HC Deb 16 March 1987 vol 112 cc790-6

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]

10.15 pm
Mr. Clement Freud (Cambridgeshire, North-East)

I am pleased to have this opportunity to raise on the Adjournment of the House the subject of the registration of gangmasters in East Anglia. On the whole, gangmasters are excellent people. They are essential to the rural economy of East Anglia, where there is little public transport and intensive cropping. The registration of gangmasters is supported by the Transport and General Workers Union, by the honourable people of Lincolnshire, Norfolk and Cambridgeshire and by my honourable neighbour the Member for Holland with Boston (Sir R. Body), whose Bill is about to come before the House for its Second Reading.

Mr. Tony Banks (Newham, North-West)

What are they?

Mr. Freud

The gangmaster is an agricultural subcontractor.

Mr. Banks

I thank the hon. Gentleman. We do not have many gangmasters in Newham. That is why I asked that question.

Mr. Freud

In 1867, a Bill passed by this House said: Whereas in certain Counties in England certain Persons known as Gangmasters hire Children, Young Persons arid Women with a view to contracting with Farmers and others for the Execution on their Lands of various Kinds of Agricultural Work". The 1867 Act was called the Agricultural Gangs Act, and it stipulated that a 'Child' shall mean a Child under the Age of Thirteen years; 'Young Person' shall mean a Person of the Age of Thirteen years, … No Child under the Age of Eight Years shall be employed in any Agricultural Gang; No Female shall be employed in any Gang". There was more, but the important point was that no person should act as a gangmaster unless he had obtained a licence to act as such under that Act.

Most hon. Members have said from time to time that every time a new Act reaches the statute book one ought to look around with care for some old Act that needs to be scrapped, and 99 years after the 1867 Act Mr. Richard Crossman's Local Government Bill of 1966 scrapped the Gangmaster's Act. On 14 June 1966, Mr. Crossman said: But I found, for example, that county councils are still required by the Agricultural Gangs Act, 1867, to issue licences to persons of good character fit to be entrusted with the duties of gangmaster. Those duties still include preventing females from being in the same gang as males, or from being under the control of a male gangmaster. Since the fee is only Is. for six months, I felt it was hardly worth keeping, and we have therefore decided to repeal the licensing requirements. — [Official Report, 14 June 1966; Vol. 729, c. 1268.] It was an easy and obvious option to take, but the sad part of it is that unscrupulous people have come into the gangmaster business. They are undercutting honourable gangmasters and persuading the farmers who lack a civic conscience to hire personnel from them at a rate in contravention of the agricultural wages board minimum wage.

The hon. Member for Sheffield, Brightside (Miss Maynard), who is also on the side of the angels, had an Adjournment debate on this four years ago, when she stated that because of the unemployment in the areas concerned, the gangmasters are able to exploit the workers, who have no right to holidays or sick pay, and no insurance is paid by the farmer … Anyone who is known to be a member of the union is never again given a job by certain gangmasters … As there is no system of licensing, any unscrupulous person can set up as a gangmaster. With the high unemployment, he is able to intimidate the members of the work force, who desperately need to bring some form of income into the home … the farmers are doing very nicely out of the arrangement … There are other implications … These people are not the employees of the farmer. He does not have to insure them … If a gangworker is involved in an accident on a farm … presumably, he is not covered for industrial injury benefit and so on …"—[Official Report, 18 February 1983; Vol. 37, c. 640–41.]

In surgeries over the years, I have found that the odd, dishonest gangmaster has failed to insure the workers, neglected to pass on to the DHSS the national health insurance, or provide holiday pay and other benefits deducted from the payments made to his staff. Having discussed the matter with the Paymaster General, we corresponded, and in January of this year I received a letter from him, stating: The problem of these activities is insidious in two main respects. Firstly, if they rely on benefit payments for their work force, these employers have a source of labour which may feel itself trapped into a situation where low wage levels are subsidised (illegally, of course) by unemployment benefit. Claimants in this situation may believe that they cannot afford to sign off. Secondly, honest employers who are deducting tax and paying contributions find themselves facing unfair competition in the market. It can also have repercussions for individual workers, who may at a later stage wish to apply for sickness, maternity or any other benefits and then find their contributions records deficient because of the employers' practices.

There are only a small number of dishonest gangmasters, but the great danger is that this small number undercuts the honourable gangmasters and is allowed to flourish. Obviously cheap labour is an attraction to farmers and to packing stations which, more and more in East Anglia, are now in the hands of multinational companies and put out to a management which is on commission.

