HC Deb 16 June 1999 vol 333 cc479-98

'.—Section 8 of the Asylum and Immigration Act 1996 (restrictions on employment) shall cease to have effect.'.—[Mr. Allan.]

Brought up, and read the First time.

Mr. Allan

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

Mr. Deputy Speaker

With this, it will be convenient to discuss the following amendments: No. 150, in clause 15, page 11, line 7, leave out Clause 15.

No. 157, in schedule 14, page 141, line 35, column 3, at end insert 'Section 8'.

Mr. Allan

New clause 7 is a straightforward proposal which seeks to repeal section 8 of the Asylum and Immigration Act 1996. The issue was debated at enormous length during the passage of the 1996 Act, when Labour Members expressed great concern about the potential impact of section 8. We have now been able to see how the section operates in practice, and Liberal Democrats believe that those earlier fears have been justified. We also believe that the Government should take this opportunity to honour the clear commitment that they made when in opposition to deal with section 8 and its discriminatory effects on employment prospects.

In Committee, we gave an undertaking to determine whether we could find a formula for revising section 8 that was better than the Government's proposals, so that Ministers would be able to keep to the spirit of section 8—to prevent the illegal employment of people who have no right to work—and to ameliorate its discriminatory effects. After investigating the matter, we—like Ministers—have found no way of substantially changing section 8, leaving us with the fairly straightforward decision whether to repeal it.

I ask Labour Members to read the debates on the 1996 Act, as the decision that we shall have to make today should be based on the precisely the same arguments. We have to determine whether the harm done by section 8—the discrimination against people from other countries in seeking employment—is outweighed by the benefit gained in deterring people from employing others illegally.

I believe that the evidence shows that the harm done by section 8 clearly outweighs any benefit that it brings, and that experience gained since passage of the 1996 Act makes the case for the section's repeal. My primary evidence for repealing the section has been provided by the Commission for Racial Equality and the National Association of Citizens Advice Bureaux, both of which have said that they have received many inquiries suggesting that employers are misapplying section 8, causing discrimination.

The CRE has said that it continues to receive inquiries that demonstrate widespread misunderstanding and the"— often inadvertent— application of unlawful discriminatory practices. Citizens advice bureaux have given similar examples of individuals who have been on the receiving end of that discrimination, who have told the bureaux about how they were refused jobs by employers who were frightened to employ them because of the provisions of section 8, which could make them liable to pay fines of up to £5,000. Since then, the better regulation task force has clearly set out in its review of anti-discrimination legislation its belief that section 8 should be repealed.

9.30 pm

At the time when the 1996 Act was passed, the Government estimated that the increased costs to employers would total £13.5 million initially and £11.5 million in recurring costs. I should be interested to hear whether the Minister believes that those estimates have been borne out. The Government's proposals, which would impose a code of practice that is designed somehow to ameliorate the effects of section 8, might increase the costs to business. In any case, why should we believe that the new code of practice will be more effective in reducing discrimination than previous guidance issued by the Home Office?

I got the impression from the Minister that the new procedure would work as follows: in order to avoid direct discrimination, if any applicant for a job might conceivably have an immigration status that needs to be checked, the duty will be on the employer to check the immigration status of all applicants for the job. My constituency contains a university, and I know how common it is for foreign nationals to work in universities and apply for jobs in them. However, it would appear that for university employers—this point applies to many multinational and international companies as well—the way forward now is to check the eligibility for work under immigration rules of every applicant to each job. That is a huge burden, which is not outweighed by any potential benefits.

In respect of the benefits that could be attached to section 8, the Government's clear intention has been to send the message to employers that they should not illegally employ those who are not eligible to work. However, since section 8 came into force, there has been only one prosecution under its provisions. The Government have said that there are to be more, but it is clear that section 8 has not been used effectively.

The people we want to catch are the traffickers in human misery—the racketeers and gang masters who bring in people to work in the agricultural sector and other sectors. A more appropriate way in which to deal with them is under section 25 of the Immigration Act 1971 and, at the start of Report stage, we talked about strengthening the provisions of that Act to deal with such racketeers. I believe that we can take measures to deal with employers that do not involve burdening them with strict liability when they are found guilty of employing people illegally, given that that has been clearly shown to put employers off employing anyone other than obviously British white citizens, whose employment poses no risk to the employer under section 8 of the 1996 Act.

The CRE's verdict on section 8 is absolutely explicit: There is no evidence that section 8 has proved to be an effective deterrent to illegal working or racketeering. It is likely to have increased the employment costs of good employers, and it has encouraged the unscrupulous to discriminate. For ethnic minority job-seekers it has added to the barriers which they face. That is a clear indictment from an expert front-line organisation which is responsible for dealing with such matters. I understand that my hon. Friend the Member for Twickenham (Dr. Cable) will refer to evidence from the CBI and the TUC, which both regularly deal with employment issues on the front line.

The case is clear. Some of the Labour Members present tonight were involved in the debates on the 1996 Act and they will remember the case that was made at that time. It has been proved that section 8 has had a discriminatory effect and there is nothing in the Bill to suggest that we can look forward to a period in which it will not continue to have serious negative effects. The Government should respond positively to the report of the better regulation task force, accept the amendment and repeal section 8. They should concentrate on hitting human traffickers with more appropriate measures, which now carry penalties of up to 10 years' imprisonment, rather than imposing a strict liability on all employers. That only leads employers to discriminate against people, many of whom have been British citizens for years or have a perfect right to work in British companies.

Ms Oona King

I have grave concerns about the implications of section 8. I cannot resolve the irony of a Government with a better race relations record than any before them maintaining section 8. The effects of that policy may be unintentional on the Government's part, but that will not make much difference to my constituents, many of whom may well face direct discrimination as a result of a law that we have a chance to repeal.

The Commission for Racial Equality brought to our attention the example of an employment agency supplying temping staff that refused to accept the national insurance number of a Bangladeshi person and on that basis refused them employment. More than one third of the people in my constituency are of Bangladeshi origin. Research conducted by the University of Cambridge shows that their chance of finding a job is already five times worse than that of a white person, based on an employer receiving two identical CVs, one with a British name and one with a Bangladeshi name. It is a great shame for us not only to do nothing to mitigate that fivefold discrimination, but to encourage employers, particularly unscrupulous ones, to discriminate.

