EMPLOYMENT AGENCIES BILL

HC Deb 16 February 1973 vol 850 cc1672-715

Order for Second Reading read.

1.36 p.m.

Mr. Kenneth Lewis (Rutland and Stamford)

I beg to move, That the Bill be now read a Second time.

This is the first time in my 14 years in the House that I have been in the first 20 in the Ballot for Private Members' Bills. I suppose that it is like drawing a ticket in a political Grand National. There used to be a man at racecourses who said "I gotta horse". A Member who gets a place in the Ballot normally says "I gotta Bill", and then has thrust at him a large number of possibilities for legislation.

There are hurdles for my Bill to overcome, and Second Reading is the first. I hope that it will be possible to jump this hurdle at least, and perhaps go on to finish the course.

First, I should like to thank those who have acted as sponsors. A Bill on the same subject has been before the House in the past. The possibility of improving the licensing procedures and introducing regulations into the employment agency business has been considered over a number of years. I believe that legislation is now necessary.

I should particularly like to mention the hon. Member for Putney (Mr. Hugh Jenkins), because he sought to introduce a previous Bill on the subject. His work has not been lost, as I think he realises. On the contrary, although my Bill is shorter and less complex than his, it includes much of what he wanted.

My choice of employment agency legislation rests on two propositions. The first is that there is an urgent need for reform. As one who has used the agencies on occasions, I have at least a little experience of them. Those who have such experience know of the need for reform. The agencies are used very widely.

The second reason for my selecting this Bill is that I have always had an interest in labour and employment matters over the years and it has seemed to me that the employment services, both in the State and in the private sector, need the provision of the best available, and nothing else. My right hon. Friend is to reorganise the public sector. My hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith) is on the Front Bench today. Both he and I have been associated with these matters on the back benches in the past, and I am particularly glad that he is here to speak on this Bill, and I shall be interested to hear what he has to say.

If there is to be an improvement and reorganisation in the public sector, it would, clearly, be wrong to leave the private sector completely untouched. We already have the Trade Descriptions Act, which aims to assure the public of a fair deal in the purchase of goods, and there are other consumer protection measures in the process of going through the House. It would be wrong to leave the provision of a service as personal as employment to the methods of the get-in get-out on-the-make merchants who are prepared to play around with people's careers and the staffing of companies in the process.

Licensing and regulation are right, inevitable and needed now. I realise that there are those who want to disband private employment agencies altogether. If it is any comfort to them I will say that I took that view myself many years ago. Since then the industry itself has done its best to reform its own procedures. But it cannot control everybody coming into the business, and that is one of the reasons why we need the Bill. However, the industry has done its best, and the best of it is providing a good service.

Secondly, the business of employment agencies has grown tremendously in recent years, and it cannot be denied that it is now a major national business. If the private sector were destroyed altogether, there would be a massive gap in employment facilities that the public services could not fill. We have to recognise that employment agencies play a major part in placing people in commerce and industry, and we must seek to get the best out of them. I am sure that the right course is, therefore, to develop and improve the public service and to license and regulate the private sector nationally, realistically and firmly.

In the process of preparing the Bill I have consulted a wide range of interested parties. I have consulted the Federation of Personnel Services—that is, the agencies themselves—the Entertainment Agents Association, the London Boroughs Association and the TUC, which has views on the subject. I met a committee at Congress House and we did what we could to meet various views. I have also been in touch with the CBI and the County Councils Association.

It is common to all those bodies that they recognise the need for reform. My mail clearly indicates that some agencies need control, if not removal from the scene. Criticisms are often exaggerated, but they are not always without foundation. The relatively high fees are sometimes resented, and rightly so if the quality of service and the personnel offered do not come up to standard. On the other hand, if the services can be improved through licensing and regulation, the standards of employment agencies may be brought up to the best available and the charges would then be less subject to criticism, for people are prepared to pay a reasonable figure if they are given a good service.

It is a criticism that some agencies do not match the competence of the personnel sent to employers with the wages proposed for such personnel, and that criticism is not infrequent. The Bill does not deal with fees. but I hope that by dealing with quality is will remove criticism of charges.

One hears a number of other criticisms from time to time. One agency, not a member of the federation, recently put an advertisement in the newspapers to say "If you wish to beat the freeze, apply to us." That is the kind of thing that leads to the suggestion that some people will go to any ends to make money in this business.

Another criticism that one hears from time to time is that some agencies place people in jobs, but after a short time, when the time for the agency to claim the full fee is running out, the agency telephones to offer that person another job, and thus it starts the process of earning fees all over again. There are too many rumours about that to discount them altogether. The federation itself does not want that to happen, and I hope that the regulations under the Bill will prevent it.

The agencies have to recognise that if they get a Bill of this kind and there is full geographical licensing, if the Government lay down regulations, the agencies themselves will have to put more of their resources into providing trained staff within their own organisations, trained interviewers and so on. They have to ensure that the skills for which employers ask are matched by the training provided by those interviewing, so that an interviewer may tell an employer, "I am sending you an individual who has these qualifications, and I am certain that those qualifications are right".

That may be perfection, but the agencies have to seek to reach a situation where they can provide that service. That means spending more money on training and on research and perhaps a little less of proliferating branches for the sake of them, for the sake of opening new outlets. Let us have outlets that provide quality rather than too many that do not provide the standards that we ought to have.

There is a need to regulate and to licence over the whole country. The old Prices and Incomes Board carried out a survey on employment agencies. It did not come out in favour of doing away with them, although many people hoped and expected that it would. It made an expert survey and clearly indicated that the agencies were performing a useful service. It did not, on the other hand, say that they were perfect. One gets the clear impression from that report that the board felt there was a need for an improvement in standards.

The Select Committee on Expenditure has recently been engaged in investigating employment services. The report is not yet published, so I cannot comment on it. I can say that some of those representing the employment agencies who appeared before the Committee have made it clear that they do not object to the kind of proposals that we have here. My intention is to extend the present licensing system, which applies to London and some other areas, to the rest of the country. As a result of the Bill the present provisions will be replaced.

The Secretary of State for Employment will have the power to lay regulations under the negative resolution procedure, and the House will have the right to object and to vote against any regulation. It is my firm expectation that these regulations will be used to import quality and integrity of service by forbidding the kind of abuses about which we hear and by establishing a high quality of service. My right hon. Friend will need to make use of the tool that is being provided.

I turn now to the Bill. Clauses 1 to 4 deal with the licensing procedure. Because local authorities do this now, I felt it right to retain this licensing function with the district and county councils —the boroughs in London and the county councils outside. Those agents at present working will be able to continue, irrespective of whether they have licences at the moment, provided that they apply for a licence when the Bill becomes law. They will be able to continue in business until the licence for which they have applied is refused. They will be able to continue throughout the appeal procedure.

The licensing authority will require full information. It will extract a fee determined by the Secretary of State. Registration fees should be neither too high nor too low. This is a business which can well afford to pay. We want standards and people who can afford to pay the money that goes with them. My feeling is that there should be a first registration fee of £100 and a fee of £50 a year thereafter. This would be for every branch. Grounds for refusal to grant a licence are set out in Clause 2. This is quite separate from the impositions to be contained in the regulations laid by my right hon. Friend under Clause 5. Failure to conform with those can also result in a loss of licence.

Under Clause 2 the licence can be refused in the first place to anyone under 21 years of age. Some may ask "Why not 18, which is the normal age of majority now?" I took that point, but I believe that 21 is a fair age to be running a business. For someone to come out of the sixth form and begin to run a business, particularly a business of this kind, is a little much. We live in the days when young men get to the top quickly, but not that quickly.

A licence can be refused for any known misconduct, for the inadequacy of the premises and for any improper conduct. The refusal to grant a licence must be communicated within seven days. The period of the licence can extend from one to five years. It was suggested that it might be one year, but I believe that we should have flexibility here to cut down on bureaucracy. We operate a similar system with driving licences.

There are penalties laid down ranging from fines of £100 to £400 for failure to comply with the regulations and other matters set out in the Bill. The arrangements for the revocation of any licence are set out, with suitable safeguards concerning notice of appeal. Clause 3 deals with the revoking of licences, and it is widely drawn to cover failure in quality or suitability of staff as a ground for revocation. The clause is also sufficiently widely drawn to cover the Race Relations Act without having to make specific reference to it.

Appeals are dealt with under Clause 4 and are to the Secretary of State, who may appoint an independent person. I would be open to any proposals in Committee about the best kind of appeals procedure. Perhaps the procedure in the Bill is the best answer. There are points for and against it.

