Gangmasters Licensing Authority

Steve Barclay Excerpts

Wednesday 20th June 2012 Westminster Hall

[Stephen Barclay (North East Cambridgeshire) (Con)]

Thank you, Mr Dobbin, for the opportunity to speak in this debate.

I want us to pause, and for Members, in their busy lives, to picture waking up in a crowded room—with several other people sleeping nearby and without any space to sit down for breakfast—leaving before dawn in an old, rickety minibus to work a 12-hour day in the cold, windswept fields and fens and, at the end of a hard week, finding that most of their wages have been taken from them in spurious charges. Moreover, if they complain, they risk being thrown out without a job, without a home, and being on the streets with no money, in a foreign land and not speaking the language, a long way from home.

That is not a picture of some foreign country; those difficult-to-imagine working conditions are here in Britain today. Just last month, a report by the Joseph Rowntree Foundation found that many migrant workers continue to live in a climate of fear, with the reality of poverty and subject to inhuman conditions. Such issues are becoming more important. A report due out shortly by Durham university academics suggests that between 2,000 and 5,000 people experience the worst manifestations of illegal gangmasters in the UK. It is a pressing issue for people who are legally in this country—they are here to work and not for benefits—and that alone should justify there being action.

There is also a wider impact on those living next door to the people I am talking about, in houses in multiple occupation, because antisocial behaviour has a social impact. In my surgery only last Saturday, a constituent came in to complain about someone urinating in the street outside their house. That behaviour arises from the dehumanising and squalid conditions in which those people have to live, and it often manifests itself in the form of large groups of young men, without much money, drinking from shared cans in the street, which can intimidate the local population. Another impact is that many constituents, in all constituencies I think, have expressed concern about the pace and scale of immigration. Legally, Ministers can do little in relation to eastern European migration, which is movement within the European Union. However, I want to highlight the opportunity that the Government now have, through taking action with the Gangmasters Licensing Authority, to show that they are tackling some of the worst abuses associated with that migration.

The purpose of this debate is not to criticise the many legal gangmasters, who are an important part of the agricultural labour force. We must distinguish between them and the many illegal gangs associated with the abuses and criminality that blight some of the most vulnerable workers in my constituency and those of many other Members. Having established why the issue matters and why we are having this debate, I want to focus the Minister’s attention on five areas in which action is now required: resource allocation, the introduction of civil penalties, sentencing guidelines, repayment orders and more effective multi-agency working.

I am not saying that the Gangmasters Licensing Authority has had a negative impact. Since it was set up, following the tragic Morecambe bay cockle pickers disaster, it has made an improvement. I welcome the Minister’s decision to retain it, but I signal to him that its status at the moment is somewhat in limbo: it has not been adequately resourced to be effective, but nor has it been scrapped and merged with another body.

[David Morris (Morecambe and Lunesdale) (Con)]

My hon. Friend and I go back a long way—back to Lancaster days. As everyone knows, I represent Morecambe. Does he agree that any legislative measures to curb red tape should not impede the safety of the cockle pickers and shell fisheries industry? It must always be borne in mind that any future changes should enhance protection powers and not detract from them.

[Stephen Barclay]

I thank my hon. Friend for his contribution, and he is right. I will come on to how we can make improvements without their being a bureaucratic imposition on firms. I should point out that I am talking about tackling illegal gangmasters, not the legal ones who already adhere to the rules.

My first point is about resource allocation. At the moment, 12 counties across the eastern spine of the country are covered by only six inspectors from the Gangmasters Licensing Authority. That is equivalent to Cambridgeshire and Norfolk being covered by just one inspector. My right hon. Friend the Minister is my constituency neighbour. He will know, as I do, how much time is taken only by travel; let alone by dealing with translation, illegal gangmasters, intelligence gathering and the many other issues that an inspector has to address. I simply do not think it realistic to expect one inspector to cover 3,500 square miles. I accept and, as a member of the Public Accounts Committee, I very much recognise the difficulty of asking for more resource. However, I urge my right hon. Friend to look at resource allocation across his Department and agencies to see whether resource could be redeployed from other areas to what is a pressing community need.

