24 Apr 2013 : Column 905

Public Service Pensions Bill

Consideration of Lords message

After Clause 9

Defence Fire and Rescue Service and Ministry of Defence Police Capability Review

1.32 pm

The Economic Secretary to the Treasury (Sajid Javid): I beg to move,

That this House disagrees with the Lords in their Amendment 78B but proposes amendment (a) to the Bill in lieu of that amendment.

I begin by thanking Opposition Members for their constructive engagement on the treatment of Ministry of Defence police and fire workers’ normal pension age under the Bill. Important issues were explored during our debate on Monday, when views were put forward passionately by Members on both sides of the House. The Government have acknowledged the strength of feeling. In the other place, my colleague Lord Newby has explained that the Government fully accept the spirit of the Lords amendment we are considering today.

We are willing to include a review of defence fire and rescue service and MOD police members’ NPA in the Bill and formalise the approach that I announced we were intending to take. The review will ensure that the issue can be discussed formally by the appropriate parties to consider the best way forward. However, although the Government agree with the amendment, it requires some small changes to ensure that it works as intended. I urge hon. Members to agree to the tweaks put forward in our amendment.

I will explain briefly why the wording of the Government’s amendment differs slightly from that proposed in the other place. First, we have made a small change to the nature of what must be reported on in order to make it more precise and legally certain. Secondly, the names of the work forces were incorrect. The reference to the “Defence Fire and Rescue Service” has been adjusted to make it consistent with the terms of other legislation that describes the same work force.

Thirdly, the amendment passed to us from the other place seems to confer a double role on the Secretary of State for Defence, as he would be included by both references. My right hon. Friend is a very busy man. It cannot be right to require him both to prepare and to lay a report in conjunction with himself—that would defy the laws of physics. I assume that was unintentional, and it is easily rectified by Government amendment (a).

Finally, and most importantly, it is unclear when the amendment is to come into force. The Opposition in the other place have called for the review to be completed within six months. I am keen to address the House on that point, because I believe that there has been some confusion about whether that means six months from the date of Royal Assent, or six months after section 9 comes into effect. The Opposition’s amendment would require a review within six months of the Act coming into force. However, the Act will be brought into force in stages and some sections might not be commenced for more than a year. We do not intend section 9 to be one of those stages.

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The Government’s amendment proposes that the review period should be six months from when clause 9, which relates to the state pension age link, comes into force. That provision alters the normal pension ages for those work forces, so that is where the focus should be. It is our intention that the clause should be commenced as early as possible. Standard Government rules require that provisions in a Bill are not commenced until two months after Royal Assent unless the Bill itself provides for earlier commencement, as the hon. Member for Nottingham East (Chris Leslie) will be aware from his time in government.

We should all remember that the key effect of the review is likely to be felt in 2015, which is when the new schemes are brought in, but the important point is that there will be no delay. The Government have every incentive to resolve the terms and conditions of the MOD police and the defence fire and rescue service as soon as possible, since they will be needed to design and implement the new scheme, which will cater for them in time for April 2015.

Sir Bob Russell (Colchester) (LD): The Minister will recall that on Monday I was very critical of the absence of the Ministry of Defence from the debate. Has there been any involvement with it in the past 48 hours?

Sajid Javid: Yes, absolutely. It is of course a full Government position; it represents the views of not only the Treasury, but the MOD. In fact, I discussed the matter only yesterday with the Secretary of State for Defence.

Dr Eilidh Whiteford (Banff and Buchan) (SNP): I congratulate the Minister on seeing sense and reaching an accommodation with the Lords on the amendment. Can he assure me that he will continue to work with the representatives of the MOD police and firefighters to ensure that the work force representations are brought into the process?

Sajid Javid: I am not used to getting warm words from the hon. Lady, and when I do I take them with good grace. I thank her for her warm welcome. I can assure her that when the MOD commences the review—it has already begun the preliminary work on it—it will include all stakeholders, and that of course includes the representatives of the two work forces in question.

The clock is already ticking and a delay would make implementation of the schemes all the more challenging. Moreover, I should emphasise that the time scale is already much tighter than that which Members requested during our debate on Monday. My colleague Lord Newby stated yesterday that the Government would not kick the review into the long grass. I reiterate that statement today and fully endorse his comments. I give the House my assurance that the MOD and the Treasury will work to ensure not only that clause 9 and the new clause set out in our amendment are commenced as soon as possible, but that preliminary work on the review will start before the new clause is commenced. I hope that hon. Members will agree that rejecting the amendment passed to us for consideration from the Lords and replacing it with the Government’s slightly more refined version is the most sensible way forward.

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Chris Leslie (Nottingham East) (Lab/Co-op): It is refreshing to have the Minister in this emollient frame of mind. His words suggest a tacit acknowledgment that he has been on the wrong side of the argument to date. I am pleased that the House of Lords continued to insist that the Government should think afresh on the issue. Clearly, there is an unfair disparity between Ministry of Defence and civilian firefighters and police, and every rule of natural justice suggested that that anomaly needed to be addressed.

I make the point in passing that it was a little unwarranted for the Government to tell the Lords that it was not allowed to continue with its point of principle—this was one way of shutting it up—because of financial privilege. Nevertheless, I am glad at the ingenuity of the Lords in keeping the issue alive with their proposal for a review.

The Government could not resist tinkering with that proposal. The Minister has explained why he made some of those changes, but I want to press him for a few reassurances. We welcome the proposal for a review, as broadly agreed by the Lords, but we now need—if you will forgive the pun, Mr Deputy Speaker—to keep the Government’s feet to the fire.

The Government have to address the issue of the physical demands on individual personnel and whether it is reasonable to insist that they should keep working in arduous and dangerous conditions until they are 67. The review has to get the Government and Ministers finally to answer the question about how it can possibly be fair for one set of firefighters and police to work until they are 60 and for MOD staff to work until they are 67. The review should address whether the job description can realistically be fulfilled by those who continue to work into their late 60s.

Ministers have changed the Lords amendment so that it no longer mentions the need for statements of requirements, which are official MOD documents and would address any concerns, especially among heads of forces. However, I think that the Government’s amendment sort of preserves the original meaning. The review should also reveal whether an insistence on staff working until they are 67 would have a perverse effect on the taxpayer, because it might cost more as a result of the numbers forced into early retirement on the grounds of sickness or illness.

I have three principal questions on which I would like the Minister’s reassurance, although he has addressed them in part. First—the hon. Member for Colchester (Sir Bob Russell) alluded to this—the Lords felt that it was important that Treasury Ministers and the Secretary of State for Defence should undertake the review jointly, that it should not be brushed off to one Department or the other, or to a third, independent reviewer, and that it should be the Government’s set of conclusions. Sometimes Treasury documents refer to a Secretary of State and sometimes they refer to the Chancellor of the Exchequer. I sensed from what the Minister said that both Departments would be involved in the review. Will he give that reassurance?

Secondly, when will we get the review? The Minister said that it is not normal practice to refer to Royal Assent as the date that triggers the announcement of how many months it will take before reports and reviews will be produced. I am not sure whether I agree with him, but I will go with it on this occasion, given that he

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has spoken in the spirit of compromise today. He said that the process would start as soon as possible. I got the impression that he was implicitly saying that it would take two months or similar to trigger clause 9 and then six months thereafter. He implied that we would get the review at the end of this calendar year, so it would be helpful if he could confirm that general time frame. He also responded to the intervention by the hon. Member for Banff and Buchan (Dr Whiteford) by reassuring us that there will be ongoing consultation with employee representatives.

Thirdly, a source of anxiety since our debate on Monday—the Minister has not touched on this—has been the question of the abatement of MOD firefighter and police pay as part of the necessary adjustment to ensure parity between the civilian and civil service pension schemes. Obviously, it would be unfair to deduct a sum from the pay of MOD firefighters and police at source—that seems to be the case historically—as well as to ask them to pay again when additional contributions begin under the new scheme. Will the Minister assure us that that discrepancy will be properly addressed in the review? The risk of a duplication of contributions would be unfair and there is some anxiety about this. The level of the abatement needs properly to reflect the relative value of benefits in the new scheme. This is a complex point, but it would help if the Minister could assure us that the abatement issue will be drawn to a conclusion.

1.45 pm

By accepting the need for a proper review, the Treasury has moved from its previous insistence that nothing could be done. Earlier this week the most we could get was a hint that it might consider sticking to 65 as the age of retirement. We will now see—by the end of this calendar year, I hope—whether the Government will honour their responsibilities to the 356 MOD firefighters and police.

I am glad that we have extracted some concessions from Ministers and that the further review is on the table. I also commend David Kirby and MOD firefighters and police representatives for their unrelenting hard work in getting the Government to this position. The story is not over. We need to keep a watchful eye on things, particularly when the review is published. I want the Minister’s reassurance on each of the three points that I have raised, because they matter and it would be preferable if the House reached consensus.

Simon Hughes (Bermondsey and Old Southwark) (LD): I join in the thanks to the Minister and our noble friend Lord Newby for their work during all the stages of this end-of-term attempt at reconciliation, which has at last been achieved. I also thank colleagues on the Labour Benches and those on our Back Benches and on the Cross Benches in the Lords who made sure that the remaining issue in this huge Bill could be resolved amicably. The Lords’ proposal and the Minister’s amendment mean that this is not a closed book and I hope that this hugely important Bill to reform public sector pensions will be put on to the statute book this week. There is now a fixed time frame in which to address further the anomaly that was not spotted by the previous Government or by Lord Hutton, but that has since been brought to our attention.

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I also join in the thanks to Mr Kirby and his colleagues for their efforts in making sure that we understood their concerns. Their request is not unfair. They are asking to be put in a position similar to those who do similar jobs—they are not identical jobs—in the civilian services. My hon. Friend the Member for Colchester (Sir Bob Russell) made the obvious point about the logic of that position when he said earlier this week that the argument in favour of Ministry of Defence firefighters and police and rescue people retiring at 60, as is the case in the civilian services, is, bluntly, that they do dangerous jobs that require them to be particularly fit. The argument that they can be expected to do their job properly and protect themselves and others after they reach 60 has not been made. We are all in favour of more flexible ages of retirement. I buy the argument that the retirement age has to go up, both in general and in relation to public servants, and I support the Government’s proposals, but we have to accept that the time when people are not fit enough to do certain jobs will come earlier than others.

I have a few questions. The Bill’s provisions will commence when it is enacted, but that does not apply to those in clause 9—the pension age provisions—which will be subject to an announcement by the Chancellor or a Treasury Minister at a later date. That is a perfectly normal procedure. Will the Minister explain in his response to the hon. Member for Nottingham East (Chris Leslie) when he expects that announcement to be made? That will be of wider interest, because it is a hugely important issue.

Secondly, I ask the Minister to accept that some of the facts and figures that he has used, which I think have also been used by the Government in the other place, are not accepted as facts and may be misinformed. I am not accusing the Minister of doing that wilfully. For example, he has made the fairly strong argument that an 8% increase in contributions would be required from these firefighers, rescue workers and police to fund a pension age of 60. The workers say that it would be a very small figure of about 2%.

That ties in to my third question. It is important that we take into account what this change would cost the Treasury and the taxpayer. The Government have in both Houses given the estimate of £10 million a year. The people who have come to see me have argued that the sum will be much smaller and may be in the order of £2 million a year. I do not pretend to be an expert on these issues, but I am sure that the Minister will say when he winds up that the Government will not go into this process with a closed view. It is a negotiation, so the arguments will be heard and I hope that the true facts will be accepted.

It has been accepted already in the conversations with the Ministry of Defence that the pension age for fire and rescue workers and police in the services can be held at 65 and not rise in line with the provisions of the Bill, which take account of increasing life expectancy. I want to reinforce the point that the people who will be affected argue not that their pension age should held at 65, but that it should be 60, in line with similar civilian workers. If that age is later renegotiated across the piece for firefighters, rescue workers and police, that is fine. I

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think the Minister understands that, but I wanted to put it on the record that that is where the workers want to start from. That is a reasonable expectation.

