I want to start a debate and challenge what I think is a too-cosy consensus among all the political parties about the unchallenged supremacy of market forces. I also want to challenge the dominant idea—again, held across the political stage—that there should be automatic support for the free movement of capital, goods and, in the context of today’s debate, labour. We must also therefore discuss the role of the Government in—some people would say interfering, we would say intervening in—the market. Today, we are talking about the impact of the free movement of labour on people working in this country, but I also want to consider the impact of economic conditions on determining and dictating the situation for migrant workers.
All political parties and leaders applaud the theory of flexible labour markets. I, for one, do not share their enthusiasm, because in the current climate of weak employment regulation, it means low pay and diminished employment rights for both migrant workers and resident workers. I draw the House’s attention to the recently published House of Lords Select Committee report that dealt with the economic impact of immigration. It made it clear that what I would argue to be under-regulated migration has sustained, and is helping to sustain, an economy that, again, I would argue—the facts seem to substantiate this—is increasingly dominated by employment that is low paid, insecure and leaves workers, resident and migrant alike, vulnerable and ill equipped to face the rising costs of living and all the increasing challenges of today’s period of economic turbulence.
The recent TUC report “Hard Work, Hidden Lives” makes it clear that the proposed agency worker developments—the Government’s discussions with the TUC and the CBI—may not make any meaningful difference to the status quo. The Minister will be pleased to know that I shall look at that issue, I hope, in some depth. Perhaps my colleagues will join me.
My hon. Friend will recall the 2004 Warwick agreement. Is he as disappointed as I am about the lack of progress on the Temporary and Agency Workers (Equal Treatment) Bill, introduced by our hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller), which would tackle some of the concerns that he is about to detail to the Chamber this morning? I congratulate him on securing the debate, which is very important indeed.
I share my hon. Friend’s reservations about the 12-week period affecting agency workers. I hope that we will discuss it in detail. I hope—perhaps against hope—that the people who negotiated on the side of the trade unions got some real plums out of the agreement. If they did not, it will have to me the faint whiff of a Munich agreement, and we may well regret that instead of pushing for a six-week European directive, we settled on 12 weeks. I hope that other Members will comment on that.
I called for the debate because in Yorkshire and Humber, and particularly in the city of Leeds, where my constituency is located, evidence of low pay and abuse of migrant labour is crystal clear. Yorkshire and Humber is the third worst UK region in terms of its percentage of low-paid workers. Something like 26 per cent. of the work force fall into that category. Currently, 24,000 workers in my region are known by central and local government not to be receiving even the minimum wage. That figure does not include the unquantifiable number of temporary and agency workers, many of them migrant workers, employed on varying contracts or on no contracts at all in Leeds. To put the issue in context, despite strong economic growth in Leeds—under a Labour Government, I might add—149,000 people are designated as deprived and wage inequality is really sharp.
I have some facts to buttress that argument. The median gross weekly wage for all employees in Leeds is £367—the highest-paid 10 per cent. receiving £775, the lowest-paid 10 per cent. receiving just £121. The median gross weekly wage for men stands at £429, compared with £290 for women. The highest-earning men in Leeds, leaving out MPs of course, receive £865 weekly, and the lowest, £202. The highest-earning women receive £595 weekly, and the lowest—incredibly—just £84. That disparity increases dramatically when part-time work is measured.
I should like to place on the record some balance: my encouragement and appreciation of the Government both for their recent moves on agency labour, although many of us have reservations about how effective those will be, and, to be fair, for their hard work over the past decade to introduce extra employment rights, such as the national minimum wage, paid holidays, health and safety regulations, statutory maternity and paternity leave and sick pay.
I congratulate my hon. Friend on securing the debate. On the measures that the Government have introduced over the past decade, he will also be aware of the Gangmasters (Licensing) Act 2004. Indeed, today the Gangmasters Licensing Authority has clear evidence that the exploitation of vulnerable migrant workers is far deeper than we expected. Even the TUC general secretary, Brendan Barber, is now calling for the Act to be extended to other sectors, in particular the construction industry, where migrant workers are being exploited.
The hon. Gentleman touched a few moments ago on the subject of those people who were being denied the legal protection of the national minimum wage. Would he care to elaborate on that and to tell colleagues what evidence he has of the incidence of straightforward non-payment among migrant workers? Secondly, Mr. Martlew, if I can try my luck, I wonder whether the hon. Gentleman would care to say something about the phenomenon, highlighted in the TUC report, of what might be called bogus self-employment, and how it impacts in particular on migrant workers and on those for whom English is an additional language.
I shall attempt to cover those two points as I develop my argument.
I mentioned the Government’s achievements, and I shall come back to praise not the Minister but the Government, of whom he is a representative and we are, too. They are all good, solid achievements, but they are not enough for the most vulnerable in our work force. At this point, I shall give the Minister a chance to assert his independence, because I was somewhat disappointed to hear my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform say to the Fabian Society last week that the Government had
“reached the end of the era on considering major new regulation as the best way to improve standards”.
I am sure that the Minister agrees that, perhaps, his superior has got it wrong, so I shall give the Minister a chance in his summing up to say, “Yeah, on balance, the Member for Elmet is right and the Secretary of State is wrong.” Any suggestion—[Interruption.] On balance, yes. Any suggestion that this, or any, Government could have sealed the end of the era for new laws to protect workers is very worrying, and such a move would be incredibly short-sighted in these turbulent times. On a serious note, I ask the Minister to respond to those particular comments when he sums up.
Today’s debate should be seen in the context of the recent publication of two important reports, to which I have already referred, relating to low pay and migrant labour in the UK. They are the TUC’s “Hard Work, Hidden Lives” report and the House of Lords Select Committee report “The Economic Impact of Immigration”. Whether we like it or not, the Lords report—despite the overwhelmingly negative comments in the media and in this House—lends weight to the objective conclusion that increases in net migration have contributed to the creation and expansion of a low-pay economy. By enabling employers to hold down wages at the lower end of the labour market and facilitating a net expansion of low-paid jobs, migration has been an important contributory factor in shoring up a status quo that is unacceptable to low-paid residents and migrant workers alike.
Let us consider the effects on the resident population. A core conclusion of the report is that increases in net migration to Britain have resulted in winners and losers among the resident population. The report cites evidence that while migration has had a “positive absolute wage effect” on native residents of the UK, recent studies suggest a negative effect on the wages of the workers employed in the lowest-paid jobs, and those most in need of Government assistance. Evidence submitted to the Committee by Professor Dustmann and others suggests that every 1 per cent. increase in the ratio of migrants to natives in the working-age population ratio leads to a 0.5 per cent. decrease in wages for the lowest 10 per cent of wage earners. For example, evidence submitted to the Committee by the City of London Corporation stated that a concentration of immigrants in low-paid jobs in the capital had led to
“significant downward pressure on wages at the bottom end of the market.”
