employment comes to an end. The cost to the rural economy that the Department for Business, Innovation and Skills impact assessment estimates—there are varying figures—are to do with the direct loss of wages, holiday pay and sick pay out of workers’ pockets.

[Mr Mark Spencer (Sherwood) (Con)]

Will the hon. Lady identify what is special about agriculture? Is it that farmers want to exploit their workers, or should there be protection for people in retail, catering and other such industries?

[Mary Creagh]

I am surprised that the hon. Gentleman, with 380 workers who will be affected in his constituency, is asking me what is special about agriculture; I believe that he is a farmer, so he might stand up and tell me. Agriculture is different because people are often living in rural isolation; they may have their home provided by their employer, which puts them in a uniquely vulnerable position; and, as the right hon. Member for South East Cambridgeshire (Sir James Paice) said, they are brought in from countries where English is not their first language—perhaps they do not speak English at all—and are not in a position to negotiate. Those are three reasons for starters, but I am happy to come back to that.

[Robert Flello (Stoke-on-Trent South) (Lab)]

My hon. Friend’s speech is hitting exactly the right notes. Has the former Minister, the right hon. Member for South East Cambridgeshire (Sir James Paice), not just given the game away? This measure is about getting eastern Europeans into the country to pay them poverty wages far below those that anybody else would possibly want.

[Mary Creagh]

I will look at that in detail later, but we do not want either a race to the bottom on wages or a great increase in the amount that employers charge workers for their tied accommodation—their hot bed in a caravan—which will mean that they end up effectively working for below national minimum wage and undercut British workers out of the market.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

My hon. Friend is making an excellent case. One point covered by the AWB that scares me is workers’ sick pay and terms and conditions. At the moment, sick pay ranges from £150 to £250. Once the AWB has gone, employers will have to pay sick pay at only statutory minimum terms of just more than £85. That is a direct hit on workers, a quarter of whom are over 55 years old.

[Mary Creagh]

That is right, and we all know that as we get older we are more prone to illness. A further reason why farming is different is that people are expected to work antisocial hours and long hours out in what can be very difficult conditions. We saw that with the flooding last year and when farmers and their employees had to dig lambs out of the snow in the very cold winter we have just had.

[Mr Spencer]

rose—

[Mary Creagh]

I will give way later, but I would like to make some progress.

The Government’s own figures suggest that up to £280 million could be lost over 10 years in wages and in holiday and sick pay—a quarter of a billion pounds taken out of areas represented mainly by the parties on the Government Benches, where the cost of living is estimated to be approximately £3,000 more than for those living in urban areas. Up to £35 million a year could be lost in wages alone—again, those figures are taken from the Department for Business, Innovation and Skills impact assessment.

I want to know what happens when money is taken from rural families on the breadline. Who will pick up the tab? People with children will have recourse to income-related benefits, such as tax credits, council tax benefit and housing benefit. Reducing rural workers to the poverty line will take money out of workers’ pockets and transfer it directly to their employers. We, the taxpayer, will pick up the in-work welfare bill. That will add to the deficit. As a strategy for rural growth and deficit reduction, this thoughtless abolition will be catastrophic.

My second point is that the abolition will be bad for the food industry; it goes against business needs. Britain’s biggest manufacturing industry, the food production sector, needs more skilled workers. Instead, the Government are encouraging employers to race to the bottom on pay. That will see skilled workers turn their backs on the industry—and become MPs instead!

There are 2.5 million unemployed people in the United Kingdom, 1 million of whom are young people. There are 25 million unemployed people in the European Union, yet the horticulture industry still says that it needs to bring in workers under the seasonal agricultural workers scheme because it cannot find reliable British workers. It simply defies economic logic to suggest that a race to the bottom on pay is the way to attract the skilled new entrants that the industry needs.

[Mrs Caroline Spelman (Meriden) (Con)]

Is the hon. Lady unaware or simply ignoring the fact that the AWB was debated at length during the consideration of the Public Bodies Bill in both Houses of Parliament? Secondly, is she aware of the impact assessment’s conclusion that current wage levels are generally above the minimum, and that, with wage-setting practices and modern working practices in agriculture, wages are unlikely to be eroded, as farmers will need to attract their workers? That was its conclusion.

