The Government are aware of the important and growing role played by private renting and residential leasehold. This is true particularly in London and the south-east, where the pressures of growth in housing demand and the challenges of increasing supply are intense. There are now around 3.8 million privately rented and 3 million leasehold properties across England, with the majority of the latter being flats. Obviously, not everyone living in those millions of properties is happy with their property in every respect, whether
because of the costs they face in buying or renting it and then living in it, its condition or the quality of its management. Many of them are content, of course, and find that on balance private renting or leasehold meets their needs.
We have heard a number of contributions today, and previously in Grand Committee, describing unsatisfactory practices by letting agents in the private rented sector. This was highlighted today, notably by the noble Baronesses, Lady Howe and Lady Hayter, among others. Indeed, this sector has had a substantial amount of attention recently in the other place, in the media and in recent reports from Which? magazine, the Office of Fair Trading, the Property Ombudsman and others. The Government have been listening carefully to the views expressed on this subject, and recognise that there are issues. I am pleased that the noble Baroness, Lady Hayter, acknowledged this and highlighted it today.
While there are many agents who perform a good and honest service for their clients and serve an important role in the private rental market, there are too many agents who are not acting responsibly. My honourable friend in the other place, Mark Prisk, said in a debate in Westminster Hall last week that the Government consider many of the problems to be a consequence of years of undersupply in the housing market. The imbalance between supply and demand has put rents, the quality of accommodation and standards of service under pressure in some areas of the country. That has had consequences for the way lettings agents, as well as landlords, operate.
Expanding the supply of rented homes is therefore at the heart of the Government’s strategy. We want a bigger and better private rented sector. That is why we established a debt guarantee scheme of up to £10 billion to encourage institutional investment and, alongside that, a £200 million Build to Rent fund. Boosting supply is not just about financial support, however. It also means avoiding excessive regulation that can deter investment and stifle supply. Excessive regulation, however well intentioned, can result in precisely the outcomes we want to avoid. That is why we did not proceed with the proposals of the previous Government, such as a national register of landlords and the full statutory regulation of letting agents.
Nonetheless, there is a role for regulation in preserving standards. We have heard a number of people express the view that the lettings market is totally unregulated. That is not in fact the case. There is a substantial body of consumer protection legislation that covers letting agents. The Consumer Protection from Unfair Trading Regulations 2008 protect tenants from letting agents who mislead or engage in aggressive business practices. Similarly, the Unfair Terms in Consumer Contracts Regulations 1999 protect tenants from unfair conditions, such as unfair restrictions on the ways in which they can use a property. We know that trading standards bodies use these powers to prosecute lettings agents. Some very substantial fines, and indeed prison sentences, have been handed down to agents who engage in serious misdemeanours, such as misrepresenting their membership of professional bodies, or indeed misappropriating clients’ money.
However, my honourable friend in the other place, Mark Prisk, acknowledged that there is a problem with enforcement, and that action is needed on the less serious cases as well as the most serious ones. He stated his determination in Westminster Hall only last week to encourage national trading standards bodies to ensure that they tackle these issues across the marketplace. I am pleased to reassure my noble friend Lord Jenkin that recently my honourable friend indeed stated his case very clearly. I strongly support making better use of existing regulations before we create new ones.
The noble Baroness, Lady Howe, raised the question of bad letting agents harming the reputation of good ones, which is an extremely fair point. That is why we are clear in government guidance to landlords and tenants that they should ask which bodies letting agents belong to. The more that landlords and tenants ask these questions, the more pressure there will be on all letting agents to join such schemes.
The Office of Fair Trading has just produced its report on the lettings sector. It makes some suggestions for regulatory changes, but it makes other, non-regulatory proposals, too. The Government will study the report carefully, alongside the evidence to the Communities and Local Government Select Committee’s inquiry on the private rented sector. Evidence and recommendations are being presented by bodies with extensive expertise. We owe it to them to study the committee’s recommendations carefully.
The noble Baroness, Lady Hayter, referred to the fact that the OFT called for redress and enforcement. The OFT report on letting agents recommends that the Government should consider whether it would be beneficial to require agents to sign up to a code of practice or to join a redress scheme. The Government will consider the OFT’s recommendations carefully, but we need to see the recommendation to consider mandatory redress alongside other elements of the OFT’s recommendations, some of which relate to making better use of existing laws and non-regulatory mechanisms.
Turning to residential leasehold, I believe that we have to be realistic and to recognise that living in a property where more than one party has significant financial and other interests, and where common parts of a property need to be maintained, is bound on occasion to lead to concerns and disputes. Although complaints procedures and a range of mediation and ombudsman services are already available—and, where those options fail, a number of legal options that can be pursued—we recognise that not all leaseholders are happy. The noble Baroness, Lady Hayter, asked why there is no client money protection in residential leasehold, but I reassure her—as she may know—that statutory protection already exists for leasehold service charges, which the law deems to be held in trust.
Our postbags, and those of Members of the other place, sometimes contain letters from leaseholders whose freeholder—or, more often, whose freeholder’s managing agent—is not providing the service they deserve or expect, or is sending increasingly unaffordable bills. We also hear from elderly and sometimes vulnerable people whose freeholder, or their agent, is failing to
follow good practice and, in some cases, may even be breaking the law. Where relationships over the management of people’s homes break down and become adversarial, it can lead to real worry and distress and can in some cases, as we know, culminate in cases before tribunals and the courts.
The Government are aware of concerns among some leaseholders about a range of issues such as management standards and consultation, but remain unconvinced of the case for increasing government regulation at this time. Rather than create new leasehold regulation, the Government want, in the main, to see existing rights and protections on the statute book used to best effect. We therefore welcome current moves towards greater self-regulation by professionals in the sector and are interested in ideas for giving these more support and encouragement. The Government are aware that there are failings and even abuses in some parts of both sectors and will continue to address them. We have carefully considered the amendment of the noble Baroness, Lady Hayter, and her arguments for regulating letting and management in the private rented and leasehold sectors, and I can assure her that the Government take her concerns very seriously.
The amendment would amend the Estate Agents Act 1979, extending the definition of “estate agency work” to include those involved in letting and managing agency work. This is intended, as we understand it, to give the Office of Fair Trading powers to prevent letting and management agents conducting business and to require agents to have in place redress schemes, client money protection and to meet the other requirements of the Act. While we acknowledge that there are issues that need addressing, we do not believe that the answer is to regulate letting and managing agents in the way that the noble Baroness proposes. The regulatory burden could be substantial, adding to costs borne by landlords and, in turn, tenants.
In his report for the Property Ombudsman, Professor Michael Ball set out a range of costs that this would entail. The noble Baroness, Lady Hayter, and my noble friend Lord Sharkey both brought up the issue of the cost of compliance with a mandatory scheme, and both stated that there would be a debit of only some £800. Indeed, there are costs to bear in mind, including of extra staffing and other administrative work, to ensure that the business is run according to the relevant codes of practice. Our own figures suggest that these are on top of costs of perhaps £170 per office per year for redress, £300 for client money protection and £300 or more for professional indemnity insurance.
6.15 pm
Of course, many letting and managing agents already sign up to similar schemes, and government guidance encourages landlords and tenants to ask which bodies an agent belongs to. However, the approaches that are right for many agents are not necessarily appropriate for all. That is why the Government are in favour of nimbler and more tailored self-regulatory approaches wherever possible. For example, while client money protection is not mandatory for letting agents who are not members of professional bodies, the Government have endorsed the SAFE— safe agent fully endorsed—scheme, whose easy-to-recognise logo makes it easier
for consumers to understand whether the agent offers client money protection. Legislation already sets down requirements on how service charge money in leasehold must be held.
Furthermore, it is not clear what the effect of the noble Baroness’s amendment would be. In particular, it is not clear that it would succeed in bringing letting and managing agents into the scope of redress mechanisms within the Act. This is because the definition of a complaint within the Act relates to selling and buying “an interest in land”, not letting and renting. On the other hand, because the amendment covers management activities in connection with land, it could, possibly unintentionally, bring some other activities such as property development and perhaps even agricultural land management into the scope of the Act, resulting in a far broader range of industries having to comply with the terms of the Act. That would not be right. Therefore, while I understand why the noble Baroness might like to see letting agents in the private rented sector, and managing agents in the leasehold sector, brought into the scope of the Estate Agents Act, in particular in terms of access to redress, I do not believe that this amendment is the best way to achieve that goal.
I very much appreciate the input and acknowledge the expertise of the noble Baroness, Lady Hayter, in raising these important issues, and I was pleased to be able to consult her on these matters after our debate in Grand Committee.
Lord Jenkin of Roding: Before my noble friend goes on to discuss auctions, will he give some indication of how long it will take for the Government to study the substantial report to which he referred, and how long he thinks it will take for the DCLG Select Committee at the other end to produce its report? I understand both his arguments—there is a substantial report from the OFT and there is also that Select Committee report—but we really do not want to have to wait for ever.
Viscount Younger of Leckie: My noble friend makes a very good point. I can reassure him that the Select Committee report is due out very soon. It is likely to be in May; it may even be as early as April. That is not a guarantee, but I hope that it gives a helpful indication as to what the timing might be.
None the less, I recognise that the issue of a lack of redress is a serious one, and I know that my honourable friend in the other place, the Housing Minister Mark Prisk, considers this a serious issue, too, and is giving it the most serious consideration. We will reflect very carefully on this and other recent debates, and I am sure that the Housing Minister will keep in touch with Peers who have spoken today.
I shall turn as fast as I can to Amendment 82. I thank the noble Lord, Lord Campbell-Savours, for having brought this issue to my attention and to that of the House. I have considered carefully the amendment and the arguments for introducing it. The Government are of course concerned to hear that buyers may be experiencing difficulties when trying to purchase a property at auction, especially if it involves first-time buyers. I am pleased to say that there is already
legislation in place designed to address just this sort of unfair practice. Therefore, new legislation will not change the position regarding consumer protection in such matters. I will explain why.
Under the Consumer Protection from Unfair Trading Regulations 2008, auctioneers, like traders in all sectors of the economy, are required in their dealings with consumers to treat them fairly and not mislead them. Under the CPRs, there are also a number of business practices that are considered unfair in all circumstances and are prohibited. When marketing a property, it is prohibited to use bait tactics such as luring bidders to auctions using pricing techniques, which the noble Lord raised as an example. OFT guidance on the CPRs published last September, of which the industry should be fully aware, gives the specific example of guide prices not being distorted to attract potential buyers.
Where traders treat consumers unfairly, they may face criminal or civil enforcement action. Enforcement of the CPRs is by the OFT and local authority trading standards services. We are, of course, in the process of better equipping trading standards to take greater responsibility for consumer law enforcement, and will be transferring central government funding for national leadership and co-ordination of enforcement activity from the OFT to the National Trading Standards Board. In addition, the new Competition and Markets Authority will have consumer enforcement powers to address business practices that distort competition or impact on consumer choice in otherwise competitive markets.
Furthermore, I understand that the industry encourages fair practice in this area and offers guidance and training. For example, the Royal Institution of Chartered Surveyors provides best practice guidance for auctioneers selling real estate. Such guidance addresses price guides and states that these guides must not be misleading, advising that a price guide that is clearly below the figure that the seller will accept is misleading. As best practice it also says that auctioneers should clearly indicate in the catalogue that price guides may be subject to amendment during the period leading up to the day and time of the auction sale.
In the light of the consumer protection legislation already in place, and as we have not seen any evidence on which a change of legislation could be justified, we do not feel the necessity to change legislation in this area. The noble Lord may wish to write to the OFT, providing evidence of the experiences and findings in this matter that are causing him concern. I hope that he is reassured by my answer and that he will therefore not press his amendment. I note that this is a new issue that was not raised in Committee and I acknowledge his apology. However, I believe that he raised some interesting points that we will keep in our sights. I also ask the noble Baroness, Lady Hayter, to withdraw her amendment.
Baroness Hayter of Kentish Town: My Lords, this amendment simply asks that letting agents should have to sign up to a redress scheme. We have checked it with the lawyers, and it does not apply to development land or anything else. If that was the case, and if the noble Lord had said that he accepted the need for
redress, that it was just the wording that needed changing and that it was coming back at Third Reading, I would be happy to withdraw. Sadly, that is not what the Government have said.
The unfair trading regulations do not work. You cannot go to trading standards; it does not give redress. The Government have given no answers other than self-regulation or, “Wait for another committee”. Consumers want this; Mark Prisk wanted this in 2007; Lib Dem policy is in favour; landlords and tenants want it; the OFT wants it; and so does the industry, despite the costs. I thank noble Lords who have all spoken in support—there has been nothing but support from all around this House. I believe that, in addition to that list, the House will support the amendment. I beg leave to test the opinion of the House.
6.23 pm
Contents 211; Not-Contents 206.
CONTENTS
Adams of Craigielea, B.
Adebowale, L.
Adonis, L.
Ahmed, L.
Allenby of Megiddo, V.
Anderson of Swansea, L.
Andrews, B.
Armstrong of Hill Top, B.
Bach, L.
Bassam of Brighton, L. [Teller]
Berkeley, L.
Bew, L.
Bhatia, L.
Bilston, L.
Blackstone, B.
Borrie, L.
Bradley, L.
Bragg, L.
Brennan, L.
Brinton, B.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Brown of Eaton-under-Heywood, L.
Browne of Belmont, L.
Browne of Ladyton, L.
Campbell-Savours, L.
Chandos, V.
Christopher, L.
Clancarty, E.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Collins of Highbury, L.
Corston, B.
Coussins, B.
Craigavon, V.
Crawley, B.
Cunningham of Felling, L.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Dean of Thornton-le-Fylde, B.
Deech, B.
Donaghy, B.
Donoughue, L.
Drake, B.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Ford, B.
Foulkes of Cumnock, L.
Freyberg, L.
Gale, B.
Gardner of Parkes, B.
Gibson of Market Rasen, B.
Giddens, L.
Golding, B.
Gould of Potternewton, B.
Grantchester, L.
Greaves, L.
Greengross, B.
Grenfell, L.
Grocott, L.
Hanworth, V.
Hardie, L.
Harris of Haringey, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hayman, B.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hereford, Bp.
Hilton of Eggardon, B.
Hollick, L.
Hollis of Heigham, B.
Howarth of Newport, L.
Howe of Idlicote, B.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Joffe, L.
Jones, L.
Jones of Whitchurch, B.