Far be it from me to say that, in effect, the Government have an unofficial incomes policy but that incomes policy only affects those towards the bottom of the wage scale.
My hon. Friend is absolutely right. Yesterday, The Times reported that a large number of migrant workers are now employed in the care sector, which has massive repercussions for workers in that sector. In the Lords report, Professor Nickell says that negative wage effects are felt in the social care and cleaning sectors, in which low hourly-paid work is most concentrated. That reflects the existing economic theory as presented to the Committee. The report notes that it is typically assumed in conventional models that in
“a simple short-run model of the labour market, immigration lowers the wages of local workers”
with whom they compete. It goes on to say:
“Importantly, immigration creates a positive income effect for the resident population in aggregate only if immigrants are, on average, ‘different’ from existing residents in terms of their skills and human/physical capital.”
The report notes that the bulk of recent immigration in the UK—more than 75,000 are workers from the A8 EU nations who gained free access to the UK labour market in May 2004—are employed in jobs that offer roughly the national minimum wage. Often those jobs come from employment agencies. As Professor Dustmann and Professor Ian Preston say,
“immigrants appear to be most concentrated at precisely the same points where we find the most negative wage effects.”
My hon. Friend is right to raise the issue of the minimum wage. Although the minimum wage went some way towards easing poverty pay, some would argue that it did not go far enough. I should like to answer the point raised by the hon. Member for Buckingham (John Bercow) about the evidence that suggests that people are being denied the right to a minimum wage. He will be aware that people in the service sector are being denied the national minimum wage because their tips are included in their pay. Therefore, the public are subsidising unscrupulous employers and helping to pay service workers the national minimum wage.
Once again, my hon. Friend makes a very telling intervention. As I progress, I want to discuss the possibility of inspecting the average employer on the issue of the minimum wage, given that we have a regime in place to enforce it.
The report provides evidence to suggest that the bulk of net immigration into the UK has led to short-term competition between resident and migrant workers for low-paid work. Crucially, the report suggests that the downward pressure on wages at the lower end of the labour market has, over the long term, encouraged growth in the number of low-paid jobs. The number of low-paid jobs as a proportion of the British economy has increased and continues to do so. If that is the effect on resident workers, what is the effect on migrant workers, because they should not be left out of the equation?
In addition to highlighting the potential negative effects of increases in net migration on resident low-paid workers, the Lords report offers substantial evidence regarding the plight of many migrant workers in the UK who face insecure employment conditions and wages that often fall below the legal requirement stipulated by the national minimum wage. The report cited evidence that vividly illustrates the unequal employment conditions associated with employment in employment agencies, in which intermediary companies perform services on behalf of the user company. Current estimates suggest that there are 1.4 million agency and temporary workers in the UK, but the lack of reliable data means that the true figure could be far higher. Hopefully my colleagues will agree that such agencies have been a key means for employers to hold down wages at the lower end of the labour market. The report also cites evidence confirming the widespread abuses of minimum employment standards associated with many employment agencies.
I congratulate my hon. Friend on the debate. He must be aware that a major factor is the way in which the Home Office does not process wholly legitimate applications for long-term residence and family reunion in this country, which means that many migrant workers are grossly exploited, their children are denied access to health care and all the other services that we believe to be right, and also many are working in a twilight sector way below their skills and capacity, which increases the pressure on the cleaning and the catering sector. Does my hon. Friend not think that the Home Office needs to be brought into this debate to ensure that all workers in this country are legal workers and recognised as such?
I hate to disrupt a superb opening speech, but does my hon. Friend agree that one of the industries where the abuse of migrant workers is particularly rife is the food processing industry? If he ever saw the film “Ghosts”, which talked about the cockle picker deaths in Morecambe bay, he would have seen clear evidence of gangmasters who were providing accommodation at exorbitant prices and transport to work at super-exorbitant prices. That is the way in which they are getting round the minimum wage legislation.
Further to what was said by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan), whose work on gangmasters has rightly been paid tribute to by hon. Members in this Chamber this morning, the Gangmasters Licensing Authority needs resources and needs a political priority coming from the very top. I hope that the Minister will announce some initiatives in that regard later on.
Once again, my hon. Friend has raised issues that the hon. Member for Buckingham was edging around asking me to address. The report cites practices whereby agencies impose various charges on immigrants’ salaries for such things as accommodation, uniforms and, as my hon. Friend said, transport. That brings their salaries well below the hourly requirement stipulated by the national minimum wage.
The evidence from the House of Lords is supported by evidence from the TUC commission on vulnerable employment and the Government’s vulnerable worker enforcement forum. Government measures coming into force in April 2008, which aim to halt such abuses by allowing agency workers to opt out of services provided alongside a job, may just remedy such abuses. We discussed that matter with a Minister in Committee. Again, the take-up of such provisions is likely to be hampered by the widespread ignorance of labour rights—we have raised the issue of language problems and so on—in the immigrant and resident communities who staff the employment agencies.
Again, I reiterate that I welcome the move on agency worker legislation: I hope that it is the beginning and not the end, as the Secretary of State seemed to indicate. But unfortunately, it is by no means clear that the recently announced Government commitment to give greater rights to agency workers will make anything like a significant difference to the suffering of migrant workers caught in the trap of the widespread two-tier employment system, which has depressed wages for resident workers, and the associated social tensions that are often exploited by the far right. The far right chooses to mobilise opinion against Poles or Latvians. We on the left say that these people are driven by huge economic forces and that we should be trying to understand the forces that drive these people and then to frame policies to address some of the issues.
I am grateful to the hon. Gentleman for giving way. He is making an excellent speech and has been generous in allowing colleagues to intervene. I confess that I am wary of highly burdensome regulation, but I do believe that once Parliament has passed legislation—I think that the minimum wage legislation is good legislation—it ought then to enforce it. Does the hon. Gentleman agree that Madeleine Bunting in The Guardian effectively summed up the problem when she said:
“Poor pay is inextricably bound up with a culture of institutional negligence: no one ensures workers know their rights or how to find out about them; a myriad of enforcement agencies with tiny budgets confuse everyone”?
Is it not unsatisfactory that while millions of pounds are devoted to advertising for benefit fraud, the amount allocated to advertise the national minimum wage was, until a recent increase, one sixth of the sum spent on a Government campaign urging people to use tissues when they sneeze?
Well, it was worth attempting.
Returning to the agency workers legislation, which we will be dealing with, I understand that after 12 weeks in work, temporary and agency workers will qualify for the same pro rata pay and conditions as full-time workers, but will they qualify for the other in-work benefits, such as sick pay and pensions? I should like some clarification from the Minister on that point.
On the potential impacts of the agency workers legislation, it is interesting that John Cridland, the deputy director general of the CBI, told the media:
“Half of agency assignments will be unaffected as they last less than 12 weeks.”
