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Public Bill Committees

Debated on Tuesday 27 October 2015

Immigration Bill (Fifth sitting)

The Committee consisted of the following Members:

Chairs: † Mr Peter Bone, Albert Owen

† Blomfield, Paul (Sheffield Central) (Lab)

† Brokenshire, James (Minister for Immigration)

† Buckland, Robert (Solicitor General)

† Champion, Sarah (Rotherham) (Lab)

† Davies, Byron (Gower) (Con)

† Davies, Mims (Eastleigh) (Con)

† Elphicke, Charlie (Lord Commissioner of Her Majesty's Treasury)

† Harris, Rebecca (Castle Point) (Con)

† Hayman, Sue (Workington) (Lab)

† Hoare, Simon (North Dorset) (Con)

† Hollern, Kate (Blackburn) (Lab)

† Lewell-Buck, Mrs Emma (South Shields) (Lab)

† McLaughlin, Anne (Glasgow North East) (SNP)

† Newlands, Gavin (Paisley and Renfrewshire North) (SNP)

† Smith, Chloe (Norwich North) (Con)

† Starmer, Keir (Holborn and St Pancras) (Lab)

† Tolhurst, Kelly (Rochester and Strood) (Con)

† Whittaker, Craig (Calder Valley) (Con)

Marek Kubala, Joanna Welham, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 27 October 2015

(Morning)

[Mr Peter Bone in the Chair]

Immigration Bill

We now begin line-by-line consideration of the Bill. May I congratulate members of the Committee on how enthusiastically they took part in the evidence sessions.

Before we begin, I remind Members that they may remove their jackets during Committee sittings. Everyone should also ensure that all electronic devices are switched off or to silent mode. Tea and coffee are not allowed in our sittings.

The selection list for today’s sitting is available in the room. It shows how the selected amendments have been grouped for debate. Grouped amendments are generally on the same or a similar issue. The Member who puts their name to the lead amendment in the group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in the group. A Member may speak more than once in a debate.

I work on the assumption that the Minister wishes the Committee to reach a decision on all Government amendments. Decisions on amendments take place not in the order in which they are debated but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection and grouping, and decisions are taken when we reach the clause that the amendment affects. Therefore, Members sometimes debate things and think they are going to vote on them then, but they vote on them later. I hope that that explanation is helpful.

I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following debate on the relevant amendments.

Clause 1

Director of Labour Market Enforcement

I beg to move amendment 55, in clause 1, page 1, line 6, after subsection (1) insert—

‘(1A) The primary purpose of the Director of Labour Market Enforcement is to secure the enforcement of labour market legislation, as defined in Section 3(3) of this Act.”

To ensure that the functions of the Director of Labour Market Enforcement are exercised for the purpose of protecting those vulnerable to labour market exploitation and to make this explicit on the face of the Bill.

I preface my remarks on amendment 55 by indicating that Labour supports a director of labour market enforcement, provided that the purpose of the director is effective enforcement of labour standards and that the relevant agencies are properly resourced to that end. That is the in principle position. With that, there should be no overlap with or merging into inspectorate or immigration enforcement functions. Part of the Bill and the Government’s associated consultation document suggests that the role is a director of labour market enforcement in name but not in design. The aim of amendment 55 is to resolve that issue.

The purpose of the amendment is to ensure that the functions of the director of labour market enforcement are exercised for the purpose of protecting those vulnerable to labour market exploitation and to make that explicit in the Bill. I will not go through the wording unless that is necessary. It is proposed that the director will report to the Home Secretary and to the Secretary of State for Business, Innovation and Skills. That is welcome, but the position is being created via an Immigration Bill sponsored by the Home Office. Therefore, that concern, and particularly the overlap between immigration enforcement and labour market enforcement, gives rise to the amendment.

Immigration enforcement threatens the success of labour inspection. A better approach to reducing illegal working is effectively to enforce labour standards, thereby reducing the demand for illegal workers, who are more vulnerable to being exploited due to their irregular immigration status. The OSCE has said:

“A rising challenge to effective labour inspection is an increasingly widespread imposition of measures that compel labour inspectors to conduct immigration enforcement activity as part of their workplace inspection agenda.”

That is the concern that we have about the Bill—hence, amendment 55.

The International Labour Organisation said:

“the primary duty of labour inspectors is to protect workers and not to enforce immigration law.”

Other countries have experienced the dangers of merging those two functions. For example, research in the Netherlands shows that dual labour inspection priorities to identify, on the one hand, undocumented workers, and, on the other hand, victims of trafficking have negative impacts on the uncovering of trafficking cases. There are two reasons for that. One is that victims of trafficking are too scared to come forward and the second is that labour inspectors fail to identify them. In the Dutch research, there is a classic example of that, involving an individual who was trafficked into commercial cleaning in the Netherlands. Labour inspectors came to his workplace on many occasions, but he did not come forward; in fact, he claimed not to work in the establishment rather than come forward and be identified as an employee. For that reason, he was missed by the inspectors. As I say, this is a classic example of its type.

It is not just in the Netherlands where there is such evidence. In the USA, there is now a memorandum of understanding between the Department of Labor and the Department of Homeland Security, the purpose of which is to ensure that immigration control does not interfere with the protection of workers’ rights. For example, when the Wages and Hours Directorate investigates a case of unpaid wages, its officials must not ask for immigration documents. So there is a clear separation of roles, and the fact that workers’ rights are protected in the USA regardless of immigration status prevents retaliation and intimidation by employers, who could otherwise threaten to report undocumented workers if they exercised their labour rights. Our position is that in order to tackle labour exploitation effectively, there must be a strict firewall between immigration control and labour inspection. That offers the best prospect of success for this director of labour market enforcement.

We have some questions for the Minister, and I will just run quickly through them; he may be able to pick up on them in his remarks. First, how will the director of labour market enforcement prioritise non-compliance in the labour market when non-compliance constitutes a range of offences in relation to requirements set out under the labour market legislation, and what assurances are in place to ensure that the work of the director will prioritise the protection of vulnerable workers from abuse and exploitation? Secondly, what overlap will the director’s consideration of non-compliance have with the work of the Home Office to control immigration and identify undocumented workers? Thirdly, what is the intended overlap between the twin aims of tackling the undercutting of British workers by undocumented workers and addressing worker exploitation, and how does the Minister see those two aims being achieved in unison?

I have set out the principal reasons why we have tabled the amendment. It may be helpful at this stage, Mr Bone, if I indicate that although we will not push a number of amendments to a vote, we will push this one to a vote. I hope that is helpful.

It is a pleasure to serve under your chairmanship, Mr Bone.

I will speak briefly about amendment 55, which has the modest aim of making it explicit that the new director of labour market enforcement should have a duty to stand up for those who are at risk of exploitation. This amendment has been tabled because Labour Members believe that if such a position is going to exist, whoever holds it should be responsible for enforcing all aspects of labour market law and not just some of them.

If they accept this amendment, the Government will signal that part 1 of the Bill is truly about improving labour market enforcement and not simply about grabbing headlines to bolster their credentials of being tough on immigration. If the Government are willing to make that commitment, I think we will all welcome the creation of the new director.

The amendment is important because without it there would be a worrying ambiguity in the new role of the director, which could see the resources allocated to the director directed primarily at illegal migrants in work rather than at those who employ them.

There is a tonal shift in the Bill towards criminalising the employee over the employer, which is concerning because it seems to focus on the symptom rather than the cause; the focus appears to be on the workers rather than on the organised gangs who traffic and exploit them. That approach will not have a lasting impact on illegal labour market activity in Britain. The reason is simple: if workers are arrested and deported, employers will find others to take their place. If you strike at employers, however, that market soon disappears. There is even a risk, as witnesses told us last week, that an emphasis on criminalising workers will actually be counterproductive in fighting illegal working. If people fear that they will be harshly punished if their immigration status is discovered, that can be used by their employers as a threat, driving them even further underground and opening them up to worse forms of exploitation.

The Government therefore need to make it explicit that the new director will have powers and duties that allow them to act in all areas of the labour market and that the role will be used to tackle exploitation at its source. Without that commitment, the director is unlikely to be an effective office because it will be limited to clearing up the symptoms, rather than the root causes, of labour market exploitation. Such an approach might bring some great headlines for the Home Secretary, but it will do little to prevent trafficking and abuse or to reduce the number of illegal migrants working in this country. I am sure that the Minister will agree that if public money is going to be spent establishing a new agency, we need to be sure that it is going to get results, and that is why he and his colleagues should back this amendment today.

It is a pleasure to serve on the Committee with you in the Chair, Mr Bone. I echo the comments made by my hon. Friends, save that I have one caveat in relation to the point made by my hon. and learned Friend the shadow Minister. I hope that we do not need to push the amendment to the vote. I hope that there can be agreement, because we are on the same page on several of these issues, in the wider sense in relation to an effectively managed immigration system, and particularly on labour market enforcement. Many Opposition Members commended the Government on their work on the Modern Slavery Act 2015. We had differences on points of detail, but very much agreed with the main thrust of that legislation. There is strong support for the principle of more effective labour market enforcement. The Prime Minister spoke powerfully about that when he spoke, at that stage, not about a director but about the establishment of a labour market enforcement agency. Clearly, the Bill has a slightly different, but nevertheless welcome, approach to seek to co-ordinate the efforts of those agencies dealing with more effective enforcement in the labour market.

However, it does not sit comfortably that our debate about labour market enforcement is in the context of an immigration Bill—so there is perhaps a point of confusion. At the heart of this clarificatory amendment is the desire to be absolutely clear on the role of the director of labour market enforcement. The post—the function—should do what it says on the tin: it should be focused on labour market enforcement. My hon. and learned Friend the shadow Minister has cited international examples. It is useful to learn from other countries, though we do not do it as often as we might. There are powerful examples of where confusion between labour market enforcement and immigration control and enforcement is counterproductive. It neither supports effective immigration enforcement—because it drives undocumented workers underground and out of the way of the authorities—and does not help with labour market enforcement either.

It is a pleasure to serve under your chairmanship. If I may add to what my hon. Friend is saying, Caroline Robinson, the policy director of Focus on Labour Exploitation, said in her witness statement,

“The point about the protective purpose of the director is very important. For us, the core purpose of that role should be the protection of vulnerable workers and the prevention of exploitation.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 27, Q54.]

That is what the amendment is trying to get at.

I thank my hon. Friend for her helpful intervention. Throughout our deliberations, we should seek to draw on the evidence that we heard. The evidence cited by her and by my hon. and learned Friend the shadow Minister has powerfully made the case that the confusion of immigration functions and labour market enforcement is damaging and counterproductive to our objectives for the labour market and for immigration. The amendment seeks to provide absolute clarity. I hope that the Government will accept it.

The Scottish National party tabled the amendment with Labour because we believe that the primary purpose of the director of labour market enforcement should be to enforce the rights of workers and protect people from exploitation. Indeed, the Government’s background briefing states that the new labour market enforcement agency will be established to protect people against being exploited or coerced into work. The Immigration Law Practitioners’ Association has said:

“Where those working or living in very poor conditions are deterred from accessing assistance because of their immigration status”—

this will clearly make it harder for them—

“or because of their vulnerability to threats by unscrupulous employers in relation to their immigration status, agencies will be restricted in their ability to gather the intelligence needed to exercise their regulatory functions and protect against labour market exploitation. A lack of clarity over the protective function of the labour market enforcement agency may therefore undermine its aims.”

It would be good to have a little more clarity.

Last week, one of the Conservative Members really shocked me with a statement about illegal workers. On reflection, I wonder whether there is a genuine, fundamental misunderstanding about some of these people that might need to be addressed. The comment was that if people knew that the Bill was being introduced and that it was going be so much harder to work here illegally, they would be less likely to allow themselves to be trafficked. That really shocked me. We are talking about the most vulnerable people, who are taken from other countries against their will. They do not choose or allow themselves to be trafficked. They are used and abused. The Bill will make it so much worse for them. Does the Minister believe that people are trafficked here because they choose to be or not? If there is a belief that there is an element of choice to trafficking, I understand where the measures come from. I would like to know that the Minister intends to protect the most vulnerable people.

If the hon. Lady accepts the premise that the trafficker is the conduit for the individual to go from A to B, does she accept that if the individual understands that entry to B is now harder and tougher, it is likely that they will not be sought to be trafficked in the first place or that they will ask the traffickers to traffic them elsewhere? It is all about signal and message.

So there is the answer to my question. I really would love the Minister to respond and to understand that people do not choose to be trafficked. They do not say, “Please kidnap me, tie me up, bundle me into a van, and take me to a country that I’ve never been to where I can’t speak the language.”

That is kidnapping; it is not trafficking. Trafficking, in my judgment, is when somebody goes to somebody else who is providing that service and says, “I want to get from A to B. Will you get me there?” That might be in a private motorcraft, an aeroplane or whatever it might happen to be. When I talk about trafficking, that is what I am talking about, not about kidnap, which is illegal.

In legal terms, the hon. Gentleman is wrong. That is not what trafficking is. He needs to look up the legal definition of trafficking because trafficking happens against somebody’s will. We have to protect those people. Now that the hon. Gentleman understands, perhaps he will support this amendment.

Does the hon. Lady accept that when I worked as a police officer in Romania, young ladies who wanted to come to the UK through Spain would look for a trafficker to facilitate that journey to Spain and the UK? That is trafficking, contrary to what the hon. Lady is suggesting.

I think the hon. Gentleman is making the decision to do what a lot of today’s media do, which is to focus on people who have an element of choice. Most people who are trafficked—well maybe not most people, but a significant number—are trafficked against their will. They are the most vulnerable people and the people we have to protect. This amendment is asking only that the new director pays attention to the rights of the most vulnerable people. We cannot say that one person has had an element of choice but another person has not, so we will not protect the second person. So no, I do not accept what the hon. Gentleman says.

The premise of the amendment is:

“To ensure that the functions of the Director of Labour Market Enforcement are exercised for the purpose of protecting those vulnerable to labour market exploitation and to make this explicit on the face of the Bill”—

Where in the Bill is that purpose not explicit? Clause 3 refers to non-compliance and the interpretation of it. It specifically refers to the Employment Agencies Act 1973, the National Minimum Wage Act 1998, the Gangmasters (Licensing) Act 2004 and anything else prescribed by the Secretary of State.

If the hon. Gentleman thinks that it is already explicitly stated, surely he will have no problem supporting this amendment.

I wanted to develop the point, because I think that some of the discussion about trafficking is a diversion. Does the hon. Lady agree that the primary purpose of this amendment is simply to clarify the role of the labour market enforcement director and make it clear that there is no disagreement on either side of the House that such a director should focus on preventing those vulnerable to exploitation in the labour market?

It is a clarification, courtesy of Google. The UN defines trafficking as

“the recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability”.

As my colleague has just said, this gets to the nub of the problem. My understanding, and perhaps the Minister could provide clarity, is that when we are talking about trafficked people, the legislation is in place already so it can be enforced. What we are saying here is that a large number of people are in a grey area. They might, as in the example given by the hon. Member for Gower, have paid to come into this country to work but then, very quickly, find themselves in an exploitative situation.

We need clarity about the role of the labour market enforcement director. Is he very clear that he is responsible for enforcing good labour practice? Does he have the resources to do that and can he work collaboratively with the other agencies to make sure that when something like the Modern Slavery Act 2015 is enforced, that vulnerable person is taken care of?

Just before we move on, I want to say that I have allowed the debate to go fairly wide of the mark on trafficking as it does indeed go to the heart of the Bill. If you recall, I did ask for one of the witnesses to define trafficking. I myself was none the wiser after she had finished speaking, unfortunately.

I welcome you to the Chair, Mr Bone, and other members of the Committee to our consideration of part 1 of the Bill, which deals with labour market enforcement. I look forward to the debates that we will have in the coming sittings to, I hope, improve the Bill and to reflect on significant issues relating to labour market enforcement and immigration more generally. I look forward to debate that I am sure will be wide ranging and well informed and that I hope will be good natured. These Committees are about scrutiny of the detail of the legislation. There will be strong views on certain issues, but the approach that I always take on Bill Committees is to listen and to reflect, and I hope to be able to inform and provide evidence and further background to the Committee during the detailed consideration of this Bill. With those words of introduction, I will move on to clause 1 and the amendment tabled by the hon. and learned Member for Holborn and St Pancras.

The effect of the amendment would be to specify the primary purpose of the director of labour market enforcement in clause 1. Although I appreciate the desire to include a strong statement up front on the director’s remit, I believe, for reasons that I will explain, that the amendment is unnecessary. The director’s role and remit are already clearly set out in clauses 1 to 7. When we look at the provisions in clauses 2 and 3, which we will debate in the course of this morning, and the specific definitions of “labour market enforcement functions” and “labour market legislation”, we see that that provides a clear framework as to the intent behind the creation of the director, but I will explain this a little further.

We are creating the director of labour market enforcement to lead efforts to tackle abuse and non-compliance in the labour market. As we will explain in the debates on later clauses, that will include setting the strategy for the Government’s work to tackle all types of labour market exploitation and creating an information hub to facilitate better sharing of tactical and operational intelligence. I think that that is equally important. On some of the issues of vulnerability that have already been flagged in terms of identification, it is important to be able to share that information and get it to the right agencies so that they are able to act. I think that that goes beyond the remit specifically of the director, but I certainly understand and respect the points that have been made.

I want to push the Minister on that point. As I said, the confusion arises because a director of labour market enforcement is being proposed in the context of an immigration Bill and it is a post that will report to the Home Secretary. Were the director of labour market enforcement sitting in a different Department, reporting perhaps to the Secretary of State for Business, Innovation and Skills, the necessity for this absolute clarity might be diminished. Does the Minister agree that the fact that the labour market enforcement function is within an immigration Bill and the post reports to the Home Secretary means that it would be helpful to have absolute clarity on the purpose, so that this post holder is not distracted by other—quite legitimate but other—considerations of Government?

I welcome the hon. Gentleman’s welcome for the creation of the director of labour market enforcement and what he said about the way in which it is framed and the intent behind it. I will go on to respond to his direct point, but let me address the issue about whom the director reports to. It is to the director of business and to the Home Secretary. Let us look at the agencies in relation to which the director has a remit. One of those is the Gangmasters Licensing Authority. That sits within the Home Office and therefore it is appropriate for the director to report to the Home Secretary in respect of the overarching work; the GLA is a Home Office-sponsored and led agency. The hon. Gentleman may want to engage in a broader debate as to whether he thinks that that is appropriate, but it is important that it is structured in that way.

Obviously, one of the concerns is where the director reports to. I understand the point about the need to report to the Home Secretary as some of the other agencies do. I am trying to explore where we have common ground. The experience in other countries is that merging labour market enforcement with immigration is counterproductive. There is a concern that this is an immigration Bill and therefore there is the potential for that merger. Other countries have experienced a practical problem in exercising the primary function because it has been merged with immigration control and enforcement. Does the Minister accept that there are real examples in other countries of action which started with a good intention but went wrong because it morphed into what was, in truth, immigration control and enforcement?

I would point to the fact that immigration enforcement—the directorate within the Home Office that is responsible for the enforcement of immigration rules—is not one of the structures that the director has responsibility for. I will cover in turn the point about remit because there is an important aspect to this. When hon. Members have heard what I have to say, I hope that they will understand that the hon. and learned Gentleman’s concern about some sort of merger is not what this is about. We intend the director’s remit to cover labour market breaches, not immigration offences. The director and the enforcement bodies will work closely with Home Office immigration enforcement wherever labour market breaches are linked to illegal immigrants or people working in breach of their visa conditions, but that is an adjunct and not the purpose of the director.

I was asked why this measure was in an immigration Bill. There are two reasons. First, immigrant workers can be particularly vulnerable to exploitation by rogue employers, a point that has been flagged by hon. Members already this morning. I am sure that that will be a continuing theme during our consideration of the Bill. Secondly, by ensuring that workers are treated fairly, we are preventing businesses bringing in cheap labour that illegally undercuts the wages of people already in this country. Good labour market enforcement has knock-on effects.

Modern slavery has been a theme of some of the contributions this morning. With the Modern Slavery Act, Britain is once again at the forefront of the fight against the inhuman crimes of slavery and forced labour—the hon. Member for Sheffield Central and others made comments on this—but it is important to understand that exploitation occurs in many forms and can start with abuse of employment law. We must step in to protect not just the vulnerable—I will address the point about vulnerability—but also local workers and responsible businesses affected by those who are prepared to exploit cheap labour. That is why there is the need for this strategic approach and for the director to work with the different organisations that are in place. This is not a merger, as the hon. Member for Sheffield Central highlighted in his contribution, but rather we have an over-arching strategy of looking at ways in which we can promote good practice.

