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

The new clause would extend the licensing standards of the Gangmasters and Labour Abuse Authority to more sectors. As with the new clauses that we discussed a few moments ago, I am grateful to Focus on Labour Exploitation for its help with drafting.

Currently, the GLAA licenses four sectors: agriculture, horticulture, shellfish gathering and any associated processing and packaging. The new clause would extend its licensing remit to construction, cleaning, care and hospitality. I am moving the new clause against a backdrop of Government plans for short-term work visas following the ending of free movement, as set out in the immigration White Paper, and out of concern to ensure that there is protection from exploitation for potentially vulnerable workers in sectors that have traditionally relied on migrant labour.

As members of the Committee will know, the GLAA was established in the wake of the Morecambe Bay tragedy in 2004, originally as the Gangmasters Licensing Authority. Under the Immigration Act 2016, it was renamed and its remit was increased to give it police-style powers across the labour market. Anyone who supplies labour—so-called gangmasters—to the specified sectors must have a licence and it is a criminal offence to do so without one. A licence can be granted to any kind of legal entity, such as an individual, a company or a partnership.

Licensing standards include provisions on the payment of taxes, the payment of national minimum wage rates, the prevention of physical and mental mistreatment, and the restriction of a worker’s movement through debt bondage, threats or the retention of ID documents. Licensing is a crucial tool for preventing human trafficking and modern slavery.

The system is widely regarded as effective in monitoring labour providers in the sectors covered and in detecting cases of abuse and exploitation. It has raised employment standards, protected vulnerable workers from exploitation and prevented rogue labour providers from gaining an unfair advantage over legitimate businesses. It is strongly supported by retailers, labour market providers, food manufacturers, trade unions and charities that represent victims of exploitation. The Association of Labour Providers’ biennial survey in 2015 showed that 93% of labour providers surveyed were in favour of licensing.

The purpose of the new clause is to extend that successful licensing regime to four additional sectors in the light of a likely increase in the use of short-term labour in sectors that have traditionally been dependent on migrant labour. I stress that the majority of employers will not be exploitative. Indeed, good employers will welcome measures that prevent unscrupulous employers from damaging the reputation of their industries and from undercutting those who do not take advantage of vulnerable workers.

The Government’s Brexit plans will make workers in those four new sectors more vulnerable. The proposed short-term work visa will allow those workers to stay in the UK for only 12 months, which will give exploitative employers the opportunity to take advantage of the continual churn of a disposable workforce. We think that there will be a tendency towards more precarious work contracts in those sectors, as is already the case, such as zero hours and an increased risk of agency work or bogus self-employment.

As we heard in the oral evidence sessions, migrant workers are likely to be less well educated about their rights and less likely to report workplace issues as they may not have knowledge of UK labour laws or a good command of English. It will also be harder for unions to organise among them. Extending licensing provisions to those four new sectors will be important to help to protect workers from human trafficking and modern slavery, which is in line with the Government’s objectives; provide a clear guarantee to businesses seeking workers and to workers seeking employment that labour providers are operating responsibly and in line with the law; and prevent unscrupulous labour providers from undercutting responsible and legal competitors.

The licensing model adopted by the Gangmasters and Labour Abuse Authority has been commended internationally by the Council of Europe’s Group of Experts on Action against Trafficking in Human Beings, which called it an “example of good practice”. Repeated reviews of its function have commended its work to protect vulnerable workers and, importantly, have not found that its licensing function creates an undue burden on employers.

One concern was alluded to by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East and my hon. Friend the Member for Manchester, Gorton, which is that our labour inspection capacity is insufficient to provide the protections needed for those workers. The Employment Agency Standards Inspectorate oversees 18,000 employment agencies in the UK with a staff of 12. The likelihood of HMRC performing a proactive inspection—that is, a non-complaint-driven inspection—of a company to see if it is paying minimum wage rates is once every 500 years on average. The International Labour Organisation recommends a ratio of one inspector to 10,000 workers, but the UK rate is less than half that.

Today, the GLAA has to license four sectors and oversee the whole labour market with a staff of just 123 people. If we want a labour market that provides decent work and conditions to all in the future, the resources must be in place to enable that to happen. Although the new clause calls for effective licensing to protect migrant workers in sectors where short-term visas may be particularly prevalent, and where there is an increased risk of exploitation, it will also be important for Ministers to provide the resources needed to make such protection a reality.