If he is right, we are effectively saying that 700,000 people—the ones we know about—will be totally unaffected by the new proposal. I do not want to class it as a Munich agreement, but it is something of a damp squib when compared with the expectations that many of us had.
I look forward with great hope to the proposed anti-avoidance measures, which are meant to stop employers evading the regulations. We know from our experience of such laudable measures as the national minimum wage that principle, enforcement and reality are often very different. For example, in November 2007 I asked in a written question for details of the number of national minimum wage enforcement officers policing the entire Yorkshire and Humberside region. I was told that the two offices at Shipley and Sheffield, which service the entire region, had seven each, and that by 2009 the figures would be increased—to seven in Shipley and eight in Sheffield. Given that our region is the third worst in the country for low-paid workers, and that the offices are based some way from Leeds, low-paid workers in Leeds are as likely to spot a minimum wage enforcement officer as they are to see Lord Lucan.
Clearly, even on a minimum level there is a huge amount of work to be done. I bring to the attention of hon. Members the fact that on current trends the chance of an employer being inspected is now once in every 330 years. I think that we could do a bit better—perhaps we can get it down to every 300 years; that might be satisfactory. The Lords report highlighted the problems associated with enforcement of the national minimum wage, and the evidence shows some ways in which employers contravene the minimum wage provisions.
I urge hon. Members to look at the report: it is a very good read. It confirms the fact that the national minimum wage regularly fails to provide a wage floor for low-paid workers, and that alongside a more general pressure to hold down wages at the lower end of the labour market it allows wages to be depressed below the legal minimum. However, although I have extolled the virtues of the report, it is strangely silent on the vulnerability of workers—both resident and migrant—in the informal economy; yet as the Low Pay Commission makes clear, the Government have no idea of how many are working in it.
The Department for Business, Enterprise and Regulatory Reform recently announced new measures aimed at reforming the minimum wage and cracking down on rogue employers, including fairer methods for dealing with minimum wage arrears, the toughening of penalties for those who break the law, and increasing the maximum penalty for non-payment of the national minimum wage to an unlimited fine. The Department states that the most serious cases of non-compliance will be tried in the Crown court, yet I would argue that those measures are corrective and are therefore dependent on rogue employers being caught in the first place. As we have heard, the sparseness of the resources devoted to discovering and tracking such employers, coupled with a range of barriers and disincentives that inhibit closer working between enforcement agencies, is likely to undermine the effectiveness of the measures. Indeed, the TUC says that it is a “national scandal”.
The TUC report, “Hard Work, Hidden Lives”, published last month, says that up to 2 million workers in Britain are still at risk of exploitation because of their vulnerable work status. Its research found some employees being paid £1 an hour, some working 70 hours a week, and others facing sexual abuse. The TUC also said that exploitative employment practices seen in the 19th century were still being used today. It found home workers being paid £1 an hour, fast-food employees working 70 hours a week, and domestic staff facing physical and sexual abuse. It is exactly those types of jobs that vulnerable migrant workers and serial low-paid and low-skilled resident workers fall into.
As part of the TUC study, a Community union survey of 8,000 workers found that three out of four workplaces used temporary and agency workers, with some on contracts of a week or less. Some were on only two hours’ notice. Will the Minister tell us how the proposed strengthening of agency worker legislation will help workers on one-week contracts? Will the Minister tell us how the proposed strengthening of agency worker legislation will help workers on one-week contracts? Again, I look forward to his explanation on that.
Particularly at this time of economic difficulty and global turbulence, which hits the poorest hardest, I ask the Government, as a matter of urgency, to be bold—we are best when we are bold—
I agree with that comment—do not get me into trouble. I ask the Government to ensure a continuation of the effectiveness of the minimum wage by taking forward recommendations from organisations such as the Institute for Public Policy Research and the Fair Pay Network. Those recommendations include maintaining the value of the national minimum wage to at least remain in line with average earnings growth over an economic cycle, and guaranteeing tougher, robust and meaningful enforcement of the minimum wage. Other proposals include incrementally increasing the present lower rates for young workers, offering skills and career advice to all low-paid workers in receipt of working tax credit, and improving their pay and prospects at work.
Critically, we should also build fair-wage commitments into central and local Government contracts and the huge financial transactions that national and local Government engage in. We—local and national Government—should be the agency that drives up terms, conditions and living standards for poorer-paid workers across the scene.
I shall end on the following point. At root, we are discussing a situation that I believe will not be improved through market forces. We have mentioned the word “agency” many times today, but the only agency that will bring justice and fairness into the arena of work is the Government, and they should not abdicate that responsibility. During the rough economic times into which we are moving, people expect a Government to defend them. It is the very least people should expect and I hope we can do so.
I know it is customary as part of the protocol on these occasions to congratulate my hon. Friend the Member for Elmet (Colin Burgon) on securing the debate, but I also wish to do so because of the content of his contribution. He touched on some profoundly difficult territory in terms of race, class and demographic change in this country, but he navigated through those issues creatively and touched on some public policy remedies that need to be part of the mix—not least, because of the point he made at the end of his speech.
As we enter more difficult economic waters, there is a possibility that the scramble over scarce resources and the race to the bottom that is arguably occurring in certain sectors of the labour market will become more intense and racialised. That raises real issues for the future in terms of what is euphemistically called community cohesion. My hon. Friend touched on that creatively. In the community that I represent, these are not abstract matters, and the issues of migration, low pay and insecure work need to be centre stage in terms of our public policy debates—not least because, as my hon. Friend mentioned, certain forms of compound abuse are involved. Often that relates to systemic failures in the Home Office, but forms of landlordism that I thought had been abolished 20 years ago, and forms of exploitation at work also compound the insecurities of some of the most vulnerable people in our communities.
I congratulate my hon. Friend on securing the debate because we often ignore such issues. We convince ourselves that we have presided over an economic miracle during the past 10 years, but the problems will not go away when we hit choppier times during the next few months and years.
I, too, listened to the programme on the radio this morning about the report from the Gangmasters Licensing Authority that painted a much worse picture of exploitation than it had imagined a few years ago. Last year, the authority revoked the licences of some 20 gangmasters for abuse and it expects to revoke about 60 by the end of this year. There has been a series of dreadful abuses in terms of transport and accommodation deductions, which make people’s relative poverty even more intense than in terms of their nominal hourly wage cost. The TUC commission on vulnerable employment estimated that 2 million people are in such employment across the economy. It defined vulnerable employment as
“precarious work that places people at risk of continuing poverty and injustice resulting from an imbalance of power in the employer-worker relationship”.