The Government's aim in maintaining the section is to prosecute racketeers and gang masters. None of us would oppose any Government in that aim, but I cannot support the idea of encouraging employers to make checks on people whom they suspect of being unable to fulfil the correct immigration status criteria. As black people, we wear our passports on our faces. Immigrants will not be the only ones to be called to account, although that would be bad enough, because many people who have sought to regularise their stay here have a right to work. Black British citizens will also be affected. I urge the Government to reconsider the policy. I repeat that I am proud to be a member of this governing party, because we have had an excellent race relations record to date, although far more needs to be done.

Section 8 has not achieved its objective. There has been only one prosecution. It has encouraged discrimination and added to the burdens on business. In these days of the third way and encouraging consensus, it is a shame that the Government are continuing with section 8 when the CBI, the TUC and the Federation of Small Businesses are urging them not to do so. I hope that, in this House or in another place, the Government may be able to mitigate the severe consequences of section 8 on members of ethnic minorities.

Miss Ann Widdecombe (Maidstone and The Weald)

I do not intend to speak for long on the new clause, because I do not believe that it is very sensible. However, I am intrigued, because, in opposition, Labour Members promised not to implement that portion of the 1996 Act. Indeed, they inveighed heavily against it, as I well remember, because I was charged with piloting the legislation through Committee.

At that time, Opposition spokesmen claimed that the proposal was iniquitous and that it would place considerable burdens on business. They did not seem much concerned about other burdens that they wanted to impose on business, and indeed have imposed, such as the minimum wage and the working time directive. The Financial Secretary to the Treasury, who was then Opposition spokesman on small businesses, wrote to The Daily Telegraph—she has good reading—saying that the Act would be an imposition on small firms and that it gave them a raw deal.

Are the Government now planning to give such firms a raw deal? In that letter, the hon. Lady calculated that the Act would cost small firms £12 million in the first year alone. Are the Government now saying that that is acceptable, which they denied in opposition, or do they have some plans that we do not know about to give financial relief to small firms?

It was not only before the general election that the Government opposed the measure as an unnecessary burden on business and a deterrent to employing people from ethnic minorities. Since the election, the Government have several times promised that they would not implement section 8. Now they are not only implementing it but adding the further burden of a code of practice. Will they admit that they got it wrong in opposition?

We would have been intrigued to hear about this in the Special Standing Committee, but the Minister was not present when we debated the code of practice in Committee, so this is his first opportunity to comment on it. I might not have been so ungenerous as to point that out had the Home Secretary not made much of the absence of Conservative Back Benchers in the previous debate. My hon. Friend the Member for Hertsmere (Mr. Clappison) was present throughout, and it would have been nice if the Minister could have managed the same.

Mr. Mike O'Brien

To which Committee is the right hon. Lady referring? I was present throughout—and indeed spoke in—the debate on these matters in Committee.

Miss Widdecombe

I am informed by my hon. Friend the Member for Hertsmere that the Minister was absent for the discussion on the other code of practice, for lorry drivers, so I shall tease him when we debate that.

Mr. O'Brien

The right hon. Lady has accused me of not being present when we debated this very important code of practice and of not being concerned about another code of practice. I spent a lot of time talking to lorry drivers and their organisations and I was present in Committee when we dealt with this code of practice, so perhaps she will be gracious enough to offer me an apology.

Miss Widdecombe

I am afraid that when it comes to the lorry drivers—

Mr. Deputy Speaker

Order. I may not be in possession of a roll call of those who were present in Committee, but I am in possession of the rules of the House. We must debate the new clause.

Miss Widdecombe

Perhaps I should return to the new clause, and we can return to the other argument, if necessary, when we discuss lorry drivers.

Since the general election, the Government and the Minister himself have repeated their intention not to implement section 8 of the 1996 Act. The Minister himself has repeated that intention.

9.45 pm

Before the Minister says that I have my facts wrong again, I refer him to the record of the Special Standing Committee. It was pointed out in column 374 that, in opposition, the Government promised to repeal section 8 of the Asylum and Immigration Act 1996, exactly as the Liberals have now asked them to do. But in June 1997—in case anyone needs reminding, that is one month after the Government were elected for the short period that they will enjoy in power—at a conference on the European Year Against Racism, which took place in London, the Minister said that section 8 of that Act would be repealed because it was discriminatory against black and minority ethnic people.

That was the Minister's considered judgment. I assume that, as he was a Minister, it had to be a considered judgment. It could not be one of those off-the-cuff remarks that he might have turned out in opposition. I presume also that official advice backed up that considered judgment. The hon. Gentleman said that section 8 would be repealed because it was, in his judgment, discriminatory against black and minority ethnic people.

At another conference in January 1998, the Minister answered a similar question. He said that the Home Office was undertaking a comprehensive review of immigration policy, and that that was one of the issues that would be considered. This year, he answered another question, and it was then, after all that review and despite all the pontification—there is no other way to describe it—on the evils of section 8, that he said he had decided that it was best after all for section 8 to remain.

I am intrigued. I should like to know why, from a position which was clear when the Conservative Government introduced that measure; to a position that was apparently equally clear immediately after the election when the Minister was responsible for these matters; to now when we come before the House, the hon. Gentleman has decided that section 8 is a good thing.

I am delighted. I welcome any sinner who repenteth. The Minister challenged me just now to give him an apology for confusing an absence with an occasion when he was present. I shall do that. I expect him in return, having now decided to retain section 8, to apologise for all the things of which he accused us.

Ms Abbott

I was one of the members of the Committee which considered the Asylum and Immigration Act. I well remember speaking at length, along with several colleagues, against section 8 and its discriminatory effects. I do not intend to speak at length today, but I could not let this debate go past without stating that my position then is my position now—section 8 is potentially discriminatory.

I support my hon. Friend the Member for Bethnal Green and Bow (Ms King) in saying that we see in inner London high unemployment, particularly among black and Asian young men, even where they have the same qualifications as their white counterparts. I live with and work among the consequences of those high levels of unemployment among black and Asian young men, and it is my strongly held view that if section 8 contributes even in small measure to a climate in which employers feel that they can discriminate, it should be removed.