I am grateful to the Minister and am pleased that we have been able to carry out this bicameral activity again in a spirit of determined resolution, which I hope will mean that this important Bill becomes an Act on the statute book this week.

Sir Bob Russell: I am delighted that the trust and confidence that I placed in the Minister on the public record on Monday has been justified. I thank him, those around him and those in the other place for bringing matters to a resolution that, although a compromise, is one that I hope we can all live with. In that spirit of concord, I thank Opposition Front Benchers for their contribution. We should praise the representatives of the Ministry of Defence police and fire and rescue service, because without their sterling endeavours, we might have ended up with a right mess.

I remain critical of the Ministry of Defence, because if it had been involved at an earlier stage, we would not have got to the stage where a resolution was needed. I am still concerned that we are looking at this matter the wrong way around. It is the fitness of the people to do these very dangerous jobs that should be paramount, not the retirement age or the pension. They defend and provide security and fire services for nuclear installations. I urge the Ministry of Defence, notwithstanding the resolution of this particular matter, to look calmly at the security and fire protection that its police and fire and rescue services provide in the national interest to ensure that they are fit for purpose. Nobody doubts the courage and commitment of the individuals concerned. However, as I said on Monday, do we really want our nuclear installations to be looked after by people of my age?

Mr Alan Reid (Argyll and Bute) (LD): I am pleased that the Government have agreed to make this amendment. My constituents who work as police officers and firefighters at Faslane and Coulport will be pleased that the Government have listened to their case and tabled this amendment.

The report will look at the impact of the Bill on the health and well-being of defence police and firefighters, and at the ability of those over 60 to meet the strict fitness requirements that are necessary for the important and dangerous job that they do. The report will also consider the consequences of early retirement for the workers who are forced to retire early on health grounds because they cannot meet the stringent fitness requirements in their 60s, as well as the cost to the taxpayer.

The Government inherited this anomaly and it was missed by Lord Hutton in preparing his report. The Government have been faithful to the Hutton report in the Bill. I am pleased that they have listened to the concerns of defence police and firefighters, and have agreed to table this amendment.

After Monday’s debate, defence police and firefighters in my constituency expressed concerns to me about the size of the abatement of their pay that it was suggested might be necessary to reduce their retirement age to 60. I hope that all the calculations on the abatement of pay will be transparent in the report. Calculating pension contributions is an enormously complex process. Following

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a review by the Government Actuary’s Department, the abatement on pay rates for MOD firefighters has been reduced retrospectively from 9% to 7.8% from 1 April last year. The fact that that calculation has been made only recently and has been backdated is an indication of how complicated a subject this is. It is important that during the review, all the calculations are transparent and independently verified, and that the workers are allowed to ask questions about them.

I am delighted that the Government have listened and brought forward the review. I am fairly confident that the review will find that it is not good for the workers or for the taxpayer for people doing these strenuous and dangerous jobs to work beyond 60. The calculations will show that if the retirement age is 65 or 68 and significant numbers of people are forced to retire early on health grounds, both the taxpayer and the worker will lose out. The worker will lose out because they will not get the full pension that they had expected. The taxpayer will lose out because the amount that has been paid into the pension pot will not cover the cost of the pension if it is paid out early.

It would not be right for these workers to work beyond 60. The right comparison is with civilian firefighters and police who work for local authority fire services or other police forces. I am fairly confident that the review will recommend a retirement age of 60. I congratulate the Government on listening to the legitimate concerns that have been put forward.

Sajid Javid: I thank all hon. Members who spoke in the debate on Monday and who have spoken to me outside the Chamber. In particular, I thank my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) and my hon. Friends the Members for Colchester (Sir Bob Russell) and for Argyll and Bute (Mr Reid) who have spoken today. I also want to put it on the record that my right hon. Friend the Member for East Yorkshire (Mr Knight) has made representations on behalf of his constituents on this important issue. He has been robust in representing them, even though as a member of the Whips Office he is not able to speak on their behalf in the Chamber, and that is reflected in the Government’s amendment.

2 pm

As I said on Monday, and as we have heard again today, the whole House believes that the work forces we are talking about today—defence fire workers and police—do excellent, vital and sometimes dangerous work, and we all hold them in high regard. I am sure I speak on behalf of the House and all our constituents in saying that.

I will go through the questions that have been asked, starting with those from the hon. Member for Nottingham East (Chris Leslie). First, he understandably asked for

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reassurance that the review would include consideration of the physical demands placed on Ministry of Defence fire workers and police officers. Of course, that is exactly what I expect. To give him further reassurance, I point out that proposed subsection (2)(b) in the Government’s amendment in lieu makes that clear. It clearly states that the Ministry of Defence will ensure that the work forces in question can meet their operational requirements. That is an important part of the review.

The hon. Gentleman also wanted reassurance that the review would not just be an MOD review. Of course, the MOD will carry out the review, but I can assure him that it will do so with the full support of the Treasury and on behalf of the Government. That is the important thing.

My right hon. Friend the Member for Bermondsey and Old Southwark asked an important question about timing. Perhaps I can add some more clarity. As I said earlier, the Government intend that the review, which will take no longer than six months, will commence when the provision in clause 9 related to the pension age is itself commenced. We plan that to be within two months of the Bill receiving Royal Assent. I am willing to go further, because this is an important issue and I know that many fire workers and police officers from the MOD will be listening. I am happy to say that we not only intend but fully expect that to be the time scale. I am therefore happy to commit to the House that I fully expect the review to be over within eight months of Royal Assent.

I agree that abatement, which the hon. Member for Nottingham East and my right hon. Friend the Member for Bermondsey and Old Southwark raised, is an important issue. It is therefore important that the MOD review considers it. It will have to consider a broad range of issues affecting the workers in question, including all pay and remuneration conditions and other potential benefits. It will have to examine the matter in its totality, and I would expect nothing else.

If I understood my right hon. Friend correctly, he was also looking for reassurance that contrary to the letter that the MOD wrote to forces personnel about the review considering only a retirement age of 65, which we discussed on Monday, there is no such restriction. The review will be much broader-based, and the MOD will make comparisons with civilian fire workers and police officers. No restriction at all is being put in its way.

I hope that I have answered hon. Members’ questions, and that they will see that the Government have considered the matter carefully and value the work forces in question. I urge the House to accept the amendment in lieu.

Question put and agreed to.

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Defamation Bill

Consideration of Lords message

Clause 1

Serious harm

2.4 pm

The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant): I beg to move,

That this House agrees with Lords amendment 2B in lieu of Lords amendment 2, to which this House has disagreed.

The reasons that this House gave for disagreeing to certain amendments to the Bill have been considered in the other place, and a further amendment has been agreed there that now requires consideration by this House. I ask the House to agree to Lords amendment 2B.

The Lords amendment is to clause 1 and makes it clear that a body that trades for profit will satisfy the serious harm test only if it is able to show that the statement complained of has caused that body, or is likely to cause it, serious financial loss. As I made clear when we originally considered Lords amendments, we recognise the strength of feeling that exists on whether there should be a specific provision in the Bill on the issue. I indicated that I would consider the matter further, and the amendment reflects the outcome of those considerations.

As the Government explained at earlier stages of the Bill’s passage, we amended what was initially a “substantial harm” requirement to one of “serious harm” to raise the bar for bringing defamation claims. The Lords amendment therefore refers to “serious financial loss”, to reflect that aim, and is now linked explicitly with the serious harm test.

We consider that the approach that we have taken is clearly preferable to that in the earlier Lords amendment 2 for two main reasons. First, the use of the words “serious financial loss” makes it absolutely clear that the financial loss required to meet the serious harm test must itself be serious. By contrast, the reference in the earlier amendment to “substantial financial loss” could inadvertently have weakened the requirements of what must be shown to satisfy the test.

Sir Edward Garnier (Harborough) (Con): Why does my hon. Friend say that? What is the difference between “serious” and “substantial”?

Mrs Grant: I am sure that my hon. and learned Friend will go into details about the motion that he tabled, but as we have made clear, we think it is helpful that there will be a direct link between serious harm and serious financial loss. That will make the situation absolutely clear to those wishing to bring an action.

The second reason why Lords amendment 2B is preferable to the earlier Lords amendment 2 is that the term that we have used to define those who will be subject to the requirement—

“a body that trades for profit”—

is a much clearer and simpler definition. Those are the bodies about which people have expressed concern, so we have phrased the amendment specifically and directly to meet those concerns.

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I believe that the Lords amendment represents an effective and proportionate approach that addresses the concerns that have been expressed in this House and elsewhere. I urge the House to support it.

Robert Flello (Stoke-on-Trent South) (Lab): Thanks to a lot of hard work—especially in the other place, it has to be said—the Bill is now in a much better place. It is still far from perfect, sadly, which is a huge shame. It could have been perfect and a marvel to behold, but sadly the to-do list in the Bill includes early strike-out, website operator regulations and clarification for booksellers of the innocent dissemination rules, about which they were concerned. It also includes costs, which are a strange case, because we are really no further forward on them.

Indeed, we are left in a wholly unsatisfactory place. The last-minute announcement of a consultation on costs over the summer shows how sloppily this Government have treated parts of the Defamation Bill. The mess in respect of defamation, Leveson and the Legal Aid, Sentencing and Punishment of Offenders Act 2012 means in future people in a similar position to the Dowlers, Simon Singh and Peter Wilmshurst who will fight defamation cases will probably be in a worse position on costs than they would have been had the Government not got their hands on this legislation. Despite the promises that were made during the passage of the LASPO Act, costs is a major issue, and it should have been dealt with properly before this Bill returned to the Chamber.

The Minister commented on extending the Derbyshire principle to private companies. It is estimated that, following this Government’s privatisation agenda, in the NHS alone private companies will take over £16 billion- worth of Government contracts to provide services previously carried out by the public sector. Those services will go to private companies that use the law to chill debate in a way that the NHS cannot. Atos frequently suppresses disquiet, and Baroness Hayter cited Serco in the other place yesterday.

I hope the judiciary is listening to this debate and has listened to some of the other debates, because as Ministers both in this House and the other place have repeatedly said, the courts should further develop the Derbyshire principle in line with the will of Parliament. That is an unsatisfactory position, however, and this is on the to-do list of things that would have improved the Bill dramatically, but I hope the courts will now extend Derbyshire to contracts between the private sector and the Government or local authorities, because that is in line with the will of this House. [Interruption.] The Minister has commented on that, as I have said.

It is thanks to Opposition Members that the Bill has been improved. No matter what is claimed on the Liberal Democrat Voice website, not once have the Lib Dems backed us against the Government. Indeed, yesterday in the other place in the vote on the Derbyshire aspect of what was amendment 2—[Interruption.] The Minister keeps chuntering about Derbyshire, but the issue here is clearly that the will of this House has been expressed on many occasions, but thanks to the Liberal Democrats supporting the Government, we are not able to take that forward. It is important to put that on the record. No matter what they say, it is all talk and no action from the Liberal Democrats.

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This is now a better Bill, but it is not the best it could be, and we will need to return to it after Labour is re-elected to government in 2015—or sooner, I hope. It is the best we can expect at present, however, and that is a shame. I am disappointed—and also surprised, although perhaps I should not be—that the hon. and learned Member for Harborough (Sir Edward Garnier) has introduced his proposal. We will hear his observations on this matter in a few moments. We will decide whether what is before us is the best we can get today after we have heard the Minister’s final comments.

Sir Edward Garnier: I must disappoint the hon. Member for Stoke-on-Trent South (Robert Flello) because I do not think my motion has been selected. None the less, I am not prevented from—and nor shall I be inhibited from—saying a few things about where we are now.