I would direct hon. Members to the consultation published alongside the Bill to set out some of those details. It says that:

“The Director will lead and co-ordinate work to promote compliance by employers and labour providers with labour market legislation, and to encourage and enable people to report infringements and exploitation.”

We are conducting a consultation at the moment around the director. We look forward to receiving feedback and input so that we are able to reflect fairly and appropriately.

Our employment law framework guarantees decent minimum rights for workers, including from next April the national living wage for over-25s, and promotes fair competition between businesses. The majority of employment law is enforced by individuals taking their employer to an employment tribunal to seek redress if they believe they have been wronged. State enforcement bodies step in to enforce legislation where there is a higher risk of exploitation or vulnerability.

As I have indicated, clause 3 already defines the director’s role by reference to the legislation and enforcement functions that will be within his remit. It makes it clear that the three enforcement bodies for which the director will set the strategy are the Employment Agency Standards Inspectorate, HMRC’s national minimum wage team and the Gangmasters Licensing Authority. We want the director to bring co-ordination across the whole spectrum of breaches of employment law—from employers who do not know the rules right through to organised, criminal exploitation of workers. That will be the director’s broad remit. However, I am concerned about some of the pictures we see of organised immigration crime and organised criminality more generally that seeks to exploit labour markets and uses the front of employment. We are dealing with a broad spectrum, which ranges from vulnerability all the way to good practice and compliance. It is right that the director should have that remit—setting up strategy, commenting on the balance of resources across each of the three agencies and reporting to the relevant Secretary of State.

Could the Minister give clarity on how the director would work in collaboration with the Independent Commissioner for Modern Day Slavery? Whether it is in guidance or within the Bill, it would help if the two roles could be clarified, because there is a grey area.

It is important to stress that they are separate roles. We make that point clearly in the consultation document, where we say that the director will have a role that is distinct from the commissioner’s role. Obviously, the commissioner looks at all types of modern slavery, whereas the focus of the director will be on labour market exploitation and enforcement. The practical roles are equally different:

“The Director will set the strategic plan, priorities for targeted action and overall approach”,

whereas

“the Commissioner has a broad role to look at the effectiveness of all the bodies engaged in the fight against modern slavery, encourage best practice, and make recommendations for improvements. That role will in future include looking at the effectiveness of the new Director and the reformed GLA”,

which we are consulting on now. I hope that is helpful and explains that these are complementary roles. I think that the commissioner, Kevin Hyland, is doing an excellent job. He has a great deal of practical experience from his time in law enforcement. I remember a couple of years ago going out with Mr Hyland on an enforcement raid to do with trafficking, so I know the real passion he has for that job. I think that he will use and work with the new director in a very positive way to continue to confront the appalling evil that is slavery and trafficking, with people being horribly exploited and enslaved for gain. We continue to need to shine a light on this, so that it is seen for what it is.

I endorse the points that the Minister made on enforcement, but I want to come to the issue he raised about the review of the Gangmasters Licensing Authority. I agree that effective enforcement is important. The opportunity for exploitation in the labour market is growing. Can he reassure us that the review of the GLA will not mean that we will be moving to voluntary licensing?

I think that the hon. Gentleman may be straying a little from the specific amendment. He will have seen the clear manner in which the consultation document is set out and the various questions that are being asked about the licensing function in ensuring that that is conducted appropriately, is evidence-based and is used as a tool to prevent exploitation in the highest-risk sectors. I direct right hon. and hon. Members to the relevant sections on pages 40 and 41 of the consultation document, which set that out. Obviously, we will reflect carefully in the context of the feedback we receive around the consultation.

Before the Minister moves on from that point, he has understandably set out the functions in clause 3(3) that are of primary relevance. I understand that. The purpose of the amendment is to say that, among those purposes or functions, this is the primary one and it is protective. That is the sole purpose of the amendment. His point is that it is not needed in the light of clause 3(3). The concern is that there is no clear reference in the Bill to the primary purpose. The measure comes in an Immigration Bill that, a few clauses on, includes offences of illegal working. Does he understand that, although we do not quarrel with the functions or why he has chosen them, we want to underline what I think is common ground, that the primary purpose is protective? In this environment, and given other international examples, it is helpful for all concerned to have that included in the Bill.

I think I have already explained that the functions of the director of labour market enforcement are by their nature framed within the context of the various pieces of legislation that the hon. and learned Gentleman set out. I have also explained, as set out in the consultation document, that the measure is about promoting good practice and highlighting issues where employers can equally comply. That is why I responded as I did to a number of hon. Members about the spectrum of activity engaged here.

We are very clear that the purpose of the director of labour market enforcement is to tackle labour market exploitation across the field. We believe this measure will give the stronger drive to deliver that step change in tackling exploitation. The director will have that purpose set out in terms of appointment and, in delivering that, will be accountable to the Home Secretary and Secretary of State for Business, Innovation and Skills.

We also believe that the requirement to publish the strategy and annual report—it will not be a private document but will be visible according to the legislative framework—will demonstrate the clear commitment to protecting the vulnerable and tackling exploitation. That is again why we are clear on the remit, role and function. From a tactical operational perspective—I am sure we will come on to the information hub—that will support the activity.

I am grateful to the Minister for being generous with his time. I have listened carefully to his comments and there is little in them that I can disagree with. Given that we are seeking to be on the same page as far as we can on all these issues, will the Minister explain why he feels that the Bill would be diminished by the amendment?

As I have already indicated, I simply do not think it is necessary, because the Bill is already framed so as to cover the points hon. Members are highlighting. I have always taken the approach in legislation that, if the situation is clear through other mechanisms, adding provisions that are not needed is not appropriate. I had hoped in my comments to assure the Committee why the amendment is not necessary, the purpose of the provisions and the intent of the Government. Transparency will be provided through the annual reporting to see what is happening in practice, and therefore the amendment as expressed is not needed. The director’s strategy will be evidence-based, which will allow the plan to be from year to year, based on where non-compliance is most likely to cause harm. That will be reflected in the plan.

I have also listened carefully to the Minister, but I am confused and puzzled. If the purpose of the measure is to tackle labour market exploitation across the board, why did the Government see fit to include it in the Immigration Bill?

I have already responded to that point by mentioning the vulnerability faced by people who are here through immigration. Equally, the measure can be a means of ensuring that we have a good, regulated labour market that therefore does not add to exploitation, nor encourages people to come here illegally or through trafficking, which is why it sits in the overall framework of an immigration Bill. I hope that I have explained that the purpose and remit of the director is labour market enforcement. The provision is not intended to stray into the separate issues of immigration enforcement, but if cases of people who are here illegally are highlighted, the director would be duty-bound to report that and to pass on intelligence through the hub that is being created. We will no doubt have a separate debate about that when we reach the relevant provisions.

I am sorry for intervening again. Although I disagree with very little of what the Minister is saying, that last point is a cause for concern. Of course it makes sense for the director to have these primary functions and to co-ordinate with other action on immigration, but the concern is that when we put the two functions together and do not clarify the primary purpose, there will be a misunderstanding about how this works.

We support this good initiative of having a director, but the good work—the head of steam—will be lost if the primary purpose is not clear. People will feel that the measure is, on the face of it, about labour market enforcement, but it carries with it immigration checks and it is in an immigration Bill. What the Minister says makes perfect sense, but that concern is the cause of our discomfort and the reason behind the amendment, which would make the provision much more powerful.

In many ways, the purpose of a Bill’s Committee stage is to tease out some of these issues, and to get the Minister—in this case, me—to set out and clarify the purpose and intent of a Bill’s provisions. We strongly believe that the Bill gives certainty and clarity about how the director will provide co-ordination.

The measure is about existing agencies that are already carrying out functions. If intelligence is already discovered by those agencies, sharing will already take place. This does not change anything about operational practice; rather, the director will provide strategy, co-ordination and an overarching response. We need good work on enforcement between agencies so that we do not—I do not think we have this, but the provision ensures that that is the case—have a silo-based approach, given that there is an overlap and that we need to look at this as an overall market. Those are the reasons why we do not believe the amendment is required, so I ask the hon. and learned Gentleman to withdraw it.

As I have already indicated, I am grateful to the Minister for setting out so clearly the purpose behind the director of labour market enforcement. In one sense, there is nothing between us on that. Our concern is clear: this positive development comes in an immigration Bill, yet there is clear evidence from other countries that unless we are clear about the primary purpose of such a measure, we run the risk of losing everything that we have tried to gain.

As I have said, the offences of illegal working in relation to employers and employees are set out just a few clauses later in the Bill. When such measures are together in one Bill, a clear explanation of the primary purpose of the director would cut through a lot of the concern and help that person to devise a strategy that focuses on that primary purpose, rather than other possible purposes. I welcome the comments of the Minister and other members of the Committee, but I will not withdraw the amendment.

Question put, That the amendment be made.

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

I shall be brief, given that we have had quite a wide-ranging debate about the purpose of clause 1. I underline that the purpose of and the rationale behind the appointment of the labour market enforcement director is that the three main enforcement agencies work together. They are well respected, with distinct expertise, knowledge and skills, and collectively they span the spectrum of infringement from the simplest forms of non-compliance to exploitation that may include some form of slavery. There has been a shift in the nature of such exploitation from individual abuses of employment regulation towards organised criminal activity, which is why it is important that we have an overarching response that ensures that we join the work of the bodies together.

To enable the enforcement bodies to address the problem collectively, we have determined that there is a need for greater co-ordination among them, as well as the need for a single set of priorities. We want to ensure that there is strong, effective co-ordination of the three enforcement bodies, but we also want to achieve that with minimal disruption and while avoiding significant structural change.

We believe that the key lies in establishing effective overarching leadership and co-ordination of the enforcement bodies, so the clause creates the position of director of labour market enforcement. The director will lead efforts to tackle abuse and non-compliance in the labour market. As we will debate later, that work will involve setting the strategy for the Government’s work to tackle all types of labour market exploitation, and heading an information hub to enable better sharing of tactical and operational intelligence, as well as to build a stronger evidence base to inform future interventions.

Creating a director provides the greatest scope for achieving the strategic integration of the three enforcement bodies without losing their different specialist skills. It is vital that those skills are retained to deal with not only day-to-day compliance issues, but serious criminality. If the system focused exclusively on either serious exploitation or lower-level breaches, it would not provide the necessary protection for vulnerable workers, which is why we have drafted the Bill in such a way.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Labour market enforcement strategy

I beg to move amendment 57, in clause 2, page 2, line 9, at end insert—

(ia) the threats and obstacles to effective labour market enforcement,

(ib) the remedies secured by victims of non-compliance in the labour market,”

To ensure that the labour market enforcement strategy sets out an assessment of the threats and obstacles to effective labour market enforcements and the remedies secured by victims of labour rights infringements and labour market offences.

With this, it will be convenient to discuss the following:

Amendment 58, in clause 2, page 2, line 12, leave out paragraph (b) and insert—

“(b) contains a proposal for the year to which the strategy relates setting out—

(i) how the non-compliance outlined in the assessment required by subsection (2)(a) (i) and (ii) is to be addressed,

(ii) how the threats and obstacles identified under subsection (2)(ia) are to be overcome, and

(iii) how the provision of remedies for victims of non-compliance in the labour market identified under subsection 2(a)(ib) is to be improved.”

To ensure that the functions of the Director of Labour Market Enforcement are exercised for the purpose of enforcing all existing labour market standards, rather than prioritising a limited number of areas, and to link the Director’s strategy with his or her assessment of non-compliance with labour market standards.

Amendment 56, in clause 2, page 2, line 24, leave out subsection (3) and insert—

‘(3) The proposal mentioned in subsection (2)(b) must set out the resources required to—

(a) address the non-compliance in the labour market,

(b) overcome the threats and obstacles identified under subsection 2(b)(ia),

(c) improve the provision of remedies for victims of non-compliance in the labour market.”

To oblige the Director of Labour Market Enforcement to provide an assessment of the resources required for effective labour market enforcement and remedies for victims, rather than simply to determine how currently available resources should be allocated.

Amendment 59, in clause 2, page 2, line 26, at end insert—

‘(3A) Nothing in the strategy shall—

(a) restrict, or

(b) reduce the resources allocated to

the labour market enforcement functions as defined in Section 3(2) of this Act.”

To clarify the relationship between the Director of Labour Market Enforcement and the UK’s existing labour inspection agencies, ensuring the current role, remit and resources of labour inspectorates are safeguarded.

Amendment 65, in clause 3, page 3, line 6, at end insert—

“(da) any function of the Health and Safety Executive and the Health and Safety Executive for Northern Ireland;

(db) any function of local authorities in relation to the “relevant statutory provisions” as defined in Part 1 of the Health and Safety at Work etc. Act 1973;

(dc) any function of local authorities under the Children and Young Persons Act 1933 and by-laws made under that Act, the Management of Health and Safety at Work Regulations 1999, and the Children (Protection at Work) (Scotland) Regulations 2006.”

To include the remit of the Director of Labour Market Enforcement to cover functions relating to health and safety at work and child labour, functions carried out for the most part by local authorities.

Amendment 66, in clause 3, page 3, line 12, at end insert—

“(ca) Part 1 and The Health and Safety at Work etc. Act 1973;

(cb) Sections 3 and 4 and Part 2 of the Children and Young Persons Act 1933.”

This a consequential amendment to amendment 65.

Amendment 63, in clause 3, page 3, line 31, before “in this section”, insert “Subject to subsection 6A,”.

Amendment 64, in clause 3, page 3, line 33, at end insert—

‘(6A) A person is not prevented from being a worker, or a person seeking work, for the purposes of this section by reason of the fact that he has no right to be, or to work, in the United Kingdom.”

To ensure that labour market offences committed against all workers are included within the scope of the Director of Labour Market Enforcement’s work, irrespective of immigration status (as under subsection 2 of section 26 of the Gangmasters (Licensing) Act 2004).

Amendment 62, in clause 4, page 3, line 42, leave out paragraph (a) and insert—

“(a) An assessment of the extent to which the strategy developed under section 2 of this Act has—

(i) addressed the non-compliance identified under Section 2 (2)(a)(i),

(ii) improved the provision of remedies for victims of non-compliance in the labour market identified under 2 (2)(a)(ia), and

(iii) overcome the threats and obstacles identified under 2 (2)(a)(ib)”.

To ensure the Director of Labour Market Enforcement’s Annual Report links with his or her assessments about non-compliance in the labour market (and assessment of the remedies secured by victims and threats and obstacles to effective enforcement).

I should have said earlier that it is, of course, a privilege to serve under your chairmanship, Mr Bone—better late than never. If it is convenient for hon. Members, I will deal with all the amendments in one go. On the other hand, if that is not the best way forward, I hope that somebody will indicate that.

The amendments address the strategy that it is envisaged that the director will set out. Amendment 57 would ensure that the labour market enforcement strategy would include an assessment of the threats and obstacles to effective labour market enforcement, and the remedies secured by victims of labour rights infringements and labour market offences.

The Bill requires the director to make an assessment of non-compliance in the labour market, but does not require him or her to assess the threats or obstacles to effective enforcement, including, for example, powers and resources, or to examine remedies secured by victims of non-compliance in the labour market. The amendment would oblige the director to incorporate those considerations into his or her strategy—in other words, to add value to what the labour inspectorate is already doing. The director needs to look at how enforcement could be done better, as well as the extent of non-compliance.

We want to build on the victim-focused legacy of the Modern Slavery Act, so we suggest that the director should look at the remedies for victims of labour exploitation as part of his or her strategy. Let me point to some gaps in the data. Recorded data on compensation for infringements of labour market standards are limited. For example, HMRC does not keep data in a format that enables the provision of statistics on the amount of arrears paid or not paid to workers. Data on civil claims brought by victims of trafficking and damages awarded are not available.

During the financial years 2010-11 to 2012-13, no prosecutions by the Gangmasters Licensing Authority resulted in compensation orders for victims of human trafficking. Data on compensation secured through the criminal injuries compensation scheme for victims of human trafficking for non-sexual exploitation, forced labour, slavery and servitude are not being recorded, so there are clear gaps. Why does not the Bill make provision for the director to assess why non-compliance is at its current level, as well as an assessment of non-compliance within the labour standards? How can the Government know whether they are making progress on meeting the needs of victims of exploitation if they are not collecting data on remedies?

The hon. and learned Gentleman and I both had lives outside this place before we were elected, and I know that he had a high-profile role. Has he written a strategy for any job he has held that did not take account of threats and obstacles relating to the strategy that he was trying to write?

The straight answer is no; of course that would be within the strategy. The purpose of the amendment is to make it clear that that has to be part of the strategy for this director. I am sure that members of the Committee share concerns about resources. The amendment is an attempt to ensure that this step forward is as effective as possible, and that touches on strategy and resources. While my answer to the hon. Gentleman is no, I do not think that that is a good enough reason not to support the amendment.

Amendment 58 would ensure that the functions of the director were exercised for the purpose of enforcing all existing labour market standards, rather than prioritising a limited number of areas. It would link the director’s strategy with his or her assessment of non-compliance with labour market standards. The Bill proposes that there is an assessment of compliance in the labour market, as well as a strategy to address the situation. I anticipate the point that a strategy would necessarily address as well as assess, but we think that our amendment would clarify in the Bill what the strategy should include. That would strengthen the strategy which, in the end, is all important. We need the post and we need the strategy, and it is putting the two together that will make the approach truly effective.

Is my hon. and learned Friend, like me, keen for the Minister to give us a bit more clarity about what seems to be a shift in narrative towards more serious issues of exploitation, which has not been defined? Our hope is that we are seeking to enforce all standards for all workers.

Yes, I thank my hon. Friend for his contribution. I will come later to where the director will put his or her emphasis—on what might be called the higher end breaches, or on more routine breaches. I welcome that contribution and I ask the Minister to deal with it if he can in his comments.

Amendment 59 is intended to clarify the relationship between the director of labour market enforcement and the UK’s existing labour inspection agencies, ensuring that the current role, remit and resources of labour inspectorates are safeguarded. By way of background, I give an example, because practical realities follow from what we hope is a very good initiative. This year we saw the pay and work rights helpline merge with the Advisory, Conciliation and Arbitration Service. The pay and work rights helpline used to provide vital advice; it was a service with an annual cost of £500,000, yet, when it was merged, the money did not go with it, which has led to a strain on the service. As a result, ACAS struggles to meet extra demand with no extra resources. There is some evidence that representatives have been asked not to use it. By making explicit the resource implications in the strategy, we hope to avoid this sort of implication. Where there is a merger of various functions and enforcement without the resources, it becomes ineffective.

I give another example. During the witness session, I asked Professor Metcalf whether he believed that there were sufficient resources and he said,

“Probably not, but in the consultation document and, I think, in the Bill, it does not actually set out quite what the resources are.”

I went on to ask him what he thought they should be and he said:

“One understands the difficulties with the public finances, but we probably do not have sufficient resources. In the low-skilled report, we calculated that you would get an inspection from HMRC once every 250 years and you would get a prosecution once in a million years. That suggests that we do not have enough resources. In turn, that takes you to the potential trade-off between the resources and the punishments.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 19-20, Q36-37.]

I am grateful for that intervention, which is another example from the evidence that we heard last week about resources. Unless we tackle the resources issue head on, all that will be achieved is the creation of a director without any real powers to carry out the functions, which I think everybody accepts need to be enforced and enhanced. In a sense, if we try to do more with less, services are jeopardised and, in truth, the vulnerable workers suffer and we will not succeed in reducing the pull factor for illegal migration because exploitation will not be uncovered and penalised.

By way of example, the number of Gangmasters Licensing Authority investigations into the illegal activities of gangmasters dropped from 134 in 2011 to 68 in 2014, and prosecutions were down from 19 in 2010 to three in 2014. I accept that underlying this reduction will be some intelligence-led work, but those figures are stark and they underline the general point made by the witnesses last week, namely, that the concern about labour market enforcement is not so much about the agencies and the enforcement powers as about the fact that the resources are simply not there to allow for investigations and action to be taken very frequently. Unless that problem is addressed head-on, there is the danger that all we will create is a director who does not actually carry out the enhanced functions that it is hoped will be carried out.

