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Alun Michael: We have designed the arrangements so that there can be engagement with the industry on such issues, such as whether there should be a flat rate or a sliding scale. Would a sliding scale mean more bureaucracy, or would it be fairer? That is precisely why the engagement with the board of the body to be established, as well as in consultation work, is crucial. What matters is not just my view, or that of other DEFRA Ministers and officials, but what will work best in helping the legitimate industry, as the hon. Gentleman suggests.
Mr. Simmonds: I am grateful for that helpful intervention.
For the licence to be effectively self-financing, running costs and bureaucracy must, as the Minister suggested, be kept to an absolute minimum, so that licence fees are as low as possible. However, that should not be done at the expense of enforcement.
According to the regulatory impact assessment, accommodation costs for the new authority are likely to be in excess of £200,000 per annum. I believe that to be extravagant, and suggest that the authority could—and should—be based close to the agricultural areas that it serves, rather than in Whitehall. That would also reduce the accommodation costs and other overheads. Personally, I would be delighted to see it based in Boston in Lincolnshire—[Interruption.]—just to mention somewhere at random.
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Paragraph 5.2 of the regulatory impact assessment emphasises the point made by the hon. Member for Brecon and Radnorshire (Mr. Williams) when it suggests that labour providers may pass increased costs up the food chain. I wonder how likely it is that retailers will be prepared to absorb the costs themselves rather than pass them on to suppliers and consumers. In order for the Bill to work, retailers must be prepared to engage and co-operate with suppliers. In these days of ethical consumerism, it would be in their interests, so I hope that they will play their part.
In Committee I expressed my concern about some of the ambiguity in the Bill, especially the provisions in clause 13, which refer to "all reasonable steps" to be taken by labour employers such as farmers to ensure that a gangmaster holds a valid licence. I understand that the definition of reasonable steps will be elaborated on in secondary legislation, and I understand why that is necessary. However, it would be helpful to have an assurance from the Minister today that that will be subject to the fullest consultation with the industry. It is essential that those reasonable steps be practical. Farmers will often require labour at short notice, sometimes in the middle of the night while in the middle of a field. It is essential that a gangmasters' register is available 24 hours a day, seven days a week, and is up to date, to ensure that a gangmaster's licence is valid. The only way that can happen is if the register is an online, computer-accessed facility, so that a farmer can access it via a laptop in the middle of a field in the middle of the night.
It is still unclear what steps a farmer or packhouse owner will have to take to ensure that he is not liable for employing an unlicensed gangmaster. It is also unclear from the Bill how far the liability would extend. For instance, would a large retailer which sold produce knowingly harvested or produced by an unlicensed gangmaster be liable to prosecution? Paragraph 44 of the EFRA most recent report, paragraph 44 recommended that the Government consider extending liability to retailers. Has the Minister considered that suggestion and, if so, has he reached any conclusions?
I have previously expressed concerns about the lack of detail available regarding secondary legislation. That point was also raised by my hon. Friend the Member for Mid-Worcestershire and the right hon. Member for Holborn and St. Pancras. I understand why flexibility must be maintained, but the make-up of the authority is clearly hugely important. I am pleased that DEFRA has provided details of the structure and operations of the gangmaster licensing authority, and that that will be subject to affirmative procedure in the House.
In the context of the gangmaster licensing authority, the DEFRA document, in annexe 1, section 17 on "Liaison Groups and Committees", says that the authority shall establish enforcement, labour provider and labour user liaison groups. Will that be stipulated by Ministers in the regulations, or will the authority set up such groups at its discretion? Annexe 2, which refers to exclusions, is helpful in clarifying which types of work require a licence for supplying labour and which do not. I particularly welcome the exclusion of gathering
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shellfish using boats. Many small-scale family shellfish gatherers would otherwise be classed as gangmasters and would require licences to employ family members.
Annexe 3 suggests that the providers of workers to farmers under the seasonal agricultural workers scheme would not require a licence. That may initially seem sensible, as the organisations that operate within SAWS are perfectly legitimate. However, I am concerned by the number of SAWS workers who may have overstayed and breached their permits. In October last year, the Home Office said that it had no reliable estimate of the number of SAWS workers that had officially disappeared and failed to return to their country of origin. Surely it would be sensible to address this aperture in the immigration system before excluding the scheme from the gangmaster license. SAWS suppliers should ensure that their workers do not violate the terms of their immigration status, and that could be something that the gangmaster licensing scheme could enforce and control.
In conclusion, I broadly welcome the provisions to license gangmasters, which are long overdue. The Bill should make enforcing existing legislation easier, provide a level playing field for legitimate labour providers, and put an end to the exploitation of British and migrant workers by rogue gangmasters. However, the Bill by itself is not a complete solution, and there are still issues that need to be resolved. The Bill must ensure that the licence fee does not become too burdensome and a deterrent to legitimate labour providers, and there must be adequate enforcement and prosecution of those who continue to operate outside the law.
I specifically welcome clause 23, which states that the Secretary of State will report to Parliament once a year, analysing the performance of the scheme. I would like the Minister to clarify what form that report will take, and that if required it will involve a debate in the House. We would not want the report just to be stuck in a dusty corner of the Library. As the criminal element becomes more sophisticated and imaginative in its determination to flout the law and exploit vulnerable workers, so we must be equally determined to ensure that legislation is continually monitored and updated to enforce this Bill robustly, to the benefit of those who are exploited and to the benefit of the whole food chain.
11.24 am
The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): I am pleased to be able to respond positively to a debate that has been remarkably well informed and a detailed examination of the issues before the House. On occasions one feels that the House has skated over the surface of important issues, but that could not be said of today's debate. From the start, it has gone to the heart of the Bill.
