From the TUC

Farm workers lose £280m wage protection: Agricultural Wages Board abolition

28 Oct 2013, by in Labour market

tractor working in field

The government is doing away with key legal pay protections for farm workers. The Agricultural Wages Board, which has set skilled pay rates, overtime rates and other conditions for more than half a century, has now been abolished in England and Wales. Hidden in the small print is the government’s own admission that this will lead to falling wages in the sector and worsen rural poverty.

Given that many farmers wanted to keep the pay rules, what has driven the government to take a step that both Thatcher and Major baulked at? Read on for a harrowing tale of big business and old money winning out against the interest of farm employees, small farmers and rural communities.

Democracy overruled

The coalition Government in its eagerness to abolish the Agricultural Wages Board drove it through with undue haste, using obscure legislative means and ignoring the majority of responses. The majority of responses had objected to the proposed abolition.

A consultation period which, given the known parlous state of broadband in rural areas, allowed only four weeks for the formal consultation. This was in clear breach of a compact that the Government have with the voluntary sector that commits to a twelve week consultation period. Many of the responders complained bitterly about the lack of time to consult properly. The period for consultation was just before Christmas which made it even more problematic. Also, DEFRA did not bother to consult any rural church organisations as part of this process despite their having a key interest in the issue of poverty in rural parishes.

However, despite the lack of time there were still 930 responses to the consultation, many from farm workers and some from farmers, objecting in the strongest terms to the proposals.

The key question in the consultation for agricultural workers was whether consultees agreed that agricultural workers in England & Wales should be brought within the same minimum employment terms and conditions as in all other sectors of the economy. This received a resounding rejection with 64% of the responses saying No. So clearly under the consultation a majority rejected the proposal.

If the Government consults, then ignores the majority response, is it any wonder that people feel further alienated from the political process as it is a clear rejection of any semblance of a democratic process?

Only those with little understanding of the complex social relationships in often isolated rural areas would suggest that individual farm workers would be able to negotiate decent pay and conditions with an employer. There is a massive power imbalance in this relationship which was ignored by Ministers but was frequently referred to by farm workers who responded. The following is fairly typical from a woman whose husband had been a farm worker for 30 years:-

“From our experience (my husband has faced redundancy through changing farming policies on numerous occasions), each employer with the exception of one has only ever paid the minimum rates. If he came under the national minimum wage he would be paid that.”

The mantra of modernisation was promoted by Ministers as a reason for the abolition of the AWB. One key point they frequently made, was that the AWB somehow stopped the use of annual salaries by employers. However, this argument was undermined by a cursory look at DEFRA publications in their own Farm Labour & Wage Statistics publication 2012 which identified that there are 10,000 to 12,000 farm managers who were currently paid on an annual salary.

The AWB provided minimum rates up to and including a grade for Farm Managers at Grade 6, with a minimum rate of £9.40 per hour. This was the highest rate specified by the AWB, for a highly skilled and experienced individual who in effect ran the farm. This is hardly a high minimum rate for such a responsible job dealing with thousands of pounds worth of animals, machinery, buildings and/ or crops.

It was not just farm workers that objected to the change. Many small farmers also objected. One small farmer expressed his frustration in the following way:-

“The AWB has brought fairness and justice for all concerned in the industry and I cannot comprehend the reasoning behind abolition”

However, it was the larger farmers, landowners, horticultural growers with the NFU and pressure down the supply chain from the supermarkets that pushed aside such objections.

Power in rural areas

Whilst there were many exceptions with both farmers and landowners objecting to the proposals, it is instructive to consider some of those that were eager for abolition and also the context of subsidies that are paid to the industry.

The Agricultural industry is the only industry in the UK where the employers receive more in subsidy (£3 billion) than the entire hired wage bill (£1.7 billion). There is no free market in agriculture: it operates within the EU Common Agricultural Policy.

