Examination of Witnesses (Questions 320-339)
23 MARCH 2004
BEVERLEY HUGHES,
MR BRODIE
CLARK, MR
CHRIS POND
AND MR
RICHARD KITCHEN
Q320 Mr Wiggin: You must be very frustrated
because you actually thought, I believe, that operations against
cockle pickers had actually taken place in August? Is that not
the case?
Mr Pond: Can I explain the circumstances,
which I think are related to Mr Breed's question. Of course there
were multi-agency activities actually in the Morecambe area—Operation
Exodus, and then in the Dee Estuary, Operation Omega,
which was in August—activities which were in the same general
geographical area. Further Operation Gangmaster operations
were planned between March and April of this year, again in the
Morecambe Bay area. Members of the Committee will understand why
those operations have not gone ahead given that we still have
a police investigation that is going on. In relation to Mr Breed's
earlier question, which I think is relevant to Mr Wiggin's, there
has been an activity to see what is happening. The question is
with all that activity is there anything which could have been
done other than having an officer from each of our Departments
standing on the beach overnight 365 nights a year to avoid the
tragedy that occurred? That is a question which all of us, especially
those of us with ministerial responsibility, have had to ask ourselves.
I think the answer has to be that clearly there is more that must
be done. Hindsight is a wonderful thing and on this we will have
to learn the lessons from the past.
Ms Atherton: We had produced a report
warning Ministers and the Government that there was a real problem
in the wider agricultural sector relating to gangmasters working
not only in cockles but in the whole agricultural and horticultural
sector; it is going on today.
Diana Organ: I wonder if you could let
us know what resources the Government and Home Office have given
to police forces to cope with the problem of illegal gangmasters
and in the light of the Sheridan Bill and the Morecambe issue
do you intend to allocate additional resources for the police
to cope with it in the future? What have been the instructions
that the Home Office have given to police forces about the prioritising
of this problem? Police forces have a wide range of issues to
deal with, in the order of things how much priority is this to
be given? What have you said as instructions and guidance to police
forces, particularly in those areas like East Anglia where we
know there are large agricultural gangmasters, illegal or otherwise,
operating?
Beverley Hughes: All of the agencies
get the resources allocated to them for a variety of purposes
and it is up to the agencies to allocate those recourses to the
various activities for which they are responsible. In terms of
the police, I think you have to look at the two recent prosecutions
we have seen which were both police-led with Reflex involvement,
the ultimate source prosecution and the Cox family whose prosecution,
convictions and sentencing has recently been publicised. As I
said, I get asked for approval from all of the operations, and
I had another one today that has just come to fruition in terms
of conviction, with the people being sentenced on 2 April, again
police involvement. What happens is that through Reflex and also
through the Regional Gangmaster Fora the DWP, the police, IMD,
the IMD Intelligence Service, Defra and other agencies meet regionally
to pool their information and to decide on a strategic basis on
all of the information they have as to what is going on and what
is concerning them, which operation they will either lead on their
own or with the agencies and they will pull together and have
a multi-agency operation. It seems to me that is a reasonable
way to go about things, to make decisions on the basis of the
shared intelligence and the assessment of that intelligence as
to which operations are likely to yield the most results. That
is a very credible way to go about it frankly.
Q321 Diana Organ: On the inter-agency
work you are quite right, Minister. We are looking at gangmasters
and they tend to operate, because it is to do with agriculture,
in more rural areas, so police forces and police constabularies
in places like Lincolnshire, Norfolk, Gloucestershire, Dorset
and Cornwall are all police forces that are operating in predominantly
rural areas so they are fairly stretched because of the distances.
I am just a little amazed that it looks like it is not even going
to come on to their radar because they have lots of other things
they have to deal with and you are not giving them any particular
guidance that this is an issue which is going on and it is an
important crime. I can understand that you work together but it
seems there is no guidance going to the police forces in these
rural areas that this is a crime that they should be looking out
for.
