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Public Bodies Bill [HL]

My Lords, this is a much more substantive and important amendment—not that the last one was not important, but this one is much more so. I shall speak also to Amendment 21, which is grouped with and linked to it. Amendment 20 is about the agricultural wages board, whose purpose is to set the scale of agricultural minimum wages and related minimum terms and conditions of employment. It is an independent statutory body established by the Agricultural Wages Act 1948, and it goes back in its lineage as far as 1924, when there were far more agricultural labourers than there are now. The question posed by the amendment is: are the functions of the AWB still needed, in whole or in part; and if they are still needed, in some way at least, is the best way to carry them out through the continued existence of the AWB or in some other way? There has been pressure for its abolition. The NFU has called for it, although not all farmers who employ agricultural workers would welcome that because it provides them with a clear framework of what they should be paying without having to negotiate. Its abolition was promised in the Conservative manifesto at the last election. It was not in the Liberal Democrat manifesto and was not in the coalition agreement. It is opposed by the relevant trade union, Unite. That information sets the amendment in its political context, but, as we know, the manifestos on which the last election were fought are probably redundant following the formation of the new coalition Government. Liberal Democrat spokespersons, including my honourable friend Andrew George in the House of Commons, have expressed concern at the abolition and the potential removal of existing protections. The proposal to abolish the body was announced by the Secretary of State, Caroline Spelman, on 22 July, but it was done so, to the best of my knowledge, without any prior consultation. Any consultation would still have to take place. The agricultural wages board consists of 21 people, comprising eight representatives of the employers, nominated by the NFU; eight representatives of the workers, nominated by Unite; and five independent members, including the chairman, appointed by the Secretary of State and the Welsh Assembly Government. I shall not speak much about the regional agricultural wages committees, which are the subject of the second amendment in the group, but they are linked to the AWB and basically set up by the same legislation. What does the AWB do? It meets each year to make an Agricultural Wages (England and Wales) Order, which sets the agricultural minimum wage and other terms and conditions from 1 October each year. It may meet again to make amendments during the year. The agricultural minimum wage must not be lower than the national minimum wage. There are currently six categories determined according to responsibilities and qualifications. It starts with grade 1, which is a few pence above the national minimum wage and is basically for unskilled, temporary and seasonal workers. At the moment it is £5.95 an hour, £232.05 a week. The other five grades are higher than that, as you might expect. Grade 2, for example, is the standard worker grade and it requires some minimum basic qualifications or certain responsibilities such as working with animals or driving a tractor, and that is £6.58 an hour. The grades progress to grade 5, the supervisory grade, at £8.23 an hour and grade 6, the highest, which is the farm management grade. The recipient of this grade may have responsibility for a whole farm and for employing and disciplining staff, so it is not a trivial job. The minimum rate for that is £8.88 an hour at the moment, £346.32 a week. These are not huge salaries and wages by any stretch of the imagination, but they do provide a guarantee for people working within the farm industry. It is generally recognised that reform and modernisation are needed, and the board itself is keen to change the structure of the arrangements to a degree, and to change the consultation arrangements and procedures. For example, there is clearly a need now for the minimum wage in each category to be stated in annual, rather than in hourly or weekly amounts, and there is clearly a possibility that the whole system could be simplified and that some of the detail could be removed from it. But this still applies to 154,000 workers. It is not something trivial that can be discounted on the grounds that it is no longer needed because there is hardly anybody involved. There are far fewer than there used to be, but nevertheless, there are still 154,000 workers—that is 154,000 families. It is a lot of people. What will happen if the agricultural wages board is abolished? Will there be a new national system set up? Will there be a bargaining system set up within the industry—an unofficial system, as it were—outside the purview of statutes and government, in which employers and representatives of agricultural workers negotiate? Or to what extent will it be left to individual farmers to negotiate with their own workers or just impose the terms and conditions and wages that they want to impose above the national minimum wage? It has been said that the national minimum wage now makes the AWB unnecessary, but quite clearly that is an argument that would apply only to the very basic level of grade 1, which only applies to a minority—I think it is about 20 per cent of workers. The cost of the organisation is reported as £195,000, together with servicing costs from Defra itself of £77,000 which totals £272,000. This is not insignificant even nowadays, but again, it is not a huge figure. Two questions arise. First, if it is abolished, in the absence of protection, what is to stop wages and terms and conditions of employment being squeezed, being forced down due to the pressure that we all know exists on farm gate prices, particularly from supermarkets and from food processors? At the moment, many farmers are adversely affected by market conditions and by their inability to match the monopoly powers of the people that they sell their produce to. However, they cannot compensate for that by reducing the wages that they pay below the AWB rates—the minimum agricultural wage rates. If they were able to do that, it seems highly likely that it would happen in a significant number of cases and wage rates would go down. Unite believes that if that happened, industrial action would be inevitable. I cannot comment on that and have no idea whether it is true. But I believe that if agricultural wages were to fall in the present circumstances, that in itself would be wrong. The second question is: what is the best way forward? If savings can be made and the system can be streamlined to an extent, I do not think that any of us would disagree with that. I am certainly not going to go to the wall to defend the existence of a particular quango—and I think that this probably is a quango. The AWB as it stands may or may not be the best way of doing it. I am not asking the Government to stand and have an argument today and in future weeks over the existence of a particular body; I am asking them to look for a better way forward without prejudicing existing protection for what is still a relatively vulnerable group of workers. I beg to move.