I beg to move,
That, for the purposes of any Act resulting from the Gangmasters (Licensing) Bill, it is expedient to authorise—
(1) the payment out of money provided by Parliament of—
(a) any expenditure incurred under the Act by a Minister of the Crown or government department or by a body performing functions on behalf of the Crown, and
(b) any increase attributable to the provisions of the Act in the sums payable out of such money under any other Act, and
(2) the making of payments into the Consolidated Fund.
On Second Reading, I confirmed that the Government were content for the Bill to proceed, and the promoter, my hon. Friend Jim Sheridan, agreed to work with us in Committee to ensure that the detailed provisions deliver both his and the Government's objective: a reduction in the exploitative activities of gangmasters.
Let us be clear: gangmasters play a necessary role by providing the flexible labour supply required to underpin the production and supply of food. However, for far too long that flexibility has been delivered at the expense of the workers involved, and the current approach fosters illegal working.
The Gangmasters (Licensing) Bill seeks to tackle those abuses through the introduction of a licensing scheme and the creation of a register of licensed gang labour providers. It will introduce welcome transparency to the labour supply chain and ensure that the supermarkets and other purchasers of fresh and other produce can insist that their suppliers use only licensed labour providers.
The Bill will create two new offences—supplying labour without a licence and using an unlicensed labour provider—and the Secretary of State will be authorised to appoint officers to enforce those provisions. Final decisions on the precise role and nature of the body responsible for issuing licences have yet to be taken. We are discussing the best way to work with the industry, trade union representatives, the National Farmers Union and the retail trade. It is clearly in everybody's interests to harness their knowledge and experience and that of legitimate gangmasters who want to work within the law and who should be able to compete effectively in the market while doing so. It is in their interest and ours to work together to create an effective licensing body rather than merely a top-down bureaucratic structure, and I am delighted by the co-operation that I have received since Second Reading.
The code to be observed by licensed gangmasters will be important.
The Department for Environment, Food and Rural Affairs leads on the legislation. My hon. Friend knows that the Department for Work and Pensions leads on Operation Gangmaster, which has been successful in enforcing the law in a number of ways but is not enough on its own. That is why we support the legislation and the introduction of the licensing system, which was a point argued by my hon. Friend the Member for West Renfrewshire when he introduced the Bill.
Responsibility for the legislation and the licensing system lies with DEFRA, so the Secretary of State for Environment, Food and Rural Affairs is responsible and I deal with the Bill in this place. My noble Friend Lord Whitty has played a considerable part in promoting co-operation on Operation Gangmaster, but I am accountable to this House, as I was on Second Reading and will continue to be as the Bill goes through Parliament.
As I indicated, important issues include not only the question of the licence but the expectations and requirements placed on licensed gangmasters. We are examining the outcomes of the best practice project run by the Ethical Trading Initiative with DEFRA and industry support, which will inform the licensing system and help us to calculate the cost of an adequate monitoring system. Those outcomes will also show us what ethical audit can and cannot do, which will help us to create the right environment to enable enforcement to take place. Lord Whitty and I met representatives this morning for an update on the work of the project.
However it operates, it is intended that the licensing process should be self-funding with a fee charged to cover the cost of the licence applications and periodic renewals. An applicant's business will also be audited to ensure that procedures are compliant with the terms of the licence, which again raises the issue of exactly what the requirements should be.
The Minister and the Government will not want to involve themselves in unnecessary expense. In view of that, does he agree that it would be far better for the Government to use existing provisions and regulations—for example, the agricultural compliance unit in the Inland Revenue—rather than creating new organisations or regulations when an effective method is already available?
The hon. Gentleman is right, and that point applies to a number of areas. The Inland Revenue has a considerable interest in ensuring that people pay their tax and national insurance. We have a strong interest in ensuring that the minimum wage is observed and that agricultural rates are paid. The point of the licensing system is that it would draw a line between those who are legitimate and working within the system, and those who are outside it. That would make easier the enforcement of such matters as the payment of tax. The current situation makes it easy for people to operate in an exploitative way.
