With this it will be convenient to consider the following:
New clause 2—Directions etc. by the Secretary of State.
New clause 7—Grant of licence.
New clause 8—General power of Authority to make rules.
New clause 9—Modification, revocation or transfer of licence.
New clause 10—Appeals.
New clause 11—Register of licences.
New clause 14—Offences: supplementary provisions.
New clause 15—Enforcement and compliance officers.
New clause 16—Powers of officers.
New clause 17—Entry by warrant.
New clause 18—Obstruction of officers.
New clause 19—Information relating to gangmasters.
New clause 20—Application of Act to bodies corporate.
New clause 21—Application of Act to unincorporated associations.
New clause 22—Application of Act to partnerships.
New clause 23—Annual report.
New schedule 1—The Authority: consequential amendments of enactments.
I shall not go into great detail about the establishment of the gangmaster licensing authority, except to note, first, that it will be separate from DEFRA—it would be useful if the Minister explained why it was concluded that it should be separate from rather than an extension of a Department—and, secondly, that the authority will not be responsible for enforcement of the legislation. I understand that the Secretary of State will have powers to appoint enforcement officers from other Government bodies and agencies.
I know that we are engaged in constructive debate today, and I do not want to be critical of past events, but I am deeply concerned about Operation Gangmaster and the lack of co-ordination between Departments in attempts to stop the exploitation of vulnerable workers, both legal and illegal. To date, those attempts have not been successful, and I want to ensure that the gangmaster licensing authority and whatever body is responsible for the enforcement of the licensing and regulation scheme will work together extremely closely, and that there will be sufficient resources to enforce the measures that are to be on the statute book.
New clause 8 deals with the power of the authority to make rules. I should like the Minister to clarify why the word ''rules'' is used, rather than ''conditions''.
What, if any, is the difference between the two? It might be my suspicious nature that makes me ask.
The simple answer is that ''rules'' looked reasonable in that sentence. I do not believe that there is any great distinction between the two terms, although I shall check that for the hon. Gentleman.
I am grateful for that response.
''It is important that the right balance is achieved with the rules, and that the rules relate directly to existing legislation. If the GLA introduced too many, too complex rules than was reasonably required for the purpose then the grant of licences could become cumbersome and bureaucratic''—
we covered some of that argument before—
''and of course increase the overall costs of the scheme and pitch licence fees upwards to excessive levels'',
which might deter the legitimate supply of labour, as I pointed out.
That brings me neatly to the regulatory impact assessment, which suggests that the cost of an audit of a legitimate gangmaster who is meeting the legal obligations could be as much as £1,500. That is in addition to the administrative costs of processing and issuing the licence and maintaining the register, which could be a further £750. I understand that those figures are based on a two or three-year licence. I should like to understand why those costs are so high, particularly in comparison to those that apply under the Private Security Industry Act 2001, which total only £190. The disparity between the two figures is large. I, my constituents, businesses in the horticultural and agricultural sectors and legitimate gangmasters all wish to avoid penalising the latter with provisions that are over-burdensome—not only in terms of bureaucracy, but in terms of unnecessary cost.
New clause 8(2)(f) would allow the authority to grant provisional licences before it had been determined whether the requirements for the granting of a licence had been met. That unnerves me and some legitimate gangmaster operators who believe that some rogue operators may obtain licences, however temporary, and operate without meeting the relevant criteria. It would be wrong to allow that to happen, even if only for a limited time. Why cannot we have beginners criteria, which might be linked to the sending of tax and VAT returns to the Inland Revenue and Customs and Excise?
New clause 15 deals with enforcement. From reading the Bill, it is not clear to me who the enforcement officers will be. Will they be from Inland Revenue, Customs and Excise or the new merged body? Will they be immigration officers? Where will they come from, and who will fund their operations? Which Government Minister will be responsible for them and, ultimately, answerable to this House and the other place? How will the officers liaise with local police? I have consulted the police in Lincolnshire and they are enthusiastic about the Bill, provided that it is correct, but they want to make sure
that there is an understanding about how police will link with the enforcement operators.
