Immigration Bill (Fifth sitting)

Keir Starmer Excerpts

Tuesday 27th October 2015 Public Bill Committees

[The Chair]

We now begin line-by-line consideration of the Bill. May I congratulate members of the Committee on how enthusiastically they took part in the evidence sessions.

Before we begin, I remind Members that they may remove their jackets during Committee sittings. Everyone should also ensure that all electronic devices are switched off or to silent mode. Tea and coffee are not allowed in our sittings.

The selection list for today’s sitting is available in the room. It shows how the selected amendments have been grouped for debate. Grouped amendments are generally on the same or a similar issue. The Member who puts their name to the lead amendment in the group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in the group. A Member may speak more than once in a debate.

I work on the assumption that the Minister wishes the Committee to reach a decision on all Government amendments. Decisions on amendments take place not in the order in which they are debated but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection and grouping, and decisions are taken when we reach the clause that the amendment affects. Therefore, Members sometimes debate things and think they are going to vote on them then, but they vote on them later. I hope that that explanation is helpful.

I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following debate on the relevant amendments.

Clause 1

Director of Labour Market Enforcement

[Keir Starmer (Holborn and St Pancras) (Lab)]

I beg to move amendment 55, in clause 1, page 1, line 6, after subsection (1) insert—

‘(1A) The primary purpose of the Director of Labour Market Enforcement is to secure the enforcement of labour market legislation, as defined in Section 3(3) of this Act.”

To ensure that the functions of the Director of Labour Market Enforcement are exercised for the purpose of protecting those vulnerable to labour market exploitation and to make this explicit on the face of the Bill.

I preface my remarks on amendment 55 by indicating that Labour supports a director of labour market enforcement, provided that the purpose of the director is effective enforcement of labour standards and that the relevant agencies are properly resourced to that end. That is the in principle position. With that, there should be no overlap with or merging into inspectorate or immigration enforcement functions. Part of the Bill and the Government’s associated consultation document suggests that the role is a director of labour market enforcement in name but not in design. The aim of amendment 55 is to resolve that issue.

The purpose of the amendment is to ensure that the functions of the director of labour market enforcement are exercised for the purpose of protecting those vulnerable to labour market exploitation and to make that explicit in the Bill. I will not go through the wording unless that is necessary. It is proposed that the director will report to the Home Secretary and to the Secretary of State for Business, Innovation and Skills. That is welcome, but the position is being created via an Immigration Bill sponsored by the Home Office. Therefore, that concern, and particularly the overlap between immigration enforcement and labour market enforcement, gives rise to the amendment.

Immigration enforcement threatens the success of labour inspection. A better approach to reducing illegal working is effectively to enforce labour standards, thereby reducing the demand for illegal workers, who are more vulnerable to being exploited due to their irregular immigration status. The OSCE has said:

“A rising challenge to effective labour inspection is an increasingly widespread imposition of measures that compel labour inspectors to conduct immigration enforcement activity as part of their workplace inspection agenda.”

That is the concern that we have about the Bill—hence, amendment 55.

The International Labour Organisation said:

“the primary duty of labour inspectors is to protect workers and not to enforce immigration law.”

Other countries have experienced the dangers of merging those two functions. For example, research in the Netherlands shows that dual labour inspection priorities to identify, on the one hand, undocumented workers, and, on the other hand, victims of trafficking have negative impacts on the uncovering of trafficking cases. There are two reasons for that. One is that victims of trafficking are too scared to come forward and the second is that labour inspectors fail to identify them. In the Dutch research, there is a classic example of that, involving an individual who was trafficked into commercial cleaning in the Netherlands. Labour inspectors came to his workplace on many occasions, but he did not come forward; in fact, he claimed not to work in the establishment rather than come forward and be identified as an employee. For that reason, he was missed by the inspectors. As I say, this is a classic example of its type.

It is not just in the Netherlands where there is such evidence. In the USA, there is now a memorandum of understanding between the Department of Labor and the Department of Homeland Security, the purpose of which is to ensure that immigration control does not interfere with the protection of workers’ rights. For example, when the Wages and Hours Directorate investigates a case of unpaid wages, its officials must not ask for immigration documents. So there is a clear separation of roles, and the fact that workers’ rights are protected in the USA regardless of immigration status prevents retaliation and intimidation by employers, who could otherwise threaten to report undocumented workers if they exercised their labour rights. Our position is that in order to tackle labour exploitation effectively, there must be a strict firewall between immigration control and labour inspection. That offers the best prospect of success for this director of labour market enforcement.

We have some questions for the Minister, and I will just run quickly through them; he may be able to pick up on them in his remarks. First, how will the director of labour market enforcement prioritise non-compliance in the labour market when non-compliance constitutes a range of offences in relation to requirements set out under the labour market legislation, and what assurances are in place to ensure that the work of the director will prioritise the protection of vulnerable workers from abuse and exploitation? Secondly, what overlap will the director’s consideration of non-compliance have with the work of the Home Office to control immigration and identify undocumented workers? Thirdly, what is the intended overlap between the twin aims of tackling the undercutting of British workers by undocumented workers and addressing worker exploitation, and how does the Minister see those two aims being achieved in unison?

I have set out the principal reasons why we have tabled the amendment. It may be helpful at this stage, Mr Bone, if I indicate that although we will not push a number of amendments to a vote, we will push this one to a vote. I hope that is helpful.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bone.

