Agricultural Wages Board

Neil Carmichael Excerpts

Wednesday 24th April 2013 Commons Chamber

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

The backdrop to this terrible and petty Government measure is the fact that real wages have fallen by £1,700 since this Government were elected. This is a Government who preach about making work pay, yet raise the national minimum wage by only 1.9% while consumer prices index inflation is at 2.8%. This is a living standards debate. Instead of raising standards for farm workers, the Government are engaging in a race to the bottom on pay and fair treatment.

The first early-day motion I ever tabled in this House —early-day motion 754, on 6 September 2010—was a motion opposing the Government’s then proposals to eradicate the AWB. I did it with the full support of the Labour party, because we on the Opposition Benches know that the AWB protects pay and conditions for 152,000 farm workers in England and Wales and is used as a benchmark for others employed in food manufacturing. Some 3,360 of those workers live in the north-east of England and 170 of them are in my constituency. Once the AWB is gone, 42,000 casual workers could see a drop in wages as soon as they finish their next job. The remaining 110,000 could see their wages eroded over time.

Let me ask the Minister straight out: why are the Government taking £260 million out of the rural economy in disposable income? That is how much will be lost in sick pay and holiday entitlement over a 10-year period. How do we know that? We know because the Department’s impact assessment tells us so. The loss to local businesses is not the only part of that cost, which also includes estimates for new HR costs and litigation for farming businesses that will no longer have the collective negotiating umbrella under which the whole labour market is regulated. Indeed, the last time an attempt was made to get rid of the AWB, even Baroness Thatcher had to U-turn. Not only did she U-turn, but the gravity of the deprivation that could have hurt hard-working people did not make economic or moral sense then, and it does not make economic or moral sense now. We believe that those people—often they do not own even 1 square foot of soil on the land—should at the very least be able to afford the food they grow on that land. The Government should be helping families across this nation to deal with rising living costs, not actively participating in driving down hard-working people’s pay—and all this from a Government who are doubling the nation’s debt in a five-year period, with accrual of debt outstripping any allegations of debt accrual against us over the 13 years of Labour governance.

That is the perverse backdrop against which the demolition of the AWB is juxtaposed—a demolition that saves virtually nothing in Treasury terms, but which will ultimately bestow a huge tragedy upon rural communities. I repeat: it is a policy that saves virtually nothing, while the Government are also, as we know, cavalierly forgoing more than £1 billion in revenue that could be used for investment or to pay off the debt they are accruing. Instead, that money is being sacrificed to give millionaires a cut in the top rate of tax. Those millionaires could use that tax rebate, stick it with the Government’s spare home subsidy and buy up the surplus housing stock in some rural communities. The Government have just shafted people on AWB pay and terms and conditions.

Farm workers work in all elements. They do tough, hard-working jobs, much like those in the steel industry that I know—hard labour, shifts and working outdoors. Those jobs lead to a far greater incidence of ill health. Farm workers on the lowest grade will lose between £150 and £264 in sick pay once the AWB is abolished. The Secretary of State disagreed and said it would continue, but that is as long as TUPE regulations exist, and that is worth about 90 days in the current currency. A new employee in that sector will not be grandfathered like previous workers but put on statutory minimums, and the Secretary of State knows that.

A quarter of the current work force covered by the AWB are over 55, and the change to sick pay damns those workers to the self-fulfilling perpetuation of grinding poverty that those on the Government Benches simply choose to ignore. Another point is just how exposed an individual is under the new terms. They will be negotiating their pay, terms and conditions while the AWB is being abolished. For example, if an individual is tied into accommodation, how will they be able or confident enough to raise the issue of sick pay or holidays without collective bargaining when their home is at stake? We are talking about real living standards. This is not some sort of arithmetical debate; these are real people who are going to suffer.

[Neil Carmichael (Stroud) (Con)]

I have been listening carefully to the hon. Gentleman, but does he recognise that 41% of farm workers currently earn considerably more than the national minimum wage, as prescribed by the Agricultural Wages Board? That is a substantial difference. [Interruption.]

[Tom Blenkinsop]

As my hon. Friend the Member for Llanelli (Nia Griffith) said from a sedentary position, that means that 59% of workers do not earn that. Therefore, 41% have enhanced terms because a statutory minimum is in place—the same principle as for the national minimum wage. It is a different sector, but 59% of people do not earn that and there is no guarantee about what direction their pay, terms and conditions will go in. In economic terms, for the agricultural sector, that is mad.

