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The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): My hon. Friend is making interesting points on a variety of issues on which licensing has been part of the solution. Does he agree that licensing is not a panacea—indeed, he said that the Bill is not a panacea—but a necessary part of an effective system? Given that our enforcement target is a group of serious law breakers, the key is making sure that the system of licensing is effective and cost-effective. Indeed, our discussions about the Bill have concerned making it simple and effective. I hope to welcome and support the Bill at a later stage. Does he agree that that is the basis on which we are seeking to obtain effective legislation?

Jim Sheridan: I thank my right hon. Friend for the help, support and advice that he has given me during these discussions. He is right that licensing is not a panacea. No matter what legislation we introduce, unscrupulous operators will always seek to circumvent and undermine it.

Ian Stewart (Eccles) (Lab): The Minister's statement and the Bill both recognise that licensing and registration will not solve the problem in themselves. We must recognise that registration and licensing can be

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effective only if there is informal policing, which means unions such as the Transport and General Workers Union playing full and active roles.

Jim Sheridan: My hon. Friend's point is valid. If the legislation is to be effective, those at the sharp end of the industry must be involved in the process to ensure that it works. Equally, we must make the proper resources available to allow them to do that.

Mr. Michael Connarty (Falkirk, East) (Lab): My hon. Friend the Member for Eccles (Ian Stewart), who is a fellow TGWU member, recognises the problem that many areas are practically no-go zones for trade unions, which do not get the effective support of either the civil authorities or others in contacting people who are not in a trade union and do not know their rights. In beginning the licensing process, the Government must examine how trade unions can be given legitimate access to provide people with the information that they require to learn their rights.

Jim Sheridan: My hon. Friend has a proud history of working alongside the trade unions. The Government have introduced employment legislation that allows people to join a trade union, if they so wish. I hope that those engaged in the twilight world of the gangmasters will see fit to join a proper, independent trade union, obtain its advice and allow it to act on their behalf—sadly, that is missing in the industry at the moment. In principle and in practice, the Labour Government champion licensing and registration, and I call on them to do so once again by supporting this Bill.

If licensing and registration are to work, they must be backed by effective enforcement. Currently, when it comes to gangmasters, enforcement is non-existent at best and ineffective at worst. It relies on whistleblowing by workers who are terrified that they might lose their jobs and homes if their gangmaster finds out. It falls on—or to be more accurate between—the desks of a long list of Departments and agencies such as the Department for Work and Pensions, the Department for Environment, Food and Rural Affairs, the Home Office, the Department of Trade and Industry, the Treasury, the Inland Revenue, the Agricultural Wages Board and Customs and Excise.

Enforcement suffers from a lack of joined-up thinking and proper co-ordination; it is ad hoc and lacks proper targeting. The EFRA Committee did not mince its words when it considered the impact of the Government's flagship enforcement mechanism for gangmasters, the so-called Operation Gangmaster, which it considered a failure. It said that it was

If the Government are serious about tackling rogue gangmasters, ensuring compliance with minimum standards, protecting workers and safeguarding the taxpayer, they must get serious about enforcement.

The Government must also consider the costs of a lack of effective enforcement: what will be the financial cost, in addition to the human cost that is paramount to all of us, of the current police and Health and Safety Executive investigation into events in Morecambe bay?

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Judging by other inquiries, it could run into the millions. The Ladbroke Grove rail inquiry cost £7 million, the Marchioness inquiry cost £5.1 million and the Southall rail inquiry cost £2.25 million.

The Bill is not prescriptive on enforcement, which it leaves to the discretion of the Secretary of State. That could mean setting up a new agency as the Government did with the Private Security Industry Act 2001, which set up the Security Industry Authority, and the nurses agency regulations in the Care Standards Act 2000, which set up the National Care Standards Commission. Alternatively, it could mean using and co-ordinating existing agencies. Whichever route the Government choose, enforcement must be underpinned by certain principles. It must have a proactive element and cannot simply rely on whistleblowing, especially in an area in which workers are too scared to blow the whistle. Any enforcement scheme must be transparent, accountable and proportionate. The regulator and the regulated must have no conflict of interest, and the Government must properly resource enforcement.

I shall summarise the key points in the debate. Rogue gangmasters in the agricultural, shellfish, food processing and packaging industries are exploiting workers, undercutting good labour providers and engaging in serious criminal activity. The voluntary system has not worked, is not working and will not work—the EFRA Committee has said as much, and hon. Members and the entire industry also recognise that fact. The proof can be seen in the faces of the families and loved ones of the 20 people who lost their lives in Morecambe bay. It is time to introduce a statutory licence and register for all gangmasters. It is time to enforce the law proactively. It is time to track down gangmasters and hold them to account. And it is time for legislation, not exploitation.

