House of Lords
Monday, 18 January 2016.
Prayers—read by the Lord Bishop of Derby.
Higher Education: Disabled Students
To ask Her Majesty’s Government what steps will be taken to ensure that from the start of the 2016–17 academic year all providers of higher education have fulfilled their obligation to provide non-medical provision for disabled students which was previously covered by the Disabled Students’ Allowance.
My Lords, it is not the Government’s intention that institutions are to be responsible for all non-medical provision, and the disabled students’ allowance will continue to supplement institutional provision where students require a more specialist type of support. Officials are meeting with sector partners including the Higher Education Funding Council for England, the Quality Assurance Agency for Higher Education, the Office for Fair Access and the Equality Challenge Unit to discuss how best to monitor equality and inclusivity. This will include considering the provision of reasonable adjustments by HE providers.
I thank the Minister for that reply. However, is it not clear that HE providers are taking on a new responsibility which they have not had hitherto? Also, is it not true that BIS in its own equality analysis has pointed out that there is no structure to make sure that the duties which are to be imposed will be carried out? As these are new duties which, if HE providers get it wrong will mean that students fail, why have not the Government got something ready in time?
The noble Lord will be aware that higher education institutions already have a duty to make reasonable adjustments for disabled students under the Equality Act 2010. We are working hard with organisations to make sure that not only do they share best practice but also, importantly, to enable us to identify a baseline which disabled students can expect as a minimum level of provision in the duties that will be moved over to higher education institutions from this September.
My Lords, a Which? report produced last October found that higher education institutions are falling short in providing information on course design, choice and assessment, as required by law. This suggests that the expectations of BIS about its ability to transfer its responsibilities for disabled students to higher education institutions are not realistic, and that students will be severely disadvantaged and left to implement the Equality Act provisions on an individual basis. In order to hold higher education institutions effectively to account for their performance, would it not make sense for them to be required to report annually on their support for disabled students, and for those reports to be monitored and in turn reported on by the Office for Fair Access in its annual report?
I thank the noble Lord for his question. As I have said, BIS officials are working hard with universities and organisations to make sure that disabled students receive the level of support they need. We are certainly going to be encouraging providers to publish data on their provision for disabled students. We have seen an increase in the number of disabled students accessing higher education, a trend that we are very proud of and want to see continue. We are determined to work with higher education institutions to make sure that disabled students continue to get the level of support they need.
I do not know what the Government have got against students. They take away their maintenance grant and now they are going to cut some £65 million which has been providing non-medical help for disabled students. What assurances can the Minister give that the smaller institutions, or indeed those like the Open University which have done the most to attract and service disabled students, will be able to continue providing help without that funding? Further, what assurances can she give that students of whichever organisation they go to will get the help they need at a consistent level?
As I have already mentioned, our higher education institutions have a responsibility under the Equality Act 2010, and we are working closely with them to ensure that disabled students continue to get the high-quality support they need. We have seen the institutional income of universities go up from £23 billion to nearly £24.5 billion, and it is forecast to go to £31 billion by 2017-18. We believe that it is right that the responsibility for supporting disabled students, whom both we and universities want to encourage to attend, is spread between universities and the Government.
Following on from the question of the noble Baroness, can I press the Minister on support for disabled part-time students? There are real concerns that these cuts will have a disproportionate effect on them. What safeguards are the Government putting in place to ensure that these students are not disadvantaged from going on to further study?
Disabled students’ allowances are not disappearing; they are simply being refocused on more specialist help, with universities taking on some of the responsibility for some help. For the first time, we are instituting an exceptional cases process so that if a student is in dispute with the university about the reasonable adjustments they believe should be implemented, they are not disadvantaged. That is a new process to make sure that no student suffers.
My Lords, has the Minister’s department been in touch with the Department for Work and Pensions and talked to her honourable friend Justin Tomlinson, the Minister responsible for disabled people about this matter? It seems to me that government is not always joined up when talking about disabled people. As the noble Baroness will know, the Minister is in charge of the Disability Confident campaign to get more disabled people into work. This is a very important part of making sure that disabled students are not disadvantaged.
We are doing a lot of across-government work in this area. In response to the consultation, we received a number of extremely useful suggestions on how our education providers might be able to ensure that they make reasonable adjustments and implement this well. Again, we are talking to university and sector partners to make sure that all these good ideas and best practice are spread.
As I have said, students will continue to have their needs assessed. The disabled students’ allowances will remain. Universities will be responsible for delivering some of that support. We are working with university partners to ensure that they are ready to deliver this and can do so to a high quality. We are looking to them to identify and baseline what disabled students can expect as a minimum level of provision and we are introducing a new exceptional cases process to ensure that where there is a dispute, students are not left without the support they need.
Education: Polish A-level
My Lords—or Moi szlachetni Panowie—we remain committed to securing the future of the existing range of language qualifications, including the Polish A-level. We are therefore continuing to work closely with relevant organisations and others to explore how best to enable these qualifications to be offered in future years.
Polish is the second most spoken language in our country. Deep historic ties exist between Great Britain and Poland. Is not the number of candidates sitting A-level Polish increasing, not falling, as is sometimes alleged? Does my noble friend agree that the Conservative Party has given an unambiguous commitment to preserve the Polish A-level exam? Does he also agree that the highly respected Polish Educational Society has put forward effective solutions to the small number of practical difficulties—such as the need to recruit more senior examiners—that have been raised by the AQA and Ofqual?
Not only are A-levels increasing, but the number of entrants over the last five years for GCSE Polish has gone up by 50%. I agree entirely with my noble friend’s sentiments. We have given a clear commitment. We are determined to ensure that these courses continue. They are very important to us as a trading nation and an outward-facing country, but as my noble friend says they are also particularly important for communities to enable their children to engage with their rich cultural history.
My Lords, of course it is important for immigrants, not just Muslim ones, to learn English, but is it not also important for this linguistically challenged nation to maximise its language resources? Do the Government have a strategy to support the retention and flourishing of what one might call family heritage languages as a source of strength for the economy and trade—indeed, the Minister just referenced that—as well as social, cultural and intellectual enrichment?
My Lords, the Government’s commitment to the continuation of Polish is welcome, but will the Minister also assure the House that the Government’s injection of £10 million into teaching Mandarin in schools will not be at the expense of other languages identified by the British Council as the 10 most vital to the UK for economic, cultural and diplomatic reasons, including French, German and Spanish, as well as lesser-taught languages such as Arabic and Turkish?
I am happy to give the noble Baroness that assurance. China is obviously a country of huge strategic importance to this country and education is very important in that. A great deal of activity is going on. In addition to the £10 million that we have given to boost Mandarin teaching in schools, excellent work is being done at the IOE Confucius Institute, supported ably by organisations such as HSBC and Swire.
My Lords, will my noble friend the Minister tell us what progress has been made on teaching foreign languages overall at A-level? In particular, to what extent are we reversing the trend in the teaching of German, which has shown the sharpest decline in recent years?
My noble friend makes a very good point about the decline in German, but as I said, we believe that, with our expectation that 90% of pupils will take the EBacc, this will further increase the number of pupils taking GCSEs in modern languages. Certainly, the number of pupils taking languages in the EBacc has gone up by 25% over the last five years. We hope that this will have a compounding effect on A-levels.
My Lords, do the Government not agree that, while traditionally our relations with Poland have been extremely close, one or two statements recently made by the Prime Minister have not improved them? Would not the encouragement of the learning of Polish by British, as well as other, students be of considerable importance at a time when our relations with Poland are so important?
My Lords, the noble Lord, Lord Lexden, spoke of the deep historic ties between Britain and Poland. I recall that the Poles produced the largest non-British contingent of pilots in the Battle of Britain, and several squadrons in the RAF and at least two armoured divisions in the Second World War. Britain seems almost entirely to have forgotten about that. I understand that the Prime Minister was unaware of it when he visited Warsaw last time. Could we not do something to symbolise the contribution that Poland made to the British victory in the Second World War, for example by encouraging a visible Polish presence at the next Remembrance Sunday commemorations?
My Lords, most British citizens are likely to respect the Poles who live and work in this country not for having obtained A-levels in English, although that is greatly to be encouraged, but for providing the skill levels in crucial trades—plumbing is an obvious example, but there are many other such trades—which we are clearly not matching. Are the cuts in further education defensible, given that we clearly have low skill levels in this country in crucial areas?
The noble Lord makes an extremely good point. Of course, we have a lot of Polish labour here, particularly in certain skills where there are shortages—partly as a result of the booming economy—such as construction. However, our apprenticeships programme is very much focused on rectifying this.
My Lords, I do not think our war-time connections with Poland have been forgotten in any way, and they never will be. On the contrary, I think we are constantly reminded of them. However, in considering the teaching of the Polish language, does he agree that Poland recognises the need for the major reform that Europe is now undergoing, and that, despite some differences over the handling of migrant benefits, our relations with Poland are very close indeed and will form a major force in the reform of the European Union which we are now seeking?
Living with Difference
My Lords, the Government note this report and its contribution to the debate on faith in Britain today. We continue to celebrate the role of faith in society, with a particular emphasis on co-operation between different faiths as a way of breaking down barriers and strengthening communities. The report raises a number of questions for a range of organisations. I will ensure that all government departments consider the recommendations relevant to their individual policies.
I thank the noble Baroness. I declare an interest as chairman of the commission. Will the Government consider organising, or allowing to be organised, a meeting of senior civil servants from the relevant departments to discuss some of the implications of our report?
My Lords, is it acceptable to talk of celebrating differences while, at the same time, Muslims in particular are being demonised at every turn? Is it not a question of celebrating differences but of recognising what all religions have in common and not choosing some as terrorists and others as friendly people?
Can the Minister say how the Government will respond to the point made by the report that, UK wide, there has been a lack of movement in education policy to implement the Equality Act’s requirement for all schools to foster good relations between people of different backgrounds? The noble Baroness’s fine words do not talk about implementation.
My Lords, while this is not an official report, I can certainly say that from my own department’s point of view, and certainly from my personal point of view, there are very good examples of schools—particularly faith schools—that do much to foster understanding and relationships between other faiths. I am sure there may also be examples where schools could do that better.
My Lords, I thank my noble friend for her comments about faith schools and for reinforcing the point that this report, welcome as it is as a contribution to debate, is not an official report. The Government have no obligation to respond to it, and many people feel that it does not have the balance entirely right.
I thank my noble friend for that comment. He is right; it is not an official report but I have undertaken to meet the noble and learned Baroness, Lady Butler-Sloss, and officials to discuss it. However, the noble Lord is absolutely right that it is not an official report.
My Lords, does the Minister agree that the recommendation around religious literacy is of particular note? Does she recognise that, at local and national government levels, there is a serious problem with religious literacy that the Government may seek to help address?
My Lords, the focus of the questions so far has been very much around faith, but the title of the report is about religion and belief. What are the Government doing to ensure that all schools teach a wide-ranging RE and belief curriculum, including academies and free schools?
My Lords, while we are on that subject, when the Minister writes to the noble Baroness, Lady Brinton, will she also comment on the fact that it will be quite difficult for schools to tackle the important issue of religious literacy and literacy with regard to belief raised by the right reverend Prelate if we cannot improve access to a significant number of well-trained teachers in this area? What will the Government do to make that issue more of a priority?
Does my noble friend the Minister agree that the Prayers we have here before our business begins are not just energising but a stark reminder that we are here to represent something bigger than ourselves and our respective political parties? Therefore, the Prayers are not just complementary to other faiths but very much inclusive of them?
My noble friend makes a very good point. When I stand at Prayers, my noble friend is often there, as are members of other religions and myself as a Catholic. I commend the fact that the Bishops conduct the Prayers in such an inclusive way. That is why I think so many Members of your Lordships’ House attend Prayers, as it is a lovely time of reflection.
My Lords, I declare my interest as patron of the Woolf Institute, which promoted the inquiry chaired by the noble and learned Baroness, Lady Butler-Sloss. Does the Minister agree that the inquiry is an excellent example of people of different faiths coming together to discuss critical problems which face this country, as differences between faiths are very complex? The inquiry drew representatives with different views from all sections of the community, who produced an excellent report.
My Lords, would the Minister please care to reply to the question about what the Government are doing to increase the supply of suitably qualified teachers? Among the considerations they ought to take into account is that no member of the Government should run down the many thousands of excellent teachers in all schools, not just free schools and academies.
National Health Service: In-Patients with Learning Disabilities
My Lords, this Government are committed to reducing the level of avoidable deaths. The learning disabilities mortality review, commencing this year, is piloting local reviews of premature deaths of people with learning disabilities. The Care Quality Commission will also be undertaking a wider review into the investigation of deaths in a sample of acute, mental health and community trusts.
My Lords, I am grateful to the Minister for his Answer. He is clearly aware of the recent reports which have shown that there have been many avoidable deaths of people with learning disabilities within the care of the National Health Service. Indeed, some estimates have put it at more than 1,000 deaths per year. He is aware that Sir Bruce Keogh, medical director of NHS England, has very recently written to NHS and foundation trusts asking them to carry out a self-assessment of avoidable deaths. Given that the NHS seems to have a real problem with providing decent care generally to people with learning disabilities, how confident can we be that this self-assessment will actually identify people with learning disabilities who have suffered avoidable deaths within its care?
My Lords, this is a very important question. The fact that so many people with learning difficulties die much younger than people without them is of concern to everybody in this House. The review being conducted by Sir Bruce Keogh, to which the noble Lord referred, is a self-assessment tool. It is due to report quickly—by April—so is a short-term attempt to get the bottom of this. It is not a long-term effort, which would be much more comprehensive. We have two forms of looking at avoidable or excess deaths. One is the standardised system, which is a statistical basis for looking at the number of excess deaths. The other looks at avoidable deaths and is done by looking comprehensively at a wide sample of case reviews to give us a much more accurate picture of what is really happening.
My Lords, as the noble Lord says, we know a great deal about why people with learning disabilities die sooner than they should. What has been missing so far is a mechanism for taking that learning forward into practice. Such feedback mechanisms, and the fact that their reviews are mandatory, are the strengths of the other confidential enquiries. Will the Minister explain why the new national learning disability mortality review has not been established on the same footing as, for example, the national child death review?
My Lords, the noble Baroness is right. The national learning disability mortality review programme, which is being hosted by Bristol University, does not have the mandatory basis that other reviews have had. I am not sure why it was not set up on the same basis. It is being funded by NHS England, although it has the support of a wide range of different organisations. I will look into that aspect of the review and write to the noble Baroness.
Does my noble friend agree that the failure in hospitals to assess the capacity of people with learning disabilities and those on the autistic spectrum is one of the great weaknesses in providing accurate and timely intervention for people who are in hospital and who have a learning disability? Will he make a particular case for assessing the ability of staff to accurately define capacity? Will he also take another look to see that hospital passports for people with learning disabilities and autism are a mandatory requirement, not just an option, for all inpatients?
My noble friend makes a number of very good points. I will draw them to the attention of Mike Richards, the chief inspector for acute care in England, who is about to embark on a thematic review of avoidable deaths. He will look in particular at those with learning difficulties and I am sure that he will take into account the words of my noble friend.
My Lords, does the Minister accept that something is seriously wrong when two-thirds of the unexplained deaths of these highly vulnerable people with learning difficulties who die in NHS hospitals in England are not properly investigated? Does he accept that this is a much more serious scandal than that based upon some highly dubious statistics used by the Secretary of State for Health to talk about unexplained deaths in hospitals at weekends?
I tried to explain the difference between avoidable deaths and excess deaths earlier in my answers, without trying to make any political point about it. There is an important distinction to be made, and I hope that I made it. I agree with the noble Lord that this is a very serious issue, and the Government are approaching it in a very serious way.
My Lords, is the Minister aware that clinicians meet regularly to discuss all their complications, and that these meetings are extremely valuable and relevant? Have politicians considered the possibility that they might meet every week to discuss their mistakes?
My Lords, I am sure that it would be a very long meeting. My noble friend is right that mortality and morbidity meetings are extremely important in hospitals. It would seem that practice is very variable across hospital trusts and I know that part of what Sir Bruce Keogh, the medical director of the NHS, is doing is trying to develop, along with Monitor and the CQC, a governance structure around mortality that all hospitals can learn from.
My Lords, the new learning disability strategy, Building the Right Support, proposes that people with learning disabilities should get their mental health treatment from mainstream mental health services—which as noble Lords will know are already under considerable strain. Can the Minister let us know what assessment the Government have made of the likely impact that this will have on mental health services and how they envisage that the financial and other implications will be managed?
The noble Lord refers to the paper Building the Right Support, which I think he will be very supportive of. It is designed to treat and look after many more people with learning difficulties outside institutional settings—in their own homes or in special purpose, much smaller homes. Where necessary, they will of course need to receive mental health services. I am not aware that we have done a particular impact study on that, but I will investigate it and write to the noble Lord.
Accessible Sports Grounds Bill [HL]
Bill passed and sent to the Commons.
National Minimum Wage (Amendment) Regulations 2016
Motion to Approve
My Lords, I am rarely surprised by events in your Lordships’ House but I must admit that I was taken aback to be confronted by a regret Motion on the statutory instrument before us, laid by the main opposition party. The policy thinking behind the regulations is to move to a higher-wage, lower-tax and lower-welfare society, one aspect of which requires building on the present national minimum wage. This thinking has been widely explained and debated here and in the other place.
As to the detail, the essence of the regulations before us is to introduce the new national living wage on 1 April this year, initially at a rate of £7.20 an hour for all those aged 25 and over. As has been well publicised, the objective is to reach a rate equivalent to 60% of median earnings by 2020, which is expected to be over £9 per hour. Further steps towards the 60% objective between now and 2020 will benefit from the advice of the Low Pay Commission. Its role going forward will be even more important: consulting and recommending increases to the national living wage as well as recommending national minimum wage rates for under-25s.
Of course increasing minimum wages makes possible non-compliance a more serious issue. Therefore the regulations also include measures to deal with this aspect, notably by significantly increasing the penalties, which I will come back to. We will also be launching a publicity campaign to run until 24 April to ensure that everyone, employer and employee alike, is aware of their rights and their responsibilities. We estimate that this will cost up to £4.8 million.
These changes require a certain amount of administrative tidying-up. In particular, the Government are undertaking a review to assess the case for aligning the national minimum wage cycle with that for the national living wage and with the tax year. As part of this review we are consulting key employer and worker representatives as well as working closely with the Low Pay Commission, whose good work I remember so well from my time as a private employer. For completeness I should add that a number of measures have been adopted to help employers to adapt to the changed situation, notably via cuts in national insurance contributions and in corporation tax, and by increasing small business rate relief for a further year. That is the background and the contents of the regulations in a nutshell.
I now turn to possible problems which may be of concern to the Benches opposite. Their Motion refers to the 19th report of the Secondary Legislation Scrutiny Committee. That report drew attention to risk of non-compliance to which the Government themselves had drawn attention in our impact assessment. The committee stressed that the Government should continue to acquire and publish information on non-compliance. The Government accept this principle, and the information will continue to be provided through the Low Pay Commission, which publishes a hefty report alongside its annual recommendations to government.
The wider background is that companies might react to the increase in minimum wages in a number of ways, including by a reduction in profits, by a reduction in the number of hours worked, by a restructuring of their workforce, by an increase in prices or by increasing the productivity of their workers. Of course, theoretically, non-compliance would be another response, but we are taking steps to deal with that. We calculate that by 2020, if the policies I have outlined are followed, then the number of workers on the national minimum wage and living wage will almost double from 1.5 million now to around 3 million. So of course effective enforcement is key.
Here we have done much and propose to do more. Since March 2014, both the penalty calculation and the cap have been increased. The rules on naming and shaming have been relaxed, so more employers are named publicly. We have significantly increased HMRC’s enforcement budget—from £8.3 million in 2009-10 to £13.2 million this year—with commitments from the Prime Minister in September to further increases. All this has resulted in greater enforcement activity and tougher sanctions for those who break the law. Already this year, HMRC has recovered over £8 million in arrears for 46,000 workers—this compares to £3.3 million in arrears and 26,000 workers in the previous year.
Your Lordships will recall that this Government have recently increased the maximum penalty an employer can face when they break the law. We quadrupled the £5,000 cap to £20,000 in March 2014—the noble Lord, Lord Stevenson, will remember some of the discussion—and applied the cap on a per worker basis rather than per employer in May 2015. We are starting to see those larger penalties come through. In the next month, we will name a single employer who faced a penalty in excess of £500,000. Under the old regime, that penalty would have been capped at £5,000. As a result of these regulations, a penalty for any similar underpayments in the future would be greater still.
Increasing the calculation of the penalty from 100% of the arrears owed by an employer to 200%, as proposed in these regulations, will further deter employers who would otherwise be tempted to underpay their workers. We are using the power of advertising to ram this home. The Government want everyone to benefit from the economic recovery. That is why we believe that the national living wage is the appropriate step up for hard-working people right across the United Kingdom. I commend these regulations to the House.
