EMPLOYMENT AGENCIES (Hansard, 19 July 1972)

§ Mr. Gavin Strang (Edinburg, East)

I beg to move, That leave be given to bring in a Bill to abolish private employment agencies. Private employment agencies have been subjected to a great deal of adverse publicity recently, and most of it has concentrated on the practice whereby some agencies charge young girls fees to place them in holiday jobs overseas. Very often the jobs turn out to be quite different from those advertised, and, in my experience, the girls usually find it impossible to get back their money.

However, this Bill is to abolish all employment agencies. In the short time available to me I wish to concentrate on the wider questions, although it seems obvious that it ought to be illegal for all agencies to charge fees to employees and for any agency to place a young girl under 21 in a job overseas. I am concerned with the big bureaux. I have in mind people like the Brook Street Bureau, the Alfred Marks Bureau and the Conduit Bureau.

I suggest that there are three fundamental reasons why private employment agencies should be abolished. First, they represent a monstrous misuse of human and material resources. If any hon. Member doubts that he has only to walk along Victoria Street where in about 100 yards he will see no fewer than a dozen separate branch offices of these employment agencies, all doing much the same thing.

The second reason that I give for abolition is that private employment agencies exist to make a profit. For that reason, inevitably they have to resort to activities which are incompatible with the provision of a humane and efficient service.

The third reason which I give for abolition is that the existence of private employment agencies on any substantial scale makes it virtually impossible for us to create an efficient and comprehensive State employment service.

632 Private employment agencies have two basic functions. First, they employ staff known as "temps" who are hired out to employers for short periods. Secondly, they place staff in permanent jobs. In the time available to me I intend to concentrate on the second of those two activities.

At any one time an agency has a certain number of jobs on its books. To make money, it has to put people in those jobs. That means that it is forced to use high-powered sales techniques which to my mind are quite anti-social. Employers frequently complain that the interviewers are not well trained. My complaint is that, while many interviewers are not trained, those who are trained to be salesmen and not to be proper counsellors to help people find the jobs appropriate to them.

One example of high-powered sales techniques is phoney or misleading advertising. Recently a fashionable employment agency got on its books a vacancy for a trainee film producer with a film-producing company. The employer insisted that the employee be experienced. The agency advertised the job in the Evening Standard on a Friday omitting to say that applicants had to be experienced. The job was filled on the Friday. On the following Monday about 100 people went to the agency all wanting the job. The interviewers at the agency then had the task of selling them other jobs. That is what it is all about.

I heard about another example from an employee of one of the big bureaux. The practice is to put in the window of the branch particulars of jobs available. The best jobs are put in the window and only limited information is given. I was informed that after one job had gone the interviewer concerned wanted to remove the advertisement from the window. The supervisor would not allow him to do so. That card was bringing people into the shop, and it was the interviewer's task then to try to put applicants into other jobs.

This leads to the situation where people are put into jobs which are quite unsuitable for them, and a frequent complaint by employers is that people are sent from agencies who are quite unsuitable for the jobs with the result that something like a third of them leave within 10 weeks.

633 Why do employers insist on using agencies? The reason is that agencies flourish when there are staff shortages. They are able to attract articulate and skilled staff, and when there is a shortage many employers feel obliged to go to them. Many large employers are now stopping the use of agencies for these reasons. But, inevitably, in times of labour shortage agencies can corner some of the most highly skilled labour. The agencies, of course, have a vested interest in turning over staff.

However, precisely because the task of the interviewer is to fill vacancies as opposed to finding jobs suitable for people coming to the shop, they are not concerned with people who are unemployed and who have difficulty in getting jobs. A blatant example of the effect on people with difficulty in getting jobs is the attitude of many agencies to black people. There is no doubt that many large city firms and insurance companies use private employment agencies as a way of getting round the Race Relations Act. Anyone speaking to interviewers who have spent some time with big agencies will have no doubt about that.

It is worth mentioning in passing that this situation has been referred to in the two last reports of the Race Relations Board. Paragraph 61 of the 1970–71 report says: The extent to which employment agencies adjust to unlawful discrimination is of course unknown, but, as we have indicated, there is no reason to suspect that it is not uncommon. Paragraph 42 of the 1971–72 report says: As last year, the majority of cases arose from allegations made by employees of private employment agencies.…A number of investigations was started on the basis of allegations made by two employees of a major employment agency. These resulted in opinions of discrimination being formed against 10 firms. There is no doubt that these private employment agencies have flourished to a large extent because of the inadequacy of our State service. Everyone, I think, now accepts that the job-finding service must be separated from the unemployment benefit side. But the Governments proposals are hopelessly inadequate and seem almost to be designed to maintain private employment agencies and to push our State service into the market place 634 We want separate, attractive offices in our town centres with staff trained as counsellors, not high-powered salesmen whose only function is to put people in jobs for which they sometimes get a commission. Above all, we want all vacancies in an area to be registered with the State employment service. An employee must be able to visit the local Department of Employment office and see all the vacancies which exist in the area at the time. A whole variety of services could be provided by that one office: information about training in the area and a host of other matters.

