§ 8.48 p.m.
My Lords, I beg to move that this Bill be now read a second time.
The Bill has come from the Commons, where it was introduced by my honourable friend Mr Jim Sheridan, the Member for West Renfrewshire, and I pay tribute to his skill in steering the Bill through the other place and building a network of support for it, so that every interested stakeholder has worked with him on it and fully supports it. Both he and I have received much help from Defra, for which we are grateful.
In the past two days I have received letters and e-mails supporting the Bill from the Association of Labour Providers, the Transport and General Workers' Union, the National Farmers' Union, the Fresh Produce Consortium, Safeway, Asda and the Joint Council for the Welfare of Immigrants. The Bill is supported by many other organisations and bodies, including Church Action on Poverty.
I should add that the noble Lord, Lord Chan, who had intended to speak tonight but now cannot do so, sent me a note. It says:My interest in this Bill arose out of events involving the (illegal) employment of migrants from China in East Anglian fruit farms (where large numbers of Chinese are used) and the tragedy of the Morecambe Bay cockle pickers in February this year.He concludes:I strongly support statutory licensing of gangmasters empowering regular inspection of their registers of workers and business practices to ensure they abide by our employment and business laws. If gangmasters are left unregulated, they are likely to exploit migrant workers, to flout health and safety standards, deny British workers legitimate employment, and avoid paying taxes that are due from them as employers.Agriculture and horticulture have long depended on casual workers at times of peak activity. The work includes the grading, packing, cleaning and processing 840 of produce and shellfish. Legitimate gangmasters provide a valuable service and they have nothing to fear from the Bill. The Association of Labour Providers fully supports the Bill.
I do not propose to take the time of the House by going over the history, the voluntary codes, Operation Gangmaster and the rest. We are where we are and the Bill now sets up a licensing and regulation system which will deal with the criminality of certain gangmasters who are perhaps some 20 per cent of the total. It is further estimated that, in total, between 60,000 and 100,000 workers are involved as gang workers.
The criminal gangmasters commit offences on health and safety, wage regulation, social security benefits, housing, immigration controls, VAT and taxation. They move fast and they are adept at escaping the clutches of the law. The only way to deal with them is to have a proper system by which gangmasters are known, registered and licensed. There must be a system to ensure compliance with the licence system and, crucially, enforcement when an offence under the Bill is committed.
Because of the time constraint on us today, I will describe only the main components of the Bill. The Bill will apply to the whole of the UK and cover agricultural and horticultural work, the gathering of shellfish and the processing or packaging of any products that derive from these industries. It defines a gangmaster as anyone employing, supplying or supervising a worker to do work in these areas. It will apply to gangmasters operating in the sectors outlined whether they are based in the UK or offshore. It also covers all subcontractors.
The Bill extends the full protection of the law to any individual worker undertaking work to which the provisions apply. It establishes the gangmasters licensing authority. This body will be a non-departmental public body sponsored by Defra with a clear line to a Defra Minister. The authority will consist of key industry stakeholders and representatives of government and enforcement agencies. It will set the conditions of the licence after consultation; process the licence applications; set and collect licence fees; establish a public register of licensed gangmasters; have the power to modify, suspend or revoke licences under a licence appeal system; and proactively enforce the licence conditions.
The Bill establishes the following offences. First, operating without a licence. Secondly, obtaining or possessing a false licence or false documentation which is likely to cause another person to believe that a person acting for the gangmaster is licensed. Thirdly, using an unlicensed gangmaster, which would be subject to reasonable steps and due diligence defences. That is important for farmers who have shown that they have taken reasonable steps to ensure that they are employing a licensed gangmaster, if it turns out that they have been defrauded by someone pretending to have a licence. Lastly and importantly is the offence of obstruction of enforcement officers, or compliance officers, exercising their functions under the Act.
841 The Bill amends the Proceeds of Crime Act 2002 to enable the assets of convicted gangmasters to be seized. The Bill also amends the Police and Criminal Evidence Act 1984 to make operating without a licence, or possession of a false licence, arrestable offences. The Bill also gives an enforcement officer the power of arrest for these offences.
The Bill also gives the Secretary of State the power to appoint enforcement officers to enforce the criminal offences of operating without a licence and possessing false documents. It also gives them rights to enter premises, search premises to take possession of any items from premises; require the production of relevant records; inspect and take away records, including computers; and order attendance of persons before them. Extremely importantly, the Bill opens up a gateway between departments, the authority and other enforcement agencies to facilitate the exchange of enforcement information connected with the purposes of the Bill.
The Bill requires the Secretary of State to lay an annual report before each House of Parliament on the operation of the Act. I hope that that report will state that the authority has been able to approach, on a voluntary basis, all the supermarkets and that they have all agreed that they will take produce only from suppliers who use licensed gangmasters. That is extremely important.
The Bill also sets out the requirements of regulations that may be made by the Secretary of State through statutory instruments to set up the gangmasters' licensing authority and to give it the required licensing powers; to set up a system of appeals; to clarify the rights of users of gangmasters; and to clarify what it is reasonable for those users to do to establish that a gangmaster is licensed.