Clause 5 is the heart of the Bill. This is where the Minister comes in. He will have to determine the regulations. It has been said that these regulations will bite differently in different areas. These regulations will need to be realistic and firm. I hope that my hon. Friend can say something about this at some stage. We must have regulations to ensure quality. The protection of the interests of young people is also important, and we must ensure that the regulations cover this.

The Bill gives examples of what may be included in the regulations. It sets out record-keeping, advertising, provision of services offered and the safeguarding of client's money accounts, a matter which has rightly concerned the hon. Member for Putney, whom I mentioned before he entered the Chamber. I am glad to see him here. I hope I can accept that the Minister will lay realistic regulations. If he does not and this measure is passed, some Minister will do so at some time. It would be a nonsense to pass such a Bill without adequate regulations being made. It would become a slumbering elephant, all trunk and no movement. The TUC and others interested in the Bill and the code of conduct want to make sure that disciplines are uniform throughout the country. All that I can say to that is, so do I. That is why I have introduced the Bill. Its purpose is to establish a national pattern rather than one that bites in some places and not in others.

I should like in Committee to consider including a subsection to impose upon local authorities, which will police the measure when it becomes law, the obligation to report regularly to the Secretary of State. It is important that there should be close liaison between the Secretary of State, who will make the regulations and those who will have to see that they are carried out.

Clause 6 forbids the charging of employees either for putting them in touch with jobs or for providing them with lists of jobs. This is a safeguard against exploitation. I am sure it is generally accepted that the right to work should not be a matter of payment. There is not a deal of that going on now, but there is some, and the selling of lists will be prohibited by the Bill.

There are certain difficulties in the entertainment industry, and that is why the Bill allows flexibility to the Minister. I hope that he will be able to lay regulations to exempt the entertainment industry. Where artists are concerned with contracts, and where, as at present, an agent takes 10 per cent. of the contract as a fee, there is a need to recognise that situation. To change the whole system would cause complete turmoil in that industry. That is one exception which I hope will be accepted and which the Minister will have to spell out in due course.

There is one thing in the Bill which I think the hon. Member for Putney will feel is helpful to the entertainment industry, and that is the provision dealing with clients' money accounts. Some agents hold on to artists' money. That will not be permitted if the Bill becomes law.

Clause 8 gives licensing authorities the right of inspection. If there are regulations, and penalties for not carrying them out, there must be inspection. This will be carried out by the authorities in whichever way seems best to them. Some may use the police and some may use their own officials.

Clause 11 gives the Secretary of State power to lay the regulations referred to in Clause 5. Hon. Members may like to note that after representations made to me I have written into the clause the provision that before laying these regulations the Minister must consult such representative bodies as seem to him to be appropriate. As the Minister has to help the industry to make itself more efficient, I think that there should be discussions with all those who have been involved in this business over many years.

Clause 12 is the interpretation clause. It is self-explanatory, but it should be noted that it refers to both employment agencies and employment businesses. Employment agencies are those which provide staff which employers take into their offices permanently. Employment businesses are a new development in recent years, and are increasing. They are responsible for the employment of temporary staff who remain employed by the employment businesses themselves.

The Bill also deals with agencies that are responsible for providing au pair workers. These girls have come to this country from abroad in increasing num- bers in recent years, but the House should appreciate that in addition there are some who come to England from Scotland. The Bill has, therefore, had to be drawn to cover them too.

Some of the arrangements for au pair girls are sensible. If a girl wishes to live with a family who in return want some help from her, an arrangement is made whereby she receives a certain minimum income plus her keep. Most people involved in this kind of arrangement provide a good deal for the girls concerned. They allow them time off to do what many of them want to do when they come here from abroad; namely, to see the country and enjoy themselves. But there are some people who take advantage of these part-time workers, and it is necessary that provision should be made to regulate their activities.

Nurses and seamen are exempt from the Bill because they are covered by other Acts of Parliament. Excluded also are certain employment arrangements for Service and ex-Service men and women. A further exemption covers services provided by employers for workers within their own company structure. Apart from those exemptions, I think that the Bill covers most, if not all, workers who are not now covered by other Acts of Parliament.

The Bill deals with an area that has become of considerable importance in our national life. It is bound to grow and provide more and more opportunities for those who want to use them. It is, therefore, necessary that the standards of employment should be maintained. We are dealing with a matter that concerns particularly the working lives of young men and women.

Training, testing and fitting square pegs into square holes are important in both the public and the private service, and it is necessary that the standards in both sectors are of the highest. Without the Bill, the employment business will be good and it will be bad. There will be a mixture. We cannot afford to allow it to be bad. We should not tolerate it when we are dealing with working people.

I am afraid that my Bill does not apply to Members of Parliament. We are employed or unemployed according to what the electors think. The Bill does, however, deal with most other people.

I hope that the measure will be regarded as both reasonable and sensible. I have sought to take the voices and listen to what people have proposed. I have not accepted everything that has been put to me. Obviously, there has had to be compromise, but in so far as the Bill seeks to improve a field of activity which is now important to us I hope that the House will think it right to give it a Second Reading and allow it to go to Committee.

2.10 p.m.

Mr. Hugh Jenkins (Putney)

I congratulate the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) upon his success in drawing a good place in the ballot. That does not always necessarily mean that a Private Member's Bill receives a Second Reading. However, at least the hon. Gentleman has begun the Second Reading process. He is also to be congratulated on having selected this subject for his Bill.

It is an important subject. I wonder whether there is any other sphere of activity in which the need for adequate legislation has been recognised for so long when at the same time there has been a total absence of legislation. Over the period since the ILO Convention of 1949 successive Governments have indicated their intention to ratify the convention. A Labour Government did so in 1950 and a Conservative Government did the same in 1951.

The international convention provides for what are called fee-charging employment agencies to be abolished or regulated. There are those who believe that there is no requirement for the function of an agent between employer and employee. If one were operating in a vacuum or even in a society in which certain practices and customs were not fully developed, one would feel that there was a great deal to be said for the proposition that the relationship between employer and employee did not provide any satisfactory sphere for the operation of an agency other than one provided by the State. This view is taken in many parts of the world. In a number of Western European countries fee-charging agencies are illegal. The practice is illegal in France and Denmark, for example, where the view is taken that there is no need for any other person to interpose himself between employer and employee as agent for either.

One curious feature of employment agents which some people think makes their activities questionable, as distinct from those of other agents, is that according to the nature of the market sometimes they operate for employers and sometimes for employees, and sometimes they charge employers and sometimes employees. There is a shortage of office labour, for example. In this area fees are charged to employers. In the entertainment business, on the other hand, which originally attracted my own attention to the subject when I was assistant general secretary to British Actors Equity Association, there is a shortage of employment with too many people seeking it. In those circumstances agents charge employees for their services. This situation often gives rise to the accusation that the function of an agent is essentially parasitical—

Mr. Marcus Lipton (Brixton)

Apart from the theatrical and entertainment professions, is there any sphere in which the person seeking employment has to pay a fee or commission? As I understand it, the overwhelming majority of agencies charge employers.

Mr. Jenkins

That is largely the case, though I think that there are one or two instances in which employees pay commission. It used to be the case in some forms of domestic service, for example. Whether this is still the case no doubt the Under-Secretary will be able to tell us. Probably he will also tell us that in addition to the world of entertainment there are one or two other spheres in which fees are paid by employees. However, I agree with my hon. Friend the Member for Brixton (Mr. Lipton) that it is comparatively rare and that the three spheres in which the rôle of the employment agent comes to public notice most often are the entertatinment world, about which I shall comment in a moment, office employment, where the feeling rightly or wrongly, is that employers are sometimes exploited by the operation of agents, and what is often called "head-hunting" where rather top people are shunted from one part of the world to another to take jobs at very high salaries and where fees are taken by the agents who, incidentally, do not like to call themselves agents, though legally they are, and resent the idea of being regarded as anything other than specialist and high-powered persons placing equally high-powered persons into high-powered positions.

It was this last sphere of operations whose representatives succeeded in bringing about the failure of a Bill which I introduced and which came to no good, as I shall describe presently. I wish the hon. Member for Rutland and Stamford every success because his initiative provides an opportunity to rectify the fact that my own Bill did not reach fruition. It is a long-recognised need.

