Private Security Industry Bill [Lords]

Public Bill Committee, 24 April 2001.

Standing Committee B

Clause 1 - The Security Industry Authority

Nick Hawkins (Conservative, Surrey Heath)

I welcome you to the Chair, Mr. Benton. We are confident that we shall prosper under your wise chairmanship as we did under that of your co-Chairman, Mr. Winterton.

Before the Committee adjourned for the short recess, I was describing the concerns of Conservative Members about the future role of the lay magistracy in relation to the Bill. That is an issue to which my noble Friend Lord Cope referred in another place on 30 January and to which we shall return when discussing subsequent clauses. However, we also have other worries about clause 1, such as those to which reference was made at column 564 of the Official Report in another place on 30 January. It concerned whether the Bill would be better if it applied to people who were employed wholly or predominantly as security operatives.

As my noble Friend Viscount Astor said on that occasion, there is still some confusion about the position of people who are working full-time or part-time in the security industry. It should be clear that the new authority is responsible for those who are either full-time or predominantly employed as security operatives. For example, let us consider barmen. They are frequently called on to exclude people from pubs. Some busy pubs in city centres operate as late-night bars and have people who look after security. However, many pubs do not employ full-time security doormen, but use the bar staff when people need to be excluded. It would be excessively burdensome for such barmen to be covered by the authority.

On Second Reading in another place, the Under-Secretary, Lord Bassam, said that the Bill might catch publicans, and we are concerned about how and to what extent that will work. An amendment was tabled to add the words

``people employed wholly or predominantly as security operatives''

and to ensure that the Bill would cover only the operation of people who work in security as a principal part of their employment.

As the Minister will be aware, there has been much correspondence from those in the security industry, particularly from the licensed trade. Some people in the industry want to extend as widely as possible the provisions of the new body. Some see it as a wonderful business opportunity. There is always the danger that a regulatory measure can act as a job creation scheme and set up a completely new bureaucracy. We sympathise with those who do not want the industry to be faced with costly over-regulation. We want the new body to work. We do not want it to be heavy-handed. We want any regulation to be a light-touch measure.

John Bercow (Conservative, Buckingham)

My hon. Friend knows that I share his concern. Does he agree that there would be a greater argument for including the pub trade within the provisions of the clause if there were a demonstrable problem of people in public houses behaving heavy-handedly and abusing their authority? As that would not seem to be the case, does he agree that there is no need to extend the power?

Nick Hawkins (Conservative, Surrey Heath)

My hon. Friend is right, but the difficulty lies in the fact that there are different kinds of pubs. As I said earlier, some pubs operate as city-centre late-night bars and have their own security staff, and it is clear that such full-time security staff should be covered by the new agency. However, we do not want pubs that have no need for full-time security staff to be covered as a by-product or side-effect of the provisions.

In my remarks before we adjourned for the Easter recess, I touched on concerns about how training should operate. More information is coming to light as the Bill progresses, and a fascinating letter was passed to me during the short recess. Michelle Mackleston from Newcastle-under-Lyme in Staffordshire is a qualified training officer for the Security Industry Training Organisation who works in the security industry and was a warrant officer in the armed forces. She wrote to my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) about her concerns, and perhaps the Minister can deal with them in his response to this debate.

Miss Mackleston asks what the word ``training'' means in clause 1. From her experience working at the sharp end, she points out that, while training security staff, she has encountered individuals who have worked in the security industry for years without any basic training. Those people tell her about their experiences. One person who came to her for training told her that on starting work in the security industry

``I was told to carry a piece of 2 by 4''

for protection. Some people told her that they thought it appropriate for men to search women—with no regard for the possible later allegations of indecent assault. She had also been asked to train people who, although they had been working in the security industry for years, had not been told anything about the powers of citizen's arrest. She wrote:

``When I hear comments like these I begin to worry about not only the security officers safety but also the safety of the people in the areas where the security officers are working.''

She knows that reputable

``companies do train their officers (to BS7499) -but what about the ones who do not.''

Miss Mackleston is concerned about the number of people who are unaware of the obligations of criminal law regarding the restraining of individuals and the use of minimum force, and security people who believe that it is legitimate to use handcuffs and batons. Those are the concerns of someone working at the sharp end in the industry, and perhaps they touch on some of the points raised by the right hon. Member for Walsall, South (Mr. George) at an earlier stage of our deliberations.

Conservative Members feel that the remit for the powers of the new authority as drafted in the Bill is too wide. The provisions in subsection (3) are astonishingly wide. It states:

``The Authority may do anything that it considers is calculated to facilitate, or is incidental or conducive to, the carrying out of any of its functions.''

That is a wide brief. In the other place, we sought to test the breadth of subsection (3) with an amendment designed to stop the authority borrowing money, and, more importantly, to require annual consultation with the industry to be written into the Bill.

That point is similar to a point raised by one of the amendments tabled by the right hon. Member for Walsall, South that was starred for our previous sitting. We still feel that such a move would be greatly welcomed by the reputable side of the industry—trade bodies such as the British Security Industry Association and the Joint Security Industry Council. Are the Government prepared at least to contemplate later, perhaps on Report, adding wording to reduce the breadth of the wide words in subsection (3)? We look forward to the Minister's response.

Ronnie Fearn (Liberal Democrat, Southport)

I, too, welcome you to the Chair, Mr. Benton. It is not the first time that I have sat with you in Parliament, and we sat together on Sefton council many times, you with the Labour group and me with the Liberal Democrats. We got on well together, so I am sure that the Committee will go smoothly.

The hon. Member for Surrey Heath (Mr. Hawkins) touched on the fact that the powers in the Bill are wide. They are not specified anywhere, and I have read the Bill closely. The Secretary of State seems to have overall consent and power. How is the industry being consulted? Will representatives from other sectors, such as the police, be invited to serve on the body? Those important questions should be dealt with.

Bruce George (Labour, Walsall South)

I used the recess profitably, visiting Denmark to consider further its excellent regulation. My attempt to consider security legislation in the Ukraine was less successful, as I only reached Heathrow, proffered the wrong passport minus the visa for the Ukraine, and was back in the office at 7 o'clock in the morning. However, having been there twice before for the same purpose, I feel that I have a handle on the system there.

Although I have been critical of aspects of the Bill and its predecessors, I am reasonably satisfied with the clause. In almost all cases, clause 1 is in essence the nub of a Bill, and this one is perfectly okay.

I am especially delighted given the fact that the Government could have used another model of regulation, many of which are available in this country. Another Department or, as in many countries, the police could have been responsible for regulation. In Germany, much is done by an economic, industrial Department. Wisely, however, the Government have chosen the model of a non-departmental public body.

The Bill bears more than a superficial resemblance to my first private Member's Bill on the subject, which was published in 1977 and subsequently disappeared without trace for a quarter of a century. I like the fact that clause 1 shows the symbiotic relationship between the Home Office and the Security Industry Authority: one is dependent on the other. The Bill provides the Home Office with information and consent and decentralises much of the decision making to the regulatory body, while the Home Secretary reserves his or perhaps her rights to instruct, advise and be consulted.

That could be an ideal relationship of neither dependence nor total independence. It establishes some independence from the industry. Although the industry must be seriously consulted, the model will not be the voluntary self-regulatory one that we had before. Responsibility will be divided between the Home Office and the regulatory body. That is the best model because it is the most flexible. It is good that a Department has not been given sole responsibility for regulation, because Departments often fail to develop the necessary expertise and flexibility.

The police feel that, in some ways, the private security industry is a competitor. If they had been given a dominant regulatory role, some people would have cried foul: it would have been thought, erroneously perhaps, that the police were protecting their own interests, rather than those of the public.

Mixed regulatory systems that involve many layers of government frequently breed conflicts over responsibility: problems of jurisdiction might arise as legislation is introduced in Scotland and Wales—and Northern Ireland already has its own rules.

I have studied a wide variety of regulatory systems in countries around the world. Regulation can be categorised as either narrow or broad. Opposition Members have said that they want a light-touch regulatory system. I am in favour not of heavy-touch systems but of broader and deeper modes of regulation. The Home Office has, perhaps, achieved the right balance between those categories.

However, the Bill is narrow: it covers man guarding and the activities of private eyes, with regard largely to their man-guarding functions, but it excludes many other aspects of the security industry that should be included in the regulations. Many security companies engage in a range of activities other than man guarding that involve, for instance, alarms and information technology. A broad regulatory system should therefore be chosen.