All the regulations made under the Bill will be made in accordance with the current government practice on the use of delegated powers. That will include early discussion with key stakeholder interests, the publication of draft regulations, the preparation of a regulatory impact assessment, the conduct of a small firm's impact test and the formal consultation allowing a minimum of 12 weeks for comment.
The Bill has deliberately been drafted very widely to cover the wide range of activity so that defined work can be excluded by regulations which will also define the circumstances in which a licence is not required; for example, agricultural contracting or the sharing or the swapping of farm labour.
As I have said, illegitimate gangmasters are adept at finding loopholes. The flexibility of statutory instruments is a distinct advantage in this kind of situation in not having to amend primary legislation. One can set down the criteria in the Bill and produce regulations to exclude all those activities that we know should not be included, such as agricultural contractors, the sharing or swapping of farm labour or whatever.
842 A full explanatory memorandum has been submitted to the Delegated Powers and Regulatory Reform Committee. I am aware that the Constitution Committee of this House has reported on the Bill. I understand that my noble friend Lord Whitty will respond to the report when he replies for the Government.
§ We hear a great deal about the regulatory burden on business. This Bill introduces a regulatory system that is warmly supported by legitimate gangmasters, farmers, processors, suppliers and retailers and those who deal with the welfare of immigrants, the Churches and many other organisations. The Bill has been warmly welcomed by all the stakeholders who have been involved with it. I hope that the Bill can now proceed to Royal Assent and on to the statute book so that a proper licensing and regulatory system can be set up to bring to an end, once and for all, the criminal activity that I have described. I commend the Bill to the House.
§ Moved, That the Bill be now read a second time.—(Lord Carter.)
§ 8.58 p.m.
§ The Lord Bishop of Norwich
My Lords, I welcome the Bill and believe that it will provide considerable protection for a vulnerable group of necessary workers in our society. It will also provide a legal framework for employers who want to use gangmasters. However, while the Bill is welcome, it is only the beginning of an answer to a much more complex phenomenon. I want to make a few general observations and then a couple of points about particular clauses in the Bill.
Last Friday a significant conference took place in Norwich on the impact of migrant workers in the county of Norfolk. The noble Lord, Lord Carter, has drawn attention to the letter from the noble Lord, Lord Chan, about Chinese migrant workers in west Norfolk being in particular danger and difficulty. Some detailed research, commissioned by the Norfolk Constabulary with the support of the county strategy partnership, was presented to the conference. It is an important piece of work, as the researchers managed to get into a very shadowy and withdrawn community in King's Lynn and west Norfolk that generally treated the researchers, even those who could speak their language, as if they were from the Immigration Service and were about to deport them. The work was astonishingly delicate and difficult.
It is to that report's introduction that I owe some of my education about the scale of global migration. According to statistics published last year, one in every 35 people worldwide is now an international migrant—that is 2.9 per cent of the world's population. If all those migrant workers were brought together in one place, they would make up the world's fifth largest country. With the population of the least developed countries growing, those living in poverty are bound to seek wealth in richer countries. The prospect of a cheap labour force in the industrialised world is bound to be attractive, so the dynamic is unlikely to change.
843 However, poverty was certainly not the only reason that brought so many Chinese migrant workers to west Norfolk. Last week's research revealed, for example, that one migrant worker came here because he feared arrest and imprisonment in China following his participation in a political protest. Another was here because he feared for his future in China because of his association with the rather unusual quasi-religious movement the Falun Gong. So fear drives migration as much as economics. It was distressing to discover in that research how easily one set of fears in China is replaced by a different set here, not least because of the way in which migrant workers fall into the hands of gangmasters, often from their own community.
Then there are the fears of the host community. Last week's research showed that the number of Chinese migrant workers in King's Lynn over the past year was between 300 and 500 at its peak, although it has been variously described to me, and published in the press, as being 1,500 to 2,000. The figure was exaggerated. The research also showed that a lot of low-level racial abuse and violence was occurring, which migrant workers, for obvious reasons, did not report to the police, leading to the perpetrators feeling satisfied or even vindicated by their actions, and also to greater local lawlessness. It is the withdrawn nature of some communities controlled by gangmasters that fuels local suspicion. Even though migrant workers often undertake tasks for which there is an inadequate local labour market the assumption remains that they are taking jobs that belong to local people. Their separated and hidden existence, together with significant language harriers, reinforces that impression.
I mention all this because, even when this widely supported Bill becomes law, significant work in community education and community cohesion still remains to be done. Bringing gangmasters into a framework of licensing will not alone do that for us. We badly need to align the labour requirements in business, farming and food processing with our immigration policy. Equally, there is a lot to be done to improve access to education, health and even reliable financial services for migrant workers.
Elsewhere in Norfolk, we have a significant number of Portuguese migrant workers. The fact that they are there legally from another country in the European Union does not make their situation necessarily straightforward. However, there is good practice to commend. During the past two years, Bernard Matthews—there is no greater Norfolk name—has recruited 1,000 Portuguese workers directly from Portugal, without using gangmasters, agencies or middlemen. Each worker is given three weeks' English tuition at a local college and receives health and safety training. There is a health and safety officer on the factory floor who speaks Portuguese. Workers are given plentiful introduction in their own language to the local facilities provided.