There are plenty of aspects of the Defamation Bill—which has been chuntering away in the background in this House and the other place for a few years now—that are commendable, and other aspects that are utterly harmless; they will not do any good, but neither will they do any harm. I am disappointed as well, however—although I suppose that might partly be to do with my having been first elected to this House 21 years ago and having been here too long—that the coalition Government have allowed themselves to create the law of England through a series of backdoor deals, rather than through any rational and coherent thought.

I think the hon. Gentleman largely agrees with me about where we are now with this Bill, as, I suspect, does my hon. Friend the Minister, but she is in a difficult place and I sympathise with her about that. It is a pity that the Secretary of State for Justice is not here to defend where we are now and to speak up for the Bill for which he has responsibility on behalf of the Government.

Last week my hon. Friend and I were in agreement; this week we are not. Last week the Government whipped coalition Members to support what I and my hon. Friend were advocating—that it is not in the public interest to have a financial damage hurdle for companies to overcome that want to bring proceedings in libel. This week, the Government have changed their mind—or have had their mind changed for them. I am all for people changing their mind if the circumstances or evidence supports that. What I find intolerable—and what I think amounts to a form of incoherence and political feebleness, and which is little short of intellectual dishonesty—is for a Government to march their troops up the hill one week and then to rush down the hill the next week saying, “We didn’t really mean it last week,” or “We had not really thought about it,” or “We are doing this for no other reason than that we are under political pressure from A, B or C, and we have decided to ask our Government troops to do something else.”

2.15 pm

I do not think that is a proper way to create the law of England. If we want to adjust the law of defamation we can, of course, do so; Parliament is sovereign and it can do that as and when it sees fit. On the whole, however, Parliament and this Government will be better respected if they do so on the basis of having thought about the matter and having relied on the evidence that supports their case, as opposed to running harum-scarum all

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over the place and looking confused. I think we are in a confused position. Sadly, nothing that I heard from my hon. Friend this afternoon, or from the Minister in the other place, Lord McNally, when he spoke to the Government position, has filled me with any confidence that this is anything other than a backstairs deal. If the Government admit this is a backstairs deal, so we can clear that up, that will be good, but I have a suspicion it is being dressed up as a matter of principle when there is no principle other than the shenanigans of coalition politics.

As is clear from my unselected motion, I have an interest to declare. I declared it last week, and I shall probably go to my grave with R in square brackets printed on my forehead, but if a Member of Parliament happens to know a bit about something, such as an area of law, it is a pity if he or she feels he or she cannot say something about that subject when a Bill touching upon it comes to be considered.

Clause 1 currently states:

“A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant”.

It is now being proposed that these words be added to it:

“For the purposes of this section, harm to the reputation of a body that trades for profit is not ‘serious harm’ unless it has caused or is likely to cause the body serious financial loss.”

Those words are perfectly understandable; they are ordinary English words and my hon. Friend and I can well understand what they say. What I find troublesome, however, is that last week she did not approve of them being inserted into the Bill, but this week she does. As I have said, this smells of a pretty low-grade backstairs deal.

Last week, I made some arguments that the House accepted, and it therefore rejected an amendment whose terms are broadly similar to the one the Government are now pushing upon us, so I will not repeat what I said in the House last week, and nor will I repeat what my noble Friend Lord Faulks said in the other place—although I urge those in this House and elsewhere who are interested in this subject to look at what he said. He made a short and considered speech; it was a shorter speech than the one I am making. In it, he unpicked in a gently generous way my noble Friend Lord McNally’s arguments—I should, perhaps, put that word in inverted commas.

It strikes me—and I think it struck my noble Friend yesterday—that the additional requirement of special damage, which the Government’s amendment proposes, is unnecessary because of the serious harm test that will already exist in clause 1. The clause will simply have the effect of ensuring that libel claims brought by corporations generate satellite litigation and become more costly. Special damages claims are expensive to try, more complicated and far less easy to settle. Those who chose to defend libel claims brought by corporations, but who ultimately fail, will have an even bigger bill to pay.

The clause as amended—if the Government have their way—will not achieve its aims because usually the more damaging a libel, the more likely a corporation is to try to silence its critics. There are remarkably few cases of the kind that are cited as examples of bullying, which keep being repeated and repeated—Wilmshurst

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and GE Healthcare are two cases that are cited. I know from my experience and listening to others who know a little bit about this area of law, that the number of cases involving corporate plaintiffs is remarkably few.

Robert Flello: Would the hon. and learned Gentleman not accept, however, that what we hear time and time again is that cases do not get to court because of the bullying by corporations at an early stage? People give in straight away or, more often—as in the Serco case, which I think Baroness Hayter raised yesterday in the other place—newspapers face the difficult decision of whether to pursue something that might end up being challenged, even if they are citing the truth.

Sir Edward Garnier: The hon. Gentleman no doubt makes a correct factual point, but I think he exaggerates it. The number of cases involving corporate claimants is small and the damages they recover, absent special damages, is low. Damages to trading reputation alone probably attract £20,000 at the top end and usually no more than £10,000, so we are not talking about hugely extravagant damages claims.

Allegations of bullying can be made against anybody who has more money than the person they are suing. Jimmy Goldsmith, now long dead, sued about 100 distributors—I was involved in the case in a junior capacity—such as WH Smith, Menzies and so forth. He issued proceedings in his dispute with Private Eye. It was suggested by those defendants that he was doing it to shut them down—to prevent them from distributing a newspaper.

Helen Goodman (Bishop Auckland) (Lab): He was!

Sir Edward Garnier: The Court of Appeal disagreed with that and said—the case is called Sperrings, if the hon. Lady is interested—that there was no basis for suggesting that Jimmy Goldsmith was misconducting himself, albeit that a reasonable person could comment that he was using his financial wealth to bully those defendants. The same could be said of Robert Maxwell, who stole Daily Mirror employees’ money in order to run libel actions against every Tom, Dick and Harry he could lay his fingers on.

What is the difference between complaints about financial wealth or strength in the hands of individuals being used to bully defendants, compared with financial wealth in the hands of corporate claimants being used to do that? If the case is an abuse—if it does not come within the terms of the currently unamended clause 1—the court will stop it. However, what has happened is that a general case has been built up, but on the basis of about two, three or four cases—I congratulate the campaigners and those who have seduced my hon. Friend and the Opposition into believing that what they are doing is in the public interest. That is illogical, although it has been highly effective politically—you can perhaps hear from the frustration in my voice, Mr Deputy Speaker, that I recognise defeat when I see it. I am about to be defeated, because the Government have simply whipped the people who voted one way last week to vote another way this week.

Sir Peter Bottomley (Worthing West) (Con): Will my hon. and learned Friend give way?

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Sir Edward Garnier: Although my hon. Friend was not here at the beginning of the debate, I will, if I may, permit him to intervene.

Sir Peter Bottomley: My hon. and learned Friend is absolutely right, but as soon as I saw that he was on his feet, I came as fast as I could, dropping everything else. Last week I voted the way I intend to vote this week.

Sir Edward Garnier: At least you’re consistent.

Sir Peter Bottomley: And I still think I am right. Can my hon. and learned Friend give some examples of where corporations have taken defamation or libel cases that were necessary and could not have been dealt with in another way? As he says, the problem with illustrative cases is that they do not always make good law, but the cases involving Dr Peter Wilmshurst and Simon Singh were examples of how the law did not bring justice within a time scale and for an amount of money that ordinary people or publishers can afford.

Sir Edward Garnier: Obviously I cannot give my hon. Friend a catalogue of cases one way or the other. What I can tell him is that if clause 1 is amended as he always wanted and as the Government now want, the case of Wilmshurst, in which he was sued by NMT Medical, would probably pass the “serious financial loss” hurdle. If my hon. Friend thinks that he is helping Dr Wilmshurst or those like him by amending the Bill in that way, I am afraid he is wrong. If he wants to lock future Dr Wilmshursts into satellite litigation about “serious financial loss”, then make my day, as they say. That will be the unintended consequence of what is going to happen.

As I said last week and as was said in the other place yesterday, the great and sadly late Lord Bingham said in the case of Jameel that corporations have trading reputations that ought to be worthy of protection. A corporation’s trading reputation is a thing of value. However, the Government and those who support them on this particular volte face confuse themselves because they have separated out—no doubt for well intentioned reasons—non-trading companies and trading companies for the purposes of the amendment to clause 1. However, trading companies have different types of reputation, as Mr Justice Tugendhat said in the case of Thornton last year. Individuals—and certainly companies—have different segments of their reputation that are susceptible to being defamed.

I used the example of the BBC last night on “The World Tonight”, at about quarter past 10. The BBC is a large trading corporation. It sells things for profit—programmes—but it has another reputation as a source of unbiased and disinterested news reporting. It has another reputation as a supporter of good causes such as Children in Need and another reputation as an employer. I could libel the BBC in its trading capacity and it might or might not overcome the hurdle that clause 1, as about to be amended, would present. However, I could also accuse it of being, let us say, a hotbed of or a magnet for child sex abusers. That would not necessarily cause it serious financial loss, but it would most certainly defame the BBC and undermine its reputation as a place to be employed or a place to go and visit. Despite the fact that that would cause it serious reputational

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loss, the BBC would be unable to vindicate its reputation, because it would be unable to show serious financial loss.

It strikes me that as I begin to repeat myself and say what I said last week—

Sir Peter Bottomley: That’s age.

Sir Edward Garnier: My hon. and very elderly Friend says, “That’s age.” Well, he has more experience of—

Hon. Members: Ooh!

Sir Peter Bottomley: It is true.

Sir Edward Garnier: It is true, it is justifiable and I do not even have to—

Sir Peter Bottomley: It is privileged, too.

Sir Edward Garnier: It is all sorts of things and it will not cause my hon. Friend financial loss, but he will still be able to sue me if I repeat it outside—assuming that accusing somebody of my hon. Friend’s distinction of being elderly were defamatory. But anyhow, I digress—I am amused to be led to digress by my hon. Friend, because he is an amusing and diverting person.

I will not call a Division this afternoon, because I can do a bit of arithmetic and also because by not calling a vote I will create more embarrassment for the Government. I urge them to think carefully about what they think they are doing, why they have done it, and whether they can justify what they have done. Are they able to answer accusations of backstairs deals, and allegations of incoherence or producing a measure that will have huge and unintended consequences of deleterious effect?

2.30 pm

The Government are making the law of England in a wholly non-party political area. This is a technical issue about the proper regulation of libel law. If they wish to go on and make a fool of themselves, fair enough. I cannot stop them. I do not have the votes behind me, albeit that exactly the same Members of Parliament were behind me last week, one of whom was my hon. Friend—not my hon. Friend the Member for Worthing West (Sir Peter Bottomley), but the Minister on the Front Bench. If the Government wish to go ahead—fair enough, I cannot stop them. However, I regret today’s state of affairs which I think is unwise, and the Government are being very silly. I congratulate those who have supported this campaign on pulling this particular rabbit out of the hat at this late stage, but in the end they will no doubt have little to congratulate themselves on, and the courts will be full of satellite litigation about the definition of “serious financial loss.”

When I asked the Minister about the difference between serious financial loss and substantial financial loss or harm, she said simply that I would be able to answer that question better myself. If that is what she said—

Mrs Grant indicated dissent.

Sir Edward Garnier: She is shaking her head to say she did not, but I am not sure that is an answer to the question. The Government should come to the Dispatch Box and have a coherent case to make, but they do not.

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Old and ill-tempered Members of Parliament, whether they represent Worthing or Harborough, must draw their remarks to a conclusion at some stage so I shall do that now. I do so, however, with acute disappointment, and I think the Government are letting themselves down.

