“(1) The Secretary of State shall undertake a review of the Gangmasters Licensing Authority’s remit with regard to section 2 of the Gangmasters (Licensing) Act 2004 and the necessity and evidence for an extension of work covered by this Act and the additional resources required for any additional work, and lay a report in both Houses of Parliament within one year of this Bill obtaining Royal Assent.

(2) The Secretary of State may by order amend section 3 of the Gangmasters (Licensing) Act 2004 to include other areas of work where the Secretary of State believes abuse and exploitation of workers may be taking place, and must allocate additional resources accordingly.”—(Keir Starmer.)

To extend the remit of the Gangmasters Licensing Authority with appropriate resourcing, to better enforce labour standards in high risk sectors beyond agriculture, gathering shellfish, processing and packaging.

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

The Gangmasters Licensing Authority—GLA—is the foremost labour inspection agency in the UK and it works to protect workers within the sectors it oversees, namely agriculture, forestry, horticulture, shellfish gathering, and food processing and packaging. It was set up in the aftermath of the 2004 Morecambe bay cockling disaster, in which 23 Chinese cockle pickers drowned when trapped by sweeping tides. In the past two years, the authority has prevented the exploitation of probably more than 5,000 workers.

During debates on the Modern Slavery Act 2015, a number of colleagues called for the Gangmasters Licensing Authority’s remit to be extended to cover sectors beyond those it currently regulates to include other sectors known to be high risk, among them construction, hospitality  and social care. We then have the provisions in the Bill, which are not an extension of the GLA’s powers but the creation of a different body—the director of labour market enforcement. We welcome and support that, but there are two major implications. First, by increasing the focus on criminal investigations by the GLA, the provisions extend investigations within the existing remit but not the remit itself. The first issue that raises is one of resources, which has already been touched on in previous discussions in the Committee. Without the resources to go with the additional number of criminal investigations there is, in fact, a thinning down of the GLA’s ability to carry out its important work, rather than a reinforcing of it.

At this stage in particular, I draw to the Committee’s attention the fact that the GLA already sustained 20% savings—or cuts—in the previous spending review. There is a new spending review pending, and I ask the Minister: what further cuts are expected to the GLA in that review?

Secondly, on a separate point, the consultation exercise that accompanies the Bill seems to suggest going down the route of voluntary rather than statutory licensing. It would be helpful for the Committee if the Minister clarified whether this is the intended direction of travel for the GLA, particularly since, in our opinion, the statutory licencing approach has worked very well in the past.

I am grateful to the hon. and learned Gentleman for proposing the new clause, which seeks to introduce a power to extend the licensing regime contained in the Gangmasters Licensing Act 2004 to new sectors of the economy. It rightly facilitates a debate and I join him in underlining the important work that the GLA has undertaken and how it remains an important agency in seeking to respond to labour market abuses.

The hon. and learned Gentleman will recollect our debates on the director of labour market enforcement and the new strategy that we intend to adopt. He will also remember that I made it clear that it would be for the director of labour market enforcement effectively to make recommendations as to how resources should be applied within the overall spending envelope.

The hon. and learned Gentleman asked about the spending review. Sadly, that is a matter for others, and he will have to wait for the Chancellor’s statement next week. I am not going to tread on the Chancellor’s toes. I think that is the right and proper way. However, I want to touch on the current consultation on the role and remit of the Gangmasters Licensing Authority. Hon. Members have already voiced opinions of the work undertaken by the GLA and I hope they will welcome the consultation and the questions it asks about the GLA’s role in tackling labour market exploitation.

As demonstrated by the amendments to the Modern Slavery Act 2015, which require a review of the role of the GLA, we have taken very seriously the issues raised during debates during the passage of that Act about whether the GLA should have a wider role. Section 55 of the Modern Slavery Act already requires the Government  to publish a paper on the role of the GLA and to consult on it. Our current consultation on the GLA and wider labour market exploitation fulfils that requirement.

We are unclear what the new clause seeks to achieve, given that we are in the midst of consulting on the GLA’s remit and role. In fact, our consultation goes further than the new clause proposes. We are seeking views on extending the role of the GLA beyond its current role in licensing gangmasters in certain sectors. The new clause appears to restrict the GLA’s role solely to licensing. We have a broader ambition for the GLA’s contribution to tackling exploitation, which is why we are proposing a new, wider remit for the GLA with new investigatory and enforcement powers to tackle serious cases of labour market exploitation, wherever they occur in the economy. We also want to ensure that the licensing regime can be adapted to fit the latest intelligence and the changing threat of worker exploitation in different sectors. We have set out several proposals in our consultation that we believe would achieve that.

We are looking to the role of the director of labour market enforcement to recommend any changes to the current statutory licensing regime and also to work closely with businesses to identify areas of possible self-regulation. It is the director’s role in considering the use of licensing to tackle labour market exploitation. The consultation proposes that the director should recommend extensions or reductions to the licensing remit. That may identify new sectors beyond those in the remit of the licensing regime where licensing can play a part in tackling worker exploitation.

At paragraph 137 of the consultation document, we suggest:

“a flexible and evidence-based approach to using licensing as a tool to prevent exploitation in the very highest risk sectors. Any changes to the licensed sectors would be agreed by Parliament, after Ministers had considered an evidence based proposal from the Director. This would be based on a risk based intelligence analysis of labour sectors.”

So we are envisaging a regulation-making power that would allow Ministers to change the licensing regime or the sectors covered by licensing through regulations that would be agreed by Parliament, after Ministers had considered the director’s evidence-based proposal. We believe that that would give an appropriate level of scrutiny to the evidence presented for any changes to the licensing regime.

We are consulting on the changes because we recognise the broad support to build on the effectiveness and good work of the GLA by providing the authority with further powers to increase its already strong performance. Once the consultation has closed, we will consider our response, including the funding necessary for the GLA to operate effectively in the context of the spending review, the results of which will be announced shortly. We fully expect that process to conclude during the passage of the Bill.

In the light of the proposals made in the consultation, which would extend the GLA’s enforcement function across the economy and set the framework for evidence-based decisions on licensing, we believe that the new clause is unnecessary, but we look forward to the results of the consultation and a clear, evidence-based analysis, which I hope will strengthen the GLA and our response to illegal working and to those who are abusing the vulnerable. We are adding to the GLA’s functions and  to the progress in enhancing our response to bad, inappropriate and at times illegal practices in the labour market. The new enforcement measures contemplated in the Bill will strengthen the GLA.

The Minister resists the temptation to anticipate the Chancellor, but I wager that the resources for the GLA will go down, not up. All that will be discussed between now and what will be announced is by how much the resources will go down. I hope I am wrong, but I doubt it.

I fear what the Minister and other Ministers have said about savings and cuts. Of course I accept that efficiencies can always be made, but I have deep concerns that, in the area we are discussing, as well as in others, we will look back on the spending review and recognise that we did long-standing damage to the ability of our various agencies and authorities to carry out their necessary work, in particular with those who are most exploited in our society. However, we can return to the subject after the Chancellor’s announcement and see what the position is.

The Minister asked what the purpose of the new clause was. It was to build in a review. I listened carefully to what he said about the consultation and what might follow, and I welcome that. Given what he said about the exercise to be followed, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.