James Brokenshire
Main Page: James Brokenshire (Conservative - Old Bexley and Sidcup)Department Debates - View all James Brokenshire's debates with the Home Office
Immigration Bill (Second sitting)
James Brokenshire Excerpts(8 years, 6 months ago)
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The Chair
Q 7474 Neil, may I ask you to introduce yourself for the record?
Neil Carberry: Yes. I am Neil Carberry, the CBI’s director for employment skills and public services. For the record, I should say that I am a member of the Low Pay Commission and the council of ACAS, but all my comments today will be made purely in a CBI capacity.
The Minister for Immigration (James Brokenshire)
Q 75 Neil, thank you for coming to give evidence this afternoon. This is one of the rare occasions when I, as the Minister, get to ask some questions, so there is nothing unusual in this. On labour market enforcement, Sir David Metcalf, head of the Migration Advisory Committee, gave evidence to the Committee earlier today and commented that he hoped that the CBI would buy into the labour market enforcement director mechanism contained in the Bill. He was essentially extolling it and suggesting that the CBI should welcome it. In fairness to you, I want to put his perspective to you so that you can respond.
Neil Carberry: Ever since I was a student in the London School of Economics industrial relations department and Professor Metcalf was there, I have tried to keep him happy. The CBI’s attitude to the labour market section of this Bill is probably a good place to start. We are interested in driving out some of the appalling practices that exist in parts of our labour market. It has always been the view of CBI members that empowering enforcement officers to kick a few doors down and bring some bad guys to justice is the right thing to do. To do that effectively, you need a risk-based, intelligence-led approach. To the extent that any Government of any political colour take that up, the CBI will be supportive.
In a sense, our attitude to the labour market enforcement director is that if that is what is on the cards here, we will support that work. It is important that we ensure that people who are not able to raise their own concerns, because of the situation that they find themselves in, have some method of support from state enforcement. The labour market director will hopefully do that. Our concern is whether that work will topple too far into what we have perhaps seen in the past: tick-box approaches that actually fall more heavily on the compliant than on the non-compliant, who we would all agree need enforcement action.
James Brokenshire
Q 76 So your call is for smart enforcement, using intelligence and drawing together all the different strands of information to target more rigorously the non-compliant.
Neil Carberry: I think that is right. My understanding of the role of the director as we have seen it so far is that this individual will work across agencies. It is important that this change does not draw agencies’ attention away from their work. HMRC is still investigating every national minimum wage complaint that it hears and has also started to do some excellent intelligence-based, targeted work in key sectors. The introduction of the director will hopefully improve interaction with other authorities, but will not draw funding and work away from protecting people in areas such as payment of the national minimum wage.
James Brokenshire
Q 77 What is the CBI’s current assessment of labour market exploitation and non-payment of the minimum wage? How does your organisation seek to challenge that? In parallel with the Bill’s provisions, what role do you see the CBI playing?
Neil Carberry: Broadly, our view is that compliance with employment law in the United Kingdom is good. Largely, non-compliance is inadvertent and we have excellent systems to allow people to raise their concerns about that. There are parts of the labour market—where, I am glad to say, CBI members tend not to be found—which are more open to abuse, where there are more interlinks with people trafficking, for instance, and which are not easily policed by traditional labour market means because these companies are not traditional companies.
James Brokenshire
Q 78 And are you looking at particular sectors, or is that a more general comment about the labour market?
Neil Carberry: I would think that it clusters in three or four particular sectors, yes.
James Brokenshire
Q 79 Such as?
Neil Carberry: The obvious one would be parts of agriculture.
Sarah Champion (Rotherham) (Lab)
Q 80 I look forward to serving under your chairmanship, Mr Owen. Mr Carberry, offences are already specified in the Immigration Act 1971 that are applicable to migrants who breach their immigration conditions. Do you believe that clause 8, which creates the new criminal offence of illegal working, is necessary, and do you think that it may have unintended consequences?
