Examination of Witnesses (Questions 360-379)
Wednesday 4 June 2003
Lord Whitty, and Mr
Lindsay Harris
Q360 Paddy Tipping:
Do you not think we ought to be doing something more? The ethical
trading and the traceability are all things that your Department
subscribes to and in fact are pushing quite hard. Is this not
another example of where retailers ought to be getting their act
together?
Lord Whitty: As
I was saying earlier, I think there is a responsibility on the
biggest final consumer of the goods at the centre which relates
to the supermarkets and to some extent the large processors. Yes,
I do think there is a responsibility on the industry as a whole,
but we do need to decide first what they are being asked to sign
up to and this is why we need to develop what is a more robust
system of good practice which does need to involve in that process
the gangmasters themselves. Those gangmasters who wish to act
responsibly, of whom there are many, need to be engaged in that
process rather than have imposed on them by another sector, whether
it is the supermarkets or the fresh produce people or the Government,
something which they have not participated in. The difficulty
for us at the moment, which we are trying to tackle, is getting
enough of the gangmasters to be engaged in that process.
Q361 Paddy Tipping:
There is a clear choice for you, is there not? You can go down
the voluntary good practice route which has got lots of advantages
in a way, or you could do what other people have been advocating
to us, which is to have a statutory regulatory system. I think
you said earlier on you had your own views on which approach was
better. Which do you think is better?
Lord Whitty: With
either approach there is a prerequisite so that we know what we
are talking about in terms of good practice, there is no point
being namby-pamby about it, which relates to an operation in what
is a very complex and tight labour market and that is why we want
to try the voluntary approach to getting more gangmasters involved
in that. This is not a Government point of view, it is not even
a DEFRA point of view, but my view is that we can get a significant
number to sign up to that but it will not be sufficient in number
to change the overall situation and therefore we will have to
contemplate something further than that. We are not yet at the
definitive point where we have to decide that.
Q362 Paddy Tipping:
You could have a twin-track approach, could you not?
Lord Whitty: Yes.
Q363 Paddy Tipping:
The final point that the retailers made to us is that you are
not putting anywhere near enough resources into this area. How
would you respond to that? T&G made the same point as well.
Lord Whitty: If
you add the total amount of enforcement which goes on in relation
to gangmasters then there is significant resource there. It may
be that we need to focus that a little bit more and it may be
we need to co-ordinate it a bit more, but I am not sure that the
additional resources to the total would have a huge marginal benefit.
As to their code of practice, then of course the work we have
now started may well require more resources in order to deliver
it, but we need to be clear of those initial steps, which is the
ones we have taken over the last few months.
Q364 Ms Atherton:
I want to ask about supermarkets. How much do you think the pressure
to keep prices to the absolute minimum is a contributory factor
in encouraging illegal activity and would you go further and say
that supermarkets are actively turning a blind eye, as are some
producers, in this whole process?
Lord Whitty: I
do not think supermarkets are consciously engaged in a process
that says, "If you cannot do it for that price then you'd
better get some cheap labour from somewhere and I don't care how
dodgy it is", I do not think there is a supermarket which
would be doing that. I think there are some supermarket buyers
who are pretty ferocious in their bargaining with suppliers of
all sorts, but of course by and large the supermarkets are not
dealing directly with the suppliers of labour, they are dealing
with people who for the most part are producing products in relatively
stable labour forces, from processors or from market gardens or
from the wholesale sector who are not themselves the direct or
indirect employees of the gangmaster-type operation. So it is
two or three stages removed from the supermarkets. That is not
to say, if we look at ethical trading and they pride themselves
on higher standards and quality control, that there is not some
social responsibility on supermarkets to ensure that the people
they deal with are themselves dealing with people who obey the
law.
Q365 Ms Atherton:
You mean ethically produced food?
Lord Whitty: Yes.
This is one of the reasons why farmers complain that they are
getting a significantly lower proportion of the total value added
than they were a few years ago and in some cases the French farmers
do or whatever, the way you have got a tightly controlled, very
competitive, very well organised and concentrated operation at
the end of the chain which pushes costs down and pretty close
to the bottom of that chain is the supply of casual labour, so
it does have an effect. I am sure the supermarkets would wish
to meet the same prices by legal labour.
Q366 Ms Atherton:
The Fresh Produce Consortium suggested to us in their evidence
that they did not think there was any link between illegal activity
and the end result of the product on our supermarket shelf. Would
you agree with that statistic?
