Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Examination of Witness (Questions 60-79)

Wednesday 7 May 2003

Mrs Marilyn Day

  Q60  Alan Simpson: Can I try and explore the relationship between the supermarkets and gang masters? What is the pressure that you are put under in terms of this balance between proper, legitimate, decent employment practices and reduced costs? Where do the supermarkets lean on you most?

  Mrs Day: The supermarkets specify the prices. They have pre-contracts and they will give you what is called a contract plus, which gives you a small amount of profit. Then they want the goods at that price. They hold the right to have those goods destroyed if they do not want them and you cannot resell them. That dictates the price you pay for your labour. If you employ them properly through a reputable agency, they have all the covering costs from the DSS, the holiday pay, the sick pay and all the rest of it which has to be carried forward. That means that you are going to charge them between £6 and £8 per hour. If you have cheap jack, illegal labour coming in, especially under various schemes that have been set up by other parties, you are looking at national insurance free payments, £4.91 if you are lucky, charging them for their accommodation. They have to pay for the accommodation through an agency so where are you going to go for your labour? To the cheapest. It is inevitable. It is business.

  Q61  Alan Simpson: You will have just heard the representatives of the supermarket saying, "Not me, Guv. Absolutely clean hands. It makes no difference, the price that we are asking, because the money is disappearing in the non-payment of VAT", so, as a committee, we were being asked to accept that it is not that it is the contract price that is the issue, but it is the illegality of practices beneath that price. Does that square with your own experience?

  Mrs Day: No, it does not at all. When we started in business, we covered areas in horticulture, arable work, beef, sheep, and over the years the amount of work we covered in horticulture has gone to nothing, zero. We do not do anything at all because they cannot afford our pricing structure. Arable work is going the same way because there have been some alterations to the labour inputs under the student schemes, so they are now coming into arable work whether they are trained or not and into livestock work. Now, we are losing bookings. We have gone from being completely booked all the time down to about one-third over a three-month period, so we are watching this happen now. I have an option. I have to choose either to continue this and fight it out until it is sorted or I go with the rest of them and reduce our standards. It is as simple as that.

  Q62  Alan Simpson: There is a dilemma which that presents us with as a committee because you support a nationalised scheme.

  Mrs Day: I do.

  Q63  Alan Simpson: So too did the fresh produce suppliers, but what you are now saying is that actually it is not necessarily the licensing, but the pricing that determines the rate at which this gross exploitation of human labour is not only allowed to continue, but is almost a prerequisite of the way the market works, so is the legislation that you would be looking for one which really ought to focus on the minimum wage entitlement as opposed to the licensing entitlement?

  Mrs Day: Well, we have a minimum wage. The licensing would prevent the slip. It would carry out the legalities and everyone would have to do them. They would have to make the deductions. Therefore, one gang master would not be able to undermine another, which is what is happening at the moment. Now, I have always been in favour of the licensing system right from the word go and when they got rid of it, I was very disappointed because the standard was very good at that time, we had lost a lot of the activities, people were much better off working in the industry and they were getting what they required. Now we are just back where we started. With the combination of no licensing, no legislation, various schemes being chucked in the pot and stirred around, supermarkets dictating very low prices, I hate to say it, but at the end of this, if we do not do something, there is going to be a large, black hole and it is called "agriculture" and there will be no workers for this country at all.

  Q64  Chairman: We were told by Mr Henderson, who gave evidence a few moments ago, that the supermarkets bought from the pack-houses and that the relationship between the pack-houses and the gang masters really was not to do with supermarkets, but since there has been a great deal of debate about this whole issue and everybody knows it is out there, do you think it is plausible for the supermarkets to argue that in a sense this problem is one which stops below their level? Have purchasing directors of supermarkets, to your knowledge, contacted pack-houses and asked them for undertakings about the nature of the labour they employ? In this age of social responsibility, environmental responsibility and companies falling over themselves to tell us what a great role they play in the community and society, is there any evidence that supermarkets have actually sought to trace this one backwards?

  Mrs Day: There are actually, I think, two that do make an effort. They are not the top sellers, but they do make a point of investigating the labour. Am I allowed to name names?

  Q65  Chairman: Yes.

  Mrs Day: Well, Waitrose, for one, and Sainsbury's, and I know that in the strawberry-picking situation, they have actually cancelled contracts with growers which are not being picked by traceable people within the UK because they were worried about illegal immigrants. That is something that they could do, but of course it all depends on the morals of the particular supermarket involved and also profit is always key.

  Q66  Diana Organ: Can I just follow on from that very interesting point that you make, Mrs Day, about Waitrose and Sainsbury's doing some checks on the people that are doing it. Does the Co-op do that too?

  Mrs Day: I think they actually have their own inhouse staff for most of it and most of their stuff is traceable. They operate on this co-operative scheme.

  Q67  Diana Organ: And they have certain values about their whole organisation, about purchasing and so on.

  Mrs Day: Absolutely, yes.

  Q68  Diana Organ: You have made it quite clear from what you have said to us so far that you are looking very much for the reintroduction of the licensing scheme and that with no legislation and everything sort of letting rip, you yourself, shall we say, really a best practice agency, are losing out to the more dubious operations, but I wonder if you can just say a couple of things because there have been a whole load of voluntary initiatives, hoping to put right the system as it is, so in your view have they had any success?