Of course, the number of Portuguese workers in Norfolk is much higher than the number of Chinese workers. The Churches and other voluntary agencies have begun to play their part in serving their needs. Some Churches are now conducting services in 844 Portuguese in places such as Swaffham and Thetford where one would not expect them. Celebrations of Portuguese life and culture are developing in mid and west Norfolk, not least prompted by the fact that all football supporters' eyes are rather mourn fully directed to Euro 2004.
However, the truth is that many of those migrant workers have complex religious and spiritual needs to meet. The provision of decent pay and accommodation is but part of that. Later this year, an ecumenical group that we have set up in Norfolk intends to publish a manifesto in Norwich Cathedral reminding the Christian community of its core values in welcoming the stranger and loving our neighbour.
It is certainly true that the connection between the growth of the BNP and some of the consequences of the numbers of migrant workers is beginning to be noticeable. One notices that BNP literature is starting to be circulated in the very areas where migrant workers are most found, even in an area like ours.
The system of gang labour bringing groups of people together on a daily basis to work on local farms is thought to have originated in the village of Castle Acre in Norfolk as long ago as the 1820s. Gangmasters soon emerged because someone needed to organise and supervise those teams. Generally, it was a regular labourer with organisational drive who transformed himself into a gangmaster and who benefited by receiving a portion of the wage of each member of the group. It is easy to see how a corrupt system can develop gradually from that.
It is also easy to see that quite small exchanges of labour and agriculture between one farmer and another could be mistaken for gangmastering. Clause 6(2) may prevent that—I am glad to hear the noble Lord, Lord Carter, refer to it—but until we see the regulations, we do not really know. Equally, we need to make certain that the onus for licensing remains with the gangmaster himself. The need for labour in my part of the world is often immediate. It is easy to see how an employer could be misled or tricked.
Clause 13 requires employers to take reasonable steps to ensure that the gangmasters with whom they do business are licensed. Again, we do not know what those reasonable steps might be until we see the Secretary of State's regulations. There is quite a substantial amount of regulatory detail that could be the devil. We do not want to prosecute responsible but hoodwinked employers. As the Bill presently stands, that is what I fear.
I wish the Bill well, but in some areas it has a very strange vagueness. What is not vague is the community work that still needs to be done. Certainly, the Churches and faith communities in our area stand ready to participate in that.
§ 9.8 p.m.
§ Lord Grantchester
My Lords, I should like to give my support to this Bill and to wish it a speedy passage. It is tackling an aspect of agriculture that has been allowed to persist largely unchecked for too long. 845 While governments have been reticent in coming forward with legislation, I trust that enough parliamentary time will be given to secure this largely uncontroversial Bill. I pay tribute to my noble friend Lord Carter for introducing it tonight and for securing widespread approval, and to Defra for facilitating the process.
I should like to declare an interest as a dairy farmer and must say at the outset that I have never used a gangmaster. As a rule, dairy farmers do not have a need for seasonal labour. There may be seasonal operations that are undertaken, for example, by agricultural contractors, but those are not subject to the provisions of this Bill. The supply of low-skilled labour to farmers and growers on a short-term basis to meet peaks of activity, such as planting, picking and packing, is crucial to the running of certain crop enterprises, especially to meet the exacting contractual requirements for fresh produce that are set by their customers.
Farmers find it virtually impossible to source these key workers locally at short notice. Increases in the number of permits for the Seasonal Agricultural Worker Scheme, SAWS, have been helpful although insufficient. There will continue to be a need for a pool of labour to meet peak demand periods. The best estimates put the size of this activity at approximately 3,000 gangmasters, of whom 250 are relatively important, using several thousand casual workers.
But that labour flexibility must not come at a price. Many suppliers of labour are reputable and comply with the various legal requirements such as working time, tax, health and safety, and so forth. They are also careful not to use people who should not be working because they are either receiving benefits or are illegal immigrants. The recent establishment of the Association of Labour Providers has given these gangmasters an effective collective voice. However, as the EFRA Committee in another place reported in December,there are powerful economic incentives pulling in the direction of non-compliance".The workforce is mainly foreign and the influx of large numbers in unregulated use can pose significant difficulties regarding housing and social services to local authorities.
The complexity of the problems increases as the EU boundaries expand, in that with the accession of the 10 new member states, workers from those countries generally become able to find more lucrative work in other industries. The licensing of gangmasters promises to clarify the effective enforcement of the law, which will benefit workers, remove the stain on the reputation of agriculture and generate funds to the Exchequer that will counterbalance the funding requirement of the Gangmasters Licensing Authority.
Turning to the Bill, I am content that the impact is accurately targeted at the correct people, as set out in Clause 3(5). Similarly, Clause 6(2) specifies the circumstances where a licence is not required. I am concerned that the cost of audit inspections, and hence 846 the licence fee, should be kept under tight control to limit the added costs that undoubtedly will land at the farmer's door, adding to his pressures. There must also be a willingness to commit a sufficient level of resources for effective enforcement, which will tend to work against the tight cost controls I have just mentioned.
In that regard, I look to the supermarkets. They must give a clear indication that they will sign up to the Ethical Trading Initiative code of practice currently being developed. In the short term that code will be a precursor while the licensing authority becomes a reality in around 18 months' time. The code will be operated by the new Association of Labour Providers, and it should not be ambitious to think that supermarkets could be highly constructive in either direct funding to mitigate the industry's added costs, or at least providing in-kind secondment of staff. That would be welcome evidence of the supply chain working co-operatively.