Neil Carberry: What we are particularly concerned about is that any criminal offence is genuinely used to go after criminal activity. Employment law offences are typically civil offences. As I have already said, breaches are largely inadvertent, or if they are not inadvertent they are due to lack of understanding on the part of an employer. The right place to police that is through education, the tribunal system, the advice that ACAS offers and so forth. I am not a criminal lawyer. To the extent that the offence that has been created is to be used to go after employers where there is repeated, multi-faceted and exploitative treatment of workers, we are very happy for that offence to exist, so long as the businesses that are brought to justice are engaged in those steps. What worries us particularly is not the existence of the offence but the risk that there may be a general drift of employment law in the United Kingdom from the civil to the criminal, because that would be quite destructive for employee relations in general.
Gavin Newlands
Q 96 Do you think that it should be employers’ or the Government’s responsibility to prevent illegal working, especially given the move away from civil penalties to criminal charges?
Neil Carberry: I think employers should have a duty to ensure that their workforce have the right to work in the United Kingdom—that is probably accepted by our members—at the point of hiring. The issues that we have often faced are issues of establishing that fact in a timely fashion.
James Brokenshire
Q 97 Just to come back on that last question, what is your assessment of the level of knowledge among your members, recognising that part of the role of the labour market enforcement strategy, which the director will obviously have a key role in developing, is to focus on advice to the Secretary of State about education and training? What further steps, in practice, should be undertaken around that, and what about the role of the director in that piece?
Neil Carberry: There is an analogy here, slightly oddly, with the process of automatic enrolment in pension schemes. The Pensions Regulator for many years dealt with some very large companies, which had large defined-benefit pension schemes, kind of knew what they were doing and spent a lot of money on compliance. In many of our largest members, immigration compliance is a million pound a year commitment, because of the scale of it and the reputational risks that we have already discussed. We live in a world in which company size is gradually getting smaller, and has been for 20 or 25 years; the majority of firms are small businesses, and the majority of our members at the CBI are small businesses, often with limited HR capacity. The transition that, for instance, the Pensions Regulator had to make to talking to businesses that had never even heard of it and offering support—it is still struggling to get that right now, but progress is being made—is exactly the same transition that we need to make in this space. It really is helping smaller businesses to understand their duties and the support on offer to them that will be critical to making sure that illegal working action is effective.
James Brokenshire
Q 98 So I suppose in other words, to draw out another comment in Committee this afternoon, you are suggesting that the focus on that awareness should be at the smaller business end, the SME end, and on the some of the challenges that might reside there. Equally, I am assuming that you would not say that the larger firms themselves have no potential issues, given the supply chain elements touched on previously—who your sub-sub-contractor is, who is on a building site or has been contracted into a particular job—and the need for alertness around those sorts of elements, from a reputational as well as a legal perspective.
The Chair
Just before you answer that, we have a couple of minutes. Will any other Member wish to ask a question in that short time? No. Neil.
Neil Carberry: I agree with that. We talked earlier about the capacity of a firm to know whether it was dealing with partners who are compliant. What I would point to is that in this space we should not look for answers that look easy in Westminster but are actually ineffective on the ground. Experience with, for instance, licensing models—we are concerned about the potential for part of the Bill to create the space for the Secretary of State to dial up or dial down the extent of licensing models—is that licensing itself does not actually give a company any assurance that the licensee is compliant or not. The record of the GLA in taking away licences shows that firms behaving improperly were licensed. It is much, much better to have rigorous enforcement, intelligence-led, and then high-quality advice and support for companies that are taking action under the Modern Slavery Act 2015.
James Brokenshire
Q 103 Lord Green, there has been some questioning during the course of this session about the introduction of offences relating to illegal working, in particular the creation of an illegal working offence against employees. Could you share any thoughts and comments on how we can have a firm response and crack down on illegal working in all its different forms, as well as some of the draws that entice people into migration? How would you respond to the challenge that this may somehow prevent people from coming forward who may be victims of exploitation or trafficking, for example?