The hon. Member for Holland with Boston has a Bill before the House that requires gangmasters to be licensed by justices. The important parts of the Bill are, first: No person shall act as a gangmaster unless he has obtained a licence". secondly: Any person acting as a gangmaster without licence … commits an offence of summary jurisdiction"; thirdly: In deciding to grant a licence to act as a gangmaster the court shall have regard to the applicant's character and the terms of employment which he intends to offer.

I am not gravely worried about the duration of the licence. I am sure it is right to have an appeals procedure, and obviously it is important to have an interpretation. I should simply like to see the Minister enabling the hon. Gentleman's Bill to become an Act on the statute book.

I am well aware that the Government have a strange feeling that they should not interfere and that the more legislation they pass the less Conservative the Administration becomes. This is a minor Bill which prevents a major evil. If it is not enacted, unscrupulous farmers will be able to jump on the bandwagon of exploitation.

The Agricultural Wages Board has two forms of agricultural wage: one for the worker who works for more —or just less—than 30 hours in regular employment which is £2.30 or £2.36; the other for seasonal workers at 40p an hour less. It is the practice of unscrupulous gangmasters to misinterpret the status of a worker, to translate a regular worker into a seasonal one and reap the benefit.

Recently, I spoke on Anglia television about gangmasters, and the reporter said, "Surely if the Bill goes through, if gangmasters must register and no more cheap labour is provided for less scrupulous farmers, the price of food will go up?" I had to reply that this will not increase the price of food; it would decrease the profits made by middlemen. Sadly, where people can produce food cheaply, that cheapness is not passed on to consumers; just more people line their pockets.

Registration is a simple solution and would be welcomed by all but the unscrupulous farmer, producer, and packing station. I hope that the Minister will consider the evil which is at present being perpetrated in parts of east Anglia and lend his support to the Bill.

10.26 pm
Sir Richard Body (Holland with Boston)

I endorse everything that the hon. Member for Cambridgeshire, North-East (Mr. Freud) has said. Unfortunately, the problem has arisen in recent years because of high unemployment and the way in which the social security system works. The hon. Gentleman spoke of reputable gangmasters, who completely support a system of licensing, being undercut. The undercutting is done by cheating the social security system and by goading people who are desperate for work to go on social security for part of the time and to work for a derisory wage, being treated disgracefully by gangmasters, for the rest of the time.

I support what the hon. Gentleman said and I know that my hon. Friend the Minister is looking into the matter most sympathetically. I know that he will carry out an investigation and I hope that it will be done speedily so that we can correct this injustice as soon as possible.

10.28 pm
Sir Paul Hawkins (Norfolk, South-West)

I shall not keep my hon. Friend the Minister for more than one minute. At first I did not believe in the Bill, but I have made some inquiries, and although I do not believe that there are any dishonest gangmasters and farmers in Norfolk, I can believe that there may be some on the boundaries. The Bill may be a good way of putting the matter right for those who work for dishonest gangmasters and farmers. In that respect, I support the Bill.

10.29 pm
The Parliamentary Under-Secretary of State for Employment (Mr. John Lee)

I acknowledge the genuine concern felt by the hon. Member for Cambridgeshire, North-East (Mr. Freud) in this area of gangmaster abuse and also his support for the private Member's Bill recently presented by my hon. Friend the Member for Holland with Boston (Sir R. Body), who spoke with conviction, albeit briefly, to require gangmasters to be licensed by justices. It is clear that the problem of gangmasters is a longstanding one. It goes back more than a century, when provision was made in the Agricultural Gangs Act 1867 for gangmasters to be licensed. The Act was passed to curb cruelty and immorality that existed in gangs at that time. It was repealed by the then Labour Government in the Local Government Act 1966 as the abuses had long since disappeared and were considered unlikely to return. The agricultural trade unions were consulted at the time and did not object to the repeal.

The House returned to the matter in 1983 when the subject was raised on the Adjournment by the hon. Member for Sheffield, Brightside (Miss Maynard) on 18 February. It was then contended that, because rural life had changed out of all recognition in recent years, and because there had been a large rise in unemployment, abuses had returned to the gangmaster system. It was urged that licensing of gangmasters should be reintroduced. The Government's position at that time was that the evidence before them, including the evidence put forward in the debate, did not lead them to believe that the exploitation was such that it required Government interference.

