Immigration Bill (Seventh sitting)

Paul Blomfield Excerpts

Thursday 29th October 2015 Public Bill Committees

[James Brokenshire]

I am happy to consider the narrow point raised by the hon. and learned Gentleman on the normal legal definitional drafting issues surrounding the use of “and” and “or”, which he will understand from all sorts of legal documents that he has undoubtedly read. I am content to look again at the provision and see whether any further clarification is needed. My hon. and learned Friend the Solicitor General, sitting alongside me, is shaking his head, but in fairness to the hon. and learned Gentleman, I am happy to reflect further on the narrow point that he has raised and consider it carefully.

I underline the general point that in those rare cases—it is for a limited period as well, just 24 or 48 hours—where a mistake is made and the issuance of a notice does not proceed to an order, any loss that may crystallise is likely to be small, because the period of closure is short. However, I do not make any judgments on that, given the nature and size of the businesses that might be involved and so on. In those circumstances, if it turns out later that illegal workers were not in fact employed at or in connection with the business operating on the premises, paragraph 15 does not prevent an affected employer, owner or occupier of the premises from applying for compensation. I hope that that is a helpful response.

The hon. and learned Gentleman drew some comparisons involving the time periods, and rightly highlighted the process and steps that must be gone through. The concept is modelled, as I have indicated, on other forms of legislation with which he will be equally familiar; I refer him to the Anti-social Behaviour, Crime and Policing Act 2014. I can think of other circumstances, such as under licensing laws, in which temporary closure notices may be granted to the police or a licensing officer in certain circumstances. The concept of a short-term mechanism is understood.

Equally, that addresses the point made by the hon. Member for Paisley and Renfrewshire North about whether it is appropriate for the Executive to have such a power. Yes, it is, in the constrained way that the power is structured within the schedule. It provides an appropriate system and process, as well as judicial oversight in the fact that the court must assess, confirm and validate the power. As we have just said in the discussion on compensation, if the officer gets it wrong, compensation can be awarded through the courts.

[Paul Blomfield (Sheffield Central) (Lab)]

In terms of objectives, we are on the same page in seeking to ensure that repeat-offending employers are dealt with robustly. A moment ago, in his response to my hon. and learned Friend the Member for Holborn and St Pancras, the Minister said that the orders would be used in a constrained way. Does he understand the anxiety, given that the schedule does not explain that constrained way, or can he point me to something that I am missing?

[James Brokenshire]

I can, if the hon. Gentleman looks at the triggers for the use of the power in paragraphs 15(3) and (5), and the reasonable grounds that would need to be satisfied. I would highlight the second condition in paragraph (5):

“the employer, or a connected person in relation to the employer...has been convicted of an offence under section 21...has, during the period of three years ending with the date on which the illegal working closure notice is issued, been required to pay a penalty under section 15 of the 2006 Act, or...has at any time been required to pay such a penalty and failed to pay it.”

In other words, it is not trying to look for first offenders. Because of the two conditions in paragraphs (3) and (5), it is trying to get at some of those businesses and employers who are not doing things properly and who have already had some form of sanction applied to them.

I mentioned phoenix companies in my opening comments. We have dealt with the concept of a connected person in paragraph 8 of schedule 2. It is important. We know of circumstances in which people will seek to try to subvert the law by creating a new company to try to get round the rules and requirements. They might say it is the first time because they are not able to pierce the corporate veil. So we have considered this measure carefully and we judge that it is appropriate to have such safeguards and that it has that element of the court being able to intervene for compensation or for confirmation of any extended period. This is an important tool to support and take action against businesses that are acting inappropriately.

I say to the hon. Member for Paisley and Renfrewshire North that the matter is about the impact and consequences. I do not think that he would tolerate a business that employed people illegally on a serial basis, because people who are in his constituency and in this country lawfully should have the jobs, rather than the people who are not here lawfully and are staying here illegally. We are seeking a balanced approach and we judge that the manner in which this measure is constructed, and on the basis of experience in other spheres, it is appropriate in terms of the operational benefit that it provides as well as the safeguards contained within it. For those reasons, I will oppose new clause 5. I hope that hon. Members will be minded to see that clause 11 stands part of the Bill.

Question put, That the clause stand part of the Bill.

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[Keir Starmer]

I accept that proposition, but it does not take us much further. There are different forms of discrimination. Some measures are directly discriminatory, but can be justified in certain circumstances; others are not intended to be discriminatory and do not cut across other protections against discrimination, but have a discriminatory effect. Concern about that was one reason for setting up the pilot and for making an assessment of discrimination in the evaluation.