Lord Green of Deddington: I will keep my answers shorter in future, Mr Chairman, but I wanted to set out some of the basic considerations.
The Chair
Sure. It was a good opening exchange.
Lord Green of Deddington: Our view is that it simply has to be an offence to work illegally in this country. I cannot see how it can be otherwise. For starters, these people are unquestionably undermining the wages of British workers or immigrant workers, for that matter—legal workers. There is no question that they are undermining the wages of legal workers.
Wages in London are lower than anywhere else in the country. Why? Because in low-paid work there is an enormous number of people who are ready to work for very little and, of course, employers know they can get illegals for even less. It has to be an offence, and it is high time that it was. As you say, there has to be a balance. As you know, the Modern Slavery Act helps in certain cases if people will come forward, but the answer probably is stronger enforcement—in other words, lean on the employers in order to squeeze out the ability to do this.
Keir Starmer
Q 120 May I ask the panel—but I think probably Mr Lambert and Mr Smith in the first instance—about the provisions in the Bill dealing with the duties on landlords to carry out checks before renting to, or allowing premises to be occupied by, a person without the right immigration status? Do you have concerns about those provisions, from the perspective of the landlords, and do you have any comment about the concern of others that there could be a default position leading to discrimination—in other words, landlords being so concerned, because it is a complicated exercise and they are not entirely sure what they are doing, that it is easier simply to default to a position where you rent to somebody who is pretty obviously British, or who has a British passport?
David Smith: We have four areas of concern, so yes to your first question and, actually, yes to your second as well, but in a different way. We are concerned about the speed with which the second Bill has been brought forward when the first Act, the Immigration Act 2014, is not fully in force. It was announced only two hours ago that the pilot that has been evaluated in the west midlands will be rolled out across the country from 1 February. That pilot was held by the Immigration Minister to be a success, so we are not clear why there needs to be a set of criminal provisions on top of civil fines, which are, apparently, already effective. We would urge Parliament to take its time as it goes through implementation of the changes.
We are concerned about document discrimination—so not so much discrimination on grounds of nationality as discrimination on the grounds of people not having passports. Having a passport is far and away the simplest way to check somebody, so we are concerned that landlords, rather than just discriminating against people, will simply take the path of least resistance, especially as more pressure, potentially, is applied to them, with the possibility of ultimately going to jail. Indeed, I note from the evaluation that was published a few hours ago that one example was given, by one of the interviewees, of a situation of somebody without a passport being refused accommodation. So we are concerned about that.
We are concerned about the way in which the offences come into effect. The way the Bill is drafted, as soon as the Secretary of State has served a notice informing a landlord that they have illegal immigrants in their property, they are immediately committing the offence of having illegal immigrants in their property. It takes 28 days before you can possibly evict those people, so there are 28 days during which they are committing an offence. It has been suggested to us that the Home Office will not seek to prosecute, but it would seem to me that the only person who could give such an assurance is the person who is now filling your old job, Mr Starmer, at the CPS, the prosecuting body.
It would also be normal with offence of this type to have a provision that says that a landlord can establish a reasonable excuse—for example, if they have been severely ill or something like that—and that provision is not there.
The last thing is the air of confusion about two aspects in particular. First, the helpline has been described as a helpline, and was stated as such the other day. However, it has also been described to us as only being there to check for asylum seekers and people who do not have documentation. We would like to know which it is, and whether it will be fully funded as a helpline, so as to be effective.
The other thing that is notable from today’s announcement is that the provision is to be rolled out from 1 February, but it is not clear whether it will only apply to new tenancies commencing on or after 1 February, because it has also been stated to us in other meetings that it may apply to tenancies that are already in place on 1 February. It would be very nice to have some clarity on that, because it would be an extremely serious problem. I see that the Immigration Minister is shaking his head, which may give me the answer to that question.