Lord Whitty: You
mean in terms of quality?
Q367 Ms Atherton:
No, in terms of price.
Lord Whitty: It
would be almost impossible to define how you would calculate this,
but I suspect that you could produce the same product to the same
price without engaging in these practices. In other words I do
not think they are particularly efficient users of labour and
those who use a higher proportion of illegal labour are probably
less efficient users than those who by and large follow the rules.
I think they are probably right, their cost is one thing, but
the convenience and the ability to intimidate or control the labour
is another. Whilst you may be not the most efficient provider,
there are other considerations which drive people to contemplate
dodgy labour places.
Q368 Ms Atherton:
Can you see a time when consumers will be choosing the supermarket
or the products of their choice that are ethically produced in
this country as well as in developing countries?
Lord Whitty: I
think some of the consumers of supermarkets already do a bit of
that.
Q369 Ms Atherton:
But not in this country.
Lord Whitty: I
thought you were making a more general point. It is clear that
supermarkets have been responsive to a segment of their customers
who are concerned about the provenance of the food, the way it
has been produced and the way labour has been treated in the way
it has been produced, for example in relation to tea and coffee.
It may not be a huge proportion of their consumers but it is significant
enough for them to take some notice of it in making sure they
have on their shelves things which they can genuinely say meet
those standards. I believe that segment is growing. It is not
one that has hitherto focused very much on the way casual labour
is used within this country to produce British-based products.
Frankly, there has been more concentration on whether they are
organic or animal welfare considerations and the welfare of the
workers and I think it may take a change of focus for enough consumers
to move into this area. Given that they have moved into these
other ethical and quality areas then there is no reason why quite
similar sectors of consumers should not move into that area. In
order to say something is fair traded or ethically produced or
organically produced you have to have a standard and this goes
back to the issue of quality control and good practice. Until
you have got that in, even if they think about it, they have not
got a way of telling.
Q370 Mr Mitchell:
This is a sad picture of rural life, a modern A&E houseman
with nothing to write about but "Labour fiddles, tax fraud"
and "aliens in the agricultural area" and the arguments
over parking in Shropshire supermarkets. That is my point for
the day. You do not say much about experiences from abroad in
other EU countries. You say they use casual labour in this way,
you do not say what the experience is there and whether there
is anything we can learn from the way they handle the products
of casual labour in this way.
Lord Whitty: I
think it is a very good area where we do need to know more information.
Of course the labour law structures are different in some of these
other structures and the structure of agriculture is somewhat
different. We probably use a higher proportion of non-local seasonal
workers than most of our European counterparts. There are some
migrant casual workers in other countries, but a lot of the casual
labour in Germany and France is more equivalent to your hazy memories
of Lincolnshire or wherever it was in the 1950s in that a lot
of labour is provided locally and is mobilised by what may be
the equivalent of gangmasters. It is also the case that in some
labour law jurisdictions there is more responsibility on the user
of the labour than there is in the UK. In the Netherlands, for
example, the user of the labour would have some responsibility
for ensuring that they or the subcontractor meet various labour
standards. I am not sure about the tax side, but certainly in
labour law terms they would have that responsibility which we
do not have here. There may be something to be learned from that.
What I am not aware of is any European country which has effectively
created through the various agencies which use casual labour in
the whole of the agricultural sector a system which is equivalent
to what I am talking about for the registration or accreditation
of gangmasters here. It is partly because in Germany, etcetera—and
there may be some here who would regard this as part of archaic
labour laws—there is more registration of agencies, there
is more control over agencies of labour in those countries than
there is here anyway and to some extent at least the equivalent
of gangmasters would fall under that general employment law. There
may be lessons to be learned, but we have to bear in mind there
are different agricultural social patterns and there is a different
labour law structure in many respects and it is not instantly
transferable.
Q371 Mrs Shephard:
Minister, I would like to ask you about the statutory registration
scheme. A lot of the people who have given evidence to the Committee
have felt that a statutory registration scheme would be the panacea
to all the problems that we have been identifying. However, it
needs regulation and it might be very difficult to do given the
fractured nature of the industry. What do you think about it?
Lord Whitty: I
think it might be necessary. I think the issue is really whether
it is effective or not. If you can establish a basic code of practice,
if you can get both the users of labour and the users of the final
product to sign up to that system then a voluntary system could
work. I am in favour of some form of registration. The question
of whether you can do it voluntary is one where we are going to
have to test the water and test the water more than we are able
to do at the moment. My personal suspicion is that it is quite
difficult to get an effective voluntary register because not a
very high proportion even of the large gangmasters would sign
up to it voluntarily. That may be changed and I may be too cynical
and too negative. If we could get a voluntary register, I would
prefer that. I suspect that we might need to have some statutory
backing for that register in the long run.