I appreciate that that will become apparent in secondary legislation, but I am concerned that, at this stage, there seem to be no defined mechanisms or structures in place. Will the Minister provide assurances regarding the likely number of enforcement and compliance offices that will be required? Will the resources necessary to fund them be forthcoming? Where will that funding come from? I do not mean to be difficult, but, at the moment, there is a lack of co-ordination. Insufficient resources have been put in place to enforce the existing legislation. We need to make sure that that gap does not continue.
As the Minister said, we must catch those who continue to ignore the rules. That is far harder than penalising licensed operators for minor compliance issues, and it may involve considerable resources and manpower. Where will those resources and manpower emanate from?
Mr. Illsley, I am happy to be able to say without any doubt that your chairing was the most helpful piece of chairing that I have come across in nearly 25 years in the House. I also cannot help but observe the appropriateness of Room 9 being renamed the Wellington Room. Someone obviously had a sense of humour, as we are discussing the gathering of shellfish, agriculture and horticulture in a place named after the appropriate clothing.
I would be grateful if the Minister confirmed that those to have powers of arrest will include not only the enforcement officers, but the usual people—the police—under the Bill or under general legislation.
I want to raise two other points. As I understand it, powers of arrest will apply only to someone who has not got a licence or who has a dodgy licence. There is no proposal that a power of arrest should be applied to someone who is wildly in breach of a licence, which might appropriately be an arrestable offence. Might someone who is obstructing enforcement and compliance officers in the exercise of their duties be arrested? Some of the minority of evil people involved in gangmaster activities are precisely the sort of people who would destroy important information in the period between the enforcement officer trying to get in and anybody laying hands on the information.
In new clause 7(2), which relates to the period of grant, there is no mention of renewals. The clause talks about revocation, alterations and the like and the subsection says that the licence
''shall be granted for such period as the authority thinks fit.''
However, because there is no mention of renewals, it suggests that one might be able to issue a licence for 25 or 30 years, or for life. Many of us would prefer a general presumption in favour of a maximum period of five years, so that renewals take place. It might be shorter than that for people who have to prove themselves or are brand new to the business, but those who have been operating for a while should have
to undergo a renewal or reappraisal, not least because they can provide more money through the renewal.
New clause 9(3) states that the licence
''may be transferred with the written consent of the Authority''.
Our experience of the transferability of licences has not been good. Some have acquired financial value and become transferable and marketable. I cannot understand why we are prepared to allow the transfer of a licence when all that is needed is a new licence. Any person, corporate body, organisation or partnership should apply for a new licence when they want one. I have become opposed to transferring licences, because licences and other rights that have for various reasons been transferred have caused us concern in many different spheres. Why do we need to worry about transferring licences when people could simply apply for a new licence? There is no need to provide for transferability.
A lot of ground has been covered in a short time and I shall seek to do the same. The hon. Member for Boston and Skegness asked about the nature of the authority. We envisage a body in which the chair will be appointed by the Secretary of State through the normal appointments system and in which other members of the board—approximately 17 representatives—will be chosen for specific aspects of expertise. That would mean representation from the industry—farmers, growers and trade unions—and from Government. That would ensure that people on the board are involved in those bodies that enforce legislation relevant to the activities of gangmasters. We envisage a board that has practical experience to inform the decisions that it makes. The appointment of the chairman by the Secretary of State would be in line with the recognised procedures laid down by the Office of the Commissioner for Public Appointments.
In terms of enforcement, the licensing body must, most importantly, create an environment for the licence and ensure that licence requirements are complied with. Another aspect of enforcement covers the activities of those who are not licensed—the villains outside the licensing system. We are considering the way in which enforcement will be exercised; a degree of enforcement from DEFRA might be required.
The power of arrest included in the Bill could be useful for organisations other than the licensing authority and DEFRA, because it establishes a clear line. It may be suspected, but not immediately apparent, that a variety of offences are being committed—for example, one may not know whether offences under health and safety legislation are taking place. However, one would immediately know whether the person has a licence to be a gangmaster; if they do not, there is the power to arrest them straight away. That creates a means of taking hold of the situation in, as my right hon. Friend the Member for Holborn and St. Pancras described them, the 5 o'clock mists of the countryside.
Like those who have already spoken in the debate, I strongly support for the Bill.
On the information that may be obtained through the activities of the new authority, is the Minister satisfied that if the authority's officers come across information that points not to a breach of this legislation, but to possible breaches of other legislation, that information could be passed to the appropriate authorities?