I will speak briefly about amendment 55, which has the modest aim of making it explicit that the new director of labour market enforcement should have a duty to stand up for those who are at risk of exploitation. This amendment has been tabled because Labour Members believe that if such a position is going to exist, whoever holds it should be responsible for enforcing all aspects of labour market law and not just some of them.

If they accept this amendment, the Government will signal that part 1 of the Bill is truly about improving labour market enforcement and not simply about grabbing headlines to bolster their credentials of being tough on immigration. If the Government are willing to make that commitment, I think we will all welcome the creation of the new director.

The amendment is important because without it there would be a worrying ambiguity in the new role of the director, which could see the resources allocated to the director directed primarily at illegal migrants in work rather than at those who employ them.

There is a tonal shift in the Bill towards criminalising the employee over the employer, which is concerning because it seems to focus on the symptom rather than the cause; the focus appears to be on the workers rather than on the organised gangs who traffic and exploit them. That approach will not have a lasting impact on illegal labour market activity in Britain. The reason is simple: if workers are arrested and deported, employers will find others to take their place. If you strike at employers, however, that market soon disappears. There is even a risk, as witnesses told us last week, that an emphasis on criminalising workers will actually be counterproductive in fighting illegal working. If people fear that they will be harshly punished if their immigration status is discovered, that can be used by their employers as a threat, driving them even further underground and opening them up to worse forms of exploitation.

The Government therefore need to make it explicit that the new director will have powers and duties that allow them to act in all areas of the labour market and that the role will be used to tackle exploitation at its source. Without that commitment, the director is unlikely to be an effective office because it will be limited to clearing up the symptoms, rather than the root causes, of labour market exploitation. Such an approach might bring some great headlines for the Home Secretary, but it will do little to prevent trafficking and abuse or to reduce the number of illegal migrants working in this country. I am sure that the Minister will agree that if public money is going to be spent establishing a new agency, we need to be sure that it is going to get results, and that is why he and his colleagues should back this amendment today.

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[Keir Starmer]

Obviously, one of the concerns is where the director reports to. I understand the point about the need to report to the Home Secretary as some of the other agencies do. I am trying to explore where we have common ground. The experience in other countries is that merging labour market enforcement with immigration is counterproductive. There is a concern that this is an immigration Bill and therefore there is the potential for that merger. Other countries have experienced a practical problem in exercising the primary function because it has been merged with immigration control and enforcement. Does the Minister accept that there are real examples in other countries of action which started with a good intention but went wrong because it morphed into what was, in truth, immigration control and enforcement?

[James Brokenshire]

I would point to the fact that immigration enforcement—the directorate within the Home Office that is responsible for the enforcement of immigration rules—is not one of the structures that the director has responsibility for. I will cover in turn the point about remit because there is an important aspect to this. When hon. Members have heard what I have to say, I hope that they will understand that the hon. and learned Gentleman’s concern about some sort of merger is not what this is about. We intend the director’s remit to cover labour market breaches, not immigration offences. The director and the enforcement bodies will work closely with Home Office immigration enforcement wherever labour market breaches are linked to illegal immigrants or people working in breach of their visa conditions, but that is an adjunct and not the purpose of the director.

I was asked why this measure was in an immigration Bill. There are two reasons. First, immigrant workers can be particularly vulnerable to exploitation by rogue employers, a point that has been flagged by hon. Members already this morning. I am sure that that will be a continuing theme during our consideration of the Bill. Secondly, by ensuring that workers are treated fairly, we are preventing businesses bringing in cheap labour that illegally undercuts the wages of people already in this country. Good labour market enforcement has knock-on effects.

Modern slavery has been a theme of some of the contributions this morning. With the Modern Slavery Act, Britain is once again at the forefront of the fight against the inhuman crimes of slavery and forced labour—the hon. Member for Sheffield Central and others made comments on this—but it is important to understand that exploitation occurs in many forms and can start with abuse of employment law. We must step in to protect not just the vulnerable—I will address the point about vulnerability—but also local workers and responsible businesses affected by those who are prepared to exploit cheap labour. That is why there is the need for this strategic approach and for the director to work with the different organisations that are in place. This is not a merger, as the hon. Member for Sheffield Central highlighted in his contribution, but rather we have an over-arching strategy of looking at ways in which we can promote good practice.

I would direct hon. Members to the consultation published alongside the Bill to set out some of those details. It says that:

“The Director will lead and co-ordinate work to promote compliance by employers and labour providers with labour market legislation, and to encourage and enable people to report infringements and exploitation.”

We are conducting a consultation at the moment around the director. We look forward to receiving feedback and input so that we are able to reflect fairly and appropriately.

Our employment law framework guarantees decent minimum rights for workers, including from next April the national living wage for over-25s, and promotes fair competition between businesses. The majority of employment law is enforced by individuals taking their employer to an employment tribunal to seek redress if they believe they have been wronged. State enforcement bodies step in to enforce legislation where there is a higher risk of exploitation or vulnerability.

As I have indicated, clause 3 already defines the director’s role by reference to the legislation and enforcement functions that will be within his remit. It makes it clear that the three enforcement bodies for which the director will set the strategy are the Employment Agency Standards Inspectorate, HMRC’s national minimum wage team and the Gangmasters Licensing Authority. We want the director to bring co-ordination across the whole spectrum of breaches of employment law—from employers who do not know the rules right through to organised, criminal exploitation of workers. That will be the director’s broad remit. However, I am concerned about some of the pictures we see of organised immigration crime and organised criminality more generally that seeks to exploit labour markets and uses the front of employment. We are dealing with a broad spectrum, which ranges from vulnerability all the way to good practice and compliance. It is right that the director should have that remit—setting up strategy, commenting on the balance of resources across each of the three agencies and reporting to the relevant Secretary of State.

