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Mr. Henry Bellingham (North-West Norfolk) (Con): My hon. Friend is absolutely right. A number of labour operations in our part of the world provide labour seasonally. Obviously, when they are not providing labour for the agricultural sector, they often seek other work, such as cleaning or construction.

Mr. Simmonds: I am grateful to my hon. Friend for that intervention, and he makes a good point, which the Minister and his advisers need to consider very carefully.

Alun Michael: The hon. Gentleman is absolutely right to suggest that we need to clear up such issues, as I have indicated, and they can be dealt with in Committee. I have discussed that issue with my hon. Friend the Member for West Renfrewshire (Jim Sheridan) and our lawyers are looking at it with care. I am confident that we can find a way to ensure not only that there is no duplication—with more than one piece of legislation bearing down, thus creating the bureaucracy that the hon. Gentleman fears—but that there are no loopholes that would allow gangmasters to evade the Bill. That is a detailed matter, but he is right to raise it, as it is important in ensuring that the Bill is effective.

Mr. Simmonds: Again, I am grateful to the Minister for that helpful intervention. One of the issues that need to be considered is whether the Bill will capture employment agencies. When gangmasters operate inside the existing legislative structure, paying their tax and paying their workers properly, they tend to try to legitimise their businesses by turning them into employment agencies, rather than carrying on as what we would all understand as traditional gangmasters. We need to look at how to capture all that activity.

We also need to be alive to ongoing scams. For example, many packhouse owners and farmers insist that gangmasters who are providing labour have proof of indemnity insurance. However, a gangmaster often receives the indemnity insurance, which he agrees to pay through 12 monthly direct debits, he pays the first month's instalment and receives a certificate that he can show to his employers, and then cancels the direct debit. That is just one of many scams. There are many VAT scams that do not simply involve taking the VAT from

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the employer and not passing it on. I shall not explain that in detail because such scams are extremely complex and I do not want to give hon. Members or people outside the House ideas.

Another key issue in my constituency—which is also a problem in Norfolk—is that large numbers of legitimate foreign workers, and foreign workers who are not supposed to be here, are controlled by gangmasters outside the United Kingdom. How do we control those gangmasters? We do not want simply to move the whole business offshore. Could the Minister have words with his counterparts in Europe to ensure that the system encapsulates everyone? I am deeply concerned about some eastern Europeans in my constituency who, although they will be welcome when they join us as part of the European Union, are not playing by the rules at the moment or following current regulations and legislative structures.

Rob Marris (Wolverhampton, South-West) (Lab): On the hon. Gentleman's point about foreign gangmasters, does he agree that given that almost all the principals will be in the United Kingdom, those operations will be caught by clause 4(1), which makes it an offence for a principal to engage the services of a gangmaster who is not licensed? By bearing down on the domestic principals in that way, we will therefore bear down even on the foreign gangmasters.

Mr. Simmonds: I understand the hon. Gentleman's point, which is fair. However, let me give him a particular example. A farmer may decide that he wants to employ Portuguese workers directly from Portugal, so he flies over to Portugal and meets a Portuguese gangmaster in Lisbon, who then agrees to bring over 20 workers to work on his farm. How would that be caught under the Bill? My understanding is it would not be, because such workers are quite legitimately allowed here, since their country is in the European Union. That is the sort of detail that needs to be looked into. It might not be possible to legislate to stop that happening, but I would be interested to go into that in Committee.

I have several other concerns. I understand the logic of including in the Bill the provision that the ultimate employer—the farmer, the producer, the packhouse owner—could also be fined and imprisoned if they were employing non-licensed gang labour. However, I can clearly envisage circumstances in which an ultimate employer could inadvertently employ a rogue or licensed gangmaster who was subcontracting illegitimate labour down the chain using fraudulent documents. That happens at the moment. It cannot be right to make the farmer or packhouse owner liable for that fraudulent activity when he has not been involved in it. It is when it can be proved that an ultimate employer deliberately employs rogue and unlicensed gangmasters that he should be penalised.

Mr. Bellingham: During the summer, I visited various agriculture operations in my constituency, and saw one where an end user was employing labourers from one gang who had been subcontracted from another. A third subcontracting operation was also involved. At frenetic times of year, when it is desperately important to get the

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harvest in quickly or, for example, to pick strawberries before they deteriorate, what my hon. Friend describes could well happen.

Mr. Simmonds: My hon. Friend makes a good point. We need carefully to consider in Committee how subcontractors are caught by the provisions. Not only the ultimate gangmaster but all subsequent labour providers down the chain must have a licence and be on the register; otherwise the Bill will not work.

One of the critical elements of the legislation is enforcement, which must be properly considered and thought through. Whatever body is in place—whether or not it is appropriate to create a new statutory authority—must be effective and cost-effective, as the Minister rightly said. It is essential that the relationship between the various Departments and the enforcement body be co-ordinated and proper. The major onus of the legislation must be on the gangmasters. All legitimate gangmasters desire to clean up the current situation.

I know that others want to speak, so in conclusion I shall quote from a letter in this week's Boston Standard which sums up the problem very clearly. The person who wrote it works in a factory,

To my mind, that is unacceptable in the fourth largest economy in the world. We need to stop this exploitation, intimidation and massive fraud, and promote the legitimate supply of labour. I hope that we will be able to work together, across the parties, to ensure that the Bill is expeditiously enacted.