The crucial point in this context is that as long as private employment agencies operate on a big scale they will be able to cream off the employees who find it easy to get jobs. They will attract the people who can go for the best-paid jobs. The State service will therefore be forced to cater for a disproportionate number of people who have difficulty in getting jobs. It will make it more difficult for us to get the new image and approach across that the new State employment service is not just for the unemployed but for everyone who is interested in a job.

If hon. Gentlemen opposite think that this is a piece of doctrinaire socialism which does not relate to the real situation, I suggest they look at a recent OECD report which, among other things, draws attention to this fact: Only in the United Kingdom and North America are private employment agencies organised for profit allowed to operate extensively. I suggest that hon. Gentlemen should go and look at Sweden's excellent State employment service. I suggest they go to Germany, the Netherlands, and other Common Market countries and discover why those countries have found it necessary to abolish private employment agencies.

§ Mr. Nicholas Ridley (Cirencester and Tewkesbury)

The hon. Member for Edinburgh, East (Mr. Strang) was remarkably improvident to suggest bringing forward the Bill. There seems to be a witch hunt on the benches opposite against private employment agencies. There was a Bill in the name of the hon. Member for Putney (Mr. Hugh Jenkins) a few years ago which, even though the 635 Labour Party was in the majority, was defeated and not brought forward by the then Government. The National Board for Prices and Incomes was asked to investigate the problem, and right hon. and hon. Gentlemen opposite were horrified to get a report which denied the silly allegations which the hon. Member for Edinburgh, East has been making, and pointed out what a valuable function the private employment agencies fulfil in the economy.

As the hon. Gentleman said, private employment agencies provide jobs for half the professional people in this country. In addition, they provide introductions to jobs for all the temporary staff in this country. Is the hon. Gentleman seriously suggesting that we should abolish an industry which is making such a massive contribution to the employment and redeployment of people?

The private employment agencies do this without any delay. The hon. Gentleman asked us to inspect the scene in Sweden and the Common Market countries where there are no private employment agencies. After his travels the hon. Gentleman will discover that a person has to wait ten days before he can get a job, even if there is a tremendous shortage of skilled clerical labour, because there are no private employment agencies to effect this extremely quick changeover.

It seems extraordinary, when we have a free State employment service, to which I pay tribute, that alongside it a charging service can exist and flourish although it has to pay its way in competition with that free service. That the hon. Gentleman should suggest that this efficient service, which is paying its way and charging fees, should be abolished because it is standing in the way of the State service, seems to be turning logic on its head.

I have the dubious authority, but at least the authority, of the National Board for Prices and Incomes to back up what I say: Employment agencies are a symptom of two causes—the absence of a fully developed State employment service operating an integrated manpower policy and the failure of many employers to use effectively the staff at their command. If there is this need, the hon. Gentleman is indeed rash to suggest abolishing it.

The hon. Gentleman made a lot of unsubstantiated allegations. I should like 636 to answer some of them, because I do not think he should make allegations in a tip and run Ten-Minutes Rule speech and be allowed to get away with them.

The hon. Gentleman talked about deceptive advertisements. He should know that in London the local authorities control the standard of advertisements and actively check that the advertisements outside correspond to jobs inside which are real and available. There is active local authority policing. I should like his Bill to extend local authority licensing to the rest of the country where it does not exist. That would be worth while. However, that is a different matter from abolishing the lot. In addition, the Trade Descriptions Act applies. If any member of the public is aggrieved or thinks an advertisement is false, he has his remedy by going to the local weights and measures inspector, who will prosecute at no cost to the individual if the advertisement proves to be false.

The hon. Gentleman said that employers were given the wrong staff and that the interviewers were not competent. The National Board for Prices and Incomes considered this point, too, and, quite truthfully in my opinion, said that employers do not specify accurately enough their staff requirements and therefore it is impossible for the interviewers to produce the right applicants for the vacancy or vacancies.

The hon. Gentleman implied a slur about young girls being taken to Spain and given jobs which turned out to be immoral. [Hon. Members: "No."] The hon. Gentleman should know that on investigation that was proved not to be true. He should be careful to avoid that kind of slur against employment agencies.

The hon. Gentleman's worst point was that there were too many of these private employment agencies. What can they all be doing? They must be doing business or they would not be there. There could not be 12 agencies in Victoria Street not earning profits or they would not be there. If the hon. Gentleman goes along Victoria Street he will find probably 12 grocers and 12 tobacconists. There is nothing wrong in that. It means they are doing good business and fulfilling a need.

Private employment agencies find the staff which employers need for very good 637 reasons: when staff are sick or on holiday and when there is a shortage of staff to do extra work. The agencies match the staff to the requirements of the market. The private employment agencies form a most effective instrument.

Until the Labour Party realises that we do not build for the future by trying to destroy what is good about the present, it will never endear itself to those who want to see this country get on, bustle forward, and improve its position.

I do not intend to divide the House on this occasion. It is ridiculous to think that the Bill could make any progress. We are already in the middle of July and the Session is about to come to an end. It would have been a waste of my hon. Friends' time to have asked them to come in large numbers this afternoon to vote down leave to bring in the Bill. The hon. Gentleman's Bill will get nowhere. The only reason why I am not dividing the House on this occasion is that his Bill has no hope of reaching the Statute Book. That is something about which the House should be extremely pleased.