In 2010, 47 CAP payments of more than £1 million were paid to large landowners. The Government rejected a call for a limit on EU subsidies to be set at £250,000 arguing rather hypocritically that charities such as the National Trust would be harmed if subsidy requirements were changed. Unsurprisingly, the NFU defended the current subsidy system saying some payouts to wealthy landowners were unavoidable. It seems that subsidies for the wealthy must be retained but pay and conditions safeguards for workers must be removed.

The organisations that wrote calling for abolition reached up to the apex of power and wealth.  A Duchy of Cornwall Nursery manager in Cornwall wrote calling for abolition and stating that the “overtime rates are ridiculous”. These are standard overtime rates prevalent throughout the private sector. The Duchy last year distributed a surplus of £18.3 million to Prince Charles.

Another interesting submission calling for abolition came from Stowell Park Estate Ltd. The ultimate parent entity is the Vestey Settlement based in the Channel Islands. The estate has been the beneficiary of considerable EU subsidies, as were many other organisations that called for abolition. The tax arrangements of the Vestey’s seem not to hinder them calling for abolition of pay regulation for low paid rural workers in the UK, all of whom will be UK tax payers. Lord Vestey is also the second richest man in the South West and is friends with the Royal Family.

In a submission by Action with Communities in Rural England, the foremost rural organisation in the country they outlined well the unique nature of relationships in rural areas as follows:-

“Workers in retail, construction or the car industry do not go home to a house owned by their employer, unlike 30% of agricultural employees. In tightly knit rural communities it is often the case that a farm worker’s employer, employer’s spouse or other members of their family may be in positions of social control such as justice of the peace, parish councillor, a school governor all of these and more.”

Rural workers are more vulnerable and less powerful than their urban counterparts and have a far narrower range of choices when it comes to employment.

Poverty impact

The high cost of living in rural areas is defined by Action with Communities in Rural England, as a rural premium. The costs of goods and services are greater and transport is often essential to reach basic services.

Submissions opposing abolition from local Citizens Advices Bureaus, such as one in Suffolk, identified that the AWB had given invaluable help to their Bureau in dealing with unscrupulous gang masters in the area. In addition, they were concerned that loss of enhancements for workers for night work, on call and other allowances would have a big impact on the take home pay of those called upon to work extremely long, unsocial hours, at critical times of the year for the industry such as harvest and lambing.

It is clear that the abolition of the AWB will lead to a worsening of pay and conditions for agricultural workers. This was demonstrated by DEFRA’s own Economic Impact Assessment on the impact of abolition of the AWB. They calculated that in the next 10 years, the total cost to workers would be £279.7 million. Some of this money is itemised in the following way:- £8.8 million lost in sick pay, £100.1 million lost in annual leave, £149.9 million in reduction of wages to workers and £2 million in general reduction in employment costs. This will be money taken from the pay packets of agricultural workers in the next decade.

So, it is quite clear that Ministers were aware that abolition would lead to a reduction in pay and conditions for agricultural workers. These are low paid workers in comparison with many others and this level of cuts will push many into poverty, particularly given the high and rising cost of living in rural areas.

DEFRA also recognised that women working in agriculture (approx 28% of the workforce) will be particularly hit by abolition.  Women are over-represented in the non-permanent workforce at present with only 18% permanent workers. So, with abolition, it is expected that their employment will become even more precarious and less permanent. It is difficult to understand the function of an Equality Impact Assessment carried out by DEFRA on the proposal for abolition that identifies the negative impact on women and is then ignored.

Finally, there can be fewer more graphic examples of the ability of the Coalition Government to side with those of wealth and power against the hard working but more vulnerable, isolated and powerless to the advantage of the former and the detriment of the latter. No wonder that the Tories’ slogan that “We are all in it together” rings so hollow with so many people in this country.

GUEST POST:  Penny Morley was Researcher for the Rural Agricultural & Allied Workers of the T&G and served as a member of the Agricultural Wages Board in the 1990’s. She was also the Researcher for Local Government for the T&G (now Unite) and a member of the TUC’s Sustainable Development Committee. Since retirement she has been active in promoting Older People’s issues in her local community.