Richard Lambert: We have concerns about placing this kind of responsibility on landlords, who are not trained for it and are not familiar with it. However, we have taken the view that we have to try to make sure that if this system is going to be introduced, it is as straightforward and practical as possible for landlords to operate. That has been the level of our discussions with the Home Office and other agencies throughout the past year, since the previous Act was introduced.
On concern about discrimination, we were probably more concerned about discrimination when the original policy was announced, or at least I was more concerned at that time than I am now. That is partly as a result of my going round and talking to local landlord meetings, as I do regularly. Rank and file landlords in our organisation are very worried about this issue, and those outside the pilot area are more worried than those inside it. One of the things that really comes back to me is, “How will we be able to tell if somebody is British? You can’t just look at them and say they are British. You can’t see their name and say whether or not they are British. In this day and age, you can’t even listen to their accent and say whether or not they are British.” So what we find is that landlords are moving towards the assumption that, in the same way that employers now tend to check all identities regardless of nationality, landlords will check identification, to make they cover off this particular aspect.
James Brokenshire
Q 121 I thank our witnesses for giving evidence this afternoon, and I also thank the relevant landlord bodies for their participation in the round-table sessions that we have had and will continue to have throughout the detailed implementation of the Bill.
I want to come on to one of the parts of the Bill that relates to the termination of tenancies. When landlords discover someone who is in the country illegally, they will be able to resolve that issue in a speedier fashion through the landlord and tenant legislation. Would that be welcomed by the sector?
Richard Lambert: Most definitely. Our big concern about the initial Act was what would happen once a landlord found they had a tenant who no longer had the right to rent, or who they thought had the right to rent but turned out not to have it. How could the landlord end the tenancy as quickly and as cleanly as possible, without necessarily getting into the whole court process? One of the problems with a court process is that it can be very protracted, yet the landlord is in the position of having committed an offence.
What we wanted to see was a process that moved that forward as quickly and clearly as possible. The provision in the Bill whereby the Home Secretary issues a notice once the Home Office has been informed that a tenant no longer has the right to rent achieves that. We have some concern about a power that has always been with the courts moving over to the Executive, but that is a constitutional principle for Parliament, ultimately, to decide. For our purposes, and looking at the practicalities, the power should work effectively.
David Smith: There are a couple of different points to make. First, it is generous of you to put in a provision to allow eviction of Rent Act tenants, but it is possibly not entirely necessary, as Rent Act tenants will have lived in the UK for so long that they are almost certainly entitled to stay here anyway, irrespective of how they entered the country.
The other part of it that I am a little bit more concerned about is with relation to assured shorthold tenancies and the power you have put in to evict. As I read it, it would still require an amendment to the tenancy itself for that power to be exercised, in that ground 7A can only be used inside a fixed term if it is mentioned in the tenancy agreement. So that ground for possession would require a lot of landlords to change their tenancies, which it is obviously their responsibility to do, but there is obviously a substantial piece of education that will need to be done in the sector, which I accept is our responsibility—possibly more than it is yours.
The other point is the issue of transfer of tenancies, so where there is a group of tenants, some of whom are illegal immigrants and some of whom are not, there is a power for the court to transfer the tenancy. The first point is that it is easily got around by simply issuing proceedings for some other ground for possession as well, which is relatively easy to do. The other problem about it is: how will you deal with all the other side bits that go with it—for example, tenancy deposit protection?
If a deposit is registered in one group of tenants’ names and the tenancy is transferred by the court to a different group of tenants’ names, the deposit protection schemes will need to have the deposit re-registered, and something will need to be done to deal with that contractual positon. So I am a bit concerned as to how that will work. In practice, I am afraid the mechanics are a little bit more complex in terms of shifting tenancies around between tenants.
James Brokenshire
Q 122 The detailed input given thus far has been helpful in flushing some of those issues and, no doubt, those discussions will continue.
