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I am very pleased indeed to be responding in this Opposition debate, and I am even more pleased having heard the speech of the hon. Member for Epsom and Ewell (Chris Grayling). Up to five minutes to 4 yesterday, the Opposition wanted to debate pensioner poverty today. Now they do not, and I can understand why. They treated pensioners appallingly when they were in power and now they have nothing to say to them. For our part, we will continue to work, speak and act for justice for pensioners.

I welcome this debate, not least because it gives me the opportunity to explain to the hon. Gentleman—and he clearly needs a proper education on this—what national insurance numbers are for and what they are not for, because he does not appear to understand. In fact, when he reads Hansard tomorrow, or online later today, I think he will be embarrassed by what he has just said. The hon. Gentleman makes accusations about national insurance numbers and compares them with work permits, but they are not the same. Total national insurance numbers issued to non-EU nationals and the number of work permits issued cannot be compared, which he tries to do.

National insurance numbers cover categories of people who are not required to have work permits but are eligible for national insurance numbers, such as overseas students, whom we welcome into our universities and who bring the fees that help to finance those universities, and the dependants of work permit holders—relatives who are given permission to come to the UK to join a family who already live here legally. There will always be more national insurance numbers than population, as, for example, national insurance numbers for deceased persons remain on the system to ensure that their surviving dependants can get benefits based on the deceased’s national insurance contributions, including the widow’s pension. That would also have been the case before 1997, when our Government came to power.

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Chris Grayling rose—

Mr. Hain: Let me explain the facts that the hon. Gentleman clearly does not understand.

European Union workers are entitled to count on national insurance contributions paid here for their pension in their country so their national insurance numbers and contribution records have to remain on UK systems after they have come and gone. That is part of the reason for the figures for national insurance numbers being greater than the hon. Gentleman might suppose.

Chris Grayling: I was making a point about national insurance numbers that were issued in the past three years. I assume that the Secretary of State has not been issuing national insurance numbers to dead people.

Mr. Hain: I think the hon. Gentleman will be even more embarrassed about those comments. Of course we do not do that. The national insurance numbers of people who die remain on the system so that their dependants, including widows, can claim the benefits that flow from their contributions.

Mr. Andrew Robathan (Blaby) (Con): As Secretary of State for work, will the right hon. Gentleman explain whether it is in order under employment law for a boss to call a member of his work force “incompetent”? How does it feel?

Mr. Hain: That question does not merit an answer.

Under Labour today, a national insurance number can never be proof of anyone’s right to work, as the hon. Member for Epsom and Ewell appears to believe and as he implied this afternoon. The previous Conservative Government believed that it should be and legislated to that effect. That is a crucial point. The Tories thought that a national insurance number should be a passport to work and legislated to that effect. I repeat that, under Labour today, the national insurance number on its own cannot be an automatic passport to a job. It is an administrative mechanism whereby we can track people’s contributions to the national insurance system and record their entitlement to pensions and other benefits.

Of course, when the Conservatives were in power, illegal immigration and working were not the global phenomena they are now. That was not because they had well thought out policies to keep them under control. The main reason was that, under their stewardship, the economy was going to hell in a handcart. No one, especially not the 3 million unemployed, associated Britain with work.

Mr. Stewart Jackson: I am listening to the Secretary of State with interest. It is clear from the quality of his speech that it was written by one of his phoney think tanks; we are not sure whether it exists or whether it is a hologram.

The motion deals with immigration. If the Government are worried about immigration, why, two years ago, did they specifically opt out of sharing criminal records data with European Union countries? There are many cases throughout the country of national insurance numbers being given to people who
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have a criminal record in other EU countries. The Government do not seem to know about that and, what is more, do not seem to care.

Mr. Hain: Again, I am not sure what the hon. Gentleman’s comments have to do with the debate, but I am happy to answer his question. We are putting together systems and procedures to share information with Interpol and I shall tackle directly the subject of illegal immigration, its flow into illegal work and the question of national insurance. I give way.

Mr. Speaker: I call Douglas Carswell.

