4 Gangmasters (Licensing) Bill
35. As we have noted above, the Gangmasters (Licensing)
Bill is currently before the House of Commons: it received its
Second Reading on 27 February 2004, and was committed to Standing
Committee. It was considered in Committee on 28 April 2004.
36. The Government, particularly after the incident
in Morecambe Bay, has been broadly supportive of the objectives
of the Bill as presented by Mr Sheridan. Thus the Home Secretary
said that "we will want to back Jim Sheridan's Bill in relation
to gangmasters and I hope we can move forward on that very quickly".[58]
A similar sentiment was expressed by the Prime Minister, although
he was clearly concerned about the Bill's detail: on 11 February
he said that the Government "certainly support[s] the objectives
set out in the private Member's Bill proposed by my hon. Friend
the Member for West Renfrewshire (Mr Sheridan). The detail must
be got right, and we are working with him and Departments to ensure
that it is".[59]
37. Lord Whitty told us that one of the principal
concerns about the Gangmasters (Licensing) Bill was that as drafted
it ranged too widely. He told us that the Government would prefer
the Bill to "be confined, at least in its initial circumstances,
to agriculture, shellfish gathering, processing and pack-houses
related to agriculture, but not [extend] into areas like construction
and catering".[60]
He also said that there were issues to be resolved about the detail
of the licensing and registration scheme.[61]
Lord Whitty said that the Government would work with Mr Sheridan
to "refine" the Bill through amendments at Committee
stage.[62]
38. In its memorandum the Government listed the amendments
it sought to the Bill. It argued that the Bill should:
- "be specific and limited
to gang workers supplied or used to undertake work in agriculture,
[and] shellfish gathering including related areas and activities";
- apply both the primary labour providers and to
sub-contractors;
- define the form of licensing to be applied;
- make provision for a licensing scheme and associated
register of licensed gangmasters to be established by the Secretary
of State using secondary legislation;
- make provision for charges to be made for licenses,
with the charges to be set in secondary legislation at a level
to cover the full costs of the scheme;
- create 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; and
- set out the powers of enforcement officers, including
a provision for enforcement officers from different departments
to share information.[63]
39. In the event Mr Sheridan tabled a large number
of amendments at Committee stage. Their effect was to scrap the
existing Bill, and replace it with provisions to which the Government
agreed. The amendments were then agreed to by the Committee.[64]
The most significant provisions of the 'new' Bill are:
- To establish a 'Gangmasters
Licensing Authority', to define its functions, and to provide
for the Secretary of State to make provisions by secondary
legislation regarding its status, membership, and other matters;
- To provide that the Secretary of State may direct
the Authority;
- To restrict the Bill to agricultural work, gathering
shellfish, and processing and packaging of products derived from
agricultural work and of shellfish and fish, and to allow the
Secretary of State through secondary legislation to exclude
and include certain activities within the ambit of the Bill;
- To define what is meant by the word 'gangmaster';
- To require the Authority to licence the activities
of gangmasters, to make rules and other provisions relating to
licences, and to maintain a register of licensed gangmasters;
- To prohibit unlicensed activities (although the
Secretary of State, by secondary legislation, may
determine that certain activities do not require a licence), and
to make offences of acting as an unlicensed gangmaster, or in
contravention of a licence, or of entering into an arrangement
with a prohibited gangmaster (though the Secretary of State can,
by secondary legislation, alter aspects of this provision);
- To establish through secondary legislation
an appeals process; and
- To make provisions relating to enforcement.
40. In our previous report we said that we were "not
convinced that a statutory registration scheme offers a stand-alone
solution to the problems of illegal gangmasters. … without
concerted action to remedy shortcomings in enforcement …a
statutory registration scheme, introduced as a single policy response,
will solve nothing".[65]
For that reason we did not then declare our support for registration
and licensing. 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.
41. We are particularly concerned about two aspects
of the Bill. First, for it to be fully effective the Government
must introduce a considerable volume of secondary legislation.
There is no defined timetable which it must follow in doing so.
Second, the Bill requires a reliable form of identification to
be carried by both gangmasters and their employees so that farmers,
enforcement officers and others are able to identify who is legitimate
and who is not. We assume that this will be the subject of rules
set out by the licensing authority. 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.
Costs
42. There are concerns about the costs the legislation
will impose on legal gangmasters. In his evidence, Zad Padda,
a legitimate gangmaster, told us that under the original Gangmasters
(Licensing) Bill the cost of a licence will be around between
£1500 and £3000.[66]
The worry is that this will simply add to the cost base of legitimate
operators relative to the illegal, perhaps encouraging less scrupulous
farmers and others to consider using unlicensed gangmasters. 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.
Supermarkets' responsibility
43. In our previous report we said that the "dominant
position of the supermarkets in relation to their suppliers is
a significant contributory factor in creating an environment where
illegal activity by gangmasters can take root".[67]
Our contention was that the pressure for just-in-time delivery
of produce, and the downward pressure supermarkets are able to
influence on price, put pressure on producers to cut costs and
cut corners.
44. It is clear that supermarkets have made efforts
to address the issue. The Transport and General Workers' Union
said that although supermarkets "do exert pressure on the
food chain", they had worked through the Ethical Trading
Initiative to address the problem.[68]
Mr Sheridan told us that the supermarkets had been "first
class" in their support for his Bill.[69]
Indeed the British Retail Consortium, representing the supermarkets,
said in its evidence that it supported the registration of
legitimate gangmasters.[70]
Nevertheless, the dominance of the major retailers over the supply
chain inevitably means that producers are pressured to produce
at high speed and at low costs. 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.
45. That said, perhaps the most sobering point made
in our evidence was that of the Transport and General Workers'
Union. It pointed out that we all have responsibility for the
problem of illegal gangmasters because we all demand ever-cheaper
food.[71] We made the
same point in our previous report into this subject.[72]
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.
58 Quoted in TUC Risks, No.143, 14 February. Back
59
HC Deb, 11 February 2004, col.1405 Back
60
Q146 Back
61
Q211 Back
62
Q210 Back
63
Ev 36, para.22 Back
64
See Standing Committee C Proceedings, 28 April 2004, cols.3 to
46 Back
65
HC (2002-03) 691, para.58 Back
66
Q119 Back
67
HC (2002-03) 691, para.25 Back
68
Q16 Back
69
Q18 Back
70
Ev 84 Back
71
Q16 Back
72
HC (2002-03) 691, para.29 Back
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