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Lord McIntosh of Haringey: My Lords, I am sorry; I thought I had made it clear that I believed the scale of illegal working of all kinds, avoiding taxes, PAYE and health and safety regulations, is very widespread. What we are saying is that it is linked with the employment of illegal immigrants and therefore there will be great difficulty in enforcing Clause 8, not that the problem is insignificant.

Baroness Blatch: My Lords, it was in response to the fact that I used the figure 10,000; I think the noble Lord suggested that we did not know. As we have made clear, the immigration service detected more than 10,000 people working here illegally in 1994, compared to 4,000 detected in 1988. But the figure relates only to those detected. We cannot tell what is the full scale of the problem. However, we believe it is substantial. That is the point I wish to make, and which I believe the noble Lord rather belittled, having heard the figure 10,000.

We are not alone in thinking that illegal working is a significant problem. It is an anxiety shared by most of our European colleagues, who already have measures in place aimed to address it. The Government take the view that we, too, must take action; for we are vulnerable if we do not attempt to control illegal working when other countries do.

The noble Earl said that he does not want to see employers bankrupted. I certainly do not want to see that. We want to see not just a healthy and wealthy sector of

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employment, and particularly of small employers; we wish to see more of them. For that reason I absolutely join with the noble Earl. However, to suggest that Clause 8 will bankrupt employers is to take a very distorted view of what the burdens on employers are likely to prove in practice.

I gave an example earlier of an employer with 20 employees, with a turnover as high as 25 per cent., looking at only three recruited people in any one year. That can hardly be said to be an issue that would bankrupt a person--and, again, using everyday documents such as P45s and P46s.

Earl Russell: My Lords, the case I had in mind was the one I used a moment later; namely that of my plumber, who is a one-man band. If he has to employ a secretary, it will bankrupt him.

Baroness Blatch: My Lords, I will comment on that example in a moment.

The noble Earl also said that he dislikes unemployment. We certainly dislike unemployment. We believe that if this particular issue goes unchecked, then unemployment will continue to be a serious problem, because those 10,000 people who were detected as working here illegally last year were in 10,000 jobs that could be done by people who are here legally and are entitled to them.

The noble Earl went on to say that he dislikes racial discrimination. I wholeheartedly agree with him. He gave some examples that are more a matter for the Race Relations Act 1976 than they are for this Bill. Perhaps I may touch on some of them.

First, I turn to the example of the noble Earl's plumber. If the plumber wished to employ somebody, I hope that he would pay his taxes and pay national insurance on behalf of his new employee. Then, his plumber would have nothing whatever to worry about. If he merely pays his taxes and pays national insurance on behalf of his employee, he has a defence under this clause because he will have the kind of contact and information about his employee that it will be necessary to have as a defence. So the plumber has no worry.

The noble Earl also referred to the CAB case of the lady with the German passport. If the CAB discovered that an employer told that person that the German passport did not allow her to work in this country, that was plainly wrong. It may be that she did not get a job. That is another matter; one does not know why in the end she was not employed. But if it was as a result of holding a German passport, that would simply be wrong.

The Anglo-Turkish person who had applied for every job in sight and was declared unqualified even for packing shelves is probably more a case for the 1976 Race Relations Act. Certainly that would be the situation as regards the examples given by the noble Earl.

We heard the example of the Sri Lankan who had worked for two years and was told by her employer, the Benefits Agency, that if this measure came into effect the employer would have to check her employment status. First, her employer would have her National Insurance number so that no more checks would be needed. But it

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might well be that that person is time limited on her stay here. I do not know. It is possible that the body employing that lady would simply want to know whether her stay was time limited and whether she had come to the end of that time, in order to make sure that it had a proper defence. However, if that body had employed the lady for two years, it would have all the defence that it would need against the offences in Clause 8. I believe that the black British subject called Mr. Birdi who was turned down for an interview under that name and when he applied for exactly the same job under the name John Smith was taken on, is a very clear case in which the Commission for Racial Equality would be interested.