Simon Hughes (Bermondsey and Old Southwark) (LD): My hon. and learned Friend the Member for Harborough (Sir Edward Garnier) is clearly experienced in these matters, but he is not satisfied by the conclusion reached by the two Houses after a huge amount of consideration over a very long period, with attempts by everybody to achieve maximum consensus. I understand his point that Parliament works by doing a deal at the end of the day. A Government—any Government—have to get a Bill through both Houses of Parliament, and for a long time no single party has had a majority in the House of Lords. The House of Lords has often intervened to say that it does not like what the House of Commons is doing, and there have been one, two or three attempts at the end of the Session to see whether we can reach a point of conciliation. That is what has happened in this case.

My hon. and learned Friend and I might agree that we ought to have a system that always gives the final vote on Third Reading of a Bill to the elected House at the end of discussions. I hope I can persuade colleagues on the Procedure Committee to eventually come forward with such proposals, but that is for another day.

Sir Edward Garnier: I do not suggest that what is being done today is unconstitutional; I say simply that it is incoherent and foolish.

Simon Hughes: I understood that and I will say why I think the measure is a reasonable last change that the House should support. I wish to pay tribute to several people, including Lord Lester of Herne Hill who introduced a private Member’s Bill to Parliament some years ago and in many ways triggered this reform of our defamation legislation. I also pay tribute to my noble Friend Lord McNally, who has steered a controversial Bill through many stages. He referred in his speech yesterday to the fact that it has been through the pre-legislative stage and the legislative stage. It has been considered by the Liberal Democrat party; there were conference debates and resolutions were passed on it, and there have also been many cross-party conversations.

I was a little troubled that the hon. Member for Stoke-on-Trent South (Robert Flello) was slightly churlish about the point we have reached. His party and mine, as well as the Conservatives and Cross Benchers, have worked together on the threshold for dealing with corporate claims, and we have made progress on that. Therefore, today is progress along the lines that he wanted, and that he knows colleagues from all three parties wanted. He pretends to be naïve—which he is not—about the way these things work, whether or not there is a coalition Government. At the end of a political process in Parliament, negotiations take place in the public light and also behind the scenes. As he knows perfectly well, that has happened with all three parties to try to get to the most agreeable and consensual place. My party has been as much a part of that process as the Labour party and the Conservatives in arriving at this point.

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The Minister rightly says that this is not about what is known as the Derbyshire principle. For those outside the House who have no clue what that is, in essence—I do not pretend to be legalistic about this—it is a principle enunciated by the courts in a case to do with a local authority, which effectively stated that local authorities cannot generally sue to protect their reputation because they are public authorities. However, as I think everybody has agreed in both Houses, common law will evolve, which does not stop it being dealt with by further judgments of the courts across the United Kingdom. In light of the Localism Act 2011, there may be further definitions of a public authority that seek to deal with the issue of a private body that does public authority work. That business remains unaltered by the Lords amendment.

The Lords amendment, which has returned to this House in a form I hope will be accepted, would provide one additional hurdle for people who are seeking as companies to use this country’s defamation legislation. It states:

“For the purposes of this section, harm to the reputation of a body that trades for profit—”

therefore not a body that makes no profit—

“is not “serious harm” unless it has caused or is likely to cause the body serious financial loss.”

I heard the previous speech and we can debate whether that is the perfect wording. It is, however, a clear statement that there must be “serious financial loss” before someone gets to a position from which they can win a defamation case. The Government rejected the idea of a pre-hearing. I understand that and think they were right because it would have meant going round the courts twice.

The Government have accepted that the bar for companies should be higher than that for individuals, which I am sure is right. That measure is meant to deal with the sort of cases that my hon. Friend the Member for Worthing West (Sir Peter Bottomley) alluded to where in the past individuals were clobbered by companies with huge resources and assets in a way regarded as totally unfair. As Lord McNally pointed out yesterday in the House of Lords, not only have we now, I hope, protected the little person in financial terms against the big corporate giant, we have also done things to protect academic reputations and academic dispute, and to allow that to go on without the threat of defamation. We have also, I hope, made the law clearer and brought it up to date.

The hon. Member for Stoke-on-Trent South said that if the Labour party returns to government, it may wish to return to these matters, and I suppose any Government may want to do that. In this country, however, we understandably do not reform defamation law—generally a cross-party exercise—very frequently. This is a major piece of legislation and I hope that we have dealt with the last tricky issue in a way that provides greater protection for the individual against the big corporate. I think that is a job well done in both Houses of this Parliament.

Sir Peter Bottomley: I apologise for not being present at the start of the debate, and I am grateful to my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) for introducing my interest. I

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should declare that I have been successful in three major defamation actions, and I hope I shall not have to take another.

I want to tell the story of Richard Doll, who drank too much college beer when applying to study mathematics at Trinity college, Cambridge. He did not get chosen, so he went to St Thomas’ instead. He had an interest in asthma and lung diseases. In 1950, he did a quick study on whether motor fumes or tarmac caused lung cancer, as was suspected at the time. He and his colleague, Bradford Hill, discovered that the common factor was smoking. They did not show until 1955 beyond any doubt what had first been suspected by German scientists in the 1930s, namely that, if a person smokes 25 cigarettes a day, their chances of developing lung cancer or associated serious illnesses increased by 25 or 50 times—I forget the actual figure.

If the too-frequent current habit of commercial companies suing for damage had been prevalent when Richard Doll published his material, I suspect that the tobacco companies would have shut him down. When he later came out with the proposed link, which was proved, between asbestos and serious lung conditions, the same thing might have happened. One vital question is how we protect scientific speculation and the publishing of preliminary findings without the risk of action.

I believe we should accept the Lords amendments in lieu because they give conditions in which court authority is necessary if the action is to start. There is one condition by which the court “must” rule action out. I hope the courts realise that they “may” disqualify such action on other grounds. There is a “must”, but the measure leaves open the “may” option for disqualifying cases.

Sir Edward Garnier: Beyond clause 1—the serious harm test—we have clause 6, on peer-reviewed statements in scientific or academic journals. Clause 6 comes to the aid of scientists or medical experts such as Professor Doll if they make statements of that nature that are published in a peer-reviewed magazine or whatever, but there are plenty of other ways in which they could be assisted, such as through the common law, other measures in the Bill and earlier Defamation Acts.

Sir Peter Bottomley: Indeed—that is why my hon. and learned Friend’s career will not be interrupted by the passage of the Bill. Plenty of people will seek his advice. The condition in the proposed new clause in lieu states:

“(2) The permission of the court must be obtained in order to bring an action…(3) The court must strike out an application under subsection (2) unless”

it can show X, Y and Z. My point is that the courts also have a “may” power, which I hope they use.

The Trafigura event, which involved super-injunctions, was another example of people trying to shut down public knowledge, inquiry, discussion and debate.

Sir Edward Garnier: That was a matter of confidence, not libel.

Sir Peter Bottomley: I am aware of that—my hon. and learned Friend is guiding me into making my speech longer than I had intended.

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When I was appointed to the Joint Committee on the draft Defamation Bill, I had hoped that the Government and their Law Officers would introduce positive proposals that went further than the Bill and that gave more power to people to speculate in public, defend their arguments and themselves. Defamation provides limits in that context.

When I had to take defamation action, I did so as a private individual. What was said about me made such action necessary—I was labelled, in effect, as a paedophile on the front page of a major Sunday paper. It struck me that it was not true, not privileged and damaging, and therefore that it provided justification for action. Auberon Waugh made a living for four years out of calling me all sorts of things under the sun. One journalist said, “Why don’t you sue him?” I said, “First, I don’t mind; secondly, it might be true; and, thirdly, it is not compulsory to sue.” It would be fair if those who take defamation action justified why they were taking it, so that they do not just pile up costs, which can become too great.

I should return to my earlier point. What comes before peer review? Suppose I am a scientist or someone else who suspects that there is a link between a commercial product and a bad consequence. I should not have to keep absolutely silent about it until I have managed to do a research study, which would involve getting the funding for the research study, finishing it, delivering it to the magazine so it can send it to other publications, and getting permission to make it public. Speculation requires people having the ability to speak more openly, but perhaps not always with certainty—they may have to put their views in terms of speculation rather than of direct accusations.

We have had the recent case—it is now finished—of the fraud related to the device that was supposed to detect improvised explosives. If someone had spoken up against that company long before there was evidence for the court case, would they have faced a defamation action? We should remember that many magazines and newspapers do not have a great deal of money.

If we accept the Lords amendment and pass the Bill, we will have done good, but not enough. I therefore make a plea to the Minister—she does not need to answer this point today—to work out how the relevant Departments can, either by themselves or by proxy, monitor defamation actions. They should have studies that report on the kinds of actions that are being taken, the writs that are being issued, the writs that are served having been issued, and the results—whether there is a settlement or whatever.

2.45 pm

My last question—having not given notice to the Minister, I do not necessarily expect an answer now—is this. If tomorrow, for the first time, Paul Dacre printed on the front page of the Daily Mail the names of those who are thought to have murdered Stephen Lawrence, would either the new press code or the Bill allow those accused to take action? Could they say that such a publication was improper? It was certainly unusual and rare when it happened, but I reckon it was in the public interest. That is the kind of permission or liberty that our media ought to be able to take, and I am glad Paul Dacre did so on that occasion.

Question put and agreed to.

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Opposition Day

[Unallotted Half Day]

Agricultural Wages Board

2.46 pm

Mary Creagh (Wakefield) (Lab): I beg to move,

That this House notes that the Agricultural Wages Board (AWB) was set up in 1948 to provide a fair wage and skills structure for agricultural workers; recognises that it is used as a benchmark for other employment in the food industry and that it was the only wages council not to be scrapped in the 1980s; further notes that around a quarter of agricultural workers live in tied accommodation and that casual seasonal workers may move around the country; regrets that the Welsh Government’s wish to retain the AWB has been ignored by the Government; condemns the Government for its abolition of the AWB, which took place after just four weeks consultation and will take £260 million out of the rural economy over the next 10 years, lead to a race to the bottom on wages in rural areas, reduce living standards and impoverish rural workers, exacerbating social deprivation and harming social inclusion; further regrets that hon. Members could not debate that issue as part of the Enterprise and Regulatory Reform Bill; and calls on the Government to drop its plans to abolish the AWB.

Last week, the House abolished the Agricultural Wages Board without debate and without a vote. The AWB sets the pay and conditions for 152,000 farm workers in England and Wales. That shoddy little manoeuvre was the result of Government desperation to force through the board’s abolition in the teeth of opposition from my colleagues in the Welsh Assembly Government, workers’ representatives and many farmers. Perhaps it was also the result of a fear of another coalition split or Back-Bench revolt. Today, the Opposition are allowing Back Benchers the chance to debate and vote on that abolition—a vote the Government denied them last week.

Like today’s debate, other debates on the subject have been sparsely attended by Government Back Benchers. Perhaps they flinch from defending an ideological decision that will impoverish hundreds, and in some cases thousands, of their hard-working constituents who work the land. We know that the Secretary of State for Environment, Food and Rural Affairs traps squirrels on his estate. His Liberal Democrat colleagues should beware the political traps that he enjoys setting for his coalition partners. In opposition, the Minister of State supported a motion that warned that abolishing the AWB would

“impoverish the rural working class”.

Today, he and his colleagues once again act as midwives to Tory dogma that will make thousands of people in their constituencies worse off—1,020 people in the Minister’s constituency and 1,120 people in the Secretary of State’s constituency.

The abolition of the AWB is wrong on three counts. First, it will take money out of workers’ pockets and out of rural high streets at a time when the economy needs it most. The abolition does nothing to reduce the deficit; it could even increase the deficit by adding to the welfare bill, because workers pushed into poverty pay will claim more in-work benefits and lose the incentive to gain new skills. Secondly, the abolition is bad for our food industry. A race to the bottom on pay will not help to attract the new recruits the industry needs. Thirdly, the abolition is bad regulatory reform because,

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paradoxically, it will increase the burden of employment regulation on small farmers, meaning that many more of them could end up in employment tribunals. Ministers’ incompetence will result in lower pay, higher welfare spending and more regulation, and it will deepen the recession in the rural high streets they represent.

