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Mr. Bellingham: I am grateful to the Minister for that intervention. He is absolutely right: we have to make sure that all the agencies are involved in solving the problem.

We have in this country a legal framework that is designed to prevent these abuses. We have quite tough immigration controls in some areas, and it is illegal to employ an illegal immigrant, although I understand that countrywide there have only been seven prosecutions in the past four years or so. Health and safety and environmental health authorities have some teeth, as do the fire service and the police. However, it became apparent during the King's Lynn meeting that many organisations and agencies did not know what the others were doing. That is one of the most important conclusions that I drew from the meeting.

Geraldine Smith: We held similar meetings in Morecambe. One of the problems of the multi-agency meetings was getting anyone to accept responsibility or assume leadership. The joined-up approach needs to operate at all levels of government, but it was missing in my locality.

Mr. Bellingham: That is true, and it also applies to enforcement of minimum wage legislation. In the agricultural sector, DEFRA has a lot of responsibility for that under the Agricultural Wages Act 1948, but in fruit-packing, potato-grading or carrot-topping plants, for example, the Inland Revenue is responsible. However, it is clear that there is overlap: when does agriculture become mainstream industry? That is a grey area.

I speak both as a Back Bencher and as shadow employment and small businesses Minister, although I speak from the Back Benches today. I am instinctively against new impositions of business regulation and red tape. The past few years have witnessed a plethora of additional red tape and regulation bearing down on businesses, and it is always small businesses that are hit the hardest. Most do not have human resources departments or the personnel needed to cope with extra legislation, and it is therefore small businesses that find it most difficult to adjust to new regulations and legislation.

One must ask whether, by regulating and introducing new laws, one is helping to create wealth, or to destroy it, or helping to create jobs and to increase the tax take. The first thing to do is to find out what industry and business want. In the present case, they want Government action. On the other hand, parts of the Bill cause me great concern, for example, the £3,000 fee that my hon. Friend the Member for Boston and Skegness mentioned. Many highly reputable organisations would find such a fee onerous—it is a large sum to small businesses. Farming is a precarious business at the moment. At times, certain crops and products fetch a good price, at other times, they fetch much less. We should not forget that many of the products that the gangs supply labour to harvest are not part of the

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common agricultural policy price support operations—they are in a free market—and the multiples have huge buying power. Margins are therefore very tight.

I also have reservations about the use of the criminal law against the end user. I have an open mind on whether we should use the criminal law at all in this respect. I accept the points made by the hon. Member for West Renfrewshire, who made a strong case for proper enforcement and sanctions and for using the criminal law. He does not want a toothless paper tiger; he wants a Bill that carries sanctions, and I accept the logic of his arguments. On the other hand, should the criminal law be applied to business, especially those that might have been acting in good faith?

This summer, I visited several operations in my constituency where gangmasters were providing labour. Harvest is an unbelievably busy, frenetic time. The end users are desperate to get crops such as strawberries and raspberries picked, because they have the multiples breathing down their neck, demanding the next delivery, saying that the fruit must be not quite ripe, but ready to ripen in the next 24 hours and with a shelf life of a week or so. The farmer or grower may have got up at 4 am, after working all night; he needs 40 or 50 people on the farm the next day, so he phones the gangmaster he normally uses, but he cannot send enough people, so that gangmaster phones another, who may phone a third or even a fourth to organise the necessary labour. In such circumstances, the farmer, who is desperate to get his crop picked, might end up with the full force of the criminal law bearing down on him, and that causes me concern.

Having said that I am by instinct, at every turn, anti-red tape and an anti-regulator who believes strongly that we should not regulate if at all possible, I acknowledge that the Bill has obvious merits. There is a feeling throughout the country, and in particular in East Anglia and south Lincolnshire, that people are being ruthlessly exploited by cynical, cruel and wicked people. As my hon. Friend the Member for Boston and Skegness said, that is wholly unacceptable in the world's fourth-largest economy. That is why it is important that the Bill is sent to Committee: it might not be perfect, but in Committee we can make it workable, so that it can be used to put things right.

