Draft Immigration Act 2014 (Residential Accommodation) (Maximum Penalty) Order 2023 Draft Immigration (Employment of Adults Subject to Immigration Control) (Maximum Penalty) (Amendment) Order 2023 Debate
Full Debate: Read Full DebateNeil Coyle
Main Page: Neil Coyle (Labour - Bermondsey and Old Southwark)(7 months, 1 week ago)
General CommitteesIt is a pleasure to serve under your chairmanship, Mr Dowd. May I welcome you to the Chair and welcome members of the Committee to this debate?
I turn first to the draft Immigration (Employment of Adults Subject to Immigration Control) (Maximum Penalty) (Amendment) Order 2023. The Home Office is the first line of enforcement against illegal migration and works across Government to prevent individuals without lawful status in the UK from accessing work, benefits and services. Illegal working often results in abusive and exploitative behaviour, the mistreatment of unlawful migrant workers, and revenue evasion. It can undercut legitimate businesses and have an adverse impact on the employment opportunities of people who are lawfully in the UK.
Employers have a role to play in ensuring that all their employees have the right to work in the UK. Since 2008, this has been underpinned by the right-to-work civil penalty scheme, under which employers are required to carry out prescribed checks on individuals before employing them, to ensure that they are lawfully allowed to work in the UK. If an employer employs someone who does not have the right to work in the UK, that employer may be liable for a civil penalty. Employers can avoid liability for a civil penalty if the correct right-to-work checks are carried out before the individual commences employment.
The level of civil penalty for non-compliance has remained the same since 2014, diluting its impact as a deterrent to those who seek to allow illegal working and labour exploitation to take place. Accordingly, the Government intend to increase from £20,000 to £60,000 the civil penalty for employers, by virtue of the draft Immigration (Employment of Adults Subject to Immigration Control) (Maximum Penalty) (Amendment) Order 2023. This will ensure that the scheme continues to act as a deterrent to employers who employ illegal migrants, and will send a clear message that only individuals with the right to work in the UK can secure employment.
In the case of a first breach, the starting point is £45,000. Employers who elect to pay the penalty via the fast payment option will benefit from a further 30% reduction in the overall amount after reductions have been applied for any specific mitigating factors. It remains a criminal offence for migrants to work illegally in the UK, or where the individual is in the UK unlawfully. The offence of working illegally carries a maximum penalty of 51 weeks’ imprisonment in England and Wales, or six months’ imprisonment in Scotland or Northern Ireland, or a fine.
The draft Immigration Act 2014 (Residential Accommodation) (Maximum Penalty) Order 2023 will be in force in England only. Since 2014, anyone who offers rental accommodation in the private rented sector has had to carry out checks on new adult occupiers before renting to them. This is to check that the individual has the right to rent. These checks are commonly known as the right-to-rent scheme.
Allowing those without a lawful right to be in the UK to rent property enables them to establish a settled life in spite of being here unlawfully. This creates a cost to the public purse, including through the provision of local authority support, and reduces the amount of housing stock available to those who lawfully reside in the UK. The practice can result in abusive and exploitative behaviour, with rogue landlords housing unlawful migrants in what is often unsafe accommodation. The maximum civil penalty for landlords, including letting agents, will be raised from £3,000 to £20,000, by virtue of the draft Immigration Act 2014 (Residential Accommodation) (Maximum Penalty) Order 2023. In the case of a first breach, the starting point is £10,000.
Can the Minister tell us how many times the employer and landlord fines have been imposed, and what that money is used for?
If I may, I will come back to the hon. Gentleman’s point. It is worth saying that the figure we are proposing is £45,000 per worker for a first breach and £60,000 for a repeat breach; that is the position we are taking. To give the hon. Gentleman some context as to the number of illegal working penalties issued, I am happy to write to him with a chart that sets out in a granular way, month by month, the number and the value of penalties issued.
