Gangmasters Licensing Authority

Jim Sheridan Excerpts

Tuesday 21st February 2012 Westminster Hall

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

I congratulate my hon. Friend the Member for Edinburgh South (Ian Murray) on securing this important debate. I am concerned that, almost eight years on, we are still talking about the threat of the GLA legislation rights being diluted. That gives me serious cause for concern and I think we need to move forward.

I thank the staff at the GLA—in particular, the former chairman Paul Whitehouse, who got the agency up and running and hit the ground running. He has certainly done a very efficient job. I also thank the National Farmers Union. A strange coalition of trade unions came together to fight and organise for a GLA. I think that it was the first time that the TUC and the NFU have campaigned on the same side. The Transport and General Workers Union, as it was known then, was at the heart of the campaign, under its then national secretary, now my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who helped drive the legislation through.

The legal gangmasters also played an important role in introducing the legislation, as did the legal employment agencies that were right behind it from the start. There was cross-party support from Conservatives, Liberals, Labour and so on. That was extremely important. Last, but perhaps not least, we eventually managed to convince the major retailers that it was to their benefit to have some credible employment legislation and not to exploit farmers, as they were doing at that time. Eventually, they did come on board.

In practical terms, my contribution to the debate on migration and employment rights has been to take through Parliament the private Member’s Bill that became the Gangmasters (Licensing) Act 2004. I would like to run briefly through the main points of the Act, before I highlight some of the challenges that lie ahead in ensuring that the Act does exactly what it says on the tin and why it must be retained.

The Act introduced a licensing, registration and auditing scheme for the providers of agricultural and horticultural work, shellfish-gathering and in the food-processing and packaging industries. Many people think the Act was drafted as a response to the Morecambe Bay tragedy. That is not factually correct; it was drafted before that tragic event. However, the introduction of the Bill stands testimony, in memory of those poor Chinese people who died. That tragedy was the catalyst that made the Government of the time accept the Bill.

The Bill was drafted as a response to the deregulation that led to the loss of so many lives on the sands of Morecambe Bay. Years of deregulation had left rogue operators beyond the reach of the law and vulnerable workers, especially migrant workers, beyond the protection of the law. The Act was therefore designed to regulate the activities of gangmasters, to drive the rogues out of business, put the criminals behind bars and stop the exploitation of migrant and indigenous workers.

I will quickly walk through the details of the Act to show how it has delivered on its key objectives. First, we have always argued for the widest possible scope. That involves closing down any loopholes or rat runs through which rogue gangmasters might evade the law or escape licensing. The Act applies to the whole UK and, as I said, covers agricultural and horticultural work, shellfish-gathering and the processing or packaging of any products derived from those industries. It defines a gangmaster as anyone employing, supplying or supervising a worker in those sectors. It also applies to gangmasters, whether based in the UK or offshore, and all subcontractors. It also covers employment agencies and employment businesses if they operate in the sectors covered by the Act.

Secondly, we have always argued for a robust and effective body to regulate gangmasters and enforce the licence conditions. The Act set up the GLA, chaired by former Chief Constable Paul Whitehouse, and run by a board of key community and industry stakeholders, from Departments such as the Department for Environment, Food and Rural Affairs, the Department for Work and Pensions and the Home Office, and from enforcement agencies such as the Inland Revenue. It set licence conditions and the licence fee and established a public register of licensed gangmasters. It also has the ability to carry out investigations of abuse by gangmasters and the power proactively to enforce the licence conditions, with a line of accountability leading from the GLA, through the Secretary of State to Parliament.

Thirdly, the Act provides for effective enforcement by creating offences that will help to bring about a real culture change in the industry. The offences are operating without a licence, obtaining or possessing a false licence, using an unlicensed gangmaster and obstructing an enforcement officer. The Act also amends the Proceeds of Crime Act 2002, so that the assets of convicted gangmasters can be seized, and it also amends the Police and Criminal Evidence Act 1984 to make operating without a licence and possession of a false licence arrestable offences.