However, there are substantial differences between the Bill currently before us and my own Bill which got as far as Report stage before foundering. Externally this Bill bears a close resemblance to my own, though not to my own as it went into Committee but after it emerged from its Committee stage. It had a detailed Committee stage, and it was very different after it. The present Bill resembles my own Bill after its Committee stage rather than the form in which it went into the Committee stage. That fact probably reflects departmental thinking on the subject, and it is none the worse for that because the Department will have to administer any legislation, and I have no doubt that the shape of the present Bill is one to which no exception can be taken. However, there are important differences and perhaps I might refer to one or two of them.

Rather than go through the whole Bill, I plunge immediately into the main points which probably will present us with problems. The first was touched upon by the hon. Member for Rutland and Stamford. It concerns the regulation of fees. Probably the need for regulating fees is not so apparent elsewhere as it is in the world of entertainment, where it is abundantly apparent. As the Bill is drafted at present, it seems possible with minor alterations to provide for fee limitation regulations to be issued by the Secretary of State, even though there is a general prohibition. If that is not the case the matter must be looked at in Committee.

In Clause 5 there is a specific prohibition in the following terms: Provided that regulations under this section shall not make provision for regulating or restricting the charging of fees by persons carrying on such agencies and business. Clause 6 provides a general prohibition on fee charging except in such cases as the Secretary of State may prescribe. Under Clause 6 the Secretary of State could, if he saw fit, prescribe a limitation of fees when fees are charged for the obtaining of employment. There is no doubt that in the entertainment world fees are charged for the obtaining of employment. They are also charged for the negotiation of the size of the remuneration. The bringing together of the actor and the manager is a part of the duty of an employment agency.

Some actors tell me that their agencies do not find them employment. They say that they discover their employment for themselves, that they tell the agent and the agent goes to the manager and fixes the fee for them. Thus, the mundane business of discussing remuneration is removed from the sensitivities of the actor. However, the actor obtains the employment himself by personal contact with the manager.

That situation sometimes occurs, but there is no doubt that it is recognised as a part of the duty of an agent in the entertainment world to try to obtain employment for his client. Of course, at times it is pretty difficult to do so. That is one of the reasons for payment of a fee. If the Bill as drafted does not, or would not, permit the regulation of fees under Clause 6, it will be necessary to make some alterations in Committee so as to permit that regulation in entertainment even if it were prohibited generally.

There are areas in the entertainment world where the pressures of unemployment, the number of unemployed persons and the pressure of persons seeking employment are so great and the number of opportunities for employment is so limited that the agent is in a peculiarly strong position if he is not one of the more reputable agents. Of course, there are many reputable agents. However, an agent in such a strong position can exploit the situation. Fees as high as 25 per cent. and more have been known to have been paid. There needs to be close regulation. Such regulation should include power for the Secretary of State to limit the fee charged. I shall be interested to hear what the Under-Secretary of State says about that matter.

It has always been my view, based upon experience, that if there is no central licensing that is almost as bad as no licensing. In the past an agent deprived of a licence by a properly functioning authority—and only about two authorities in the country ever functioned properly under the existing and rather nugatory legislation—in, for example, the old LCC area would move into Surrey where there were no licensing regulations. If an agent was based in Manchester he would move to Salford or from Salford, for example, to Cheshire. Therefore, an agent could move from an area where licensing was enforced to an area where licensing was non-existent. The licensing procedure was thus rendered almost inoperative.

I am in favour of a central licensing system. If there is not to be such a system and if licensing is to be carried out by local authorities, it is extremely important that the licensing process shall be obligatory. There should be general standards laid down in the regulations so that the authorities carry out their functions similarly in different parts of the country. If we adhere to the belief that the licensing authorities should be the local authorities, it seems that there must be obligatory licensing, the sort of licensing which an authority must carry out whether or not it wants to do so.

Further, the nature of the licensing, the duty of the authorities and the necessity of inspection by the authorities to ensure that the functions of the authority and the provisions of the authority are being carried out will have to be clearly laid down either in the Bill or by the regulations that the Secretary of State will issue under the Bill.

That is another area, together with limitation of fees, which it will be necessary to examine in Committee. The hon. Member for Rutland and Stamford said that if the quality of the work performed by the agent was regulated there was no necessity to regulate the fees charged. That is not a proposition which could be said to hold in the world of entertainment. There is no relationship in that world between the quality of the job done and the size of the fee charged. Indeed, the reverse is often the case. By and large the best work is done by the agents who charge the smallest fees. The agents who work in personal management, whose work consists of carrying out the contractual relationships of no more than a dozen or so of the leading actors, are necessary in the sort of world in which we now exist. Their work is not parasitical. In fact, it is a useful and necessary occupation.

The fees charged mean that the agents do quite nicely. Although their fee is a small percentage of the total, they operate in a sphere where the fees are large, and 10 per cent. of a large fee represents handsome remuneration. If I have suggested that the agent is an employer, that was a slip of the tongue. The legal situation is that the agent is the employee of the actor. In fact, the agents often joke about that and regard themselves as the employer of the actor. It was said by one agent that actors were people who took 90 per cent. of his fee.

In my original Bill I included a provision to prohibit a person from being both employer and agent. I should like to see in this Bill such a provision, or at least one to prohibit the charging of fees in circumstances where a person is both employer and agent. Although it is done less now than it used to be, it is not unusual in the entertainment world for the same person, under two different hats, to be both employer and agent. An actor goes to an office, gets a job and is then sent round to another office where he agrees to have 10 per cent. deducted from his salary as a charge, as it were, for being permitted to work. Of course, this could only happen where work was scarce, but it goes on. To write such a provision into the Bill would not interfere with its general operation because the sort of situation I have described does not happen in other sectors of employment.

Mr. Patrick Cormack (Cannock)

Has the hon. Gentleman got much current evidence of this practice?

Mr. Jenkins

Not a great deal. I am not so closely in touch as I used to be on this subject, but I hope between now and the Committee stage to do research into the current situation. However, I am told that although it was very blatant at one time, it is now less so. I myself have seen in a single envelope both the employment contract and the agency fee demand—and this was from a well-known employer.

There is today a well-known West End employer of actors who also owns, in another name, an agency. To gain employment by this well-known manager, it is obligatory to go through his agency. Sometimes in such circumstances difficulties arise. For example, the actor may have a permanent agent of his own who will refuse to split the commission. Usually, where the employer has his own agency and the actor has his own personal agent, the two agents get together and take 5 per cent. each of the charge paid by the actor. That is not uncustomary. But if the actor's agent refuses to split the commission, it can have the effect of depriving the actor of that piece of employment. This was happening as late as a year ago, and I think it is still sufficient of a scandal to be prohibited specifically in the Bill or in the regulations which would be made under it.

In putting forward various thoughts and suggesting various improvements which might be made in it, I hope that I do not appear to be derogating from my general welcome to the Bill. I hope that the House will give it a Second Reading and that we shall have an opportunity in Committee to consider it in detail and decide whether some of the suggestions I have made could be included.

I was glad that the hon. Gentleman referred to the question of the client's money. I am not sure whether it is sufficient for the Secretary of State to have power to issue regulations on the question of safeguarding the client's money. Perhaps there should be a clause in the Bill laying down a provision similar to that which I understand applies in the legal profession, whereby a solicitor is compelled to have an entirely separate account for the client's money, which does not form part of his own money.

The trouble in this context is not that always the agent concerned is a crook—not at all. I give an example of a sector of employment where fees are low—crowd work. A little more than a year ago an agent supply extras for crowd work, employed mostly by the BBC, went bankrupt. He may have been a bad business man or whatever it was, but because there is no provision in the law for a separate client's money clause all the money involved, including that which he had kept for the actors, went into the general pool, as it were. The actors were thus entirely deprived of their fees, which totalled £20,000. They never saw their money.

Such people are not the sort who can afford to let sums like £6 or £8 go—the £20,000 was mainly made up of small fees like that. Such agents are vulnerable because they do not operate on very large margins. One could argue that they should not operate at all. They are saving money for the BBC and other organisations which should employ casting departments. But all the BBC, or whatever it is, does is to say to an agent "We want six crowd people for a programme. Find them for us." The agent does the work, sends along the people and is paid the fee. He thus saves the BBC and the television companies the necessity of having casting departments.

This sort of thing should not take place, but as it does take place we now have an opportunity in the Bill to provide against loss by clients by creating the legal necessity for their money to be put into separate clients' accounts. In this way, the money would be the client's own property and would not go into the pool in the event of the agent going bankrupt. I am sure that there is at least one more agent in this area who is going to go bankrupt within the next few weeks or months. It is a situation which Equity is following at the moment with considerable anxiety.