  Mrs Day: Not particularly. It is just getting worse.

  Q69  Diana Organ: The other thing follows on from that and again Mr Henderson before because he was looking for a code of practice and a trade association for what he calls "legitimate gang masters", and I suspect he would put you into that group, and he thinks that seems to be the way forward. How much do you think that would help suppliers and purchasers to operate within the law?

  Mrs Day: My experience of farming and farmers is that you get 50% of the farming population co-operating and the others just carry on doing what they are doing.

  Q70  Diana Organ: You are mainly making a statement about what farmers are like, that they are independent individuals and they possibly do not necessarily like to keep to a voluntary code unless they have to?

  Mrs Day: I am afraid so, yes.

  Q71  Mr Mitchell: The Seasonal Agricultural Workers Scheme, on the face of it, sounds quite a good idea with kids from agricultural colleges in Eastern Europe, or wherever it is, coming here, working a bit on the land and then going back, but you seem suspicious of it. Why?

  Mrs Day: We have noted activities by users of SAWS labour. They over-quote the number of staff they want and they are feeding those spare staff into some manufacturing industries, meat production, that sort of thing. It is coming to light in the locality where I live at the moment and it is not the only place. They are also operating in fields that they are not supposed to be in under the scheme. Recently I was supplied two head herdsmen on a job in Dorset, milking 500 cows, and I had a phone call from the farmer saying, "I don't need you next week", to which I thought, "Fine. He has obviously got some new labour". He had got some SAWS students coming in and milking those cows, but under the legislation they were not supposed to do that. That means they are undermining the skilled workforce too which was not the idea in the first place. Also we are having great difficulties placing students from the UK this year because it is cheaper to have one of these students from SAWS, so we are not really doing ourselves any favours on this one at all and it should be legislated much tighter than it is.

  Q72  Mr Mitchell: Well, the idea was, after all, that it was a two-way process. Who is being abused? Are they abusing the system since they are not really students or are they abused when they come to this country?

  Mrs Day: The farmers are abusing the system. It is actually farmers who are doing it. The Government have created a secondary gang master system.

  Q73  Mr Mitchell: And are they working for gang masters or, as the Scheme intended, directly for farmers?

  Mrs Day: No, they are organised by what they call "providers". You have to be approved by the Government and then you supply to a single provider, which is a farmer who puts an order in for X, Y and Z numbers of people. What is happening is they are putting in some extra numbers that they do not really need and then passing them on to somebody else, which they are not supposed to do, and they obviously do it for a fee, they do not do it for nothing, so they have created a secondary gang master system which again undermines the existing labour forces, so we have got that problem as well. When you look at all this, it is not just the licensing, but you have to look at all the schemes which are running at the moment to see if they can sort it out.

  Q74  Mr Mitchell: But who makes the arrangements? Is it the bright, young student at the foreign agricultural college who would like to work in England who makes the arrangements or is it the employer at this end who makes the arrangements?

  Mrs Day: The source of the provider goes out to the universities and enlists these people. They then go back to the provider who then collects the orders and then you have your orders for X, Y, Z students whom they send on to you as your package, but you have to be approved and inspected before you start. From my experience, the inspection has a lot to be desired.

  Q75  Mr Mitchell: Are there any other abuses of the Seasonal Agricultural Workers Scheme?

  Mrs Day: That is the main one, but the thing that worries me is that they are extending it to twelve months at a time and also one of the problems with gang masters on the lower level is that if you get a foreign person over here, you put his name on a dotted line, he becomes an English student and, therefore, is a student and they are protected that way, so they do not have to make any deductions. The loss to the Treasury must be vast, I should imagine.

  Q76  Alan Simpson: Your enthusiasm for the licensing system is admirable, but the thing that troubles me is that under the previous arrangements there were only, on average, four licences revoked a year. I just wondered whether that is really where you want to turn the clock back to or is it a different form of licensing with much more stringent penalties attached to it?

  Mrs Day: Well, as somebody who takes the right side of the legislation, I would be quite happy to accept more legislation. With today's technology, there is no reason why things cannot be tighter.

  Q77  Alan Simpson: If we follow that one through, if you had tighter legislation, there will be a framework for licensing and for the application and then administration of the licensing, all of which will have costs attached to it. How do you balance the sense in which there will be different pulls, one, to make the whole process cleaner and more legitimate and accountable as opposed to the pressure that then says, "Let's just look for other routes to bypass the system", if the costs are going to fall on those who are applying for licences?

  Mrs Day: What we noticed when the licence first came in was that that sort of thing was going on, but by the time we got about five years into it, most people had fallen behind the rest. It is as though they realised that there was legislation against them. If the fines are hefty enough, it does frighten them and eventually they will fall in behind, but while there is nothing, there is absolutely nothing that can be done about what is happening at the moment. It is a matter of whether we try and save it now or let it drift.

  Q78  Alan Simpson: In the construction of that licensing scheme, if you were to focus around a single either set of powers or a sort of agency function within the monitoring regime, what would you feel was needed generally to make that licensing work?

  Mrs Day: Traceability of the people who are working for you. At the end of the day that is the most important thing for everybody's sake, including the rural areas that they work in.

  Q79  Alan Simpson: So where would you locate the liability for traceability—with gang masters?

  Mrs Day: With the gang master, no doubt.

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