Amendment to the Motion
At the end insert “but that this House regrets that the draft regulations may not deliver the expected benefits to employees, in the light of the 19th Report of the Secondary Legislation Scrutiny Committee, which pointed out that the Government accept that business reactions to the resulting increased labour costs are uncertain, and in the light of the continuing need for greater information on actions being taken to reduce non-compliance with the National Minimum Wage so that Parliament can judge the success of new measures”.
My Lords, I thank the Minister for introducing this statutory instrument. I also congratulate her on her brilliant sense of timing. She has clearly been having acting lessons—to be able to pause so gracefully to allow those who do not want to hear her to leave is a masterpiece in timing from which we could all learn.
In its 19th report of the current Session, the Secondary Legislation Scrutiny Committee chaired by the noble Lord, Lord Trefgarne, drew these draft regulations to the special attention of the House on the grounds that they give rise to issues of public policy likely to be of interest to the House. We owe a considerable debt to this hard-working committee, which has once again done your Lordships’ House a great favour in helping us hold the Government to account by drawing this SI to our attention. Therefore, the Minister should not be surprised at the Motion. She should look to the wider context within which this is placed because we are not against the principle, but we think the committee has made some important points.
Statutory instruments have a major impact on people’s lives so it is right that they are given proper scrutiny in Parliament. As a responsible and loyal Opposition, we take pride in doing this and intend to continue to do so. However, as was made clear by my noble friend Lady Smith in the debate in your Lordships’ House last week, it is important that the Government also act responsibly and do not abuse the trust we should place in this process by trying to slip through substantial and far-reaching changes. Just because the power exists in primary legislation is a necessary but not always sufficient reason. When she responds to this amendment, will the noble Baroness share with us whether the question of using primary legislation for this important measure was considered?
The SLSC’s report says:
“It will fall to employers to meet the cost of the increases in employees’ pay. BIS puts the estimated total cost of the NLW’s introduction at £1,138.7 million in 2016–17”.
The report goes on:
“BIS says that business reactions to increased labour costs can include reducing profits, reducing the number of hours worked, restructuring their workforce, increasing prices, increasing the productivity of their workers, or substituting younger workers aged less than 25”.
As the report highlights, this response raises a number of questions about what work has been done by BIS on whether the benefits of the national living wage to low-paid workers could be offset by any or all of these business reactions. The department’s response—I think this was the reason that the committee picked up this point—was that there were too many uncertainties for a reliable estimate of the cost to be given. The SLSC is surely right to highlight this as a major deficiency in a policy. When she responds, will the Minister give us a bit more detail about what modelling has been done on likely business responses?
I accept, as has the Regulatory Policy Committee, that it is difficult to monetise these options but even so it surely would not be difficult to give a broad-brush assessment of what the department thinks is likely to happen on the ground. A significant trend towards any or all of these options will materially affect the benefits anticipated and if we accept the ripple effect described in the impact assessment it will flow to some 6 million hard-working but low-paid people.
Secondly, the SLSC report points out, as the Minister said, that BIS accepts that non-compliance with the national minimum wage may increase. In the excellent impact assessment—I pay tribute to officials for the work they have done on this—the detail included spells out the measures that are going to be taken by BIS, some of which the Minister mentioned. There are what we might call carrots covering various allowances and tax reductions although it is fair to point out that these will not compensate either in total or in timing for the increased costs being transferred to millions of businesses, particularly those which are small or medium-sized. A very good example of this is the reference on page 29 of the impact assessment which says that, “Funding from the apprentice levy will be put in the hands of employers to support training. This will improve worker productivity”. I invite the Minister to set out for me in writing how the additional cost of the apprenticeship levy, which is intended to be borne by larger employers, translates into a compensating financial benefit for the higher labour costs being transferred to the SME sector.
In truth, the stick, as described by the Minister, is the proposal to double the financial penalties for companies which do not pay the new national minimum wage. BIS has confirmed that extending the coverage of the statutory wage floor and adding complexity may increase non-compliance. Will the Minister set out, in more detail than she has already, how she will comply with the SLSC’s request for the Government to publish more information in future and thus satisfy the wish expressed by the committee that Parliament can properly judge the extent to which compliance with the new rate delivers the expected benefits to employees?
There is a good section in the Explanatory Memorandum on the equalities impact of the new proposals and the duties of the department in this regard. It is demonstrated within the Explanatory Memorandum that low-paid work is most prevalent in some sectors, such as retail, social care, hospitality and cleaning. It also appears to be more prevalent in part-time work, shift work, and among younger and older workers. It affects women more than men, and the largest numbers of people affected live in the north-west, the Midlands and Scotland. Clearly, if the policy works as intended, things should improve in these sectors, areas and groups. It may help to reduce the gender imbalance in pay, and we can hope that a more equal society will gradually emerge.
However, as the SLSC points out, there are real risks that non-compliance will rise and that changes in employment practice will vitiate the policy objectives. The national living wage will have national universal coverage for workers aged 25 and above, and the forthcoming publicity and other measures contained in the SI will help. Does the Minister agree that it may be necessary, and would certainly be desirable, to design additional measures to root out poor practice and illegality in the low-paying sectors listed in Table A3 of Annexe 2, the worst regions identified in Table A4 of Annexe 2 and among the groups identified in Chart A1 of Annexe 1 of the Explanatory Memorandum?
I do not want to suggest or imply that there is not a majority of responsible employers who are always going to abide by minimum wage legislation, but the figures presented in the report which accompanies the regulations are cause for concern and, as I am sure the Minister will agree, more can always be done.
Finally, I challenge the use of the term “national living wage”. As I understand it, the reason for the change from the NMW to the NLW is that:
“The Government believes that the economy needs rebalancing from a low wage, high tax, high welfare society to a higher wage, lower tax, lower welfare society”.
The impact assessment goes on to say:
“The UK can also do more to raise the wages of the low-paid compared to other countries—22% of UK workers are low-paid, compared to the OECD average of 16%”.
It explains that the OECD defines low pay as less than two-thirds of median earnings, but the initial introduction of the NLW will put those who receive it at 55% of the current UK median wage. Even if the aspirations for a £9 per hour living wage are achieved by 2020, it is estimated that that will get to only 60% of the UK median wage. In other words, this is more about raising the level of the existing national minimum wage than it is about introducing a genuine living wage. According to the Living Wage Foundation, the current UK living wage is £8.25 an hour and the current London living wage is £9.40 an hour. Will the Minister explain this anomaly? In particular, will she explain why the target for 2020 is only 60% of the median wage and why the Government are not trying to reach the OECD target of 66.7%? I beg to move.
My Lords, the Minister should not be surprised that we are having a debate of this nature. On this side, we fully understand the reasons why the noble Lord, Lord Stevenson, has moved his amendment. There is concern that the Government entered into this policy on the hoof. They did very little consultation or preparation for it. There are also signs that there were was not much cross-departmental consultation within government. The measure is designed, we think, to deflect attention from what was at that time the reduction of the tax credit policy. Like the noble Lord, Lord Stevenson, we are very concerned about the looseness of words to describe something that it is not. We have had in the housing area the concept of affordable rents, and indeed affordable housing, when they clearly are not affordable. Now we have the national minimum wage perverted into the national living wage. We welcome the increase but it is a deception to think that we will necessarily be able to reach what is a genuine living wage, as the noble Lord, Lord Stevenson, pointed out.
However, if this is the first step—and I accept that it is—to do more for low-paid employees and reduce subsidies to employers, then of course we welcome it. That initial step is acceptable, but there are a number of conditions. Clearly there was a lack of involvement of the Low Pay Commission in drawing up these original proposals. We accept what the Government have said—in future they will use the Low Pay Commission for advice on further increases, and in bringing together the national minimum wage with the so-called national living wage. But as the Secondary Legislation Scrutiny Committee pointed out, this is a big change: it involves £1.2 billion of costs in the labour market, and 6 million employees are affected. I must declare an interest here as chair of Housing & Care 21, which employs people who will be affected by these changes, although we largely pay well above the national minimum rate. The whole area of social care is particularly vulnerable. I know that the Government have made a number of initiatives on this, but obviously we will want reassurances that public sector contracts are seeking to push pay levels up, rather than contain them. Also, young people are excluded from these changes and no recognition is given to the extra costs of actually living in London. Therefore, the higher living wage should apply there.
We have a number of questions for the Government, some of which the noble Lord, Lord Stevenson, has already put. In what form will the Low Pay Commission’s advice be sought when it comes ahead of the Budget next year in setting the rates for 2017? What encouragement will be given by the Government to raise productivity, particularly in low-paid sectors? At the end of the day, if we wish to avoid inflation and unemployment, we have to raise productivity in these areas. What extra resources are going to be put into HM Revenue to deal with the extra policing of a much wider group of employees to ensure compliance? As the care cost cap implementation was delayed for five years at the start of this Government, what reassurance can the Government give that they will not delay that further, given the costs that will obviously be implied by these changes in the cost of social care? Finally, do the Government have any ambition to extend to those under 25 years of age the whole concept of the national living wage?
We cannot vote for this amendment to the Motion, because we set the direction of policy, but we do expect assurances from the Government for the ongoing investigation, particularly regarding the work of the Low Pay Commission. This measure generally supports our own policy of raising tax allowances and making sure that those at the low end of the pay market are paid a living wage.
My Lords, I am grateful for this opportunity to debate this very important area of government policy, and I would like to ask the Minister about the impact on early years provision. As we all know, high-quality early years provision is vital to improve social mobility and to help many more families into employment. In principle, this policy should increase the pay to those working in early years settings, which are, notoriously, very poorly paid, so in principle this is very welcome. The Government have recently doubled the amount of free hours for families using childcare for two and three year-olds, so that puts a big burden on providers, and the new national living wage will exacerbate that. If the Minister could provide some reassurance about the impact of the national living wage on early years providers, I would be grateful.
My Lords, I thank the noble Lord, Lord Stevenson, for his comments. I endorse his comments about the great work done by the Secondary Legislation Scrutiny Committee; year in, year out, it does us a great service. I thank him for his kind words about the impact assessment and I shall pass them on.
I sympathise with noble Lords opposite, who were clearly wrong-footed by the most recent Budget, especially the living wage aspect, but then disappointment is part of political life. The strength of the economy means that we can afford to take this important step towards a higher-wage, lower-tax and lower-welfare society. The measures support the Government’s commitment to deliver fairness on pay for working people while being sensitive to the needs of business. By 2020, the national living wage will benefit 2.75 million low-wage workers directly, with up to 6 million in total expected to see their wages rise as a result of the ripple effects further up the distribution chain. I think that this is good news, and the House seems to recognise that.
The noble Lord, Lord Stevenson, asked whether we had considered the use of primary legislation. Of course we considered all legislative options, but the powers are available to do this through secondary legislation and it will ensure that workers get their pay rise much more quickly. That is the reason why we have adopted this approach. I also took note of some of his questions on apprenticeships. I will need to have a look at Hansard, and perhaps he and I can have a word at one of our many meetings on other matters.
The rationale for 60% is that the 2014 Resolution Foundation review of the national minimum wage, More Than a Minimum—chaired by the excellent Professor Sir George Bain, who, as some will remember, was the founding chair of the LPC—recommended a national minimum wage at 60% of median earnings as “a reasonable lodestar”—a great word. The report’s expert panel also included Professor Alan Manning, Professor Paul Gregg and Professor Karen Mumford.
I accept that there was no consultation on setting the original rate at £7.20. The background work existed, and of course this was a Budget measure and its announcement was treated as such. I am afraid that that is the nature of Budget measures, but I hope that I have already given some reassurance in my opening remarks on the process in future in relation to consultation. Future national living wage rates will be recommended by the independent Low Pay Commission, which will continue to provide the invaluable advice that it has been giving for many years, firmly grounded in evidence and with public consultation. It seems right that it should have a pivotal role in this.
The noble Lord asked about the double impact of the national living wage and the apprenticeship levy. This will of course mean extra costs for some businesses, but it is right that workers are fairly rewarded for the work that they do. The economy is growing and profits and wages are rising, and we have given businesses some help, as I said in my opening remarks. The apprenticeship levy is equally necessary. It will support the development of a higher-skilled, more productive workforce, supporting greater economic growth in future and the creation of new jobs right across the UK. Employers will of course be able to get back the levy for the training that they are doing.
The noble Lord, Lord Stoneham, asked about how the LPC will seek advice when it is uprating the national minimum wage. It will continue to adopt the sort of process that we have seen operating successfully under the coalition: it will make recommendations to the Government by the end of October 2016, setting out its ideas for rates for the new national minimum wage from April 2017 and looking at indicative rates from April 2018.
Productivity growth is one of the key economic challenges for this Parliament and a route to raising living standards for everyone in the UK in a long-term, sustainable way. Our ambitious plan for this is set out in Fixing the Foundations and includes the introduction of the national living wage. There is a fair amount of research that shows that increasing wages to the national living wage should result in an increase in productivity in many areas, as people use labour more carefully and capital more efficiently.
As the noble Lords, Lord Stoneham and Lord Stevenson, mentioned, some parts of the economy—for example, the social care sector and retail—will be impacted more than others when the living wage is introduced. I reassure noble Lords that this Government recognise the particular position of these sectors. In response we are, for example, giving local authorities access to up to £3.5 billion in new support for social care by 2019-20. Equally important will be enforcement in these sectors. I have already outlined some of the changes that we are making, such as the extra funding and work on bringing the new rights to the attention of workers, and HMRC is taking action against those employers who break the law and underpay their staff. It currently has 155 investigations open with social care employers. These include acting on complaints and extensive targeted enforcement. I know from having worked in business that HMRC is also very keen to make sure that the national minimum wage—and in future the national living wage—is paid in low-paid service sectors.
The noble Lord, Lord Stoneham, and the noble Earl, Lord Listowel, asked about early years provision and employing under-25s. It is for the Low Pay Commission to use its consultations and expert judgment to advise on appropriate rates for under 25 year-olds and those aged 25 and over. As with all of its recommendations, should it recommend a change to the differential in the national minimum wage or living wage rates, the Government will want to understand why it thought this was appropriate to ensure that the minimum rates of pay continue to support low-paid working people as well as the economy. The substitution effect will depend on future LPC recommendations. Of course, the underlying reason for the difference between the national living wage and that for under 25 year-olds is that we are extremely keen to ensure that early years provision is employed provision—we really want to make sure that we do not hit employers and that we encourage people to give jobs to the youngsters.
I hope that the comments I made in my introduction and the points that I have been able to make in summing up will go some way to reassuring noble Lords who have put down this regret Motion both in respect of our plans and in respect of stronger enforcement. In the light of that, I recommend these regulations to the House.
My Lords, I am very grateful to the noble Lord, Lord Stoneham, and the noble Earl, Lord Listowel, for contributing to this debate. They raised additional questions that were helpful and useful. I hope that further information will be forthcoming from the department into some of the details the Minister was not able to get to in her response.
The Minister ended by saying that she hoped that noble Lords—there is only one—who put down this regret Motion could see their way to providing some measure of agreement that this regulation is a good thing. Of course, we cannot be against additional pay for the lowest paid and we support the Minister on that. However, I sense a slight poverty of ambition behind the regulations and that is why I wanted to put forward a regret Motion for those of us who feel that this is a step in the right direction but only a very small step. It would have been good if we could have got from the Government more of a sense of an understanding of the need for pay to go up, for sticky areas in the economy to be addressed very vigorously and for the regulations to deal with those who wish to severely underpay—I think that some do go down that route—as well as, to pick up a point that the Minister made in her opening and closing remarks, an understanding that this is not just a right/left issue.
Many commentators—of which the Resolution Foundation, a non-partisan group, is a very good example—absolutely believe that the basis on which we will see recovery in this country is a real commitment to a proper high-wage and well-rewarded economy, in which people are paid for the work they do in growing the economy and making exports and everything else return to a level that we have seen in the past. I do not think that the regulations, as described, get us all the way there. They are a step in the right direction, but I think that this is something that we may wish to return to.
The reason for putting down the amendment—although not the timing, which was in the hands of the Government and not in our hands—was to get these debates up and running, and we have achieved that. With that, I beg leave to withdraw the amendment.
Amendment to the Motion withdrawn.
Committee (1st Day)
Relevant documents: 7th Report from the Constitution Committee, 17th and 18th Reports from the Delegated Powers Committee
Clause 1: Director of Labour Market Enforcement
1: Clause 1, page 1, line 5, after “State” insert “for the Home Department”
My Lords, I also have Amendments 2, 3, 6 and 13 in this group. My noble friend Lord Greaves commented the other day that it has become something of a custom—not as much as a convention—for the early speeches on amendments in Committee to turn into something like Second Reading speeches. I do not intend to make a Second Reading speech, and the comments with which I shall preface my remarks on Amendment 1 could not have been made at Second Reading.
I do not suppose that having to deal with 112 amendments at such a late stage was easy for the Minister or for officials. Indeed, I suspect that the officials who have had to deal in very short order with what is in effect a new Bill as regards the provisions for labour market enforcement have had a particularly difficult time, so I am sympathetic to all of them. However, others of us who have been involved in the Bill have not found it easy and, in particular, those outside this House who are involved in the sector and whose comments are always so valuable to us have had a really hard time. Frankly, this is no way to legislate.
A member of the Public Bill Committee in the Commons commented on how good the process had been, although he did say, “Pity about the content of the Bill”. The Minister has also commented on the evidence sessions in the Commons, saying that more detailed scrutiny was undertaken than is often the case. However, these new clauses dealing with the role and remit of the GLA affect the structural arrangements and the relationships of actors in the sector. They also introduce new measures and more, and I cannot see that anyone could describe this as best practice.
I apologise to the Committee for the late tabling of amendments to the government amendments—I tabled a number on Friday—but I wanted to look at them, with my own responses to them, at this stage rather than repeat the process on Report, as might have happened had I left it until then. As I said, how can the NGOs and others respond, presented with amendments in effect less than a week ago? It is not just their problem; it is ours as well, because we cannot do our job well if we are in a vacuum. I am sure the Minister will say that the consultation on the labour market sector, which closed in December, trailed the proposals, but it did not; not in the way in which we now see them. We are making law and therefore we have got to make it right, not just have a general narrative discourse on the arrangements.
Part 1 of the Bill, on the labour market, has no place in immigration legislation. The issues do not apply universally to immigrants and, conversely, are very relevant to many people who are not immigrants. Even without the new version, as I will call it, the Bill would be difficult enough. The Constitution Committee of your Lordships’ House has commented scathingly that immigration law stands out as a particularly byzantine field, saying that the Bill’s complexity is exacerbated by much of it amending existing, already highly complex pieces of immigration legislation which are subject to frequent changes. It comes in the wake—although the wake has not subsided, of course, but we will come to that later—of the 2014 Bill, which itself is substantial and complicated. The Constitution Committee expresses its,
“real concern from a rule of law perspective”,
describing immigration law as inaccessible and not fit for purpose—whinge over.
Amendments 1 and 2 seek an understanding of how the new regime will sit within government. I appreciate that it is quite usual to refer to a Secretary of State without designating a department, for obvious reasons. However, this situation is unusual, which is why I have referred to the Secretary of State “for the Home Department”. That is the sponsoring department for the Gangmasters Licensing Authority, but the consultation to which I have referred was a joint consultation involving the Home Office, which focuses on protection and enforcement, and BIS, which focuses, among other things, on deregulation. Of course, the Treasury is also involved, and the debate in the Commons suggested that the director will report to the Home Office.
I had better pre-empt any teasing about my criticising joined-up government. I am not doing so. I have argued often enough for that myself, so I do not want to complain about cross-departmental working. However, if the powers are to be exercised jointly, it is important to have an on-the-record explanation of how that is going to operate.
Amendments 3, 6 and 13 would put the involvement of the devolved Administrations on the face of the Bill. I had a look back at the Modern Slavery Bill, which seems to deal with this issue in the way that I have dealt with it in these amendments. I have picked up that progress has been made on this, and I hope it has. It hit my consciousness only last week during a visit to the Scottish Parliament. Although the Governments continue, the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly will go into purdah in about nine weeks’ time because of their elections. This adds another dimension to our consideration of the Bill, because clearly these things need to be sorted out quickly, and not just in respect of this clause. I beg to move.
My Lords, I support the amendments that the noble Baroness, Lady Hamwee, has laid before the Committee of your Lordships’ House this afternoon. In particular, I support her remarks about Scotland and the need for proper and adequate consultation. She is right to say all those things.
The noble Baroness referred to the Gangmasters Licensing Authority, an issue to which we will return in the later group of amendments dealing with government amendment 39 and those connected to it. However, it is linked in some ways with these amendments. I will not pre-empt remarks on the amendment by addressing it in detail, other than to note that, as the noble Baroness said, 112 government amendments have been tabled. There has been no pre-scrutiny of this legislation by both Houses, and these amendments have been introduced for the first time here in Committee, which is asking an awful lot in terms of producing good quality legislation. I know that this is not the Minister’s fault, but I raised that issue with him in the excellent meeting that he organised for all Peers. To make legislation on the hoof is always a mistake.