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[James Brokenshire]

I think that the hon. Gentleman may be straying a little from the specific amendment. He will have seen the clear manner in which the consultation document is set out and the various questions that are being asked about the licensing function in ensuring that that is conducted appropriately, is evidence-based and is used as a tool to prevent exploitation in the highest-risk sectors. I direct right hon. and hon. Members to the relevant sections on pages 40 and 41 of the consultation document, which set that out. Obviously, we will reflect carefully in the context of the feedback we receive around the consultation.

[Keir Starmer]

Before the Minister moves on from that point, he has understandably set out the functions in clause 3(3) that are of primary relevance. I understand that. The purpose of the amendment is to say that, among those purposes or functions, this is the primary one and it is protective. That is the sole purpose of the amendment. His point is that it is not needed in the light of clause 3(3). The concern is that there is no clear reference in the Bill to the primary purpose. The measure comes in an Immigration Bill that, a few clauses on, includes offences of illegal working. Does he understand that, although we do not quarrel with the functions or why he has chosen them, we want to underline what I think is common ground, that the primary purpose is protective? In this environment, and given other international examples, it is helpful for all concerned to have that included in the Bill.

[James Brokenshire]

I think I have already explained that the functions of the director of labour market enforcement are by their nature framed within the context of the various pieces of legislation that the hon. and learned Gentleman set out. I have also explained, as set out in the consultation document, that the measure is about promoting good practice and highlighting issues where employers can equally comply. That is why I responded as I did to a number of hon. Members about the spectrum of activity engaged here.

We are very clear that the purpose of the director of labour market enforcement is to tackle labour market exploitation across the field. We believe this measure will give the stronger drive to deliver that step change in tackling exploitation. The director will have that purpose set out in terms of appointment and, in delivering that, will be accountable to the Home Secretary and Secretary of State for Business, Innovation and Skills.

We also believe that the requirement to publish the strategy and annual report—it will not be a private document but will be visible according to the legislative framework—will demonstrate the clear commitment to protecting the vulnerable and tackling exploitation. That is again why we are clear on the remit, role and function. From a tactical operational perspective—I am sure we will come on to the information hub—that will support the activity.

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[James Brokenshire]

I have already responded to that point by mentioning the vulnerability faced by people who are here through immigration. Equally, the measure can be a means of ensuring that we have a good, regulated labour market that therefore does not add to exploitation, nor encourages people to come here illegally or through trafficking, which is why it sits in the overall framework of an immigration Bill. I hope that I have explained that the purpose and remit of the director is labour market enforcement. The provision is not intended to stray into the separate issues of immigration enforcement, but if cases of people who are here illegally are highlighted, the director would be duty-bound to report that and to pass on intelligence through the hub that is being created. We will no doubt have a separate debate about that when we reach the relevant provisions.

[Keir Starmer]

I am sorry for intervening again. Although I disagree with very little of what the Minister is saying, that last point is a cause for concern. Of course it makes sense for the director to have these primary functions and to co-ordinate with other action on immigration, but the concern is that when we put the two functions together and do not clarify the primary purpose, there will be a misunderstanding about how this works.

We support this good initiative of having a director, but the good work—the head of steam—will be lost if the primary purpose is not clear. People will feel that the measure is, on the face of it, about labour market enforcement, but it carries with it immigration checks and it is in an immigration Bill. What the Minister says makes perfect sense, but that concern is the cause of our discomfort and the reason behind the amendment, which would make the provision much more powerful.

[James Brokenshire]

In many ways, the purpose of a Bill’s Committee stage is to tease out some of these issues, and to get the Minister—in this case, me—to set out and clarify the purpose and intent of a Bill’s provisions. We strongly believe that the Bill gives certainty and clarity about how the director will provide co-ordination.

The measure is about existing agencies that are already carrying out functions. If intelligence is already discovered by those agencies, sharing will already take place. This does not change anything about operational practice; rather, the director will provide strategy, co-ordination and an overarching response. We need good work on enforcement between agencies so that we do not—I do not think we have this, but the provision ensures that that is the case—have a silo-based approach, given that there is an overlap and that we need to look at this as an overall market. Those are the reasons why we do not believe the amendment is required, so I ask the hon. and learned Gentleman to withdraw it.

[Keir Starmer]

As I have already indicated, I am grateful to the Minister for setting out so clearly the purpose behind the director of labour market enforcement. In one sense, there is nothing between us on that. Our concern is clear: this positive development comes in an immigration Bill, yet there is clear evidence from other countries that unless we are clear about the primary purpose of such a measure, we run the risk of losing everything that we have tried to gain.

As I have said, the offences of illegal working in relation to employers and employees are set out just a few clauses later in the Bill. When such measures are together in one Bill, a clear explanation of the primary purpose of the director would cut through a lot of the concern and help that person to devise a strategy that focuses on that primary purpose, rather than other possible purposes. I welcome the comments of the Minister and other members of the Committee, but I will not withdraw the amendment.

Question put, That the amendment be made.

