Gangmasters Licensing Authority (Civil Fines)

(Limited Text - Ministerial Extracts only)

Tuesday 11th June 2013 Westminster Hall

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Hollobone. I congratulate the hon. Member for North East Cambridgeshire (Stephen Barclay) on securing the debate. I am pleased to see his colleagues, the hon. Members for Peterborough (Mr Jackson) and for Morecambe and Lunesdale (David Morris) here. I know that they share a common concern about the operation of gangmasters in their constituencies.

It is important that I open by saying how significant the operation of the Gangmasters Licensing Authority is. We need it to work for precisely the reasons that the hon. Member for North East Cambridgeshire set out: to ensure that very vulnerable people are not exploited by criminals—let us be clear, they are criminals—who wish to use the opportunities that arise from people coming from overseas and finding themselves in a vulnerable situation.

I would like to respond to the points that the hon. Gentleman made, but also to say a few words about the proposed improvements to the operation of the GLA, which has done and continues to do a great deal of valuable work, which most people recognise, to protect and enforce the rights of vulnerable workers. Many reviews over recent years, including the farming regulation task force and forestry regulation task force, have looked at the GLA’s work, and there is general recognition among stakeholders that it has been effective in improving working conditions in the regulated sectors.

In recognising the highly valuable work the GLA has done, the reviews have also shown that there is room for improvement, so there is an opportunity to make the GLA a modern enforcement agency that better targets criminal activities, while applying a light touch elsewhere. That is one of the thrusts of the work we have done. Part of the consultation that is happening at the moment is about how we can take our foot off the pedal in areas where it is not needed, to concentrate resources on the areas that the hon. Gentleman has drawn to the attention of the House.

Through the employment theme of the red tape challenge, the continuing need for the GLA’s work was endorsed, alongside the need to bring forward measures to ensure that it can become more focused on the worst excesses of worker exploitation in the sectors it regulates. As the hon. Gentleman said, my predecessor, the right hon. Member for South East Cambridgeshire (Sir James Paice), announced, via a written statement to Parliament a year ago, the range of reforms that would come forward.

The GLA will increase joint working with other agencies involved in stamping out serious organised crime activities, including human trafficking, money laundering, tax evasion and other serious organised crimes. To enable that increased focus on the serious criminal elements in the supply of labour to the food and food processing sector, the GLA will modify its processes and deploy its resources in a way that relieves the burden of regulation from highly compliant businesses, but targets criminals through improved intelligence gathering.

[David Morris (Morecambe and Lunesdale) (Con)]

In Carnforth in my constituency, the Morecambe bay hybrid fishery order is being drafted at the moment. Can the Minister assist the legislation to go through quicker? It will enable the licensing and policing of the bay for shellfish farmers and harvesters and cockle pickers.

[Mr Heath]

I am not sure that I am in a position to help with what is presumably private legislation, in that it is independent of Government processes, but I have heard what the hon. Gentleman has said. Having such an order in place would clearly benefit his constituents, which is why he has raised it today. I do not blame him for doing so.

Before that intervention, I was suggesting that in areas where the experience of GLA enforcement over the years has shown that there is less need for regulation, we can safely remove those currently licensed activities from the scope of regulation and redeploy the resources elsewhere. My Department launched a public consultation in April this year on proposed reforms to GLA operations, as the hon. Member for North East Cambridgeshire said. That consultation includes proposals to exclude some activities that currently require a licence from the scope of licensing, where evidence suggests that there is a low risk of exploitation of workers. That proposal would remove about 150 businesses from licensing, saving those businesses about £60,000 and enabling GLA resources to be deployed elsewhere to tackle serious abuses.

Changes are proposed to the size and constitution of the GLA board, to make it smaller and better able to provide clear strategic direction for the organisation. The consultation also looks at the scope to introduce civil penalties—exactly the point that the hon. Member for North East Cambridgeshire made—into the range of enforcement tools that the GLA has available.

The GLA is a designated regulator under the Regulatory Enforcement and Sanctions Act 2008—the so-called RES Act—which permits the use of civil penalties as an alternative to prosecution in certain circumstances. The point that the hon. Gentleman made, and he quite properly set out exactly why this is an obstacle for us, is that the sectors that the GLA regulates are overwhelmingly made up of small and medium-sized enterprises.

The scope for use of civil sanctions in the RES Act is constrained by Government policy in that area, and I recognise immediately that what the hon. Gentleman is asking me to do is to challenge another Department’s policy. I think that is implicit in what he says, but for the benefit of the record I want to state that Government policy in that area was clearly set out in a written statement to Parliament last November, by the Department for Business, Innovation and Skills Minister, my right hon. Friend the Member for Sevenoaks (Michael Fallon).

That statement made it clear that, in general, SMEs should not be subject to monetary fines because of the risk of smaller companies feeling less equipped to challenge the basis for such fines. That is very clear Government policy and if I wished to engage in a dialogue with my right hon. Friend the Member for Sevenoaks on the issue, we would need to establish why this matter should be the exception to that rule.