There is to be a code of conduct, but, as we discussed in Committee, good employers will abide by such a code and are not causing problems under section 8 anyway, and bad employers will ignore it. It is unfortunate that the Government have reversed what was a well-founded position on the issue.

I see on the Treasury Bench the Parliamentary Secretary, Lord Chancellor's Department. When he was a Back Bencher, he pursued a long-running campaign about the number of black persons employed by the civil service and their seniority, pointing out, from the statistics that he had gathered, that black and Asian people find it hard to get promotion.

I say again that if section 8 contributes in any way to that situation, we should remove it. We made those arguments in opposition and I do not believe that things have changed. I could not let this debate go past without putting my views on the record.

Dr. Vincent Cable (Twickenham)

I wish to say a few words in support of my hon. Friends in connection with the new clause. My normal stamping ground is economic policy. Choices between social improvement and business costs often require a balance to be struck. However, section 8 of the Asylum and Immigration Act 1996 is unusual, in that it inflicts considerable social harm in the form of racial discrimination and, at the same time, imposes costs on business. That is why it has attracted such an unusual coalition of opposition.

The opposition comes from the refugee organisations and the Campaign for Racial Equality, and from both sides of industry. Employer organisations are normally fractious bodies, but they have found an unusual unanimity in their opposition to section 7. They include the Confederation of British Industry, the Institute of Directors, the British Chambers of Commerce, the Institute of Management, the Institute of Personnel and Development and others.

As we have already assimilated the impact of clause 15 as a possible ameliorative step, it will useful to refer to some of those organisations' comments. Last week, having considered the balance of evidence and argument, the CBI said: Since its introduction over two years ago, there is no evidence that section 8 is an effective deterrent to illegal working or racketeering. Many employers still remain confused as to what is expected of them and its main effect has been to place costly administrative burdens on good employers and increase the likelihood of discrimination against ethnic minorities. The Trades Union Congress is an interesting and important witness to the debate, as, perhaps more than any other organisation, it is concerned with employees' conditions and the exploitation of workers. In Committee, the Minister rightly paid a good deal of attention to the exploitation of the labour force. However, the TUC, on behalf of the trade union movement, makes it clear that it is astonished to read … that the Government intend to allow section 8 of the Asylum and Immigration Act 1996 to remain on the statute book. It argues that the complexity of the checks required would lead to discrimination by employers against black and ethnic minority citizens. The hon. Members for Bethnal Green and Bow (Ms King) and for Hackney, North and Stoke Newington (Ms Abbott) know better than I how racial discrimination operates in the labour force. They have probably experienced it themselves and they will be widely familiar with it among their constituents. However, it might be useful to explore how discrimination appears as a result of section 8.

There are different types of employers. Some are genuinely conscientious, but they may none the less discriminate as a result of the complexity of section 8. About 13 different forms have to be used to perform a due diligence check on a job applicant's nationality status, and as many as 40 separate documents have to be reviewed. For companies such as Shell or Unilever and their armies of lawyers that is manageable, but small and medium-sized companies either do not follow procedures, or try to do so and make mistakes.

I suspect that most employers are neither angels nor especially progressive, but they are not racist either. They are merely trying to avoid trouble, given that errors can land them in criminal difficulties. We know the little tricks of the trade in the labour market. A person who rings up about a job and whose accent is obviously Asian or African receives polite excuses to the effect that the job has already gone or that there are many applicants, while an application for a job from someone called Mohammed or Patel meets a predictable response.

The Government claim that those effects can be mitigated by clause 15, but that flies in the face of 20 years of race relations legislation. Such measures are not effective. I am sure that other hon. Members have had similar experiences, but a very able young Asian man came to my advice surgery on Friday who had achieved three A grades at A-level and 7 starred A grades in his GCSEs. He had applied to five medical schools, but had not secured an interview at any of them. He knew and I knew the reason—his name is Patel. Nor are we conspiracy theorists: two days later the Secretary of the Medical Schools Association happened to confirm in the press that that practice was widespread among medical schools. If that can happen in a public and highly reputable profession, in institutions funded by the Government, it is bound to happen on a much wider scale among the small and medium-sized businesses in which such practices are almost impossible to detect.

The Government have tried to discourage such action and have worked hard to produce a formula in the new clause. However, the Commission for Racial Equality has concluded that it will not work. I shall quote from the text cited by my hon. Friend the Member for Sheffield, Hallam (Mr. Allan), which says that the new regulations will not work unless non-compliance was to form part of the criminal offence (which would effectively shift anti-discrimination from a civil to a criminal offence)". The clause is bound to be relatively ineffective and will not outlaw discrimination.

I do not want to exaggerate the importance of the impact of costs on small businesses. If a Bill could outlaw discrimination, it would be worth the price, and business should pay a price. It is reasonable to ask employers to be careful about whom they employ. They should take responsibility for checking that they are not employing illegal people. What is at issue is the magnitude of the administrative problem and the enormous number of checks that must be completed.

Hon. Members who have read previous debates will know of the problem with national insurance numbers. Many people entitled to work have no national insurance number, including people who have indefinite leave to stay or right of abode. Equally, many people who are not entitled to work have national insurance numbers. There are many spare national insurance numbers, and there is a massive disparity between the national insurance numbers of the Benefits Agency and the Contributions Agency. Using national insurance as a check does not work, and passports and other documents must be used as a back-up, which makes the system onerous.

There has been only one prosecution under the 1986 Act—of a farm in Kent—and the Government could argue that the Act is a deterrent and does not impede business operations. It clearly does affect business, however. A constituent of mine who runs a residential home was recently visited by the authorities because someone had tipped them off that asylum seekers were being illegally employed. The company was turned over and its reputation traduced in the local paper. It became widely regarded as a racketeering company, until it was eventually established that nothing wrong had been done. The African who was believed to be an illegal asylum seeker was employed perfectly legally. No explanation was received from the authorities and no apology given. My constituent is pursuing the matter with the ombudsman, but I shall not hold my breath.

Such enforcement is starting to affect businesses. That sort of harassment, plus considerable legal compliance costs, raises problems for business. I do not exaggerate the importance of business costs; racial discrimination is the dominant issue. Encouragement of racial discrimination will continue as long as section 8 remains on the statute book. As my hon. Friend the Member for Hallam has said, that section is unnecessary because enforcement powers exist under earlier Acts.