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[James Brokenshire]

I shall be brief, given that we have had quite a wide-ranging debate about the purpose of clause 1. I underline that the purpose of and the rationale behind the appointment of the labour market enforcement director is that the three main enforcement agencies work together. They are well respected, with distinct expertise, knowledge and skills, and collectively they span the spectrum of infringement from the simplest forms of non-compliance to exploitation that may include some form of slavery. There has been a shift in the nature of such exploitation from individual abuses of employment regulation towards organised criminal activity, which is why it is important that we have an overarching response that ensures that we join the work of the bodies together.

To enable the enforcement bodies to address the problem collectively, we have determined that there is a need for greater co-ordination among them, as well as the need for a single set of priorities. We want to ensure that there is strong, effective co-ordination of the three enforcement bodies, but we also want to achieve that with minimal disruption and while avoiding significant structural change.

We believe that the key lies in establishing effective overarching leadership and co-ordination of the enforcement bodies, so the clause creates the position of director of labour market enforcement. The director will lead efforts to tackle abuse and non-compliance in the labour market. As we will debate later, that work will involve setting the strategy for the Government’s work to tackle all types of labour market exploitation, and heading an information hub to enable better sharing of tactical and operational intelligence, as well as to build a stronger evidence base to inform future interventions.

Creating a director provides the greatest scope for achieving the strategic integration of the three enforcement bodies without losing their different specialist skills. It is vital that those skills are retained to deal with not only day-to-day compliance issues, but serious criminality. If the system focused exclusively on either serious exploitation or lower-level breaches, it would not provide the necessary protection for vulnerable workers, which is why we have drafted the Bill in such a way.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Labour market enforcement strategy

[Keir Starmer]

I beg to move amendment 57, in clause 2, page 2, line 9, at end insert—

(ia) the threats and obstacles to effective labour market enforcement,

(ib) the remedies secured by victims of non-compliance in the labour market,”

To ensure that the labour market enforcement strategy sets out an assessment of the threats and obstacles to effective labour market enforcements and the remedies secured by victims of labour rights infringements and labour market offences.

[The Chair]

With this, it will be convenient to discuss the following:

Amendment 58, in clause 2, page 2, line 12, leave out paragraph (b) and insert—

“(b) contains a proposal for the year to which the strategy relates setting out—

(i) how the non-compliance outlined in the assessment required by subsection (2)(a) (i) and (ii) is to be addressed,

(ii) how the threats and obstacles identified under subsection (2)(ia) are to be overcome, and

(iii) how the provision of remedies for victims of non-compliance in the labour market identified under subsection 2(a)(ib) is to be improved.”

To ensure that the functions of the Director of Labour Market Enforcement are exercised for the purpose of enforcing all existing labour market standards, rather than prioritising a limited number of areas, and to link the Director’s strategy with his or her assessment of non-compliance with labour market standards.

Amendment 56, in clause 2, page 2, line 24, leave out subsection (3) and insert—

‘(3) The proposal mentioned in subsection (2)(b) must set out the resources required to—

(a) address the non-compliance in the labour market,

(b) overcome the threats and obstacles identified under subsection 2(b)(ia),

(c) improve the provision of remedies for victims of non-compliance in the labour market.”

To oblige the Director of Labour Market Enforcement to provide an assessment of the resources required for effective labour market enforcement and remedies for victims, rather than simply to determine how currently available resources should be allocated.

Amendment 59, in clause 2, page 2, line 26, at end insert—

‘(3A) Nothing in the strategy shall—

(a) restrict, or

(b) reduce the resources allocated to

the labour market enforcement functions as defined in Section 3(2) of this Act.”

To clarify the relationship between the Director of Labour Market Enforcement and the UK’s existing labour inspection agencies, ensuring the current role, remit and resources of labour inspectorates are safeguarded.

Amendment 65, in clause 3, page 3, line 6, at end insert—

“(da) any function of the Health and Safety Executive and the Health and Safety Executive for Northern Ireland;

(db) any function of local authorities in relation to the “relevant statutory provisions” as defined in Part 1 of the Health and Safety at Work etc. Act 1973;

(dc) any function of local authorities under the Children and Young Persons Act 1933 and by-laws made under that Act, the Management of Health and Safety at Work Regulations 1999, and the Children (Protection at Work) (Scotland) Regulations 2006.”

To include the remit of the Director of Labour Market Enforcement to cover functions relating to health and safety at work and child labour, functions carried out for the most part by local authorities.

Amendment 66, in clause 3, page 3, line 12, at end insert—

“(ca) Part 1 and The Health and Safety at Work etc. Act 1973;

(cb) Sections 3 and 4 and Part 2 of the Children and Young Persons Act 1933.”

This a consequential amendment to amendment 65.

Amendment 63, in clause 3, page 3, line 31, before “in this section”, insert “Subject to subsection 6A,”.

Amendment 64, in clause 3, page 3, line 33, at end insert—

‘(6A) A person is not prevented from being a worker, or a person seeking work, for the purposes of this section by reason of the fact that he has no right to be, or to work, in the United Kingdom.”

To ensure that labour market offences committed against all workers are included within the scope of the Director of Labour Market Enforcement’s work, irrespective of immigration status (as under subsection 2 of section 26 of the Gangmasters (Licensing) Act 2004).