Mr. Ernest G. Perry (Battersea, South)

Can my hon. Friend tell us how long the delay is before someone who has acted in a crowd gets his money? He has said that the motley would be paid to the agent. Would the agent pay the person working in the crowd straight away, or would the actor have to wait a week or a month, for example?

Mr. Jenkins

A time lag usually shows that things are starting to go wrong. When actors have to wait for their money, one immediately knows that the money from one job is being used against another. It is a sign in advance that someone will be going bankrupt before long. Equity gets letters from actors saying "I have had to wait six weeks for my fee ', and when it does it is usually not because of sheer incompetence or carelessness by the agency, although there may be one or the other, but because the agent has obviously been using one fee to cover his administrative expenses and presumably his living expenses instead of putting the money into entirely separate accounts. I hope that the Bill will deal with this sort of consideration.

Mr. Lipton

But does it not work the other way round as well? Does not the agent sometimes have to wait for the money from the BBC or other organisations? Is there not sometimes a time lag between the work done by the extra and payment by the BBC or whatever organisation is involved?

Mr. Jenkins

Indeed, yes. It is not always the case that the agent is to blame, but, whereas it is possible for the trade union to get at and put pressure upon a major employer to pay quickly, the situation of an agent is very different. As my hon. Friend indicates, some of the very large organisations are not always as quick in paying as they should be, but that is something we cannot deal with in the Bill.

I hope I have not taken up too much time in going through these matters, but I felt it might be right at this stage to give the hon. Gentleman and the Under-Secretary of State an indication of some of the things which we hope they will be good enough to look at in the later stages which I hope the Bill will go through.

There is the question of what I should call a central licensing authority or, if that cannot be, the general application of similar licensing conditions throughout the country. I think that that can be done only by central decision of some kind. The present anomaly in the law, which provides that moneys received by agencies belong to those agencies, should be changed to make it money in trust.

Mr. Albert Booth (Barrow-in-Furness)

My hon. Friend will have noted that in Clause 5(1)(d) there is a specific provision for the Secretary of State to make an order which would require safeguards of the kind that he has mentioned regarding money deposited with agents. In view of my hon. Friend's knowledge of the practice in this sphere, may I ask him to indicate his view whether this safeguard would be offset by the other provisions in Clause 5 which would prevent the Secretary of State regulating the amount which might be chargeable by way of fees?

Mr. Jenkins

I do not think that that would be the trouble. The trouble, if we are to be effective, is keeping clients' money separate from the money of the agency. We need a powerful piece of legislation to make it effective. We need similar legislation to that which operates in the law under which solicitors are required to keep their clients' money separate, and, if they fail to do so, are subjected to considerable penalties. I am not clear whether those penalties are imposed by law or by internal organisations within the profession. We need something of that magnitude in this area. I question whether this should be done by regulation or by a clause in the Bill and, we hope, a section in the Act.

With those somewhat detailed remarks, I hope that I have indicated the kind of changes which I should like to see in the Bill. I welcome the Bill and again congratulate the hon. Member for Rutland and Stamford on having introduced it. I express the hope that the Bill will reach the statute book. If it does, the words "filling a long-felt want" will never have been used with greater reality.

2.43 p.m.

The Under-Secretary of State for Employment (Mr. Dudley Smith)

Without in any way seeking to curtail the debate, it might be helpful if I were to indicate the Government's views about the Bill, as I have been invited to do.

Before doing so, I should like to take the opportunity of congratulating my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) on his good fortune, rare for most of us, in securing a high place in the ballot for Private Members' Bills and to say how pleased I am to join in the debate.

I know of my hon. Friend's great interest in this subject. He has always been concerned with employment and industrial relations matters. He has felt for many years that legislation was needed in this sphere, and it is appropriate that he should be the vehicle for bringing the Bill before the House today.

As we have been reminded by the hon. Member for Putney (Mr. Hugh Jenkins), this is not the first time that this subject has been debated. He reminded us of his Bill, which was a casualty, as so many Private Members' Bills are, although it seemed to make rather more progress than many. That was in 1966. I do not recall it, because at that time I was having an enforced absence at the behest of the electorate. I am glad that it was only a temporary absence—and I read about the hon. Gentleman's Bill outside the House. I am glad to be here today to take part in the debate on this Bill.

In 1966 the then Minister of Labour estimated that there were more than 3,000 employment agencies in Britain. At a recent count there were more than 5,200 such agencies listed in the Yellow Pages of the Post Office Directory. I hope that no one will get up and ask why we do not have a better count. As things stand, it is not our responsibility to make a count of how many there are. That is the best estimate I am able to present today. If it was accepted in 1966 that there was a case for regularising the law relating to employment agencies, surely those figures show how much stronger that case is today.

The Government welcome and support the Bill. Before explaining our view, however, I want to stress the complexity of the subject with which we are dealing. It is too easy to forget that the Bill covers a much wider area than the secretarial agencies of central London. There are entertainment agencies, which we have heard about from the hon. Member for Putney, model agencies and agencies providing haulage drivers. All these come within the subject, as do management consultants. Whether they like it or not, they are in fact employment agencies.

Officials of my Department have been examining this complex area to see what would be required if new legislation to control private employment agencies were to be introduced. I am glad that the proposals now before us to a great extent meet those points which we have identified as being in need of attention.

First, there is a need to correct the rather ludicrous situation in which the geographical location of an agency governs whether it shall or shall not be licensed. Only some 50 local authority areas in the country are covered by licensing powers contained in local Acts.

Mr. Lipton

Will the hon. Gentleman explain why so few local authorities take the trouble to acquire licensing powers in this sphere?

Mr. Dudley Smith

Offhand I cannot answer that question. I can, however, confirm that authorities vary. I think that those which have powers operate them with a certain degree of good sense and go into the subject in a serious way, but others do not and I do not know why they have not taken powers upon themselves. The Bill will make it obligatory for this to be a fairly universal power throughout the country.

It is not unknown in this situation for the unscrupulous to transfer their activities from areas in which they have been refused a licence to areas in which no licensing requirement exists. We welcome the proposal that all agencies, wherever they are established, should hold a current licence. This will put right the situation to which the hon. Member for Brixton (Mr. Lipton) rightly drew attention.

Secondly, the legislation in those areas where it applies is based on original provisions contained in the London County Council Act 1921. It does not require much imagination on the part of hon. Members to realise that many of those provisions are now out of date and that many of the present-day practices do not come within the scope of such legislation.

Emphasis in those days was on the prevention of immorality and fraud in the operation of employment agencies. In today's circumstances it is unusual for these to be much in evidence, although we cannot, of course, afford to ignore them completely. What is now required, in our opinion, is a set of rules for the conduct of businesses of this kind which would protect the interests of both their employee and their employer clients.

I do not wish to dwell here on matters which would be dealt with in regulations if the Bill reaches the Statute Book, but I should like to tell my hon. Friend, particularly in response to his comment on this point, that it would be our intention to use the regulation-making power to ensure that employment agency services were of a consistently high standard and that the genuine interests of those who used the services of agents were properly protected. In particularly, it is important that clients who are not in a position to protect themselves should be entitled to the knowledge that the agents with whom they are dealing are giving them a fair and honest deal. This is no more than be expected from any profession, and that, I believe, is what many in the industry regard themselves as being.

Last summer we had our moments of concern about young English women who were taking jobs in Spain. Certain allegations were made about the employment conditions which they encountered on arriving there. To the best of my knowledge, it has never been shown that there was anything improper either in the arrangements for sending these girls to Spain or in the nature of the employment which they undertook on arrival.

However, that affair left an unpleasant feeling that the rules for safeguarding the interests of such clients were by no means strict enough. I know that the Federation of Personnel Services has taken certain steps to ensure that in future its own membership conforms to an improved standard of practice in this respect. I would hope to see that standard accepted through out the employment industry.

As a further example, there is adequate reason for requiring agents who handle their clients' money to take proper steps to safeguard their funds, as we heard from the hon. Member for Putney. Such clients are entitled to know that the affairs of the agencies are being properly conducted, and I am pleased to note that the Secretary of State is to be given powers in this Bill to make regulations for this purpose. The hon. Gentleman implied that we have not got it quite right and that my hon. Friend's Bill may not achieve exactly what he would like to see achieved. In that case, we can discuss this important point in Committee, but the essence is there. The provision is in the Bill, and I hope and believe that in due course it will be effective.