The second issue relates to penalties. We need to have new civil penalties, rather than to rely on criminal charges. That is accepted by most of the experts in the field I have spoken to—the Gangmasters Licensing Authority, the Joseph Rowntree Foundation and others. I urge the Minister to consider the wider use of civil penalties. Civil fines should be available not only for technical breaches, but for all gangmaster-related offences, and they should apply to both gangmasters and those who are unlicensed. Although criminal powers exist, there have been only 11 prosecutions in two years. It is therefore clear that the difficulty of getting vulnerable workers to give evidence in court and the high threshold for prosecution—the burden of proof required for criminal prosecutions—mean that that is not working as an enforcement tool. There is a problem with the tool that is currently available to the GLA, and I welcome the positive soundings in the Minister’s recent statement.

The fact that the GLA has issued 300 warning notices makes it clear that some issues are not being addressed. I therefore urge the Minister to consider the example of the UK Border Agency, which can impose fines of £10,000 on those employing illegal immigrants, as a model that could be applied to the GLA. If the UKBA can do that, I question why such powers are not place to deal with those who illegally employ agricultural workers. The point is that those committing such crimes are motivated by greed. Therefore, having civil penalties that hit them in the pocket would be far more effective.

In its correspondence with me, the Joseph Rowntree Foundation stated that

“all our evidence would support beefing up the powers of the GLA. It’s clear that bringing prosecutions is complex and difficult, and that tackling the problem of forced labour cannot solely depend on the existence of the criminal offence. So looking at civil penalties is an entirely appropriate and welcome policy”.

I urge my right hon. Friend the Minister to respond to that. Even when criminal prosecutions are made, the fine imposed by the court is often negligible. In a recent case in Nottingham, both the court and the council urged the provision of sentencing guidelines.

Thirdly, we should have sentencing guidelines to give courts the clarity that they themselves would welcome. Such cases are relatively rare, and it is even more important to have good guidelines, given that there are few criminal prosecutions. Fourthly, I want to flag up the need for repayment orders. One of the deterrents within the regulatory toolkit that could be imposed is to ensure that those who have committed offences have to recompense those deprived of their wages. I return to my original example of people having worked all week in the field, only for them to be deprived of their wages. We need to find a way of ensuring that those who are in future held to account—currently, they are not—are also forced, through repayment orders, to compensate those they have exploited. Those are the financial drivers that would address the exploitation currently taking place.

The fifth and final area I want to flag up to is the need for far more effective multi-agency working. Illegal gangmasters deprive the Exchequer of significant tax revenue through the non-payment of pay-as-you-earn and VAT. Will my right hon. Friend the Minister hold discussions with the Treasury on whether any potential savings made from addressing tax loopholes or the non-payment of tax could be used to help address the resource issue and funding challenge that I have highlighted?

Could my right hon. Friend the Minister provide reassurance that there will be more multi-agency work between the Home Office, police, UKBA and local councils? Houses in multiple occupation need to be registered only if they have three floors, but most of the houses in the fens, as he knows, have two floors, so they are not registered and are falling through the gaps between different agencies. Likewise, where criminality has taken place, it is essential that those responsible be deported.

Finally, it would be useful if we demonstrated the effectiveness of a multi-agency taskforce via an urgent pilot programme. The fens and my constituency of North East Cambridgeshire in particular are well placed to take part in such a programme. Perhaps my right hon. Friend the Minister—as I said, he is my constituency neighbour—and I could discuss over the next few weeks how we could bring together the Home Office, UKBA, the local council and the police to run a pilot programme that shines a light on some of the worst abuses that are taking place in our country and depriving people working in tough jobs in our fields of the wages they are due.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I not only congratulate my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay) on securing this debate, as is the convention, but thank him, because, as he has rightly said, I have a similar constituency interest to his. Moreover, as good fortune has it, this debate follows on from a relevant debate about agricultural employment. I have spent a lot of time on many of these issues over the years, trying not only to achieve satisfactory terms and conditions for those who work predominantly in the fruit and vegetable industry, but to ensure that there is a sufficient supply of competent people to do that work and that they are all suitably managed. This debate is extraordinarily timely, because it follows on, as my hon. Friend has said, from my statement in March.

I should explain to my hon. Friend that the shadow Minister, the hon. Member for Ogmore (Huw Irranca-Davies), raised in the previous debate a number of issues about the GLA, but I flatly refused to answer him, on the basis that I hoped to address the issues in this debate. Otherwise, I am sure that we would all congratulate the hon. Gentleman on his diligence in sitting through another debate, and one to which he is not even allowed to contribute.

As the hon. Gentleman and others rightly said during the previous debate, the GLA has been subject to a number of reviews, including those by the farming regulation taskforce and the forestry regulation taskforce; the ongoing workplace rights compliance and enforcement review; and, of course, the red tape challenge. It is, therefore, fair to say that the GLA’s role and scope have been considered and debated by a wide range of interested parties, which have had the opportunity to present their views via calls for evidence and other mediums.