10 pm

Fiona Mactaggart (Slough)

The Bill has taught me several lessons about the realities of politics. The first lesson is that it is easier to say something in opposition than it is to do it in government. The second is that when one is faced with complex legislation, and seeks and achieves changes to it by Ministers—I am very grateful for the changes to this Bill—one must focus on the priorities. That means that, during the process of negotiation, one can end up being relatively silent on points that give cause for concern. I have been relatively silent on the new clause, but I am concerned because I believe that the commitments that we gave in opposition and in the early days of the Government were right.

The third lesson is that civil servants capture Ministers and tell them that something can be achieved. That is particularly ironic when it involves the civil servants responsible for the administration of immigration control, who have for many years been telling Ministers that they can speed up the system. I remember vividly commitments in 1993 and 1996 to make the system much faster, but it did not speed up.

I believe that the commitment to a code of practice was a correct attempt to mitigate the discriminatory effects of section 8 of the Asylum and Immigration Act 1996. However, we should reconsider that commitment now that the Commission for Racial Equality has had an opportunity to examine the draft code of practice, and now that the better regulation task force has said, convincingly, that there will be burdens on business.

There is more than one way to skin this cat. We could amend section 25 of the Immigration Act 1971, so that it is an offence not only knowingly to harbour a person unlawfully but knowingly to secure the unlawful employment of a person. That would be a better way to tackle the abuse, which Ministers have rightly identified, of organised racketeering, and it is right to take action against that.

I strongly supported the Home Secretary when certain other anti-racists suggested that it is unfair for Britain to retain the right to its own immigration controls and that we should be part of a European system. I am absolutely convinced that the focus of immigration controls should be at ports of entry and that one of the advantages of being an island nation is that we have a geographical ability to administer immigration controls more effectively than mainland Europe.

We should not try to expand the operation of controls internally. We should reduce the number of places where immigration controls operate. Those controls should not be operated by hospitals and employers but should be exercised at ports and by immigration officers who follow up people who seek to lie and cheat their way into Britain. By doing that, we could have a more effective system of control. We need methods to deal with organised rackets, but I am not yet convinced that this is the right method.

In view of the further representations by the Commission for Racial Equality, debates in Committee and the unanimous concerns about burdens on business, Ministers might like to take the opportunity of the Bill's passage through another place to find out whether there is another way to skin this cat.

Mr. Peter Bottomley

I shall make a brief contribution because, by my calculation, we should have 10 minutes for each of the other groups of amendments before the guillotine falls at midnight. I doubt whether we shall have the chance to discuss all those amendments or to have a Third Reading debate on what hon. Members on both sides of the House regard as a significant Bill. Whether or not the Government are trying to achieve something similar to the proposals of the previous Government, Government amendments and those in the names of other hon. Members ought often to be discussed at length, if possible. Perhaps when the Bill returns from another place we shall have the opportunity to do that.

I ought to say that I probably voted for section 8 of the Asylum and Immigration Act 1996. Having put that on record, I would like to add that some of the arguments of the Commission for Racial Equality are important. The argument that only one successful prosecution has taken place raises the question whether there are better ways of achieving the aim of section 8. Sir Herman Ouseley and others would want this House to take such arguments seriously.

Those who tabled the new clause and the associated amendment, No. 150, suggest that we should leave out either section 8 of the previous Act or clause 15—originally clause 13—of this Bill. Did the Home Office consult the Commission for Racial Equality on clause 15, as subsection (4) would require? If it did not give Sir Herman Ouseley and the Commission the opportunity to comment on it, I would wonder why. The Government ought to be setting an example instead of waiting until legislation catches their action. It would be useful to hear from the Minister whether the CRE was consulted, what advice it gave and to what extent that advice differs from the content of the very reasonable letter that the commission sent to Members of Parliament concerning this part of the Bill.

I turn to the totally separate university employment issues, which were raised by the hon. Member for Sheffield, Hallam (Mr. Allan). If overseas students seek employment in part to support themselves at university, how are they affected by clause 15? Is it one of the issues on which the United Kingdom Council for Overseas Student Affairs will have consulted the Home Office? Is it one of the issues, among others, to which the Minister might like to tell the House his response? When may UKCOSA expect to receive a reply to the letter which many hon. Members wished that they had received before Report and Third Reading?

The issue is not politically contentious; it is a straightforward and practical question of whether people such as immigration advisers at universities will need to be registered or pay registration fees, and whether they will be brought within the scope of the Bill under the designated professional bodies, which are now cited in clause 71. That is a point of detail to which the Minister may want to refer.

The overall point is whether we can avoid those ghastly circumstances where, in addition—possibly—to indirect prejudice in employment, all employers are required under the code of practice to undergo for all employees some of the stages stipulated under section 8 of the previous Act when some suspicion is raised. We must move forward from that.

I look forward with interest to what the Minister has to say. He is unlikely to satisfy the whole House now, but if he does not, I believe that another place will interfere with clause 15 to try to introduce a degree of fairness, which this House, with the amount of time left available to it, will not succeed in doing.

Mr. Mike O'Brien

Let us be perfectly straightforward and honest: this new clause presents us with a practical and moral dilemma. The Government have thought very long and hard about this issue. We were initially intending to revoke section 8 of the Asylum and Immigration Act 1996, but we have had to consider in detail the implications of doing so. We have reached the conclusion that the mischief caused by removing section 8 would be greater than that caused by its remaining, although we acknowledge that it causes discrimination. I have no doubt about that, and that is why we must send a very clear message to employers that it is unacceptable for them to discriminate through the use of section 8. The statutory code is our way of sending that very strong message.

The right hon. Member for Maidstone and The Weald (Miss Widdecombe) rightly asked whether we had changed our mind. The straight answer is yes, and we have done so after long and careful thought. She criticises us for having opposed the Asylum and Immigration Act 1996. I would say of that Act—I do not know whether she would agree—that there was something of the night about it. Therefore, there were many reasons why we were right to take the view that we did.

However, we have studied this issue with great care, taken stock of the problems associated with illegal working and the exploitation of illegal immigrants and reached the view that this provision will be a valuable tool if it is better targeted against unscrupulous and exploitative employers. We are not alone in that view. Illegal working is a growing global problem. Every other European Union country now has employer sanctions. Indeed, most countries punish the offence by imprisonment as well as fines. We have concluded that we must have a way of dealing with the problem of illegal working in the United Kingdom and the systematic abuse and exploitation of workers.

