Public Bodies Bill [Lords]
The Committee consisted of the following Members:
Mr James Rhys, Committee Clerk
† attended the Committee
‘as set out in Regulations,’.—(Jon Trickett.)
‘as set out in Regulations.’.
‘or other unincorporated body of persons.’.
‘(f) a society registered or deemed to be registered under the Co-operative and Community Benefit Societies and Credit Unions Act 1965.’.
‘(f) a community benefit society.’.
Before we begin, I have a few announcements. If hon. Members want to take their jackets off, that will not be a problem. There will be no stand part debate on clause 1, although I do intend to allow a stand part debate on schedule 1.
was included in the list. As the hon. Member for Hemsworth described, the intention was to draw attention to the possibility of co-operatives and mutual societies taking over particular matters referred to in the schedules to the Bill. It is only a probing amendment because it is very easy to structure these things as having a subsidiary that is a company limited by guarantee, which then takes on the transfer in question. We simply wanted to make this point: do not forget about co-ops and mutuals. They were incorporated in the Localism Bill as bodies that might take over services from local councils. I will be interested to hear my hon. Friend the Minister’s comments as to why that should not be the case here.
It has been said previously that one cannot necessarily quite trust co-operatives and mutuals. Who knows what their members might be up to and what interests their members might represent? That was the thrust of the argument. I take issue with that and remind the Committee that housing associations are organised as mutual and provident societies in many cases. Trade unions are organised on such a basis. Many Members of Parliament are representatives of the Labour and Co-operative party, and I would not question its members’ belief that they serve the community. As is well known, the previous Government established foundation hospital trusts, which also organise in effect as mutuals, albeit heavily regulated ones. The idea is to have a membership base that fosters engagement.
Why do we like co-ops? Why have the House of Commons and Parliament previously supported co-ops and mutuals and had a place for them? This is an issue of engagement and accountability that goes to the heart of all the issues in the Bill. Much of it is about restoring accountability, be that back to central Government or to another body to carry on the functions. Accountability lies at the heart of the Bill, which is why I, for one, so strongly support much of the thrust of what it seeks to achieve. I believe that co-ops and mutual societies should be seen as part of the toolkit to establish the Government’s purpose in restoring accountability, which I think hon. Members on both sides of the House agree has been weaker in recent years than it might be. I will be interested to hear the Minister’s comments in due course.
Hywel Williams (Arfon) (PC): I want to speak briefly in support of the hon. Member for Dover. As we saw this morning, one of the fundamental questions about mutuals and co-ops might be, who benefits? To put it rather more coarsely: follow the money. I can see that on a very large scale that might be problematic.
I will draw the Committee’s attention to a few Welsh examples on a much smaller scale. I am not offering this as a way forward, but in the village that my family come from, Llithfaen, the community own the pub. They used to own the shop as well, but they had to sell that off when it no longer remained viable. There is a shared community of interest there, which it is possible to manage in a small community of 400 or 500 people.
Equally, in the nearby village of Llanfrothen, the community have bought the shop, rebuilt it and reopened it not only as a shop but as a post office. They have also
Let me return to the serious points about Glas Cymru and Dwr Cymru. The previous provider, Hyder, was widely criticised by many commentators for investing in everything but water. It diversified in every direction, and it came to grief in the end and had to fold. Its undertaking was taken over by Glas Cymru, which is a group of publicly spirited people who have set up first-issue bonds. It has given the business to Dwr Cymru, which now runs it as a separate company. As for what the hon. Member for Dover said, one of the virtues of the water market is that it is stable. It is a bit like undertaking—people will always die, drink water and pipe water away. Dover has a stable market as well. It is the leading port for import/export. I think that some £80 billion goes through Dover.
The other point about Glas Cymru is its ability to reinvest any surplus. The water market in Wales has quietened down tremendously since Glas Cymru and Dwr Cymru have taken over. All they do is work in the water business. Unlike the previous undertaker, they do not buy hotels, public relations companies or anything else. They have a defined provision which they manage well, and when any surplus comes along they reinvest it. As a result, the water business in Wales has prospered tremendously.
Jon Trickett (Hemsworth) (Lab): The hon. Gentleman is making a powerful case, as did the hon. Member for Dover. He is describing an organisation that is providing the community with a benefit. It is not disposing of its assets or using its pockets for anything other that further to develop the service it is there to provide. Is that guaranteed in statute or is it a choice the board has made? How is that being secured so that the concerns I was expressing earlier are avoided?
Hywel Williams: To be honest, I am not a lawyer and not on its board. I have no link with it. I understand that the trust is set up in such a way that the only way in which the surplus can be used is to be reinvested in the business.
The question really is one of accountability. If the people of Dover collectively feel that such an organisation would be accountable, then that would be the ideal. As far as Glas Cymru is concerned, it consults and reports to the people of Wales. Most people, however, do not even know that it exists because it just gets on with it. That might be the case in respect of Dover as well. It is a way of cracking this particular nut that has much to commend it. I will be interested to hear the Minister’s reply.
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd): Mr Robertson, it is a great pleasure to serve under your chairmanship. You share a reputation for firmness and fairness with your co-Chairman. Time will tell whether you share his confessed susceptibility to flattery. I am sure that that will be tested by the Committee over the days to come. We have had a good debate around these amendments. The hon. Member for Hemsworth described me as reasonable. That was bad enough but when he then described his amendment as “designed to be helpful” the alarm bells really began to ring. In truth though, having listened to him carefully, his amendments are helpful, both in the general and in the specific. His speech was helpful in clarifying that the Opposition agree with the general principle of the Bill and with the need to reform and reduce the size of what he described as the overly bureaucratic state. He talked about a democratic deficit, which we all know is real. It was therefore useful to have on the record the cross-party support for the principle underlying the Bill. I say that because, frankly, the Labour party’s walk was less impressive than its talk when in power, and in opposition the messages have been foggy. It was good to have that placed on the record.
The group of amendments concerns the definition of an “eligible person” to whom the functions of a body or office can be transferred via an order made under clauses 1, 2 or 5. Amendments 30 and 31 would require that regulations set up the names of those persons exercising public functions, and bodies of trustees, to whom functions can be transferred. Amendments 32, 34, 35 and 39 would amend the definition, removing the reference to
or adding specific reference to community benefit societies and registered charities. I understand, and it was clear from the debate, that the spirit of the amendments is to query the reasoning behind the Government’s definition of “eligible person” for the purposes of such transfers.
Before responding specifically to the amendments, I will briefly set out the process leading to the Bill because, during the course of the hon. Gentleman’s remarks, I felt that he either had missed or was deliberately missing a central point of the legislation. It might be helpful to the Committee if I set out how we got to this place and how we see the process for making what are generally recognised to be the overdue changes to public bodies that will follow Royal Assent.
The proposals that the Bill will enable through clauses 1 to 5 and the corresponding schedules, which we will debate, are the result of a cross-Government review of public bodies, which took place last year and was reported to the House by the Minister for the Cabinet Office and Paymaster General, my right hon. Friend the Member for Horsham (Mr Maude) on 14 October 2010. The proposed changes to individual bodies and offices, and to which person functions may transfer in the case of bodies listed in schedules 1, 2 and 5, are—as I stressed in my intervention—the responsibility of individual Departments and their Ministers. That is entirely in line with the Government’s approach, which is clear that Ministers should be ultimately accountable for the delivery of public functions.
Given remarks made by a number of hon. Members, I would like to emphasise to the Committee that the Bill as drafted would not create a power to transfer any of
As I have made clear, the Bill is enabling, and the proposals we discuss will be the subject of a secondary legislative process, which will require draft orders to be scrutinised and approved by both Houses of Parliament, through an enhanced procedure if either House decides that that is appropriate. Such a draft order can only be laid following consultation on the proposal, as described in clause 10. Both procedures will require Ministers to make available detailed proposals about the future of the bodies, including, in cases in which functions will be transferred, precisely who the proposed transferee will be, what functions they will inherit and on what basis. For that reason, returning to amendments 30 and 31, it is not necessary to include in the Bill such a requirement for regulations. The accompanying explanatory material would clearly state to whom a specific function would be transferred.
Parliament will therefore have the opportunity to debate each proposed transfer of functions and the suitability of each proposed transferee; crucially, it will retain the capacity to reject an order that is deemed inappropriate. To require separate regulations would result in an additional layer of procedure; it would also prevent Ministers from taking a flexible approach to their proposed reforms in the event that a potentially valuable and sensible option for transfer of functions was not set out in the regulations proposed by the Opposition. That is particularly pertinent, given that new innovative approaches to delivery, perhaps not anticipated by the Government—we cannot anticipate everything—may emerge as a result of the consultation process.
I turn now to the amendments that deal with the definition of “eligible person”. The thinking behind this provision is simple. The Government envisage that effective public body reform in the short and long terms will best be delivered by transferring functions to a range of persons. For example, the Government are working to establish local enterprise partnerships across England—something that we shall debate later—to provide targeted support for regional growth. However, the Government do not seek to prescribe the form that LEPs should take, and they could include unincorporated bodies. We believe that such decisions should be taken by the partners themselves.
I find it difficult to understand the Opposition’s objection to subsection (3)(e), and the phrase “unincorporated body of persons”. I became a Member
Mr Hurd: I thank my hon. Friend for that helpful intervention. He is right that the definition of unincorporated bodies is broad and covers a wide range of organisations. We welcome that. We need to retain flexibility to create the space for exactly the sort of innovation that I mentioned earlier.
I return to the example of local enterprise partnerships. They could include unincorporated bodies. The Committee will be aware that Government amendments have been tabled that will take forward the abolition of RDAs; the transition to LEPs will be by a different route. However, it remains the case that to restrict the Bill in the manner proposed by amendment 34 could prevent innovative approaches to the delivery of public functions. As I said, the Government view the scope to open opportunities to a diversity of organisations as being crucial to the success of public body reform.
The category of “unincorporated body of persons” to which the hon. Member for Hemsworth takes exception is broad. It could include charities not registered with the Charity Commission and, as he suggested, it could also include a variety of community associations. I appreciate the hon. Gentleman’s interest in seeking clarity on the processes and safeguards that might needed to apply to such categories—indeed, to all reforms that can be made under the Bill—and I hope to provide some reassurance on that point.
I have already discussed the important safeguards provided by the consultation and parliamentary procedures that apply to this enabling Bill. In addition, there are two other crucial safeguards that I draw to the Committee’s attention.
Some hon. Members, including the hon. Member for Wigan, have expressed concern about the independent operation of public functions. That is an extremely important point. I assure them that clause 7 prevents Ministers from making orders that would prevent some important public functions from being exercised independently, including those important scrutiny functions that we would associate with bodies such as the office of the Children’s Commissioner. In addition, clauses 20 to 22 create a set of restrictions that prevent certain functions from being transferred to persons not already exercising public functions, such as companies limited by guarantee. That would, for example, prevent functions, including a power to search, to seize property or to compel evidence, from being transferred in an inappropriate manner.