The hon. Gentleman makes exactly the point that I have been making in our discussions with the industry. We want something that is effective but that does not put excessive burdens on industry. On Second Reading, we discussed the level of fee that might be charged and Mr. Simmonds mentioned the figure of £3,000. That should not be necessary and, indeed, a much lower fee should be achievable. We do not want to increase bureaucracy. Rather, we want to work with those who know the industry and how it works—the trade unions and farming organisations—to ensure that bureaucracy is kept to a minimum and effectiveness is maximised. Resources already allocated to the matter must be properly and effectively deployed, and that is why I make the point that the costs involved would be determined, in part, by the conditions attached to the licence. The costs are provisional, but are likely to be considerably less than the figure mentioned on Second Reading.
Robust cost estimates will be prepared once the consultation on the detail of the licensing provisions has been completed, and we will be able to discuss the issue in full in Committee. Much of the detail will have to be worked out in Committee, but we are engaging vigorously with people in the industry to create a scheme that works for the industry, protects those who are currently being exploited and allows legitimate gangmasters to work within the law without being undermined by those who work outside it.
I cannot do so at the moment, because we are in discussion with the organisations involved about the best way to use the strengths of the industry and those of Government to work together. If the issue of gangmasters could be dealt with easily—if we could wave a magic wand—it would have been done years ago. It is a complex situation, with people working in a complex market to provide labour for farmers such as those mentioned by Mr. Gale. It would be possible to create a very bureaucratic structure that did not even hit the target.
I am pleased by the way in which some legitimate gangmasters, the National Farmers Union and the Transport and General Workers Union have proved so prepared to sit down with us and tease out the most effective way to achieve the aspirations set out in the Bill. While the Government must have a commitment to meeting the finance necessary to implement the Bill, we must also ensure that costs—there will of course be set-up costs that will affect the industry—and the impact on the industry are kept to a minimum.
The Minister talks about using the strength of the Government. He will recall his intervention on me during Second Reading and the focus at that time of the debate on the need for Departments to break down potential barriers such as data protection. It was argued that farmers and gangmasters should not be asked to replicate forms and information to different Departments separately. What discussions has he had with his colleagues in other Departments to ensure that that does not happen?
The hon. Gentleman is right, and I did say on Second Reading that we would seek to achieve that. That is not a requirement in the Bill, but we should use existing resources and powers in other legislation and ensure that they are co-ordinated effectively. Where co-ordination has been tried—in Lincolnshire, for example, through Operation Gangmaster—we have seen the benefits and learned lessons from it. It has also helped us to understand the best way of running a licensing system and the requirements that would be placed on licensees.
Overall, it is not anticipated that the Bill will lead to any significant net increase in Exchequer expenditure, because the additional resources allocated to enforcement activities will be offset by savings to the Exchequer in respect of lost tax, national insurance revenue and reductions in benefit fraud.
My hon. Friend is right, and I am aware of his interest in ensuring that problems on the Dee estuary are properly tackled in a manner that will last. That is the concern of many hon. Members. For some time, we have seen an effort to co-ordinate work across several Departments and enforcement agencies. I gave more detail about that on Second Reading, when it was more appropriate. Those efforts have had some success, but clearly more is needed. That is why we supported the efforts of my hon. Friend the Member for West Renfrewshire to introduce legislation, and we welcome the opportunity to work with him and with organisations on both sides of industry to produce effective measures.
Clearly, it is developments occurring in parallel with the legislation that will create the licensing system and a clear line between those who are licensed and those who are not. That will allow us to create a simple offence of operating while not licensed to do so. All that will make a difference to the geography of activities, though it will not detract from the complexities of some offences or of the market, which is far from simple. Nevertheless, the line will be created, and all hon. Members accept that that is important.
My hon. Friend makes a fair point, which shows the value of individual enforcement agencies such as the Exchequer being involved in enforcement processes. The point of the licensing system, however, is to create the division between those acting illegally and those acting under a licence. That leads to a simple offence, whereas many other offences that have to be pursued require a considerable collection of evidence and drawn-out enforcement processes. The Bill will create two very simple offences, which should create an impetus towards virtue, if I may put it that way, within the farming industry and in the activities of gangmasters. I therefore commend the motion to the House.