We cannot have this debate without a broader discussion about poverty in the UK today. Let us consider the broader context in terms of in-work poverty. I refer hon. Members to the recent Institute for Public Policy Research report entitled “Working out of poverty: A study of the low-paid and the ‘working poor’”, and the figures that it has provided for us. More than 5 million people—more than one in five of those in work, or 23 per cent. of all employees—are paid less than £6.67 an hour. That is in the formal economy. Some 1.4 million poor children—the same number as in 1997—live in working households. Although since 1997 the number of poor children in workless households has fallen from 2 million to 1.4 million, the level of working poverty has been maintained and, as a proportion of total poverty, has increased over the last decade.
Arguably, therefore, we have seen a Government anti-poverty strategy that has been an in-work strategy. We need to develop a more systematic working poverty strategy that confronts issues relating to people’s day-to-day employment. Half of all poor kids are in working households, up from 40 per cent. 10 years ago; and 57 per cent. of poor households are working households, up from 47 per cent. 10 years ago. The issue of working poverty, which relates to some of the points raised by my hon. Friend the Member for Elmet, will not go away. Indeed, as a proportion of total poverty, it is rising, which means that different remedies are needed from those based simply on getting people into work. The poverty that people face in work now needs to be addressed.
The report by the House of Lords Economic Affairs Committee, “The Economic Impact of Immigration” refers to the role of immigration in the creation and expansion of a broader low-paid economy. I refer, too, to some of the evidence that my hon. Friend recited, as sent to me by the Fair Pay Network. There were three pieces of evidence that he used to describe a contemporary, modern-day incomes policy. The use and abuse of migrant workers in that respect is demonstrated by some of the specific empirical evidence that he documented.
The first piece of evidence is from Professor Dustmann: every 1 per cent. increase in the ratio of immigrants to natives in the working age population led to a 0.5 per cent. decrease in wages for the lowest 10 per cent. of wage earners. Secondly, my hon. Friend used evidence from the City of London corporation that reinforced the argument that significant downward pressure on wages at the bottom end of the labour market is occurring through the abuse of migrant workers. Thirdly, there was evidence from Steve Nickell that negative wage effects are concentrated in sectors, including social care and cleaning, where low-paid hourly work is most concentrated.
A series of different empirical studies reinforce the idea that migrant workers are used in certain segmented labour markets to reinforce patterns of low-wage, low-skill employment, and that the bulk of recent migration to the UK is gravitating towards jobs that are low paid—around the level of the minimum wage. Professor Dustmann concludes that immigrants appear to be most concentrated at precisely the same points where we find the most negative wage effects.
All of that reinforces the evidence in academic economic texts over some years of the intensification of what is called an hourglass economy—growth at the top end of the labour market, but a broadly expanding low-wage, low-skill labour market. It is often linked to patterns of public service contract structures and is interlinked with patterns of net migration and abuse by employers.
For me, as I said, this is not an abstract debate. Our borough has the lowest-cost housing market in Greater London and is the lowest-cost wage economy in terms of the wage rates of the resident population, so we have seen the effects at first hand. Our community is the fastest changing, not least because of right to buy, which has created a private housing market that we have never had before. Over the past few years, there has been an intensified scramble for limited resources—most noticeably housing, but also public services more broadly.
In the workplace, we have seen a race to the bottom, with tensions over access to, and the quality of, paid employment. That takes us back to the empirical evidence that employees are being paid below the national minimum wage, as was mentioned earlier. The best example of that, which we pointed out to the Low Pay Commission when it was gathering evidence for its recent report, involved Lithuanian employees on a public contract in London at the back end of 2007 who were paid about £2.50 an hour, or barely half the minimum wage. They were eating cold beans from a tin for their lunch while they were on the job. That is not a unique experience; such stories ricochet around the community, so everyone knows them, which creates a heightened sense of vulnerability across broader labour markets.
There is thus the challenge of massive demographic change, intensified insecurity in the workplace and a scramble for limited public services, with a legacy of poor public services in a poor community. The collision between change and that legacy of need is creating a rich, fertile ground for the far right to inhabit, so it is no surprise that the fastest-changing community in Britain is also on the front line of the battle against the far right, which is moving in and intensifying the racialisation of access to public services. There are also tensions over workplace activity and insecurity, and unless the Government step in to provide remedies for the heightened sense of vulnerability in the workplace, the situation will become more intense.
I hope that I have not misunderstood what the hon. Gentleman has just said. We are all familiar with the problem that illegal pay in the informal and, by implication, often invisible economy makes the situation that much more intractable. However, am I correct in understanding his reference to a public contract to mean that he knows of cases of people being paid illegally as part of a service provided under contract to central or local government? If that is the case, it really is scandalous. Those organisations should be named and shamed and should not be on any list of contractors supplying services to central or local government.
I tentatively suggest that it would be naive to assume otherwise, especially given the whole supply chain involved in public procurement. I would not be shocked to the core by the possibility that the House, through its contract regime, was employing unregularised migrants, or paying migrants and indigenous employees below what was set out in statutory terms and conditions of employment. My unscientific take on things is that such forms of abuse are rampant across environments such as the community that I represent.
I am glad that my hon. Friend has drawn attention to that point. I am sure that he supports the “Strangers into Citizens” campaign, which, if it is successful, will help to reduce the exploitation of migrant workers. If such people ever complain to an employer of any sort—be it a gangmaster, agency or anybody else—they find themselves before the Home Office threatened with deportation.
That is right. My hon. Friend the Member for Elmet referred to the fact that there might be a different combination of forces in London, as opposed to other parts of the country, and it is worth dwelling on the situation in London, which I touched on earlier. There are compound abuses. There is the Home Office’s systemic failure and the fact that people are often provided with appalling legal advice. Employers and landlords abuse those most vulnerable workers, and criminality is often interlinked with that. There are therefore five or six elements to the compound abuse, and we need a remedy that goes above and beyond simple labour market remedies of the type that we mentioned earlier.
There are issues about how we deal with the legacy of unregularised migrants in cities such as London. Some informed estimates suggest that the number could amount to 500,000 or 600,000 people, which is why people must become involved with the “Strangers into Citizens” forum, like my hon. Friend the Member for Elmet and me. The forum involves vibrant coalitions of trade unions, Church groups and political activists speaking on behalf of those who most need help, namely the most vulnerable, who are abused most systematically, especially in the workplace, which is the subject of the debate.
Remedies could be provided to the intense exploitation of some of the most vulnerable people, but it is an exercise in political will—such things do not fall out of the sky and they are not God given. My colleague, my hon. Friend the Member for Elmet, mentioned some proposals. We could have a low-pay benchmark that is higher than the minimum average, for example 60 per cent. of median full-time earnings of £6.67 an hour; we could expand the role of the Low Pay Commission to monitor and report on low pay, or set out an ambition to tackle low pay as an active public policy. The procurement regime could be altered—billions of pounds worth of public contracts are on the runway every year—or we could have fair employment conditions based on a living wage in London, and enforced by the state. Those things would mean that the state is on the front foot in saying that we should not tolerate such forms of compound abuse in our city. As was discussed, we could examine the regulation of employment agencies, which more often than not are a Trojan horse to deregulate further other employment relationships, or we could extend the Gangmasters Licensing Authority to other sectors. A series of remedies could be provided if we had the political will to do so.
