Select Committee on Environment, Food and Rural Affairs Fourteenth Report


Industry response

30. Representatives from across the food industry stressed to us that they took the issue of illegal activity by gangmasters extremely seriously. Voluntary Codes of Practice, covering both field and packhouse workers, have been developed in collaboration with the Government. The supermarkets have adopted the packhouse code of practice as a supplier requirement.

31. From the evidence we received there is a clear consensus that, while the codes of practice within the industry have helped to an extent, they have not eliminated illegal activity by gangmasters. In his evidence on behalf of the Fresh Produce Consortium, the Chief Executive, Doug Henderson, described the difficulties faced by those trying to enforce a voluntary code of practice:

Thus a supplier can be signed up to a code of practice with which he or she is trying to comply but may be unable to verify that the gangmaster being used is, in fact, meeting the requirements set out in the code. These problems are exacerbated in relation to illegal working. Mr Henderson went on to describe how staff in packhouses are not able to distinguish between forged and genuine documents.[26] This point was also made to us in private meetings with gangmasters who said that they had difficulty verifying the status of people from abroad. They also told us that the Immigration Service was not equipped to respond to queries which would help them verify documents presented to them. The NFU reiterated the view that voluntary codes were not working. Representatives pointed out that the NFU could not discipline those members who did not comply with the codes, and they had no powers to enforce them.[27]

32. We welcome the work that the industry has carried out to develop codes of practice on the use of temporary labour. We also recognise the problems faced by those in the industry who are trying to monitor compliance with the codes. While they may have served some purpose in raising awareness of the problems within the industry, we conclude that it is unrealistic to expect the voluntary codes to prevent widespread illegal activity by gangmasters. The industry must be a major part of the solution; it cannot, however, be expected to stamp out illegal activity by gangmasters on its own.

33. We wrote to the major supermarkets to ask for their response to the problems associated with the use of temporary labour by food and horticultural suppliers, and details of any checks they carried out to ensure that the temporary labour used by its suppliers is provided by those operating within the law. Tesco, Asda and Marks and Spencer described, or provided, the documentation they issue to suppliers and, where applicable, the checks they carried out to ensure compliance.[28] We were concerned to note that of the three supermarkets which responded to our request for details of their policy on gangmaster labour, only one was committed to taking action against suppliers who did not comply with its required employment practices.

Government response

34. In 1997, the Government established an Interdepartmental Working Party on Gangmasters. The Working Party was asked to consider what action could be taken to control the activities of gangmasters and to address those concerns. As part of its work, MAFF officials made visits to a number of producers. They also held bilateral meetings with officials from other Government departments to establish how wider Government policy initiatives might impact on the operation of gangmasters.

35. The Working Party reported in June 1998.[29] It noted that Government enforcement agencies "had different objectives: one agency sought to prevent payments being made where people were not entitled to them, three sought to collect money due to the Exchequer, and the others were concerned with wages, health and safety and illegal immigration".[30] The Working Party recommended that co-ordination between all departments should be piloted in the summer of 1998. The Benefit Agency agreed to consider initiating a collaborative enforcement initiative to be known as Operation Gangmaster.

The legal framework for gangmasters

Activity Main legislation Enforcement agency
Illegal workingAsylum and Immigration Act 1996 Immigration and Nationality Division (Home Office)
National Minimum WageNational Minimum Wage Act 1998 Inland Revenue on behalf of DTI
Agricultural Minimum WageAgricultural Wages Act 1948 Defra
Deductions from payEmployment Rights Act 1996 By an individual worker bringing a complaint to an Employment Tribunal
Employment Agencies minimum standardsEmployment Agencies Act 1973 DTI's Employment Agency Standards Inspectorate.
Notice of termination of employmentEmployment Rights Act 1996 By an individual worker bringing a complaint to an Employment Tribunal
Written statement of employment particulars Employment Rights Act 1996By an individual worker bringing a complaint to an Employment Tribunal
Working time and holidaysWorking Time Regulations and Agricultural Wages Order By an individual worker bringing a complaint to an Employment Tribunal
Income Tax and National InsuranceTaxes Acts Inland Revenue
Benefit fraudSocial Security and Administration Act 1992 and Theft Act 1968 Department for Work and Pensions
VATVAT Act 1994Customs and Excise
Health and SafetyHealth and Safety at Work etc Act 1974 Inspectorate of the Health and Safety Executive