10.9 am

Mr. Mark Simmonds (Boston and Skegness) (Con): I am delighted to participate in this debate and congratulate the hon. Member for West Renfrewshire (Jim Sheridan) on being selected in the private Member's Bill ballot and on choosing this important Bill that must be debated in great detail. I also congratulate him on holding together a disparate coalition of hon. Members of all parties, and the TGWU, the Fresh Produce Consortium and the NFU, which is an achievement in itself. I am especially delighted that the hon. Gentleman chose this subject because, as some hon. Members will know, I tabled a ten-minute Bill last September on the same issue. Had I been fortunate in the ballot, I would have chosen to bring in a Bill of exactly the same nature as the one before us.

The Bill poses something of a philosophical paradox for me. I certainly believe that we should not over-regulate, over-burden or impose red tape where it is not necessary. However, the Bill is not about regulation, burdening business unnecessarily or bureaucracy. It is about creating fair competition, removing exploitation and providing a fundamental building block to limit criminal activity, including extensive tax and VAT fraud.

This is an important piece of legislation that appears to be supported by everyone except—until very recently—the Government. I hope that when the

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Minister winds up he will say that he supports not only the objectives of the Bill—which were the carefully chosen words of the Minister today and the Prime Minister before—but also the specifics and getting it through Parliament, to the extent that if a Member decides at some future stage to talk out the Bill, the Government will find room for it in their legislative programme, to ensure that it becomes law.

Alun Michael: I am happy to respond to the hon. Gentleman's comments, as I did to my hon. Friend the Member for West Renfrewshire (Jim Sheridan) during his introductory remarks. There are issues to be addressed in terms of the specific content of the Bill to ensure that it does what the hon. Gentleman said—keeps bureaucracy to a minimum, operates with maximum effectiveness and creates fair competition, as well as addresses illegal activities. It is in that context that my hon. Friend and I have had discussions in the past few days and I hope later to indicate my support, and the grounds for that support, along the lines of our discussions.

Mr. Simmonds: I am grateful for that intervention, which is constructive. I hope that we will be able to consider certain issues in greater detail in Committee, and I hope that the Minister and his advisers will also give them further consideration.

I wish to add some comments on my personal experiences of, and information I have gained on, this subject in the past few years since I have been an MP. It is important that the House understands that being a gangmaster or labour provider is a legitimate and necessary business that provides the work force for the agricultural and horticultural sectors. Most gangmasters, in my constituency and across the UK, operate inside the law, but a vast number do not.

I shall give a specific Lincolnshire perspective on the issue. The Lincolnshire economy, historically and to this day, is driven by the agricultural and horticultural sectors. Some of the issues that were raised by the hon. Member for West Renfrewshire are exacerbated and exaggerated in Lincolnshire. In the 16-mile stretch between Spalding and Boston, it is estimated that 20,000 workers a year are employed by gangmasters. An additional, and different, 20,000 workers are employed between Spalding and Ely. Boston has a population of between 25,000 and 30,000, and it is estimated that it has an additional 3,500 Portuguese workers, solely employed in the agricultural sector. Including the Portuguese workers, it is estimated that a total of 8,000 foreign nationals live in Boston. That causes tremendous social cohesion problems, but that is not the issue that I wish to address today.

Gangmasters have provided casual labour in Lincolnshire for hundreds of years. Traditionally, they did so to use the local work force to bring in the harvest. That has now changed, as supermarkets demand fresh produce from farms and packhouses in Lincolnshire 24 hours a day and 364 days of the year. It is no longer seasonal, casual labour, but a permanent fixture on the employment calendar. The pressure from the supermarkets is intense. Many of the businesses involved have open-book accounting so that the supermarkets can see the margins that they are charging, which allows the supermarkets to reduce

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prices. There is continual pressure on the packhouse owners, the producers and the farmers to reduce their cost base. However, all the producers and farmers to whom I have spoken want to legitimise the work force, because they believe that damage is being done to the totality of the food chain. We should applaud that aim.

The situation has deteriorated dramatically in Lincolnshire in the past three years. I have received some confidential statistics that show that three years ago the percentage of foreign nationals working on farms and in packhouses in Lincolnshire was 3 per cent. Today, that figure is 97 per cent.

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