Over my 17 years in this place, I have worked out that something curious happens every day. Today's curiosity is a Whip speaking from the Dispatch Box. Perhaps it would be helpful to say that this is not my first outing at the Dispatch Box. My first and only other outing was on
This debate is not about the Gangmasters (Licensing) Bill. The Minister made some fair points and I very much welcome the opportunity to agree with much of what he said and to discuss the issues, but I am fairly sure that if I did so it would not be long before you, Mr. Deputy Speaker, told me that the debate was not about the Bill but about the money resolution. Having said that, I should like to say—probably—just one sentence about the legislation because it is important to set in the context of the Bill my comments on the money resolution.
When the Bill was debated on
I and my colleagues tonight stand four-square behind that commitment, but our commitment to that principle does not justify our allowing this money resolution to pass on the nod.
The money resolution raises some important issues, so I listened carefully to the Minister in the hope that he would address those that concern us. I had hoped that he would tell the House how much taxpayers' money he wants us to authorise, yet he said that he could not be clear, so he did not do so. I had also hoped that he would tell us what the Government will spend that money on, but he was not quite sure about that either. It is because he did not answer properly either of those questions that I would contend that he is asking us to sign a blank cheque.
Before we decide whether to support the money resolution, we need to know a number of things. As far as how much is concerned, all we have to go on at the moment is what the Minister said, and he said a number of things. He said that the legislation may or may not be self-funding; he hopes that it will, but he is not sure. Then he said that he will try to keep expenditure to the minimum, but did not say what that will be. He said that the fee might be £3,000 or it might be less; he was not sure.
I referred to £3,000 because Conservative Members had cited that figure during the previous debate. Estimates of the cost of funding a licensing system have ranged in some work that I have seen between £1,000 and £2,000, but that is not sufficiently robust for me to come before the House and say, "That's what I think the figure is." That is why we are working with the industry to try to ensure that the figure is as low as possible and that the system is as effective as possible. We want an effective licensing system, but we need to ensure, as one of his hon. Friends said, that it does not impose an unreasonable burden on industry.
I am grateful to the Minister for correcting that, but it does not matter who cited the figure. All that is clear is that we do not know how much the system will cost—regardless of whether the Minister or the £3,000 figure that I use is correct. He said that the cost might be £1,000 or £2,000. That is a 100 per cent. variation.
Of course, I accept that, which is why I made it crystal clear at the outset that we are four-square behind the attempts to get rid of that criminal activity. I am not raising these points on the basis that we should spend nothing. The House is being asked to vote on a money resolution for an unknown quantity of money, and we should know how much we are being asked to authorise before we authorise it. That is all I am saying; I am not arguing that we should never authorise anything.
No one objects to the Minister proposing a money resolution; that is why he is here—to ask for more money, and Geraldine Smith clearly wants that money spent. The confusion is that, on the one hand, the Minister said that the scheme was self-financing, yet on the other he said that there would be no significant net expenditure. All we are asking is: what will be the net expenditure? If my hon. Friend or the Minister can help us on that point, we might foreshorten the debate.
I cannot help my hon. Friend. I hoped that the Minister would help us. He shook his head when the phrase "self-funding" was used, but I wrote down his words. He said that the scheme might be self-funding but that he would need robust cost estimates for the information that he needed.
I think that the hon. Gentleman is a little bit muddled. Fees will be charged for the licensing system, which we expect to be self-financing. That is why it is sensible to hold discussions between the Government, the promoter and sponsors of the Bill and the industry to ensure that the fees are sufficient to be effective but as low as possible to avoid burdens to the industry. That is the self-financing element. The establishment costs and the amount that might be needed for additional enforcement would of course fall to Government and they will depend, to some extent, on the outcome of those discussions. That is perfectly self-evident.
I am grateful to the Minister. He confirms the point that I was making: he does not know what the scheme will cost, which underlines the importance of the House asking him that question, because I at least do not like signing blank cheques. Until the Minister gives us the figures, the only factual information we have to go on is in the motion, which refers to
"any expenditure incurred under the Act".
Any expenditure means a blank cheque and that is why we need more information.
This debate is being held against the background of the highly emotive and terrifying circumstances that occurred in the constituency of Geraldine Smith. No one has any quarrel with that. However, the Minister is saying that the measure will be self-financing and we all know what that means: the cost will be passed on.