Yes, absolutely. My hon. Friend might be aware that I have taken a great interest in the exchange of information, which, for instance, resulted in a specific clause in the Crime and Disorder Act 1998. I have carefully explored that point with officials and legal advisors to ensure that the licensing body will be able to undertake exchanges of information, particularly in relation to breaches of the law.
The engagement of every aspect of the industry in the body that will oversee the activity, and the engagement of Government in that body, is the way to ensure that there is a genuine partnership and that the licensing organisation is fit for its purpose. That goes back to the general purposes of ensuring that appropriate provisions are in place and that a code of good practice and existing legislation are pursued effectively, but at minimum cost and with a minimum of regulatory burden.
Some of us suspect that we are in a ''may'' situation when we would rather be in a ''shall'' situation, so that if information was discovered, the new organisation would be obliged to pass it on and it would not be at its discretion.
I am delighted to say that I am entirely at one with my right hon. Friend. I am happy to put it clearly on the record that the provisions as drafted include the power of direction in the event of any doubt. It is our intention that ''shall'' rather than ''may'' is the way in which the organisation will operate.
The regulatory impact assessment is based on the best available knowledge, gained, for example, from examining the operation of the Ethical Trading Initiative, which is a voluntary initiative undertaken by legitimate gangmasters and the business. If, in time, it becomes possible to slim down the requirements and therefore the burden on business, we would be happy to see that happen. We have the sort of partnership of organisations and individuals that points in that direction, but we have to base RIA figures on the best available knowledge now.
The hon. Member for Boston and Skegness referred to temporary licences or beginners arrangements, which are entirely possible under the legislation. The reason for putting enforcement in the hands of the Secretary of State is that she would be able to authorise the agency and others to use such powers. That means that the usefulness of the legislation extends beyond the enforcement of the licence. That is something that we will discuss with enforcement organisations—for example, we are planning a discussion with the police. The arrangements for enforcement liaison are in the Bill, so that there is a mechanism for ensuring that there is complementary
enforcement of the provisions in this Bill and other legislation.
My right hon. Friend the Member for Holborn and St. Pancras asked about the powers of arrest in relation to someone who was wildly in breach of the provisions. I rather suspect that in those circumstances the individual concerned would be committing one of the many offences of exploitation, to which we have already referred, and would therefore be breaching other legislation. As far as the licences are concerned, an individual could commit the offences once, but breaching the licence would mean that they would be acting illegally if they undertook any activity, even if they ensured that the activity was within the ambit of the law. The repeat offences and the increased penalties would then kick in. I assure my right hon. Friend that we are creating a powerful instrument, provided that what I have described is understood. The individuals concerned may, of course, be committing arrestable offences under existing legislation and it is right that they should be arrested if that is the case.
The hon. Member for South-East Cornwall (Mr. Breed) referred to the period of a licence and to renewal. That is not the sort of thing that needs to be in the Bill. Our initial thinking is that the licence might run for three years, but, again, that is open to discussion with the industry and I am happy to hear the views of colleagues as well. As far as the transfer of licences is concerned, we can look at pub licences or transfers of a business, from father to son or to a new proprietor. We do not want to create a new burden for the business by making people submit a new application and thereby pay the full licensing fee. That would add to the cost. I am certain that the issues about which the hon. Gentleman expressed concern can be managed through the regulations.
If hon. Members would like further detail on any of the points that I have covered fairly briefly, I shall be happy to provide it.
My understanding is that obstruction of enforcement would fall under existing legislation. However, I am not absolutely certain about that, so I shall look into it and write to my right hon. Friend.
I am aware that the Committee wants to rattle through the remaining new clauses and I hope that the Minister will forgive me for coming back on some points that has not addressed to my satisfaction. Will he now, or in writing, tell me why the
assessment of regulatory costs for the implementation of the licensing scheme are so much higher than those that the security industry had to bear under the security legislation, which I understand was £190? That may be a function of the different industries that are being regulated. If so, I would like more information on why the disparity is so great.