Amendment 62, in clause 4, page 3, line 42, leave out paragraph (a) and insert—

“(a) An assessment of the extent to which the strategy developed under section 2 of this Act has—

(i) addressed the non-compliance identified under Section 2 (2)(a)(i),

(ii) improved the provision of remedies for victims of non-compliance in the labour market identified under 2 (2)(a)(ia), and

(iii) overcome the threats and obstacles identified under 2 (2)(a)(ib)”.

To ensure the Director of Labour Market Enforcement’s Annual Report links with his or her assessments about non-compliance in the labour market (and assessment of the remedies secured by victims and threats and obstacles to effective enforcement).

[Keir Starmer]

I should have said earlier that it is, of course, a privilege to serve under your chairmanship, Mr Bone—better late than never. If it is convenient for hon. Members, I will deal with all the amendments in one go. On the other hand, if that is not the best way forward, I hope that somebody will indicate that.

The amendments address the strategy that it is envisaged that the director will set out. Amendment 57 would ensure that the labour market enforcement strategy would include an assessment of the threats and obstacles to effective labour market enforcement, and the remedies secured by victims of labour rights infringements and labour market offences.

The Bill requires the director to make an assessment of non-compliance in the labour market, but does not require him or her to assess the threats or obstacles to effective enforcement, including, for example, powers and resources, or to examine remedies secured by victims of non-compliance in the labour market. The amendment would oblige the director to incorporate those considerations into his or her strategy—in other words, to add value to what the labour inspectorate is already doing. The director needs to look at how enforcement could be done better, as well as the extent of non-compliance.

We want to build on the victim-focused legacy of the Modern Slavery Act, so we suggest that the director should look at the remedies for victims of labour exploitation as part of his or her strategy. Let me point to some gaps in the data. Recorded data on compensation for infringements of labour market standards are limited. For example, HMRC does not keep data in a format that enables the provision of statistics on the amount of arrears paid or not paid to workers. Data on civil claims brought by victims of trafficking and damages awarded are not available.

During the financial years 2010-11 to 2012-13, no prosecutions by the Gangmasters Licensing Authority resulted in compensation orders for victims of human trafficking. Data on compensation secured through the criminal injuries compensation scheme for victims of human trafficking for non-sexual exploitation, forced labour, slavery and servitude are not being recorded, so there are clear gaps. Why does not the Bill make provision for the director to assess why non-compliance is at its current level, as well as an assessment of non-compliance within the labour standards? How can the Government know whether they are making progress on meeting the needs of victims of exploitation if they are not collecting data on remedies?

[Craig Whittaker]

The hon. and learned Gentleman and I both had lives outside this place before we were elected, and I know that he had a high-profile role. Has he written a strategy for any job he has held that did not take account of threats and obstacles relating to the strategy that he was trying to write?

[Keir Starmer]

The straight answer is no; of course that would be within the strategy. The purpose of the amendment is to make it clear that that has to be part of the strategy for this director. I am sure that members of the Committee share concerns about resources. The amendment is an attempt to ensure that this step forward is as effective as possible, and that touches on strategy and resources. While my answer to the hon. Gentleman is no, I do not think that that is a good enough reason not to support the amendment.

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[Paul Blomfield]

Is my hon. and learned Friend, like me, keen for the Minister to give us a bit more clarity about what seems to be a shift in narrative towards more serious issues of exploitation, which has not been defined? Our hope is that we are seeking to enforce all standards for all workers.

[Keir Starmer]

Yes, I thank my hon. Friend for his contribution. I will come later to where the director will put his or her emphasis—on what might be called the higher end breaches, or on more routine breaches. I welcome that contribution and I ask the Minister to deal with it if he can in his comments.

Amendment 59 is intended to clarify the relationship between the director of labour market enforcement and the UK’s existing labour inspection agencies, ensuring that the current role, remit and resources of labour inspectorates are safeguarded. By way of background, I give an example, because practical realities follow from what we hope is a very good initiative. This year we saw the pay and work rights helpline merge with the Advisory, Conciliation and Arbitration Service. The pay and work rights helpline used to provide vital advice; it was a service with an annual cost of £500,000, yet, when it was merged, the money did not go with it, which has led to a strain on the service. As a result, ACAS struggles to meet extra demand with no extra resources. There is some evidence that representatives have been asked not to use it. By making explicit the resource implications in the strategy, we hope to avoid this sort of implication. Where there is a merger of various functions and enforcement without the resources, it becomes ineffective.

[Sarah Champion]

I give another example. During the witness session, I asked Professor Metcalf whether he believed that there were sufficient resources and he said,

“Probably not, but in the consultation document and, I think, in the Bill, it does not actually set out quite what the resources are.”

I went on to ask him what he thought they should be and he said:

“One understands the difficulties with the public finances, but we probably do not have sufficient resources. In the low-skilled report, we calculated that you would get an inspection from HMRC once every 250 years and you would get a prosecution once in a million years. That suggests that we do not have enough resources. In turn, that takes you to the potential trade-off between the resources and the punishments.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 19-20, Q36-37.]

[Keir Starmer]

I am grateful for that intervention, which is another example from the evidence that we heard last week about resources. Unless we tackle the resources issue head on, all that will be achieved is the creation of a director without any real powers to carry out the functions, which I think everybody accepts need to be enforced and enhanced. In a sense, if we try to do more with less, services are jeopardised and, in truth, the vulnerable workers suffer and we will not succeed in reducing the pull factor for illegal migration because exploitation will not be uncovered and penalised.