I can give the Committee some illustrative examples. In November 2023, 123 illegal working penalties were issued, with a value of over £3 million—a considerable number, and important in context. In the same month, 40 illegal renting penalties were issued, with a value of £38,320. From January 2023 to November 2023, 140 right-to-rent civil penalties were issued, an increase of over 380% on the same period in 2022. Between January 2023 and November 2023, the value of right-to-rent civil penalties issued was over £136,000, an increase of over 495% on the same period in 2022.
I can see why the Government want to use employers and landlords to try to help the failing, chaotic Home Office, but the second part of my question was about what those funds are being used for, because they do not seem to be supporting the Home Office in delivering its core function.
I am covering this statutory instrument today for the Minister for Countering Illegal Migration, my hon. and learned Friend the Member for Mid Dorset and North Poole (Michael Tomlinson), but I will gladly come back to the hon. Member for Bermondsey and Old Southwark with a substantive answer to his specific point about the funds and the way in which they are deployed. I have been able to set out quite comprehensively, I think, the nature of the funds that are being collected for both these important schemes. If I may, in my wind-up speech I will pick up that point directly.
The Minister is being very generous in giving way. I was unaware that he was covering for his colleague, but of course it takes multiple Government Ministers to cover one excellent shadow Minister, my hon. Friend the Member for Aberavon.
In how many instances has the Home Office been notified of an employer illegally using someone who is unlawfully working in the UK, and then failed to take action? I have at least two constituency cases involving people who are working in this country who should not be in the country, because they have committed very serious criminal offences and should have been removed. One of them was in prison until 2016, and the Home Office has failed to issue the deportation order.
I suppose I might say that it is very easy for a party to have one shadow Minister when it has a very limited policy platform to advance on the substance of the migration and borders portfolio.
On the Home Office’s ability to collect the fines, we have robust debt recovery strategies in place to maximise the opportunities to collect outstanding debt. This is difficult debt to collect, as the hon. Gentleman will appreciate. The organisations that we are dealing with are often determined to act in a non-compliant way. That is the nature of the activity to which we are responding through these schemes.
Of the £355 million raised throughout the life of the scheme, approximately 56% of debt has been recovered or discounted for compliance and faster payment. More recently, between January 2023 and November 2023, more than 1,400 right-to-work civil penalties were issued, to a value of over £26 million. Within the same period, 140 right-to-rent civil penalties were issued, to a value of over £136,000. I know that the Department continues to strive to improve collection rates wherever possible; it is a real area of focus.
May I express my gratitude to colleagues from across the House for the scrutiny and insight that this debate has brought to bear on the undoubtedly important subject of the fees and fines in established schemes?
Before I address some of the issues raised and questions asked, I want to make the general point that we can deliver a comprehensive response to tackle illegal migration only if we work with UK employers, landlords and letting agents to deny employment and housing to those without the right to work or rent in this country. Illegal working and renting are the main incentives for illegal migration and often involve exploitation and unfair competition.
The civil penalty scheme encourages employers, landlords and letting agents to comply with their obligations to check the right to work and rent of all employees and occupiers, without criminalising those who make a mistake. Legitimate employers, landlords or letting agents will not face higher costs through increased penalties. The scope of the penalty regime has not changed. Those that continue to act in a legitimate manner, by checking and recording the documents of their employees or tenants, will not be affected by the strengthened penalty regime.
I will now touch on several points raised during the course of the debate. First, I would be keen to see the details of the specific case raised by the hon. Member for Glasgow Central; if she shares them with me, I will look at the case with the utmost urgency to help vulnerable users of the online checking system. The Home Office is developing its digital products and services for use by all, including vulnerable users. Users can contact the UK Visas and Immigration resolution centre, which provides telephone and email support to those using online immigration status services and supports all individuals interacting with online services.
The services include a priority response helpline specifically for employers, landlords and letting agents who need help accessing or using the online immigration status services. To ensure that service demand is responsive to need, there are separate lines for EU settlement scheme applicants and for non-EUSS status-related queries. All callers speak to a trained agent who works to resolve their specific query. Again, if the hon. Lady shares the details with me, I will be happy to look at the specifics of the case.
