HC Deb 31 January 1969 vol 776 cc1802-10

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]

4.8 p.m.

Mr. John P. Mackintosh (Berwick and East Lothian)

This debate was sought as a result of the shock caused to the agricultural industry when the Government recommended the agreed rise in wages for farmworkers, worked out and agreed by the Agricultural Wages Board, to the Prices and Incomes Board. The result was announced yesterday. The P.I.B. recommended that the Government should, in fact, allow this rise, which the Government have decided to do. In a sense, therefore, the immediate urgency of the debate is over.

Nevertheless, I wish to draw attention to the fact that the mere reference of the claim to the P.I.B. caused grave alarm. I wish to probe the Government on their intentions in this matter. A point which needs to be stressed is that the original White Paper on Prices and Incomes pointed out that low wages were a criterion for a rise in wages being allowed, and a rise higher than the norm allowed for the average increase. In the agricultural industry, the hours worked are longer than those in any other, the standard being 44 as opposed to the 40 which is normal in the rest of industry.

Secondly, the wages are considerably lower. The last figure for earnings this year was a weekly average of £15 18s. 3d. compared with a £22 5s. 3d. average in industry. There is a gap of £6 7s. a week between the earnings of agricultural workers and those in the rest of industry. Moreover, the position has been getting worse because, in the last two years, despite successive rises, the agricultural wage has risen by 29s. a week, since 1966, while industrial wages have, on average, risen by £2 a week. The particular problem that this causes in the industry is severe, but in terms of poverty—and this is the criterion taken in the original attitude of the Government to prices and incomes—there could be certain groups in the industry in extremely poor conditions.

A total of 27 per cent. of all hired men in agriculture today—or prior to this award being implemented—earned less than £13 10s. a week. This is important for members of the community to remember when there is talk about people on the "dole" getting more than they could by working. This is a constant temptation to agricultural workers, 25 per cent. of whom, if they have large families, could be getting more supplementary benefits than they would in wages in the industry.

The result is that when the question of an increase was taken up, everyone in the industry was horrified that it had to go to the Prices and Incomes Board. I was upset when it took this body to tell the Government—and I quote from the Board's findings—that In our view, on grounds of low pay alone, agricultural workers would now qualify for an increase in pay. The second criterion of the original Prices and Incomes White Paper was comparability with other types of remuneration. Here again, as I have shown, agricultural workers have fallen behind. In 1958, the average agricultural wage was 75.6 per cent. of average earnings in industry.

For 1968 they had fallen to 71.5 per cent. of average earnings in industry. Over the last ten years agricultural wages have gone up by 60 per cent. while in the same period industrial wages have gone up by 73 per cent. Again, to quote the Prices and Incomes Board finding on this matter, it says that: The … evidence of earning trends suggests that agricultural workers have fallen back and in money terms the gap between them and others might continue to grow substantially. Those are the grounds, in terms of low income and declining comparable ratios between the agricultural and industrial workers, which form the case which the Government should have accepted right away, rather than deal with in this fashion.

The second point that the Government raised when they referred this to the Prices and Incomes Board was that the only way in which it was possible to get over 3½ per cent. under present legislation was as a result of productivity agreements. Here again, this is a case of sticking far too closely to the letter of Government instructions, because productivity agreements as such are impossible in an industry where productivity arrangements are made at the level of the individual farm, between the farmer and the worker. If we are looking at the facts, and these are accepted by the Government, over the past decade—ten solid years—productivity in agriculture has risen annually by between 6 per cent. and 7 per cent. per annum.

This is at a time when the agricultural workers' relative wage position has been declining. Accepting this point, as the Government do, to have stuck to the letter of the law for the need for a productivity agreement when this could not be arranged, in the nature of the industry was a mistake. If we look at agriculture, it is, as is well known, an industry less given to disputes over the introduction of new machinery and new methods than any other. It is an industry in which it is axiomatic that the farmworker will get on anything, drive anything, operate any machinery, try any new method for which he is trained. This was not adequately taken into consideration.

Also, simply in terms of the effects of this rise on other prices, as the Government admitted, the rise in productivity in the industry was such that this rise was capable of being absorbed without in any way putting up the prices of agricultural products to the consumer.