By way of example, the number of Gangmasters Licensing Authority investigations into the illegal activities of gangmasters dropped from 134 in 2011 to 68 in 2014, and prosecutions were down from 19 in 2010 to three in 2014. I accept that underlying this reduction will be some intelligence-led work, but those figures are stark and they underline the general point made by the witnesses last week, namely, that the concern about labour market enforcement is not so much about the agencies and the enforcement powers as about the fact that the resources are simply not there to allow for investigations and action to be taken very frequently. Unless that problem is addressed head-on, there is the danger that all we will create is a director who does not actually carry out the enhanced functions that it is hoped will be carried out.

Sticking with the GLA itself, its budget, of course, has been cut by 20% since 2010, so we are in an environment where the enforcement agencies are already suffering quite significant cuts. It means that the GLA regulates labour in a £100 billion sector with a budget of 0.004% of that figure.

I have some questions that I hope the Minister will be able to address in his reply. On page 8 of the Government’s consultation document, “Labour market exploitation: improving enforcement”, it states that there has been

“a shift from abuses of employment regulation towards increasingly organised criminal activity engaged in labour market exploitation.”

That shift has occurred during the past 10 years. But what is the evidential basis for that assertion? In other words, that is the shift of abuse from, as it were, lower-level routine abuse to increasingly organised criminal activity. Linked to that is another question. Does the Minister agree that if we do not enforce employment legislation effectively at the lower end of abuse—if you like, minimum wage, health and safety and so on—we will create conditions for higher levels of abuse to develop. So, as I say, where is the evidence to support that assertion? And if we abandon the lower end or do not put resource into it, do we not run the risk of creating conditions in which unscrupulous employers will get away with whatever they want?

Amendments 65 and 66 would include the functions relating to health and safety at work and child labour within the remit of the director. May I just be clear about the spirit in which amendment 65 was tabled? It aims to explore the thinking behind the division of functions here, and to understand why all the functions are not brought together under this director, while also recognising—as we do—the work that the Health and Safety Executive is currently undertaking. So, amendment 65 was tabled in that spirit of properly understanding the Bill’s limited remit. The health and safety at work aspects of the Bill speak for themselves; I think that the child labour functions are enforced by local authorities.

Earlier this morning, the Minister said that the purpose of the Bill was to cover the whole spectrum of labour market enforcement, and therefore the ownership of the HSE and of the legislation to deal with child labour were obvious. There may have been a good deal of thinking behind that, but it would be useful through this exercise to understand that thinking properly, because the exclusion of those functions from the remit of the director of labour market enforcement could have an influence on the issue addressed by amendment 55, namely, the primary purpose of the director. Why is the HSE excluded and what is the thinking behind that exclusion?

Of course, there is also a budgetary consideration. The budget of the three labour inspection agencies covered in part 1 amounts to just over £14 million. That is compared with the £81 million for the Health and Safety Executive, which adopts a cross-labour market role. If the aim is to cover the whole spectrum and there are already resource considerations—of course there are—why do these provisions not cover the whole spectrum and leave out the health and safety and child labour aspects?

Amendments 63 and 64 aim to ensure that labour market offences committed against all workers are included within the scope of the director of labour market enforcement’s work, irrespective of immigration status. I will try to explain our concern clearly. Trafficking offences, as we understand it, are outside the remit of the Bill, save where they touch on the role of workers. That makes sense on one level because we would not expect the director of labour market enforcement to be looking at trafficking offences outside the employment or labour context. The problem as we see it—which may simply require clarification or may require amendment—is that the definition of “worker” within the Bill is then not wide enough to cover all those who may be in the labour market, including undocumented victims of trafficking. Perhaps there is a clear explanation; there may be a simple amendment. We follow the logic of the scheme, but we are concerned that the definition of “worker” is in fact too narrow and will leave some who it is probably the intention of the Government to include outside the scope of the protection. The amendment is put forward in that spirit.

[Sarah Champion]

On that point, I wonder if the Minister could also clarify why clauses 3 and 9 use two different pieces of legislation relating to workers? It seems to be a bit of an anomaly. Some clarity on that would be welcome.

[Keir Starmer]

Finally, amendment 62 touches on the annual report and is intended to ensure that the director of labour market enforcement’s annual report links with his or her assessment about non-compliance in the labour market and the remedies secured by victims and threats and obstacles to effective enforcement. The bullet point is this: as drafted, the director’s strategy does not link with his or her assessment of non-compliance in the labour market and his or her annual report does not link back to the assessment of non-compliance as a baseline. The amendment aims to ensure that the strategy covers everything that it should and that the annual report is tied into the same process.

[Mrs Lewell-Buck]

I rise to support the Opposition amendments, which will be helpful in clarifying the role and duties of the director of labour market enforcement. I will also echo some of the comments made by my hon. and learned Friend the Member for Holborn and St Pancras.

The creation of the role is welcome, as my hon. Friends have said, but if the director is to have real influence and impact, they need to be involved across enforcement of labour market standards and not confined to a narrow area. The director should be able to take the lead on issues of labour market enforcement, to command respect from employers and be a strong advocate for compliance and tougher enforcement. The Opposition amendments are designed to make that happen. Amendment 56, for example, would require the new director to set out the resources that are needed for effective labour market enforcement.

