Government response
Introduction
The Government welcomes the opportunity to respond
to the Select Committee's second (follow up) report on gangmasters.
This report, like the first, has helped to maintain interest in
illegal activity by gangmasters.
The Government welcomes the support of the Committee
for Jim Sheridan's Private Member's Bill on the licensing of gangmasters
and it agrees with the Committee on the need to introduce secondary
legislation as soon as possible in order to implement the licensing
scheme. Now that the Bill has received Royal Assent the Government
will be working closely with non Government organisations and
the industry to set up the Gangmaster Licensing Authority by April
2005 so that it can commence issuing licences to gangmasters (recommendations
11 and 12).
The Government also welcomes the acknowledgement
by the Committee of the work undertaken by personnel engaged in
enforcement activity against gangmasters who act illegally.
The Government rejects the suggestion by the Committee
that its approach to tackling illegal activity by gangmasters
has been characterised by a lack of urgency (recommendation 6).
The Government also refutes the assertion by the Committee that
the Ministerial response to the Morecambe Bay tragedy reflected
an underlying confusion about the responsibilities of Ministers
in relation to illegal activity by gangmasters (recommendation
7). The Government accepts that there is a need to improve the
co-ordination of its policy towards gangmasters who act illegally
(recommendations 9 and 10), but does not believe that it would
be either advantageous or always possible to co-ordinate all enforcement
activity against illegal gangmasters through Operation Gangmaster
fora (recommendation 4).
Recommendations 1-3 and 5
The reality, then, is that the Government
is no nearer obtaining a comprehensive picture of the scale and
nature of the problem of illegal gangmaster activity than it was
when we published our original report eight months ago. Other
than issuing a tender for one piece of limited research, the Government
has made no progress. So we repeat our previous observation: the
Government cannot develop an appropriate policy response to a
problem, or allocate appropriate resources, if it cannot make
even a rough estimate of the scale of that problem. (Paragraph
11)
We strongly recommend that the Government take
urgent steps to develop a better picture of the extent and nature
of illegal activities by gangmasters. It should do so through
a combination of research in the field and by centrally compiling
data from sources such as regional Operation Gangmaster operations.
Anecdotal evidence suggests that this is a widespread problem:
the Government should now produce figures which at least attempt
to estimate how widespread it is. (Paragraph
12)
We recommend that the Government look at the various
tenders it issues which relate to research into gangmaster activity,
and consider what scope there might be for amalgamating the 'pot'
of funding available to allow for more extensive, better-funded
research in future. (Paragraph 13)
We repeat our earlier recommendation that the
Government take steps better to understand the nature and scope
of illegal activity by gangmasters. Unless it does so it is extremely
hard to assess how effective enforcement has been. (Paragraph
22)
The Government's response to the Committee's first
report explained that agricultural "gangmasters" (or
labour providers) involved in illegal activities will seek to
hide such activities from Government enforcement agencies. As
a result any research undertaken is likely to underestimate the
true scale of these activities. By definition, it is difficult
to establish the scale of the problem, especially since illegal
gangmaster activity will 'ebb and flow' with the seasons.
The Home Office has implemented a major programme
of research to obtain better information on illegal workers and
people who are illegally resident in the UK. The results of this
research will be used to help tackle illegal migration and illegal
working.
Plans are also being developed for new qualitative
research with employers to explore their use of legal and illegal
migrant workers, and studies of the prevalence and nature of illegal
residence and illegal working within certain areas of the UK.
It is expected that the preliminary results from this research
will be available in Spring 2005. The Home Office's programme
of research will investigate the use of illegal working within
the context of migrant workers more generally, and will explore,
but not focus primarily on, the role of gangmasters.
