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Mrs. Irene Adams (Paisley, North) (Lab): I congratulate my hon. Friend on bringing this matter to the House's attention before the rest of us realised just how bad the situation was. Will he comment on the fact that the security industry was in a similar position before legislation was introduced? Security companies were up to the same sort of thing—employing illegal workers and exploiting the most vulnerable people in society, who were often too terrified to report what was happening.

Jim Sheridan: My hon. Friend makes a valid point. She is right about the practices going on in the security industry before legislation was introduced. I congratulate her on her sterling and widely recognised work in dealing with some of the most unscrupulous drug dealers in her constituency, which neighbours my own.

Rogue gangmasters are exploiting workers, undercutting legitimate labour providers, defrauding the taxpayer and engaging in a range of criminal activities. They are bad for workers, bad for business, bad for taxpayers and, more importantly, bad for our society, yet there is no law to regulate them. Instead, we have depended on voluntary codes to curb their excesses. I should like to explain why I believe the voluntary approach has failed.

Two voluntary codes affecting the National Farmers Union and the Fresh Produce Consortium, though well meaning, have failed to tackle the problems associated with rogue gangmasters. They have not reduced exploitation of workers, nor have they made illegal operators operate within the law. Now the Government are putting their faith in a third voluntary code—a voluntary code of practice for gangmasters. Again, it is well intentioned, but it will not deal with the problem.

Anne Picking (East Lothian) (Lab): I, too, congratulate my hon. Friend on introducing this

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important Bill. The point that he was just making reaches the nub of the matter: the Bill needs teeth. It is not about regulation for regulation's sake—it is serious stuff. We must really mean what we say about protecting those extremely vulnerable people. We must license and regulate gangmasters.

Jim Sheridan: My hon. Friend makes a valid point. The legislation must be robust. Legislation for legislation's sake is worthless. I congratulate her, as she has a proud history of working against some of the unscrupulous gangmaster employers, who are reported to be moving into the health service.

The voluntary code was well intentioned but it will not deal with the problem. It is not underpinned by credible enforcement or sanctions. Furthermore, voluntary codes do not allow reputable labour users to check whether labour providers are legitimate. As the EFRA Committee said,

In their response to the report, the Government agreed. I welcome the Government's acknowledgment that voluntarism has failed. I share that view, as does the entire industry. That is why it supports my Bill, which would set up a statutory licence and register. Weak voluntary codes and inadequate enforcement will mean only more tragedies like Morecambe bay; it is time to legislate and to regulate.

The Bill is a simple one, presented by a simple person. As I have already said, it targets gangmasters in the economic sectors where they and their abuses are most prevalent.

Mr. Iain Luke (Dundee, East) (Lab): My hon. Friend's description of himself is too severe. He is to be congratulated by all Members on introducing his Bill. He is following an honourable tradition. In the last session, a private Member's Bill brought in legislation to regulate fireworks and he is promoting an important measure that will regulate a large sector of the black economy that has exploited foreign and British workers. I hope that, in conjunction with the Government, the Bill will be successful to ensure that those practices do not continue.

Jim Sheridan: I thank my hon. Friend for those kind words. He mentioned the Fireworks Act 2003. When the House supports and passes such legislation, it shows, to any who have doubts about us, that there are good politicians and good politics.

The abuses are at their worst and most widespread in agriculture, horticulture, shell fishing and food processing and packaging. In essence, the Bill would establish an effective system for registering and licensing gangmasters, specifically those who carry out work for and supply labour to those industries in the UK. We want to make it illegal for gangmasters to operate without a licence and for people to use the services of an unlicensed gangmaster.

Under the conditions of the licence, all gangmasters will have to carry, and produce for users of their services, photo identification containing their name, company details and licence number. They will be required to keep proper records—who they employ,

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who they supply to, who they work for, what they pay and what they deduct from wages. They would also be required to return all personal documents to gang workers, to co-operate with the proper enforcement agencies and to abide by the minimum standards that operate throughout the rest of the country.

At present, the Government have no accurate data to tell them how many gangmasters exist, where they operate, who they employ or how they treat their workers. That is confirmed by the EFRA Committee whose recent report stated:

Without a licence or a register, gangmasters are free to operate beyond the reach of the law, but with a licence and a register, the Government can trace them, track them and make sure that they are abiding by their employment law obligations and fulfilling their health and safety duties.

The taxpayer is also protected through that same paper trail. At present, the Inland Revenue is largely reliant upon whistleblowing and the occasional targeted raid through Operation Gangmaster to uncover tax abuse. It is possible that up to £100 million a year of unpaid tax from rogue operators is being lost to the Treasury; a licence and a register would be the trail that led to the recovery of such money.

A licence and a register would protect those who rely on the services of gangmasters. The measure would require all gangmasters to show proof that they are licensed and legitimate; furthermore, all legitimate gangmasters will have their names placed on a register that is open to public inspection. That is why the Bill has the support of the NFU, which I greatly appreciate, the Fresh Produce Consortium and the major supermarkets.

No one is claiming that a licence and a register will be a panacea for the ills of rogue gangmasters. The requirement to have driving licences does not stop some people speeding, but it certainly concentrates their minds to know that, if they are caught, they will face the full force of the law. The Bill may not be the last word, but it is an important first step.

Currently, no laws mean no chance: no chance to protect vulnerable workers, and no chance to track down the rogue operators, bring them to justice and drive them out of business. Without a licence and a register, I fear that Ministers will, all too regularly, have to stand here sending messages of condolence to the families of workers like those who perished on the sands of Morecambe bay—the victims of exploitation and of voluntarism.

The Government already support licensing and registration in other sectors, both in principle and in practice. When the Labour Government found similar levels of criminal activity in the private security industry, to which my hon. Friend the Member for Paisley, North (Mrs. Adams) referred, they did something about it: they introduced licensing and registration through the Private Security Industry Act 2001 and they made sure that the system was backed up by effective sanctions and enforcement.

When the Government were concerned about protecting the rights of workers and ensuring the safety of the public from the actions of rogue employment

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agencies in nursing, they introduced licensing and registration through the nurses agency regulations. That system, too, was backed by effective sanctions and enforcement.

Following the 1999 White Paper, the Government introduced licensing in the UK's private security industry in 2001, arguing that a licensing scheme would help to raise standards for employees and reduce offending. The absence of licensing meant that

The voluntary approach to regulation failed because reputable companies

In 2001, the Government produced a consultation document on the licensing and registration of the employment agencies supplying nurses and workers to care homes. Following the consultation exercise, licensing, registration and regulation were introduced by including those agencies in the provisions of the Care Standards Act 2000 and the Employment Agencies Act 1973. The Government argued that licensing and regulation protect vulnerable nurses and secure the proper conduct of nursing agencies. The absence of licensing and registration for agencies had engendered inconsistency, unfairness and many loopholes, with few deterrents for unscrupulous operators. When illegality and exploitation are uncovered, this Labour Government have recognised the benefits of licensing and registration. They have even introduced a licensing system, the horse passport scheme, to identify and track horses in the UK—as a betting man, I think that some of the horses are still carrying their luggage. If it is good enough for horses, it must be good enough for gangmasters.

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