HC Deb 28 June 2000 vol 352 cc1017-24

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

10.43 pm
Dr. Gavin Strang (Edinburgh, East and Musselburgh)

I am grateful for the opportunity to raise the issue of the agricultural wages boards at a time when the Government are considering the future of the boards as part of the quinquennial review that they are required to carry out by statute.

My guess is that this is the first debate to take place in the House of Commons on the agricultural wages boards since devolution. My right hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food has direct responsibility for the Agricultural Wages Board for England and Wales, but the arguments that I deploy have equal force in Scotland and Northern Ireland where the decision is for the devolved Administrations.

British farm workers are skilled workers who deserve a decent rate for the job. I am sure that nobody would disagree with me on that point. However, individual farm workers are in an exceptionally weak negotiating position with their employers. They tend to be geographically isolated, operating in remote locations. They usually work alone or alongside just one other worker, and often their house goes with their job. About a third of agricultural workers live in tied accommodation, and in some parts of the country the figure is higher than that. There is little mobility of labour, and the social relationship between the farmer and the farm worker can bring its own pressures.

That is why the agricultural wages boards are so important. The boards provide the forum where both parties in the agricultural industry negotiate alongside independent members to reach an annual agreement on farm workers pay and conditions. The Government and the devolved representative bodies are currently considering the future of the boards under their quinquennial reviews. I am grateful for the opportunity to urge that the boards be kept, and that the Government explore options to expand their scope.

There has been a historical consensus of support for the agricultural wages boards across the farming industry and within the rural economy. Farmers do not want a minority in their midst undercutting them by paying exploitative wages, and they appreciate that the boards remove the time-consuming and stressful work associated with annual individual pay negotiations.

Furthermore, unlike other industries, farmers receive large sums of money from the taxpayer in the form of subsidies. It has long been accepted that as a quid pro quo, farmers should be required to provide statutory minimum rates of pay and conditions. Indeed, the Corn Production Act 1917, which first established the Agricultural Wages Board for England and Wales, also fixed minimum guaranteed prices for cereals.

The fact that the farming unions are currently split on the future of the boards is due to the crisis in the industry. That is understandable, but the crisis in the industry should not be used as a reason for abolishing or weakening the agricultural wages boards. The current trough, though deep and damaging, must be temporary. Farmers are under great pressure to cut costs, and a regrettable but defensible response would be to reduce the working hours of a farm worker when less work needs to be done on the farm. However, it would be indefensible if the farm worker's rate of pay were eroded.

Although the National Farmers Union and the National Farmers Union of Scotland report that their members currently want the boards abolished, the Country Landowners Association, the Farmers Union of Wales and the Transport and General Workers Union—the rural and agricultural workers union—are supporting the boards.

Policies that prevent the exploitation of rural workers, of course, have support which extends beyond the organisations that represent the industry. My right hon. Friend will be aware of the strong support expressed by the parliamentary Labour party agriculture committee for the continuation of the boards with at least their present responsibilities.

As well as the provisions of the agricultural wages boards, farm workers are protected by general employment law. It is to the credit of the Labour Government that employment law is much better than it was when last the future of the agricultural wages boards was up for review. The national minimum wage and the working time regulations are in place.

However, the improved legislation is in no way a substitute for the boards. The national minimum wage and the provisions of the working time regulations are intended as a floor below which it would be wrong to employ workers.

The agricultural wages boards are entirely different. First, I make the point again that the boards provide the forum where both parties in the industry reach an agreement on the pay and conditions of farm workers which reflects the state of the agricultural industry. The Country Landowners Association states that it is extremely important that the industry should continue to regulate the level of pay for agricultural workers and be able to take into account the peculiarities of employment in agriculture. Secondly, the boards provide far more than the national minimum wage and the working time regulations, as is set out so clearly in the Government's consultation document. The agricultural minimum wage is higher than the national minimum wage. The standard agricultural adult hourly rate is £4.57 in England and Wales, £4.42 in Scotland and £4.38 in Northern Ireland, compared with the adult national minimum wage of £3.60.

The board in England and Wales sets down rates of pay to reflect the skills of farm workers. In an industry where a career structure is difficult to establish owing to the small number of workers in each unit, this provides an incentive to train. The Farmers Union of Wales said: rewarding qualifications, levels of responsibility etc is a vital means of persuading high-calibre people to remain in or enter the industry. The boards set overtime rates. That is very important, as the average working week for a farm worker in England and Wales is 48 hours. They set a better working week, better sick pay, better holidays and rest breaks, a rate for working at night, a better rate for tied accommodation, an allowance for keeping a working dog and holiday entitlement for working Sundays. They also provide for paid paternity, adoption and bereavement leave.