It is totally and utterly crazy to say that by undermining a statutory minimum at the bottom, pay will go up. That is just not the case, as the past 13 years of the Labour Government proved. The national minimum wage was put in place, but collective bargaining allowed enhancements to be brought in. If the floor is taken away, the floor goes through the floor—it goes lower and lower.

[Neil Carmichael]

If the hon. Gentleman is so determined on the matter of the Agricultural Wages Board, why did the previous Labour Government not renew all other wages boards that were abolished under the Major Government?

[Tom Blenkinsop]

I would take those on the Government Benches more seriously if—pardon my slight diversion, Madam Deputy Speaker—the Government were not giving the full pay reward to the Army. Armed forces were awarded a 1.5% pay increase. The Chancellor announced the increase in the Budget at the Dispatch Box, yet delayed the start of those payments until 1 May. That is unique in the private or public sector. I have never heard of that in the steel industry, or any other manufacturing industry in the private sector, yet the Government are doing that to the armed forces—I apologise, Madam Deputy Speaker.

Tied accommodation affects 30,300 farm workers and their families. Will Ministers at least guarantee that those properties will not be taken from under the noses of those workers, and potentially opened up to the new spare homes subsidy market so that millionaires can increase their property portfolios? This is a piece of despicable legislation, outdone only by the sheer cowardice of a Government who wish to pass this measure without attempting to justify one scintilla of it to the House in open debate.

--- Later in debate ---

[George Eustice]

I do not want this debate to get distracted, but even in the current Parliament the coalition Government have changed tax thresholds that help all working people, especially those on the lowest income.

Another problem with the rigid pay structure is that, as currently structured, it can discourage training and career development in small farm businesses. I will explain why. A small farmer might have two or three employees. He might not be able to afford to employ someone on grade 2, grade 3 or grade 4. He might not really have a need for those staff to be trained to those grades, but might nevertheless take the view that to aid the career development of a new employee—perhaps someone who has just left school and joined their business—he will give them time off work and support them in proficiency tests and training. At the moment, if they do that, the next thing that happens is that they suddenly have to pay that person more money. Is it not better if that person can develop and train, and has a farmer who wants to facilitate that, so that maybe, when a neighbouring farm needs somebody who has the proficiency test skills and a different type of skill set, they are able to progress and take a job that is higher paid in that neighbouring farm? The farmer will want that to happen; he will be happy to encourage somebody and see a career develop. At the moment, however, we are in a situation where the rigid grade structure discourages farmers from wanting to have their employees seek further training.

We have heard a lot in this debate, both from my hon. Friend the Member for St Ives (Andrew George) from my neighbouring constituency—we take different views on this, as people will have noticed—and others, about how difficult it is for farmers to negotiate with their staff, as if it is something that is dreadfully embarrassing and they cannot possibly do it. I reject that idea completely. Farmers, if they are still in business today, have to do all sorts of challenging things: they have to negotiate with people day in, day out; they have huge amounts of paperwork to deal with; and they have to negotiate and fight over the costs of their feeds, fuel bills and all sorts of things. The idea that they cannot sit down with the people they work with every day and have an intelligent conversation about their pay review is, frankly, ludicrous.

Farm businesses are no different from any other businesses. Even if they do not have to have discussions with their employees about pay rates, one can guarantee that there will still be times when they have to have discussions about people turning up for work late and staff who have problems at home and need some time off—all those sorts of issues. There is nothing different about farming. I was in the young farmers club in Cornwall with many of the farmers in my hon. Friend’s constituency. I know many of them and I can tell him that they are perfectly capable of having those conversations with their employees.

[Neil Carmichael]

I endorse what my hon. Friend is saying. I, too, was a farmer in the 1990s, and know that farmers can easily negotiate. It is also important to recognise that agriculture today is a modern industry that is moving forward, with added value products, retail sectors and so on. All of that is happening to farms, so we cannot anchor them down to something as archaic as the AWB. It is not just a floor, but potentially a ceiling—something to which my hon. Friend has referred.

[George Eustice]

My hon. Friend makes an incredibly good point. Farming has changed.

The biggest farm employer in St Ives is a firm called Winchester Growers, which does not receive subsidies like the large farmers and tends to rent land and employ lots of people. Quite often, young men who would have had farms themselves become managers and supervisors within such businesses and have a proper career structure, with profit options, share options—all sorts of things. It is very important that we modernise and move on. The AWB is a relic of the past. It is full of “bosses versus workers” rhetoric that is frankly 40 years out of date. It is right that it should go.