Gangmasters (Licensing Authority) Regulations 2014

Debate between Lord Grantchester and Lord Young of Norwood Green

Wednesday 16th July 2014 Grand Committee

[Lord Grantchester (Lab)]

I thank the Minister for her explanation. From these Benches, I am unhappy and reluctant to endorse this measure as currently drafted. Several features of the order cause considerable concern.

Labour is rightfully proud that in government it established the Gangmasters Licensing Authority. I remember that my noble friend Lord Whitty steered the Bill through this House without any amendment. It is unfortunate that the Government wish to press ahead with this order despite the misgivings voiced in the other place calling for a period of reconsideration, and the measure having been subject to a vote. That the Government wish to proceed with the governance alterations in spite of this controversy is to be regretted, given that the authority is so important and does such vital work.

My first anxiety stems from the fact that responsibility for the Gangmasters Licensing Authority passed from Defra to the Home Office in April this year. This runs the risk of interpreting the work of the authority as merely enforcement. I am sure the Minister will appreciate that there will be a difference of culture between the two departments. We are concerned that the Home Office may be focused only on prosecutions. Can the Minister outline how her department will widen the approach beyond mere prosecution towards prevention and guidance to encourage interplay in farming activities, with a view to achieving outcomes beyond prosecution?

Labour is approaching this area with a view to extending and building on the gangmasters legislation so that it covers other areas. In this regard, it is disappointing to hear that the Government may well have intentions to withdraw forestry from the authority’s areas of responsibility. The governance structure is a vital part of establishing full participation in the objectives and strategy of the authority, which is leading the way in tackling abuse among certain workers. The approach from my colleagues in the other place was to seek to be satisfied that the reduction in board representation from 29 ensured that the full skill set and expertise required by the authority would still be present. The Minister did not explain the logic behind reducing the number on the board to nine. While recognising that numbers could be reduced, we are looking for assurances that the board will continue to be effective, and indeed improved, by reducing its size to a certain number.

It is disappointing that the Minister in the other place did not explain how nine would be the correct number to ensure that the members of the board brought the level of expertise needed and that there was enough recognition from and connection to the community that will ultimately implement the regime. Instead, the Minister concentrated on the belief that the order had to be brought in immediately and could not be subject to further consideration. Since it is recognised that the board members will now be members on the basis of their own abilities and not as representatives of various organisations, the Government must have given some thought to the range of skills needed in order for the number nine to be proposed.

It would be helpful to understand better the consultation that was undertaken on the matter as explained in the memorandum. The explanatory document gives details of the consultation where the respondents agreed with the proposals to reduce the size of the board and to move away from a representative board to one recruited by open competition. Respondents were also asked to give details of their preferred mechanism for ensuring that a smaller board would have access to and take account of the wide range of stakeholder views. The memorandum says, at paragraph 8.5:

“Of those answering the question about the GLA Board structure, 56 agreed with the Government’s proposal for reform, while 5 expressed their disagreement. Forty five of the 48 responses to the question seeking views on how to maintain stakeholder contact with a reformed Board were in favour of the retention of a formal mechanism for ensuring these views were heard. There was no clear consensus on how this would best be achieved”.

I repeat the last sentence:

“There was no clear consensus on how this would best be achieved”.

Can the Minister say how many respondents came up with a number and how popular nine was?

I will be so bold as to suggest an amendment to the order today. Would the Minister consider an alternative, whereby the number of board members must total at least nine but not more than 15? That might go a long way to ensuring that the right skill set was always present on the board and make it flexible as to the operation of the authority and responsive to the challenges that may be thrown up in future. Would the Minister like to withdraw the order today to consider that? The TUC argued in its representation:

“If the Regulations are adopted, future Board members will be recruited against a generic skill-set. There is a risk that future Board appointees will have no knowledge of the agricultural, fresh produce and shellfish industries … The appointees are also likely to lack experience in representing or protecting vulnerable workers from exploitation”.

In her response today, will the Minister also include some further details that are not included in the regulations? Under Regulation 5, relating to,

“Tenure of office and remuneration of the Board”,

neither the length of time of a board appointment nor whether a board member may serve multiple terms of appointment is stated. Is this included in an earlier regulation that is not being changed by these regulations? Could the Minister perhaps expand with further details on how the department expects the board to be constituted and how it may operate? What assessment has been made of the impact of these changes on vulnerable workers? How will the Government ensure stakeholder engagement and provide joined-up government? Finally, will the Government review the impact of these governance changes on the Gangmasters Licensing Authority and its ability to perform its functions? On this crucial area, where so many people are vulnerable, I would like to be reassured by the Minister today.