Now the subject is before us again. I make no complaint about that, as it is clear that there are still strong feelings that something ought to be done to curb the abuses which are said to exist. I see that my hon. Friend's Bill has all-party support and I hope therefore that we can tonight have a frank and sensible, if small, debate about this problem on a non-party basis. Certainly that is how I intend to approach the matter, which I take very seriously.

What is suggested in the Bill, and what has been proposed by the hon. Member tonight, is the reintroduction of a system of licensing along the lines of that which existed between 1867 and 1966. In a sense, therefore we are asked to turn the clock back—and at a time when we believed firmly that less, rather than more, regulation of business is needed. Turning the clock back is not necessarily a had thing if it is the only way in which to check real abuses, but obviously we must look very carefully at this proposal, and indeed any other proposals for dealing with the problem, before we finally decide what to do.

I have to say straight away that I remain to be convinced that the reintroduction of a system of licensing or registration of gangmasters would serve any useful purpose today. It could be illogical to require one small group of persons supplying subcontracted labour to be licensed and not all the others in industries such as, say, building or fish processing. Licensing a gangmaster, or requiring him to be registered, would not necessarily improve the terms and conditions of the workers he eventually hired, even if the licensing body was obliged to take into account the terms of employment which he intended to offer before granting him a licence.

Mr. Freud

Does the Minister accept that, by licensing gangmasters, the Government and their agencies would have access to gangmasters' books, which is currently not the case? At the moment, gangmasters are being allowed, unlicensed and unchecked, to pay less than the minimum agricultural wage, and not necessarily to pass on the deduction to the Government. The Minister is doing a great disservice by opposing licensing.

Mr. Lee

I accept what the hon. Gentleman says and that there may be pluses in that approach, but we have to consider the problem in the round. We shall consider the pros and cons.

Licensing gangmasters would mean almost inevitably that a Government agency would have to be allocated the additional tasks involved in enforcing the new arrangements. That would not necessarily be desirable. As I have already said, the proposal that gangmasters should be registered would run counter to the thrust of the Government's deregulation policy. At the time I want the House to understand that we are determined that abuses should be eradicated.

I am aware that some gangmasters provide labour to do work that falls outside the formal definition of agriculture—for example, sorting and grading vegtables in a packing shed, or processing food in a factory.

There is some doubt as to who works for the gangmaster. A hundred years ago, they were the local villagers who could not obtain regular employment with a farmer, but I understand that the position is different today. Many, if not most, of the workers are married women and students, who are glad of the opportunity for some seasonal work. They are casual workers in the true sense of the phrase and, as with other casual workers, it is not always easy to ensure that they are working within the rules of the tax and benefit systems.

I know of claims that serious problems are caused by some dishonest gangmasters and that reputable gangmasters are concerned about this, but we do not have evidence to suggest that abuses have been increasing in the past few years. There may well be individual cases of gangmasters whose activities are contrary to the law. As the hon. Gentleman said, we are referring to a minority. It is our duty to ensure that they are prosecuted, where that is appropriate, and that their future affairs are carefully monitored to ensure that there is no extension of abuses. The present evidence before us does not lead us to believe that the scale of abuses is such that they require further legislation, but I am looking into the whole area again and would welcome hard evidence. That would make it a lot easier to consider the whole matter and decide what, if anything, needs to be done.

The hon. Member will know that gangmasters already have clear responsibilities under existing legislation. When acting as contractors, they are responsible for meeting the requirements of the Agricultural Wages Act 1948 and the relevant Department of Health and Social Security and Inland Revenue regulations. Information received about alleged abuse is pursued systematically, and suitable cases are taken to court. Gangmasters are treated no differently from other labour subcontractors, but it is not easy to get hard evidence of abuse of the system, as I am sure the hon. Gentleman will acknowledge. There is plenty of rumour, but little hard fact, and I am not clear how the registration of gangmasters would significantly improve the situation.

