Public Bodies Bill [HL]

My Lords, allow me to intervene at this stage. I add to the remarks of the noble Baroness, Lady Quin, as to how much, as always, we miss my noble friend Lord Greaves, who is, unfortunately, unable to be here. I listened very carefully to what she said; I am still not persuaded and I will set out why. I will start with a very small apology. When she said that 2p was the difference from the minimum wage, I interrupted her from a sedentary position to say that it was 3p. She was correct—it was 2p. So, mea culpa, I was wrong. But I am not sure that 1p makes that much difference. I think it worth saying at this point, in relation to the points made by the noble and learned Baroness, Lady Butler-Sloss, and the noble Lord, Lord Whitty, about the protection of vulnerable workers, that the Gangmasters Licensing Authority will continue to be there. Its job is to protect those vulnerable people and it does not appear in the Bill at all. It exists and there is no plan to change that. We intend to abolish the board and to remove outdated—my noble friend Lord Newton correctly described them as antique, worse than outdated—and unnecessary regulatory burdens from farm businesses so that they can focus their time on farming in order to develop a thriving, sustainable and prosperous industry. I ask all noble Lords to listen very carefully to what the noble Lord, Lord Cameron of Dillington, had to say, particularly about the way in which farmers themselves make decisions about what they pay their employees. These employees are using large machinery which very often costs a great deal of money, and these employers are not going to employ people without the appropriate skills. They will pay them the appropriate amount of money if they want to look after that machinery. Similarly, I commend the noble Lord for what he said about supermarkets, including the deals and quality assurances that they want. These assurances often involve the environmental and employment practices of farms and so on. As noble Lords will know, the board has itself been keen to modernise the agricultural wages legislation; for example, to allow farmers and workers to agree payment of annual salaries. This will be far easier to achieve outside the current restrictions of a statutory framework. Once abolished, these functions of the board will cease to exist and agricultural workers within England and Wales will be protected by the National Minimum Wage Act and by wider employment legislation, as are workers in all other sectors of the economy. My noble friend Lady Byford asked how much it would save, and how much it had cost over the past 10 years. All I can say is that the cost of the board last year was some £200,000, but that is without taking into account the cost to the department. However, this is not purely about saving money. We think that the board has outlived its term and therefore ought to go. Importantly, one should also remember that workers will retain contractual rights that exist at the time when the board is abolished until such time as the contract is varied by agreement between the employer and the worker or until any contract comes to an end. My noble friend and others raised the matter of devolution, as did the noble Lord, Lord Empey, who objected to the amendment. I was grateful for what he had to say about the position in Northern Ireland. The position there is different, as is the position in Scotland. That is quite right; it is the point of devolution. We have to accept that there will be different arrangements in different parts of the country. There is nothing wrong with that and we should positively welcome it. With regard to the position in Wales, I can give my noble friend an assurance that Ministers in the Welsh Assembly Government have been consulted on the proposal to abolish the board and have agreed to its abolition. Welsh Ministers will be able to bring forward a separate order in due course abolishing the Agricultural Wages Committee in Wales, and we will be liaising with them to deal with those matters. The Low Pay Commission was asked to take into account the circumstances of agricultural workers when making its annual recommendations to the Government on the national minimum wage rate. Responsibility for the enforcement of the national minimum wage in the agricultural sector will transfer to the commission. As for the funding to the commission and HMRC for this additional work, Defra will be making a resource transfer that will be broadly comparable with the annual budget of the board. That is why I stress that this is not being done to save money. I can also give an assurance that, in the absence of the wages board, workers and employers will need to agree terms and conditions for employment according to individual circumstances, a point that was emphasised by the noble Lord, Lord Cameron. Obviously the Government strongly encourage industry representatives—the noble Baroness mentioned Unite, of which she has been a member for many years—to work together to provide the benchmarks for agricultural wage rates. This will be particularly beneficial to small businesses. A non-statutory approach to wage-setting works in industries such as the construction sector, and while there are differences between sectors there is no reason why a similar approach should not work in agriculture. The noble Lords, Lord Whitty and Lord Clark of Windermere, talked about the different grades. The vast majority of full-time permanent workers fall into either grades 2 or 4 within the current Agricultural Wages Order banding. That suggests that they have skills that are desirable in a competitive market, and the figures bear that out. Last year nearly three-quarters of agricultural workers over 21 were paid at or above the minimum wage for their grade, and of those almost half were paid more than 10p above the hourly minimum wage for their grade. That provides firm evidence that the market, not the wages board, is generally delivering higher wages and that minimum rates do not act as a floor. Lower-skilled workers who are paid at or around the grade 1 agricultural minimum rate will, as I said, be protected by the national minimum wage requirements. I shall make one or two comments about the supermarket problem, as put forward by a number of noble Lords on the Benches opposite. First, I take the point made by the noble Lord, Lord Cameron of Dillington, which they ought to bear in mind. Secondly, I again remind the House that we have plans to bring forward the groceries code adjudicator. I was teased by the noble Baroness; she said that there seemed to be a go-slow by the Government on this. That is not the case at all. We have made it clear right from the start, or from very recently, that there will be a groceries code adjudicator. He will have certain powers in terms of naming and shaming, and we will be bringing forward draft legislation to deal with that in due course. I hope that the noble Baroness will accept that that is the case. The noble Baroness also made allegations about a lack of consultation. I can assure her that the new procedures for the Public Bodies Bill which were agreed in Committee require Ministers to consult on a proposal to make an order. This may be done before, or after, the Bill comes into force. Accordingly, we will consult on the abolition of the Agricultural Wages Board and hope to issue such a consultation this autumn. A quality impact assessment will be published as part of that consultation exercise. I apologise to the noble Baroness if, on a previous occasion in Committee, I possibly misspoke on this subject. The impact assessment will be informed by independent research that we have already commissioned on the impact of the abolition of the Agricultural Wages Board on wage rates. With those assurances, I hope that the noble Baroness will withdraw her amendment.