[Mary Creagh]

I am delighted that the right hon. Lady refers to the AWB and the Public Bodies Bill, the so-called bonfire of the quangos. The Bill certainly brought her a degree of notoriety, as it contained her proposals to sell off the forests and scrap protection for farm workers. She mentions the impact assessment. I am just quoting the Government’s figures: their estimate is as high as £280 million over 10 years, or with a best estimate of £260 million.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

Many times during the passage of the Gangmasters (Licensing) Act 2004, I and my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) met the National Farmers Union, employers and all the major people employed in the farming industry, all of whom recognised the valuable contribution of the AWB. Perhaps today we can find out who is the driving force behind its abolition. Employers do not want to get rid of it.

[Mary Creagh]

That is very interesting. I was just reading some of the responses to the consultation. One farmer said:

“I am a farmer with 3 employees. The annual AWB wage award has been an invaluable tool to help determine wage awards...We are overburdened with enthusiastic government departments issuing guidance rules & legislation...The annual guidance for the level of wage awards is one of the few useful tools”.

[Andrew George (St Ives) (LD)]

It is quite clear that the proposal to abolish the AWB is not driven by a worry that it holds pay back or conditions down.

[Andrew George]

If the Government are arguing that it is being abolished to enhance pay and conditions, we will hear that from the Front Bench in a moment. Does the hon. Lady agree that we do not want simply to go the lowest common denominator?

[Mary Creagh]

I have been making that point repeatedly. The hon. Gentleman has 1,110 people in his constituency who will be affected. I am afraid that we heard some noises off from the right hon. Member for South East Cambridgeshire; he said, “It is,” so it seems that coalition divisions are once more being exposed, as I thought they would be. I look forward to having a chat with the hon. Member for St Ives (Andrew George) in our Lobby during tonight’s vote.

I want to return to the role of the major supermarkets, which have silently supported the abolition of the AWB. Even the farm manager of the Duchy of Cornwall, which supplies Waitrose, responded to the consultation in support of abolition. The Duchy Originals website talks about food that “is good” and “does good” and says that it raises money for charity, but rural workers should not have to rely on charity to feed their families at the end of the week. Today’s figures on food banks, many of which are springing up in rural areas, give the lie to the fact that there is any overpayment in rural areas.

The supermarkets trumpet their commitment to fair trade, but why is that only for workers in developing countries? Why not here? They trumpet their corporate social responsibility programmes in communities, yet are silent when it comes to reducing pay in their own supply chains. I quote again from the responses to the consultation. A vegetable producer in the north-west said:

“We are unfortunately in an industry where we are seeing increasing pressure from retailers to lower prices of supply of produce,”

and added that

“some of our produce price returns are no higher in 2012 than they were over 10 years ago.”

This has real implications for the sustainability of the food supply chain and the UK’s self-sufficiency, which has already fallen to about 55%, making us much more vulnerable to global shocks. The supermarkets have got to start thinking long term. We supported the Government’s creation of the groceries code adjudicator, although we would have preferred an ombudsman. We want fairness in the supply chain, but that does not stop with the horticultural businesses. It has to feed down to the level of the individual workers as well.

[Toby Perkins (Chesterfield) (Lab)]

I am grateful to my hon. Friend for the case she is making. The Conservative party was once seen as the party of the countryside, but does not the Government’s shoddy behaviour demonstrate just who in the countryside it really stands up for?

[Mary Creagh]

Absolutely. It is not even clear whom they support in the countryside, though. I have quoted some farmers opposed to abolition. It is a bit of a mystery who actually wants it. The right hon. Member for South East Cambridgeshire has left the Chamber, so we will never know.

[Glyn Davies (Montgomeryshire) (Con)]

I am listening carefully to the hon. Lady’s case, which makes it clear that she disagrees very strongly with the abolition of the AWB. The Opposition likewise made their opposition clear when other wages boards were abolished in the 1990s, none of which was brought back during the 13 years of Labour government. Will she give us an absolute commitment that, if the Labour party forms the next Government, the AWB will be returned forthwith? Will she give us that guarantee?

[Mary Creagh]

If the hon. Gentleman is so keen to retain the AWB—I know that many in his constituency, including the Farmers’ Union of Wales, are against abolition—I hope that that will be reflected in his voting on our side this evening.

I want to deal with the regulatory burdens that could fall on farmers. We have considered the history behind the AWB’s abolition. The board has survived until now thanks to my colleagues in the Welsh Assembly Government, who listened to their constituents and were totally against getting rid of it. Constitutionally, abolition required consent, and they refused to give it.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The motion notes that it is

“the Welsh Government’s wish to retain the AWB”.

Scotland and Northern Ireland can keep their AWBs, of course. Is the hon. Lady making the case, therefore, for a reserved powers model for the Welsh Government?