Clearly there is further crucial work to be done in setting up the precise regulations, such as, for example, the regulations to be brought forward under Clause 13(3), to define what are "reasonable steps" for the farmer or grower to take in order to satisfy himself that the gangmaster was acting under the authority of a valid licence. After all, it is the gangmasters who are to be controlled, not the farmers. However, at this stage the intention is clear and I trust that the Bill will be supported on all sides of the House.
§ 9.13 p.m.
§ Lord Palmer
My Lords, I too welcome this Bill and congratulate the noble Lord, Lord Carter, on explaining it to the House so thoroughly and comprehensively. The only thing that I do not like about the Bill is its name, as it gives the impression of having medieval origins, which of course in reality may well be true. However, I was interested to learn that the right reverend Prelate believes that gangmastering started in Norfolk not all that long ago. But a politically correct name such as "purveyor of unskilled labour" is perhaps a bit of a mouthful.
I declare an interest as a farmer in Scotland, although it is many years since my family farm employed gangmasters. However, they do operate in my part of the world. I am also delighted that the Bill is to cover the whole of the United Kingdom.
As other noble Lords have said, there has been a great need for this Bill for many years. If only the relevant authorities were doing their job, then it would not be necessary. I have one or two minor concerns which I would like to air, especially having spoken to various gangmasters. I very much hope that the real rogue gangmasters will be properly targeted and that the genuine gangmasters will not be hassled.
I am always apprehensive and nervous about new legislation, particularly where it is liable to become overly bureaucratic. I very much hope that the Minister will do 847 all he can to ensure that the bureaucracy to implement this Bill is kept to the absolute minimum, especially as there is, of course, a difficulty in knowing the difference between a legitimate gangmaster and a rogue one. I believe that the licensing authority will need extremely good PR from the outset if this Bill is to succeed.
When evidence was given to EFRA in September last year, it was horrifying to think that in this day and age people can be exploited to the extent that they are. I heard only last weekend that not far from me, in the Borders of Scotland, Portuguese workers were being charged £70 a week for a room, whereas I find it impossible to let a nice two-bedroom cottage for more than £45 a week.
It is to be abhorred that rogue gangmasters ignore all the most basic health and safety legislation, and I cannot help but feel that the estimate for workers' undeclared income tax and contributions of up to £100 million could, in reality, be doubled, trebled or, indeed, quadrupled. This, indeed, could prove to be most useful genuine revenue for the Exchequer, once the Bill has become law.
I, too, believe it is important that all retailers, wholesalers and, indeed, processors, become involved in this Bill. As such, it is vital, as the noble Lord, Lord Grantchester, mentioned, that the cost of licensing fees is kept to a realistic level and that the whole food chain commits to this scheme. Needless to say, there are rumours that the Bill is going to increase the cost of fresh vegetables greatly. I simply do not believe this to be true. It is worth remembering that food today is ridiculously cheap; I remind your Lordships that 40 years ago, 40 per cent of the annual wage was spent on food, whereas today that figure is just under 16 per cent—a very dramatic change.
My final point is that I believe that the licensing authority must be given real teeth if this legislation is to work. I hope that the noble Lord, Lord Whitty, will take these points on board, and I wish the Bill well.
§ 9.17 p.m.
§ Lord Livsey of Talgarth
My Lords, this is the third time that I have spoken today, and I am looking forward to eating my sandwiches in my office, in much the same way as I ate sandwiches when I was a member of a gang, long ago and far away.
The need for such a Bill to control gangmasters was quite apparent in the days when I was a student. All one summer, I worked in a gang. We were ill treated and very badly paid. I remember two things clearly about the summer I spent in Lincolnshire as a Welshman. First, I remember being told by a brutal gangmaster, along with the rest of the gang, to work through a torrential two-hour thunderstorm with huge flashes of lightning, scrabbling around in the field for potatoes and getting them on to a lorry in the corner of the field bound for Manchester which, we were told, had to leave at 10 o'clock at night.
My second memory was the more interesting phenomenon of two blonde sisters from Grimsby who looked good, but as soon as they opened their mouths, 848 there was a torrent of expletives deleted. I hope that it is not too sexist, but I named them "Hell's Belles". I am sure that immigrant workers are still having such experiences in their first experience of Britain.
I have lectured to agriculture students on the organisation and capabilities of gangs, introducing them to the concept of gang work days—easily calculated, incidentally—and work rates relating to the different teams of machinery and workers, usually related to harvesting a huge variety of crops.
Timing, in the dynamic of farming and horticulture, is crucial. Crops have to be harvested when they are ripe and ready. In some cases, that may be in the middle of the night. The gangmasters Bill must not, through too bureaucratic a system, delay the essential time-frame of harvesting—that is crucial, and I say that as an agriculturalist. The exclusion of agricultural contractors from the Bill is essential in this context.
I congratulate the noble Lord, Lord Carter, on the introduction of this Bill and, in particular, Jim Sheridan MP, whose Private Member's Bill was introduced into the House of Commons. The Government appear to have adopted quite a large chunk of that Bill and have rightly given Jim Sheridan a lot of support.