Yesterday, my hon. Friend the Member for Islington, North (Mr. Corbyn), who is sitting on the Back Bench, mentioned the sweatshop economy, where overstayers work, and described how some employers take on overstayers at appalling rates and in very bad conditions, often exploiting them unmercifully. Often, the working conditions are little short of slavery.

We need to ensure that we have a mechanism for dealing with the way in which some of those employers operate. They are able to get away with it because there is almost a conspiracy between the overstayer or illegal immigrant and the employer. The overstayer or illegal immigrant does not want to come to the attention of the authorities and therefore will not report a breach of health and safety conditions or of minimum wage legislation, so those are not ways in which we can get at the employer. We have carefully considered other ways.

The hon. Member for Sheffield, Hallam (Mr. Allan) candidly said that the Liberal Democrats, too, had considered the issue, and had reached a judgment that section 8 had to go. I can understand why they might have reached that judgment, but it is a difficult judgment for us to reach. We think that, by having a statutory code, we can correct the balance and convey a strong message that the discrimination that section 8 sometimes creates can be dealt with and that employers must not discriminate. However, the removal of section 8 would come at too high a price in terms of leaving many workers to be exploited.

My hon. Friend the Member for Slough (Fiona MactaggArt) argued that existing offences under section 25 of the Immigration Act 1971 relating to persons who are knowingly concerned in assisting illegal entry and harbouring could be accommodated or used against those who facilitate illegal working. We have looked at that argument very closely, and it does not work. No doubt the Liberal Democrats have looked at it, too, and concluded that it does not work. However, the problem is one of mens rea—proof of the requisite state of mind. Employers simply say, "I did not ask, so I did not know", and unless there is an obligation for them to do some checks—the nature of which I shall discuss in a moment—it is very difficult to use section 25 against an employer who poses as a facilitator or harbours illegal immigrants. Our advice is that the need to prove mens rea makes it very difficult to convict in those circumstances, and it is not possible to create a criminal law that will enable us to deal with that.

On the other hand, section 8 deals with the unscrupulous employer, yet affords the honest employer a defence based on a simple document check, which he must apply in a way that does not discriminate. We seek to retain that offence and want it to be further tested in tackling the growing problem of systematic abuse.

Members of the Chinese community have met the Home Secretary. They are concerned that Chinese illegal immigrants are paying traffickers as much as £14,000 to get them illegally into Britain and into jobs. They do that not by having £14,000 in a bank in China, but by becoming bound labour. They are bound for five years or more, and they come to Britain and work at appallingly low wages and often in dreadful conditions. The Chinese community is rightly concerned at the extent of that activity, and wants it stopped.

10.15 pm

We also have the problem of the gang masters, who use the lump system that was used on building sites in the past. It is now used on the land. The gang master sells a gang of illegal immigrants or asylum seekers—people from Poland and Lithuania seem to have been particularly involved in this exercise—and the farmer asks no questions and gets cheap labour, which undercuts the wages of agricultural workers in the area. Section 8 at least enables us to get at the gang master. We need to be able to tackle unscrupulous employers.

We did oppose section 8 in opposition, because we seriously feared that it would cause discrimination. That is a problem, but we need to be able to deal with exploitative employers. We say that at present section 8 is not operating properly. We refer an allegation to the prosecuting authorities after we have served an offending employer with a warning. That is because the measures were primarily designed to combat widespread abuse, not to penalise small employers who have made a simple mistake.

We do not intend to penalise small employers who have made a mistake and do not intend to facilitate on a large scale. To date, 40 warnings have been issued, but there has been only one prosecution, which was very recent. After long and hard thought, we took a decision to implement the legislation. The reason that we have not prosecuted more is that we were considering the issue carefully. We were extremely concerned about the implications of section 8. We finally decided that we needed to take action because the extent of the abuse was so considerable.

The recent prosecution involved the illegal employment of a number of people in the horticultural industry. Given the opportunity of mounting a defence against prosecution under section 8, the employer was unable to do so. The company pleaded guilty and was fined a total of £4,500 and ordered to pay costs.

Given the vast profits involved in employing cheap, exploitable, illegal labour, we must tackle the abuse. We are keen to bring more cases to court and to send a strong message to racketeers, who often employ quite large numbers of illegal immigrants, and to those who facilitate that. That is not only with a view to maintaining firm control of immigration, but in the interests of vulnerable employees, many of whom are badly exploited. Those who seek to remove section 8 would leave illegal immigrants to be exploited by unscrupulous employers in order to cut wages.

On amendments Nos. 150 and 157, clause 15 is designed to emphasise to employers their duty to avoid racial discrimination in their recruiting practices when they seek to secure the statutory defence under section 8. We will make it part of our statutory code to apply initial checks without discrimination, and we will enforce that.

The obligation is clear. I shall read from the current code, which is not statutory, but forms the basis on which we will consult. It states: The best way to ensure that you do not discriminate is to treat all applicants in the same way at each stage of the recruitment process. You may ask for a document at any stage—but if you ask for a document from one applicant make sure you ask for a document from all applicants being considered at that stage. That is a clear way in which employers can make sure that they do not discriminate.

Our code has the serious purpose of tackling discrimination where it occurs. It occurs in some employment practices. We accept that some employers might seek to use section 8 as an excuse for racially discriminatory purposes. We want to make it clear to all employers that they should not even begin to contemplate using the excuse of the statutory defence under section 8 to discriminate. We will not tolerate racism from employers.

That is why we need clause 15 and reject the amendment, which would remove the statutory code. We want to deal with these issues firmly. Our code will give a clear and simple message to employers who may be discriminating unintentionally, or who may attempt to dissriminate. They will be unable to do so because the legislation will be enforced. Those who discriminate and use section 8 as an excuse to do so will know that the code will be used against them in the courts. It therefore provides the extra deterrent against discrimination that we need.

As I have said throughout the debate, there are two problems that we need to tackle: first, the mischief of unscrupulous employers exploiting illegal labour to drive down wages; and, secondly, the mischief of racist discrimination being excused by section 8. We will tolerate neither. Section 8 will be used to tackle gang masters and racketeers, and those who import illegal labour. It will be used to target serious criminals without warning in a much more concerted and focused way.