I also welcome in this Bill the provision that employment agencies shall no longer be allowed to charge employee clients for the services which they provide for them. This is an important point. It is one which was raised by the hon. Member for Putney and, in an intervention, by the hon. Member for Brixton. They asked me what was the situation in connection with fees which were charged, and whether there were any examples. The practice is most commonly found in relation to the sending of workers overseas and to the finding of employment in Great Britain for people who normally reside overseas. I also understand that occasionally fees are charged to employees in the catering industry. Again, I think it is a matter which certainly needs regularising, and the Bill, in fact, does this.

In both cases the employees concerned finish up at the other side of the water to their money and they have no ready means of redress when things go wrong. We have received many complaints from the non-industrialised countries about this practice, and I sincerely hope the Bill will stamp out once for all this petty, pernicious practice.

The hon. Member for Putney also dealt with the question of limitation of fees. Regulations could be made to permit the charging of fees to employees in the entertainment industry under prescribed conditions, but my right hon. Friend and I would wish to discuss the details of this with the industry before making regulations. This is a point which has not been overlooked.

On the other hand, it is fair to say that my Department also receives complaints from employer clients about the services which they have received from agents. There is a general view that when an agency is being paid sums of the order of from £100 to £200 for securing the introduction of just one employee, employers are entitled to a somewhat higher standard of service than that which they have been receiving. I consider this to be a further matter which could be dealt with by a code of professional conduct to which I hope all sectors of the industry will subscribe.

There are, however, matters on which employers feel the need for protection against the activities of some employment agents. I refer particularly to the question of inducing employees to leave an employer with whom they have been previously placed. As this is a private matter between the agency and the employee, the employer rightly feels completely defenceless, knowing only that he has paid a fee for the introduction of that employee and that he is likely to have to pay a further fee if the employee leaves his employment.

This problem takes on a different aspect, however, with the general inducement of people to leave their employment by seeking new posts through an agency in return for which they will receive various rewards, including free holidays abroad. Movement of labour within the labour force for these reasons cannot be condoned. I do not think it is any advantage to the economic life of this country that labour turnover should be induced in this way. I want to see an end to such practices, as I am sure do the vast majority of hon. Members.

I should like to make one final reference to the quality of the service offered by agencies. This deals partly with one of the issues brought out by the hon. Member for Putney. We in my Department, as my hon. Friend the Member for Rutland and Stamford reminded us, are pressing ahead with a massive programme for modernising and developing the public employment service in Britain, but we do not seek to secure a monopoly of placing work. The labour market is complex and diverse and needs a variety of ways of bringing employers and workers together if it is to operate smoothly.

We believe that the public service has a distinctive and fundamental role to play, but we recognise that advertising, personal contact and private agencies each have a role to play as well. They fit into the spectrum, provided that they are conducted honourably and properly.

Just as the operation of some of the private agencies has acted as a spur in some measure to the development of the public service, so I am convinced that modernisation of the public service will encourage improvement in the services of private agencies, which will be greatly to the advantage of the public at large.

Mr. Harold Walker (Doncaster)

I am assuming that the hon. Gentleman has passed that part of his speech dealing with the charging of fees. I apologise for intervening if he intends to say something more about it, but will he give some indication of the kind of examples where the Secretary of State might wish to use the prohibitive power provided in Clause 6(1)?

Mr. Smith

That is an interesting point. If the hon. Gentleman will excuse me, I am not trying to dodge the issue but it is one to which I should like to give further thought before replying. Perhaps it is a useful point that we could discuss in Committee, when I hope the hon. Member will be prepared to raise it. The hon. Gentleman will appreciate that, although this is my hon. Friend's Bill, we obviously have a view on this and I should like to be able to put it forward in Committee.

I have so far dealt with, I suppose, about half the problem. The present legislation, where it exists, needs to be updated not only because the atmosphere in which the commercial agency has operated has changed over the years since the first legislation was passed but because agencies are now involved in placing people in situations other than those covered by straightforward contract of employment. For example, there has been an enormous increase in the number of young people seeking positions as an pairs, and there are a number of agencies specialising in this type of activity. I know that my hon. Friend the Member for Plymouth Devonport (Dame Joan Vickers) has a close interest in this.

It would seem to me indefensible that an employment agency should be required to take certain steps to protect the interests of its clients when sending them abroad or placing them in employment in this country if those agencies which specialised in au pairs were not required to conform to similar conditions. I am pleased to see that there is in the Bill an extension of the definition of "employment" so as to include that activity.

An even more obvious extension of the present legal definition of employment agency is required in connection with staff contracting. This practice is by no means a new phenomenon, but it is expanding not only in this country but in most industrial nations. In this kind of activity, the business makes a contract to supply to a borrower staff who are on the payroll of the business itself. Such businesses are, therefore, employers and not agencies in the usual meaning of the word, but their activity, particularly in secretarial work, is so closely related to the permanent placing activity, and is so often carried on from the same premises, that it would not be right, in my view, to provide for the proper control of the one without at the same time providing for the control of the other. The Government recognise the case which has been advanced by the Federation of Personnel Services and others that the business of staff contracting is not employment agency business, and I am pleased to note that my hon. Friend has made a specific reference in the Bill to employment agencies and employment businesses, providing two separate definitions of these activities. I am sure that they are needed.

It might be useful if I said a word about the position in Europe, since it bears directly on the position of the staff contractor. The general situation in the original six member countries of the Common Market is that agencies dealing with permanent placing of employees are prohibited, but businesses which deal with temporary hire are permitted, although in some cases they are subject to legislative control.

We have no intention of aligning ourselves completely with that position since we cannot accept that there is any virtue in the prohibition of employment agencies. There are many aspects of the employment market in which it would clearly be absurd for the State employment service to have a monopoly, and I understand that, to some extent, the national Governments in the EEC are beginning to relent and allow permanent placing agencies to operate in certain parts of the labour market.

My hon. Friend's Bill, therefore, will not bring us completely into line with the European countries, but it will establish in this country a licensing system for staff contracting which will be very similar to the arrangements being made in other countries. This will be welcomed, I know, by our new partners in Europe since it will remove any fear that after our accession to the Com- munity businesses which have been refused licences to operate in their home countries would find no obstruction to setting up business here.

Mr. Hugh Jenkins

The hon. Gentleman points out that the Bill would not enable the Government to ratify that part of the ILO Convention which provides for the abolition of agencies. However, after the passage of the Bill they would be able to ratify the part of the convention which provides for the regulation of agencies, would they not?

Mr. Smith

That is another matter for consideration. There is no intention to ratify at present, but, in view of what the hon. Gentleman says, I shall look into that aspect of it. As he knows, the main thinking behind that original proposal was the abolition of private employment agencies.

It is not true, as so many people seem to think, that there is any Community legislation on this subject which will apply to us as a result of our membership of the EEC. Such legislation as there is originates in the separate countries, not from Brussels. Therefore, if the House so wills and his Bill goes forward, my hon. Friend can be assured that it can be put on the statute book without in any way contravening any EEC legislation.

I come now to two other matters of detail which touch on Government policy, and I take, first, the choice of the local authority as licensing authority. It has long been part of our policy to devolve responsibility to the appropriate local authority wherever possible. In that sense not only is it possible but some local authorities, as we know, are already carrying out duties prescribed by the Bill and all of them perform similar duties under the Nurses Agencies Act. It therefore seems right for the licensing authority in this case to rest with the local authority. I know the argument for central control, but again this is a matter which can certainly be influenced very strongly by the suggestions made by the Secretary of State of the day. Here again we can take up in Committee the point raised by the hon. Member as to the degree of uniformity which should desirably be achieved by the various licensing authorities. I have noted the point about the lack of uniformity of enforcement and I am certain that we can give it further thought in Committee and perhaps find a form of words which will strengthen this aspect of the legislation.

I wish to turn briefly to the question of appeals. The Bill also includes provision for appeal to be made to the Secretary of State against the licensing authority's decision. That is a change from current practice, but it is in line with the Government's current views that the courts should deal with judicial and not administrative matters. The provision in the Bill, which again we can discuss in Committee if hon. Members are unhappy about it, takes cognisance of this view whilst retaining the independence of the arbitration provided for.

In the short time available to me, and I am conscious that other hon. Members wish to speak, I think I have said enough about why the Government welcome the introduction of the Bill. We regard it as a flexible measure, and it would certainly be our intention to discuss with the various interests all those complex matters contained in the regulations which would be made. I do not want the House to imagine that such regulations could he produced overnight. Extensive consultations would certainly be necessary. I hope that during the Committee stage, which I hope will take place, I shall be able to indicate more fully than I can today the scope of the regulations which could be made.

