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13 May 2009 : Column 249WH—continued


13 May 2009 : Column 250WH

I would welcome the opportunity to extend the 2004 Act to all sectors, but I realise that that may be somewhat over-ambitious. Perhaps we could learn from our experience and concentrate on the construction industry.

Health and safety matters are important to those in the building trade and, in the wider context, in related industries. People must have the fundamental right to return home safely after their work. Since 2007, there have been 120 fatal accidents in the construction industry. In terms of serious accidents, those are only the ones that are reported. I would struggle to guess how many unreported serious incidents or accidents there have been in the construction industry. Given the nature of that industry, people are sometimes afraid to report accidents, simply because they fear being sacked or losing their job.

Again, there is evidence that illegal gangmasters supply unskilled labour to major construction companies and their subcontractors to carry out skilled and dangerous work without taking into consideration the safety consequences for the general public, others on the site and themselves. They also undermine legitimate employers who invest in training, and pay their taxes and national insurance contributions.

Alun Michael: My hon. Friend is making a powerful point, concentrating on a single industry to ensure that it is dealt with. Does he agree that the lesson that we should learn from his private Member’s legislation is to get everyone in the industry together? Does he hope, as I do, that the Minister will take the initiative to get all partners in the industry together to promote the right environment for extending the gangmasters legislation quickly?

Jim Sheridan: My right hon. Friend is knowledgeable about the industry and the legislation. He may be aware that last week I asked the Prime Minister whether he and like-minded colleagues would have a meeting on gangmasters in the construction industry. He has kindly agreed, and I look forward to that meeting so that they get a feel for the Gangmasters Licensing Authority’s work and how effective it is, and accept that it must be properly resourced.

Companies that pay their taxes and train apprentices for the future are damaged financially, especially small businesses that are struggling to survive and that must compete with cowboys in the construction industry. Cowboys often advertise on mobile phones tied to lamp posts, so they are untraceable. It would be helpful if Her Majesty’s Revenue and Customs tracked down those mobile phones and asked the people who operate illegally how they pay their taxes and national insurance, and how they treat their workers.

Mr. Clapham: As my hon. Friend is aware, the construction industry is peculiar in its diversity. It is made up of some 274,000 companies—that figure was given to the Select Committee on Business and Enterprise—and has many thousands of self-employed workers, many of whom have their tax deducted at source as though they were full-time employees. That makes the industry peculiar, and the Exchequer loses out.

Jim Sheridan: My hon. Friend is absolutely right. One of the powerful arguments for the 2004 Act was the benefits to the Treasury, and I will return to that. It is important to understand that the result for the Government
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of taking steps to protect workers’ terms and conditions, and their safety in the workplace, is win-win, because registering gangmasters provides a financial return from the registration fee and ensures that taxes and national insurance are paid.

There is increasing tangible evidence that if gangmasters are required to register, they must also be tax compliant and follow the VAT registration rules. In 2007 alone, the Gangmasters Licensing Authority identified more than £2 million of extra VAT payments for the Exchequer, and that figure takes no account of additional income tax and national insurance contributions being paid as a result of the authority’s work. The Government have a vested interest in seriously considering the matter, and I sincerely hope that they do.

Hon. Members should also be aware of the serious matter of community unrest when genuine workers see others doing their work and not contributing to the community or to wider society. That generates social unrest and frustration, which manifest themselves in people turning to extremist parties, such as the British National party, which are happy to exploit such situations. There is political advantage in addressing this matter.

Mr. Clapham: My hon. Friend is being generous in giving way. He will be aware that at the lobby that we both attended last week, there was a feeling among the many hundreds of workers present that they are being badly let down and that employers are using the immigrant labour force to drive down wages. Does he believe that extending the regulations on gangmasters would introduce greater harmony and avoid extremist expression such as that we heard at the lobby last week?