Judd, L.
Kennedy of Southwark, L.
Kennedy of The Shaws, B.
Kerr of Kinlochard, L.
King of Bow, B.
Kingsmill, B.
Kinnock, L.
Kinnock of Holyhead, B.
Kirkhill, L.
Laming, L.
Lea of Crondall, L.
Leitch, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Lister of Burtersett, B.
Low of Dalston, L.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mallalieu, B.
Mandelson, L.
Mar, C.
Martin of Springburn, L.
Masham of Ilton, B.
Massey of Darwen, B.
Maxton, L.
Meacher, B.
Mitchell, L.
Monks, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Noon, L.
Nye, B.
O'Loan, B.
O'Neill of Clackmannan, L.
Pannick, L.
Parekh, L.
Patel of Blackburn, L.
Patel of Bradford, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Prashar, B.
Prescott, L.
Prosser, B.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Rea, L.
Reid of Cardowan, L.
Rendell of Babergh, B.
Richard, L.
Roberts of Llandudno, L.
Rooker, L.
Rosser, L.
Rowe-Beddoe, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Scotland of Asthal, B.
Sherlock, B.
Shipley, L.
Simon, V.
Smith of Basildon, B.
Smith of Finsbury, L.
Snape, L.
Soley, L.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Strasburger, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Tonge, B.
Tope, L.
Touhig, L.
Triesman, L.
Tunnicliffe, L. [Teller]
Turnberg, L.
Turner of Camden, B.
Wall of New Barnet, B.
Walpole, L.
Warner, L.
Warnock, B.
Watson of Invergowrie, L.
West of Spithead, L.
Wheeler, B.
Whitaker, B.
Whitty, L.
Wigley, L.
Wilkins, B.
Williams of Elvel, L.
Wills, L.
Winston, L.
Wood of Anfield, L.
Woolmer of Leeds, L.
Worthington, B.
Young of Hornsey, B.
Young of Norwood Green, L.
Young of Old Scone, B.
NOT CONTENTS
Addington, L.
Ahmad of Wimbledon, L.
Alderdice, L.
Allan of Hallam, L.
Anelay of St Johns, B. [Teller]
Ashdown of Norton-sub-Hamdon, L.
Ashton of Hyde, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Ballyedmond, L.
Barker, B.
Bates, L.
Bell, L.
Benjamin, B.
Berridge, B.
Black of Brentwood, L.
Blencathra, L.
Bonham-Carter of Yarnbury, B.
Bottomley of Nettlestone, B.
Bowness, L.
Brabazon of Tara, L.
Bradshaw, L.
Brittan of Spennithorne, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browning, B.
Burnett, L.
Buscombe, B.
Byford, B.
Cameron of Dillington, L.
Cathcart, E.
Cavendish of Furness, L.
Chadlington, L.
Chidgey, L.
Cope of Berkeley, L.
Cotter, L.
Courtown, E.
Crickhowell, L.
Curry of Kirkharle, L.
Dannatt, L.
De Mauley, L.
Deighton, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
Dobbs, L.
Doocey, B.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Edmiston, L.
Elton, L.
Empey, L.
Erroll, E.
Falkner of Margravine, B.
Faulks, L.
Feldman of Elstree, L.
Fellowes of West Stafford, L.
Fink, L.
Flight, L.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Framlingham, L.
Freeman, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Geddes, L.
German, L.
Glasgow, E.
Glentoran, L.
Gold, L.
Goodhart, L.
Goodlad, L.
Grade of Yarmouth, L.
Greenway, L.
Griffiths of Fforestfach, L.
Hamilton of Epsom, L.
Hamwee, B.
Hanham, B.
Harris of Richmond, B.
Henley, L.
Heyhoe Flint, B.
Hill of Oareford, L.
Hodgson of Astley Abbotts, L.
Hooper, B.
Howard of Lympne, L.
Howard of Rising, L.
Howe, E.
Howe of Aberavon, L.
Howell of Guildford, L.
Hunt of Wirral, L.
Hussain, L.
Inglewood, L.
James of Blackheath, L.
Jay of Ewelme, L.
Jenkin of Roding, L.
Jolly, B.
Jones of Cheltenham, L.
Jopling, L.
Kakkar, L.
Kilclooney, L.
King of Bridgwater, L.
Kirkham, L.
Kirkwood of Kirkhope, L.
Knight of Collingtree, B.
Kramer, B.
Laird, L.
Lang of Monkton, L.
Lawson of Blaby, L.
Lexden, L.
Lingfield, L.
Liverpool, E.
Loomba, L.
Lothian, M.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
McNally, L.
Maddock, B.
Maginnis of Drumglass, L.
Mancroft, L.
Marks of Henley-on-Thames, L.
Marland, L.
Marlesford, L.
Mayhew of Twysden, L.
Methuen, L.
Montrose, D.
Morris of Bolton, B.
Naseby, L.
Nash, L.
Neville-Jones, B.
Newby, L. [Teller]
Newlove, B.
Northbrook, L.
Northover, B.
Norton of Louth, L.
Oppenheim-Barnes, B.
Palmer of Childs Hill, L.
Parminter, B.
Patten, L.
Perry of Southwark, B.
Phillips of Sudbury, L.
Popat, L.
Randerson, B.
Rawlings, B.
Razzall, L.
Redesdale, L.
Ribeiro, L.
Risby, L.
Rodgers of Quarry Bank, L.
Rogan, L.
Ryder of Wensum, L.
Sanderson of Bowden, L.
Seccombe, B.
Selkirk of Douglas, L.
Selsdon, L.
Shackleton of Belgravia, B.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Shrewsbury, E.
Shutt of Greetland, L.
Skelmersdale, L.
Skidelsky, L.
Smith of Clifton, L.
Spicer, L.
Stedman-Scott, B.
Steel of Aikwood, L.
Stephen, L.
Stewartby, L.
Stirrup, L.
Stoneham of Droxford, L.
Stowell of Beeston, B.
Strathclyde, L.
Taverne, L.
Taylor of Holbeach, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Winchester, B.
Tordoff, L.
Trefgarne, L.
Trenchard, V.
Trimble, L.
True, L.
Tugendhat, L.
Tyler, L.
Ullswater, V.
Verma, B.
Wakeham, L.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Wasserman, L.
Wei, L.
Wheatcroft, B.
Wilcox, B.
Wolfson of Aspley Guise, L.
Younger of Leckie, V.
6.34 pm
81B: Before Clause 63, insert the following new Clause—
“Leasehold Valuation Tribunals: costs
At the end of paragraph 10 (costs) of Schedule 12 to the Commonhold and Leasehold Reform Act 2002 (leasehold valuation tribunals: procedure) insert—
“(5) A tenant of residential property shall not be required to pay costs incurred by a landlord or any other party with an interest in that property in connection with proceedings before a leasehold valuation tribunal except when their lease specifically permits such costs to be included as a legitimate management charge.””
Baroness Gardner of Parkes: My Lords, I shall speak to the group of amendments in my name, so that we do not have to keep coming back on different items. I have been asked to put them all together. I will start with Amendment 81F because that is the most important of them all. That has come about because of the court decision recently in the Phillips and Goddard v Francis case that any amount of work to be done per flat worth more than £250 in a year would require consultation. If, for example, it was a block of 10 flats and you had spent £2,500, after that, for everything, even if it was for £1, £10, or whatever, you would have to implement a consultation process.
In their answers tonight, the Government have told us that the one thing that they want to avoid is lots more paper, cost, expense and consultation. That is exactly what the amendment is designed to achieve. The Public Bill Office has now gone online and worked out that the sum of £250 should in today’s prices be £330, so that is why there is a difference in the figures. We have gone through it carefully, and we think that certain things are particularly important or desperate, such as fire provisions, safety provisions and—one of which I have had personal experience—when the front door of a block of flats is damaged. What would happen if you had to wait for about two months to get consent for you to put on a new front door lock, although it was so urgent?
We do not wish to change the law at all. We wish to clarify the law as it is to make clear that the £250 is not an annual figure but a per item or per effective work figure. That amendment is straightforward and the Government should certainly consider it. I have heard
them tonight and 50 million other times say that they want to reduce costs, difficulties and expenses. This is the opportunity to do it. Otherwise, every tenant will be burdened with so many consultation documents that they will get to a point where they barely look at the really important, serious one because they say, “Oh, that’s another one from the agent and it is all out of my pocket”. Amendment 81F is really simple.
Amendment 81B concerns leasehold valuation tribunal costs. I tabled the amendment because when I asked about the cost of leasehold valuation tribunals, which, at the moment, are limited to £500 for any applicant, I found that the practice, which is quite wrong, has arisen where the landlord, head lessee, or whoever is at the next stage above the leaseholder, is bringing in more and more expensive legal brains against the ordinary applicant. The worst thing about that is that, win or lose, the amount paid for that extremely major legal defence is charged back to the residents in the leasehold flats as a management expense. That was never the way that leasehold valuation was envisaged. In 1996, I was very involved when we passed the legislation. Those things were specifically against what we wanted. We wanted it to be approachable for anyone at £500. I received a letter from the noble Lord, Lord McNally, from which I understand that later in the year it will be swallowed up into a major tribunals review and the figure of £500 will probably rise. However, that is different from where the unlimited cost is being charged back to the leaseholders. That is the reason for that amendment.
Amendment 81C concerns a redress scheme. As we pretty well won the redress scheme with the previous amendment, which has just been passed, I do not think it is so important any more. However, when we had a round-table meeting at the department of all the interested people, they all said, from the most extravagant people down to the most careful, that the one thing that could save time, trouble, expense and simplify life for everyone would be a redress scheme. Therefore, no matter what happens with the previous amendment, I am hoping that at Third Reading the Government might bring forward some wording on a simple redress scheme.
That takes me on to Amendment 81D and protection schemes for service charge money. The noble Baroness, Lady Brinton, mentioned that university students had a problem regarding their deposits and so on for the premises they were letting. I pay full tribute to the Labour Government who as a response to that introduced protection for tenancy deposits. Tenancy deposits are well-protected now. No longer can an avaricious landlord grab every penny of your deposit money. Even if you are just an ordinary individual, letting property without an agent or anything like that, you have to place the deposit in a secure government scheme, which is very good and desirable. However, why is the same amount of protection not given to people who pay service charges, which are probably very much larger amounts?
Amendment 81E concerns the redress scheme. If I am satisfied with how the previous amendment, which has just been passed, is interpreted, I will not bring it back at Third Reading. However, if I find there is something that really could be clearer or better, I might bring it back. I beg to move.
Baroness Hayter of Kentish Town: My Lords, not surprisingly we support these amendments. I have been working with ARMA on trying to get some of this done. There will be a voluntary scheme, but only the good ones will join. The advantage of these amendments is that they will make sure that everyone, not only the good, will have to meet those standards.
Viscount Younger of Leckie: My Lords, I am grateful to my noble friend Lady Gardner for the thought and effort that she has put into the preparation of the five amendments we are now considering. Her ideas and broad experience of the housing sector are an invaluable resource to this House. Her amendments, like those of the noble Baroness, Lady Hayter, address the private rented and residential leasehold sectors. I will not repeat what I have already said about those areas.
I have carefully considered my noble friend’s Amendment 81B on the ability of freeholders to recover their legal costs from leaseholders and I take her concerns very seriously. This amendment aims to limit the circumstances in which costs of proceedings incurred by a landlord or other party with an interest in the property at a leasehold valuation tribunal could be charged back to leaseholders. I should point out that where a freeholder is able to recover costs in connection with proceedings from the leaseholders, this is contractual matter between them and will be set out in the lease. I am aware that leaseholders are increasingly concerned about the recovery of such costs as administration charges where the lease permits this and I understand that my honourable friend Mark Prisk is thinking about this issue. I am concerned that my noble friend’s amendment would not achieve her goals and would not in fact provide any greater protection for leaseholders than already exists.
I know that my noble friend, as she said, recently took part in a high-level round-table discussion on residential leasehold issues. I understand that a number of practical ideas for improving awareness of leaseholders’ rights emerged from that event and that the Department for Communities and Local Government is committed to working with the Ministry of Justice and others to take those ideas forward. The issue of recovery of legal costs as an administration charge, rather than a service charge, requires detailed consideration. For this reason, I believe that the current Bill is not the best place to consider this complex issue.
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My noble friend’s Amendment 81C concerns an alternative form of dispute resolution for landlords and tenants in the private rented sector. The amendment would require the current deposit protection schemes to provide a dispute resolution service for all disputes between landlords and tenants whose deposits are protected under the scheme—for example, disputes about repairs or rent arrears. The tenancy deposit protection schemes are authorised by the Department for Communities and Local Government under concession agreements that require them to offer a free service to resolve disputes over tenants’ deposits. The latest round of agreements has just been awarded and it would not be reasonable or appropriate to change them now.
To change these schemes would expose tenancy deposit schemes to a much broader range of activities than they have signed up for, or for which they are perhaps qualified. To expect those services to be free, as they are for resolving disputes on deposits, would also be unreasonable. This is not the best vehicle for introducing further dispute resolution mechanisms between landlords and tenants.
We should also remember that mechanisms besides resorting to the courts already exist for tenants who are dissatisfied with their landlords. They can complain to their local authority about hazardous conditions, for example, or may apply to the rent assessment committee about unfair rent increases.
I have looked carefully at my noble friend’s Amendment 81D on the protection of service charge money in residential leasehold and I take her concerns on this matter very seriously. The Government are aware that the service charges paid by leaseholders are a key issue, particularly where these are high and increasing, and where they are regarded as unreasonable by those paying them. My noble friend’s amendment attempts to provide similar protection for service charges in leasehold as that which has for some years applied to tenancy deposits in the private rented sector. I understand, however, that statutory protection already exists for leasehold service charges, which the law deems to be held in trust. To apply the deposit protection scheme, which has produced good results in private letting, to residential leasehold is unnecessary and may in practice be unworkable as deposits and service charges are for different purposes. Given that for many leaseholders what matters most is the level of their service charges, we also need to be very careful not to create additional burdens and compliance costs on freeholders and their managing agents, which would over time be passed on to the leaseholders.
My noble friend’s Amendment 81E concerns arbitration and mediation services. In the private rented sector there is a range of consumer protection legislation that protects tenants and many landlords from poor practices by agents. Our goal should be to work with trading standards bodies to ensure more effective enforcement, and I note the intention of my honourable friend Mark Prisk to do just that.