A distinction should also be drawn between shallow regulation, which might merely permit access to criminal records, and deep regulation, which lays down standards concerning a range of matters such as education, training and insurance. Regulation should, therefore, be regarded in terms of breadth and depth.

John Bercow (Conservative, Buckingham)

Does the right hon. Gentleman's support for a broad approach lead him to favour the inclusion within the terms of the legislation of public houses that do not employ designated security officers? As he knows, my hon. Friend the Member for Surrey Heath objected to that.

Bruce George (Labour, Walsall South)

The majority of public houses have security problems, although there are a fortunate few that do not. Many 19th-century pugilists ended up either as chucker outers or as the owners of the licensed premises where they worked. They dealt with their security problems in a manner unique to middle-aged, 22-stone pugilists.

If a public house does not employ designated security officers, their role might have to be undertaken by other staff, so the definition of security staff presents problems. There are so many marginal or tangential—although not peripheral—sectors of the security industry. Many employees perform security roles. If a driver pulls off the M1 to visit a service station to buy a copy of The Guardian—although I suspect that Conservative Members would be unlikely to buy that newspaper—the sales assistant might have a screen that monitors what is happening in the rest of the building.

The problem of definition would bedevil any legislation. I failed O-level maths so I am not in a position to offer advice concerning horizontal explanations, but depth of regulation takes account of entry requirements for firms and individuals wanting to operate in the industry and minimum standards of operation, and I feel that the Bill is in between shallow and deep. I devised five models of regulation: non-interventionist—which we have had until now—minimum narrow, minimum wide, comprehensive narrow and comprehensive wide. My view, and that of professionals in the security field, is that if we consider the top 10 countries in terms of a successful, accountable, regulated security industry, we can see that most of the best-regulated systems have a combination of breadth and depth. The Opposition want the system to be narrow—just covering man guarding—and shallow, whereas I think that it should be wide and deep. I suspect that the Home Secretary and the Minister are in favour of something in between. The clause is admirable—I will not be quite as eulogistic about all the other clauses—it sets the scene, and I support it.

Ian Stewart (Labour, Eccles)

Good morning, Mr. Benton. It is good to see you in the Chair. I, too, am happy with the clause. The industry to which it applies ranges from well-organised, well-regulated companies to, at the other end of the spectrum, cowboys. I want to speak about the cowboy end.

I should declare an interest. Most people know that I am a lifelong trade unionist, and although I am extremely keen for the clause to be implemented in relation to standards, I believe, on the basis of personal experience, that because of the nature of the cowboy firms—doormen in clubs and pubs provide a good example—it is problematic in terms of industrial relations. A large number of people involved at that end of the industry pursue their activities within the black economy. That militates against good and proper standards in the industry, which are the subject of the clause. The one matter cannot be considered separately from the other.

During my 20 years as a Transport and General Workers Union regional officer I had occasion to recruit those who are known, colloquially, as bouncers. The nature of the recruitment was such that I did not have to go looking for them. Every December, they would come knocking on the union's door, asking to join. I came to realise that they would knock on the door in December, make use of their union identity for that month as a bargaining lever to ensure the highest possible return for working over Christmas and the new year, and in January they would no longer be members. Such playing of the game was endemic in the black economy.

I am firmly in favour of good, sensible and appropriate minimum regulation, as outlined in the clause. In turn, however, the Government should not forget that employment regulations are equally important.

Charles Clarke (Labour, Norwich South)

I join my colleagues in welcoming you as Chairman, Mr. Benton. I hope that you will find the Committee interesting, and I am sure that we shall conduct ourselves in order under your stewardship.

I thank my right hon. Friend the Member for Walsall, South for his comments on the clause. He is right to say that it raises a question of balance of judgment. He is also right to emphasise, as I have sought to do throughout, that the process will be dynamic rather than static. As we examine the situation, we must see how we can make progress and respond to such circumstances.

I was grateful for the remarks of my hon. Friend the Member for Eccles (Mr. Stewart) because he summed up his experience of organising many of the people who work in one sector of the industry, and of the practical problems that we are trying to address. I shall refer to his comments when I mention training.

I agree with the hon. Member for Southport (Mr. Fearn) about the need for proper consultation and collaboration in the process. There has been a full consultation process since the publication of the White Paper, and my colleagues and I have had many meetings with the industry and the police to discuss the matter. The membership of the authority is addressed in the schedule. As the hon. Gentleman knows, we have debated issues such as the extent to which the Bill should specify interests. I want to reinforce two points. First, we believe that it is critical that the authority is independent in character and is not merely an in-house operation. Secondly, the authority should contain people who can ensure that it operates in an informed and intelligent way, because of their professional experience and knowledge of the industry. I assure the hon. Gentleman that such a factor will be a major consideration when we address the make-up of the authority.

I shall address the specific points of the hon. Member for Surrey Heath. On the matter of the licensed trade, it is important to make a point that follows on from an observation made by my right hon. Friend the Member for Walsall, South. The Bill does not cover publicans or any other people who perform security duties that are incidental to their main employment. There was confusion about that in the other place, in the debate to which the hon. Member for Surrey Heath referred. I make it clear that where security responsibility is incidental to a person's main employment, the Bill does not cover that individual. An illustration is that the bouncer is covered but not the barman, because the bouncer is retained specifically for security responsibilities as the main part of his employment. The barman is not covered because his main concern is to serve the drinks and run the pub, rather than security matters. I hope that that clarifies the matter.

The Bill does not cover a wide variety of people who undertake security activities incidentally. My right hon. Friend referred to many such people who undertake security as a bit of their job, but are not covered by the Bill. We are specifically focusing on the security industry.

John Bercow (Conservative, Buckingham)

I think that what the Minister is saying is clear, but I want to establish it beyond peradventure. Will he confirm that the definition or job title of an individual establishes what is incidental and what is not, rather than the frequency with which he or she may have to deal with outbreaks of disorder?

Charles Clarke (Labour, Norwich South)

That is correct. The point is what is the main employment, and therefore what is the definition of that employment. There are other Bills currently before the House, or in the other place, in which we are considering issues such as outbreaks of disorder in other circumstances. That is not germane to the key purpose of this Bill, which is to focus on people whose main employment is within the security industry.

On training, I was interested in the letter that the right hon. Member for Maidstone and The Weald received from the trainer in Newcastle-under-Lyme. I think that it illustrated as clearly as anything could the importance of training in the process. That is why subsection (2)(e) states that a function of the authority shall be

``to set or approve standards of conduct, training and levels of supervision''.

That is key to the clause. Many argue for a much stronger and better training regime—individual Members of Parliament with experience of the matter, trade unions and many of the companies involved. We should establish what types of training are involved, both on fundamental issues such as what forms of restraint may be used in which circumstances—handcuffs have been mentioned, for example—and on how to operate generally. Consideration must be given to whether carrying a two by four is the appropriate way in which to deal with such situations.

The hon. Member for Surrey Heath referred to well-established organisations that have done a lot of work in such matters, such as the Security Industry Training Organisation, the National Security Inspectorate, the British Security Industry Association and the Joint Security Industry Council. They would be the first to say that to establish a national regime whereby standards are approved by a national body is the right way forward. The letter to which he referred emphasised the strength of the case for such action. It will be a central function of the authority.

I cannot be as helpful about the hon. Gentleman's final point as he would wish. Subsection (3) states:

``The Authority may do anything that it considers is calculated to facilitate, or is incidental or conducive to, the carrying out of any of its functions''.

That is an important responsibility of the authority. We live in a dynamic world. An example to which reference has already been made is the fact that 30 years ago the current structure of security in pubs and clubs would not have been recognisable. The industry has evolved. My right hon. Friend the Member for Walsall, South referred to the security camera. Reforms in the industry will take place because of the rapid process of change. It is an important obligation of the authority to have that responsibility under subsection (3).

We are not considering further amendments to define that provision more widely. I say in its defence that the clause is only ancillary to the SIA's function, which is why it is covered by subsection (3), not subsection (2). Its power is not that broad: it is supplementary to what else is happening. The power is important, however, for the reasons of change that I have set out. I urge the Committee to agree to the clause.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 2 - Directions etc. by the Secretary of State

John Bercow (Conservative, Buckingham)

I beg to move amendment No. 19, in page 2, line 24, at end insert—

`(2A) The Secretary of State shall lay a copy of any such direction before each House of Parliament.'.