The need for the licensing of gangmasters in Clause 1 is absolutely essential, as is the setting up of the licensing authority. I welcome the Bill unreservedly. It is long overdue. One has only to mention the words "Morecambe Bay" to identify the urgent need for this legislation. The exploitation of people must be halted in its tracks.
Clause 2, which provides for licensing and inspection and the activities of gangmasters to be constantly reviewed, is essential. The other clauses set out the administration of the licensing of gangmasters. I agree with the noble Lord, Lord Carter, that enforcement is extremely important. There must be sanctions for those who break the law.
I believe that there is widespread support for this Bill not only in the farming community but in the population at large—and rightly so. I sincerely hope that the supermarkets and other outlets take this legislation extremely seriously. The regulations associated with the Bill must be spelt out and as much as possible incorporated into the body of the Bill. There must be no room for doubt on this issue. Indeed, I believe that we will come to a situation in which gangmasters realise their responsibilities and discharge them as such, especially in relation to the human rights of people who work on the land.
§ 9.22 p.m.
§ Baroness Byford
My Lords, I start by thanking the noble Lord, Lord Carter, for introducing his Private Member's Bill today and for openly explaining to Members of your Lordships' House why this Bill is drafted so widely. I also record my thanks to the noble Lord, Lord Whitty, who agreed to meet the noble Lord, Lord Livsey, and me last week to go through some of our anxieties. I am grateful for that and for the back-up work that we have had. In his comments—I shall not repeat 849 them all—the noble Lord, Lord Carter, was quite right. Where criminal activity is going on it needs dealing with very severely.
As I continue my contribution, the noble Lord should not be surprised because I have already explained to him that I have concerns—which reflect some of those expressed by the right reverend Prelate the Bishop of Norwich—that so much is left to regulation and is not included in the Bill.
Before I begin my contribution, I declare that I am president of a not-for-profit organisation called Concordia, which exists to assist overseas students, especially those from Europe and the newly accepted countries, to find seasonal work in the UK during their university and college courses. I understand that some 50 or 60 per cent of them are linked by their courses to agriculture or horticulture work, so it is a useful way of giving experience to the students. Usually, the work is farm-based, but not always, as their interests encompass everything to do with food production.
Concordia began its life way back in the 1943—I asked how old it was—and has a good reputation for supplying hard-working, committed workers who are a credit to the colleges that they represent. The UK farms and other work places all treat the workers well and most have been employing such students for many years. In total, there are nine companies like Concordia without which overseas students would have greater difficulty in obtaining the experience that they seek. Similarly, farmers and processors, particularly those who specialise in seasonal foods, would have a greater difficulty in obtaining the labour force that they needed if such schemes were not in existence.
The fact that there are irresponsible and corrupt gangmasters should not cause the Government to pass legislation that is unduly onerous for honest labour brokers, nor should it result in extra bureaucracy or unfair responsibilities for honest employers—something to which other noble Lords have referred. It should not be rushed through Parliament without careful and thorough examination of some of the consequences.
At the earlier consideration of this Bill in another place, my honourable friend Owen Paterson listed the legislation that is already in place and could be used to control many of the activities of dishonest gangmasters. I can do no better than to draw the House's attention to what he said. The Asylum and Immigration Act 1996 allows for fines of up to £5,000 on employers of illegal immigrants. To date, the Government have brought 22 proceedings under Section 8 and eight people have been found guilty. The Health and Safety at Work, etc. Act 1974 applies to anyone working in Britain legally or illegally. The Health and Safety Executive covers the coast down to the low-water mark and has acknowledged that it is aware of a near disaster on the Cumbria side of the Morecombe Bay before Christmas last year. The 850 National Minimum Wage Act 1998 could be used by the DTI through the Inland Revenue to raise wages. The Agricultural Wages Act 1948 could be used by Defra. The Employment Rights Act 1996 covers deductions from pay and termination of employment requirements. The Employment Agency Standards Inspectorate is empowered by the Employment Agencies Act 1973 to inspect anyone carrying on an activity associated with labour supply.
Those are Acts, guidelines and statutory instruments that cover tax, benefit, fraud, VAT rules and national insurance requirements. It is clear that over the years the government of the day have been aware that there was a problem. One of my anxieties is that if there are such a large number of Acts already that would cover some of the problems that we are discussing, it only really underlines the need to enforce Acts. It is no use having more legislation unless enforcement is made.
How many individuals operating as labour brokers have been charged in the past five years with breaking any of the laws that should bind them? Can the noble Lord, Lord Carter, explain why those laws have not been used more rigorously to stamp out the very practices that we have debated tonight, which are well known and appreciated by all those who seek to satisfy market demand in a legal, upright and honest way?
The Bill before us today is motivated by a genuine horror at the Morecombe Bay deaths—something that we all felt with great shame, possibly shame that such a thing could happen for such despicable reasons—and possibly in recognition that the Government must be seen to be doing something. Our job in this House is to analyse that something, to prove that it answers an identified need in a way that cannot be fulfilled by any existing legislation. As the noble Lord, Lord Carter, said, we should protect farmers and businesses that give no cause for concern from measures that could seriously disadvantage them and ensure a quick implementation, with a resulting elimination of the problem.