In the residential leasehold sector I understand that a significant number of managing agents are already members of an ombudsman’s scheme, often via their membership of a trade body. These bodies also have their own internal complaints systems. There are other routes through which the resolution of an issue in dispute can be sought, such as the leasehold valuation tribunal. An ombudsman does not, as I understand it, consider complaints that are within the jurisdiction of the leasehold valuation tribunal.
As I said in relation to the amendment tabled by the noble Baroness, Lady Hayter, I recognise that the issue of a lack of redress is a serious one. I, therefore, repeat that the Department for Communities and Local Government will be reflecting very carefully on this and other recent debates.
My noble friend’s final amendment, Amendment 81F, concerns consultation about service charges. The Government take the issue of transparency and
consultation on service charges in residential leasehold very seriously. I understand that this amendment has been tabled following a recent High Court judgment. It is not for me to comment on the decision of the court, but the Government are aware of the concerns that have been raised by those working in the sector. Very careful consideration of the new position is, however, needed. Introducing amendments to the current Bill before the sector has had time to reflect may not result in the outcome sought by my noble friend.
This amendment would increase the threshold above which landlords should consult with their service charge payers and it attempts to link future increases to the consumer prices index. Any such changes would, however, need to be properly scoped and consulted on in order to ensure that any increase and link to inflation was appropriate. It is not clear whether the amendment, as drafted, would fully achieve the noble Baroness’s intention. Also, the proposed new exemptions from the need to consult might be welcome to the sector but could, without very thorough consideration, prove unworkable. I would expect the Department for Communities and Local Government, which is responsible for this area of law, to be open to considering with interested parties over the coming months how best to address concerns on this issue.
I am grateful to my noble friend for the thought and effort which she has put into the preparation of these five amendments. I hope I have been able to explain to the House why the Government are not convinced that her amendments will achieve her goals, or that this Bill is the best vehicle for addressing these issues. I know that my noble friend Lady Hanham and the Department for Communities and Local Government are thinking seriously about all these concerns. For all these reasons, I ask my noble friend Lady Gardner to withdraw her amendment.
Baroness Gardner of Parkes: My Lords, I listened to the explanations from the Minister, some of which are quite unsatisfactory. For example, he says that what people are really concerned about is the level of service charges and that we want to keep those down, and so on. We all understand that. But he then rejects Amendment 81F, which is so important and would clarify exactly what you can and cannot do in a block with or without permission and would tremendously reduce the paperwork and red tape, with its terrible waste of time and money, on the grounds that it is perhaps too cheap and saves too much. I do not know on what ground he is rejecting it but I do not accept that it is fair to reject it.
The Minister says that they will look into it over the coming months, but the coming months are too long. Even this Bill is going to take quite some time before it goes through. The thought of having extra “coming months” on top of that is just too much, so I do not really accept his arguments. As I said, if the amendment tabled by the noble Baroness, Lady Hayter, covers a redress scheme that is mandatory for everyone, and if they would have to belong whether they are managing agents or whoever, then I am satisfied with that. I would not then want to pursue it further myself because if we have put a good scheme through, that might be the thing to run with and it would not need amplification.
If, on the other hand, after studying the noble Baroness’s amendment, to see what it means and whether there are any loopholes in it, I think there is still a need for clarification on redress I would want to come back on that. In no way could I say that I have forgotten this matter. I warn the Minister to expect me to return at Third Reading, by which time I hope we will be a bit clearer on exactly what is good and bad in what we have decided tonight. Fortunately, there is the opportunity to return at Third Reading. I reserve my right to do that because nothing has been said today that really satisfies me completely on those amendments. I beg leave to withdraw the amendment.
Amendments 81C to 82 not moved.
83: After Clause 64, insert the following new Clause—
“Abolition of Agricultural Wages Board and related English bodies
(1) The Agricultural Wages Board for England and Wales is abolished.
(2) Every agricultural wages committee for an area in England is abolished.
(3) Every agricultural dwelling-house advisory committee for an area in England is abolished.
(4) Schedule (Abolition of Agricultural Wages Board and related English bodies: consequential provision) (abolition of Agricultural Wages Board and related English bodies: consequential provision) has effect.”
Viscount Younger of Leckie: My Lords, these amendments will simplify employment legislation for around 40,000 farm businesses in England and Wales. They will ensure the same levels of employment protection for agricultural workers as for workers in all other sectors of the economy. They will also abolish 31 public bodies whose functions are now used infrequently or have simply fallen into disuse. This is an important reform, which will contribute to the Government’s key objective of encouraging economic growth as well as the programme of reducing the number of public bodies. We brought these provisions forward in Grand Committee but they were not accepted. We believe that the case for them is very strong and therefore we have reintroduced them.
The agricultural wages committees were set up in their current form nearly 65 years ago, just after the Second World War, although their origins go back even further. The Agricultural Wages Board is now the only remaining sector wage council; the 26 others were abolished 20 years ago, in 1993. Agricultural workers represent 0.5% of the total workforce. There is no reason why they should be treated differently from the other 99.5% of workers, who are all protected by the national minimum wage and other statutory employment provisions.
Agriculture today is very different from 65 years ago. It is a now a global, international business. Farmers compete against not just each other but farmers overseas to sell both here and in international markets.
Technological developments and increased mechanisation mean that workers need to be highly skilled and qualified to operate complex machinery, and to be able to keep up to date with modern animal husbandry methods. The industry is also becoming increasingly diverse, particularly as businesses move away from mixed farming to specialise in specific sectors. Around a quarter of farms now also operate non-agricultural businesses; for example, a farm shop or bed and breakfast. This means that many farm businesses have to employ workers under both the agricultural minimum wage and the national minimum wage regimes. They therefore have to comply with two sets of employment legislation, which is an unnecessary cost to farm businesses in both time and resources.
Even within what are traditionally regarded as agricultural activities, there are grey areas where a farm business has to determine whether employees are employed in agriculture and entitled to the agricultural wages order terms and conditions as opposed to general employment terms. For example, livestock and poultry rearing would normally be considered agricultural activities and covered by the agricultural wages order, but this is not necessarily the case for on-farm slaughtering operations. Similarly, where there is a farm packing business, packing of produce grown on the farm would normally be covered by the agricultural wages order, whereas packing of bought-in produce is not.
The abolition of the agricultural minimum wage will remove the need for farm businesses to operate two employment regimes and end the confusion of whether activities fall within the national minimum wage regime or the agricultural minimum wage regime. It is widely accepted that the legislation which underpins the Agricultural Wages Board is outdated and hampers the ability of the industry to offer more modern, flexible employment packages. For example, it effectively dissuades employers from offering the payment of annual salaries, which is disadvantageous for workers as it hinders long-term financial planning—and thereby better security for farm workers and their families.
The abolition of the Agricultural Wages Board and the agricultural minimum wage regime will allow farmers to agree terms and conditions that take account of the requirements of the farming sector and suit the particular circumstances of both employers and workers. It will make it easier for employers to offer opportunities for workers to work the same number of weekly hours, but over a compressed period. This could be beneficial for businesses, who may want to provide for longer shifts, and for workers with family and domestic responsibilities.
Abolition will enable farm businesses to compete for workers on a level playing field with other local employers. It should encourage longer-term and more permanent employment of farm workers, which will boost growth and have wider benefits. For the avoidance of doubt, research suggests that there will continue to be considerable demand for farm workers in the years ahead, which will mean that employers will need to offer competitive pay rates to attract new workers. A majority of workers already receive terms and conditions
above the agricultural minimum wage rates, and as contracts are already in place their wages should not be affected if the board were abolished.
The underlying market conditions suggest that there will be a sustained demand for agricultural workers. The 2011 survey from the UK Commission for Employment and Skills indicates a shortage of workers with relevant skills within the agricultural sector, and that this shortage is higher than comparable shortages in other areas of the economy. The agricultural workforce is also ageing: 55% of the sector’s workforce is aged over 45, which again is higher than in other sectors of the economy. These factors mean that we can expect demand for both workers and skills in the sector to increase over the next 10 years and beyond, which means that market drivers will ensure that wages remain competitive. Farm businesses will be wise and prudent to provide career and development opportunities to encourage workers into agriculture and offer attractive terms and conditions to retain them.
It is also important to remember that agricultural workers who have contractual rights reflecting the terms of the agricultural wages order at the time of the board’s abolition will retain those rights until either their employment contract is varied by agreement or their employment comes to an end. New workers coming into the industry or workers who negotiate a new contract will have the same level of employment protection as workers in all other sectors of the economy. Furthermore, agricultural workers who are supplied by a labour provider and who may be at the lower end of the wage scale will continue to have the added protection of the gangmaster licensing legislation.
Turning to the 15 agricultural wages committees in England, most of their functions have now lapsed in practice or have been replaced by wider legislation. Their only remaining active function is to appoint members of the 16 agricultural dwelling house advisory committees in England—or, as they are more generally called, ADHACs.
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ADHACs were established under the Rent (Agriculture) Act 1976 and their function is to give advice to local authorities on rehousing agricultural workers. As a result of changes in housing legislation during the 1980s, the number of requests for advice from ADHACs has declined significantly from 500 then to around 10 requests per year now. It is not a statutory requirement to consult an ADHAC, and while a local authority is required to take account of the advice of an ADHAC in making its assessment of an applicant’s case, it is not obliged to follow that advice. We understand that many local authorities are very comfortable taking decisions on rehousing without the advice of an ADHAC.
Therefore, the 15 agricultural wages committees and 16 ADHACs in England are now effectively defunct bodies. It is difficult to justify their continued existence at public expense so the Government’s view is that they should be abolished. With regard to abolition of the ADHACs in England, I want to assure noble Lords that there are no plans to change the provisions in the Rent (Agriculture) Act 1976 which give security
of tenure to protected tenants. Therefore, the amendment will not in any way jeopardise the position of tenants with protected tenancies.
In summary, the Government firmly believe that these amendments will benefit the agricultural industry by removing regulatory burdens from farm businesses, allowing the industry to modernise and compete for labour on an equal basis with all other employers, while ensuring that agricultural workers have the same levels of protection as other workers. All this will encourage the development of a sustainable and prosperous industry for the future, which is good for businesses and workers, as well as consumers and the country as a whole. These amendments will also remove 31 obsolete public bodies, contributing to the Government’s wider programme of public body reform.
I hope that, in the light of my remarks, noble Lords will accept these amendments. I will address the opposition amendments when we have heard from noble Lords. In the mean time, I beg to move Amendment 83.
83A: After Clause 64, leave out lines 3 to 6 and insert—
“(1) Every agricultural wages committee for an area in England is abolished.
(2) Every agricultural dwelling-house advisory committee for an area in England is abolished and the services formerly provided by such a committee shall instead be provided by the Agricultural Wages Board for England and Wales.
(3) Without prejudice to section 3 of the Agricultural Wages Act 1948, any minimum rate of pay contained, or to be contained, in an Order of the Agricultural Wages Board may, where the Agricultural Wages Board considers it convenient to do so, be fixed by reference to any periods during the currency of employment.”
Lord Whitty: My Lords, my name is on this, as are the names of the noble Lord, Lord Greaves, the right reverend Prelate the Bishop of Hereford and the noble Baroness, Lady Trumpington. I regret to inform the House that the noble Baroness has suffered a fall and will not be with us tonight. I understand that there was no government Whip close to the incident so I am sure that we can pass unanimously our best wishes to the noble Baroness, Lady Trumpington, and wish her a speedy return.
Lord Whitty: My Lords, what the Minister failed to mention is that the Government’s own best estimate, in the only document that they have produced on the effect of abolishing the Agricultural Wages Board, will be a direct cut of £240 million from the income of rural workers.
Our amendments would do some of the things that the Government are after: they would abolish the 31 bodies; they would allow for simplification and modernisation to the wages order; but, crucially, Amendment 83A keeps the legal underpinning of the terms and conditions of those who work in our agricultural sectors.
That figure of £240 million comes directly from Defra’s impact assessment, and it is its best estimate—there is a range, but that is its best estimate. The House is in some difficulty here because it should have more information. We are in a slightly bizarre procedural position because on the face of it the Government had the right to abolish the Agricultural Wages Board under the Public Bodies Bill. But, of course, under that Bill, after long and rather testy debate in this House, there are some very detailed procedures for implementing that abolition. They require much greater information, much clearer arguments, much better figures and much more effective consultation than the Government have coming forward. The Government are trying to cut corners by inserting their amendment into a piece of legislation that had already passed all stages in the House of Commons and which was not accepted in Committee in this House.
There may be good reasons why the Government are trying to change tack. One is that they have problems with the Welsh Government—this is England and Wales legislation. The Welsh Government, like their counterparts in Scotland and Northern Ireland, want to maintain statutory minimum standards in the agriculture sector. Of course, it is also convenient for the Government that they have not been required to come forward with that kind of information. They have not presented us with any alternatives; they have simply come forward with a proposition for abolition. The House would be entitled to say to the Government that we are not prepared to consider this government amendment until the equivalent of Section 11 of the Public Bodies Act is before the House. Clearly, the Government are not prepared to go down that road.
I will say a few words about the nature of the agricultural workforce. Of course, the Minister is right that it has changed since 1917 and 1948, but we are left with an agricultural work structure of a lot of relatively small businesses that employ one, two, three, perhaps six, permanent staff and parts of a sector that employ large numbers of casual workers on a seasonal basis. There is no other sector in the whole of the economy that is like that. There is no other sector, therefore, that requires the kind of legal protection that until very recently all parties in the industry and all parties in the House recognised was important.
Moreover, the Government’s analogy is quite wrong. The Agricultural Wages Board specifies a whole wages structure and a whole career structure for workers in the agricultural sector. It does not simply specify a minimum wage, like the national minimum wage; nor is it the same as most of the old wages councils, which simply specified a basic rate rather than the whole range of conditions required within the agricultural sector, which will be difficult to achieve without some legal underpinning by normal methods of collective bargaining either nationally or by agreements between individual farmers and their own workforce—something that would often be very difficult for both sides to accomplish.
