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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 281-xvii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE welsh affairs COMMITTEE
globalisation and its impact on wales
Tuesday 24 July 2007 Evidence heard in Public Questions 1267 - 1316
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Welsh Affairs Committee on Tuesday 24 July 2007 Members present Dr Hywel Francis, in the Chair Mr Stephen Crabb David T. C. Davies Nia Griffith Mrs Siān C. James Mr David Jones Mr Martyn Jones Mr Albert Owen Hywel Williams ________________ Memorandum submitted by Gangmasters Licensing Authority Examination of Witnesses
Witness: Mr Paul Whitehouse, Chairman, Gangmasters Licensing Authority, gave evidence. Q1267 Chairman: Welcome. For the record, could you introduce yourself, please? Mr Whitehouse: Paul Whitehouse, Chairman. I am the Chairman of the Gangmasters Licensing Authority. Q1268 Chairman: Could you outline very briefly for the Committee the work undertaken by the Gangmasters Licensing Authority in Wales since its establishment in April 2005? Mr Whitehouse: It is very difficult for me to say, Chairman, exactly what we have done in Wales. What I can say is what we have done across the United Kingdom and make specific reference to one operation in Wales and some other ongoing work. We were set up, although most people consider because of the Morecombe Bay disaster in order primarily to deal with the shellfish, we were set up primarily to deal with the exploitation of labour in the agriculture and food processing industries, and the bill for that was already in the House at the time of the Morecombe Bay disaster and shell-fishing was added on. We have the power to issue licences to those who are providing labour in the licensed sector, which we have been doing since 1 April 2006, and we have been enforcing against people without licences and dealing with those who fail to comply with the terms of licences since October last year. In the papers that we provided to you there is a regrettable error, where we said we refused 30 applications, actually we have refused only 29, but since the date of the submission we have revoked a further four licences. We have not yet revoked any in Wales, but I have read some of the evidence which has been provided to the Committee by other witnesses, who have made allegations which may or may not relate to our sector, and it is very difficult to tell. We have not received any intelligence information from anybody, which makes it very difficult for us to act, because the way in which we operate is to respond to reports, apart from looking for them ourselves, that we are very pleased to respond to reports from organisations, whether they be trade unions, Citizens Advice Bureau, interested parties, Members of Parliament, whoever, and we will do so rapidly. There was one interesting exposure by a television producer on a labour provider in Neath, which alleged behaviour towards his substantial immigrant workforce, mainly of Polish origin, which suggested a whole host of improper behaviour towards them. Our compliance inspector went into the premises before the programme was broadcast and found no evidence, in fact, that he was still in breach, but he was prepared to say that, yes, had she come a year earlier, when we had no power, indeed she would have found the problems which that television programme had discovered. We took that to be evidence of our existence, having pushed him into legality. In no way do we wish to catch people out who want to do things properly, we want to help those who want to do things properly, and deal mainly with those who are not wanting to follow the law. There is one point, Chairman, which gives us difficulty. If you can imagine the area in which temporary labour, principally migrant but not entirely, is employed as being a large circle, of which 25%, a central 25%, is agriculture and food processing, and the remaining 75% is cleaning, construction and hospitality. One of your Members, Chairman, suggested that we were toothless. We have very fierce and effective teeth, but we are tethered to the central point, and as long as you carefully stay outside the area of agriculture and food processing you are not caught by us. As we come along to revoke your licence because you have behaved improperly in the agricultural field, you can carry on being a gangmaster and not get caught by us by moving into one of those other fields where there is just as much money to be made. Q1269 Mrs James: I think I was the Member who referred you to the activity which took place. I am very aware, from the work that I have been doing with various licensees in Wales, that they were concerned that you were also given the skills and the tools to undertake a fuller responsibility, so please take that request in the light that it was made, more into expanding your opportunities and the areas of your work. You note in your memorandum that gangmasters range from recognisable agencies and businesses supplying large processing plants to small-scale operators. Could you outline for the Committee the size