The hon. Member for Hemsworth is right to point out that this is not the whole story. To ensure that public functions are delivered effectively, efficiently and with due accountability, the Government need to be sure that the appropriate mechanisms are in place. As I
Like many members of the Committee, I see this through the prism of my constituency and the views expressed to me by a number of constituents who are frustrated by the size, complexity and cost of government and the public sector and would like to see it simplified and made more efficient and effective and cheaper. They would also like to be clear about who is in charge. What I often hear is: “Who is accountable? Who is in charge?”
Valerie Vaz (Walsall South) (Lab): The Minister talks about clarity and accountability so to whom would the unincorporated body of persons be accountable? It does not have a normal shareholder structure. If it is a registered charity, the Charity Commission looks after it.
Mr Hurd: As I said earlier about who these unincorporated bodies might be in the event that that was the appropriate solution for any proposed reform, the clarity and definition would come through the secondary legislative process. In terms of accountability, at the end of the day accountability for the delivery of a public function lies with Ministers. It is a requirement on them and that is set out clearly in clause 8. There is a requirement on them to ensure that, in proposing and implementing any transfer, there is adequate accountability.
Moving on from the central point about the motivation to increase ministerial accountability and make it clearer who is accountable and in charge, the Government intend to abolish 200 public bodies, in many cases transferring their functions back to the sponsor Department. The hon. Member for Hemsworth characterises such changes as renationalisation. As I said, I prefer to think of it as making Ministers, not unelected chairs and boards, directly accountable for public functions and for the use of public money.
As the Committee will be aware, Government Departments and agencies are subject to rigorous audit through the National Audit Office. The Government are also committed to increase transparency in their actions, as evidenced by the publication of detailed Treasury data on public expenditure and by the new departmental structural reform plans. Where public bodies have been retained and where functions have been transferred to them from other bodies, I can assure the Committee that they will continue to be subject to existing requirements on accounting, reporting as well as data protection and freedom of information law.
Non-departmental public bodies are required to have in place robust governance and accountability arrangements and both the Cabinet Office and the Treasury provide detailed guidance on that. The Government are further committed to extending the scope of the Freedom of Information Act 2000 to provide greater transparency and they have announced their intention to extend it to a range of bodies carrying out functions of a public nature.
There may be instances where public functions are transferred to an eligible person outside the scope of some of these protections, such as a company limited by guarantee or a community interest company. In such cases, it would be the responsibility of Ministers to make sure that appropriate safeguards are in place to ensure that the body is properly accountable for its delivery of public functions. Such information will perform part of the proposals for consultation and orders laid before Parliament. As I have emphasised, the Government’s clear position is that the ultimate accountability lies with Ministers. I have no doubt that Parliament will wish properly to scrutinise any order made under the powers of the Bill.
The hon. Member for Hemsworth also emphasised the value he attaches to asset locks as a means of securing for the community any proceeds stemming from the delivery of public functions. The list of eligible persons in clause 1 already provides for one type of legal form which must, by law, include an asset lock, which is the community interest company. The list also provides for other legal forms which can, but are not necessarily required to include asset locks—namely, companies limited by guarantee and bodies of trustees or other unincorporated bodies or persons.
To be a charity, an organisation must be established for wholly charitable purposes and for public benefit. The hon. Member for Hemsworth knows that. In practice, that means that whatever its legal form, the organisation must have an asset lock and a non-profit distribution clause. Otherwise, it would be considered to exist for private benefit and would not qualify for charitable status.
Jon Trickett: I appreciate the way in which the Minister is approaching the discussion, which is enormously helpful. He has just moved on to charities and asset locks. The truth is that the eligible persons do not include charities; that is the reason for our amendment. Why did the Government not include charities as eligible persons? Is the Minister now agreeing to our amendment?
Mr Hurd: No. I will come on to that; we think we did. In relation to amendment 32, and speaking to the hon. Gentleman’s point, I assure the Committee that we believe existing charities are already within the scope of the Bill. Charities can take a number of legal forms, including charitable trusts, companies limited by guarantee and unincorporated associations. We believe that each of those forms is covered by clause 1(3) as drafted.
Indeed, the Government propose to use the powers in the Bill to transfer a number of functions, including the specific example of those of British Waterways, to charitable bodies. We believe that amendments 32 and 34, taken together, would have the effect of excluding some small charities which, while subject to charity law, are not required to register with the Charity Commission, and exist as unincorporated associations.
Amendment 35, in the names of my hon. Friends the Members for Dover and for Esher and Walton, and amendment 39 seek to add community benefit societies and co-operatives to the list of types of organisation defined as an eligible person. As has been noted, the Government are, as part of our commitment to the big society, keen to explore how alternative models such as
I have a lot of sympathy with the spirit of the amendments, which have been particularly helpful in the specific. There may indeed be circumstances where public functions could be effectively carried out by community benefit societies, and potentially by other forms of co-operative. I will bear in mind the points about the use of assets made by the hon. Member for Hemsworth. I commit to consider the matter further before Report. I hope that provides some assurance that the Government are committed to exploring a range of options to support community-focused provision of services and functions.
Finally, the hon. Member for Hemsworth raised the question of salary control, an extremely emotive issue about which we have read in the press. We know that is an extremely important matter, not least for our constituents. I assure him that the Government have taken steps to ensure that appropriate controls are in place. I think the hon. Gentleman knows, because we have debated the matter in a Standing Order, that the Chief Secretary to the Treasury signs off all civil service and NDPB appointments that pay salaries that exceed £142,500—which is the extraordinarily good-value salary paid to the Prime Minister, I would like to place on the record.
The Government publish annually the salary details of all staff earning £150,000 and above. The Committee should know that there are 291 individuals on the recently published 2011 list, compared with 345 in the equivalent disclosure for 2010. That represents a salary bill saving for the highest earners of approximately 16%, or a cash saving of around £10 million. I hope I have assured the hon. Gentleman and the Committee that, in relation to controls on salary, we are moving in a better direction.
This has been a substantial debate—with good reason, as it speaks to the importance of the functions carried out by many of the bodies the Bill proposes to reform, and to the responsibility of Government to ensure that appropriate levels of transparency and accountability apply to their actions and proposals. As I have stressed, and perhaps laboured, the Government’s position on that is clear.
Ministers are ultimately responsible for the effective delivery of public functions, many of which require a degree of independence from Government, and they are accountable to Parliament in that regard. The mechanisms of the Bill and the safeguards that it includes reiterate that position. Clause 1 is a valuable and important contribution to that.
On that basis, Mr Robertson, and with the commitment that I have made to consider further potential provision regarding community benefit societies and co-operatives, I ask hon. Members to withdraw their amendments.
Jon Trickett: I welcome you, Mr Robertson, to the Chair this afternoon. We look forward to working under a benevolent, but probably fairly tough, chairmanship. I certainly suffered from that this morning, and I still
We are anxious to get on to the bones of the Bill, which are in the schedules, but I want to make a couple of points. We agree across the Committee that there is a wide perception in the country of a gap between the governed and those who govern and that we ought to narrow down what we have come to describe as a democratic deficit wherever we can. The previous Government had, therefore, begun the process of reviewing quangos. We probably did not work fast enough or go far enough, and I accept that. We support the principles of the Bill, as the Minister was generous enough to indicate, and on that there is no disagreement whatever. It is the detail of the amendments that I want to turn to for a moment.
Overcoming the clear democratic deficit of the quango state in general is not necessarily best achieved by increasing the power, functions and size of the centralised state or by giving extremely strong powers to Ministers. Although the other place introduced—the Government accepted this—a number of checks and balances on the power that Ministers can exercise relating to quangos, the Opposition are somewhat troubled by it. That is why I wanted to open up clause 1 to a significant debate before we get on to the schedules. It would still be better were the Minister prepared to publish regulations on how he intends to proceed with “eligible persons”, but we would not want to vote against clause 1 as a whole, because it gives Ministers the power to abolish.
The Minister was good enough to say that he would look again at the amendments that have been submitted by both sides of the Committee relating to co-ops or community benefit societies, which are a narrower form of co-op that gives an asset lock and guarantees community benefit. Given the Minister’s generosity on that, it would be bad of us not to reciprocate and say that we are happy with that assurance, and we await his further comments as the Committee proceeds.
On amendment 32, which relates to charities, it would have been better to have had charities as a separate “eligible person.” Listening carefully to what the Minister has just said, it is possible for vehicles (c), (d) and (e) to be charities, and it is clear that a trust can be a charity. It is also possible for a company limited by guarantee to have charitable status and, therefore, to be registered by the Charity Commission.
There might be charities that do not take the form of a trust, community interest company or company limited by guarantees. I want a generic commitment to the charitable sector, which the Government have made a lot of in their talk of the big society. Having said that, we will not press the amendment because the Minister has again indicated that he sees a role for the charitable sector in the provision of services. We now have a better understanding of his intentions.
The other amendments, apart from amendment 34, which I will press to a vote, address the possibility that orders explaining the Minister’s intentions are not followed. I do not accept that it will be best to deal with them case
I have spoken already about the co-op, and there was no disagreement on that, which leaves us with unincorporated bodies of persons, about which I am genuinely troubled. An unincorporated body, as I said earlier, is a legal non-entity; it is not a legal person in its own right. The Minister wants public functions guaranteeing the common good in particular areas of activity to be regulated by bodies independent of the Government. That is fine, and we agree with it, but he wants to include unincorporated bodies of persons, about which I am genuinely troubled.
That is important, because an unincorporated body cannot exercise functions, could not be sued if it were to be neglectful in some way and cannot hold property. Each individual member of the unincorporated body, which could change over time as individuals come and go, would individually be liable for the decisions taken by that unincorporated body. That is a serious problem and it troubles me.
Richard Harrington: I am grateful to the hon. Gentleman for addressing the point I raised in my intervention. He has made my point for me, inasmuch as members of unincorporated bodies will think carefully about their actions, and whether they are correct, for that very reason. Unlike the hon. Member for Walsall South, who, as ever, spoke very eloquently this morning—I cannot say that I am a lawyer, because she knows I am not a lawyer—I think there is nothing better than such personal liability and responsibility. An unincorporated body will not automatically provide less accountability or a lesser service to the public than an incorporated body.
Jon Trickett: Of course it is wonderful that there are so many unincorporated bodies of persons in our society who come together to clean the streets, clear away the rubbish, help young people off the streets to play football in the evening or whatever objective they give themselves.
Roberta Blackman-Woods (City of Durham) (Lab): I, too, am troubled by the category. I want to take my hon. Friend back to his pub group—I think I would like to be a member. Is it not the case that if that group bid to run S4C, we would have no idea at this point how it would be accountable or transparent?
Jon Trickett: Thank you. Of course that is exactly the point I am trying to make, though I think the Minister said that S4C was not included because it is not listed under the clause. However, the point that my hon. Friend makes is correct. If a body of people who are unincorporated come together to make a decision about the common good, exercising a function currently performed by a quango or NDPB, that group has no legal existence at all. It cannot hold property and it cannot be sued for incorrect decisions or negligence. That poses a serious problem.
Charlie Elphicke: I hope the hon. Gentleman will forgive me; I used to be a lawyer, and it is not right to say that because unincorporated bodies of persons and unincorporated associations or, typically, partnerships, do not have legal personality as companies they do not have legal identity. They have legal identity through the individuals. The key difference is that we can burn a company, put it into bankruptcy, wind it up and stuff the creditors, but we cannot do that individually because our house, property and personal assets are on the line. As such, and ironically, we will have to take greater responsibility than a company.