Mr Pond: That is precisely why
we need the targeted and co-ordinated response which Operation
Gangmaster represents. We know that each of the agencies cannot
do everything they would like to do in every part of the country
so we have to use a risk assessment basis to work out where we
are most likely to use those resources most effectively, to have
that co-ordinated approach and to use those resources in the ways
we have been describing. One member of the Committee suggested
this was less than effective. It is a very effective way of making
sure that we respond to a particular problem where we know that
problem exists.
Q322 Chairman: Could I interrupt you,
just talked about an operational matter in which you said that
there has to be a risk assessment undertaken, who is calling the
shots? Are we talking about an investigation which involves officers
from your Department, the police, Immigration, the Nationality
Directorate, are you deciding how that group is going to act in
a particular set of circumstances or were your remarks focused
solely on the DWP input on an operation that the Minister of State
might be involved in? Help me because I do not understand that?
Mr Pond: Operation Gangmaster
brings together a number of the agencies—we all heard about
that—that is in addition to the normal work that each of
those agencies will be doing in the enforcement and operational
work. In terms of how these things operate the DWP acts for Operation
Gangmaster as a secretariat on these matters. We will convene
the agencies to invite them to take part in a particular operation
once we receive a referral and we will make an assessment of that
referral using pretty objective criteria as to how serious it
is.
Q323 Chairman: Out on the ground is it
that all of the inputs of different parts of Government who are
involved in this are all ferreting about doing their own thing
and suddenly they go, "There is a characteristic of something
which looks like an illegal gang master operation", and then
it comes up to your co-ordinating body? Explain how the relationship
occurs between the detection of activity on the ground and the
initiation of and operation to deal with it?
Mr Pond: At a local or regional
level it may be a referral which comes from a number of sources,
it might be from the police, it might be from our own people in
DWP fraud operations, it might come from individual referrals,
it might come from another gangmaster, a gangmaster who is operating
formally and legally who sees somebody else who is not.
Q324 Chairman: Given you have some experience
in this field what do the statistics tell us so far?
Mr Pond: I can give you information
from those three gangmaster operations which have been completed
so far, I cannot yet give you detailed outcomes for the 11 current
and live operations for reasons you will understand, that there
is some sensitivity there. You have as Annex A of the memorandum
we submitted a breakdown on one of those, Operation Christmas,
and we will be very happy to provide you with a breakdown of all
of the others. To answer your specific question, Mr Jack, DWP's
role here is in acting as a secretariat, it is in co-ordination.
The involvement of the other agencies is voluntary and it will
be determined according to the priority which they themselves
place on a particular operation. We find that works well. We would
be interested to hear further from the Committee whether you believe
there are other ways in which Operation Gangmaster should
be co-ordinated. On the basis of the experience we have had so
far that seems to be working well.
Mr Clark: Can I say from our side
a similar process is taking place in terms of looking at various
priorities we have in terms of student abuse, marriage abuse,
illegal working. We are also looking at the threat and the risk
round those and we will undertake and agree to undertake operations.
We come to those decisions at a fairly high level but we will
percolate that through our organisation through our tasking arrangements
and at local and regional level there will be liaison with other
departments to talk about the engagement which needs to occur
for these operations to move forward successfully. On a couple
of other resourcing points which I think you mentioned, one is
that we are constantly in the business of looking at where the
resourcing lies and where it can be more effectively utilised.
In the course of last year we moved resourcing round in order
to allow new offices in rural areas to take up the role and carry
forward their business. That is an on-going part of what we have
to do to keep tracking and follow the threat and risk issues.
The other thing to mention, which the Minister mentioned earlier,
was a full review that we are now undertaking within the Immigration
Service looking at the resources round enforcement of immigration
law. That has now begun, it is in its second or third week, and
we are looking at findings coming from that towards the end of
July this year, that will help us determine whether we have the
right level of resourcing in the right parts of the country doing
what we judge to be the appropriate work in mitigating the risk.