and scale of those labour providers licensed with you and awaiting licensing in Wales? Mr Whitehouse: I cannot give you specific figures for the numbers in Wales but I can write to you with details from today. I am very happy to provide that, Chairman, if you would like. What I can say is that there are a lot of national agencies which operate across the whole of the United Kingdom, certainly across main line Great Britain, which will operate in Wales, and these will be household names, in many instances, people recognise them from their local high street. Equally there will be quite small operators operating just out of the back of a white van. There will be those entire ranges across Wales and everywhere else, because the fact that someone is not licensed in Wales does not mean that they do not operate in Wales. We have had difficulty with some other government departments which have not realised that actually the fact that someone is licensed in Boston, in Lincolnshire, for example, which is a centre of labour provision activity, does not mean they confine their activities to Lincolnshire; actually they operate across the whole of England, Scotland and Wales from there. They will go for where the business is, and, to that extent, the fact that there are few licensed labour providers with addresses in Wales does not mean that there is not a lot of activity in Wales, but we do not know where people are operating, necessarily. Q1270 Mrs James: You say in the submission which you gave us that you believed there were about 13 licensed companies and three others are awaiting licensing: those would be exclusively within the food processing area? Mr Whitehouse: That is the only area where we have power to license; we have no powers outside of that. Q1271 Hywel Williams: This is an inquiry about globalisation. Broadly, can you tell the Committee, how has globalisation, and related labour shifts, impacted on labour providers in Wales specifically, if you can? Mr Whitehouse: The fact that people are able to come to this country from all other countries of the EU, in order to work in the licensed sector, including the two most recent states, Bulgaria and Romania, and the fact that the wages they can obtain for work in this country are generally substantially higher than they can obtain for equivalent or even considerably more responsible work in their own countries, means that many people come, and because there is an incessant demand for labour to do a whole host of tasks which most people in England and Wales no longer wish to undertake then increasing numbers of people are coming and are being employed. Unfortunately, there is a lack of understanding often in the countries from which they come that you can get work over here without having to go through a great many hoops; you have to register yourself under the Worker Registration Scheme, of course, but you do not necessarily have to pay someone a lot of money in your country of origin. You can get a bus from most parts of Europe now, for not very much money, or a cheap air flight, and be here, but unfortunately people do not always know that and some people who are not well informed, sometimes they may not be wholly literate, and certainly not literate in English, are misled, so they can be put upon. This means that the good side of labour being available is turned against those individuals because they are not paid or treated properly. Q1272 Hywel Williams: You said earlier, in answer to a question, that you felt that the general composition of the licensed gangmaster workforce is largely migrants. Do you have any definite figures on that, and, if not, do you have any impression of trends over the last months, years? Mr Whitehouse: No, we have no idea who works, in terms of numbers, for individual gangmasters; we are interested only in that: whoever they employ, they employ them within the terms of the law, that is the gist of it, the important points we have to fulfil, so we cannot specify numbers. We think that in the agriculture field there could be between 500,000 and 750,000 people working altogether, but not necessarily at the same time, and it is one of those questions tied up with immigration. We do not know how many people are here and therefore who is involved, but it is a very substantial number of people, it is certainly not less than half a million. Q1273 Hywel Williams: Not all of them are registered? Mr Whitehouse: No; no, I am sure there are many people who will not be registered. It is not a requirement to be. It is a requirement to be registered on the individual; it is not a requirement on the employer to have his, or her, employees registered. Q1274 Hywel Williams: Would you say that was a weakness then, in terms of our broad understanding of the numbers involved here? Mr Whitehouse: It could be. I am not sure myself that the Worker Registration Scheme is terribly helpful in that area, but, yes, certainly it prevents us, those who keep those figures, from having a full picture, you are right. Q1275 Hywel Williams: Given that the forecasts initially were for, I cannot remember how many it was, was it 18,000 or 30,000 