Jon Trickett: Is that really how we want to run our society? Public functions created by Parliament are handed over to individuals who are left to be sued and left homeless if a mistake has been made, perhaps through poor advice. I do not think so. It would be better if we were to enrich our society by using co-operatives, charities or other bodies to deliver services, not by using individuals who from the goodness of their hearts volunteer to undertake activities on behalf of the wider community, thereby leaving themselves exposed, as the hon. Gentleman said, to legal action. The unincorporated association has no existence, as he confirmed, other than the existence of the individuals who make up the association.
If the Minister had been able to help us by printing regulations that made it clear what functions, assets or whatever an unincorporated body might hold, I would have listened carefully to his argument. However, that was one of the possibilities in his argument, not the thrust. On that basis, it is difficult for us to say that such
It is hard to see how an unincorporated association, which is a group of discrete individuals meeting to have discussions and make decisions, can form a single persona. It is a legal non-entity. I am a plumber by the way, so I am not going to mix with the hon. Member for Dover, but even I know that an unincorporated association is not a “person”, as it says here. It is a group of separate individuals.
I remain unconvinced, Mr Robertson, so I seek your permission to press amendment 34 to a vote at the appropriate time. I fear that either somebody will be badly damaged—in the course of carrying out a function because they want to make a better society—by making an inappropriate decision and being held responsible, or, more likely, that the unincorporated body that receives the public functions will be so risk-averse because of the potential for actions against it that it will effectively make no decisions at all. I want to test the feeling of the Committee by pressing amendment 34 to a vote, but I beg to ask leave to withdraw amendment 30.
Roberta Blackman-Woods: It is a pleasure to serve under your chairmanship, Mr Robertson. I have some general points to raise about schedule 1, but I will leave those until the clause stand part debate. The fact that amendments 26 and 27 have been tabled at all partly relates to the conversations that we had in this morning’s Committee. I will be asking the Minister a number of questions and seeking some reassurance, partly because it has not been possible to quiz the bodies directly and also because of the lack of available information about the Government’s deliberations so far regarding successor arrangements. I hope that the Committee will bear with me as I go through a number of issues that we need to consider as part of the scrutiny process.
It is easy to overlook the work of advisory bodies. The Advisory Committee on Hazardous Substances provides expert advice to Government on the science behind hazardous chemicals. At present, it is made up of 11 scientists, who are drawn from private sector industries and public sector non-governmental organisations, and a lay member. The Advisory Committee on Pesticides is a statutory body that was set up by Ministers under section 16(7) of the Food and Environmental Protection Act 1985 to advise on all matters relating to the control of pesticides.
Those are very important committees that have as a key aspect of their work the protection of public safety. They cover issues such as the effects of pesticides on human health—for example, the effects of garden pesticides on children. Each year, they look at the national poison survey and at reports about incidents relating to hazardous substances and pesticides, so they are very important bodies. If the Government are to change arrangements that appear to have worked reasonably well to date, it is incumbent on them to tell us why.
These amendments are largely probing ones. It is important that the Committee gets reassurances so that members of the public and those working in related industries and occupations dealing with hazardous substances and pesticides are not put at greater risk by the abolition of those two bodies.
We thought that we already had expert scientific committees. However, that is the point that he made. He goes on to say that it reflects the work that the Department is undertaking with the Government chief scientific adviser and the head of the Government Office for Science
The problem with that is that there is no mention of how and in what ways the new arrangements of the committees of experts will do a better job than the current advisory committees. Indeed, no evidence has been presented that suggests that the committees to date have done something wrong or given information that is inaccurate or ineffective. Perhaps when we hear from the Minister later, he will explain to us why that point was made and whether it is it one that is shared by other Ministers. Indeed, quite the reverse could be the case. It is possible to argue that the current arrangements have really stood the test of time.
I hope to give the ministerial team the opportunity to correct the really significant omission that occurred in the other place and to give us a reasoning and rationale as to why these committees are to be abolished. Will it tell us exactly what is to be gained by setting up two new committees within the Department?
Will the Minister explain why one of the reasons that was given by the Government for abolishing the committees on pesticides and hazardous substances is that statutory regimes for hazardous chemicals and pesticides are increasingly driven by EU legislation? That suggests two things: first, that the current committees do not deal with EU issues so they are increasingly irrelevant; and secondly, that there is no need for the committees as the Government must do what they are told by Europe without further scrutiny. However, neither of those two things is correct.
There is, therefore, clear evidence that the existing committees deal with EU directives and appear to have been capable of giving the Government advice on such matters. Will we be assured this afternoon that the successor committees will also give advice on EU directives?
Secondly, the current committees value the independence that enables them to put public safety right at the top of their agendas. In doing so, they have been able, because of their independent status, to draw on a range of outside experts. I again ask that we be given some assurance that that will continue, once the committees are moved within a departmental structure, which is what we think will happen.
Independence is especially important when one considers that the Government have recently abolished the Sustainable Development Commission and scrapped the Royal Commission on Environmental Pollution. Those were well respected, independent bodies, which worked in a related area to the two advisory committees that are the subject of the amendments. That raises concerns among the public and those working in related sectors that the Government, in this area of possible environmental pollution, do not want proper, independent, external scrutiny. I am sure that we will get more information this afternoon about whether that is the case.
Will we be told how the Department for Environment, Food and Rural Affairs proposes to access expert opinion more widely than what is immediately available from committee members themselves? We have seen that
Thirdly, because of their independent status, the committees have been able to provide a co-ordinating role, so that evidence could be taken across a range of Government Departments, either on specific issues, or perhaps more importantly, to help develop a strategic view of how best to protect the public and the environment from hazardous substances and pesticides. Will the Minister confirm that the new arrangements will enable this co-ordinating and strategic role to be carried out? It would be quite unusual if that were not the case, because bodies in one particular Department generally find it quite difficult to work in a cross-departmental way. We want some assurances that the ability to work across Departments will not be lost under the new arrangements.
Fourthly, we have it on the record that the committees operate in an open and inclusive manner. Will the Minister guarantee that the new committees will operate with same spirit of openness and transparency?
Lisa Nandy (Wigan) (Lab): My hon. Friend’s last few words prompted me to recall that the bodies are known for their impressive transparency and accountability arrangements. A concern that was raised in the House of Lords, and which has been raised by many others, is whether the new structures will replicate such arrangements, because many others have been able to learn from them. I would be grateful if the Minister assured us about that, given the importance of the bodies for safety.
Roberta Blackman-Woods: My hon. Friend makes an excellent point. She is absolutely right to say that we need strong reassurances on this matter, given the sensitive issues that the two committees deal with. Once they are moved into a departmental structure, they might be subject to a wider range of objectives and they might be tempted on occasion to listen to other voices rather than do what is immediately in the public interest. For example, will we get the same openness, transparency and wide range of views taken when a committee is dealing with such difficult questions as the use of animals in chemical testing? There are many other sensitive issues as well.
Given the importance of well rounded, independent scientific advice to Government, can the Minister explain why he has decided to take such committees in-house when that will lead, by the Government’s own admission, to negligible savings? The Government are not disputing that the committees are needed, so why are they making the changes? How does the Department propose to reassure stakeholders that those important areas of work will continue to be resourced adequately by DEFRA and that, once those committees are taken inside, they will not simply disappear or merge into other committees? That is a really important point. There is a lot of anxiety out there that when finances are under pressure in future, those committees might simply disappear. They also have an important regulatory function, and we need to hear from the Minister that that function will be addressed and managed by the new structure.
What will the remit of the proposed new committee of experts be? Will its advice be covered by ministerial protocol? We know that the current remit allows the
Roberta Blackman-Woods: When the Division bell rang, I was making the point that the committees in question have a wide range of responsibilities, from making regulations and looking at how chemicals are stored, to commissioning research and developing indicators. Importantly, they are doing so without direct interference from Government. There is a huge risk that that might not happen in future. I would be grateful to hear from the Minister what will happen to that wide range of functions. Will they be transferred in totality to the new body? How will the Minister assure the public?
Mr Mark Williams (Ceredigion) (LD): I will not launch into a great defence of the committees, but would the hon. Lady agree that the Minister in another place talked about the new system being more coherent and efficient, with better advice? That was in November last year, and time has moved on. There have obviously been great discussions in the Department. We are told by the Minister that, quite correctly, in the fullness of time things will become much clearer. However, it is imperative that the Committee is told how the discussions in the Department proceeded.
Roberta Blackman-Woods: The hon. Gentleman makes a good point. Part of the problem in scrutinising this legislation is the lack of information from the Government about successor bodies. I would be grateful if the Minister could give us an assurance that such bodies will remain independent and accountable once they move into a departmental structure.
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath): It is a pleasure to serve under your chairmanship, Mr Robertson, as it is to be asked to contribute in some small way to the Committee. I feel that I am almost back where I first started, because one of my first acts as the newly elected leader of Somerset county council back in 1985 was to abolish the Somerset light horse committee, which had been established to ensure that there was sufficient supply and procurement of light horses for the Somerset yeomanry in the first world war and which no one had thought to abolish since. The general purposes of the Bill are something that I have a lot of time for.
The hon. Member for City of Durham was good enough to say that her amendments were essentially probing, rather than seeking to remove from schedule 1, and prevent the abolition of, the Advisory Committee on Hazardous Substances, the Advisory Committee on Pesticides and the Advisory Committee on Pesticides for Northern Ireland. It may be helpful to the Committee if I explain that, as far as the two advisory committees on pesticides are concerned, although they are legally distinct, they are the same in practical terms, because they have the same members and meet at the same time.
Mr Heath: I will come back to the hon. Gentleman on how often they meet and their detailed membership. My recollection is that they have 11 members, but I may be incorrect on that, so I will ensure that I give him a correct figure.
It is important to make it clear from the beginning that it is our intention to reconstitute both the ACHS and the ACPs as expert scientific committees, as the hon. Member for City of Durham said, but to do that, we need first to abolish them by means of the powers proposed in schedule 1. I have now remembered that the committees meet quarterly, and I was correct in saying that there are 11 members on ACHS, but there are 19 members on the ACPs.
Mr Heath: I think the hon. Lady was referring to me. The purpose in the Bill is to abolish the committees as statutory bodies, and replicate and enhance their functions elsewhere by means of the expert scientific committees. As far as the membership is concerned, they will not necessarily have the same membership for ever and a day, but several members of the existing committees have just had their terms renewed, which would suggest an overlap between the two bodies. I hope that I can reassure her on that.
David Wright: I am puzzled. I accept that one of the drivers of the Bill is reducing bureaucracy and administration; we all accept that. Another driver, however, is saving money. How much does reconstituting these structures actually save?
Mr Heath: As the hon. Gentleman will see as we work our way through the bodies in the Bill, sometimes the driver is to save money, and sometimes it is simply to do the job better and more effectively. In this case,
The hon. Member for City of Durham mentioned the debate in another place. It was a good debate, and some important points were raised, many of which were carefully considered by Ministers, which is shown in the way the changes have been taken forward. I think I can provide the sort of reassurance that she sought on the other matters. Let us make one thing absolutely clear, because it is important: there is no intention to turn off the flow of independent and impartial scientific advice to Ministers or others on hazardous substances or pesticides. We fully intend and expect the proposed successor bodies to operate independently. They will be able to put advice directly to Ministers, and be open in how they work and report on what they do. That will not change.