It remains for me only to congratulate my hon. Friend on his success in the ballot and commend the Bill to the House. It is not a massive piece of prospective legislation but none the less it is important, and it is a measure which can have a very definite bearing on the future good conduct of employment agencies in this country.

3.8 p.m.

Mr. Harold Walker (Doncaster)

It may be helpful at this stage if I intervene to explain the view of the official Opposition. I join in the congratulations which have been very properly extended to the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) on his good fortune in being fortunate in the ballot to secure a high enough place to give his Bill a good chance of getting on to the statute book and also on his wisdom in choosing the measure that he has put before the House.

Inevitably I shall be echoing some of the remarks of my hon. Friend the Member for Putney (Mr. Hugh Jenkins), but if I do so it is to make it abundantly clear that it is the view not only of back benchers but also of the Front Bench that we support the Bill but that we have some of the reservations expressed by my hon. Friend. No doubt my hon. Friend will derive some satisfaction from seeing the Bill before the House after the persistent way in which he has pursued this issue over the years.

I welcome the remarks by the Under-Secretary and I shall mildly quarrel with him on one or two of them. Generally, however, I welcome the Government's support for the Bill. It is a rare occasion these days for all quarters of the House to seem to find themselves in harmony on something. We have some quibbles to which I shall refer briefly, but on the whole we welcome the Bill and we will support it. Of course, we should like to see it tightened up along the lines already suggested by my hon. Friends. The most important factor is the question referred to by the Under-Secretary about who should be the licensing authority and whether it should be the local authorities or otherwise.

The hon. Gentleman said that it had been the Government's policy to devolve responsibility to local authorities. I am not quite sure whether he meant that generally or simply in this matter. It is not quite true. For example, the Government are centralising car licensing arrangements, which seem analogous, at Swansea.

When my hon. Friend the Member for Putney presented his Bill the then Minister, the former right hon. Member for Southwark, Mr. Gunter, expressed the view of the Labour Government of the day, presumably with his Department behind him, that the employment agencies should be licensed by a central authority. He said: The licence should be issued by a central authority, and before a licence can be obtained the central authority should be satisfied about the activities of the employment agencies and it should have the power to require an agency to supply information about its activities".— [OFFICIAL REPORT, 24th June 1966; Vol. 730, c. 1160.] I wonder what has influenced the Department to change its views over a relatively short time.

Mr. Dudley Smith

It is very strange and refreshing to hear the Opposition these days quoting the former right hon. Member for Southwark. Usually his views are derided when Conservative Members mention them. But I do not want to be politically controversial. The former Minister was fully entitled to his view. It is the view of the present Government that it is better to devolve responsibility where possible on to local authorities. That remains our view on the Bill.

Mr. Kenneth Lewis

There was a discussion about the matter, and I came to the conclusion that local authorities were adequate to deal with licensing, although I too at one stage thought that it should be centralised. In car licensing, a licence fee is collected and the police nationally see whether motorists have car licences. Here we are dealing with local businesses. The view I came to accept was that the local people knew more about them and could police them better than a central authority in London.

Mr. Harold Walker

I am glad that the hon. Gentleman intervened to throw a little more light on the matter but I find it difficult to accept the logic of his argument. Many activities are administered at local level but according to standards determined by the national Government. The Government provide a common standard to ensure a uniform pattern of behaviour. I fear that one of the consequences of putting licensing in the hands of local authorities is that we shall have a patchwork effect, with greater vigilance and more rigorous application in some areas than in others.

Perhaps it was a good thing that the hon. Gentleman intervened, because he has diverted me from entering into what might have been a political quarrel with the Under-Secretary about the Government's devolution of power to local authorities. We can think of many areas in which power has been taken away from local authorities since the present Government took office. But I do not want to be too controversial on a matter about which I hope we shall all try to be as much in harmony as possible.

I must draw attention to one omission from the Bill concerning the practice of employment agencies in relation to young persons. I hope that in Committee the hon. Member for Rutland and Stamford will listen sympathetically to the plea that employment agencies should not be permitted to place in employment young persons under the age of 18. It is of the utmost importance that their placing in employment should be undertaken by people whose sole object is their wellbeing and who will give advice and guidance in the exclusive interests of young people. It should not be undertaken by someone motivated by pecuniary considerations, and I do not make any criticism of the agencies when I say that.

Miss Joan Hall (Keighley)

As someone who has been an employee particularly of a secretarial agency, may I ask the hon. Gentleman whether he is saying that a girl who leaves school at, say, 16 and who then does a year's secretarial training until she is 17 may not go to an agency to get a job?

Mr. Walker

I am saying that it would be preferable for the existing local authority and Department of Employment officers to have exclusive responsibility.

Mr. Patrick Cormack (Cannock)

If a girl is old enough at 16 to get married, as she is, is she not old enough to decide whether to go to an agency for a job?

Mr. Walker

The hon. Gentleman is inviting me to discuss a controversial subject. It is my view, and I am sure the view of my hon. Friends, that the existing State and local authority agencies should be responsible for guiding young people into placings and careers up to the age of 18.

The hon. Member for Rutland and Stamford acknowledged Clause 5 as the key clause of the Bill. A small but important issue arises and I mention it now to give him warning of it. It concerns whether the Secretary of State's power to make regulations shall be mandatory or permissive—in other words, whether he will be obliged to make regulations. I do not deny the good intentions of the Secretary of State, but many people would be reassured if the Bill stipulated an obligation on the Secretary of State to make regulations.

The Under-Secretary of State referred to abuses. On the limited information available it seems that a prevalent malpractice is to induce young employees to switch jobs. I do not comment now, but I welcome what the hon. Gentleman says. I echo what was said by the Minister in the 1966 debate and welcome the proposal to have regulations to oblige the agencies to make returns to the Department or its subordinate offices about such things as the number and kind of placings that it has undertaken. This could be done through the new Office of Manpower Economics or the new department that it is proposed to create. This would strengthen the Government's surveillance over the work and functions of the agencies.

I hope that it will be explained why in Clause 6(1) there is a provision enabling the Secretary of State to provide exemptions in respect of receiving fees for placing persons in employment. We are entitled to know what kind of people the hon. Gentleman has in mind. I have thought about it. I can think of possible categories but I do not see why there should be this provision. Perhaps the hon. Gentleman will convince me in Committee.

I turn to the terms of the ILO convention, a copy of which I have before me from the TUC. It seems that if the Bill is subsequently enacted it will give an opportunity for the Government to ratify the convention. The terms of the convention require Governments either to abolish fee-paying agencies within a limited period and to exercise interim control of them or to regulate them by way of annual licensing by the competent authority, the fees to be on a scale approved by that authority and recruitment and placing abroad to be permitted only by that authority.

Very largely the Bill meets the second of those alternatives. In that event, I do not see why the Government should not consider eventual ratification. I hope that the Minister will tell us what the position is. I am sure that both sides of the House would like us to move towards ratification of a treaty which was drafted in 1949. It is a source of embarrassment that we have failed to ratify so many of these treaties which have been in existence for so many years. The Minister will no doubt say that one reason for this is that, as distinct from some member countries, we like to make sure that our practice conforms sufficiently to the requirements of the treaty before we put our name to it. There are other countries which will put their names to treaties but one wonders whether they have any serious intention of observing them.

Another point about which I should like to question the hon. Member for Rutland and Stamford concerns the provision for different dates of commencement. That is a minor matter and the hon. Gentleman will no doubt be able to explain it in Committee.

My hon. Friend the Member for Putney referred to the situation where the agent is also the employer. The Under-Secretary went on, relevant to this point, to refer to girls going to work in Spain. To what extent will the provisions of the Bill regulate the position concerning an employer in this country who is acting as agent and bringing in girls from abroad to work here?

I have in mind the notorious example we had last month of the girls from the Philippine Islands who were employed in the most atrocious conditions, apparently, in Rochdale. I have a news cutting from the Sunday Times of 7th January describing some of the allegations. It was alleged that while some of the girls had been induced to apply by newspaper advertisements in their home country saying that they would earn wages of £35 a week. When they were employed they received a basic rate of only £13 for a 40-hour week. From that figure the company deducted £1.50 a week for reimbursement of the girls' air fare. That included interest on the money, and at the end of two years some of them were still in debt to the company. In addition, the company took a £1-a-week bend to guarantee that the girls stayed for their contracted two years. Those are some of the things that were alleged. I am sure that they scandalised the Minister as much as they did me.