There are other Bills and other immigration legislation in which powers such as those proposed exist, but they are not being enforced properly, which is why there is a loophole. The Minister did not answer to my satisfaction two key points on the enforcement of the Bill, which will be essential to its success: first, how many enforcement officers will be put in place and, secondly, who will fund them and how will they link with other authorities such as the police? Will the funding be from DEFRA or from the cost of the licence? I assume that it will not be from the latter, because of the desire to keep the cost of the licence to a minimum.
My final point, which I would like the Minister to address now or in writing, is about the forging of IDs and licences. As he knows, there is a huge market in forgery. Last week, I was at Boston police station, which has enormous numbers of forged passports and ID cards. Sophisticated criminal gangs, which have the ability to carry out very good forgeries, are involved in these rackets. I want to ensure that that does not happen in the case of these licences. To ensure that they cannot be forged, it may be possible to use technology that has been discussed in connection with ID cards.
I shall try to satisfy the hon. Gentleman, but I cannot respond to his point on the comparison with the licensing charges for the security industry scheme, because I do not know the details of it. I was responsible for that area of policy when my party was in opposition, but that was some time ago and my knowledge of it is a little out of date. However, I am happy to consider the arrangements under the legislation that he mentioned and to write to him to deal with the comparison.
The hon. Gentleman also raised several issues relating to enforcement—issues of the sort where the question is simple, but the answer tends to be complex. The Bill's purpose is to set in place licensing arrangements and to make provision for enforcement and prosecuting those who breach the licence requirements or operate without a licence. We want to ensure that the costs that fall on the industry are those that relate to the licensing activity. We do not want the industry to be asked to bear the costs of other enforcement in respect of those who are not legitimate gangmasters. That is why the answer is slightly complicated. The licensing authority needs the powers to do its job, but DEFRA might undertake, or provide finance for, additional related enforcement activities. The offences in the Bill may be useful to those seeking to enforce other parts of the law and to the police in general.
That is why we have drafted the provisions in wide terms and said that the Secretary of State can
authorise the power to prosecute. We are thereby providing flexibility to ensure that we get the best out of the legislation by putting the least burden on the licensing operation and therefore on the industry. That relates directly to the issues raised by the hon. Gentleman and the opinions expressed by the NFU and others. The trade union side is equally keen that there should not be an excessive burden that almost penalises a licensed gangmaster. We want this to be easy and as simple as possible to operate within the law. We also want to make things as difficult as possible for anyone who thinks of operating outside the law, whether outside the licensing system or in the variety of other ways that have caused this issue to become so important to hon. Members.
Responsibility for financing falls to DEFRA, so clearly we will have to bear the cost of establishing the agency. We will seek cost recovery from the licensing system once it is up and running, but we cannot achieve that on the first day. The obligation rests with DEFRA. As with all other non-departmental public bodies and agencies, there is an annual arrangement with the body to provide the resources. It can advise the Secretary of State on its experience of operating within the legislation and so on. I cannot peer into a crystal ball and give the hon. Gentleman figures, but that is not how we are approaching the issue—we are not considering it top-down. This is about working with industry and enforcement agencies to ensure that we create a system that is fit for purpose.
If I interpret the question correctly, yes, because the responsibility for the legislation, its use and the establishment of the agency is DEFRA's. We are setting up a Government agency, but we seek to share the development of the policy and the mechanisms with an industry that knows its own business. That is where we are trying to be intelligent in squaring the circle. We want to ensure that the agency and all that it does both have Government underpinning and authority, and that the licensing system is a legal requirement and is underpinned by the legislation. DEFRA takes responsibility for that.
What sometimes confuses people, for instance, is the fact that there will be a relationship between the licensing system, which creates a dividing line between the legitimate and the non-legitimate, and the work of Operation Gangmaster. The hon. Gentleman was a little dismissive of that work, but if he checks the newspaper cuttings from recent weeks he will see that there have been several serious successes and prosecutions. The activities involved in such operations go on throughout the country but remain invisible until people are arrested. Even then, there tends to be a bit of a delay until the cases come to court, so there is a tailback in terms of effectiveness. Nevertheless, I can assure him of Ministers' enthusiasm for such activities. Indeed, the support
and encouragement that I have received from Ministers in other Departments in relation to the Bill shows the will to make enforcement effective.
I understand that the licensing scheme and the policy surrounding it are, quite properly, matters for DEFRA, but how will the enforcement responsibilities that DEFRA is accepting sit alongside those of the Minister at the Department for Work and Pensions who is taking a co-ordinating role on such matters and on Operation Gangmaster in particular?