I hope that the hon. Member understands that the Government treat the matter seriously. He is already aware that my Department is willing to investigate suspect gangmasters. He also knows, because he has been in correspondence with my right hon. Friend the Paymaster General about a particular case, that during recent months the DHSS has mounted a number of investigations into the gangmasters' operations. He also knows that my Department has been pursuing an inquiry into one particular case and that the investigators have made considerable progress. If similar cases are brought to my attention, I and colleagues in the other Departments involved will make sure that they are followed up swiftly and energetically. However, as a result of recent: investigations, my Department now proposes to mount a. saturation survey of East Anglia in the summer. Likewise, as a result of representations made to my hon. Friend the Minister for Social Security and the Disabled about abuse in the fish curing and processing industries, my Department is to investigate the employers and workers who are subcontracted in the north-east of Scotland. Ultimately, however, any prosecution depends for its success on the willingness of people to come forward and report abuses.

Another aspect of the gangmaster system is the level of payments to workers. The agricultural wages boards, which are composed of representatives of employers and workers and independent members, have a statutory obligation to fix minimum rates of pay below which the pay of those covered by the orders must not fall. Hon. Members will be aware that on 10 March a settlement was reached with the full agreement of both sides of industry which will mean a 5 per cent. increase on minimum rates. The parties to a contract can, of course, agree to higher levels of pay. The provisions of the orders cover people who are employed in agriculture and under a contract of service—that is, those who are employees. Workers in the gangs who satisfied this condition would have the full protection of the agricultural wages legislation and would be able to seek the advice and help of the local agricultural wages inspector if they felt that they were being underpaid or otherwise exploited. I understand, however, that in practice the inspectors receive very few complaints. In addition, those workers who are employees are entitled to various rights under the employment protection legislation, provided that they have worked for a minimum qualifying period, which varies according to the right concerned. Those employment rights can be enforced by the industrial tribunals.

The difficulties that arise mainly involve those who are not within the scope of the agricultural wages orders or the employment protection legislation, because they are self-employed, with the gangmaster acting as agent in finding work. For workers not covered by the orders, pay and other terms and conditions are matters to be agreed between the parties to the contract, without Government involvement. All workers, including those in agricultural gangs, whether employees or self-employed, can seek to enforce their contractual rights through the civil courts. Although it would in theory be possible to make the agricultural wages board minimum rates apply to the self-employed, I do not think that this is a workable solution for the gang members in this category who may or may not be paid lower rates.

Much of the work done by agricultural gangs is of a short-term seasonal nature. It is unlikely that farmers would wish to employ full-time workers to satisfy these needs, especially in view of the extra work that this would entail at the busiest time of the year for the farmer. It seems sensible that the parties concerned should be able to negotiate contractual arrangements which suit the nature of the work. The gang system is a convenient arrangement which provides the necessary flexibility for farmers to meet their short-term needs and for the workers to choose hours of work that fit their personal commitments. The advantages of the system for all concerned outweigh the cases of abuse which may arise.

Mr. Freud

If the Minister accepts that there is occasional abuse, does he accept that the strength of the 1867 Act was that, if such an abuse was discovered, the gangmaster was disqualified from working as a gangmaster? He was no longer able to hire people. What happens now is that, if a gangmaster is flushed, he moves a few miles away and starts up again, possibly under another name, using the same people without registering them. That is why we want them to be licensed.

Mr. Lee

I fully appreciate the advantages that the hon. Gentleman sees in licensing, but I repeat that other factors and aspects must be taken into account. That is why we shall be considering the whole area after this debate. I have given that asssurance repeatedly.

Nevertheless, and even though the gangmaster system serves a very useful purpose. I am in no doubt that there is great concern, in the area where the system operates, that individuals are suffering and that the Government are not receiving revenue and insurance contributions that are their due. I have already said that I view these concerns with seriousness and that I shall ensure that cases brought to my attention are properly and quickly investigated. The difficulty, as I have said, is to get to the bottom of those rumours, although the investigating officers from the Departments affected are doing their best.

I have already had discussions with my hon. Friend the Member for Holland with Boston about his Bill, as he has acknowledged these discussions are continuing. I will obviously take the comments made in this debate by the hon. Member for Cambridgeshire, North-East into account before deciding what more, if aything, needs to be done. I also intend to consult my colleagues in the Ministry of Agriculture, Fisheries and Food, who clearly have an important interest. I sympathise with the views of hon. Members that something must be done to bring gangmasters' operations within the law—and in such a way that they are seen to be clean and above board.

We have had a most useful debate, but I have to say that nevertheless I have yet to be convinced that licensing or registration, in themselves, will prove to be effective. There are too many potential loopholes. However, I very much hope that, during our resumed discussions, we shall be able to bring about improvements and a more effective combating of abuse.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Eleven o'clock.