Gangmasters Licensing (Extension to Construction Industry) Bill

Gordon Banks Excerpts

Friday 3rd December 2010 Commons Chamber

[Mr Davey]

My hon. Friend is exactly right in his analysis of the construction industry and of how we use licensing as one of the tools to deal with everything from health and safety to fairness in the workplace. We need to consider the conditions that need to be met before something such as licensing is appropriate. We need to consider whether existing enforcement arrangements are inadequate; whether there is hard evidence of illegal activity; where a licensing system would be a proportionate and effective way of tackling the problems that are seen; and where licensing would be practicable, enforceable and, finally, affordable. The Government do not consider that those tests have been met for the construction sector.

There is a misapprehension in some quarters that employment agencies that supply labour to the construction sector are unregulated, and that workers are unprotected. In fact, regulatory safeguards are already in place for all agency workers, whichever sector they work in. For example, employment agencies operating outside the Gangmasters Licensing Authority’s sectors have to comply with health and safety and working time legislation enforced by the Health and Safety Executive. They must also comply with the national minimum wage regulations enforced by Her Majesty’s Revenue and Customs. In addition, they must adhere to special employment agency regulations enforced by my Department’s employment agency standards inspectorate—the EAS—which responds to complaints from agency workers, and carries out an additional programme of proactive, risk-assessed inspections each year.

On health and safety legislation and the work of the HSE in the construction sector, the hon. Member for Midlothian is rightly worried about health and safety, which is a big concern for the sector, but I am not convinced that a licensing system would improve the sector’s health and safety record. The GLA applies a range of licensing standards. The conditions for health and safety are intended to ensure agreement between the labour supplier and the hirer about who will have responsibility for managing day-to-day health and safety, including the preparation of risk assessments, but that is already clear in construction.

Under the Construction (Design and Management) Regulations 2007, the principal contractor has responsibilities for ensuring the health and safety of all individuals who work on a construction site regardless of their employment status. This includes directly employed workers, labour-only sub-contractors and the self-employed. In addition, each contractor working under the principal contractor has duties to every individual working under their control. Those duties are on top of the requirements that individual employers have to their employees. Duties of the principal contractor include the requirement to consult all workers involved in a project to ensure that the measures taken to protect their health and safety are effective.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

I am listening to the Minister’s remarks with great interest. He has explained his position on why the GLA is not relevant to the construction industry, but will he expand on why he has changed his mind since signing early-day motion 1366 in 2009?

[Mr Davey]

I have considered all the issues that would have to be taken into account, such as whether it would be appropriate, proportionate and justifiable, and it is clear that the EAS does an extremely good job and that it deals with all the problems. Let me quote some of the statistics, which are worth bearing in mind. In 2009-10, there were 42 fatal injuries to workers in construction, with a fatal injury incidence rate of 2.2 per 100,000 workers per year. That compares with 105 deaths and a rate of 5.9 per 100,000 per year in 2000-01. Injury rates are also at an all-time low since the reporting regulations changed in 1995. That is done under the existing system. There has been some success and the previous Government should take credit for that.

It is clear that an extension of gangmaster licensing is not the way forward, but there is a case for taking a fresh look at our compliance and enforcement arrangements. As the hon. Member for Midlothian said, existing enforcement functions are undertaken by a number of bodies, including the EAS, HMRC, the GLA and the HSE. The Department for Environment, Food and Rural Affairs also has a role, in enforcing the agricultural minimum wage, but that will disappear with the proposed abolition of the Agricultural Wages Board as part of the public bodies review.

The single pay and work rights line has drawn those bodies closer together and has been a major step forward in creating a single port of call for workers who want advice or to report an abuse. It has also been a powerful spur to more joint working between the enforcement bodies, which are now carrying forward multi-issue cases together on a regular basis. However, the time is right to ask whether it is possible to build on the progress that has been made. I am therefore announcing today an intention to review the Government’s workplace rights compliance and enforcement arrangements to establish the scope for streamlining them and making them more effective. I hope that the hon. Gentleman will welcome that announcement. The review will be undertaken next year, when other priorities permit, and will be part of the wider rolling review of employment law being co-ordinated by my Department.