We are dancing around the issue. Everyone accepts that if the scheme has a discriminatory effect it should not be rolled out. That was part of the reason why there was an evaluation—there were others, of course. However, that is why all the evaluations of the scheme have focused on whether it has had any discriminatory effect.

[Paul Blomfield]

The Prime Minister’s observations at the Conservative party conference this year on unintentional discrimination were illuminating on the point that my hon. and learned Friend is making. The Prime Minister rightly highlighted that, although there is a range of law that seeks to prevent discrimination in employment, unintended consequences nevertheless lead to real discrimination. Is it not that lesson, which the Prime Minister was seeking to draw in the context of employment, that concerns us now in the context of letting?

[Keir Starmer]

I agree with my hon. Friend.

There have been two evaluations of the scheme, one by the Joint Council for the Welfare of Immigrants and one by the Home Office.

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[Keir Starmer]

The sample was small, and the findings in that evaluation—I will move on to the Home Office evaluation in a minute—are clear: 42% of landlords said that the right to rent requirements made them less likely to consider someone who does not have a British passport. More than 25% said that they would be less likely to rent to someone with a foreign name or foreign accent, and checks were not being carried out uniformly across all tenants. Opposition was uniform, in the sense that 69% of landlords surveyed said that they did not feel that they should be required to undertake the checks, and 77% said that they were not in favour. They were the landlords surveyed in that evaluation.

Before we move on to the Home Office evaluation, as I said, Richard Lambert told us that he anticipated 1 million to 1.5 million new tenancies a year. The Home Office sample was based on 114 responses from landlords in the pilot area, which is a very small sample, given that more than 1 million new tenancies are created each year. It is a tiny sample. In addition, 67 responses came from tenants, but 60 of those 67 were students, so it is difficult to argue that it is a representative sample. That percentage does not in any way reflect a cross-section of the sorts of tenancy that will be caught by the provisions. It is predominantly student tenants.

[Paul Blomfield]

To underline that point, does my hon. Friend agree that the Home Office itself has acknowledged the inadequacy of the sample? It says in the evaluation that the survey

“should be read as primarily reflecting the views of the student community, rather than being generalisable to the wider tenant group.”

[Keir Starmer]

Yes, I do. Those are the Home Office’s words. It is all very well to pick holes in the JCWI evaluation on the basis that it is a small and unrepresentative sample, but when the Home Office itself says, “The sample that we used was not representative of the wider tenant community,” it raises the same questions in relation to the Home Office’s evaluation. [Interruption.]

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I seek a second piece of clarification for when a token payment is made. If a room is given to someone, the heating will be on when it might not otherwise have been. There could be very generous people who just cannot afford to give the room for nothing and to pay the increased bills. If organisations and charities match up destitute people with homeowners and give them a token amount to cover their increased costs, will they be covered by this legislation or will they be exempt?

[Paul Blomfield]

I want to take the opportunity to look at the wider concerns behind the group of amendments and the clause itself. I want to return to the Prime Minister, who always seems a useful reference point. I thought his speech at the Conservative party conference was moving and significant. He said:

“Picture this. You’ve graduated with a good degree. You send out your CV far and wide. But you get rejection after rejection. What’s wrong? It’s not the qualifications or the previous experience. It’s just two words at the top: first name, surname. Do you know that in our country today: even if they have exactly the same qualifications, people with white-sounding names are nearly twice as likely to get call backs for jobs than people with ethnic-sounding names? This is a true story.”

He went on to elaborate one example. I thought that was a telling description of how discrimination operates in the workplace, and a passionate appeal for us to take care not to create those conditions. We should be seeking to mitigate and prevent the occurrences he highlighted.

As in the workplace, so in the relationship between landlords and tenants.

[James Brokenshire]

The hon. Gentleman is making an important point about discrimination more generally. That concern would be shared across the Committee, in seeking to confront and combat discrimination in all its forms. He and I share the same stance on that. To follow the logic of what he and his hon. and learned Friend have said, does he think that the right to work checks were a mistake by the previous Labour Government? Because that appears to be where his logic is taking him.

[Paul Blomfield]

That is an interesting intervention from the Minister. He, I and everybody on the Committee surely share the objectives of ensuring discrimination does not take place. We could have a useful and reflective discussion on the lessons we could learn from the previous Labour Government, but I guess the Chair might rule that a diversion. It is more important that we focus on the issue before us today.

