Oral Answers to Questions

Debate between Tom Blenkinsop and Owen Paterson

Thursday 27th March 2014 Commons Chamber

[Mr Paterson]

My hon. Friend is absolutely right to say that it would be a huge change if we could use PCR to analyse diseased badgers on the spot. That would change the whole debate and would be an enormous help in disease reduction. We have been working closely with the university of Warwick and are bringing in other agencies to see whether we can accelerate that work. Sadly, PCR is not yet reliable enough. If we can get a greater than 50% chance of identification, it will cause a sea change on this issue.

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

3. What steps he is taking to prevent redundancies among staff working on flood protection at the Environment Agency.

Agricultural Wages Board

Debate between Tom Blenkinsop and Owen Paterson

Wednesday 24th April 2013 Commons Chamber

[Mr Paterson]

I am grateful to the hon. Lady for that early intervention. If she gives me a chance, I will explain my case. I take a completely contrasting view to hers. I have a positive view of agriculture and I see an expanding demand for labour in the countryside. I believe that the current minimum wage arrangements will give protection to those at the lower end of the scale, but I am absolutely convinced—because it is happening already—that the overwhelming number of employees in the sector will be paid well above the minimum wage. Let me make my case; I might be able to convince her.

A successful agricultural industry will contribute to the growth of the wider rural economy, which is one of the four key objectives of my Department. Agriculture is vital for the UK. It produces much of the food that we eat and supports other industries that add nearly £90 billion to our economy. The food supply chain employs nearly 4 million people and includes the largest manufacturing sector in the UK. Exports of agricultural food and drink have seen seven years of continuous export growth and were worth £18 billion in 2011.

There are huge opportunities for further growth within agriculture to meet the demands of feeding the world’s population as it grows from 6 billion to 9 billion. We want to ensure that the UK industry is in the forefront of meeting those demands, and we are already doing a great deal to help to ensure the success of the industry. An example is the joint Department for Business, Innovation and Skills-Department for Environment, Food and Rural Affairs agri-tech strategy, which will provide a framework for research and the development of technologies. It will support growth through encouraging the global uptake of world-class UK-based agri-science and associated technologies, stimulating their translation into high-tech agricultural systems in the UK. We are working on the design of the new rural development programme, which we will use to develop professional skills, including business management and risk awareness, across the agriculture and forestry sectors.

[Tom Blenkinsop]

I am sure that the Secretary of State will be telling all this to the workers on his estate, but will he tell the House how many of the people on his estate will be affected by the termination of the AWB?

[Mr Paterson]

I have to disappoint the hon. Gentleman by telling him that I do not have an estate, and that I do not have any direct employees who take the agricultural wage.

I shall take up my case again. In addition, I want to give businesses the tools they need to have the confidence to invest, adopt and benefit from innovative technologies and farming practices.

--- Later in debate ---

[Mr Paterson]

I am grateful to the right hon. Lady for that question. There are modest administrative savings from the running of this organisation. Labour Members concentrate on the impact assessment, which makes it clear that we have a dynamic market, stating:

“Current wage levels are generally above the AWO minima & are underpinned by the National Minimum Wage.”

On page 3, it says:

“Government intervention is no longer necessary because…it is considered that there is no market failure in the agricultural labour market such that workers require protection which is over and above other statutory terms and conditions and wider employment legislation applying to all workers.”

Let me pick up my thread again. I am confident that we have a thriving sector with demand for labour, which will push wages up, not down. I have touched on the farming regulation task force, which will remove a whole range of regulatory burdens from farm businesses. In fact, since 2011, we have removed £13 of compliance costs for every pound added. There will be 12,000 fewer dairy inspections a year.

The abolition of the Agricultural Wages Board will complement and supplement this work. That is why I find the position of the Opposition Front-Bench team so disappointing. Agriculture is now the only sector of the economy to retain a separate statutory wages regime. There is no rationale for treating agriculture any differently from other sectors. More than 900,000 businesses in England and Wales are micro-businesses that employ between one and nine people. The vast majority of those cover sectors other than farming and do not require an independent body to set employment terms and conditions, so there is no reason why it is still necessary for farm businesses.

It was in fact the last Labour Government who set up a single national minimum wage, and whose Minister, the noble Lord Falconer argued that

“the Government”—

namely the Labour Government—

“do not believe that a multitude of regional, sectoral or other minimum wages is the right approach. It is neither sensible nor justifiable intellectually.”—(Official Report, House of Lords, 11 June 1998; Vol. 590, c. 1240.)

Agriculture has moved on significantly from when the current wages board was established 65 years ago under the Attlee Government. It is now a global business and the price of agricultural commodities is determined by international supply and demand. British farmers have to compete not only with each other, but with farmers overseas in order to sell both here and in international markets.

The industry has become highly scientific and mechanised, with developments in plant and animal breeding, improved fertilizers and pesticides, and other scientific and technological advances. Workers in the industry need to be highly skilled and specialised. Modern farm businesses are no longer confined just to agriculture. Around a quarter of farms have now diversified into non-agricultural activities, such as rural tourism, retail and sporting activities. Rural tourism alone is worth £33 billion to the economy.

The agricultural wages order takes no account of the changes within agriculture, but imposes an inflexible structure, which is no longer appropriate for the varied and diverse businesses within the industry. This is an industry whose processes, structures and products would be barely recognisable to those drafting or debating the Agricultural Wages Act 1948.

Many farm businesses are faced with the burden of having to administer both the agricultural minimum wage regime and the national minimum wage regime. Employers have to decide whether or not a worker’s activity is covered by the provisions of the agricultural wages order or by general employment legislation. In some cases, there are grey areas as to whether or not work is covered by the agricultural minimum wage or the national minimum wage. For example, packing of salad and vegetable produce grown on farm would normally be covered by the agricultural minimum wage, whereas packing of produce bought in from other farms is not.

Abolition of the Agricultural Wages Board will allow agriculture to compete on a level playing field with all other sectors of the economy, with all employees treated equally and all underpinned by the national minimum wage and other statutory provisions. Such an approach was championed by the last Government. Speaking in the Committee stage of the National Minimum Wage Bill, the noble Lord Falconer argued:

“a single national minimum wage is a fundamental principle of the Bill. A single rate is easier to understand and fairer and easier to enforce...I believe that there is a great virtue in simplicity. The simpler we can make the provision, the simpler and more effective the Bill will be. People will know what their rights are. There will be no difficulty in understanding their minimum wage entitlement; and there will be no over-complexity, which might lessen the effect of the Bill.”—(Official Report, House of Lords, 11 June 1998; Vol. 590, c. 1240.)

It is that over-complexity and bureaucracy, as represented by the Agricultural Wages Board, that we are seeking to remove. This will improve the industry’s competitiveness to produce for both domestic and export markets. About 40% of our fresh vegetables and 90% of our fresh fruit are imported, so there are plenty of opportunities for domestic growers to improve their share of the market. 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.

[Tom Blenkinsop]

Is the Secretary of State saying that enhanced statutory sick pay is an outdated term and condition for farm workers, who have now had it removed due to the abolition of the AWB? Is he really saying that?

[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.