The Agricultural Wages Board and Agricultural Wages Committees were set up in their current form nearly 65 years ago. The board was established at a time when there was little statutory employment protection for workers. Today the situation is very different and all workers are protected by the National Minimum Wage Act and working time regulations. Before I proceed any further, I want to reassure noble Lords that this Government firmly support the national minimum wage.
The Agricultural Wages Board is the only remaining sector wage council—all others have now been abolished. There is now no compelling reason why the agriculture sector alone should continue to be subject to a separate statutory employment regime. Let me explain why.
The agriculture industry today is very different. First, such businesses are often not just dependent on agriculture. Technological developments and increased mechanisation mean that there is no longer such dependency on manual labour in order to carry out agricultural functions. This has enabled businesses to expand and take on other, complementary work. The sectors within agriculture are therefore becoming increasingly diverse and many farm businesses now carry out non-agricultural activities alongside more traditional farming enterprises—for example bed and breakfast, and farm shops, where workers would not necessarily be covered by the agricultural wages order.
The agricultural wages order, which is made each year by the Agricultural Wages Board, takes no account of these changes within the agriculture industry. The process is one of “one size fits all” and this imposes a rigid and no longer appropriate structure on what are in reality nowadays myriad businesses that come under the umbrella term of “the agriculture sector”. The order is overly complicated and its provisions are wide-ranging and restrictive, hampering the ability of the industry to offer more flexible, modern employment packages. These amendments will end the separate statutory employment regime for agricultural workers in England and Wales and make amendments to the National Minimum Wage Act to bring the agricultural industry within the scope of the national minimum wage. The Government will also make amendments to secondary legislation to ensure that agricultural workers are adequately protected by the working time regulations.
The abolition of the Agricultural Wages Board and the associated agricultural minimum wage regime will enable farmers to offer terms and conditions for new workers that suit their particular circumstances and take account of the requirements of the specific farming sector. They will also be able to agree more flexible terms with existing workers by mutual consent. It will make it easier for farm businesses to employ workers, including taking on new workers, and encourage longer-term employment, thereby boosting growth and creating job opportunities.
The abolition of the Agricultural Wages Board will also mean that a single employment regime applies to all types of activities. This will bring transparency for both employers and workers, which is increasingly important given the diversity of farm businesses, not
least in the interests of fairness and as the distinction between agricultural and non-agricultural activities becomes blurred. Even within the agricultural sector there can be confusion as to whether activities are covered by the agricultural wages order. For example, where a business packs and trims salad produce that is both grown on the farm and bought in, the packing of the home-grown produce is covered by the agricultural wages order, whereas the packing of the bought-in produce may not necessarily be. There are similar examples of confusion in the dairy and livestock sectors. Abolition will lift administrative and regulatory burdens from farm businesses and enable them to focus on their core business activity. It should encourage farmers to offer more in the way of longer-term employment, including the payment of annual salaries. All of this will encourage the development of a sustainable and prosperous industry for the future.
For the avoidance of any doubt, let me offer some further reassurance. Agricultural workers who have contractual rights reflecting the terms of the agricultural wages order at the time of the abolition of the board will continue to have those rights until such time as the contract might be varied by agreement between the employer and the worker or until the contract comes to an end. Moving forward, it is important to bear in mind that if agriculture-based businesses want to retain and attract able and well-qualified people, they need to offer remuneration packages that are competitive. We know that the majority of workers in the agriculture sector already benefit from terms and conditions that are above the agricultural minimum wage rates. Currently, about 60% of permanent agricultural workers over the age of 22 are paid above the agriculture wages order minima. There is no reason why they should find themselves in a worse position in the absence of the board. The Government have asked the Low Pay Commission to include agricultural workers in its considerations when providing recommendations for all of the elements of the national minimum wage in order to achieve the smooth integration of agricultural workers in England and Wales.
Most of the functions of the 15 Agricultural Wages Committees in England have now lapsed in practice or been replaced by wider legislation. Their only remaining active function is to appoint members of the 16 Agricultural Dwelling House Advisory Committees in England, which are sometimes known as the ADHACs. The committees were established under the Rent (Agriculture) Act 1976 and their function is to give advice to local authorities on rehousing agricultural workers. As a result of changes in housing legislation, the number of requests for advice from ADHACs has declined significantly, to fewer than 10 in each of the last two years. There is no statutory requirement to consult an ADHAC and many local authorities happily take decisions on rehousing without such advice. I hope the Committee agrees that these 31 regional committees in England are now effectively defunct bodies and their continued existence at public expense cannot be justified. With regard to the abolition of the ADHACs in England, I want to assure noble Lords that there are no plans to change the provisions in the Rent (Agriculture) Act 1976 which give security of
tenure to protected tenants, and therefore the amendments will not in any way jeopardise the position of tenants with protected tenancies under the 1976 legislation.
In summary, these amendments will bring employment practices in the agricultural industry into the 21st century, enabling sustainable growth for the future. They will also remove a number of obsolete public bodies and contribute to the Government’s wider programme of public body reform. I hope that, in the light of my remarks, noble Lords will accept them. I beg to move Amendment 28ZK.