[Mary Creagh]

I think the hon. Gentleman has made that case very well himself. We expect an announcement from our colleagues in the Welsh Assembly Government, but they have made a commitment to retain the functions of the AWB in Wales. We will see what that delivers over time.

All was quiet until the appointment of the Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for North Shropshire (Mr Paterson), who decided to abolish the AWB by tacking it on to the Enterprise and Regulatory Reform Bill—a regulatory reform that could therefore bypass the Welsh Government. His Department conducted a pitifully short, four-week consultation. Let us remember that there was a full 12-week consultation on banning ash trees from Europe four months after Ministers were first told that ash dieback disease was here. We can see where this Secretary of State’s priorities lie—apart from the squirrels. He is swift to take money from workers’ pockets and hand it back to their bosses, but slow to defend the natural environment.

[Mr David Hanson (Delyn) (Lab)]

Does my hon. Friend recognise that the Secretary of State represents a border constituency? If, as expected, the Labour-controlled Welsh Assembly maintains the AWB at its own expense, members of the farming community in his constituency would have to travel only one or two miles, potentially, to get a better deal. He will have a skills shortage in his own constituency.

[Mary Creagh]

Absolutely. The Secretary of State has not only 1,120 agricultural workers, but a food bank, in his constituency, so that is an excellent point very well made.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I apologise, Mr Deputy Speaker, for being late into the Chamber and further apologise if my point has already been mentioned. I want to highlight to my hon. Friend that not long after the previous Labour Government introduced the national minimum wage, the Conservative party called for the abolition of the AWB, saying that the national minimum wage would cover it, which clearly it would not.

[Mary Creagh]

Clearly, the national minimum wage does not cover it all, which is why it was not abolished under various previous Tory Governments. Various Conservative Prime Ministers understood that if someone’s house was provided by their employer, they were in a uniquely vulnerable position when it came to negotiating their wages.

Many small farmers want to keep the AWB so that they do not have to become employment specialists. They want to get on with running their business. Instead, this change will add to their regulatory burden. The Farmers’ Union of Wales, where 12,000 workers are covered by the AWB, opposes abolition. It has said:

“Many farms in Wales run with relatively few staff, or indeed with family labour. The Agricultural Wages Board is considered an important means of avoiding potential conflict and lengthy negotiations with individual members of staff.”

Without the AWB, each farm business owner will have to negotiate terms and conditions annually with its work force. They will make mistakes, as employers sometimes do, and might end up in employment tribunals as a result.

I want to quote again from one of the consultation responses. A farmer in Kings Lynn said:

“I disagree strongly with the abolition of the Agricultural Wages Board...the last thing I want to do with my limited management time is to negotiate wages with my 6 full-time and up to 30 part-time workers some of whom have worked for me for 30 to 40 years and have a strong personal relationship with me. I do not want to damage this by having to negotiate wages with them.”

The hon. Member for Sherwood (Mr Spencer) asked why farming was different. I think that that answers his question.

We have talked about gangmasters and licensing and, before I conclude, I want to touch briefly on the issue of workers’ accommodation. The Government’s impact assessment indicates that 25,500 farm workers have a house or cottage provided by their employer, and that another 4,700 live in other accommodation, such as caravans. The agricultural wages order defines “other” accommodation and guarantees all farm workers that it is fit for human habitation, safe and secure, and that every worker should have a bed for their sole use and be provided with suitable and sufficient free drinking water and sanitation.

Abolishing the AWB will remove those guarantees on housing for farm workers. The accommodation will no longer have to be fit for human habitation, safe or secure. Workers will not be guaranteed a bed for their sole use, and there will be no requirement to provide drinking water or sanitation. I should like to cite the case of one of the firms that wrote in support of the AWB’s abolition, Suffolk Mushrooms. Last year, the firm was fined £10,000 for failing to have a safety certificate for the boiler in the men’s accommodation, and for various hazardous working practices that put workers’ lives at risk, including leaving high-level safety gates open. After the case was won, the Health and Safety Executive inspector, John Claxton, said:

“Suffolk Mushrooms invested more than £1.5 million refurbishing its factory and mushroom growing equipment, yet failed to spend even a few hundred pounds to keep its employees safe”.

[Mrs Spelman]

Obviously the laws already exist to enable the Health and Safety Executive to fine employers, in every sector of the economy, when they break the law. Does the hon. Lady not accept that she is perpetrating the myth that farmers set out to exploit their workers? The vast majority of farmers listening to the debate today would be affronted by that suggestion.

