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Lord Bassam of Brighton: My Lords, I am grateful to noble Lords for the points and questions that they

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have raised on the matter; indeed, they have enabled me to elucidate a little further on why we feel that this provision is necessary. I believe that the noble Baroness, Lady Williams, put her finger on the point: it is about establishing relationships of trust. We see that as being very important. It is also about openness and transparency. That is why we have decided that this provision would be best placed on the face of the Bill.

I take the point made by the noble Lord, Lord Alton, about the important relationship based on trust that must exist between voluntary organisations and the need to avoid difficulties. We well understand the points that have been raised about the relationship with Article 8. However, I can offer some reassurance. This clause does not in any way override the ECHR or existing data protection legislation; indeed, it does not compromise it in any way. We believe that disclosures must each be assessed for compatibility with those considerations.

It is a matter of volunteering; it is not a matter of the organisations concerned being placed under a duty to provide such information. Therefore, any sense that there may be some obligation, some pressure, placed on organisations to bring forward information here is misplaced. I do not believe that noble Lords' concerns in that respect need to be too greatly emphasised. We feel that this is a sensible, practical and transparent move. We also believe that it is probably a protective provision, which will place voluntary organisations, and also some statutory organisations which are contracted as a result of the clause, to fulfil their role more openly and transparently. This will be a beneficial move and one which will enable them to be established on the same basis as all the other main organisations under the clause. For that reason, we think that this is a sensible amendment to bring forward at this stage. I commend the amendment to the House.

On Question, amendment agreed to.

Lord Dholakia moved Amendment No. 18:

Before Clause 18, insert the following new clause--


(“In the 1971 Act, after section 25(2), insert--
“(2A) If any person (“the employer") is employing or has within the preceding 3 months employed any person who is an illegal entrant or a person who has committed an offence under section 24(1)(b) or (c), an immigration officer may serve a notice on the employer, in accordance with regulations made by the Secretary of State.
(2B) Any employer who, within 12 months of being served with a notice under subsection (2A), employs any person who is an illegal entrant or a person who has committed an offence under section 24(1)(b) or (c), shall be guilty of an offence punishable on summary conviction with a fine of not more than level 5 on the standard scale or with imprisonment for not more than six months or with both.
(2C) It shall be a defence to proceedings under subsection (2B) above to prove that in respect of any person employed after service of the notice under subsection (2A), before the employment began the employer made such enquiries or inspected such documents as were reasonable in the circumstances to satisfy himself that to employ the person would not contravene subsection (2B).

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(2D) Where an offence under subsection (2B) committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to the neglect on the part of--
(a) any director, manager, secretary or other similar officer of the body corporate; or
(b) any person who was purporting to act in any such capacity,
he as well as the body corporate shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
(2E) Where the affairs of a body corporate are managed by its members, subsection (2D) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
(2F) In this section, “employ" means employ under a contract of service or apprenticeship, whether express or implied and (if it is express) whether it is oral or written, and “employment" shall be construed accordingly."").

The noble Lord said: My Lords, I introduced this amendment in Committee and was given some assurance by the Minister that he would take the matter away, look at it and see whether we could come to an agreement on its form. I am sorry to say that nothing of that sort has happened. Effectively, my purpose was to assist the Government as regards precisely what they said while in opposition. I distinctly remember the Labour Party saying, when in opposition, that it would repeal Section 8 of the Immigration Act 1971. I was simply trying to assist them in this particular exercise.

Perhaps I may explain the purpose of the amendment. It is not designed to take away any powers that the Government have now. In fact, there are now much wider powers in terms of the powers of immigration officers. We are trying to ensure that the powers they use do not in any way harm good community relations in this country. The purpose is simply to amend the Immigration Act 1971 and put into statutory form the criminal sanctions on the employment of illegal workers as they are being applied by the Government at present.

Why do we think that it is necessary to do so and what would the proposed new clause do? The new clause would provide a two-stage process. In the first stage, an immigration officer would be given specific powers to serve a notice in a prescribed form on an employer where the officer has reasonable grounds to believe that the employer is employing an illegal entrant--an overstayer, or a person in breach of his or her conditions of leave. Of course, the power is supplementary to powers that may be exercised directly in relation to any offence committed by the employee. The power to serve a notice is discretionary and consistent with current policy. It is anticipated that immigration officers will serve notices on those employers whose employment practices are of particular concern to the Immigration Service, notably those who appear to be involved in large-scale exploitation of illegal workers.

The basic defect of Section 8, which is now incorporated in the Bill, is that, by imposing a threat of prosecution on all employers and by offering a statutory defence that was acknowledged to be an

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additional burden to employers, it is an invitation to discriminate on racial grounds. Rather than become involved in checking documents for every new employee, employers are easily tempted to avoid recruiting anyone whose appearance or accent suggests that he or she may be foreign.

The forecast made from these Benches by my noble friend Lord Thurso, as early as 1996 when we debated Section 8 in this House--namely, that some employers would simply “go white" to avoid prosecution--has already been realised in some cases, while, in others, employers have introduced their own arbitrary restrictions, based on a misunderstanding of immigration law, and have excluded jobseekers who are lawfully able to work in this country.

The new offence has been drafted to meet the Government's reluctance to accept the recommendation of the CBI, the Federation of Small Businesses, the Better Regulation Task Force, the TUC and the Commission for Racial Equality. It would shift the balance of responsibility to the Immigration Service; it would put the responsibility on employers to change their practice once there is evidence that they are permitting people who have committed immigration offences to work for them. It would also remove the threat of prosecution--and either the burden of elaborate checking or the inducement to discriminate--from well-intentioned employers. As it is proposed to repeal Section 8, Clause 18, which seeks to modify the discriminatory impact of Section 8, would not be required and should be deleted from the Bill. I beg to move.