In answer to an earlier question, the Minister did not say what the funds raised from the penalties actually pay for. Are the funds supposed to pay for this service? They are clearly not paying for crimes to be prevented or solved, given that nine out of 10 are unsolved, and they are clearly not cutting the asylum backlog. Where is the money raised through the fines going?
The hon. Gentleman sort of pre-empts what I was going to say in my remarks; I was just trying to deal with each contribution in turn to ensure that the points are dealt with thoroughly. However, I can tell him that the Home Office is allowed to keep £19 million of the civil penalty regime income, and that is put into the consolidated fund, underpinned through the Immigration Act 2014.
The hon. Member for Glasgow Central rightly also asked about some of the safeguards around debt recovery and appeals against the civil penalties. People can appeal a civil penalty decision if, following an objection to the Home Office, that decision has been upheld. An appeal must be made on the same grounds as the objection, and the employer, landlord or letting agent must do so within 28 days, registering the appeal at a county court or sheriff court. The three grounds are as follows: the person is not liable to pay the penalty, which could mean they are not the employer, landlord or letting agent of the illegal migrant identified; they have a statutory excuse, which means they carried out checks as required; and the level of the penalty is too high. She specifically asked whether there is sensible discretion within the system, and the answer is yes: officials have discretion in order to deal with such matters appropriately.
My understanding is that we try to deal with the matter as quickly as possible following an appeal being lodged and that we work to a similar 28-day timescale.
I understand why the hon. Lady asked about the devolved Administrations. They were not consulted on these measures, which are reserved policies, but the Government wrote to them to advise on the increase to the civil penalties when the draft orders were laid in November 2023. On whether the civil penalty increase applies across the UK, the right-to-work scheme has UK-wide application, as the hon. Lady knows, and the right-to-rent scheme is in force in England only. The longer-term intention is to explore rolling the scheme out to the rest of the UK.
The hon. Member for Bermondsey and Old Southwark asked an important question about how we ensure that the penalties are paid. The Home Office works closely with debt recovery providers and other Departments to do as much as we can to ensure that they are. Where a penalty is unpaid, it will be registered with the civil court and enforcement action commenced. Where companies take action to dissolve and be struck off the companies register, we may lodge an objection against the application when a penalty has not been paid. Where an employer remains non-compliant or becomes liquidated or bankrupt, details are shared with the Insolvency Service, which considers action under the Company Directors Disqualification Act 1986. Successful action to disqualify an employer as a director can tackle the practice of carrying on the same business successively through a series of companies each of which becomes insolvent. As I mentioned earlier, we look carefully at what more we can do to ensure that the fines are paid as expeditiously as possible.
Let me turn to how the increase was calculated. Civil penalties for non-compliance have remained the same since 2014, despite periods of high inflation, and the approach to the increase in the civil penalties was based on evidence and research on international comparisons and other civil penalty schemes operated in the UK. Where illegal working is identified, the increased penalty level for the right-to-work scheme aligns the UK at the higher range of sanctions applied across international comparators, including France, Germany, Spain, Belgium and Australia.
An employer, landlord or letting agent may request permission from the Home Office to pay a civil penalty in instalments over an agreed period, which is usually up to 24 months. In such cases, they should provide the full reasons for their inability to pay the full penalty amount in one payment. I reiterate that the Home Office has discretion to handle such matters sensibly and appropriately, which I think addresses the points raised by the SNP spokesperson, the hon. Member for Glasgow Central.
The shadow Minister, the hon. Member for Aberavon, had an interesting approach, in that he alluded to things being a little bit illegal or more illegal. The fact is that the activities and behaviours that we are seeing are illegal and unacceptable, and it is right that we have a firm and robust approach to them. We welcome the shadow Minister’s and Opposition Members’ support for the changes to the level of the penalty. The Home Office has delivered an extensive, wide-reaching engagement programme to employers, landlords and lettings agents. Extensive communication strategies, including online guidance, webinars and engagement events, are in place to help ensure that employers, landlords and letting agents understand their obligations.