My earlier comments on the raft of existing legislation that applies to the situation show that I am not convinced that the Bill will improve matters unless it is enforced. The various departments concerned, which I have named, have not been able to control the problem using the instruments that they have already at their disposal. What guarantees will there be that a new batch of tools will be any easier to use or more readily enforceable? For example, will the employment of an enforcement officer be more effective than a similar increase in the number of HSE inspectorate staff charged with policing this area?
To be effective, this legislation will have to rely to a large extent on policing the users of seasonal labour. Honest brokers such as Concordia have an entry in the phone book. They have an office that does not change from decade to decade, never mind month to month. They are known and easy to investigate. With a little joined-up thinking between government departments, 851 they can he given a clean bill of health readily, easily and quickly. As other noble Lords have pointed out, the problem is the dishonest, fly-by-night, always-on-the-move merchant who is a totally different prospect. How can one catch someone who has no permanent address, who uses the Internet with a different post box for each assignment, who pays no tax of any sort and has as many different identities as phases of the moon? One goes after farmers and food processors and takes up their time.
I find myself in agreement with Owen Paterson. The Bill is not the only way of solving the problem. The Employment Agencies Act 1973 can surely be used to introduce a gangmaster's licence. It could have been. However, as I said earlier, the Bill will succeed only if it is quickly and fully implemented. How many inspectors will be employed? How many enforcement officers will be deemed necessary? How will they operate? Will the lists of food processors that they draw up be licensed by each local authority and will they then visit them? Or do they consult the Yellow Pages for farmers' phone numbers and ring round to find out whether they use seasonal labour? Will they talk to Customs and the Immigration Service for information on the whereabouts of recent immigrants?
I understand that the Health and Safety Executive already has the power to investigate any worker at any time in any place in Great Britain. The Morecambe Bay problem is not confined to people supplied by gangmasters. There are many individuals, and small groups, risking their lives daily in pursuit of what they perceive to be free gain. I understand that the lifeboat has already been called out more than 30 times this year.
I have raised several questions this evening. I support the aims of the Bill and I wish it well but I have reservations, as I have already indicated. I am very anxious to see that all employees are looked after properly and are employed reputably. But, as it stands, the Bill is woefully short on detail as the noble Lord, Lord Carter, acknowledged. Is it envisaged that the gangmaster licence fees collected will cover only the registration system or will they be used to implement the enforcement side as well? I do not think that that is clear at this stage. Paragraph 78 on page 14 of the Explanatory Notes states that:Once operational the Authority will be self-financing".My concerns on the Bill are reflected not only by the House of Lords Select Committee on the Constitution, which the noble Lord touched on earlier, but by the Association of Labour Providers, also quoted by the noble Lord. I acknowledge that it supports the Bill, as do the NFU and all the other organisations mentioned by the noble Lord, but it states that it is important to understand that legislation itself will not be sufficient to deal with this problem. There needs to be greater enforcement of existing legislation by the existing enforcement agencies.
852 Like the noble Lord, I looked at the comments made on the Bill by the Select Committee on the Constitution—I know that the noble Lord, Lord Whitty, will refer to this. There are eight very important points. To start with, the committee comments on the fact that the Bill originally introduced by Jim Sheridan has been totally transformed and that many of the present Bill's 30 clauses have been incorporated without debate.
The third paragraph states:Public interest in the Bill has been magnified by the Morecambe Bay tragedy and by recent media reports of many types of abuse connected with the provision of gangs of labour for casual work. An effective scheme of licensing will need to restrict these abuses and encourage good practice, as well as to maintain a structure for providing casual labour when this is urgently needed in agriculture".
§ That is a point which the noble Lord, Lord Livsey, quite rightly highlighted.
Paragraph 4 states:
But the status and constitution of the Authority and the appointment of its members is left to regulations. It is therefore impossible to know from the Bill whether the Authority is intended to act autonomously, and the quotation above regarding general or specific directions does not make that position clearer. The Authority is to exercise a very wide discretion under this Bill. By clause 7(1), 'The Authority may grant a licence if it thinks fit'".
Further it says:
clause 8(1) is a very broad power".
§ I shall not go through them all because I believe that the noble Lord, Lord Whitty, will pick up on some of the points within this recommendation. It is hugely important. There is pressure on us to try to gel this Bill through as quickly as possible. I would hate any Member of this House to think that I did not support the Bill. I am concerned that so much of the proper detail is not on the face of the Bill and we do not have it to hand.
Paragraph 8 of the committee's remarks states:
The Bill would be improved from the perspective of administrative justice if it were to address questions that are fundamental to the scheme of licensing that it proposes to create, and we so recommend".
§ So it is not just me and other people who have raised issues with me. The Select Committee on the Constitution has questions which it has put and which we have had the advantage of reading.
§ I thank the noble Lord, Lord Carter. We support the principles and aims of the Bill. But there are some very real questions which I hope the Minister will cover when he responds.
§ 9.37 p.m.
§ The Parliamentary Under-Secretary of State, Department for Environment. Food and Rural Affairs (Lord Whitty)
My Lords, I am grateful to my noble friend Lord Carter and to Jim Sheridan for making it possible to consider this Bill, which deals with a very important issue. I give my thanks to the Members of the House who have spoken tonight, all of whom have, at least in principle, accepted the need for such a Bill. I do not need to go over it in great detail.