Sticking with the GLA itself, its budget, of course, has been cut by 20% since 2010, so we are in an environment where the enforcement agencies are already suffering quite significant cuts. It means that the GLA regulates labour in a £100 billion sector with a budget of 0.004% of that figure.

I have some questions that I hope the Minister will be able to address in his reply. On page 8 of the Government’s consultation document, “Labour market exploitation: improving enforcement”, it states that there has been

“a shift from abuses of employment regulation towards increasingly organised criminal activity engaged in labour market exploitation.”

That shift has occurred during the past 10 years. But what is the evidential basis for that assertion? In other words, that is the shift of abuse from, as it were, lower-level routine abuse to increasingly organised criminal activity. Linked to that is another question. Does the Minister agree that if we do not enforce employment legislation effectively at the lower end of abuse—if you like, minimum wage, health and safety and so on—we will create conditions for higher levels of abuse to develop. So, as I say, where is the evidence to support that assertion? And if we abandon the lower end or do not put resource into it, do we not run the risk of creating conditions in which unscrupulous employers will get away with whatever they want?

Amendments 65 and 66 would include the functions relating to health and safety at work and child labour within the remit of the director. May I just be clear about the spirit in which amendment 65 was tabled? It aims to explore the thinking behind the division of functions here, and to understand why all the functions are not brought together under this director, while also recognising—as we do—the work that the Health and Safety Executive is currently undertaking. So, amendment 65 was tabled in that spirit of properly understanding the Bill’s limited remit. The health and safety at work aspects of the Bill speak for themselves; I think that the child labour functions are enforced by local authorities.

Earlier this morning, the Minister said that the purpose of the Bill was to cover the whole spectrum of labour market enforcement, and therefore the ownership of the HSE and of the legislation to deal with child labour were obvious. There may have been a good deal of thinking behind that, but it would be useful through this exercise to understand that thinking properly, because the exclusion of those functions from the remit of the director of labour market enforcement could have an influence on the issue addressed by amendment 55, namely, the primary purpose of the director. Why is the HSE excluded and what is the thinking behind that exclusion?

Of course, there is also a budgetary consideration. The budget of the three labour inspection agencies covered in part 1 amounts to just over £14 million. That is compared with the £81 million for the Health and Safety Executive, which adopts a cross-labour market role. If the aim is to cover the whole spectrum and there are already resource considerations—of course there are—why do these provisions not cover the whole spectrum and leave out the health and safety and child labour aspects?

Amendments 63 and 64 aim to ensure that labour market offences committed against all workers are included within the scope of the director of labour market enforcement’s work, irrespective of immigration status. I will try to explain our concern clearly. Trafficking offences, as we understand it, are outside the remit of the Bill, save where they touch on the role of workers. That makes sense on one level because we would not expect the director of labour market enforcement to be looking at trafficking offences outside the employment or labour context. The problem as we see it—which may simply require clarification or may require amendment—is that the definition of “worker” within the Bill is then not wide enough to cover all those who may be in the labour market, including undocumented victims of trafficking. Perhaps there is a clear explanation; there may be a simple amendment. We follow the logic of the scheme, but we are concerned that the definition of “worker” is in fact too narrow and will leave some who it is probably the intention of the Government to include outside the scope of the protection. The amendment is put forward in that spirit.

On that point, I wonder if the Minister could also clarify why clauses 3 and 9 use two different pieces of legislation relating to workers? It seems to be a bit of an anomaly. Some clarity on that would be welcome.

Finally, amendment 62 touches on the annual report and is intended to ensure that the director of labour market enforcement’s annual report links with his or her assessment about non-compliance in the labour market and the remedies secured by victims and threats and obstacles to effective enforcement. The bullet point is this: as drafted, the director’s strategy does not link with his or her assessment of non-compliance in the labour market and his or her annual report does not link back to the assessment of non-compliance as a baseline. The amendment aims to ensure that the strategy covers everything that it should and that the annual report is tied into the same process.

I rise to support the Opposition amendments, which will be helpful in clarifying the role and duties of the director of labour market enforcement. I will also echo some of the comments made by my hon. and learned Friend the Member for Holborn and St Pancras.

The creation of the role is welcome, as my hon. Friends have said, but if the director is to have real influence and impact, they need to be involved across enforcement of labour market standards and not confined to a narrow area. The director should be able to take the lead on issues of labour market enforcement, to command respect from employers and be a strong advocate for compliance and tougher enforcement. The Opposition amendments are designed to make that happen. Amendment 56, for example, would require the new director to set out the resources that are needed for effective labour market enforcement.

Witnesses told the Committee that the problems with the immigration system are due not to a lack of powers but to a lack of resources, which undermines enforcement. The Government can introduce all the legislation they like, but criminal employers will not bat an eyelid unless they believe that there is an actual chance of their door being kicked down. That chance is incredibly low right now. The UK has less than one inspector per 100,000 workers, which is one of the worst ratios in Europe. The director should be able to tell the Government when they are not doing enough, and amendment 57 would introduce a clear duty to examine and identify where enforcement is failing and where there are obstacles to effective enforcement, thereby helping to identify where further resources are needed. There are currently too few data on the scale of labour market exploitation, and the director could and should be able to fill that gap.

I am also concerned that, as currently defined, the director’s focus appears too targeted on illegal workers, rather than on the people who exploit them. As I mentioned earlier, that is a rather counterproductive approach that addresses the symptoms rather than the causes of exploitation. The Modern Slavery Act 2015, as we can all agree, had a welcome focus on victims. Unfortunately, that is not the focus in this Bill. We should never forget that many illegal workers face violence and extortion and that, no matter what their immigration status, these people are victims. That is why amendments 56 and 57 would specify that the director’s remit should include remedies for victims and amendment 64 would guarantee that all labour market offences committed against workers were within the director’s remit.

Without those amendments, there is a danger that the director’s role will come to be seen as that of an inquisitor, rather than one that leads in driving up labour market standards and addressing systemic problems in the market, thereby undermining the director’s potential to influence change. I hope that the Minister agrees that our amendments would give the director the remit and the stature necessary to be effective. I look forward to hearing his comments.

It is a pleasure to serve under your chairmanship, Mr Bone. I rise to support amendments 56 to 58 and 62 to 64, but I will focus on the first three of those amendments lest I test the Committee’s patience.

Clause 2 is perhaps the only clause that my Scottish National party colleagues and I fully support. I wish that were the case for the remainder of the Bill, but I am afraid it is downhill from here. It is an outrage that we are talking about modern day slavery. The director of labour market enforcement, first and foremost, should be used to take action against exploitative employers and to protect workers from being abused and taken advantage of. Nice chap though he is, there is not much on which I agree with the Minister for Immigration on this Bill—or anything else for that matter. However, I find myself in the unusual position of agreeing with him that it is unacceptable for any employer to recruit staff whom they think they can exploit because those employees are less likely or less able to complain about working conditions. It is a scandal that we still have to talk about slavery and exploitation in modern-day Britain. However, that is the experience facing many workers, particularly migrant workers, when they clock in each morning. I am sure that we have all been appalled, upset and angered by the frequent newspaper reports on the level of exploitation that some migrant workers have faced and, truth be told, we could possibly be accused of not responding appropriately or quickly enough.

I hope that the recruitment of a new director of labour market enforcement is the first step in addressing the plight of many migrant workers. It should be welcomed that we have already started to talk about the work that the director will undertake, and the strategy in clause 2 outlines the action that will be taken to eradicate modern day slavery and exploitation in the workplace. There is currently a worrying lack of information on the level of exploitation faced by migrant workers. We do not know how many are being exploited. We have little evidence of the physical exploitation that they face, and we have little insight into the activities of gangmasters.

Therefore, amendment 57, which is supported by Focus on Labour Exploitation among others, would allow us to gain a greater understanding of the challenges to operating successful, fair and effective labour market enforcement. An assessment of the risks will allow us to gain the appropriate level of evidence so that we can take action against rogue employers. The amendment details our vision for addressing the exploitation that can arise from illegal migrant working and the steps that should be taken to gather the required level of evidence. Amendment 58 would ensure that we can use the evidence that has been gathered to take an evidence-based approach to addressing worker exploitation. That is important, as it prevents any prejudice-based opinions or judgments from influencing what action should be taken.

During our evidence sessions last week, Caroline Robinson of Focus on Labour Exploitation said:

“The point about the protective purpose of the director is very important. For us, the core purpose of that role should be the protection of vulnerable workers and the prevention of exploitation. That has been at the centre of the work of the Gangmasters Licensing Authority and has been part of its success. That authority, as we know, operates on a limited budget, so the resources are also of critical importance. On the role of the director of labour market enforcement and the labour market enforcement strategy, what most concerns us is the power of the director to hold control of the budgets, governance of those labour inspectorates and shifting budgets according to the strategy.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 27, Q54.]

She also raised the point that, along with the director, the inspectorate needs further resources to ensure that our position is comparable to that of other EU countries. At the moment we have just 0.9 inspectors per 100,000 workers.

Other hon. Members have mentioned that figure; I will give a bit more information to put it into perspective. As the hon. Member for South Shields said, that figure compares very unfavourably with figures for the rest of Europe. In Ireland, for instance, there are 4.6 inspectors per 100,000 workers, Belgium has 12.5 and France has 18.9. I got that information from a policy blueprint published by FLEX in the past couple of weeks. FLEX has said:

“Enforcement of employment law…is at desperate levels, creating the perfect conditions for modern slavery to take place.”

I agree that there must be proper funding for inspection, otherwise it is pointless.

My hon. Friend has highlighted the paucity of resources in this area, something that we will come back to time and again throughout this debate.

The resources question, raised by amendment 56, was also a cause of concern for Professor Sir David Metcalf, the chair of the Migration Advisory Committee. During our evidence session last Tuesday, Professor Metcalf raised concerns about the resources required to enforce measures and punish rogue employers who are failing to abide by labour market enforcement. After we have gathered evidence on labour market enforcement, we cannot be put in a position where we cannot use that evidence effectively because of a lack of resources. Professor Metcalf stated that, as things stand, he does not believe that the director will have the resources to be able to effectively deal with the problem of worker exploitation.

Professor Metcalf also stated that when working on the implementation and enforcement of the minimum wage he estimated that an employer would get a visit from HMRC once every 250 years and there would be a prosecution once in 1 million years. Quite frankly, that is a ridiculous position for us to find ourselves in, and we cannot allow ourselves to be put in it when it comes to tackling the issue of workers who are being exploited. Amendment 56 would require that the resources required to tackle the problem should be set out and calculated.

As I have said, we broadly support the clause, but clarification is required on a few matters, not least resourcing for the position of director. In our evidence session last week, Professor Metcalf said

“I suspect we just do not have the public finances for sufficient enforcement”

before going on to say that

“in the Bill, it does not actually set out quite what the resources are.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 18-19, Q33-36.]

I hope the Minister will go some way to answering that point today or else will support amendment 56, which would allow the new director the opportunity to assess the required resources.

I will speak to a number of the amendments in the group, starting with amendment 14. Following on from our earlier discussion, it is important—

I meant amendment 57, Mr Bone. I apologise—I do not know where I got 14 from; you ought to see my notes!

It is important that the director has a broad oversight and is able to inform Government and the agencies, when they are taking work forward, of all the issues that are a challenge for us, in government and in this place, when trying to ensure effective labour market enforcement.

It is worth mapping out the scale of change within our labour market, as that causes some of the difficulties. For example, according to the Office for National Statistics labour force survey, from 2010 to 2014 jobs paying below the national minimum wage went up 14.8%, zero-hours contracts were up 343%, the number of agency workers went up 20% and bogus self-employment rose substantially.

We all celebrate the entrepreneurial spirit that leads to genuine self-employment, but the level of self-employment in the construction industry is of particular concern—66.7% of workers are now self-employed, which compares with 9% in the finance and insurance sector and 8% in manufacturing. There is concern in the construction industry, where we know that exploitation is rife, that about half those in self-employment are bogusly self-employed.

That sets part of the context for the need to ensure that we have a proper and comprehensive assessment. Kevin Hyland, the independent anti-slavery commissioner, who has been mentioned already this morning, talked about the scale of the problem in the Daily Mail, which I was reading last week—I note the Minister’s surprise, because that is not my habit, but I happened to be catching up with the paper last week. The article stated:

“Up to 13,000 people in Britain are forced to work in factories…sold for sex…or kept in domestic servitude, among other forms of slavery...But in 2014 only 2,340 potential victims were referred to the National Referral Mechanism…And there were only 39 convictions”.

The commissioner made the point that many people have fled from countries where confidence in the rule of law and in the authorities is low, which makes them reluctant to come forward in Britain. He said:

“Victims who come here with a promise of a better life and then become exploited, they’re going to be fearful of going to the authorities through previous experience.”

Such barriers and issues are precisely those that ought to be within the scope of the consideration of the director of labour market enforcement.

The amendment also relates to the remedies secured by victims. Compensation is of enormous importance. Earlier this year I asked the Secretary of State a written question about compensation for victims of trafficking identified by the Gangmasters Licensing Authority. The answer on 17 September was:

“During the financial years 2010/11 to 2012/13, no prosecutions”—

no prosecutions—

“by the Gangmasters’ Licensing Authority resulted in compensation orders for victims.”

I find that shocking. Again, that sort of issue ought to be within the scope of the director of labour market enforcement and within the strategy. Amendment 57—not, indeed, 14—provides that clarity.

On amendment 59, the whole purpose of the director of labour market enforcement is to provide co-ordination, but we need greater clarity. I am interested in the Minister’s response about the relationship between strategic planning, co-ordination and line management. For example, the Gangmasters Licensing Authority is a non-departmental public body and has its own board, which sets its budget and defines its priorities. We want to see an overall strategy, but a number of us would be concerned if the integrity of the GLA as originally constituted was in any way undermined. Amendment 59 will, I hope, draw clarification from the Minister.

Amendment 65 is on the Health and Safety Executive. As the shadow Minister pointed out, we are seeking clarity. Why has the HSE, among others, been excluded from the director’s remit? The Minister will recall from the evidence we received from the chair of the Migration Advisory Committee that there is a real case to include the HSE, local authorities and, potentially, sections of DWP. When we look at the scale of labour market enforcement between different agencies, the Employment Agency Standards Inspectorate has nine inspectors, the GLA has 69, the national minimum wage inspectorate has 232, and the HSE has 1,047 staff, of whom 972 are front-line inspectors. If we are to have a coherent approach to labour market enforcement, it would be useful to have a clearer understanding of the Government’s thinking on why at this stage the HSE is excluded.

I am not sure whether this is an oversight on the Government’s part—again, clarification would be helpful—but amendment 64 is seeking simply to ensure that labour market offences committed against all workers are included, because the current definition of “worker” suggests that it would not include—

Not just amendment 64, which I shall come to, but all these amendments were perhaps summed up best by the hon. Member for Glasgow North East, who said that they are about the enforcement of employment law. Is not that amendment asking employers to specifically break employment law, which currently excludes them from employing anybody who is not legally allowed to work in this country anyway?

No. I thank the hon. Gentleman for his intervention because it allows me the opportunity to clarify that the amendment is seeking to ensure that labour market offences by employers committed against all workers be included within the scope of the director of labour market enforcement’s work. The point is that, as currently drafted—unless the Minister can provide contrary clarification—the measure suggests that undocumented workers will be excluded. Clearly, it is nonsense that a labour market enforcement director who is seeking to challenge all abuse in all parts of the labour market would have excluded from his terms of reference that part of the labour market which, by definition, is most likely to be subject to substantial abuse and exploitation. The Minister might be able to provide clarification that makes the amendment unnecessary.

I thank all hon. Members for their contributions in this mini-debate. Equally, I should celebrate and recognise the contribution from the hon. Member for Paisley and Renfrewshire North. I appreciate that this may be a rare moment in the consideration of the Bill—he is supportive of the measures—but, in good spirits, I welcome his comments and the support he has given. I think that there is a shared recognition that we need to deal with exploitation and to achieve better co-ordination, and that we need the strategic response that is provided by the Bill. I welcome his comments in the spirit in which they were made.

The hon. and learned Member for Holborn and St Pancras asked me at the outset about organised criminal activity and the evidence base. It is feedback from enforcement officers that tells us that the incidence of forced labour may be growing at a faster rate than other types of exploitation. It appears to be due to criminal gangs infiltrating the supply chain, which I know is a broader issue that was debated during the passage of the Modern Slavery Act. I will not stray widely, but perhaps that will give him a sense of what we have been looking at.

Amendments 57 and 58 relate to the contents of the director’s annual strategy to address non-compliance in the labour market in the forthcoming financial year. Although I agree entirely with the intention behind the amendments, they are unnecessary because it is the Government’s expectation that the director will feed information of that nature into the planning and reporting cycle. Page 24 of the consultation document says of the strategy:

“It will set out, for the financial year ahead: the priorities for enforcement; the outcomes required from the enforcement bodies; and the budgets for the enforcement bodies, within the total envelope of available funding.”

So we have been quite clear about our expectations.

The issue of how non-compliance in the labour market should be addressed is at the heart of the strategy, which is why clause 2(2)(b)(i) requires the director to propose how labour market enforcement functions should be exercised, or, to put it another way, how the three enforcement agencies under the director’s remit should operate to address non-compliance.

The Government would not consider the strategy to be effective if it did not identify the threats and obstacles to effective labour market enforcement. We expect the director to turn over stones to tell us where the gaps are and to propose how they can be addressed. That is a crucial and valuable aspect of the role. Similarly, the Government would not consider any strategy or report to be effective if it did not examine the important issue of securing remedies for victims, which would naturally include recovering wages owed to workers and sanctions against employers for labour market offences.

Therefore, will the Minister confirm that, as in amendment 62, non-compliance will be reported on and used as a baseline for forthcoming reports?

As the hon. Lady will note from the consultation document, the strategy is about setting out information and issues concerning the work of different bodies and agencies, including some themes of non-compliance. How that feeds into communication, good practice and sharing information is at the heart of the matter and needs to be reflected in the strategy.

Amendments 56 and 59 bring me to the director’s role in setting the resources of the enforcement bodies. It is the Government’s intention not that the director of labour market enforcement decides the budgets of the three enforcement bodies, but that the director should recommend how resources should be allocated within the total envelope of available funding. Hon. Members will be aware that the Gangmasters Licensing Authority is funded by the Home Office, and the Employment Agencies Standards Inspectorate and HMRC’s national minimum wage enforcement teams are funded by the Department for Business, Innovation and Skills. Funding for those agencies is secured via the usual departmental bidding process. While the Government intend that the relevant Secretaries of State will take the director’s proposals on resources into account during the preparation of those bids, it is right that the Government set the overall level of resources devoted to labour market enforcement in the context of the totality of pressures on public spending. I point out that HMRC has increased its budget for enforcing the national minimum wage; for 2015-16, that has increased by £4 million, meaning that the total budget has increased to £13.2 million.

I do not want to lose the central concern—a concern that gives rise to the amendment and that was in all the evidence, both written and oral evidence given to us last week. The existing agencies have their budgets and their funding. Funding streams will be set by different parts of the Government and different bodies. Although HMRC is an example of where there has been an increase, budgets are being cut. The real concern being expressed across the board is that the resources at the moment for the existing agencies are such that the likelihood of any inspection or action being taken is very low. I am the first to accept that some of the statistics about one visit every 250 years and a prosecution once every million years have to be put into proper context; if it is intelligence-led, that gives a different perspective. I completely understand that, but the point made by independent body after independent body is that the likelihood of inspection and enforcement action is so low that it does not operate as much of a deterrent for most of those who may be involved in abuse of the market. That is a real concern. The Migrant Advisory Committee has been mentioned, but plenty of others charged with overseeing some of these issues are extremely concerned about the resources.

In that context, and understanding that it will not be the director’s role to require resources to be used in a particular way, what assurance can we be given that there will be a shift—a step change—in approach? Without providing the resources necessary to give some assurance to the many people, including Opposition Members, who have raised their voices on this issue, it is difficult to see how the strategy will achieve the desired objective and be the positive step forward that it needs to be. Accepting the constraints and the framework in the Bill, what assurance can be given in response to the powerful evidence about the lack of resources and the limited likelihood of inspection and enforcement action being the real problem, rather than the penalties after the event?