The principal objectives of much of this research
are to improve understanding of the nature of illegal working
and the reasons why illegal workers are used. It is not intended
to quantify the extent of illegal working. By investigating illegal
working within the context of other migration routes, the research
will assist in the development of policies which tackle the root
causes of illegal working and are focused on implementing sustainable
solutions. The other advantages of this approach are that it should
help to reduce the sensitivity and hence the difficulty of conducting
research on illegal working, and provide a better understanding
of the role of labour provider activity in relation to wider recruitment
practices.
Operational enforcement data prepared by Home Office
will be used to inform the design of the research, and operational
personnel will be closely involved in the programme. However,
initial investigations have shown that it is not possible to use
operational data in itself to develop estimates of the overall
scale of illegal working. Home Office research is being developed
in collaboration with other government departments, and opportunities
will be actively sought for the joint funding and/or management
of projects.
With regard to research in agriculture, the Government
explained in its memorandum to the Committee that Defra was commissioning
research into the use of seasonal and casual labour in agriculture
and related food processing and packing sectors. This is a major
project, costing almost £100,000, and is now underway. The
results of the research should be available at the beginning of
next year.
This work will look at the supply of labour to the
fresh produce sector and will consider the role played by gangmasters
in this process. It will also, in line with the recommendation
of the Select Committee's first report, look at the role played
by the Seasonal Agricultural Workers Scheme (SAWS) in meeting
the industry's labour needs. The information obtained by this
research will both help to inform future decisions specifically
about the size of the SAWS quota and more generally about action
to tackle gangmasters who act illegally.
The Government also collates information from its
operational activity about illegal activity by gangmasters. For
example the Department for Work and Pensions' (DWP) Agricultural
Investigation Team (AIT) manages an intelligence database which
uses information drawn from Operation Gangmaster and AIT work
to produce intelligence reports that help inform the targeting
of future Operation Gangmaster activity. DWP is currently consulting
with participating departments to consider how best to capitalise
on this database and will report the findings of this review to
the Informal Economy Steering Group. Customs & Excise
is currently analysing the data it holds about the lack of compliance
by gangmasters in order to prepare a more accurate estimate of
the scale of VAT fraud and infringement of the VAT rules by gangmasters.
Since the beginning of this financial year, the Inland Revenue
has been setting up new specialist enforcement units to tackle
infringements of Income Tax rules by gangmasters. These units
will be building up a picture of gangmaster activity as their
risk assessment programme develops and they will share this information
with other departments so far as the legal gateways allows. This
will be done through the Operation Gangmaster fora and on a regional
and national level as appropriate. In particular, Inland Revenue
will be working very closely with Customs & Excise (in the
period before the two are integrated in a single revenue department),
as a common objective of both departments is to tackle tax fraud
by gangmasters.
As recommended by the Committee, the Government will
draw on the information generated by the research projects mentioned
above and the increasing body of data about illegal activity obtained
from operational activities to develop as comprehensive a picture
as possible of the level of illegal activity by gangmasters.
Recommendation 4
There is some evidence, such as that presented
by Geraldine Smith MP, that enforcement continues to be held back
to an extent by a lack of resources and an absence of coordination.
We are surprised that so much current enforcement activity is
apparently carried out by agencies acting alone, rather than in
concert through Operation Gangmaster. We once again urge the Government
to coordinate all attempts to enforce existing legislation, even
if only by ensuring that agencies report their activities to regional
Operation Gangmaster meetings, and through them to central Government.
That said, there is also evidence of increasing levels of enforcement
activity, and we commend all those involved for their efforts.
(Paragraph 21)
The Government welcomes the Committee's
acknowledgement in this second report of the efforts of those
involved in its enforcement activity against gangmasters who act
illegally. We are pleased that the commitment of operational staff
on the ground has now been recognised. Those members of the Committee
who plan to visit an Operation Gangmaster forum will be able to
see at first hand the dedication of the staff involved. We are
sure such visits will help the Committee to better understand
the nature of the problem and the extent of the activity against
it.