The Act carries penalties with real deterrent value: 12 months in prison for operating without a licence or possessing a false licence; up to two years’ imprisonment for a second offence; and up to 10 years’ imprisonment for a third offence. Out of the 30 sections of the Act, section 26 may be the most important in protecting migrant workers:

“A person is not prevented from being a worker for the purposes of this Act by reason of the fact that he [or she] has no right to be, or to work, in the United Kingdom.”

In other words, regardless of whether a person is regular or irregular, documented or undocumented, indigenous or migrant, if they work in the areas covered by the Act, they are legal workers.

Not only are people protected by the conditions attached to the gangmasters licence, but they are also entitled to the rights and protections offered by UK employment law. Under the Act, there is no such thing as an illegal worker—a worker is a worker is a worker—and that is a huge advance in the rights of migrant workers in this country. It is also an important step on the road to building a just and humane system of managed migration.

That is what the Act does and how it works. However, getting an Act on to the statute book is not the end but rather the beginning of the process. If this country is to prosper economically, socially and culturally, we must have a just, humane and well-managed migration policy. A key ingredient of such a policy must be the opening up of legal routes for migration by ensuring that every migrant worker who comes to the country can earn a decent living in well-regulated, safe jobs that are free from exploitation. The Gangmasters (Licensing) Act 2004 is legal proof that we have the political will to do that in the UK. We do not have to let vulnerable migrant workers fall prey to criminals who run the black economy, and that is not only my opinion, but that of legal businesses that operate in the industry.

I am conscious of the time, Mr Brady, and that other hon. Members wish to speak. I will therefore conclude by saying that there is an overwhelming case for the Act to be extended, starting with the construction industry—my hon. Friend the Member for Midlothian (Mr Hamilton) spoke about the problems faced by legal employers in that area. There is also an argument that exploitation takes place in the service industry, and many of the main hotels in the country will be staffed by illegal migrants or people who have been organised by gangmasters. There is therefore an overwhelming case, not only in the construction industry but also in the service sector, that if we are to be a decent country that treats people with respect, the Act should be extended to other industries.

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Brady, and I pay tribute to my hon. Friend the Member for Edinburgh South (Ian Murray) for initiating this debate.

I want to tell a story about what happened in February 2008. Five years after the Morecambe bay tragedy, a commemorative event was organised by the Chinese community in London. Given my involvement in the Gangmasters (Licensing) Bill and its passage into law, I was asked to attend. Two young Chinese women read out letters from relatives of those who had died at Morecambe bay. I do not mind admitting that I, together with everyone else, was in tears as we heard heartbreaking stories of Chinese workers who had come to build a new life in Britain, ringing home on their mobile phones. One story in particular always sticks in my mind. The daughter said: “He was weeping. He asked me to quickly get his mother and his wife. He wanted to say farewell because the water was lapping at his chest. He knew that there was no way out and that he was about to die.”

My hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan) did the cause of social justice in Britain an outstanding service by taking through the Bill, and he is right to say that its origins predated Morecambe bay. However, the appalling tragedy of February 2003 brought together the country, all political parties, communities and the industry, to ensure that never again would we have a Morecambe bay tragedy. There was a remarkable coalition of support from Plough to Plate and the National Farmers Union to the supermarkets, and there was also a remarkable all-party coalition. I remember appearing on many platforms with my hon. Friend the Member for Paisley and Renfrewshire North and with Gillian Shephard, who was then a Member of Parliament and spoke in support of the Bill.

At the time, I was deputy general secretary of the Transport and General Workers Union, and I saw an utter determination across party politics and throughout the industry to end modern day slavery and ensure the fair treatment of workers and fair competition. There were honourable gangmasters such as Zad Padda, who spoke out and complained bitterly about how difficult it was to be a reputable gangmaster in what he described as a jungle. Workers were not only treated unfairly, but reputable gangmasters were undercut. The legislation sought to reassure decent farmers that they were using reputable gangmasters and assure shoppers in supermarkets that the goods they were buying were not the product of modern day slavery. It was the most complex private Member’s Bill in 30 years, but it became law.

