Retailers will have to help meet the costs of eradicating the problem of illegal gangmasters, Paul Whitehouse has said.
The chairman of the government’s new Gangmaster Licensing Authority, said retailers will have to be realistic and revise their targets to help stamp out the problem.
He said: “I recognise that buyers have targets they need to meet and to do that they have to squeeze the suppliers, but if those targets have to be revised to stick to the rules then they will have to be revised.”
He said he noted farmers and growers have concerns the extra costs caused by the legislation would eat into their profit margins, but said that should be true of everyone in the industry.
The GLA was due to be officially put into place this week as the regulations for the authority was set to pass through both houses as the Journal went to press. Defra, meanwhile, has also launched a consultation on the draft gangmasters regulations this week. The move is aimed at clarifying the definition of what areas of activity the licence will cover.
Whitehouse, a former chief constable of Sussex, said he is keen to stress to the industry that the move would not mean an increasing burden of red tape, particularly to the producers.
“I’m hoping to set their minds at rest by assuring them that we’re not going to inflict more red tape on them. All they have to do is ask, ‘is this gangmaster legal’, and look for the licence,” he said.
The authority is getting full support from all of the industry: “Everyone is being supportive, including the retailers. After all, no-one wants to be fingered as being in favour of exploiting workers.”
He said he is confident the GLA would succeed where other government schemes had failed in tackling the illegal gangmaster issue. “The major difference is that there hasn’t been an proper system in place before. In the past there has been a whole host of different agencies looking at different things, VAT health and safety etc.”
He said that has allowed people to slip under the radar, and even if they are caught, they could carry on working, making money until they are convicted.
“With the licensing system, if we find someone isn’t paying the right wages, he loses his licence and has to stop working. He doesn’t necessarily get prosecuted, but it’s still effective. It won’t stop everybody, but it will help reduce the problem.”
He said the GLA will be looking to the retail sector to help ensure the system works: “They want to help and they can ensure, through their open book accounting with suppliers, that the figures are all in the right place.”
Statutory regulation is the only way forward, he said: “Statutory backing is the only way to make this work. Which supermarket would want to move first if they have to raise their prices and risk losing market share. But if they’re all forced to at the same time, it’s not a problem.”
He said the industry has to take the issue seriously and said the fact the chairmen and chief executives of the big retailers were all supportive is encouraging. “None of the supermarkets wants to be caught out, they all want to be on the side of the good guys.”
Whitehouse said his message to the sector is simple: “If you’re an illegal gangmaster, make yourself legal, because it won’t be difficult to get a licence if you’re a legal operator.”
Meanwhile, the Association of Labour Providers has published an outline of what needs to be paid for labour to meet the legal requirements of the minimum wage.
A spokesman said: “The minimum amount to cover the legal requirements, with the minimum wage at £4.85, is around £6.30 an hour, but the labour provider’s management costs and profits must be added to this. The general view is that the minimum figure in the £6.70 to £6.90 range is reasonable.”
And with the minimum wage set to rise in October, the ALP said that figure will rise further to around £7.07.