people migrating? Mr Whitehouse: It has been far more than that. On the other hand, the figures in this area have always been very loose. When I first became involved, which was at the end of 2004, I was told that in the licensed sector there were between 1,000 and 10,000 gangmasters. We have now got that back to, we think, between 1,000 and 2,000, but people do not really know because it is a very fluid area; there has not been much research, it goes on without people necessarily wanting to know about it. Q1276 Hywel Williams: Can I ask you about gangmasters who provide accommodation to employees, and you know yourself that the accommodation must be proper. Could you expand on exactly what you mean by proper accommodation and give us an idea of what the general nature of breaches of that physical requirement is like? Mr Whitehouse: One of the difficulties of all legislation is that, of course, generally it achieves sometimes the opposite to what you intend, and gangmasters realise that if they provide accommodation they can be caught if it is not good enough. We treat related companies as being part of that, but if, in fact, a gangmaster chooses not to provide accommodation then that is the end of the matter. If he says to his employees "You go and find somewhere to live" then we cannot go to anyone else and say "The accommodation you are providing is not good enough." Generally what we are looking for is for it to be clean, not overcrowded, proper sanitation, washing facilities, and so on; it has to be a bit of a subjective test. On the other hand, compliance inspectors are reasonable people, they do not expect the accommodation to be four-star, they do not expect to find four beds being slept on by 12 different people, for shifts; there is nothing wrong with a twin-bedded room, properly provided. It has got to be a judgment in each case. Some of the accommodation, we should not be mistaken about this, Chairman, is very good, and there are a lot of employers, labour providers, who want to make sure that their employees come back and they do not want to treat them badly. Q1277 Hywel Williams: I am aware of cases in my own constituency of some employers who have complained to me about other employers, because they are providing a proper standard of accommodation. Just to pursue that for a moment, you are aware, therefore, that in some cases there are associated companies which might be providing the accommodation, and, for your purposes, are they treated as being part of the gangmaster operation? Mr Whitehouse: They would be, and what I would say, Chairman, is that if any Member hears of this sort of complaint, which Mr Hywel Williams has just mentioned, then tell us, because we want to go there and deal with it, or establish perhaps that it is a misunderstanding. Of course, in business there are occasionally allegations made for purposes which are not exactly what we would wish. Q1278 Hywel Williams: You also note in your memorandum the need to increase workers' knowledge of their own employment rights, and you mentioned that earlier, in terms of paying fees, and that sort of thing. Can you tell us how you have set out to achieve this, and to the extent that you expect gangmasters themselves to follow your lead to inform their workers of their rights? Mr Whitehouse: We hope that a good employer would do that, but we work on the basis that workers are easily exploited and therefore we have provided in every single European language, and of course Welsh, the rights that everyone should expect. These leaflets are small, will fold up and go inside your shoe, so you can easily take them in circumstances where you might not wish them to be seen by others. They are in very heavy demand, because, of course, they apply whether you work in the licensed sector or not, and they give people an opportunity to challenge when someone is not being paid the right amount, or whatever it might be. Q1279 Hywel Williams: I am interested in that, to what extent here your good practice is generalised in areas for which you do not have particular responsibility but where one suspects that migrant workers are being exploited? Mr Whitehouse: All we know is that we provide tens of thousands of leaflets via some of the Embassies; we go to trade fairs in the capitals of the Accession States and we provide leaflets there, and we have provided now all of our leaflets in PDF form, so they can be printed off locally, at Embassies, and they are providing them out to those who enquire. We are gradually spreading it to all those people who are interested enough to make enquiries before they come to the UK to work and, of course, they may come to work in any sector at all, so that must be good. Q1280 Mrs James: I wanted to go back to the accommodation. You did cover in part the area that I wanted to ask you about. I have come across several problems, not just problems of accommodation provided by the gangmasters, but, in effect, the people who leave that poor accommodation because of problems and then go out into the wider community and they are then on the open market, so to speak, and open to exploitation, so