[Stephen Barclay]

The crux of the matter is in two of the words that the Minister just said: “in general”. My colleagues on the Government Benches very much support the statement made by my right hon. Friend the Member for Sevenoaks. We understand the difficulties of the red tape, but it is this “in general”. What we are saying is that in this instance there is a distinction between the criminality of gangmasters operating against vulnerable people—the raids are revealing some horrendous and immoral issues—and the small business owner suffering from red tape. It is that distinction that I ask the Minister to take away, from a cross-departmental point of view, and take up with colleagues.

[Mr Heath]

Of course I understand what the hon. Gentleman says, and I understand why he is bringing the matter forward in the context of his constituency interest, but I have to say that where there is criminality I believe that criminal sanctions should apply. I want to make it absolutely clear that, if the evidence is there, there should not be the slightest hesitation in bringing a criminal action. The question of civil sanctions is, in a sense, a reserve position for situations in which a criminal prosecution is inappropriate.

[Stephen Barclay]

The Minister is generous in giving way a second time. The facts speak for themselves—only 15 prosecutions. For criminal prosecutions a higher standard of evidence is required, and they are therefore more difficult. They take longer and are more expensive, and we are talking about an organisation with resource constraints.

For the measure to work, the Minister needs the resource. Perhaps I can take him back to his earlier remarks. Yes, in the consultation we are reducing the board—frankly, big deal; it is pretty irrelevant—but how many investigators from the GLA are covering Cambridgeshire, Norfolk and Lincolnshire? The figures I had, off the record, were very small. Will the Minister share the figures with the House?

[Mr Heath]

I am grateful to the hon. Gentleman. I do not have the figures with me and will, therefore, happily write to him to set out the position.

I will, in fact, go further than that. I am due in East Anglia tomorrow and I plan to meet with the GLA to discuss exactly how it operates and how we can help it to operate, so it seems entirely appropriate that we look at the resourcing issues. It is not small beer to redirect resources from areas where they are deployed to no great benefit because they are being used to license people who have not the slightest intention of breaking the law, and have the track record to show that they do not. It seems entirely appropriate to redirect the resource to deal with the bad guys, against whom we need to collect evidence.

I take the point about the difference between criminal and civil standards of proof. That is, of course, a factor, but let me be absolutely clear: I want more criminal prosecutions. I want to see more people brought before a court for their abuses and I want them then to suffer the further penalty, where appropriate, of proceeds of crime restitution, so that we get back the money that the gangmasters have acquired through illicit means. We also need to make it plain that they are not wanted in our agricultural industry. We must deal with them effectively.

I do not quarrel at all with the hon. Gentleman’s point, but I want to ensure that we do this right, and I am working within an overall Government policy that is resistant to the view that civil sanctions are the appropriate means of dealing with small and medium-sized businesses. That is my difficulty. It is not an insurmountable difficulty, but I need to persuade others in Government of the case.

Some provisions of the RES Act might be useful to the operation of the GLA. We have invited views from stakeholders on the usefulness of the measures, and the public consultation by the Department for Environment, Food and Rural Affairs remains open until 21 June. I therefore invite the hon. Gentleman, and others who feel strongly about the matter, to ensure that their views are fed into that consultation process. When we respond to the consultation in due course, it will be helpful for us clearly to understand, from colleagues who represent areas where many labourers work in such schemes, what the problems are and how we should best deal with them.

As I said, I am very happy to look at the matter in the round and to recognise the strength of the arguments, but I come back to my basic premise, from which I will not resile: the key change will be to redirect resources as the GLA is asking us to. That seems to make sense, but obviously we must wait for the consultation process to end to see whether others agree that we should redirect resources in the key areas of serious offences and organised crime.

The GLA itself has been at the forefront of the reform programme, and last week published its three-year strategy for protecting vulnerable workers, which emphasises an intelligence-led, risk-based approach, working closely in partnership with other agencies. The hon. Gentleman will know that the GLA is active in many parts of the country, including in the constituencies of the hon. Gentlemen here today: North East Cambridgeshire, Morecambe and Lunesdale, and Peterborough.

The hon. Member for North East Cambridgeshire mentioned Operation Pheasant, a multi-agency taskforce set up to tackle ongoing worker issues in the area. Three people have been arrested on suspicion of human trafficking offences in Wisbech, and a diverse team of agencies has been assembled to assist with the operation, with partners including Her Majesty’s Revenue and Customs, the Home Office, trading standards, Fenland district council and Cambridgeshire fire and rescue.

I want to know more about the matter at first hand, which is one of the reasons why I am going to East Anglia tomorrow to talk directly to GLA officers and partner agencies involved in the joint operation. If they tell me that there are clear areas in which we have still not dealt effectively with the issues they want us to address, the hon. Gentleman can be assured that I will act on that and take their advice in developing Government policy.

I believe that the package of reforms that we are taking forward with the GLA will make the authority better able to protect vulnerable workers, while easing burdens on the majority of businesses, which are compliant and law-abiding. I am very grateful to the hon. Gentleman for having given us the opportunity to discuss this extremely important issue.

[Mr Philip Hollobone (in the Chair)]

I suspect that the debate has been the best possible pre-briefing for the Minister’s visit tomorrow.

Question put and agreed to.