We will also use the new statutory code to tackle racism. The Liberal Democrat amendment would remove our ability to do that. The hon. Member for Hallam has been honest and open about how the Liberal Democrats have come to their conclusion, and I understand the logic of their argument. Indeed, I have a degree of sympathy with it. However, it leaves dangerously exposed many vulnerable people, who are either overstayers or illegal immigrants, and others, who may then face exploitation. Moreover, it does nothing about the fact that illegal working drives down wages and allows some unscrupulous employers to drive down the wages of people who might otherwise be able to work lawfully.

My hon. Friend the Member for Bethnal Green and Bow (Ms King) mentioned that Bangladeshis in her community face fivefold discrimination. We need to tackle discrimination and enforce the Race Relations Act 1976. We also need to enforce the statutory code that we are providing in the Bill. I remind my hon. Friend that her constituents also face the problem of exploitation in sweatshops. We need to deal with that, too. She said that the Government have an excellent record on race relations and race equality. We want to enhance that record. We have already said that we are examining the race equality legislation and we seek to move it firmly forward. What we cannot do, however, is allow the exploitation of vulnerable workers by the removal of section 8.

My hon. Friend the Member for Slough (Fiona Mactaggart) and the hon. Member for Worthing, West (Mr. Bottomley) asked whether we were still listening. My hon. Friend asked whether there was another way to skin a cat. We are still listening and if there are ways to deal with exploitative employers and to reduce discrimination, we want to hear them. This matter is still to be discussed in another place and we are more than willing to talk to the Commission for Racial Equality. I met Bob Perkiss of the CRE and discussed those matters at length. It is aware of our concerns, although it still has its views, as the Liberal Democrats and others have theirs. However, it understands that these are real issues, which the Government must address.

Mr. Peter Bottomley

Can the Minister answer directly the question that was put to him, which was: was the CRE consulted about section 8? Was it consulted about clause 15, which was previously clause 13, and has it put directly to the Minister, as it has to Back-Bench Members, its concerns about the present position? It has written to Members of Parliament saying that it is against it.

Mr. O'Brien

Yes. When we were considering this matter I met Bob Perkiss of the Commission for Racial Equality, who was representing Sir Herman Ouseley, and we discussed at length our concerns about the issue. Strong representations were made to me and it was clear that there were some arguments. Like the Liberal Democrats, the CRE took the view that the balance of the argument was in favour of removing section 8. Although it accepted that there was an issue of exploitative employers, it wanted to have section 8 removed. We have reached a different judgment. We do not think that we can leave the exploitative employers to continue to exploit vulnerable people, which would be the effect of removing the provision.

We have consulted widely. No organisation has yet come back to us to show us how we can effectively deal with both the mischiefs that we seek to tackle with the provision. We were faced with a dilemma. We have resolved it by strengthening the anti-racist provisions with a statutory code, which we will enforce. We have had to face up to the reality that section 8 is being used to discriminate and we have had to find a way of tackling that. We believe that the statutory code will achieve that.

The previous Government had a non-statutory code and, therefore, we needed to send a much tougher and stronger message. There is no panacea here, and this dilemma is difficult for all of us, but the hard realities have had to be faced. We have taken the view that the balance of the argument comes down in favour of retaining section 8, but improving the strength of the code by making it statutory, and making a firm commitment that the Government will take action if we find that employers are discriminating.

Mr. Allan

We do not want to encourage illegal working or the exploitation of workers in such a situation. We do not take that view; nor do those who share our position—the Commission for Racial Equality, the National Association of Citizens Advice Bureaux, the Trades Union Congress and the Confederation of British Industry. I hope that the Minister does not characterise all of us as wishing to encourage illegal working. We are talking about the best way to tackle that without the unnecessary consequence, and it is important that we get that straight.

I was grateful to the right hon. Member for Maidstone and The Weald (Miss Widdecombe) for intervening to point out the discrepancy—or the movement—in the Government's position. We moved on to talk about skinning cats, which took me back to a comment made yesterday by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott). She characterised the staff of the Immigration and Nationality Directorate as nice people who probably love animals and go to church. I wondered whether she was recommending the right hon. Lady for a job in the IND; she seems to be eminently qualified.

When the Minister opened the debate on Report yesterday, he said that many of the previous positions could be characterised as knee-jerk leftism, but we certainly feel that the opposition to section 8 which the Labour party showed during proceedings on the Asylum and Immigration Act 1996 was not knee-jerk leftism, but a principled and rational response to what turned out to be discriminatory. We are disappointed that, once again, firmer seems to have won out over fairer in measures relating to illegal working.

I was rather attracted to the suggestions made by the hon. Member for Slough (Fiona Mactaggart), who said that we ought to be considering new and better ways of making section 25 of the Immigration Act 1971 work. The situations described by the Minister, such as Chinese gang masters smuggling people in at great expense, should be dealt with under section 25. I should be horrified to find that such people are being dealt with under section 8 of the 1996 Act when we have a provision on the statue book under which we could sentence them to up to 10 years in jail, rather than imposing rather paltry fines under that section.

Mr. Mike O'Brien

I think that the hon. Gentleman misunderstands the point. Facilitators are able to do such things because some employers are prepared to employ people at low salaries and in bad conditions. We need to be able to prevent them, not the people who import the workers, from doing that.

Mr. Allan

I do not disagree that there may be connivance and that that causes problems, but I should have thought that, because the National Criminal Intelligence Service is doing good work on such rackets and because we are taking many intelligence-led approaches, we could trace people through, take appropriate action and, if necessary, amend the 1971 Act.

The 1971 Act deals with intent, which is the crucial element. Section 8 of the 1996 Act refers to a strict liability, and intent does not have to be shown in the same way, which is a fundamental difference. I believe that, rather than coming up with new provisions which simply cast the net wider, provide lower penalties and have a lower standard of proof because that makes it easier to prosecute, it would be far better to use existing law to show intent.

It is not the business of government to revise the law in such a way. Rather, we should make existing law work when it is the appropriate law for dealing with the kind of the offences that we are discussing. Section 25 is the appropriate provision for such offences. If the Government were serious about tackling the racketeers, they would include in the Bill an amendment to section 25 of the 1971 Act. That would be a much better way of dealing with the problem than continuing the life span of section 8 of the 1996 Act.