Jim Sheridan: My hon. Friend is absolutely right. There was anger and frustration among last week’s lobby of construction workers, and it was targeted at us—the Government—for not providing proper legislation to protect them. People are saying that foreign workers are taking our jobs, and undermining our terms and conditions, and that the Government—a Labour Government—are not doing anything like enough to help them. That resonates in communities.

People on English oil platforms were recently on strike for a long time, and 400 Italian workers, based on a ship offshore, were taken on during the day. That generated anger and frustration among indigenous workers. There is a community cohesion issue, and if the situation is allowed to continue, people will turn to extremist parties, which will provide simplistic answers, but not many solutions.

Trade unions, the Federation of Small Businesses and the Federation of Master Builders are asking for help to get us through these difficult times. With a little vision, we can make that change, help the industry and get people back to work with the terms and conditions and, more importantly, the safety environment to which they are entitled.

11.17 am

The Economic Secretary to the Treasury (Ian Pearson): I congratulate my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing this debate, on all his work through his private Member’s
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legislation, and on championing the issue. As he said, the Prime Minister agreed last week to meet him, and I assure him that the Government believe that it is important to debate the matter, particularly when health and safety issues are involved.

As my hon. Friend knows, we have carefully considered extending the licensing regime to other sectors. That was part of the vulnerable worker enforcement forum’s work last year. The forum consisted of union and business representatives, Citizens Advice and the key workplace enforcement bodies. There was disagreement about the strength of the case for broadening the Gangmasters Licensing Authority’s remit, and it is important to recognise that employment agencies operating outside GLA areas of agriculture and food processing are not unregulated. They are, in fact, subject to employment agency regulations enforced by my Department's employment agency standards inspectorate, and I will say a little about its work.

Following the forum’s work, the Government announced that we have no plans to extend the licensing regime, but that we want to prioritise effective enforcement of the existing law. We are doing so by taking steps to strengthen the employment agency standards inspectorate, and to raise its profile among agency workers and agencies as an effective, but less intrusive regulatory alternative. It is important to remember that the majority of agencies want to comply with the law, but my hon. Friend rightly highlighted a number of incidents of abuse and I recognise that there is a live debate about the matter.

Alun Michael: I rise briefly in support of the arguments advanced by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan). I urge my hon. Friend the Minister to take on board the fact that although regulation exists in a variety of areas, the success of the GLA arises from the partnership of people who engaged in the industry to go beyond what top-down regulation can do, think outside the box and create an environment that changed how the problem was dealt with. That development was stimulated by events in Morecambe bay, which removed much of the opposition that had existed. We do not want something like that to be the necessary trigger to opening up the debate to which my hon. Friend the Member for Paisley and Renfrewshire, North has drawn attention today.

Ian Pearson: I certainly agree that we do not want a repetition of the events of Morecambe bay. We need to make progress with effective enforcement of the existing law, while continuing to have the policy debate that my hon. Friend the Member for Paisley and Renfrewshire, North has been encouraging us to have. No doubt he will continue to pursue that with the Prime Minister and others, and we are certainly open to listening to his arguments.

However, we are strengthening the employment agency standards inspectorate by doubling the number of employment agency inspectors. In addition, provisions in the Employment Act 2008 that have now come into effect give it stronger powers of investigation—for example, through access to bank and other financial records. Inspectors also have access to stronger penalties. The Act now makes infringements of employment agency regulations indictable, so that they can be tried in a Crown court, where unlimited fines for certain offences
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are available. It is important to recognise the strengthening of employment legislation that we have done on the back of my hon. Friend’s campaigning.

As I think my hon. Friend is aware, a campaign was run in February and March to build a higher profile for the EAS inspectorate and to increase awareness of the special safeguards for agency workers. That has had a significant impact on the number of calls to the helpline and visits to the direct.gov website.