10.36 am

Geraldine Smith (Morecambe and Lunesdale) (Lab): There is a whole host of reasons for supporting this Bill to license gangmasters, but I shall confine my remarks to one particular area of concern: the tragic drowning of 20 young people picking cockles in Morecambe bay on Thursday 5 February. I am aware that the incident is the subject of an ongoing police investigation and that it would be inappropriate for me to make any comment that would prejudice those inquiries or any legal proceedings flowing from them. I shall of course refrain from doing so, except to say that whenever I reflect on the terrible events of that day, I find it extremely difficult to free my mind from the sense of terror, helplessness and despair that those young men and women must have felt as they stumbled blindly, in the darkness, through the freezing waters of Morecambe bay, gripped by the growing realisation that they were about to die.

Nothing can alter what happened to those poor, unfortunate people. We cannot turn the clock back—it is too late. However, we can ensure that although their lives were lost, they were not wasted. We must take steps to prevent such a tragedy from occurring again. Whatever the outcome of the police investigation, wherever the finger of blame ultimately points, there can be no doubt that the laws, agencies and systems failed to protect those people from being exploited and placed in danger, and from suffering an horrific death.

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Local people in my constituency, particularly those involved in inshore fisheries, insist that that Morecambe bay tragedy was an accident waiting to happen. I say that there is still an accident waiting to happen, because as yet nothing has changed to prevent the terrible events of 5 February from reoccurring. Many of my constituents were not surprised that an accident involving cockle pickers had occurred because it was common knowledge that many gangs with little or no knowledge of the treacherous tides and sinking sands were working in Morecambe bay. What my constituents did find surprising, however, was that so little had been done to prevent that accident.

It is a fact that the Government were aware of the situation. I first became involved after receiving a report from one of my constituents, who is a fisherwoman. She contacted me after being involved in a police raid on Pilling sands on 19 June 2003, instigated by the Department for Work and Pensions. She apprised me of her concerns about the exploitation and danger that a large number of people of Asian origin were subject to by a gangmaster. She also informed me that the police and the Department for Work and Pensions had been unable to interview any of the people involved because they did not speak English and there was no interpreter present. She also said that she had been told that, despite people's efforts over a number of weeks, they had been unable to get the immigration service to participate in the raid.

Although the incident that my constituent referred to had taken place outside my constituency, owing to the serious nature of the matters that she had raised, I promptly wrote to the Minister for Citizenship and Immigration at the Home Office to apprise her of the situation. I subsequently received a reply on 8 August 2003 from an Under-Secretary of State, which basically informed me that health and safety issues have nothing to do with the immigration service—so much for joined-up government. The letter said that, although the immigration service was aware of the operation on Pilling sands and had assisted with similar operations in Morecambe bay and elsewhere—that Home Office information has subsequently proved to be flawed and will be the subject of my Adjournment debate on Thursday evening next week—its intelligence had indicated that any foreign nationals likely to be involved in cockling would in all probability be Chinese, so it could not do very much about the matter, and it would therefore not have been the best use of limited resources to have participated in the raid on Pilling sands.

I am sure that hon. Members will not be surprised to learn that that was not quite the response that either I or my constituents had been looking for. Nevertheless, the response contained one short paragraph that I believe is extremely important in the context of this debate. It reads as follows:

I find that frank admission that certain gangmasters and their gangs can operate outside the law to be breathtaking. It certainly adds great weight to the case for licensing gangmasters.

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The Environment, Food and Rural Affairs Committee report on gangmasters states in paragraph 8 of its conclusions and recommendations:

I can only say in light of my experience that I find those comments remarkably generous towards the Government.

The tragedy in Morecambe bay and the slave labour practices of rogue gangmasters who operate with impunity in 21st century Britain has shamed the nation in the eyes of the world. I would at least hope that this terrible tragedy will shame the Government into taking long-overdue action against rogue gangmasters, and they make a very good start by supporting the Bill. We must ensure that the Bill is not watered down in Committee.

The Bill is simple and straightforward, and it will make it a criminal offence for gangmasters in agriculture and related industries to operate without a licence. Just as important, it will make it a criminal offence for anyone knowingly to use the services of an unlicensed gangmaster. It is at the intersection of the mainstream and shadow economies that the rogue gangmasters begin to ply their trade and build their evil empires. Offences committed under those provisions can be punished by fines or imprisonment, or by a combination of both, which should act as a strong deterrent. However, for the deterrent effect to be fully realised, it is essential that the measures in the Bill are rigorously enforced. The legislation must have teeth; there must be a mandatory licensing scheme with strong, proactive enforcement, and it must be properly resourced.

The Bill is about safeguarding the health and safety of workers and about protecting them from unscrupulous gangmasters. Those workers must be at the forefront of our deliberations. The slight inconvenience to some business and any cost associated with the introduction of such a licensing scheme to business or, indeed, the public purse, should be of secondary importance.

I pay tribute to my hon. Friend the Member for West Renfrewshire (Jim Sheridan) and congratulate him on bringing this extremely important Bill to the House. I certainly hope that it gains the support that it deserves from all parties. I thank hon. Members of all parties who have expressed their sincere sympathy to me and my constituents about the tragic events in Morecambe bay.

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