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House of Commons

Friday 27 February 2004

The House met at half-past Nine o'clock


The First Deputy Chairman of Ways and Means took the Chair as Deputy Speaker, pursuant to the Standing Order.

[Sylvia Heal in the Chair]

Orders of the Day

Gangmaster (Licensing) Bill

Order for Second Reading read.

9.33 am

Jim Sheridan (West Renfrewshire) (Lab): I beg to move, That the Bill be now read a Second time.

I am proud and honoured to present my Bill to the House. At the outset, I put on the record my appreciation of the great cross-party support that I have received for the Bill, which has been backed by MPs from every party and, indeed, every nation. In the past two months, I have also benefited from discussions with Ministers and officials from Government Departments with a particular interest in the Bill: the Department of Trade and Industry, the Department for Work and Pensions, the Department for Environment, Food and Rural Affairs and the Treasury.

I also express my sincere thanks for the fantastic support that I have received from outside the House, particularly from the Transport and General Workers Union but also from a broad and growing coalition that includes the National Farmers Union, the TUC, the Ethical Trading Initiative, the Fresh Produce Consortium, major retailers—including Tesco, Sainsbury's, Safeway, the Co-op, Marks and Spencer and Asda—Unison, the Recruitment and Employment Confederation, which represents employment agencies, the Joint Council for the Welfare of Immigrants, the Dover 58 group, the National Association of Citizens Advice Bureaux, the Family Welfare Association, the Catholic Bishops Conference, and last, but certainly not least, the legitimate gangmasters themselves. That coalition for progress spans workers, employers, industry, unions and communities. Its breadth and depth are a powerful reflection of the seriousness of the issue and of the Bill's merits.

I should also like to place on record my appreciation for the help and advice that I have received from Ministers in various Government Departments, including DEFRA, the DTI, the DWP and the Home Office. In particular, I thank the Home Secretary for his continuing support, along with my right hon. Friend the Minister for Rural Affairs and Local Environmental Quality, who has also been very constructive and helpful in introducing this legislation.

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I should perhaps explain the Bill's context. The recent tragic deaths of 20 cockle pickers in Morecambe bay have brought gangmasters into the headlines. It is the duty of us all to ensure that those who lost their lives have a fitting memorial, and first and foremost, that must mean legislation to tackle the worst excesses of illegal gangmasters. It is time for such legislation to stop the exploitation.

As the House knows, gangmasters are basically labour providers who operate throughout the whole UK economy. The Bill is not intended to introduce regulations in each and every industry; instead, it seeks to regulate gangmasters in the sectors in which they are most common, and where the abuses are the most extreme: agriculture, the shellfish industry, and food processing and packaging. Gangmasters have been supplying and supervising workers in those sectors for decades. It is estimated that at least 3,000 gangmasters operate in them, employing at least 60,000 workers. However, the absence of accurate data could mean that the real figure is as many as 100,000. It is also estimated that the gang labour work force comprises approximately 70 per cent. indigenous workers and 30 per cent. migrant workers.

Many gangmasters operate within the law and are extremely reputable, but far too many are rogue employers. In 1997, an interdepartmental working party estimated that some 20 per cent. of gangmasters were committing a wide range of offences. That is a minimum of 600 gangmasters. The harrowing events in Morecambe bay have shown the human cost of gangmaster abuses: Chinese cockle pickers paid 11p an hour and left to die. We now know that 20 people drowned in what was the worst workplace disaster in this country since Piper Alpha in 1988.

There have been other tragic incidents involving workers who were organised by illegal gangmasters. Three workers were killed in July 2003 when the minibus in which they were travelling to work was hit by a train on a level crossing. Two workers died on a fruit farm, also in July 2003, after being caught in a rope-reeling machine. The rogue gangmasters undercut legitimate gangmasters and exploit workers, both migrant and indigenous.