However, we have a responsibility to deliver more effective ways of working and making policy. The proposals in the Bill are part of a much wider, consistent approach across all 18 scientific and technical advisory bodies of the Department for Environment, Food and Rural Affairs. The hon. Lady will have seen the statement made by the Secretary of State about that approach on 26 January, when she announced the new arrangements for the Science Advisory Council to DEFRA. It will preserve the independence, and provide greater scrutiny and co-ordination, of the scientific advice that underpins policy in the Department.
The Science Advisory Council and DEFRA’s chief scientific adviser will, working more closely together, provide greater oversight of all DEFRA’s scientific committees. That degree of challenge and peer review will yield greater and more co-ordinated evidence assurance to meet DEFRA’s needs. As a quondam scientist of sorts—my first degree was in a scientific subject—peer review seems to me to be a crucial element in providing competent, evidence-based advice. The Department, and the new expert committees with which we intend to replace the ACHS and the ACPs, will benefit greatly from that approach.
The new bodies will bring together independent people with a range of specialist scientific expertise, and will work independently of Government and in an open manner. They will be able to put advice directly to Ministers where members consider that to be appropriate. Importantly, the new arrangements will be inherently more flexible and adaptable than current arrangements. That touches on a point that the hon. Member for City of Durham raised: why change at all if we have something that works reasonably well and everyone accepts that it does?
The new bodies’ non-statutory basis will allow changes in membership or terms of reference to reflect developments in relevant sectors. That will help negate the risk of a statutory body being overtaken by legislative developments. That is quite important in this highly technical field. It is no good having an advisory committee that is bound, through its terms of inference, by statute, to limit or restrict its advice on matters that are no longer part of the legislative framework that is being addressed.
The hon. Member for City of Durham asked about specific areas. I have indicated why I think the new arrangement is better. It might help her and the Committee if I give a little more background. The new model for the Science Advisory Council that the Secretary of State announced follows an arm’s length body review and a separate and independent review of the Science Advisory Council led by Professor Charles Godfray. The arm’s length body review sought to ensure better co-ordination among the science advisory bodies. As part of that, DEFRA reviewed the roles and functions of all 18 scientific and technical advisory bodies. On 14 October, the Government announced that the majority of DEFRA’s advisory bodies would be reconstituted as committees of experts. In DEFRA, they will continue to provide independent advice, but will now work more closely with the Science Advisory Council and the chief scientific adviser. We are getting better integration, not only of the advice that the specialist bodies offer, but also in the way such bodies work with other advisory bodies elsewhere, the chief scientific officer and the Science Advisory Council.
There is an issue with European legislation. I do not want to over-stress it, because part of the function will be, as the hon. Lady rightly says, to advise Ministers on the effects of European legislation. Legislative developments might stem from Europe. For example, the regulation on hazardous substances is now largely occupied by the EU REACH—registration, evaluation, authorisation and restriction of chemical substances—regime, which means that we no longer make domestic regulations as such. There are Europe-wide regulations, and previously the advisory committee would obviously have been deeply involved in that function. It is now involved in providing a view and advice to Ministers, but not involved in the sense of developing the legislative proposals.
The hon. Lady asked whether the committees will still be able to access outside expert opinion. Of course, yes. She asked whether they will be able to work across Departments. I think they will do that better than they have done—not due to any inherent flaws in the previous arrangement, but simply because there will be a wider scientific advisory framework. I think I talked about transparency and openness, which we have already stressed.
Mr Mark Williams: I am grateful to my hon. Friend, the Minister; he has reassured me on the efficiency that the new committees will exercise. We heard the debate in the other place on the costs of the restructuring being negligible. Will he give more detail on openness and transparency? They have been great strengths of the Advisory Committee on Hazardous Substances, as the hon. Member for Wigan mentioned. They are important, if he is to hit the three targets of the overall reforms—cost, transparency and efficiency.
Mr Heath: I can only give assurances to my hon. Friend that it is the intention that nothing will change in those terms. This will not suddenly become a deep dark secret in the Department. The openness and transparency of the system will remain, buttressed by the code the Government published on the conduct of scientific advisers. If anyone imagines that any scientist with their professional expertise, buttressed by the provisions of
The hon. Lady asked about the regulatory functions. To be honest, I am not absolutely sure what she means. I do not think the previous advisory committees had regulatory functions. They advised, but they did not have a regulatory function. That was not part of their remit.
The hon. Lady’s final point was very important. It was essentially on whether the changes limit the scope of what the committees can do in their present form and what they will be able to do in their future form. It is quite the reverse. It might help the Committee if I quote from the consultation on the future of the Advisory Committee on Hazardous Substances. I can only do so at length, I am afraid. It was published in July and I am sure the hon. Lady will have read it carefully. Terms of reference were suggested for the new committee, and she will realise that the scope is wider, rather than narrower, than previously:
on matters of relevance at a domestic, European and global level, relating to the protection of the environment, and human health via the environment, from potentially hazardous substances and articles, including nanomaterials; including on future issues of concern, on impacts and on wider strategic linkages;
on research needs and other evidence gaps relating to potentially hazardous substances and articles, including nanomaterials; including analysing, interpreting, and assessing the quality and relevance of, evidence.
To advise officials and UK Ministers, on request or otherwise, on policy development and evaluation, including the impact of different policy options; the assessment of new regulations and deregulation, and the development of voluntary initiatives, best practice advice and formal guidance, which are relevant to its remit.”
It goes on to detail the ways in which the committee will engage with the chief scientific adviser, the Science Advisory Council and others. The committee has a pretty global remit, and it is hard to identify a legitimate spirit of scientific curiosity that would fall outside those terms of reference.
Roberta Blackman-Woods: I wish to ask the Minister for clarification. He said that, within the terms of reference, the new committee might be able to assess regulations. I understand that, at the moment, the committees can bring forward regulations for Ministers to consider. Will that continue with the new bodies, or will they simply be assessing current regulations?
Mr Heath: They are open to do anything. My point is that they will not regulate, which is the responsibility of the Department and its Ministers. They will advise on external proposals, such as European legislation, and on internal matters at which it is requested to look. There is no restriction, and I hope that, from the draft terms of reference, which I have just read out, the hon. Lady will accept that the remit is a wide-ranging.
These statutory bodies, which may be limited by their statutory remit, are being moved into a position in which they have a much wider remit within the same field. Initially they will have the same or similar membership, and they will be able to integrate better with other scientific committees and will be part of a wider structure in which they have the security of the code of conduct for scientific advisers. All of those things, put together, indicate that this a sensible move, but to get any of those advantages we first have to abolish them as statutory bodies so that we can reconstitute them as expert advisory committees, which is the Government’s proposal.
Roberta Blackman-Woods: I thank the Minister for his detailed response, which was genuinely helpful to the Committee. We have received some additional information this afternoon. I do not totally agree that the new terms of reference extend beyond the work of the current committees, but we perhaps need a little more time to look at the emerging structure and further consider what it will do.
The amendment deals with the Agricultural Wages Board and brings us to the first double-whammy for rural communities that we will debate today. The abolition of the Agricultural Wages Board was much debated in the other place. Interestingly, Liberal Democrats in the House of Lords put forward amendments to try to prevent the abolition. I confess that I am not an avid reader of Liberal Democrat Voice, though I do occasionally dip into it, to know what the opposition are thinking. During one of my dipping-in sessions I was interested to discover that it was tracking the debate on the AWB in the other place and advising Liberal Democrats to lobby their MPs to ensure that the AWB remains. It will be interesting to see what happens.
Jon Trickett: I confess I have never read Lib Dem Voice, but I am intrigued. Earlier today, Mr Amess indicated that we could take written evidence from any interested body. Does my hon. Friend think it would be possible to ask it to submit written evidence as to why that body should not be abolished?
Roberta Blackman-Woods: I thank my hon. Friend for that intervention. Personally, I thought it enough to dip into it, not to read it all. However, if it will help the deliberations of the Committee I will be happy to write to Liberal Democrat Voice and ask it to send us additional evidence.
Given the catastrophic effect the abolition of the AWB could have on the pay, terms and conditions of agricultural workers, it is important to ask serious questions of the Government about why they consider it necessary, and whose interests they are serving in doing so.
As we are aware, the AWB’s purpose is to set the scale of agricultural wages and related minimum terms and conditions of employment. It is an independent statutory body, established by the Agricultural Wages Act 1948, but it has a lineage that can be traced back
The Government’s response to why they want to abolish the AWB is that agricultural workers, like others, are now covered by minimum wage legislation. Excellent though the minimum wage legislation is, it does not cover the range of wage levels and categories that the AWB covers and it does not look at the other terms and conditions at all. Why are the Government doing this, and in whose interests? I hope that the Minister will be able to give us some additional information to help us to understand why the Government want to abolish the AWB, and what will be put in its place to carry out the wide range of functions that it currently undertakes.
Susan Elan Jones (Clwyd South) (Lab): My hon. Friend rightly makes that point, but the Farmers Union of Wales has taken a completely different line and has emphasised the importance of the AWB to family farms in Wales. The line taken by the NFU is only one of many.
Roberta Blackman-Woods: My hon. Friend makes an excellent point, which I will come to in a moment. We know that the NFU has called for the abolition of the AWB for some time, although not all farmers—even if they are members of the NFU—who employ agricultural workers support its abolition. Indeed, many farmers, particularly small farmers, do not feel that their needs and concerns are adequately represented by the NFU. Many farmers like the AWB because it sets out a clear template for wages and terms and conditions of employment without their having to negotiate or regulate those. The Farmers Union of Wales does not support the abolition of the body either. In listening to the NFU and using what it has said as a reason for abolishing the AWB, the Government appear to be listening only to some of the larger and most powerful farmers, and completely ignoring the views of many small farmers.
Glyn Davies (Montgomeryshire) (Con): Although I am not a farmer now—I let all my land—I used to be one. We should remember that an awful lot of very small farmers are members of the NFU. It is not a union for larger farmers; it is a union for all farmers. In Wales, the NFU and the FUW are two separate unions, and farmers of a variety of sizes belong to each of them.
Roberta Blackman-Woods: I was not suggesting for a moment that the NFU represented only large farmers. I was saying quite clearly that in abolishing the AWB, the Government are representing only the interests of the larger farmers and not listening sufficiently to the needs of smaller ones. One reason why a number of small farmers support the AWB is that they often have close
We can see huge concern from the FUW. It has also stated—the Minister can tell us whether this is still the case—that since the consultation in Wales in August 2010, no progress whatever has been made on any of the issues that the FUW raised with the Government. It has also clearly said that as a union, it believes that
Agricultural workers are required to be flexible in their working arrangements to cover busy periods, the weather and unsocial hours. Those are not covered by general employment provisions, and the FUW argues that it is therefore important to keep the AWB in place.