11.6 am

Mr. Nicholas Brown (Newcastle upon Tyne, East and Wallsend) (Lab): I shall be brief, because it is of course possible for the Bill promoted by my hon. Friend the Member for West Renfrewshire (Jim Sheridan) to be talked out by its friends as well as by its opponents, and I would not want to be responsible for that happening. I congratulate my hon. Friend on introducing a Bill on this topic and on the enormous amount of work that has gone into preparing it and assembling the supporters who are lined up behind it. What is proposed is absolutely right and the Bill has my wholehearted support.

This is not the first time that Parliament has considered a licensing regime for gangmasters—there were licensing schemes in the 19th century. The most recent was introduced in 1973 and administered by the

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then Department of Employment, but that scheme was abolished in 1994 because the Government of the day believed that it was a burden on business. I was therefore interested to hear the hon. Member for Boston and Skegness (Mr. Simmonds) date the explosion in the abuses that we are trying to deal with to 1995. I wonder whether there is a connection between that and the abolition of the licensing scheme the year before.

Mr. Simmonds: The right hon. Gentleman is putting words into my mouth. The last time that any Government did any serious research into the gangmaster problem was 1995, and they found that there were about 5,500 such operations. To my mind, the explosion has taken place in the past three years.

Mr. Brown: Nevertheless, I wonder whether the hon. Gentleman would care to reflect on the wisdom of abolishing the previous licensing scheme in 1994.

I remind the House of the abuses with which we are trying to deal. Those who are taking advantage of the current position pay less than the national minimum wage and the agricultural wages boards minimum wage. They make people work longer than the 48-hour maximum and they do not observe statutory sick pay and holiday pay regulations, or rules on employment and termination notice. There is benefit fraud—people work and claim benefits. Illegal workers who are not entitled to work in our country are employed and illegal deductions from pay are made for so-called services provided. Income tax and national insurance contributions are not paid, VAT is evaded and health and safety regulations are breached.

As my hon. Friend the Member for Morecambe and Lunesdale (Geraldine Smith) made so clear to the House in a moving speech, health and safety issues are not minor matters. The agricultural sector's record on health and safety matters is not good, and the victims range from owner-operators—people who operate their own farm businesses—to employees. We should take these matters seriously, and it is perhaps worth reminding ourselves who the victims are. They include legal workers in the industry who are being paid the rate for the job, and having to compete with others who are not being so treated. The victims are also honest employers. I am not surprised that the National Farmers Union supports the Bill. There is nothing more galling for an honest employer than finding that they are being undercut by others who are not obeying the law and, worse, finding that the law is not being enforced. In other words, the dishonest get away with it. I can think of nothing that is more likely to induce cynicism and disrespect for the law than the fact that it is being honoured in the breach.

If that is not bad enough, there are people illegally in this country who are being exploited for poor rates of pay. We as citizens are perhaps turning a blind eye to all this. At least that is the current state of affairs. We are turning a blind eye to the oppression of an underclass, the members of which are in our country and among us but are being treated extremely badly. What should we do about it? I think that the licensing proposal is the correct remedy, but it will not work on its own. Of course we want an effective licensing regime, and that means a system that is backed by powers that are in force. More than that, we need to know who is doing the

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enforcing within the Government. We need to know also which Department is accepting lead responsibility and which Minister can make the necessary decisions and come to the House and reasonably be held accountable for the decisions.