In addition to raising awareness, the EAS inspectorate is increasing its targeted enforcement activity. Last December, it had a blitz on agencies supplying workers to the construction industry. Using locally sourced intelligence, together with information previously provided by unions working in the construction sector, 52 agencies were identified and inspected to establish compliance with the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003. Of the 52 agencies inspected, 40 were found to be breaking regulations, with a total of 192 separate infringements. They were sent warning letters, which are being followed up.

I can assure my hon. Friend that the EAS inspectorate has teeth. It has powers to send warning letters, to prosecute in the civil courts and to prohibit people from running employment agencies for up to 10 years—something the GLA licensing system does not provide for.

Jim Sheridan: Some of the people operating as illegal gangmasters will not take much cognisance of warning letters; in fact, they will probably just throw them in the bin. It would be extremely helpful and would send a clear message to those who wish to operate in that way if they, or the company they are working for as subcontractors, were denied the opportunity to tender for Government work. That might concentrate their minds more than just receiving warning letters.

Ian Pearson: I agree that warning letters are unlikely to be taken into account by some of the people whom my hon. Friend describes. That is why, under legislation, we have further powers for enforcement through the courts. On what he says about Government contracts, he will be aware of Government procurement processes and the high standards that are applied to Government procurement. We certainly do not want to be procuring services from the sort of agencies he is talking about.

Mr. McCartney: What has come out of the blacklisting saga is that some companies were operating a blacklist in the construction industry, but solely with public sector contracts. They were getting public sector contracts and private finance initiative work, and all the companies were operating a blacklist against British construction workers. Large numbers were involved. That is just not acceptable. What will we do about it?

Ian Pearson: I shall say something about blacklisting in a moment, but first I want to make the point that although there is clearly more work to be done, it is important to recognise that the EAS inspectorate is having increasing success in cracking down on agencies that flout the law. The team has doubled in size. The inspectorate has been given stronger investigative powers and a higher profile, and we are confident that it will
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have increasing success in the future in ensuring compliance with the law. That does not mean that there is not more to be done, but we need to recognise that the Government have made progress.

We are putting a great deal of effort into closer working between the enforcement bodies that enforce basic employment rights. At the recent fair employment enforcement board, made up of unions, business representatives and the enforcement bodies, praise was given for the even closer working relationship between the EAS inspectorate and the GLA. They hold joint management sessions, have signed a memorandum of understanding, and work closely together to share information about non-compliant or suspect businesses operating across their respective sectors.

Good progress is being made on setting up a single enforcement helpline, bringing together the helplines of the five key workplace enforcement agencies. That will make it much easier for vulnerable workers to report abuses, and will facilitate more joint enforcement activity where abuses raise issues for more than one enforcement body. I recognise that there is an issue regarding linking things together more effectively.

Let me make some comments about the construction sector, which accounted for a significant part of the contribution from my hon. Friend the Member for Paisley and Renfrewshire, North. According to Construction Confederation figures, only 3 per cent. of workers in the construction sector are engaged through agencies, which suggests that licensing agencies in this sector would have a very limited impact. They are none the less a significant group of employers, and even 3 per cent. accounts for a significant amount of employment. I recognise the points that my hon. Friend makes.

However, given serious economic problems in the sector, which is facing the full impact of the economic downturn, we need to be careful about imposing significant new regulations. That might not only place extra pressures on construction businesses at this time, but could make it more difficult for them to engage workers when the upturn comes. Construction is a tightly regulated sector that also has an unusually large number of small companies, which could suffer disproportionately because of the cost and administrative burden of a licensing regime. However, my hon. Friend is absolutely right to point out the abuses that exist. We need to ensure that we take action in that regard, and to take into account the appropriate way of taking action.

Jim Sheridan: Will my hon. Friend the Minister give way?

Ian Pearson: I have only three minutes left and I have some other points to make in direct response to what my hon. Friend said.

