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Viscount Thurso: My Lords, it had not been my intention to speak. However, having listened to the debate on the previous amendment, I feel it necessary to support my noble friend. I have been an employer in the hotel and catering industry all my working life. I have run a number of small and medium-sized businesses. I have discussed the contents of this Bill with a number of my colleagues as it affects those of us who work in the industry. Their reaction is very straightforward. It is to say simply, "We may be publicans, but we do not necessarily want to be sinners. So we shall avoid that risk by taking on white people." In other words, they are worried about the possibility of committing a criminal offence. The worry is such that they will do whatever they can to avoid that.

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Baroness Gardner of Parkes: My Lords, I have previously drawn the attention of your Lordships' House to the fact that not all illegal immigrants are coloured. Certainly, one needs to watch out for those with an accent like mine.

Baroness Blatch: My Lords, I find what the noble Viscount has just said quite extraordinary. The defence that an employer can use is simply to ask for some kind of documentation such as a National Insurance number, a P45 or P46, birth certificate or passport. There is a whole raft of documents. Someone may be black, white or halfway between those two colours. It does not matter. That is an absolute defence for the employer who will have "honestly tried", as the noble Baroness put it. That will become a defence. If the document turns out to be fraudulent and the person is an illegal immigrant, the offence will be that of an employee who has sought to gain employment by illegal means. It will not be an offence by the employer at all.

The amendment would set the maximum penalty for the new offence at level 3, which is currently £1,000, rather than at level 5, which is currently £5,000. Again, it is essential that the penalties available for an offence should provide the courts with the powers they need to deal with all offenders who appear before them. As I explained in Committee, in setting the maximum penalty for the new offence the most important consideration must be to ensure that the courts will be able to sentence appropriately for the most serious examples of the offence. Within that maximum penalty it is then for the courts to set the penalty in individual cases, taking account of the seriousness of the particular offence and the financial circumstances of the offender. Noble Lords will know that the offence can be very minor indeed, but it can also be very serious. To have a maximum penalty of just £1,000 makes it almost worthwhile for the unscrupulous not to worry about an offence.

We do not believe that a maximum penalty of £1,000 would allow the courts to deal adequately with, for example, the deliberately exploitative employer who employs people he knows or suspects to be working illegally simply because he can pay them lower wages. We believe that a maximum penalty of £5,000 will allow the courts to deal with such offenders in an appropriate fashion. The courts will still be able to set much lower fines in the less serious cases.

I emphasise that we will be providing guidance to employers and explaining to them exactly what they will need to do to establish a defence. We want all employers to be aware of their new obligations and will therefore use all available channels to ensure that advice and guidance reaches them.

There should therefore be no danger that an employer of good will will find himself without a defence. Even if he does, it is unlikely in practice that the Immigration Service, the police or the Crown Prosecution Service would think it appropriate to take forward a prosecution in the case of a first offence, except in particularly serious cases involving large numbers of people working illegally. Final decisions will, of course, be for the CPS. But as far as the Immigration Service is

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concerned, the target will be repeated for major abuses. In the majority of cases it will probably be sufficient to caution first offenders, particularly where it is clear that the offence was committed unknowingly.

The maximum penalty will be available in respect of each offence with which an employer has been charged. If five individuals were being employed illegally, five offences would be committed. If the prosecutor chose to charge in the case of all five separately, the maximum penalty available to the court would be £25,000. I believe that that would be a real deterrent for the most unscrupulous. However, it is possible that the prosecution might prefer to bring forward a single specimen charge rather than five separate charges, in which case the maximum penalty would then be £5,000.

It has to be for the Crown Prosecution Service to select the charges which should be brought in particular cases. When selecting charges Crown prosecutors are guided by the general principles set out in the code for Crown prosecutors. This states that Crown prosecutors should select charges which reflect the seriousness of the offending, give the court adequate sentencing powers and enable the case to be presented in a clear and simple way. It is a matter for the discretion of the prosecution to decide which approach to adopt in the public interest, taking account of all the relevant circumstances, including the existence of any previous convictions. The Crown Prosecution Service regularly makes such decisions in respect of other types of offences.

The noble Baroness referred to the word "neglect". It is a standard provision and follows standard language in similar legislation. The penalties are the maximum and the courts can assess the degree of culpability, but we need substantial financial penalties for the most serious offences.

We believe that it is right to distinguish between the honest and the dishonest. That is the whole point of these provisions. An honest employer who finds himself unwittingly caught up by these measures will find that reflected in the way in which his case is handled, but we hope that the dishonest and the really culpable will be dealt with more severely. Magistrates' courts are also accustomed to sentencing offenders who have been found guilty of a number of similar offences on the same occasion. In setting financial penalties in such cases, they are still obliged to take account of the seriousness of the offence. For those reasons, I hope that the noble Baroness will feel that in the more severe cases the flexibility to range up to £5,000 is very important.

9.15 p.m.

Baroness Williams of Crosby: My Lords, I thank the Minister for her response to the amendment and for her kindness in writing to me in advance of the debate to set out clearly the maximum penalty which, as she has rightly repeated tonight, applies to each individual offence. That means that the offence does not just attract a fine of £5,000, but a fine of £5,000 in each case. Therefore, if I am correct, the maximum fine for an employer of, say, 20 people if all those employees were

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found to be outwith the regulations in some way would be £100,000, which is a sufficient fine to make it difficult for that business to carry on.