I would point to what Professor Metcalf said during the evidence session about checks taking place every 250 years. He said:

“I am exaggerating when I say once every 250 years for a visit. Of course, they will do it based on risk.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 21, Q40.]

Our reforms are about enabling better targeting of enforcement activity, to make best use of the resources available and, therefore, to best protect vulnerable workers.

I return to my point about the additional support that HMRC is providing in terms of the national minimum wage. Where the director feels that the overall level of resources available has had an impact on delivery of the strategy, he or she will be able to say so in the annual report, which is laid before Parliament. That report can be redacted only for reasons of national security or the safety of any person in the UK, or if an investigation may be prejudiced, so it would be open to the director to make any comments.

It is right that, overall, the director is able to prioritise between the different agencies, while the envelope must reside within Government. We are having to make savings, and that is well recognised across the House. We have to deal with the deficit and a number of other issues, which I will not rehearse in this Committee. This is about being more effective and about using collaboration and co-ordination to step up our response. Amendment 59 is therefore unnecessary, as the director would be unable to restrict or reduce the resources allocated to labour market enforcement functions overall.

Amendments 65 and 66 would extend the director’s remit. The enforcement bodies and pieces of legislation that should be included are those relating to workers who are most at risk of infringement of their labour market rights—workers on low pay, those engaged through agencies or those working in sectors deemed at high risk. They are most likely to be vulnerable to abuse by unscrupulous employers. The amendments would include other areas of state enforcement—namely, health and safety and the protection of child workers. We do not agree that those should be within the director’s remit, and I will explain why.

The Health and Safety Executive, the Health and Safety Executive for Northern Ireland and the health and safety functions of local authorities play an important role in ensuring that risks to health and safety are properly managed in a worker’s place of work. That is a wide responsibility; some of the requirements that those bodies enforce relate to labour market and employment rights, and others to different types of risk, from the storing of chemicals to the training necessary to operate machinery.

We want the director to remain focused on enforcement of the most relevant employment rights. The current way in which the Health and Safety Executive and the Health and Safety Executive for Northern Ireland use their specialist expertise to set their strategy is best placed to protect workers from workplace hazards. However, we are consulting on information-sharing powers for the director. Those will include the ability to share information with other enforcement bodies, including the Health and Safety Executive and local authorities. That will enable all enforcement bodies to take a shared view of risk, and that is the right way to approach the issue.

Similarly, the Children and Young Persons Act 1933 provides protections for those younger than 18 who work. It covers a range of scenarios, from very young children who may act or model, to older children who take a job in the school holidays. While the protections that it affords can be seen as employment rights, they are fundamentally about protecting children and their health, wellbeing and education. That naturally fits with local authorities’ other responsibilities towards children and young people. We do not believe it would be in the child’s best interest to separate this piece of legislation and enforcement and have it within the remit of the director. We think that local authorities are best placed to know the particular risks in their areas. As I have indicated, the sharing of information and intelligence is the most effective way in which the provisions in the Bill can contribute to that important work.

Will the Minister elaborate a little on how he sees that information sharing developing? Given the scale of the HSE inspectorate’s opportunity to identify, for example in the construction industry, wider labour market abuses, that is clearly significant. I am keen to hear how the Minister anticipates HSE inspectors being briefed, trained and supported on those wider potential labour market infringements, in a way that would inform and guide the other three agencies under the jurisdiction of the director of labour market enforcement.

The hon. Gentleman will be aware that information sharing is a specific point in our consultation. There are barriers—legal and otherwise—to sharing data between enforcement bodies. That is why we are consulting on that point, and some suggestions have been highlighted in the consultation document.

We are reflecting carefully on that and have put it out to consultation to consider the most effective and appropriate ways to do so. We want these gateways to information sharing, which we have in other enforcement spheres. I want to reflect on the responses to the consultation on that point to ensure that we act appropriately.

I hope I have set out why we think this role is different in character and nature, in terms of workplace safety and the best interests of the child, and why we do not think it would be appropriate to include the proposal in this part.

Does the Minister believe the consultation will be complete by Third Reading and able to influence the Bill?

We have today announced an extension to the consultation period. It was originally due to close at the beginning of November, and it has been extended by about four weeks—I can come back to confirm that. I want to ensure that we get the provisions right on some of these detailed points. The consultation may inform later parts of the Bill. Our judgment is that we should ensure that the consultation is framed to get the right responses from those actively engaged at the front end. That is why we have announced a time extension, which I believe will be welcomed by the different sectors.

There were comments about redefining the term “worker”. The clause and the proposed amendment do not redefine “worker” for the purposes of the Employment Agencies Act 1973, the National Minimum Wage Act 1998 or the Gangmasters (Licensing) Act 2004. The coverage of those respective Acts continues to apply. That means that the Employment Agency Standards Inspectorate and the GLA will still tackle non-compliance by employment agencies, businesses and gangmasters, regardless of whether the affected workers have the right to be or to work in the UK.

We see the director as being focused on improving the way we enforce labour market and employment law rules. The Bill is not about extending labour protections to illegal workers, and we think that the director’s focus should be on making sure that workers who are properly here are better protected.

However, we are committed to tackling serious crimes against individuals, whatever their status. We have set out in the modern slavery strategy and the Modern Slavery Act 2015 enhanced powers and an improved approach to tackling slavery and human trafficking, whether victims are trafficked for sexual exploitation, exploitation involving criminal activity or indeed labour exploitation.

That is why we have implemented life sentences for modern slavery offences, new preventive orders to stop harm before it takes place and improved protections for victims such as a statutory defence. We see an important but specific role for the director in supporting this crucial work. The director’s remit includes modern slavery offences where they are committed against a worker or person seeking work, or where a person is subject to slavery, servitude or forced or compulsory labour. We are also consulting on additional powers for the Gangmasters Licensing Authority to include tackling such offences in their proposed enhanced enforcement role. I draw Members’ attention to that.

We think the balance is right. The director’s role is focused on workers who are here legally, although he can include in his plans action against forced labour as well. Trafficking people from around the world to work in brothels in the UK is an absolutely unacceptable crime, but we judge it is right for the director of labour market enforcement to tackle those aspects that are within the remit outlined in the Bill.

I wish to understand what the Minister has just said, because it is a concern in relation to the amendment. Is the Minister saying that an amendment along the lines of amendment 64 is simply unnecessary because the individuals will be fully included within the protection, or that, contrariwise, they are not fully included, but that hopefully the strategy will include action that would protect all workers in the broader sense? To be specific, is it that amendment 64 is simply not required and is a misunderstanding of the definition or limitation, or is there a broader point? It is quite important.

I think it is the latter of the two points that the hon. and learned Gentleman has articulated. We think it is covered by other means, but, for the purposes of defining the specific role, it is about lawful entitlement to be within the UK. For the reasons that I have outlined, there are other mechanisms and ways in which the issue is being addressed. It is about labour market enforcement and the lawful upholding of existing legislation. The amendment appears to take us in a direction that would apply new rights to those who are here illegally, whereas there are other mechanisms through the linkages, through the rights that the Gangmasters Licensing Authority will have, and through the consultation. It is about the extension of those aspects through other means. That is why I made the point about the specific role for the director in supporting this crucial work through a different mechanism, through the work that the Gangmasters Licensing Authority will take forward. The role concerns the lawful upholding of existing labour rights, rather than the extension of those rights, which the amendment appears to suggest. That is why we have not found the amendment attractive.

The director’s role that we have proposed supports our wider strategy on modern slavery, enhancing the response to labour exploitation. Crucially, it should not confuse or undermine the responsibility of the National Crime Agency and the national policing lead to lead the operational law enforcement response to modern slavery, overseen by the independent anti-slavery commissioner. Where an illegal worker is a victim of modern slavery, appropriate support mechanisms are available to them via the national referral mechanism. Their status as a victim will be reflected in how they are subsequently treated by the immigration system, including the relevant reflection periods during which the person will be granted leave to remain. There are also crucial protections within the criminal justice system, which we will come to later.

Amendment 62 seeks to specify the content of the director’s annual report in the same way as amendments 57 and 58 did for the director’s strategy. I do not propose to repeat the same arguments that I made in respect of the earlier amendments, but I want to be clear that this amendment is unnecessary.

Clause 4 as drafted states that the annual report must include:

“an assessment of the extent to which labour market enforcement functions were exercised in accordance with the strategy”.

As we expect the director’s strategy to propose how the enforcement bodies should tackle non-compliance, seek remedies for victims and overcome obstacles to compliance, it follows that the director’s annual report will set out how successful the enforcement bodies were at doing exactly these things.

I am still puzzled by the Minister’s comments on amendment 64 and how the director of labour market enforcement would be able to consider all workers irrespective of their immigration status. If I understood him correctly, undocumented victims of trafficking would not be covered by the work of the director. If that was the case, would that not hinder his or her work?

No. It is complementary to the work of the National Crime Agency and the independent commissioner, so the Bill provides clarity in that regard.

The Chair adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Two o’clock.

Immigration Bill (Sixth sitting)

The Committee consisted of the following Members:

Chairs: † Mr Peter Bone, Albert Owen

† Blomfield, Paul (Sheffield Central) (Lab)

† Brokenshire, James (Minister for Immigration)

† Buckland, Robert (Solicitor General)

† Champion, Sarah (Rotherham) (Lab)

† Davies, Byron (Gower) (Con)

† Davies, Mims (Eastleigh) (Con)

† Elphicke, Charlie (Lord Commissioner of Her Majesty's Treasury)

† Harris, Rebecca (Castle Point) (Con)

† Hayman, Sue (Workington) (Lab)

† Hoare, Simon (North Dorset) (Con)

† Hollern, Kate (Blackburn) (Lab)

† Lewell-Buck, Mrs Emma (South Shields) (Lab)

† McLaughlin, Anne (Glasgow North East) (SNP)

† Newlands, Gavin (Paisley and Renfrewshire North) (SNP)

† Smith, Chloe (Norwich North) (Con)

† Starmer, Keir (Holborn and St Pancras) (Lab)

† Tolhurst, Kelly (Rochester and Strood) (Con)

† Whittaker, Craig (Calder Valley) (Con)

Marek Kubala, Joanna Welham, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 27 October 2015

(Afternoon)

[Mr Peter Bone in the Chair]

Immigration Bill

Clause 2

Labour market enforcement strategy

Amendment proposed (this day): 57, in clause 2, page 2, line 9, at end insert—

‘(ia) the threats and obstacles to effective labour market enforcement,

(ib) the remedies secured by victims of non-compliance in the labour market,’—(Keir Starmer.)

To ensure that the labour market enforcement strategy sets out an assessment of the threats and obstacles to effective labour market enforcements and the remedies secured by victims of labour rights infringements and labour market offences.

Question again proposed, That the amendment be made.

I remind the Committee that with this we are discussing the following:

Amendment 58, in clause 2, page 2, line 12, leave out paragraph (b) and insert—

‘(b) contains a proposal for the year to which the strategy relates setting out—

(i) how the non-compliance outlined in the assessment required by subsection (2)(a) (i) and (ii) is to be addressed,

(ii) how the threats and obstacles identified under subsection (2)(ia) are to be overcome, and

(iii) how the provision of remedies for victims of non-compliance in the labour market identified under subsection 2(a)(ib) is to be improved.’

To ensure that the functions of the Director of Labour Market Enforcement are exercised for the purpose of enforcing all existing labour market standards, rather than prioritising a limited number of areas, and to link the Director’s strategy with his or her assessment of non-compliance with labour market standards.

Amendment 56, in clause 2, page 2, line 24, leave out subsection (3) and insert—

‘(3) The proposal mentioned in subsection (2)(b) must set out the resources required to—

(a) address the non-compliance in the labour market,

(b) overcome the threats and obstacles identified under subsection 2(b)(ia),

(c) improve the provision of remedies for victims of non-compliance in the labour market.’

To oblige the Director of Labour Market Enforcement to provide an assessment of the resources required for effective labour market enforcement and remedies for victims, rather than simply to determine how currently available resources should be allocated.

Amendment 59, in clause 2, page 2, line 26, at end insert—

‘(3A) Nothing in the strategy shall—

(a) restrict, or

(b) reduce the resources allocated to

the labour market enforcement functions as defined in Section 3(2) of this Act.’

To clarify the relationship between the Director of Labour Market Enforcement and the UK’s existing labour inspection agencies, ensuring the current role, remit and resources of labour inspectorates are safeguarded.

Amendment 65, in clause 3, page 3, line 6, at end insert—

‘(da) ny function of the Health and Safety Executive and the Health and Safety Executive for Northern Ireland;

(db) any function of local authorities in relation to the “relevant statutory provisions” as defined in Part 1 of the Health and Safety at Work etc. Act 1973;

(dc) any function of local authorities under the Children and Young Persons Act 1933 and by-laws made under that Act, the Management of Health and Safety at Work Regulations 1999, and the Children (Protection at Work) (Scotland) Regulations 2006.’

To include the remit of the Director of Labour Market Enforcement to cover functions relating to health and safety at work and child labour, functions carried out for the most part by local authorities.

Amendment 66, in clause 3, page 3, line 12, at end insert—

‘(ca) Part 1 and The Health and Safety at Work etc. Act 1973;

(cb) Sections 3 and 4 and Part 2 of the Children and Young Persons Act 1933.’

This a consequential amendment to amendment 65.

Amendment 63, in clause 3, page 3, line 31, before “in this section”, insert “Subject to subsection 6A,”

Amendment 64, in clause 3, page 3, line 33, at end insert—

‘(6A) A person is not prevented from being a worker, or a person seeking work, for the purposes of this section by reason of the fact that he has no right to be, or to work, in the United Kingdom.’

To ensure that labour market offences committed against all workers are included within the scope of the Director of Labour Market Enforcement’s work, irrespective of immigration status (as under subsection 2 of section 26 of the Gangmasters (Licensing) Act 2004).

Amendment 62, in clause 4, page 3, line 42, leave out paragraph (a) and insert—

‘(a) An assessment of the extent to which the strategy developed under section 2 of this Act has—

(i) addressed the non-compliance identified under Section 2 (2)(a)(i),

(ii) improved the provision of remedies for victims of non-compliance in the labour market identified under 2 (2)(a)(ia), and

(iii) overcome the threats and obstacles identified under 2 (2)(a)(ib)”.’

To ensure the Director of Labour Market Enforcement’s Annual Report links with his or her assessments about non-compliance in the labour market (and assessment of the remedies secured by victims and threats and obstacles to effective enforcement).

When we broke for our short adjournment, we were touching on the use of a particular term: we were looking slightly ahead to the use of the term “worker” in clauses 3 and 9. I want to ensure clarity about where that term is used because that may be informative to the Committee and perhaps help to narrow the debate and argument.

I assure hon. Members that the definition of worker in clause 3(6) applies only in one context, which is in respect of clause 3(4)(e)(i), which relates to sections 2 and 4 of the Modern Slavery Act 2015. The definition of worker in all other Acts in the director’s remit is unaffected. The hon. and learned Member for Holborn and St Pancras may find that and the context in which the definition applies helpful.

The definition of worker in the Employment Agencies Act 1973 is unaffected. The Employment Agency Standards Inspectorate will continue to take action against rogue employment agencies and businesses regardless of whether the worker is here legally or illegally. Similarly, the definition of worker in the Gangmasters (Licensing) Act 2004 is unaffected. The Gangmasters Licensing Authority will continue to take action against rogue gangmasters regardless of whether the worker is here legally or illegally. That matches the concerns raised in contributions this morning.

Furthermore, the definition in the National Minimum Wage Act 1998 is also unaffected. That will continue to apply only to legal workers—that is how it is framed. The provisions are about not extending rights to illegal workers, but bringing strategic oversight together under one person. We do not think it is appropriate to give illegal workers the right to the national minimum wage. Of course, the employer who employs an illegal worker and pays them less than the national minimum wage will still be committing an offence under section 21 of the Immigration, Asylum and Nationality Act 2006, which comes with a higher penalty. The Bill also includes measures to enable us to take a tougher enforcement approach to employers of illegal workers, including increased prison sentences if they employ people whom they know or reasonably suspect are illegal workers.

The definition of worker in clause 3(6) has no effect on section 1 of the Modern Slavery Act 2015. All offences of slavery, servitude and forced or compulsory labour will be within the director of labour market enforcement’s remit, because it would be illogical to exclude those forced to work from the director’s purview. Indeed, all offences of trafficking under sections 2 and 4 of the Modern Slavery Act that involve slavery, servitude and forced or compulsory labour will also be within the director’s remit.

The definition in clause 3(6) also has no effect on the trafficking offences criminalised by sections 2 and 4 of the Modern Slavery Act. The only effect the definition has is on which type of trafficking offences are in the director’s remit. Offences involving sexual exploitation, removal of organs, securing services by force and securing services from children and vulnerable persons will be in the director’s remit only if they relate to workers or work seekers provided for in the definition—legal workers. It will still be an offence to traffic an illegal worker for any of those purposes, but we do not think it appropriate for that to be in the director’s remit. Instead, such offences will be dealt with by the police and the National Crime Agency. All modern slavery offences will be in the Independent Anti-slavery Commissioner’s remit.

As I explained before, the definition is not about granting new rights or curtailing offences. It is simply about creating the right remit for the director of labour market enforcement, which I believe the clause does. We are clear that the remit provides the director with the ability to tackle the broad spectrum of labour exploitation, from non-compliance to the most serious harm against workers.

I recall the comment I made earlier about the relationship between the commissioner and director, where the commissioner will effectively have that oversight role. Therefore, we believe that that will lock things together in a clear fashion.

I appreciate that this has drawn us into something more technical than contemplated at first sight by the amendment. I hope, for the sake of clarity, I have spelled out the context in which the definition is used.

I am grateful to the Minister for giving way and for the statement he has just shared with us. I am not absorbing its detail as quickly as I would wish; perhaps we can find a way to reflect on it before we reach a final view.

Notwithstanding the points the Minister has made, the concern remains that we are in danger of including only offences committed against workers as defined in the Employment Rights Act 1996, that is, those with a valid contract of employment, so by definition, regular migration status. Although we are trying to achieve the same objective here, the provision might risk leaving the director powerless to investigate trafficking in the very sector of the labour market—illegal working—that the Bill is designed to target.

As the Minister indicated, this is about not conferring new rights on workers, whether in relation to the national minimum wage or whatever, but ensuring that the director can cover all the listed offences, no matter against whom they are committed. As it stands, the clause is potentially in violation of article 3 of the European convention on action against trafficking in human beings, which guarantees the provisions of that convention, irrespective of national origin.

I take it that the purpose of clause 3(4)(e)(i) is to narrow the remit of the director so that he or she covers human trafficking offences only for labour exploitation, as opposed to sexual exploitation or organ harvesting. In that case, subject to reaching agreement on the position in our amendment, the Minister would have our support. The way the clause is currently drafted seems to exclude human trafficking of illegal workers from the remit. Further confusion is created by including human trafficking offences committed against “a person seeking work” in the director’s remit. We just need a bit of time for reflection on that, if the Minister would agree.

Before the Minister answers, these are detailed and complex matters, which is why I am allowing the interventions to be relatively lengthy. I would not normally stand for an intervention that long, but I will because it is on a technicality. Do not think, ladies and gentlemen, that you will get away with it later.

I am grateful to you, Mr Bone. It is important on these points of detail where issues have been raised that we try to give clarity in Committee. I entirely understand your ruling; as always, the Chair is entirely sensible.

In response to the hon. Gentleman, when he reads the record of what I said—as I know he will as he is assiduous and focused on getting things right—I hope he will see in the explanation the distinction we are drawing between labour market and what is straying beyond labour market issues, and why we have drawn the provision that way.

I apologise for straying slightly, but clause 3(6) links to the amendment and it is appropriate to comment on the point now. This definition of “worker” is used only once in the context of clause 3(4). I will reflect on the drafting of that, since we are clear on the intent and how it works through. The intention is not to imply or impute any limiting of that definition into the other provisions listed in clause 3(4). That is not the intent and hence my comments. Without any commitment, I will certainly look at the wording of that to satisfy myself that it does not give any wrong impression. As I have said, that is not the intention.

Thank you, Mr Bone, for your indulgence on this. I want to make sure that we have got the point right, because it may be that the area of dispute is considerably reduced. I am grateful to the Minister and the team that has been behind him over the last hour and a half for this clarification, which really helps. As I understand it, the definition of “worker” in clause 3(6) is limited for the purposes of this measure alone and therefore does not affect anything beyond it.