The Minister claims that this is a great removal of burdens on small farm businesses, but the operation of the board has in many cases been of great benefit to small farmers. In the consultation—such as it was; it
was only four weeks’ consultation, whereas most people are required to go through three months, and it was only one week in Wales—a significant number of small farmers said they wished to retain the Agricultural Wages Board because that meant that once a year they knew what they were going to pay their staff and they did not have to go into embarrassing and lengthy detailed negotiations with their own two or three employees. Therefore, the burden of administration on the farmers is actually less under the Agricultural Wages Board than it will be if the Minister gets his way and it is abolished. In the evidence, there are a large number of small farmers saying precisely that, ranging from the West Country to Yorkshire to Norfolk.
The impact assessment also says that the effect on farmers’ incomes will be a significant improvement. In fact, it has that down as the reciprocal of the cut in the agricultural workers’ wages. But the reality is that a lot of those farmers will never see that money, or will only see it temporarily. The wage cut for workers will almost certainly end up being of benefit to the supermarkets. It is very interesting that in the consultation nearly 40% of the replies are from the horticultural sector, which employs the mass amount of casual, unskilled labour and which deals directly with the supermarkets. Even more tellingly, the strongest supporters in the rest of the food chain are the Fresh Produce Consortium, whose dominant members happen to be Tesco, Morrisons, Asda and Marks & Spencer.
The reality is that once the supermarket buyers hear that the Agricultural Wages Board and the minimum rates have been abolished, they will go back to their farmers and suppliers and say, “We want a cut in the prices that we are giving you”. The reality is that whatever burdens the Minister claims will be removed from small employers, many of whom do not accept that, the money will not come out of the pockets of farm workers and into the pockets of the farmers; it will go out of the rural community entirely and into the pockets of the supermarkets.
This is a very dangerous move and one that we certainly could not support. There is little in what the Minister said tonight with which I can agree. There is little in what his supporters in Committee, who were in the minority, brought to bear. They said, “In my area, on my own estate, on my own farm, people I know pay a lot more than the minimum wage”. Of course they do. It is a wages structure. A lot of employers pay more than the minimum. But once you abolish the floor, the whole wages structure starts coming down. The impact assessment which the advisers of the department of the noble Lord, Lord De Mauley, Defra, and BIS had before them makes it quite clear that the best estimate is that this will be nearly £250 million out of the pockets of relatively low-paid agricultural workers. It is a disgrace, frankly, that the Government are proposing this. It is a disgrace, in some ways, that the NFU has changed what has historically been its position in support of the board to pressing for its abolition and, in so doing, does not represent the views of many small farmers.
Our amendment would allow simplification and modernisation. It would allow the abolition of the 31 quangos to which the Minister has referred, which
would give Defra a few brownie points on the Cabinet Office’s scorecard of the quango cull. The abolition of the wages board, however, is a different matter. It will bring distress to rural communities, a cut in income to rural workers and will do nothing for the farmers and the agricultural sector of this country. I beg to move our amendment to the Government’s amendment.
The Lord Bishop of Hereford: My Lords, I thank the noble Lord, Lord Whitty, for his clear and eloquent statement on why it is essential not to abolish the Agricultural Wages Board, and why it is therefore vital that as a House we support this amendment to the Government’s amendment.
It is noteworthy that the wages councils were established by Winston Churchill in 1909, and he spoke of the need for them in these words:
“It is a serious national evil that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions … where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst; the worker, whose whole livelihood depends upon the industry, is undersold by the worker who only takes the trade up as a second string … where those conditions prevail you have not a condition of progress, but a condition of progressive degeneration”.—[Official Report, Commons, 28/4/1909; col. 388.]
That may not be quite the language that we would use today. It is language from 100 years ago, but they are still salient points. Indeed, these underlying principles and thinking have led to a minimum wage and then a living wage.
When other wages councils were abolished in the 1980s, the Government chose to keep the Agricultural Wages Board on the grounds that the industry required some central oversight to prevent wages being driven down unacceptably. In order to consolidate and build upon the progress achieved in terms and conditions during the past 30 years, we need to retain and further develop, and update, the Agricultural Wages Board, not abolish it.
The NFU has criticised the cost and provision of the AWB, claiming that it is a,
“bureaucratic irrelevance since the advent of the Minimum Wage”,
and pointing out that the gap between the national minimum wage and the basic agricultural wages order minimum is only tuppence. However, the AWO also, of course, lists six different grades, to which we have heard reference made, with levels to be paid according to responsibilities, qualifications and the nature of the work in question: a salary structure.
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The Low Pay Commission, in its review of the Agricultural Wages Board, highlights the impact on young people especially and says:
“Abolition of the Board enables potential exploitation of young workers aged under 16”.
It also recognises the provision for guaranteed wage levels for those between the ages of 16 and 21, which are of course not covered by the national minimum wage. This relates to another vital area, namely that of attracting new entrants into the work of the agricultural sector; the Minister has referred to the average age of
agricultural workers being high. It is crucial not only for the health of the industry but for the health of the nation. Food security is, thankfully, slightly higher up the national agenda than it was, with our still only producing about 70% of the food we consume. Further, the “horseburger” scares are prompting retailers to examine their own supply chains and are further encouraging “Buy British” among consumers. The Low Pay Commission wrote:
“Should employers choose to move away from the minimum standards and grading and career path, outlined by the AWB, it could prove difficult to attract new workers to the sector in sufficient numbers”.
We surely need to be joined up in this as in other areas. We need greater food security. We need to encourage “Buy British”. We need more workers in the industry. This is not a time to make a decision such as abolishing the Agricultural Wages Board, which would make that more difficult to achieve.
The NFU draws attention to the fact that, in 2010, the average earnings of 58% of full-time farm workers were above the industry minimum. But that of course means that for 42% it was at the minimum or below. Furthermore, the minimum itself is well below, more than £1 below, the living wage. To make matters worse, the cost of living in the countryside is higher for a whole host of reasons, as we are aware, including fuel, transport and other services.
Defra’s own equality impact assessment also identifies the detrimental effect that abolishing the AWB would have on women, as well as on workers under the age of 21. It is also worth pointing out that the agricultural wages order is a used as a benchmark for other rural workers and occupations, so that abolishing it would have a deleterious effect on them as well.
While there is, as the Minister said, clearly competition in the workplace for the workforce in agriculture in some parts of the country, it is not quite the same everywhere. Rather, agriculture is in many ways a highly fragmented industry, with a lack of real competition for labour in some large areas of the United Kingdom. This point is brought out very clearly in the Government’s wretchedly short four-week consultation, to which reference has already been made. Let me quote from a farmer in Shropshire; our diocese in Hereford includes half of Shropshire. He wrote:
“Having an AWB helps the industry to minimise the wage disputes. Many rural workers on their own are not good negotiators and many will have more compassion for the animals they tend than for themselves!"
The citizens advice bureau in Crediton wrote:
“We have evidence of exploitation of agricultural workers, which, due to their isolation, lack of contact with other agricultural workers, they were not aware of the approximate £30,000 underpayment due to them over the last four years”.
I quote these to stress the particular difficulties resulting from isolation. In the more sparsely populated parts of our nation, there is not the same labour mobility, and without the Agricultural Wages Board and enforced parity of pay, there would not be the knowledge of what rates are being paid on a neighbouring farm or one 10 miles away, nor the knowledge about overtime rates, pay for younger workers, accommodation allowances and the other things covered by the AWO.
The Farmers’ Union of Wales favours retention of the board, stating that the majority of its members,
“still consider the Agricultural Wages Board to be the most effective body to determine the pay and conditions of service, which reflect the unique requirements of the agricultural industry in Wales. As many farms in Wales are run with relatively few staff, the AWB is considered an important means of avoiding potential conflict and lengthy negotiations with individual staff”.
This comes close to the heart of the issue, namely that larger employers see the AWB arrangements as “cumbersome”, to use the NFU’s own word, while many smaller employers—such as those in much of Wales, the border areas of England and other more sparsely populated counties—value the Agricultural Wages Board because it protects them and their workforce from having to spend hours and hours of time learning to be human resources specialists and negotiating terms and conditions for just a few people.
The pressure to abolish the AWB is coming principally from, as we have been hearing, horticulturalists, large farm businesses and large estates—with the supermarkets behind them—seeking all the time to push down prices at the expense of wages and despite the realistic costs. I fully accept that there are some difficulties with the present agricultural wages order; I do not think anybody is likely to suggest that it is perfect. I also accept that there are difficulties with the definition of what is and what is not “agricultural work”, giving rise to problems for employers whose employees, for example, work both on farms and in packing facilities. The answer to this, however, is not to scrap the whole system but rather to make it more fit for purpose.
If the complaint is that the AWB has not been properly modernised, then it should be modernised. You do not scrap a car or a tractor because a part of it is damaged: you mend it. The AWB was needed when Winston Churchill first set up the wages councils; it was needed in the 1980s when other wages councils were abolished and it is still needed now. Let the AWB be improved and updated, but not abolished.
Lord Greaves: My Lords, I was pleased to add my name to this amendment. I congratulate the two previous speakers who said quite a lot of what I might have said, and I will try not to repeat what they said. I agree with practically every word that both speakers said and I think we should be aware that the noble Lord, Lord Whitty, is probably the greatest expert on these matters in your Lordships’ House. There are obviously others on different sides who have similar expertise.
This takes me back to the debates on the Public Bodies Bill some two years ago when I moved an amendment in Committee to remove the Agricultural Wages Board from the purview of that Bill. Noble Lords will be surprised to learn that I made a long speech on 1 December 2010, which is reported in Hansard, beginning in col. 1513. I read it again just now and nothing seems to have changed, so I thought I would read it all out again. Then I looked around the House and saw at least half a dozen people whom I remember being present in that debate; it would be unfair to them to subject them to it again, although it might have done everybody else some good.
At the time, efforts were being made within what I might call coalition circles, led by my honourable friend Andrew George, who was co-chair, along with
me, of the Liberal Democrat Defra committee at the time. We were trying to save the AWB, or at least find an alternative system which would preserve some of its best features. We thought we were going to achieve some success, but we failed; I very much regret that. One reason may have been that the Defra Ministers at that time did not include any Liberal Democrats, but I do not know.
When the then Secretary of State Caroline Spelman announced that she wanted to abolish the Agricultural Workers Board, there had been no consultation whatever. There has now been a consultation, but, as the noble Lord, Lord Whitty said, it was for a mere four weeks. That breached the standard of 12 weeks which is supposed to prevail for such consultations. It was obviously part and parcel of the effort to shunt this clause into the end of this Bill, pretty well at the end of the parliamentary process. It has resulted in my appearance for the first time in this Bill at the end of the process.
Why are the Government doing this? The Government’s consultation and their report on it are thorough and very interesting. It is absolutely clear, as the right reverend Prelate said, that the people and organisations in favour of it include, in particular, the horticultural sector, with its very large number of seasonal workers. There are some very good horticultural firms, but there are also some where the conditions for the workers leave a lot to be desired. They are different from most other farms in this country. Those in favour of abolition also include the big farms, which are often prosperous, the supermarkets and the food processors. They are the people who want this and we have to ask ourselves why.
Then there are the people who do not support it, which is clear from the consultation. There are some quite harrowing comments from small and medium-sized farmers who believe that, far from it removing the regulatory burdens from farm business, as the Minister argued when he opened this debate, it will increase their administrative burdens. These are small businesses that rely very much on the help and support they get by having a firm structure and framework for employing their staff. If they have to do it all themselves, it is going to be much more difficult for them.
Two years ago, my honourable friend Mark Williams spoke in the Public Bill Committee in the House of Commons and quoted what I had said here; it is all a bit circular, but there is a good reason for this. He said:
“As we have heard, it is not totally acceptable to rest behind the national minimum wage legislation, because other concerns about terms and conditions need to be addressed. Lord Greaves said in that debate:
‘Will there be a new national system set up? Will there be a bargaining system set up within the industry—an unofficial system…outside the purview of statutes and government, in which employers and representatives of agricultural workers negotiate? Or to what extent will it be left to individual farmers to negotiate with their own workers or just impose’—
the word “impose” is critical—
‘terms and conditions and wages…above the national minimum wage?’—[
Official Report, House of Lords,
1 December 2010; Vol. 722, c. 1515.]
I am still looking for the elusive clarity on that matter, particularly about the issues that the hon. Lady mentioned on terms and conditions, people under 16 and so on”.—[Official Report, Commons, Public Bodies Bill Committee, 8/9/2011; col. 54.]
As far as I can see, that remains the position. The NFU has answered this to a degree by saying that it would provide support, assistance, advice and help to its members, but first, not all small and medium farmers are members of the NFU by any means. That is a problem.
Secondly, the NFU, which sounds like a trade union, is in fact the employers’ organisation in this context. It simply cannot give the sort of balanced and unbiased regulation that the AWB now provides. The AWB has an equal number of representatives from the NFU and from Unite, as well as five independent members on top. It provides a place in which negotiation can take place, but it also has to take an overall balanced view, which we would lose. The questions that Mark Williams put have not been answered; it will be interesting to hear how the Government think it will work.
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The Government are saying, “Well, it’s okay because this was in the Conservative manifesto”. It was not in the Liberal Democrat manifesto or in the coalition agreement, and on that basis, those of us who sit here as Liberal Democrats ought to be able to have the freedom to look at this issue and make up our own minds. I will certainly vote for the amendment to the government amendment in the name of the noble Lord, Lord Whitty, if it is put to the vote, as no doubt it will be.
I will add one further thing. I received a message from somebody local, adding to the list of objections to the abolition that came from so many farmers in the consultation. This is an issue where the NFU does not by any means speak for the whole of the farming industry. The letter was sent to me by an acquaintance of mine in Pendle, Charlie Clutterbuck. He sums up many of the problems when he states:
“On this occasion I wanted to raise the issue of the abolition of the Agricultural Wages Board. And the general disappointment that the Lib Dems are going along with it. It surprises some of us and it seems a most surprising turn around”.
This is the point at which, like all my colleagues, I give people a lesson in coalition government—in trade-offs, compromises and all the rest, which I perfectly accept. There are times when an issue is not fundamental, and when we, as a party, should turn round and say no. Mr Clutterbuck continues:
“It is also odd that there are few farmers round here”—
this is upland Pennine Lancashire—
“who really want this abolition. It won’t help them with their many other problems, by adding the difficulties of employment complexities. I was Chair of the Governors at Myerscough Agricultural College, and know of nobody who thinks this move is going to bring rural prosperity to areas like ours”.