36. The need for an inter-departmental response to the problem of illegal activities by gangmasters is clear from the complexity of the relevant legislation and the range of government agencies involved in enforcing it. Annex 3 of the Working Party report describes the legal framework. The table above summarises the current position taking into account legislative and departmental changes since the Working Party reported.

37. The Working Party felt that publicity was an important element in the enforcement process. It therefore recommended that successful prosecutions should be publicised to discourage perpetrators.[31] It also felt that employers and employees should have a better understanding of their obligations and rights. The Government should contribute to this by "providing explanatory leaflets for growers, workers and gangmasters setting out the basic legal provisions under which they operate."[32]

Operation Gangmaster

38. Operation Gangmaster was launched as a pilot initiative in Lincolnshire and parts of East Anglia in 1998. The Government departments involved in the operation include the Home Office, Department for Work and Pensions (DWP), Customs and Excise, Inland Revenue and Defra. The Government is currently rolling out Operation Gangmaster to other areas of the UK where gangmasters are active.[33]

39. Much of the original impetus behind Operation Gangmaster was provided by MAFF. With the launch of Lord Grabiner's report on the Informal Economy in March 2000, and the subsequent implementation of various initiatives to tackle the hidden economy, the control of Operation Gangmaster was moved to the Grabiner Working Group, chaired by DWP and on which Defra sits. DWP provides the lead and secretariat for Operation Gangmaster.

40. The Government argues that this arrangement provides Operation Gangmaster with greater enforcement strength and better legislative avenues with other major departmental players for the exchange of intelligence about individual gangmasters.[34] In response to a Parliamentary Question on Operation Gangmaster in July 2000, the Minister of State at MAFF described it as "a good example of joint action by several Government agencies".[35]

41. Doubts about the adequacy of Operation Gangmaster as a response to the problems associated with illegal activities by gangmasters were identified at an early stage. The Report of the 1998 Working Party noted that in taking the lead on Operation Gangmaster, what was then the Benefits Agency was "not able to commit additional resources to this area of work".[36] An economic evaluation of Operation Gangmaster in April 1999 similarly commented that "no additional resource of any consequence has been put behind Operation Gangmaster". This evaluation also noted that Operation Gangmaster was difficult to evaluate because it was "a pilot operation, without the benefit of careful preparatory work enabling clearly-defined objectives to be set or the conduct of baseline research (internally and externally) against which change could be measured".[37]

42. In its Memorandum to the Committee, the Government described two operations carried out under Operation Gangmaster: Operation Shark and Operation Twin Stem. Apart from these operations, we found it difficult to obtain any idea of what work had been carried out under Operation Gangmaster since it was established in 1998. The Government told us that "it is not always possible to quantify precisely the enforcement activity taken against gangmasters, as Government Departments use different means to record enforcement activity and results".[38] Much of the information presented to us lacked any detail whatsoever. For example, in relation to the Immigration Service and National Asylum Support Service, we were told that "many raids have been undertaken" and "numerous illegal workers and failed asylum seekers have been detected" [emphasis added].[39]

43. Officials confirmed that there are no targets for Operation Gangmaster as a whole.[40] Furthermore, there is no single Minister to whom the whole operation reports.[41] The TGWU told us that when they asked what Operation Gangmaster had done since 1998 they were given two paragraphs of information.[42] Moreover, Operation Gangmaster appears to have carried out no significant analysis of the scale of the problem it has been set up to address, or the adequacy of its response. Lord Whitty told us that a report on Operation Gangmaster would be produced at the end of the financial year 2003/04.[43] When this is published it will be the first report describing activities undertaken as part of Operation Gangmaster for six years.