If we are to deal with this problem, section 8 must be removed. Hon. Members face a simple choice: they can vote with us to lift the burden from citizens of this country and people who are legitimately seeking appropriate work, but happen to look foreign or have foreign-sounding names, or they can sit on their hands and allow the Bill to go through unamended and let the Government off the hook. The Government are retreating from the position that they took in opposition of fighting discrimination, and are hoping that a few more prosecutions will take place.

The code of practice that the Government have suggested as a solution would have to be operated and enforced against employers. It is difficult to see how we could seriously expect that code of practice to be enforced in an anti-discriminatory way if section 8 of the 1996 Act is not even enforced significantly. We will not move forward on anti-discrimination if section 8 remains in force. I urge Labour Members to stick to the position that they honourably took in opposition and vote with us for the repeal of section 8 of the 1996 Act.

Question put, That the clause be read a Second time:—

The House divided: Ayes 39, Noes 334.

Division No. 210] [10.31 pm
Allan, Richard Burstow, Paul
Baker, Norman Campbell, Rt Hon Menzies (NE Fife)
Ballard, Jackie
Beggs, Roy Chidgey David
Beith, Rt Hon A J Cotter, Brian
Bottomley, Peter (Worthing W) Davey, Edward (Kingston)
Brake, Tom Feam, Ronnie
Brake, Tom Foster, Don (Bath)
Bruce, Malcolm (Gordon) Harvey, Nick
Burnett, John Hughes, Simon (Southwark N)
Jones, Nigel (Cheltenham) Sanders, Adrian
Keetch, Paul Smith, Sir Robert (W Ab'd'ns)
Kirkwood, Archy Stunell, Andrew
Livsey, Richard Tonge, Dr Jenny
Lloyd, Rt Hon Sir Peter (Fareham) Tyler, Paul
Llwyd, Elfyn Webb, Steve
Michie, Mrs Ray (Argyll & Bute) Welsh, Andrew
Moore, Michael Wills, Phill
Oaten, Mark Wood, Mike
Öpik, Lembit Tellers for the Ayes:
Rendel, David Dr. Evan Harris and
Russell, Bob (Colchester) Dr. Vincent Cable.
Abbott, Ms Diane Clarke, Rt Hon Tom (Coatbridge)
Adams, Mrs Irene (Paisley N) Clarke, Tony (Northampton S)
Ainger, Nick Clelland, David
Ainsworth, Robert (Cov'try NE) Clwyd, Ann
Alexander, Douglas Coaker, Vernon
Allen, Graham Coffey, Ms Ann
Anderson, Donald (Swansea E) Coleman, Iain
Anderson, Janet (Rossendale) Colman, Tony
Ashton, Joe Connarty, Michael
Atherton, Ms Candy Cook, Rt Hon Robin (Livingston)
Atkins, Charlotte Corbett, Robin
Barnes, Harry Corbyn, Jeremy
Barron, Kevin Corston, Ms Jean
Battle, John Cousins, Jim
Bayley, Hugh Cranston, Ross
Beard, Nigel Crausby, David
Beckett, Rt Hon Mrs Margaret Cryer, Mrs Ann (Keighley)
Begg, Miss Anne Cryer, John (Hornchurch)
Bell, Stuart (Middlesbrough) Cummings, John
Benn, Hilary (Leeds C) Curtis-Thomas, Mrs Claire
Benn, Rt Hon Tony (Chesterfield) Dalyell, Tam
Bennett, Andrew F Darling, Rt Hon Alistair
Benton, Joe Darvill, Keith
Berry, Roger Davey, Valerie (Bristol W)
Best, Harold Davidson, Ian
Blackman, Liz Davies, Rt Hon Denzil (Llanelli)
Blears, Ms Hazel Davies, Geraint (Croydon C)
Blizzard, Bob Dawson, Hilton
Blunkett, Rt Hon David Dean, Mrs Janet
Boateng, Paul Denham, John
Borrow, David Dismore, Andrew
Bradley, Keith (Withington) Dobbin, Jim
Bradley, Peter (The Wrekin) Dobson, Rt Hon Frank
Bradshaw, Ben Donohoe, Brian H
Brinton, Mrs Helen Doran, Frank
Brown, Rt Hon Gordon (Dunfermline E) Dowd, Jim
Drew, David
Brown, Rt Hon Nick (Newcastle E) Eagle, Angela (Wallasey)
Brown, Russell (Dumfries) Eagle, Maria (L'pool Garston)
Browne, Desmond Edwards, Huw
Buck, Ms Karen Efford, Clive
Burden, Richard Ellman, Mrs Louise
Butler, Mrs Christine Ennis, Jeff
Caborn, Rt Hon Richard Fisher, Mark
Campbell, Alan (Tynemouth) Fitzpatrick, Jim
Campbell, Mrs Anne (C'bridge) Fitzsimons, Lorna
Campbell, Ronnie (Blyth V) Flint, Caroline
Campbell-Savours, Dale Follett, Barbara
Cann, Jamie Foster, Michael Jabez (Hastings)
Caton, Martin Foster, Michael J (Worcester)
Cawsey, Ian Foulkes, George
Chapman, Ben (Wirral S) Fyfe, Maria
Chaytor, David Galloway, George
Church, Ms Judith Gapes, Mike
Clapham, Michael Gardiner, Barry
Clark, Rt Hon Dr David (S Shields) Gerrard, Neil
Clark, Dr Lynda (Edinburgh Pentlands) Gibson, Dr Ian
Gilroy, Mrs Linda
Clark, Paul (Gillingham) Godman, Dr Norman A
Clarke, Charles (Norwich S) Godsiff, Roger
Clarke, Eric (Midlothian) Goggins, Paul
Golding, Mrs Llin Macdonald, Calum