Evidence to the Environment, Food and Rural Affairs Committee in September 2003 showed that exploitation is commonplace, and I shall give the House some examples. They include the failure to supply workers with written statements of employment practices; infringements of Agricultural Wages Board agreements and the national minimum wage; and denying workers rights to paid holidays and statutory sick pay. Notice rights, rights to salaries slips and protections from illegal deductions from wages are also denied. There are also the failure to abide by termination of employment obligations, breaches of working time regulations and poor quality housing and accommodation, often in houses in multiple occupation, portakabins or caravans. There is overcharging for housing and accommodation, failure to provide tenancy agreements or rent books, use of under-age workers and abuse of tenancy rights with immediate eviction of workers on termination of their employment. There is withholding of workers' personal

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documents and, perhaps worst of all, telling legal migrant workers that they are really working illegally to deter them from complaining or seeking advice.

Andrew George (St. Ives) (LD): I congratulate the hon. Gentleman on making such a strong case, which I fully support. He referred to the report of the Environment, Food and Rural Affairs Committee and pointed out that many supermarkets, among others, strongly supported his proposed Bill. However, does he accept that the Committee pointed out in its conclusions and recommendations that supermarkets could not wash their hands of this matter? Many farmers complain that farm-gate prices are being squeezed by the monopolistic activities of supermarkets to such an extent that farmers and growers are seeking other sources of—

Madam Deputy Speaker (Sylvia Heal): Order. That is long enough for an intervention.

Jim Sheridan: The hon. Gentleman makes the valid point that some major retailers have been squeezing farmers, but I have to say that, during the consultation on my Bill, the major retailers have been first class in offering help and assistance to me and to others in the coalition parties. They have played a fundamental role in the coalition. Although there have been cases of some retailers going for the lowest common denominator in prices, that is certainly not the case among the major retailers today. I repeat that they have helped me enormously in bringing forward this legislation.

I should like to mention some relevant case studies. In the midlands, a gang worker was charged £600 by a gangmaster for documentation that was never produced. In Norfolk, gang workers have reported receiving no statutory sick pay during periods of ill health, while in Kent, gang workers have complained about being denied holiday pay. In Norfolk, gang workers were paid just £3 to cut 1,000 daffodils. In Bristol, accommodation arranged by a gangmaster involved 27 people living in one house, while in Suffolk, gang workers were housed in a holiday camp that charged the gangmaster £70 per week for each unit of accommodation, but he placed five workers in each unit, charging each employee £35 per week. In Cambridgeshire, gang workers were forced to live in partitioned containers that had no water supply. Rent and transport were deducted from the workers' wages before they were paid. One worker was paid £83 and the rent deducted was £80.

There is plenty of anecdotal evidence of what is going on, and there is similar evidence in Scotland of people being totally exploited. Unfortunately, many of the people who tell us what is going on are terrified to come forward, and we have to respect their anonymity.

I have also received correspondence from the Labour group leader at Arun district council, which has a substantial number of gangmaster-supplied migrant workers engaged mainly in horticultural work. There are persistent reports of appalling wages. We have heard of Portuguese workers being paid just £2 a day, exploitative and unsanitary accommodation and the possible involvement of Russian mafia-style operators.

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There is also a major problem with tax evasion. Between 1989 and 1994—the last years for which accurate national figures are available—the agricultural compliance unit recovered £537 million in unpaid taxes from gangmasters. In June 2002, a gangmaster in Boston, Lincolnshire was jailed for three years for a £300,000 VAT fraud. A customs spokesman said:

During 2002–03, 46 Inland Revenue investigations in the Thames valley area alone resulted in the recovery from gangmasters of £4.3 million in unpaid tax and national insurance contributions.

Other serious criminal activities are associated with these gangmasters. According to the National Criminal Intelligence Service, the worst gangmasters are known to be involved in both human trafficking and drug smuggling. In its 2003 United Kingdom threat assessment, NCIS said:

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