44. The DWP was able to tell us that it had deployed 51 staff on gangmaster activity at a cost of about £1 million. However, we were told that "Customs and Excise has no staff allocated specifically to combating gangmasters and no specific budget allocation".[44] The official from the Inland Revenue said that his Department had not assessed the costs to it of working on Operation Gangmaster.[45] Defra told us that "Agricultural Wages Inspectors devote some 2-3 staff years to enforcement work under the Agricultural Wages Act 1948 at a cost of roughly £125,000 … but only a small proportion of this activity is directly associated with gangmasters".[46] The Home Office could "not provide a breakdown of the amount of staff hours or costs involved in Operation Gangmaster activities".[47]

45. We are appalled by the lack of priority given to, and political accountability for, what is supposed to be the Government's co-ordinated response to illegal activity by gangmasters. Operation Gangmaster appears to be little more than an umbrella term for a few local enforcement operations in which the various agencies have exchanged information. Five years after it was established Operation Gangmaster has had no significant resources allocated to it, has no targets and no Minister to take overall responsibility for its activities. Nobody could give us a comprehensive picture of what Operation Gangmaster does, how much it has spent and what it has achieved. Far from being a "good example of joint action by several Government agencies" we conclude that Operation Gangmaster remains a woefully inadequate response to the complex enforcement issues arising from the illegal activities of gangmasters.

46. We accept that the lack of centrally available information about the activities of Operation Gangmaster does not necessarily mean that nothing has been happening on the ground. We note the comments of the official from the Immigration and Nationality Services Division who said:

    "We have moved on in the last few years from government departments that never even spoke to each other—refused to speak to one another—to a group of diverse organisations … my people meet with people from their departments on a regular and continuous basis. We talk to one another. My department has gained access to industries that it would not have been able to do to take out areas where there has been exploitation and where there is illegal working, which has been on the back of the DWP. We have worked together with the agricultural investigation teams, and I do not think we should just throw out the baby with the bath water."[48]

47. We accept that Operation Gangmaster has facilitated some joint working between officials of different agencies. However, it appears to us that Operation Gangmaster serves as a convenient reference point for Ministers to give the impression that the Government is doing far more about dealing with the problems associated with gangmasters than is the case. We recommend that a Defra Minister take overall responsibility for Operation Gangmaster. The Operation should be given clear aims and objectives and it should report regularly on these to the responsible Minister. Defra's annual report should include a section on the Operation's work and achievements. Data should be collected from the different agencies involved enabling a comprehensive record of activities maintained and lessons learned. Operation Gangmaster should have a single budget derived from the budgets of each of the relevant Government agencies and Departments.

25   Q 5 Back

26   Ibid Back

27   Q 86; Q 107 Back

28   Ev 105-109 Back

29   MAFF, Report of the Interdepartmental Working Party on Agricultural Gangmasters, June 1998 Back

30   Ibid, para. 27 Back

31   Ibid, para. 31 Back

32   Ibid,para. 32 Back

33   MAFF news release, Elliot Morley announces extension of Operation Gangmaster, 20 March 2000 Back

34   Note on Operation Gangmaster, DWP, November 2002, para. 3 Back

35   HC Deb 27 July 2000 c 1222 Back

36   Report of the Interdepartmental Working Party on Agricultural Gangmasters, June 1998, para.29 Back

37   MAFF, An economic evaluation of Operation Gangmaster, April 1999 Back

38   Ev 72, para. 52 Back

39   Ev 73, para. 55 Back

40   Q 225 Back

41   Q 260 Back

42   Q 185 Back

43   Q 348 Back

44   Ev 48  Back

45   Q 241 Back

46   Ev 48  Back

47   Ibid  Back

48   Q 251 Back

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