houses under multiple occupation which do not meet the requirements. My concern about the problems which have been brought to me is things like personal security. You have talked about your compliance officers going in and inspecting; do they inspect things - I know they are mundane but they are very important for a woman - like locks on the bathroom door, that there are proper electrical points, etc., things which are health and safety issues? Mr Whitehouse: Chairman, I do not wish Members to go away from here thinking I have enormous numbers of people out there. For the whole of the United Kingdom, I have got only nine people doing compliance inspections, so it is a big job with a small number of people. Yes, they will be looking for that sort of thing, but in the particular instance I gave, the Neath inspection, the compliance inspector was a woman, I would expect that she would notice that sort of thing. I think what we are talking about here is a commonsense approach and if it were apparent that were no locks on the bathroom door then that is the sort of thing which, because we always want to talk to the people, we are very particular about saying "We'll talk to him and her and her," and not the ones that are put forward, and if necessary we take interpreters with us who would get this sort of information and would tell us. Unfortunately, the problem of people going to live in HMOs, which are run by third parties, we have no control over at all, it is a local authority responsibility. Q1281 Mrs James: We can come to you; you very kindly said that we could come to you with complaints? Mr Whitehouse: Please; yes. Q1282 Mr Martyn Jones: If I can go back to accommodation, Mr Whitehouse, I will be coming to ABP, a company just outside my constituency which employs people from my constituency, in depth later, possibly, but one of the issues surrounding that is a point you have just mentioned about related companies providing accommodation. Would you say that if a company had essentially inveigled people into signing a contract with another company to provide accommodation at much greater than the £29.50, which I understand they are only allowed to charge if they provide it themselves, would you consider that was a related company? Mr Whitehouse: We will look at anything, the simple answer is, Chairman. Please may we have the information and we will investigate it? Mr Martyn Jones: I have got that here. I will give it to you later. Q1283 Mr David Jones: Just a brief point, Mr Whitehouse, on the question of the leaflets you mentioned. I see that they are published in many languages. I found it surprising that none of them were in any of the Chinese languages, considering that it was a well-publicised incident involving Chinese workers that actually brought your Authority into being in the first place? Mr Whitehouse: Yes; except that, of course, it is extremely unlikely that a Chinese person would have a right to work here and therefore could not be employed by a gangmaster. This is a slight difficulty. On the one hand, we wish to prevent the exploitation of workers, but someone who does not have a right to work should not be employed, because one of the conditions of holding a licence is that you obey all the laws, and one of the laws you would need to obey is that you should only employ people who have a right to work here; so those who do not have a right to work here cannot be employed. To that extent, we are not aware of significant numbers of people from outside the EU, except those who come on the SAWS schemes from slightly further afield who would be eligible for employment. Q1284 Mr David Jones: I suspected that would be your line, Sir, but I still find it surprising that you have not at least published the leaflets? Mr Whitehouse: It is an interesting question. I will consider it, Chairman. Thank you very much for that. Q1285 Mrs James: Did you have any input into the documentation which the Welsh Assembly has created? I was very interested to note, at my local library on Friday, that there is a 'Welcome to Wales' pack for migrant workers, which is produced in a variety of languages, including Welsh. Mr Whitehouse: I am not aware of its existence and I am not aware that we had any input into it. Mrs James: I shall ask for you to be included. Q1286 Mr David Jones: Could you outline briefly for the Committee the licensing process? Mr Whitehouse: Yes, Chairman. About 75% of all our applicants do carry out the application on line; the remainder talk to one of our operators on the telephone and are then sent a form to fill in. They have to say who they are, generally a limited company, for how long they have been trading, where they are trading, all the relevant details which apply to a limited company, whether they wish to be licensed in the shell-fishing area or the general agriculture and food processing and forestry. Having completed all of that, they have to send us the money; we do not start the process until we have received the fee. As soon as that happens we send off all the details of each applicant to a substantial number of other government departments, the HMRC, what