Lord Sheppard of Liverpool: My Lords, I hope that my noble friend the Minister will take rather seriously what the noble Lord, Lord Dholakia, has said. At various moments we have expressed concerns in your Lordships' House about the effect of immigration and asylum law on race relations. There is nothing that has touched me more sharply than this particular Section 8, about which I spoke on Second Reading. I said that I wished it was not there. I do not believe that the Government's Clause 18 actually removes the sting.

If we want to know where bad race relations bite as seriously as anywhere, the answer is in employment. The temptation for an employer to avoid all the hassle of vigorous interviewing, looking at people beyond his normal circle of staff and perhaps taking on someone who has an unfamiliar name or an unfamiliar face, is a great one. It is hard to charge someone with an omission when that omission is the fact that he has not vigorously recruited in the whole field and has limited his recruiting to where he feels he will be safe.

Employers have been exhorted over and over again by race relations legislation and by many attempts to produce codes of practice. I ask my noble friend the Minister to tell us what he thinks this new code of practice is likely to achieve that others have failed to achieve. I believe that the noble Lord, Lord Dholakia, has it the right way round. If an immigration officer has suspicions, he should serve a notice to which the employer must respond. But to make employers carry

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out such research will simply prove to be a disincentive to them to take on workers in fields where we very much want them to widen their recruiting.

6.30 p.m.

Lord Williams of Mostyn : My Lords, the noble Lord, Lord Dholakia, is quite right; when he introduced his proposal at an earlier stage I said that we would take it away and think about it carefully. That has been done. I hope that he has received a letter from my colleague, Mrs Roche, dated 12th October, which sets out fully the nature of the consultation that we undertook.

Originally the amendment of the noble Lord, Lord Dholakia--this was a critical difference--differed from the present one. The new offence under the present amendment of the noble Lord, Lord Dholakia, would be in addition to the existing Section 8 of the Asylum and Immigration Act 1996. I am not sure whether the noble Lord intended that. I thought that his purpose originally--I understood that this evening--was to repeal Section 8. We consulted quite widely through the summer. Those consultations included the CBI, the TUC, the Commission for Racial Equality, the Better Regulation Task Force, the Federation of Recruitment and Employment Services, the Construction Confederation, the Federation of Small Businesses, the Cleaning and Support Services Association and of course colleagues within government. The proposals of the noble Lord, Lord Dholakia, were supported by some but not by others. It was not an easy conclusion to reach.

The amendment outlined a warning notice procedure, but under the proposed arrangements there would be no obligation that a recipient could be warned of breaching. Without any expectation that employers would carry out employability checks, employers could employ illegal workers with impunity until served a warning notice. In other words, the message would be, “Employ illegal workers until you are found out". As Mrs Roche's letter to the noble Lord pointed out, we considered whether or not we could construct a hybrid amendment retaining the basic thrust of Section 8 but building into it elements of the noble Lord's proposals specifically to target more carefully--or in a more focused way--those in the business of exploiting the labour of those who are here illegally. This further alternative has not been supported either by the TUC or the CBI or, notably, the CRE.

The measures originally were designed to combat widescale abuse and not to penalise small employers who may have made a simple mistake. Where appropriate, offending employers were warned in the first instance rather than prosecuted, but no one can pretend now that the provision is new. The evidence we have suggests that most employers are aware of what is required of them. There has been one successful prosecution and a number are in prospect. The recent prosecution involved the illegal employment of a number of people in the horticultural industry. In many cases--I do not speak of any in the pipeline--people are being exploited in a harsh, abusive way.

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This is one protection for them. I believe that more cases will be brought to court to send a strong signal to those who are alleged to be racketeers that the Government are determined to see this kind of abuse tackled.

My noble friend Lord Sheppard asked what benefit a new code of practice would bring. We believe that it is able to work in a tighter, more focused way so that potential employers have their responsibilities properly in mind. We had to try to balance the maintenance of a firm line on the problem of illegal immigration on the one hand with the avoidance of the scope for discriminatory practice on the other. We believe that Section 8 can work properly if it is allowed to do so. However, we do not want this to be at the expense of good community relations.

That brings me to the point of Clause 18, the purpose and intention of which is to supplement the provisions of Section 8. We have been concerned at reports from the CRE that some employers may be making more checks than the legislation requires. We have had to face up to that.

Clause 18 therefore is aimed at employers and their duty to avoid racial discrimination in their recruitment practices when seeking to secure the statutory defence under Section 8. It places the Secretary of State--I return to the question of my noble friend Lord Sheppard--under a statutory duty to issue a code of practice containing measures to ensure that employers do not breach provisions of the Race Relations Act 1976 by making more checks than are required.

Some will perhaps take a contrary view to that expressed by my noble friend Lord Sheppard. They will feel that this is an additional cost to business and that another code of practice will add little. It is a difficult balance, but we think that we have it right. For the reasons I have set out in a little detail--I am bound to defer to the helpful and thoughtful way in which the noble Lord, Lord Dholakia, has approached this matter--I repeat that I said that we would listen carefully and consult widely. We have done so. I do not pretend that it was an easy conclusion to reach. I am sorry that the noble Lord will be disappointed but I do not think he can feel that I have not fulfilled my undertaking despite the fact that we came to the policy conclusion in the end that our way was better than his. I hope that that explanation will enable the noble Lord neither to press his challenge to Clause 18 nor to insist on his amendment.

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