Mr Mark Williams: I am grateful to the hon. Lady for giving way and for the many references to the FUW, which is based in my constituency. On consultation, is she concerned about not only the extent of consultation with the farming unions, but the apparent lack of consultation with the Assembly Government and the Minister responsible for agriculture in the National Assembly?
Roberta Blackman-Woods: The hon. Gentleman makes an excellent point. The FUW goes on to say that it believes that there is still a vital role for additional minimum rates of pay for agricultural workers across all levels. It is an arrogant Government who think that they know better than farmers when it comes to how farmers should go about employing their workers.
Jonathan Ashworth (Leicester South) (Lab): I have to be honest: I was not familiar with the Farmers Union of Wales until I joined the Committee. Is one reason for the FUW’s support for the AWB that it appears to bring stability to industrial relations in the sector? As I understand it, there has been no major industrial dispute in the agricultural sector since the 1920s. Is there a risk that if the AWB is abolished, we could return to industrial disputes in that sector for the first time in 90 years?
Roberta Blackman-Woods: My hon. Friend makes a really excellent point, which I may return to later if there is time. Indeed, the TUC made the comment on the proposal that the Government may be incurring long-term costs—industrial relations problems could be one of those costs—to get short-term gains. That is an additional reason why we want the Government to think again about whether abolition is the correct way forward.
I hope that my comments demonstrate my point that the minimum wage legislation does not cover all the dimensions of the AWB’s work, and in making that point, I owe the Committee a deeper explanation. The agricultural industry needs to attract people with the
Some people argue that we do not have as many agricultural workers as we did a century ago, so the AWB is not needed. It is true that we have fewer agricultural workers, but the AWB provisions cover about 150,000 workers, with a further 14,000 in Wales, so it is not an insubstantial group. The small numbers are not a reason for getting rid of the AWB. It is clear that the abolition will not help agricultural workers or farmers. My hon. Friend the Member for Wakefield (Mary Creagh), our DEFRA spokesperson, has grave concerns that abolishing the AWB will result in a race to the bottom in agricultural wages. Labour members of the Committee share her concerns.
If the Government manage to get approval for the abolition, it is incumbent on the Minister to explain how he will prevent such a dreadful situation. To that end I have a number of questions for him. What will he do to prevent wage levels in the sector dropping? As I have argued, he cannot say that minimum wage legislation will do that, because it would cover only level 1, and even then not quite when we have the next uprating. What will happen to the other levels? Everyone knows, as stated in the other place, that supermarkets put pressure on farmers to reduce costs every day. Unite’s representative for agricultural workers identifies that one of the reasons why the horticultural sector has problems with the AWB is the pressure put on the sector by supermarkets to lower costs. She recommends strengthening the negotiating position of the agricultural industry with supermarkets. I agree with her, but perhaps the Minister does not, because Unite’s negotiating position will not be strengthened by the withdrawal of the AWB.
There is likely to be extreme pressure on farmers to reduce staff costs. What will the Minister do to ensure that wage levels are not affected? Lord Whitty, speaking in the other place, said that within a week or two of the legally binding minimum wages disappearing from horticulture and agriculture, the supermarket buyer will say, “You now do not need to pay the wages that you previously paid. You can lower your costs and your prices to us and provide a significantly lower rate.” He pointed out, poignantly, that in such a scenario the savings do not go to the farmer but to the supermarket. So the agricultural worker, who is not that well paid in
In the 1980s and 1990s, when other wage boards were abolished by the Thatcher Government, average wages in the sectors concerned dropped significantly. Even Mrs Thatcher recognised the peculiarities of the agricultural industry and decided to keep the AWB. I will not argue that the AWB could not be updated or improved. It could be more open in its deliberations; it could consult more. Those are reasons to modernise the board, not abolish it. It is not clear that the Government have recognised the needs of modern farming, and in particular the need for an experienced and skilled work force.
Has the Minister consulted Lantra, the skills organisation for the agricultural and horticultural sector? I am fortunate in having—unusually for a Member with a city seat—an agricultural college in my constituency, so I deal with Lantra and those seeking to build skills in the sector probably weekly. There is real concern in the agricultural and horticultural sector that not enough people are getting the skills to work in that sector. There is a problem in encouraging some young people to think that it is a career that they might wish to take up. Lantra does excellent work, going round schools, trying to persuade young people that they can make a good career in agriculture in particular. It is perhaps not such a problem in horticulture.
The point Lantra would make is that unless there is a really good process in place to move people up the skills levels, so that they can upgrade and receive higher wages, there will be a complete loss of skills to the sector, and people will not choose it for an occupation. It says that there is a clear, identifiable need to build and maintain professionalism. We do not know how the situation will be improved if progression rates are not clearly visible and there is not proper remuneration. We know that because of the ease with which the Government seek to abolish the six different grades of agricultural worker. The Minister of State, Department for Environment, Food and Rural Affairs, the right hon. Member for South East Cambridgeshire (Mr Paice), says that on the abolition of the AWB, the six grades of worker will not be replaced. He makes the point—again, wrongly—that the minimum wage will meet that problem. It will not. We need to hear from the Minister what will happen about the different grades.
The crucial missing element in all that the Government have said so far is how the other levels are to be protected. Many workers have set salary scales in other occupations that depend on skills and experience. We need that to remain, and certainly not be removed, for agricultural workers. We are concerned that members of the NFU and the Government constantly refer to the national minimum wage as the protection. Perhaps they think the only wage level in place in the sector in future will be the national minimum. If that is not to be the case, we again need clarification and reassurance.
I have listened carefully to her arguments about why the AWB should be retained—that the industry is complex and that the minimum wage legislation is not enough, and so on. If that is the case, and if one follows her argument, is it right to say that the Labour party would also ask for the reinstatement of all the other wages boards that were created in 1948 and have since been abolished? Many of those sectors are complex, and for many of those, the minimum wage is not suitable. I assume that that would be a change in Labour party policy.
Roberta Blackman-Woods: I am not sure that I have ever made a statement such as the one I am about to make: on this issue, I agree with Margaret Thatcher—and that is really saying something. When she abolished all the other wages councils, she recognised that the peculiarities of this industry meant that the AWB should remain. It may be the only time I ever say this, but in that instance, she was absolutely right.
Jonathan Ashworth: My point is similar to a point I made earlier, and it picks up on the intervention by the hon. the Member for Watford—I think. I am a new Member, so I am still getting used to all the names of hon. Members’ constituencies. Perhaps industrial disputes, which I mentioned, were one reason why Mrs Thatcher did not abolish the AWB. We know that Mrs Thatcher enjoyed a good industrial dispute, but a dispute in this sector is particularly serious because of the effect on food production, and security of supply on food production. Anything that puts industrial stability in this sector at risk is very serious.
Roberta Blackman-Woods: I thank my hon. Friend for his intervention. That may well have been a reason for her decision, but in agreeing with her on this very, very specific point, I am not going to suggest that I know what her thinking processes were generally.
The Government need to explain how other issues that are not covered by minimum wage legislation will be dealt with. There are quite a few. Who will decide the value of accommodation provided under contracts of employment to employees who live on the farm as part of their job, if it is not the AWB? Which civil servant will person the existing helpline, or will it be scrapped? How will complex arrangements to cover the work demands of different seasons be addressed? Have the Government given any consideration to how the economy of rural areas will be affected by a depression in rural wages, should it occur because of this ill-thought-out proposal? Why has there been no assessment of the impact that the abolition of this body could have on rural communities?
Who will set overtime rates, stand-by duty and night allowances? Who will set out bereavement leave? Who will set the birth and adoption grant? Who will make specific rulings for apprentices under the age of 19 during their first year of apprenticeship, and who will consider the position of students on work placements of less than one year? Who will deal with sick pay? Who will regulate the food and care provision for dogs, where a dog is needed to do the work? Who will set rest breaks? Who will set bad weather payments?
The order covering the sector for this year has already been produced, and if Members have a quick look, they will see that at present the AWB addresses all those issues in some detail. Part 4, for example, addresses minimum rates of pay for workers in grades one to six, and part 6 addresses allowances, grants and supplements, including dog allowances, on-call allowances, night work supplements and birth and adoption grants. The order also addresses piecework, overtime for a range of workers, training, travelling, bad weather, flexibility of employment and entitlement to rest breaks. Those issues, which are vital to the sector, are addressed by the board, so what will happen in future? The AWB has much stronger powers for enforcing the order than currently exist for the minimum wage.
The AWB deals with a wide variety of issues, so the Minister cannot simply abolish it without saying how those issues will be addressed. The order is one thing, but it does not demonstrate how individuals are affected by the proposed changes and it does not tell us what it feels like to face the possibility of one’s terms and conditions of employment changing drastically.
“I have been in horticulture for nearly 25 years, working for the same nursery since 1987. During this time, as you can imagine, I have seen many changes. The work is sometimes hard, sometimes repetitive and often carried out in less-than-pleasant conditions.”
The letter goes on to state that the AWB has worked hard to ensure that the salary rates for that sometimes difficult work have been negotiated and recommended to employers, which has made the work bearable:
Lisa Nandy: Listening to that extract, I am struck that this is precisely why there was such strength of feeling this morning on the decision not to allow expert evidence to be presented to the Committee. I would have welcomed the opportunity to hear directly from people, and, given the importance of the abolition of the AWB and the serious effect it will have on their lives, those people would have welcomed it themselves.
Again, concern is expressed about what will happen when the body is no longer in place. It is important that we have raised those issues. This is a sensitive matter, and many workers in the sector are concerned.
Those words come not from a trade union leader, but from Winston Churchill, when he introduced the wages councils. The sentiment in that statement is, unfortunately, all too relevant today, so the AWB is still needed to protect farm workers and their families. The Government should think again and remove the AWB from schedule 1. I look forward to receiving further information and comments from the Minister.
Mr Mark Williams: It is a privilege to be able once again to talk about an issue that has a direct effect on Wales. Wales has had a very good day in this Committee, and I suspect that there will be livelier ones in due course.
The hon. Member for Wigan was right to make her comments about the young in the farming sector. My constituency is in a large, important rural area in Wales, and it contains 600 farming families and 147 villages. I have fought four elections, and every year at election time we have meetings with the Farmers Union of Wales and the NFU, two functioning unions in my constituency. At the end of those meetings, we are always asked, usually by an elderly farmer—our farmers are increasingly elderly; the age profile of farmers is going up—whether the candidate would advise their son or daughter to remain in the farming industry. I am always asked that question, and the hon. Member for Arfon has had the same experience in his constituency.
With hand on heart, it is incredibly difficult to say, “Yes, your son or your daughter—maybe more than one—should stay in the industry.” One of the reasons for that is the low wage base in the low-wage economy that many of our constituents in Wales grapple with daily. I have a great deal of sympathy with what the hon. Member for Wigan has said. It is very hard to attract young people into the industry. We have vibrant young farmers’ clubs across our constituencies, but all too often those people have to farm part time or leave the industry altogether.
The hon. Member for City of Durham was also right to talk about the influence of the supermarkets, and I am pleased to say that the Government are taking action on that through the grocery ombudsman. We have waited a long time, and there were many debates in the previous Parliament—and no doubt beyond—about the inadequacies of existing legislation. I look forward
Like the hon. Member for City of Durham, I start with the spirited debates in the House of Lords, in which my noble Friends Lord Maclennan and Lord Greaves, who were no doubt tracked on Liberal Democrat Voice, tabled amendments.