I am not alone in thinking that. The Immigration Law Practitioners’ Association has written to us to say:
“The volume of these amendments, the late stage of their introduction and the time available means that both ourselves and the House will be limited in our ability to provide the scrutiny that this detailed legislation requires”.
That was a point made by the noble Baroness, Lady Hamwee, a few moments ago. We simply cannot do our job properly when we are stampeded into having to make decisions on major questions of this kind with so many amendments being placed before us at once. The ILPA also says:
“We note that new clauses introduced by the Government contain a range of new delegated legislation which will not have been subject to scrutiny by the Delegated Powers and Regulatory Reform Committee which reported earlier on the Immigration Bill”.
That issue will surface again when we come to the question of the Gangmasters Licensing Authority.
I do not want to be churlish, either, because the legislation that we considered last year—also introduced by the noble Lord, Lord Bates—was classic and admirable of its kind, and benefited from having been scrutinised by both Houses. It was showpiece, showcase legislation and the Government should be justifiably proud of having introduced it—as should Parliament for having enacted it. The danger in some of these amendments, and we will come to this in due course, is that they may undermine some of the excellent legislation that we enacted last year. I hope that when the Minister replies, he will therefore address the concerns raised by the noble Baroness and the Immigration Law Practitioners’ Association. The noble Baroness did not describe this as hybridity, but effectively inserting an entirely new Bill inside an existing Bill at this late stage in parliamentary proceedings amounts to that. I hope her amendment will be taken in the spirit in which it has been offered, and that the Minister will address all those points.
My Lords, I endorse what the noble Lord, Lord Alton, has just said. This is not the first time during the passage of this Bill that a vast number of government amendments have been inserted. The same thing happened in the other place immediately before Report, and the same complaints were made that none of the amendments had been scrutinised properly. Indeed, there was no time to do so before the other place had to vote on amendments in Committee that they had not had time to scrutinise. Remembering my own time in the Ministry of Defence, if I were faced as a civil servant with such a huge and complex piece of legislation, with additional complexities, I would have complained to the Secretary of State and to the Permanent Under-Secretary that legislation was being made so complex that it was simply undeliverable.
We have to realise that the immigration system in this country is currently under stress. There are said to be some 600,000 unrecorded migrants in the country now and we will face not just a flood of people coming here from the Middle East but an additional flood of people from places such as Africa thanks to climate change. Therefore, we should be simplifying our legislation so that it can cope with pressure rather than complicating it in this way.
My Lords, I speak in support of the views expressed. If eminent Members of the House who are familiar with these matters are finding this legislation difficult, what can immigrants do with it? They are not British and many of them are possibly already here. These changing laws will be whirling around their heads just as they arrive. It makes it impossible for them to abide by the law when even this House cannot understand what the law is. Is it not possible to have something simple and clear that immigrants can abide by?
My Lords, I shall start my remarks by associating myself with the introductory remarks of the noble Baroness, Lady Hamwee, who talked about the unsatisfactory way the Government have handled the Bill so far. I also agree that the first part of the Bill, which concerns the Director of Labour Market Enforcement, has no place in this legislation and is a separate matter. The lack of pre-legislative scrutiny was referred to by the noble Lord, Lord Alton—whose remarks, again, I very much agreed with. This is no way to legislate. It reflects poorly on the process and risks undermining other legislation such as the Modern Slavery Act 2015.
When the noble Lord, Lord Bates, responds to the debate, I think that he owes it to the Committee to give a proper explanation of why we are in this situation. Let us be clear. The Government are in charge of the Bill and of the timetable, and their legislation should be dealt with much better than this. As I say, I hope that he will give a full explanation to the Committee when he responds.
This first group of amendments seeks in the main to improve what is presented here by putting into the Bill clarifications and duties to consult. The noble Lord, Lord Bates, may be suggesting something similar shortly, but that has not necessarily been implied. I am generally supportive of what is being proposed in the amendments tabled by the noble Baroness, Lady Hamwee, and the noble Lord, Lord Paddick, while Amendment 11 has been proposed by myself and my noble friend Lord Rosser. I will deal with Amendment 11 first. We are seeking to put a clear duty on the Director of Labour Market Enforcement to consult with civil society and voluntary organisations in the preparation of the annual report that he will have a duty to present to the Secretary of State each year. If a proper report is to be prepared for the Secretary of State, information will need to be gathered and assessed, and it is often voluntary organisations and civil society that will acquire the information that will be vital to the production of a report of substance to ensure that the duties of the director remain relevant and can identify the modifications which are necessary to achieve that.
As has been said, the amendments in the names of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Paddick, clarify that it must be the Home Secretary who appoints the Director of Labour Market Enforcement, and that the Business Secretary and relevant Scottish and other departmental Ministers must also be consulted. They also place a duty on the Director of Labour Market Enforcement to consult with Ministers in the devolved institutions and various officials exercising powers under labour market legislation on the preparation of a labour market enforcement strategy that will be submitted to the Home Secretary. Again, if in his response the noble Lord, Lord Bates, is going to suggest that this is not necessary, can he please tell the Committee how the Secretary of State will ensure that the report they receive is both timely and relevant to the matters in hand, and give us some direction as to how they should be consulted?
My Lords, I was waiting for the noble Lord to mention his Amendment 11 before saying that I am delighted to see it here. The Government will recognise the role in the Modern Slavery Act of the coalition of NGOs which really helped to put the Bill together. It should be emphasised that we want to see the same thing again with the director in this case. I hope that that will borne in mind throughout the consideration of these amendments.
I also rise very briefly to support Amendment 11 in the names of the noble Lords, Lord Rosser and Lord Kennedy of Southwark, for the simple and obvious reason that voluntary organisations are the key players in this. They are the eyes and ears of what is going on, and if they are not consulted, the Government are simply not going to be in a position to understand the realities of the situation.
I begin, as I have been invited to, by apologising to the Committee for the late tabling of these amendments, but let me try to explain that a little further. We were faced with a particular challenge. Noble Lords will recall that we had the Second Reading on 22 December, and one issue raised at that point was that the scheduled date for the first day in Committee was 13 January. In the light of the likely publication of our response to the consultation, we agreed to see whether the start date could be put back—which it was until today, 18 January.
We were then faced with a challenge regarding the publication of the report, referred to by the noble Baroness, Lady Hamwee, in response to the consultation document on tackling exploitation in the labour market. We said that we would have a period of consultation, which ran from September through to December, and that we would legislate on the back of that consultation, which seems to me to be general good practice. The question was then: at what stage should the amendments be introduced? There was a little debate—I am looking at the Box, but it is probably best that I do not—as to whether they should be introduced on Report, or in Committee. My noble friends Lord Ashton, Lord Keen and I took the view that if they were introduced for the Committee stage, at least they could receive a thorough airing, which could be reflected on before Report.
There is a large number of amendments. We had a meeting with all interested Peers and again, we tried to listen carefully to the points that were being raised. One was that because the amendments were tabled, it was not easy for an opposition spokesman or any Member of the House, let alone the Minister responding, immediately to correlate the amendment to the specific recommendation. A suggestion was made that we should produce a schedule, which was done within 24 hours of that meeting. That then went out to noble Lords who had attended the meeting, through the usual channels to the official party groupings and to Cross-Benchers, of course.
I am trying to explain some of the thought process. It was not intended to be discourteous to your Lordships’ House but sought to be helpful. The other point is on the nature of these amendments. I think that 59 relate to the consultation document. There is also a vast swathe—I did not manage to calculate the number—linked to the licensing of private hire taxi companies. We shall be coming to that issue in later groups. I did not realise that it seems as if every locality in the entire country has its own regulation for private hire taxi companies, so one amendment cannot apply across the entire country but needs to amend legislation pertaining to a particular area. That deals with the large tranche of the amendments.
I add to the previous debate on the minimum wage regulations my appreciation and that of the whole House to the Delegated Powers and Regulatory Reform Committee for its incredibly speedy work, even if it did introduce a bit of a riposte by stating that,
“the Government tabled a substantial number of amendments—54 pages’ worth!”.
I think that is the first time I have seen an exclamation mark in one of its reports. The point was made eloquently by symbol on the committee’s feelings on that. I offer my apologies, and hope that this is by some way of explanation. I also express our appreciation to the Select Committee on the Constitution for its very helpful report, which I know we will be coming to in later stages.
With that attempt at setting out the position, which I know is not ideal, I now turn to the amendments before us. The noble Baroness has rightly noted that the Director of Labour Market Enforcement’s remit covers the work of enforcement bodies that sit under two departments: the Gangmasters Licensing Authority reports to the Home Secretary while the Secretary of State for Business, Innovation and Skills is responsible for the work of the Employment Agency Standards Inspectorate and the HMRC’s national minimum wage team.
The Government have been clear in the consultation that we published and our response to it, as well as in assurances made by my right honourable friend James Brokenshire in Committee in another place, that the director will be a joint appointment by the Home Secretary and the Secretary of State for Business, Innovation and Skills. They will jointly appoint the director and receive the strategy. The noble Baroness may have concerns about how the two Secretaries of State will reach agreement, but I reassure her that preventing abuse of labour market laws is a priority for both departments. Subject to parliamentary approval of the role, they will both be looking to appoint a director with the necessary skills and experience to make a difference.
The requirement to consult Scottish and Northern Irish Ministers in Amendment 3 brings me to the territorial extent of this role. Employment law is broadly reserved as the UK operating as a single labour market brings great benefits to workers and employers. Therefore, the director’s remit will be UK-wide. However, there are parts of the remit where the policy is not reserved. To deal with this, we are legislating to ensure that the director can set the strategy to enforce labour market legislation only to the extent that it already applies and is reserved. That is: the whole of the UK in respect of the national minimum wage; Great Britain for the Employment Agencies Act 1973 and the Gangmasters (Licensing) Act 2004; and England and Wales in respect of the Modern Slavery Act 2015. Therefore, there will be no need for Ministers formally to consult Scottish Ministers or the Department of Justice in Northern Ireland.
However, to allow the strategy to be successful, the legislation requires it to be evidence-based and include the director’s assessment of the scale and nature of non-compliance in the labour market. To do this, the director will draw on the widest possible range of sources. This will include the intelligence hub provided for in Clause 6, but will inevitably include engaging non-governmental organisations, as the noble Lord, Lord Kennedy, requested, bodies representing employers, bodies representing workers and other organisations to develop the fullest possible picture. These will include charities, the enforcement bodies themselves, and other organisations such as the police.
Amendments 6 and 13 would require the Director of Labour Market Enforcement to engage certain people in the development of the labour market enforcement strategy, while Amendment 11 would require the Director of Labour Market Enforcement to engage with civil society and voluntary organisations in the development of the labour market enforcement strategy. It is not yet clear how the director would be able to discharge the legal requirement to,
“engage with civil society and voluntary organisations”,
which is not defined. I fear that putting this duty on the director would be unhelpful as it does not specify the full range of organisations that the Government expect would need to be consulted as part of that provision. These include non-governmental organisations, bodies representing employers, bodies representing workers and other organisations not specified in the amendment. Therefore, my opposition to it rests on it being unnecessary, while risking unhelpfully to narrow the director’s focus.
Amendments 12 and 14 appear to limit the director’s proposed role by not permitting his strategy to alter the strategies set out by any of the other enforcement bodies, or binding the enforcement bodies to delivering the director’s strategy. The director’s strategy is not intended to undermine the strategies of the enforcement bodies, or to take precedence. Rather, we expect those strategies to be informed by the director’s strategy as they deliver their contribution to tackling labour market exploitation.
On the GLA, the GLA board will continue to be responsible for the delivery of the GLA’s functions. What will change is that the delivery of those functions will sit within a wider vision of tackling labour market exploitation. While I will address this in due course, the Government’s amendments will add the functions of the GLA board to the list of labour market enforcement functions as specified. Furthermore, the GLA board will have a duty to exercise its functions in accordance with the director’s strategy. We believe that this will ensure that the enforcement bodies and the director work together more effectively.
The final amendment in this group, Amendment 38, brings me to the intelligence hub. Clause 6 as drafted gives the new director the duty to lead an intelligence hub that forms a coherent view of the nature and extent of exploitation and non-compliance in the labour market.
I thank the Minister for his helpful explanations of his remarks. Will he confirm that, because of the situation we find ourselves in with these amendments coming at such a late stage—civil society will want to look at them again—there will be plenty of time outside the Chamber for noble Lords and campaigners to meet the Minister to discuss these things in more detail?
I can certainly say that. That is a very helpful intervention on a number of levels. I know that officials found our meetings last week and before Christmas very helpful. I think that that will continue to strengthen the work of the Committee. With that, I will pause my remarks and hope that the noble Baroness will feel able to withdraw her amendment at this stage.
My Lords, I certainly will. It would not be profitable to continue the discussion now about the tabling of these quite considerable changes. I. too, am grateful to the officials who have been very helpful in the most difficult circumstances.
It is extraordinary to me how many people outside this House read the report of our proceedings in very considerable detail, particularly those who have an interest in the subject matter. For them, I will say that I checked with the Public Bill Office this morning and it was confirmed to me that, provided we do not divide but merely agree the government amendments, there are no bars to our tabling amendments to what will then be part of the Bill on Report. I apologise to the Minister and officials if that prompts a flood of further amendments—but so be it.
My only other point, with regard to the Minister’s remarks on taxis, is to offer him a piece of advice. He should never tell a taxi driver that he is a Minister in the Government—or indeed a Member of this House—because he will not get out of the taxi without a most difficult conversation.
On Amendment 11, I understand the technical points that the Minister makes, but the third sector is hugely important. As has been said, it is the linchpin of the way in which our immigration service—if that is the right word—deals with asylum seekers and some other immigrants. It is absolutely central. It should not need saying that there will be the contact with the voluntary sector and other organisations that has been spelled out. I think that it says a lot that it was felt necessary to put that down.
With regard to my amendments and which departments do what and how they work together, we are told that the legislation is a priority for both departments, but I would say that each department has its own distinctive and different priorities. That is where I see problems, perhaps, coming. I beg leave to withdraw Amendment 1.
Amendment 1 withdrawn.
Amendments 2 and 3 not moved.
4: Clause 1, page 1, line 8, at end insert—
“( ) The primary purpose of the Director is to secure the enforcement of labour market legislation, as defined in section 3(3) of this Act.”
Before I start, may I say that I certainly do not wish to comment adversely if the Minister got a little confused as to where he was in his notes, if only because I am pretty confident that that is going to happen to me on probably more than one occasion through the passage of the Bill. It is nice to know that I am already in good company.
As we pointed out at Second Reading, the Explanatory Notes to the Bill say:
“The purpose of the Bill is to tackle illegal immigration by making it harder to live and work illegally in the UK … The intention behind the Bill is that without access to work, illegal migrants will depart voluntarily, but where they do not, the Bill contains other measures to support enforced removals”.
Those two sentences are not tucked away at the back of the Explanatory Notes, almost as an afterthought, but are in the second of two short paragraphs at the very beginning of the Notes that constitute the first section, “Overview of the Bill”.
Since the clauses dealing with the new post of Director of Labour Market Enforcement, which we are discussing, are the first seven clauses of the Bill, it is not unreasonable to ask the Government what the role of the Director of Labour Market Enforcement will be in delivering the purpose of the Bill in making it harder to live and work illegally in the UK, in increasing the number of migrants who will depart voluntarily and, if they do not, in supporting enforced removals.
In his welcome and helpful letter of 8 January 2016, responding to points raised at Second Reading, the Minister said, on behalf of the Government, that the new director’s role did not cover immigration control, that nowhere in the Bill was he or she given the purpose or power to do that, and that, if they did, they would be acting outside their statutory powers. That clarifies the issue in relation to immigration control, although it begs the question of what activities or roles the Government do or do not regard as being covered by the words “immigration control” and therefore outside the statutory powers of the Director of Labour Market Enforcement.
I appreciate that the Director of Labour Market Enforcement will not have staff at points of entry to the UK making decisions on who can and cannot be allowed to enter, and will not determine asylum claims or applications for extended leave. But that does not mean that the director and his organisation can play no part in what many might regard as part of the immigration control process. As has already been said, the new post is, after all, being introduced in an Immigration Bill and a Home Office Bill. The director must surely have some part to play in the immigration enforcement system because, if he or she does not, how will they contribute to the declared purpose of the Bill as set out in the Explanatory Notes, to which I have already referred?
The purpose of our Amendment 4 is to seek to ensure that the functions of the Director of Labour Market Enforcement are exercised primarily for the purpose of protecting those vulnerable to labour market exploitation, and to make that clear on the face of the Bill. The Government’s argument against doing this appears to be that Clause 3 defines the director’s role by reference to the legislation and enforcement functions that will be within the remit of the post, including the three enforcement bodies for which the director will set the strategy: namely, the Employment Agency Standards Inspectorate, HMRC’s national minimum wage team and the Gangmasters Licensing Authority.
That, of course, is correct but it is also a problem since the Bill, in particular Clause 3, sets out a range of functions but does not set out what the primary function should be, which, for a Director of Labour Market Enforcement, one would have thought would be the protection of those vulnerable to labour market exploitation through the enforcement of labour market legislation, with the primary role of this post being a protective one.
In the other place, the Minister said that the purpose of the Director of Labour Market Enforcement was to tackle labour market exploitation across the field. But he was not prepared, for reasons that are not clear, to say that that was the primary purpose of the director, and to put that in the Bill, in line with our amendment. The need to make it clear in the Bill that the primary purpose of the director is to secure the enforcement of labour market legislation and tackle labour market exploitation was further highlighted by the observation of the Minister in the other place that while the role of the new director,
“was not intended to stray into the separate issues of immigration enforcement”,
if he or she came across people who were here illegally,
“the director would be duty-bound to report that and to pass on intelligence”.—[Official Report, Commons, Immigration Bill Committee, 27/10/15; col. 166.]
It is quite likely, one would have thought, that the director could on this basis prove to be a not insignificant player in finding people who are here illegally. It is precisely because of this, and the fact that the post is being established on a statutory footing in an Immigration Bill whose declared purpose is to tackle illegal immigration by making it harder to live and work illegally in the UK, that it is so necessary to spell out in the Bill what the primary role of the director is if we are to avoid any misunderstandings or wrong assumptions from those who might come into contact with the director’s organisation that the post is also about immigration checks rather than just about labour market enforcement.
There is clear evidence from the Netherlands and the USA of the dangers if there is any confusion over, or merging of, the roles of labour inspection and immigration enforcement. Research in the Netherlands shows that dual labour inspection priorities to identify undocumented workers on the one hand and victims of trafficking on the other have negative impacts on the uncovering of trafficking cases, since victims of trafficking are too scared to come forward and the labour inspectors also fail to identify them.
The Anti-Slavery Commissioner has also made the point that many people have fled from countries where confidence in the rule of law and the authorities is low. If they come here and are exploited, they are going to be fearful of going to the authorities because of previous experience. If we are not careful, this could be an unintended consequence of the Bill as it stands, in relation to the Director of Labour Market Enforcement.
Three other amendments in this group relate to the strategy that the Director of Labour Market Enforcement will set out. Amendment 7 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 there is no requirement to assess the threats or obstacles to effective enforcement which could, of course, include powers and resources, human and financial, which would impact on non-compliance, or a requirement to examine remedies secured by victims of non-compliance in the labour market which, likewise, could also impact on levels of non-compliance. A strategy is not just about making an assessment of non-compliance and its extent. It is also about looking at how enforcement could be done better and at what actions need to be taken, or changes made, to achieve that objective. The Minister will, no doubt, also wish to say something, either now or in a later group of amendments if he finds that more appropriate, about the resources that will be made available to the new director.
The Modern Slavery Act is victim-focused and victims of labour exploitation ought to be a key focus of this Bill. This is why the amendment provides for the enforcement strategy to cover the issue of remedies. Information on compensation for infringement of labour market standards is currently limited. For example, HMRC does not keep data in a format that provides statistics on the amount of arrears paid—or not paid—to working people. Data on civil claims and damages awarded are, likewise, not available. During the financial years 2010-11 to 2012-13, there were no prosecutions by the Gangmasters Licensing Authority resulting in compensation orders for victims of human trafficking, and data on compensation secured through the criminal injuries compensation scheme for such victims are not recorded. With the present dearth of information, how can anyone know whether progress is being made on meeting the needs of victims of exploitation in the labour market if data on remedies are not being collected, as would be required in future under the terms of Amendment 7?
Amendment 35 seeks to ensure that labour market offences committed against all workers are included within the scope of the enforcement work of the Director of Labour Market Enforcement, irrespective of immigration status. That should include all those who may be in the labour market, including undocumented victims of trafficking—hence the wording of the amendment. Finally, Amendment 36 refers to the annual report from the Director of Labour Market Enforcement and is intended to ensure that it links with his or her assessment about non-compliance in the labour market, the remedies secured by victims and the threats and obstacles to effective enforcement. This is not provided for in the Bill, as drafted, and nor is linking the director’s strategy with his or her assessment of non-compliance in the labour market. The amendment aims to ensure that the strategy covers everything that it should and that the annual report is tied into the same process.