Given the time, I should ask Mr Leenders about the banking provisions. The new provisions in clause 18 are on existing bank accounts and the ability to take action. That may be linked to some of the other issues we have touched on in the session, such as proceeds of crime legislation, linked to the employee criminal sanction that was highlighted in a previous session. Will you comment on the practicality and operation of that?
Eric Leenders: Certainly. We have some experience through the Immigration Act 2014 of implementing the required database search for new accounts that customers might want to open. That has given us some experience and some learning. The three-stage process in the Immigration Bill is broadly similar in the sense that first there is the status check, currently through CIFAS. Then there will be notification of any matches back to the Home Office, which is the three-point match, and no fuzzy logic, which gives a clear indication of those particular clients that we might need to close accounts for. The differential is the action that is then taken.
Essentially, though, as we understand it, there are two ensuing actions. First would be an instruction to close the account. We are working closely with HM Treasury officials to understand how that might work in practice—if I may, I will come back to that point. Second would be some form of freezing order through the courts that might facilitate ongoing regular payments, potentially for rent and other things, if there are subsequent actions that the individual might need to take.
In the context of closing the accounts, some of the challenges I think we find are, first, which types of accounts? We know it is individual accounts, joint accounts, additional signatories, charities and some smaller accounts, but is it all those instant access accounts or is it simply current accounts? That has been a challenge that we faced that was clarified, I think on the Floor of the House, with the Act.
There is also the treatment of balances, particularly of course for overdrafts. That has a bearing on the amount of time we would consider appropriate for actually closing the account. Currently, the default would typically would be 28 days, but, if there is an overdrawn balance, we would probably like to see that paid and the account closed quicker to lessen the propensity for that overdraft to drift up again.
I think we have a bit of an issue where there might be knowledge of a disqualification but we might not hold the qualifying account. These days we tend to have financial services across a range of providers, and the extent to which our responsibility might be to disclose to those whom we feel might hold the account, or whether we do nothing, is a moot point just now.
The granularity of disclosure once we have given notice to close the account is something that we are working on with Treasury officials. Currently we are looking at whether that should include balances, additional parties to an account or details of regular payments, which potentially would include details of the originating account for that regular payment. That is not information that we would necessarily find easy to extract from systems, so that is an additional build for us.
In the Financial Conduct Authority we have obligations to treat customers fairly. We found with the Act that there are some cohorts of consumers where actually it is quite difficult, in the sense that those with no fixed address might not have suitable matching criteria to pass through the database, so then we should call them out. That of course creates a customer service issue. Elderly consumers are another area—perhaps they have not registered on the electoral roll and therefore, again, we might need to call them out. We need to get that referral process quite slick.
We will in parallel need to implement the payments accounts directive, which has a requirement that you are familiar with to do with account opening for citizens legally resident in the European Union, which is a different definition and criterion to work through.
In terms of the pragmatics, as we envisage what we call operationalising, we would see that first wave of checks across a database—it might be as many as 120 million-something accounts, so there will be a volume of activity. Thereafter, if we were to undertake checks quarterly, say, we would be very keen just to check any additions and amendments to a register, rather than to have to sheep-dip the whole database.
The final point of course is the timeline. We have had some useful clarifications, again, from Treasury officials that suggest that the first checks might not take place until the latter stages of 2017. Typically, banks need something of the order of 18 months to implement mandatory change processes and to go through testing and assurance internally. We might be able to foreshorten that—we are talking about a period of about, say, 12 months. Whatever we can do ahead of the detail in the secondary legislation would be very helpful to us.
James Brokenshire
Q 123 Thank you for that detailed and comprehensive answer on the provisions, which is quite helpful and instructive on the level of detail that is engaged here. Just briefly, perhaps you could reflect on the provisions of the Immigration Act 2014 and their implementation. What has been the practical experience? Clearly a lot of this quite detailed analysis was engaged there as well. What has been the situation to date?
