Gangmasters Licensing Authority

John Pugh Excerpts

Tuesday 21st February 2012 Westminster Hall

[John Pugh (Southport) (LD)]

I congratulate the hon. Member for Edinburgh South (Ian Murray) on securing this important debate.

I also congratulate the hon. Member for Paisley and Renfrewshire North (Jim Sheridan), who is present and who was responsible for the original proposals, which went through the House of Commons and into legislation. I followed and supported his private Member’s Bill, turning up on a few Fridays to ensure that it ran the course. That might seem strange, because I represent a seaside constituency, but it is one that has a large agricultural hinterland. It was obvious to me, when he was promoting his Bill, that something needed to be done. I was acutely aware of a number of workers whom I saw around the town who were there illegally or were trafficked—they were certainly not treated at all well. In many cases, they were appallingly housed. In one celebrated case, a large number of Russians were found in a big house in Southport in conditions resembling the black hole of Calcutta. Those who were better housed might still be extraordinarily badly treated, with their rent often deducted from the pittance they were paid; every conceivable regulation for houses in multiple occupation was violated by gangmasters who often owned the property concerned.

It was also apparent to me at that time that there was some criminal involvement. Conversations that I had with the police and immigration authorities indicated that that was indeed the case. Clearly, from conversations that I had with valid employment agencies operating properly within the law, the situation was also a considerable restraint on their trade and was a problem in the labour market. As the hon. Member for Edinburgh South said, such people were breaching the law not only by using illegal labour but by not paying full taxation or proper national insurance. It was rather puzzling, when looking at the accounts of some large agricultural suppliers, as to how much they managed to get done with so few people seemingly employed on the books. That was before the Morecambe bay tragedy, which focused people’s minds on the seriousness of the issue and on how right the hon. Member for Paisley and Renfrewshire North was to bring it to our attention. Had people acted sooner, we certainly would not have had that tragedy.

I had a foretaste quite recently of what might still happen in the absence of a similar piece of legislation. Southport has a long history of shrimping, but we had a bonanza—almost a freak of nature—of cockles and other shellfish quite recently. It was a sudden surge, perhaps because of some tidal movement. However, it became well know that in the northern part of the constituency an awful lot of money was to be made from prestigious restaurants by going there quickly, taking appreciable risks and obtaining what was there. The local authority took the matter under control very effectively, but it was obvious in the circumstances that many strange people were suddenly showing up in town, and were prepared to take appreciable risks on behalf of themselves and those they employed in trying to obtain a quick financial return.

I wholly support the thrust of the legislation. As the hon. Member for Edinburgh South said, it prevents a number of wholly undesirable activities. It prevents people from being treated badly, and prevents abuse of health and safety legislation. It even saves lives. It is not an underestimate to say that lives would be put at risk in the absence of proper supervision of the gangmaster business. It certainly ensures that more taxes are paid than would otherwise be the case, and it goes a long way towards cleaning up the supply chain, which has been fairly murky in the past. I have no real evidence for this, but I am fairly confident that supermarkets were receiving vegetables that had been provided through gangmaster chains that required some inspection, to say the least.

At the moment, the Government are against red tape, as we all are. No one makes a case for red tape. The issue is what is meant by red tape. There is no clear definition. I am told by people in the Department for Transport that they were asked to look at traffic regulation orders as a sample of red tape, which shows how vague and blurred the definition is. If it means over-regulation and unnecessary regulation, we are against it in principle, but what we are discussing is not an example of that. There is clear evidence that an authority such as the GLA is needed, and I would be sorry to see it abolished.

The hon. Member for Edinburgh South has made a case for an extension of the GLA’s remit, and I am slightly wary of that. He drew a valid distinction between dealing with gangmasters as an industry-specific issue, and dealing with them in terms of the business model involved. My instinctive preference is to look at the industry-specific aspect.

[Mr David Hamilton]

I draw the hon. Gentleman’s attention to the construction industry. Many foreign companies come to the UK and bring their employees with them. The very problem of employment and accommodation to which he referred exists here now. Such companies give with one hand, and take away with the other. They pay wages to their employees, but then increase the rent for their accommodation. That happens now in the construction industry, and it goes against local British firms that are trying to get into the market and do a fair job with people they care about: their employees. The regulations should apply to foreign employers, and ensure that exploitation does not happen.

[John Pugh]

The hon. Gentleman has slightly anticipated me. There is a prima facie case in the construction industry, and there has long been a history of gangmaster behaviour, which used to be called the lump. Building firms sometimes employ people as a gang instead of employing them individually to avoid some of the penalties that might be incurred because work on a building site is intrinsically risky. A construction firm might incur liabilities, but sometimes, by arrangement, they fall on the gangmasters, who accept no ultimate liability whatever.

There is a decent case for including the construction and agriculture industries, but it becomes more difficult in the catering industry, which the hon. Member for Edinburgh South mentioned. We seem to be moving into territory where we may be imposing on an industry regulation that, strictly speaking, is unnecessary.

[Ian Murray]

Perhaps I could provide some clarification. I examined whether there should be an extension to other industries, but I particularly asked the Minister to examine whether it would be appropriate for the GLA to cover other industries, rather than saying that it should have a blanket involvement. I was asking for some proposals from the Government, and whether it would wise and prudent to do so.