These amendments were also considered in Committee in the other place. The Minister maintained that Amendment 7 was unnecessary because the Government expected that the director would feed information of the kind called for in the amendment into the planning and reporting cycle, and that this would be covered by the director’s labour market enforcement strategy. He then went to say that the director’s strategy,
“is about setting out information and issues concerning the work of different bodies and agencies, including some themes of non-compliance”.—[Official Report, Commons, Immigration Bill Committee, 27/10/15; col. 180.]
That seemed a rather less specific commitment that the director would be assessing the threats and obstacles to effective labour market enforcement, including powers and resources. Why not put this clearly in the Bill?
There is an issue with resources, particularly since the Government intend that while the relevant Secretaries of State will take the new director’s proposals on resources into account, the Government will set the overall level of resources devoted to labour market enforcement, and that the director should then recommend how resources should be allocated within the total envelope of funding available to the three enforcement bodies coming under the director, namely the Gangmasters Licensing Authority, the employment standards inspectorate and HMRC’s national minimum wage enforcement teams. A number of independent bodies, including the Migration Advisory Committee, have expressed concern 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 and that, as a result, there is not much of a deterrent to most of those who may be involved in abuse in the labour market. One example is that Gangmasters Licensing Authority investigations dropped from 134 in 2011 to 68 in 2014.
Despite a recent increase in the funding for HMRC to enforce the national minimum wage, it still does not match the scale of the task. For example, the TUC estimates that at least 250,000 workers have been underpaid the national minimum wage. The number of front-line enforcement staff at the Gangmasters Licensing Authority has been cut by 25% since 2010-11 and the Employment Agency Standards Inspectorate now has nine inspectors, compared to 20 at its peak. Millions more workers will come within the remit of the HMRC team when the national living wage is introduced.
The Government are also proposing to create a new authority out of the GLA, which will be responsible for prosecuting a new offence of aggravated labour law breach across the whole economy. The Government will need to commit to increasing significantly the funding available for enforcement work if it is to be effective and act as a deterrent. Without providing the necessary resources, any strategy from the new Director of Labour Market Enforcement will not achieve the objectives set out in the Bill. Accordingly, the issue of any threats or obstacles to effective labour market enforcement is one which the director should be required to address in his labour market enforcement strategy.
On Amendment 35, the Minister in the Commons was less than clear in Committee. He said that the labour enforcement agencies would tackle non-compliance by employment agencies, businesses and gangmasters regardless of whether the affected workers had the right to be or to work in the United Kingdom, and that the Government were committed to tackling serious crimes against individuals whatever their status. However, the Minister then said that the amendment was not attractive because it,
“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”.
The Minister in the other place also said:
“The director’s role that we have proposed supports our wider strategy on modern slavery, enhancing the response to labour exploitation”.—[Official Report, Commons, Immigration Bill Committee, 27/10/15; col. 184.]
It would be helpful if the Minister, the noble Lord, Lord Bates, could interpret the seemingly contradictory and complex comments by the Minister in the other place by spelling out what protections, if any, are provided under the Bill to workers irrespective of immigration status, and what role the Director of Labour Market Enforcement will play in respect of labour exploitation and abuse in the workplace of those who do not have the required immigration status to be in this country. I beg to move Amendment 4.
My Lords, my noble friend Lord Paddick and I have Amendments 5, 8, 10, 25, 28, 32 to 34 and 37 in this group. Our names are also put to Amendments 7 and 36, tabled by the noble Lord, Lord Rosser, like whom I think it is important that the legislation is clear as to the director’s purpose. In other words, what is the point of the director? The director’s strategy is, in my eyes, a mechanism for implementing his purpose, and unless we spell out the purpose in a succinct fashion then we go straight to the strategy and that does not seem to be logical.
My Amendment 5 would go further than Amendment 4 by saying that,
“The primary function of the Director shall be the protection of workers from exploitation”.
It would not tie their status down to or specify other legislation. I appreciate of course that the director is not going to be able to act unless he is formally able to do so by reference to other legislation, but he should be in a position to see what is going on right across the labour market, so that he can advise on a cross-governmental basis and monitor access to remedies across the labour market. If this approach is attractive it would need other amendments, but at this stage I would simply say that although a single regime is welcome, if the objective is protection from exploitation, the legislation should say so.
I would also ask whether there is a place for a relationship with the Health and Safety Executive and with local authorities, which have duties in enforcing health and safety legislation and the rights of children at work. We also want to make clear, as has been said, that although this is in an Immigration Bill, it is not about immigration enforcement. Employers have duties towards the whole of the workforce, whoever they are, and although immigrants—including legal immigrants who do not understand their rights—may be particularly exploitable, what we must not do, as the noble Lord said, is deter immigrants from seeking help to escape abuse. The Minister in the Commons did agree to continue to reflect on this, and we now have the government extension of functions in the new schedule, but I think, if anything, that might add to the risk of deterrence that the noble Lord and I are concerned about, by associating inspection and immigration.
Our Amendments 25 and 28 would insert a reference to the “protection of workers” in the provisions which allow the Secretary of State to prescribe additional labour market enforcement functions and offences. This is asking for an assurance from the Minister, which I am sure he will find it easy to give, that the provisions are not primarily aimed at immigration enforcement. The question is what enactments or offences are in the Government’s contemplation.
Amendments 33 and 34 are also about which workers are protected. Again, time was spent on this in the Commons, but it is obvious from the briefings that I and, I am sure, other noble Lords have received that there is still some confusion. This is not only about cases where there is no right to be in the UK. Under the Employment Rights Act, whose definition is imported here, a worker is defined as someone who has entered a “contract of employment” or another contract, which I assume means a contract for services where someone is self-employed. One question is whether, in a situation of exploitation, there is always a contract, but particularly important is that Amendment 33 replicates the definition of a worker in Section 26 of the Gangmasters (Licensing) Act, which includes the fact that a right to be in the UK is irrelevant. Switching from a definition which the GLA has been accustomed to work with raises issues in itself.
As for Amendment 37, Clause 5 says the Secretary of State can remove material from the director’s strategies and reports, on the basis set out, for example if it would,
“be against the interests of national security … jeopardise … safety … or … prejudice the investigation or prosecution of an offence”.
That is fair enough. I have seen that elsewhere in legislation. However, Clause 5(2) says that the Secretary of State must not then put that material back when he lays the report before Parliament. I am puzzled as to why that is necessary. If the Secretary of State has taken it out, is he likely to put it back before laying the report before Parliament? Is this because the Home Office fears a future Secretary of State might lose the plot, or is it to protect against a change of Government or what? I was curious.
Amendments 8 and 10 are on resources, and again I was confused as to where to deal with this. However, the means as well as the ends need to be willed; fine words about objectives are not enough. This has been such an issue throughout discussions not just on the Bill but on the remit of the Gangmasters Licensing Authority. Quite rightly in previous debates, the point has been made that it would be very good to extend the remit, but we must make sure that they have the money to do so; otherwise, we risk damaging the good work currently done. It is essential that the director takes resources into account. Otherwise, what is said is effectively meaningless.
My Lords, these amendments, which I support, raise both the role and resources available, as the noble Baroness, Lady Hamwee and the noble Lord, Lord Rosser, described, to the Director of Labour Market Enforcement. Reading though the exchanges in another place, it is clear that the Government were uneasy at Report stage about the lack of clarity in the Bill. Otherwise, why would the Minister, Mr James Brokenshire, have given an assurance to the House of Commons that they would go away and reflect on the matter? Therefore, it would be interesting to hear today the outcome of those reflections.
Certainly, looking at what was said in another place, there are some contradictions obvious to anyone who reads those exchanges. The Minister said, for instance, in Committee:
“We intend the director’s remit to cover labour market breaches, not immigration offences”.—[Official Report, Commons, Immigration Bill Committee, 27/10/15; col. 163.]
That is very straightforward. However, at a later stage, he said:
“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”.—[Official Report, Commons, Immigration Bill Committee, 27/10/15; col. 166.]
I would therefore like to know what happens when there is a contradiction between those two roles. Where there is a protective role and an enforcement role, what would be the director’s expected priority in those circumstances? We said throughout the proceedings on the modern day slavery and human trafficking legislation that it should always be victim focused. Is this a derogation from that, or are we simply being consistent with what we did before? The House needs to know before we give this the green light.
I was surprised when the Minister in another place, in refuting the arguments that have been put forward again in your Lordships’ House today, said,
“I simply do not think it is necessary”.—[Official Report, Commons, Immigration Bill Committee, 27/10/15; col. 166.]
I wonder why he came to that conclusion, because clarity in legislation is always highly desirable. Otherwise, why would he have wanted to go away and reflect; why would these amendments have been moved in another place; and why would they be here again today? Clearly, something is necessary. Will the Minister, if he cannot put it right today, be agreeable to doing so on Report?
My Lords, I share colleagues’ concerns about the lack of clarity of the remit and purpose of the Director of Labour Market Enforcement and the indications of a lack of resources for the organisation so far. The Migration Advisory Committee has already been cited, but it is worth mentioning the remarks of Sir David Metcalfe in evidence to the Committee in the other place. He said that funding remains an issue, particularly for the Gangmasters Licensing Authority, and that:
“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”.—[Official Report, Commons, Immigration Bill Committee, 20/10/15; col. 20.]
The odds of bad employers being caught, let alone prosecuted, seem slim. It comes to something when the US State Department is moved to mention the lack of resources. In its Trafficking in Persons Report 2015 it mentioned concern that there needs to be an increase in funds for the Gangmasters Licensing Authority. It is a little galling to have to be told by another Government that there are not enough resources, but we could take that to heart. That report also stated that government funding for specialised services for victims of trafficking remains limited. We are judged to be falling down on resources.
I, too, was confused by the exchanges in committee in the other place about the director’s focus outside workers who are here legally. The suggestion seems to be that a labour market offence can be committed only against persons legally in the country, which suggests that others are going to be dealt with through an immigration lens. I add my voice to those who have asked for clarity about whether the director will be focused on employers who most exploit workers, including those without leave to be in this country and to work. Without that wider remit outside legal workers, the director cannot be effective against the worst employers.
I am confused by the number of definitions of worker. We can add to them the definition under EU free movement law, but perhaps that would unnecessarily complicate the matter in hand. However, there seem to be at least three definitions of worker, and it might be sensible to have one.
I understand the questions raised by noble Lords and the dangers of a lack of clarity in this area, but we may be making a bit of a meal of this issue. In the House of Commons, James Brokenshire made the situation fairly plain. Referring to the comment quoted by the noble Lord, Lord Alton, clearly, offences are matters not for the Director of Labour Market Enforcement but for immigration officers. Equally, the director may well want to look at intelligence arising from offences relating to immigration in the context of the strategy he is trying to devise to avoid labour market exploitation. There seems to be a difference between people on the ground who are trying to deal with immigration offences day to day, and the director, who is trying to enact a supervisory role on a rather larger scale.
If I am right about that—I may be wrong, and I fully agree that the situation is confusing and difficult and should be simpler—the amendments put down by the noble Lord, Lord Rosser, are mistaken because they tie the director down too much. In practice, we may want the director’s remit to go rather wider and to take into account what he may learn as a consequence of the information he acquires from immigration officers operating on the ground. That is a sensible way to proceed administratively. I may be wrong, and I will listen to what the Minister says, but it seems to me that the situation is rather clearer than we seem to be suggesting.
My Lords, we may be in danger of making a meal of this group of amendments. I quite understand that the noble Lord, Lord Horam, has pointed out a connection between the two, but it is a very serious issue to describe the difference between them. I go back to the Modern Slavery Act, which was an excellent example of pioneering government and listening Ministers. A welcome number of government amendments on both that and this Bill shows that the law is constantly in need of review. As many NGOs are actively demonstrating, there is much more to be done on illegal working, as we work through this Bill and beyond. Part 1 does not adequately reflect human rights concerns. The noble Lord, Lord Rosser, pointed out the big confusion here that comes up under several amendments between labour regulation and immigration law enforcement, and the improper use—or potentially improper use—of employers and landlords as immigration officers, making migrant workers especially vulnerable. Some with more legal training than me are concerned about the likelihood that this encroachment is inconsistent with the ILO Convention No. 81, the Labour inspection convention of 1947. I hope someone will confirm that that is a difficulty. Do the Government agree that to ensure protection these two areas must be kept separate?
I have to say that I have some sympathy with my noble friend Lord Horam about the importance of not narrowing the gateway too much in terms of the work of the Director of Labour Market Enforcement. The wording in Clause 2(2)(a)(i) allows for a very wide remit: it seems to me to be important to preserve this. It is very easy of course to see this only through the prism of the victims—and indeed there are terrible victims who need protection—but the director should surely be able to identify practices, behaviours and trends not only relating to the protection of workers.
I am a keen supporter of employee share ownership. Every year the Employee Ownership Association has a dinner in your Lordships’ House, which I am proud to sponsor. Last year I was sitting next to one of the biggest companies in the field of imports, which brings a lot of stuff across the Channel in containers. He said to me, “Do you know that up to about a year ago, once a year a container would have people inside it; two or three times a week now, you open the container in Cowley and six or seven people jump out and disappear into the dark. They have a baseball bat and you can’t stop them—and talking to my colleagues in other firms this is an increasingly prevalent practice”.
It seems to me that this is the sort of issue that ought to be publicised and the director ought to be able to raise. It is not about protection of workers, though that is a very important part of his job. It is about what is happening in the labour market generally. It would be a grave mistake if we allowed ourselves not to think about these activities as well, and make sure that the director could comment on them and make suggestions for improvement. It is in the interests of everybody, but particularly those who are victimised, that this should be publicised—and the other side of the coin should be publicised as well. I hope that my noble friend will bear that in mind when he comes to consider his reply to this set of amendments.
I first thank the noble Lord, Lord Rosser for moving this amendment. I am glad we are on the same page in terms of tracking the amendments. As I do that, let me remove another lever-arch file, with a message from the Box, which I thought was a very timely one: if noble Lords would kindly tell us when they plan to degroup an amendment, then we will try to do better at telling people when we intend to lay an amendment. But I suppose it is the first day in Committee and we are all finding our way through that postbag.
This has been a useful exchange. Under this particular group, as I see it, the Committee is seeking to understand better the nature of the role of the new Director of Labour Market Enforcement and to flesh it out, to understand something more of the resources and to understand where the immigration enforcement boundary and the role of standards in the labour market actually connect. While I appreciate the desire to include upfront a strong statement of the remit of the Director of Labour Market Enforcement, a role that has been welcomed on all sides of the House and in the other place, I believe that amendments on the subject are unnecessary. The role and remit of the director are clearly set out already in Clauses 1 to 7. We want the director to bring co-ordination across the whole spectrum of breaches in employment law, from employers who do not know the rules right through to the organised criminal exploitation of workers.
I should say here—this is relevant to the contributions from a number of noble Lords, particularly the noble Lord, Lord Alton, and the noble Earl, Lord Sandwich—that we often find that the rogue employers, underpaying employees with regard to the national minimum wage, and the unscrupulous employment agencies that deduct far more than they should from employees’ salaries are often the same people, who will be guilty of abuse across a whole range of different headings. That is the essential value that the information gives us, and the essential value of the overall role.
I will send around to noble Lords a very useful schematic. I know that schematics are not favoured by your Lordships’ House because of the difficulties that they convey to the Official Report in communicating them, but this one is a good way of illustrating that at the moment a number of disparate functions are prosecuted in different silos. We are seeking to be much more effective by bringing those silos together, not just in terms of their strategy but by placing the Director of Labour Market Enforcement above them to ensure that scarce resources are allocated most efficiently, and that we learn the maximum that we are able to about exploitation.
Where we set the director’s primary purpose in legislation as enforcement, as the noble Lord, Lord Rosser, seeks in Amendment 4, we are prejudging the best way to secure compliance. The noble Baroness, Lady Hamwee, seeks in Amendment 5 to give the director the purpose of protecting workers from exploitation. Exploitation is not universally defined and means different things to different people. Concerns have been expressed that the director will get involved in enforcing our immigration laws. I reassure noble Lords that that is not part of the role of the Director of Labour Market Enforcement. I know that there was some discussion about the exchanges in Committee in another place on this, but I am happy to place on record again my remarks in my letter of 8 January:
“I want to reassure colleagues”,
following Second Reading, that immigration control,
“is not part of the role of the Director of Labour Enforcement. Nowhere in this Bill is the Director given the power or purpose to do that … they would be acting outside of their statutory powers”.
It is useful to get that very clear statement on the record in Committee. Concerns have been expressed that the director will get involved in enforcing our immigration laws, and I want to ensure that that is not the case.
I turn to the annual labour market enforcement strategy. The Government’s position is that it will be successful only if it includes an assessment of threats and obstacles by “turning over stones”, telling Ministers where the gaps are and making proposals for how they can be addressed. Similarly, a successful strategy will be based on the evidence of what enforcement has happened in previous years, including what remedies were secured for victims. These are both already covered by the Bill so Amendment 7, in our opinion, is unnecessary.
Amendments 8 and 10 cover the director’s role in the funding arrangements for the enforcement bodies. It is the Government’s intention that Ministers in the Home Office and the Department for Business, Innovation and Skills should continue to set the overall envelope of spending available for labour market enforcement and should recommend how best to allocate this between the three bodies and the different activities they undertake, based on their assessment of the likely nature of non-compliance in the following year. I cannot support these amendments. While the Government intend that the relevant Secretaries of State will take the director’s proposals on resources into account in their discussions with the Treasury about funding, 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.
Amendments 18, 25, 28 and 32 relate to the power to change the scope of the labour market enforcement strategy by regulations. While at present we believe that the director’s remit is sensibly defined, it may make sense in the future to extend this if it becomes clear that the risk of abuse and exploitation is changing. It is appropriate for such extension to be made by secondary legislation to ensure flexibility and to enable us to act quickly, subject of course to the appropriate degree of parliamentary oversight.
Amendments 33 to 35 relate to the director’s strategy-making role in respect of offences committed against workers under the Modern Slavery Act 2015. The clause or the proposed amendments would not redefine “worker”—as mentioned by the noble Baroness, Lady Ludford—for the purposes of the Employment Agencies Act 1973, the National Minimum Wage Act 1998 or the Gangmasters (Licensing) Act 2004. The existing coverage of the respective Acts continues to apply. This 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 work—in the UK. We see the director’s focus as improving the way we enforce labour market and employment law rules—making sure workers who are properly here are protected better. However, we are committed to tackling serious crimes committed against individuals, whatever their status, as the noble Baroness will know from the work she and others did on the Modern Slavery Act last year—a landmark piece of legislation.
I turn to the contents of the director’s annual report. The Bill already requires the annual report to include an assessment of the extent to which the strategy had an effect on non-compliance in the labour market. There is no need to specify the other details. If the strategy identifies threats and obstacles to effective enforcement and makes proposals to address them, the effectiveness of these throughout the year must be covered in the annual report. Similarly, as the strategy will set out how the enforcement bodies are to exercise their functions, including seeking remedies for victims, the success of this must be covered by the annual report. Therefore, I believe the majority of Amendment 36 is unnecessary.
The point was made that we need to focus our attention on victims. Victims have been protected, for example, by the recovery of unpaid earnings, by making sure that employment agents who persistently abuse contracts or unfairly treat their employees are no longer allowed to register as agents, and by the Gangmasters Licensing Authority not renewing certain licences.
The final amendment in this group concerns the publication of the annual strategy and annual report. The legislation as drafted states that any strategy or annual or other report prepared by the director and laid before Parliament must not contain material that has been removed for very specific reasons. These reasons are where the publication of such material,
“would be against the interests of national security, … might jeopardise the safety of any person in the United Kingdom, or … might prejudice the investigation or prosecution of an offence under the law of England and Wales, Scotland or Northern Ireland”.
These are pretty standard exclusions that we have come across in previous legislation. The Bill as drafted requires the Secretary of State to remove information from a publication if he or she considers it to fall into those categories. The Government believe that this is essential and strikes the right balance between transparency and safety. Indeed, it replicates provisions in Section 42 of the Modern Slavery Act regarding the strategic plan and annual report prepared by the Independent Anti-slavery Commissioner. I hope that my answer will reassure noble Lords on that point.
Finally, we have put on the face of the Bill, in Clause 1(4):
“The Secretary of State must provide the Director with such staff, goods, services, accommodation and other resources as the Secretary of State considers the Director needs for the exercise of his or her functions”.
That is a statutory statement. My noble friend Lady Neville-Rolfe announced in the previous debate that the amount of money that has gone into national minimum wage enforcement has increased by £4 million. While it is right to press us to spell out in more detail exactly what is intended for the role, I think that there is a logic there, which my noble friends Lord Horam and Lord Hodgson have reinforced. I hope that, with that reassurance, the noble Lord will feel able to withdraw the amendment.