[Jim Dobbin in the Chair]

I was privileged to be asked by Members from across the parties, and by the industry, together with the then president of the National Farmers Union, Tim Bennett, to appoint the first chairman of the Gangmasters Licensing Authority, Paul Whitehouse. He is a remarkable man who provided outstanding leadership in setting up what was, without doubt, the most effective of the enforcement agencies. It was governed by a board that brought together the other enforcement agencies and the totality of the industry.

The track record of the Gangmasters Licensing Authority is remarkable. The Hampton review pointed out that it has been impressive given its size, and indeed it has. Its achievements in raising standards throughout agriculture and fisheries were welcomed by the overwhelming majority of gangmasters, including the Association of Labour Providers. The authority has rightly driven rogues out of the industry, and recovered millions of pounds for the public purse, including by combating tax avoidance.

The Equality and Human Rights Commission was right to say that the Gangmasters Licensing Authority is the most effective of the enforcement agencies. Its approach to raising standards has been positive and underpinned by the unmistakable message that has been sent to rogue gangmasters and disreputable farmers—there are some—that if they break the law, penalties will be rigorously enforced.

If the Gangmasters Licensing Authority was powerful in the past, it is all the more powerful now because of the issues that it is tackling, which include labour and human trafficking. It works in close consultation with agencies that range from the Home Office to the police. Given the reasons why the GLA was set up, its success and the issues that it now tackles, it seems extraordinary that we should need such a debate because of the red tape review. We should start by celebrating the success of a remarkable organisation and ensure that it has continuing resources to do its job. We should not debate scaling back the Gangmasters Licensing Authority, but consider how we can make it yet more effective and extend its powers and scope.

I take the point that such decisions should be evidence-based. If we consider the evidence, however, there is a powerful case for extending the authority of the GLA into the construction industry. Evidence suggests that the same gangmasters found in agriculture and fisheries also operate in construction. Powers, including the ability to impose civil penalties, should make it easier for the GLA to act against disreputable gangmasters and recover moneys for the public purse. That is the debate that we should be having; we should not have to defend the GLA in the way that I am doing, albeit proudly. I therefore hope that the Government will seriously reflect on the red tape review and put beyond doubt any question mark over the future of the GLA.

[Jim Sheridan]

I suppose that it is right and responsible that we always check red tape. That is being done through the red tape challenge, the red tape review or whatever it is called. However, I am not aware of a single employer, during the time that we were negotiating, raising objections to the Gangmasters (Licensing) Act 2004. Perhaps through my hon. Friend, I can ask the Minister whether there is any evidence of a single employer who has asked for the 2004 Act to be rescinded or for the authority to be merged into some obscure department.

[Jack Dromey]

My hon. Friend makes a very powerful point. I remember a meeting in the House during the passage of the Bill that he addressed. I chaired the meeting. Sitting to my left was Gillian Shephard. Sitting to my right was the president of the National Farmers Union. Sitting to his right were two senior chief executives of two of the major supermarkets. Sitting to Gillian Shephard’s left were two gangmasters. It was a remarkable meeting. All of them were saying the same thing—the time had come to tackle what was a jungle, characterised by serious exploitation, because it shamed our society, and together we were determined to act to end that modern-day slavery.

The debate should be about considering how we make an outstanding organisation yet more effective, tackling exploitation wherever there is evidence of it, including in other sectors, and following the evidence into those sectors—the case in relation to construction is particularly powerful.

I will conclude by saying—this is not aimed at the Minister here today—that I have sometimes been involved in debates with Ministers who, when the word “regulation” is mentioned, hold up a clove of garlic in one hand and a cross in the other. Unashamedly, this debate is about regulation, but this regulation is right. It is effective. It tackles extreme exploitation. Ultimately, the debate is about what kind of society we want to live in. If what happened at Morecambe bay shamed Britain, there should be an utter determination to say, “Never, ever again.”

