Select Committee on Environment, Food and Rural Affairs Fourteenth Report


1.  Defra's response to criticism that, by its own acknowledgement it "does not have a sufficiently comprehensive view of the situation", is extremely disappointing. Moreover no Government Department appeared willing to take any responsibility for addressing the difficulties with gangmasters. We recommend that the Government commission a detailed study into the use of casual labour in the agricultural and horticultural industries. This study should not be used as an excuse to delay further any concerted policy action but should be used to inform ongoing policy solutions. It should publish its findings by March 2004. (Paragraph 20)

2.  We are convinced that the dominant position of the supermarkets in relation to their suppliers is a significant contributory factor in creating an environment where illegal activity by gangmasters can take root. Intense price competition and the short time-scales between orders from the supermarkets and deliveries to them put great pressure on suppliers who have little opportunity or incentive to check the legality of the labour which helps them meet these orders. Supermarkets go to great lengths to ensure that the labels on their products are accurate, for example, whether they are organic or contain certain products. We believe they should pay equal attention to the conditions under which their produce is harvested and packed, and label it accordingly. (Paragraph 25)

3.  We ask the supermarkets to re-examine their policies in this area bearing in mind their own stated policies on corporate social responsibility. Supermarkets cannot wash their hands of this matter. We urge them to monitor their suppliers more closely, eliminate supply routes which rely on illegal gangmasters, and take action where illegal activity has been identified. (Paragraph 26)

4.  We recommend that the Department for Trade and Industry revisit the relationship between the supermarkets and their suppliers. The evidence we received during the course of this inquiry suggests that the code of practice recommended by the Competition Commission has failed. We welcome the OFT's review of the code. A more interventionist approach may now need to be considered. (Paragraph 27)

5.  More needs to be done to promote consumer awareness of the issues related to gang labour and identify those suppliers and supermarkets who subscribe to, and enforce, ethical employment practices. Such a development could have an effect on purchasing decisions in the same way that public demand is now growing for Fairtrade products. (Paragraph 29)

6.  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. (Paragraph 32)

7.  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. (Paragraph 33)

8.  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. (Paragraph 45)

9.  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. (Paragraph 47)

10.  We are not convinced that a statutory registration scheme offers a stand-alone solution to the problems of illegal gangmasters. Certainly, without concerted action to remedy the shortcomings in enforcement that we have highlighted in this Report, a statutory registration scheme, introduced as a single policy response, will solve nothing. It is difficult to imagine that those individuals engaged in the types of illegal activity about which we received evidence would be affected by a registration scheme unless it were rigorously enforced. A statutory registration scheme may prove to be necessary, but it will only be effective if it is introduced as part of a wide range of policy initiatives designed to confront the difficulties associated with the supply of temporary labour to the agriculture and horticulture industries. (Paragraph 58)

11.  We recommend that the scope of the pilot work that Defra is carrying out with a firm of gangmasters is extended. The enforcement issues cross many different Government Departments; a cross-departmental approach is therefore required. Specifically, we recommend that an official from the Immigration and Nationality Directorate is seconded to work with the Defra official to help develop a good practice blueprint linked to a system of independent verification of individuals' employment and immigration status. Officials from other Government Departments such as the Inland Revenue and the Department for Work and Pensions should also work closely with the project and use its findings to inform policy. (Paragraph 63)

12.  We believe there is a role for Regional Development Agencies and Government Offices in those parts of the country where gang labour is commonly used. We recommend that the pilot project being developed in the West Midlands is monitored and, if successful, should be developed in other parts of the country. We also believe that there is scope for private funding of such projects. The supermarkets told us that they took the problems associated with gang labour very seriously: such initiatives provide them with an opportunity to support projects which would help prevent these problems. (Paragraph 65)

13.  We applaud the work that the Thetford Citizens Advice Bureau has undertaken to support Portuguese workers who are facing exploitation by gangmasters. We recommend that in areas where gang labour is commonly used, local authorities, job centres and advice agencies form local forums to co-ordinate responses to ensure that workers, particularly those from abroad, know their rights. Defra should provide the small amount of funding such projects would require as part of its rural affairs remit. (Paragraph 68)

14.  We recognise that the Seasonal Agricultural Workers Scheme (SAWS) provides a useful source of temporary labour for the agriculture industry. Similarly, workers from EU countries who are able to work in the UK help to meet the shortfall between the demand and supply for casual labour in rural areas. This legal source of foreign labour is likely to increase with the accession of the new Member States to the European Union. Nevertheless there appears to be a lack of co-ordination between Government Departments in the management of migrant labour. Earlier in the Report, we recommended that Defra carry out a detailed study into the use of casual labour in the agricultural and horticultural industries. This work should assess the demand for foreign workers and be used to inform decisions about SAWS. (Paragraph 73)

15.  If the demand for casual labour in the agricultural and horticultural industries continues to be met by workers from abroad because local people are not attracted by the terms and conditions offered, there may be wider issues for the Government to consider. Defra has a rural affairs remit. In its assessment of the temporary labour market, it should consider the implications for rural services and how these can be best managed. Projects such as the proposed Gateway scheme in the West Midlands could make an important contribution to policy in this area. Defra needs to take a lead on these issues and ensure that it has sufficient information available to enable it to suggest appropriate policy responses, including a review of the current system of work permits. (Paragraph 74)

16.  This is a policy area which would benefit significantly from a cross-departmental approach. Unfortunately, we found no evidence to suggest such an approach has been effectively applied. The Government needs to deal with the issues we have identified if it is to realise its vision of a competitive farming and food industry based on sustainable practices. (Paragraph 77)

17.  We therefore recommend that the Government establish an inter-departmental working group which would report to a Defra Minister of State with overall responsibility for policy on gangmasters. The Minister and inter-departmental group should have a small number of clearly-defined and measurable targets. Defra should report to us annually on the actions it has taken and the working group's performance against its targets. We believe that the Government must demonstrate that it is taking seriously the problems in the agriculture and horticulture labour markets and has the political will to tackle them; the establishment of such an inter-departmental group would go some way to doing so. (Paragraph 78)

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