Q325 Diana Organ: I wanted to go back
to the issue about police resourcing and instructions. I recognise
that in rural areas police have a lot of priorities and they are
quite stretched. One way they are incredibly effective is if you
take an example which happened recently where police resources
were moved from Gloucester into the Forest of Dean to help with
the Safer Streets Initiative in the market towns and by coming
in on Friday and Saturday nights we had real results pushing down
anti-social behaviour in those market towns and it had a lasting
effect. Given that is done as normal policing, whether it is on
a drugs issue or on anti-social behaviour, resources are pulled
in for a particular operation, when Jim Sheridan's Bill becomes
law, not if, when his Bill becomes law would you expect to give
guidance to rural police forces where we know that agricultural
gangmasters operate to make them say, "What are we going
to do, let us give an instruction about this?" This has to
become one of the operations that is a priority for a rural police
force. Will you give extra resources or instructions to rural
police officers when that piece of legislation is in place?
Beverley Hughes: We will look
at whether that is necessary. If we can give you a clearer picture
of what is happening already it may reassure you that police in
rural areas I do not think need that guidance or that push because
most of the big operations, two of which I have just outlined
which have been in the media recently, have been police-led in
those rural areas, where they knew extensive illegal working and
rogue gangmasters were operating. It was the police who led those,
pulled the other agencies in and it is because the police are
at the table both at a high level on Reflex and at the regional
level on the DWP Co-ordinated Regional Fora of Operation Gangmaster
that they are fully plugged in to their potential to assist with
operations and are doing so. I do feel, and it is probably our
fault, if we can give you a clearer picture both of the architecture,
and it is complicated, which exists and also a clearer picture
of the level and scale of operations across the piece that have
affected this sector, whether it is being led by IND, DWP, the
police or whoever you may still have some concerns but you may
have some reassurance that the picture is not as bleak as you
seem to think it is.
Diana Organ: If you go back to the evidence
Geraldine Smith gave—and we know when the cockle beds were
opened there were hundreds of people out on the foreshore collecting—it
would seem in all probability, it was a jolly good bet—there
had been concerns about Chinese workers in the town brought to
the attention of the police and of local authorities and the MP
long before—if a police officer were to go out one morning
and just look at the foreshore where there were hundreds of workers
and just interview one or two of them, and the same might be the
case for the lettuce pickers in East Anglia.
Beverley Hughes: I would say in
general terms this is a very tempting point of view and I understand
it absolutely. The best way to make sure that you get the most
out of the resources you put in in terms of enforcement is to
base your decisions on what you do on the collection of intelligence
first. Just dropping into a situation in the hope you will find
some people actually takes a lot of resources often for little
gain. We deliberately instituted an intelligence-led approach
because the evidence shows if you collect your evidence first
and your intelligence you get much more effective operations in
terms of the numbers of people you find and people that you can,
in terms of the organisers, apprehend.
Q326 Chairman: Minister, we would love
to have your architectural clarity as long as it can be delivered
in a slightly quicker time scale than other material which we
have discussed because the Committee want to produce its report
very rapidly, you are very welcome to send that information.
Q327 Patrick Hall: Two points, one is
just an adjunct to that offer of the architecture, Minister of
State, you included in that an example of exercises and operations,
what I wanted to specifically say was, because there is confusion—at
least I am confused having listened to Geraldine Smith's evidence
last week regarding IND operations in the Morecambe Bay area which
may or may not have been joint with the police—could you
include that in your note to explain to us what actually happened
in the Morecambe Bay area in 2003 because that will help to clarify
some unnecessary misunderstanding? The second, and maybe more
substantive point I would like to make, arises from the evidence
we heard last week from Bill Hughes, the Director General of the
National Crime Squad when he was talking about Reflex. At one
point he said in response to a question from me "Policing
gangmasters is not something I see as an issue for the police
at this time, it is for other agencies involved". What that
has made me think is that whilst illegality and exploitation are
very much at the core of what Reflex is looking at I fail to see
how people who are working for an illegal gangmaster are being
exploited. I was trying to get from him whether or not gangmasters
as such, certainly illegal gangmasters, are on the agenda of the
National Crime Squad or perhaps Reflex in particular. I was not
clear from the questions and answers whether or not gangmasters
as such are at that level. If they are not at that level what
emphasis would there be upon the operation of illegal gangmasters
lower down the scale, particularly at local level? I would like
that clarified. It seems that the attitude is, and there may be
clear reasons for this, that gangmaster operations are for other
agencies to deal with, not for the police and not for IND. I think
there surely is an overlap and if that could be clarified and
if you can assure me and this Committee that it is on the national
agenda and therefore the signal locally, where it happens on the
ground, is that illegal gangmasters can also be dealt with.