[Rebecca Harris (Castle Point) (Con)]

I am sorry to intervene because I am a great admirer of the hon. Gentleman’s oratory. Does he agree that the obligatory checks for landlords may actually reduce any discrimination that already exists in society, in that landlords could already be discriminating against people? Actually, as the mystery shopper exercise showed, it may have led to more people of ethnic-minority origin getting the accommodation. That was also a point reflected by the housing officer Mr Gabriel in the evidence session.

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[Paul Blomfield]

I am happy to take the hon. Lady’s intervention and I respect her views on these issues. We worked closely together in the previous Parliament on the Select Committee on Business, Innovation and Skills; it was a fruitful engagement. If we look at the totality of the Home Office evaluation, which I will move on to, it highlights more the risks than the benefits that she seeks to identify. If she will bear with me, perhaps we could come back to that later.

It was, I think, Mr Bone—sorry, Mr Owen. What a terrible mistake; I do apologise. It was quite telling in the witness stages of the Committee that Members were quick to discredit the Joint Council for the Welfare of Immigrants study, saying that the area that was subject to the evaluation was small and limited. I gave some credence to the criticisms of the sample and was, therefore, expecting, when the long-awaited evaluation by the Home Office was published, that we would see a study of substantial size and depth that would enable us to draw real conclusions.

It was, therefore, a real shock when we discovered how limited that survey was, in terms of both the number of landlords and the number of tenants. About 67 or 68 tenants were surveyed and, of those, 66% were white. So the sample group in which discrimination was likely consisted of 23 people. I am not sure that that gives us a depth of understanding of the way in which discrimination operates or the issues related to it, or is sufficient to enable us to agree to the Government’s proposals on the relationship between landlords and tenants.

As my hon. and learned Friend the shadow Minister has pointed out, this was a very short pilot, at what landlords and others have pointed out was a quiet time in the rental market. The area considered is very different from the one that I represent, certainly from the capital, and is much less competitive. It is a very different sort of rental market. One would have expected that an evaluation to provide information for legislation that would affect all parts of the country might have been drawn more widely.

As we pointed out earlier, even the Home Office itself acknowledged that the sample group was not typical of the rental market as a whole—of the wider tenant group. We are dealing with some fairly flawed evidence from the Home Office. Notwithstanding that, 15% of the tenants expressed concern, even within the Home Office’s own sample, that they would be treated unfairly under the right to rent scheme, and 9% expressed concern that they would be unable to secure accommodation because they did not have the correct documentation.

One landlord expressed the view that if applicants were white and had a Brummie accent, they would not need to put them through the process. We can already see from the Home Office’s own study of how things might work the sort of impacts that are possible.

Furthermore, some of the landlords in the focus groups made it clear that they would not rent to potential tenants with limited—as opposed to permanent—leave to remain in the UK. A focus group of letting agents produced evidence that some landlords had instructed their agents not to let to non-EEA nationals or to any what they described as “foreigners”—probably the sort of people with foreign-sounding names whom the Prime Minister referenced in his speech to the Conservative party conference.

We are beginning to see, from the Home Office’s own evaluation, albeit limited and flawed, a picture of exactly how discrimination would operate. We have every reason to be concerned about the trajectory of policy. I urge the Government to think carefully before they put into legislation something that will create the traps that the Prime Minister himself identified to his colleagues at the Conservative party conference.

[The Chair]

Before I call the Minister, I remind the Committee that amendment 89 to clause 14 is grouped with the amendment that we are discussing and that there will be no opportunity for the shadow Minister to speak to it when we reach clause 14. He has the opportunity now.

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[James Brokenshire]

It is our judgment on the tools that are necessary for immigrant enforcement. The hon. and learned Gentleman will recall the debate that we had on illegal working and sanctions, and how the escalation of a civil penalty regime for dealing with negligence was appropriate, but how, when someone has knowledge or reasonable cause to believe, a criminal sanction was appropriate to deal with those ingrained circumstances for those who deliberately turn a blind eye. If he looks at the language in new section 33A(3), it states:

“knows or has reasonable cause to believe”,

so this provision reflects the approach that we have previously taken in the Bill, which has been approved as we have gone through the Bill, on the different escalations. That is the basis upon which we judge that a separate criminal sanction alongside the negligence approaches in the civil scheme would operate. Again, this measure is not an attempt to catch out the unwary, but the element needs to be satisfied in the second condition attached to the offence. That is why I framed my response in the way that I did.