John Penrose: John Penrose, Mr. Speaker.

Mr. Speaker: Mr. Penrose, I apologise.

John Penrose: I keep saying that I am a lot prettier than my hon. Friend.

If someone approaches an employer saying that they are a British citizen, that they have no proof of it but they have a national insurance number, how is that employer to be sure that the person has a right to work in the UK?

Mr. Hain: Employers must make the requisite checks. I shall deal with the matter shortly because it is another false premise on which the Opposition motion has been framed.

Unemployment was dire under the Conservatives, but it is no longer the case. This morning’s figures again show that employment is at an all-time high, with nearly 3 million more people in work. Inactivity is historically low and a million people are off benefits. That is our Labour Government’s record. It is a record of genuine achievement and competence, not Tory abject failure and incompetence.

David T.C. Davies (Monmouth) (Con): The Secretary of State says that 3 million more people are in work. He has plenty of figures at his fingertips; can he tell us how many of those 3 million people are British citizens?

Mr. Hain: As I have been explaining, employment has gone up, including for British citizens. Wages have risen and prosperity has increased. There are more house owners and the economic picture is completely different from the one that we inherited from the Conservatives.

Angela Watkinson: The amendment announces measures to prevent illegal immigrants from being issued with national insurance numbers—a clear admission that it has been happening. [Interruption.] Does the Secretary of State believe that he is introducing the measures unnecessarily? Their introduction implies that illegal immigrants have been issued with national insurance numbers. What additional measures will he introduce to retrieve or withdraw the national insurance numbers that have been issued to people who are not entitled to them?

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Mr. Hain: I am sorry to say to the hon. Lady that the level of ignorance and misunderstanding among Conservative Members on the matter is astonishing. Given that they chose to switch at the last moment from another topic to this one, I am amazed that they have not checked their facts. I shall describe shortly exactly what happens. I shall also describe the way in which, under the Government whom the hon. Lady supported and who were in power until 1997, the relevant procedures were inadequate and incompetent and could not nearly have dealt with the problems that we have faced with the global flows of millions of people on a scale never previously experienced in advanced European countries such as ours.

Chris Grayling: The Secretary of State accuses us of not checking our figures. However, his Department’s figures show that both the proportion and the absolute number of British adults of working age in employment have fallen in the past two years.

Mr. Hain: It is important to note when considering proportion that the population has been increased— [Interruption.] The facts are stark: 3 million unemployed under the Conservatives, but record employment under Labour, including record numbers of British citizens.

I agree with Conservative Members that illegal working is an issue and I shall explain what we are doing about it. The hon. Member for Epsom and Ewell should know that the Conservative Government in 1996 established a clear and unequivocal statutory duty on employers to check that new employees had the right to work. However, it is worth pausing and considering the key issue that, in doing so, they said that the possession of a national insurance number was sufficient proof of a right to work. The Tories said so and legislated to that effect. Perhaps with the benefit of hindsight, it is clear that that was a stupid thing for the Tories to do—it was both administratively impractical and left the door wide open to abuse. Yet as we all know, despite the requirements on employers, illegal working has remained a problem. Employers cannot abrogate their responsibilities for that, which is a point to which I shall return later in my speech.

Stewart Hosie (Dundee, East) (SNP): Will the Secretary of State give way?

Mr. Hain: I want to make some progress, because I have been asked specific questions about changes and I want to answer them. Then I will give way.

The situation has evolved over the years. It became apparent to us that some employers, either wilfully or inadvertently, were employing illegal workers, in part because those people had been issued with national insurance numbers. Some of those NINOs will have been issued to students who then overstayed, for example. In other cases, employers will have created their own reference numbers, to record tax and national insurance deductions, which are not recognised by either the Department for Work and Pensions or Her Majesty’s Revenue and Customs.

We have therefore taken action, and I have been asked what we have done. In 2004, we changed the legislation inherited from the Conservatives to provide that a national insurance number alone is not enough
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to prove an entitlement to work, as it had been under the Conservatives. Since July 2006, all employment-related national insurance number applicants have to prove that they have the right to work in the United Kingdom, which is something that no previous Government—and certainly not the previous Tory Government—ever required. That has made a real impact.