My Lords, before the noble Lord responds, perhaps I may take some of those comments but in something of a reverse order. On the question of resources, the Minister referred to Clause 1(4), but that relates to provision for the director. Of course, we are concerned not just about the director but about the organisations—if that is the right term for the various entities—which will be implementing the strategy. Whoever’s strategy it turns out to be is the subject of another debate. So, although I accept the point that the Minister has made, I do not think that it goes all the way, as some of us were seeking.
If it would be helpful to noble Lords, I should be happy to set this out in writing. However, I can tell them that the 2015-16 budget for the Employment Agency Standards Inspectorate is £0.5 million and it has 8.6 full-time-equivalent staff. For the same period, the Gangmasters Licensing Authority has funding of £4.268 million, including £100,000 for Northern Ireland enforcement, and it has 66 full-time-equivalent staff. The budget for the national minimum wage enforcement team was increased by £4 million to the current figure of £13.2 million, and it has 230 full-time-equivalent staff. We are saying that the helpful part of the role of the Director of Labour Market Enforcement will be to look at those three groups and the current basket of resource, which has been increased substantially over the past year, and to see how it can be most effectively deployed to tackle the types of wrongs that we are seeing.
My Lords, the figures are interesting. Nobody is ever content and no one will say, “That’s enough”, but my impression—I say this as somebody who hears those figures, although they do not really mean anything to me; I am not an expert in any of those fields—is that there are organisations struggling to do the job that they have and which in some cases they do absolutely extraordinarily. Just hearing figures expressed in millions does not advance the argument in the way that I know the noble Lord and I are concerned with.
Before the noble Baroness leaves the point about resources, she may recall that during the proceedings on the modern slavery and human trafficking legislation we were told that between 2011 and 2014 the Gangmasters Licensing Authority saw a reduction of 17% in its budget—a figure that I think we can all comprehend very easily. I wonder—this is directed at the Minister partly through the noble Baroness—whether the figures that he has just given represent a real increase on those reductions and whether we are seeing a reinstatement of the moneys that were cut.
I have not received inspiration, but I do not doubt for one minute what the noble Lord rightly observes. He refers to a time when we were having to tackle some pretty sizable problems in the public finances, and that continues to be a pressure. That is one reason why, I think, we are bringing these resources together. It would be helpful—and I will certainly undertake to do this—to set out in one letter to Members of the Committee in your Lordships’ House the situation on resources, perhaps in a way that is easier to assess. However, the point is that when you have different pots in different areas with different groups of people, it makes it all the more important that they are joined up, that there is co-ordination and that we get the maximum effect for every taxpayer pound that is spent. That is, of course, what the remit of the Director of Labour Market Enforcement is envisaged to be.
But within the budgets set by the two departments, as we have just heard. I do not think that anyone is arguing against efficiency, but those budgets are being spent, I assume, to their maximum now. So it is a discussion that will go on.
With regard to the point about the regulations and the possibility of extending the scope of the director’s work, the Minister mentioned parliamentary oversight. Of course, that is a very current issue, because oversight only goes so far. Indeed, one might say that it is “sight” but not “change”, because we cannot do anything about secondary legislation.
I want to comment on the points that have been made about trends and the work, other than that to which the noble Lord and I have pointed, on the protection of workers. I realise that the way in which I have worded my amendment was perhaps not the most felicitous. I did in my speech mention things such as monitoring and trends, and I meant that in a very wide sense. I understand, for instance, that the GLA—this is a very important part of its work—has been extremely successful in its relationship with employers and runs a liaison group with employers and agents in the sectors in which it currently works. One might take any survey with a pinch of salt, but a 93% approval rating—I think I have got that right—from employers in their view of their own regulator strikes me as being pretty high, and I for one certainly do not dismiss the points that have been made by the two noble Lords on the other side.
My Lords, I will be brief in responding, with just one or two points to make. I have listened carefully to what the Minister has said in response but, frankly, I think that we are making a meal out of not being willing, as far as the Government are concerned, to put the primary purpose of the Director of Labour Market Enforcement in the Bill. I certainly do not accept any argument that it would somehow restrict the functions of that particular post.
I appreciate what the Minister has had to say about his willingness to send a letter relating to resources, and I am sure that that will be extremely helpful. It is certainly my intention to come back to the issue of resources in a later group of amendments.
On the issue of the involvement or otherwise of the Director of Labour Market Enforcement in the immigration system, the Minister repeated the part of his letter that I also referred to: that the new director’s role did not cover immigration control and that nowhere in this Bill is the director given the purpose or power to do that, and if he or she did they would be acting outside their statutory powers. This is a genuine question and not a challenge, but if the Minister is going to send a letter on resources, will he consider adding to it an indication of which clauses of the Bill would preclude the director from being involved in any aspect of immigration enforcement and control? I ask that partly in the context of Clause 2, which states that
“A labour market enforcement strategy … is a document which … deals with such other matters as the Director considers appropriate”.
What happens if the director considers that a strategy relating in part to some involvement in the immigration process is appropriate? Is he entitled under that particular subsection to get so involved? It would be extremely helpful if in his letter the Minister would address that point. With those comments, I beg leave to withdraw the amendment.
Amendment 4 withdrawn.
Amendment 5 not moved.
Clause 1 agreed.
House resumed. Committee to begin again not before 5.45 pm.
My Lords, with the leave of the House I shall now repeat a Statement made in the other place by my right honourable friend the Minister of State for Small Business, Industry and Enterprise. The Statement is as follows.
“It is with regret that I find myself having to update the House on further job losses in the steel sector. This morning, Tata Steel announced plans to make over 1,000 redundancies across its UK strip business as part of its continuing restructuring plans. The proposals involve 750 job losses at Port Talbot and Llanwern. There will be 200 redundancies in support functions, and Tata has also announced 100 redundancies at steel mills in Trostre, Corby and Hartlepool. This will be a difficult time for all workers and their families. Our immediate focus will be on helping any workers who lose their jobs back into employment as quickly as possible. We will also continue to support the steel industry.
Given the UK’s devolution settlement, much of the support that can be offered both to workers and to Tata in south Wales will come from the Welsh Government. But the UK Government want to ensure that Port Talbot has a commercial and sustainable future, and it is encouraging that the Welsh Government are to launch a task force this week to support those affected by today’s announcement.
I have previously offered our support to the task force chair, Edwina Hart, and will continue to work with the Welsh Government going forward. I therefore welcome the commitment that the First Minister made today to working closely with the UK Government. I can also assure Members that I am working closely with the Secretary of State for Wales, who I know has been in the area today and hence is not here in the House.
It is important to remember that the fundamental problem facing our steel industry is the fall in world prices, caused by the overproduction and underconsumption of steel. No Government can change the price of steel. But we can and are achieving a level playing field for British producers. I can inform the House that the Government have been working closely with Tata to do all we can to ensure a sustainable future for Tata Steel in the UK, both at Port Talbot and Scunthorpe. The Government have offered their assistance to Tata as it seeks to find a buyer for its long products division. It is encouraging that Tata has announced Greybull Capital as its preferred bidder and we remain in close contact with Tata as its commercial negotiations continue. The Government stand ready to play our part to help secure Scunthorpe’s long-term future.
Returning to today’s announcement, the same offer is there for Port Talbot. Tata is currently working with consultants to develop a plan to address the near-term competitiveness of its business at Port Talbot. We and the Welsh Government are in regular dialogue with Tata. This dialogue includes my right honourable friend the Secretary of State for BIS, as well as my officials and me. While the future of Port Talbot must be commercially led, we will help where we can within the parameters of state aid rules.
Last October, the Government held a steel summit at which the UK steel sector set out its five asks of Government. I can report that we have made quick and substantial progress against these asks to ensure a level playing field for our steel industry. The industry asked for lower energy costs. In December, we secured state aid approval to pay further compensation to energy-intensive industries, including steel, to include renewable policy costs. We have already paid nearly £60 million to the steel industry to help mitigate the costs of its existing renewable policies. The latest state aid approval will now enable us to extend the scope of compensation, saving steel makers hundreds of millions of pounds. But we will go even further and exempt energy-intensive industries from most of these costs.
The sector asked for flexibility over EU emissions regulations, and that is exactly what we have secured. Derogations for Port Talbot have already been agreed by Natural Resources Wales. The Environment Agency has accepted Tata Steel’s proposals for derogations for improving emissions from Scunthorpe, subject to a current public consultation. Once approved, this will give Tata a further six years to improve emissions levels from the coke ovens, and both Tata Steel’s major power plants have been included in the UK transitional national plan which the UK has submitted to the European Union. This gives the company until June 2020, a further four years, to meet emissions requirements. These actions will save the industry millions of pounds.
We have also published and further updated procurement guidance for government departments to allow aspects such as social impacts, job impacts and staff safety to be taken into account when procuring steel for major projects. We are the first country in the EU to take advantage of and implement these new flexibilities. In short, there is no excuse not to and every reason to buy British steel.
I have heard it said that the Government have blocked the reform of trade defence investigations; we have not. I can assure you that the Government have been acting decisively to safeguard the UK’s steel interests in Europe. In July and again in November last year we voted in favour of anti-dumping measures on certain steel imports. It was the UK that lobbied successfully in support of industry calls for an investigation into imports of reinforcing steel bar. The European Commission has taken this forward swiftly, including an extraordinary meeting of the EU’s Competitiveness Council, and has agreed faster action. I will be returning to a follow-up stakeholder conference next month where I will push for further progress. The review on business rates in England will conclude this year. Of course, the Welsh Government have responsibility for business rates in Wales and therefore in Port Talbot.
UK steel has today added to its original five asks with two further requests concerning China securing market economy status and funding assistance for environmental improvements, research and development. We will explore both of these with the sector while continuing to drive forward the original five.
As we have seen today, the steel industry remains subject to unprecedented global pressures. While the immediate causes of these are beyond the Government’s control, I can assure the House that we continue to do all we can to help the industry and will stand by all those workers who face redundancy in south Wales and other parts of the United Kingdom”.
My Lords, that concludes the Statement.
My Lords, the devastating impact of job losses in the country as a result of Tata’s announcement of more than 1,000 job losses across Wales, Corby and Hartlepool is devastating news for all of the workers, their families and the close-knit communities surrounding the plants. The impact is a double whammy for Wales because steel is an industry which has contributed significantly to the added value of the economy there, adding several percentage points to GVA figures. Of course, this latest news comes on top of job losses at Tata’s Newport plant last year, along with job losses across the UK announced by a number of operators in September 2015, and the complete closure of the Redcar plant.
Steel is the foundation of many of the UK’s most important manufacturing sectors, including aerospace, defence, automotive and construction. However, the industry suffers from a perfect storm. Countries such as China are engaging in ruthlessly uncompetitive practices which are destroying the steel industry, energy prices are too high and emissions regulations are too restrictive. The Government centrally, although they are doing some work on this, still, perversely, do not require their own contractors to buy steel from the UK. The Minister, in repeating the Statement in this House, for which we are grateful to her, mentioned that there is some progress on these matters, but the general view around the country is that although progress is being made, it has sadly been too little and it has certainly come too late.
Central to ensuring that our steel industry survives and thrives is the urgent need for an industrial strategy. The Chancellor declared recently that Britain would be carried aloft by the march of its makers. But manufacturing exports have slumped and manufacturing output is still below its level of seven years ago, before the crash. There is a lot more still to be done.
I have some questions for the Minister. When did she or her colleagues raise the issue of the dumping of steel directly with the Chinese? Can she give us chapter and verse on that? Can she spell out the support from the UK Government that will be made available directly to the families and communities affected by the latest round of cuts? She said that the Government would help where they can, subject to state-aid rules—but there is a humanitarian crisis on our doorsteps and we really need to see action. What work is being done by the department on the supply chain that supports these companies affected by job losses and, presumably, reductions in activity? Many of these are small and medium-sized companies that help to keep the British steel industry going. What work will be done to support the UK buyers of output from these plants who may well now have to seek alternative supplies on the market?
The steel industry is of vital strategic importance to this country and the Government need to safeguard its future. We are very conscious that there are issues in the market of price and overcapacity, but these have been there for a long time, and we have been raising concerns about the structure of the UK steel industry for most of the previous Government and certainly during this one. Where is the action?
We are keen that the Government support key strategic industries in this country and make sure that highly skilled jobs are not lost. I hope that these sad events will trigger a reconsideration of the Government’s hostility to an industrial policy and strategy. We hope that they will get to grips with this crisis. It would be a tragedy for the steel industry if they did not, not only for those who have lost their livelihoods but for those of us who wish to make the case for modern economic progress.
My Lords, I am sure that I represent everyone in the House when I say that our thoughts today are with the steelworkers and their families.
A major cause of this, it would seem, has been the dumping of Chinese steel. We are part of the largest trading bloc in the world, and this has been going on for a very long time. What are the Government doing to defend our interests and to fight for British steel in the EU? The noble Baroness said that some things are being done but I think that everyone would agree that we need to do more to mitigate some of the worst problems that we are going through at the moment.
The British Government need to do more, but so do the Welsh Government. My Liberal Democrat colleagues in Wales have called for scrapping business rates on planting in the Welsh steel industry. The Labour Party has criticised the Government in England but seems to have done nothing where it is in charge in Wales.
Finally, one-third of the production in Port Talbot is for the car industry—a highly successful industry. The Minister says that there is no excuse not to buy, and every reason to buy, British steel. So why does she think, given all that she said, it is not being bought?
I start by agreeing with how devastating today’s news is, and I agree with the statement made by the First Minister in Wales, Carwyn Jones. Our first thoughts today are with the families, communities and supply chain businesses that are dependent on steel production in Port Talbot, Llanwern and Trostre. This is a severe blow to the community and to steel production in the UK. Indeed, I welcome the task force that has been set up in Wales today, which will meet this week. That follows the model of task forces set up in other areas, such as Redcar. They have done very good work and are particularly good at focusing locally, not only on issues affecting steelworkers but on businesses in the supply chain, which are obviously vital to future jobs.
It is right to say that we have made a lot of progress since we last discussed this in the autumn. Noble Lords will remember that there were five asks from industry, trade unions and others. There are two more today. We have made substantial progress on four of those five asks, as I pointed out in my Statement. We have not made progress on rates because they are the subject of a current review by the Government. In Wales action on rates is, rightly, for the devolved Administration, as has already been said.
I was asked when the Prime Minister first raised steel in China. I know that he certainly raised the issue of steel when President Xi visited us in October. In Brussels, which I was asked about, we have of course changed our approach on steel. In the relevant committees in July and in November, for the first time we pressed for action and voted against rebar. Individual cases of Chinese and other dumping have been pursued and accelerated. There was a summit of the EU Competitiveness Council, a special meeting that took place entirely because of a request by the Secretary of State to Brussels. I think noble Lords will agree that looking at these things together in Brussels is necessary, and that the action on energy costs and industrial emissions directives has come about directly as a result of that work. These things are difficult, but we have been determined to do a lot and we have been acting in Brussels constructively.
My Lords, from these Benches I first express my sympathy for the workforce, whose jobs are being lost. Bearing in mind what has rightly been said about the importance of Port Talbot for our highly successful motor and white goods industries, I am pleased to hear of the determination of the Government, working with the Welsh Government, to see that Port Talbot has a sustainable and commercial future. I also welcome the specific measures that my noble friend has drawn attention to. However, on the question of rates, although it is true that there is a long-term review in England and that rates are the responsibility of the Welsh Government, surely there is a need for early and specific action in the steel industry on the rates question. Will my noble friend assure me that we will not necessarily have to wait to the end of the year for the completion of the long-term review of rates?
I hear what my noble friend says and completely agree that rates is a vital area. We have three ministerial working groups, set up in October. They are very aware of the importance of rates. My noble friend Lord O’Neill is leading the work stream on productivity and competitiveness. I will ensure that I pass on the comments made on rates.
My Lords, I wanted to hear what the Minister had to say because I was general secretary of one of the unions involved in the steel industry. As the Minister said, it is devastating news, but it is not unusual news for the steel industry. I am reminded of something I said a few weeks or months ago, about when there were 270,000 employees in one company in the steel industry in the United Kingdom, called the British Steel Corporation. Now we are where we are. The figures are abysmal and most worrying. I worried even further when someone said to me, “Keith”—that is my first name—“You must remember that we live in a post-industrial society”. If we are heading down that track—we are rapidly going down that track as far as the steel industry is concerned—frankly, what the Minister and the Government are saying is not good enough.
I am concerned that I do not hear too much from the Minister about what the trade unions are actually saying at the moment. Are they accepting the closures? Are they accepting the fact that there will be fewer than 30,000 people in total manufacturing steel in the United Kingdom? Are they not that concerned—the Minister made the point that she was—that the imports from China and elsewhere are causing havoc in this country? I do not think the news from the Government is good enough, and I hope we get some more positive action from them.
My Lords, I would like to pay tribute to the unions in these very serious steel difficulties. They really have been amazing and shown that they can be extremely constructive. They therefore have been working in the task forces with Tata and other steel producers to try to minimise the problems and difficulties of the steel industry.
It has unfortunately been a long tale of decline, with job numbers halving between 1998 and 2010 and a reduction of around one-third in production in that area. There has been an improvement up to 2014, with numbers up from 33,000 to 35,000, but, of course, we now have the latest set of difficulties.
All sides need to come together. Obviously, we need to pursue the problems in Brussels. We have colleagues in other member states who also have steel industries that are suffering from the effect of China. We have to engage on the China side. In the various working groups, we have to look ahead because steel is an important industrial sector. One of the things we have been looking at, for example, is how the improved procurement rules that we helped to negotiate in Brussels can be used to help British steel go into major projects such as HS2.
My Lords, is the Minister aware of the article in today’s Western Mail by the eminent economist Gerry Holtham and Adam Price? They see the possibility of being able to create a joint public and private sector venture between the Government of Wales and Tata, and because of the high quality and specialist steels that are being made in Shotton, Trostre, Llanwern and Port Talbot, this could be a flyer.
In the past, such investment by government has been allowed in Italy and Germany within European rules. Will the Minister and the Government take this forward in conjunction with the Welsh Government to see if this is a positive way out of our difficulty?
I have not seen the article, but it sounds extremely interesting. I think we have made it clear that we are very keen to work with the Welsh Government on sensible options. We have already shown our readiness to get proposals through and ensure that the state aid rules are not a bar to that.
My Lords, this is a very sad day for Port Talbot. When I first became its MP, 16,000 workers went through its gates every day. There has been huge investment in the harbour, which I had the privilege of opening, and continuous casting. While I welcome the state aid approach of compensation for about 30% of electricity bills, could not the long-standing grievance of an unlevel playing field have been dealt with some years ago?
I also welcome the new guidance on procuring steel for major contracts, but is this another example of trying to bolt the stable door much too late? In short, could not the long-standing problems of the steel industry that we have been talking and reading about have been anticipated many years ago?
This has indeed been a very long-standing issue. As far as I am concerned, I am always “glass half full” and I think we have to look forward to action that we can take together in the EU. We have to look forward to the work that has been suggested by the industrial strategy groups that have been set up on steel, and to the work that the Welsh Government, supported by our Government, can do in Port Talbot in particular.
My Lords, I come from an area which has suffered steel losses in the past. The Brymbo steelworks near Wrexham were closed. I think the noble Lord, Lord Evans, had something to do with that. Shotton had the greatest number of redundancies in Europe at that time. It required a huge effort to replace those industries in order to give jobs to the people who had been displaced.
Will the United Kingdom Government promise to fund to the utmost extent the needs of the people of Port Talbot and surrounding areas—the 10,000 jobs that depend on the steelworks, as well as those of the people who actually work there—to make sure that that part of Wales remains viable and economically successful?
The work we are going to do with the Welsh Government, who lead on these issues for Port Talbot, is incredibly important. In other areas, task forces have come together from all stakeholders and have spent the available money really well, which obviously has to include looking after the people who are made redundant.
My Lords, will the Minister accept the deep frustration that many of us feel—in my case, as a former MP for Neath—who have had close associations with the steel industry and with the Port Talbot plant in particular? We gave warnings many years ago about sky-high energy costs, about Chinese dumping of steel more recently, and about the failure of this Government and their immediate predecessor to tackle the deficit through investment in growth rather than austerity. As a result, there has not been sufficient demand in terms of Government and private capital investment these last six years for British steel, including from Port Talbot. To that extent, the Government are responsible for the catastrophic impact on the local communities of Neath and Port Talbot in particular.
My Lords, I do not think I can accept that, although I know all that the noble Lord did when he was Secretary of State for Wales. There actually was a decline in the steel industry for many years. We have helped to get viable steel operations on their feet. We are dealing sensitively and carefully with the current issues that have arisen partly because of global changes. Consumption of steel, as the House will know, has declined radically and at the same time China has been increasing its production hugely. This causes a unique storm and we are trying to find a way forward in these very difficult circumstances. I think that the Secretary of State and the steel Minister, Anna Soubry, are doing an excellent job in very difficult circumstances.