was the DTI, BERR these days, I think, the Department for Work and Pensions, the Home Office, and so on, anyone who has a database which will be able to tell us whether this company, or its directors, or the principal authority, has any record with that other agency, either because they have actually been through proceedings or perhaps because there is intelligence about them. We have had excellent co‑operation from all these other government departments; we get an answer within ten working days on that. Until the middle of last year there was a hangover of companies which had been audited under the auspices of the Temporary Labour Working Group; we allowed them to go forward at that stage without inspection, but everyone applying today is then inspected, that is the current position. An inspector, or inspectors, with interpreters as necessary, will visit and go through the records, which will support, one hopes, the application, and also goes to talk to workers, and chooses the workers themselves so they get the people they want, to ask them questions. If they do not score more than 30 points, and in our licensing standards there are critical, major, minor and correctable faults, a critical fault is 30 points and a major fault is eight; so one critical fault means you do not get a licence, four major, but most people, if they start to get lots of majors, get more than just the three and tend to drop out. If they have got fewer than 30 points we will issue the licence with a requirement to correct the conditions which are not up to the mark within three months, perhaps six months, and then, depending on what the nature of that is, we may go back and visit or we may require a statutory declaration from the firm that they have remedied it. Then we will go out on a further inspection later, either on an intelligence basis, because someone has provided us with information, or we may go at random, in order to make sure that we do not go just because someone has told us, and we hit an occasional firm on the basis that we have not been in that area before and we have not seen that firm. Q1287 Mr David Jones: You mentioned in your memo that the number of licensed labour providers in Wales was surprisingly low, given the agricultural nature of the country. To what do you attribute that, and what is the Authority doing to address that situation? Mr Whitehouse: Until we have information which leads us to suppose that there are a significant number of unlicensed labour providers operating in the sector then there is no reason why we should address it. Q1288 Mr David Jones: But you found the phenomenon surprising? Mr Whitehouse: It is surprising in the sense that one would have expected that it would be proportional, but I go back to an earlier answer I gave, that since labour providers go where the business is and it is not always as high in some parts as in others then they will go and seek business elsewhere. The fact that there are businesses in the West Midlands, which is a very short distance away from most parts, in fact it is better placed for going to all parts of Wales than someone based, for example, in South Wales, therefore it would not surprise me that a labour provider might choose to base himself in the Midlands rather than Wales. Q1289 Mr David Jones: It is, of course, as you pointed out, an offence to act as a gangmaster without a licence, or to use an unlicensed labour provider. To what extent are you able to monitor and calculate the number of companies which may be breaching the law, and what positive work are you doing to reduce illegal activity? Mr Whitehouse: We rely entirely on information provided to us by other people, in whatever capacity they come across it, together with the work done by our own enforcement teams, in conjunction with other agencies, so running, for example, road stops. There are certain parts of the country where it is well known that if you run a road stop in the early hours of the morning you will catch a very significant number of white vans full of people going to work in different places. Not only may they be in breach of our legislation, they may be in breach of a whole host of other legislation as well, so we can do that by ourselves or with other agencies, such as VOSA and the police, and so on. We have got at the moment one prosecution pending in Scotland; we are waiting for the Fiscal to decide whether to take that forward, but we are optimistic. Essentially, if we got close to someone, it would not surprise me, given the nature of our constrained remit, if they just stepped outside our area. Why bother to put yourself at risk of being arrested if you can continue to make money by moving into an area where there is no offence. Q1290 Mr David Jones: You have mentioned in your memo that licences will be refused, or will be revoked, if there is any non-compliance. Is there any appeals procedure? Mr Whitehouse: Yes, there is an appeals procedure to an appointed person, who is a district judge, and we have lost two appeals so far. One, we think the decision was misdirected; the other was so near the knuckle we were not too worried about