My hon. Friend the Member for Somerton and Frome, who will be responding for the Government, knows all about the issues that we are discussing. He has direct experience of them because he represents a rural constituency in Somerset, so these matters are not lost on him. I start by posing to him the final question that my noble Friend Lord Greaves asked in the other place; it reflects what I ask from the Government, which is to lift the haze. As we have heard, it is not totally acceptable to rest behind the national minimum wage legislation, because other concerns about terms and conditions need to be addressed. Lord Greaves said in that debate:
“Will there be a new national system set up? Will there be a bargaining system set up within the industry—an unofficial system…outside the purview of statutes and government, in which employers and representatives of agricultural workers negotiate? Or to what extent will it be left to individual farmers to negotiate with their own workers or just impose”—
Mr Sam Gyimah (East Surrey) (Con): The hon. Gentleman makes his point eloquently, but given that fewer and fewer young people are going into the farming industry and there is a wages board, does not the logic of his position indicate that a wages board is not effective in supporting the industry? Is that not why we should look further and create a new industry?
Mr Mark Williams: I hesitate to use the words “wages board”, because I am looking for some reassurance from my hon. Friend the Minister on new structures and systems that will be put in place. Some beauties of the wages board were the differentiation of the six levels and how skilled, often highly technical, work could be rewarded at an appropriate level. I do not think that it has been a disincentive; it has been a reassurance.
I represent some family farmers who work in the most sparse and scattered communities, often made up of one or two individuals. They might be members of the FUW or the NFU, but the wages board gives some reassurance that there is a body to assist them. I am not sure that it will be the Agricultural Wages Board, but that is the reassurance I seek from the Minister. There has been talk of the Low Pay Commission taking on some responsibilities, but I need clarity on that.
The hon. Member for City of Durham was right when she talked about the other issues, such as terms and conditions. In particular, she talked about the implications for the wider rural community. We are talking about very small communities and the prospect of people leaving the industry and the area and taking their families away.
My wife and I are blessed with four young children. There was great concern in my village that had I lost my job, four children would have been taken out of my village school and school numbers would have plummeted. We have only 30 children in our school. There was an interest in electing me. In very small, close-knit communities, the job base waning and people leaving the industry has a direct effect on the wider rural economy and the ability of councils and the Assembly to respond to needs in education, transport and so on. We need acknowledgment that that is an issue.
I was going to remind the Committee that this is an English and Welsh matter, but there has been no need to do so. When I intervened, I made a point about the consultation. The former Agriculture Minister in Wales—we share the same constituency, though not the same party—said in the National Assembly, in response to questioning, that she did not feel that the Department for Rural Affairs in Cardiff had been adequately consulted. I believe that the Government are serious about the respect agenda with the devolved Administrations, but there have been serious lapses and this may well be one of them.
The former Agriculture Minister in Wales also said that had the Assembly Government wished to pursue a Wales-only agricultural wages board, DEFRA would not have intended to devolve the Welsh share of any savings. I may be corrected on that, but that was certainly my understanding of what she said in the Assembly. There are arguments to be had about a Wales-only agricultural wages board because there is movement of workers between England and Wales, which has benefited my constituency.
I am waiting to be reassured by my hon. Friend the Minister. There is a role for clarity on these matters, but I am not sure we have had it to date—the point raised by my noble Friends in another place. I look forward to the Minister’s lifting the haze. These are matters of great concern, not only in a handful of scattered rural constituencies in mid, west and north Wales, but across the country. I think we are talking about 154,000 workers. I know that my hon. Friend empathises with these points. They need to be addressed.
Lisa Nandy: It is an honour to serve under your chairmanship, Mr Robertson, on my first Public Bill Committee. I ask for your patience and that of the rest of the Committee, who are my guinea pigs today. I hope that the Committee will bear with me.
It is also an honour to discuss such an important issue. As the hon. Member for Ceredigion just said, the issue is important for people up and down the country, but it is also important for my constituents. People often make the mistake of thinking that Wigan is an urban constituency because of its town centre and all the fantastic things for which Wigan is famed, such as football and rugby league in particular. We recently won the Challenge cup, on which I am sure the Committee will want to congratulate us later.
The constituency of Wigan actually has huge areas of beautiful countryside with a number of agricultural workers and employers in Shevington, Standish and Aspull in particular, and this issue could not be more important to them. I echo the points made by my hon. Friend the Member for City of Durham in her introductory
The AWB has protected thousands of workers since it was set up, but it has also protected their families. As someone who has spent the past 10 years or so working with children and young people, that is particularly important to me. I want to remind the Committee that in this country—one of the wealthiest in the world—one in five children still grows up in poverty, and a number of those children are in rural areas. I know that Ministers have expressed concern about that and have said that they will do all they can to tackle it. I want to say to them that this measure will make that situation worse; I am almost sure of it. The matter is not just of concern to Ministers in the Cabinet Office; it should be of concern to Ministers right across the Government with an interest in the issue.
The point about the AWB, as hon. Members have said, is that it covers not just pay but a whole range of other things. One issue that I want to dwell on briefly is tied housing, because nearly one third of the workers that we are discussing live in such housing. The AWB plays an extremely important role in that it regulates rent and negotiates to ensure that people are not evicted. Many agricultural workers have families and children and that is why I am concerned about what will happen to them should the AWB cease to exist, with no clear arrangements or understanding of what will follow.
I mentioned earlier that the AWB regulates under-16s, to whom the national minimum wage does not apply. I want to remind the Committee that, at present, we have some 1 million unemployed young people in this country. The Education Committee, of which I am a member, has recently looked at several issues to do with that and has identified that there are particular problems for younger people—particularly those who leave school at 16.
In rural communities, young people often work in agriculture before they reach 16, with the intention that it will become their full-time job. We should not be starting those young people off on a lifetime of employment with the strong message that their labour is not worth much at all. Given that they are not protected by minimum wage legislation, I would welcome some kind of response from the Minister on the issue of under-16s and what will happen to them under the new system.
Several of my colleagues have pointed out that the AWB is also of considerable use to employers. My hon. Friend the Member for Leicester South pointed out earlier that there has been no major dispute in this area for some time. The last major dispute was in 1923, one year before the AWB, in its present form, was constituted. It cannot be a coincidence that there has been no major strike in this industry since the AWB was set up, and I ask the Committee to reflect on that.
It is also true that the AWB has a good track record of success. The hon. Member for Montgomeryshire asked whether we should conclude that because there are difficulties in recruiting young people into the industry, the AWB has not done its job. The reverse is true. There are a number of examples, many of which have been
I also want to respond to a point raised by the hon. Member for Watford—whether the logic of arguing that the AWB should remain should also lead us to set up wage boards in other areas. There are some unique factors in this industry, which my hon. Friend the Member for City of Durham dwelt on and which are worth stressing. Health and safety is a subject close to my heart because it is incredibly important in my constituency. Many people work in agriculture and the construction industry, and the injury rates in agriculture are high. It is a dangerous industry. If we needed a more pressing example of that, the fact that 45 people died at work as a result of working in the agricultural industry in 2009-10 should serve to focus our minds. It seems almost inconceivable in this day and age that people should die at work. It is therefore important that people be protected and remunerated and that they have their own negotiating body. The point applies to that industry more than any other; it is unique.
Such work is incredibly isolating in many instances. There needs to be a centralised way of ensuring that a forum exists for employers and workers to come together to negotiate pay conditions and all the other elements my hon. Friend referred to. There is a real problem of lack of mobility in this area. My constituency is a former mining area, made up of a town centre connected to a number of pit villages by narrow roads formerly used just for carts. A number of geographical factors make it difficult to widen those roads, including houses being built at the side of the roads. We have a canal and a railway line. Moving around the area is therefore particularly difficult for people in the industry. For someone who works on a farm in Shevington, getting work in Standish is extraordinarily difficult. They would have to go into Wigan town centre and then back out again. Also, there is not a huge availability of such work. At a time when six people are chasing every job in my constituency, it is hard for people to move around. That makes it particularly important that people with limited choices of where they work and the sort of work they do are properly represented and remunerated.
Roberta Blackman-Woods: Does my hon. Friend agree that tied housing, which often comes with these jobs, is very important for the workers? There is a strong need to protect such housing in contract. Rural housing costs mean that it is often difficult for workers simply to move to another job; they have to check that housing is available. High rural housing costs also impact on this industry.
Lisa Nandy: Absolutely. Pressure on housing is just one of many factors that make such work and the costs incurred when living in these communities very expensive. As I said earlier, we are talking about people’s homes, not just jobs—in effect, their lives. I hope that Parliament
A feature of this industry that makes it unique, and which greatly concerns me, is the prevalence of gangmasters. This issue was recognised in action taken by the previous Government. The obvious reasons for the prevalence of gangmasters are the factors I have mentioned: isolation and the mobility of labour. This is an incredibly serious issue. In order to protect the vulnerable from the terrible people who carry out these acts, we must ensure there is a body capable of acting in the collective interest. One aspect of the AWB is that it works with employers as well as workers, which is important, as that dialogue is essential.
Finally, I wish to talk about the groceries ombudsman. The subject could not be more relevant to the decision to abolish the AWB. My hon. Friend the Member for City of Durham gave a good portrait of the pressure from supermarkets on farmers, who then have to find those savings somewhere. In some cases, they bring pressure to try to drive down wages and terms and conditions. It is essential to have a level playing field and that we reward the employers who do everything they can to act decently and ethically. In the light of the banking crisis and the News International scandal, we would all surely now accept that we as politicians have a huge duty to ensure that we promote the best and not the worst of business.
I am concerned that we have seen some action to bring in a groceries ombudsman, but we do not know when it will happen. I would welcome an assurance from the Minister on that. The legislation as drafted is weak and I am concerned about that: if we do not know what action is being taken to stop the pressure at the top, removing the AWB would be a huge mistake.
Susan Elan Jones: Many of us were rather mystified when last October the Government announced plans to scrap the AWB, which sets wages and conditions for farm workers. One of those who appeared rather mystified was the Liberal Democrat spokesperson on DEFRA matters in the House of Lords, Lord Greaves. He made the point that the abolition was not in his party’s manifesto or in the coalition agreement.
The AWB sets pay and conditions for 154,000 workers in England and Wales, 140,000 of them in England—including almost 24,000 in the south-west, as I am sure the Minister is all too aware—and 14,000 in Wales. Over the summer, I had the pleasure of travelling to Pembrokeshire. That journey took me through Clwyd South, seeing many of those agricultural villages, through Montgomery, seeing more of those agricultural communities, further into Brecon and Radnor, then Ceredigion. I do not know if I passed through the hon. Member for Ceredigion’s home village with its school. My stopping point was the beautiful area of Preseli Pembrokeshire, with its extraordinary countryside and agricultural communities. One can imagine the importance of agriculture in those areas.