That removes one concern, so I am grateful for that clarification.

As far as clause 3(4)(e) is concerned, what is being said is that the offence itself is unaffected by any definition; it only goes to the remit of the director. Again, that removes a concern. Therefore, the only remaining concern is that the director has a remit only over certain types of worker for the offences in clause 3(4)(e), as I understand it. The Minister put forward a reason for that—just to make sure I have understood that. I am not sure how it works in a Committee such as this, but I wonder whether it is possible to have that in some written form over and above what the Minister has said already, which I know will be on the record. It is critical to the international obligations and how other people will look at this and understand it. I am grateful for the clarification.

I am grateful for the way in which the hon. and learned Gentleman has raised the matter. If it helps the Committee, I will be happy to write to him to set out what I have said and give that clarity in context. I get the sense that the issue on these provisions is perhaps narrower than it may have appeared at first sight. It relates to the way the provision operates within the Modern Slavery Act itself and the way in which the term “worker” is used within that. It is perhaps not even as complete as he was suggesting in that context. Given this is quite a narrow, technical, but important point, I think it will probably be helpful if I write to him to set that out in further detail. It would be open to him to reflect on that as we look towards Report.

Could you write to the Committee, too, and we will circulate it? Then every Member will have it.

Of course. It is important that all Committee members see that, so I am happy to undertake to do that.

Various comments were made about the Gangmasters Licensing Authority and prosecutions and investigations. Over time, the GLA has undertaken a number of more complex investigations that focused more effectively on serious and organised crime. I think that reflects a targeting and risk-based enforcement approach by the GLA. Only one GLA-initiated prosecution has ever failed to return a conviction. This year alone, the GLA has undertaken 92 investigations—already more than the 72 undertaken in 2014 and its highest since 2011. During that time, the GLA also secured four prosecutions of unlicensed gangmasters, with the same number last year. That demonstrates that the GLA continues to be capable of targeting rogue gangmasters effectively. That is why we see it as an important component of the director’s new remit to tackle labour exploitation. We are reflecting further in relation to the GLA as part of the consultation, albeit that that strays wider than the group of amendments we are debating today.

On the labour market consultation, I mentioned this morning that we have announced today that the consultation has been extended. It now closes on 7 December, rather than 9 November. As I said, I hope that that will give further opportunity for interested parties to feed in and ensure that this is understood and well-reflected.

The hon. Member for Sheffield Central talked about recovering compensation. The GLA does seek recompense for workers when it finds breaches of licensing conditions as part of its negotiations around putting breaches right and the retention of a licence. I have seen figures in the order of £3.5 million that have been provided in recompense through that route.

I reassure the hon. and learned Member for Holborn and St Pancras that the issue of compensation is not ignored. He makes a point around compensation orders, but we hope that, through the new strategy and approaches, compensation will remain a focus of operational activity. I ask him to withdraw the amendment.

I am grateful to the Minister for his clarification, not only on the technical point we have just discussed, but more generally on the health and safety and other agencies that are not included in the Bill. I now understand that that is because of the particular function and focus of their activity and, in relation to children, because of the localised knowledge of some authorities that would not otherwise be more generally available.

I am going to withdraw the amendment, so I shall be brief. However, it would be helpful if there could be greater clarity about the sharing of intelligence. Although they are separate functions, there will be a huge overlap between what the health and safety and other agencies are doing, and what the director is trying to pull together in the strategy. The Minister says that there will be a sharing of intelligence, so it would be helpful if we had more clarity about exactly how that will work. I say no more about the strategy in relation to obstacles and resources, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 60, in clause 2, page 2, line 26, at end insert—

‘(3A) The Director must engage with civil society in the development of his or her labour market enforcement strategy.”

To expressly require engagement between civil society and the Director of Labour Market Enforcement in the development of the labour market enforcement strategy.

The amendment would require the director of labour market enforcement to engage with civil society in the development of the labour market enforcement strategy. Page 26 of the Government’s consultation document “Tackling Exploitation in the Labour Market” states that a director:

“will engage with a wide range of stakeholders to gather insights and perspectives on real world practices, improve detection of exploitation and understand external views of the effectiveness of the enforcement landscape. Stakeholders will include Government departments, the IASC, the police, local authorities and other public bodies; organisations representing employers and employees across the economy and in particular sectors of interest; and a range of third sector bodies that engage with vulnerable/exploited groups.”

The amendment would make that explicit in the Bill.

It is important that the voice of organisations working with victims of labour exploitation, trade unions and others are invited to feed their expertise into the director’s work, especially at the strategy stage. The absence of any formal engagement strategy will mean that the director may fail to gain the breadth of front-line experience and expertise required to prepare an evidence-based strategy. This is linked to the resource point that was made earlier. With extremely limited resources, it will be very hard for the director to gather the range of information required to complete a comprehensive labour market assessment, so strong engagement mechanisms will be required to ensure that all expertise is integrated into the strategy. The amendment would strengthen the strategy and formalise the involvement of others who have expertise and experience, as is recognised in the consultation document, and ensure that the strategy is as strong as it needs to be, if the approach is to be the step change that we hope it will be.

The hon. and learned Gentleman has tabled an extremely interesting amendment. Has he given more thought as to how “civil society” ought to be defined? If he is going to put that phrase into primary legislation, it should be well defined. Of course, he would expect there to be consequences if the director does not do what the Bill says the director must do. Could the hon. and learned Gentleman better define civil society and explain how he would enforce such a thing?

I am grateful to the hon. Lady for that intervention. In a sense, the intent is to formalise what was envisaged in the consultation document, which contained a fairly lengthy list—I read it out a moment ago—of stakeholders, including organisations representing employers and employees, and third sector bodies that engage with vulnerable and exploited groups. It might be helpful to go a bit further than that, but the intention was to formalise what was rightly set out in the consultation document—the bodies with which the director should engage—using the words “civil society”. That is what lies behind the amendment.

As the hon. and learned Gentleman highlighted, the amendment would require the director of labour market enforcement to engage with civil society in developing the enforcement strategy provided for by the clause. I sympathise with the intention behind the amendment, but it is not necessary or, for the reasons highlighted by my hon. Friend the Member for Norwich North, workable in its current form.

The hon. and learned Gentleman rightly highlighted the consultation that we are undertaking, and he read out the relevant part, about our expectations regarding stakeholder engagement. It is right that the director should speak to a range of people—the widest range of sources—to identify the scale and nature of non-compliance in the labour market. That will include securing information from the information hub we will consider when we reach clause 6, but it will rightly also include engaging non-governmental organisations, bodies representing employers and workers, and other organisations to develop the fullest picture.

The consultation published on 13 October contains more information on how we envisage the relationship working. We will flesh that out further in the light of the views received in response to the consultation. I want to see what the responses look like before we reflect on whether anything further needs to be undertaken.

The director will play a leading role publicly in bringing greater co-ordination and coherence to the enforcement of labour market legislation. The strategy they produce will be public, so I have no difficulty in principle with their consulting civil society in developing it, however that may be framed or defined.

Sometimes, when we go into legislation, we can close things off, rather than opening them up. We need to define things in a very legalistic way, and the issue is how we can properly give effect to the desires in the consultation document. I do not want to risk creating unnecessary scope for legal challenges to be brought against the director or, bearing in mind the legalistic approach we have to take, closing things down.

I do have sympathy with what the hon. and learned Gentleman said, and I will obviously review the responses to the consultation. With that reassurance about how we are approaching the issue, however, I hope he will be minded to withdraw the amendment.

I am grateful to the Minister for that reassurance, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

I intend to speak only briefly because we have had quite a wide-ranging discussion of the priorities for enforcement and the outcomes required from the enforcement bodies, which the director will be looking for in the strategy, as well as a number of other themes relating to the nature of the director’s operations, which we touched on in the group of amendments before last. Crucially, the strategy will be evidence-based. It will contain the director’s assessments of non-compliance in the previous year—points were raised about that in previous debates—and predictions for the next two years, based on information drawn from a range of sources, including the three enforcement bodies, other Government bodies and civil society organisations. That will allow the plan for the coming year to be based on where non-compliance is most likely to occur and to cause harm. It will be subject to more public involvement, and the strategy will be published in the way I have outlined. I trust that the Committee will support the clause.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3

Non-compliance in the labour market etc: interpretation

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

We have had a detailed debate on one aspect of the clause, which I will not go back over.

The clause defines certain aspects of the operation of the director, highlighting the three enforcement bodies that fall within their remit. We want that remit—what they consider in their assessment of non-compliance and their strategy for addressing it—to include the work of the three bodies on non-compliance and the offences they enforce, and to capture the most serious end of the exploitation spectrum. We also want the director to inform his or her strategy by consideration of the rate of instances of slavery, servitude, and forced or compulsory labour as defined by the Modern Slavery Act 2015.

We see the director’s role as focused on labour market offences and therefore distinct from the role of the Independent Anti-slavery Commissioner, upon which we have touched in preceding debates. We have therefore limited the remit to where offences relate to work. As I have said, I will write to the Committee on that particular point.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4

Annual and other reports

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

The clause requires the director to produce an annual report at the end of the year. That complements the director’s strategy by requiring them to set out their assessment of how labour market enforcement functions have been carried out during the year and the impact of that activity. It provides accountability for the director and an independent assessment of the enforcement body’s work.

The clause also allows the director to make reports throughout the year if needed. That is an important point. Ministers may wish to ask the director to report on the causes of a new, evolving challenge in fighting labour market exploitation—for example, if the rate of phoenix companies perpetrating exploitation were to grow—or to consider an issue in greater depth than the annual strategy permits, such as the effectiveness of penalties as a deterrent to employers. The reports will add to our understanding of how to tackle exploitation and, ultimately, will make us better equipped to stop it.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Publication of strategy and reports

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

The clause requires the Secretary of State to lay before Parliament any strategy or report produced by the director, to provide transparency and accountability for the director’s role and to inform Members of the House. As I have indicated, we want the director to be a visible leading figure. Laying their reports before Parliament in a very public way will inform debate. It will also allow for greater scrutiny and accountability for Ministers on the performance of the three agencies, and on how the director’s function is working and operating, and why it is framed as it is.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Clause 6

Information hub

I beg to move amendment 61, in clause 6, page 4, line 31, after “market” insert

“to facilitate the labour market enforcement functions as defined in Section 3 of this Act”.

To prompt debate about the information hub proposed in Clause 6 of the Bill.

We have tabled the amendment to prompt a debate exploring how the information hub will work. We welcome the co-ordination and joined-up thinking that the hub will bring about, we hope, for the director of labour market enforcement, as that will lead to better enforcement. We raise the question against the backdrop of concern expressed earlier about the overlap between immigration enforcement and labour market standards enforcement, which brings the information hub into sharp focus. Page 23 of the consultation document states that the information hub

“will gather available data from the labour market enforcement bodies and other sources, such as Immigration Enforcement, the police, NCA, HSE, local authorities and the voluntary sector”,

which is a wide range of information.

Will the Minister allay concerns about the overlap between immigration enforcement and labour market standards enforcement? More specifically, will he indicate whether there will be extra funding for the information hub? If there is not to be, and if funding is coming out of the director’s budget, what is the necessary level of resourcing to make the information hub effective?

As the hon. and learned Gentleman has highlighted, the amendment seeks to clarify the role of the proposed information hub. In our ongoing consultation on tackling labour market exploitation, we set out the intention behind our proposal for an information hub, which is to

“inform and support delivery of the Director’s strategic plan”.

The hon. and learned Gentleman highlighted the relevant section in paragraph 71 of the consultation document. We will continue to reflect on that as we receive submissions in response to the consultation.

I stress that there is already close co-operation between the different labour market enforcement bodies, often in tackling abuses. However, that is sometimes impeded by barriers to sharing data and because the bodies cannot share data. The clause therefore gives the new director the responsibility to lead an information hub, which will form a coherent view of the nature and extent of exploitation and of non-compliance in the labour market.

The director will use the hub to formulate the strategy. The information hub will gather available data from the labour market enforcement bodies and other sources, such as immigration enforcement, the police, the National Crime Agency, the Health and Safety Executive, local authorities and the voluntary sector. The hub will analyse information and develop a much richer picture of the nature, extent and impacts of exploitation in the labour market. It will identify where workers are at risk of abuse and use that information to formulate the enforcement strategy. It will also provide tactical intelligence to the enforcement bodies for use in targeting their enforcement activity. The hub is intended to help strategically and tactically. It will be able to assist in the tasking of operations and to see and understand what practice might inform strategy. It will assist in the promulgation of good practice and in employers fulfilling their duties and responsibilities.

The hon. and learned Gentleman highlighted resourcing. Resources will be provided by the Secretary of State and may include officers from the enforcement agencies, their parent Departments and the wider law enforcement community, so there is that sense of people, as well as of how data are provided and linked. We are giving further consideration to how things would work practically and who would be involved, but in fairness we also want to allow the consultation to inform further development. I am highlighting the nature of what we envisage that the hub will provide—a centre for the sharing of intelligence and data to inform the director and to inform, potentially, the tactical response.

I reassure you, Mr Bone, that this is a brief intervention. I thank you for your indulgence earlier; I thought that that was an important point that needed to be resolved.

On the question of funding, the Minister spoke earlier about the integrity of the budgets of the three separate agencies over which the director of labour market enforcement will have strategic overview. He pointed out that the agencies sit within individual Departments. He is obviously right—we agree—that data sharing and better use of data are critical to the effective development of the role, but that will presumably require, apart from people pooling, some additional resource. Is he saying that that resource will not be drawn from any of the three existing budgets and will, therefore, be found by the Secretary of State as an additional support?

Matters of resourcing, and indeed the support that the director will require, are under careful consideration by Ministers. They are working on the recruitment of that individual and how that office will operate and be resourced. I would certainly wish to reflect further on the consultation, given its focus on the role and after hearing views in the debate on this Bill. We have not made final decisions about budgets or staffing—those decisions will be taken once there is agreement on the role and following the spending review. Clearly, the operation hub as part of that activity will be part of the overall examination of what is appropriate.

It is right that the consultation seeks views on the need for powers to share data and intelligence across the enforcement bodies and with other organisations. We are consulting a range of partners within and outside Government to understand what information they hold that might be of use to the director in designing the strategy to tackle performance and non-compliance and building the hub itself. We want to reflect further on how the hub is established, given what I have said about resourcing, the nature of the people who might need to be part of it, who would add the most value, and connections with different agencies. We have set the framework for this and I think that I have clearly set out the intent and what we wish to achieve. In implementation, we will certainly reflect on the further submissions received and the comments that have been made.

This really is not meant to be a difficult question. The Minister is putting a lot of weight on the consultation, as we are. Is there not the facility to pause proceedings on the Bill so that the findings of the consultation can actually affect the Bill and we achieve the best legislation, which is what we all want?

No, the provisions of clause 6 state that the director must gather, store, process, analyse and disseminate information relating to non-compliance in the labour market. It is important that we provide this statutory mechanism. Equally, in terms of further development and implementation, it is not appropriate for us to legislate while constantly taking into account further submissions. I do not think that that cuts across the need for clause 6 or the manner in which the labour market enforcement director would conduct his duties. I do not see them in any respect as being at odds. I hope that in the light of those points the hon. and learned Gentleman will be minded to withdraw his amendment.

I am grateful to the Minister. As I said, the aim of the amendment was to enable us to understand better how the hub would work and be resourced. On that basis, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 ordered to stand part of the Bill.

Clause 7

Restriction on exercising functions in relation to individual cases

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

Clause 7 prevents the director getting involved in individual cases. This is to allow the enforcement bodies to preserve their operational independence, a theme that was also highlighted in earlier contributions on the Bill. It is not appropriate for the director to have the power to influence decisions about the enforcement action to be taken against individual businesses. However, the clause allows the director to consider individual cases where these provide useful information in relation to general issues and to inform the director’s strategy or other work. Sometimes the individual parable, or the experiences of an individual can be important to understanding the reality of the abuses that take place. It is in that context that the clause has been introduced; we do not seek to encroach on the operational independence of other agencies in pursuing cases against particular employers or in particular circumstances.

I have, as it were, a genuine question; perhaps assurance on this will do the trick. At the moment, clause 7(1) would prevent the director making a recommendation after completion of a case, whatever legal proceedings were contemplated. Therefore, it may be over-narrow. In other words, the director may see a completed individual case and want to make a recommendation about whether it was good, bad or indifferent.

I can see the point in a provision that prevents interference in ongoing proceedings or the carrying out of functions by other bodies. A simple assurance or explanation may help, but at the moment the clause may be read as preventing a recommendation after the event about a particularly good way of doing something or a problem that needed to be avoided in future.

It will be open to the director, in looking at individual cases, to make broader recommendations on strategy or the manner in which agencies conduct their duties. We have to be careful, which is why we have structured the director role in this way, that there is operational independence for each of the agencies to pursue a case using their expertise and their chosen manner.

The position is more strategic. The director should not be drawn into how an agency should or should not have acted in a specific case. It is still open to the director to look at individual circumstances and cases, hence my earlier comment, and to make recommendations for the future. I do not think that that strays in relation to the language that we have here, into making a recommendation in an individual case; that would be to second guess the operational thinking of the different agencies. That is the intent behind the drafting, and I hope that is helpful.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Clause 8

Offence of illegal working

I beg to move amendment 68, in clause 8, page 5, line 6, after “if”, insert “without reasonable excuse”

To provide for a defence against the offence of illegal working.

We have reached an area in the Bill on which there is greater disagreement. We welcome the provisions that bear down on employers who exploit employees. That is in keeping with our welcoming of the director of labour market enforcement. However, we have considerable difficulty with the notion of creating an offence that can be committed by employees, which is strict and without any defences.

I begin by drawing the Committee’s attention to the baseline evidence from the Migration Advisory Committee 2014 report, which makes a number of comments pertinent to clause 8. It says:

“The combination of non-compliance and insufficient enforcement can lead to instances of severe exploitation, particularly of vulnerable groups such as migrants.”

That same 2014 report records the Committee’s research on labour market exploitation of migrant workers in particular:

“We were struck on our visits around the country by the amount of concern that was expressed by virtually everyone we spoke to about the exploitation of migrants in low-skilled jobs…The TUC told us that migrants, particularly from lower income EU accession countries, are often likely to take up low-skilled work, partly due to the nature of the labour market but also due to the labour market profile of such migrants.”

A little later the report says:

“During our visits to places which had experienced relatively high levels of migrants the point that migrant workers are more likely to be exploited than resident workers as they are not aware of their rights and are afraid they may be sacked/evicted/deported if they complain was raised on a number of occasions.”

The Committee cites its meeting with the Equality and Human Rights Commission, which

“expressed the view that migrant workers, and especially agency workers, were more likely than resident workers to put up with poor working conditions and bad treatment by employers because they were not aware of their rights, they do not know who to complain to and are scared that if they do complain they could lose their job. The EHRC said it is often better for a migrant to be in the UK with a job, albeit a low-paid one, than in their home country without a job.”

The background is a general recognition that migrants and vulnerable employees are extremely vulnerable under all current conditions and often feel that they simply cannot come forward, even under current circumstances, to explain to anyone what is happening to them for fear, as that committee set out, of being sacked or deported. Here, for the first time in the Bill, the offence of illegal working applies to employees rather than employers. The great fear is that that will simply mean that those who are the most exploited and vulnerable will become more exploited and vulnerable as they are pushed further and further away from any legal protection.

The offence is one, pretty much, of strict liability, in the sense that it is triggered by not having the right immigration status. There is no mental element in any way; nor is any defence set out in clause 8. Amendment 68 would resolve that issue by inserting a defence of “reasonable excuse”. Obviously, that is a fall-back position; the in-principle position is that there should not be an offence for employees. It makes them more exploited and vulnerable, and less likely to come forward. As a general proposition, outside of the immigration context, it has been the thinking for some time that to criminalise those who are employees or victims is usually a mistake if we want effective enforcement action. The further they are pushed away from law enforcement, the less likely we are to get to the truth. They will not come forward to protect themselves.

To understand the hon. and learned Gentleman’s logic and thinking, is he arguing that some offences that already exist for people who have entered the country illegally should be done away with? If I follow his line of argument, he is saying that any criminal offence is problematic and should not be there.

I am grateful to the Minister for that intervention. No, I am not going that far. Those offences are on the statute book. They are much wider than offences in the working environment. I am starting from the proposition that this group of people has been recognised as the most vulnerable and exploited in the workplace, and the least likely to be able to come forward and explain what has happened to them.

