Draft Immigration Act 2014 (Residential Accommodation) (Maximum Penalty) Order 2023 Draft Immigration (Employment of Adults Subject to Immigration Control) (Maximum Penalty) (Amendment) Order 2023

Nigel Mills Excerpts

Monday 15th January 2024 General Committees

[Tom Pursglove]

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.

[Nigel Mills (Amber Valley) (Con)]

Can the Minister help me with one question? I am trying to work out what the increase in the penalties is trying to achieve. Is the problem that people do not know that the penalties exist and therefore end up breaking the law unwittingly, or is it that they know the law but think, “Actually, I can make loads of money out of this, so it’s worth the risk of a penalty because I probably won’t get detected”? Is it the purpose of increasing the penalty to break that economic equation?

[Tom Pursglove]

My hon. Friend raises a good point. The rationale for the level of the penalty is to focus on deterring people from going about these practices, which are very harmful in many respects and which have the adverse consequences that I have mentioned. The Government believe that employers, landlords or letting agents that employ or let to individuals without status should face much higher penalties as a matter of principle. Also, the value of the penalties has not been revised recently, so we think the time is right to have another look at them and revise the levels to those that I have set out. The higher expected cost of non-compliance aims to reduce the number of landlords, letting agents and employers who engage in this activity, with the ultimate aim of driving changes in behaviour and reducing the incidence of non-compliant letting and employment, which will deter individuals from remaining in the country without status, deter illegal migration, and deter all the root causes.

To finish the point that I was making before I began taking interventions, landlords and lettings agents who elect to pay the penalty via the fast payment option will benefit from a 30% reduction from £10,000 to £7,000 or from £5,000 to £3,500 as applicable. As is the case now, the maximum penalty will be levied only on an employer, landlord or letting agent that has breached one of the schemes on more than one occasion in a three-year period, where the fast payment option was not used and where no specified mitigating factors apply.

Across both schemes, employers, landlords and letting agents can appeal a civil penalty decision if, following an objection to the Home Office, that decision has been upheld. An appeal must be on the same grounds as the objection, and an employer, landlord or letting agent must appeal within 28 days, registering the appeal at a county court or sheriff court. That provides accidentally non-compliant employers, landlords or letting agents with safeguards against penalties.

In summary, the draft orders aim to change the behaviour of rogue employers, landlords and letting agents; to eliminate any financial gain or benefit from non-compliance; to deter those contemplating entering the UK illegally; to tackle, where appropriate, the harm caused by regulatory non-compliance; and to deter future non-compliance. I commend the draft orders to the Committee.

--- Later in debate ---

[Nigel Mills]

I have a few questions for the Minister. I can remember serving on the Public Bill Committee on the Immigration Act a decade ago, and supporting these measures when they were introduced. I think the logic at the time was that it is almost impossible to stop people getting here, given that we have a relatively open border. If they arrive on a holiday visa and stay illegally, there is no way we can stop them. We need to make it as difficult as we can for them to stay here illegally.

What we do not really have is any evidence that the measures have actually worked to reduce the problem. An estimate I found suggested that 600,000 to 700,000 people are working illegally in the UK. Can the Minister tell us whether that number has gone up or down in the last decade? I sense that it has probably gone up, which might suggest that the plan is not working as well as it should. Perhaps increasing the penalty is the way to make the plan work.

What also concerns me is the amount of enforcement action we are taking. The Government now publish data on this issue quarterly, and I think it took until the last quarter of last year to get back to the pre-covid level of inspections. The number of penalties is tiny. In 2022-23, 1,105 penalties were issued to employers in relation to the 600,000 or 700,000 people who we think are working illegally, and only 45 to letting agents. It is a hell of a lot of work for 45 penalty notices a year, so what plans do the Government have to increase the number of inspections and the number of penalties being issued to help tackle this type of behaviour? Do the Government have any targets or expectations for what the reduced number of people being employed illegally or letting illegally will be in, say, three or five years’ time, so that we can judge whether the measures are working or whether we need a different strategy?