First, let us look at how the measure will take money off low-paid workers. The AWB protects pay and conditions for 152,000 farm workers in England and Wales.

Andy Sawford (Corby) (Lab/Co-op): Does my hon. Friend share my concern that among those working on the land are people like me and many others in Northamptonshire whose first experience of work, under the age of 16, was picking fruit on the farms in rural Northamptonshire? This will have a particular impact on them because they are not covered by the minimum wage.

Mary Creagh: Absolutely. With the abolition of the AWB, there will be no minimum wage for children under the age of 16 who are picking fruit or driving tractors at weekends and in the summer holidays. When one thinks about the amount of money a tractor is worth, and how such work could become a route into farming for some young people, it will certainly cap their access to that employment.

As well as the 152,000 who are directly covered by the board, a similar number have their wages set against the AWB benchmark, including equestrian workers in the racing and leisure industries, estate workers and gamekeepers. Nearly every constituency in the country has some people who will be affected, including more than 50 people in Wakefield. The board sets fair wages, holiday pay, sick pay and overtime. It has six grades, and the lowest grade is just 2p an hour more than the national minimum wage.

Yasmin Qureshi (Bolton South East) (Lab): Does my hon. Friend agree that this is another pernicious, shoddy little policy by the Government, who are ideologically driven to cut the wages of ordinary working people?

Mary Creagh: They are certainly driven by ideology, although the ideology of the Minister of State seems to have changed from when he was a Back Bencher, now that he enjoys the privilege of a Government car. I do not know what has changed for him.

Without the AWB, farm workers will be worse off. As my hon. Friend the Member for Corby (Andy Sawford) said, there will be no minimum wage for children under 16. Seasonal workers will lose their entitlement to their own bed, which is currently guaranteed by the board. The cap on the amount employers can charge workers for tied accommodation, currently £4.82 a day for a caravan, will be removed. Some 42,000 casual workers will see their pay cut to the minimum wage as soon as they finish their current job. The rest will see their wages eroded over time.

Sir James Paice (South East Cambridgeshire) (Con): What evidence does the hon. Lady have for her statement that all those casual workers will see their pay cut immediately at the end of their contracts? Farmers are desperate to get casual workers, and that is why they

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are keen for us to continue the schemes to bring them in from eastern Europe. They will not be able to get the staff if, as she suggests, they cut their pay.

Mary Creagh: I will be talking in detail about the seasonal agricultural workers scheme. I just say to the right hon. Gentleman that 1,610 people in his constituency will be affected by the reduction in pay. I do not know whether he has read the Department for Environment, Food and Rural Affairs impact assessment that was conducted when he was the Minister; I certainly have. It states that 42,000 casual workers are likely to see their pay default to the national minimum wage when their current employment comes to an end. The cost to the rural economy that the Department for Business, Innovation and Skills impact assessment estimates—there are varying figures—are to do with the direct loss of wages, holiday pay and sick pay out of workers’ pockets.

Mr Mark Spencer (Sherwood) (Con): Will the hon. Lady identify what is special about agriculture? Is it that farmers want to exploit their workers, or should there be protection for people in retail, catering and other such industries?

Mary Creagh: I am surprised that the hon. Gentleman, with 380 workers who will be affected in his constituency, is asking me what is special about agriculture; I believe that he is a farmer, so he might stand up and tell me. Agriculture is different because people are often living in rural isolation; they may have their home provided by their employer, which puts them in a uniquely vulnerable position; and, as the right hon. Member for South East Cambridgeshire (Sir James Paice) said, they are brought in from countries where English is not their first language—perhaps they do not speak English at all—and are not in a position to negotiate. Those are three reasons for starters, but I am happy to come back to that.

Robert Flello (Stoke-on-Trent South) (Lab): My hon. Friend’s speech is hitting exactly the right notes. Has the former Minister, the right hon. Member for South East Cambridgeshire (Sir James Paice), not just given the game away? This measure is about getting eastern Europeans into the country to pay them poverty wages far below those that anybody else would possibly want.

Mary Creagh: I will look at that in detail later, but we do not want either a race to the bottom on wages or a great increase in the amount that employers charge workers for their tied accommodation—their hot bed in a caravan—which will mean that they end up effectively working for below national minimum wage and undercut British workers out of the market.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): My hon. Friend is making an excellent case. One point covered by the AWB that scares me is workers’ sick pay and terms and conditions. At the moment, sick pay ranges from £150 to £250. Once the AWB has gone, employers will have to pay sick pay at only statutory minimum terms of just more than £85. That is a direct hit on workers, a quarter of whom are over 55 years old.

Mary Creagh: That is right, and we all know that as we get older we are more prone to illness. A further reason why farming is different is that people are expected to work antisocial hours and long hours out in what can be very difficult conditions. We saw that with the flooding

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last year and when farmers and their employees had to dig lambs out of the snow in the very cold winter we have just had.

Mr Spencer rose

Mary Creagh: I will give way later, but I would like to make some progress.

The Government’s own figures suggest that up to £280 million could be lost over 10 years in wages and in holiday and sick pay—a quarter of a billion pounds taken out of areas represented mainly by the parties on the Government Benches, where the cost of living is estimated to be approximately £3,000 more than for those living in urban areas. Up to £35 million a year could be lost in wages alone—again, those figures are taken from the Department for Business, Innovation and Skills impact assessment.

I want to know what happens when money is taken from rural families on the breadline. Who will pick up the tab? People with children will have recourse to income-related benefits, such as tax credits, council tax benefit and housing benefit. Reducing rural workers to the poverty line will take money out of workers’ pockets and transfer it directly to their employers. We, the taxpayer, will pick up the in-work welfare bill. That will add to the deficit. As a strategy for rural growth and deficit reduction, this thoughtless abolition will be catastrophic.

My second point is that the abolition will be bad for the food industry; it goes against business needs. Britain’s biggest manufacturing industry, the food production sector, needs more skilled workers. Instead, the Government are encouraging employers to race to the bottom on pay. That will see skilled workers turn their backs on the industry—and become MPs instead!

There are 2.5 million unemployed people in the United Kingdom, 1 million of whom are young people. There are 25 million unemployed people in the European Union, yet the horticulture industry still says that it needs to bring in workers under the seasonal agricultural workers scheme because it cannot find reliable British workers. It simply defies economic logic to suggest that a race to the bottom on pay is the way to attract the skilled new entrants that the industry needs.

Mrs Caroline Spelman (Meriden) (Con): Is the hon. Lady unaware or simply ignoring the fact that the AWB was debated at length during the consideration of the Public Bodies Bill in both Houses of Parliament? Secondly, is she aware of the impact assessment’s conclusion that current wage levels are generally above the minimum, and that, with wage-setting practices and modern working practices in agriculture, wages are unlikely to be eroded, as farmers will need to attract their workers? That was its conclusion.

Mary Creagh: I am delighted that the right hon. Lady refers to the AWB and the Public Bodies Bill, the so-called bonfire of the quangos. The Bill certainly brought her a degree of notoriety, as it contained her proposals to sell off the forests and scrap protection for farm workers. She mentions the impact assessment. I am just quoting the Government’s figures: their estimate is as high as £280 million over 10 years, or with a best estimate of £260 million.

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Jim Sheridan (Paisley and Renfrewshire North) (Lab): Many times during the passage of the Gangmasters (Licensing) Act 2004, I and my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) met the National Farmers Union, employers and all the major people employed in the farming industry, all of whom recognised the valuable contribution of the AWB. Perhaps today we can find out who is the driving force behind its abolition. Employers do not want to get rid of it.

Mary Creagh: That is very interesting. I was just reading some of the responses to the consultation. One farmer said:

“I am a farmer with 3 employees. The annual AWB wage award has been an invaluable tool to help determine wage awards...We are overburdened with enthusiastic government departments issuing guidance rules & legislation...The annual guidance for the level of wage awards is one of the few useful tools”.

Andrew George (St Ives) (LD): It is quite clear that the proposal to abolish the AWB is not driven by a worry that it holds pay back or conditions down.

Sir James Paice: Yes, it is.

Andrew George: If the Government are arguing that it is being abolished to enhance pay and conditions, we will hear that from the Front Bench in a moment. Does the hon. Lady agree that we do not want simply to go the lowest common denominator?

Mary Creagh: I have been making that point repeatedly. The hon. Gentleman has 1,110 people in his constituency who will be affected. I am afraid that we heard some noises off from the right hon. Member for South East Cambridgeshire; he said, “It is,” so it seems that coalition divisions are once more being exposed, as I thought they would be. I look forward to having a chat with the hon. Member for St Ives (Andrew George) in our Lobby during tonight’s vote.

I want to return to the role of the major supermarkets, which have silently supported the abolition of the AWB. Even the farm manager of the Duchy of Cornwall, which supplies Waitrose, responded to the consultation in support of abolition. The Duchy Originals website talks about food that “is good” and “does good” and says that it raises money for charity, but rural workers should not have to rely on charity to feed their families at the end of the week. Today’s figures on food banks, many of which are springing up in rural areas, give the lie to the fact that there is any overpayment in rural areas.

The supermarkets trumpet their commitment to fair trade, but why is that only for workers in developing countries? Why not here? They trumpet their corporate social responsibility programmes in communities, yet are silent when it comes to reducing pay in their own supply chains. I quote again from the responses to the consultation. A vegetable producer in the north-west said:

“We are unfortunately in an industry where we are seeing increasing pressure from retailers to lower prices of supply of produce,”

and added that

“some of our produce price returns are no higher in 2012 than they were over 10 years ago.”

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This has real implications for the sustainability of the food supply chain and the UK’s self-sufficiency, which has already fallen to about 55%, making us much more vulnerable to global shocks. The supermarkets have got to start thinking long term. We supported the Government’s creation of the groceries code adjudicator, although we would have preferred an ombudsman. We want fairness in the supply chain, but that does not stop with the horticultural businesses. It has to feed down to the level of the individual workers as well.

Toby Perkins (Chesterfield) (Lab): I am grateful to my hon. Friend for the case she is making. The Conservative party was once seen as the party of the countryside, but does not the Government’s shoddy behaviour demonstrate just who in the countryside it really stands up for?

Mary Creagh: Absolutely. It is not even clear whom they support in the countryside, though. I have quoted some farmers opposed to abolition. It is a bit of a mystery who actually wants it. The right hon. Member for South East Cambridgeshire has left the Chamber, so we will never know.

Glyn Davies (Montgomeryshire) (Con): I am listening carefully to the hon. Lady’s case, which makes it clear that she disagrees very strongly with the abolition of the AWB. The Opposition likewise made their opposition clear when other wages boards were abolished in the 1990s, none of which was brought back during the 13 years of Labour government. Will she give us an absolute commitment that, if the Labour party forms the next Government, the AWB will be returned forthwith? Will she give us that guarantee?

Mary Creagh: If the hon. Gentleman is so keen to retain the AWB—I know that many in his constituency, including the Farmers’ Union of Wales, are against abolition—I hope that that will be reflected in his voting on our side this evening.

I want to deal with the regulatory burdens that could fall on farmers. We have considered the history behind the AWB’s abolition. The board has survived until now thanks to my colleagues in the Welsh Assembly Government, who listened to their constituents and were totally against getting rid of it. Constitutionally, abolition required consent, and they refused to give it.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): The motion notes that it is

“the Welsh Government’s wish to retain the AWB”.

Scotland and Northern Ireland can keep their AWBs, of course. Is the hon. Lady making the case, therefore, for a reserved powers model for the Welsh Government?

Mary Creagh: I think the hon. Gentleman has made that case very well himself. We expect an announcement from our colleagues in the Welsh Assembly Government, but they have made a commitment to retain the functions of the AWB in Wales. We will see what that delivers over time.

