Gangmasters (Licensing Authority) Regulations 2014

Baroness Williams of Trafford Excerpts

Wednesday 16th July 2014 Grand Committee

Moved by

[Baroness Williams of Trafford]

That the Grand Committee do consider the Gangmasters (Licensing Authority) Regulations 2014.

Relevant document: 5th Report from the Joint Committee on Statutory Instruments

[Baroness Williams of Trafford (Con)]

My Lords, the regulations were laid before Parliament on 9 June 2014. They revoke and replace the Gangmasters (Licensing Authority) Regulations 2005 and reform the governance of the Gangmasters Licensing Authority (GLA) by reducing the size of the board from its current 29 members to nine members and enabling board members to be recruited through open competition rather than by nomination from a restricted set of organisations.

The GLA was set up in 2004 to protect vulnerable and exploited workers after the tragic deaths of 23 Chinese cockle pickers in Morecambe Bay. The authority licenses businesses which provide workers to the farming, food processing and shellfish-gathering sectors to make sure they meet the employment standards required by law, and carries out inspections and enforcement activity. Since 2004 the GLA has issued over 2,500 licences and initiated the successful prosecution of 70 individuals. Since 2010, the GLA has identified £1.2 million in proceeds of crime and protected over 5,000 workers, recovering some £4 million for victims. The GLA became a Home Office non-departmental public body on 9 April 2014, transferring from Defra.

The regulations before noble Lords today reflect one of the key recommendations of the Red Tape Challenge review of the GLA’s operations and implement a measure announced in a Written Ministerial Statement presented to Parliament in May 2012 by the noble Lord, Lord Taylor, when he was Parliamentary Under-Secretary of State at Defra. The planned reform of the board was a key recommendation of the triennial review of the GLA, which reported in April 2014.

When the GLA was established in 2004, the main concern underlying the design of its governance structures was to encourage a high level of participation from the widest possible cross-section of industry stakeholders in order to secure support for the introduction of the licensing regime. This resulted in a very large, representative board with places reserved—subject to ministerial appointment—to specific organisations named in statute, as well as a number of ex-officio places for government departments and agencies with operational interests in common with the GLA. This approach succeeded in helping the GLA establish itself as a well respected and effective regulator. However, it was recognised that the governance structures enshrined in the 2005 regulations were intended to serve the authority during its early years of operation, and that they should be reviewed to ensure that they continued to enable effective leadership.

The Red Tape Challenge review of the GLA concluded that its developing role in tackling worker exploitation and criminal activity demands more focused leadership, and the review recommended the introduction of a smaller board to provide the authority with clear strategic oversight and direction. Reforming the board in the way provided for in these regulations will enable the GLA to better adapt to the changing circumstances that it faces. Strong and effective engagement with the sectors that the GLA regulates remains important. This will be ensured through improved advisory groups reporting to the main board, building on the current system of sector liaison groups. I commend these regulations to the Committee.

[The Duke of Montrose (Con)]

My Lords, I greatly welcome the measure introduced by the Minister, particularly the reduction in the number of people involved in running this operation. This will presumably result in better value for money in what is produced by the Gangmasters Licensing Authority. However, considering that originally—and, probably, even now—the expenditure was supposed to be recovered from the applicants, will this mean that the cost of the licences will now reduce? I do not know whether the GLA was successful in that regard. It might well have had a shortfall but, as the Minister mentioned, it certainly issued a great many licences over the period.

Originally, the GLA appeared to have only one set fee in obtaining a licence, and I wonder whether the new body will be allowed to differentiate at all between large and small employers. This is a topic that I have followed on and off for some time, and one of the interesting things is the range of activities that the GLA covers. The Explanatory Memorandum states that the GLA issues licences to businesses supplying labour in connection with agriculture, and the gathering of wild animals and wild plants. The Minister mentioned this in her introduction, but it may not be immediately obvious to Members of the Committee that apparently the gathering of wild plants includes forestry, and therefore the whole forestry industry seems to be brought into the regulations.

The particular issue that I came across was that many of the people who come to work in forestry are single, individual contractors. For example, I came across a fencer. In fencing it is much better to have two people, but as an independent contractor he would ask someone to come along and cut branches off the trees along the path of the fence he was building. If that person, however, finished his work and stopped to pick up a hammer in order to help the fencer, a gangmaster’s licence would be needed. The distinguishing feature is that if you are in charge of equipment, you are not part of a gang. The minute you become involved in manual labour for someone else, a gangmaster’s licence is required. I should be grateful to know how this has progressed and whether there will be any discretion under the new body to tailor the way in which it applies the regulations.

--- Later in debate ---

[Lord Young of Norwood Green]

There were two figures that the Minister quoted that I thought were interesting. I missed exactly whether the £1.2 million was the licence fee—I might have got that wrong but she can correct me if so. As interesting was the £4 million compensation that was obtained. I presume that was in circumstances where, for one reason or another, employment rights had been transgressed, whether it was minimum wage or whatever the circumstances were. It would be interesting to have some detail about what that compensation involved.