I thank my hon. Friend the Member for West Renfrewshire (Jim Sheridan) for giving me the opportunity to engage with the Bill. As many hon. Members have said, it has been a very positive process. The Bill is very different from the one considered by the House on Second Reading, but its target is the same. The Bill is now clear and specific in its design and intentions. It provides a licensing system for gangmasters, which has been debated on many occasions, but it goes further. It will create a kind of
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antisocial behaviour order for gangmasters, if used in the way that hon. Members who have taken an interest in it intend.
Much work has been done in a short time to get the detail of the Bill right. It has been an excellent example of co-operation and teamwork. I am pleased that hon. Members on both sides of the House have referred to DEFRA officials, because policy officials, lawyers and parliamentary counsel have demonstrated an extraordinary willingness to work hard and quickly to achieve the Bill that we now have before us. They have brought credit on themselves and the civil service in general. They have demonstrated that things can be done both quickly and carefully when the will is there.
I also support my hon. Friend's comments about the work undertaken by officials of the Transport and General Workers Union, the National Farmers Union and others. Indeed, it is fair to say that when we met informally again this week, at a meeting called by my hon. Friend, significant commitment was evident from a variety of organisations. However, the personal engagement of Jack Dromey, the deputy general secretary of the TGWU, and Tim Bennett, the president of the NFU, provided encouragement and support to their teams which was essential in evoking the co-operation necessary to achieve the result we have before us. People not only talked about the problems, they went away and tried to tease out the answers. My right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) posed some difficult questions at the beginning of the process. Having three former Cabinet Ministers—including two former Agriculture Ministers—as part of the team was very good for concentrating the mind. They each made a positive contribution.
I also wish to thank the members of the Committee, of all parties, who worked constructively with us to ensure that the Bill would be effective in delivering its objectives. By the time we reached Committee stage and Report, unseen work had been done that made a difference to the quality of the legislation. We reached the point at which the Committee's members were able to support unanimously the amendments tabled. We now have a much stronger Bill that will, I hope, continue to command the cross-party support that was evident in Committee. We have a Bill that provides for the registration and licensing of gangmasters. It will make the whole labour supply process more open and ensure that gangmasters are accountable for their actions.
Members have raised significant issues during the debate, while making it clear that they want the Bill to progress. I think that my hon. Friend the Member for West Renfrewshire, myself and the groups to which I have referred have discussed and anticipated all those points, but it is only fair to mention some of them. I was pleased that the hon. Member for Mid-Worcestershire (Mr. Luff) referred to the way in which my noble Friend Lord Whitty has engaged with this issue. He referred to the work of Zad Padda, a young man who has shown leadership and intelligence in recognising the importance for labour providers of setting up an effective system of licensing.
To those hon. Members who have referred to how much activity is going on, I would say that the work of Operation Gangmaster is only in the headlines when a major prosecution takes place, which is often
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considerably after the events that have led to arrests. A number of successes have been reflected in the press and other media recently, perhaps not with as great a splash as we would wish. It is a pity that that was not reflected in the Environment, Food and Rural Affairs Committee report. It was right to comment that the support of that Committee for the Bill, which was not given earlier, is important and welcome.
My hon. Friend the Member for Morecambe and Lunesdale (Geraldine Smith) was right to underline, as other Members have, the fact that this Bill is not a panacea. Indeed, legislation is never a panacea and never a substitute for action. Previous Governments have made the mistake sometimes of engaging in frenetic activity in adding to legislation, without making a difference on the ground. We must recognise that we are dealing with illegal activity, which does not operate on the basis of convenient structures in which we can intervene without a great deal of work. We are dealing with a market in which there is flexibility, in which people change their methods of working rapidly, and in which a lot of people are not prepared to obey the law. Flexibility is what the market needs. Growers, to whom the hon. Member for Mid-Worcestershire referred, need help fast at particular stages in the year, but that flexibility is what makes it difficult to regulate the industry properly. I take on board the point made about the impact on lifeboat crews and the police, and the much wider ramifications of the events in Morecambe bay.
My hon. Friend the Member for Morecambe and Lunesdale rightly mentioned the damage done to legitimate labour providers. I am pleased that Members on both sides of the House have refereed to the legitimate contribution made by those who are trying to operate within the law and do things properly. The liaison between Departments and agencies, which was mentioned by my hon. Friend the Member for West Renfrewshire and touched on by various other Members, is a serious issue. The problem is that although liaison is often good at ministerial level and the will is there to co-operate, the situation at ground level is different. The trick is to ensure that that will is reflected on the ground.
In relation to the Bill, enforcement has two elements. Of course, there is the desire to prevent tax evasion and to ensure that the minimum wage is paid, but the two elements are enforcement by licensed gangmasters of the requirements of the agency in relation to the code of practice and so on, and making sure that we burn off those who work outside the licensing system so that they cannot undercut legitimate labour providers. Those two elements need to be looked at separately, because they are different. Enforcement in relation to those who are within the virtuous circle of licensing needs to be kept to the minimum necessary to ensure that they comply with the requirements, whereas firm and swift action is needed to ensure that those who are not licensed, and not within that virtuous circle, are unable to continue their activities.
The hon. Member for Southport (Dr. Pugh) referred to agencies and those who operate in the shadows. If somebody is operating as a gangmaster, whatever title they use or however they advertise, they are within the ambit of the legislation. One of the questions that we discussed with some care was that of employment
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agencies. We did not want a duplication of legislation, but we wanted to ensure that somebody could not register as an employment agency and effectively act as a gangmaster but not be caught by the provisions of the Bill. I believe that we have got the design right.
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