My Lords, I appreciate the Minister’s recognition that the news we have heard today is grievous for the communities of south and south-east Wales, including Newport, where I was the Member of Parliament. The steelworks at Llanwern are located in my former constituency of Newport East.
Will the Minister be more specific about the measures that she indicated in highly general terms that the Government intend to take to stand by those who have been made redundant? I also echo what my noble and learned friend Lord Morris and my noble friend Lord Hain have said. Surely, the measures to support the steel industry that the Government have taken in recent months, welcome though they are, should have been taken much earlier so that they could have averted the disasters that we now face rather than taking steps simply to palliate them. Will the Minister also say what intention the Government have to act strategically to help the economies of south Wales and south-east Wales to diversify? What will she do to support retraining of those who have lost their jobs in the steel industry and what will she do to support investment to enable new industries and new businesses to grow in the regions affected?
My Lords, there was, of course, a new Government after the election and I have tried to explain what this new Government have been doing in this area. It is important to have a growing economy; that creates jobs in other areas. The noble Lord is right to point to other opportunities. On other occasions we debate the digital single market and all the service industry that has grown so strongly in the UK. That has to be part of the solution to the problems in communities such as those in south Wales that have been so severely affected today and for which we are all so sorry. The task forces that we have set up elsewhere, and that the Welsh Government are setting up for Port Talbot, can, in my experience, make a huge difference.
My Lords, first, I refute the suggestion that the Welsh Government have done very little to help the steel situation in Wales. They have worked very closely with the steel unions and Tata Steel to try to prevent this happening but the writing was on the wall a long time ago. There has been a steel summit and I am very happy to hear that a task force has been set up. While the biggest blow in terms of job losses announced today will be felt at the huge plant at Port Talbot, which is an absolute tragedy for that community, particularly for the workers and their families, we must not forget the impact on plants such as Trostre in Llanelli, which also have a very proud and long tradition of steel making. Will the Minister explain why we should be subject to the whims of the Chinese, who are dumping steel in the UK at below market cost? She talked about a level playing field; it simply does not exist. However, at the same time, we are bending over backwards to give the Chinese massive, costly subsidies for their nuclear ambitions in the UK, which will tie the UK into long-term high energy prices and kill off any hopes of a manufacturing revival in this country in the future.
I very much agree with what the noble Baroness said about Trostre. Indeed, Llanwern, Corby and Hartlepool have also been affected today, so it is not just Port Talbot. Our hearts go out to them. We have taken action on Chinese imports. As I said, we voted last July in favour of anti-dumping measures for Chinese imports of steel wire. Again, in November, we voted for anti-dumping measures. We have changed the paradigm and we have raised the issue with Premier Xi. In ongoing discussions on the special status of market economy status, we have made it clear that while we would like to see China get market economy status in due course, it has to abide by the rules and that, if we give it market economy status—which is for the Commission to decide—duties can also be imposed.
My Lords, it is clear that China is massively dumping and the measures which have been taken so far have manifestly proved insufficient. Those Chinese dumping activities—their industry is largely state owned—impact the whole of the European Union. What further is the European Union proposing to do? What timetable is proposed to stem this manifest dumping by China?
My Lords, the noble Lord, Lord Stevenson, mentioned delays in the Government taking action. Of course, one reason for the delay is the European situation in relation to trade assistance. Can I have an assurance from the Minister that other countries in the EU are taking the same notice of EC rules as is this country? Secondly, in relation to energy costs, why are the Government—as has already been noted—paying the Chinese and the French huge sums of money to build nuclear power stations which will take at least 10 to 15 years to build and, at the same time, are closing down coal-fired power stations, which provide the cheapest form of energy?
My Lords, the EU rules on state aid apply to everybody. Where member states do not apply them, they get taken to the European Court of Justice and there are quite significant penalties and financial implications. That is why steel industries across the EU have found it difficult. These state aid rules can be beneficial in other areas. On nuclear power, we are, of course, looking for investment in this vital industry. It is one of the areas in which the Chinese have indicated that they may invest. I see that as different and separate from steel. If there are problems with steel, we should take action in the steel area.
My Lords, the noble Baroness says that we need investment in nuclear. We actually need investment in steel as well. The Government are guaranteeing £92.50 for every unit of electricity produced at Hinkley Point for the next 35 years. The subsidy will come to £20 billion and the plant will cost customers some £4.5 billion. If we have these gigantic figures for the nuclear industry, what is missing for the steel industry? Is it just a lack of resolve on the Government’s part?
Of course, we need investment in steel in parallel with nuclear. We should look at how Tata has come in and invested in steel in the UK. There is bad news today but Tata has worked well with us in these very difficult circumstances to try to do the right thing and to really improve our offer for steel that can be used in the UK in our car industry—and overseas—HS2 and in all the other very important uses for steel, because I believe that what we need is a market for our goods. That is what the steel industry needs.
Committee (1st Day) (Continued)
Clause 2: Labour market enforcement strategy
Amendments 6 to 8 not moved.
9: Clause 2, page 2, line 17, leave out “whose officers” and insert “whom, or by whose officers,”
My Lords, before I turn to the amendments before us, it may be helpful to explain what the changes the Government are proposing will do to the Bill print. We have brought forward a number of amendments to Part 1. To avoid this becoming unwieldy, on reprint this will be split into two chapters. Chapter 1 will be entitled “Labour Market Enforcement” and will cover that topic, meaning what is currently Clauses 1 to 7 and the material in government amendments numbered between 9 and 77. Chapter 2 will start at what is now Clause 8 and will cover illegal working.
I have taken on board and listened to what was said in Committee on the Director of Labour Market Enforcement, and his role and resources, and the general points that have been made about these government amendments. In the light of what has been said, it now falls to me, in bringing these amendments forward, to explain the nature of the amendments which bring into being some of the issues we have talked about.
I will begin with those amendments that collectively better define the “labour market enforcement functions”,
“non-compliance in the labour market”,
and “labour market offence” that are within the scope of the labour market enforcement strategy that the director is required to create every year. Some of these are substantive, others are technical in nature, but they all go to the core of the purpose of the Director of Labour Market Enforcement and what should be covered by the annual labour market enforcement strategy.
Amendments 9 and 19 to 23 ensure that all the enforcement bodies’ functions contained in the Employment Agencies Act 1973, the National Minimum Wage Act 1998 and the Gangmasters (Licensing) Act 2004 are brought within the oversight of the director. Amendment 23 has two key purposes. First, it adds new functions of the Gangmasters and Labour Abuse Authority under Part 2 of the Modern Slavery Act 2015 to the list. As I hope noble Lords will know from our response to the consultation on Tackling Exploitation in the Labour Market, published on 12 January, and as we will cover when we reach later amendments, the Government wish the Gangmasters Licensing Authority to evolve into an authority that is able to tackle serious labour market exploitation across the economy. As part of this, we intend that the Gangmasters and Labour Abuse Authority will be able to enforce certain parts of the Modern Slavery Act 2015.
Secondly, Amendment 23 includes the investigation of breaches of the new labour market enforcement orders. As I hope noble Lords will be aware, we are bringing forward amendments to enable a new regime of labour market enforcement undertakings and orders. These will be used to tackle the most unscrupulous employers. I look forward to dealing with this in detail later today but, if it is the will of this House that these undertakings and orders should be added to the Bill, the Government want this regime to be firmly in the scope of the labour market enforcement strategy.
I turn to the abuses in the labour market that we want the director to help us tackle. It is the Government’s intention that the labour market enforcement strategy covers all types of non-compliance by business with the Employment Agencies Act 1973, the National Minimum Wage Act 1998 and the Gangmasters (Licensing) Act 2004, whether they are criminal offences or not. Amendments 16, 17 and 24 seek to better define in legislation the non-compliance that is not an offence but should be included. This is: non-payment of the national minimum wage where it does not meet the wilful criminal intention; failure to pay a notice of underpayment of national minimum wage; and breaching a Gangmasters and Labour Abuse Authority licence condition that results in withdrawal of a licence rather than a criminal prosecution.
The next set of amendments deals with the offences that will be included in the labour market enforcement strategy. The Bill already includes offences under the Employment Agencies Act 1973, the National Minimum Wage Act 1998 and the Gangmasters (Licensing) Act 2004—the three core pieces of legislation enforced by the three enforcement bodies—and offences in Part 1 of the Modern Slavery Act 2015. Amendment 26 excludes an offence from this core legislation that applies to enforcement officers rather than employers—the offence of improper disclosure of information collected by the enforcer. We think this is not best dealt with through the Director of Labour Market Enforcement but is covered by other mechanisms. Amendments 27 and 30 add to the scope of the labour market enforcement strategy the offence of breaching a slavery and trafficking prevention order where the action against the perpetrator was taken by the Gangmasters and Labour Abuse Authority. Amendment 27 also adds to the scope breaches of the new LME orders that the Government are proposing to create. Amendment 29 adds related offences, such as aiding and abetting, to the list.
The Government believe that this is a sensible remit for the Director of Labour Market Enforcement at this time. However, I draw noble Lords’ attention to the powers currently in the Bill which provide that the Government can add further labour market enforcement functions and labour market offences to the scope of the labour market enforcement strategy. Amendment 17 includes the ability for the Secretary of State to also add further non-compliance in the labour market by regulations. The Government believe it is appropriate for such extensions to be made by secondary legislation to enable us to act quickly if it becomes apparent that changes are required urgently. We believe that making these regulations subject to the negative procedure is the appropriate degree of parliamentary oversight. The power would allow the Government only to add labour market enforcement functions, non-compliance or offences already set out in legislation to the scope of the labour market enforcement strategy, not to create new categories of non-compliance or offences.
I turn to the more technical amendments. Amendment 15 removes the definition of “financial year” from Clause 2, which is now contained, along with other relevant definitions, in a new clause proposed in Amendment 62. Amendments 31, 61, 243 and 244 deal with the regulation-making powers under this Part. As I have said, we want the Secretary of State to have the ability to widen the remit of the Director of Labour Market Enforcement’s annual labour market enforcement strategy, should the nature of exploitation change in the future. This will make sure that the role stays relevant to prevent abuses in the labour market. Secondly, we want the Secretary of State to have the ability to confer extra functions on the Gangmasters and Labour Abuse Authority by regulations for the same reason: if there are new abuses in the labour market that we need the authority to be able to crack down on. The Government believe that the appropriate level of parliamentary scrutiny for these regulations is the negative procedure. This is because Parliament has approved the regimes and the Government are keeping them up to date. However, were any primary legislation to be amended as a consequence, we believe it is appropriate for the affirmative procedure to apply, as that merits a higher level of parliamentary scrutiny. Thirdly, the ability to add to the list of trigger offences would enable enforcement bodies to request an LME undertaking. Again, this will mean that our labour market enforcement can be flexible to changing non-compliance and criminality in the labour market. Lastly, the list of measures that can be included in an LME undertaking and an LME order are added to.
For these three regulation-making powers, we are proposing that the affirmative procedure should apply. This is because a breach of an LME order is a criminal offence, and we want that to be subject to appropriate scrutiny here and in the other place. In relation to the territorial extent of the regulations, Amendment 61 makes clear that the regulation-making powers can contain only devolved matters with the consent of the Ministers in the relevant devolved Administrations. Finally, Amendment 246 changes the Long Title of the Bill to better reflect the functions which have been added since introduction. I beg to move.
My Lords, my noble friend and I have one amendment in this group. It is an amendment to the Government’s Amendment 17, which allows other requirements to be added to the list of roles already set out, and other enactments to be added. The noble Lord said that this does not mean the creation of new offences: I accept and understand that. He also said that it will extend to “non-compliance in the labour market”. That is exactly what I am seeking—
It is Amendment 18, which is an amendment to government Amendment 17. From the way in which the Minister introduced Amendment 17, I think that he was anticipating Amendment 18. He seemed to glance in my direction at the time as well.
The Minister said that the fourth paragraph of Amendment 17, regarding,
“failure to comply with any other requirement imposed by or under any enactment and which is prescribed by regulations”,
was to deal with other enactments which related to non-compliance in the labour market. My amendment seeks an assurance to exactly that effect: that the Secretary of State could not roam far and wide over the statute book by adding whatever enactment took his or her fancy under that paragraph. I realise, looking at Amendment 18 now, that my drafting is not completely correct—in other words, it is wrong. I have taken out too many words, but I am sure that the Minister and his officials will have understood what I was driving at.
My Lords, the noble Lord, Lord Ashton of Hyde, explained that he was hoping to make things a bit easier for noble Lords with the reprinting. I welcome that and wish him well with it.
The amendments in this group are all government amendments, with the exception of Amendment 18, in the names of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Paddick, which seeks to amend a government amendment. I am grateful to the noble Lord, Lord Ashton of Hyde, for explaining these amendments. One of the amendments refers to functions that were considered for inclusion. Can he help the Committee by saying what functions were considered and then not included? I would be interested to know that in relation to Amendments 16, 17 and 24.
I can see the value of being able to add further non-compliance matters by regulation. However, this should be by the affirmative and not the negative procedure, as proposed here. Such matters often benefit from a short debate in the Moses Room when additions are proposed. I think that many in the Committee would agree that this legislation is not to the same standard or quality as we saw with the Modern Slavery Bill, for example. For that reason, if for no other, we should have the affirmative rather than the negative procedure.
It could be suggested that Amendments 19, 20, 21, 22 and 23 better define the labour market functions within the scope of the labour market enforcement strategy, by reference to specific legislation; I can see that point.
Government Amendments 243 and 244 both require the use of the affirmative procedures. That is welcome, but it contradicts the earlier decision to use the negative procedure, which I have referred to on this group. The last amendment, Amendment 246, would take out a reference to the Director of Labour Market Enforcement. Yes, that is fine, but I wonder whether the Government should perhaps have taken the whole thing out of the Bill and brought a separate Bill back.
My Lords, I welcome the greater powers for the Gangmasters Licensing Authority, both in this group of amendments and in a later group. The authority has done extremely good work ever since its inception in legislation and I am delighted that there will in due course be powers for its officers to take steps under PACE. I appreciate that that provision is not in the present group, but I want to say that in case I am not here when that point comes up.
I want to put two points to the Minister. First, how far afield is he expecting the Gangmasters Licensing Authority to roam? In particular, does he have in mind either the hospitality or the construction industry, each of which should at some stage be under the control of that authority, or possibly this new director, in a way which is not covered at present? Secondly, if in fact the Gangmasters Licensing Authority is to have further powers, as it will, it is crucial that it has greater resources. That matter should be absolutely upfront because if its officers are allowed to become prevention officers—to be able to arrest and to do much more than they can at the moment—it really does not have sufficient resources to carry that out, let alone anything further that needs to be done.
My Lords, several noble Lords said right at the beginning of our debate that these government amendments came fairly late, but noble Lords on the opposition Benches are not the only ones to suffer from that. I will therefore have to ask the noble Baroness, Lady Hamwee, for her indulgence because I am afraid that her Amendment 18 was not contained within my speaking notes for this group. It is an amendment to our Amendment 17, but I do not have the details of how I should refute it with the power that I normally would. As my noble friend Lord Bates said right at the beginning, and as I think the noble Baroness mentioned, some of these issues may be revisited at times on Report—but I accept that that is not a very compelling argument tonight.
The noble Lord, Lord Kennedy, talked about negative and affirmative procedures. I have never known him to agree that we should have a negative procedure when we could have the affirmative. I do not want to repeat the reasons that I gave, but we have made a distinction between regulations that create new offences or affect primary legislation and those which merely deal with existing offences, where we still maintain that the negative procedure is correct.
The noble and learned Baroness, Lady Butler-Sloss, asked how far the remit of the Gangmasters Licensing Authority will roam in future. I cannot tell her that today, but I absolutely take on board her point. As I said in my opening remarks, we intend that the authority should evolve. That is the whole point of our changing the Gangmasters Licensing Authority to the new arrangements, and putting it under the remit of the Director of Labour Market Enforcement. The only thing we are likely to be concerned about—we have made this point before—is that it will be for labour market enforcement issues and not for other things. However, I take on board the noble and learned Baroness’s point on where it might evolve.
Of course, the Director of Labour Market Enforcement is required to outline a strategy. That is one of the things that we would expect him to do, having used the intelligence hub to work out where the efforts of his three enforcement agencies should best be employed. I also take on board that if we are expanding their role, there will be resource implications. My noble friend Lord Bates has already committed to write to noble Lords about the resource issue, so I would like to leave it there and ask that the amendments be accepted.
I assure the noble Lord that I would be very happy to agree to a negative procedure. I have nothing against that at all, but my concern here is that we have not had the greatest time today, with amendments arriving late. It is about my lack of confidence and the fear that we may be sitting back here in some weeks’ or months’ time with problems, only for us to say, “I told you so”.
Amendment 9 agreed.
Amendments 10 and 11 not moved.
12: Clause 2, page 2, line 26, at end insert—
“( ) Nothing in this section shall permit the alteration of a strategy of a person entitled to prepare a strategy under any labour market legislation (as defined in section 3).”
My Lords, Amendment 12, together with Amendments 14 and 38, is in my name and that of my noble friend Lord Paddick. The first of these amendments again goes to the relationship between the new director and the other bodies which the Bill concerns, in particular the Gangmasters Licensing Authority. The Bill provides for a strategy to be prepared by the director. Amendment 12 is probing in the sense that I am not sure whether the language is quite right, but the point is clear enough. It would provide that anyone else who is entitled to prepare a labour market legislation strategy under that legislation gets to keep it, so that their strategy cannot just be altered by some diktat from the director. Of course, in real life, one hopes there would be consultation and discussion.
As we have heard from several noble Lords this afternoon, most recently the noble and learned Baroness, Lady Butler-Sloss, the GLA is a successful body. It has a board and it publishes a strategy. Which strategy takes precedence? In particular, what is the function of the GLA board under the new regime if a strategy is to be handed down by the director? It is important to know how the Government envisage that this will work. We start at the top of the tree with two Secretaries of State, who will have to sort out what was described earlier as “an envelope”. Then there is some sort of trickle-down arrangement. The Government must have thought about how the relative powers and the working arrangements would operate. It is not going to be that easy.
My other amendments are rather to the same point. Amendment 14 is about whether or not the other bodies should be bound by what the director provides. These amendments came before the Government’s mega-tranche of amendments last week. Again, I want to probe the relationship between the various strategies and whether Clause 2(6) affects the GLA board. It refers to:
“Any person by whom labour market enforcement functions are exercisable”.
Is the GLA a “person” for this purpose? Clause 2(6) refers to Labour market enforcement functions being carried out by enforcement officers, not by the employing authority
The last amendment in the group, Amendment 38, is on Clause 6, which provides that the director must set up what is referred to as an “information hub”. The GLA has an information hub. Is that to be superseded? Again, it raises the question of resources. Something like a hub does not just come naturally by shoving some pieces of paper into a file. One thing that will have to be addressed is the funding of the IT infrastructure. Who is to manage the hub? As I said, the Government’s new proposals were published after these amendments were tabled, so they have been rather overtaken—or possibly had their significance magnified—by the new proposals.
This morning on the “Today” programme, the Prime Minister talked, I think in the context of the police, about a country whose Government rely on independent institutions. He said something like, “Independent institutions should be able to exercise independent judgments”. That rather neatly encapsulates the quandary that I find myself in when trying to understand who will be able to be independent within this new regime. I beg to move.
My Lords, I share the concerns of the noble Baroness, Lady Hamwee, in relation to Amendment 12. As I said on the earlier amendments, and as agreed by everyone in the House, the Gangmasters Licensing Authority has gained a great deal of expertise and is working extremely efficiently. The concern that I share and would like to ask the Minister about is whether the director is going to give the Gangmasters Licensing Authority a free rein to continue the good work it is doing. Is there not a danger it may be controlled by strategies set out by someone who does not have the same expertise as Paul Broadbent and his team? I would be very worried about putting the director over the Gangmasters Licensing Authority without clear instructions that his strategy must be very broad and that he should let the authority get on with the work it has done so well. It would not do it so well if it was confined by any sort of strategy that posed unnecessary restrictions on the work of Paul Broadbent and his team.
My Lords, Amendment 12, moved by the noble Baroness, Lady Hamwee, puts in the Bill a new clause that puts beyond doubt that this part of the Bill cannot be used to permit the alteration of a strategy of a person entitled to prepare a labour market enforcement strategy paper. This is a sensible addition to the Bill and one that I hope the Minister—whether it is the noble Lord, Lord Bates, or the noble Lord, Lord Ashton, who responds—will be able to support, or at least agree to look at carefully and perhaps bring something back on Report.
I am not sure that Amendment 14, also proposed by the noble Baroness, Lady Hamwee, would bring much to the clause, although I am not against it in principle. Amendment 38 makes it optional for the Director of Labour Market Enforcement to,
“gather, store, process, analyse and disseminate information”.
I have given thought to the amendment and listened to the reasoning behind it. In fact, it may be quite useful to have this information, but the noble Baroness made some excellent points about resources and the useful work already done by the Gangmasters Licensing Authority.