The only argument which one can advance on behalf of the Government is that if that rise were allowed it would open a gap through which other unions would press their claims, because the claim was for a 7.3 per cent. increase. But if the prices and incomes policy is to have any meaning of a socially redistribute kind—and those on these benches who have supported it have done so on the assumption that, among other things, its aim is to help lower-paid workers—then we cannot accept the argument that if the poorest workers are given a rise it must mean equivalent rises all the way up the scale. That would be a total defeat for the prices and incomes policy as it is understood by those on these benches who have supported it on grounds of social equality and justice.

The Government, therefore, should have said that this case was manifestly made out in terms of productivity and low wages and they should not have offered 10s. a week and referred the remaining 7s. to the Prices and Incomes Board. They should have brought heavy pressure to bear on the trade union leaders in the matter. The suggestion that part of the rise was not properly earned has caused grave resentment throughout the industry and among trade union leaders, particularly because these leaders knew that the Ministry of Agriculture sympathised with their case and because they first heard of the decision to refer the matter to the Board from the columns of The Guardian.

We are in the process of a fundamental reappraisal of our agricultural policy. The National Plan accepted that we should expand agriculture to meet a major part of the additional demand for food in this country which would be a consequence of the rising population. That was our policy in 1965. Following the balance-of-payments deficits since then and a reappraisal of the position, we have accepted the proposal laid down in the N.E.D.C. Report that we can positively replace imports by increased domestic production of temperate products. The N.E.D.C. Report suggested that £220 million worth of imports could be saved annually after five years' expansion. The Government accepted a similar sum—that is to say, £160 million saved by 1972–73.

The key point is that if this expansion is to be achieved, as the N.E.D.C. Report points out, the present outflow of labour from the industry is too great. The number of workers leaving agriculture was as follows: 1962–63, 22,000; 1963–64, 27,000; 1964–65, 34,000; 1965–66, 31,000; and 1966–67, the last year for which figures are available, 37,000. The N.E.D.C. Report pointed out that if an average of 25,000 a year—a conservative estimate—left the industry, the result would be to make that expansion practically impossible, because to achieve it would require a 9 per cent. increase in productivity by the workers left in the industry.

In view of the time, I will not give examples of how farmers in my constituency have advertised, week after week, for shepherds, offering to pay them £25 a week each. Nor will I explain how farmers constantly face a shortage of labour which prevents them from carrying out the kind of work which they want to do.

The situation is so serious, the N.E.D.C. Report points out, that unless the wages of agricultural workers rise from 70 per cent. of industrial wages to at least 80 per cent., it will not cut the outflow, and that unless the outflow is cut by half, the target set by the Ministry of Agriculture will not be achieved. In a sense, therefore, in putting this issue to the Prices and Incomes Board, the Department were countering the policy of the Ministry of Agriculture.

This rise of 17s. a week takes the wages of farm workers from 71 per cent. of industrial earnings to 74 per cent., so that they are still 6 per cent. behind the level estimated by N.E.D.C. as necessary, not to stop the outflow of labour but to cut it to 13,000 or 14,000 a year, which would be a manageable figure in terms of the increase in productivity expected.

I know that my hon. Friend has sympathy with the case which I am making. I hope that he will tell us that his Ministry will spread these facts among other Departments, particularly Departments which are less sympathetic towards agriculture. I hope that he will convince the people in the industry that the Government will see that it is paid the sort of wages necessary if our own targets for industrial expansion are to be achieved.

4.20 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie)

With his usual vigour, my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) made a good job of putting his case this afternoon. I think that the shock to which he referred was not quite as great as he suggests, although I know that there was considerable feeling about it. My hon. Friend bases his case on the necessity for increased wages in agriculture, and, as he said, this question was the subject of a statement in the House this week. However, if the issues can be clarified further today, that will be to the good.

I refer, first, to the agricultural workers themselves and their contribution to increased production. No one needs to tell me about the value to the nation of what agricultural workers have done or what they can do, or about their willingness, as my hon. Friend said, to give increased productivity and to work new machines, and so on, without special arrangements, or strikes of any kind. I give one instance from my own experience. When I started farming, many years ago now, my cattleman looked after 40 cattle. Today, my cattleman, Charlie Butt, out in Essex, looks after 400. That shows how productivity is going in the industry. A tremendous amount of it is due to the farmworker.