It is a pleasure, Mr. Benton, to echo the welcome to you that has been expressed by my hon. Friend the Member for Surrey Heath and the Minister of State. We look forward to your chairmanship of our proceedings and to the firmness, fairness and humour that you will bring to the task.

Clause 2 is broad and, some fear, potentially all-encompassing. That is why we want to amend it. The Minister will be aware of both the content of the amendment and the fact that my noble Friends in another place tabled a similar amendment, the purpose of which is to ensure that Parliament retains—or perhaps I should say establishes—some leverage and control over what is issued to the authority.

On 1 March in another place, the amendment was tabled on Report. On that occasion, the Government's stance seemed equivocal. Lord Bassam seemed uncertain—and I put that as mildly, politely and understatedly as is my wont—whether the directions given by the Secretary of State to the SIA would be transparent. He said:

``there will be very limited circumstances in which these confidential directions might be necessary.''

It was not clear to me that those limits were explained or explored. He continued:

``Yes, they might relate to directions naming individuals or companies.''

However, he went on to tease us, inadvertently if not deliberately. He began by attempting to reassure us that

``in the majority of cases—probably 99 per cent.—there will be transparency

and went on to say:

``in the majority of circumstances the directions should be a matter of public record . . . . We plan to establish the authority on the basis of a presumption of openness on the issue except in the limited and very sensitive circumstances that I have described.''—[Official Report, House of Lords, 1 March 2001; Vol. 622, c. 1366-68.]

However, the point at which my hon. Friends and I cavil is that Lord Bassam referred to

``limited and very sensitive circumstances''

but did not describe them in any meaningful or adequate sense, although he wrongly claimed to have done so. We are anxious to tease such a description out of the Government. If there is to be transparency in the great majority of cases—we will know what the directions are and they will be on the public record—why is that presumption not in the Bill? If it is 99 per cent. certain that everything will be public, or if it is certain that, in the ordinary course of events, 99 per cent. of the direction will be made public, where is the harm in assuring us of that by stating as much in the Bill?

It repays study if we examine the worthwhile but slightly curious debate in the other place, in which my noble Friends sought to establish what the Government had in mind, or to gain some reasonable example of the directions that they might issue. However, they were unable to get much information out of the Government. My noble Friend Viscount Astor emphasised the broad power in clause 2 for the Secretary of State to

``give general or specific directions in writing to the authority''

as well as

``the power to request information''.

In the course of the debate, Viscount Astor asked the Under-Secretary why directions were required and whether they would be a matter of public record. In response, he got a Sir Humphrey-style answer. [Interruption.] Lord Bassam said:

``I believe that the standard arrangement is for the Secretary of State to be able to give directions to non-departmental public bodies. If necessary, that could include the placing of a cap on fees.'' —[Official Report, House of Lords, 1 March 2001; Vol. 622, c. 1362.]

If all that is involved is a cap on fees—

Charles Clarke (Labour, Norwich South)

Sounds reasonable.

John Bercow (Conservative, Buckingham)

The Minister is chuntering from a sedentary position. There is no reason why such a cap on fees should not be stated in the Bill. If the power is to be permissive rather than prescriptive—a matter of concern to my hon. Friends and me— and a wider set of directions covering a broader range of topics may be issued, with necessarily greater power being conferred upon the Secretary of State, I politely tell the Minister that it is incumbent on him, as it was on Lord Bassam, to tell us what sort of information may be required of the authority and what sort of directions may typically be issued to it.

Nick Hawkins (Conservative, Surrey Heath)

I do not know whether my hon. Friend caught what I thought I heard the hon. Member for Lewisham, East (Ms Prentice) saying from a sedentary position, when he accurately described Lord Bassam's response as a Sir Humphrey-style reply. I think that she said ``Excellent.'' I am not sure whether that is an example of the training programme that Lord Bassam has been undergoing to make himself more like Sir Humphrey. It is interesting that a former Government Whip feels so strongly that Ministers should behave like Sir Humphrey Appleby rather than like Ministers.

John Bercow (Conservative, Buckingham)

I am grateful to my hon. Friend for that intervention, as I did not hear what the hon. Lady muttered. I thought that I was probably the poorer for being deprived of her words—if not words of wisdom, words of revelation. The right hon. Member for Walsall, South spoke earlier about symbiotic relationships. I am bound to say, as will become progressively clearer during the course of our exchanges, that my hon. Friend and I have a symbiotic relationship. He knows when I am in need of a useful nudge, which he has just provided.

I want to develop important arguments—[Interruption.] However, I am, above all, courteous. Does the hon. Lady wish to intervene?

Joe Benton (Labour, Bootle)

Order. The hon. Lady in the Gallery is not part of the debate.

Bridget Prentice (Labour, Lewisham East)

There are so many hon. Ladies in the Room, Mr. Benton, that you are confusing me with my hon. Friend the Parliamentary Secretary, Lord Chancellor's Department. I would hate the hon. Gentleman to have missed what I said, because the idea that I muttered something appals me. I did say ``Excellent'' in response to the comment about Sir Humphrey. The hon. Gentleman would benefit from watching that old BBC television series, which is currently being shown again. He would learn a great deal from Sir Humphrey if he did so.

Mr. Bercow rose—

Joe Benton (Labour, Bootle)

Order. The Committee should return to the amendment.

John Bercow (Conservative, Buckingham)

I do not seek to ape Sir Humphrey. I am always grateful for the kindly guidance of the hon. Lady, but as she knows, robustness, bluntness and specificity are my watchwords.

I want to focus on what Lord Bassam said. I am not prepared to allow Labour Members to divert attention from his curious reply. He said:

``Directions are not statutory instruments; they are merely a mechanism for a more informal way of establishing priorities and registering concerns''.—[Official Report, House of Lords, 30 January 2001; Vol. 621, c. 591.]

He was seeking to reassure those who had expressed concerns by saying, ``Don't worry, this isn't an overarching imposition or a hefty jackboot of a statutory imposition. These are informal mechanisms.''

Much of the debate so far has concerned the relationship between the SIA and the Secretary of State. That issue has been properly explored, whether the relationship is one of dependence, independence or, as the right hon. Member for Walsall, South interestingly, and perhaps appositely, suggested, one of mutual dependence or constructive interaction. I would like to think that that is the relationship that will evolve. However, it is important that we should know, in the overwhelming majority of cases, when directions are being issued by the Secretary of State, the matters on which they are being issued, the purposes for which they are being issued, and what, in those circumstances—which may vary—the word ``direction'' connotes.

My anxiety is that the Government assume, too often, that direction—something insisted on—is what is required. If, as the Minister emphasised, the Security Industry Authority will be carefully composed as a credible, authoritative and responsible body, it is not clear why, on a range of matters, it should regularly need to be subject to direction, as opposed to encouragement, consultation or open exchanges of opinion about what approach should be followed.

I did not find the words of Lord Bassam in the Official Report on 30 January at column 591 at all reassuring, even if they were intended to be so. I know that my noble Friends initially felt encouraged that he was seeking to reassure them that, in the vast majority of cases, information would be public, and there was nothing about which to be greatly concerned. I know that they went on to feel, as the debate progressed, that the Government were, if anything, backtracking on that commitment to openness, and seemed to be paving the way for a more wide-ranging and extensive issue of directions that would not be placed on the public record. That was a concern that my noble Friend Viscount Astor articulated at column 1362 on 1 March. He said that in Committee the Under-Secretary had been kind enough to say that he would reflect on the matter of public record.

However, my noble Friend was alarmed when, as he understood it, the Under-Secretary went back to the Home Office and all his natural inclinations for open and reasonable government deserted him, notwithstanding all his years of saying that the Labour party wanted more openness in government. My noble Friend was afraid that he had been subverted by the system. I shall not dilate on that point—because you will not like it, Mr. Benton—about which the hon. Member for Lewisham, East expressed such enthusiasm.

Lord Bassam said that he would write to my noble Friend Viscount Astor, and he did so, in his usual courteous fashion. However, the letter was rather extraordinary, because it appeared to be a total denial of what my noble Friend thought that Lord Bassam had previously stood for and argued. He reminded my noble Friend that he had acknowledged the arguments in favour of a general presumption of openness. However, he went on to say:

``I remain of the view that there may be very limited circumstances in which the use of a confidential direction may be necessary.''