All that has shown that the GLA is regarded as having brought significant improvements to the treatment of the most vulnerable workers in the area that it regulates. As my hon. Friend the Member for Morecambe and Lunesdale (David Morris) has said, it originated from an unbelievable tragedy that horrified the whole country. That does not mean that there is not room for improvement or change, or room to make the GLA a much more modern enforcement agency that targets criminal activities, while applying a light touch, using risk assessment, to those who comply fully—I believe them to be in the majority—with the letter and the spirit of the law and regulations. The GLA’s own experience of operating under the terms of the original Gangmasters (Licensing) Act 2004 suggests that there is room for modification.

I assure my hon. Friend the Member for North East Cambridgeshire and others that this is not about removing protection for vulnerable workers. The GLA is there to provide that protection, and it should concentrate entirely on doing that and on detecting problems and enforcing legislation. I will return to some of those points later. This is about ensuring a framework that safeguards workers’ rights, while reducing unnecessary or onerous demands on business. That is as it should be.

It is important that the GLA continues to be supported by industry—not just by farmers, but by retailers, because they want to maximise the assurance about the proper employment of the people who pick their products. It also needs to be supported by the labour providers—the legal, honest and straightforward gangmasters and others—who need to operate on a level playing field. We do not want them to be undercut by unfair or illegal practices.

One factor that faces the workers—my hon. Friend touched on this—is that they often have no fixed abode, because they are moved as gangs around the country to do the work that needs to be done. They are often located in difficult-to-access settings. My hon. Friend referred to workers—I am not sure whether this was a mistake—as being here legally, but I am afraid that that is not the case. Many of them are not here legally, so they are often undocumented and sometimes unsupervised. They are often low-skilled and, as my hon. Friend said, have little or no working knowledge of English. Moreover, if they have no fixed abode, they are dependent on the gangmaster for the provision of accommodation.

[Stephen Barclay]

My right hon. Friend the Minister is right that, as with all factors relating to immigration, the issue is multifaceted. There are, of course, people here illegally, which is why we need a multi-agency approach, but that is not happening in my constituency at the moment. That is one of the issues that is driving community tension. Coupled with that, people who are here legally are being stigmatised. Although they have come here within the law and are working, they are not getting the benefits, because they fall within the criminality of illegal gangs. That is what I was trying to highlight.

[Mr Paice]

I am grateful to my hon. Friend for that clarification. I was trying to make the point that he rightly referred in his opening remarks to some of the social problems from which my constituency and his suffer as a result of migrant workers. Many of them, as I know full well from my own constituency, are not only here perfectly legally, but operating under licensed gangmasters and earning an income that allows them to buy cans of beer that they then consume outside somebody else’s house. They do not always fully understand British culture and ways of life.

I have announced a package of proposed changes to the GLA, including removing from its scope low-risk areas as far as worker abuse is concerned, streamlining the licensing process, and—this was my hon. Friend’s key point—looking at the scope to use civil penalties. He is right that, at present, the GLA board has very few enforcement weapons, other than its ultimate weapon, which is to withdraw the licence. He is right that we need a tier of measures for it to utilise. The proposed changes also include changes to the GLA board’s governance and structure.

During the earlier debate, the hon. Member for Ogmore referred to some of the issues that are being removed from the scope. I nearly responded to him then, but decided to leave it until now. On cultivated shellfish, let me be clear that we are removing the use of directly employed workers so, if anybody who cultivates shellfish lawfully on land for which they hold title directly employs workers, they will not be covered. If they use a gangmaster, they will still be covered. I just wanted to make that clear. Overall, the changes will ensure that the GLA is better able to concentrate on where it really matters.

--- Later in debate ---

[Mr Paice]

There is a slight trap in what the hon. Gentleman asks me, because if I were to say yes to the first part of his question, he would immediately react by saying, “Well, why make any changes?” I cannot agree that everything the GLA has done has been perfect. We do not think that, which is precisely why we have reviewed it and are making changes. However, I can give him the assurance he referred to. That is why we have gone against recommendations, as the hon. Member for Ogmore pointed out in the earlier debate, to get rid of the GLA. We want to protect the most vulnerable workers, but we believe that it is time to refocus the GLA’s work precisely on that, rather than perhaps dissipating some of its efforts on much lower-risk sectors such as forestry, where there is no evidence of it being necessary whatsoever. I can give him that assurance.