Q372 Mrs Shephard:
Obviously the supermarkets themselves, the retailers, would have
to be involved because there would be no point in having a registration
scheme unless that knowledge was passed on to the consumer, and
Ms Atherton has already asked you a question about fair trade
principles being applied to food that is produced here. Have you
had any discussions with major retailers about ways forward in
this respect?
Lord Whitty: Part
of the project we are talking about will apply to the supermarkets
and wholesalers as it will to the gangmasters. We have not had
any systematic discussion with the whole supermarkets sector.
Q373 Mrs Shephard:
Is it in your mind to do so?
Lord Whitty: Yes.
Part of the project will be looking at the supermarket end of
it.
Q374 Mrs Shephard:
Do you have any other ideas about how you might pursue gangmasters
operating illegally? I have particularly in mind foreign workers
who may or may not be being employed illegally. The main point
is that you cannot know because there is no record of the numbers,
we do not know where they live, they come and go, they are brought
in to work, they disperse and some of them may well be being illegally
employed, but they may also be being exploited.
Lord Whitty: Yes.
Q375 Mrs Shephard:
Clearly you are aware of that problem. What is being done within
DEFRA?
Lord Whitty: The
issue of control of migration would not be a matter for DEFRA.
Clearly there are problems which might be identified in our investigations
or our knowledge of the industry which we would then have to pass
on to the Immigration or Home Office authorities and of course
there is an overall look at what I called earlier grey labour
market practices involving migrant labour following the Grabiner
inquiry which is led by the Home Office rather than ourselves.
Q376 Mrs Shephard:
This does rather come back to the point where I certainly came
in to this discussion with you and that is that nobody is in charge.
Does anybody mind?
Lord Whitty: People
are in charge of illegal migration and illegal working and of
course we have talked as if a gangmaster system in agriculture
is a single and unique phenomena, but the provision of casual
labour for various means in other sectors can equally be subject
to people working illegally, themselves being illegal immigrants,
not having work permits or whatever. Catering, retail, construction,
all of those areas also suffer from those same problems and particularly
in areas like construction and catering the problem of people
being one place one day and somewhere else the next day also applies.
So it is important that that is dealt with by the immigration
authorities in a cohesive way rather than being led to it via
the gangmaster route.
Q377 Mrs Shephard:
The Chief Immigration Officer in Norfolk told me that he is so
far from that pipe-dream of being able to deal with the matter
at all that he and his officers have ceased even to bother to
identify whether people are from Brazil or Portugal, they do not
have the resources.
Lord Whitty: I
am afraid I am not really able to respond on the resources for
the Immigration Service, you would have to summon a Home Office
minister for that.
Mrs Shephard: I have no doubt we will. Thank you.
Q378 Chairman: You
said earlier that there was already a framework of law in place
and that all the various government bodies represented on the
operation of gangmaster were pursuing people who were breaking
existing laws. I am not absolutely sure what you would expect
a registration scheme backed up by statute to deliver for you.
What would you expect to be able to do with it that you cannot
do without it?
Lord Whitty: Effectively
squeeze out those who are relying totally on illegal practices
because once you have an accreditation scheme then respectable
farmers would only use people who are registered, respectable
supermarkets would seek to ensure that—of course all supermarkets
are respectable—and they would use those suppliers who themselves
were using only accredited labour suppliers. The effect over time
would be that those outside of that system would be squeezed out.
Q379 Chairman: But
that implies, does it not, really administratively a terribly
onerous process of monitoring the practices of those who have
been registered or monitoring before they register and a continuous
monitoring of how they operate? One of the things Government is
concerned about—I know from my own experience—is the
administrative burden of schemes which are very resource intensive.
That is going to take a lot of money, a lot of application, without
the certainty of being able to keep a clean sheet.
Lord Whitty: Clearly
it has some resource implication but it is not resource implication
in the same way as setting up a new taxation system where you
have to investigate everybody every year. We are talking about
a system which would be subject probably to spot checks by whoever
was running the system. If it was a voluntary system you would
have a relatively small staff checking that everybody was following
the procedures that they had signed up to, but you would not investigate
everybody on that list every year.
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