I come now to the relationship between the Agricultural Wages Board and the Government's prices and incomes policy. The Wages Board is a statutory board which has always been and remains independent. The Government's prices and incomes policy also has a statutory basis in the Prices and Incomes Acts, 1966 to 1968. The most recent statement of policy is in the White Paper, "Productivity, Prices and Incomes Policy in 1968." The White Paper sets out the criteria which need to be met before a proposed pay increase is acceptable and makes clear that determinations made by such bodies as the Wages Board come within the ambit of the policy. This means that the Government have a responsibility to consider the proposals of all statutory wage-fixing bodies against the criteria laid down, and, if a particular proposal appears to be inconsistent with the policy, they must decide whether to use their statutory powers to delay its implementation.

In the case of the recent award to agricultural workers, the Government decided after consultation with representatives of employers and employees—to seek the advice of the Prices and Incomes Board before considering whether to exercise their delaying powers. I thank the Board for the speed with which it has produced its Report. We asked whether the Report could be produced before 3rd February the day the award comes into effect.

It has been suggested that, by making the reference, the Government were abrogating their responsibilities. On the contrary. The purpose of the Prices and Incomes Board is to consider issues of this kind and to advise the Government. I think that my hon. Friend appreciates that, in spite of the points which he made.

It has been suggested, also, that, since the Prices and Incomes Board reported on agricultural wages two years ago there was no need for a further reference. But the issues involved then were different.

In 1966, the Prices and Incomes Board was asked to examine a proposal for an increase of 6s. and to judge it against the low-paid criterion which applied during the period of severe restraint. When the Agricultural Wages Board published its proposal for an increase of 17s. this time, the Government considered that it raised issues relating to both low pay and productivity which were of such importance as to warrant a further independent examination of agricultural pay by the Prices and Incomes Board.

The Board has indicated that grounds did exist for the doubts which led us to make the reference. At the same time, it has clarified the issues and reported with commendable promptitude, so that it has been possible for the Government to make their decision before the award was due to come into operation. Since that decision has been to let the award stand, agricultural workers have not been adversely affected in any way, and I am sure that my hon. Friend will be pleased at that.

It has also been suggested that this is a fortunate outcome for the Government. I believe that it is a fortunte outcome for everybody concerned. I am very glad that it is a fortunate outcome for the workers. I maintain that, far from there being grounds for criticism of the Government's handling of the issue, it is the case that we have exercised our proper responsibilities and we were right in the first instance to seek the assistance of the Board. I believe that we were right in the light of that Report to let the award stand.

My hon. Friend referred to the difference between wages in agriculture and wage levels in other industries. As I said in the House last week in reply to Questions, we are aware of the gap and would like to see it narrowed. But this is not a matter that can be dealt with overnight. Even with low-paid workers action must be related to the requirements of the prices and incomes policy. With this latest increase, although it is not a straightforward calculation, because we are projecting forward, the percentage is now 75.

Mr. Mackintosh

Seventy-four per cent.

Mr. Mackie

My hon. Friend's calculation is probably nearer than mine. I am told that the percentage is now 75.

I agree that the question of the drift from the land is very important. However, this is not quite so easily dealt with. I suggest, also, that the drift from the land may not be caused by low wages. It can be caused also by high wages. Efficiency rises as wages rise, and farmers find ways of saving labour. There is considerable force in the point that the drift may be increased by high wages, although nobody wants to see low wages. What we want is a small, well-paid, well-trained, labour force in agriculture.

I take it that my hon. Friend has in mind the estimates, based on the Cowling-Metcalf projection. Already—this shows how difficult it is to act on the basis of forward projections—the E.D.C. forecast is 4,000 out as to the actual outflow of labour.

Mr. Mackintosh


Mr. Mackie

Yes, short.

Mr. Mackintosh

It is worse?

Mr. Mackie

No. It is better than was thought from the point of view my hon. Friend was putting.

In conclusion, I again emphasise that in this matter of the reference of agricultural wages to the Prices and Incomes Board the Government have at no time lost sight of the value of the agricultural worker and have been motivated solely by the importance which they attach to the need to maintain the prices and incomes policy.

Question put and agreed to.

Adjourned accordingly at twenty-eight minutes past Four o'clock.