The only example that he went on to give was one in which directions may be required naming individuals or particular companies. He continued:

``consequently we should not place a requirement on the face of the Bill for all directions under Clause 2 to be published.''—[Official Report, House of Lords, 1 March 2000; Vol. 622, c. 1362.]

I put it to the Minister of State—who will speedily have followed the argument—that that is a classic example of erecting an Aunt Sally and then knocking it down. My noble Friend did not make any such request or demand, or insist that there should be a requirement in the Bill for all directions to be published, but said that there should be a presumption that such directions should be published, which is perfectly reasonable.

As I think that my hon. Friend the Member for Surrey Heath believes, it is necessary for directions to be laid before each House of Parliament—we can no longer trust to luck. There has been much backsliding, hedging and prevarication by the Government, and we feel that any direction that is of sufficient public interest to require being stated in writing to the authority should also be of sufficient significance and public interest to be placed on record in Parliament. If the Minister can think of circumstances in which that would be prejudicial to the public interest, it would be helpful if he would explain—rather better than Lord Bassam did—what such circumstances would be. So far, we have not had much satisfaction from the Government on this matter.

There is an anxiety—which is the root of our amendment—that the Government do not seem to have much confidence in the authority that they have chosen to establish. Even before it has been created, the Minister appears to be saying that he is able to decide who gets a licence and who does not. In certain circumstances, he may direct the authority not to give someone a licence because he does not think that it should. I want to know what circumstances would cause a conflict between the Security Industry Authority and the Secretary of State, and what would justify the insistence of the latter on his point of view over and above the considered judgment of the authority appointed to make such assessments. If such circumstances can be envisaged, they should be explained to us now. If such conflicts are thought likely to arise in future, it is not unreasonable, if we believe in open government and the integrity of the SIA and of the relationship between it and the Secretary of State, to demand public explanations. That much we have not yet had from the Government.

The position seems even worse than I have so far described. I will probably be excoriated by my hon. Friends the Members for Surrey Heath and for Mid-Norfolk (Mr. Simpson) for my characteristic understatement of the case. I know that I tend to fall into that trap, but I am doing my best to speak up with some force on the matter, and they will no doubt encourage me.

The position seems worse than I have so far described because the Home Secretary may discover reasons why someone should not be given a licence—for example because that person has a criminal record. Under the Bill, the authority will have the right to acquire such information. It will be able to hold informal discussions with the Home Office and agree with the Home Secretary not to issue a licence. However, central Government have reserved the power to issue directions—not to have a discussion or a mutually beneficial interaction, but simply to insist.

I want to explore the point in some detail. I may have satisfaction from the Minister, but I have not had satisfaction from reading the debates in the other place. For the avoidance of doubt, let us remind ourselves of the terms of the clause. It states:

``In carrying out its functions the Authority shall comply with any general or specific directions given to it in writing by the Secretary of State.''

It refers not merely to ``directions'' but to ``general or specific directions''. We must therefore assume that in some circumstances the Secretary of State expects—to deploy another word, I believe accurately—to insist on his preferred course, even if that course has not been decided on or has even been rejected by the Security Industry Authority.

I am unhappy about that. It is perfectly possible that someone could be refused a licence not because the Security Industry Authority decides that he or she is unsuitable to hold one, but because the Secretary of State has been reminded by officials that, under the clause, he can stamp his feet and issue a written instruction—``directions'' or ``instruction'' seem to be interchangeable terms in such circumstances—to the authority to that effect.

If that is not what the Government have in mind—I am prepared to accept that it might not be, although it is difficult to understand how it would not be—why is the Minister not prepared to give us an assurance by stating more explicitly in the Bill the extent of the perceived power of direction or the limits to it? When we are not told the specifics and a permissive power is provided that seems to be extremely wide, we become anxious that the power might be abused or, if not abused in the strict terms of the Bill and the entitlement that it confers, used for purposes for which we do not believe that it should be used.

In the same debate, my noble Friend Viscount Astor, at column 1366, asked the Under-Secretary to give an example of when the Home Secretary would give a direction relating to an individual. I emphasise that that could be a direction about which the individual himself or herself never learned. That is disturbing, because surely the first principle of natural justice is that a person against whom an adverse decision is made should know why. If he or she does not, it is difficult to understand how he or she can properly appeal. I do not see why the circumstances pertaining to that individual cannot be assessed by and adjudicated on by the authority. It is not clear why the Secretary of State needs to intervene. However, in response to my noble Friend Viscount Astor asking him to explain the matter, interestingly and curiously, Lord Bassam said:

``The direction would not be: `Thou'—the SIA—`shalt not give a licence to'. In very limited circumstances the Secretary of State may ask for investigations to be made on sensitive issues with regard to companies about which there is concern. The Secretary of State may use that power to direct the SIA to carry out an investigation into a specific company where there is concern—perhaps a PSI equivalent of BCCI.''—[Official Report, House of Lords, 1 March 2001; Vol. 622, c. 1367.]

That is interesting. The Government were saying, ``Oh yes, there is a power of direction. We know that—general or specific—because it is in clause 2, but all we would be doing is directing the authority to conduct an investigation or to consider a factor that hitherto it had failed, through inadvertence or refusal, to consider.'' The Under-Secretary seemed to be trying to reassure my noble Friends that the direction would not insist on the granting or refusal of a licence to an individual.

We now come back to the issue to which we often return in our debates: the conflict between what is written in the Bill and Ministers' assurances. They assure us that the Bill sets out how they intend to proceed, but my hon. Friend the Member for Surrey Heath and I are worried that such measures may not always be interpreted that way in practice. Why? Well, Ministers are not computers, although they occasionally make a good imitation of them. They are human beings and will vary. Some may adopt a relatively light-touch approach, some may take a middling approach and some may take a wide and comprehensive approach. I do not know which of the models offered by the right hon. Member for Walsall, South will be taken as their guiding light, but that could vary, and honourably so.

That is why we are worried that, if there were a potential for power to be used more widely than we would consider justified or consistent with the independence and integrity of the Security Industry Authority, caveats and safeguards should be put in place to ensure that that does not happen, whatever the legislative and directional appetite of the Secretary of State of the day. That, as yet, we do not have that assurance is a source of concern to me.

My noble Friend Viscount Astor went on to develop his point about the Secretary of State's power. He said that the directions not only give him the power to

``direct that someone should not be given a licence, but they give him the power to give a secret direction to the authority to give someone a licence. Someone could get a licence because, on a whim, the Secretary of State feels that it is necessary. We will never know. The authority might be against the decision, but there will be nothing that it can do about it. It will have to comply.''—[Official Report, House of Lords, 1 March 2001; Vol. 622, c. 1368-69.]

I regard that as a central point. Will the Minister answer me head on about this subject? I am willing to concede that such action may not happen often. I accept that it might not happen at all, but it is conceivable that a situation could arise in which the Secretary of State thought that a particular individual—perhaps someone who had lobbied privately for the privilege—should be granted a licence, when the Security Industry Authority had come to a different view.

The Secretary of State of the day would issue either a general or specific direction, because he is empowered to do that under the terms of the unamended clause. In this context, it would be a specific direction: he might state that, although he recognises that the authority has judged that a licence should not be granted to the individual, he has access to information to which the authority is not privy, or he is better acquainted than the authority with the individual, and he insists that the authority provide a licence.

Would such information be in the public domain? Would the example that I have described be one of the 99 per cent. of cases that, Lord Bassam assured us, would be publicly recorded, or would reasons be invoked to justify withholding the information? Those are legitimate concerns. Although only a small number of cases might be affected, they would be of great importance to the individuals concerned, and they might reflect on the integrity and propriety of the procedures undertaken.

In the course of the debate to which I have referred, Lord Bassam said that

``The Secretary of State cannot interfere in the judgment of the SIA. That is not the point. The noble Viscount''—

Viscount Astor—

``is assuming that the Secretary of State will simply tell the SIA not to give a licence.''

Equally, as I have argued, he could tell it to give a licence. Lord Bassam then states:

``That is not what I am saying. I was very careful not to say that. That is the authority's judgment alone.''—[Official Report, House of Lords, 1 March 2001; Vol. 622, c. 1369.]

That was the Under-Secretary's statement, but it is merely his interpretation, as there is no reference point for it in the clause.

If it is intended that in no circumstances would the Secretary of State do more than direct that particular investigations take place, and that in no circumstances would he use a power—or even think that he had a power—to require the SIA to change a decision that it had reached, why does the clause not include an assurance to that effect? That is a simple point: indeed, as the late Enoch Powell would have said, it is so blindingly obvious that only an extraordinarily clever person could fail to grasp it.