Beverley Hughes: Perhaps I can
look at it in the context of the record of your question to Bill
Hughes, I will not try and interpret it here. It may be that policing
gangmasters might have been interpreted as checking on gangmasters.
As I have made clear, and Bill has made clear in other circumstances,
both in terms of the operation of Reflex at a very high level
and also the operation of the police at a regional and a local
level, it is a policing function—and it is one that the
police have readily accepted—to enforce the law and to assist
other agencies to enforce the law round illegal working, and that
will include gangmasters. I did have a figure somewhere, Reflex
is currently supporting nine operations by regional police forces
that involve the activities of gangmasters and illegal working.
Of all of the activities that Reflex has going on it is supporting
nine directly by regional police services which are about gangmasters.
In term of the issue of enforcement there clearly is an acceptance
by the police that it falls fair and square with them to work
with other agencies.
Q328 Alan Simpson: When we started the
inquiry into gangmasters the representations that we had from
the trade unions and from some of the more reputable gangmasters
was to say to us in agriculture we know there are seasonable markets
therefore there is a need for seasonal labour. Their concern was
that we should have a legal market for such labour rather than
an illegal market. Is it not the case that we have, for whatever
reasons, created a national framework where it is easier to make
money now out of the exploitation of people than of selling crack
cocaine? The fines you mentioned are derisory. There are issues
about what sort of illegality it is. We had reports coming into
us that set out the most horrendous treatment of people. When
the police were involved by and large it was around one of two
questions: "Are you here illegally?" Or "Are you
defrauding the Exchequer?" That was it, the exploitation
of people was not on anyone's particular, strategic legal agenda.
Is that not what we have to address? A revisiting of the work
permit arrangements that we have in the United Kingdom that give
a much more upfront approach to a legal right to employment that
can be checked through a legal duty to be licensed as a supplier
of temporary labour and a much tougher regime of criminal penalties
for those who exploit it?
Mr Pond: May I respond first on
that. I do not think you are right to say we have created a framework
in which this sort of exploitation is encouraged. We have taken
many of the measures necessary to provide people with their basic
rights, the introduction of the minimum wage and the legislation
on working hours. The fact that anybody, regardless of whether
or not they are legally or illegally employed, is subject to the
same protection under health and safety legislation. All of those
measures are there but it will always be the case that there will
be some ruthless and unscrupulous people who are prepared to make
money, as you say, whether it be through exploiting people or
exploiting the illegal drugs market, whatever the opportunity
happens to be. It is our job all of the time, our in the most
general sense, to make sure that we keep on top of those people
and take whatever measures are necessary. In terms of the quota
proposal I think the Employment Registration Scheme we are introducing
to take account of the enlargement of the European Union and the
eight Accession States will have precisely the effect that you
are suggesting, people will no longer have to fear that they are
here on an illegal basis. We will not be encouraging people to
go underground into the informal economy and therefore to be even
more vulnerable to this sort of exploitation. I think that will
help us more effectively than a quota scheme would to achieve
your objectives.
Beverley Hughes: I absolutely
agree that the protection of migrant workers as well as British
nationals from exploitation by unscrupulous employers is fundamentally
important. In relation to migrant workers we have included in
the Bill going through Parliament offences against trafficking
for labour exploitation, for domestic slavery amongst other things,
so that we have some really tough sentences that courts can give,
a maximum of 14 years for people who are convicted of bringing
people in for those purposes. I think this is an issue that is
not just about migrant labourers, it is about the exploitation
of people across the board by those who would make money out of
the exploitation of people who are very vulnerable. Certainly
as far as migrant workers are concerned I am determined we will
bring all of the resources and pressures we can to bear to act
as strongly as we can against any employer in any sector who is
doing that, including the agricultural sector.