He goes on to say, in his words, not mine:
“It is clearly motivated and being pushed by the ‘Plantation owners’ in the East who hire hundreds of migrant workers and want to pay them a penny or two less an hour. ‘Rural’ won’t benefit, but ‘retailers’ will. And in smashing up the AWB, they smash up the whole skills structure, on which most permanent farm workers depend for their career. I am on the LANTRA England Council and know that ‘growing’ skills are going to be crucial in the future. Doing away with the AWB Skills scheme sends the wrong message to anybody wanting a career in farming and who doesn’t own a few hundred acres of their own land”.
I do not in any way condemn people who own land and farm it, whether they are small or big farmers. However, this particular proposal is misguided and unnecessary. It will save a minimal amount of money in the short term, and the only explanation we get is, “Well, in the long term wages will be driven up because of market conditions”. In the long term that may or may not be true, but, as John Maynard Keynes famously said, in the long run we are all dead. I am concerned about the welfare of farm workers in the short and medium term. I support this amendment.
Lord Cavendish of Furness: My Lords, I read carefully the recent debate on this subject in Grand Committee, and I am sorry that I was not there. I declare an interest in that I have beneficial interests in a landed estate based mainly in south Cumbria. The estate’s activities include farming, forestry, leisure, minerals and housebuilding. As a family business we farm modestly on our own account, but the majority of the land is tenanted.
It is not my intention to pretend that the Agricultural Wages Board and its satellite committees represent one of the great evils of our time, but the Government deserve support on this issue, and I am happy to give them mine. I will resist repeating the arguments that the Minister made beyond saying that all of them carry weight. I am not sure that there is much disagreement; some want abolition while others want reform, but all seem to be fairly clear that we need to change.
Stirred by the apparent passions that came through in the Official Report on Grand Committee, I have been to some lengths to canvass opinion in my native Cumbria and a little bit in Lancashire, and have also sought to inform myself better of the facts. On the basis of my findings it is very hard to find any justification whatever for the continued existence of this body. The AWB may not be a great evil but the very best that can be said of it is that it is an obsolete irrelevance and symbolic of the way small businesses continue to be fettered in a way that disadvantages business and inhibits growth.
My canvass extended to farmers on small, medium and large farms, to those who had diversified and those who had not, to tenants and to owner occupiers. Much to my surprise, unlike my noble friend Lord Greaves, I had to go quite far down my list before I found anyone who had even heard of the AWB. It simply did not appear on their radar. One of the local NFU representatives said that he had never had any call to understand the workings of the board, adding wryly that he expected that the sort of committee I was talking about would indeed be a very nice thing to belong to.
I drew a complete blank when it came to finding any evidence to support the claim that the noble Lord, Lord Whitty, appeared to make in Grand Committee, that the handful of workers on smaller farms would be exposed to exploitation in the event of abolition. Not one person I spoke to could bring themselves to say that the board was a force for good. The noble Lord, Lord Whitty, went on to say:
“The abolition of the Agricultural Wages Board is a direct attack on the living standards of 150,000 rural workers”.—[Official Report, 16/1/13; col. GC 258.]
Let us have a look at that claim. In the decade to 2011 the consumer prices index rose by 28% and the retail prices index by 38%. Over the same period, the national minimum wage—almost identically mirrored by the lowest grade of AWB—rose by 64%.
Alternatively, we could approach this from a different angle. The Institute for Public Policy Research confirmed that just 12.3% of agricultural workers earn below two-thirds of median hourly pay. By comparison, hotels and restaurants are nearly 70% below; the wholesale and retail sectors are over 40% below; the situation is much the same in administration; and the arts are about 37% below. The figures for education and health, where the state is predominantly the paymaster, are 18.3% and 14.6% respectively below two-thirds of median hourly pay. Even those workers are paid less than workers in the agricultural sector. I understand that 90% of farm workers are paid at or above grade 2 on the board scale.
Surely the noble Lord, Lord Whitty, and others, understand that all but a tiny minority of employers these days have long since grasped the fact that bad pay always produces bad results. Can he not see that this is especially true in this sector, which has become so much more specialist in recent years? Will he accept that there is now far more legal protection for those who are vulnerable to exploitation?
Low pay among agricultural workers is manifestly a myth, but more important for today’s debate is the demonstrable absurdity of the notion that the AWB is the appropriate vehicle to address rural poverty. I should perhaps stress that I mind very much about rural poverty—it exists and is worthy of debate. However, it is simply not related to the issue under discussion. If, as I have heard suggested, the objection to abolition is to do with terms and conditions of work, I can only say that I found a dearth of convincing arguments that this sector alone should be picked out for special treatment.
The noble Lord, Lord Whitty, said that administration costs would be lower. I do not agree. In this House there is no dearth of people prepared to talk about wages but rather fewer pay them. I speak from experience in this matter. When the Labour Government was introducing the national minimum wage in June 1998, the noble and learned Lord, Lord Falconer, said:
“As I have indicated, the 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, 11/6/98; col. 1240.]
I do not understand what has changed to invalidate that sensible opinion then held by the party opposite. There is something unattractively patronising about these discriminatory attitudes. They come close to suggesting that people involved with the farmyard must be so primitive as to need their hand held by agencies of the state.
In his opening remarks, the Minister most pertinently pointed out that farmers compete globally these days, not just one with another. It is possible to imagine a future world without the common agricultural policy. It is possible to envisage a future where farmers are vastly more exposed to the marketplace and with many fewer subsidies. Subsidies, after all, are not just
handouts by the taxpayer; they disguise all kinds of market distortions on the one hand and, on the other, fund environmental initiatives prescribed by Parliament or the European Union. Nor is it entirely fanciful that, as the right reverend Prelate said, the day might come when we have to take the question of fuel security seriously. These considerations are not necessarily matters to be dreaded; rather they are challenges to be faced. Whatever the future, we must be prepared for change.
As I have said before in your Lordships’ House, SMEs stand ready to lead growth in our economy if only they are allowed to. It is time agriculture was unshackled and allowed to prosper as it is capable of doing. It is time we were treated as a well established, modern industry. Above all, it is time we were treated like everybody else. Our farmers have a huge amount to offer. The abolition of the AWB is a welcome and long overdue measure and the Government must be congratulated on introducing it. It deserves support in your Lordships’ House.
Lord Curry of Kirkharle: My Lords, I fully support the Government’s desire to abolish the Agricultural Wages Board. I declare an interest as a tenant farmer in Northumberland. I started my business in 1971, employed two young people who had left school, and built up the business until I employed six. Though I no longer employ staff, I have done so for most of my professional life. As a contrast, I also chair the Leckford estate for Waitrose, where we employ 170 staff. My key interest in this debate, however, is as chair of the Better Regulation Executive—and this is an important deregulation measure. I consider myself to be firmly embedded in the agricultural community. I know lots of farmers and I know no farmer who rewards their staff at Agricultural Wages Board rates. The NFU has 70% farmer membership and most of those who are not members do not employ staff.
The Agricultural Wages Board is a relic of the past. In 2002, in a report for which I was responsible, commissioned by the previous Administration, I recommended that its future be reconsidered. The noble Lord, Lord Whitty, and I had interesting conversations about the wages board at the time. No other industrial sector has a wages board. We do not have one in construction or in transport: why in agriculture? The perception seems to be of a sector stuck in a Lark Rise to Candleford era where employees are exploited by unscrupulous employers who resemble the mill owners of the 19th century. Nothing could be further from the truth. The agricultural sector is now a highly professional industry. Today’s employees have to be skilled to cope with the technological changes that are taking place at an unparalleled rate. The cab of a modern tractor is now like the cockpit of an aircraft.
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Like other Peers, I have been lobbied strongly to retain the board because of the fear that wages will plummet if the board is abolished and “families will face destitution”. This is complete nonsense and scare tactics. The impact assessment had to consider the possibility, in the extreme, that wages would decline over time to national minimum wage levels, but that is
such a remote possibility that it should be disregarded. A debate on what the level of a living wage in the countryside should be would be extremely helpful.
The board has been in existence for 65 years. Has the world not changed a lot in that time? The parties concerned meet for their annual sport and confront each other. Eventually the smoke comes out of the chimney and the world continues as before. In the past, most employees were stuck in tied cottages. Now, however, they are far more mobile than they have ever been. If they wish to move, they can. Recruiting and retaining good people is a real challenge. If attractive reward packages are not offered it is impossible to recruit workers. The agricultural industry is mature and professional.
The market has moved on and the wages board is stuck in a time warp. It is reflected in some of the responses to the consultation that, as long as the wages board exists, many farmers will continue to abdicate their responsibilities for negotiating terms with their employees and simply adjust their salary levels annually when the wages board pronounces its decision. It is time for that to stop and for employers to properly take on the responsibility—as I am convinced they will—to reward their employees for the skilled and responsible work they do in a world where their role is becoming ever more important with climate change, environmental management and food security so high on the global agenda. The wages board could be a drag on progress, and reward packages will improve without it.
With others, I am spending a considerable amount of time promoting agriculture as a career. Like the noble Baroness, Lady Byford, I am a patron of Lantra, the association of colleges, and I must inform the House that, in promoting agriculture to students, the wages board does not feature at all. It is obsolete, irrelevant and should be abolished.
The Duke of Montrose: My Lords, I was most grateful to hear what the noble Lord, Lord Curry of Kirkharle, has been telling us. A particular difficulty for the House has been the shortened consultation period, which left a number of questions not fully answered in our minds.
The noble Lord, Lord Whitty, and agricultural workers who came to brief us this morning are obviously very worried at the Government’s assessment of a loss of £259 million. The noble Lord, Lord Curry, has given us some indication as to how that was achieved. Can the Minister tell us whether that figure includes savings or reductions in monies other than purely wages, where the figure was derived from and on whom is it likely to impact? The agricultural representatives took it that overtime rates will be totally abolished. The question of working hours is well defined, for all workers, by the EU working time directive, so everyone knows how many hours are required in any employment in excess of this figure. Under what guidance or legislation will the rates of payment for these hours be determined?
The noble Lord, Lord Whitty, said that the floor was being removed. As the right reverend Prelate said, that is not quite the picture. The floor is not being removed. At the present rate, it is very slightly diminished by 2p. One of the other factors that the representatives
are keen to emphasise is that currently there is a graded system in the rates of remuneration. However, the grades currently in place are built on a system of certified qualifications and experience. Is it not possible for the agricultural workers’ union to produce its own guide to a graded wage structure, which would give its members an indication of what the level should be when they are entering into a new contract? These things could be done by responsible people in their own way and would not necessarily require the retention of the wages board.
Lord Cameron of Dillington: My Lords, first, I declare an interest as a farmer. We have all received much evidence, both for and against, on this amendment. It seemed right to consider all the evidence and facts afresh, including my own knowledge of the industry, and to re-examine the case for and against abolition.
I think everyone acknowledges that agriculture is very different from 60 to 65 years ago when the current Agricultural Wages Board was introduced. I know that some of the work can still be very tedious and repetitive, such as riddling potatoes for hour after hour or even driving up and down a field all day, albeit in an air-conditioned or heated cab, either with or without sat-nav assisted steering. Of course, now no weights are lifted because instead of bags coming in at 1 hundredweight or even 2 hundredweight as they used to, they come in weights of 1 tonne. So you automatically jump into the forklift truck, do things much quicker and save yourself from exposure to the weather.
I admit that some of the work with livestock can be pretty full-time. You are always on call, particularly at certain times of the year, such as during lambing or calving and, even more importantly, when quietly walking up and down your dairy buildings at night to check which cows might be on heat in order to maintain or to avoid your calving index slipping. I also know that work with livestock can sometimes take place in fairly fresh and rugged conditions, both wet and cold. It has always seemed to me that shepherds and dairymen really should be flock or herd managers and paid an annual salary with bonuses paid on targets achieved. As I understand it, that is not specifically allowed under the current rules of the AWB—or at least it does not count.
On our farm, including in our dairy, we do not pay much attention to that or to any Agricultural Wages Board rates. We pay much more than the AWB rate. We would not keep staff very long if we did not. As I have said before, why would one pay a minimum wage to people responsible for operating machinery costing up to £500,000 or more, and whose skill at operating it can sometimes be the difference between profit and loss on the farm?
However, the Agricultural Wages Board is—everyone has mentioned this and I have admitted it before—a very convenient benchmark to use in the annual wage adjustments. On our farm, all wages across the farm go up by the 2%, 3% or whatever the AWB rate is. In addition, we usually round it up. Incidentally, in the consultation evidence I received from Unite, I noted that by far the most common reason—again, it has been repeated in the debate today—from farmers for
opposing the abolition was the helpful benchmarking service that the AWB provides. However, as I have also said previously, this is a service quite easily replaced, and indeed promised, by the NFU and others on a non-statutory basis. Therefore, I am afraid that I have to discount all that evidence. I do not think that it is relevant to the debate.
The question really is: why should we get rid of the safety net? If most farmers pay no attention to it, does it really matter whether we have it or not? After all, it is only a small cost to the taxpayer in the general scheme of things. It is the last of many wages boards and councils, and therefore has a historic role, if nothing else—the last vestige of post-war socialism. I admit that I have only limited knowledge of the horticultural industry, where it is claimed that the national minimum wage—a full 2p per hour less—would apply if the AWB was not there. Furthermore, the rightly generous overtime rates of the AWB would no longer apply in that industry, which I believe is a valid point. But perhaps that is a fault of the national minimum wage rules rather than a plus point for the AWB.
I paused in my thought processes here. What harm is the AWB doing? After all, agriculture is no longer a poorly paid industry, so it must be being successful. The hourly average pay in agriculture is higher than in hotels, restaurants, shops and even local authority administration. Why dispense with all that gain? I like to think that I care about farming families, both employers and employees. I have spent most of my life trying to promote wider businesses and jobs in the countryside outside farming, because agriculture represents less than 4% of rural employment. Therefore, one of the reasons for my passionate promotion of the wider economy is that many farming families, both employers and employees, depend on having a non-agricultural wage earner in their family to maintain their lifestyle or, if they are the employers, their presence on the land.
I asked myself whether it is helpful to overall employment in agriculture that there should be a state-controlled wage structure over and above the minimum wage which the other 96% of the rural workforce does not enjoy. I asked myself whether the rest of the rural economy was ruined by the abolition of the other 100 or so wage councils. Or is it spoilt now by having a free market in wages, subject of course to the national minimum wage?