It is fair to say that the purpose of Operation Gangmaster is to deal with the villains of the piece, and different Departments clearly have an interest in different aspects of enforcement. For instance, my Department has an interest in the agricultural wages requirements, while the Department for Work and Pensions has an interest in relation to the minimum wage and employment issues generally. The Inland Revenue has more than a passing interest in people paying their taxes. We are all concerned about health and safety at work, although the Health and Safety Executive has responsibility for that.
The point is that legitimate businesses sometimes breach one or other of the relevant pieces of legislation, while the villains of the piece have no regard for any of them. There needs to be co-ordination across government so that we can use whichever instrument is appropriate, or indeed all of them, to get a grip on things. Operation Gangmaster draws together a team of people from across government to tackle a particular investigation and the ensuing prosecution.
The existence of a licensing system, as well as the ability both to revoke the licences of organisations that play fast and loose and to prosecute gangmasters who operate without a licence, give us a new opportunity to target such people. The licensing authority targets people to ensure that they operate as legitimate gangmasters, but the power to prosecute is useful beyond simply enforcing the licensing system. We should consider not only the licensing authority but others having the opportunity to prosecute.
The Secretary of State at DEFRA will have responsibility for that. The provisions will complement existing opportunities and create new ones for those who enforce other legislation. The relationship between the enforcement of these and other provisions will lead us to look for experience on the board to promote the usefulness of the licensing system. The connection with other breaches of the law, particularly where the villains are concerned, has resulted in the proposition of an enforcement liaison group to ensure that things are pulled together. As my right hon. Friend suggested, responsibility for leading the co-ordination of Operation Gangmaster activities clearly lies with the DWP. That will not only add significantly to the armoury of offences for which
prosecution can take place, but change the geography of enforcement by making it much easier to get a grip.
Let me describe a hypothetical situation. As an MP, I might be alerted to the operations of gangmasters who are, perhaps, in breach of health and safety requirements, exploiting illegal immigrants, involved in tax evasion or engaging in any of a range of activities. If I have difficulty in getting local agencies to work together, which Minister should I approach to kick off the operation to check the licences and to liaise with health and safety officials and other agencies, thereby ensuring that something happens?
In the first instance, the question appears simple. We want to make it as easy as possible for people to get things done, whether they are Members of Parliament or members of the public. A member of the public will not ask under which piece of legislation he is making an inquiry; he will have a problem that he wants to draw to somebody's attention and will want to know how to do it. At a recent meeting, in response to a question from my hon. Friend, I undertook to consider how we can ensure that there is one point to which people can go for information on licensing and other gangmaster issues. I repeat that undertaking.
If there is a bit of a problem with the way in which a licence is working, my hon. Friend should come to me or to another DEFRA Minister. However, when it comes to enforcement issues and trying to catch villains, we shall ensure that the way the Bill is stitched in allows people to get to the right place without having to make half a dozen inquiries.
It is also important that agencies with good reasons for wanting answers should be able to find out pretty quickly whether somebody is a legitimate gangmaster, just as the police can now check a car registration number immediately, rather than having to send off a form and wait three weeks. We shall consider how to deal with that, too.
The hon. Member for Boston and Skegness raised the matter of the ability of individuals to prove their identity. That is very relevant if there is a question about which individuals are authorised to work in this country. Work is under way in a number of Departments, under a Home Office lead, to establish a simple system to deal with authorisation to work. That ties in with proof of identity and proof of authority, which will be necessary if the system is to work. I am going beyond the detail that needs to be in the Bill, but I assure the hon. Gentleman that the matter is on the agenda and being addressed.
Finally, there are matters on which the detail in the Bill should not pre-empt decisions that might be made by the agency's board—or the shadow board, which we want to establish as soon as possible—as we want to use the knowledge of the industry. We are doing that by consulting with the consortium and with the Association of Labour Providers. Much of that has to be an iterative process. I do not think that there is any disagreement over the practicalities that need to be dealt with.
I hope that with those assurances, and the offer to go into any further detail that hon. Members wish, the Committee will agree to the measures proposed.
Question put and negatived.
Clause 3 disagreed to.Clause 4Obligations of principals