The Minister raises a different point, which is that it is often thought—I certainly think this—that new criminal offences should not be introduced in legislation unless there is a clear need for them and there is a gap in the current enforcement mechanisms that the new offence is intended to fill. For many years, there was criticism of Governments for simply introducing criminal offences as a response to a non-problem when there was no evidence of the need for the offence. This is an example of that. As we heard in evidence last week, the problem is the low likelihood of intervention, inspection or any enforcement action. There is no evidence that this offence, for employees, is needed. There are existing offences with which they can be charged. In those circumstances, the clause fails the fundamental non-immigration test that we should not be legislating to introduce offences when there is no evidence that the offence is needed because there has never been any evidence of a case where action could not be taken because the offence did not exist.

Following what the hon. and learned Gentleman is saying about offences, it seems that his principal point is about those who are vulnerable coming forward. That takes us into broader issues on the national referral mechanism and some of the steps we have taken through the Modern Slavery Act to shine a light. Our focus needs to be on those broader issues—if I have followed the line of his argument—on helping people to come forward. This offence would not have the impact that he is suggesting, because of all the other inhibitions about those who may be enslaving people and putting them in fear. Rather, we need to tackle the broader themes and help people to come forward, which is what the Government and Members across the House have rightly focused on.

I am grateful to the Minister. Of course, any measures to give people the confidence to come forward should be pursued. There would be general agreement about that—in particular, in relation to some of the offences we have been discussing. However, adding an offence when there is no evidence that it is needed simply makes a bad situation worse. If the Minister has evidence that anybody at all has ever said, “The problem here is that we haven’t got an offence for the employees”, I have not seen it and it has not been set out in any great detail.

Does my hon. and learned Friend accept that the nub of the Government’s argument in relation to this offence, as we understand it, is to reduce pull factors—to create a disincentive for those coming to this country to enter into illegal work? Is he concerned, as I am, that the Government seem to have no evidence that it will work? We have heard substantial evidence that this may be counterproductive, but there is no evidence from the Government that it will work as a deterrent and undermine pull factors.

I agree with my hon. Friend and am grateful for his intervention. What is important is that the objective behind the Bill is properly pursued. There is a real risk that introducing an offence against the employee will be counterproductive if it drives underground the very group of people who are the most vulnerable when there is little or no evidence that the offence is needed.

I want to go a little further than that, because this is an offence without any mental element in the Bill. It is strict in the sense that absent the right status, the offence is made out, and then it is an offence without a defence, which is an unusual combination in criminal law. For example, some people will be here working in the belief that they have the right status because they are sponsored by the employer or somebody else. However, unbeknown to them, they may not have status because their employer has not correctly completed all the necessary arrangements for sponsorship. They fall into a category of individuals who are here without the required status, but without any knowledge of that or any intention to be in that position. Given the inflexibility of the offence, they would be immediately criminalised without even the opportunity of raising a defence of reasonable excuse. Their defence would be, “I am working. I had understood that my employer or somebody else had completed all the necessary forms and legalities. It now transpires they haven’t, but I had absolutely no reason to think that to be the case.” At the very least, if the clause is to stand, such an offence—there could be many other examples—ought to have a reasonable excuse defence, and that argument lies behind the amendment.

I speak in support of my hon. and learned Friend. It is fundamentally wrong to make the employee a criminal—it makes no sense. I have not been convinced by any of the witnesses we have heard or any of the evidence that I have seen that this is the right way to achieve the Government’s objectives.

My main concern is that the measure will compound exploitation. I would like to quote Caroline Robinson, one of our witnesses, from FLEX—Focus on Labour Exploitation—who put the three issues more succinctly than I can. She said:

“First, we think that people will be fearful of coming forward to be referred into the UK national referral mechanism as victims of trafficking…The second reason is that we know that traffickers use the threat of deportation, removal and reporting to immigration officials in order to abuse and exploit workers…The third reason is something that was raised a lot on Second Reading, namely the criminalisation of trafficked persons. Although the Home Secretary set out the statutory defence, which is in the Modern Slavery Act 2015, it is quite narrow in its terms. The schedules exclude a number of offences for the victims of trafficking, such as aggravated criminal damage, but if I was to leave the building in which I was held I would no longer be covered by the statutory defence in the Modern Slavery Act.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 24-25, Q50.]

My biggest concern is that the measure will stop whistleblowers. How will we identify bad employers if the very people who can give us that evidence are too scared to come forward for fear of being criminalised? It is not only bad employers that could be overlooked, but health and safety risks that could impact on a number of employees.

I am pleased about the Modern Slavery Act, which is a good and strong piece of legislation. I am also very pleased that the Minister has made it clear that people are protected under the Act if they are trafficked into the country. If they are used as a slave, they are exploited. However, I would like clarification from the Minister about how someone will be dealt with if their status shifts. For example, if someone was trafficked into the country and forced into slavery, but then managed to escape and became an illegal worker, would they be protected because at the start of their journey they were protected under the Modern Slavery Act, meaning that they would be treated as a victim, or would they be criminalised because, at the end of their journey, they were an illegal worker? What happens the opposite way round? If a person comes to the UK as an undocumented worker and is then exploited by their employer, at what point would they be protected if, having come to the country illegally as a worker, they were then used as a slave?

The hon. Lady and I both served on the Committee that considered the Bill that became the Modern Slavery Act. I looked at the list of exemptions in that Act while we heard the piece of evidence that she quoted. It is worth reminding the Committee that there is a set of defences in the Act, and to that set of defences, there is a set of exemptions. In that set of exemptions—this is rather like a Russian doll, but bear with me—there is an exemption on this point of criminal damage. In other words, an individual might be at risk of being accused of criminal damage only if they had behaved recklessly and endangered somebody’s life. That is in the Modern Slavery Act 2015, which the hon. Lady and I debated. Has she reflected on that before trying to advance this line of argument that the provision is all one thing, rather than being nuanced?

I thank the hon. Lady for her intervention; she is always fantastic on detail. My answer is yes, but I am not a lawyer, so I would like the Minister to lay out, in language that a former charity worker can understand, the protections for people who are exploited. To be honest, I am unclear. A number of our witnesses said they were unclear, although I recall that clarification was sought on this point.

I will give the hypothetical example of a woman who paid a criminal gang for her passage here and came expecting a job. She was given a job, but then told that she had to pay additional costs, which took away all of her income, effectively making her a slave without legal protection under our current system. She could be beholden to that employer for an indefinite period and be too terrified to speak out, because I can guarantee that the employer would use the fact that she would be reported and become a criminal if she did.

I do not see how clause 8 helps that person in any way. I would like clarification from the Minister about how that person could have the confidence to come forward when their employer is telling them that they will be criminalised if they do so. Surely the best approach is to stick with clause 9, under which the employer becomes liable for the actions and will be criminalised for those actions.

We know where the employers are. They will be registered at Companies House and they will be filing their taxes. It will be a lot easier to follow that trail to get the prosecutions, particularly with limited resources, rather than spending an indefinite period trying to track down illegal workers when we do not know who they are, where they are working or their status, just on the off chance that we might catch and criminalise them so that we send out the right message. Surely it is better to go for the employers.

I wonder whether there is a misunderstanding, or at least an underestimation, of how vulnerable some of these workers are. Does the Minister realise the extent of their vulnerability? If he does, will he change his mind about criminalising those who work illegally?

I will cite an example of not a young vulnerable woman trafficked here as a sex slave, but someone whom hon. Members might use as an example of why we need to criminalise. On my travels a few years ago, I spent time with a man called Mehdi, who was fit and healthy in his mid-thirties. He was married to Rezi, who was pregnant with their first child. They sought asylum in the UK—I met him some years after all this happened—and ended up in Glasgow where, despite their best efforts, they were refused asylum because they could not prove they were in danger. She had a miscarriage and they were made destitute. They were told they would be deported and they embarked on a terrible downward spiral. They removed themselves from all support mechanisms, so frightened were they of being found and deported to certain danger, but they could not survive here, so Mehdi found a job. He knew he was not allowed to do that, as did his employers, who took advantage of that knowledge and made him work extremely long hours for £3 an hour.

Mehdi was abused, exploited and occasionally beaten. He was worked until he would regularly collapse with exhaustion, but he had no choice. Some Government Members might argue that he did have a choice because he could have gone back to his home country. However, he was not working not just to feed himself and get by in life in Glasgow, but to save money to buy false passports so that the couple could get out of the UK and away from the danger of deportation to his home country. Who among us would not do whatever it took to protect our loved ones and our own lives if we had to?

If the Bill had been in force when Mehdi was doing all that, what might the outcome have been for this loving and protective husband? This kindly but damaged man could very well have ended up in jail, followed by being deported to the country that he was so afraid of returning to. For him, the worst part would have been leaving his wife—

Sitting suspended for Divisions in the House.

On resuming—

Before I ask Anne McLaughlin to continue her speech, I thought it might be advisable to take discussion of the clause with the amendment and not have a stand part debate. If anyone wants to make a contribution on the clause, please feel free to do so now.

It has come to my attention that some Conservative Members did not listen to absolutely every word, so I wondered whether they would like me to recap from the start, or just to summarise where I was.

I was speaking about someone I met on my travels who had sought asylum in the UK and ended up in Glasgow. Mehdi, with his wife Rezi, were refused asylum, were destitute and were threatened with deportation. They were terrified of being returned to their country of origin because of what would happen to them. Mehdi ended up working illegally for £3 an hour, being completely exploited, and he did that because he did not have a choice. The point I was making was that he did not do that just to get by and to be able to buy food and clothes. He was doing it because they were saving up to be smuggled out of the country, not back to their country of origin, but to another country that they would enter illegally because they were so afraid of being sent back to their home country.

I was making the point that if this Bill had been in place then, Mehdi would have faced the additional risk of going to prison. I spent some time with him and he was most certainly not someone who—

It would depend on whether he had been caught working. He would be prosecuted and could have been imprisoned. Thankfully for Mehdi and Rezi, that did not happen, but there are many other people like them. She was extremely vulnerable. Had the Bill been around and they had been imprisoned, she would have been left destitute, facing deportation without him by her side. With him by her side, she was terrified enough. He would have gone to prison and then, undoubtedly, he would have been deported separately from her.

A fit, healthy married man in his 30s who is working illegally is not someone we typically highlight when trying to attract compassion from those who wish to control illegal working and are also concerned about vulnerable people, but who among us could not feel compassion for Mehdi and Rezi? We should remember that even those who are not the archetypal exploitable worker often have truly heart-breaking stories and are often left with no choices. The Bill would make it even riskier for them. If it is riskier, they will become ever more dependent on their abusive, exploitative employers. They deserve our compassion and support to get out of those situations. They do not deserve the threat of a prison sentence hanging over them.

On amendment 68, I welcome the observations the Minister made in his latter comments. The Bill creates an unreasonable anomaly between the caveats it provides for employers and the absence of any for employees. As I understand it, under clause 9, employers are only guilty of the offence of employing an illegal worker if they do so “knowing” or

“having reasonable cause to believe”

that the person is an illegal worker.

We are saying to employers that there is a test of reasonableness before they are criminalised for the act of wrongful employment. The problem with clause 8 is that there is no such test of reasonableness. With the amendment, we seek to bring some equivalence between the way we approach employers and the way we approach employees by enabling them to be able to demonstrate “reasonable excuse” for the predicament in which they find themselves. Although I have reservations about the entire clause, were the Government successful in retaining it, I hope they would look generously on the amendment, which could provide that equivalence.

I have concerns about clause 8 more generally, as it criminalises the act of illegal working. I take the point made by my hon. and learned Friend the shadow Minister that we might disagree on this matter across the House. However, I do not think we need to. A number of us have said that we are at one on the objectives of the Bill, as we were with the Modern Slavery Act. In seeking to ensure that clause 8 does not stand part of the Bill, we are at one with the Government’s policy objectives of achieving effective labour market enforcement and, indeed, of combating modern slavery. Less than two years ago, in November 2013, the Home Secretary made combating modern slavery a priority. I do not have the experience that Conservative Members and, indeed, my hon. Friend the Member for Rotherham have of serving on that Bill Committee but I commend those who were involved on that legislation, just as I commend the Home Secretary on the priority that she placed on combating modern slavery. That aim won wide support, found expression in the Modern Slavery Act, and took us in the right direction. The problem with clause 8 of this Bill is that it risks undoing some of the good of the Modern Slavery Act.

I am sure that the Government do not intend to undermine their own legislation so soon after it has become law so I hope that the Minister will give serious regard to the points that we are raising in suggesting that clause 8 should not stand part of the Bill. I hope he recognises that if it does, slavery is more likely to thrive. I notice that he is shaking his head and I look forward to his response.

I put this to the Minister: what do we know? What is all the evidence clear about? I am happy for him to intervene if he disagrees, but all the evidence is clear on one thing. The more vulnerable workers are, the stronger the hand of the gangmasters or the unscrupulous employers who seek to exploit them. I am sure that the Minister agrees, as I notice he does not wish to intervene. Vulnerability plays into the hands of those who seek to exploit, such as unscrupulous employers. The more vulnerable workers feel, the less likely they are to come forward to report their abusers. Clause 8 increases that vulnerability and strengthens the hands of the gangmasters. I note that the Minister is again shaking his head. I would be happy for him to intervene if he can provide any evidence to suggest that that is not the case. When we took evidence from witnesses, we heard from many experts who said that this was the case; none said that it was not.

The clause, by threatening exploited workers with 12 months in prison if they are deemed to have committed the offence of illegal working, gives another crucial card to the suit of cards that gangmasters can play. It does not only affect those who have committed the offence of illegal working; it changes the psychology and relationship even between the employer and the employees who have not committed an offence. According to the National Crime Agency, in cases that it has taken up, 78% of those who have been exploited for their labour in the UK actually have the right to work here as EEA nationals. Rights awareness among those workers is low and their options are limited, which allows unscrupulous employers to hold the threat of removal over them.

I have listened carefully to the hon. Gentleman. In the example he just gave, he said that the individuals concerned had the right to work. How would they be caught under the clause if they would not be working illegally?

I thank the Minister for that intervention because it gives me the opportunity to explain more clearly; I apologise if I did not do so before. The point I am making is that clause 8 affects those who do not have the right to work, because it criminalises them and makes it less likely that they will whistleblow and report their employers. Rights awareness is low, even among those who have the right to work here. We have seen various cases where exploitative practices have been blown apart. Part of the intimidation and the way in which employers were enforcing compliance was by cloaking a series of threats that did not apply in those cases. That is my point.

The hon. Gentleman makes an interesting point, but he seems to be articulating some of the broader issues that we know are redolent around slavery and trafficking, on debt bondage, housing, and physical enslavement. It is those threats and issues and the threat of deportation that might be more redolent in the examples that he has given, rather than law enforcement.

I take the Minister’s point, but why give those who exploit yet another card to play? The threat of 12 months’ imprisonment and criminalisation is the card that will be exercised both in relation to those who have no right to be here, or to be working, and in relation to those who do.

One of our witnesses, Caroline Robinson from Focus on Labour Exploitation, said:

“We know that 78% of those exploited for their labour are, in fact, documented in the UK.”––[Official Report, Immigration Public Bill Committee, 20 October; c. 28, Q59.]

My hon. Friend makes exactly the point that I was seeking to make. Even where people have rights to work, the lack of rights awareness and the intimidatory relationship between exploiter and exploited make this another card to play. I see the Minister is still shaking his head. Even if we were to restrict the measure simply to those who did not have the right to work, we are still giving the exploiter another card to intimidate and therefore make it less likely that people would be willing to whistleblow. I am happy for the Minister to intervene on me. Perhaps he could illustrate the evidence that suggests the clause will be of assistance—not the intuition, the belief, the view, but the evidence.

The hon. Gentleman is encouraging me to intervene. I will take him through the logic as to why we think the clause is necessary. The interesting and thoughtful way in which he always presents his case identifies broader issues, and I do not see this offence changing the situation in the way that he says. The cases that he has enunciated and the evidence that the hon. Member for Rotherham highlighted show that in the majority of cases people did have rights and are not touched by the offence. The area is complex, and I know that the hon. Gentleman understands this. It is about the broader issues and themes that I touched on earlier.

Order. Mr Blomfield, I have used that trick a lot of times, but, given that the Minister is going to speak and that some of the responses will have to be lengthy, the matter is not right for an intervention, so it might be better if the Minister deals with some of the issues in his remarks later.

Is the hon. Gentleman aware that it is not only the exploitative employer who can continue to exploit the person who is working illegally? Undocumented workers face threats from all sorts of people. I spoke to somebody who had worked illegally for different reasons to the previous person I talked about. They were not only ruthlessly exploited by the employer, but were blackmailed by colleagues who themselves were working legally, but were aware or at least suspected that this person was working illegally. He faced blackmail, threats and intimidation. Although he said, “Actually, you don’t know what my status is”, the point that the blackmailers made was, “Are you willing to take that risk?” Of course, such workers are not. The exploitation comes from all around, not just from one employer.

The hon. Lady adds another dimension to my argument that the clause makes those who are already in a precarious situation more vulnerable and open to exploitation. In an earlier intervention, my hon. Friend the Member for Rotherham mentioned the evidence given by Caroline Robinson from Focus on Labour Exploitation, which works directly with victims of trafficking for labour exploitation and of which I am the trustee along with some Members from other parties.

FLEX has identified three drivers of labour exploitation. The first is the feeling among migrant workers that they deserve less or have fewer rights than UK citizens. The second is a lack of checks on labour standards in the workplace, including everything from health and safety to minimum wage enforcement. The third is a fear of officials, especially of immigration officials. The Bill makes each of those drivers worse, and clause 8 has a particular effect on the first and third factors.

First, on the rights of migrant workers, the clause puts the focus on immigration status as a condition of asserting labour rights. By criminalising the exploited worker, whether they are committing the offence of illegal working or not, they can be treated and threatened by a gangmaster as if they are. On the second driver, we have talked at length about a number of aspects of labour market enforcement. The Bill seems to reflect the Government’s desire to move further towards an intelligence-based approach to enforcement. Essential to that intelligence is whistleblowing. We need to ensure that we do nothing in the Bill to discourage exploited workers from coming forward and thereby give gangmasters another card to play. Sadly, the clause risks doing exactly that.

On the third driver of labour exploitation, the problem that we identified earlier—the overlap between labour market enforcement and immigration enforcement—is at the heart of the Bill. The clause gives undocumented workers another reason to be worried. The consequence is that labour exploitation is not rooted out and continues to be a pull factor for migration, which is against the Government’s policy objectives.

Mr Bone, I will take your advice. I will not ask the Minister to intervene, but I press him to share evidence from anywhere in the world that shows that the approach of criminalising workers, unlike many other aspects of the Bill with which we agree, assists in the policy objective that he outlined and we share.

Will my hon. Friend comment on something else that Caroline Robinson said, which gets to the nub of his point that clause 8 does not meet the Government’s objective? She said:

“What we think will prevent people from working here undocumented is to reduce the demand for undocumented workers. To do that, we require enforcement of labour standards across the board. To be clear, the demand for undocumented workers is not because employers prefer undocumented over documented workers; it is because they cannot pay documented workers below minimum wage as easily as they can undocumented workers.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 28, Q59.]

My hon. Friend will not be surprised to know that I agree. The quotation adds very much to the case that I seek to make; perhaps it makes the point more clearly than I was doing.

I want to move on and talk about international examples. I have challenged the Minister and I am confident that he will come back with examples later. I have challenged him to give comparisons, but let me share one that was shared with me yesterday when I met representatives of the Council of Europe convention on action against trafficking in human beings—GRETA. They shared with me the example of Italy. They had done some work and talked about the amendments made to the Italian Consolidated Immigration Act in 2002, the so-called Bossi Fini law, which was aimed at regulating migrant worker flows by introducing a system of entry quotas, and which was supplemented in 2009 by the criminalisation of irregular entry and stay. Their concern was that the requirements of a formal employment contract in order to obtain a residence permit exposed migrant workers who were already at risk of labour exploitation because of their irregular migration status. They were worried that irregular migrants would be afraid to report cases of exploitation to the authorities because they were concerned about being detained and expelled. The United Nations special rapporteur on trafficking in persons, especially in women and children, reported on the negative consequences of the criminalisation of irregular migration for victims of trafficking.