it. Q1291 Mr David Jones: If there is no appeal, what follow-up procedure is undertaken in those circumstances? Mr Whitehouse: If there is no appeal we look to see whether the individual continues to operate in the licensed sector. Q1292 Mr David Jones: Then you may prosecute, I assume? Mr Whitehouse: We will, yes. Q1293 Mr Martyn Jones: Mr Whitehouse, you note in your memorandum that employment rights, such as working hours, contractual arrangements and protection from intimidation, are all part of the GLA's licensing requirements. To what extent are those factors affected by globalisation? Mr Whitehouse: In the sense that if you live in a country where, for argument's sake, the average wage is £1 an hour and you can come over here for not very much money and get work at £3 an hour and actually get that work and not pay too much for accommodation, and therefore have, net, shall we say, £1.50 an hour, you are going to be considerably better off than you would be in your own country. You might be being paid much less than the National Minimum Wage in this country but you will still be, in your eyes, well rewarded. To the extent that people will want to do that sort of thing then globalisation will encourage not just labour providers to make money out of such people but such people to feel that they are not necessarily being exploited, because in their own terms they are not being exploited. If we go back to the Morecombe Bay disaster, the money that the Chinese men and women were making there was unconscionably greater than anything they could earn in the Province from which they came; so, in their eyes, they were not necessarily being exploited, and that is a difficulty which we have to face and contend with. Q1294 Mr Martyn Jones: It makes your job more difficult, does it not, in terms of enforcing the laws which must apply, minimum wages? Mr Whitehouse: Except that, because we know what the wages have to be, ought to be, and because we can make assumptions about what the labour user needs to pay in order to allow a labour provider to pay our minimum wage, we publish on our website an advisory minimum contractual rate. Paying less than that would be prima facie evidence that there is improper practice of some sort, which might be either insufficient payment of the wages or not sufficient payment of holiday pay; equally, it might be not paying VAT, for example, or not paying over deductions to HMRC for income tax, and so on. We can do that; and we are talking to all the major retailers at the moment about the need for their auditors, because they all use auditors, to add in a question about that contractual right as part of their audit. As you will not be surprised, they are extremely concerned to preserve their brand; they do not want to be caught either in the sense that we revoke labour providers who are said to be in the chain for this, that or the other supermarket. We are optimistic that they will come along with us, because they have always been part of this, along with a whole host of other organisations, and that would be a great help. The danger is that the individual who does not believe that he, or she, is being exploited is actually being exploited by the middle man, or woman, and that is not good either. Q1295 Mr Martyn Jones: I am pleased that you are thinking of talking to the retailers because I have actually written to Sainsbury's. The particular factory that I mentioned, ABP, which is, as I said, just outside my constituency, in Ellesmere, I have had some horrendous anecdotal stories, admittedly, about what has been going on, primarily with Polish workers there. Sainsbury's accept all of the output of ABP, and therefore, I believe, as I am pleased to hear you are, they should be concerned about how their process of getting their product is conducted; so I am pleased to hear that. You also note that you work closely with other enforcement agencies and workers' groups and trade unions, to gather intelligent reports on the gangmaster industry. Do you also talk to the police, for example? Mr Whitehouse: Yes; we talk to everybody. Q1296 Mr Martyn Jones: Are there any formal arrangements in place to enable the sharing of reports, and to what extent are you supported in your endeavours by local authorities and by the UK Government? Mr Whitehouse: Our Act was written specifically to allow the exchange of information relating to gangmasters between any government department, or the police, and us, which we do very effectively, and we work with any local authority or national or sub-national agency which is prepared to get involved with us. We are very happy to work in partnership with anyone in order to stamp out this exploitation. Q1297 Mr Martyn Jones: To what extent are the trade unions engaged with your working with gangmasters in Wales? Mr Whitehouse: Like the retailers who are represented on my Board, the trade unions are represented on my Board as well and they play a part because often they have access to the information earlier than other people. What we keep saying to them is it is fine, as with any national organisation, the national people know that, it is the