The provisions of the wages boards are certainly better for farm workers than the national minimum wage and working time regulations, but it would be wrong to imagine that they have been over-generous to farm workers. It must be remembered that they contain equal numbers of representatives of both farm workers and farmers. The minimum agricultural rate stands at about the same proportion of average male earnings as it did when the current board was established in 1947, and average pay in the agriculture, hunting and forestry sector is still £129 less every week than the average weekly pay in manufacturing.

If the boards were abolished or weakened, not only agricultural workers would suffer. The board rates are used as a benchmark throughout the rural economy. I understand that the Country Landowners Association has an agreement with the TGWU to recommend to all its members that they pay their staff the AWB rates. Furthermore, if farm workers receive less pay, it will mean more rural social exclusion, less money spent in the rural economy and a greater cost to the state through the working families tax credit.

The last time the boards were reviewed, the Conservative Government threatened to abolish them altogether. Their intention was clear from the letter covering their consultation document. It said: On the basis of its view that statutory wage fixing arrangements distort the labour market and destroy jobs, the Government has already taken steps to eliminate statutory wages controls in other sectors where they exist. The Labour Party campaigned alongside the farm workers, other parties and indeed the farmers, to save the boards. We said that we would keep the them. I refer my right hon. Friend the Minister to Labour's general election policy handbook, where she will see the question: Will Labour keep the Agricultural Wages Boards? The answer given is "Yes." We also knew that it was crucial that the boards were not weakened but that their role was maintained. In our policy document "Reforming the Common Agricultural Policy", we said: We see their continuing role as crucial to long-term prosperity within the industry. The agricultural wages boards perform a most important service for farm workers, for the agricultural industry and for the rural economy. It would be a great mistake to weaken or abolish them.

There is a strong case for saying that the boards should be harnessed to do more: I commend to my right hon. Friend the proposal that their scope be extended to cover all workers in the rural economy who currently undertake agriculture-related jobs—gamekeepers, estate workers and so on. She will also be aware that there is a strong body of opinion that the boards should be used to develop a decent occupational pension scheme in the industry.

I understand that the Government are currently considering their review of the wages boards. I appreciate that my right hon. Friend will not be in a position to announce the outcome tonight, but I hope that she can give us a preliminary indication of her thinking.

10.53 pm
The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin)

I am grateful to my right hon. Friend the Member for Edinburgh, East and Musselburgh (Dr. Strang) for initiating this debate. We all recognise his enviably long record in campaigning for improvements in the working conditions and remuneration of agricultural workers. He has taken an interest in those matters for longer than I have been in the House.

The debate gives me a welcome opportunity to update the House on the review of the operation of the Agricultural Wages Board and the agricultural wages committees. The review obviously includes a review of statutory wage and other employment provisions that obtain in agriculture and horticulture. My right hon. Friend mentioned devolution. I am primarily concerned with the arrangements in England and Wales and my remarks should be interpreted in that context, but right hon. and hon. Members will wish to note that a parallel review of the separate agricultural minimum wage arrangements in Scotland is also being conducted.

I know that my right hon. Friend is familiar with the history of the Agricultural Wages Board, which has served us well over a long period. It was established in 1924 and has played an increasingly important role in setting minimum rates of pay and other terms and conditions for agricultural workers.

In the early days, the board, working with the agricultural wages committees, was responsible for fixing minimum rates of pay, overtime rates and the value of payments in kind. The power to fix holidays with pay came in 1938, and the power to introduce agricultural wages sick pay came as recently as 1967. In 1975, the board was given the power to fix other terms and conditions for employment for agricultural workers, and in 1999 we imported the better enforcement arrangement, which was provided under the National Minimum Wage Act 1998, into the agriculture system.

In looking at the current agricultural wages order, which came into force in England and Wales on 1 June, one can certainly recognise the wide range of issues covered by the board. Those include minimum basic and overtime rates for standard workers, flexible workers, casual workers and several categories of young workers. The order provides a career structure for the industry by setting higher minimum rates for workers with particular qualifications and for workers with special responsibilities. Those relate both to the farming side of the business and to staff management. Workers on stand-by duty, on a day when they do not normally work, or those doing night work, perhaps during lambing or other busy times of the year, are entitled to a prescribed minimum payment.

My right hon. Friend also mentioned the dog rate. When I first heard of that I wondered whether it was some minimum wage for dogs, but of course, as he said, it is a payment to agricultural workers who are required to keep working dogs, in recognition of the additional costs they must bear.

The current order deals with rest breaks; additional holiday days for workers who normally work overtime on a Sunday; holidays and other leave, including public holidays; the new service holiday; bereavement, paternity and adoption leave; and the payment of agriculture wages sick pay. Those arrangements help to ensure that agricultural workers are given fair terms and conditions of employment and are treated fairly by their employers. The arrangements recognise, too, that agricultural work is highly skilled, demanding and, as we know, frequently dangerous.

Since the election, this Government have made significant changes in the protection offered by general employment law. Those apply to all workers, including those covered by the agricultural wages order. The Government introduced the working time regulations, which place a limit on average weekly working hours and entitle workers to minimum rest periods and rest breaks and to paid annual leave.