The AWB in its current form was set up by the Attlee Government in 1948. It provides basic pay and protection for fruit pickers, farm labourers and other farm workers, including on wages, holidays, sick pay, overtime and bereavement leave. I speak with a constituency interest, and I am delighted that the FUW is supporting this amendment to keep the AWB in place. We have already discussed the FUW’s argument, so I am pleased to be able to quote an excerpt from a letter written by the FUW to Elin Jones, the former Welsh Minister for Rural Affairs, to whom the hon. Member for Ceredigion has alluded:
The Farmers’ Union of Wales believes that the Agricultural Wages Board’s role in setting minimum rates of pay allows reflection of the necessity for agricultural workers to be flexible in their working arrangements to cover busy periods, fine weather, and unsocial hours, which are not covered by general employment law provision.”
The Union maintains that the future of the agricultural industry is dependent on attracting highly trained technicians into the industry. The economic climate within the agricultural industry has made it a less attractive option for young people and, therefore, in the Union’s view”—
“rewarding skills, qualifications, and levels of responsibility, is a vital means of persuading high calibre people to remain in or enter the industry. Reliance on a single national minimum wage will inevitably result in an erosion of talent and skills from farming as more lucrative and physically less challenging professions are taken up.
The Union believes that it is vital to ensure that whatever new arrangements are put in place, enhanced terms and conditions as a reflection of the dedication of agricultural workers must be fully retained.
The Union would also point out that information on Agricultural Wages Board agreed terms and conditions is a popular query received at the Union’s offices around Wales and it is clear that the work of the Board and its Committees has been much appreciated by farmers in Wales.”
Mr Mark Williams: I am grateful to the hon. Lady for quoting a constituent of mine. In the debate in the other place, it was suggested that there would be an enhanced role for ACAS and citizens advice bureaux in advising some of our farming constituents on such matters. Does she acknowledge that they will be able retrospectively to advise on matters gone by, but they will not be able proactively to advise in the first instance? There needs to be a permanent advice structure, rather than a somewhat piecemeal suggestion.
We have discussed how, at the lowest level, the AWB is only 2p more than the national minimum wage—in the House of Lords, Lord Greaves made the point well that only some 20% of workers covered by the AWB are
It is important that the AWB is seen as a partnership between industry and unions, which sets fair wages and terms and conditions for people working in agriculture. The board also sets overtime rates, rates for night work, standby allowances, sick pay, bereavement leave and holiday entitlements. Without the AWB—this is an extension of the point made about the FUW—each farm business owner would have to negotiate their own terms and conditions with their work force. Many farmers want to keep the AWB, because it means that they do not have to become employment specialists, and they can get on with running their farms.
Should the AWB be abolished, farm workers could lose up to £264 a week in sick pay, if they fall sick. Allow me to explain: farm workers are entitled to agricultural sick pay after one year’s employment, equivalent to the minimum rate for the grade that they are on. Under the plans, workers on the lowest grade will lose £150 in sick pay. Grade 1—initial grade—agricultural sick pay is £232.05, while statutory sick pay comes out at £81.60, making a potential loss of £150.45 a week. The source for this information is the Agricultural Wages (England and Wales) Order 2010. For grade 6—farm manager—sick pay is £346.32, while statutory sick pay is £81.60, making a potential loss of £264.72. Clearly, that would not be affected by a diversion into any sort of low-pay business, because it would not affect many of these grades.
We also have to look at the wider impact on rural communities. The Joseph Rowntree Foundation, in its report from last November, “A minimum income standard for rural households”, made the point that living costs in rural areas are 10% to 20% higher than in urban areas, due to high petrol costs, which is something Members across the House have expressed concern about. There is also the lack of affordable housing, cuts to public services, and few accessible jobs.
The Government plan to take £2 billion in cash out of the DEFRA budget over the next four years, which is the second biggest cut for any Department. I hope that the Minister takes on board people’s concerns, but I cannot help thinking that the same Government who wanted to sell off the forests now want to sell out agricultural workers. We have seen front-loaded cuts to local government, meaning that there are fewer council-supported rural bus services on Sundays and in the evenings. Next January, the Government will cut the bus service operators grant, which supports many rural services, by 20%. That will mean higher fares and fewer buses.
Getting rid of the AWB at a time of such cuts, which I believe are disproportionately affecting rural communities, would be devastating for workers in the agricultural sector. It would make it even more difficult for them and for people’s lives in our rural communities.
Mr Heath: It has been an interesting and illuminating debate on a subject that people feel very attached to, and I recognise the totemic significance of the AWB. I yield to no member of the Committee on the rurality of my constituency and the number of people directly affected by the proposals—not to my hon. Friends the Members for Ceredigion and for Preseli Pembrokeshire, or the hon. Members for Arfon and for Clwyd South. I represent 900 square miles of rural Somerset with an awful lot of farm enterprises, so I speak with some knowledge, at least.
I gently say to members of the Committee that we have to look at this issue not with the eyes of someone from 1948, or even the beginning of the 20th century, because agriculture has changed. Not only has agriculture changed, but the social and employment legislation of the country has, too. We are not working in the context that Churchill worked in—I think that that quote probably came from when he was a good Liberal, rather than a good Conservative. He operated in circumstances where there were no social protections. People in rural areas were the poorest of the poor. He was trying to establish a basis of fairness, equality and social security for those people. That is not the case in circumstances where we have the national minimum wage—I will come back to the fact that that is not the be-all and end-all in this argument—employment protection legislation, working time regulations, housing protection and contract protection. When we are talking about people who work in the agricultural and horticultural industries, a lot of different factors come into play that simply were not there when this—then necessary—protection was put in place.
Jonathan Ashworth: Given what the Minister has said, would he claim that there is no connection whatsoever between the existence of the AWB and the fact that there has been no industrial dispute in this sector since 1923 or 1924?
Mr Heath: I could make a flippant response, although I know that the hon. Gentleman is making a serious point. A lot of other wages boards have been abolished, and the hon. Member for City of Durham has been asked why the Labour Government did not bring them back if they were so necessary. The answer, of course, is that they proved not to have been necessary, and when we look at some of the wages councils that have been abolished we can see why. This is a reduction to the absurd, because it is quite astonishing that some of them got through to 1993 without being abolished, such as the Aerated Waters Wages Council; the Coffin Furniture and Cerement-making Wages Council; the Flax and Hemp Wages Council; and the Ostrich and Fancy Feather and Artificial Flower Wages Council. If I were trying to make a flippant point, I would say that perhaps the time had gone for some of those.
The wages councils for some serious, current industries also disappeared at that point: the Licensed Non-residential Establishments Wages Council; the Licensed Residential and Licensed Restaurant Wages Council; and the Hairdressing Undertakings Wages Council. If I were to say to the hon. Member for Leicester South that I cannot remember significant industrial unrest in any of those sectors since they were abolished, he would quite rightly say that I was making a spurious point. It is a
David Wright: I am trying to work out, from remarks that the hon. Member for Ceredigion has made in the Committee and that the hon. Member for St Ives (Andrew George) has made in the House, the basis for the Liberal Democrat position on the AWB. Is it a policy area that the Liberal Democrats sacrificed in the construction of the coalition? The hon. Member for St Ives, who leads on these matters for the Liberal Democrats, has said clearly that he is opposed to the abolition of the AWB. Have the Liberal Democrats sacrificed this area to form a coalition Government?
Mr Heath: It is not an area of sacrifice; it is an area where one applies common sense to the prevailing circumstances. My hon. Friend the Member for St Ives will speak for himself, as he frequently does—as he did, in fact, over the past two days on another matter—but I will speak for the Government, and I will not be distracted from speaking for the Government on this issue.
I am making the valid point that if I felt that protections were insufficient to protect my constituents and the constituents of rural Britain, I would not be arguing this case. I will say, however, that there is an argument—it is perfectly proper and is the argument that the Government are putting forward—that here we have the only sector in the economy that retains a specific employment regime for workers. That is simply fact. That means that businesses in this sector face regulatory burdens when they employ workers that are not shared by other businesses in other areas. There are internal contradictions, which I shall expand on in a moment, within what is proposed, but all of us want to see a thriving and sustainable agricultural industry.
The industry has shrunk massively over the years. I used to have 10 dairy farms in my village. I now have three working farms and one that is essentially used for shooting purposes. It has contracted massively. Most of those farmers no longer employ large numbers of staff. The ones that they do employ are highly prized, and that may come as a surprise to some members of the Committee who are perhaps not as close to rural communities. In the livestock sector, farmers desperately want to recruit good stockmen and stockwomen who will look after your livestock. They do not come cheaply or easily. They have to be attracted. The idea that a good milker could be paid below the national minimum wage is nonsense in the present agricultural context. I want to see something developing that will help both employers and workers alike.
Looking at it objectively, the legislation is outdated, restrictive. It discourages employment and inhibits modern employment practices. I will give an example, because it is one that people may instantly recognise. At the moment, the legislation discourages the payment of annual salaries. In most professions and trades, annual salaries are now the norm. We do not pay people on a less-than-annual-salary basis. In the context of agricultural workers, however, because of the way that the AWB does its business, that is actively discouraged. In contrast, the national minimum wage legislation, which I have always
I will give another example of the difficulties in the present system. The current arrangements mean that farm businesses are often required to operate dual regimes. What constitutes agricultural work for the purposes of the AWB is not necessarily carried out in isolation from non-agricultural work, which leads to confusion and difficulties and a great deal of bother for both employers and employees. An example of that would be if a farmer operates a packer house on a farm. Under the current arrangements, packing produce grown on the farm is covered by the agricultural minimum wage. The packing of bought-in produce is covered by the national minimum wage. That makes no sense from a business point of view, and it discourages the use of produce grown on-farm, which hinders enterprise and job opportunities within agriculture. That is a real and practical difficulty.
We want to simplify the legislation and create a single employment framework governing all workers, which would end the confusion and the administrative duplication for agricultural businesses. It would encourage the growth of an integrated food supply chain, which would offer better prospects for the agricultural sector as a whole.
Agricultural workers will receive the same level of employment protection as workers in other sectors of the economy. There have been claims that if the board were abolished, workers would see an immediate drop in wages and other benefits. For the purposes of the Committee and for those listening outside, it is very important to stress that all workers in employment at the time the board is abolished will retain their existing contractual rights until their contract is varied by agreement between them and their employer or it comes to an end. That includes not only basic salary conditions, but the other conditions as well. There is contract protection, provided someone has worked for the same employer continuously for 52 weeks. It does not matter whether there is a written contract of employment; there is an implied contract. There have been concerns about the loss of agricultural sick pay, but, again, that would be covered by the implied contract. Workers would remain on exactly the same terms.
Susan Elan Jones: Will the Minister clarify what he is saying? It would not affect the sick pay and conditions of somebody currently in post, but a new person coming to do exactly the same job could be penalised.
Mr Heath: Yes, that would be the case, as it would be the case in every other industry, but let us consider what I said earlier about the competition for people to work in the industry. That is a real situation in real agriculture, as opposed to the romantic idea of what happens. Farmers are desperate to get good staff. They will employ them under contracts that do not put them at a disadvantage to those already in the industry and elsewhere. That is the reality and I see no reason to doubt that that would be the case.