Q329 Alan Simpson: Leaving the immigration
crimes to one side what we are also clear about is that really
the cowboys in the system, those who are the most exploitative,
go out in search of those who are most able to be exploited. It
is quite clear to me that many of those who are most vulnerable
are those who have had their rights to work removed from them,
their right to work their and right to claim benefits, they are
the sitting market really for an exploitable workforce either
to be draw into marginal illegality, i.e. doing legitimate work
on a non-legitimate basis or into the networks of crime. In the
review policy will that include a review of section 55 and the
withdrawal of benefit entitlements?
Beverley Hughes: No, it will not
on this issue or it will not on the removal of the right to work
for people who have claimed asylum. It is fundamental to dealing
with this problem, and I am talking about the problem of illegal
working as well, in a sustained way that we separate those two
systems. That is one of the cornerstones of government policy,
and rightly so, to say to people, "If you want to come here
and work we want you to but we want you to do so legally".
That is why we have opened up the Seasonal Agricultural Workers
Scheme, the work permit scheme, issuing work permits to ever-increasing
numbers, and I have also opened up, as you know, on a pilot basis
two sector based schemes for the lower skilled end, not at the
moment for agriculture, but we are trying it out in food processing
and hospitality to see how that works. We have to separate illegal
entry and illegal working and using the asylum system from legal
working and legal entry. In those circumstances in legal entry
and legal working we have opened up opportunities as a government,
as a political commitment to offer opportunities to foreign nationals
who can contribute to the economy but they must do so in ways
that are legal and that is why it would be wrong to go back on
the decision to take away the right to work to failed asylum seekers.
We have to separate those two avenues and that is quite fundamental.
Q330 Alan Simpson: Do you not accept
there is an issue that needs to be separated but whatever decision
is made by the State about someone's long-term rights to remain
here ought not be confused about their ability to survive short-term
in that process. If we create a vacuum in which the only way you
can survive is by throwing yourself into the hands of those who
will exploit are we not part of the problem?
Beverley Hughes: I understand
the point you are making entirely and it is a dilemma. The alternative
is to go back to a situation where the pull factor of allowing
people who claimed asylum to work and to be fully supported right
until they left the country, given that many do not want to leave
the country—and in some instances if we cannot document
them we cannot remove them forcibly—I think constituted
very significant pull factors to people using the asylum system
instead of using the legitimate routes into work. We have welcomed
that as a Government. We have faced some criticism from the Opposition
and other parties outside but nonetheless we stand by that, it
is what we believe in and that is why we have taken the decision
on EU accession to give people the right to work immediately alongside
the right to free movement provided we can monitor the situation.
I make no apology for that, that is where we stand politically.
On asylum we have to be clear and tough and we must not return
to a situation in which both the right to work and unconditional
support indefinitely remain part of that system because it will
simply encourage more people to use asylum as a route in instead
of the legitimate economic routes.
Q331 Chairman: You said "Provided
we can monitor the situation" part of the problem is there
are a lot of people in the United Kingdom who ought not to be
here for various reasons who you find difficulty in monitoring,
tracking down until they pop up perhaps as part of an illegal
gangmaster operation, how are you going to improve monitoring
over and above what you can currently do?
Beverley Hughes: The registration
scheme that Chris Pond referred to for nationals of the EU Accession
States will provide people with a legitimate way to work so they
can work in a formal economy for a legitimate employer and through
the registration process where they will have to give information
about who they are working for, what their wages are, where they
are based so that we can keep a record, a collation of the information,
the numbers of people, where they are, what sectors, and so on.
Through that process we can enable people to work but also have
a system which enables us to know how many people are here and
what they are doing.
Q332 Chairman: Will that mean they will
have to have a job before they arrive or will it be left to their
honesty to report their activities once they are admitted to the
United Kingdom?
