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
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
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
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 traceabilitywith gang masters?
Mrs Day: With the gang master,