In response to points made to them by GRETA, the Italian authorities indicated that there were 14 convictions for trafficking in human beings in 2010 and nine in 2011. GRETA was concerned that those conviction rates were very low and urged the Italian authorities to strengthen their efforts to ensure that crimes related to trafficking were proactively investigated and prosecuted promptly and effectively. They asked the Italian authorities to study the implications of their immigration legislation, particularly the offence of illegal entry and stay. As a consequence, in January 2014, the Italian Senate approved Government measures to decriminalise those aspects of illegal immigration. They had recognised that the approach of criminalisation was not only unhelpful and policy-neutral but actively counterproductive.

I am interested in what the hon. Gentleman is saying, but does he accept that the approach of immigration enforcement in relation to those who have entered the country illegally and committed an offence is to deport rather than prosecute?

I accept that it is to deport. Clearly, those who are here without rights, having exercised due process to establish whether they have a right to remain, should be deported. There is no disagreement on that, but does the provision of criminalising illegal working in clause 8 assist in that process or not? All the evidence seems to suggest that it will drive people underground, out of sight and make them less likely to whistleblow. That will frustrate the aspirations of the Government, with which we agree, to tackle both illegal working and its exploitation.

We have had a wide-ranging debate on clause 8 and the amendment tabled by the hon. and learned Member for Holborn and St Pancras. It is important to take a step back. In all the contributions to date, the focus has been on the victims of trafficking and the effects of it; I will come on to those issues in more detail. There has not been much focus on the impact of illegal working on the rest of the population. For example, an illegal worker in effect takes a job from someone who is here legally—people born in this country, or those who have gone through all the right routes to come to this country.

The hon. Member for Glasgow North East made an impassioned contribution about an individual case. I am not familiar with it, obviously, and have to take at face value everything she told me. However, the measure we are debating has equal implications for someone in her constituency who is unemployed and cannot get a job. It is part of a broader strategy that links back to discussions on part 1 of the Bill on labour market enforcement and the role of the director, of enforcement and of doing more and better. There are also the offences that we are coming on to and the separate role of the Gangmasters Licensing Authority and how we can better direct its activity to go after those who are acting inappropriately and contributing to the problem. We need to see things in that broader context of the impact of illegal working on legitimate businesses and those who play by the rules, on wage levels and on the availability of work for British citizens and other lawful residents. It is important to underline that broader context when discussing the intent behind a number of provisions in the Bill, which need to be looked at as a whole, rather than always in isolation.

I could have used exactly that point in my argument, because it is the employer who makes the decision whether to employ the legal person or the illegal person. Why are we going after the illegal people when already, under section 24 of the Immigration Act 2014, we have the power to deport them? The Minister has cited other Acts under which we can deport. Why are we not punishing the employer who is wilfully employing illegal workers?

The Bill is doing both. It is taking steps in relation to employers and to employees, including with the overall enforcement approach. That is why I put things in that broader context. I will respond later to some of the specific questions on purpose, intent and how things fit in the overall deportation strategy. It is important to contextualise that so that the Committee understands the intent of the Government.

The argument I was making was not that we should allow people who are not permitted to work in this country to work in this country; my point was that those people are often the most vulnerable. A man who is fit and healthy and in his mid-30s might not appear to be that vulnerable on the face of it, but imprisoning him would not make him less likely to commit the offence—he was left with no choice—nor would it change his situation. My argument was not that it is in some way acceptable for people to lose their jobs because others are working illegally; I was arguing that the imprisonment aspect, the criminalisation, is not necessary and will make no difference.

I hear the point that the hon. Lady is making, although I do not want to get into the specifics of the case, as I am not entirely familiar with it, so it would not be appropriate or fair, for her or myself, for me to do so. In many cases, however, there is that choice of leaving the country. She might want to make a broader point about assisted voluntary returns and other means of appropriate removal, but that is the context for my arguments about the purpose of the clause and how it fits with other measures in the Bill to support the approach of discouraging people from coming to this country and to deal with some of the broader impacts of illegal working.

I will give way to the hon. and learned Gentleman, but I hope that the Committee will then allow me to articulate some of the broader issues that will help our debate.

I am grateful. The Minister talks about illegal wage undercutting. Professor Metcalf rightly said in his evidence that if more rogue employers were brought to task for exploitation, it would reduce illegal wage undercutting and unlock wealth creation by legitimate business by releasing them from unfair competition from exploitative rivals. We need to bring rogue employers to book for all the reasons that the Minister has set out, but our central point is that if we are to achieve that, it will be important that those who are being exploited feel able to come forward.

The evidence to date is that even for documented individuals, there is a huge problem, which I think is generally accepted. The next proposition—it will be interesting to know whether the Minister disagrees with the proposition—is that while we have a bad situation for documented workers, it is likely to be far worse for undocumented workers. What assurance can the Minister give that the accepted bad situation will not be made worse by these provisions and that, in the end, the goal of bringing more rogue employers to book will not be lost?

The hon. and learned Gentleman, perhaps understandably, given his perspective, is fastening on to this issue without looking at the broader context that I outlined. We can have a broader discussion about the national referral mechanism—we had such debates during our consideration of the Modern Slavery Act 2015—and elements that inhibit people from coming forward. More direct control is likely, as the hon. Member for Sheffield Central highlighted, because this is a complex arena. A debt bonder may wish to impose a number of different conditions and restrictions may be put in place. That goes to other issues such as confinement and the challenge of removal, rather than the legal issues that we are highlighting today.

I want to develop a point that I started in interventions on the hon. Member for Sheffield Central. Home Office immigration enforcement’s normal response, when it encounters illegal workers with no permission to be here, is to try to remove them from the UK as quickly as possible, which has to be the right approach. Action is also taken against non-compliant employers in the form of civil penalties or prosecution. We will come on to that in the next clause, although a strict liability approach is taken against employers under the civil penalty arrangements, so the prosecution element is added to that. That remains the right approach.

If I may, I would like to make a bit of progress.

We are also keen to take action in the Bill to address a genuine gap in the law that currently impedes the Home Office’s ability to address the economic incentives behind illegal work and impairs our clear message that those engaging in such activity should not profit from it. It is already a criminal offence to enter or remain in the UK illegally, as I have highlighted. However, migrants who require permission to be in the UK but do not have it, such as overstayers, may not be committing a separate offence of working illegally if they engage in paid work, including employment and self-employment. That is the gap for overstayers who go on to work. In other words, they have not come into the country illegally, so the courts do not always regard earnings derived from working illegally as the proceeds of crime when considering cash seizure or asset confiscation cases. The new offence tackles for the first time the difficult issue of those in self-employed occupations.

What is important in the context of the Bill is how the offence links to economic incentives and proceeds of crime legislation. As hon. Members will see, there is a specific reference to the Proceeds of Crime Act 2002 in the clause. I would articulate this as focusing on some of the economic benefits that might be derived. We think that there are benefits in how this is framed to assist immigration enforcement officers in their work, because they have identified this specific element in the course of their activities when seeking the removal of people from this country.

It would be helpful if the Minister could tell us how many people fall into the category of those who are working illegally because they are overstayers. I anticipate that the number will be much smaller than the general figures. This is about balancing the impact on one group against the negative impact on another. Will he provide those numbers, both specifically and as a proportion of overall illegal workers?

The hon. Gentleman makes an interesting point, but as he will well know, one challenge that we have faced is understanding overstaying, which was why we introduced exit checks at the start of this year to identify more clearly patterns of behaviour, sectors and other elements that are relevant to those who are not overstaying the leave granted to this country. He asks me for information that is not currently held, and it is equally difficult to estimate the size of the population who are working illegally. I am sure that the labour market enforcement director will consider that when he examines the size of the problem in his reports to Ministers, but that does not undercut what immigration enforcement representatives say to me about the gap in the existing legal framework.

We need to ensure that there is an overarching approach on criminal law and, as I have said, there is a criminal aspect of people entering the country illegally. We are creating an additional offence for those who are overstaying, who are not covered by the existing criminal law. That means that they are not subject to proceeds of crime legislation, which is having the negative impact about which we have heard.

I share the concerns of the hon. and learned Member for Holborn and St Pancras about ensuring that an offence is used when circumstances suggest that it is the right approach. However, it is important to remember that individuals with an irregular immigration status will have committed a criminal offence under existing legislation by coming into the UK in the manner that I have described, regardless of whether they are working. Therefore, I do not accept arguments made about how the criminal law, or an extension to it in the form of the offence we are discussing, will make the situation more difficult, as has been suggested. However, there are some important points to which I want to respond, including what the hon. Member for Rotherham said about slavery and existing offences under the Modern Slavery Act 2015. She served on the Modern Slavery Public Bill Committee, so she understands these issues.

If I may finish this point, I will be happy to give way to the hon. and learned Gentleman.

The provisions of the Modern Slavery Act aim to encourage victims of modern slavery to come forward and give evidence, and to provide them with the confidence to do so, without fear of being inappropriately prosecuted or convicted. However, section 45 was carefully drawn to avoid inadvertently creating a loophole through which serious criminals could avoid justice, such as if they had been a trafficking victim at one point, but eventually became a member of an organised crime group and, motivated by profit, victimised others. There is always a balance to be struck, as was the case when framing the defence under section 45, and that balance applies to the defences that will operate under the Bill. This issue needs to be seen in that context.

As the hon. Member for Rotherham will understand—I know the hon. and learned Member for Holborn and St Pancras understands this, given his experience—the statutory defence acts as an additional protection on top of guidance from the Director of Public Prosecutions on whether prosecution is in the public interest. It is also in a court’s powers to stop an inappropriate prosecution for abuse of process. Although we need to think about the relevant section of the Modern Slavery Act, it is also important to bear in mind the DPP’s guidance. The normal decisions that the Crown Prosecution Service takes are equally relevant to these issues.

I said that I would give way to the hon. Member for Blackburn, so I will; I apologise for not doing so sooner.

On economic stability and the creation of unfair competition through what is, to my mind, exploitation, I find it difficult to understand why the penalty for an employee is much harder than that for an employer. We would presume that an employer would be more aware of rules and regulations in this country, yet they have a get out: they did not know or have “reasonable cause to believe”. The balance needs to be shifted and more onus should be put on the employer who is exploiting people to the detriment of other businesses within the same field. At the same time, we are criminalising people who, whether here illegally or because of a process of right to stay, will probably be unaware of their situation, and certainly—

Order. I apologise for interrupting the hon. Lady, but either I am getting more tired or the interventions are getting longer—perhaps it is a combination of the two. She is making a perfectly fair point, but it might be better if she tries to catch my eye later as her intervention was veering towards a speech.

As I have said, the primary response will be to seek to remove people from the UK. We judge that the offence will be helpful in particularly serious cases in which there may be aspects of culpability or links to organised crime, so it gives us an important additional mechanism. Given that the hon. Lady wants additional sanctions against and more punishment of employers, I hope she will welcome clause 9(2), which provides for an increase in the punishment for employers.

I have two quick points. As I understand it, the Minister is saying that for the vast majority of cases in which other offences have been committed, the policy will remain as deportation rather than prosecution—that is a pretty long-standing position. For that class of individuals, the Bill therefore adds absolutely nothing, except to the unlikelihood of people coming forward. The new offence is in fact designed to tackle a smaller number of individuals—the numbers are unknown—who might not fit within that category of “deport not prosecute”, so as to get to any proceeds. The new offence is being introduced to crack that particular nut. My second point—

Order. As we are trying to do this properly through interventions, why not sit down for a minute and then you can intervene again with your second point?

To respond to the point on proceeds of crime, the Government are committed to taking robust action to prevent illegal working. In our judgment, the current situation encourages illegal migrants to come to the UK, and those who are already here to overstay their leave and remain in the UK. We are clear that working without permission should be an offence that has consequences for an immigrant’s earnings. It is unfair if firms are undercutting their competitors through exploitation and the use of illegal labour. The Government will have the ability to seize cash sums and, as the hon. and learned Gentleman will know from other provisions of the Bill, that may have implications for bank accounts. The way in which powers could be used operationally in various contexts is a thread that goes through the Bill. Some of the unlawful proceeds that are being derived can be actioned through various mechanisms in the Bill.

It is important that we are closing a gap and sending out a clear message on the implications of illegal working. I underline the core element behind the Government’s focus, which is to deport and remove those with no entitlement to be here.

I want to move on to the question of defences and the guidance that the Director of Public Prosecutions may issue. I am not concerned about the defence under the Modern Slavery Act—we had that exchange earlier and I understand the position—but the wider point of when that defence is unavailable. There is no defence of reasonable excuse in the Bill, so the individual in the example I cited earlier, who may not know that their leave to remain has ceased to have effect but therefore becomes a criminal, has no escape route. Does the Minister accept that in such circumstances it is not right to leave it to the DPP’s discretion? In other words, should not the DPP’s discretion be exercised according to the known offence and known defences? If there is a case for a defence, that ought to be in the Bill, rather than left to the discretion of the DPP. That is not to suggest that discretion does not operate in many cases, but if there is a proper case for having a defence, it ought to be for Parliament to write that into the Bill and then for the DPP to exercise discretion as to how it operates in individual cases. The alternative is the DPP effectively introducing a back-door defence, which has not been thought to be an appropriate use of guidelines.

First and foremost, I underline the point that, for those who are in the country unlawfully, the priority will be to see that they are removed. That is the first line of approach that immigration enforcement would take. Secondly, the use of the DPP’s guidance makes it clear that it is generally not in the public interest to prosecute an adult victim of slavery or trafficking where the crime they committed was a direct consequence of their slavery or trafficking situation and they were compelled to commit the crime.

A wide debate took place prior to the Modern Slavery Act as to whether that was sufficient in its own right or whether additional provisions were required. There was an extended debate between the non-governmental organisations, the DPP, the Crown Prosecution Service and policing. On balance, it was judged that the further defence provided in section 45 was appropriate. However, guidance can be provided on what is in the best interests of justice in that determination. Clearly, this will be a matter for individual cases, but, as I have already indicated, the primary approach that we want to take in respect of people who are here unlawfully is to see that they are removed.

The offence is to strengthen the message that the Government and the country send. Also, we want a method of dealing with serious or significant cases where an individual may be seeking to absolutely frustrate the system. The offence can be seen as an appropriate and effective tool in the work of immigration and enforcement in conducting their work. I suspect there will be a point of difference between us on that and it may be for the Committee to express its view on the issues, rather than to try to suggest there is not a difference of opinion when there is.

All victims, regardless of their involvement in criminal activity, are entitled to the same level of protection and support through the national referral mechanism and are assessed against exactly the same criteria. Support is tailored to each individual’s need and can include accommodation or outreach support and access to medical, legal and psychological support. As many hon. Members will know, the Government fund the Salvation Army to provide that service through a network of specialist charities across England and Wales.

On the point about whether the measures will strengthen the hands of the exploitative employer, as has been postulated, that is precisely why we are taking tougher action in the rest of the Bill against employers who exploit illegal labour. We are changing the knowledge base required in relation to the subsequent offence, as well as strengthening the approach to enforcement through the creation of the new role of director of labour market enforcement. Where employers repeatedly flout the law, we propose to use new powers to close their business premises and apply special measures as directed by the courts. Again, it is about the broad context.

I know that traffickers and those involved in such criminality are insidious in some of the techniques that they use. They use a wide range of techniques to exploit their victims, including debt bondage, physical force or threats to put victims in fear. There is no way entirely to stop traffickers misleading victims about what will happen if they come forward; they will often use such direct tactics to intimidate. The Government are making identifying and protecting victims of modern slavery, and giving them the confidence to come forward, fundamental to our modern slavery strategy.

That is why the Modern Slavery Act introduced the new statutory defence for victims who commit crimes due to their exploitation. Last year, the Home Office set up a modern slavery helpline and website and ran a national television campaign, with which many people will be familiar, to reach out to victims and encourage the public to report suspected modern slavery. In many cases, it is happening under our noses, in our communities and across our country.

As I have consistently said during my involvement in the initial preparation of the Bill, we must shine a light into those dark places, to see what is there in plain sight but is somehow unseen by us. That is the reason for the practical implementation of the Modern Slavery Act and the work that we are doing through a number of measures through the commissioner. It is about raising awareness and knowledge within law enforcement, so that the signs of slavery can be spotted and victims given the support that they need. That includes setting up specialist teams at the border to identify and protect victims when they enter or leave the UK. We are taking a multi-faceted approach in a way that has not been undertaken before. That is not a partisan view; good work has been done across the House on confronting modern slavery, and I welcome the contribution made to that work by numerous Members over an extended period.

Because of all that complexity and the elements that I have highlighted, I am simply not persuaded that the proposals make the situation worse in the manner postulated. As has been said, it is often those with the right to be in this country who are held here and kept in appalling conditions. We want to shine a light on those dark places from which they cannot escape, often physically, due to the manner in which they have been enslaved. That is precisely the reason for raising understanding in law enforcement and more generally across the population of this country, in order to deal with these issues when they become apparent. I know that I should refer to the contribution that you have made over a number of years, Mr Bone, to get us to a position in which we can have this debate with much greater understanding of the issues concerned. It is significant.

I see the issue in the broader context of what we are seeking to achieve in the Bill in terms of dealing with labour market exploitation, but I do not see that as inconsistent with the important work that we have done and will continue to do to confront slavery, traffickers and exploitation, and to go after those causing human misery in our country. I am proud to be part of a Government who take these issues seriously and are seeking to make a difference in that way.

Kate Hollern, would you like to say something now, as I have rather rudely cut you off?

In the light of the fact that we have discussed the clause and the amendment together, I do not feel the need to add anything on the amendment, save to say that we will press it to a vote.

Question put, That the amendment be made.

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

Clause 8 ordered to stand part of the Bill.

Clause 9

Offence of employing illegal worker

I beg to move amendment 67, in clause 9, page 7, line 6, leave out subsection 1 and insert—

“(1) In section 21 of the Immigration, Asylum and Nationality Act 2006 (offence of knowingly employing an illegal worker), delete subsection (1) and substitute—

(1) A person commits an offence if he knowingly or recklessly employs an adult subject to immigration control, where—

(a) this adult has not been granted leave to enter or remain in the United Kingdom, or

(b) this adult’s leave to enter or remain in the United Kingdom—

(i) is invalid,

(ii) has ceased to have effect (whether by reason of curtailment, revocation, cancellation, passage of time or otherwise), or

(iii) is subject to a condition preventing him from accepting the employment.”

To adopt a test of recklessness rather than negligence for the offence of employing an illegal worker, so as to avoid discriminatory employment practices by employers.

I can be relatively brief. The extension of the offence has been advanced on the basis of the need to deal with repeat offenders, but there is nothing in the Bill that requires an offender to have already offended before the new test is applied. Therefore, it is applied more generally. In our submission the right approach is to move to a position of recklessness rather than negligence for fear of the default position of employers, which could be discriminatory in its effect.

As the hon. and learned Gentleman says, the amendment seeks to avoid discriminatory practices by employers through adopting a test of recklessness for the offence of employing an illegal worker. The Government’s intention of using the “reasonable cause to believe” test is to make the current test more objective and easier to prove. It is intended to capture those employers who have wilfully turned a blind eye to someone’s immigration status.

It must be emphasised that the test of “reasonable cause to believe” is not the same as negligence, as the hon. and learned Member for Holborn and St Pancras will well understand. The intention is to continue to apply the civil penalty sanction to those employers who are simply negligent; that is to say, those employers who act without reasonable care and skill in terms of not checking a person’s right to work, or not doing so correctly.

We judge that introducing a test of recklessness would not assist in increasing the number of prosecutions of those employers who flout the rules on illegal working. It would remain a subjective test and would require proof that the employer foresaw a risk that the person had no right to work, yet went on to take that risk and employ them. It is precisely the difficulties in establishing the state of mind of the employer that the Government are seeking to address in the Bill, by introducing an objective element to the test. Having “reasonable cause to believe” will capture circumstances in which an employer wilfully turns a blind eye to anything that would give them reasonable grounds to believe that the employee has no right to work.

In addition to being more difficult to prove, a test of recklessness would also potentially go too wide and be more likely to lead to discriminatory behaviour, which the amendment seeks to avoid. In our judgment, the Bill’s test that the cause to believe must be a “reasonable” one strikes the right balance between making the offence easier to prove and guarding against discriminatory behaviour.

I do not believe that the test of “reasonable cause to believe” will encourage further discriminatory behaviour on the part of employers, because they are already required to undertake prescribed right to work checks to establish a statutory excuse in the event of illegal working. That does not change.