This matter is of concern to my party, so I hope that the Minister will reflect seriously on it and provide an answer. The power is widely drawn and my party believes that it could be abused, and used in ways that the House does not understand. Perhaps the Minister will tell us how far he would involve himself in the mechanics of individual applications? I presume that he accepts that he could direct inquiries or investigations of particular individuals to be undertaken. If that is the case, why does he not also accept that if a Government did not agree with the conclusion of an authority's investigation, they could insist that it was changed?

Will the Minister tell us more than Lord Bassam did about the circumstances in which this broad power would be used? If he is prepared to set out in detail the circumstances that he or the Home Secretary envisage, we might be reassured. Is it a Henry VIII power? Will it allow the Secretary of State to direct the SIA to act contrary to its decisions, or in ways that might conflict with other parts of the Bill or other legislation? I am also concerned about the relationship between the directions and any other legislation that might be forthcoming, such as secondary legislation. If this wide power is to exist, surely the direction should, ordinarily, be placed before Parliament?

The following question begs itself: if the Secretary of State is to have such broad powers of direction, what, ultimately, is the purpose of having the security authority at all? I hope that that point is not reached. The Minister will recall that similar issues were raised concerning the Secretary of State's powers of direction in relation to the new national probation service during the debates on the Criminal Justice and Court Services Act 2000. I do not intend to do any more than animadvert in that way to that legislation, because you, Mr. Benton, would get upset if I dilated on it. However, I am worried that the Government are providing themselves with a broad power.

I believe that the Minister will accept that the power is broad. If he does, will he explain the legal constraints on its exercise? If, however, he is in an especially argumentative mood, which I hope he is not, and disputes that the power is broad—although it is difficult to understand how he could—and says that it is narrow and limited, there is no good reason why he should not now explain what the narrowness of the power entails and the strict limits on its exercise. Either way, there is no good reason why we should not have a rather better explanation of that intended exercise than Ministers have so far provided. It is on that basis—to raise legitimate anxieties about the scope of the clause—that I press the amendment.

Ronnie Fearn (Liberal Democrat, Southport)

I shall be brief, unlike the hon. Member for Buckingham (Mr. Bercow). Is one of the directions the timing of setting up the authority? Will that be the Secretary of State's first direction? If so, is there a time scale in mind?

Bruce George (Labour, Walsall South)

I have no concerns about whether the directions given are published. In many cases, they should be. The question is when they should be published; at the time of the direction or in the annual report. It would be interesting to know the range of means by which the Home Secretary or the Minister of State will communicate the views of the Home Office and, I presume, other Government Departments, to the SIA. We are not creating an independent fiefdom of the private security industry or any other group of organisations. I would be appalled if the SIA regarded itself as separate from Government and able to do what it wanted and merely reported to the Home Secretary or Parliament annually.

When I first became a Member of Parliament and my local councillors whinged that I was pinching a lot of their work by holding weekly surgeries, I wisely said that enough casework was available to keep us all fully engaged for a long time. Crime prevention is a sufficiently enormous job not only to keep the Home Office and its competent civil servants in jobs to retirement and way beyond, but to provide ample scope for the SIA.

The Home Secretary has an advantage that the chairman and chief executive of the SIA will not have. The Home Secretary will be aware of the activities in the Home Office, involving the police, civil servants and the fire service, and links with the intelligence services and other Departments. The scheme under which the SIA will, I presume, work will be much more limited and restricted to the private security industry in all its dimensions.

I envisage an enormous advantage for a Cabinet Minister and his deputy, who will have the organisational and informational breadth of activity to be able to communicate to the SIA in one of a variety of forms. One level will be through statutory instruments. For hon. Members who have not read it, I recommend the report by the House of Lords Select Committee on Delegated Powers and Deregulation in which it offered its wisdom on the Private Security Industry Bill, saying:

``There is nothing in this Bill which the Committee wishes to draw to the attention of the House.''

Far more interesting is the evidence given to that House of Lords Committee by the Home Office, which lists all the different examples of when statutory instruments will be used and what response is available to the House of Commons and, I presume, the House of Lords. However, I do not speak as somebody with any experience of government. There is one person here who is in government, and he and the distinguished Secretary of State will know the methods by which their personal or departmental views will be communicated to an organisation that will be set up by the Home Office.

John Bercow (Conservative, Buckingham)

I welcome what the right hon. Gentleman said about transparency. However, with respect to him, we are debating not merely the communication of personal views, but a proposed amendment to a clause that confers a substantial power on the Secretary of State. In the light of what the right hon. Gentleman said about Ministers having access to certain information to which the SIA may not have access, will he say whether he thinks that the Secretary of State should be able to direct the granting of a licence to individuals, or the refusal to grant a licence? Does he think that that is what Ministers have in mind? If Ministers do have such things in mind, should they be open about it? That would be consistent with the right hon. Gentleman's comments about transparency.

Bruce George (Labour, Walsall South)

I have no idea what is in my hon. Friend the Minister of State's mind at any stage, but I can imagine instances when it will be necessary for the Secretary of State to communicate sensitive information to the SIA.

In Russia—this country is not in such a position—a high percentage of private security companies are run either by the KGB or criminal gangs. What if such an organisation set up a branch in this country for the purpose of investigation or to pursue people for the Russian Government? What if such a company wished to take over a British or European company using laundered money? The SIA may not have access to such information, but the heads of MI5 and MI6 would have a word in the ear of the appropriate Minister, who could then have a word in the ear of the chairman or chief executive of the SIA. I assume that that would not be committed to the public domain.

John Bercow (Conservative, Buckingham)

Why not?

Bruce George (Labour, Walsall South)

Did I hear the hon. Gentleman correctly? I cannot argue any further; if he thinks that much information of such sensitivity should be put on the website—too much is, anyway—he is making a big mistake.

John Bercow (Conservative, Buckingham)

It would depend on the circumstances of the case. I say in all sincerity to the right hon. Gentleman—he knows that I respect his position—that I am concerned about establishing transparency, which he said that he supports. I accept that the right hon. Gentleman cannot predict what the Minister thinks, but is he saying that, because of the greater knowledge available to the Government, they should be able not only to communicate their view, but to insist on whether an individual should be granted a licence? If so, does he accept that that directly conflicts with what Lord Bassam of Brighton said in the other place? What is the Government's position, and can it be clearly established?

Bruce George (Labour, Walsall South)

The Minister of State outranks his colleague in the House of Lords, and two months have elapsed since the House of Lords debates. All of us, not least those in the Home Office, are learning; the Home Office's interest in private security is a recent phenomenon.

I do not want to give colleagues a lecture, because I am not competent to do so on this matter; I have never been and am not likely to be a Minister. However, there is a range of available methods. I recall attending a lunch at No. 10 when the then Prime Minister, Lady Thatcher, merely lifted her head to look in the direction of Charles Powell, and up he jumped. I am not aware of any words having passed her lips or any

gesticulation of either her left or right hand. It was merely a glance—no doubt a piercing one—that led to the intended reaction. There will be a whole range of methods of communication. Psychologists talk about the law of anticipated reaction; this leads to students dressing up as lawyers even when they are in their first year at university. People behave according to how they believe they should behave.

The Home Secretary will appoint the chairman in the first instance, so he should be reasonably compatible with the future incumbent of the office. I should be interested to know the range of methods of communication. Anyone who has been in the Government or who aspires to be in the Government knows that there is a range of methods and modes of communication that do not have to be absolutely formalised. The Conservative party has operated for centuries on that basis, as have all political parties.

I do not have the slightest anxiety about any malevolence on the part of Home Secretaries. Over the years, they have all been either competent or exceedingly competent. I have no worries that they are closet fascists, closet communists or mentally deranged. They have a great deal of input to make into the setting up, the workings and the future of the SIA. They will be the people who can integrate the various Government Departments.

I wrote an article about the myth of non-regulation, which, thankfully, no one read, because it countered the argument that I have been advancing for the past 25 years that there is no regulation in this area. In fact, there is an enormous amount of regulation and anyone who has been the Secretary of State for Trade and Industry, the Minister for Energy or a Secretary of State for Defence could explain exactly how much regulation in respect of the police or security operatives is outside the scope of the Bill.

John Bercow (Conservative, Buckingham)

Does the right hon. Gentleman believe that the Secretary of State should have the power to insist on the refusal or the granting of a licence?