The Committee has raised the issue of resources available
for law enforcement activity, and the degree to which such activity
is co-ordinated. Of course the resources available to Departments
for enforcement activity are finite, and such activity must therefore
be prioritised and carried out on an intelligence-led basis to
secure best value in public interest terms. However, we do not
accept the Committee's suggestion that lack of resource has compromised
the effectiveness of operations. The Government's memorandum to
the Committee provided information about the increasing level
of enforcement activity in this area.
From April 2004 Customs & Excise has deployed
80 new staff allocated in seven regional operational teams set
up to tackle VAT abuse by gangmasters. These teams work closely
with colleagues in other Government departments, exchanging intelligence
in the drive to tackle the problem. Team representatives attend
Operation Gangmaster fora and play a full and active role to ensure
anti-fraud activity is co-ordinated and directed for maximum impact.
The successful prosecution earlier this year of four labour providers,
all working within the same supply chain, has already resulted
in custodial sentences for three of these totalling over 5 years.
A fourth labour provider is due to be sentenced on 23 July.
Inland Revenue have already set up two specialist
teams to tackle illegal activity by gangmasters. In the two years
to March 2004 these teams settled 78 investigations with additional
liabilities in excess of £10m being identified. Since April
2004 the Revenue has been establishing four additional teams
to tackle non-compliant gangmasters and these teams are now
largely in place. Inland Revenue plan to set up a further team
in Northern Ireland from April 2005 which will then ensure that
the activity of these teams covers the UK. The personnel engaged
in this activity are front line investigators tackling Corporation
Tax, Income Tax and PAYE irregularities. The teams are based in
regional locations to ensure local intelligence and information
is gathered and acted upon. They work closely together and with
other Government departments under the umbrella of Operation Gangmaster.
UK Immigration Service activity into illegal working
has increased over recent years with a marked increase in activity
in the last year. A total of 697 operations into illegal working
were reported in 2003-04, of which 39 were related to farms or
packhouses. This compares with 301 operations reported in 2002-03,
an increase of 132%. These figures serve as an indicator of what
is being achieved, and do not reflect the full extent of Immigration
Service activity against illegal working. The Home Office is currently
reviewing the way in which immigration legislation is enforced,
to establish whether effectiveness can be further improved.
There are now 9 Operation Gangmaster fora co-ordinating
joint operations at a local level. Currently there are 13 live
operations and, Ministers and senior officials monitor and evaluate
operational activity on a regular basis. Operation Gangmaster
produces quarterly performance reports for both the Informal Economy
Working and Steering Groups. The progress of operations is reviewed
monthly by Chris Pond as the DWP Minister responsible for Operation
Gangmaster.
Operation Gangmaster brings together departments
and agencies in cross-government initiatives where such joint
activity would prove more effective. Within this context the exchange
of information, the building up of intelligence dossiers and the
carrying out of joint operations through the Operation Gangmaster
regional fora are subject to continuous review and improvement.
There are also arrangements in place to ensure that where significant
operations are being conducted or planned by individual departments,
they are made known to the Operation Gangmaster fora. Operation
Gangmaster does not seek to subsume routine compliance work undertaken
by individual agencies against illegal labour providers. Labour
providers represent different risks to individual Government departments.
Therefore it is not always possible, nor would it be advantageous,
for all enforcement activity to be co-ordinated through the Operation
Gangmaster fora. To do so could hinder the routine compliance
work of individual departments. In view of this the Government
confirms that it does not intend to remove the distinction between
individual departmental enforcement effort and that which is coordinated
through Operation Gangmaster. However, more generally the Government
is currently considering how workplace enforcement activity by
departments contributing to a reduction in illegal migrant working
and a reduction in the exploitation of illegal migrants, might
be brought together in a more effective way.
Recommendation 6
It is regrettable that Ministers do
not seem to have been sufficiently seized of the urgency of the
need to deal with illegality on the part of gangmasters until
prompted into action by external pressures, principally the Gangmasters
(Licensing) Bill. We trust that they now understand how important
this matter is, and will commit themselves to continuing to treat
it as a high priority in future. (Paragraph 26)
The Government rejects the suggestion that it has
only been prompted to take action against illegal gangmasters
by the Gangmasters (Licensing) Bill.