My Lords, I thank the noble Baroness, Lady Hamwee, for giving us the opportunity to discuss this important area further and to look at the production of an evidence-based, annual labour market enforcement strategy as a key part of the role of the Director of Labour Market Enforcement. By following a single, overarching strategy with a shared view of risk, enforcement will be better co-ordinated and more effective.
A real concern was expressed during the consultation exercise on labour market enforcement, which has been referred to. The Government have of course responded to that, giving rise to the amendments referred to earlier. In many ways, this touches on the point raised by the noble and learned Baroness, Lady Butler-Sloss. In terms of responsibility for strategy, the Gangmasters Licensing Authority currently reports up to the Home Secretary. Initially, it was I think part of Defra, but it was moved across to the Home Office because we felt that that was a more logical place for it to sit, particularly in the light of the introduction of the Modern Slavery Act. So the authority refers up to the Home Secretary, while the HMRC national minimum wage team feeds up its strategy to the Secretary of State for Business, Innovation and Skills, as does the Employment Agency’s standards inspectorate. So at the moment there are two different reporting lines. The proposal is that, rather than effectively having two separate reporting structures, there is an initial feed-in to the Director of Labour Market Enforcement, who then reports to the joint Secretaries of State. That may in fact result in fewer problems.
Amendments 12 and 14 appear to limit the director’s proposed role by not permitting his strategy to alter the strategies set out by any of the other enforcement bodies or by not binding the enforcement bodies to delivering the director’s strategy. The director’s strategy is not intended to undermine or take precedence over the enforcement bodies’ strategies; rather, we expect those strategies to be informed by the director’s strategy as they contribute to tackling labour market exploitation.
The GLA board will continue to be responsible for delivery of the GLA’s functions. What will change is that the delivery of those functions will sit within a wider vision of tackling labour market exploitation, an issue I will address in due course. The Government’s amendments will add the functions of the GLA board to the list of labour market enforcement functions. Furthermore, the GLA board will have a duty to exercise its functions in accordance with the director’s strategy. We believe that this will ensure that the enforcement bodies and the director can work together more effectively.
Amendment 38 brings me to the intelligence hub. Clause 6 as drafted gives the new director the duty to lead an intelligence hub that forms a coherent view of the nature and extent of exploitation and non-compliance in the labour market—something that the consultation and the Committee have accepted as being absolutely necessary. The director will use the information gathered to formulate the annual strategy for labour market enforcement. It is essential that the director have the power to gather information from those involved in labour market enforcement to enable them to set the annual strategy. Without this, the strategy will not be evidence-based and will therefore be unable to improve the effectiveness and co-ordination of enforcement, which is our objective. If the duty on the director to gather information was removed from Clause 6, that would lead to a different role than the Government have committed to creating.
To enable the intelligence hub to work, we intend to create a statutory framework to enable information and intelligence to be shared appropriately, with the necessary safeguards. We will bring forward amendments at Report to achieve this. I reassure noble Lords that the new intelligence hub will not replace existing information-gathering arrangements in the individual enforcement bodies, which I know was a point of concern. They will continue to gather and analyse their own data in order to plan their own operational activity. This will then be fed into the new intelligence hub and the director’s strategic plan, providing an up-to-date picture of areas where workers are at risk of abuse. However, the director’s intelligence hub will be wider. It is important that the director have the power to exchange data and intelligence with other enforcement bodies whose legislation is often breached by the same rogue businesses.
I also reassure noble Lords that we are in the process of identifying what resources, including IT infrastructure, will be required to enable the new information hub to be effective, and that the Government recognise this is just as important as creating the statutory framework. I hope my explanation will be helpful to the noble Baroness and that she may therefore feel able to withdraw her amendment.
I wonder if I could just come back. I am not so concerned with Amendment 12. I am much more concerned with what lies behind it. My particular concern is that a new director who organises strategy should not be organising a strategy of the Gangmasters Licensing Authority, which knows much more about it than he does. Therefore, this new director of strategy needs to have a light touch when he deals with an established organisation that has been doing very good work with a lot of successful prosecutions. I have not had that assurance from the Minister.
I will try to be a bit more helpful if I can. I totally share the view of the noble and learned Baroness that the Gangmasters Licensing Authority is doing an outstanding job in its present field. That is one reason why we are increasing its powers. It is a recognition that it is an effective organisation and we want to make it even more effective. It is unthinkable that someone could come into this role—co-ordinating and sharpening the overall strategy of labour enforcement—who would not embrace the strategy already in place of such an effective organisation as the Gangmasters Licensing Authority.
Clause 7 prevents the director exercising functions or making recommendations in relation to individual cases. Decisions about sanctions to be taken against businesses are a matter for the enforcement bodies, which will remain operationally independent. However, the director may consider individual cases when examining the general issue during the exercise of his or her functions. I know that that relates to a previous comment, not to the comment just made. None the less, I hope that those additional reassurances—that the labour market enforcement director is building on strategies, ensuring that they are coherent and joined-up, and in doing so is absorbing best practice from a wider range of organisations involved in enforcement—will be welcomed. If so, the noble Baroness might feel these amendments are not necessary at this stage.
The noble and learned Baroness expresses my view precisely. I am not particularly concerned with the specific amendments; they were probing amendments. I might enlist her help in drafting something for the next stage. I am not sure—I may have missed it, in which case apologies—whether my question about whether the GLA board was a person for the purposes of Clause 2(6) was addressed, but perhaps that can come later. The board will exercise functions—essentially functions to the director’s priorities. In other words, the GLA board’s role is going to be changed. That is a serious issue for the individuals who will have taken one set of skills to the board and will not be expecting to get involved in something which is essentially more operational.
We are all struggling a bit to articulate the arrangements that we are concerned about and what we think should be in place. That is perhaps because it is quite easy to draw some sort of diagram—an organigram—on a page showing the relationships, but that is not necessarily what real life is like. I am afraid that the intelligence hub does not reassure me at all, because it sounds like two lots of overlapping expenditure, if not complete duplication. That may be something that I return to. The nub of all this is the relationship. I hope that I can find a more felicitous way of addressing this at the next stage, but it has to remain on the agenda. For now I beg leave to withdraw the amendment.
Amendment 12 withdrawn.
Amendments 13 and 14 not moved.
15: Clause 2, page 2, line 35, leave out subsection (7)
Amendment 15 agreed.
Clause 2, as amended, agreed.
Clause 3: Non-compliance in the labour market etc: interpretation
16: Clause 3, page 2, line 40, leave out paragraph (a)
Amendment 16 agreed.
17: Clause 3, page 2, line 41, at end insert—
“( ) failure to comply with the requirement under section 1 of the National Minimum Wage Act 1998 (workers to be paid at least national minimum wage);( ) failure to pay any financial penalty required to be paid by a notice of underpayment served under section 19 of that Act (see section 19A of that Act);( ) breach of a condition of a licence granted under section 7 of the Gangmasters (Licensing) Act 2004;( ) failure to comply with any other requirement imposed by or under any enactment and which is prescribed by regulations made by the Secretary of State.”
Amendment 18 (to Amendment 17) not moved.
Amendment 17 agreed.
Amendments 19 to 24
19: Clause 3, page 2, line 45, leave out from “officer” to end of line 46 and insert “acting for the purposes of that Act (see section 8A of that Act),”
20: Clause 3, page 3, line 2, leave out from “1998 (” to second “of” in line 3 and insert “see section 13”
21: Clause 3, page 3, line 3, at end insert—
“( ) any function of the Gangmasters and Labour Abuse Authority conferred by section 1(2)(a) to (c) of the Gangmasters (Licensing) Act 2004,”
22: Clause 3, page 3, line 4, leave out from “officer” to “of” in line 6 and insert “or a compliance officer acting for the purposes of that Act (see section 15”
23: Clause 3, page 3, line 6, after “Act),” insert—
“( ) any function of the Gangmasters and Labour Abuse Authority under Part 2 of the Modern Slavery Act 2015 (slavery and trafficking prevention orders etc),( ) any function of an officer of that Authority acting for the purposes of Part 1 or 2 of that Act (see sections 11A and 30A of that Act),( ) any function an officer has by virtue of section (Investigative functions),”
24: Clause 3, page 3, line 9, leave out subsection (3)
Amendments 19 to 24 agreed.
Amendment 25 not moved.
Amendments 26 and 27
26: Clause 3, page 3, line 16, at end insert “other than one under section 9(4)(b) of that Act”
27: Clause 3, page 3, line 24, at end insert—
“( ) an offence under section 30(1) or (2) of that Act which is committed in relation to—(i) an order which was made on the application of the Gangmasters and Labour Abuse Authority, or(ii) an order which was made under section 14 of that Act and which falls within subsection (4A) below;( ) an offence under section (Offence);”
Amendments 26 and 27 agreed.
Amendment 28 not moved.
Amendments 29 to 31
29: Clause 3, page 3, line 26, at end insert—
“( ) an offence of attempting or conspiring to commit an offence mentioned in paragraphs (a) to (f);( ) an offence under Part 2 of the Serious Crime Act 2007 in relation to an offence so mentioned;( ) an offence of inciting a person to commit an offence so mentioned;( ) an offence of aiding, abetting, counselling or procuring the commission of an offence so mentioned.”
30: Clause 3, page 3, line 26, at end insert—
“(4A) An order made under section 14 of the Modern Slavery Act 2015 falls within this subsection if—
(a) the order was made following the conviction of the defendant of an offence mentioned in subsection (4)(d) or (e), and(b) the prosecution resulted from an investigation conducted by a labour abuse prevention officer (within the meaning of section 114B of the Police and Criminal Evidence Act 1984).”
31: Clause 3, page 3, line 27, leave out subsection (5)
Amendments 29 to 31 agreed.
Amendments 32 to 35 not moved.
Clause 3, as amended, agreed.
Clause 4: Annual and other reports
Amendment 36 not moved.
Clause 4 agreed.
Clause 5: Publication of strategy and reports
Amendment 37 not moved.
Clause 5 agreed.
Clause 6: Information hub
Amendment 38 not moved.
Clause 6 agreed.
Clause 7 agreed.
39: After Clause 7, insert the following new Clause—
“Gangmasters and Labour Abuse AuthorityRenaming of Gangmasters Licensing Authority
(1) The Gangmasters Licensing Authority is renamed the Gangmasters and Labour Abuse Authority.
(2) In any enactment passed before the day on which this section comes into force, and in any instrument or other document made before that day, references to the Gangmasters Licensing Authority are to be read, in relation to any time on or after that day, as references to the Gangmasters and Labour Abuse Authority.”
My Lords, I shall speak also to Amendments 40 to 42, 60, 73, 77 and 214. I will allow the sponsors of Amendments 71 and 245 to speak to them.
Government Amendment 39 will rename the GLA the Gangmasters and Labour Abuse Authority, reflecting the transformation of its role. Amendment 40 relates to a new schedule, inserted by Amendment 73, enabling the GLAA to investigate labour market exploitation through investigative powers for our proposed new offence and the labour market offences contained in Clause 3. Government Amendment 41 enables GLAA officers to exercise police-style powers when investigating labour market offences, ensuring prompt action to tackle criminal behaviour. Officers will undergo necessary training, meeting College of Policing standards, to exercise these powers.
Other noble Lords will speak to Amendments 41A to 41D. Government Amendment 42 introduces a power for the GLAA to request assistance from the National Crime Agency, the police and immigration enforcement, who will have a similar right to ask the GLAA for assistance. Other bodies can be added by order.
Government Amendments 60 and 77 make consequential amendments reflecting the GLA’s change of name, adding the director to certain legislation, such as the Freedom of Information Act, introducing IPCC oversight for the exercise of PACE powers and retaining the current GLA regime in Northern Ireland.
I will deal with the other amendments in this group when they have been spoken to by other noble Lords. I beg to move.
My Lords, earlier today a number of noble Lords referred to their misgivings about the changes being made to the Gangmasters Licensing Authority. During the passage of the modern-day slavery and human trafficking legislation, I moved amendments on the GLA and queried its ability to meet its obligations because of the resources made available to it—a point referred to earlier by my noble and learned friend and by other Members of your Lordships’ House during our earlier debates. During the passage of that legislation, I moved amendments to enable the GLA to utilise assets from the proceeds of the crimes that it had investigated. In doing so, I reminded the House of the events which led to the genesis of the GLA, notably the 23 Chinese men and women who drowned in Morecambe bay after their Liverpool gangmasters took them to undertake cockle picking. At the time, a local fisherman, Harold Benson, described the tragedy as not only awful beyond words but absolutely avoidable.
In December 2014, during the passage of the legislation on modern-day slavery, I told the House that the lessons of Morecambe bay had not been fully learned. I described a similar incident in the Ribble estuary in which 17 cockle pickers of eastern European origin had been snatched to safety. In those debates, I cited the small number of personnel employed by the GLA, the cut, which I referred to earlier, of around 17% in the GLA’s budget between 2011 and 2014, the small number of convictions—just seven—and the research by the University of Durham calling for the mandate of the GLA to be extended. Instead of seeing an expansion of the GLA’s remit in order to prevent labour exploitation, there are genuine fears that the Government’s amendments that we are considering represent a severe threat to the GLA, with changes to its role, remit and name resulting in a greatly weakened licensing labour inspection regime. If this comes to pass, it would inevitably allow new labour abuses, such as those I have just described, to abound.
The main issue revolves around the creation of what has been described as flexible licensing standards without a requirement for affirmative procedures. Government Amendment 77 to omit the requirement for the GLA to make rules by statutory instrument in effect means that the GLA has power to amend licensing standards and must—this is changed from “may” in the original GLA Act—seek approval of the Secretary of State, but not Parliament. The Secretary of State still retains the power she always has had under Section 6(2) of the Gangmasters (Licensing) Act to remove by negative procedure certain circumstances in which labour providers do not require a licence.
In summary, these amendments, taken with existing powers, mean that the Secretary of State could greatly reduce by negative procedure the number of labour providers licensed in a GLA sector, as suggested by the recent consultation response, and could greatly reduce the licence standards to be applied to those who are licensed with no requirement for any statutory instrument. This appears to be what the Government mean when they talk about flexible licensing, which was put forward in the consultation and supported by just 19%—less than one in five—of the respondents.
The Delegated Powers and Regulatory Reform Committee published a report on the new government amendments only last Friday and found that these new powers to change rules without parliamentary approval are inappropriate and therefore should be removed from the Bill. Focus on Labour Exploitation states that,
“the GLA is a first line of defence against the labour abuses that develop into severe exploitation and modern slavery. We are extremely concerned that a new ‘flexible’ licensing regime as proposed in these amendments will leave the GLA powerless to prevent widespread abuses and therefore exploitation and instead caught up in police style investigations that absorb a huge amount of time and resources”.
In our debate on the Modern Slavery Act, the noble Baroness, Lady Garden of Frognal, answering for the Government said:
“We need to consider this carefully and ensure that in seeking to broaden the GLA’s remit, we do not undermine the good work that is being done already”.—[Official Report, 10/12/14; col. 1879.]
I entirely concur with that sentiment. We must be very careful indeed not to do precisely that.
The noble Baroness also said:
“The GLA is working with the University of Derby to devise training and to develop an anti-slavery training academy for use by supply chain businesses. This will build on the GLA’s excellent existing collaboration with business in its regulated sectors. The GLA is well placed to tackle the serious worker exploitation that lies between the more technical compliance offences that fall to be investigated by HMRC and the serious and organised crimes that are addressed by the National Crime Agency”.—[Official Report, 10/12/14; cols. 1880-81.]
Presuming that this is the aim of today’s amendments, what are the resource implications? This point was made earlier by my noble and learned friend and other Members of your Lordships’ House. Without the necessary resources, how on earth will this agency be able to do these things? Clearly the Government envisage an expanded role. This will include police-style investigations and powers for offences across the labour market. Alongside this is the proposal to have a more flexible approach to licensing.
The Minister needs to be clear about whether the aim of the amendments published on the very day that the consultation concluded—which hardly demonstrates that there was a long period of reflection—is to remove strict compliance obligations from those businesses which have been compliant hitherto or whether it is to give the GLA more teeth. I wonder what the Minister makes of the minimal support which the flexibility proposal received from the respondents—just 19% out of a total of, I think, 93 respondents to the consultation, who came from academia, charities, trades unions and industry.
Existing GLA licence standards are crafted to give strong protection against exploitation. That includes issues such as working hours, pay, accommodation and safe transport. Clearly, flexible licensing should not mean a reduction in licensing. This must not become a sort of trade-off between licensing as a means of raising labour standards and preventing exploitation and a more flexible approach that could divert time and resources to tackling extreme cases instead. That in turn would create a climate in which rogue gangmasters could flourish and undermine the excellent intentions of the legislation we passed on human trafficking and exploitation of people as modern-day slaves.
Furthermore, the amendment removes a requirement for the GLA to make rules by negative procedure—a point made by the noble Lord, Lord Kennedy, when we were dealing with the earlier amendments. In effect this will mean that the GLA would have the power to amend licensing standards and must seek the approval only of the Secretary of State and not of this House or the other place. The Secretary of State still retains, and always has had, the power to remove certain categories of labour providers requiring a licence by negative procedure. These amendments mean that the licence standards to be applied to labour providers in a given sector could be significantly reduced or expanded without parliamentary scrutiny. Unless Parliament is engaged in the shaping of licence standards, changes could be made without a clear evidential basis and without proper and full consultation with all stakeholders with expertise in labour sector licensing requirements. GLA licensing rules should not be changed without detailed impact assessments, including worker consultation, which might assure Parliament that any changes would not negatively impact upon the vulnerable workers whom they are designed to protect.
In conclusion, when the modern-day anti-slavery legislation was enacted, it had the benefit of pre-legislative scrutiny and of the forensic examination by both Houses. That is not the case with what is before us today. We would be wrong to treat this avalanche of amendments lightly or to be pushed pell-mell into approving them in haste.
I, too, want more clarity on the same issue that we have been discussing for the past half hour or so. I refer to the new Schedule, on page 32 of the Marshalled List. Why is some of this necessary? At the bottom of that page, the proposed new subsection states:
“The body known as the Gangmasters Licensing Authority is to continue to exist”—
that is very nice—
“and is to be known as the Gangmasters and Labour Abuse Authority”.
Given that the word “Licensing” is disappearing, does that arise in respect of the present functions of the Gangmasters Licensing Authority simply because those are being subsumed in the wider exercise that is mentioned at the bottom of the page, where it says,
“the Authority and its officers must carry out those functions in accordance with the strategy”,
which is the wider strategy? The more I think about it, the more I cannot quite believe that this will do anything other than restrict some of the present functions of the Gangmasters Licensing Authority. Therefore, at the foot of page 32 instead of just saying “continue to exist”, which, as I say, is very nice—a pat on the head, so jolly good—why could we not say “and its functions continue to exist”? Could the Minister clarify why that is not the case?
I thank the Minister for introducing the government amendments in this group, which set out the Government’s proposals for the new Gangmasters and Labour Abuse Authority. We also have an amendment in this group calling for the Secretary of State to undertake a review of the existing, highly successful and effective Gangmasters Licensing Authority, with a view to extending its remit to enforce labour standards and protection wherever it is believed abuse and exploitation of workers may be taking place.
The Delegated Powers and Regulatory Reform Committee, as the Minister has said, has already expressed its views, through the use of an exclamation mark, on the number of last-minute amendments the Government have submitted. In its speedily produced report on those amendments—for which we are, I am sure, all very grateful—the committee made a number of recommendations relating to the latest tranche of government amendments. It would be helpful if the Minister could say whether the Government intend to adopt those latest recommendations and will therefore be bringing forward appropriate amendments as necessary. It would be very helpful to know what the Government’s position is on that point.
The Gangmasters Licensing Authority, as has already been said, was set up in the aftermath of the Morecambe Bay tragedy in 2004, when 23 Chinese cockle pickers drowned while working there. In the past two years, the GLA has prevented the exploitation of over 5,000 workers. The question that has to be asked, in the light of the changes proposed by the Government and the setting up of a new Gangmasters and Labour Abuse Authority, is whether these changes will address the problem of labour exploitation and abuse across the board, or will the effect be to extend across a broader front a watered-down and less effective version of the current Gangmasters Licensing Authority? If that is the case, this would do little to help eradicate labour exploitation or abuse or, equally significantly, do little to encourage those being abused to come forward.
According to the Association of Labour Providers, which conducts a survey of Gangmasters Licensing Authority licence holders once every two years, this year—as I think the noble Baroness, Lady Hamwee, said earlier—93% of licence holders said they were in favour of licensing, 73% perceived the Gangmasters Licensing Authority to be doing a good job and 67% deemed the Gangmasters Licensing Authority to have contributed to a significantly or slightly improved level-playing field. The point about regulation and achieving a level playing field is important because, as the chairman of the Migration Advisory Committee told the Public Bill Committee in the Commons,
“It takes away the cowboys … and the people who do the undercutting”.—[Official Report, Commons, Immigration Bill Committee, 20/10/15; col. 20.]