Bruce George (Labour, Walsall South)

I am not speaking for the Home Office. There may be exceptional cases when such action will be necessary. If I had sensitive information that had been derived from the United States, for example, about an individual, it would not be necessary for me to drag into my office the chairman of the SIA and say, ``You will not grant a licence to that individual because I have information from X intelligence agency in the United States that he is funded by the Russian or Italian mafia. He is an undesirable person. Although I am not telling you not to issue a licence, I shall leave you to look at the file to make your own judgment.'' In some circumstances, such action would not only be desirable, but absolutely necessary.

I do not believe that such provisions will be abused. As the Minister of State said, the industry is evolving. In 20 years from now, the number of man guards will be far less because, regrettably or otherwise, technology will have supplanted them. The Home Office and other Government Departments must be able to change gear without coming back to Parliament to ask for new legislation and I believe that the Bill is sufficiently flexible to allow them to do that.

We will have the Home Affairs Committee, the Defence Committee, the statutory instrument process, parliamentary questions, private briefings with the Home Secretary, meetings with the chief executive or the chairman of the SIA and an annual report. There will be many opportunities for Members of Parliament to express their views without necessarily thinking that somewhere in the Home Office is a malevolent individual who is hell-bent on denying them the necessary information.

The Minister would be capable of providing more detail on many occasions, and that information could, quite legitimately, swiftly be made public. However, there must be many circumstances in the murky world of policing, national crime and international private security in which it is necessary for information that is transmitted not to find its way into the public domain. If the chief constable of any police authority were asked if he would be prepared for all communications to his officers or to the police authority to appear in the local newspaper, he would think that we were bonkers.

Ian Stewart (Labour, Eccles)

The hon. Member for Southport implied that the hon. Member for Buckingham had a mouth full of words, or that he raised simple but serious points. Is it not sensible to let the Minister answer them, because the other question, about whether the matter should be written into the Bill, is also impacted on by the fact that the official record of our debates can be used in courts and tribunals?

Bruce George (Labour, Walsall South)

I think that I have said enough.

Charles Clarke (Labour, Norwich South)

I enjoyed my right hon. Friend's contribution. I was a little distressed by what I can only describe as his revolutionary pessimism in saying that he thought that there was enough work to share between himself, his councillor colleagues and the rest of us. We in the Government had all hoped that after another term of the Labour Government we would have achieved utopia; there would be no complaints because we would have achieved a perfect society. I am disappointed that he does not share that ambition.

On the points made by the hon. Member for Southport, I draw the Committee's attention to clause 26 (2), concerning commencement. It states:

``The provisions of this Act, other than this section, shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint; and different days may be appointed under this subsection for different purposes.''

The process of kicking the thing off would be done by statutory instrument in the manner set out in the Bill.

The hon. Member for Buckingham made a speech in which, even more than usual, he made a tremendous mountain out of what is a small molehill. Some may say—I could not possibly—that that is his characteristic contribution to this Parliament. The power of direction in relation to a non-departmental public body is a standard provision in legislation, as we all know. It is the kind of provision that was available and was established in legislation passed by the previous Government for dealing with NDPBs. It is a routine process and I am surprised that so much could be made of it.

I will be clear; it is not the case that the Secretary of State can direct the SIA to issue or not issue a licence to a particular individual. A Secretary of State cannot issue such a direction. The licensing function is specifically conferred on the SIA and clearly set out in clauses 7 and 8. The power of direction cannot be exercised in such a way as to deprive the authority of its function. The power does not enable the Secretary of State to take over functions conferred on the authority by Parliament. That is important.

Peter Lilley (Conservative, Hitchin and Harpenden)

Is the Minister saying that the Secretary of State can only order the SIA to do things that it is not authorised to do by Parliament?

Charles Clarke (Labour, Norwich South)

I am saying that the Act has the primacy. I do not know whether, in his time as a Secretary of State in the previous Government, the right hon. Gentleman put legislation through the House dealing with NDPBs, but the power exists specifically to allow directions to be made on issues such as what might be published in the annual report of the organisation or on a range of such functions. It is a general power. The explicit meaning of the Act is that it is the responsibility of the NDPB—in this case, the Security Industry Authority—to carry out the responsibilities set out in clause 1 in the ways elaborated on throughout the Bill. It is the authority's responsibility; it is not the prerogative of the Secretary of State to usurp that authority.

John Bercow (Conservative, Buckingham)

The Minister accused me—unworthily, although entirely typically—of trying to make a mountain out of a molehill. I was doing nothing of the kind. I was airing legitimate concerns, as I will continue to do at every stage—[Interruption.] The hon. Member for Weaver Vale (Mr. Hall) can chunter and be smug from a sedentary position if he so wishes, but it will not discourage me from the pursuit of that duty.

Will the Minister acknowledge that what he is saying is argument by advocacy and not by evidence? He is simply asserting that there is no power to grant or to refuse a licence. How does he explain the conflict between that assertion and the fact that in subsection (1) of the unamended clause 2 we are told that the authority shall comply with any ``general or specific directions'' given to it in writing by the Secretary of State? It does not make an exception in relation to decisions on the granting or non-granting of licences.

Charles Clarke (Labour, Norwich South)

The point that the hon. Gentleman has not understood is that a series of functions are set out for the SIA in clause 1, including the power to grant or not grant licences. It is the SIA that, under the legislation passed by this Parliament, will have the legal authority to carry those matters through. It would not be right or appropriate for a Secretary of State to seek to usurp that function. If he turns his attention to clauses 7 and 8, he will see that the Secretary of State does have certain functions in relation to the operations set out, which we shall debate later. That demonstrates clearly that there are issues in relation to criteria. Clause 7(5) states:

``Criteria or revised criteria set out under this section shall not have effect for the purposes of this Act unless the Secretary of State has approved them.''

The Secretary of State therefore performs certain roles, which are set out, but they do not include the ability to usurp the responsibility given to the SIA by an Act of Parliament.

Peter Lilley (Conservative, Hitchin and Harpenden)

Is the Minister saying that subsection (1) cannot be used in the way suggested—for example, to direct the SIA not to give a licence to a company when, for security reasons, it is known that it would be inappropriate to do so? What he has told the Committee would rule that out. Clearly, that is not what was previously understood by the Committee. That would seem to be one of the few occasions on which the clause would be justified without the amendment for which my hon. Friend the Member for Buckingham has so eloquently argued.

Charles Clarke (Labour, Norwich South)

I am saying that the power does not exist in precisely the way indicated. I thought that my right hon. Friend the Member for Walsall, South was saying—he will correct me if I misunderstood—that information, influence and opinions are spread throughout Government by a multiplicity of different means. He was not approving the stare of Baroness Thatcher, as it were, but simply describing what he had seen. There are many such areas, as he suggested. If the right hon. Gentleman is asking whether the Secretary of State has a right to direct the authority to issue or not issue a licence to a particular individual or company, the answer is no.

Nick Hawkins (Conservative, Surrey Heath)

I am listening carefully to the Minister, but does he not recognise that what he is setting out as the Government's position is directly contrary to the letter that his ministerial colleague, Lord Bassam, wrote to my noble Friends in relation to the Bill? The terms of that letter were set out by my noble Friend Viscount Astor at column 1362 of the Official Report on 1 March 2001. It stated:

``I remain of the view that there may be very limited circumstances in which the use of a confidential direction may be necessary, for example, directions naming individuals or particular companies and consequently we should not place a requirement on the face of the Bill for all directions under Clause 2 to be published''.

That is a quotation from a ministerial letter relating to the clause. It is specific about what the Government were taking power to do.

Charles Clarke (Labour, Norwich South)

I had planned to address that matter later. The hon. Gentleman has misunderstood—although not, I think, maliciously—the point that has been made. As my noble Friend stated, it is conceivable that a Secretary of State might feel sufficiently concerned about the activities of particular individuals or companies to direct the SIA to investigate them. There is a difference between that and the argument erected by the hon. Member for Buckingham, which concerned the issuing of licences against SIA decisions, and therefore usurping its power. If I have not sufficiently dealt with that matter I will give way later, but I want to make more progress in addressing the points that have been made.