I raise this point because the type of employment in which people are employed for short periods, often from an employment agency at very short notice, is found in precisely those areas where our own minority communities seek work because they may not be highly qualified or highly skilled, especially those who are first or second generation. There is a good deal of evidence to show that they tend to go for relatively short-term, low paid jobs of precisely the kind likely to attract employers in, say, the catering or farming industries.

The Minister said--with sincerity, I am sure--that she did not regard the objection made by my noble friend Lord Thurso as one that she could accept. She said that she did not see any reason why an employer should not take on somebody of a non-white skin colour, simply on the grounds of Clause 8. However, long ago the then Minister of Health, Aneurin Bevan, said in another place that there is no need to read the crystal if you can read the book. The "crystal" may suggest--in other words, foresight based on expectations may suggest--that that will not happen, but my noble friend read the book. He gave us an account of what friends in his own industry had told him. Whether or not we approve of it, I hope that the Minister will take seriously the evidence that he has laid before the House because that is the way in which many employers will react, although we might wish that they would not.

I repeat that the idea of being held responsible for a criminal offence which may arise from "neglect" is very different from being held responsible for a civil offence and being fined accordingly. While I fully accept that those engaged in systematic racketeering ought to attract a criminal offence, it does not seem to me that this should be applied to the general run of small business people. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 73:

Page 7, line 17, at end insert--
("( ) No order shall be made under this section unless the Secretary of State is satisfied that no racial discrimination contrary to the Race Relations Act 1976 and the Local Government Act 1985 will result from the order, and before making any such order the Secretary of State shall consult organisations appearing to him to be representative of persons concerned and other relevant organisations.").

The noble Lord said: My Lords, in rising to move Amendment No. 73, I should like to speak also to the comparable amendments which arise on later clauses: Amendments Nos. 83, 96 and 102. When I spoke about the hotel and catering industry I had not fully appreciated that the House had the benefit of the presence of the noble Viscount, Lord Thurso. I believe the noble Viscount will agree with me that my reference to the hotel and catering jobcentre is perhaps a gentle example of what happens. One wonders what people in the Conservative Party are like and where they live. Do they not have children who go to pubs? Do they not go to pubs themselves? What happens when one is short of

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bar staff? One does not go to the jobcentre but to a mate on the other side of the bar. One asks him to help for the evening and pays him cash in return. I am sure the noble Viscount is right in saying that if there is a choice between black and white people, or people with a foreign accent and people with a British accent, white people with British accents will be chosen to do the work. That is true of marginal employment in many sectors, not just the hotel and catering industry.

In relation to these amendments, all those who have experience in employment and race relations say the same as the noble Viscount said based on his experience. They say that there will be a conflict between the obligations on employers and citizens under race relations legislation and the obligations laid down under Clause 8 of the Bill. All but the most scrupulous employers will take the easy way out and will not wish to be involved in any possibility of committing an offence. They will not risk the possibility of being picked up later on for having committed the offence of employing an illegal immigrant. They will cut out the possibility at source and will not employ anyone whose skin is different or who speaks with a different accent, or indeed speaks a different language.

I will not hear again from the noble Baroness, Lady Gardner of Parkes. Of course, I understand that she is an immigrant, and is proud to be one. But I am sure that, based on her knowledge of London--she has lived here for many years and has taken an honourable and active part in London society--she will understand that the difference between someone coming from Australia and working in one of the professions and someone coming from the new Commonwealth, or other parts of the world, and working in very much more marginal occupations than the noble Baroness is very great. Other people will not glory in the name immigrant in the way that she does. Much as I admire and respect her experience, it is not relevant to the case that I argue this evening.

I am not alone in making this argument. Adair Turner of the CBI has said--although this has been said before, I believe that the House should be reminded of it--that the proposed legislation will do nothing to improve equal opportunities and may undermine employers' commitment to implement equal opportunities policies. We do not claim that every employer will have his commitment to equal opportunities policies undermined, nor does Adair Turner of the CBI say it. We simply say that there is a significant danger of a conflict between those who genuinely want to implement equal opportunities policies and those who are genuinely afraid of falling foul of the law. All that has been made clear to the Government, not just in response to the original White Paper, but in response to each stage of the Bill as it has gone through.

Already, black workers in this country suffer from a higher unemployment rate; already, there is a much higher proportion of younger Afro-Caribbean men who are unemployed than those in any other age group or from any other ethnic community; already, young black men are more likely to be long-term unemployed; already, it is more difficult for them to find jobs when

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they finish the Government's training-for-work programmes. All those factors will be exacerbated if there will have to be a check on employment when they come out of their work programmes or period of unemployment.

As I said, that will not apply to all employers. There will be good employers for whom there is no difficulty, but it will apply to enough employers to exacerbate the already unacceptable differences between the employment of people from black and other ethnic communities and those who are less likely to be questioned under the conditions of Clause 8.

In these amendments we are saying that there should be no action under the clause until there has been a proper investigation, confirmed by the Secretary of State, that there will no be racial discrimination contrary to the Race Relations Act 1976 and the Local Government Act 1985, and that the Secretary of State should consult those organisations which appear to him to be representative of persons concerned and other relevant organisations.

This is not a destructive amendment; it is a protective amendment. It protects the Government from the risk of imposing legislation which is in conflict with the existing law. I beg to move.

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