I want to come back to what the hon. and learned Gentleman and the hon. Member for Glasgow North East said. I want to emphasise the intent behind the measure. I will reflect carefully on the contributions that they have made, because the intent is not to try to catch out and to act in a deliberate way to seek effectively to say, as a consequence of the issuance of the notice, that someone is committing a criminal offence. In fairness to the hon. and learned Gentleman and the hon. Lady, and to the Committee, I will reflect on what they have said because of the intent that we have in respect of the measure, on which I have just responded. I could say that, as he knows, it is for the CPS to make those sorts of decision, but, in fairness to both Members, I will reflect further on what they have said and my intention and that of the Government as regards whom the measure is aimed at and the manner in which we seek the offence to be advanced. I hope that that is helpful to the Committee.

We judge that amendment 72 is unnecessary. An agent who is a co-tenant would fall liable for prosecution only where they are the party that is responsible for any right to rent checks. This is the approach taken in the right to rent scheme and reflects the incidence of sub-letting found in the private rented sector. In such instances, a landlord may not be aware that another occupant has moved into the rented property and it is inappropriate that they should then fall liable for the offence.

The Immigration Act 2014 does provide for instances where an agent is involved: an agent acting on behalf of a landlord as a normal part of their business. In essence, that is where the responsibility has been transferred. In such instances, the landlord and agent should agree in writing where the responsibility for the right to rent checks should lie. There may be instances where a landlord is happy that a tenant may take in another occupant in a sub-letting arrangement. In such circumstances, the landlord and existing tenant should agree where the responsibility for right to rent checks should lie. So we are looking back to the operation of the original Immigration Act 2014 on where responsibility lies and that transfer of responsibility to the agent, as provided in the Act. I think hon. Members can understand the circumstances in which professional agents act on behalf of landlords, and it is understood, as part of the other checks and validation, that the agent should bear such responsibility.

[Paul Blomfield]

I want to be absolutely clear, because, as the Minister knows, I represent a constituency with a considerable number of students: more than any other Member in the country. I want to be clear on the position that co-tenants might be in, for example. In the ordinary run of things, if someone drops out of a house, the onus is on the co-tenants to find somebody to fill the vacancy. Does the Bill place any liability on co-tenants that might end up with them facing prosecution?

[James Brokenshire]

If I understand the hon. Gentleman correctly and if he is referring to what might be regarded as an agency, we are looking more at the formal agency structure under the Immigration Act 2014 that I have referenced. He will know about the exceptions and provisions regarding halls of residence and the formalised arrangements involving universities and other academic institutions regarding property used for student accommodation. I will take his specific point about students, because my understanding is that that should not be the case. Given that the point about co-tenancy is quite technical and narrow, if I am unable to come back to him—we are running over into the luncheon period—during my response to the debate, I will certainly seek to do so separately.

On amendment 85, the offences do not apply retrospectively. The criminal behaviour for which a landlord may be liable to prosecution would be their behaviour in renting to someone disqualified from renting or their failure to notify the Home Office that someone is disqualified from renting after the point when the offence came into force. A landlord can be prosecuted, however, for renting to someone disqualified from renting when the tenancy agreement was entered into before the offence came into force. The burden would be on the prosecution to prove that a landlord knew or had reasonable cause to believe that they were renting to a disqualified person. The amendment would serve to put any rogue landlord who could establish that a tenancy started before the offence came into force beyond the reach of prosecution.

I return to my general point about the intent behind the provisions. It is about that element of knowledge involved here, hence the escalated emphasis behind this and what the prosecution would need to prove. Therefore, if an appalling landlord whose properties were in dreadful condition was renting to someone illegally, it would not necessarily be right to say, “Action should not be taken, because that tenancy did not arise in respect of the original right to rent scheme.” I appreciate that there may be differences of opinion on that, but in such an egregious situation where we might say that the tenancy did not arise until after the scheme was rolled out, I am not sure that hon. Members would feel that we were doing the right thing. Indeed, I do not think that we would necessarily be doing the right thing in such circumstances, which is why the offence is framed in the manner that it is. I understand why the hon. and learned Gentleman tabled the amendment and sought to ally it firmly to the right to rent scheme, but considering such egregious cases is an important part of the approach and is why we have framed our statements about why this is necessary around repeat offenders and rogue landlords.

We have one minute left before we break for lunch, but I will give way to the hon. and learned Gentleman.