As I indicated earlier, if directions are given, they are likely to relate to relatively routine matters, or conceivably to sudden or unusual circumstances to which the Secretary of State wants the SIA to respond, perhaps swiftly: he might be sufficiently concerned about the activities of particular individuals or companies to decide to ask the SIA to investigate them. I am not suggesting that those are likely scenarios, but a prudent Government would wish to be able to address them if they arose. If a directive were to be given about the activities of an individual or company, making it public at the outset might defeat the objective of achieving a confidential report. The hon. Member for Buckingham asked whether there were cases in which a directive should not be made public, and I suggest that that is one such example.

The Government believe that in the overwhelming majority of cases it would be right, and a matter of course, for directions to be placed in the public domain at the time that they are made, but that there are circumstances in which that might not be right.

My noble Friend Lord Bassam did not fully describe the limited and sensitive circumstances in the letter to which the hon. Member for Surrey Heath referred, because they are likely to be so rare and unusual that it is difficult to conceive of them. He suggested that, although it might be necessary to direct that there should be an investigation, it might be prejudicial to make that direction public at the outset.

Finally, I want to offer a little commercial for the Government. We passed the Freedom of Information Act 2000. That empowers individuals by enabling them to request to see directions when they arise, as all information held by public authorities is covered by the Act. That is another weapon in the armoury that my right hon. Friend the Member for Walsall, South described when he was discussing parliamentary actions that can be taken in particular areas. The Government put that weapon on the statute book. Its practical effect is to enable the public to look directly at situations and to place information in the public arena.

It is also important to take account of the Act's disqualifications: one of its exclusions concerns instances when disclosure is prejudicial to the conduct of public affairs. I am trying to describe an example of that. A direction to look at a particular individual or company could be prejudicial to the effective conduct of public affairs, so the situation should be allowed to stand as it is. That is the basis on which I ask the Committee to consider the amendment, and on which I ask for it to be withdrawn or voted down.

Nick Hawkins (Conservative, Surrey Heath)

I have listened to the Minister's attempts to resolve the conflict between what he is saying with the contents of his noble Friend's letter. My noble Friend Viscount Goschen said:

``I understand the natural desire of Home Office officials to issue the Minister with a `get out of gaol free card' to sew into the lining of the back pocket of his coat for some eventuality that may arise in the future which had not been considered.''—[Official Report, House of Lords, 1 March 2001; Vol. 622, c. 1365.]

That is an accurate description of the Minister's argument, which is that he cannot anticipate future circumstances, but in case the Security Industry Authority is not able to listen to informal advice a future Secretary of State may have to issue a direction. If that were the case, should we in Parliament not know about it? That is precisely the point of the amendment.

Charles Clarke (Labour, Norwich South)

That is a point for the hon. Gentleman to make in his winding-up speech. I was asked to give examples. They ranged from the relatively trivial direction to include certain uncontroversial aspects in the annual report to the possibly delicate and sensitive direction to investigate a particular company or individual. I acknowledge that that would be a rare circumstance. It would not necessarily be in the public interest for such a direction to be in the public arena, because that would of itself inhibit the purpose of the direction and the activities of the authority.

I do not accept the universality of the amendment. Let us suppose that certain information—whether from the security services, which is unlikely, or from any other source—causes an investigation into a particular security company. If such information were made public, the criminals in that company would cover their tracks before they could be examined properly. I cannot accept that that is in the public interest. That is why I reject the amendment, which, in such circumstances, favours telling the criminals beforehand that they are about to be investigated. That is not a good way in which to proceed. I urge the hon. Member for Buckingham to withdraw the amendment. If he is not willing to do so, I shall ask the Committee to vote against it.

John Bercow (Conservative, Buckingham)

The Minister of State was at his least convincing. He said that the power is relatively narrow. We fear that, by contrast, it is broad. The right hon. Member for Walsall, South declined to say whether he thought the power was narrow or broad, but he explained why he can envisage circumstances in which a relatively broad power would be justified. That is at the heart of the matter. The right hon. Gentleman, in explaining that it might be legitimate and desirable in certain circumstances for the Secretary of State to require the authority not to issue a licence, invoked more information being made available to the Secretary of State by comparison with the free-standing Security Industry Authority.

In effect, the right hon. Gentleman said that he did not know exactly what the Minister was thinking, but looking at the matter from a common-sense point of view, it seemed that from time to time the Government will have access to information about individuals or companies that will not be available to the Security Industry Authority. He said that, in such circumstances, the Government ought to be able to say to the authority, ``We have this information. We are happy to tell you what it is either in detail or in general terms, and you should not issue a licence.'' He went so far as to say that he thought that such cases would be so obvious and incontrovertible that the authority would not argue about them. However, he conceded that, even if the authority were minded to argue about the matter, the Secretary of State should be able to insist on his decision being taken.

The stance of the right hon. Gentleman is eminently respectable. He went on to defend it. In fairness, it is a different stance from that of the Minister, which is murkier and less defensible. I do not want to be uncharitable. I have been more than charitable to the Minister in previous Standing Committees, but I have greater regard for the candour of the right hon. Member for Walsall, South than for his. In a poor and unconvincing winding-up speech, he simply argued by advocacy, not evidence. My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) speedily picked up on that. The Minister just said that the Security Industry Authority has the power and responsibility for decisions about licences. That is not supposed to be the business of the Secretary of State.

Clauses 7 and 8 describe the powers available to the SIA that, admittedly, relate to licensing. What makes hon. Members think that the Secretary of State would wish to interfere in that process, or could do so? The answer, which is why my hon. Friends and I are minded to press the amendment, is the broad and potentially all-embracing power that the Government have decided to confer on themselves in the unamended clause.

The hon. Member for Eccles made an interesting point about the admissibility of evidence and proceedings that could be invoked in cases of conflict that go to the courts. I acknowledge that, but we must have an overwhelming concern about what is in the Bill, rather than the utterances on a particular occasion by a given Minister who, by definition, whatever his or her merits and whether he or she is destined to go upwards or downwards, is a here today and gone tomorrow—or the day after tomorrow—Minister. What matters is what is in the Bill. [Interruption.] I am grateful for the encouragement of my right hon. Friend the Member for Hitchin and Harpenden. He has taken many Bills through the House—rather more than any other member of the Committee. I am concerned by the specific reference to ``general or specific directions'' given to the authority by the Secretary of State.

Apart from transparency, scope is the central point about which I am overwhelmingly concerned. The Minister said, in response to the invocation of my hon. Friend the Member for Surrey Heath of the comments of Lord Bassam, that the reference to particular individuals or companies is simply a reference to the power that would be taken to direct an investigation. I should be grateful for the Minister's attention at this point because, if I am to criticise his argument, as I shall, it would be helpful if he would confirm what his argument is.

The Minister seemed to say that there would a power to provide that the Security Industry Authority ``should look at'' a particular individual or company. When challenged by my hon. Friend the Member for Surrey Heath, he insisted that the power did not go beyond that: the Secretary of State could insist that someone should be investigated or examined in more detail, but he could not insist on the primacy of his judgment over that of the authority. However, the problem with that is that it is not what the unamended clause states. If the Minister is adamant that the Secretary of State would in no circumstances insist on his view over that of the authority, why does it not say so in the clause?

Charles Clarke (Labour, Norwich South)

The reason that I accused the hon. Gentleman of making a mountain out of a molehill—I have difficulty maintaining an active attention when he goes through the matter in such a pettifogging way—is that if he examines clause 1(2)(a), he will note that it states that the functions of the authority shall be

``to carry out the functions relating to licensing and approvals that are conferred on it by this Act''.

That is a function of the authority, not of the Secretary of State. That is the point.

John Bercow (Conservative, Buckingham)

Actually, that is not the point. First, let me deal with the nonsense about pettifogging. The Minister ought to understand—let him learn it once and for all—that it is precisely the responsibility of the Committee to scrutinise the Bill in detail. If he is so obviously preoccupied with his ascent up the greasy pole of politics that he does not understand that that responsibility is incumbent not only on Opposition members of the Committee but on every member, it is time that he learned that. That is the first point, of which the hon. Member for Weaver Vale, who frankly does not understand much of what we are debating, does not have the slightest comprehension.

Secondly, clause 1, to which the Minister referred in defence of his position, confers the responsibility on the authority but does not make it clear that it is its exclusive responsibility. Sure enough, responsibilities are granted to and powers are conferred on the Security Industry Authority, but the Bill does not state that the matter is exclusively the authority's concern and that in no circumstances can the directional power of the Secretary of State touch on the exclusive discretion of the authority in granting or not granting licences. If that is how the Secretary of State wants us to understand the matter, it is incumbent on the Government to draft their legislation such that the matter can brook no doubt, but they have not chosen to do so.