Construction is also a relatively skilled area in which, unlike agriculture and food processing, workers earn more than the minimum wage. However, my hon. Friend is right to point to examples of abuse, and it is important that the Government take action in those areas. Therefore, although we are not currently persuaded of the case for licensing in the construction sector, we will certainly continue to listen to the arguments made by my hon. Friend and others, and I can assure him that we are taking a very close interest in health and safety matters and in self-employment, which he also raised.


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The updated and tightened Construction (Design and Management) Regulations 2007 place a duty on construction sites to employ competent, skilled staff and to ensure health and safety on-site. The regulations now extend to all construction sites—large and small—and the possible fine for non-compliance is unlimited, so there is a big incentive for sites to comply. The Health and Safety Executive is recruiting additional inspectors with a construction industry background. They will join the HSE next month, so further work is taking place, as it is on self-employment.

I want to mention the action we are taking to tackle the issue of blacklisting, which was raised by my right hon. Friend the Member for Makerfield (Mr. McCartney). He will be aware that on Monday, we announced that we were minded to introduce new regulations under the powers in section 3 of the Employment Relations Act 1999 to tackle blacklisting. My Department will launch a short public consultation in the summer, seeking views on revised draft regulations, with a view to securing parliamentary approval of the final draft regulations in the autumn. We had previously thought that there was no evidence for taking action in that area, but we had legislation on the stocks. It is right that we check that it is appropriate, but it is important, given the events that have come to light recently, that the Government take action. We want to ensure that it is the right action, which is why we shall be consulting on it.

11.30 am

Sitting suspended.


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Rivers (England)

2.30 pm

Mr. Oliver Heald (North-East Hertfordshire) (Con): It is marvellous that I was able to secure this debate at such a timely moment. I am pleased that it is being held today, as the national campaign “Rivers on the Edge” was launched last night by the World Wide Fund for Nature. The campaign highlights the plight of our rivers, their poor condition and the fact that action is needed if they are not to run dry. Early-day motion 1392, in my name and those of many colleagues, also highlights the problem. I thank Martin Jee, my researcher, who has done a good deal of work in researching the subject. I also thank Charles Rangeley-Wilson of WWF for his work on the campaign.

I was brought up close to the banks of the River Kennet in the Newbury constituency, and I often used to walk by the side of what is probably the best chalk river in the country. I believe that the river runs through the constituency of another Member here this afternoon—the hon. Member for Reading, West (Martin Salter). If I am wrong, it is nearby. It is good to see the hon. Gentleman here today.

The beauty of the Kennet—a wonderful river—is now spoilt by the fact that great parts of it run dry. In my constituency of North-East Hertfordshire can be found the four towns of Letchworth Garden City, Royston, Baldock and Buntingford, but the geography of the constituency consists of 180 square miles of rolling hills and fields, with a tracery of lanes joining the many villages, and nestling in the valleys are the seven chalk rivers and streams—the Ivel, the Ash, the upper Rhee, the Rib, the Quin, the Beane and the Mimram. Chalk rivers naturally have uniquely pure water.

2.32 pm

Sitting suspended for a Division in the House.

2.44 pm

On resuming—

Mr. Heald: Water bubbles up from the chalk aquifer and sustains many species. The main chalk rivers are located in the south east of England and a small part of Normandy in France; they are internationally unique and should be prized and considered as important as other major international ecological concerns such as the ice caps or—

Anne Main (St. Albans) (Con): The rainforests.

Mr. Heald: Indeed.

The River Mimram, in my constituency, features in the WWF campaign and includes a site of special scientific interest, at Tewin Bury, which is home to wetland birds, rare plants—for example, the southern marsh orchid and the golden saxifrage—fish and the white-clawed crayfish. It is also a refuge of the water vole, the population of which has collapsed—it has fallen by 90 per cent. It would be sad to lose the animal that was the inspiration for Ratty in “Wind in the Willows”. The Hertfordshire and Middlesex Wildlife Trust has undertaken a major survey of the vole population using data from Tewin Bury.


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