A year later, we saw the introduction of the national minimum wage. There has also been legislation entitling workers to unpaid time off in certain circumstances, and dealing with part-time work. The result is that all workers are much better protected than they were when the Government came to power.

While ensuring that we protect employees, we have also sought in various ways not to over-regulate businesses—which is important in agriculture as well as in other sectors—and to look at issues of competitiveness. We know that some sectors of agriculture receive particular levels of subsidy from the European Union. Others, such as horticulture, pigs and poultry, have to compete freely, often against cheap imports from countries outside the EU.

However, a recognition of costs and the competitive factors never justifies exploitation, and it certainly does not justify any illegal activity such as the exploitation of illegal immigrant workers. I make that point because I know that there is interest in the House in some of the activities of gangmasters in the agricultural sector which have been discovered. The Government take those issues very seriously.

In May 1997, we began work on the issue, investigating gangmasters and their way of operating, and a year later we launched Operation Gangmaster as a way of joining up the enforcement activities of seven to eight agencies covering all aspects of employment law, taxation and benefits. We began that in a pilot area and we are now extending it to six other areas.

Mr. Alasdair Morgan (Galloway and Upper Nithsdale)

The right hon. Member for Edinburgh, East and Musselburgh (Dr. Strang) said that the wage rates set by the Agricultural Wages Board were in excess of the minimum wage under the National Minimum Wage Act 1998. Yet in rural areas, average earnings are very much below average earnings in urban areas. Does that not make the case for the Agricultural Wages Board to be strengthened and for its role to be broadened rather than diminished?

Ms Quin

In the course of the review, we are considering various proposals, not just in relation to the board's core activities but in relation to related issues. There is at least some evidence that, in rural areas, the agricultural wages committees have the beneficial effect of setting an example to other employers. It is important to take that into account.

I pay tribute to the work done by the Agricultural Wages Board over the years. It has been well served by the generation of representative members, particularly those nominated by the Transport and General Workers Union, of which I am a member, by the National Farmers Union, and by the independent members. I know that the members on the board have given a great deal of time and thought to the board's work.

I also know that the board has been quick to acknowledge the recent changes in the general employment law, and that it has taken steps to ensure that there is no conflict between the wages order and the general law. In 1998 and 1999 it made two orders to keep abreast of the changes. This year, the board has brought the holiday provisions as closely into line with those in the working time regulations as possible under the board's current powers.

The Agricultural Wages Board, like all other non-departmental public bodies, is subject to regular quinquennial reviews. That gives us a chance to take a fresh look at all aspects of the policy and the operation of the current arrangements. I recognise that such reviews can be unsettling, but they have an important role to play in ensuring that Government policy meets current needs, and that the work of those important organisations is regularly reviewed.

Mr. Roy Beggs (East Antrim)

Reference has been made to England, Wales and Scotland, but I am sure that the Minister will agree that the same provisions should apply to agricultural workers in Northern Ireland.

Ms Quin

Obviously, the principles that we are discussing are important in all parts of the United Kingdom, but I do not want in this debate to trespass on the responsibilities of our good colleague, Brid Rodgers, whom I was pleased to see return to her agriculture and rural affairs portfolio in Northern Ireland.

My right hon. Friend the Member for Edinburgh, East and Musselburgh made a number of comments to which it is important I respond. In general terms, the results of the consultation process are not wholly surprising. Obviously, the trade unions and representatives of agricultural workers strongly support retention of the board. The NFU has advocated its abolition, while some other employer organisations, and some individual employers have backed its retention, but some have put forward ideas for modifications to the current arrangements.

My right hon. Friend mentioned the views of the Farmers Union of Wales, which supports the board. On the other hand, the Horticultural Trades Association saw little need to retain it. The Country Landowners Association believes that it serves a useful purpose, although it and the Tenant Farmers Association made some proposals for change. That is a broad-brush account of the response, which contained a great deal of detail and is currently being considered thoroughly.

An independent research project also examined the impact of the current arrangements on employers and their workers. My right hon. Friend expressed some anxiety about that procedure, but that approach has been applied to at least one review of the Agricultural Wages Board, and to other normal quinquennial reviews. Again, I would not like to suggest that the approach to the review that we are considering was unique. The opposite is the case.

I understand the desire for an early announcement on the board's future. I recognise the strong belief of many hon. Members of all parties in the work of the board. I know about the recent early-day motion tabled on the subject, which shows strong support from colleagues. However, we want to do the review process justice. I hope that my right hon. Friend and other hon. Members appreciate that the issues that the review raised mean considering a range of social, employment and competitiveness matters.

I assure my right hon. Friend and other hon. Members that their points are being given due weight in the current deliberations. I hope to be able to announce the outcome of the review as soon as possible.

Question put and agreed to.

Adjourned accordingly at seven minutes past Eleven o ' clock.