Roberta Blackman-Woods: Can the Minister help us further by agreeing to monitor the situation should the abolition go through and by requiring annual reports to be given to the Select Committee on Environment, Food and Rural Affairs? That way, the future impact of the abolition of the AWB on wage levels and other terms and conditions of employment can be absolutely clear and transparent.
Mr Heath: I will not give that commitment as such, but I certainly expect the Environment, Food and Rural Affairs Committee to take an active interest. However, I will mention the important role we anticipate for the Low Pay Commission, which touches on a point raised by my hon. Friend the Member for Ceredigion. Again, I stress that not all people working in the agricultural industry are at the bottom end of the wage spectrum, as hon. Members have said. Only about 20% of such workers are in the lowest bracket, but because it is desperately important that we protect their interests, it is important that the responsibility for setting the minimum wage for agricultural workers will be transferred to the Low Pay Commission. It will consider evidence from the agriculture sectors when recommending the adult national minimum wage rate, as well as the rates for young people and apprentices. It will collect that information.
Her Majesty’s Revenue and Customs, which already enforces the national minimum wage on behalf of Ministers in the Department for Business, Innovation and Skills, will enforce the new arrangements. The Committee may be interested to know that the details of the arrangements for covering the costs to the Low Pay Commission and HMRC are a matter of discussion between BIS and DEFRA at the moment, but we expect the change to lead to the development of more efficient ways of working to help deal with wider budgetary pressures.
Following the transfer of responsibility to HMRC, enforcement arrangements would change significantly. At the moment, agricultural workers’ minimum wage entitlement is enforced only if they make a complaint. HMRC has traditionally operated a more proactive approach. As well as dealing with complaints from workers, it routinely undertakes investigations on the basis of risk. That approach would be applied to agricultural workers and would put a far larger number of the most vulnerable workers in agriculture within reach of minimum wage enforcement. Workers who wish to make a complaint or seek advice will continue to use the pay and works rights helpline as their first point of contact. That is quite a significant protection.
Let me come back to the wider issue, because it is important. This industry is very dear to my heart, as I come from a part of the county where milk and cheese production is still a significant part of our economy. It
Glyn Davies: I want to reinforce the point the Minister is making. I was involved in the agricultural industry for many years. Good agricultural workers are like gold dust. In the part of the world I live in, agricultural workers are paid considerably above the minimum wage. They are in huge demand. I just want to make certain that that impression of the industry is the correct one, and not that it is low-paid work. It is not: it is now a skilled business attracting well-paid, professional employees.
I wanted to touch on consultation because, the issue was raised by my hon. Friend the Member for Ceredigion. We have a Welsh tinge to this Committee. I suspect that it will not be the last time that I hear concerns about the Principality in Committee. My qualification for listening carefully to Welsh concerns is that I can see Wales from my constituency and the Welsh can see me. I do not accept that there was not proper consultation with the Welsh Assembly Government on this; nor do I accept that that is not still carrying on. It is. We still await the final position of the Welsh Government. There was a point at which they appeared to be supportive of these proposals. There was then the election in Wales. There is a change.
We do not quite know what the position is at the moment. But let me make it clear on behalf of the United Kingdom Government that if Wales wants to have a different arrangement, that is its prerogative. We will do everything we can to facilitate that. That offer is there. What we have to do here is deal with the Agricultural Wages Board for England and Wales, and we have decided that these matters can be better dealt with in another way. If the Welsh Government decide that they wish to retain something on the basis of the advice they receive from the Farmers Union of Wales and others, then certainly, the Department for Environment, Food and Rural Affairs in Whitehall will happily listen to those proposals and act accordingly.
Stephen Mosley (City of Chester) (Con): In my constituency, right on the border of England and Wales, there are farms—sometimes fields—that cross the border. When looking at different systems in England and Wales, please consider cross-border issues. We do not want farmers having to pay different rates to someone for driving a tractor from one side of a field to another. Please bear that in mind.
Mr Heath: The hon. Member for City of Chester has made a very relevant point, which I hope will be borne in mind by the Departments. I will be brief, Mr Robertson, because this is irrelevant, but many years ago when I was a county councillor and chairman of the police authority, my car had two entirely different mileage rates, depending on whether I was going to police headquarters or county hall. I had to work out whether my car knew it was meant to use less petrol going to county hall than to the police authority. That is an aside.
Mr Mark Williams: My hon. Friend will not be surprised, as a committed devolutionist, to learn that his statement was very welcome. Will he tell us a little bit more about the financial implications? If there are savings to be made through the abolition of the AWB, would there not be financial benefits by the way of Barnett consequentials for the National Assembly?
Mr Heath: I will have to write to my hon. Friend on that, simply because there are lots of complexities. I am not sure that I entirely accept the case that Wales should benefit if there are cost-savings from something we are abolishing in England but not in Wales. No doubt that will be a matter for negotiation between the Welsh Assembly Government and the Department. I will happily write, if it is helpful, insofar as I can give any indication.
Jonathan Ashworth: Given that there appears to be so much opposition in the Liberal Democrat party to these proposals, the hon. Gentleman is putting up a very spirited and entertaining defence of the policy. I hope that when the Prime Minister refreshes his top team he gives an opportunity to the hon. Gentleman to shine on a larger stage.
Mr Heath: I have not got that figure. I will ensure that the hon. Gentleman gets an estimate of it. I do not have it in front of me at the moment. The purpose of the exercise is not primarily cost saving; it is a deregulatory measure. DEFRA has made clear it is an issue of deregulation; it is about lifting burdens from industry and, hopefully, creating a sounder basis for the agricultural industry. I will ensure that Ministers from the Department write to the hon. Gentleman to provide an estimate of the savings in the abolition.
Mr Heath: There are a lot of bodies listed in the Bill. I will not be able to point to a position in the coalition agreement where it says that we will abolish a specific body. What I can say is that we have been firmly committed from day one to the removal of quangos. Indeed, both coalition parties were committed before the election, as indeed was the hon. Lady’s own party, to the removal of quangos—the removal of unnecessary public bodies, or their conversion to a more satisfactory and accountable form. That is the process in which we are engaged. The hon. Lady will look in vain in the coalition agreement for a list of the bodies—running into three figures—to be abolished. Departments are doing their work, they are asking the right questions and they are coming up with the right answers to what can be done better and more effectively.
Mr Heath: There will be no significant resource saving on the specific issue of enforcement, because the people who were doing the enforcement based on demand within the AWB set-up will be doing the same thing, with the exception that they will be able to instigate investigations themselves through the HMRC system. I do not anticipate significant cost savings in that instance.
It is important that I address the other points raised by Members. Having dealt with the general terms and conditions, a key issue is the downward pressure from supermarkets. All of us who have campaigned for many years against the unequal arrangements between the oligopoly that the supermarkets represent and the primary producers will recognise that as a real fear. We are now in a much better position to resist such downward pressure than ever before. Not only do we have the grocery supply code of practice, which gives protection in exactly those terms, but we will soon have a Bill enacting the ombudsman responsible for the grocery supply chain, which addresses the point raised by the hon. Member for Wigan. Not only has that Bill been published in draft form; it has been considered by a Committee. It has therefore had its pre-legislative scrutiny, and I am hopeful that we can introduce it as a substantive Bill in the very near future. The draft Bill will represent a huge improvement in the position of many primary producers across the country who currently feel as if they have an unequal relationship with the supermarkets.
I am pleased the Government have taken the action that many of us have been advocating for many years. I cannot pre-empt the way in which the House considers the matter, which is one for the House. It must have time to look at and go through the draft Bill in due course, but there will not be a long delay so far as the Government are concerned in introducing that proposal. Such a delay is certainly not anticipated.
It is important that we promote agricultural skills. In the rural development programme for England there is funding for training and skills development in the farming sector, including horticulture, food and forestry. My genuine feeling is that, once the Bill is enacted, there will be better long-term prospects for advancement for young people entering the industry and that agricultural work will be promoted as a career path, quite separate from the currently rather limited pool, which consists of those who inherit their family farms and therefore start with inherited capital, rather than having a stake through their own wish to engage in the industry. I am hopeful that we will do better at developing skills and bring people into the area.
The hon. Member for Wigan talked about young people below the minimum wage regulations, and she is absolutely right. At the moment, people younger than the school-leaving age are not protected by the national minimum wage. That is true in agriculture and in many other sectors. I must say that a limited number of young people now work in this sector—or, indeed, any other sector. The number of pre-school-leaving-age children working is much, much lower now than it was at one stage.
People working in the agricultural or horticultural industry will be in the same position as they would if they were sweeping up in a hairdressing salon, working in a newsagents or anything else. They continue to be protected by general employment law and health and safety legislation. They would also be regulated by the Children and Young Persons Act 1933, which gives local authorities powers to make byelaws concerning the employment of young people, sets limits on the types of work that a young person can undertake, and puts a ceiling on the number of hours worked each week. Byelaws under that legislation can also allow the issuing of permits to employers to provide a number of documents to their local authority, including a declaration that an appropriate risk assessment has been carried out. The dangers of working in the agricultural industry were mentioned in a different context, particularly in the case of young people; no one wants to see them put in dangerous positions.
None of that answers the question of whether young people will be paid the national minimum wage. No, they will not, just as they will not elsewhere. I am not sure that I actually want a system that encourages large numbers of much younger children into what the hon. Member for Wigan acknowledges is a dangerous workplace, but we need to look at ensuring that all the protections that can be put in place are put in place. I think that relatively few younger children now work in agriculture. The days when we used to arrange our school holidays in Somerset to ensure that the children were available to bring in the harvest are long gone. That was the case, and it is a well-known fact, but it is perhaps a slightly outdated issue. She mentioned gangmasters as well, and the changes that were made persist in giving protection against unscrupulous gangmasters, so that should not be an issue in this context.
I hope that I have not tired the Committee by covering some of the issues involved. I recognise the Committee’s genuine concern to ensure that the measure does not disadvantage people in rural areas. I share those concerns, but having looked at what is proposed, I believe that those concerns are misplaced. We should continue with
Roberta Blackman-Woods: I will make every attempt to be brief, because we have had an interesting and full debate this afternoon. I thank the hon. Member for Ceredigion for his informed speech, and for helping us to understand the impacts of the possible abolition on his constituents. My hon. Friend the Member for Wigan made several powerful points, particularly about protecting young people in the industry, and the need to give them opportunities and protect their homes and jobs. My hon. Friend the Member for Clwyd South spoke about the importance of the AWB to farm owners. We must not overlook that, as it added much detail to the debate.
Let me turn to the Minister’s comments. As more than 1,000 workers in his constituency are covered by the AWB, the Opposition respect what he has to say; we understand that he knows something about the industry.
I am not really sure what the Minister means by removing regulatory burdens. My point in reading out the list was to show that a wide range of issues are covered by the AWB. I am none the wiser about how those wider issues will be addressed following the Minister’s comments. If he could give more consideration to the matter before Report, that would be really helpful.
If governing bodies’ purpose is to ensure that the industry is not characterised by low pay, why refer issues to the Low Pay Commission? I am also still bewildered about the whole issue of costs and savings. The Opposition would like to give the Government another opportunity to think about the issues. We want to consider some of the responses made this afternoon, and perhaps consider the issue again on Report. I therefore beg to ask leave to withdraw the amendment.