To go back to some of the points touched on by my colleague, if we do not provide such remedies, I worry about the combustible combination of forces that we are developing, namely patterns of migration, and the intense exploitation of some of the most vulnerable and fastest changing communities in our society. It should be incumbent on a Labour Government to remedy the combination of forces that leads to the immiseration of the most vulnerable in our society. I commend my colleague for raising the profoundly complex issues of race and class—we who are involved in politics here in Westminster cannot ignore them or swerve around them.
I shall be brief because other colleagues wish to contribute. I thank my hon. Friend the Member for Elmet (Colin Burgon) for obtaining this timely and important debate and congratulate him on doing so.
Like my hon. Friend, I shall begin by putting the issue into context. Migrant workers in the UK are grossly exploited, by and large, but they make an incredible contribution to the economic well-being of our society. Our standard of living is largely dependent on migrant labour, so those newspapers, in particular the Daily Express, that constantly cite bogus immigration figures and distortions about the impact of immigration and about net migration from this country, would do well to reflect for a moment on what kind of public services, science, transport and manufacturing industries we would have if there had not been significant migration to the UK over the past 50 years. We do well to remember that we are a multi-ethnic, multicultural society that draws skills and abilities from people from all over the world, and that we have all benefited from it. We should be proud of that, not ashamed of it, and we should not allow xenophobia to take over the debate.
My hon. Friends the Members for Elmet, and for Dagenham (Jon Cruddas) mentioned the appalling nexus of poverty, lack of effective regulation of the national minimum wage and the issues that arise from those things. Like my hon. Friend the Member for Blaydon (Mr. Anderson), I am a former official of the former National Union of Public Employees, which is now Unison. The union campaigned strongly for, and finally achieved, a national minimum wage. The wage is actually very low—it is a low benchmark—so it is disgraceful to expect anyone to work for less, yet many people are expected to do so. I pay tribute to the former Mayor of London, Ken Livingstone, for forcing the London living wage of £7.20 per hour through all aspects of public procurement by the Greater London authority. That is considerably more than the national minimum wage, but it set a benchmark for other employers in the capital, which is important. When the Minister replies, I hope that he will give us an undertaking that the Government will do their best to ensure that in all aspects of procurement, wherever the supply chain comes from, national minimum wage conditions, at the very least, will be enforced by employers all the way down the line. I should not be surprised to find that even in this very building, which seems to be developing a culture of agency working, people are working for less than the national minimum wage. I have no evidence one way or the other; I just think that it is worth inquiring into the matter.
The issue of migrant workers is not new and is not confined to the UK alone. Last autumn, I represented the Inter-Parliamentary Union at a conference on “Migration: the human rights perspective”. I was elected rapporteur for the conference, which was attended by delegates from 35 countries around the world. Unfortunately, they were mostly from Africa, Latin America and Asia; disgracefully, most European countries did not bother to attend—it is hard to get from Paris or Berlin to Geneva, so obviously, the journey was far too great for them. It was disappointing how few European countries were represented. I will not go into all the details of the lengthy statement that we issued at the end of the conference, but I draw to the Minister’s attention a couple of points from it.
We made the point that
“we as parliamentarians and opinion leaders need to speak more clearly and publicly of the important—and often indispensable—contribution of migrants to growth and prosperity. This also requires us to confront fellow parliamentarians when they appeal to emotional negative stereotyping of ‘the migrant’ for political gain.”
We must stand up against xenophobia in all its forms. We have a responsibility to do so. Specifically,
“fundamental international labour and human rights norms apply to migrants without exception…the ILO Conventions, in particular Nrs. 97 and 143j. and the International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families provide an international charter”
that gives some degree of security for migrants.
Can the Minister assure us not only that the UK supports those conventions, which it has signed, but that he will ensure that they are actively carried out? When I reported to the conference on the success of the private Member’s Bill promoted by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan), which became the Gangmasters (Licensing) Act 2004, it was well received. A lot of people were very interested in the concept of introducing some regulation for people who are grossly exploited in the workplace.
My final point concerns the role of the media. About 3 per cent. of the world’s population are migrant workers of some form. They are shunned and treated disgracefully in many countries whose economies they have built. Many of the glittering 19th and early 20th-century skyscrapers of New York and Boston were built on the backs of migrant workers. When we look at the great edifices of the world, we see the contribution made by migrant workers. This country, too, relies upon them. We have a duty to ensure that those people are fairly, decently and properly treated.
As my hon. Friend the Member for Dagenham pointed out, the far right and racists within our society exploit issues of low pay and access to jobs and services. The way to confront that is to end the nonsense in the Home Office, which seems incapable—in my view, almost deliberately—of dealing with wholly legitimate cases involving long-term UK residents. Employers can exploit that situation by threatening those who complain about conditions with removal from this country. We need to develop a much greater sense of solidarity within the entire community to end such division and exploitation. We can do it. Through the national minimum wage, effective inspection, the licensing of gangmasters and through public procurement policies, we can ensure that a scar on the lives of many people who are badly paid and badly treated can be removed. I thank my hon. Friend the Member for Elmet, and congratulate him on securing this important debate.
I, too, thank my hon. Friend the Member for Elmet (Colin Burgon) for securing this debate, but it is a shame that we have to have it. The issue should have been put to bed. Our Government and party have done fantastic work in the past 10 or 11 years, on the introduction of the minimum wage, as has been mentioned, as well as on the working time regulations, the extension of maternity pay, the right to paternity leave, sick pay and paid holiday entitlements, the right to trade union membership and the gangmasters legislation brought in by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan). Clearly that raises issues, but the agenda has all been positive.
It is sad that we are here today talking about an agenda that, to me, is about going back to the future. It is about going back to the late ’80s and early ’90s, when, as a local trade union official in Newcastle upon Tyne, I was faced with the reality of telling care workers, hospital cleaners, school workers, school meals ladies and school cleaners, “I’m sorry; you have lost your contract. I’m sorry; your pay is going to be reduced. I’m sorry; you will no longer be seen as a member of the national health service. You will be working for Joe Bloggs’ cleaning company.” I thought that we had done away with those days, and put them behind us when we got rid of things like compulsory competitive tendering. I thought we had got away from those days, and what we went for in this country was value-led, not cost-driven, services. It would appear from the debate today that sadly that is not the case for far too many people.