Witnesses told the Committee that the problems with the immigration system are due not to a lack of powers but to a lack of resources, which undermines enforcement. The Government can introduce all the legislation they like, but criminal employers will not bat an eyelid unless they believe that there is an actual chance of their door being kicked down. That chance is incredibly low right now. The UK has less than one inspector per 100,000 workers, which is one of the worst ratios in Europe. The director should be able to tell the Government when they are not doing enough, and amendment 57 would introduce a clear duty to examine and identify where enforcement is failing and where there are obstacles to effective enforcement, thereby helping to identify where further resources are needed. There are currently too few data on the scale of labour market exploitation, and the director could and should be able to fill that gap.

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[James Brokenshire]

As the hon. Lady will note from the consultation document, the strategy is about setting out information and issues concerning the work of different bodies and agencies, including some themes of non-compliance. How that feeds into communication, good practice and sharing information is at the heart of the matter and needs to be reflected in the strategy.

Amendments 56 and 59 bring me to the director’s role in setting the resources of the enforcement bodies. It is the Government’s intention not that the director of labour market enforcement decides the budgets of the three enforcement bodies, but that the director should recommend how resources should be allocated within the total envelope of available funding. Hon. Members will be aware that the Gangmasters Licensing Authority is funded by the Home Office, and the Employment Agencies Standards Inspectorate and HMRC’s national minimum wage enforcement teams are funded by the Department for Business, Innovation and Skills. Funding for those agencies is secured via the usual departmental bidding process. While the Government intend that the relevant Secretaries of State will take the director’s proposals on resources into account during the preparation of those bids, it is right that the Government set the overall level of resources devoted to labour market enforcement in the context of the totality of pressures on public spending. I point out that HMRC has increased its budget for enforcing the national minimum wage; for 2015-16, that has increased by £4 million, meaning that the total budget has increased to £13.2 million.

[Keir Starmer]

I do not want to lose the central concern—a concern that gives rise to the amendment and that was in all the evidence, both written and oral evidence given to us last week. The existing agencies have their budgets and their funding. Funding streams will be set by different parts of the Government and different bodies. Although HMRC is an example of where there has been an increase, budgets are being cut. The real concern being expressed across the board is that the resources at the moment for the existing agencies are such that the likelihood of any inspection or action being taken is very low. I am the first to accept that some of the statistics about one visit every 250 years and a prosecution once every million years have to be put into proper context; if it is intelligence-led, that gives a different perspective. I completely understand that, but the point made by independent body after independent body is that the likelihood of inspection and enforcement action is so low that it does not operate as much of a deterrent for most of those who may be involved in abuse of the market. That is a real concern. The Migrant Advisory Committee has been mentioned, but plenty of others charged with overseeing some of these issues are extremely concerned about the resources.

In that context, and understanding that it will not be the director’s role to require resources to be used in a particular way, what assurance can we be given that there will be a shift—a step change—in approach? Without providing the resources necessary to give some assurance to the many people, including Opposition Members, who have raised their voices on this issue, it is difficult to see how the strategy will achieve the desired objective and be the positive step forward that it needs to be. Accepting the constraints and the framework in the Bill, what assurance can be given in response to the powerful evidence about the lack of resources and the limited likelihood of inspection and enforcement action being the real problem, rather than the penalties after the event?

[James Brokenshire]

I would point to what Professor Metcalf said during the evidence session about checks taking place every 250 years. He said:

“I am exaggerating when I say once every 250 years for a visit. Of course, they will do it based on risk.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 21, Q40.]

Our reforms are about enabling better targeting of enforcement activity, to make best use of the resources available and, therefore, to best protect vulnerable workers.

I return to my point about the additional support that HMRC is providing in terms of the national minimum wage. Where the director feels that the overall level of resources available has had an impact on delivery of the strategy, he or she will be able to say so in the annual report, which is laid before Parliament. That report can be redacted only for reasons of national security or the safety of any person in the UK, or if an investigation may be prejudiced, so it would be open to the director to make any comments.

It is right that, overall, the director is able to prioritise between the different agencies, while the envelope must reside within Government. We are having to make savings, and that is well recognised across the House. We have to deal with the deficit and a number of other issues, which I will not rehearse in this Committee. This is about being more effective and about using collaboration and co-ordination to step up our response. Amendment 59 is therefore unnecessary, as the director would be unable to restrict or reduce the resources allocated to labour market enforcement functions overall.

Amendments 65 and 66 would extend the director’s remit. The enforcement bodies and pieces of legislation that should be included are those relating to workers who are most at risk of infringement of their labour market rights—workers on low pay, those engaged through agencies or those working in sectors deemed at high risk. They are most likely to be vulnerable to abuse by unscrupulous employers. The amendments would include other areas of state enforcement—namely, health and safety and the protection of child workers. We do not agree that those should be within the director’s remit, and I will explain why.

The Health and Safety Executive, the Health and Safety Executive for Northern Ireland and the health and safety functions of local authorities play an important role in ensuring that risks to health and safety are properly managed in a worker’s place of work. That is a wide responsibility; some of the requirements that those bodies enforce relate to labour market and employment rights, and others to different types of risk, from the storing of chemicals to the training necessary to operate machinery.

We want the director to remain focused on enforcement of the most relevant employment rights. The current way in which the Health and Safety Executive and the Health and Safety Executive for Northern Ireland use their specialist expertise to set their strategy is best placed to protect workers from workplace hazards. However, we are consulting on information-sharing powers for the director. Those will include the ability to share information with other enforcement bodies, including the Health and Safety Executive and local authorities. That will enable all enforcement bodies to take a shared view of risk, and that is the right way to approach the issue.