In east Kent, in my constituency and that of my hon. Friend Mr. Fallon, farmers harvest cauliflowers, potatoes, top fruit and soft fruit, and their businesses operate at the margins of sustainability. If the costs of the measure are passed on to them, there will be another death—the death of those industries. We need the answers before we vote for the motion.
I am grateful to my hon. Friend who makes my point for me very well indeed. That is exactly why a blank cheque is wrong. It is also why we need to know how much the cost will be, so that we can make up our mind whether it is a sensible amount, which will achieve a very laudable objective, or wasting money. That is the only point the Minister needs to address.
Does the hon. Gentleman think that the cost of the licensing scheme for gangmasters, which operated for most of the lifetime of the last Conservative Government, was unreasonable?
If the right hon. Gentleman will bear with me, I shall come to the existing regulations in a moment, but we need to deal with one more thing before we decide whether to vote for the money resolution. We need to know in some detail what taxpayers' money will be spent on. We have heard a general comment or two, but we are still not clear about everything.
In fairness, a licensing scheme was in place for most of the lifetime of the last Conservative Government. The hon. Gentleman must have supported that scheme when the Conservative party was in power. Was the cost of that scheme unreasonable?
The right hon. Gentleman must contain himself for a moment. I should like to deal with things in the order in which I set out to deal with them, and it will make much more sense if he allows me to do so. We have to decide what taxpayers' money will be spent on, but we do not even know that. The Minister referred—again, I noted this down—to the fact that the code will be important, but the Government have not yet worked it out, so how can we decide whether spending money on the preparation of a code is sensible until we know what it is? On other occasions during his introductory remarks, he said that decisions have yet to be taken.
I ought to point out to the hon. Gentleman, because it seems to have escaped his notice, that the motion relates to a private Member's Bill. The Government have responded very rapidly by saying that we will help that private Member's Bill to become law. We have come before the House to say that we want the House to agree that money can be spent from public funds in support of those purposes, and it is clear what public money needs to be spent on: the establishment and enforcement of the scheme. The hon. Gentleman, by the way that he is approaching the issue, rather undermines his claim to support the efforts to deal with the mischief and evil perpetrated by some gangmasters.
Absolutely not. I predicted that, sooner or later, a Government Member would try that one. However worthy a cause, nothing justifies signing blank cheques or telling the Government that they can do what they like. It is all very well for the Minister to say what he thinks the motion means. All I have got to go on is what the motion says. The preamble states that money can be spent
"for the purposes of any Act resulting from the Gangmasters (Licensing) Bill", not just what the Minister says it will be spent on. It could be spent on anything— it is another wide-open opportunity for the Government to spend money.
No, I cannot, and I do not need to do so. The Government are dead keen on modernisation. They want their procedures to be brought up to date, and I have taken them at their word and decided that the modern way to deal with such things is to ask the Minister to answer sensible questions about how much he will spend and what he will spend it on. Until he answers those questions, all that we can go on are the words of the motion.
We are now into Alice in Wonderland country. The Minister said in his opening remarks that the scheme would be self-funding, and we are now accused of trying to wreck a private Member's Bill. We are told that this is merely a Government money resolution, putting in taxpayers' money. Well, taxpayers' money comes from the public, but that is another story. The scheme will either use taxpayers' money that comes from central Government or it will be self-funding. I want to know whether it will be self-funding—if so, it will place a cost on the farmers—or will taxpayers' money that comes from central Government be used? It cannot be both.
That is exactly what all Conservative Members would like to know, but we are not getting any sort of answer, so we cannot make up our minds whether what the Ministers is asking us to do represents a sensible way to solve a genuine problem or whether it is just another way to spend taxpayers' money. To make matters worse, paragraph (1)(b) of the motion refers not to any purpose of the Act, but to
"any increase attributable to the provisions of the Act".
That can include not only new expenditure, but an increase in current expenditure. Therefore, the spending commitment is wide open and we need more information on it.