Are lorry drivers disadvantaged by not having a lorry drivers’ wages board? I take that as a good equivalent because they, too, spend long hours in cabs, driving up and down—not fields but roads. I thought that they were not disadvantaged. The rural economy is flourishing better than ever before, including lorry drivers. As an aside, obviously any reform of the CAP should put more money into Pillar 2 and less into Pillar 1 but that is not the subject we are debating today.
My next question to myself was whether UK agriculture can adapt and grow better, including providing more overall employment up and down the whole food chain, with or without its own centrally controlled, state-run wage order. All my experience over the past 50 years suggests that state interference in an industry
is not very helpful to any of the participants in that industry, apart from the need for a national minimum wage structure and having a strong Health and Safety Executive, in which agriculture is not its finest field.
While I understand the safety net argument, I fear that the AWB is at best somewhat of an irrelevance in this day and age, and at worst is preventing new practices of salaries and well targeted bonuses that could reignite our farming industry as a career path for those who love the countryside and the healthy working life associated with it. I do not always support the Government but on this issue I fear that I must.
Baroness Byford: My Lords, in Committee we had a long discussion about whether the Agricultural Wages Board should be continued. Although the noble Lord, Lord Whitty, implied that a majority was in favour of retaining it, that is not quite a true reflection of those of us who took part.
Tonight, we have had the extra bonus of looking at Amendment 83A in the name of the noble Lord, Lord Whitty. It is within that context that I want to pose one or two questions. Amendment 83A proposes that,
“every agricultural wages committee … in England is abolished”.
However, it adds the requirement that “the services formerly provided” should be transferred to,
“the Agricultural Wages Board for England and Wales”.
I hope that the noble Lord will explain to the House what is involved and what he expects the board to do. Perhaps he might also tell us what caused so many of those committees to cease to function. Were they no longer needed or were they being dealt with in a different way? His amendment requires detailed examination.
Subsection (3) of Amendment 83A proposes that,
“any minimum rate of pay contained, or to be contained, in an Order of the Agricultural Wages Board may”—
“where the Agricultural Wages Board considers it convenient to do so, be fixed by reference to any periods during the currency of employment”.
Therefore my question to the noble Lord is: will he please tell us what “convenient” means, or how it is defined, or how it would work? It seems a very unusual way for an amendment to be expressed.
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In Committee, the Minister clearly stated that agricultural workers who are in contractual rights at the time of the abolition board will retain those rights, and I am pleased to repeat it tonight. Also, the agricultural workers would be protected by the national minimum wage and wider employment legislation, and the Gangmasters Licensing Authority will continue to provide protection for workers, particularly those at the lower end of the scale, many of whom would be in that pay scale range.
It was suggested to me that the Gangmasters Licensing Authority arrangements do not protect workers in the way that they should. I found that very worrying because it is a newly formed authority. If it is not doing the job that it should be doing, the question has to be: why? What is it within that authority that is not
doing the work that it should? If that legislation is not working properly, I suggest that it needs to be reviewed and strengthened.
The right reverend Prelate the Bishop of Hereford said that he would like the board to be looked at to be repaired rather than repealed. There seems to be a lot of confusion around what is and is not working within the Agricultural Wages Board. I think that other noble Lords have received the briefing from Steve Leniec, the union representative, and will find the 10-page submission, headed “Subsidies for wealthy landowners but pay cuts for land workers”, unhelpful and not strictly true, since the majority of farm workers are paid considerably more than the lowest level set. The union also claims that there is no such thing as a free market within agriculture. I think those of us who work within it will find that very surprising. Clearly, it is a free market in which we work; we compete against other farmers and within a global market.
I also received a briefing from the NFU. I remind the House that we have a family farm, although we are now contracted out and therefore do not pay anybody a wage directly. The NFU recognises that the Agricultural Wages Act was old-fashioned. Indeed, as the noble Lord, Lord Curry, said, things have moved on tremendously. It was needed then; it is not needed now. Times have moved on. Indeed, average earnings for 2010 for full-time workers were 31% above the industry minimum set by the board. I also understand that 45% of farm workers are already paid by salary rather than by the hour. Additionally, some 90% of workers already receive pay rates above the minimum rate. The question is: why keep the board? What does it do that the other two bits of legislation that have been brought in do not do in a much better way?
As other noble Lords have said, this is the last remaining wages council. I do not think that it is necessary in this day and age. Farming businesses have moved on. It is an extra expense and responsibility that those who employ people have to juggle. Those who have people working on a farm but working in the farm packing business have two different views to take on those whom they employ.
Agriculture has seen tremendous changes since 1948. From innovation in plant and animal breeding through the incredible advance of scientific knowledge, it has developed into a modern, high-tech industry. Work on farms has changed dramatically. Today’s workers need to be highly skilled and properly paid. I believe that Amendment 83A does nothing further in this development, and I beg and urge other noble Lords to support the Government’s amendment.
Viscount Younger of Leckie: My Lords, this has been an interesting and lively debate. I am very grateful to all noble Lords for their contributions.
I turn to some of the points raised by noble Lords during this debate. First, the noble Lord, Lord Whitty, raised the issue of the impact assessment, and the noble Lord, Lord Curry, referred to this as well. The noble Lord, Lord Whitty, pointed out that the Government’s best estimate is a cost to the rural workers of £236 million over the next decade. Abolishing the Agricultural Wages
Board would bring agriculture into line with all other sectors in the economy. Allowing farmers to compete fairly in the labour market and allowing agricultural wages to follow market levels will enhance the competitiveness of the sector and may increase employment. This would in turn encourage long-term prosperity in rural areas.
The impact assessment itself gives a range of impacts and makes it clear that there is considerable uncertainty, with a potential £238 million impact for workers being at the upper end of the range. The impact assessment also makes clear that there may be, in fact, no reduction in wages or worker benefits. I would like to give a little more information than was asked for in terms of how we arrived at these figures. I stress that the figures are the upper estimate, based on empirical research comparing wages in fisheries and the agricultural sector over an 11-year period up to 2010. The figures are based on two particular issues. First they are based on existing workers. With the abolition of the Agricultural Wages Board, one assumes that existing workers on contracts would not receive a pay rise over 10 years. Therefore there would be a definition of wage slippage, allowing for inflation. Secondly, it allows for new workers who may be taken on at the national minimum wage rate, not the old agricultural wages rate, if the Agricultural Wages Board was abolished. So it assumes the very worst scenario, with no increase at all on what there was before, and it assumes, in effect, that farmers would be sitting on their hands. I would argue that this would be highly unrealistic.
As I mentioned earlier, the reality on wages will depend on demand, and evidence shows that demand is increasing. Farmers will want to be more flexible and will be able to be more flexible with the abolition of the Agricultural Wages Board.
Lord Hunt of Kings Heath: What impact has the Minister’s department assessed there will be as a result of supermarkets forcing down costs on farmers, and what will be the impact of that on wages?
Viscount Younger of Leckie: I am glad that the noble Lord has brought up this point because I was about to move on to the issue of supermarkets which was raised by the right reverend Prelate the Bishop of Hereford and, indeed, by the noble Lord, Lord Whitty. From our perspective, we do not have any evidence at all that supermarkets—some names were mentioned by the noble Lord, Lord Whitty—would put pressure on farm workers’ wages.
Viscount Younger of Leckie: If I may be allowed to finish, prices paid to producers are determined by international markets, not just supermarkets. Supermarkets now recognise that they have their reputations to protect. Since February 2010, all contracts between major food retailers and their direct grocery suppliers must comply with the groceries supply code of practice, the aim of which is to ensure that those who directly supply the large grocery retailers do not have unexpected costs or risks transferred on to them.
I finish by saying that the horticultural sector similarly operates in international markets, with imports representing nearly 40% of fresh vegetables and over 90% of fresh fruit sold in the UK.
The right reverend Prelate the Bishop of Hereford also raised the issue of workers who worked in the farming sector who were below the school leaving age, if I understood him correctly. He argued that they would be disadvantaged by the abolition of the Agricultural Wages Board. I would like to reassure him that the National Minimum Wage Act 1998 does not apply to children below compulsory school leaving age. Therefore, following the abolition of the Agricultural Wages Board, no minimum rate would be set for young workers in agriculture in this age group. However, this would leave them in a similar position to children who work in other sectors such as shops, hotels and hairdressing salons. They will continue to be protected by general employment law and by health and safety legislation. Children of school age should be in full-time education and it is not the Government’s policy to encourage them to seek work.
The right reverend Prelate the Bishop of Hereford, in quoting Winston Churchill's words “sweated workers”, raised the question of protection. There is now a raft of protections for all workers under general employment legislation including the national minimum wage, working time regulations, the Employment Rights Act, equal pay and equality legislation and legislation for fixed-term employees, part-time employees and agency workers. If the Agricultural Wages Board were abolished, agricultural workers would enjoy the same protection as workers in all other sectors of the economy. That emphasises how far we have come since 65 years ago. It is interesting that there is quite a long list there.
To conclude on the issues that the right reverend Prelate the Bishop of Hereford raised, he made the point that there should be a defined living wage. I support that and in fact the Government support the concept of a living wage and encourage employers to take it up where possible. But the decision on what wages to set is one for employers and workers.
My noble friend Lord Greaves raised the issue of the consultation and much discussion was had in Grand Committee on that. The noble Lord, Lord Whitty, also raised this matter concerning Wales. I believe that I wrote quite a long letter to the noble Lord, Lord Stevenson, and copied it to a number of other noble Lords to address this matter.
The policy of the abolition of the Agricultural Wages Board and related committees was first announced in July 2010 so stakeholder and interested parties have had plenty of time to consider the matter. During this time, key stakeholders also had the opportunity to make their views known to Defra during meetings of the Agricultural Wages Board and agricultural wages committees. The department felt that a four-week consultation period was proportionate and realistic given the length of time that the policy had already been in the public domain.
The noble Lord, Lord Whitty, raised the issue—which, again, I believe was raised in Grand Committee—over the lack of use of the Public Bodies Act. To address this directly, the Public Bodies Act was only one method
by which the Agricultural Wages Board could have been abolished. The Government are perfectly free to bring forward primary legislation to abolish the board.
The removal of the board will provide simplification and greater flexibility and allow the agricultural sector to compete on a level playing field with all other sectors of the economy, encouraging employment and competitiveness which will benefit all those in the industry. The noble Lord’s amendments would retain the Agricultural Wages Board and the separate employment regime for agriculture. This would continue the dual regulatory burden for farm businesses. The proposal that the board should be able to fix minimum pay rates by reference to any periods of the employment is intended, we presume, to make it easier for the board to provide for annual salaries. We are not convinced that the amendment would serve its purpose.
The provisions on the enforcement of the agricultural minimum wage are derived from the National Minimum Wage Act, which dissuades farm businesses from offering annual salaries. Moreover, the introduction of salaries would not be enough in itself to bring employment in agriculture into the 21st century. If the amendment were accepted, the opportunity for the agricultural industry to move forward and modernise would be lost. Instead, agriculture would be stuck in the past with an antiquated system of statutory wage fixing and prescriptive regulation of employment practices.
The Duke of Montrose: My Lords, I wonder whether my noble friend could also answer the point that I raised earlier. Does he know of any form, format or regulation that will deal with the question of what payment rates should be for work over and above the minimum hourly rate?
Viscount Younger of Leckie: I thank my noble friend the Duke of Montrose for that question. It is best that I get back to him in writing after the debate.
While I welcome that the amendment acknowledges the need to abolish the 15 agricultural wages committees and 16 agricultural dwelling house advisory committees in England, we do not consider that there is a need to retain any of the functions. The amendment tabled by the noble Lord provides for the Agricultural Wages Board itself to take over the functions of the ADHACs in England. The Government are committed to growing the rural economy. A key part of that would be to ensure a dynamic and prosperous future for the agriculture industry.
We are already taking forward the recommendations of the Farming Regulation Task Force which will remove a range of unnecessary regulatory burdens from farm businesses. We are improving access to superfast broadband and the mobile network coverage in rural areas, which will make it easier for farm and rural businesses to operate. We have provided almost £57 million to the Welsh Government to ensure that broadband access is available to homes and businesses including the hardest to reach areas in Wales.
Some £100 million is being invested from the Rural Development Programme for England, which will help small rural businesses to improve their skills, facilities and competitiveness. We have also introduced a pilot of rural growth networks to share lessons learnt to stimulate sustainable economic rural growth.
This whole package of measures, together with the ending of a separate agricultural minimum wage, will support the agriculture industry in having a successful and competitive future, which will benefit all those who work in agriculture and the rural economy.
The abolition of the Agricultural Wages Board is supported by industry bodies, including the National Farmers’ Union, the Country Land and Business Association, the Tenant Farmers Association and the Association of Labour Providers. It is supported by independent professional advisers, such as the Central Association of Agricultural Valuers and the Agricultural Law Association. In view of the above, I hope that the noble Lord will feel able to withdraw his amendment and I commend the government amendments to the House.
Lord Greaves: On the question of dairy prices, is the Minister aware that for many dairy farmers, many of whom have been forced out of business, the farm gate price which has been forced on them by the market power of supermarkets and milk processors has been around or even below the cost of producing the milk? The supermarkets and milk processors have been able to use their market power to force down prices. The fact that there may be cheap milk imports means that the supermarkets can do that. But it is the supermarkets themselves who are responsible.
8.15 pm
Viscount Younger of Leckie: I thank my noble friend for his comment. I understand that the code adjudicator is called in in this particular case. But I owe my noble friend a full answer to his question and I will follow up after this debate.
Lord Whitty: My Lords, I thank the Minister and everyone who has participated in the debate, particularly those who supported my amendments. Those who objected to my amendments, including the Minister, seem to have two points—that we have to get rid of archaic bureaucracy and that this will not have any effect because wages will be paid well above the rate and that farmers as employers will not notice the disappearance of the Agricultural Wages Board.
As for bureaucracy, most of us are on the same page. We are happy to see the abolition of the 31 bodies. Our amendments would allow significant modernisation and simplification of the procedures and substance of the Agricultural Wages Board. To answer the noble Baroness, Lady Byford, that is why that form of phrasing is there—to move to annual salaries and so forth.
Indeed, when I was Minister, as the noble Lord, Lord Curry, will recall, I tried to get a lot of modernisation through on the Agricultural Wages Board but to retain essentially the legal underpinning which is needed in this unique industry for an isolated, sometimes exploited workforce. We have had a benign picture of the way that farming operates, but actually we know that in large parts of farming and probably most obviously within horticulture, there is still some serious exploitation of workers in all their terms and conditions including their minimum wage. The Government have not answered
my points regarding amendment and reform of the Agricultural Wages Board rather than abolition.