Between the announcement of the proposals to increase the civil penalties in August 2023 and 20 January, Home Office officials have supported more than 30 engagement events, reaching more than 11,000 stakeholders across the relevant sectors. The Home Office continues to work with members of the Home Office employers consultative group and landlord consultative panel, which cover all major employment and rental sectors. It meets them quarterly to seek their input and to inform our future guidance and communication products in respect of the operation of the right-to-work and right-to-rent schemes. As the shadow Minister will appreciate, the employers that we engage with are those that behave in a compliant manner; the individuals and businesses that we interact with through the penalties often have a very different posture. There was no duty to consult at the outset, but we have had extensive engagement.
A very valid question was asked about discrimination. Of course, all of us in this House and in Government want to ensure that we get this right. The Home Office has published codes of practice for employers, landlords and letting agents on how to avoid unlawful discrimination when undertaking checks. The codes of practice clearly stipulate that employers, landlords and letting agents are advised to provide individuals with every opportunity to demonstrate their right to work or rent. They should not discriminate on the basis of nationality or any of the other protected characteristics. We are clear that those who discriminate are breaking the law.
The evaluation has found that the right-to-rent scheme is not discriminatory, although that does not rule out discriminatory behaviour from individual landlords and letting agents. It is often easier for landlords, letting agents and employers to carry out checks digitally, with no requirement for them to understand the types of documents that renters and employers have. In some cases, it is actually easier to bring a migrant into employment or a residential tenancy agreement than a British citizen.
My hon. Friend the Member for Amber Valley and the hon. Member for Aberavon raised a point about immigration enforcement. That of course fits within the portfolio of the Minister for Countering Illegal Migration, my hon. and learned Friend the Member for Mid Dorset and North Poole, but I can say that we are very much scaling up immigration enforcement work in tandem with the changes. The Home Office immigration enforcement teams are surging the number of enforcement operations being conducted to bring those violating our laws to justice.
Over the first three quarters of 2023, 10,509 enforcement visits took place, of which 4,721 were illegal working enforcement visits, which is a rise of more than 40% compared with the same period in 2022. Between January and November 2023, over 1,400 right-to-work civil penalties were issued, which is an increase of 40% compared with the same period in 2022; the value of right-to-work civil penalties issued was over £26 million, which is over 45% more than in the same period in 2022, and demonstrates that those efforts are being stepped up and are delivering results; 140 right-to-rent civil penalties were issued, which is an increase of over 75% compared with the same period in 2022; and the value of right-to-rent civil penalties issued was over £136,000, which is an increase by over 80% compared with the same period in 2022.
One loophole that a letting agent could use is the guarantor system. Does the Minister have any data or information on the number of fines paid by a guarantor as opposed to the letting agent? If the Government are serious about stopping a behaviour, they need to ensure that the business itself is fined rather than passing it on to a guarantor covering for someone who is illegally in the country.
If the hon. Gentleman does not mind, I would like to take that point away. In the earlier part of the debate, I said that I would provide him with a letter that sets out in more granular detail the statistics that he asked for. I was able to give the headline numbers, but it is valuable for the scrutiny of these measures to share with him those more granular month-on-month numbers of fines issued, and the level at which they come in. That is a point that I am very happy to pick up on in my response to him.
On the wider loophole, we will gladly provide as much insight as we can. I will raise the point directly with the Minister for Countering Illegal Migration. The Home Office wants to continue to work closely with business, landlords and letting agents, across Government and with law enforcement partners to promote collaboration on activity aimed at tackling illegal working, ensuring safe and responsible recruitment and onboarding practices while upholding the safeguards that protect legitimate workers and those at risk of exploitation. As the hon. Gentleman would expect, in that spirit we want to directly deal with and address, in the fullest sense, all areas or avenues of abuse that emerge.
Addressing illegal working and renting not only protects the domestic labour and housing market but identifies unscrupulous employers, landlords and letting agents who exploit vulnerable migrants. Equally, it ensures that only those who are in the UK legally, with permission to work and rent, are able to do so. On that basis, I again commend the draft orders to the Committee.
Question put.