We understand that responsibility for different aspects of the problem lies with different Departments—the Home Office, the Department of Trade and Industry, the Department for Work and Pensions and the Department for Environment, Food and Rural Affairs. It is vital that we draw the strands together and ensure that there is a main Minister responsible, and that that Minister is able to operate with authority and be accountable to us in this place. It is not an easy thing to do. I have had ministerial responsibility both in the old Department of Agriculture, Fisheries and Food and in the Department for Work and Pensions. I have tried to tackle these issues, and I know that other Ministers have tried to do so as well. The willingness is there. Public servants are willing to play their part. So far, however, effective co-ordination and the single-mindedness that is necessary to tackle the problem have eluded us.

It is not true to say that nothing has been done. There have been prosecutions. In 2002–03, there were 138 prosecutions of gangmasters for benefit fraud. That is the work of the Department for Work and Pensions. There were 14 prosecutions for tax and national insurance evasion. That would come under the Treasury. Since 1997, there have been 22 prosecutions and eight convictions for employing a person subject to immigration controls. It seems to me that those figures for prosecutions do not tell the full story about the offences that are being committed. As we consider the Bill and the abuses that we are trying to clamp down on, we need to consider two other big questions. Before dealing with those I shall gently make the point that responsibility for dealing with these issues in agriculture, shell fishing and packaging does not lie only with the primary producer. A powerful supply chain operates in the food sector, and I welcome the fact that some major household names further down the supply chain have said that they, too, support the Bill.

That support needs to be given practical effect. When considering enforcement issues—I know that the Minister is interested in them—that are part of the licensing proposal, it is right to ensure that enforcement works right the way down the supply chain. In other words, powerful people have to accept the responsibility that goes with having great power and being able to weald it further down the supply chain. I do not think that it is fair to put all the pressure on the primary producer. In the Select Committee report—it is an extremely good report—the point is made that there are many people working in the primary sector who are trying to obey the law and trying to do their best, but they are up against illegal competition and also the pressures that the hon. Member for North-West Norfolk (Mr. Bellingham) properly referred to that are in the supply chain.

I take the view that the supply chain has a vested interest in the well-being of that chain and in taking responsibility for clamping down on practices that are not only illegal but considered to be completely unacceptable by Members on both sides of the House.

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Everyone has to take responsibility, and that includes the big and the powerful as well as those who are in the front line as primary producers.

Although I think that the licensing proposal set out in the Bill is right—the supply chain sits alongside it—there are two bigger issues that it would be wrong for us not to consider. The first is illegal working. Of course it should be illegal to work and claim benefit—to do so is to defraud the benefit system, and that is not acceptable. Leaving aside that rather obvious point, why should it be illegal nowadays to work? Surely the Government's whole approach is to encourage people to work and to make a contribution. The thrust of the working families tax credit proposal is to get people into work and so advantage themselves. They will be earning money and earning a better income than even the most generous benefit system could ever provide for them.

My view is that work should not be illegal, at least from the point of view of the worker. However, it is right that there should be illegal employment practices for which the employer can be held accountable. As we make progress with the Bill, I hope that the Government will reflect on this pretty fundamental point about employment law. I suspect that we do not keep illegal working as part of our framework of law because the Government philosophically believe that it should be illegal to work—most Members, certainly on the Government Benches, do not believe that. There is a view that if we make this country an unattractive place to immigrants—for example, difficulties in claiming benefits, difficulties in accessing the health service and difficulties in getting a job and being able to keep themselves—they will not come here. All the current evidence is that that is a hopeless argument. I urge the Government to think again.

At the heart of the matter is the question of how far employment law and conditions, and perhaps housing law, benefit law and the right to have access to the health service, can be used as deterrents to illegal immigration. I would like to see the Government take on, as they reflect on the licensing scheme, the issue of whether we should just deal with illegal immigration bluntly and in its own terms, and not try to use the labour market as a weapon in what the Home Office seems to find an intractable problem. There is a blunt side to this as well as obvious advantages. The labour market would work better if there were no such thing, from a worker's point of view, as illegal employment. However, it would mean having to face the question of what to do with people who should not be in the country and have exhausted all the avenues regarding their right to stay, particularly if the country that they have come from will not take them back.

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