On the point about wages, we are facing a serious dilemma. By abandoning the Public Bodies Act route, the Government have not presented to the House detailed information. The impact assessment to which we have all referred is an authoritative document. It says that the Government’s best estimate—not the most extreme case, not the worst case, not the lowest case, and not the highest case either—is that in aggregate £240 million will be taken out of the pockets of current and future workers within the agricultural sector. That is the view and best estimate, not of the Minister’s department, but of the department of the noble Lord, Lord De Mauley, of what is going to happen. Obviously, there is a range of probabilities, but the Government’s best estimate is that this measure will lead to a reduction in wages in the agricultural sector by £250 million. That is the bare fact of this.
No doubt, in many of the enterprises of the noble Lords, Lord Cavendish, Lord Cameron and Lord Curry—I am sorry to fall out with him, but at least we are both being consistent on this issue—there will be better pay and little impact. But all the Government’s statisticians, agronomists and economists are looking at the total situation and saying, “The net effect of all this in aggregate across the whole of the agricultural and horticultural sector will be a loss of wages of that order”. That is their best estimate and that is at odds with the noble Lord, Lord Cavendish, and the circle of farmers in which he moves. Although clearly they are in the same geographical area, they are a different lot from those among whom the noble Lord, Lord Greaves, moves. But, even if he is right for all those farmers, the Government’s view is that is not the total effect on the sector. Either the Government’s impact assessment is utterly wrong, or the anecdotal evidence from those who are close to land-owning interests in this House is not accurate.
Lord Cavendish of Furness: My Lords, I gave statistics showing that the way farm workers were paid was overwhelmingly higher. Those are the statistics that matter. I am not in a position to defend an impact assessment with its huge range, which seems to me entirely meaningless, but I gave the statistics that are irrefutable.
Lord Whitty: My Lords, nobody is disputing that, at present, after years of operation of the Agricultural Wages Board and the economics of the industry, a lot of agricultural workers are paid above the minimum rate and above rates in some other industries. To that extent, I agree with him. My point is that the Government have refused to do what the House asked them to do under the Public Bodies Act and present us with a full explanatory memorandum with arguments for the abolition and arguments against any other alternatives. They have tried to cut corners on this, but their own experts tell them that the net effect of this will be a substantial cut in rural workers’ incomes.
If the House votes for the Government’s amendment and defeats my amendment to that amendment, that is what they are voting for tonight and they had better recognise it. That is the message they will be sending
out to rural areas. I am looking perhaps particularly to people on the Liberal Democrat Benches who were not committed by their manifesto to this abolition, as the noble Lord, Lord Greaves, said. I do believe that the Government have got this wrong. We could have had a more coherent debate had we gone down the route of the Public Bodies Act and the Government had produced their range of statistics and we could have had a sensible argument. Instead, we have a minimalist consultation, minimalist information and the Government sticking to an ideological position, supported by some elements of the farming industry but by no means all, and prepared to try and push through something which has an impact on the incomes of a lot of rural workers and their families. My amendment would allow a better way forward, a modernising way forward, and a reduction of bureaucracy, but it would retain the central protection that those agricultural workers have had and which they deserve to retain.
Baroness Byford: My Lords. I will be very brief. Three times the noble Lord, Lord Whitty, has referred to the rural workforce. This is nothing to do with the rural workforce; it is to do with the Agricultural Wages Board and he is misleading colleagues if he keeps using that phrase.
Lord Whitty: My Lords, the right reverend Prelate said two things. First, the agriculture workforce is a smaller proportion of the rural workforce than it used to be, but also the Agricultural Wages Board is taken, either in its substance or in the rate of increase, to a lot of other rural workers, so it does affect a wider range than those who are legally entitled to Agricultural Wages Board rates. It is not the whole of the rural workforce, but it is nevertheless taking £250 million out of the rural economy, ostensibly giving it to the farmers, but actually giving it to the supermarkets. If that is what the House wishes to vote for tonight, they had better be clear that that is what they are doing.
8.24 pm
Contents 163; Not-Contents 192.
CONTENTS
Adams of Craigielea, B.
Adebowale, L.
Ahmed, L.
Anderson of Swansea, L.
Andrews, B.
Armstrong of Hill Top, B.
Bach, L.
Bassam of Brighton, L. [Teller]
Berkeley, L.
Bilston, L.
Borrie, L.
Bradley, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Browne of Ladyton, L.
Campbell-Savours, L.
Christopher, L.
Clancarty, E.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Collins of Highbury, L.
Corston, B.
Coussins, B.
Crawley, B.
Davies of Coity, L.
Davies of Oldham, L.
Davies of Stamford, L.
Dean of Thornton-le-Fylde, B.
Donaghy, B.
Drake, B.
Dubs, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falconer of Thoroton, L.
Falkland, V.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Ford, B.
Foulkes of Cumnock, L.
Gale, B.
Gibson of Market Rasen, B.
Golding, B.
Gould of Potternewton, B.
Grantchester, L.
Greaves, L.
Grenfell, L.
Grey-Thompson, B.
Grocott, L.
Hanworth, V.
Hardie, L.
Harris of Haringey, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Hereford, Bp.
Hollick, L.
Hollis of Heigham, B.
Howarth of Newport, L.
Howe of Idlicote, B.
Howells of St Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Jay of Paddington, B.
Jones, L.
Jones of Whitchurch, B.
Judd, L.
Kennedy of Southwark, L.
Kennedy of The Shaws, B.
Kidron, B.
King of Bow, B.
Kinnock, L.
Kinnock of Holyhead, B.
Kirkhill, L.
Lea of Crondall, L.
Liddell of Coatdyke, B.
Liddle, L.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mallalieu, B.
Mandelson, L.
Mar, C.
Martin of Springburn, L.
Maxton, L.
Mitchell, L.
Monks, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Noon, L.
Nye, B.
O'Loan, B.
O'Neill of Clackmannan, L.
Parekh, L.
Patel of Bradford, L.
Pitkeathley, B.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Prescott, L.
Prosser, B.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Scotland of Asthal, B.
Sherlock, B.
Simon, V.
Skidelsky, L.
Smith of Basildon, B.
Snape, L.
Soley, L.
Stevenson of Balmacara, L.
Stoddart of Swindon, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Tonge, B.
Touhig, L.
Triesman, L.
Tunnicliffe, L. [Teller]
Turnberg, L.
Turner of Camden, B.
Wakefield, Bp.
Wall of New Barnet, B.
Walpole, L.
Watson of Invergowrie, L.
Wheeler, B.
Whitaker, B.
Whitty, L.
Wigley, L.
Wilkins, B.
Williams of Elvel, L.
Wills, L.
Woolmer of Leeds, L.
Worthington, B.
Young of Hornsey, B.
Young of Norwood Green, L.
NOT CONTENTS
Addington, L.
Ahmad of Wimbledon, L.
Alderdice, L.
Allan of Hallam, L.
Anelay of St Johns, B. [Teller]
Armstrong of Ilminster, L.
Ashdown of Norton-sub-Hamdon, L.
Ashton of Hyde, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Ballyedmond, L.
Barker, B.
Bates, L.
Benjamin, B.
Berridge, B.
Bew, L.
Bilimoria, L.
Black of Brentwood, L.
Blencathra, L.
Bonham-Carter of Yarnbury, B.
Bottomley of Nettlestone, B.
Brabazon of Tara, L.
Brinton, B.
Brittan of Spennithorne, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browne of Belmont, L.
Browning, B.
Burnett, L.
Buscombe, B.
Byford, B.
Cameron of Dillington, L.
Cathcart, E.
Cavendish of Furness, L.
Chadlington, L.
Chidgey, L.
Clement-Jones, L.
Cope of Berkeley, L.
Cotter, L.
Courtown, E.
Craigavon, V.
Crickhowell, L.
Curry of Kirkharle, L.
De Mauley, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
Dobbs, L.
Doocey, B.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Edmiston, L.
Elton, L.
Empey, L.
Falkner of Margravine, B.
Faulks, L.
Feldman of Elstree, L.
Fink, L.
Flight, L.
Fookes, B.
Forsyth of Drumlean, L.
Fowler, L.
Framlingham, L.
Fraser of Carmyllie, L.
Freeman, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Geddes, L.
German, L.
Glasgow, E.
Glentoran, L.
Gold, L.
Goodlad, L.
Grade of Yarmouth, L.
Greenway, L.
Hamilton of Epsom, L.
Hamwee, B.
Hanham, B.
Harris of Richmond, B.
Henley, L.
Heyhoe Flint, B.
Hill of Oareford, L.
Hodgson of Astley Abbotts, L.
Howard of Lympne, L.
Howard of Rising, L.
Howe, E.
Howe of Aberavon, L.
Hunt of Wirral, L.
Hussain, L.
Hussein-Ece, B.
Inglewood, L.
James of Blackheath, L.
Jenkin of Roding, L.
Jolly, B.
Jones of Cheltenham, L.
Jopling, L.
Kakkar, L.
King of Bridgwater, L.
Kirkham, L.
Kirkwood of Kirkhope, L.
Knight of Collingtree, B.
Kramer, B.
Lang of Monkton, L.
Lawson of Blaby, L.
Lexden, L.
Lingfield, L.
Liverpool, E.
Loomba, L.
Lothian, M.
Luke, L.
Lyell, L.
MacGregor of Pulham Market, L.
Mackay of Clashfern, L.
McNally, L.
Maddock, B.
Maginnis of Drumglass, L.
Mancroft, L.
Marks of Henley-on-Thames, L.
Marland, L.
Marlesford, L.
Masham of Ilton, B.
Mayhew of Twysden, L.
Montrose, D.
Morris of Bolton, B.
Nash, L.
Neville-Jones, B.
Newby, L. [Teller]
Newlove, B.
Nicholson of Winterbourne, B.
Northover, B.
Palmer of Childs Hill, L.
Parminter, B.
Patten, L.
Popat, L.
Randerson, B.
Razzall, L.
Ribeiro, L.
Risby, L.
Roberts of Llandudno, L.
Rodgers of Quarry Bank, L.
Rogan, L.
Sanderson of Bowden, L.
Seccombe, B.
Selkirk of Douglas, L.
Selsdon, L.
Shackleton of Belgravia, B.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Shipley, L.
Shrewsbury, E.
Shutt of Greetland, L.
Spicer, L.
Stedman-Scott, B.
Steel of Aikwood, L.
Stewartby, L.
Stirrup, L.
Stoneham of Droxford, L.
Storey, L.
Stowell of Beeston, B.
Strasburger, L.
Strathclyde, L.
Taverne, L.
Taylor of Holbeach, L.
Teverson, L.
Thomas of Gresford, L.
Thomas of Winchester, B.
Tope, L.
Tordoff, L.
Trefgarne, L.
Trenchard, V.
Trimble, L.
True, L.
Tugendhat, L.
Tyler, L.
Ullswater, V.
Verma, B.
Wallace of Saltaire, L.
Wallace of Tankerness, L.
Walmsley, B.
Wasserman, L.
Wei, L.
Wheatcroft, B.
Wilcox, B.
Wolfson of Aspley Guise, L.
Younger of Leckie, V.
8.35 pm
Consideration on Report adjourned until not before 9.34 pm.
Arrangement of Business
Announcement
8.36 pm
Baroness Anelay of St Johns: My Lords, I appreciate that many noble Lords wish to leave the Chamber after that event. The right reverend Prelate is ready to begin his Question for Short Debate and this has taken two minutes out of his time. We might find at the end of this that the usual channels will arrange for an extra two minutes so that he does not lose a precious second of his Question for Short Debate.
Crime: Sexual Violence
Question for Short Debate
8.36 pm
Asked By The Lord Bishop of Wakefield
To ask Her Majesty’s Government what steps they are taking to address the level of sexual violence in conflict and post-conflict situations.
The Lord Bishop of Wakefield: My Lords, when Robert Runcie, then the Archbishop of Canterbury, gave the Falklands service—which rather surprisingly became controversial—he quoted Pope John Paul II. He noted the Pope’s speech in Coventry in his 1982 visit to this country, in which he said:
“War should belong to the tragic past, to history. It should find no place on humanity’s agenda for the future”.
“War is a sign of human failure, and everything we say and do in this service must be in that context”.
That last comment came, of course, from someone who had not only driven his tank up the Normandy beaches and rescued another person from a burning tank, but who had also entered the newly liberated death camp at Belsen as an Allied military observer.
Sadly and wretchedly, war remains a part of the tragic present, and today’s debate takes us to the very heart of contemporary conflict. Sexual violence in conflict stretches back into history, well before the
20th century. That conflict-strewn century saw such abuses of our common humanity multiply terrifyingly. In the Bosnian conflict, in our own continent of Europe, somewhere between 20,000 and 50,000 women were raped. In a continent that traces the history of its civilisation back to antiquity, and indeed in a continent ravaged by two world wars in that century, these figures can scarcely be taken in.
More terrifyingly still, in the Rwandan genocide between 300,000 and 400,000 women were raped in a period of only 100 days. These figures alone give us cause enthusiastically and energetically to support and develop the Government’s initiative, led personally by the Foreign Secretary: the preventing sexual violence initiative. I am sure that the Minister will elaborate further on that initiative, and on the prospects for achieving a resolute consensus on this matter at the G8 Foreign Ministers meeting next month, so I shall focus in the minutes available to me on further background.
The 2012 Human Security Report Project challenged this dominant narrative on a number of fronts. It pressed home some important points and argued that such violence is exceptional and confined to certain conflicts. Sometimes the claims are not based on evidence. The omission of male victims from the mainstream narrative is also crucial. Indeed, some of the data were missing. These exaggerations and weaknesses can too easily play down the significance of sexual violence in wider society. However, the figures quoted earlier from specific conflicts are sufficient to indicate the alarming abuse of humanity implied.
Sadly, we are seeing such terrifying abuse committed in Syria today. I would welcome some comment from the Minister on how we might properly document such abuse, so that future legal redress and prosecution will be possible. In Syria, for reasons we all know, the western nations appear powerless to halt the appalling atrocities being committed by both sides in the conflict. What, then, are the crucial questions? First, this is obviously more than a moral issue. However morality is defined—by human rights, by a categorical imperative, by natural law, by respect for persons—sexual violence is an extreme denial of moral purpose and integrity, even in the extraordinary and tragic conditions of war and armed conflict.