In the memoranda the Government has submitted to
the Committee for this and its first inquiry and in the Government's
response to the Committee's first report, we described in some
detail the range of policy responses that have been implemented
to tackle illegal activity by gangmasters. These include the establishment
of Operation Gangmaster and the enhancement of existing enforcement
effort by individual Government departments. They also include
the development of Codes of Practice on the employment of seasonal
and casual labour on farms and in packhouses and the development,
in conjunction with the Ethical Trading Initiative's Working Group
on working conditions for seasonal labour in the UK food industry,
of a Code of Best Practice for Labour Providers. For example,
during 2003/04 the Immigration Service was actively involved in
supporting two police-led prosecutions of gangmasters involved
in committing serious immigration and money-laundering offences.
In one case, six individuals received sentences ranging from 2
years 9 months to 7 years, and the police are seeking to recoup
up to £4 million under the Proceeds of Crime Act. In another
case, two individuals each received sentences of 7 years imprisonment.
Such cases are an indication of the effort, length of time and
resource required for these complex investigations.
The Gangmasters (Licensing) Bill, which the Government
fully supported and helped to re-draft into a focussed and effective
piece of legislation has provided an opportunity to introduce
further measures to address illegal activity by agricultural gangmasters
and those in related sectors. As Lord Whitty explained in the
evidence he provided to the Committee on 23rd March,
the Bill provides a vehicle by which the work with the Ethical
Trading Initiative to develop and trial on a voluntary basis a
Code of Best Practice for agricultural labour providers can be
placed on a statutory footing. Therefore, from the outset the
Government has made it clear that it supported the objectives
of the Bill. The way in which the Bill was being amended in order
to create a well-focussed licensing system and improve Government's
ability to take a firm grip on illegal activity was explained
by Alun Michael in the House of Commons. During the passage of
the Bill through Parliament we have worked closely with Jim Sheridan
and his supporters to ensure that we develop a Bill which is both
practical and effective while seeking to avoid the imposition
of disproportionate burdens on industry.
Recommendation 7
On reflection we are sure that the Government
will agree that a Minister should have visited Morecambe Bay much
sooner after the incident there, to offer condolences to the community
involved, and to support the emergency services. We are concerned
that Ministerial reaction to the incident reflects an underlying
problem of confusion and uncertainty, with no-one in Government
quite sure who is responsible for policy relating to gangmasters
and illegal working. (Paragraph 28)
The Government does not accept that it is appropriate
for Ministers to descend on the scene of a tragedy. The Morecambe
Bay tragedy called for an immediate operational, not a political,
response. On learning of this incident the Department for Work
and Pensions (DWP) immediately seconded an official to assist
the Police team investigating the tragedy. In addition the Immigration
Service deployed resources to assist the Police with the identification
of both the survivors and the deceased immediately they were notified
of the incident on the morning of 6th February. Immigration
Service resources also assisted the Police with their investigation
and they continue to be deployed to tackle immigration offences
and illegal working practices in the area.
The Health and Safety Executive (HSE) was involved
immediately in the aftermath of the tragedy and is continuing
to assist the Police-led investigation. HSE quickly prepared guidelines
for safe working in estuaries and tidal areas, in consultation
with local fishermen, the local Sea Fisheries Committee, the Maritime
and Coastguard Agency and others. HSE and the local Sea Fisheries
Committee have sent the guidelines to all permit holders (900+)
and others cockling on Morecambe Bay. They have been used as a
benchmark for a programme of HSE inspections on the Bay in association
with the police. The guidelines have been translated into Chinese
by the North West Chinese Council and have been handed to any
Chinese people encountered during HSE inspections. With the support
of Defra, these guidelines have been sent to Sea Fisheries Committees
at other estuaries and tidal areas around Great Britain as a basis
for similar joint inspections / enforcement initiatives during
2004/05. This should help minimise the chances of such a tragedy
occurring elsewhere on the British coastline.
The North West region Operation Gangmaster forum
convened on 18th February. Discussion at the forum included a
detailed analysis of activity by gangmasters in the region.
So far as Ministerial accountability is concerned,
Alun Michael (Defra Minister of State for Rural Affairs) responded
on behalf of the Government to an urgent Parliamentary Question
about the Morecambe Bay tragedy tabled on 9th February by Geraldine
Smith MP. In responding to the question, Mr Michael offered, on
behalf of Government, condolences to the friends and families
of the victims and paid tribute all who were involved in the rescue
effort. On 11th February, Home Office Minister Baroness
Scotland responded on behalf of Government to a question tabled
in the House of Lords about the tragedy. During the period before
Ben Bradshaw visited Morecambe Bay on 26th February,
the Government maintained regular contact with Geraldine Smith
MP and Andrew Miller MP who were active in representing the views
of local people about the tragedy.
Therefore, the Government does not agree that its
response to the tragedy in Morecambe Bay reflects confusion over
policy responsibility between individual departments and Ministers.
In our reply to the Committee's first report on gangmasters we
clarified Ministerial responsibilities in the areas of policy
and enforcement activity in connection with gangmasters who act
illegally. We consider that the response of both Ministers and
enforcement personnel to the tragedy accurately reflected their
responsibilities.
Recommendation 8
We urge the Government to take seriously the threat
of illegality on the part of gangmasters and ganged labour from
the European Union accession states. It should, as part of its
research into the problem, look at this particular issue and,
if it proves to be a matter of concern, take steps to address
it. (Paragraph 30)
The Government can confirm that
it does take seriously the threat of illegal activity by gangmasters
and the exploitation of workers from the new Member States. The
Government is keen to make sure that all those who wish to come
and work in the UK are aware of their employment rights and responsibilities.
We recognise that there may be a need to undertake specific awareness
raising exercises so that migrants from the new Member States
understand the implications of working overseas in general and
in the UK in particular.
The Department of Trade and Industry
and the Foreign and Commonwealth Office have already worked successfully
with the Portuguese Government and NGOs to produce and distribute
a leaflet on agency worker employment rights and responsibilities
to the Portuguese community in the UK and to prospective workers
in Portugal. We are building on this work with new Member States
to produce, where they see a need, similar leaflets for their
nationals. Leaflets on working as an agency worker overseas, in
particular in the UK, have already been prepared for Polish and
Lithuanian nationals and were launched in the UK, Poland and Lithuania
in the week beginning 28th June.
The Government can also confirm that gangmasters
from the new Member States and countries outside the EU are covered
by the provisions of the Gangmasters (Licensing) Bill. Clause
5(3) of the Bill provides that the provisions of the Bill apply
to a person acting as an agricultural gangmaster in the UK or
elsewhere in relation to work to which the Bill applies. This
ensures that an overseas gangmaster supplying or using workers
to do work in the UK must have a licence. This is intended primarily
to bring agents of overseas gangmasters operating in the UK within
the jurisdiction of the new legislation.
The Home Office will ensure that the threat of illegality
on the part of gangmasters and ganged labour from the new Member
States is considered in ongoing research. They will also ensure
that this issue is taken into account in the separate work being
conducted for the Prime Minister to monitor the impact of accession.
Recommendations 9 and 10
We note that the chart refers to Cabinet
Sub-committee MISC20. We recommend that the Government provide
us with details of the role played by the Sub-committee in determining
Government policy relating to gangmasters. (Paragraph 32)
We are convinced that the overly complicated
structure of bodies put in place to deal with this cross-departmental
issue hinders rather than helps a coherent response to the problems
of illegal working and of gangmasters. We recommend that the Government
rationalise and streamline the steering groups, working groups
and other bodies that operate in this policy area. Currently co-ordination
of activities appears only to take place on the ground: we recommend
that a single co-ordinating body for illegal working and the informal
economy be established. We again recommend that a single Minister
be made clearly responsible for the issue. Given the wider responsibility
to be taken on by that Minister we accept that the responsible
Minister probably should not be from Defra - a Minister from the
Home Office would be more appropriate. (Paragraph 34)
The Ministerial Committee MISC 20 is chaired
by the Home Secretary. Its purpose is to consider the social and
economic aspects of asylum and immigration issues. These terms
of reference encompass the Government's strategy for countering
illegal migrant working, including action against illegal gangmasters.
The Government does not believe that it
would be realistic for a single Minister in any department to
take sole responsibility for co-ordinating action against illegal
working and the informal economy. Lord Grabiner's report on the
Informal Economy, published in March 2000, explained that those
operating in the informal economy are likely to be breaching a
wide range of regulations, including tax, immigration requirements,
the minimum wage and health and safety standards. Whilst Home
Office Ministers are responsible for taking enforcement action
against illegal migrant working and human trafficking, it would
not be practical or appropriate for them to assume the responsibility
of HM Treasury colleagues for action against non-compliance with
tax or VAT obligations, nor the Department for Trade and Industry's
responsibilities for enforcing the national minimum wage and Defra's
responsibility for enforcing the agricultural minimum wage.
However, the Government agrees that it
should improve its co-ordination of policy towards illegal migrant
working, including gangmasters who exploit their workers. The
Prime Minister has therefore amended the terms of reference of
MISC 20 to make explicit that the Committee's remit includes co-ordination
of the Government's response to illegal migrant labour and gangmasters
who act illegally. The new terms of reference now read, "To
consider the social and economic aspects of asylum and immigration
issues, including co-ordination of the Government's response to
the problems of gangmasters and illegal migrant labour".
He has also decided to appoint the Minister for Citizenship, Immigration
and Nationality as an alternate chair for MISC 20 to allow the
Committee to meet more frequently to oversee implementation of
the Government's strategy on illegal migrant working and gangmasters
who act illegally.
The current network of official groups
will provide reports and information to MISC 20, and the structure
of these groups will be kept under review. The need for further
change will be dictated by the reporting requirements set down
by Ministers. The Government does not accept the Committee's view
that the current structure necessarily hinders the development
of a coherent response to illegal migrant working and gangmasters
who act illegally. In practice, there is a considerable overlap
in membership between the groups, each of which has a particular
focus which might be lost were the group to be abolished. For
example, it must be appropriate that the Gangmaster Co-ordination
Group meets to consider specific issues relating to the introduction
of statutory regulation into the agricultural labour provision
sector. Similarly, the Informal Economy Working Group meets at
practitioner level to monitor closely the progress of Operation
Gangmaster and other joint working activity. The Illegal Working
Steering Group provides a consultative forum to enable Government
and key stakeholders (such as the TUC, CBI, STUC and representatives
of relevant commercial sectors) to discuss practical solutions
to the problem of illegal migrant working.
Recommendation 11
We are now persuaded that licensing and registration
are required to deal with the problem of illegal gangmasters.
Therefore we support the Bill, and call on the Government to ensure
that time is made available - in Government time if necessary
- for its successful passage. However, the Bill cannot be regarded
as a panacea: greater political will and resources are required
to ensure that the provisions of the Bill, and of existing legislation,
are enforced. (Paragraph 40)
From the outset the Government fully supported the
objectives of the Gangmasters (Licensing) Bill and worked with
the Bill's sponsors to ensure its smooth passage through Parliament.
As a Private Members Bill it is right that the Bill should have
been handled in accordance with the Parliamentary procedures that
are in place to deal with legislation brought forward in this
way.
The Bill has now successfully completed its passage
through Parliament and received Royal Assent on 8th
July 2004. It has widely been acknowledged that this success was
achieved because of the effectiveness of joint working between
Jim Sheridan and supporting MPs, Ministers and officials at Defra
and with colleagues across Government, and the consortia of organisations
led by the TGWU and the NFU.
The Government agrees with the Committee's view that
licensing will not solve all the problems caused by gangmasters
who act illegally. However, it is committed to the effective enforcement
of the gangmasters licensing scheme. This will include the provision
of additional enforcement resources and use of the new offences
created by the Bill by existing enforcement agencies where this
would further the delivery of existing departmental enforcement
objectives.
Recommendation 12
We obviously recommend that the Government introduce
the secondary legislation envisaged in the amended Bill as soon
as possible after the Bill is passed. It should commit itself
now to a timetable for doing so. We further recommend that the
Government set out its views of exactly how gangmasters and their
employees can in practice be identified when working in the fields
and elsewhere. (Paragraph 41)
The Government agrees with the Committee that the
secondary legislation flowing from the Gangmaster (Licensing)
Act should be introduced as quickly as possible. The Government
expects that secondary legislation setting up the Gangmaster Licensing
Authority ("the Authority") will come into force by
the end of March 2005. Legislation setting out the circumstances
and activities which will be excluded from the requirement to
obtain a licence should be in place by April 2005 and the legislation
establishing an appeals procedure under the licensing scheme by
early Summer 2005. The detailed programmes for consultation and
enactment of each piece of secondary legislation are provided
below. Early working drafts of the Licensing Authority, Exclusions
and Appeals regulations have been produced and are available in
the Library of the House.
It is anticipated that a formal consultation paper
on the Gangmasters Licensing Authority Regulations (complete with
a draft partial Regulatory Impact Assessment) will be issued at
the end of July. There will be a 12 week consultation period running
to the end of October. It is hoped that the final text of the
SI will be ready to be laid when the new session of Parliament
starts in November. As this is an affirmative resolution SI, it
is necessary to allow 12 weeks when Parliament is sitting before
it comes into force. On this basis the SI should come into force
by the end of March 2005.
Regular meetings are taking place with
key stakeholders who are likely to be represented on the Authority.
It is anticipated that there will be preliminary discussions in
this forum about the Authority's Rules for the initial round of
licence applications and the Rules that will apply to licence
applications thereafter. It is anticipated that Defra may undertake
an initial informal consultation based on the views of this group
on provisions that might be included in these rules. The consultation
should commence in December 2004 and run for twelve weeks (i.e.
until mid to late March 2005). Comments would be passed to the
Authority when it is formally constituted. Provided the Authority
agrees to proceed on the basis of the preliminary proposals, revised
as appropriate to take account of comments received, the Authority
would undertake its own formal consultation. On this basis the
Rules SI relating to the provisional licences might be ready for
laying before Parliament early in June 2005 and, as it is a negative
resolution SI, it could come into force early in August. Once
this SI has come into force, gangmasters will be required to apply
to the Authority for an initial licence.
It is anticipated that a formal consultation paper
on the Exclusions Regulations (complete with a draft partial Regulatory
Impact Assessment) will be issued by mid to late September 2004.
There will be a 12 week consultation period running to the end
of December. It is hoped that the final text of the SI will be
ready to be laid by the end of January 2005. It is a negative
resolution SI and should come into force by the beginning of April
2005.
It is anticipated that the Appeal Procedure Regulations
(clause 10) will be made following broadly the same timetable
as suggested for the Exclusions Regulations.
The regulations setting out the "reasonable
steps" that an employer should take to satisfy himself that
a gangmaster has a valid licence cannot be made until the Authority
has made its rules. It is anticipated that the consultation will
commence in April 2005, on the basis of the Authority's draft
Rules and would run until the end of July 2005. The regulations
would come into force by the end of October 2005. It is emphasised
that the provisions in clause 13 of the Act making it an offence
for a person to enter into arrangements with a gangmaster who
does not have a licence will not be brought into force before
the SI defining "reasonable steps" is made.
It is not possible to give a definitive answer to
the question about the identification of gangmasters in the field,
until the Licensing Authority has developed the detailed operating
procedures for the licensing scheme and has determined the form
the licence will take and the technology involved. However the
"Reasonable Steps" Regulations will set out the documentary
or other checks required to establish a "reasonable steps"
defence. As a minimum it is expected that the labour user will
need to check the register of licensed gangmasters and require
sight of original licensing or ID documents. Where the labour
user is dealing with a representative of the licence holder some
form of identity check is likely to be necessary. This could involve
verification against the register. The Government will be working
with the Authority to ensure that the checks required do not impede
the flexibility of labour supply that farmers depend on whilst
ensuring the scope for fraud and abuse is kept to a minimum.
Recommendation 13
We are concerned that if the cost of the licence
is too high some farmers and others might be tempted to use unlicensed
gangmasters due to their lower costs. We recommend that the Government
ensure that the licence fee is set at a low level, so as not to
harm legitimate gangmasters, and that the penalties for operating
without a licence should be set at a high level. We again emphasise
the need for vigorous enforcement of the new legislation. (Paragraph
42)
Under the proposed licensing arrangements the licence
fee will be set by the Gangmaster Licensing Authority in consultation
with the Secretary of State. If necessary the Secretary of State
can use the powers of direction provided for in the Act to modify
licence fee levels proposed by the Authority. Provisional estimates
indicate that licensing fees might be in the range of £1,750
to £2,250 for a three year licence. It is anticipated that
most legitimate gangmasters will be able to afford a fee at this
level. Most will benefit from the level playing field that licensing
will encourage through the elimination of unfair competition from
illegal labour providers.
The Act provides that if a gangmaster operates without
a licence they could be subject to a maximum ten year prison sentence
if successfully prosecuted.
Recommendation 14
We continue to believe that retailers should take
greater responsibility for ensuring that their goods are produced
using high labour standards. We therefore recommend that the Government
give consideration to extending liability under the Gangmasters
(Licensing) Bill to retailers which do not take reasonable steps
- perhaps by mechanisms to be defined by the new Gangmasters Licensing
Authority - to ensure that their suppliers contract only with
licensed gangmasters. (Paragraph 44)
The Government agrees with the Committee's view that
the retailers have an important role to play in ensuring the success
of the Gangmaster Licensing Scheme. They will be involved in developing
and operating the licensing scheme through membership of the Gangmasters
Licensing Authority Board. The improved transparency that the
licensing scheme will provide will also ensure that the retailers
can require their suppliers to use licensed gangmasters.
As there is only an indirect relationship between
retailers and the gangmasters that the Act will regulate we do
not consider that it would be appropriate to use the Act to regulate
activities at the retail end of the food supply chain. However
in advance of the implementation of the gangmaster licensing scheme
the Government will be working with the retailers within the forum
of the ETI Temporary Labour Working Group to encourage retailers
to take greater responsibility for ensuring fresh produce is supplied
using high labour standards. Several retailers have already indicated
that they intend to use the Code of Best Practice for Labour Providers,
developed by the Working Group, to educate their suppliers and
the gangmasters who provide them with workers of their legal responsibilities.
The Government endorses this approach and encourages other retailers
to follow suit.
Recommendation 15
It is worth noting that the consequence of driving
down prices for consumers of food may very well be a diminution
in the wages and a deterioration in the working conditions of
those who produce it. We therefore call for the provision by supermarkets
of information for consumers about the means of production of
their food, a point to which we will return in our forthcoming
inquiry into food information. (Paragraph 45)
The Government supports the Committee's
view that consumers should have access to information about the
means of production of their food.
Department of Environment, Food and Rural
Affairs
29 July 2004
on behalf of:
Home Office
Department for Work and Pensions
HM Treasury
Cabinet Office, and
Department of Trade and Industry
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