[Baroness Williams of Trafford]

My Lords, I thank all noble Lords who took part in the debate. First, I will discuss the future direction of the GLA now that it has become a Home Office body, which has been touched upon in various speeches.

The Government are determined that criminals who engage in forced labour, trafficking and other abuses, and unscrupulous employers who exploit vulnerable workers should face tougher enforcement action and stronger penalties. That is why the GLA became a Home Office body in April, to enable it to strengthen its enforcement and intelligence-gathering capabilities. In the Home Office, the GLA can benefit from closer co-operational links to the wider law enforcement family and it will work in partnership with the National Crime Agency, regional crime hubs, local police forces and immigration enforcement teams. The GLA will be able to secure expert support from the National Crime Agency intelligence hub and immigration enforcement intelligence. The GLA will also have access to College of Policing-accredited training developed for immigration enforcement investigators.

The GLA is at the forefront of the fight against worker exploitation, forced labour and slavery. Some noble Lords touched upon modern slavery. A reformed board able to steer the organisation through change and provide leadership is essential. This reform is even more important now that the GLA sits alongside enforcement bodies in the Home Office, sharing intelligence and reducing crime.

The first point made by my noble friend the Duke of Montrose was about value for money. The reform is not primarily about saving money but about increasing effectiveness. The cost of licences is a slightly separate issue, but there is no current plan to change the licensing fee structure. The fees are currently banded according to the turnover of businesses, which I think one noble Lord touched upon, and the lowest fee is £400.

My noble friend also touched on forestry businesses. Forestry businesses were excluded from the need for licensing under an order in October 2013. As in the example given by my noble friend, forestry is therefore not an issue in this case.

Going back to the move to the Home Office, it is not about narrowing the focus of the GLA to prosecutions only. The move will only enhance partnership working, in our view.

The noble Lord, Lord Grantchester, talked about getting the right skills for the board. We are aiming for a board that has the best skills and expertise, which includes the expertise of the sectors being regulated but also those with other relevant experience; for example, commercial, financial and legal expertise, and expertise in the regulation of comparable sectors. Each individual applies through open competition and will go through a recruitment process. We want the right make-up for the board so that it can take forward the reforms that are needed to ensure that the GLA can continue to fight for workers and ensure that they are not exploited.

Noble Lords also touched upon the advisory committees that will sit alongside the main board. It is a matter for the board how it establishes and works with advisory committees. The Government’s transparency agenda would expect the board to publish relevant papers as appropriate.

There has been quite a lot of discussion this afternoon about why the Government want to reduce the current number of board members. I do not know whether noble Lords have sat on boards; I certainly have, and a board of 29 does not make decisions in a very efficient manner. Just from personal experience, I would rather sit on a board of nine than 28 or 29. The current make-up of the GLA board was designed 10 years ago to encourage all stakeholder groups affected by the licensing scheme to take part in establishing the authority. Now that licensing is established in the regulated sectors, the GLA needs a more streamlined board with a clear remit to provide strategic oversight. Having a board appointed on merit through open competition will bring the GLA in line with similar public bodies and widen the pool from which candidates can be drawn.

One noble Lord—I think it was the noble Lord, Lord Young—talked about the wide variety of stakeholders to be heard and asked how the board would do that. The advisory committees will help in that endeavour, and the existing stakeholder liaison groups, which cover the labour providers, labour users, workers and businesses concerned, will also continue.

Noble Lords asked why nine is the magic number. We believe that the right skill set can be gained through a board of nine members, while also ensuring that it is able to take swift and clear decisions. Nine is not inconsistent with comparable boards of other arm’s-length bodies.

If I could just touch on the point that the noble Lord, Lord Young, made about the £1.2 million, that is how much the GLA has identified in proceeds of crime and in protecting more than 5,000 workers and recovering some £4 million for victims. That is where the £1.2 million has come from.

I do not know whether I have satisfied the concerns of the noble Lord, Lord Grantchester, but I am sure that he is about to stand up and tell me if I have not.

[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.

[Baroness Williams of Trafford]

As I understand it, the GLA’s current role and practice will continue. I will write to noble Lords and correct this if I am wrong, but I understand that there will also be a slight budget increase for next year. We are not taking anything away in the move to the Home Office. As to whether the GLA will focus only on enforcement, it will continue as a regulator in the sectors that it covers. It regularly issues briefing notes to the sector on licensing employment and the awareness of exploitation, and I understand that that will continue.

[Lord Young of Norwood Green]

The review period?

[Baroness Williams of Trafford]

As I understand it, there is currently a triennial review, but I will clarify that in a note to the noble Lord.

Motion agreed.