Secondly, there is the issue of impunity. The facts of war do not somehow remove culpability and the normal patterns of human responsibility. Rape and sexual violence are inhumane and immoral in every circumstance, but fear has too often driven out a proper challenge and response to these tragic and inhumane abuses. In places such as the Democratic Republic of the Congo, which I know well, this is the precise situation. In the case of that republic, Her Majesty’s Government should be encouraged to push the donor community to enforce all aid-funded reforms: in the army and justice sectors, in infrastructure, in basic services provision and elsewhere. By pressing this home, there is that much more chance of putting an end to the conflict in general, and to respond to the lack of protection and the fragile situation of women. In the DRC, many agencies, including the churches, have been muzzled by fear and terror of retribution, not only individually but within
entire communities. This is true, and it is one of the reasons why it has been difficult even for churches to act together without somehow endangering some members of their sister churches.
Universally, genocide is certain to collapse courage and invade human integrity. This breeding ground of fear has led to a coalition among the Christian churches under the title We Will Speak Out. The catalyst for this, the Tearfund report, Silent No More, particularly documented the churches’ responses in the Great Lakes region of Africa. The churches are determined to set their faces against the muzzling of those caught up in such conflict. It would be good to hear from the Minister how the bottom-up, community-based efforts of churches and other faith-based organisations might best feed into the Government’s own initiative.
As was hinted at by the Human Security Report Project, there is a correlation between the incidence of sexual violence in armed conflict and its incidence in wider society. The frightening fact is that the collapsed barriers in conflict spin out into a wider world. To remove proper ethical norms in these extreme conditions cuts at the very roots of a common morality. It is often seen as unfashionable to link the study of history with moral purpose. Disconnect the two, however, and we shall repeat, or even deepen, moral dis-ease. Her Majesty’s Government’s preventing sexual violence initiative is rooted in a belief in moral purpose. It is one crucial step among others towards restoring the integrity of the human community.
I am coming close to my conclusion and I hope that the usual channels will be impressed that I may not even take up the whole of the time that I was offered. However, I beg noble Lords to accept that we dare not ignore this initiative, which has the active support of this Bench. Out of the tragedy of war and armed conflict, we have an imperative to encourage our humanity to flourish and be fulfilled.
8.45 pm
Baroness Eaton: My Lords, I give my thanks to the right reverend Prelate for bringing this debate to your Lordships’ Chamber this evening and for presenting to us the sobering issues of war in so many parts of the world. It is heartening to recognise, as the right reverend Prelate mentioned, the seriousness with which Her Majesty’s Government have approached the problem of sexual violence in conflict areas and to note the attention being paid to it through the Foreign Secretary’s initiative on preventing sexual violence. The initiative aims to address the culture of impunity, to replace it with one of deterrence and to change the balance of shame away from the survivors to the perpetrators of these crimes.
Two minutes is a very short time, so I shall concentrate on an area of concern in post-conflict areas. Rape as a weapon of war is unacceptable. Equally abhorrent is the practice that has become almost the norm in some post-conflict countries, where young men seek to rape women as a form of male sexual initiation.
The root causes of sexual and gender-based violence lie in society’s attitudes towards and practices of gender discrimination, which place women in a subordinate position in relation to men. The lack of social and
economic value attached to women and women’s work, along with accepted gender roles, perpetuate and reinforce the assumption that men have decision-making power and control over women. Through acts of sexual and gender violence, the perpetrators seek to maintain power and control over others. In post-conflict areas, there is an urgent need for campaigns that rethink gender awareness, that inform everyone that rape is a crime and an unacceptable practice, and that focus on respect for women.
8.47 pm
Lord McConnell of Glenscorrodale: I, too, thank the right reverend Prelate the Bishop of Wakefield for securing this debate and for his excellent, comprehensive introduction. I am certain that, even in the two minutes that each of us has been allocated, we could collectively ensure that our voice is heard on this vital topic ahead of International Women’s Day.
In Rwanda in 1994, as has already been mentioned with a different statistic, at least one woman was raped every two minutes while the genocide was taking place. As was said, potentially as many as half a million women were raped in that small country that year. From the Balkans to the Congo, from Haiti to Syria, rape is used all too often as a weapon of war. Extreme sexual violence, committed regularly in many countries against children not just under the age of 16 but under the age of 10, is designed to terrorise and subjugate women, their families and their communities. Mass rape has been used in far too many situations as a strategy for ethnic cleansing of the population.
I have seen too often the tortured memories and the present-day fear in the eyes of women and children from the Congolese jungle to wonderful city of Sarajevo. That is, frankly, a vision of hell and we must be clear in our resolve never to tolerate or accept it. I have also seen visions of hope. I have seen women in Nepal organise for their legal rights in a way that is starting to put the horrors of the past behind them. I have seen young girls in Liberia—young mums, the victims of rape—with the support of Save the Children rebuild their lives and give their children the potential of a better future.
We need not only to prosecute the guilty; we need to support the victims. We need also to ensure that we do something to bring about lasting change. In the 2015 review of the millennium development goals we must ensure we deliver the capacity-building that will ensure safety and security for citizens in individual fragile states, and ensure that women have the legal, political and economic empowerment that can deliver that lasting change. If we do that we will make a real difference.
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Baroness Hamwee: My Lords, if I were raped I believe I could count on the support of my family, my friends and my community, including the men—provided that I could bring myself to talk of something that to some is literally unspeakable. I would not become an outlaw from my own society. However, in many cultures the victims of sexual violence are outlaws. It is a terrible, vicious spiral when violence is a systematic response to opposition to a regime. The victims and the children
born of rape are stigmatised. The health, social and economic impacts are obvious.
I say with huge humility from the comfort of my own background that a major part of the work facing a world seeking to help is to change attitudes to sexual violence—where it is regarded as normal and not to be questioned—and the response to it. Those affected need support and treatment, not ostracism. I know that training and facilitating work by local people is a focus of the PSVI. It must be because it is best led by members of the communities involved, particularly men and boys and especially religious leaders.
There are immediate and long-term needs. The immediate need is the provision of safe, protected areas for women and children who are refugees to protect them from continued violence when they have fled their own country. In the long term victims need help to give evidence of what has happened. Prosecutions need evidence; evidence needs witnesses; witnesses who are traumatised victims need treatment, both to rebuild their own lives and to be able to give evidence to prosecutors and the courts. The burden of acting as a witness must not be overlooked.
The issue has moral, political and practical dimensions so, as others are saying, let us work with everyone who can contribute and especially those who from their own lives have a deep understanding of the cultural dimensions.
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Baroness O'Loan: My Lords, I thank the right reverend Prelate for bringing this debate today. I have worked with women in conflict in many countries and I want to share some of the things that they say donor countries could do to help.
The UK Government in their engagement with the UN could contribute by seeking to place the issue of sexual-based violence on the agenda at peace negotiations. There can be no amnesty in law for rape and violent crimes in times of war. However, very little has been done not just to bring offenders to book but even to articulate that rape is a crime and action will be taken against those responsible. These issues rarely form part of peace negotiations and that is because the offenders are the people at the table and they have no interest in bringing the issue to the table. If supporting Governments, such as the UK, could make it clear that aid and assistance will only follow if women have a place at the negotiating table and if the peace agreement contains a clear statement about sexual violence and its consequences, this would provide a context for beginning to address the problem. The UK could also use its influence to promote compliance with the requirement that peacekeepers deal with their own perpetrators of sexual violence and most particularly that they deal with, and provide for, the UN babies—those born out of the conflict.
Another contribution that the UK is very well placed to make would be in the context of criminal investigation. Any complaint that a rape victim makes has to be in the context of local and national law. Women often have to accept that they have no access through criminal law courts and their only redress is through local laws. The Government could, in their
aid packages, prioritise a functioning police and judiciary. Women in these countries express the fact that they need to be able to work closely with the social guardians to disseminate messages about GBV. They say that when church and state and any UN and EU peacekeeping units work together with the women to say these things, it works.
Women want recognition of the level and extent of that violence. They want databases established to demonstrate that. That will make self-evident the need to address the issue. They need to be able to report. They need a functioning police service. They need aid which will support the development of policing, with an emphasis on the need to provide for women. They need, above all, more than a desk and a computer in a sexual violence unit. They need cameras to photograph injuries. They need properly equipped medical services. They need medication. They need the capacity to carry out investigations. Most of all, they need a methodology through which forensic science facilities can be made available to produce, for example, DNA testing of semen left in women after rape. Properly retrieved and handled, that evidence can be conclusive. It may negate the need for investigation.
We have highly developed forensic science facilities. I am not suggesting the creation of labs across the world, but it should be possible to develop a system by which evidence could be sent to a forensic science lab for analysis and reporting. That might provide a breakthrough. Women would see that there might be some point in reporting; it would encourage and affirm them. Of all the issues that I have discussed with women in the third world, this is the one that they most want.
Lord Wallace of Saltaire: My Lords—
Baroness O’Loan: I apologise, my Lords.
Lord Wallace of Saltaire: My Lords, I know that we are very tight on time, but perhaps people will remember that when the clock shows two minutes, you have had your two minutes. Most people are taking a good two and a half minutes or more. Please can noble Lords keep their remarks brief.
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Lord Sheikh: My Lords, rape and other forms of sexual violence have been used as weapons against women in conflicts all over the world. The militias in eastern Congo are violating women as a means of exerting control, humiliation and submission. The abuses in the region are said to account for the majority of the work carried out by international aid organisations. The level of brutality is alarming and leaves victims with physical and psychological wounds. There is a stigma attached to rape which results in many victims being ostracised from mainstream society. The majority of victims are therefore reluctant to report their abuse for fear of rejection by their communities.
Some of the most brutal sexual violence occurred in Srebrenica, which was the worst atrocity on European soil since the end of the Second World War. It is a
sorry state of affairs that so far only 30 people have been convicted for the 50,000 rapes committed during the Bosnian war.
There are also reports of rape being used as a weapon in Syria. In this regard, I would like to say that the Prophet Muhammad—peace be upon him—instructed his followers not to lay hands on women, children and elderly people in any form of warfare.
Ending sexual violence is central to conflict prevention and peace-building worldwide. It is important that the perpetrators of these heinous crimes are brought to justice. I am pleased that the Government have formed a UK team of 73 experts devoted to combating and preventing sexual violence in armed conflict. The experts will be able to be deployed overseas to gather evidence and testimony that can be used to support investigations and prosecutions.
I wholeheartedly support the plans to deploy UK experts to Libya, Bosnia, South Sudan and eastern Congo. I also support the Government’s decision to provide £1 million in funding to the office of the UN Secretary-General’s Special Representative on Sexual Violence in Conflict. The Government deserve praise for ensuring that victims of these abhorrent crimes will be given access to the support and justice that they deserve.
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Lord Parekh: My Lords, I thank the right reverend Prelate the Bishop of Wakefield for securing and introducing the debate.
Sexual violence tends to occur in conflict situations far more than in others. That is so for three reasons. First, the perpetrators of sexual violence think that they have a right to the bodies of their victims, either because they have subdued them in war or because they have spared their lives. Secondly, there is a culture of immunity. They believe that they will be able to get away with this. Thirdly, there is a collective ethos that supports and encourages such behaviour, because of either a breakdown in law and order or a climate of hatred.
If these three are the conditions that facilitate sexual violence, the answer has to lie in addressing them. In the one and a half minutes left to me, I suggest that there are half a dozen things that we might think about, and I am simply going to list them.
First, it is very important that we must change the intellectual climate of the armed forces. They should not think that subduing somebody gives you a right to that person’s body.
Secondly, there should be successful prosecution. In order for that to happen, there must be a team of experts who will gather evidence and make sure that the prosecution succeeds.
Thirdly, as a result of conflict there are peace agreements in which perpetrators of this sort of violence are generally exempted from punishment or given amnesty. That should not happen.
Fourthly, the West must set an example. In all the cases we have talked about it is always the other part of the world that engages in sexual violence. We forget the fact that the American forces in Iraq behaved no better and that, sadly, some of our own have not
proved exactly worthy of the highest standards that this country sets them. It is important that the West should set a good example.
Fifthly, the churches should play a very important role. It is not entirely a matter for the state. The churches have either been silent, as in Rwanda, or partisan.
Finally, there must be a way of introducing some kind of early-warning system. Sexual violence does not break through the surface just like that; there is a build-up to it, and if it can be caught early enough it can be stopped.
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Lord Alderdice: My Lords, I suppose it is a tragic inevitability that shooting, bombing, injuring and killing people violently is part of war, and there is often debate about which incidents of bombing, shooting or violence are within the moral or legal framework. However, there is no dispute that sexual violence in the context of war is outside all moral and legal limits. I believe that those who in engage in this kind of behaviour know perfectly well that they are outside what is morally acceptable—unless they have so dehumanised those whom they are abusing that they have largely lost their own humanity. We should be clear about this: there are no contexts in which this is acceptable, either to the overwhelming majority of victims who are women, or as we are increasingly seeing in Syria, the minority who are men, often young men.
That is why I am proud that our own Government have seized on this issue as one of the most important for the G8 and for our foreign policy. Can my noble friend assure me that, as the Foreign Secretary and colleagues move to try to engage in negotiations about a new international protocol on this issue, these crimes will be taken to the International Criminal Court if such a protocol is accepted? Can my noble friend also assure me that we shall see not just a legal change but, as my noble friend Lady Hamwee has said, a cultural change, which will ensure that those who engage in sexual violence can never be regarded as national heroes, but always as cowardly and brutal people who damage their own humanity as they damage that of their victims?
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Baroness Coussins: My Lords, I want to draw attention to sexual violence in Colombia and to ask the Government if they will reconsider their decision not to include Colombia as a designated priority country under their excellent PSVI programme.
The Colombian Constitutional Court itself has said that sexual violence is,
“a habitual, extensive, systematic and invisible practice in the context of the Colombian armed conflict”.
The UN special representative noted only last May that all armed groups there—the guerrillas, the security forces and the paramilitaries—use sexual violence as a strategy of war and terror, with near total impunity.
I believe there is a great deal that the UK could do to help the situation in Colombia, and that the excellent work being carried out by our embassy in Bogota
would be all the more effective if backed up by further dedicated resources and the authority of priority country designation.