All was quiet until the appointment of the Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for North Shropshire (Mr Paterson),

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who decided to abolish the AWB by tacking it on to the Enterprise and Regulatory Reform Bill—a regulatory reform that could therefore bypass the Welsh Government. His Department conducted a pitifully short, four-week consultation. Let us remember that there was a full 12-week consultation on banning ash trees from Europe four months after Ministers were first told that ash dieback disease was here. We can see where this Secretary of State’s priorities lie—apart from the squirrels. He is swift to take money from workers’ pockets and hand it back to their bosses, but slow to defend the natural environment.

Mr David Hanson (Delyn) (Lab): Does my hon. Friend recognise that the Secretary of State represents a border constituency? If, as expected, the Labour-controlled Welsh Assembly maintains the AWB at its own expense, members of the farming community in his constituency would have to travel only one or two miles, potentially, to get a better deal. He will have a skills shortage in his own constituency.

Mary Creagh: Absolutely. The Secretary of State has not only 1,120 agricultural workers, but a food bank, in his constituency, so that is an excellent point very well made.

Mr Russell Brown (Dumfries and Galloway) (Lab): I apologise, Mr Deputy Speaker, for being late into the Chamber and further apologise if my point has already been mentioned. I want to highlight to my hon. Friend that not long after the previous Labour Government introduced the national minimum wage, the Conservative party called for the abolition of the AWB, saying that the national minimum wage would cover it, which clearly it would not.

Mary Creagh: Clearly, the national minimum wage does not cover it all, which is why it was not abolished under various previous Tory Governments. Various Conservative Prime Ministers understood that if someone’s house was provided by their employer, they were in a uniquely vulnerable position when it came to negotiating their wages.

Many small farmers want to keep the AWB so that they do not have to become employment specialists. They want to get on with running their business. Instead, this change will add to their regulatory burden. The Farmers’ Union of Wales, where 12,000 workers are covered by the AWB, opposes abolition. It has said:

“Many farms in Wales run with relatively few staff, or indeed with family labour. The Agricultural Wages Board is considered an important means of avoiding potential conflict and lengthy negotiations with individual members of staff.”

Without the AWB, each farm business owner will have to negotiate terms and conditions annually with its work force. They will make mistakes, as employers sometimes do, and might end up in employment tribunals as a result.

I want to quote again from one of the consultation responses. A farmer in Kings Lynn said:

“I disagree strongly with the abolition of the Agricultural Wages Board...the last thing I want to do with my limited management time is to negotiate wages with my 6 full-time and up to 30 part-time workers some of whom have worked for me for 30 to 40 years and have a strong personal relationship with me. I do not want to damage this by having to negotiate wages with them.”

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The hon. Member for Sherwood (Mr Spencer) asked why farming was different. I think that that answers his question.

We have talked about gangmasters and licensing and, before I conclude, I want to touch briefly on the issue of workers’ accommodation. The Government’s impact assessment indicates that 25,500 farm workers have a house or cottage provided by their employer, and that another 4,700 live in other accommodation, such as caravans. The agricultural wages order defines “other” accommodation and guarantees all farm workers that it is fit for human habitation, safe and secure, and that every worker should have a bed for their sole use and be provided with suitable and sufficient free drinking water and sanitation.

Abolishing the AWB will remove those guarantees on housing for farm workers. The accommodation will no longer have to be fit for human habitation, safe or secure. Workers will not be guaranteed a bed for their sole use, and there will be no requirement to provide drinking water or sanitation. I should like to cite the case of one of the firms that wrote in support of the AWB’s abolition, Suffolk Mushrooms. Last year, the firm was fined £10,000 for failing to have a safety certificate for the boiler in the men’s accommodation, and for various hazardous working practices that put workers’ lives at risk, including leaving high-level safety gates open. After the case was won, the Health and Safety Executive inspector, John Claxton, said:

“Suffolk Mushrooms invested more than £1.5 million refurbishing its factory and mushroom growing equipment, yet failed to spend even a few hundred pounds to keep its employees safe”.

Mrs Spelman: Obviously the laws already exist to enable the Health and Safety Executive to fine employers, in every sector of the economy, when they break the law. Does the hon. Lady not accept that she is perpetrating the myth that farmers set out to exploit their workers? The vast majority of farmers listening to the debate today would be affronted by that suggestion.

Mary Creagh: That was a good effort from the right hon. Lady. The HSE will clearly continue to exist, but I am citing a case that happened last year, not at some other point in time. I ask her whether she thinks that conditions will get worse or better when the AWB is abolished.

George Eustice (Camborne and Redruth) (Con): The Agricultural Wages Board existed when that case came to light, so it clearly did not create the defence that the hon. Lady suggested it might.

Mary Creagh: The question for the hon. Gentleman is whether conditions will get worse or better when the provisions are removed. Will they be better or worse for a worker who does not have a bed guaranteed for their sole use? Opposition Members already know of conditions in which people are hot-bedding. Is that what we want to see in our farming industry? I certainly do not, and I am sure that the majority of farmers do not, but there will now be no legal requirement for an individual to have their own bed. I think that that is wrong; does the hon. Gentleman?

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The AWB was set up by the Attlee Government in 1948. Even Mrs Thatcher did not abolish it. She understood that if someone’s home comes with their job, they are in a uniquely weak negotiating position with their employer. However, last week’s Bill ended nearly 100 years of protection for farm workers. In the Labour party, we believe that the people who pick the fruit should also be able to buy it in the shops, and not have to rely on food banks to feed themselves and their children. As many farmers themselves have said, in their responses to the consultation, this decision will not secure a stable and prosperous future for the food and farming industry or for those who work in it. The Prime Minister once said that we were all in it together, but time after time, ordinary working people are first in his firing line. If Members want a rural living wage, they should vote with the Labour party this afternoon. If they are happy with poverty pay for their constituents, they should vote with the Government.

3.14 pm

The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson): I am grateful to the hon. Member for Wakefield (Mary Creagh) for securing a debate on this issue. I acknowledge the strong feelings that she has expressed, but I am firmly convinced that the abolition of the Agricultural Wages Board is in the best interests of all those working in the industry. It will provide simplification and greater flexibility, thereby encouraging investment, growth and job opportunities in the sector.

Nia Griffith (Llanelli) (Lab): Will the Secretary of State explain exactly how the board’s abolition will create job opportunities? Will it happen by driving down wages?

Mr Paterson: I am grateful to the hon. Lady for that early intervention. If she gives me a chance, I will explain my case. I take a completely contrasting view to hers. I have a positive view of agriculture and I see an expanding demand for labour in the countryside. I believe that the current minimum wage arrangements will give protection to those at the lower end of the scale, but I am absolutely convinced—because it is happening already—that the overwhelming number of employees in the sector will be paid well above the minimum wage. Let me make my case; I might be able to convince her.

A successful agricultural industry will contribute to the growth of the wider rural economy, which is one of the four key objectives of my Department. Agriculture is vital for the UK. It produces much of the food that we eat and supports other industries that add nearly £90 billion to our economy. The food supply chain employs nearly 4 million people and includes the largest manufacturing sector in the UK. Exports of agricultural food and drink have seen seven years of continuous export growth and were worth £18 billion in 2011.

There are huge opportunities for further growth within agriculture to meet the demands of feeding the world’s population as it grows from 6 billion to 9 billion. We want to ensure that the UK industry is in the forefront of meeting those demands, and we are already doing a great deal to help to ensure the success of the industry. An example is the joint Department for Business, Innovation

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and Skills-Department for Environment, Food and Rural Affairs agri-tech strategy, which will provide a framework for research and the development of technologies. It will support growth through encouraging the global uptake of world-class UK-based agri-science and associated technologies, stimulating their translation into high-tech agricultural systems in the UK. We are working on the design of the new rural development programme, which we will use to develop professional skills, including business management and risk awareness, across the agriculture and forestry sectors.

Tom Blenkinsop: I am sure that the Secretary of State will be telling all this to the workers on his estate, but will he tell the House how many of the people on his estate will be affected by the termination of the AWB?

Mr Paterson: I have to disappoint the hon. Gentleman by telling him that I do not have an estate, and that I do not have any direct employees who take the agricultural wage.

I shall take up my case again. In addition, I want to give businesses the tools they need to have the confidence to invest, adopt and benefit from innovative technologies and farming practices.

Andrew George: Those tools will be extremely helpful, especially for research and development, but in relation to today’s debate, will my right hon. Friend tell me whether he thinks that agricultural wages and conditions will go up or down as a result of the abolition of the AWB?

Mr Paterson: As I said earlier, I am absolutely confident that there is a great future for the industry, and that there will be an increase in demand for labour, which will create pressure to drive wages up. Already, under the AWB, the vast majority of people in the industry are paid well above the minimum wage and well above the AWB minimums.

Another key area in growing the economy is the roll-out of superfast broadband to rural areas, and increasingly wider access to 3G and 4G networks will also make it easier for farm and rural businesses to operate.

Jim Sheridan: I listened carefully to the Secretary of State’s response to the hon. Member for St Ives (Andrew George). If wages and conditions were to go down, if that were to encourage migrant workers to come to this country to work for the lower wages, and if that were to result in problems in the community, whose fault would that be?

Mr Paterson: The hon. Gentleman and I have debated these issues over many years, and we simply do not agree. Would he like to go back to the arrangements under some of the earlier councils? Why did not the Labour Government re-establish the Linen and Cotton Handkerchief and Household Goods and Linen Piece Goods Wages Council (Great Britain), for example? Why did they not re-establish the Ostrich and Fancy Feather and Artificial Flower Wages Council, or the Pin, Hook and Eye and Snap Fastener Wages Council?

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Why did they not re-establish the rubber-proof garment-making industry wages council? This is the last throwback to an era during which these sort of councils did, I am sure, a worthy job, but we now have a free and expanding market and demand for labour in the countryside. To answer his question directly, I am absolutely confident that wages will be well above those currently set by the AWB.

[

Interruption.

]

The hon. Gentleman says “If”, but it is not a question of “if”: wages are currently well above those levels.

Jesse Norman (Hereford and South Herefordshire) (Con): I absolutely share my right hon. Friend’s confidence in the future of agriculture. As he will know, in Herefordshire we have a thriving agricultural sector, and it will be all the more enhanced by broadband. Does he share my surprise that despite its denunciation of the measure, the Labour party is unwilling to state whether it would restore the Agricultural Wages Board?

Mr Paterson: I am grateful to my hon. Friend, who picks up on the earlier question that the shadow Secretary of State singularly failed to answer. On my hon. Friend’s behalf, I pose this question to her: if a Labour Government were to be elected after the next election, would the AWB exist? Will they bring in legislation to re-establish an agricultural wages board?

Mary Creagh: The right hon. Gentleman asks me a direct question. We are two years away from the next election, and I am sure he will be looking forward with great eagerness to our manifesto. We will look at all measures that stop the public sector, the taxpayer, subsidising poverty wages, wherever they occur in our economy.

Mr Paterson: I think my hon. Friend will take that as a no.

Margaret Beckett (Derby South) (Lab) rose

Mr Paterson: I give way to my esteemed predecessor.

Margaret Beckett: I am grateful to the right hon. Gentleman, who has now asserted more than once, as has his predecessor, that the outcome will be to improve the wages and conditions of agricultural workers. In that case, will he tell us where the savings his Department identifies will come from?

Mr Paterson: I am grateful to the right hon. Lady for that question. There are modest administrative savings from the running of this organisation. Labour Members concentrate on the impact assessment, which makes it clear that we have a dynamic market, stating:

“Current wage levels are generally above the AWO minima & are underpinned by the National Minimum Wage.”

On page 3, it says:

“Government intervention is no longer necessary because…it is considered that there is no market failure in the agricultural labour market such that workers require protection which is over and above other statutory terms and conditions and wider employment legislation applying to all workers.”

Let me pick up my thread again. I am confident that we have a thriving sector with demand for labour, which will push wages up, not down. I have touched on the farming regulation task force, which will remove a

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whole range of regulatory burdens from farm businesses. In fact, since 2011, we have removed £13 of compliance costs for every pound added. There will be 12,000 fewer dairy inspections a year.