The proposed new or revamped authority, the Gangmasters and Labour Abuse Authority, will have the power to enforce the National Minimum Wage Act 1998, the Employment Agencies Act 1973 and relevant parts of the Modern Slavery Act of last year across the entire labour market. It will also engage in criminal investigation and enforcement. The setting up of the Gangmasters and Labour Abuse Authority, as the changed name suggests, will also lead to a move towards what the Government are describing as,
“a more flexible approach to licensing”.
Before putting forward their proposals on the proposed Gangmasters and Labour Abuse Authority, the Government conducted a consultation on tackling exploitation in the labour market. In the part of the questionnaire on licensing, the Government asked respondents to say whether they agreed that the Government,
“should introduce a more flexible approach to licensing, based on a risk assessment, judged on a sector by sector basis and agreed by Ministers and Parliament”.
Since, as the noble Lord, Lord Alton, has already pointed out, almost twice as many respondents answered no to that question as answered yes, it looks, frankly, as though the Government had already made up their minds on the issue of flexible licensing before the consultation started. Otherwise, what was the point of the consultation when almost twice as many respondents answered no to that particular question?
Unscrupulous gangmasters can of course also be flexible and simply move to a sector where the proposed flexibility of the licensing arrangements may enable them to carry on their exploitation and abuse in the labour market. What firm assurances can the Government give that this would not happen under a “flexible approach” to licensing? Can the Minister give an assurance that flexible licensing does not mean a reduction in licensing? I suspect that he cannot give such an assurance. If it means a reduction, that could threaten efforts in the Modern Slavery Act to protect vulnerable workers from exploitation and to reduce cases of modern slavery. Will the Minister also confirm that there will be no shift away from licensing towards voluntary schemes? Witnesses before the Bill Committee in the Commons were clear that the enforcement of labour standards across the board is the only way to level the playing field.
The issue raised most frequently by respondents to the consultation related to resources, and comments have already been made on this issue. Having sufficient resources attached to ensure that the new authority had the ability to match its mission was a recurring theme, and overall respondents were clear that any reforms would need to be sufficiently resourced and enforced. No doubt this clear response was in part conditioned by the fact that labour inspection authorities have seen steep declines in their budgets over the past five years, including a cut of more than 20% to the Gangmasters Licensing Authority. Not only will the GLA, in its changed role, see its remit extended to the whole labour market but it will receive new criminal powers of investigation and enforcement that could require significant resources which, if not provided, could then distract from core licensing and monitoring functions.
However, although this was the most frequently raised issue in the consultation, the Government failed to address it in any meaningful way in their response. Instead, there is a suggestion that the Director of Labour Market Enforcement will help to pool resources between labour inspection authorities. Given the existing budgets on which they operate, though, such pooling could not ensure that the proposed increase in workload was adequately funded. I ask the Minister to tell us, either now or well before Report, in the letter that he earlier undertook to send on resources, what the Government’s estimate is of the resources that will be needed by the new bodies that they are creating under the Bill, including, importantly, the new Gangmasters and Labour Abuse Authority, to undertake the role and remit that they are being given in future under the terms of the Bill—a role and remit that, in many cases, are extended over those that currently apply. Presumably, the Government do not set up new statutory bodies or organisations with defined roles and powers without having a view on the resources that will be needed to enable the remit to be carried out, and the powers given to be effectively applied and enforced.
We have also expressed concerns, in the discussions on previous amendments, about the relationship between labour standards enforcement authorities and the immigration authorities. There is a reference in one of the Government’s new clauses to the new Gangmasters and Labour Abuse Authority having a working relationship with immigration officials and,
“any other person prescribed or of a prescribed description”,
over requests for assistance. Since there is evidence that, the greater the overlap between labour inspection and immigration control, the less likely victims of exploitation are to come forward for identification, could the Minister spell out in some detail what the parameters will be of the working relationship, set out in the Bill, with immigration officials and others undefined, to which I have referred?
The Bill’s provisions also bind officers from, now, the Gangmasters Licensing Authority and, in future, the Gangmasters and Labour Abuse Authority to the provisions of the Director of Labour Market Enforcement’s strategy. The noble and learned Baroness, Lady Butler-Sloss, has already expressed her reservations about that. Why do the Government believe—I ask this despite the previous explanation that the Minister gave—that this is necessary, as opposed to requiring the GLA, and, in future, the GLAA, to have regard to the director’s strategy? What difficulty do the Government see arising if the primary functions and overall strategy of the GLA and GLAA are set by their own board after having regard to the director’s strategy? What is it that the Director of Labour Market Enforcement could conceivably require the GLA to do that that body might not want to do, and thus appear to justify the Government’s proposal that it will be bound by the provisions of the Director of Labour Market Enforcement’s strategy? I hope that the Minister will respond in some detail on that point.
I hope that I am not abusing my ability to speak on this group, but I also invite the Minister to respond, under this group or in the letter that he earlier undertook to send, to a question that I asked in an earlier group about the protections given under the Bill to workers irrespective of immigration status, and what role the Director of Labour Market Enforcement and the agencies that he or she will oversee, including the new GLAA, will play in addressing labour exploitation and abuse in the workplaces of those who do not have the required immigration status to be in this country.
As always, I will listen with interest to the response of the Minister, who I hope will be able to reply, either now or prior to Report, to the points made in response to the Government’s proposals, including the latest batch of amendments following their consultation on labour market exploitation.
My Lords, as the Minister will know, I am a refugee from the employment relations world and the language of immigration is not familiar to me. I know that the Minister himself has a lot of personal experience of employment relations so I hope he will understand that, in supporting my noble friend’s amendment, I have real concerns about why these issues have come up under an Immigration Bill at all. Obviously, I must not be self-indulgent and make a Second Reading speech at this stage, but I echo what has been said that, if this is associated with immigration matters then reporting by vulnerable workers will be even less likely, and that is a matter of some concern.
My other concern is that vulnerable workers can also be British-born. We have heard a lot about how some adults with special needs have been housed in tin shacks and exploited horribly. When I produced a report for the previous Labour Government on construction fatalities, I identified that there were also vulnerable groups of workers who were British-born: the very young, who would not necessarily challenge the authority of their employer, and—how shall I put it?—the quite mature, who were perhaps reaching the end of their working life in construction and thought that they knew rather more about it than they actually did, or perhaps were not familiar with a piece of machinery. So I would regret it if this were seen entirely as an issue of immigrant and migrant labour. Because of where it has appeared in the legislation, there is a danger that that could happen.
I take some comfort from the fact that the consultation exercise was shared between the Home Office and BIS. I look for an assurance from the Minister that BIS will have a very full role to play so that the employment relations aspect of all this—the labour market issues as I know them—rather than immigration issues, will be fully taken into consideration.
Perhaps I may underline that, when I looked at this issue, I recommended that the Gangmasters Licensing Authority should cover construction. That was seven years ago, so things have changed without all the changes the Government are recommending. In a way, I am rather glad that the powers are being extended, but it is a question of being careful what you wish for. I have a real worry that this tidy little hierarchy, which looks as if it is going to be based in the Home Office, is going to be a dissipated power and there are going to be a lot of misunderstandings about the role of the new authority.
In the year that I studied for the report, there was a lot of discussion because about 12 migrant workers had been killed in the construction industry. Some would say they were the most vulnerable because they were used to tolerating lower standards of health and safety or they were exploited or there was a language barrier that prevented effective communication. I have to say there was no real data to show this. Equally, I saw that many migrants were skilled and experienced and worked in regular groups. They were attracted to the industry, which liked their work ethic, and they were paid the agreed industry rates. Some questioned the competence of migrant skilled workers and said their qualifications were not comparable, but there was no evidence to prove that.
I agree with what my noble friend Lord Rosser has said. Can the Minister assure us that the real labour relations issues will not be neglected here and that the good work of the Gangmasters Licensing Authority will not be dissipated in any way? We should remember that this is not just an immigration issue; it concerns vulnerable workers of all kinds.
My Lords, the very fact that the noble Baroness raises this issue coming—and I do not say this at all disparagingly—rather fresher to this Bill than some of us underlines the need to get the answers to questions raised around the Committee on to the record and in such as a place as they can easily be found. It should not just be in a letter in the Library but in the Bill. That becomes all the more obvious. I am glad that the noble Baroness reinforced that. Other references have been made to the report of the Delegated Powers and Regulatory Reform Committee and to flexible licensing, so I will not take the time of the Committee now.
I have a number of amendments in this group. This may be the point at which I emulate the Government Front Bench as I am in danger of losing my place—I hope they will forgive me if I do. My Amendment 40A refers to the importance of resources by providing that the new functions conferred by regulation on the GLAA should be ones for which resources have been made available.
My amendments to Amendment 41 raise some similar points which I will refer to later, so I will deal with them in a rather more general fashion. The first is a probing amendment. Amendment 41 proposes new Section 114B for the Police and Criminal Evidence Act and says that,
“regulations may apply provisions of this Act with any modifications”.
Does that refer to modifications that are necessary simply in order to tweak references to legislation; for instance, so that the legislation being modified applies quite clearly directly or is it something wider? As it is written at the moment I fear it might be wider, which is why I have raised the issue.
I also suggest that regulations should,
“provide for labour abuse prevention officers to undertake specified training and achieve specified qualifications”.
The noble and learned Baroness referred earlier to the extension of PACE powers. One should not extend those significant powers to people who do not know how to use them. Training is needed and possibly qualifications for them to be able to use those powers. I picked that up at a number of points. I also suggest with my amendments that a statutory instrument amending or repealing a provision of the Act is significant.
In new Section 22A of the Gangmasters (Licensing) Act 2004, to which the noble Lord, Lord Rosser, referred, a relevant person for the purposes of requests for assistance going either way includes immigration officers. That again conflates immigration control and labour market regulation. I am aware that the GLA has experienced some frustrations when it might undertake what you might call hot pursuit when it has discovered a likely offence but does not have the power to deal with it. I have heard Paul Broadbent say that it is very frustrating when you have to wait for the police to arrive to deal with something and you cannot stop evidence being removed. I am not sure whether I am making that point at quite the right point in the Bill but I think it comes generally within this area.
My next group of amendments deals very much with training, qualifications and resources again so I will not repeat the arguments, but I think it was again the noble Lord, Lord Rosser, who referred to the relationship between the strategies. Under Amendment 77 the GLAA will have to carry out functions “in accordance with” the labour market enforcement strategy. Everybody else involved is left with the lighter obligation of having regard to it, so why the difference? That is my Amendment 77A.
Amendments 77B and 77C are about the relationship with the Secretary of State and the Secretary of State’s powers. At the moment, to take one instance, the GLA sets fees after consultation with the Secretary of State. What will the position be in the future? My Amendment 72 would enable the GLA to require information from supply chain. It would give it powers relating to an organisation that takes supplies of goods and services. That seems to have been a lacuna that could do with filling or closing. I am not sure what one does with a lacuna, but it is rather a different amendment from the others we have been debating. Again, it is something we could very usefully address during the course of this Bill.
My Lords, I apologise for making what I suspect will be regarded as a somewhat pedantic point but I should like to raise some specific questions about Amendment 41. At this point, I am referring to the amendments to the PACE powers.
First, as regards new subsection (1), I notice that the power is permissive and not mandatory. Perhaps the Minister would be so good as to explain why it is not a mandatory power but only a permissive one. Secondly and related to that, I am sure that your Lordships would like to know whether it is the Government’s intention to exercise this power. If so, when and to what extent?
My next point is also brief. In new subsection (7)(b) I find that the regulations may apply to “particular purposes”. I think that your Lordships will be reassured to know that this power is not going to be imposed with regard to particular investigations; rather, that it is more general in character.
My last point relates to new subsection (1)(8), which concerns a very wide power. It is contemplated giving the Secretary of State a power to amend substantive legislation. I have personally always been very cautious about using statutory instruments for such a purpose. Incidentally, I am very glad to see that the affirmative procedure is being used here for that very purpose, but, as I say, I am very cautious about using statutory instruments in this way. I suspect that the Committee would like to know the extent to which the Government are minded to use this power and, if so, for what purpose and when.
My Lords, I am very grateful to noble Lords for speaking to their amendments in this group. I shall try to address as many of the points raised as I can at this stage, but I may have to write to noble Lords on some of the more specific ones.
I want to make one general point, which more or less relates to the points made by the noble Baroness, Lady Donaghy, and the noble Lord, Lord Lea. Essentially they are asking what has changed here. The Government are effectively putting themselves in a strategic position to take much tougher action against all forms of labour market abuse. In general terms, although the TUC had some reservations about the detail, which I am sure we will come to, in a broader sense it welcomed the fact that the Government were taking this matter very seriously, wanting to join up different agencies which are all doing a very good job, to give them a stronger strategic position and, of course, more powers. Those powers would include the ability for rogue employers to be jailed. These are serious powers and I will come back to the comments of my noble friend Lord Hailsham on their use, because that is a very important point for us to consider.
It should be remembered that we are extending the base of the resources. In some of the amendments we have covered the additional resources that will be available to the agencies—for example, the Organised Immigration Crime Task Force and the National Crime Agency, which we dealt with in the Serious Crime Act, and there is also immigration enforcement. Organised crime syndicates are massively exploiting this area. Information will be shared and we will be receiving information from different areas. That is part of a big approach that we are taking to nail some of the abuse that has been going on for far too long.
When it comes to resources—a key point referred to by the noble Lord, Lord Alton—again, it is right that we get down into the detail. I was making a rough note of some figures I had quoted earlier, which I shall have to check. Effectively we are bringing together three agencies and putting in a new Director of Labour Market Enforcement. The Bill sets out that there will be funding to enable the director to do his or her job. Therefore, let us say that that is an additional element of funding. Beneath that, we have the Gangmasters Licensing Authority, whose budget is about £2.48 million, the Employment Agency Standards Inspectorate, whose budget is about half a million pounds—a relatively small sum—and the national minimum wage enforcement function. The latter has by far the greatest number of staff and by far the greatest budget, standing at £9 million last year. Therefore, the total across those three groups for last year was £12 million.
In his Autumn Statement, the Chancellor announced that a further £4 million would be going to the minimum wage task force, and the regulations, which were prayed against just before we started this Committee stage, provide for additional fines to be levied on employers. The task force’s budget was increased from £9 million to £13.2 million. Therefore, over the past year the overall pot for labour market enforcement has increased from £12 million to £16 million—a 25% increase, which is quite substantial—and there are additional powers. I am not saying that a headline figure of that nature is going to answer everybody’s questions but it underscores that we are genuinely putting resources and legislative power behind the efforts to tackle labour market abuse.
I turn to some of the points that were raised. The noble Lord, Lord Rosser, asked about the relationship between the Gangmasters and Labour Abuse Authority and immigration enforcement. It is entirely possible that the GLAA will become aware of a situation involving gangmasters that also involves illegal working and the employment of illegal workers. In such circumstances, it is vital that a defined partnership exists to enable the exchange of information while ensuring that roles remain distinct. This already happens and we are taking the opportunity to formulate how that relationship works. This is part of what I referred to earlier. Often—we are told by the prosecuting authorities—when someone is guilty of an offence in one area, they are an offender in multiple areas.
I was asked about GLA prosecutions, and this relates to the points raised by the noble Lord, Lord Alton. Over time, the GLA has undertaken a number of more complex investigations that focus more effectively on serious and organised crime. This reflects a targeted and risk-based enforcement approach by the GLA. This year alone, the GLA has undertaken 92 such investigations—already more than the 72 undertaken in 2014 and the highest level since 2011. Again, I am not trying to escape from the resources point; I am trying to say that the GLA, which we all defer to in admiration, is doing more work more effectively, and we expect it to undertake more investigations.
The noble Lord, Lord Rosser, also asked why the GLAA has to carry out its functions in accordance with the strategy rather than having to have regard to the strategy, as other enforcement bodies do. The GLAA board remains responsible for the delivery of the GLAA functions but it now sits within the wider strategic approach of tackling labour exploitation. Enforcement bodies will be responsible for delivering aspects of the strategy but the legislative difference will be driven by their different legal identities. In practice, the same expectation will apply to all three enforcement bodies—that is, they will now follow the director’s strategy.
On the strategy of the Gangmasters and Labour Abuse Authority and the point that the noble Baroness, Lady Donaghy, was making, it is important to remember that such abuse can be investigated across any sector, so it is not restricted to the traditional areas in which the Gangmasters Licensing Authority operated. It can look at labour abuse wherever it is found, including in construction. Again, I would have thought that that would be broadly welcomed.
Is it the Government’s position that the resources currently available to the existing authorities will be sufficient to cover the apparently extended role and remit under this Bill of the Director of Labour Market Enforcement and the GLAA, which, as the Minister has said, will now exercise its function across a much wider front? Do the Government think that the kind of sums the Minister says are being spent at the moment will be sufficient to cover what appears to be a considerably enhanced role for this authority in future?
As I said, they are 25% higher than this time last year in terms of overall labour market enforcement. Are we saying that that is sufficient? No, because what we are focusing on is the strategy. A very important role of the Director of Labour Market Enforcement will be to advise the Home Secretary and the Secretary of State for Business, Innovation and Skills on what resources are necessary to tackle labour market abuse and exploitation. That is what we are doing, but once we have an overall strategy that says where the focus should be, we would be confident in identifying where the gaps are. We would have more confidence in claims made for increases in resources at that point than perhaps might have existed when we were looking at them in isolation. Again, I would have thought that that would be welcomed.
The noble Lord, Lord Rosser, rightly asked if we would look at the recommendations made by the Delegated Powers and Regulatory Reform Committee. Of course we will. We take all the committees of this House extremely seriously. I would say in our defence—as has been used in defence against us—that the report is dated last Friday, 15 January, and it is now Monday.
Touché. I get that point. The point I am trying to make is a very serious one: that the Government will of course listen to and pay very careful regard to the recommendations of a committee of your Lordships’ House. I will have more to say on that by the time we get to the relevant section on Report.
Will our reforms make it easier for rogue gangmasters to operate without fear of detection? Absolutely not. Our reforms will ensure that the GLAA has tough new enforcement powers to tackle criminals in any labour sector, not just those that are licensed. Importantly, the number of licences granted for 2014-15 was 82, with 27 refusals and 23 revocations, out of a total of 954 licences in existence. That shows that it is something more than a box-ticking exercise: that genuine work is being done by the GLA in assessing the quality of those licences, and we want that to continue.
I have touched on reviews—perhaps not to the entire satisfaction of the noble Lord, Lord Alton—but I will come back to that issue and set out the position in a letter. The licensing rules contain detailed provisions on a variety of matters, such as what information should be provided by a licence holder to a worker before they start—for example, shellfish-gathering rules on tide, accommodation, record keeping and sector- specific provisions. This follows a model set out in Section 7 of the Private Security Industry Act 2001 which allows the Security Industry Authority to set its licensing criteria by publishing a document without any parliamentary procedure but with the approval of the Secretary of State.
I come to the point made on PACE powers—that there is no mention of the new labour market enforcement order offence in the proposed new Section 114B of PACE. Amendment 55, which introduces the new clause “Investigative functions”, provides that the enforcing authorities can use the investigative powers they already have for the relevant trigger offence to be investigated in any breaches in LME orders. This means that where the GLAA has PACE powers for the trigger offence, it can use those powers to investigate a breach. I am immediately conscious, as I read that out, that that does not answer the particular point. Staff designated to exercise police-style powers will be subject to the relevant PACE codes and to Independent Police Complaints Commission supervision. As I say, I am conscious that that does not answer the specific question my noble friend asked, and I will undertake to write to him and to other noble Lords whom I have not had the opportunity to respond to in the time available. I hope, with those reassurances, that noble Lords and Baronesses will feel able to withdraw their amendment.
One of the amendments to which I spoke, which was quite unrelated to any others, addressed the supply chain point for the GLAA. I wonder whether the Minister has an answer to that. If not, could that not get lost in the rather more philosophical issues we have been debating?
It is one that we listed in the supply chain regulations which recently came before your Lordships’ House. A number of undertakings were given at that time to examine options for a central database and how that will be done. It should also be said that there was general agreement that we had set the threshold for the reporting of those standards at the lower end of the expected threshold, so that more companies would have to comply. That has a concomitant effect upon the size of the database which would need to be maintained in order to carry those statements of transparency in supply chains by the companies affected. I am very happy to undertake to update noble Lords on progress with that in the course of my responses.
Before my noble friend sits down I plead the excuse of being the Minister who moved the original PACE and took it through this House. I have a sort of avuncular interest, particularly in codes of conduct. I would be most grateful if he copied me in to the correspondence about the bearing of PACE codes of conduct on these new people operating under the Bill.
Amendment 39 agreed.
40: After Clause 7, insert the following new Clause—
“Functions in relation to labour market
(1) Schedule (Functions in relation to labour market) (functions in relation to labour market) has effect.
(2) The Secretary of State may by regulations confer other functions on the Gangmasters and Labour Abuse Authority or its officers.”
Amendment 40A (to Amendment 40) not moved.
Amendment 40 agreed.