local organisers, and so on, who need to realise that actually if they ring us up we can do something about it. We have a fairly substantial programme of going round and talking to groups of people, whether they be trade union organisers, local community groups trying to help migrant workers in their community, or whoever, to explain "If you've got a problem, tell us, because it may be that we can help." Q1298 Mr Martyn Jones: I am pleased to hear that as well, because one of the problems I have had with these anecdotal reports is that Ellesmere is in West Mercia Police District, and of course my area is the North Wales Police. Although I have got good relationships with them, it is very difficult for me to deal with problems which I would say are criminal, if they are correct, people are being intimidated and threatened with firearms for example, which I would suggest is not acceptable and is probably intimidation in anybody's books. You cover both sides of the border, you cover Wales? Mr Whitehouse: We cover the whole of the United Kingdom and, as we are talking here about employment inside the licensed sector, if the information you allege is occurring and is occurring at the behest of a labour provider then we would revoke the licence at once. If they continued to trade then we would enforce against them for being unlicensed, and we would also enforce against the plant for employing an unlicensed labour provider. We just need to be told about it and we will work in conjunction with the police to ensure effective prosecution. Q1299 Mr David Jones: Is it fair to say, Mr Whitehouse, that the labour provided by gangmasters is, by and large, unskilled, or low-skilled? Mr Whitehouse: In the agriculture and food processing areas, it is lower-skilled; it does not mean to say that the individuals are low-skilled, they may have skills which are very high. Q1300 Mr David Jones: Indeed, but the work that is being provided? Mr Whitehouse: Generally, yes. There will be some jobs which are more skilled than others, but generally it is very low, yes. Q1301 Mr David Jones: Also, is it fair to say that generally the wages which the people provided by gangmasters are earning again are on the low side? Mr Whitehouse: The wages, as a general rule, are the National Minimum Wage or, where it is applicable, Agricultural Minimum Wage. Very few people will pay more than that. Q1302 Mr David Jones: So very few will pay more than the minimum wage. Are you able to say, from that, and it may be that you are not, what effect the labour imported, if you like, by gangmasters is having upon the British economy; is it effectively, if you like, bottom of the pond labour rather than anything higher? Mr Whitehouse: No. This is a general observation. Many people come here and get work immediately in low-skilled jobs, because it is very easy to get. There is a constant demand for people to work picking, packing, and so on, in agriculture and food processing, but it is not very pleasant work, which is why natives do not do it any more if they can avoid it. As they get themselves established and they get a better understanding of traditions in this country then they try to get better work, which is what most people do wherever they come from, so they move out of that. Of course, if they have got higher skills they should have no trouble in achieving that. Q1303 Mr David Jones: Effectively, it is entry-level work? Mr Whitehouse: Yes. Q1304 Mr David Jones: To what extent are gangmasters encouraged by your Authority to provide training for employees? Mr Whitehouse: Certain training is essential. You need to ensure that, if you are working in the food industry, everyone understands hygiene; you have got to be trained. If you are working with machinery, in any case, you need to understand health and safety legislation and to be trained in that. There is no requirement for an employer generally to provide training, other than that minimum, and we do not actually have any power to persuade people to do that and we are more interested in getting people up to the basic minima than taking it on beyond that; it is obviously ideal for that but we do not do it. Q1305 Mr David Jones: You do not, in fact, encourage training? Mr Whitehouse: We would not discourage it. Q1306 Mr David Jones: No, indeed, but you do not regard it as part of your remit to encourage it? Mr Whitehouse: We have insufficient resource. Q1307 Mr David Jones: I understand. In fact, you have a very, very small establishment, have you not? Mr Whitehouse: Forty-five people altogether. Q1308 Mr David Jones: Across the whole of the UK? Mr Whitehouse: Yes. Q1309 Mr David Jones: Is that sufficient? Mr Whitehouse: You would expect me to say no. Q1310 Mr David Jones: No, I would not. I just asked you to tell us what you think? Mr Whitehouse: If we had more, we could have more of an impact. Essentially, compliance staff and the element of our operation which supports them, the licensing, has been paid for by the licensees. The enforcement staff are paid for by Defra, or by bargaining an amount, and the equivalent of that, so in Scotland it is also Defra and in Wales it