Gangmasters Licensing Authority

Ian C. Lucas Excerpts

Tuesday 21st February 2012 Westminster Hall

[Ian Murray]

I am grateful for that intervention and I congratulate the hon. Gentleman on co-sponsoring the 2004 Bill. The point he makes is critical. This is not just about protecting vulnerable and exploited workers; it is about cleaning up supply chains. That feeds right into the argument about good business being rewarded for doing good things, and the need to support initiatives that get rid of businesses doing bad things. It is crucial to recognise that it is good for good businesses to be involved in initiatives such as the Gangmasters Licensing Authority. That emphasises the point made by my hon. Friend the Member for Midlothian (Mr Hamilton) about potentially extending the GLA to other areas, and clearing up the supply chains to which the hon. Member for St Ives (Andrew George) referred.

The GLA has discovered a number of cases where trafficking for financial benefit, linked directly or indirectly to labour exploitation, is to the fore. Some of the activity appears to have direct links to the targeting of vulnerable people in homeless refuges in the host country, and to persons of interest to the police in their host country. Workers are sometimes left in a no man’s land: they have no means of supporting themselves in the UK, but are unable or unwilling to go home. They are exploited; to work in a promised land, they pay up-front fees that they are never likely to be able to repay.

I have some examples that give the issues a human face. The GLA has discovered workers living in squalid accommodation; the rent is often high—above the market rate—and deducted at source. One person described 12 workers living in a caravan with no water, sanitation, lighting, heating or cooking facilities. Another talked about 30 workers who lived in a structurally dangerous two-bedroom house; they were subject to summary eviction by men wielding baseball bats if they complained.

Transport problems were an issue. Those problems included unreasonable wage deductions for transport, and unsafe vehicles. The GLA uncovered the case of a worker who lost a leg when an unroadworthy van was involved in an accident. The gangmaster’s licence was revoked, and he could no longer provide farm labourers, but two weeks later he was back in business, supplying builders’ labourers. That highlights the point made by my hon. Friend the Member for Midlothian.

An eastern European worker discovered on a farm in Cornwall was promised a job in Scotland, but was then sold to another gangmaster. Having worked all week for £5, they were told that they owed the gangmaster £6.17 in costs, which of course they did not have. They were obliged to keep working to pay the debt, which continued to accrue, resulting in bonded labour.

Those are just some of the human examples of what happens in an unregulated trade, but the GLA is identifying exploited workers in contemporary slavery and is able to do something about it. The question that people will ask is: are UK companies involved? The Joseph Rowntree Foundation found that some, possibly many, UK-based companies rely on supply chains that involve the use of slave labour, both in the UK and abroad. The complex chains of subcontracting through a variety of labour agency networks, both in the UK and abroad, mean that many companies are unaware of, or can deny knowledge of, the conditions under which their goods are produced.

The UK supply chain is inherently based on a low-cost, labour-intensive business model. The GLA identified that price pressures from competition have led to a culture where gangmasters and labour users will exploit the most vulnerable link in the chain—the worker—to protect their profits. They will often accept a charge rate that, realistically, does not allow the labour provider to meet legal requirements. Workers are being paid below the national minimum wage so that labour providers are able to make a meagre profit by charging an unrealistically low amount.

The GLA has sought to tackle this insidious problem by developing a protocol with supermarkets and suppliers—a point was made by the hon. Member for St Ives about clearing up supply chains—that allows for the exchange of information. It has garnered the support of the majority of key retailers in the food sector. By working in partnership with supermarkets—that is key—the GLA has been able to encourage them to deal with allegations of exploitation in their supply chain, and to establish an audit standard for labour supply; that allows them to clear up their supply chain. The protocol is supported by every major supermarket in the UK. It is welcomed by them as a way to allow them to monitor their supply chains.

What is the future of the GLA? I welcome Ministers’ announcement that they do not intend to abolish it. Nevertheless, the Government are considering limiting its role, and the role of licensing remains under review. The Minister needs to be crystal clear that there will be no watering down of the GLA and its powers. This is not about counting paper clips, but saving lives, preventing exploitation, promoting clean supply chains, exposing organised criminal activity and undermining human trafficking—there could be no greater cause. The GLA is especially important in difficult economic times when labour supply exceeds demand and the pressures on work increase.

[Ian Lucas (Wrexham) (Lab)]

Does my hon. Friend agree that there is a frightening aspect to the rhetoric we hear from the Government about health and safety, and health and safety legislation in particular? Will he ask the Minister to give an assurance that the Government believe that health and safety legislation is necessary to protect individuals at work? Some of the rhetoric on this issue, particularly from the Prime Minister, is deeply worrying.

[Ian Murray]

The Minister has heard that challenge on health and safety. The red tape challenge website, which I am sure every hon. Member has dipped into and had a look at, is wide-ranging. The first line of every category, including the Equality Act 2010 and health and safety legislation, poses the question: “Should this be scrapped?”. I appreciate that it is a consultation, and that the Government are looking for ideas and views on the current make-up of regulation, but there is no greater challenge than maintaining health and safety regulations to protect workers whose lives or safety may be at risk. I hope the Minister will tell us categorically that some of the questions in the red tape challenge are challenges to seek answers, rather than an overall strategy to diminish workers’ rights and health and safety regulation.

To date, the Government have been rhetorical about the dilution of workers’ rights, but a statutory instrument changing the unfair dismissal period has been laid before Parliament and will come into effect in the next few weeks. There have been leaked reports from No. 10 Downing street about making it easier to fire, rather than hire, people. There is anti-regulation sentiment and rhetoric coming out of the Department for Business, Innovation and Skills, with its “one in, one out” policy on regulation. There is real concern that some of the enforcement actions that are critical for protecting vulnerable workers and good businesses through such authorities as the GLA are being challenged.

The Macdonald report suggested an end to gangmaster licensing completely, and a move to a system of self-regulation combined with “earned recognition”. It also suggested that the GLA should change from being a heavy enforcement body to a light-touch advisory body. I am not sure that anyone would deny earned recognition to good businesses, supply chains and supermarkets who are working in partnership with the GLA, and to the good farmers who want supply chains cleaned up. The problem is that all earned recognition does is divert attention away from where gangmasters may infiltrate in the future.

There is significant confusion about the future, what with the red tape challenge and what has been termed the star chamber process. That was highlighted by the Under-Secretary of State, Department for Environment, Food and Rural Affairs, Lord Taylor of Holbeach, who said initially:

“I am pleased to say that the need for the GLA to enforce protections for vulnerable workers in its sectors”,

which is crucial,

“was endorsed by the red tape challenge ministerial star chamber, although it recognised that the GLA needed to better target non-compliant operators and reduce burdens on the compliant. The GLA will of course continue to be monitored under the Government’s ongoing reviews of public bodies and enforcement agencies.”

That is not particularly clear. In a later exchange on the same question, he says of the star chamber process and the red tape challenge:

“From my knowledge of star chambers…they are where conflicting views which may need to be resolved are discussed in an informal way. That is exactly how the star chamber has functioned in this way.”—[Official Report, House of Lords, 12 December 2011; Vol. 733, c. 993 and c. 995.]

I hope that the Minister will clear up some of the confusion this morning on the Government’s view of the GLA, and on the perceived and reported fight between the Department for Environment, Food and Rural Affairs and BIS on the where the GLA should sit. It is right that it sits with DEFRA in its current guise. It should not be transferred to a Department that is considering deregulation and stripping out the safeguards put in place by the GLA.