[Mary Creagh]

That was a good effort from the right hon. Lady. The HSE will clearly continue to exist, but I am citing a case that happened last year, not at some other point in time. I ask her whether she thinks that conditions will get worse or better when the AWB is abolished.

[George Eustice (Camborne and Redruth) (Con)]

The Agricultural Wages Board existed when that case came to light, so it clearly did not create the defence that the hon. Lady suggested it might.

[Mary Creagh]

The question for the hon. Gentleman is whether conditions will get worse or better when the provisions are removed. Will they be better or worse for a worker who does not have a bed guaranteed for their sole use? Opposition Members already know of conditions in which people are hot-bedding. Is that what we want to see in our farming industry? I certainly do not, and I am sure that the majority of farmers do not, but there will now be no legal requirement for an individual to have their own bed. I think that that is wrong; does the hon. Gentleman?

The AWB was set up by the Attlee Government in 1948. Even Mrs Thatcher did not abolish it. She understood that if someone’s home comes with their job, they are in a uniquely weak negotiating position with their employer. However, last week’s Bill ended nearly 100 years of protection for farm workers. In the Labour party, we believe that the people who pick the fruit should also be able to buy it in the shops, and not have to rely on food banks to feed themselves and their children. As many farmers themselves have said, in their responses to the consultation, this decision will not secure a stable and prosperous future for the food and farming industry or for those who work in it. The Prime Minister once said that we were all in it together, but time after time, ordinary working people are first in his firing line. If Members want a rural living wage, they should vote with the Labour party this afternoon. If they are happy with poverty pay for their constituents, they should vote with the Government.

--- Later in debate ---

[Mr Paterson]

I am grateful to my hon. Friend, who picks up on the earlier question that the shadow Secretary of State singularly failed to answer. On my hon. Friend’s behalf, I pose this question to her: if a Labour Government were to be elected after the next election, would the AWB exist? Will they bring in legislation to re-establish an agricultural wages board?

[Mary Creagh]

The right hon. Gentleman asks me a direct question. We are two years away from the next election, and I am sure he will be looking forward with great eagerness to our manifesto. We will look at all measures that stop the public sector, the taxpayer, subsidising poverty wages, wherever they occur in our economy.

[Mr Paterson]

I think my hon. Friend will take that as a no.

--- Later in debate ---

[Simon Hart]

It might surprise the hon. Lady to learn that I am not a member of the Government and so I am not really in a position to answer that. Of course, I sat through 13 years of Labour disdain for rural Britain, and that question was asked on many occasions. However, I do not want to be reprimanded by the Chair twice in two days for getting off the topic by talking about union sponsorship, so if she will forgive me—

[Mary Creagh]

The hon. Gentleman said that the motion is somehow sponsored by unions. It is nothing of the sort. This debate is about a point of principle—[Interruption.] I am sorry that Government Members are laughing. This debate is about whether people who work in remote, isolated areas, in unseasonable conditions and in one of our most dangerous industries deserve to be paid 2p an hour above the national minimum wage and to have some sort of protection against eviction from their homes.

[Simon Hart]

The hon. Lady will forgive me if I note that pretty much all the electronic traffic we have seen on this debate has been generated by her party’s biggest sponsor. Call me a cynic, but I am not going to accept her comments.

I believe that workers in my area are protected by the minimum wage, employment legislation and a raft of accommodation legislation applying to tied cottages and the like. I do not recognise the image projected by the Labour party of farm workers in tied cottages, and have 28 years’ experience in the industry. I agreed with the Secretary of State when he referred to the noble Lord Falconer’s comment that regional and sectoral pay was a thing of the past. I find it odd that we seem to be disagreeing with that now.

The final abolition of the AWB raises two questions, both of which have been raised before, but since neither has been answered I will ask them again. If the abolition of the AWB exposes young workers, foreign workers or people who are vulnerable, either through poverty or in some other way, in the way the shadow Secretary of State has set out—I know all about the unique aspects of agricultural work—why is it that no other sector in the UK from which a wages board has been removed is suffering from those consequences? Perhaps she could explain—we asked this question earlier but did not get an explanation—why those dangers are apparently unique to agriculture. I will ask her a third time, more in hope than in expectation: would Labour reinstate the AWB if it was lucky enough to form a Government in 2015? It is no good her saying that they have a couple years to come clean about their proposals. I think that this is absolutely the right forum and the right time to make clear the policy as it applies to the AWB of a party that might—I hope not—form a future Government.