Gordon, Mrs Eileen McDonnell, John
Griffiths, Jane (Reading E) McFall, John
Griffiths, Win (Bridgend) McGuire, Mrs Anne
Grocott, Bruce McIsaac, Shona
Grogan, John Mackinlay, Andrew
Gunnell, John McNulty, Tony
Hain, Peter MacShane, Denis
Hall, Mike (Weaver Vale) Mactaggart, Fiona
Hall, Patrick (Bedford) McWalter, Tony
Hamilton, Fabian (Leeds NE) McWilliam, John
Harman, Rt Hon Ms Harriet Mallaber, Judy
Heal, Mrs Sylvia Mandelson, Rt Hon Peter
Healey, John Marsden, Paul (Shrewsbury)
Henderson, Ivan (Harwich) Marshall, David (Shettleston)
Hepburn, Stephen Marshall-Andrews, Robert
Heppell, John Martlew, Eric
Hesford, Stephen Meacher, Rt Hon Michael
Hewitt, Ms Patricia Meale, Alan
Hill, Keith Merron, Gillian
Hinchliffe, David Michael, Rt Hon Alun
Hodge, Ms Margaret Michie, Bill (Shef'ld Heeley)
Hoey, Kate Milburn, Rt Hon Alan
Hood, Jimmy Miller, Andrew
Hoon, Geoffrey Moffatt, Laura
Hope, Phil Moonie, Dr Lewis
Hopkins, Kelvin Moran, Ms Margaret
Howarth, Alan (Newport E) Morgan, Ms Julie (Cardiff N)
Howarth, George (Knowsley N) Morley, Elliot
Howells, Dr Kim Morris, Ms Estelle (B'ham Yardley)
Hoyle, Lindsay Morris, Rt Hon John (Aberavon)
Hughes, Ms Beverley (Stretford) Mountford, Kali
Hughes, Kevin (Doncaster N) Mowlam, Rt Hon Marjorie
Humble, Mrs Joan Mudie, George
Hurst, Alan Mullin, Chris
Iddon, Dr Brian Murphy, Denis (Wansbeck)
Ingram, Rt Hon Adam Murphy, Jim (Eastwood)
Jackson, Ms Glenda (Hampstead) Murphy, Rt Hon Paul (Torfaen)
Jackson, Helen (Hillsborough) Naysmith, Dr Doug
Jamieson, David Norris, Dan
Jenkins, Brian O'Brien, Bill (Normanton)
Johnson, Alan (Hull W & Hessle) O'Brien, Mike (N Warks)
Johnson, Miss Melanie (Welwyn Hatfield) Olner, Bill
O'Neill, Martin
Jones, Barry (Alyn & Deeside) Osborne, Ms Sandra
Jones, Mrs Fiona (Newark) Palmer, Dr Nick
Jones, Helen (Warrington N) Pearson, Ian
Jones, Jon Owen (Cardiff C) Pendry, Tom
Jones, Dr Lynne (Selly Oak) Pickthall, Colin
Jones, Martyn (Clwyd S) Pike, Peter L
Jowell, Rt Hon Ms Tessa Plaskitt, James
Kaufman, Rt Hon Gerald Pond, Chris
Keeble, Ms Sally Pope, Greg
Keen, Alan (Feltham & Heston) Powell, Sir Raymond
Kennedy, Jane (Wavertree) Prentice, Ms Bridget (Lewisham E)
Khabra, Piara S Prentice, Gordon (Pendle)
Kidney, David Primarolo, Dawn
Kilfoyle, Peter Prosser, Gwyn
King, Andy (Rugby & Kenilworth) Purchase, Ken
Kumar, Dr Ashok Quin, Rt Hon Ms Joyce
Ladyman, Dr Stephen Quinn, Lawrie
Lawrence, Ms Jackie Radice, Giles
Laxton, Bob Rammell, Bill
Lepper, David Reed, Andrew (Loughborough)
Leslie, Christopher Reid, Rt Hon Dr John (Hamilton N)
Levitt, Tom Robinson, Geoffrey (Cov'try NW)
Lewis, Ivan (Bury S) Roche, Mrs Barbara
Linton, Martin Rooker, Jeff
Livingstone, Ken Rooney, Terry
Lloyd, Tony (Manchester C) Ross, Ernie (Dundee W)
Lock, David Rowlands, Ted
McAvoy, Thomas Roy, Frank
McCabe, Steve Ruane, Chris
McCartney, Rt Hon Ian (Makerfield) Ruddock, Joan
Russell, Ms Christine (Chester)
McDonagh, Siobhain Ryan, Ms Joan
Sarwar, Mohammad Temple-Morris, Peter
Savidge, Malcolm Thomas, Gareth (Clwyd W)
Sawford, Phil Thomas, Gareth R (Harrow W)
Sedgemore, Brian Timms, Stephen
Shaw, Jonathan Tipping, Paddy
Sheerman, Barry Touhig, Don
Sheldon, Rt Hon Robert Turner, Dennis (Wolverh'ton SE)
Short, Rt Hon Clare Turner, Dr Desmond (Kemptown)
Simpson, Alan (Nottingham S) Turner, Dr George (NW Norfolk)
Skinner, Dennis Twigg, Derek (Halton)
Smith, Rt Hon Andrew (Oxford E) Twigg, Stephen (Enfield)
Smith, Angela (Basildon) Vaz, Keith
Smith, Rt Hon Chris (Islington S) Walley, Ms Joan
Smith, Jacqui (Redditch) Ward, Ms Claire
Smith, John (Glamorgan) Wareing, Robert N
Smith, Llew (Blaenau Gwent) Watts, David
Snape, Peter White, Brian
Soley, Clive Whitehead, Dr Alan
Southworth, Ms Helen Wicks, Malcolm
Spellar, John Williams, Rt Hon Alan (Swansea W)
Squire, Ms Rachel
Steinberg, Gerry Williams, Alan W (E Carmarthen)
Stewart, David (Inverness E) Williams, Mrs Betty (Conwy)
Stewart, Ian (Eccles) Wills, Michael
Stinchcombe, Paul Winnick, David
Stoate, Dr Howard Winterton, Ms Rosie (Doncaster C)
Stott, Roger Wise, Audrey
Strang, Rt Hon Dr Gavin Woolas, Phil
Straw, Rt Hon Jack Worthington, Tony
Stringer, Graham Wright, Anthony D (Gt Yarmouth)
Stuart, Ms Gisela Wyatt, Derek
Sutcliffe, Gerry
Taylor, Rt Hon Mrs Ann (Dewsbury) Tellers for the Noes:
Mr. David Hanson and
Taylor, Ms Dari (Stockton S) Mr. Clive Betts.

Question accordingly negatived.

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