The Secretary of State has published a statutory code of practice on avoiding discrimination while preventing illegal working. If an employer is simply negligent, they will be dealt with under the civil penalty scheme. What we are changing is our ability to prosecute those employers who choose not to undertake the necessary checks because they have reasonable grounds to believe that such checks will reveal that the employee has no right to work. That is in addition to our intention to continue to prosecute those we can show actually know that someone has no right to work— which is where we largely sit currently—as we can do now under the current wording of the offence. Obviously, however, it inhibits and limits that sense of having to prove the knowledge of the employer in those circumstances. That is why the change has been brought forward.

Having given that explanation, I hope that the hon. and learned Gentleman will feel able to withdraw his amendment.

I am grateful to the Minister for that explanation and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

As part of our drive against illegal working in the UK, the Government intend to toughen their approach to employers who deliberately, cynically or systematically use illegal workers. The Immigration, Asylum and Nationality Act 2006 introduced a civil penalty scheme, under which employers of illegal workers may be liable for a civil penalty of up to £20,000 per worker. That remains the principal means of dealing with cases of non-compliance by businesses that negligently employ illegal workers. In 2014-15, 1,974 civil penalties were issued to employers, with a total value of £29.6 million.

The 2006 Act also introduced a criminal offence of knowingly employing an illegal worker, which provides the appropriate response to those employers who deliberately flout the law. The Government believe that we continue to need both the penalty scheme and the facility to prosecute in order to provide a comprehensive and appropriate response to the whole spectrum of employer non-compliance. However, we have concluded that we should take action in this Bill to strengthen the capability to prosecute where employer non-compliance goes beyond negligence or error.

Some employers are deliberately not checking whether their employees have the right to work. They routinely choose not to know, and so cannot be found to be knowingly employing an illegal worker. The new offence will also capture those employers who should have known that the employment was illegal. In addition, some employers are dissolving their businesses and simply creating a new business, in order to evade civil penalties for illegal working. In such circumstances, it is appropriate to hold an individual employer personally to account in their capacity as a company officer, and that can be done by prosecuting the individual for committing a criminal offence. Clause 9 amends the criminal sanction in the 2006 Act to make it easier to bring prosecutions successfully and to increase the maximum custodial sentence that a Crown court may impose.

Is the Minister not concerned that making it easier to bring about prosecutions and prove negligence will mean that employers are much more fearful of employing someone who, to them, does not sound, look or seem British? My fear is that people who genuinely intend to do the right thing will steer clear of employing anyone who does not appear to be British because they will be frightened of being prosecuted. They will be taking a big risk.

That is why I made the point about negligence and how that is dealt with under the civil penalty regime but not the criminal provisions that I explained earlier. That feeds back into the debate we have had in respect of the bar that needs to be set for bringing prosecutions. That is why I made the comments I did in the previous debate about discrimination. The most serious cases involving the exploitation of illegal labour will continue to be dealt with under legislation that prohibits facilitation and trafficking. It is important to make that point in the broader context of the provision.

Subsection (1) amends section 21(1) of the 2006 Act by inserting, after “knowing”,

“or having reasonable cause to believe”.

That is the test. It is not negligence. The effect is to amend what is known as the mens rea, the knowledge or intention needed to make out the offence, in order to make the test more objective and the offence easier to prove, but still with that safeguard.

My understanding is that for an employer to take on an employee the latter needs a national insurance number. Would that not automatically say that someone had the right to be here?

It is rather that the employer has to show the right-to-work check, which is what the provision relates to. There is certain documentation with which employers should be familiar. We still work on the basis of trying to raise awareness of the issues. We are not trying deliberately to catch out employers. I certainly want employers to know the relatively simple steps they have to take to comply. The obligation was introduced into law in 2006, when the civil penalty scheme was put in place by the Labour Government. That is, therefore, what needs to be shown and it is why the negligence piece sits within the civil penalty regime.

The amendment to the definition of the offence—having reasonable cause to believe—is for those who close their eyes and put their fingers in their ears so that they cannot be liable, trying to get around the existing knowledge requirement of the Act. Those employers are, frankly, trying to play the system, and we are making the changes because of the problems that the pre-existing offence presented for our ability to bring prosecutions. I think that hon. Members would want us to be able to bring prosecutions in such circumstances.

Building on what the Minister said in response to my hon. Friend, what would be a reasonable defence for an employer?

It will depend on the circumstances. It is about the distinction between negligence and having reasonable cause to believe. The legal tests are slightly different, and I do not want to hasten into issues of law as I am sure that the hon. and learned Member for Holborn and St Pancras will be well enough equipped with his knowledge and expertise in those matters to be able to underline the distinction, as will the Solicitor General. I will not hasten to stray into matters of law with such august representatives in the room.

At the moment, if a document that looks legitimate and real is presented to someone, that is often a defence in relation to the negligence argument. The employer has not been negligent. They have checked. We are not trying to make employers, or landlords—we will come on to them, I am sure, under the right to rent—into some sort of extension of immigration enforcement teams. If it is shown that the basic checks have been conducted in good faith, the civil penalty regime would not apply, even on the test of negligence—let alone the criminal sanction in clause 9. On that basis, the measure is an important step forward and fits within the broader enforcement strategy. I hope the clause will stand part of the Bill.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.

Clause 10

Licensing Act 2003: amendments relating to illegal working

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

With clause 10 and schedule 1, we move on to a slightly different provision. We will come to amendments to schedule 1 in the next group. Clause 10 deals with amendments to the Licensing Act 2003 that relate to illegal working. Home Office immigration enforcement officers frequently encounter illegal migrants in premises involved in the sale of alcohol and late-night refreshments. It is clear, on the basis of intelligence, that this is a high-risk sector for illegal working. Accordingly, we want to adapt the licensing regime to prevent illegal working in the sector.

Clause 10 and schedule 1 will prevent illegal migrants and those whose status does not permit them to work here from holding premises and personal licences. They provide a mechanism for the Home Office to object to the issue of such licences when it considers that necessary to prevent illegal working. Immigration officers are provided with the same power to enter a premises as licensing enforcement officers, for the sole purpose of checking whether immigration offences are being committed in connection with a licensable activity—namely, selling alcohol or providing late-night refreshment.

Clause 10 gives effect to schedule 1, which amends the Licensing Act 2003. The Licensing Act applies to England and Wales. We are consulting Northern Ireland and Scotland with a view to making similar amendments to their legislation in the Bill or, if that is not possible, in regulations, for which provision is made in the clause.

The provision links to schedule 1, on which some technical amendments will be moved. I will sit down at this point and move on to schedule 1 when we discuss the next group of amendments. The provisions are interlinked but I am conscious of the separation between them.

The clause and schedule pertain to the Licensing Act 2003, which is England and Wales legislation, but clause 10(2) empowers the Secretary of State to implement, by regulation, similar changes to Scotland. That is completely unacceptable and goes against the spirit of devolution and the Sewel convention. I am sure that the Minister will argue that it pertains to immigration, which is reserved, but it obviously has a big impact on a devolved matter.

Powers that ride roughshod over primary legislation—whether that is here in Westminster or at Holyrood in Edinburgh—without proper scrutiny by elected Members should be used very sparingly. The measure should be dealt with in primary legislation subject to debate prior to a legislative consent motion. The Government state that a significant proportion of illegal working happens on licensed premises where there is the sale of alcohol and late-night refreshment or the provision of entertainment. I have previously received an answer from the Minister, which confirms that the UK Government have no evidence that suggests that takeaways and off-licences are far more likely to employ illegal migrants compared to other businesses. That rather highlights the lack of evidence base for this part of the Bill. Surely, the starting point for any legislation is the requirement of evidence. To use hearsay or assertion in supporting this or any other legislation makes for neither good politics nor good law. Even if Members accept the premise of the proposal, the very need for this part of the Bill is called into question by John Miley, the chair of the National Association of Licensing and Enforcement Officers, who stated:

“Generally speaking, licensing authorities do not work in silos. They work in the broader scheme of things, and work with the police and the Security Industry Authority and more generally with immigration. Good work is currently going on in quite a lot of cases.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 32, Q67.]

The most concerning thing about the provision is the new power whereby an immigration officer

who has

“reason to believe that any premises are being used for a licensable activity”

can enter the premises

“with a view to seeing whether an offence under any of the Immigration Acts is being committed in connection with the carrying on of the activity.”

That terminology is a big concern to my colleagues and me. As framed, it gives immigration officers a very wide power to search any licensed premises. Home Office statistics show that an alarming number of offences pertain to small businesses that serve ethnic cuisines and are therefore likely to be run by ethnic minority owners. Is that because they are the gravest offenders or because they are searched most frequently? Will the same be true of licensed premises? The Migrant Rights Network states:

“These are small businesses who will be less able to deal with the additional burden of carrying out and recording frequent and complex immigration checks.”

The Secretary of State is given an additional power, as she can object to the granting of the licence, and that is to be taken into account by the licensing authority. Again, that is a completely devolved area and highlights the need for further reflection by the Government. Unlike other sections of the Bill, the Home Secretary is given leave to appeal against the granting of a licence or refusal to cancel a licence despite her objection. This is additional bureaucracy that most businesses will not welcome and that is surely not in keeping with a long-term economic plan.

Restaurants and bars—especially those serving ethnic cuisines—feature heavily on the list of those given civil penalties for employing illegal workers. Is that because they employ illegal workers more frequently than other employers or because they are targeted more frequently for enforcement activity? If it is the latter, can the Minister tell us why?

In concluding, I should point out to the Committee that if the clause is passed, we will table further amendments on Report to remove the power to extend the provision to Scotland through regulations.

As I have indicated, there are ongoing discussions with the Scottish Government about the impact of the clause and the potential for regulations. While the hon. Member for Paisley and Renfrewshire North and I were in agreement this morning, this may be a point on which we are not of the same view.

As the underlying purpose of the clause relates to immigration, our view is that a legislative consent motion is not required. We are in the process of consulting the Scottish Government on any necessary amendments to make provision for Scotland on the face of the Bill, and similarly for Northern Ireland. Management information for 2014-15 highlighted a number of operations from immigration enforcement in Scotland.

The hon. Gentleman asked me for evidence of why we think this is an important area to legislate on by building a mechanism into the licensing provisions—evidence of people with no status in the UK being captured within those sanctions and mechanisms. Of all civil penalties served in the year to June 2015, I am advised that 82% were served on the retail industry or hotel, restaurant and leisure industry, a large proportion of which hold premises or personal alcohol licences. That is why we see this as an issue affecting a particular sector. In building the legislative framework, it seems appropriate to strengthen the mechanisms available and to build the provisions in the Licensing Act and the potential sanctions in this way.

I appreciate the points that the hon. Gentleman makes and the different view he holds, but it is for the purposes I outlined that we view this as a reserved matter and are taking this stance. I assure him that discussions continue with the Scottish Government on how this may be applied within Scotland.

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

Clause 10 ordered to stand part of the Bill.

Schedule 1

Licensing Act 2003: amendments relating to illegal working

I beg to move amendment 1, in schedule 1, page 49, line 38, leave out sub-paragraph (6) and insert—

‘( ) After subsection (5) insert—

(5A) Where an interim authority notice is cancelled under subsection (3)(b)(ii), the licensing authority must also give a copy of the notice under subsection (4) to the Secretary of State.””

This amendment requires a licensing authority to notify the Secretary of State of its decision to cancel an interim authority notice where the Secretary of State has given notice under section 48(2B) of the Licensing Act 2003 that granting the interim authority notice would be prejudicial to the prevention of illegal working.

These minor and technical amendments strengthen and clarify the amendments made by schedule 1 of the Bill to the Licensing Act 2003. The amendments to that Act in general build in additional protections against illegal working in the licensing regime governing the sale of alcohol and late-night refreshments. The amendments must be considered within the context of clause 10 and schedule 1 to the Bill.

Amendment 1 requires a licensing authority to notify the Secretary of State—in effect, the Home Secretary—if the licensing authority decides to cancel an interim authority notice where the Secretary of State had notified the licensing authority that failing to cancel the interim authority notice would be prejudicial to the prevention of illegal working.

Amendment 2 ensures that a chief officer of police may take into account whether an immigration civil penalty, for employing an illegal worker or renting a dwelling to an illegal migrant, would undermine the crime prevention objective when considering whether to object to a personal licence application.

Amendment 3 makes a similar provision to amendment 2 where the chief officer of police is notified, after a personal licence has been granted, that the licence holder was required to pay an immigration penalty in the period between the application being made and its being granted.

Amendments 4, 5 and 6 substitute “licence holder” for “applicant”, so that they are consistent with the other amendments to section 124 of the 2003 Act.

Amendment 7 requires a licensing authority to notify the Secretary of State of its decision whether or not to revoke a personal licence where the Secretary of State has served an immigration objection notice under section 124(3B) of the 2003 Act.

Amendment 8 makes consequential amendments to section 10 of the 2003 Act and amendment 9 makes consequential amendments to sections 109 and 111 of the Police Reform and Social Responsibility Act 2011.

Amendment 10 makes transitional provisions, so that the amendments to sections 13, 16, 42, 47 and 120 of the 2003 Act do not apply in relation to applications made, or interim authority notices given, before the commencement of the respective paragraph of schedule 1.

On a point of clarification in relation to proposed new section 179(1A) of the Licensing Act 2003, as inserted by paragraph 22(2) of schedule 1, I want to ask the Minister an open question. Why is the test there for an immigration officer to enter premises that they have “reason to believe” the premises are being used, rather than, as I think is the case elsewhere in the Bill, that they have “reasonable grounds” to believe that? It may to be align the Bill with other licensing legislation, but on the face of it, that is a much lower threshold than the usual threshold for entering premises, and it is with a view to seeing whether an offence is being committed. This is a genuine, if probing, question.

I think the amendments are being made on the basis of consistency with other legislation. However, in the spirit in which the hon. and learned Gentleman raised that issue, I will have a look at that point of detail in relation to previous legislation and how this is framed in some of the other tests that are being applied. If there is an issue, I will come back to him.

Amendment agreed to.

Amendments made: 2, in schedule 1, page 51, line 27, at end insert—

‘( ) In subsection (5)—

(a) omit the “and” at the end of paragraph (a);

(b) at the end of paragraph (b) insert “and

(c) the applicant having been required to pay any immigration penalty,”.”

This amendment ensures that a chief officer of police may have regard to an applicant being required to pay an immigration penalty when considering whether granting a personal licence would undermine the crime prevention objective.

Amendment 3, in schedule 1, page 53, line 11, leave out sub-paragraph (3) and insert—

‘( ) In subsection (3)—

(a) in paragraph (a)—

(i) for “applicant” substitute “licence holder”;

(ii) for “, and” substitute “which occurred before the end of the application period,”;

(a) in paragraph (b), after “relevant offence” insert “and which occurred before the end of the application period”;

(b) at the end of paragraph (b) insert “and

(c) the licence holder having been required before the end of the application period to pay any immigration penalty,”;

(c) in the words after paragraph (b), omit “which occurred before the end of the application period,”.”

See the explanatory statement for amendment 2.

Amendment 4, in schedule 1, page 53, line 20, leave out “applicant” and insert “licence holder”

This amendment and amendments 5 and 6 substitute “licence holder” for “applicant” to be consistent with the other amendments to section 124 of the Licensing Act 2003.

Amendment 5, in schedule 1, page 53, line 22, leave out “applicant” and insert “licence holder”

See the explanatory statement for amendment 4.

Amendment 6, in schedule 1, page 53, line 26, leave out “applicant” and insert “licence holder”

See the explanatory statement for amendment 4.

Amendment 7, in schedule 1, page 54, line 7, leave out sub-paragraph (6) and insert—

‘( ) After subsection (5) insert—

(5A) Where the authority revokes or decides not to revoke a licence under subsection (4)(b)(ii) it must also notify the Secretary of State of the decision and its reasons for making it.””

This amendment requires a licensing authority to notify the Secretary of State of its decision whether or not to revoke a personal licence where the Secretary of State has served an immigration objection notice under section 124(3B) of the Licensing Act 2003.

Amendment 8, in schedule 1, page 56, line 24, at end insert—

In section 10 of the Licensing Act 2003, (sub-delegation of functions by licensing committee etc), in subsection (4)(a), in sub-paragraphs (v), (vi) and (x), omit “police”.”

This amendment makes consequential amendments to section 10 of the Licensing Act 2003.

Amendment 9, in schedule 1, page 57, line 17, at end insert—

In the Police Reform and Social Responsibility Act 2011, omit sections 109(9) and (10) and 111(3) and (5).”

This amendment makes consequential amendments to sections 109 and 111 of the Police Reform and Social Responsibility Act 2011.

Amendment 10, in schedule 1, page 57, line 19, at end insert—

The amendments of sections 13, 16, 42, 47 and 120 of the Licensing Act 2003 made by paragraphs 3, 4, 6, 9 and 15 respectively of this Schedule do not apply in relation to applications made, or interim authority notices given, before the coming into force of the respective paragraph.” —(James Brokenshire.)

This amendment makes transitional provision to the effect that the amendments to sections 13, 16, 42, 47 and 120 of the Licensing Act 2003 do not apply in relation to applications made, or interim authority notices given, before the coming into force of the respective paragraph of Schedule 1 making the amendment.

Ordered, That further consideration be now adjourned.—(Charlie Elphicke.)

Adjourned till Thursday 29 October at half-past Eleven o’clock.

Written evidence reported to the House

IB 12 Tai Pawb (housing for all)

IB 13 Country Land & Business Association (CLA)

IB 14 A Immigration Law Practitioners’ Association (ILPA) further submission

IB 14 B Immigration Law Practitioners’ Association (ILPA) (Part 2)

IB 14 C Immigration Law Practitioners’ Association (ILPA) (Part 3)

IB 15 Women for Refugee Women

IB 16 Detention Action

IB 17 Royal College of Nursing

IB 18 Housing Law Practitioners Association

IB 19 British Red Cross

IB 20 Amnesty International UK

IB 21 TUC

National Insurance Contributions (Rate Ceilings) Bill (First sitting)

The Committee consisted of the following Members:

Chairs: Mr Adrian Bailey, †Andrew Rosindell

† Berry, Jake (Rossendale and Darwen) (Con)

† Boswell, Philip (Coatbridge, Chryston and Bellshill) (SNP)

Cooper, Julie (Burnley) (Lab)

† Frazer, Lucy (South East Cambridgeshire) (Con)

† Gauke, Mr David (Financial Secretary to the Treasury)

† Long Bailey, Rebecca (Salford and Eccles) (Lab)

† McGinn, Conor (St Helens North) (Lab)

† Mc Nally, John (Falkirk) (SNP)

† McDonald, Andy (Middlesbrough) (Lab)

† Mak, Mr Alan (Havant) (Con)

† Marris, Rob (Wolverhampton South West) (Lab)

† Menzies, Mark (Fylde) (Con)

† Merriman, Huw (Bexhill and Battle) (Con)

† Morton, Wendy (Aldridge-Brownhills) (Con)

† Stride, Mel (Lord Commissioner of Her Majesty's Treasury)

† Warman, Matt (Boston and Skegness) (Con)

Liam Laurence Smyth, Committee Clerk

† attended the Committee

Witnesses

John Whiting, Tax Director, Office of Tax Simplification

David Gauke, Financial Secretary to the Treasury

Cerys McDonald, Deputy Director of Personal Tax at the Treasury

Public Bill Committee

Tuesday 27 October 2015

(Morning)

[Andrew Rosindell in the Chair]

National Insurance Contributions (Rate Ceilings) Bill

Before we begin, I will make a few preliminary points. Please switch electronic devices to silent. Tea and coffee are not allowed during the sittings. We will first consider the programme motion on the amendment paper. We will then consider a motion to allow us to deliberate in private about our questions before the oral evidence sessions, and then a motion to enable the reporting of written evidence for publication. In view of the time available, I hope that we can take those matter formally, without debate.

Ordered,

That—

(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 27 October) meet at 2 pm on Tuesday 27 October;

(2) the Committee shall hear oral evidence on Tuesday 27 October as follows—

TABLE

Time

Witness

Until no later than 10 am

Office of Tax Simplification

Until no later than 10.45 am

HM Treasury

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5 pm on Tuesday 27 October.— (Mel Stride.)

Resolved,

That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication—(Mel Stride.)<