Since July 2006, more than 8,000 national insurance number applications have been turned down because they did not satisfy the right to work. Before someone can be given a national insurance number, they have to undergo an intensive face-to-face interview by a specialist member of Jobcentre Plus staff—I was asked about that by, I think, the hon. Member for Upminster (Angela Watkinson), although it may have been one of her colleagues. Did that system exist when the Conservative party was in power? We all know the answer to that: no.

The fact that we have tightened up the national insurance number system does not mean, however, that we have changed the fundamental responsibility of employers to check that their employees have the right to work. It is positively irresponsible for the hon. Member for Epsom and Ewell to go on the airwaves and try to mislead employers and the public into thinking that national insurance numbers prove the right to work. That positively encourages rogue or ignorant employers to flout the law. What the Opposition are saying demonstrates not only that they do not understand the first thing about the system, but that they are far more interested in making political points than in doing anything about illegal working.

The fact that some employers continue to ignore the law is the reason we are tightening up enforcement still further, by introducing increased fines from next month and, in extreme circumstances, prison for rogue employers, and why we are telling employers what their responsibilities are, through a major public awareness campaign. Will the hon. Gentleman put his and his party’s weight behind those proposals? I give him the opportunity to answer that question.

Chris Grayling: We would be delighted to see any proposals that tightened up the system. The point that the Secretary of State appears to be missing, however, is that Ministers told the House in 2006:

That is clearly not happening. Why not?

Mr. Hain: But it is happening. The hon. Gentleman is sticking to his pre-rehearsed script. He came to the House brandishing a speech that he thought would demolish everything before him, but it is based on a total misunderstanding of the facts and the realities.

The hon. Gentleman asked about this, so let me remind the House what the Opposition’s position was when the Security Industry Authority was established. Also, the motion that we are debating was inspired by problems that the SIA has been seeking to address and which are being addressed by the Home Secretary—

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Bob Spink (Castle Point) (Con): Will the Secretary of State give way?

Mr. Hain: I need to answer this point, and then I will come back to the hon. Gentleman.

Let me remind the House what position the Opposition took when the Security Industry Authority was established. Their spokesman said:

The Conservatives will certainly get the gangmasters’ vote with that attitude. Here they are, complaining about a lack of due attention and proper regulation, but when we were putting the necessary legislative changes in place, they spoke out against the tight controls that we introduced.

David T.C. Davies: I am grateful to the Secretary of State for giving way. If the Security Industry Authority and the Home Office, which has been found to be employing illegal cleaners, cannot determine who can and cannot legitimately work in this country, how on earth does he expect a small shopkeeper, a restaurant keeper or a small business man to do so?

Mr. Hain: That is exactly why we need compulsory identity cards for foreign nationals, but the hon. Gentleman is opposed to that policy. As I will explain in a moment—clearly he does not understand the situation either—compulsory identity cards will be a crucial weapon in stamping out the illegal working that, in supporting his party’s motion, he professes to be concerned about.

Mr. James Paice (South-East Cambridgeshire) (Con): I want to return to the Secretary of State’s reference to gangmasters. The Government introduced the Gangmasters Licensing Authority, yet there has been absolutely no diminution in the number of unlawfully operating gangmasters, who completely exploit usually illegal immigrants, who are housed disgracefully and paid a fraction of what they should be paid. That is because the Government have completely failed to provide the Gangmasters Licensing Authority with the powers and the resources to do the job that everybody in the House believes it should be doing.

Mr. Hain: I just do not recognise that description of the situation at all.

John Penrose: I thank the Secretary of State for giving way a second time. He is talking about the importance of employers making the necessary checks. However, if an employer is faced with a legitimate British citizen who does not have a passport, how is that British citizen supposed to prove that he or she has a right to work in this country, and how does that affect the Secretary of State’s point about national insurance numbers not necessarily being a guarantee of a right to work?

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