--- Later in debate ---

[Mr Hamilton]

There were a number of reasons for that. I can give the example of the headquarters of the Royal Bank of Scotland—admittedly, that is not the best subject in the world to be talking about at present. Only one accident happened there, and the reason why only one accident happened was that at the beginning the contractor who got the contract sat down with the work force and the trade union movement and agreed with all the subcontractors a strategy whereby accidents were unacceptable. The problem is that very few employers of that magnitude take that view. That employer did it, and better than that, it was able to prove that the contract came in under budget and under time.

Let me contrast that with the Scottish Parliament. The Bovis company was running things at the Scottish Parliament. If someone walked on to the Scottish Parliament building site, they would hardly find an English-speaking worker, yet the signs were all in English. They had to go to serious classes and there were a number of accidents at the Scottish Parliament.

There are good employers and there are bad employers. I do not criticise all employers. However, if we un-regulate or do not regulate and employers recognise that there is a gap, they will go to that gap.

[Jim Sheridan]

We have been exceptionally lucky not to have had a Morecambe bay disaster on the Olympic site, but we cannot forget the fact that the number of deaths in the construction industry is rising. We must keep that at the forefront of our minds.

[Jim Dobbin (in the Chair)]

Mr Hamilton has one minute left.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I start by paying tribute to the hon. Member for Edinburgh South (Ian Murray) for raising this important matter. I am desperate not to sound patronising; it is in the finest tradition of this House, when the Government are considering a way forward, for the Opposition—rightly—to push their view and to push the Government in the direction they want.

It has been a useful debate and a very good one, showing the passion that surrounds the issue, and reminding us that the Gangmasters Licensing Authority was created at the time of an appalling tragedy, which we must never forget. We narrowly avoided a repeat this year in the Ribble estuary when there was a bonanza—a sort of Klondike operation—for cockle-picking. Interestingly, as my hon. Friend the Member for Southport (John Pugh) said, the GLA worked well in those circumstances with the local authority, the Inshore Fisheries and Conservation Authority, the police and the Marine and Coastguard Agency to close down that activity. I deeply regret that the fishery had to be closed, but it was necessary because of the activities of certain people; in many cases it was individuals who were involved, but there was also some evidence of illegality. That is an example of the GLA working well with other agencies.

I am pleased to have a debate today about the future of the GLA. It is a body that the Department for Environment, Food and Rural Affairs sponsors because its remit is focused on agriculture and food processing. As has been mentioned, normally the Minister of State would have responded. However, today is a significant one in the farming calendar and he is attending the National Farmers Union annual conference in Birmingham. So, too, is the Secretary of State, who made a keynote speech at the conference this morning. In that speech she announced the publication of our response to the farm regulation taskforce.

As hon. Members would expect, the taskforce, which was chaired by Richard Macdonald, had a very informed view about the work of the authority and made recommendations on how the GLA might be improved. The GLA is also subject to continuing Government reviews, including one on workplace rights compliance and enforcement, and the red tape challenge, which have been mentioned by hon. Members. The review process is under way and the views that have been expressed today, very eloquently, will be considered as part of that. We have already announced, and confirmed in our response to the farm regulation taskforce, that we endorse the need for the GLA to enforce protection for vulnerable workers in the relevant sector—those who are least able to take action on their own account. I hope that that offers some reassurance to hon. Members.