It gets worse still. On Second Reading—this picks up on the point that the Minister made about the private Member's Bill—the Minister said that he backed the Bill in principle but that the Government would need to make changes before they could let it reach the statute book. I understand that. The problem is that we are being asked to sign a blank cheque not for the private Member's Bill, which is what the Minister said to me a moment or two ago, but for a Bill the contents of which we do not know yet.
The Minister has said that he will make changes to the Bill but has not told us what they are, yet we are supposed to let him have the money to do whatever he likes. That seems to be a silly way of trying to run a Government. If we do not have those details, if we do not know how much, if we do not know what it is to be spent on, if we do not know the changes that the Minister wants to make, how on earth can the House decide whether this is the best way of achieving what Geraldine Smith properly wants and what we on the Conservative Benches want to help her to get? How can we decide without that information?
My hon. Friend is attributing some weight to paragraph (1)(b) of the money resolution. If we were precise now, and if the Minister had told us what the provisions of the Act were likely to be, we would already know what the increase attributable to those provisions was likely to be. Surely it is incumbent on the Minister to help my hon. Friend to specify what those provisions will be, so that we can judge what the increase attributable to those provisions will be.
Yes. I have known the Minister some time and I thought that he might want to help us but it appears that he does not. He sits there and appears to be refusing to tell us how much, what for or what the changes will be.
One other issue concerns me about the money resolution. It asks us to authorise yet more public expenditure on top of the huge increases that the Government have already agreed to. This is particularly relevant when we consider the points made by my hon. Friend Mr. Paterson on Second Reading on
I am no expert. I cannot say whether that was right or wrong, but my hon. Friend is an expert and I am entirely content to accept what he says. He also pointed out that enforcing existing legislation properly would lead to immediate improvements, whereas going down the route of new legislation would mean delay. Therefore, another reason why we have to be cautious of the money resolution is that perhaps we should be exploring the existing legislation route before signing a blank cheque for any new legislation.
There is one other reason for exploring the use of existing legislation.
Does the hon. Gentleman realise that existing legislation is costing the taxpayer a small fortune? He heard me intervene on my right hon. Friend the Minister. Did the hon. Gentleman know that the exercise conducted by the Department for Work and Pensions last year involved in excess of 500 public servants from seven or eight Government Departments? Surely he thinks that we need some consolidated legislation to stop that happening in future.
I find that an interesting point of view but all I can say is that, if the hon. Gentleman is trying to suggest that what is being proposed tonight is a money-saving exercise, the Minister would have told us that. However, the Minister did not suggest any such thing, so I can only assume—
I am sorry but the hon. Gentleman obviously has not listened to what I said because I referred to the savings to the Exchequer from proper enforcement. He seems to be making an extremely mealy-mouthed attempt at justifying opposition to the Bill. If he opposes the Bill, if he opposes the money resolution, which is in typical terms for a money resolution of this sort, and if he opposes the Government supporting a private Member's Bill on this issue, why does he not have the honesty to say so?
I have made my position perfectly clear. The Minister makes my point for me. He says that there will be savings from proper enforcement, which is exactly the point that I was making to the House. He did not say that there are savings to be made by scrapping existing legislation.
Does the hon. Gentleman not accept that there is a difference of opinion among Conservative Members about regulation? Labour Members accept that minimal—yet appropriate and relevant—regulation is important. When regulation is relevant, as the Bill is, does it not cost? Surely the Opposition should finally say, "Actually, it is the right thing to do".
As I said at the outset, I would be more than willing to debate that with the hon. Gentleman and to explain to him why he is wrong, but that would be to debate the terms of the Bill, not those of the money resolution. I do not want to fall foul of you, Mr. Deputy Speaker, so if the hon. Gentleman would like to meet me in Strangers Bar after the debate, I shall have a go at sorting him out and explaining things to him. For the time being, however, I must ask him to bear with me.
We must consider the whole question of using existing legislation. Although such legislation exists, we are told that it has not been used properly and that if it were used properly, it would avoid delay. However, there is another reason why we should use existing legislation, because I assume that the House has authorised the spending of taxpayers' money on it. Rather than wasting expenditure on existing legislation, we should ensure that we get proper value for money from the original money resolutions passed by the House.
Does the hon. Gentleman accept that rather than sorting each other out, we need to sort out the problem with gangmasters? Does he accept that no matter what Government are in power, sorting out such problems costs money? The money resolution is important to ensure that something effective is done while there is such a problem in this land.