In the mid-1990s, as a national official of Unison, I worked with people who, to use their language, rescued Filipino nurses from working in care homes. Those Filipino nurses were educated to degree level and were brought to this country under false pretences, being told that they would work as qualified nurses. They worked as basic grade care workers and were treated and paid in that manner; but, even worse, they were made to pay for accommodation. They were even made to pay for the lend of a bike to ride to work. They were made to pay a bond back home in the Philippines and they were made to pay a bond in this country. The term that we used then when we got those people out of that employment and into proper public service work was rescue. We should not be back in that situation today, talking about having to rescue people from exploitative employers. It is all so sad that the impact on today’s labour market is not just on those workers. It is, as my hon. Friend the Member for Elmet said, on other people in the work force. We have still not resolved the disgraceful situation by which seamen in this country are not paid the national minimum wage.
[Miss Anne Begg in the Chair]
Also, many people are losing their jobs. One of my constituents, for example, is a man who spent most of his life working in shipbuilding on the River Tyne, earning about £12 an hour as a skilled engineer. Because of a lack of orders, including Government orders, shipbuilding hardly exists now on the River Tyne. My constituent, at 63, is now faced with the reality that he might have to work offshore to make a living wage, because, in his trade as a plumber, he cannot compete with the ridiculously low wages that have appeared in the north-east of England because migrant workers are being exploited by employers. That does not help him or the work force and it does not help our party or the Government.
The workers of this country are concerned about the issue, which is a core issue for Labour party members. It is about why we are here and what we represent. In the real change that has happened in our party and Government in the past few years to become business-friendly, have we forgotten we should also be worker-friendly? If we have, that is a disaster for us, and not only for the people who are the traditional workers, but the millions of new workers who do not understand the history of our party and do not have the relationship with it that they would have had if they had come here many years ago and integrated into the work force as people did over centuries.
I was sorry to hear in the speech of my hon. Friend the Member for Elmet that the Secretary of State had said effectively that we are at the end of employment legislation in this Parliament. I hope that that is not true, because we need to put resources into making things like the vulnerable worker enforcement forum work. We need to take real action. If we need to legislate to make sure that those things work properly—and it sounds from what has been said today that we do—we should not be frightened to do it. We should do it for the right reasons.
I congratulate the hon. Member for Elmet (Colin Burgon) on securing the debate. He made a very interesting and detailed speech, and it is obviously something that he feels passionate about. It will not surprise him to hear that I am not sure I agree with all of his philosophy. I agree with some of his solutions, but disagree with many.
Not all migrant workers are vulnerable. The CBI’s 2007 employment trends survey shows that demand for skilled and managerial professional workers remains strong. Most firms hiring staff from the new EU member states, for example, expect them to be skilled, so although many migrant workers fall into the category being discussed today, it is important to make it clear that many are highly skilled and do not fall into that class of vulnerable workers. I certainly welcome, however, the focus on vulnerable workers, who are an issue in my constituency, but it is important that we distinguish between those working illegally and those working legally but being exploited. The outcome might be the same, but the solutions are clearly different.
The hon. Member for Elmet quoted the TUC and Lords reports as examples of recent reports discussing this issue. However, another recent report, by the Work Foundation, provided a highly academic analysis of the impact of migration on wages and employment. I recommend that all hon. Members interested in this issue read that report. It reached slightly different conclusions from the House of Lords report and quotes the OECD meta-analysis of all the work done in the developing world and found a very limited impact on employment and wages. Certainly on employment, if anything, the impact was found to be slightly positive, although that is a temporary effect. On wages, it found that the impact was negligible for most countries—the exception being the USA, where there is no effective minimum wage law. That is very important.
The Work Foundation also examined the trends in wages in low-paid employment, particularly in the hotel, catering and construction industries, and found great transience in wages, but the pattern largely followed the trend in minimum wage rises. Wage rises slowed when the increase in the national minimum wage also slowed. The picture is obviously very complicated, and it is difficult to demonstrate an overall effect at the macro level, but that is not to say that there are not local impacts. A number of hon. Members have discussed local impacts in their own constituencies. It is also very clear that there are particular impacts where there is abuse of migrant workers working legally. The hon. Member for Elmet and others spoke about the chances of being inspected for breaching minimum wage legislation—the figures are shocking—and about other abuses of existing legislation. The question is: how do we deal with that? There is always a temptation to legislate further, which has been part of the debate so far. I agree with the hon. Member for Buckingham (John Bercow) when he said that there is a tendency to instinctively legislate, but we can enforce existing legislation. There is no point in creating new legislation if we cannot enforce existing practices.
I welcome the agreement between the CBI, the TUC and the Government on temporary agency workers. I look forward to seeing the details, however, because it is difficult to see from this vantage-point exactly what we are dealing with without knowing the detail of the behind-the-scenes discussions. We will certainly look at that when legislation is published, later this year, I assume. However, I am concerned that the rights of many people already working legally for an agency for more than three months are not enforced, and I question whether tightening up the legislation will necessarily yield our desired outcome. New legislation will not necessarily create a change in practice. The priorities must be a change in the levels of information and enforcement.
The hon. Lady is right to remind us, as I sought to do, of that which exists but is inadequately enforced. On the subject, to which much reference was made, of media hype and scaremongering, would she agree that whatever the claims of the media, it would be extremely unwise and entirely arbitrary simply to impose a national limit on the number of migrants admitted to the country on, for example, an annual basis? It would very likely be wrong, and there is no good cause for it.
I completely agree. Immigration—in particular with respect to work gaps—must depend on the gaps in the market. I can see us imposing an arbitrary limit and then finding that Chelsea want a new footballer for their team—when we have already had the quota of immigrants for that year. What on earth would we do then? I am sure that there would be an outcry from the very same papers that said there should be a quota.
But not from Leeds fans. I am sure that that is very true.
On enforcement, will the Minister comment on Citizens Advice recommendations for an enforcement commission to consider other areas that legislation covers in practice, but where it is difficult for people to exert their rights because of a lack of information and of a practical system?
Does the hon. Lady also agree that it is important for public and local authorities and Government agencies to ensure that everyone whom they employ is at least on the minimum wage and properly employed, rather than turn a blind eye to it and accept the lowest possible bid in this contract-culture era that we are in?
I absolutely agree. The hon. Gentleman makes a sensible point.
I shall move on to the issue of illegal workers, which the hon. Members for Dagenham (Jon Cruddas) and for Islington, North (Jeremy Corbyn) spoke about extensively. I feel particularly strongly about it because I see it in my constituency. If there is an impact on the low-paid, that is where it comes from, because illegal workers are neither covered by minimum wage legislation nor protected by employment legislation. One only has to take an unlicensed minicab in London and have a conversation with the driver to understand that we have the most over-qualified minicab drivers in the world. The number of people I have spoken to who are doctors or professors in their home country but who in this country are forced to drive minicabs illegally is particularly shocking.
In my constituency, on Chichele road, whenever the media are looking for a story about illegal casual labour, they tend to film the number of casual labourers waiting, sitting on walls outside people’s homes from dawn each day. Some of them are legal and just looking for casual labour, but many are not, and as successive waves of immigrants have been unable to regularise their status, we have seen the change in the nature of those people sitting on that wall on Chichele road. It is a tragic situation and those people are very vulnerable.