Beverley Hughes: People will have
free movement to come into the United Kingdom as citizens of the
EU, as any existing Member States nationals will have, they can
come into the country provided they can support themselves, they
then get a job and through their employer they can register with
us and tell us what they are doing, where they are and we make
sure they are getting paid properly according to the national
minimum wage and also have an on-going process of collation so
we know the impact on the labour market and what sectors people
are working in, and just build up a picture of what is happening.
Q333 Paddy Tipping: Can we focus on benefit
fraud for a moment or two, paragraph 20 of the memorandum is quite
helpful, it shows that labour providers during the early part
of this year approaches 2,000 and people have had their benefits
stopped with a saving of £1.1 million. That means labour
providers as a whole, which is wider than the scope of the Sheridan
Bill, is that right?
Mr Pond: Yes, it is. I have to
point out when we are talking about the sanctions and the amount
of overpayments and monetary value adjustments benefits it will
relate to the employees in those circumstances, not the employers,
if we are to describe the gangmasters in that way. There has been
quite a big stepping up, as you can see, in terms of the activity
and the effectiveness of that. I ought to explain that does relate
to the employees and not the employers.
Q334 Paddy Tipping: I am keen to put
those figures in context, what is the total saving over the current
financial year of benefit fraud in general, what proportion is
that of £1.1 million?
Mr Pond: I cannot give you a precise
figure on the proportion at the moment, I will send you a note
on that. It is inevitably a small proportion of the total amount
because we are achieving quite considerable gains in terms of
reducing both fraud and error in the system, in particular fraud,
and over-performing on our overall targets. I am reminded that
a total of 24,000 sanctions have taken place over that period
to which the 236 sanctions in the memorandum related. It is a
small proportion but bearing in mind this is targeted activity
we think it makes an important contribution and it sends a message
through that we are not going to condone that sort of activity.
Q335 Paddy Tipping: If I have worked
the figures out right that is about 8%.
Mr Pond: That is getting close,
it is not bad. No, I think it is rather less than that, it is
0.8%.
Q336 Paddy Tipping: I was never any good—
Mr Pond: It sounded very good
initially, I was prepared to keep quiet and accept that one.
Q337 Paddy Tipping: Is benefit fraud
increasing? Are you putting more resources in?
Mr Pond: We are. In terms of the
number of operations that we have I mentioned at the beginning
it is the largest number of gangmaster operations we have ever
had. Bearing in mind this is a relatively quite period of the
year we will expect this to increase as we get more of this seasonal
activity involved. Overall we are putting about £4 million
a year in the DWP in to Operation Gangmaster operations.
Inevitably the determination of which operations we should pursue
are based on the evidence that we have we expect perhaps that
might increase as well. What I would suggest to you Mr Tipping
and to other members of the Committee is to extend an invitation
to you—given that perhaps there might be some smidgen of
doubt in your mind as to whether or not Operation Gangmaster
is as effective as you might like it to be and we might like it
to be—to visit one of the Operation Gangmaster regional
forum, see how it works on the ground, see the real co-ordination
between the different agencies, see the impact it has in terms
of dealing with this illegal activity. My Department would be
very happy to facilitate that sort of visit.
Q338 Paddy Tipping: That is a helpful
offer. Let me try and tease you a bit further on this, you said
that £4 million is spent on Operation Gangmaster activities,
fraud activities within the Department, of the total resource
that you have to fight fraud, the investigative part of the Department
what proportion is it of that?
Mr Pond: It is significant. We
spend about £126 million a year.
Paddy Tipping: You do the percentage
this time.
Mr Pond: £4 million of £126
million is approximately 3%. Of course there are other parts of
the activity, the Fraud Strategy Unit and the hotline which costs
just under 1m. It is a significant proportion of our overall costings
but we think it is very cost effective because it does draw the
other agencies in to that work.
Q339 Paddy Tipping: How do you make decisions
on how to allocate those resources on fraud?
Mr Pond: The DWP?
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