Seasonal Agricultural Workers Scheme

Owen Paterson Excerpts

Thursday 6th July 2017 Westminster Hall

[Mr Owen Paterson (North Shropshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Gapes. I thank my hon. Friend the Member for Tiverton and Honiton (Neil Parish) for securing this debate. As he said, it is very timely. I congratulate him also on his work on the Environment, Food and Rural Affairs Committee.

I begin by pointing out to the hon. Member for Perth and North Perthshire (Pete Wishart) a couple of macro facts. There was a vote of 17.4 million last year to leave. I know his party do not like it, but we are going to leave. One of the issues was taking back control of our borders. The figures are pretty startling. Last week, our population hit a record number of 65.5 million. The Department for Communities and Local Government reckons that we need to provide housing for 243,000 new households every year for the next 22 years, which means building a new home every five minutes, night and day, to cope with the increase in population. That is one macro fact that Members have to recognise.

[Angus Brendan MacNeil]

Will the right hon. Gentleman give way?

[Mr Paterson]

I will just finish making the point, because I think it is relevant.

The other fact is that, far from banging on about Brexit, it is great pleasure to state that the economies in eastern Europe are really flying. Hungary is growing at about 4% and there has been a huge increase in wages. They have risen by 15% this year, and by 25% for skilled workers, and there has been a 20% rise in the Hungarian forint. Quite soon, there will not be wage differentials between Hungarian workers and western European workers.

There are similar major strategic changes in Poland. The economy there is flying, at 4% a year. Significantly, a 250,000 annual drop in the working-age population is putting pressure on Poland, which is already opening up visa schemes for 1.3 million temporary workers from Ukraine. We have to recognise that. It is great news that in Romania, which is very relevant to our discussions, economic growth is running at 5%. Civil servants have had a 25% pay rise. Their wages are increasing and their jobless rate is not far below Scandinavian levels. Those macro elements are completely out of the discussion on Brexit.

Where I would agree with the hon. Member for Perth and North Perthshire is that the situation is a real problem. I saw it coming when I worked in the Department for Environment, Food and Rural Affairs, and it has only got worse. The hon. Gentleman cited a survey from British Summer Fruits. It sees prices rising 35% to 50% because of labour shortages. The BBC did a survey that said that 78% of growers believed that recruitment has been harder. We are all hearing this, and it is not just in the fruit and veg industry; we are hearing it from those who work in abattoirs and those who work in tourism. Many rural industries are being affected.

[Angus Brendan MacNeil]

The right hon. Gentleman talks about “taking back control”. He must have sympathy with the point I raised earlier: in Scotland we do not have control, because we have a system that is very centralised in London, deciding what we need and do not need, particularly if we want to take people from the Philippines. Switzerland, for example, can run a scheme where the 26 cantons control half the visas and the other half are controlled centrally. Is it not time that the UK changed its approach so that places such as Scotland can control their own destiny?

[Mr Paterson]

The hon. Gentleman’s party lost the argument when it lost the referendum. Scotland is a firm part of the UK. I think the control of borders is a policy area that should be in the hands of the nation state.

To get back to my not being surprised, the most angry people I met when I was the Secretary of State at DEFRA were the fruit farmers in Herefordshire, Somerset or Kent. I remember clearly going on a trip with my right hon. Friend the Member for Witham (Priti Patel) to her constituency in Essex, where there is a wonderful, world-famous fruit packing, picking and jam-making company called Tiptree, which we probably all see on virtually every plane we fly on. That company was having real problems at that time with getting really skilled people to pick fruit. As the hon. Member for Perth and North Perthshire said, the picking has to be done at the right moment. There is a critical moment when fruit and veg has to be picked, or it is lost.

At that time, SAWS had already been stopped. From memory, before they had open access, the scheme brought in 21,250 Romanians and Bulgarians, who came to targeted destinations, with proper accommodation, good catering facilities, proper medical facilities and so on. They also had the requirement to go home at the end of the season. I remember that Tiptree was really struggling. I talked to various representatives of the industries at that time and we looked at all sorts of alternatives, some of which have been completely misrepresented in the press. There was talk of reviving the old tradition of urban citizens taking working holidays in the countryside, and seeing whether pensioners could do it. We looked at students. I worked closely with the Department for Work and Pensions. None of those options was really practical. We looked at them, but they were not really going anywhere.

The only real long-term solution, if we are to use domestic labour—the hon. Member for Perth and North Perthshire made the right point when he said we all represent rural constituencies with very low rates of unemployment—is automation. Happily, near me, we have the University of Harper Adams, which is doing fantastic work on automated machinery. It will produce a crop in a field this year where a human being will not have entered that field from the moment that it was first touched. However, that is down the line. For the moment, I think we all agree that we have a real problem with our fruit and veg industry, and increasingly with our tourism industry, in finding labour.