Similarly, the Children and Young Persons Act 1933 provides protections for those younger than 18 who work. It covers a range of scenarios, from very young children who may act or model, to older children who take a job in the school holidays. While the protections that it affords can be seen as employment rights, they are fundamentally about protecting children and their health, wellbeing and education. That naturally fits with local authorities’ other responsibilities towards children and young people. We do not believe it would be in the child’s best interest to separate this piece of legislation and enforcement and have it within the remit of the director. We think that local authorities are best placed to know the particular risks in their areas. As I have indicated, the sharing of information and intelligence is the most effective way in which the provisions in the Bill can contribute to that important work.

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[James Brokenshire]

We have today announced an extension to the consultation period. It was originally due to close at the beginning of November, and it has been extended by about four weeks—I can come back to confirm that. I want to ensure that we get the provisions right on some of these detailed points. The consultation may inform later parts of the Bill. Our judgment is that we should ensure that the consultation is framed to get the right responses from those actively engaged at the front end. That is why we have announced a time extension, which I believe will be welcomed by the different sectors.

There were comments about redefining the term “worker”. The clause and the proposed amendment do not redefine “worker” for the purposes of the Employment Agencies Act 1973, the National Minimum Wage Act 1998 or the Gangmasters (Licensing) Act 2004. The coverage of those respective Acts continues to apply. That means that the Employment Agency Standards Inspectorate and the GLA will still tackle non-compliance by employment agencies, businesses and gangmasters, regardless of whether the affected workers have the right to be or to work in the UK.

We see the director as being focused on improving the way we enforce labour market and employment law rules. The Bill is not about extending labour protections to illegal workers, and we think that the director’s focus should be on making sure that workers who are properly here are better protected.

However, we are committed to tackling serious crimes against individuals, whatever their status. We have set out in the modern slavery strategy and the Modern Slavery Act 2015 enhanced powers and an improved approach to tackling slavery and human trafficking, whether victims are trafficked for sexual exploitation, exploitation involving criminal activity or indeed labour exploitation.

That is why we have implemented life sentences for modern slavery offences, new preventive orders to stop harm before it takes place and improved protections for victims such as a statutory defence. We see an important but specific role for the director in supporting this crucial work. The director’s remit includes modern slavery offences where they are committed against a worker or person seeking work, or where a person is subject to slavery, servitude or forced or compulsory labour. We are also consulting on additional powers for the Gangmasters Licensing Authority to include tackling such offences in their proposed enhanced enforcement role. I draw Members’ attention to that.

We think the balance is right. The director’s role is focused on workers who are here legally, although he can include in his plans action against forced labour as well. Trafficking people from around the world to work in brothels in the UK is an absolutely unacceptable crime, but we judge it is right for the director of labour market enforcement to tackle those aspects that are within the remit outlined in the Bill.

[Keir Starmer]

I wish to understand what the Minister has just said, because it is a concern in relation to the amendment. Is the Minister saying that an amendment along the lines of amendment 64 is simply unnecessary because the individuals will be fully included within the protection, or that, contrariwise, they are not fully included, but that hopefully the strategy will include action that would protect all workers in the broader sense? To be specific, is it that amendment 64 is simply not required and is a misunderstanding of the definition or limitation, or is there a broader point? It is quite important.

[James Brokenshire]

I think it is the latter of the two points that the hon. and learned Gentleman has articulated. We think it is covered by other means, but, for the purposes of defining the specific role, it is about lawful entitlement to be within the UK. For the reasons that I have outlined, there are other mechanisms and ways in which the issue is being addressed. It is about labour market enforcement and the lawful upholding of existing legislation. The amendment appears to take us in a direction that would apply new rights to those who are here illegally, whereas there are other mechanisms through the linkages, through the rights that the Gangmasters Licensing Authority will have, and through the consultation. It is about the extension of those aspects through other means. That is why I made the point about the specific role for the director in supporting this crucial work through a different mechanism, through the work that the Gangmasters Licensing Authority will take forward. The role concerns the lawful upholding of existing labour rights, rather than the extension of those rights, which the amendment appears to suggest. That is why we have not found the amendment attractive.

The director’s role that we have proposed supports our wider strategy on modern slavery, enhancing the response to labour exploitation. Crucially, it should not confuse or undermine the responsibility of the National Crime Agency and the national policing lead to lead the operational law enforcement response to modern slavery, overseen by the independent anti-slavery commissioner. Where an illegal worker is a victim of modern slavery, appropriate support mechanisms are available to them via the national referral mechanism. Their status as a victim will be reflected in how they are subsequently treated by the immigration system, including the relevant reflection periods during which the person will be granted leave to remain. There are also crucial protections within the criminal justice system, which we will come to later.

Amendment 62 seeks to specify the content of the director’s annual report in the same way as amendments 57 and 58 did for the director’s strategy. I do not propose to repeat the same arguments that I made in respect of the earlier amendments, but I want to be clear that this amendment is unnecessary.

Clause 4 as drafted states that the annual report must include:

“an assessment of the extent to which labour market enforcement functions were exercised in accordance with the strategy”.

As we expect the director’s strategy to propose how the enforcement bodies should tackle non-compliance, seek remedies for victims and overcome obstacles to compliance, it follows that the director’s annual report will set out how successful the enforcement bodies were at doing exactly these things.