Rural economy will lose millions if wages board goes, says Labour

Opposition MPs are calling on the coalition to “think again” over proposals to abolish the Agricultural Wages Board (AWB), set up more than 60 years ago to set a minimum wage for farmhands and other low-paid workers in rural areas.

The National Farmers’ Union wants the board abolished as quickly as possible, insisting salaries should be “market driven” and describing the board’s existence as a “relic”.

The Government says it is “modernising the industry” by cutting red tape and allowing the market to take its course.

But speaking in a Westminster Hall debate, Shadow Farming Minister Huw Iranca-Davies said the ongoing economic crisis has hit the countryside hard, and the Government should now think again.

“In the 18 months or so since the Government announced their intention to abolish the AWB, a lot has changed,” he said. “The economy has gone into a double dip recession. The cost of living has risen dramatically. Food and fuel prices have risen well above inflation.

“Overall unemployment is up, and youth unemployment is chillingly high at more than a million.

“Defra’s own figures suggest the abolition of the AWB will take £9m a year out of the rural high street through holiday and sick pay alone – that will be £9m coming out of the rural economy. I ask the Minister to think again.”

The plan to abolish the AWB was announced by the coalition as part of its much-vaunted “bonfire of the quangos” in 2010.

The coalition agreement contained a specific promise to “reduce the regulatory burden on farmers”.

However, two years later, no timetable for its abolition has been announced.

Last week the board completed its annual negotiations as normal, agreeing the minimum wage for farmworkers for the coming year.

Its future has split the farming community, with many farmers believing it will relieve them of unnecessary bureaucracy, but with farmworkers and farming support charities fearing it will hit the low-paid hard and drive down wages across the countryside.

Wakefield MP and Labour’s Shadow Environment Secretary Mary Creagh warned rural workers are facing a “race to the bottom” in an already difficult climate.

“The Government’s reckless decision to abolish the Agricultural Wages Board will lead to a race to the bottom for some of our lowest paid workers,” she said.

“The Tory-led Government are trying to turn back the clock on rural pay.”

But Farming Minister Jim Paice said the board is out of date and unnecessary, with most farm workers now earning more than the most basic rate it sets.

“To encourage employment rather than subsidise it, we need to make it easier for farm businesses to take on workers,” the Tory MP said.

“We are talking about modernising an industry, and the fact that only 20 per cent of the workforce are on the basic rate makes the case for not needing (the AWB).

“The reality is that the vast majority of people are (earning) above the basic rate, and I emphasise that no one already employed in the industry can lose out, because they are protected by their current contracts.”

Mr Paice told MPs there used to be “a plethora of such wages boards and councils” which had been “largely set up by Labour Governments” over many years, but that in 13 years of the previous Labour administration “not a single one of them was brought back.”

“If it is so important workers are covered by those arrangements, why did Labour not bring back any of them back?” Mr Paice asked.

“The Government are determined to abolish the Agricultural Wages Board... But there are negotiations and discussions to go through.”