[Lord Young of Norwood Green (Lab)]

My Lords, I thank the Minister for her explanatory statement. I did not find that it addressed all the issues of concern that my noble friend Lord Grantchester has already enunciated. I declare my interest as the acting chair of the Ethical Trading Initiative, the organisation that probably drove the previous legislation, along with the trade unions and corporates that were involved at the time. Understandably, we have a significant interest in the current proposal.

We feel that the general direction of travel during the past few years has been to make the GLA a bit more biddable to the Government’s agenda, including a focus on enforcement, possibly to the detriment of licensing and standards-setting work, which is widely acknowledged as having been important in driving a change in attitudes in the industry. It is often stated that it was a part of the Government’s Red Tape Challenge in its early days to consider whether to dissolve the GLA as a burden to business. I hope that the Government have moved away from that.

The noble Duke, the Duke of Montrose, talked about better value for money. It depends on how you assess that value for money: whether we are talking about just the cost to business of providing the scheme or about whether potential employees in these industries are still being adequately protected. We know that a lot of the risks have not gone away. I do not profess to be knowledgeable about the forestry industry; I am more familiar with the meat-processing and shellfish industries. We need to be careful about how we assess value for money.

I share the views of my noble friend Lord Grantchester about the move from Defra to the Home Office and his feeling that it will focus attention on enforcement and prosecution. While we do not regard that as unimportant, there is a concern that it will be to the detriment of standards-setting and best practice development. I would welcome the Minister’s comments on that, because we think that prevention, rather than dealing with the symptoms through prosecution, is just as important. We know that the risk is still there and in some ways has an impact on modern slavery, of which we have had examples in these industries. We should not be under any illusions about the level of risk. We may not have had a Morecambe Bay tragedy—and thank goodness for that—but we have had other tragedies of individuals being held more or less in a situation of bondage or slavery, with passports confiscated, living in terrible conditions and not even being paid minimum wages. We should not forget that.

I listened carefully to what was said about the size of the board. If we are changing to a board of nine, it is legitimate to ask whether there will be a sufficient skill set in the way that my noble friend has suggested.

I want also to ask about the advisory committees that are referred to in the consultation document, which states that,

“this instrument permits the Board to establish advisory committees. Unlike the existing stakeholder liaison groups, the measure introduced in this instrument obliges the Board to pay due regard to the advisory committees findings and recommendations”.

Can the Minister give any more detail on “pay due regard”? Will the board publish the recommendations of the advisory committees and will we be able to see how the Gangmasters Licensing Authority reacts to them? That is important, because it is inevitable that the committees will raise the concerns of stakeholders in those industries.

By having the right type of legislation and a body with a statutory mandate, positive lessons have come out of the GLA experience for tackling deep-rooted practices such as labour abuse. I am not sure how one would tackle modern-day slavery across different industry sectors without bodies such as the GLA.

On the review process, I notice that the Explanatory Memorandum states that there is no need for an impact assessment because there will be no changes that merit it. Nevertheless, this is a fundamental change to the operation of the Gangmasters Licensing Authority. Will the Minister reflect on the suggestions made by my noble friend Lord Grantchester? If she is not prepared to go quite so far as he suggested today, will she consider the need for a review process before a triennial review given the change that is taking place?

--- Later in debate ---

[Lord Grantchester]

I start by saying that I omitted to mention my farming interests in a dairy farm. I apologise to the Committee for that omission. However, in my experience in the farming sector I have never heard of a lack of back-up for any of the enforcement authorities that cover the many regulations that the general practice of agriculture has to abide by.

I listened very carefully to the Minister but I do not think I picked up how it was explained that the Home Office would ensure that best practice guidance and prevention would be maintained, even though there would be a greater emphasis on enforcement. Perhaps I could gently ask for that assurance to be given.

Similarly, I recognise that 29 is a very unwieldy number and that it could be reduced now the GLA is established. If the Minister could say a little more to reassure me on several of the further questions I posed about the GLA’s continuation of its functions, so that the Home Office could reassure stakeholders and the TUC, as the representative of workers, that possession of the proper skill set will be part of the background assessments in making an appointment, that would be most helpful.

[Lord Young of Norwood Green]

I asked whether the Minister would consider the review timetable. I do not know whether the existing triennial review is all that is proposed but, given the changes that are taking place, a shorter period would seem to be appropriate. If the Minister could respond to that, I would be grateful.