All the examples given by the noble Earl are, frankly, cases that could be taken to the Commission for Racial Equality. Certainly, it would not be necessary under Clause 8 to spend £20 on a passport. We are asking about people who have proof of identity in some form or other--and the documents will be spelt out--or have a national insurance number, or a P45. It is not necessary to say that it must be a passport and that £20 must be spent in securing one. Those examples are not at all helpful.

The noble Earl asked me about commencement dates. Clause 8 will be brought into effect as soon as suitable preparations have been made--and with the passing of the Act--such as publicising Clause 8, providing guidance for employers, setting up the helpline facility and making that widely known.

The clause also provides that employers should be safe from conviction and in practice from prosecution if they have taken one of a number of steps before taking on a new employee which would establish a statutory defence. Again, I repeat that there is a wide variety of steps that an employer can take to create that defence against the offence.

Much of the concern expressed about this clause has been based on the view that the clause will work to the disadvantage of people from ethnic minority communities who are British or otherwise lawfully resident. We believe that concern is unfounded. Our position is very clear. We oppose discrimination of all kinds. However, it would be wrong if unfounded fears of discrimination by employers prevented us from addressing the problem of illegal working. The effect of our proposals is action against those who are not entitled to live and work in the United Kingdom.

We believe that most employers want to ensure that their selection processes are fair and lawful. Therefore, we shall ensure that employers are provided with any advice and guidance that they might need on how they can recruit staff in ways which will be transparently fair. We shall be happy to provide whatever advice that we usefully can. The Commission for Racial Equality will be advising us of the best ways in which to do that.

Clause 8 will help to discourage illegal working and protect job opportunities for those entitled to work in the United Kingdom. I commend the clause to the House and trust that noble Lords will reject the amendment.

10 p.m.

Earl Russell: My Lords, I believe that there may have been some cross-purposes between us. The noble

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Baroness argued throughout that the cases that I quoted were ones in which the law was wrongly understood. That point is not at issue. That is precisely the purpose for which I quoted those cases. I quoted them in order to illustrate the proposition, which I profoundly believe to be true, that most employers, and indeed for that matter most subjects, do not understand the details of immigration law. I have tried to argue that if this clause comes into effect, it will be very widely misunderstood and because most people can recognise skin colour much more easily than exceptional leave to remain, that is the way that the clause will be used.

I am sorry that the noble Baroness is so resistant to evidence. She heard my noble friend Lord Thurso tonight; she heard the cases I quoted. She says the Government will listen to the views of the Commission for Racial Equality. Let me quote from its annual report, published last week, in relation to this clause:

    "Employers will face criminal sanctions if they employ any 'immigrant' who is not entitled to work. To avoid prosecution, employers are likely to avoid recruiting anyone who looks or sounds like an 'immigrant'".
It also reports in the chairman's introduction that:

    "The campaign related to this Bill has already done very grave harm to race relations in this country".
I believe that; the noble Baroness perhaps does not. She says that these fears are unfounded. I ask her: how many cases of this sort will it be necessary to produce before she comes to the conclusion that our fears are well-founded?

The Minister misunderstood also my reference to the case of my plumber. I have no fears of my plumber attempting to break the law. My concern for my plumber is that it may place on him a burden which would force him to take on a secretary or go out of business. Since his profits are too small to enable him to take on a secretary, I believe he would go out of business. The noble Baroness argued at length that the refusal to accept a German passport was wrong. Of course it was wrong; that was exactly my point.

I do not know how much more damage this clause will do. I believe it will do a lot. With the greatest reluctance and after listening to the noble Lord, Lord McIntosh of Haringey, I do not intend to divide the House tonight. But we will be coming back to this over and over again with many more cases of the type I have just produced. I ask the noble Baroness: how many more will we have to produce before we persuade her? I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Manuscript Amendment No. 74A not moved.]

Clause 9 [Entitlement to housing accommodation and assistance]:

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