I understand what the hon. Gentleman says, but he is again debating the Bill, which is not what we are here to do. We are here to get answers from the Minister about how much money will be involved, what he wants to spend it on and what changes he wants to make.
I want to follow on from the theme with which my hon. Friend Mr. Wilshire initiated his speech. I have armed myself with quotations from the other day's Second Reading debate to try to illustrate with great clarity the confusion in the Minister's mind—and thus, sadly, in ours—about the substance of what we are considering.
On Second Reading on
"There are a variety of concerns about the Bill as drafted, including the level of charges that might emerge, the operation of the licensing body and the engagement of the industry."
He went on to say:
"I am not convinced of the need to set up a new agency . . . We should consider in Committee the option of nominating or establishing an agency".—[Hansard, 27 February 2004; Vol. 418, c. 566.]
I cite the Minister's quotes from Hansard to illustrate the fact that we are being asked to agree to a money resolution despite the fact that the Minister does not know what Bill will emerge from Committee, which reinforces the points made by my hon. Friend the Member for Spelthorne. I shall return to further quotes from the Minister in a moment, if I may, but rather than quoting from the Hansard report of Second Reading, I shall now give a few examples of what the Minister said in this debate. He said that robust cost estimates will be prepared—note that they have not been prepared, so there are no robust cost estimates to support the money resolution. He then said that there will be set-up costs, which he also confirmed in an intervention on my hon. Friend the Member for Spelthorne. The Minister also said that there will be no significant net increases in Exchequer costs, which my hon. Friend Mr. Fallon emphasised. Finally, he said that the costs will be offset by increases in tax revenues. So a confused picture is emerging. All those different statements take us in a completely different direction with regard to the costs that the Bill will incur.
Let us consider one or two of those statements because they are contradictory. When the Minister said that there will be no significant net increases in Exchequer costs, he was implying that the revenues will be met by the licensing regime, of which we do not have any detail, although he assumes that that will emerge from the Standing Committee. We do not know what the charges will be, as my hon. Friend Mr. Gale said. We are in the invidious position of being asked to agree a money resolution without knowing the set-up costs, although the Minister hinted that he had a fairly good idea of the set-up mechanism, but without a costing, because the robust cost estimates will be prepared. He is telling us either that he knows the costs, but will not reveal them, or that he does not have a clue about the costs, but wants us to agree to the money resolution anyway.
I hope that my right hon. Friend is not going to give the Minister the benefit of the doubt. He clearly told the House that there will be no significant net costs, and we have to take his word for that. We have to assume that he has made some measurement of the costs because he has led the House into believing that the net costs of the set-up of the whole new regime, before the annual enforcement, will not be significant. Therefore, he must know roughly what they will be.
You would think so, Mr. Deputy Speaker. My hon. Friend makes a good point, but it is more complicated than that. As Geraldine Smith frequently says, the key is enforcement. If we are to believe that the Bill or, indeed, any other measure will be truly effective, the key to that is the effectiveness of enforcement, as hon. Members said on Second Reading, but we do not know how much money in the resolution will be guided towards enforcement or set-up, and how much may be offset by the costs of the licensing regime because the Minister is coy about that as well.
Here is the question: will the licensing charges be set at a level to cover all the set-up and enforcement costs, or will they be set at a reasonable level, as my hon. Friend the Member for North Thanet would prefer, so that the activities can continue to be viable, but perhaps not cover all the costs? There is a dilemma that the Minister has been unable to resolve. He is saying, "Trust me. We'll go into Committee. I'll do deals with the Bill's promoter", and the scheme will emerge in some as yet unknown form for debate on Report and Third Reading, which we all look forward to very much because that will be key to everything. In the meantime, the money resolution remains formless and shapeless. We have no idea where the emphasis will be laid when the Minister juggles, as he has had to do up to now, between covering the costs, presumably keeping faith with the restraints that the Exchequer has laid on the matter—
It being forty-five minutes after the commencement of proceedings on the motion, Mr. Deputy Speaker put forthwith the Question already proposed from the Chair, pursuant to
Question agreed to.