We have the opportunity, and I look forward to it, once we get control back of our borders, to look well outside Europe for labour—we will have to. We are going to find—I have just cited the figures—that the Romanians and the Poles are probably going to stay at home. We had better wake up to that. It is absolutely vital that the Minister is working hard at DEFRA on a replacement seasonal agricultural workers scheme.

I would ask him not to do a straight replacement. I will cite one example, New Zealand, which has been running a recognised seasonal employers scheme since 2007. The World Bank has described it as a model for best practice. It has really worked; it has eased labour shortages in the horticulture sector, and the viticulture sector, which is growing very fast of course in New Zealand, while minimising the risks of overstaying and undercutting or displacement of local labour by immigrant labour.

There is a really strong focus in New Zealand on “New Zealand first” in the labour market. Our old seasonal agricultural workers scheme did not incorporate a resident labour market test, unlike the RSE, nor did it include measures of the type included in the RSE to prevent illegal overstaying. That is a really important difference. The number has increased from 8,000 to 10,800 Pacific islanders this year. They are provided places to work during the agricultural season, and mainly come from islands such as Samoa, the Solomon Islands, Kiribati, Tuvalu and Vanuatu, for seven to 11 months.

The conditions are pretty strict. An employer must first register as a recognised seasonal employer. That is stronger than what we had: under our old legislation, SAWS, registration with the Gangmasters Licensing Authority was optional for sole operators and compulsory only for multiple operators, depending on their recruitment arrangements.

New Zealand employers are required to take a number of reasonable steps to recruit New Zealanders to available positions. The language is pretty fierce. The main document given to employers says that they are required to take

“all reasonable steps to recruit and train New Zealanders for available positions before seeking to recruit non-New Zealand citizen or resident workers”,

and that they must

“not use a recruitment agent who seeks a commission from workers in exchange for securing an employment agreement, to recruit non-New Zealand citizen or resident workers”.

That is much more strict and puts more pressure on the employer than what we had.

The other really important thing is that employers are required to pay the market rate for work so there is no competition with domestic labour. “New Zealand first” really does help. Under the SAWS arrangements, SAWS operators were subject to inspection by the GLA and what was then the UK Border Agency. That included their pay systems. In New Zealand, farms are inspected, mainly by the operator, to ensure appropriate standards of health and safety, which is the main focus. Very importantly, employers must pay half the worker’s return air fare between New Zealand and their country of origin. Under SAWS, there was no requirement to pay any portion of the worker’s return air fare.

In New Zealand, employers must bear the cost of repatriating workers if they become illegal. Again, that was not the case under SAWS, although fines were eventually introduced. Importantly, workers under RSE are allowed to be re-employed in subsequent years, and there is a very strong record of their coming back, which I think is a real advantage for the disadvantaged economies from which they come. Although seasonal agricultural schemes around the world seem to use either a resident labour market test as a form of flow control, or a quota, New Zealand uses both. The policy has contributed very much to its development objectives with its Pacific neighbours.

I recommend that the Minister read the report by Professor Alan Winters, professor of economics at the University of Sussex, on New Zealand’s recognised seasonal employers scheme. Let me pick a key quote from a 2010 survey by the New Zealand Department of Labour, which is pretty festive about this. It said:

“Overall, the RSE Policy has achieved what it set out to do. The policy has provided employers in the horticulture and viticulture industries with access to a reliable and stable seasonal workforce. The labour supply crises of previous years have been avoided and employers can now plan and manage their businesses with confidence. As the policy enters its third year”—

this was back in 2010—

“there are indications many employers are now also benefiting from skilled labour as workers return for subsequent seasons. Significant productivity gains were reported in the second season, together with improvements in harvest quality.”

As I just said,

“Alongside the employer ‘wins’, Pacific workers and three Pacific states have benefited financially from participating in the RSE Policy.”

A World Bank report said:

“We find per capita incomes of households participating in the RSE to have increased by over 30% relative to the comparison groups in both countries.”

Another report found that 50% of workers returned in the next season, and that most—86.9%—returned to the same employer.

Australia’s seasonal worker programme, which I strongly recommend the Minister check out, is a similar scheme. It brings in 12,000 workers from Pacific islands. Workers come to Australia for between 14 weeks and six months. Employers must be approved by the Government; provide the Government with evidence of labour market testing; organise flights, transport and accommodation for workers; ensure a minimum of 30 hours of labour a week; and ensure that workers depart on the expiration of their visa.

It is vital that we look at introducing a replacement for SAWS. It should be tapered and temporary, and should ensure that British workers are not displaced or undercut by migrant workers while we wait for technology to catch up—that is the real future for domestic workers. Any replacement of SAWS must include a resident labour market test and be accompanied by robust safeguards against illegal overstaying. We need to start planning that now because, given that prosperity is improving in eastern Europe, as Members have said, workers are not going to come from there. We will happily have the whole world to choose from. Hopefully, people will come here and pick our wonderful soft fruit and vegetables.