My Lords, I thank the noble Lord, Lord Whitty, for his clear and eloquent statement on why it is essential not to abolish the Agricultural Wages Board, and why it is therefore vital that as a House we support this amendment of the Government’s amendment.
It is noteworthy that the wages councils were established by Winston Churchill in 1909, and he spoke of the need for them in these words:
“It is a serious national evil that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions … where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst; the worker, whose whole livelihood depends upon the industry, is undersold by the worker who only takes the trade up as a second string … where those conditions prevail you have not a condition of progress, but a condition of progressive degeneration”.—[Official Report, Commons, 28/4/1909; col. 388.]
That may not be quite the language that we would use today. It is language from 100 years ago, but they are still salient points. Indeed, these underlying principles and thinking have led to a minimum wage and then a living wage.
When other wages councils were abolished in the 1980s, the Government chose to keep the Agricultural Wages Board on the grounds that the industry required some central oversight to prevent wages being driven down unacceptably. In order to consolidate and build upon the progress achieved in terms and conditions during the past 30 years, we need to retain and further develop, and update, the Agricultural Wages Board, not abolish it.
The NFU has criticised the cost and provision of the AWB claiming that it is a,
“bureaucratic irrelevance since the advent of the Minimum Wage”,
and pointing out that the gap between the national minimum wage and the basic agricultural wages order minimum is only tuppence. However, the AWO also, of course, lists six different grades, to which we have heard reference made, with levels to be paid according to responsibilities, qualifications and the nature of the work in question: a salary structure.
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The Low Pay Commission, in its review of the Agricultural Wages Board, highlights the impact on young people especially and says:
“Abolition of the Board enables potential exploitation of young workers aged under 16”.
It also recognises the provision for guaranteed wage levels for those between the ages of 16 and 21, which are of course not covered by the national minimum wage. This relates to another vital area, namely that of attracting new entrants into the work of the agricultural sector; the Minister has referred to the average age of
agricultural workers being high. It is crucial not only for the health of the industry but the health of the nation. Food security is, thankfully, slightly higher up the national agenda than it was, with our still only producing about 70% of the food we consume. Further, the “horseburger” scares are prompting retailers to examine their own supply chains and are further encouraging “Buy British” among consumers. The Low Pay Commission wrote:
“Should employers choose to move away from the minimum standards and grading and career path, outlined by the AWB, it could prove difficult to attract new workers to the sector in sufficient numbers”.
We surely need to be joined up in this as in other areas. We need greater food security. We need to encourage “Buy British”. We need more workers in the industry. This is not a time to make a decision such as abolishing the Agricultural Wages Board, which would make that more difficult to achieve.
The NFU draws attention to the fact that, in 2010, the average earnings of 58% of full-time farm workers were above the industry minimum. But that of course means that for 42% it was at the minimum or below. Furthermore, the minimum itself is well below, more than £1 below, the living wage. To make matters worse, the cost of living in the countryside is higher for a whole host of reasons, as we are aware, including fuel, transport and other services.
Defra’s own equality impact assessment also identifies the detrimental effect that abolishing the AWB would have on women, as well as on workers under the age of 21. It is also worth pointing out that the agricultural wages order is a used as a benchmark for other rural workers and occupations, so that abolishing it would have a deleterious effect on them as well.
While there is, as the Minister said, clearly competition in the workplace for the workforce in agriculture in some parts of the country, it is not quite the same everywhere. Rather, agriculture is in many ways a highly fragmented industry, with a lack of real competition for labour in some large areas of the United Kingdom. This point is brought out very clearly in the Government’s wretchedly short four-week consultation, to which reference has already been made. Let me quote from a farmer in Shropshire; our diocese in Hereford includes half of Shropshire. He wrote:
“Having an AWB helps the industry to minimise the wage disputes. Many rural workers on their own are not good negotiators and many will have more compassion for the animals they tend than for themselves!"
The citizens advice bureau in Crediton wrote:
“We have evidence of exploitation of agricultural workers, which, due to their isolation, lack of contact with other agricultural workers, they were not aware of the approximate £30,000 underpayment due to them over the last four years”.
I quote these to stress the particular difficulties resulting from isolation. In the more sparsely populated parts of our nation, there is not the same labour mobility, and without the Agricultural Wages Board and enforced parity of pay, there would not be the knowledge of what rates are being paid on a neighbouring farm or one 10 miles away, nor the knowledge about overtime rates, pay for younger workers, accommodation allowances and the other things covered by the AWO.
The Farmers’ Union of Wales favours retention of the board, stating that the majority of its members,
“still consider the Agricultural Wages Board to be the most effective body to determine the pay and conditions of service, which reflect the unique requirements of the agricultural industry in Wales. As many farms in Wales are run with relatively few staff, the AWB is considered an important means of avoiding potential conflict and lengthy negotiations with individual staff”.
This comes close to the heart of the issue, namely that larger employers see the AWB arrangements as “cumbersome”, to use the NFU’s own word, while many smaller employers—such as those in much of Wales, the border areas of England and other more sparsely populated counties—value the Agricultural Wages Board because it protects them and their workforce from having to spend hours and hours of time learning to be human resources specialists and negotiating terms and conditions for just a few people.
The pressure to abolish the AWB is coming principally from, as we have been hearing, horticulturalists, large farm businesses and large estates—with the supermarkets behind them—seeking all the time to push down prices at the expense of wages and despite the realistic costs. I fully accept that there are some difficulties with the present agricultural wages order; I do not think anybody is likely to suggest that it is perfect. I also accept that there are difficulties with the definition of what is and what is not “agricultural work”, giving rise to problems for employers whose employees, for example, work both on farms and in packing facilities. The answer to this, however, is not to scrap the whole system but rather to make it more fit for purpose.
If the complaint is that the AWB has not been properly modernised, then it should be modernised. You do not scrap a car or a tractor because a part of it is damaged: you mend it. The AWB was needed when Winston Churchill first set up the wages councils; it was needed in the 1980s when other wages councils were abolished and it is still needed now. Let the AWB be improved and updated, but not abolished.