The abolition of the Agricultural Wages Board will complement and supplement this work. That is why I find the position of the Opposition Front-Bench team so disappointing. Agriculture is now the only sector of the economy to retain a separate statutory wages regime. There is no rationale for treating agriculture any differently from other sectors. More than 900,000 businesses in England and Wales are micro-businesses that employ between one and nine people. The vast majority of those cover sectors other than farming and do not require an independent body to set employment terms and conditions, so there is no reason why it is still necessary for farm businesses.

It was in fact the last Labour Government who set up a single national minimum wage, and whose Minister, the noble Lord Falconer argued that

“the Government”—

namely the Labour Government—

“do not believe that a multitude of regional, sectoral or other minimum wages is the right approach. It is neither sensible nor justifiable intellectually.”—(Official Report, House of Lords, 11 June 1998; Vol. 590, c. 1240.)

Agriculture has moved on significantly from when the current wages board was established 65 years ago under the Attlee Government. It is now a global business and the price of agricultural commodities is determined by international supply and demand. British farmers have to compete not only with each other, but with farmers overseas in order to sell both here and in international markets.

The industry has become highly scientific and mechanised, with developments in plant and animal breeding, improved fertilizers and pesticides, and other scientific and technological advances. Workers in the industry need to be highly skilled and specialised. Modern farm businesses are no longer confined just to agriculture. Around a quarter of farms have now diversified into non-agricultural activities, such as rural tourism, retail and sporting activities. Rural tourism alone is worth £33 billion to the economy.

The agricultural wages order takes no account of the changes within agriculture, but imposes an inflexible structure, which is no longer appropriate for the varied and diverse businesses within the industry. This is an industry whose processes, structures and products would be barely recognisable to those drafting or debating the Agricultural Wages Act 1948.

Many farm businesses are faced with the burden of having to administer both the agricultural minimum wage regime and the national minimum wage regime. Employers have to decide whether or not a worker’s activity is covered by the provisions of the agricultural wages order or by general employment legislation. In some cases, there are grey areas as to whether or not work is covered by the agricultural minimum wage or the national minimum wage. For example, packing of salad and vegetable produce grown on farm would normally be covered by the agricultural minimum wage, whereas packing of produce bought in from other farms is not.

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Abolition of the Agricultural Wages Board will allow agriculture to compete on a level playing field with all other sectors of the economy, with all employees treated equally and all underpinned by the national minimum wage and other statutory provisions. Such an approach was championed by the last Government. Speaking in the Committee stage of the National Minimum Wage Bill, the noble Lord Falconer argued:

“a single national minimum wage is a fundamental principle of the Bill. A single rate is easier to understand and fairer and easier to enforce...I believe that there is a great virtue in simplicity. The simpler we can make the provision, the simpler and more effective the Bill will be. People will know what their rights are. There will be no difficulty in understanding their minimum wage entitlement; and there will be no over-complexity, which might lessen the effect of the Bill.”—(Official Report, House of Lords, 11 June 1998; Vol. 590, c. 1240.)

It is that over-complexity and bureaucracy, as represented by the Agricultural Wages Board, that we are seeking to remove. This will improve the industry’s competitiveness to produce for both domestic and export markets. About 40% of our fresh vegetables and 90% of our fresh fruit are imported, so there are plenty of opportunities for domestic growers to improve their share of the market. Abolition will remove outdated and prescriptive regulations that hamper the ability of industry to offer flexible modern employment packages, such as the payment of annual salaries.

Tom Blenkinsop: Is the Secretary of State saying that enhanced statutory sick pay is an outdated term and condition for farm workers, who have now had it removed due to the abolition of the AWB? Is he really saying that?

Mr Paterson: The hon. Gentleman has misunderstood. All the existing conditions continue.

As I say, abolition will remove outdated and prescriptive regulations that hamper the ability of industry to offer flexible modern employment packages, such as the payment of annual salaries. It will simplify employment legislation in the sector, provide transparency and make it easier to recruit workers. In the absence of the board, farmers and workers will be able to agree employment terms and conditions that suit the requirements of the farming sector and the particular circumstances of individuals.

Roberta Blackman-Woods (City of Durham) (Lab): I wonder whether the Secretary of State will answer a question that was asked many times but never answered when the Public Bodies Act 2011 was in Committee. Did the Government consider modernising the board rather than abolishing it?

Mr Paterson: All sorts of options were considered, but we concluded that the answer was to abolish the board, thus bringing agriculture into line with every other employment sector in the country.

I fully understand the concern about the impact on workers’ wages and terms and conditions as they adjust to the level playing field and move from being set by a system of statutory wage fixing to being set by the market. However, the figures that the hon. Member for Wakefield and Unite have been using have been cherry-picked from the impact assessment and are based on the worst possible scenario, namely a reduction in the wages

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of every single worker in the agricultural sector. Anyone with any understanding of the farming industry, or the market, knows that that simply will not happen.

The abolition of the Agricultural Wages Board will not

“lead to a race to the bottom on wages in rural areas”

or “impoverish rural workers”, as the motion suggests. It will give farmers and workers the same flexibility to agree terms and conditions as is given to employers and workers in all other sectors of the economy, while also securing the same levels of protection. Most workers already have terms and conditions over and above those in the agricultural wages order, and as contracts are already in place, their wages should not be affected. In 2010, the basic pay of full-time permanent workers was 12% above the AWB minimum for their grade, and non-permanent grade 1 and 2 workers were paid 4% above the AWB minimum for their grade. More than two thirds of permanent employees aged over 21 earn above the agricultural wage minimum at grade 1, and more than half do so at grade 6.

The National Farmers Union has described the abolition of the AWB as “a progressive reform”, which is something in which the Labour party used to believe. The “bottom up” takeover of the party by the trade unions seems to be almost complete.

I can reassure the House that agricultural workers who have existing contracts at the time of abolition will continue to retain rights to pay at the appropriate grade level, along with the other terms and conditions in the current agricultural wages order. For the avoidance of any doubt, we intend to provide for that in legislation. Employers will not be able unilaterally to alter terms and conditions for an existing worker without legal consequences. New workers coming into the industry will be protected by the national minimum wage and by wider employment legislation.

The hon. Lady has described the national minimum wage as

“one of the Labour Government’s greatest achievements.”

Why should we not let agricultural workers benefit from that achievement? The national minimum wage provides sufficient protection for 99.5% cent of the work force, including those who operate factory machinery, those who drive heavy vehicles, and those who care for the sick, the elderly or children. There is no reason why it should not also provide sufficient protection for agricultural workers.

Margaret Beckett: The Secretary of State has repeatedly mentioned the national minimum wage and the fact that it was introduced by the last Labour Government. Let me say to him, as the former Secretary of State who introduced the national minimum wage legislation, that it was no accident that when we introduced that legislation—which was, of course, opposed by both the parties who are now in government—we did not abolish the Agricultural Wages Board, precisely because we recognised the particular vulnerabilities of agricultural workers.

Mr Paterson: In October this year, the Government will raise the national minimum wage by 12p an hour to £6.31. [Interruption.] Let me respond to the chunterings

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of the shadow Secretary of State by pointing out that that is 10p above the lowest band rate set by the Agricultural Wages Board. Agricultural workers supplied by a labour provider will continue to have the added protection of the Gangmasters Licensing Authority. We will also make changes to the working time regulations by means of secondary legislation in order fully to align the treatment of agricultural workers with those in other sectors.

Yasmin Qureshi: Will the Secretary of State promise that if the wages and terms and conditions of agricultural workers start to decline after the abolition of the Agricultural Wages Board, he will reinstate the board?

Mr Paterson: I cannot promise anything. It is up to individual employers. What I do know is that employers throughout the country are crying out for good staff. Finding a good cowman is like finding hens’ teeth, and a really skilled driver of a modern piece of equipment worth hundreds of thousands of pounds is someone an employer will really hang on to.

Yasmin Qureshi rose—

Mr Paterson: I have already answered the hon. Lady’s question. She takes a completely black view of the economy, but this is an expanding sector that demands skilled people.

Yasmin Qureshi rose—

Mr Paterson: I am going to press on. Other Members want to speak.

I believe that agriculture needs to encourage new and young workers to come into the industry. Evidence suggests that the skills shortage in agriculture will be greater in the years between now and 2020 than in other sectors of the economy. The agricultural work force is also ageing: 55% are over 45, which, again, is a higher figure than is found in other sectors of the economy. Under the new arrangements, market drivers will ensure that wages remain competitive. Farmers will need to offer competitive employment packages and career opportunities at all levels to recruit and retain workers to meet their business needs.

Of course, we recognise the need to ensure a smooth transition for agricultural workers and employers to the new arrangements. Subject to parliamentary approval for the Enterprise and Regulatory Reform Bill, we intend to invite industry representatives to a meeting to explore whether there is scope for future informal, voluntary industry engagement between employers and workers. DEFRA also supports a review of the agricultural skill levels used in the agricultural wages order, which will contribute to the broader work of the industry AgriSkills Forum. We will ensure that written guidance and information is available for workers and employers to help them understand the changes and what they mean for them.

The abolition of the Agricultural Wages Board will allow the industry to modernise while ensuring that agricultural workers have the same levels of protection as workers in all other sectors of the economy. It will ensure a vibrant and sustainable future for agriculture and will have benefits for those who work in the industry, as well as the wider rural economy.

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The motion seems to look upon the UK agriculture industry as though it is still powered by beer, sandwiches and steam, when in fact it is reliant on cutting-edge technology, machinery and science. The Government wish to equip the agriculture sector for the challenges and opportunities of the 21st century. The Labour party and its union backers do not. We will vote against the motion.

Several hon. Members rose

Madam Deputy Speaker (Dawn Primarolo): Order. I think 12 Members wish to speak in the debate. I am reluctant to set a time limit, so if everybody speaks for about nine or 10 minutes, we will comfortably get them in. If somebody does not comply, they will be using another Member’s time and a time limit will be necessary. I hope that is clear.

3.36 pm

Pat Glass (North West Durham) (Lab): The Agricultural Wages Board is important in constituencies such as mine—rural communities where there is already much poverty, and wages are low. Established by the Attlee Government in 1948, the board has served us for the last 65 years, setting a minimum wage and terms and conditions of employment for workers employed in agriculture. It costs the Government little to administer; I am told that it will probably cost more to abolish than to maintain.

It appears that the decision to abolish the Agricultural Wages Board is not based on financial evidence. It is yet another decision from a Government who spurn concepts such as data and evidence in favour of ideology and dogma. Once again, their adherence to ideology and dogma will have an impact on one of the hardest working and least well paid groups of workers in our rural communities.

The Government were intent on abolishing the Agricultural Wages Board from day one. The original announcement was made in July 2010. The leading party in the coalition Government, whose MPs include members of the wealthiest landowning families in this country, hardly had time to get their well-heeled shoes under their new shiny Government desks when they made their initial announcement. However, before the Government could take the final abolition decision, I understand they were told that they needed to carry out a consultation of interested parties or face a judicial review that they would probably lose on the grounds of insufficient consultation, and that they needed the consent of the delegated Welsh authorities to abolish the board.

Mr Spencer: Given that the hon. Lady knew about the decision in 2010, has there not been adequate time between then and now to consider all the options?

Pat Glass: I am not the Government, so I cannot respond to that question. Had I been the Government, I would have stuck to their rules and standards for consultation. They did not.

What did the Government do? Did they conform to Cabinet Office standards for consultation? Did they carry out an extensive 12-week consultation, avoiding main holiday periods, and making extensive efforts to ensure that all those affected, as well as all those with an interest, had an opportunity to take part? Did they

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carefully consider the outcomes of consultation in their final decision? Did they consult the Welsh Government, whose agreement was needed for abolition? They did none of those things; they came up with an extremely shabby plan to get round them.

