Agricultural Wages Board

Roberta Blackman-Woods Excerpts

Wednesday 24th April 2013 Commons Chamber

[Mr Paterson]

The hon. Gentleman has misunderstood. All the existing conditions continue.

As I say, abolition will remove outdated and prescriptive regulations that hamper the ability of industry to offer flexible modern employment packages, such as the payment of annual salaries. It will simplify employment legislation in the sector, provide transparency and make it easier to recruit workers. In the absence of the board, farmers and workers will be able to agree employment terms and conditions that suit the requirements of the farming sector and the particular circumstances of individuals.

[Roberta Blackman-Woods (City of Durham) (Lab)]

I wonder whether the Secretary of State will answer a question that was asked many times but never answered when the Public Bodies Act 2011 was in Committee. Did the Government consider modernising the board rather than abolishing it?

[Mr Paterson]

All sorts of options were considered, but we concluded that the answer was to abolish the board, thus bringing agriculture into line with every other employment sector in the country.

I fully understand the concern about the impact on workers’ wages and terms and conditions as they adjust to the level playing field and move from being set by a system of statutory wage fixing to being set by the market. However, the figures that the hon. Member for Wakefield and Unite have been using have been cherry-picked from the impact assessment and are based on the worst possible scenario, namely a reduction in the wages of every single worker in the agricultural sector. Anyone with any understanding of the farming industry, or the market, knows that that simply will not happen.

The abolition of the Agricultural Wages Board will not

“lead to a race to the bottom on wages in rural areas”

or “impoverish rural workers”, as the motion suggests. It will give farmers and workers the same flexibility to agree terms and conditions as is given to employers and workers in all other sectors of the economy, while also securing the same levels of protection. Most workers already have terms and conditions over and above those in the agricultural wages order, and as contracts are already in place, their wages should not be affected. In 2010, the basic pay of full-time permanent workers was 12% above the AWB minimum for their grade, and non-permanent grade 1 and 2 workers were paid 4% above the AWB minimum for their grade. More than two thirds of permanent employees aged over 21 earn above the agricultural wage minimum at grade 1, and more than half do so at grade 6.

The National Farmers Union has described the abolition of the AWB as “a progressive reform”, which is something in which the Labour party used to believe. The “bottom up” takeover of the party by the trade unions seems to be almost complete.

I can reassure the House that agricultural workers who have existing contracts at the time of abolition will continue to retain rights to pay at the appropriate grade level, along with the other terms and conditions in the current agricultural wages order. For the avoidance of any doubt, we intend to provide for that in legislation. Employers will not be able unilaterally to alter terms and conditions for an existing worker without legal consequences. New workers coming into the industry will be protected by the national minimum wage and by wider employment legislation.

The hon. Lady has described the national minimum wage as

“one of the Labour Government’s greatest achievements.”

Why should we not let agricultural workers benefit from that achievement? The national minimum wage provides sufficient protection for 99.5% cent of the work force, including those who operate factory machinery, those who drive heavy vehicles, and those who care for the sick, the elderly or children. There is no reason why it should not also provide sufficient protection for agricultural workers.

--- Later in debate ---

[Roberta Blackman-Woods (City of Durham) (Lab)]

I am pleased to take part in the debate. I have a constituency interest, and I led for the Opposition in the Committee on the Public Bodies Bill, so it is a matter of some disappointment to me that in the intervening two years the Government have not refined their arguments, nor have they produced further evidence to suggest why the board should be abolished. Given the catastrophic effect abolition could have on the pay, terms and conditions of the country’s 152,000 agricultural workers, not least in my constituency, where well over 100 workers will be affected, it is important to ask serious questions of the Government about why they consider it necessary and, in particular, whose interests they are serving.

As we have heard, the Agricultural Wages Board was formed in 1948, but its lineage goes back to 1924. The fact that it has survived so long is testament to its continuing relevance. My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) is right: it has modernised over the years and could modernise further. The board has demonstrated its importance for protecting the rights of workers in the sector. Those rights are now very much at risk.

The Government’s response when asked why they want to abolish the AWB is that agricultural workers, like others, are now covered by minimum wage legislation. Excellent though the minimum wage legislation is, it does not cover the same range of wage levels and categories as the AWB. The agricultural industry needs to attract people with the right skills and aptitude, which is becoming more important as farming methods continue to develop technologically. The AWB has a grading system for the terms and conditions of employment for agricultural workers that reflects the diversity of skills needed and the responsibilities attached. As many others have said, minimum wage legislation does not cover the many other areas overseen by the AWB, such as the standard of tied accommodation, overtime rates, sick pay and holiday entitlement. Why are the Government abolishing the board, and in whose interests will it be?