The Government’s own estimate is that there may be as many as 600,000 irregular migrants in the UK. Many of them are working illegally. Several hon. Members talked about the churches’ campaign, “Strangers into Citizens”, which is a very good and interesting campaign. It is good to have a coalition of people campaigning on behalf of vulnerable people who are often overlooked. We really must face the facts about that group of people: we simply cannot deport all the people who are here illegally. It costs about £11,000 for each deportation, and I have seen a number of shocking examples of botched deportations, when people should have been sent home but the Government have been unable to manage it. No way are we going to deport them all, so the Government should concentrate on those who are criminals and make no contribution to the UK, ensuring that we bring the others out of the shadows so that they have an opportunity to integrate. They should be paying tax in this country.
If one has been in the UK for 10 years, has not committed a criminal offence and can speak English, one should be eligible for a two-year work permit, which should be the beginning of an earned route to citizenship. We should ask people to demonstrate their long-term commitment to the UK, enable them to do it and fast-track them on to indefinite leave to remain.
Complementarity is the argument used by employers for the need to recruit workers from overseas. Everybody says that it is a short-term solution to the lack of skills in this country, but we are not doing anything to ensure that we aim that work at areas where there are skills shortages. I would like the Government to consider the possibility of increasing the cost of those work permits but ring-fencing the money to be used in targeted areas to increase skills, particularly where there are shortages in the economy. That interesting solution might meet many people’s concerns.
The hon. Member for Elmet (Colin Burgon) raises an important subject today, about which he spoke strongly.
The protection of migrant workers is, of course, important. I am sure that all hon. Members in the Chamber today want to do everything in their power to put an end to the exploitation of certain sectors of the migrant work force and to prevent a rerun of the Morecambe bay tragedy. I agree with the hon. Member for Dagenham (Jon Cruddas) that the issue needs to be looked at in a broader context, as it raises important questions about the control of immigration and dealing with poverty. I would add to that list, although the hon. Gentleman might not, the environment that we have created for employers—namely, the job creators.
What should not be a factor is xenophobia, as was strongly suggested by the hon. Member for Islington, North (Jeremy Corbyn). Given that unemployment has risen for the last three months in a row and is predicted to rise increasingly over the next year, I agree that the subject needs to be analysed carefully. The challenge is to deliver action to prevent the exploitation of migrant workers without putting further strain on our already overburdened businesses.
We should certainly be looking to improve conditions for migrant workers by the better policing of existing legislation. Rights already exist, such as those in anti-discrimination law, health and safety legislation and employment and tax law, to protect vulnerable workers. It is important that Departments in charge of administering those areas work together efficiently and effectively to enforce those laws to achieve the intended effect. As the TUC recently argued, it is also important that employees are made aware of their employment rights. The trade unions are in a strong position to increase such awareness among workers, and their contribution is recognised in the recent report of the TUC’s commission on vulnerable employment. Indeed, I and my hon. Friend the Member for Rutland and Melton (Alan Duncan), the shadow Secretary of State, were pleased to have contributed to that report. One area where the law needs to be more strictly enforced is on the operation of gangmasters. They can fulfil an important role in providing flexible short-term labour, but there is much evidence of illegal gangmasters breaking the law in various ways.
As my hon. Friend the Member for Buckingham (John Bercow) said—it was also argued by the hon. Members for Elmet and for Brent, East (Sarah Teather)—there is little point in having tough legislation if it is not adequately enforced. That, I would add, is despite the fact that such a failing is a hallmark of the Government’s administration across the board.
The Conservative party supports the proper monitoring of the legislative provisions that relate to the payment of the minimum wage. It is currently estimated that 292,000 workers are being paid less than the minimum wage. I shall be joining the Government in speaking on behalf of workers who need to be protected from such exploitation when we debate the topic in more detail in the forthcoming Employment Bill, which is now wending its way through the other place. However, it must be appreciated that there is much conflicting opinion on the effect that immigration has had on wages.
I agree with the hon. Member for Brent, East that not all immigrants are poor, but today’s debate is about those who are poor, and I speak in that context. The House of Lords Economic Affairs Committee examined the issue and found, as various hon. Members said, that although immigration has had a positive effect on the wages of better-paid workers it has had a negative impact on those on lower pay.
I am extremely grateful to my hon. Friend for giving way. One can argue the toss—there is scope for different theses—about the impact of immigration on national income and whether or not it has made the country richer. I think, on the whole, that it has. Would my hon. Friend nevertheless agree that it is critically important to recognise, against the manic rantings of the red-top tabloids, that the evidence clearly shows that immigrants contribute more to the national cake than they take from it?
I agree that immigrants have contributed a lot to this nation, but whether every immigrant contributes more or less to the national cake is something that has to be considered on an individual basis. I am arguing that when it comes to pay, the evidence is definitely at odds. The 2008 report of the Low Pay Commission, which investigated the influx of migrant workers to Britain, was more on the lines set out by the hon. Member for Islington, North, noting that
“it appears that migrant workers are contributing to the success of the UK economy by filling gaps in the labour market and that, in general, they have not displaced UK nationals in the workplace”.
That is more like the argument proposed by my hon. Friend the Member for Buckingham. The evidence, however, is not conclusive. The report also dispelled the idea that migrant workers are routinely paid less than the minimum wage. It said that
“the vast majority of employers support and comply with minimum wage legislation”.
It is important that we make that point. The effect of immigration on wages in the UK is uncertain. While that remains the case, we need to be wary about introducing new legislation that will distort market flexibility in a difficult economy.
On the hon. Gentleman’s point about the importance of the national minimum wage, will he support me in welcoming the London living wage introduced by the former Mayor? Will he assure the House that the current Mayor of London will continue that humane and decent policy of ensuring that the reality of high costs in London are recognised in payment?
It is not for me to give the hon. Gentleman an answer. He needs to ask the Mayor.
We now have an economic climate in which employers often have to employ migrant workers because they find it too expensive to employ British people. The hon. Member for Elmet said that the Government strategy affected the lower paid. However, the proposed agency workers legislation—the Minister might want to put me right on this—will not only capture the low paid. Between 1991 and 2006, a net 2.3 million immigrants arrived in Britain. In 2006 alone, 130,000 non-EU nationals were granted settlement. That represents a significant strain on our country’s infrastructure. Whether such an influx is for good or bad may vary in different cases. The Conservative party has proposed that there should be an annual limit on immigration with admission based on the benefit to the wider economy.