[John Pugh]

The hon. Gentleman makes an entirely valid point. He is suggesting a benchmark or threshold that must be met before imposing additional regulation. Surely, that benchmark or threshold has been met in the agricultural industry. In my view it has certainly been met in the construction industry. Removing existing controls when there is clear evidence that they are needed would be regressive and wholly detrimental to the interests of British commerce and to the people who work in those industries.

[Mr Graham Brady (in the Chair)]

Order. It may help hon. Members to tell them that I am hoping to start the wind-ups at 10 minutes past 12. I believe that three hon. Members wish to be called, and if they are reasonably brief, they can all speak.

--- Later in debate ---

[Mr David Hamilton (Midlothian) (Lab)]

I will not take up much time, Mr Dobbin. I did not intend to speak, because the previous contributions were so good, but I would like to make one or two points. We all come to the House with our own experiences from the lives that we led before becoming Members of Parliament. That is one of the characteristics that is strong in Parliament. I came here with nearly 20 years’ experience as a coal miner. The comparisons between the mining industry and the construction industry are stark. They are very similar, in that the numbers of deaths and injuries in each are extremely high. Like my hon. Friends the Members for Birmingham, Erdington (Jack Dromey) and for Paisley and Renfrewshire North (Jim Sheridan), who spoke before me, I do not lean away from regulation. Regulation saves lives in many areas, and the construction industry is one of the areas that I believe is very important.

I take the point made by my hon. Friend the Member for Edinburgh South (Ian Murray), who initiated the debate, that the GLA should follow the evidence that comes forward. I will just make one or two observations. When I was unable to get my private Member’s Bill through—technically, it is still there, but I think that I am about 120th or so in the list—among the examples that I intended to raise was Pure Recruitment Solutions, based in Glasgow. Its licence was revoked in 2008. However, the company still operates and provides labour to a number of sectors, one of which is construction. The same is true of Prestige Recruitment Ltd. Its licence was revoked in 2007, but it still operates in a number of sectors, including construction. It is also true of Victor Wolf Ltd, which lost its licence in January of last year, and of ASAP Recruitment, which lost its licence the year before. It still works in various sectors, but not in agriculture.

The fact is that we close companies down in one sector and they re-establish themselves in another. I refer to construction unashamedly, because I strongly believe that the number of deaths and serious accidents in the construction industry can be reduced if regulation is applied. The regulation is supported by the representatives of the workers and by the honest employers in the construction industry. I meet them regularly, as other hon. Members must. People can go round the businesses in my area, where the building sites and so on are. Subcontractors are, by nature, local firms. However, in many cases, the subcontractors are being squeezed out of the market simply because labour is being brought in from other places. Bed and breakfast is included for those workers; their board and so on is included.

I remember my father telling me about the situation in the mining village of Newtongrange. Images of it can be seen in the Scottish mining museum. I am talking about a time just before the second world war. A person called Mungo Mackay owned all the houses in Newtongrange. He was also the coal owner. He gave the miners a rise and then put the price of bread up in the shops and put the rent up. It was a case of giving with one hand and taking away with the other.

The people who are being exploited today are the foreign workers who come in, but the situation is also completely unfair to local employers. It is about time that we recognised that if we want to make progress in this country and create an environment that is worth working in, we must ensure that the honest employers are protected and protect the workers at the same time.

I wanted to make one or two points, because the 2004 Act is under threat. We should be looking at extending the Act, not reducing it. We should be ensuring that we protect British workers. Disasters happen because of a sequence of events. I fear that one of these days there will be a disaster in the construction industry and then people will be concerned. I was part of the Bill that went through Parliament; my hon. Friend the Member for Paisley and Renfrewshire North allowed my name to go down. I question whether the Bill would have been able to go through if the disaster in Morecambe bay had not happened. The reason why it received support across the board was the disaster that happened at that time. If it had not happened, there might have been difficulties in getting the Bill through. I do not want the same to happen in the construction industry. There are deaths and serious accidents in the construction industry on a regular basis. The numbers will grow if employers are unregulated. They will exploit that avenue. We should not be allowing that to happen.

[John Pugh]

In the run-up to the Olympics in Athens, many lives were lost on the building sites. In the run-up to the Olympics in London, no such event or no event of such a size has taken place. Does that not help the argument that regulation on British building sites is at any rate better, if not good enough?

[Mr Hamilton]

There were a number of reasons for that. I can give the example of the headquarters of the Royal Bank of Scotland—admittedly, that is not the best subject in the world to be talking about at present. Only one accident happened there, and the reason why only one accident happened was that at the beginning the contractor who got the contract sat down with the work force and the trade union movement and agreed with all the subcontractors a strategy whereby accidents were unacceptable. The problem is that very few employers of that magnitude take that view. That employer did it, and better than that, it was able to prove that the contract came in under budget and under time.

Let me contrast that with the Scottish Parliament. The Bovis company was running things at the Scottish Parliament. If someone walked on to the Scottish Parliament building site, they would hardly find an English-speaking worker, yet the signs were all in English. They had to go to serious classes and there were a number of accidents at the Scottish Parliament.

There are good employers and there are bad employers. I do not criticise all employers. However, if we un-regulate or do not regulate and employers recognise that there is a gap, they will go to that gap.