When the Public Bodies Bill was being considered in Committee, far from Labour Members being out of line, as the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) suggested, it was Government Members who were out of line, because the only people supporting abolition were some parts of the National Farmers Union. Indeed, it was only some in the union. We received many representations from farmers and farm workers who thought that getting rid of the AWB was an extremely bad idea because they liked the structure that it gave to negotiations.

We know that the abolition is not in the interests of not only hard-pressed agricultural workers, who stand to lose significantly from the change, but those wishing to enter the sector. I have a very good agricultural and horticultural training college in my constituency. From talking to several of the young people studying at Houghall, I know that they are worried about what will happen to terms and conditions in the sector following the abolition of the AWB. They are also concerned that they will no longer have a clear career ladder after leaving college, yet no Government Member has addressed that problem. We know from Lantra, the skills body overseeing the sector, that another 60,000 people will soon be needed in the industry because 25% of agricultural workers are over 55. Ministers cannot seriously be suggesting that the abolition of the board will make the industry more attractive to young people, because they have told me directly that it will not.

The abolition is not in the interests of the rural economy as a whole, especially in the north-east, given that millions of pounds will be taken out of an economy that is already suffering from high unemployment. The Government’s policies have hit my constituency hard. The latest unemployment figures show that City of Durham’s claimant rate has almost doubled in the past 12 months, which is one of the biggest rises in the country. It will be difficult for people in the agricultural sector to argue for a better standard of living when unemployment is so high, because they will be told, “If you don’t like it, lump it, because there are lots of people in the county who will be able to take your job.” The Government simply are not addressing that problem, yet because the abolition of the board will remove workers’ protections, it will be more difficult for them to argue for a better standard of living.

I will conclude, because I want to give others time to speak, but it is difficult to understand what the abolition of the board will achieve. It does not cost much to operate, but it protects workers in the sector, and sets a clear framework for negotiations and a career structure. It could be modernised in line with the new skills needed for farming, but one can only assume that the Government, as they have shown with other policies, are hellbent on driving down the wages of the low-paid in this country while at the same time giving tax cuts to millionaires.

--- Later in debate ---

[Mr Heath]

There were a number of points. There was the introduction of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, the Employment Act 2002, the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, the Gangmasters (Licensing) Act 2004, the Pensions Act 2008, the Apprenticeships, Skills, Children and Learning Act 2009, and the Agency Workers Regulations 2010. All those provided the protections that I wanted for rural workers. They exist, and that is why we no longer need the Agricultural Wages Board, because it duplicates that position. I am grateful to the hon. Gentleman for his intervention, and I am glad he asked me that question.

In reality, when we debated these issues, Labour Members in support of the Labour Government resisted me when I spoke about rural poverty and denied that the biggest single removal of money from rural areas was the fuel escalator, which far outweighed anything that could possibly happen through the provision under discussion. They resisted my Fuel Poverty Bill applying to rural areas; they would not even allow for the existence of rural poverty, yet now they have the nerve to lecture the Government about what happens in rural areas.

Let me be clear because misinformation—deliberate I think—is being spread about some areas of this subject. There is a suggestion that people who work in the agriculture industry will no longer have any protection, which is absolute nonsense. The national minimum wage affects 99.5% of all workers in this country but is apparently hopelessly inadequate for the other 0.5%. However, I believe that the national minimum wage—which after the recent settlement is now well ahead of the first grade of pay for agricultural workers—is a valuable protection.

Every single worker who is currently paid under the protection of the Agricultural Wages Board will continue to receive that protection and to enjoy every aspect of their pay and conditions, and we shall ensure that they receive the benefit of legislative protection on that.

[Roberta Blackman-Woods]

Will the Minister give way?

[Mr Heath]

I am afraid I have no time left.

Opposition Members are telling us that the basement protection for the lowest-paid workers is the 2p difference per hour between last year’s AWB rate and the national minimum wage, and that that makes all the difference to rural poverty. I am afraid I do not believe that.

As many Government Members have said, agricultural workers are a precious resource in our rural areas. Do Opposition Members not understand that farmers cannot get a skilled stock man or woman in many areas? They have to pay them to attract them. Do they not understand that farmers do not put someone on the national minimum wage in charge of a £500,000 machine? That is the reality of the modern agriculture industry.

We are therefore left with a statutory body that, uniquely, deals with career progression in one half of one industry—the AWB does not apply to everybody in food and farming. I simply do not believe that a statutory body is necessary to do that—we can do it in better ways. I want to see career progression, flexibility of contracts and modern conditions. Those are the keys to a modern and effective agricultural industry.