853 The right reverend Prelate and others described some of the matters which arise from the dark side of the gangmaster situation. It was quite dark even when the noble Lord, Lord Livsey, was concerned with the business. It has undoubtedly got worse. It is now not only a question of exploitation of vulnerable labour, but there are also links with illegal immigration, illegal working and other aspects of criminality quite apart from the issues of tax and social security fraud.
We need to start from the proposition, which my noble friend Lord Carter, underlined, that the agriculture and horticulture industries need casual and seasonal labour, often at short notice and for very short periods. We want to facilitate a situation whereby that can happen in a legitimate and decent way, in which the employees of the gangmasters, or labour providers, as we would prefer to call them, although not many do, can operate with respect for the other laws of the land.
Because there is increased awareness of this difficulty there have been various initiatives. There has emerged a very clear consensus in the industry, which includes the Transport & General Workers' Union and the NFU. They do not see eye to eye on all occasions, but on this they are united, as with the Fresh Produce Consortium and the supermarkets. The initiative for this was established by Mr Zad Padda, who himself was a gangmaster or labour provider from the West Midlands. He looked at the trade and saw that there were very damaging aspects to it undermining the legitimate and decent gangmasters who operate this trade.
I thank all those parties, in particular Mr Padda, Jack Dromey from the TGWU, Tim Bennett from the NFU and Doug Henderson from the Fresh Produce Consortium who have come together to make this measure work. There has been a big input into the drafting on the part of the Government, but that was done on the basis of a consensus in industry.
The support for this Bill and the need for it are clear. However, a number of noble Lords have queried the nature of the Bill. I need to make clear to the right reverend Prelate and to the noble Baroness that the drafting of the Bill requires some flexibility and some use of secondary legislation—probably more than might be the case in certain other circumstances. In order to address that problem we have provided, and will provide, further indications of the outline and the first drafts of key statutory instruments so that we can consider them before the Bill completes its passage through this House. After that, there will, of course, be formal consultation in the normal way.
The licensing system is in the best interests of legitimate labour providers, of farmers who want to do business in a sensible way and of those they employ. It will create the conditions that drive out the thugs, the bullies and the more dubious gangmasters who undermine that legitimate activity. The industry, or parts of it, have attempted to make progress on this matter and are in the process of drawing up a voluntary code of practice. However, we recognise 854 that that is not enough, partly because a large section of the industry will not sign up to a code of practice on a voluntary basis and partly because it is difficult for someone further down the chain to know whether the provider of labour, and of the produce of that labour, has used legitimate gangmasters who observe the code of practice. That is why we need a mandatory register.
It is true that most of our concerns are covered by existing legislation. It is clear that government departments have an obligation to enforce that legislation on gangmaster activity. A very substantial effort has been made to co-ordinate that on a better basis through Operation Gangmaster and Operation Reflex. There are currently 11 gangmaster investigations under way and there have been some recent successes. Successful action taken against gangmasters, including on tax and VAT, have led to what is called "adjustments" of £16 million worth of tax and 2,300 cases have been taken up regarding social security benefits. Therefore, action has been taken by the authorities.
However, in a sense, the noble Baroness answers her own question regarding why the raft of legislation to which she referred needed further action to enforce it effectively. By and large that legislation is drafted to deal with static, or at least permanent and identifiable, employers and employees who live and operate in this country legitimately. However, if you are dealing with people who employ labour who may have a vulnerable status, and are in the relevant location for only a day or two, further measures are required. Those fly-by-night people to whom the noble Baroness referred can only really be targeted by identifying to whom they supply labour and who uses the products of that labour.
This measure is supported by the whole of the food chain. While we need the whole range of Customs and Excise inspectors, tax and social security inspectors and the enforcement officers provided under this Bill, we also need the trade to check that operators have a licence. In a sense that is an insurance policy for the retailer and the farmer. They need to check whether produce has been provided by someone who has a licence. If that is not the case, there is a prima facie case for investigating that and for ceasing to obtain supplies from that source. I refer to an industry code, as it were, enforced on a voluntary basis, but it requires a mandatory register before it can work.
I think we all accept, as the noble Baroness, Lady Byford, and the Select Committee of another place say, that the licensing system, of itself, is not enough. The trade as a whole, and the enforcement agency, have to operate in order to ensure that the licensing system brings about the benefits that we are looking for. The noble Baroness, incidentally, referred to the Employment Agencies Act, which originally provided for this form of registration. But that part of the Act was repealed by the Deregulation and Contracting Act of 1994, and it would not be possible to do this under that Act as it now stands.
One of the reasons why we have drafted some of the clauses quite widely, to address the biggest problem in the nature of the Bill, is that gangmasters are adept at exploiting legislative loopholes to avoid legal 855 obligations. They may find a way around what we provide for in the initial statutory regulations. We therefore need to cast the Bill relatively widely, to ensure that we can catch up with such manoeuvres. Subordinate legislation can be changed more easily to do that. In order to do so, we need to make sure people understand what the secondary legislation will do, and that is why I am proposing to give at least an outline indication of that.