I want to take up some of the points that were made, and I have already alluded to cross-agency working; we must not think that the GLA operates in a bubble. It is vital, particularly when it works in areas of high criminality and large amounts of money—where there can be criminality through the supply chain—that it should work with other agencies. That holistic approach is important. The hon. Member for Wrexham (Ian Lucas) talked in an intervention about health and safety legislation and I would link that with the point made by the hon. Member for Birmingham, Erdington (Jack Dromey) about regulation and where the Government sit on those two matters. I assure him and other hon. Members that there is no clove or garlic or cross in my hand. We are not talking about no regulation, or less regulation per se; we are talking about better regulation. We are not talking about ending health and safety legislation through any Government review or challenge. What we want is regulation that is better, more fleet of foot and less cumbersome, but also effective. We want to provide that for employers, who will hopefully, in the future, employ people who are currently unemployed; and we want it to be part of the rights of workers, wherever they come from.

We will continue to look at what more the GLA needs to do to tackle non-compliant high-risk operators while also reducing unnecessary burdens on those who are compliant. Those are complementary and mutually reinforcing goals, which we are keen to bring about. We are actively looking at what needs to be done to ensure that they happen. We are not—with respect to the GLA and employment law more widely—removing essential protections for vulnerable workers. What we are doing is about ensuring that there is a legislative framework that safeguards workers’ rights while reducing onerous and unnecessary demands on business. I hope that hon. Members understand that. That is surely an objective we all can, and should, share.

It is also important that the GLA should continue to be supported by industry, including by retailers who work with the authority because they want to maximise assurance about the proper working of the supply chain. I entirely take the point that was raised by hon. Members about good farmers, employers and businesses being disadvantaged by those who act illegally. It is important that we understand that. The GLA should also be supported by labour providers and other employers, who need to be able to operate on a level playing field, where good employers are not undercut by those who seek to gain a competitive advantage by flouting the law and taking advantage of their workers.

I am happy to recognise that the GLA is widely regarded in many circles as having brought about significant improvements to the treatment of the most vulnerable workers in the areas it regulates. I join the hon. Member for Hayes and Harlington (John McDonnell) in paying tribute to the staff of the GLA, and to those who were at its birth and campaigned for it. Often the workers about whom we are concerned share a number of common factors: they have no fixed place of work; they are located in rural and less accessible settings; they are undocumented and often unsupervised labour; they are low-skilled migrant workers with little or no working knowledge of English, and accommodation or transport is provided as part of their employment. However, the GLA’s experience of operating under the terms of the Gangmasters (Licensing) Act 2004 suggests that there is room for a number of improvements. It is clear, for example, that there are areas that it covers that are dominated not by the presence of vulnerable workers who are at risk, but by skilled workers who are articulate and more than capable of enforcing their own employment rights.

[Jim Sheridan]

Will the Minister give way?

[Richard Benyon]

I am conscious of the time, and I want to get on to the point about the construction industry, if the hon. Gentleman will forgive me.

The issue I have just outlined is one of those that we want to look at in more detail as part of the ongoing red tape challenge process. We want to come forward with proposals on it in due course. Building on the successes it has already had in improving its operations, the GLA is running its own pilot project in the forestry sector, designed to apply a light-touch enforcement approach. To answer the point made by the hon. Member for Ogmore (Huw Irranca-Davies), the forestry regulation taskforce will report shortly, and make some recommendations, which will no doubt be of great interest to him.

There was some talk in the debate about the construction industry, which is obviously not an area covered by my Department. However, the industry has made significant improvements in the past 10 years in the number of serious accidents and fatalities. I cannot say that about agriculture, which is the industry I come from. I am not proud of that. I am happy to debate the issue when we have more time, but the Government are considering the issue of enforcement as a whole, across Government. No doubt the statistics will be part of that. We are not talking just about safety in the sense of health and the number of fatalities in an industry, but about exploitation, which is more complex and requires a more nuanced approach. There is a lack of hard evidence about employment abuses in construction. It does not feature in the Low Pay Commission’s top 12 low pay sectors. According to data from the annual survey of hours and earnings, only 0.7% of construction workers were paid at the national minimum wage rate in April 2009. Pay is sometimes below union-negotiated rates but above the minimum and not illegal. The issue then is not about extending the scope of the GLA—