But what was equally disturbing was the subsequent remark that a group of London clothing firms was pressing the Government to allow a further 200 girls to be brought in from the Philippines as machinists. It is that kind of thing, just as much as the girls going to Spain, over which there ought to be powers of surveillance and regulation.

I do not know whether the Bill would cover that kind of problem but it is something about which the House ought to be concerned. It was a disgraceful and scandalous matter but it was brought to light, and one hopes that there are no concealed instances of disgraceful behaviour towards and exploitation of young girls from other countries.

Having said that, and subject to the qualifications I have set out, I echo the welcome from this side of the House for the Bill. Its sponsor will have our support. We promise him a fair wind in Committee. I hope that he will be more successful than was my hon. Friend the Member for Putney and that he will get his Bill on to the Statute Book. Should that happen, I am sure that it will bring as much joy to the heart of my hon. Friend the Member for Putney as it will to the hon. Gentleman.

3.27 p.m.

Mr. John Page (Harrow, West)

May I add my laurel wreath to those hanging around the neck of my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis)? This is a sensible Bill, and it has a particular recommendation; namely, that it is simple to understand. I congratulate my hon. Friend on his economical and simple draftsmanship. The time has come for employment agencies to be provided with a code of practice and sensible regulations, and I am sure that the measure will be generally welcomed.

This is rather a kind of old students' day for those who have taken part in these discussions before. I think that the Bill introduced by the hon. Member for Putney (Mr. Hugh Jenkins) suffered from trying to be too wide. I am glad that the Putney umbrella has been furled and that we are comfortably underneath the Rutland parasol.

For my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) today is the culmination of her efforts over a long period to cater for the employment and welfare of au pair girls, a matter in which she has been engaged in this House for almost as long as I have been an employer, and the high level of knowledge of the British constitution amongst the younger women on the island of Borholm is due to my own personal views in this House.

We should acknowledge that many of these regulations follow the pattern and model originated by the City of Westminster, and I am happy to think that my rates have helped to pay for the expertise that has enabled my hon. Friend to have practice and experience included in some parts of the Bill.

My constituency of Harrow, West probably contains more white-collar clerical and secretarial workers than any other in the country. It is because of that that I have taken an interest in the progress of previous Bills, and now in this one. It is pathetic to think that more people from Harrow have to go out of the borough to find jobs than from any other Greater London borough. Those seeking clerical and secretarial work have not gone to the Government's employment agencies for help, but perhaps the new look at employment agencies in which my right hon. Friend and the Department are now engaged will redress the imbalance. But I believe that the sharpened competition which they will receive by the existence of efficient employment agencies will improve their performance and make them deserve any success which I hope that they have.

I was glad that my hon. Friend the Under-Secretary referred to the position of the European countries and the fact that they seem to be relenting on the total banning of employment agents in their countries. I draw the attention of the hon. Member for Doncaster (Mr. Harold Walker) to the fact that even in Sweden, which is considered to be a social democratic paradise in most aspects of industrial relations where employment agencies do not exist, very few clerical and secretarial jobs are filled through the Government service. It is a strange and interesting parallel with this country. Either people apply direct for jobs or they put classified advertisements in newspapers.

This has a number of undesirable results which the abolition of employment agencies would have here. It results in additional cost to the would-be employee in putting an advertisement in a newspaper. We all know how it takes time for an advertisement to appear, and even when it does it is probably under "Cars for sale" instead of "Jobs required". It also means that an employer has to sift through pages of advertisements, and he may have to write tens, if not hundreds, of letters inviting people to interviews which are costly in their time and costly to the potential employer in terms of the expenses which he will have to pay. In Stockholm newspapers are filled with classified advertisements for secretarial and clerical jobs. Since London is about 12 times the size of Stockholm, I hate to think what the pages of theEvening News and the Evening Standard would be like if all jobs now dealt with through employment agencies were handled through the medium of classified advertisements.

A criticism often made by employers and the public in general about the services of employment agencies is that they tend to increase the rate of turnover of office staff. However, a recent interesting survey carried out in the GLC area shows that the average period during which staff remain in a job is 19 months, and that period has not changed appreciably in the past five years. Clearly, there is no sudden increase in turnover.

I wish to refer now to Report No. 89 of the National Board for Prices and Incomes. I do so with some horror. My right hon. and hon. Friends gave a dose of involuntary euthanasia to Mr. Aubrey Jones and the National Board for Prices and Incomes, and now we are giving the kiss of life not to one Aubrey Jones but to two. For all my respect for Mr. Aubrey Jones as a person, that is not a move of which I approve politically.

That report of the National Board for Prices and Incomes says: There is no evidence that the activities of employment agencies lead to staff changing jobs sooner than they would otherwise have done. Another criticism which is made mostly by employers is that through the medium of employment agencies secretarial salaries are exaggerated and a leapfrogging process takes place. It is interesting to note that in the last 12 months the pay of clerical and secretarial workers has increased by the princely sum of 12 per cent. and that industrial wages increased by the truly regal figure of 15 per cent. That is something from which I gain no satisfaction. Secretarial wages have not increased the inflationary spiral as much as industrial wages.

I have one worry about the Bill which I hope may be covered by Clause 12(7)(i). There are certain organisations, which are not necessarily registered as charities, which at present concentrate on trying to find job and placings for the older person. In the uncertain position which an hon. Member holds, and having passed the Rubicon of 50, I am concerned that the work of these organisations shall not be curtailed in any way during the next year or two. I hope that such organisations may continue to receive fees and that they will not be proscribed.

I joint with other hon. Members in wishing the Bill good luck. I hope that the work of the employment ageny is enshrined in the establishment of the country. I hope that it will make a real effort to try to carry out a process of education amongst those who seek jobs, and help them to seek jobs which are not traditional in their area or for their family. I am thinking of people like miners who might have much better opportunities for a fuller and more enjoyable life in one of the service industries. I hope that the employment agencies will have the opportunity to carry out such a useful education purpose in the new role which they may achieve.

3.38 p.m.

Dame Joan Vickers (Plymouth, Devon-port)

I am pleased to support the Bill because I supported the Bill of the hon. Member for Putney (Mr. Hugh Jenkins) and went through quite a lot of the Bill's struggles with him.

I am sorry that we have not ratified the ILO Convention. It is interesting, and perhaps we will bear this in mind, that no English-speaking country has ratified that convention. That is a pity.

I agree with the hon. Member for Putney that a centralised licensing system is desirable. If we do not have such a system we shall get many different standards. As the hon. Gentleman mentioned, it would be possible to move from one authority into the area of another authority which may have a completely different standard. There are at least seven different authorities that can give licences. I should prefer to see the system centralised so that there will be one standard for everybody. I am not usually interested in centralisation but in this case it is essential if each area is to be on the same basis.

We are apt to talk about the Bill as if it were something new. In fact, employment agencies have been going on since the Middle Ages. It is interesting to know that Nicholas Nickleby used an agency after he left Dotheboys Hall. I hope that he got a good job. We are trying to get a standard for agencies, and I congratulate my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) on the progress which he has made in getting au pair agencies within the Bill. As my hon. Friend the Member for Harrow, West (Mr. John Page) has said, I had extreme difficulties because the Government would not sign, and still have not signed the European au pair convention. But my right hon. Friend has already laid down regulations about the admission of au pairs into the country which I hope will prevent a repetition of the sort of situation which has arisen at Rochdale and elsewhere.

The Federation of Personal Services in 1963 established an institute of consultants for the training of those employed in the industry. Membership of the institute is granted only after an examination, and a diploma is awarded. Would my hon. Friend consider improving the Bill by enabling the Secretary of State to demand qualifications in those applying for licences? It is difficult to refuse a licence if a person has been carrying on an agency, but if there had to be certain qualifications it would give the Secretary of State much more control over the agencies.

My hon. Friend mentioned that these agencies have increased in number from 3,000 to 5,200, and a lot of them are being run by people who I do not believe should be in charge of agencies at all. recall the case of an agency run by a Pakistani. I am not "down" on Pakistanis but it happened that this agency was run by one. It was set up to bring in au pair girls. It might be too difficult to refuse such a man a licence, but it would be a lot easier to do so if there had to be qualifications.

Mr. Dudley Smith

Obviously, this point can be discussed in Committee, but I assure my hon. Friend that any agency established to import people from other countries—and this answers the point made by the hon. Member for Doncaster (Mr. Harold Walker)—would be subject to these regulations, I understand. Therefore, it would have to satisfy the criteria which the regulations of the Secretary of State laid down.

Dame Joan Vickers

I thank my hon. Friend. But the necessity for qualifications is still very desirable.