will be Defra, but if we had more we could do more. I believe that we are punching above our weight at the moment, but unfortunately if we push hard we just push them out of that circle I described before, away from the area where we could have the influence. Q1311 Mr David Jones: How concerned are you that, because of your small establishment, abuses are going undetected or unpunished? Mr Whitehouse: It does not matter how big an operation we have, there will always be people who get round it. I do not think, at the moment, that we are quite big enough, because we are licensing such a small number, just over 1,000, we are not big enough to be able to operate at the scale which would make us as effective as if we licensed a larger group of people. Essentially, if licensing were extended to other sectors, and I am not suggesting that it could be extended across everything immediately, but if it were extended gradually then the economies of scale which would go with that would allow us to have a much more effective group of compliance and enforcement people; that would be my observation. Q1312 Mr Martyn Jones: Another challenge you identified in your memorandum was that of licensing overseas labour providers supplying labour. Could you expand on the steps you have taken to ensure that the practical difficulties encountered when trying to license overseas labour providers are being addressed? Mr Whitehouse: The difficulties are, of course, that we do not know where they are and we do not have immediate access to the same information about them as we do with other government departments in this country. We are talking to the relevant authorities in all the other states; in some cases we are very far advanced, in others not so much. We are doing our best to understand, where there are rules of the licensing system in the other states, to what extent those are compatible with our schemes. There is a bit of a difficulty because in some countries, for example, it is perfectly legal to charge an employment finding fee, which is not legal in this country. We have said that it would be nice if some of the other countries which had this would reconsider it, because it would make a difference. We have the lever which if you are, as some organisations are, direct employers of staff in this country but using overseas agents, they need to be licensed, and we can actually enforce against direct employers here who use overseas labour providers merely as agents, because they are caught by our Act. On the other hand, they can, I do not say get round it, regularise the position either by getting that individual to become licensed or by employing the person directly, because, of course, as soon as they employ the person directly they are no longer a third party, and we do not enter into it. If that is happening, and sometimes the people over here are, in fact, very good employers but they are not sure necessarily about the quality of the agents who are working for them abroad, but it is a difficulty and it is not going to become very much easier. We shall just have to keep working at it and hope that we can achieve better relations with the other governments. Q1313 Mr Martyn Jones: Given that most of the migrant workers are Polish, do you have any connection with the Polish Government and are you trying to get them to either change the rules, if they have that particular problem, or give fuller information about the kinds of rates that they would have when they came over here? Mr Whitehouse: Poland is one of the countries with which we have very good relations and we talk to a lot of people in Poland. We have a very good relationship with the Polish Catholic Church in this country, which is a very good source of information, and, on the whole, I would say that Poland is probably the country where we are better placed, in many senses, than some others. Q1314 Mr Martyn Jones: Do you have any Polish-speaking staff? Mr Whitehouse: Two; one Pole and one Polish-speaking. Q1315 Mr Martyn Jones: Do you use translators and interpreters? Mr Whitehouse: Yes. Q1316 Mr Martyn Jones: The final paragraphs of your memorandum note that the issue of worker exploitation cannot be addressed fully by yourselves alone, nor by merely setting legislative boundaries. What do you perceive to be the additional means by which worker exploitation can be addressed in Wales, especially in the context of globalisation? Mr Whitehouse: I think, as much as anything else, raising public awareness of what goes on, how we get to talk about the licensed sector, or the cheap food on the table, and make people think perhaps a little more carefully about what they are doing, and if they knew of some of the things that went on that, in turn, would cause them to urge all those responsible to be slightly more careful in the way they employ people. Chairman: Mr Whitehouse, we are very grateful to you for coming along today and for your earlier memorandum. This has been extremely helpful to us in our inquiry on globalisation, particularly in relation to population movement. Thank you very much.
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