Eric Leenders: On volumes, I think we have seen about 1.9 million searches go through the CIFAS database. From that we have identified some 14,000 matches against the database, and those have been referred back to the Home Office. That has in turn identified some of these issues such as people with no fixed address or those elderly consumers. So we can draw on that experience to inform our thinking around the Bill.
We consider that the CIFAS process is working quite well. The truncated timeline was difficult, frankly; there was an element of manual processing, and with manual processing there is, unfortunately, a higher propensity to or risk of error. So that is why we called for that slightly longer timeline—to ensure that as far as possible we can automate and therefore reduce the error rate within the process.
Anne McLaughlin
Q 124 I want to talk about potential discrimination under the right to rent aspects of the Bill. Not everyone is as enlightened as Mr Lambert, and so not everyone believes that you cannot tell by a face, a name or an accent whether someone is British. I was very struck by a statement sent out by the Residential Landlords Association, which I am going to read from:
“Whilst the Residential Landlords Association condemns all acts of racism the threat of sanctions will inevitably lead many landlords to err on the side of caution and not rent to anyone whose nationality cannot be easily proved.”
How concerned are you that the Bill will allow some people to use it as an excuse for their racism and that others will inadvertently end up acting in a racist manner, not because they want to but out of fear that they may end up breaking the law if they do not?
Richard Lambert: How concerned am I that some will use it? Very. How concerned am I that some will use it inadvertently? Fairly, but our experience is that most of the concern about the provisions is from people who have not gone into the detail, are worried about what they might have to take on, are concerned that they do not have the expertise or knowledge and are very focused on the penalties, because what has been pushed hardest is not the responsibility or the practicality but the level of penalty for getting it wrong.
Having had a quick look, like my colleague, at the evaluation report that was published this morning—we had a chance to look at it before we came in here—something like 22 of the 26 landlords who responded said that it was actually relatively easy to undertake the checks and that there did not seem to be an obvious level of overt discrimination, although there is still an undertone, and in a few cases that does happen.
It is a real risk, but when I said what I did about awareness of the fact that we live in a multicultural, multiracial, multifaceted society, that was not me speaking—obviously, I believe that—but me recounting what has been said to me by landlords at local meetings around the country. They are very concerned about the practicalities of how you make this work, and they realise that you cannot make assumptions, from looking at somebody, about whether they have the right to rent or whether they are a British national. The only way is to check and to check everyone. I recall anecdotally from my colleagues on the Home Office working group on the evaluation report that the largest level of resentment coming back from tenants was from the indigenous white British population, who did not understand why they were being asked to prove the right to rent. You actually get a counter-intuitive response.
David Smith: People who will discriminate would discriminate anyway, so in a sense people who are going to actively discriminate as a result of the Bill would have been actively discriminating before. Our biggest concern is what we have chosen to call document discrimination. Of the UK indigenous populace—or however you want to describe those people—17% do not have passports. If a landlord has two people walk through his door who want to rent the same property, and one says, “I have a passport and can do the right to rent check right now,” and the other says, “I do not have a passport but will come back tomorrow with two forms of identification off the secondary list,” the landlord is technically not breaking the law by taking the first person, and in practice I am sure that he will take that first person.
Our concern is that there are groups of people who are not in possession of passports and driving licences. As a lawyer, I have many such people as clients, because I have a large client base of elderly people or people who are in care. There are substantial numbers of those people, and a lot of them are renting, increasingly in the private rental sector, as there is a change from social renting to private renting. There is a potential difficulty with providing those people with proper identification.
We have called for a much simpler document for people who are on benefits and would already have been checked to receive benefits. Local authorities could provide a single document—perhaps watermarked or stamped—that landlords could be clearly told was acceptable as a single document. At the moment those people are going to need to produce two separate documents. They may not have them to hand, or it may take time to acquire them. The benefits letter has to be signed by a named official, and named officials may be reluctant to put their names on these documents. Our concern is that groups of people who should have no reason to be concerned by this legislation at all may find themselves being put through checks that they cannot easily meet.