Another example is provided by an agency in Glasgow which has a connection with an agency in New York, which sends the girls over here. Where is the control to be in such cases? I have taken this point up with the Department, and I think my hon. Friend the Under-Secretary of State knows about it. It is essential to know how such agencies are being run.

One of my reasons for supporting the Bill is that I think the Federation of Personal Services has done a great deal to raise standards and it needs support. The au pair agreement with Norway has been very successful. The federation started it and the agencies agreed that they would not employ Norwegian girls until they had signed a form of contract. This was very acceptable, but, unfortunately, the Labour Government asked the other members of the European Economic Community and other countries not to go in for these private agreements. If we cannot get the Government now to sign the au pair agreement, I hope that at least my right hon. Friends will allow the agencies to make individual agreements with individual countries in order to safeguard these girls—and I assure my hon. Friend that they do need safeguarding.

We need also to go outside Europe in this context because Japanese and Philippine girls are coming here in large numbers. Regrettably, many of them who come thinking that they are to be au pair girls find themselves simply employed as domestic servants. We must try to stop this practice, and I hope that we shall find a way of tying it up.

The agencies themselves have done a tremendous job in helping to find employment for the Ugandan Asians, and this should go to their credit. Furthermore, David Ennals, our former colleague in this House who has been so prominent in the Mind campaign, has found the agencies helpful in helping him to find jobs for people in this category.

I am very glad to note that in this debate no one has said anything about the agencies being unwilling to place coloured persons. I have made inquiries, and I understand that over the last three months at least 10 per cent. of the placings by the bigger agencies have been for coloured Africans.

Clause 2(5) provides for licences not exceeding five years: does that mean that these agencies will not be inspected each year, or how often is it intended that inspections will take place?

Mr. Kenneth Lewis

I can assure my hon. Friend that they will be inspected regularly every year.

Dame Joan Vickers

I am very glad to hear that, but the Bill does not make it clear.

With regard to organisations to which the Bill does not apply, I understand the point made by my hon. Friend the Member for Harrow, West, and I should like provision to be made, and perhaps it can be made later, for them also to be inspected. Inspection will otherwise be difficult. Can we not find words suitable for this purpose? I am rather dubious about some of the organisations listed in the Bill, though not, of course, the organisation for nurses, which has been carrying on for some considerable time. If some of these organisations are not included there will be a loophole for the setting up of other organisations in the future.

I congratulate my hon. Friend, and wish his Bill well in Committee. All of us who have been interested in this matter for some time are grateful for the lead we have been given this afternoon by my hon. Friend the Under-Secretary of State, and we look forward to having further consultations in Committee.

3.47 p.m.

Miss Joan Hall (Keighley)

I welcome the Bill introduced by my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis), who follows the distinguished line of other Members who have introduced Bills on a similar topic. I welcome it mainly because I have personal experience, both as an employee and as an employer, of staff from a sec- retarial agency. I have therefore seen both sides. I have been a temporary and I also got a permanent job from an agency.

It has been asked why so few local authorities have their own standards for agencies in their areas. The answer is that until the last few years there were relatively few agencies and only in few areas. In the last few years, however, this has been a heavy growth industry, with agencies starting up not only in towns but in small villages. They answer a need of both employees and employers, which has arisen because there has been a growth, for better or for worse, in office work. At the same time we have a much more mobile population: people move about and change their jobs much more often than they did not so long ago.

Again, we have a demand by women for part-time employment. Years ago women would not have gone out to work at all, and now they do not want a full-time job but seek part-time employment. These agencies fulfil a social need, and on that score alone I believe that they should be allowed to continue in business. Agencies can cut out a lot of work for an employer who wants an employee but has not the time to sort out and sift through potential employees.

Why does not the Bill apply to Northern Ireland? Why should there be a difference? There may be an answer to this. Perhaps my hon. Friend the Under-Secretary will tell us today or at some other time.

Another valid point which has been made concerns standards and whether they should be organised at national or local level. The Bill mentions a number of standards which a licensee must fulfil. It appears to me that these will be national standards which should be carried out by the local authorities. Local authorities are in a good position to carry out the law in this respect. Anyone falling below those standards will be known much sooner to the local councillors than to anybody miles away in London. Therefore, I am in favour of the local authorities being responsible for carrying out the law in this respect.

The Bill is eminently sensible, and that is more than can be said for many Bills which come before the House. I hope that it will become law quickly as it will enhance the position of both agencies and employees. That is very important in this day and age.

3.52 p.m.

Sir Brandon Rhys Williams (Kensington, South)

I am glad to have the opportunity, at the close of this almost unanimous debate in which so many hon. Members have given a welcome to the Bill, of congratulating my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) on introducing it. I was pleased to hear the warm welcome given to it by my hon. Friend the Under-Secretary of State.

Before going any further, I should declare an interest. For a number of years I was employed by an employment agency—one of the better known firms in the field of management selection. I parted company with it after having been in this House for some time only because it was impossible for me to give the time which the work obviously required. I owe it a great deal of good will, and I should not like their interests to be damaged by the Bill. However, as I read it, the firm's interests would in no way be damaged as the Bill does not aim to curb the activities of respectable and responsible agencies but to make sure that firms active in this sphere do not fall below the standards which the public, including employers and employees, might wish.

Although this is generally an admirable Bill and I hope that it will secure a Second Reading, some points ought to be made. The Committee will have to turn its mind particularly to the wording so as to try to envisage all the possibilities which might arise. One difficulty is that there are many kinds of employment agents. My hon. Friend the Member for Keighley (Miss Joan Hall) mentioned secretarial agencies. Their work is of a somewhat different character from that of firms which attempt to give assistance to middle and senior management. In the latter area the State is a competitor, and I hope that it will become increasingly active and successful.

If the Bill is to be passed this Session at the same time as the Government are proceeding with plans for expanding their executive employment register, the rules should be absolutely specific. The discretion given to the Secretary of State should not be open to be exercised in a way which might arouse controversy or criticism. It is also particularly important, if local authorities are to exercise the discretion given to them, to have precise guidelines so that we do not get local variations. It would he an undesirable situation if firms should contemplate moving their headquarters from one area to another in order to find a district where the regulations are not likely to be applied too strictly.

Clause 5, which my hon. Friend said was the heart of the Bill, states in subsection (1)(c) that the Secretary of State may make regulations governing advertising by persons carrying on such agencies and businesses". I doubt whether it is necessary to include such a provision. Is my hon. Friend thinking of misleading or indecent advertisements? In either case, I believe that the existing law is sufficient to protect the parties concerned. If, on the other hand, he is thinking of the activities of the firms that are generally known as head-hunters, it would be better to deal particularly with head-hunters and their activities. I suggest that the Committee might consider the proposition that headhunters should be required to notify employers before making a direct approach to candidates whom they have themselves helped to place with those employers within a measurable time—perhaps two or three years—beforehand. Otherwise agencies in this field might indeed lay themselves open to misunderstanding and criticism.

As to Clause 5(1)(d), I cannot understand what necessity there is for safeguarding clients' money. Any fraudulent activity on the part of these agencies is surely covered by existing legislation.

On Clause 6, which relates to the restriction on charging persons seeking employment, I understand what my hon. Friend has in mind, but I think that the clause needs to be extended so that its meaning is absolutely clear. There is a need for firms that can offer job advice. Very often those which are best able to advise people seeking employment are the people who are most active in this field. Candidate-pushing is very bad; but I think that this clause could be restrictive and could limit responsible activities which ought to be allowed to expand.

My final point concerns Clause 7. I do not think it is practicable to suggest that notices showing the fees charged should be published, because they cannot always be made specific or standard. In the type of work with which I was personally concerned, very often the fees have to be negotiated in the light of special circumstances.

Nevertheless, having said all that as briefly as I can, I give the warmest welcome to the Bill, which certainly deserves to complete its stages in the public interest.

3.57 p.m.

Mr. Kenneth Lewis

I wish briefly to thank the House for the reception given to the Bill. It has been an interesting and pleasant debate. I thought that I had removed some road blocks in advance. I did not realise that I had gained so much unanimity on the Bill.

I hope that in Committee we shall have a realistic discussion on all those matters which have been raised by hon. Members. I shall be entirely flexible in my approach to any suggestions which may be made there. I hope we shall have a line-by-line look at the Bill and if any improvements are proposed, from whatever quarter, I shall gladly accept them.

I thank the House very much for the reception which has been given to this proposed legislation.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee, pursuant to Standing Order No. 40(Committal of Bills).