The Government redefined the Agricultural Wages Board as a “regulatory reform” to avoid the necessity of even trying to get the co-operation of the Welsh Government, and they cobbled together a four-week consultation that failed to meet their own standards on consultations, issued by the Cabinet Office. Even then, 63% of those who responded to that sham and shameful consultation disagreed with abolition, so they were simply ignored.

Having failed to carry out a proper consultation, the Government decided to attach an amendment to the Enterprise and Regulatory Reform Bill and pushed it through the House without debate. When the Government hold something that is clearly a sham consultation over four weeks instead of 12, ignore their own standards, and then ignore the results of the consultation, is it any surprise that people question, and are suspicious of, any public consultation?

Andrew George (St Ives) (LD): The problem was not just the lack of consultation with the public, but the lack of consultation with the House. Those of us who were engaged in the passage of the Public Bodies Bill expected that there would be a full debate on the abolition of the Agricultural Wages Board in the future but, whether through cock-up or conspiracy, we were denied that opportunity.

Pat Glass: I agree with the hon. Gentleman. This is not a decent way for a Government to behave. Hon. Members start to feel superior about foreign Governments that we consider illegitimate when we see them behaving in this way. We criticise such behaviour in others, and it is not what the House and the country expect from our Government.

Why are the Government so desperate to abolish the Agricultural Wages Board that they will breach their own consultation and deny debate in the House? Is the board excessively expensive? Does it act illegally? Is it so far beyond reform that the only way to deal with it is by abolishing it in this high-handed manner? It is a public body that costs very little, yet decides the terms and conditions of agricultural workers. It sets rates for young workers, including those under 16, who are not covered by the minimum wage. It also sets out maximum deductions for tied housing, which affects up to a third of farm workers.

Why are the Government so determined to use whatever means possible to abolish the board? Their only answer is that it is too bureaucratic for farmers, so implementing decent wages and conditions for workers on top of all that form filling to claim EU farm subsidy payments is clearly too bureaucratic. The Government argue that abolishing the Agricultural Wages Board, and hence the agricultural minimum wage regime, will simplify employment practices and remove an unnecessary regulatory burden. The problem for farmers is therefore nothing whatsoever to do with the predatory practices of the supermarkets, but all about the time it takes to read the annual bulletin from the Agricultural Wages Board.

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The Government’s impact assessment shows clearly that workers’ wages will fall by up to £34.5 million a year over 10 years as a result of abolition. For new contracts, the change in the value of annual leave, if employers implement statutory terms rather than those under the agricultural workers order, will be up to £13 million a year over 10 years. Farmers’ employment costs that represent transfer payments to the Government and others will fall as wages fall, so the Exchequer will also be hit, and that is before we consider the cost to the public purse of paying the working benefits that agricultural workers will need as their wages fall.

The north-east is the region that has the smallest number of people working in agriculture. That is partly because it is the smallest region and partly because it has the highest rate of unemployment in the country. Nevertheless, 3,360 people in the north-east work on the land. The abolition of the board will have a direct impact on 60 people in my constituency. If we force agricultural workers off the land and cannot attract younger workers, just who do Ministers think will fill these jobs? Let me tell them: it will be people from overseas.

According to the Government’s figures, the abolition of the Agricultural Wages Board will take £260 million out of the rural economy over 10 years. It will take money out of rural communities, village shops, pubs and post offices, and away from everyone who relies on those businesses. Rural communities have already lost local buses, and the Government are set on a national funding formula for schools that has no place for a small schools premium, which will result in the closure of rural schools—hon. Members heard it here first. The abolition of the board will lead to lower wages, poorer rural housing and an increase in the number of immigrant workers on the land. The way in which the Government have brought about the abolition does them no credit whatsoever, yet the real tragedy is not the way this discredited Government have acted, but the real impact that their policy will have on rural communities such as mine throughout the country.

3.44 pm

Simon Hart (Carmarthen West and South Pembrokeshire) (Con): I am glad to have the chance to speak in this debate. I have been getting increasingly frustrated, as is often the case, by what seems to be a cack-handed effort on the part of the Opposition to ingratiate themselves with the rural community. In so doing, they have managed to be pretty offensive to every aspect of the rural community.

I can only share some anecdotal thoughts in this debate. Prior to entering Parliament, I spent 28 years working in various parts of that community. I have worked on a farm, I have worked for farms, I have worked for big estates and small estates, I have represented landlords, tenants and farm workers, and I have worked in forestry and country sports. There is almost no aspect of the rural economy and the rural community that I have not come into contact with over quite a long period.

Throughout that whole period, not one single person ever said to me, “Of course, what we really need to do is preserve the Agricultural Wages Board.” In the run-up

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to the last election, I asked a group of farmers and farm workers in my constituency if there was a single thing that the Government could do: if there was one thing only on the Christmas list, what would it be? Without hesitation, the answer was, “Get rid of the Agricultural Wages Board. It has outlived its usefulness.”

Nia Griffith: Can the hon. Gentleman tell us what members of the Farmers Union of Wales told him in response to that question?

Simon Hart: I can. The FUW members supported the abolition of the Agricultural Wages Board. The FUW as a union made rather a different representation. I speak on behalf of members in my own constituency. Of course I cannot speak for the union based in a different area.

One of the things that I find startling is that the shadow Secretary of State, the hon. Member for Wakefield (Mary Creagh), rather than the whole party that she represents, seemed to find it impossible to believe that an owner, a manager, a farm worker and a forester can all work harmoniously together because they have a common shared love of food production or a common shared love of their community and want to do the right thing by their farmer. That seems to be a concept that the Opposition cannot absorb because they have a union-fuelled view that it is some kind of Dickensian existence out there. For those of us for whom it is our daily life—it is where I shall be by the end of tomorrow—it is not like that. It may be like that in Wakefield, but it ain’t like that in Pembrokeshire.

I am particularly sad that the shadow Minister, the hon. Member for Ogmore (Huw Irranca-Davies), is not in his place. He seems to be dancing to the union tune on the subject. I know Ogmore in the way that he knows Pembrokeshire, and we both know, as I said, that this is not an issue for agricultural workers in either of our constituencies. I am surprised that he has not stood up to the pressure from the sponsors of the debate and spoken on behalf of the agricultural workers, with whom we are all familiar and for whom we have great respect in west Wales.

Tim Farron: I deal with about 9,000 pieces of casework a year and I have not had a single farm worker write to me on the issue, which is surprising, but not when we think that the overwhelming majority of livestock farmers and dairy farmers in places like ours do not employ anybody, because they themselves are so hard up and are probably existing on significantly less then the minimum wage, considering what they earn and the hours that they work. We should be concentrating on how those farmers can get a fair deal for feeding the rest of us.

Simon Hart: The hon. Gentleman speaks with great knowledge because he represents an area suffering those hardships.

I shall not speak for long. I find it bizarre that last night when my hon. Friend the Member for Montgomeryshire (Glyn Davies) was fronting a debate on the hardship facing upland farmers, I was reprimanded by Mr Speaker for mentioning cattle when I should have been speaking about sheep. Never mind. Here we are debating something which is not relevant to the hardships facing the agricultural industry, certainly in

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my area, when we should be devoting our energy to other matters. I am surprised that the shadow Secretary of State was not there to hear the debate, which was important and involved her party as much as it involved ours. I am surprised that we are engaged in the present debate when we know that the abolition of the Agricultural Wages Board will not leave agricultural workers, certainly in my area, exposed or vulnerable.

Glyn Davies: Does my hon. Friend agree that if we believed that abolishing the Agricultural Wages Board would lead to some decrease in the wage agricultural workers are paid, we would not be in favour of it? It will not make any difference at all. The Opposition are keen to emphasise that it will, and they are wrong because they do not understand the countryside. They are driven by a completely different motive.

Simon Hart: I think that my hon. Friend is wrong on only one point: he says that the Labour party does not understand, but I think that it understands only too well. It is caught in a difficult position because its union sponsors are saying one thing and its constituents in certain areas are saying another.

Yasmin Qureshi: May I just confirm that, as a former barrister, I neither belong to a union, nor am I financed by a union? I am concerned about the working conditions and pay of working people. I will ask the hon. Gentleman the same question I asked the Secretary of State earlier: if after the abolition of the Agricultural Wages Board we find that workers’ wages, accommodation and so on deteriorate, will he reintroduce it?

Simon Hart: It might surprise the hon. Lady to learn that I am not a member of the Government and so I am not really in a position to answer that. Of course, I sat through 13 years of Labour disdain for rural Britain, and that question was asked on many occasions. However, I do not want to be reprimanded by the Chair twice in two days for getting off the topic by talking about union sponsorship, so if she will forgive me—

Mary Creagh: The hon. Gentleman said that the motion is somehow sponsored by unions. It is nothing of the sort. This debate is about a point of principle—[Interruption.] I am sorry that Government Members are laughing. This debate is about whether people who work in remote, isolated areas, in unseasonable conditions and in one of our most dangerous industries deserve to be paid 2p an hour above the national minimum wage and to have some sort of protection against eviction from their homes.

Simon Hart: The hon. Lady will forgive me if I note that pretty much all the electronic traffic we have seen on this debate has been generated by her party’s biggest sponsor. Call me a cynic, but I am not going to accept her comments.

I believe that workers in my area are protected by the minimum wage, employment legislation and a raft of accommodation legislation applying to tied cottages and the like. I do not recognise the image projected by the Labour party of farm workers in tied cottages, and have 28 years’ experience in the industry. I agreed with the Secretary of State when he referred to the noble

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Lord Falconer’s comment that regional and sectoral pay was a thing of the past. I find it odd that we seem to be disagreeing with that now.

The final abolition of the AWB raises two questions, both of which have been raised before, but since neither has been answered I will ask them again. If the abolition of the AWB exposes young workers, foreign workers or people who are vulnerable, either through poverty or in some other way, in the way the shadow Secretary of State has set out—I know all about the unique aspects of agricultural work—why is it that no other sector in the UK from which a wages board has been removed is suffering from those consequences? Perhaps she could explain—we asked this question earlier but did not get an explanation—why those dangers are apparently unique to agriculture. I will ask her a third time, more in hope than in expectation: would Labour reinstate the AWB if it was lucky enough to form a Government in 2015? It is no good her saying that they have a couple years to come clean about their proposals. I think that this is absolutely the right forum and the right time to make clear the policy as it applies to the AWB of a party that might—I hope not—form a future Government.

3.53 pm

Mr David Hanson (Delyn) (Lab): I begin by telling the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) that it is not just Conservative Members who represent rural areas; many of us on the Opposition Benches represent large rural communities, know them, understand them, live in them and want to represent them in the House today.

In this week of praise for great Prime Ministers of the 20th century, I would like to add my words of praise for Clement Attlee for introducing the original legislation in 1948. I do so not to look back more than 60 years to the conditions in 1948, but to put it on the record that these things matter today for my constituents and those of other Opposition Members.

Mr Russell Brown: I represent a constituency north of the border, where this discussion has no real relevance or impact, but farm worker constituents who have contacted me are in solidarity with their colleagues in England and Wales and say that what is going on is absolutely wrong. I appreciate that the hon. Member for Westmorland and Lonsdale (Tim Farron) says that he has not been contacted, but I have. Perhaps his constituents have not contacted him because they have no trust in what he is doing.

Mr Hanson: This issue certainly matters to people across the whole of the United Kingdom because, even though the AWB is for England and Wales, its abolition will have an impact throughout the UK.

In my constituency, 235 businesses are involved in agriculture and farming, and more than 11% of my constituents work in the agricultural sector. The market town of Mold in my constituency depends not only on the cattle and agriculture markets to bring people in, but on the wages of people who work in agriculture to maintain its shops, business and rural community.

John Glen (Salisbury) (Con): I have a great deal of respect for the right hon. Gentleman, but the National Farmers Union briefing states: