Memorandum submitted by the Government
INTRODUCTION
1. The purpose of this Memorandum is to
provide a short update for the Select Committee on the various
activities, planned or in progress, which flow from the Government's
Reply to the Committee's report submitted in December. For ease
of reference this Memorandum follows the recommendations contained
in the Select Committee's Report.
2. Although there has been a relatively
short period since the publication of the Government's Reply there
have been a number of significant developments in the activities
reported in the Reply. Most notable has been the decision by the
Government to support Jim Sheridan's Private Members Bill on the
licensing of gangmasters (recommendation 10). Compliance activity
undertaken by Government enforcement agencies against illegal
labour providers, both individually and through "Operation
Gangmaster", has been substantially enhanced (recommendations
8 and 9). Full details are provided below.
RECOMMENDATIONS 1
AND 14
3. Defra and the Home Office have jointly
invited tenders for a project to research the use of seasonal
and casual labour in the agriculture and related food processing
and packaging sectors. This research is intended to both complement
the information collected by the annual Agricultural Census and
to provide information on those areas which are not covered by
the Census. This work will provide information on the number of
seasonal and temporary workers engaged in agriculture, the agricultural
packhouse sector and in related food processing businesses. It
will also provide information on the role played by labour providers
in the supply of workers to these businesses. The research will
include an assessment of employment patterns and practices, the
origin of seasonal and temporary labour and the extent to which
temporary labour moves between different economic sectors.
4. The research will also provide information
on the potential demand for workers under both the Seasonal Agricultural
Workers Scheme and Sectors Based Scheme. In addition it will attempt
to assess the impact of EU enlargement on the demand for workers
under these schemes.
5. Defra and Home Office are currently evaluating
the tenders received. The report of the research will be published
when it is complete.
RECOMMENDATION 4
6. OFT has recently undertaken its first
annual review of the supermarket code of practice. It is aware
of anecdotal concerns about the effectiveness of the code expressed
by some suppliers and their representative bodies. However it
found no hard evidence of any breach of the code.
7. Given the reluctance of suppliers to
provide specific evidence of breaches, the OFT has announced its
intention to carry out a compliance audit of the supermarkets
own records of their dealings with suppliers. The audit will focus
on those clauses of the code where the anecdotal complaints by
suppliers suggested the most frequent problems. This audit will
be undertaken using monitoring powers conferred on the OFT by
the supermarket's undertakings under the code. The audit will
enable the OFT to establish hard facts about the supermarkets'
compliance and provide a firmer basis on which to decide whether
further action is necessary.
RECOMMENDATION 6
8. The Government is taking legislative
action to tighten the laws preventing illegal working. On 16 March
2004 the Home Secretary announced that the Government is revising
the secondary legislation supporting section 8 of the Asylum and
Immigration Act 1996, the main preventative check on the use of
illegal labour by employers. This will strengthen the types of
document which employers are required to check at the point of
recruitment to comply with section 8 and make it easier for the
Immigration Service to identify and prosecute non-compliant employers.
The new regulations implementing these changes will come into
force on 1 May 2004. The Home Secretary also said that we are
considering whether to increase the penalty for employers who
employ illegal workers. In the longer term the introduction of
ID cards will be a major boost in the fight against illegal working.
9. To deal with the most serious type of
exploitative employer engaged in organised crime, the Asylum and
Immigration (Treatment of Claimants) Bill currently before Parliament
will create a new offence covering trafficking for forced labour
and other forms of exploitation. The maximum penalty for this
offence will be 14 years' imprisonment.
10. We are making progress in tackling the
organised criminal gangs which are behind the smuggling and trafficking
of people into the UK for this kind of exploitation. This work
is being co-ordinated by Reflex, the multi-agency taskforce chaired
by the National Crime Squad. This brings together police, immigration,
intelligence agencies, CPS and government in a multi-pronged effort
to tackle trafficking and smuggling at source and at destination.
The recent announcement of the proposed creation of the UK-wide
Serious Organised Crime Agency underlines our determination to
get tough with organised criminals, including people smugglers.
11. The Home Secretary also announced on
16 March the opening of a new Immigration Office in Swaffham,
Norfolk. This will more than double the capacity of the Immigration
Service to tackle illegal working in the King's Lynn area and
northern East Anglia.
RECOMMENDATIONS 8
AND 9
"Operation Gangmaster"
12. "Operation Gangmaster" activities
are initiated through regional forums, which collate intelligence
from all participating departments and agencies. These initiatives
are supported by a dedicated intelligence database which is run
by the Department for Work and Pensions' Agricultural Investigations
Team (AIT) based at Spalding. The number of regional fora has
been extended to provide coverage for all of England, Scotland,
and Wales. Since the Committee's report was published new forums
have been inaugurated for Wales and North West England with further
new forums planned for London and Yorkshire/Humberside in March
2004. There are also plans for further initiatives in North East
England and the Home Counties. The Health and Safety Executive
has become increasingly involved in these regional forums.
13. The Informal Economy Steering Group
and Working Groups, which meet quarterly, remain the foci for
monitoring and commissioning inter-departmental action, where
appropriate. The Steering Group is due to meet again in March
2004. An evaluation by the Department for Work and Pensions of
the full range of "Operation Gangmaster" activity across
Government commenced in October 2003. The results will be presented
at the meeting. For the future the Working Group is setting up
a reporting structure which will collate the results of all unilateral
and collective enforcement activity undertaken by Government agencies
against labour providers. The Steering Group will report quarterly
to relevant Ministers.
14. There are currently 10 "live"
operations, under "Operation Gangmaster", at various
stages in the planning/operational cycle. Since the Committee's
report was published two operations have been completed and two
more have been initiated. The results of "Operation Christmas"
(the only operation where results have been fully collated thus
far), which took place in North Wales on 10 December 2003, are
attached at Annex A.
Compliance activity by individual departments
complimentary to "Operation Gangmaster"
15. The two Inland Revenue specialist teams
continue to produce good results. So far this year (2003-04) they
have settled 51 investigations identifying additional liabilities
of £4.7 million. Inland Revenue is intending to increase
the size and number of specialist teams substantially over the
next few months to provide wider coverage.
16. In the pre-Budget report in December,
additional funding was announced for Customs and Excise to establish
a national campaign to reduce VAT losses arising from the illegal
activities of labour providers. This campaign will concentrate
initially on construction and agriculture. Building on existing
activity the Customs' campaign will establish operational teams
across all Regions dedicated to tackling VAT abuses by labour
providers. This approach has already yielded results. In March
2004 four labour providers, all working within the same supply
chain, pleaded guilty to conspiracy to evade the payment of VAT
and will be sentenced at a later date.
17. Within the UK Immigration Service (UKIS)
illegal working operations are being given higher priority. As
a result there has been increased enforcement activity against
labour providers. In terms of overall illegal working enforcement
activity across all commercial sectors in the United Kingdom,
there were a total of 446 UKIS operations in 2003. In the first
nine months of 2003, UKIS reported carrying out 16 operations
specifically aimed at farms and packhouses where labour providers
were involved. By the beginning of 2004, UKIS had significantly
increased activity in this area. In the four-month period from
the beginning of November 2003 to the end of February 2004 UKIS
reported carrying out 18 enforcement operations, including some
major operations, at farms and packhouses where labour providers
were involved. A further 11 operations involving labour providers
are also scheduled or being planned. One labour provider is currently
facing prosecution under Section 8 for employing 40 illegal workers
following operations by UKIS in several parts of the country.
In addition more serious charges are under investigation.
18. Earlier this month, two major investigations
involving the police and UKIS resulted in the conviction of gangmasters
for very serious criminal offences. In March of this year six
labour providers with the company Ultimate Source were convicted
at Kings Lynn Crown Court of various offences in connection with
the supply of illegal workers. All six will be sentenced on 2
April. Over the past four months, Immigration Officers have also
been assisting in the trial of a labour provider and his associates
active in Kent, following a two-year police-led investigation
into his activities using illegal workers. On 16 March the labour
provider and his son were found guilty of charges including conspiracy
to defraud and facilitating the entry of illegal immigrants into
the UK. Both have been sentenced to seven years imprisonment.
In addition, a dedicated team of UKIS officers has also been supporting
the police in their enquiries into the tragic events in Morecambe
Bay last month.
19. UKIS has also assisted the National
Farmers Union in the provision of two training events in Kent
to farmers, packhouses and labour providers on the requirements
of the law under Section 8 of the Asylum and Immigration Act 1996.
Further presentations to labour providers in the Lincolnshire
area are also being planned in April following work with local
labour providers to provide them with assistance on document checks.
20. The Department for Work and Pensions
has produced good results this year in relation to sanctions against
the employees of labour providers under their routine compliance
activity in the labour provider industry. In the 10 months between
April 2003 and January 2004 the Department for Work and Pensions
has reported 1,908 cases where benefit was either adjusted or
stopped and 236 prosecutions and sanctions. The total value of
overpayments and monetary value adjustments to benefits for this
period has been recorded as £1,117,753. This compares with
figures for the whole of 2002-03 of 1,258 Effective Cases, 138
prosecutions and sanctions and a total value of overpayments and
monetary value adjustments of £404,832. This demonstrates
the DWP's continuing commitment to tackling illegal working in
the labour provider industry.
RECOMMENDATION 10
21. In our Reply to the Committee we noted
the Committee's view that a statutory registration scheme on its
own would not be a solution to the problems associated with agricultural
labour providers. While we do not wish to prejudge the outcome
of the trial of the Defra/ETI labour provider best practice project
(recommendation 11) it is clear that as a result of the Morecambe
Bay tragedy, there is a strong demand both within Parliament and
in the country at large, for closer regulation of those involved
in the provision of gang labour for agricultural work, associated
processing of agricultural produce and the gathering of shellfish.
The Government has therefore decided to support Jim Sheridan's
Private Members Bill on the licensing of gangmasters. This, combined
with enhanced compliance activity (recommendations 9 and 10) represents
a major strengthening of the Government's efforts to tackle such
illegal labour providers.
22. Government support for statutory licensing
was confirmed during the Second Reading of the Gangmaster (Licensing)
Private Members Bill introduced by Jim Sheridan MP on 27 February.
The Government will be working with Jim Sheridan in Committee
to amend his Bill to:
— Be specific and limited to gang workers
supplied or used to undertake work in agriculture, shellfish gathering
including related areas and activities.
— Apply to primary labour providers
and sub-contractor labour providers.
— Define the form of licensing to be
used.
— Make provision for the Secretary
of State to establish a licensing scheme and associated register
of licensed gangmasters through secondary legislation.
— Make provision for appeals in relation
to a refusal to issue a licence or a decision to revoke a licence.
— Make provision for charges to be
made for licences with the level to be set through secondary legislation
to cover full costs.
— Establish an offence of operating
as a gang labour provider whilst not registered.
— Make provision for an offence of
engaging the services of an unlicensed gangmaster.
— Give the Secretary of State the authority
to appoint officers from existing enforcement agencies to deal
with the offences of operating whilst not registered and using
an unlicensed gangmaster.
— Set out the powers of enforcement
officers, including a provision for enforcement officers from
different departments to share information.
23. Defra will be working with other Government
departments to ensure that there is no overlap between this scheme
and other legislation such as the Employment Agencies Act.
RECOMMENDATION 11
24. Work on the Ethical Trading Initiative
code of best practice for labour providers is continuing. Six
trial audits of volunteer labour users and their providers based
in Lincolnshire have now been completed. ETI are planning to submit
a report on this project to Defra Ministers in April 2004. If
a scheme of statutory licensing for labour providers engaged in
agriculture, associated processing of agricultural produce and
the gathering of shellfish is introduced as a result of the Sheridan
Private Members Bill it is anticipated that the code will be used
to develop the criteria attached to licences. The experience gained
from the trial audits will be used to inform decisions on the
compliance audits required to underpin the issue of licences.
25. Officers from DWP and HSE have been
seconded to assist the ETI project board in the development of
the Code and the implementation of the trial audit. In addition
an experienced Immigration Officer from the UK Immigration Service
has been seconded to the project.
RECOMMENDATION 12
26. There has been limited opportunity to
make progress in this area in the three months since the Government's
response was published. Representatives from South Holland District
Council addressed a National Farmers Union seminar on gang labour
held in Spalding on 30 January. Representatives of the Portuguese
Government visited the UK on 8 and 9 March to discuss the provision
of information and services to migrant workers. A meeting bringing
together central and local Government agencies in the West Midlands
has been organised for 30 March.
RECOMMENDATION 13
27. The Citizens Advice Bureau in Lincolnshire
is playing an active part in the Ethical Trading Initiative pilot
project. This work is intended to establish whether the CAB can
play a role in informing gang workers of their rights and how
they can be enforced. Leaflets have been prepared informing workers
supplied by the labour providers involved in the trial, of the
role the CAB can play. These leaflets have been translated into
the languages most commonly spoken by the workers involved and
translators are also being provided. Defra has contributed to
the cost of these services. The trial will evaluate the effectiveness
of this approach.
MORECAMBE BAY
28. Although not relevant to the Government's
response to the Select Committee's report the Morecambe Bay tragedy
does warrant specific mention. On the evening of 5 February a
gang of predominantly Chinese workers were picking cockles in
Morecambe Bay when they became trapped by rising tides. Twenty
of the workers subsequently drowned.
29. The incident is currently the subject
of a police investigation, with the involvement also of the Immigration
Service, Health and Safety Executive, the Sea Fisheries Committee
for the North West and North Wales, Marine Accident Investigation
Bureau and the rescue services. As the police investigation is
ongoing it is too early to speculate about the immigration status
of the workers or the role of gangmasters in relation to this
tragedy.
22 March 2004
Annex A
RESULTS OF OPERATION CHRISTMAS
AGENCIES INVOLVED
1. DWP North Wales Shadow Economy Team.
2. Wrexham County Borough Council Housing
Benefit Investigators.
3. Flintshire County Borough Council Housing
Benefit Investigators.
4. National Asylum Support Services.
5. United Kingdom Immigration Service.
6. Environment Agency.
7. Vehicle Operators Services Agency.
8. North Wales Police.
9. Customs and Excise.
RESULTS OF
OPERATION
— 64 mini-buses were stopped.
— 54 people were interviewed with 11
found to be in receipt of benefits. So far one overpayment has
been calculated.
— Two asylum seekers had their benefit
withdrawn.
— Five arrests were made by UK Immigration,
subsequently all five were released without charge.
— One vehicle was impounded by VOSA.
— Three certificates were issued by
North Wales Police for the production of documents.
— Four staff agencies were identified
from Chester, Manchester, Birkenhead and Stoke on Trent.
— Intelligence reports of Operation
Christmas have been passed to the Operational Intelligence Unit
in Cardiff and to Counter Fraud Investigation Service North West
and Stoke for follow up action on these identified staff agencies.
22 March 2004
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