Protecting migrant workers from exploitation is important. However, that is only part of the story if we are to tackle the underlying reasons for the need for such workers in the first place. The Conservative party proposes not only to cap non-EU immigration and bring in a more effective border police, but to look at ways to get the 1.61 million British people who are currently unemployed back into work—not least through welfare reform. We also propose providing the means to reintegrate into society the 25,000 under-18s who are currently not in education, employment or training. We would also make it easier and more attractive for businesses to take on employees. As the economy worsens and unemployment rises and wages are eroded by inflation, action needs to be taken to encourage employment, yet the Labour party is proposing further changes to employment law that will make employing staff an even greater burden for business. For example, the Government recently increased the rights of temporary and agency workers, and that is before the next round of the Warwick agreement. Labour, therefore, has adopted a very damaging attitude towards business.
Increasing working rights may be acceptable, but it will mean that more businesses will have to employ temporary workers to cover shortfalls. However, the recent beer and sandwiches deal means that employing such temporary workers, many of whom will be immigrants, will now be more expensive and burdensome for businesses. The unions may think that by demanding tougher monitoring of immigrant labour, it is less likely that companies will employ immigrants. The hon. Member for Elmet called the current position unacceptable, but that is too simplistic. Put in a wider context, more businesses are likely to be priced out of employing workers legitimately and may even be pushed into employing illegal immigrants.
To conclude on what we agree is a complicated issue, the protection of migrant workers is important for the Conservative party. Although a general legislative framework exists to tackle the problem, more should be done to improve policing in this area.
As is customary, I begin by congratulating my hon. Friend the Member for Elmet (Colin Burgon) on securing the debate. He spoke with great thoroughness about a difficult set of issues. He began by saying that there was a basic consensus between the two Front Bench spokesmen on these issues. I am not sure whether he still holds that view, having heard the contribution of the hon. Member for Huntingdon (Mr. Djanogly). However, that is for him to decide.
My hon. Friend the Member for Dagenham (Jon Cruddas) was right to say that the politics of the issue can be toxic—the debate feeds into some difficult political issues. Members, including my hon. Friends the Members for Islington, North (Jeremy Corbyn) and for Blaydon (Mr. Anderson) and the hon. Member for Brent, East (Sarah Teather), raised some issues that I hope to be able to cover.
The issues are important, because any decent society and any good economy demands that all workers, whether they were born in the country or not, get decent treatment at work. Migration is not new. People have always sought to move around the world for a better life; it is not an ignoble ambition. People come to the UK in search of a better life. The starting point for any discussion of the issues—certainly on the Government’s part—should be to acknowledge that there are some 3 million more people in work today, compared with 11 years ago, and all of them enjoy better employment rights in a number of ways than was the case more than a decade ago.
I start by mentioning the minimum wage. On coming to power, one of the Government’s central ambitions was to put a decent floor underneath the labour market. Warnings of disaster emanated from the Conservative party, but they did not come true. However, simply beginning the minimum wage was not the end of the story; it is also about how things have been handled since it came into force. The minimum wage has grown, both in real terms and as a proportion of national average earnings, since it came into being almost a decade ago. The Low Pay Commission model has worked well. The Government are committed to ensuring that all workers who are entitled to the minimum wage get it.
Let me say something about enforcement and the resources for enforcement—a point raised by the hon. Member for Buckingham (John Bercow). Last year we recognised that there was a legitimate issue. An extra £2.9 million per year, over the course of the current spending review, has been put into national minimum wage enforcement. We have seen some of the fruits of that, particularly over the past year. The money is spent in two areas: on the staff who enforce the legislation and on promoting awareness of the minimum wage. That is critical when dealing with migrant workers, many of whom arrive in the UK not knowing the employment rights to which they are entitled. For example, in the past year we were able to fund extra publicity in some non-English language newspapers, in radio advertising, and in a bus that visited 30 towns and cities throughout the United Kingdom, making contact with tens of thousands of people, to advertise better people’s entitlement to the minimum wage. However, that is not all.
Hon. Members have mentioned legislation. My hon. Friend the Member for Blaydon said that we should not fear legislating on such issues. We do not fear that. In fact, the Employment Bill, which is about to be introduced in the House, will address a number of these issues. First, where people are paid below the minimum wage, the system of arrears will be improved so that we no longer have a situation in which people are, in effect, giving an interest-free loan to a bad employer who pays below the minimum wage. Secondly, the penalty regime will be stiffened for employers who do not pay the minimum wage or who contravene the agency regulations. I look forward to holding Opposition Front Benchers to their indication that they will support the Bill when it comes before the House.
What the Minister said about interest gives me very belated gratification. As long ago as March 1998—at approximately five o’clock in the morning during our debate on the Floor of the House on the Report stage of the National Minimum Wage Bill—I tabled an amendment to the effect that employers who were eventually forced to cough up in cases of non-payment should have to pay interest. Given that the Minister believes in the Low Pay Commission model, however, will he tell me why the Government are resistant to the idea that 21-year-olds should get the full adult rate? That seems to be a basic matter of fairness.
The hon. Gentleman made two points. First, there was the issue of the interest-free loan, and we are, as I said, correcting that situation through the Bill that is coming before the House. Secondly, we take the Low Pay Commission’s recommendations very seriously. The issue of 21-year-olds is probably quite marginal either way, but we will continue to examine it. However, we are also alive to the need to ensure that younger workers have a chance in the employment market, and that factor must be taken into account.
On resources, one of the issues that has been raised, including through the Government’s vulnerable worker enforcement forum, which I chair, is where people go to report an abuse, how they do so and how any decision is enforced. In line with the Employment Bill, the Government have allocated £27 million over the coming three years to expand the work done by ACAS in resolving disputes at work. ACAS offers a high-quality service, which will now be expanded, and we want to encourage employees and employers to use it to resolve disputes at work.
My hon. Friend the Member for Elmet and several other hon. Members mentioned agency workers, and the issue has been high on the agenda for a number of years. The backdrop is a European directive. My hon. Friend and I may not take exactly the same position on the matter, as I suspect his position is that we should have signed the directive that was put before us. We did not want to do that, however, because we wanted to achieve two objectives: fair treatment for agency workers, and the kind of flexibility for UK employers that has been important in ensuring that we have 3 million more jobs in the economy. Against that backdrop, we brought together the TUC and the CBI and negotiated an agreement to ensure equal treatment on basic pay and conditions after 12 weeks, with the possibility of local agreements outside that.
My hon. Friend asked specifically about occupational benefits. They are excluded from the deal, which is about basic pay and conditions. However, the agreement does secure our two objectives of fair treatment for agency workers and flexibility for employers. The story is not over yet, however, because we must now reach a satisfactory agreement in Europe that recognises the validity of the social partner agreement so that we can introduce the legislation to implement it. Those European discussions are going on at the moment.
The hon. Member for Brent, East said that she had not seen details of the agreement, but I remind her that there was a written ministerial statement. A copy of the proposals has also been published and is available in the Library.
Rights for migrant workers have been increased in many other ways. When the vulnerable worker enforcement forum publishes its findings, we will have more to say about this important issue.