As to the points of the Constitution Committee—which I have noted and am concerned about—I can answer the bulk of those points in relation to the powers which are not explicit in the Bill. For example, it is not our intention to use licensing to restrict the number of labour providers. The only denial or removal of a license would relate to the exploitation of workers or illegal behaviour. The Bill will make explicit provision for regulation to exempt certain types of work and certain circumstances from the licensing scheme. It is that broad in order to deal with the problems that I have described. We will, as my noble friend Lord Carter explained, exempt genuine agricultural contractors who supply machinery and labour. We will not include within the Bill those farmers who loan workers to their neighbours or further afield. Nor would we wish to include processes which change the nature of the product, such as turning fresh meat into a meat pie.
All that is subject to consultation on the statutory instruments, but it is a clear Government intention that we would not include those people.
As far as concerns the establishment of the authority, day-to-day responsibility for the design and operation of the licensing scheme will rest with the authority, whose sole role and remit will be established through these regulations. The ultimate responsibility to Parliament, however, will be through the Secretary of State.
The noble Baroness, Lady Byford, asked about charging. The fees will cover the registration system and operation of the authority, and there will be other resources provided in order to deal with the enforcement officers envisaged under this Bill. The bulk of the enforcement in the wider context, however, will be by the existing agencies, which will make use of these new powers to exert—by withdrawal of the licence, or recommending to the authority the withdrawal of the licence— pressure as regards other offences.
The licensing authority will be an executive NDPB, and will have the normal constraints applied to it. The membership of the authority will represent farmers, trade unions, supermarkets, labour providers, voluntary bodies and the various enforcement agencies. The body's function will be to prevent the exploitation by gangmasters in relation to their recruitment and employment, compliance with tax, national insurance, VAT, other general employment law and, of course, immigration and illegal working law. It will be clear what the responsibilities of the authority are, and the anxieties expressed by the Constitution Committee will be dealt with in the secondary legislation.
856 The other point that the Constitution Committee raised was the need for a robust and independent appeals mechanism. I accept that. Appeals will be heard by an appointed person. We will be discussing that with the Council on Tribunals and colleagues in the Department for Constitutional Affairs so that we can establish a means of appealing decisions from the tribunals as I think the committee wanted.
I think that that deals with most of the issues raised except for the need to ensure that this does not impose too great a burden on the farmer or grower. Checking not only needs to be simple; it also needs to be quick. It will be incumbent on the authority to ensure that there are means whereby the individual farmer can check whether someone who says he is a gangmaster is in fact the gangmaster he claims to be. The farmer will have to be able to check and show due diligence if challenged rather than face prosecution if the case proves to be otherwise. He will have taken reasonable steps to check. The noble Lord, Lord Livsey, said that in harvest time such checks need to be quick, simple, understandable and effective. We certainly take that point. We will certainly take it on board in the licensing system.
Subject to that, I believe that we have a Bill that can be made to work. We will take it not on its own but with other measures taken by the trade and the government's enforcement agencies, in order to deal with the very nasty end of a very difficult employment situation which affects tens of thousands workers in our country, some of whom are here temporarily while others are here permanently. All of them face the potential of encountering a small but significant group of gangmasters who are exploiting their position. Those gangmasters give the agriculture and horticulture industry a bad name that it does not deserve.
§ Lord Palmer
My Lords, before the noble Lord sits down, can he clarify one point? As the Bill applies to the whole of the United Kingdom, will the different bodies that will implement it work independently in Scotland, Wales, England and Northern Ireland, or will there be one encompassing body for the whole United Kingdom to deal with licensing?
§ Lord Whitty
My Lords, there will be one encompassing body although some of the agencies that will need to be associated with it—for example, the police—are devolved. Most of the offences that may be connected with this are in fact UK offences. So it will be a single UK authority.
My Lords, I am extremely grateful to everyone who has spoken and for their support for the Bill. I am afraid that I forgot to declare a past interest. The noble Lord, Lord Livsey, reminded me of his experience in a gang. I also have experience in a gang, on a building site in Crawley. I was engaged at 4 p.m. but I was sacked at 4.30 p.m. as being completely unsuitable for the type of work. I was getting rather less in my wheelbarrow than the rest of the gang were getting on their shovels, and I am still owed a day's 857 pay. I was also struck by the fact that the noble Lord, Lord Livsey, remembered the sisters from Grimsby and the fact that they were blondes.
Almost all the questions have been answered by my noble friend Lord Whitty. The right reverend Prelate spoke about the small exchange of labour which we all know goes on in farms. That is explicitly excluded in the draft statutory instruments. The noble Lord, Lord Grantchester, mentioned SAWS—the seasonal agricultural workers scheme. That is specifically excluded by regulation.
The noble Baroness, Lady Byford, made a fair point about the range of Acts, but of course that shows the overlapping and confusion there has been. 858 Enforcement will be so much easier with a single authority with a single lead Minister responsible. There is an industry consensus that that should be achieved. She asked then some detailed questions about the number of inspectors, the cost and so on. A very detailed schedule of the cost is available which I will certainly send to her. I think that that will provide all the information that she needs.
As I said, I think that my noble friend the Minister has replied to all the other questions.
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.
§ House adjourned at six minutes before ten o'clock.