Overall, the changes being made will ensure that the GLA is better able to target what we mean by suspected serious and organised crime, and that evidence of worker exploitation leads to successful investigation and prosecution of organised crime. As the hon. Member for Birmingham, Erdington (Jack Dromey) mentioned, that includes the increasing problem of trafficking.

I can assure my hon. Friend the Member for North East Cambridgeshire, who I know has had a meeting with the chairman of the GLA—I am conscious that she is observing these proceedings—that the intention to work across multi-agencies is to be enhanced. He talked about a number of illegal gangmasters. I do not know whether they are illegal. He might well be right, but I am not in a position to judge. However, the GLA needs that intelligence, which is why it needs to work with other enforcement bodies—whether in terms of immigration, the UK Border Agency, the police, the Serious Organised Crime Agency or whoever—to put all this together to ensure that they can combat trafficking and illegal activities across the piece.

We will remove an estimated 150 licence holders from the scope of the GLA, which will obviously save some money and bureaucracy. However, I certainly do not believe that that will in any way dampen the GLA’s effectiveness. The GLA will still regulate all licence holders and potential licence holders in the areas for which it is responsible. As I said, it can therefore concentrate on the worst abuses and examples of exploitation. On 1 June, the chief executive of the GLA, Ian Livsey, said on the “Farming Today” programme:

“This is all about risk and resources. People that apply for a licence will actually be checked. The checks that we will do though will be risk based so we’ll be using information that we have ourselves and information from other Government departments. It’s not true that people won’t be being checked when they make an application.”

It is very important to emphasise that.

The issue is not generally those who make an application. As my hon. Friend implied, the issue is often those who do not apply and have not got a licence. We need the criminal intelligence on that. The chair of the GLA, Margaret McKinlay, to whom I have referred, is also clear that there is room to improve the way in which the GLA operates, communicates and manages relations with those it regulates. In that, she has the benefit of positive working with the highly committed staff of the GLA.

It is fair to say that, after six years of the GLA’s existence, there is a much better understanding of the areas where the greatest risks to vulnerable workers lie. Conversely, given the unique features of the workers whom the GLA regulates in the sectors that it covers, we do not support any extension of the GLA’s scope or remit. The issue is not about extending the scope of the GLA either to construction or other sectors; it is about focusing the authority’s activities where its input is most needed to tackle worker abuse and exploitation. We also need to improve its processes, so that those who are compliant are not burdened and we can ensure that it is effectively positioned within the Government’s wider employment law framework.

[Stephen Barclay]

Given the fact that, over the past two years, there have been just 11 criminal prosecutions and that 300 warning notices have, in essence, had no bite, because no action flows from them, how will we measure the success of the changes that the Minister intends to make? What will be the outcomes? Will success be measured through an increased number of prosecutions? How will we judge success in two years’ time?

[Mr Paice]

I have to be honest with my hon. Friend: there is no precise way of doing that. We could argue that if there are no prosecutions, the GLA is failing. On the other hand, we could say that that is happening because there is no criminality. We cannot make that judgment. The issue is to ensure that the GLA is working as effectively and efficiently as possible and that the leads—the intelligence—that it is getting reduces, over time, any illegal activity. This is obviously a very subjective statement, but the general perception should be that the problems are diminishing.

Very quickly, I want to pick up on a couple of the specific recommendations made by my hon. Friend to which I have not referred. He mentioned the need for sentencing guidelines. I can assure him that I am happy to refer that to my right hon. and learned Friend the Secretary of State for Justice. With that, I will refer the issue of repayment orders as part of the debate over civil penalties. That is a very valid point.

On my hon. Friend’s point about social housing, I must confess that it had not occurred to me that there was an issue surrounding three floors, two floors or, as he rightly said, in many of our constituencies, only one floor. However, I am happy to confirm that I will look into that.

Let me conclude by trying to reassure colleagues that the changes are about focusing the GLA’s resources where they really matter: on tracking down illegality and situations where workers are being abused, exploited or having money unfairly confiscated from them. The changes are about working with other enforcement agencies to ensure that the joint forces are brought together to deal with what we all agree are the unacceptable and sometimes tragic consequences of such illegal action. That is what the GLA is there for, and that is what it will do. The rest of the industry, which is operating perfectly compliantly and responsibly, should have no fears from the GLA, but it will still need to comply with the legislation, as it should. More than anything else, the changes are about improving efficiency. In the light of that, I hope that I have allayed my hon. Friend’s concerns.