Peter Lilley (Conservative, Hitchin and Harpenden)

Is my hon. Friend aware that not only does the Bill not exclusively give the SIA that authority, but clause 13 states:

``The Secretary of State may by order make provision for local authorities to carry out some or all of the Authority's relevant licensing functions''?

John Bercow (Conservative, Buckingham)

That is a helpful additional point on which I had not focused. It directly cuts across, contradicts and undermines the Minister's claim that these are matters only for the authority. They are matters for the authority, but that is not the same as saying that they are matters only for the authority.

The Minister says that the investigation is all that the Secretary of State has the power to direct. The trouble is that that is inconsistent with the perfectly reasonable point made by the right hon. Member for Walsall, South that the Secretary of State might have information provided to him by agencies that is not available to the Security Industry Authority. On the strength of that information, he might want to advise or direct the authority to grant or not to grant a licence. The Minister said a few moments ago by way of a subordinate clause of a sentence that it was unlikely that information about a particular individual or company would reach the Secretary of State via the intelligence services, although he did not explain why he thought that. I hope that he would accept that it is possible that such information might reach the Secretary of State and cause him to doubt a judgment reached by the SIA without that information being available to it.

If the Minister and his Department have come into possession of information that the SIA does not have, does the Minister not understand that in such circumstances the Department would not be asking the authority to conduct an investigation? In such circumstances, the SIA would not be the appropriate authority to conduct an investigation, because it would be doing so without information that the Secretary of State had and that made him believe that he was in a better position to reach a decision. Why then can the Minister not understand that a Secretary of State might want to insist on his preference, as opposed to that of the inadequately informed Security Industry Authority?

It is perfectly imaginable that such a scenario could arise. Interestingly, the Government, who are breathtakingly arrogant about such matters, are hypersensitive. Perhaps that is because we sometimes attack them, justifiably, with some vigour.

I am perfectly prepared to concede that a scenario such as the right hon. Member for Walsall, South describes could arise. Ministers might have information provided to them that the SIA does not have. In such circumstances, they would not be asking for an investigation to be conducted. They would probably be saying that, given the incontrovertible information that they have, a licence should not be granted: ``Please do not do so'', or ``Thou shalt not do so.'' I am saying not that that is necessarily objectionable but that such a scenario is likely to arise, so the Minister should be prepared to clarify the extent of the power in the Bill. He should not pretend that a situation might or might not arise, or that the Government are proposing to confer on themselves a lesser power than that which they are intent on conferring.

Charles Clarke (Labour, Norwich South)

I simply wanted to kill off the red herring that the right hon. Member for Hitchin and Harpenden raised in relation to clause 13. It is the point that I have been seeking to make throughout my response to this debate. Clause 13 states:

``The Secretary of State may by order make provision for local authorities to carry out some or all of the Authority's relevant licensing functions in relation to such cases and such areas, and for such purposes, as may be specified or described in the order.''

Clause 13(3) describes the order referred to. It states that such an order may

``impose such conditions and requirements in respect of the carrying out of any of the Authority's relevant licensing functions by a local authority as the Secretary of State thinks fit''.

The point that it makes is that the Secretary of State's ability to make an order is within the context of the remit of the authority as a whole. There are many local authority licensing schemes, for example, in relation to bouncers at nightclubs, in respect of which it may be appropriate for the local authority to continue that role. As is made clear, the Secretary of State's power is within the context of the overall responsibility of the SIA, under clause 1, to carry out that function. The Secretary of State must act within that framework.

John Bercow (Conservative, Buckingham)

That is very interesting, but I do not think that the Minister has even managed to persuade himself. He certainly has not persuaded any sensible, dispassionate and attentive member of the Committee, although I recognise that that excludes a substantial number of Committee members, who are not interested in the details of the argument at all.

Mike Hall (Labour, Weaver Vale)

That is so arrogant.

John Bercow (Conservative, Buckingham)

The hon. Gentleman chunters from a sedentary position, but he has not followed the argument, and does not understand the point. He cannot recognise the conflict between the Minister's assertions and the terms of the Bill, which confer extensive power. That is the reality.

Ian Stewart (Labour, Eccles)

I have been following the argument, as I am sure the hon. Gentleman recognises. I ask him to withdraw one comment: he asserted earlier, as I am sure the record will show, that the Bill does not, as my hon. Friend the Minister said, provide the SIA with the power to give or not give licences. I hope that he did not mean to imply that, but that provision is in clause 1(2).

John Bercow (Conservative, Buckingham)

I absolutely concede that. The record is always the exclusive arbiter in such matters, but I certainly intended to give no such impression. If the hon. Gentleman looks at the record, I think that he will see that I did not say that. Of course the provisions of the Bill empower the Security Industry Authority to make decisions on such matters. However, I did say—which may have led him to make his observation—that the terms of the Bill do not make it clear that that is the exclusive preserve of the SIA. In fact, I used the word ``only'' in that regard—the Bill does not make it clear that that is a matter only for the SIA. If the Minister is suggesting that that is the case, there is no reason why we should not have the additional safety net of including such an assurance in the Bill.

I am disappointed by the Minister's comments, because he has not provided a justification of his position. The power could be more widely used—I am not even arguing that it would be used for bad purposes—but he is trying to argue that it is a relatively limited power, and that all that is possible is the direction to the authority to investigate. It is more likely that the Government imagine that they have a reserve power to insist on their point of view. If that is what they want, and what they recognise that they might wish to exercise, the matter should be debated on its merits—on the basis of whether it is a good or bad idea—and the Bill should state clearly that that is what the Government have in mind. As it stands, the clause is worryingly broad. It is open to use for purposes that the Government are not acknowledging, let alone defending. That is an unsatisfactory state of affairs because it does not make for clarity of law, which is what we should seek to establish. The Minister's concluding remarks were unsatisfactory, and I urge my right hon. and hon. Friends to support the amendment.

Peter Lilley (Conservative, Hitchin and Harpenden)

I had not intended to speak in this debate, but I have been stirred to do so by the case that has been made by my hon. Friend the Member for Buckingham.

The Committee's duty is to scrutinise the legislation: its task is to establish the Bill's meaning and to ensure that it will achieve what we want it to achieve. The Minister, perhaps a little flustered by the difficulties that he experienced in adequately explaining the meaning of the clause, described the scrutiny that it was receiving as pettifogging. So be it. It is our duty to establish the meaning of the Bill clause by clause.

I entered Parliament with the objective of trying to limit the powers of Government and to minimise the discretion of Ministers, ensuring that where discretion has to be exercised, Ministers are accountable and transparent in their actions. The clause appears to give very broad powers to Ministers: it gives them discretionary powers and it does not make them transparently accountable to the House in the exercise of those powers. The amendment would at least set right some aspects of those discretionary powers by making the exercise of them transparent.

Two issues have emerged in the course of the debate. First, is it reasonable to give such powers to the Secretary of State? Secondly, does the clause give him those powers, as it appears to, or does it not, for the reasons given by the Minister?

There is a reasonable case for giving the Home Secretary those powers. That was explained by the right hon. Member for Walsall, South. Circumstances could arise in which the Home Secretary was in possession of information from the security services that he could not divulge, even to the SIA, because it would compromise the sources from which he obtained it, but that made it advisable in the public interest that the SIA be directed not to license a particular firm.

Those powers were not on the statute book when I was Secretary of State for Trade and Industry. However, three weeks after I was appointed to the post, Saddam Hussein invaded Kuwait, and we possessed information that there were two or three companies in this country that were beneficially owned by the Kuwaiti authorities, so I had to act to nationalise those companies. That was an uncharacteristic decision, and I was probably the last Conservative Minister to nationalise a company, but an exceptional power was on the statute book, and on that occasion it was necessary to exercise it in the national interest.

It might be the case that the Bill gives the Home Secretary similar exceptional powers to exercise in the national interest. If the Minister had come to the Committee and said that that was the case, we would have listened sympathetically, although we would also have tried to restrict and limit the exercise of those powers to particular circumstances. We would have wanted to ensure that his actions were as accountable and transparent as possible, but we might have accepted that there was a case for no transparency in such circumstances: for example, the Secretary of State might wish to exercise those powers without that being known to a criminal or a foreign hostile power.

There is a case for the clause as it stands. However, the Minister said that the Bill does not give the Secretary of State the power to direct the SIA specifically and generally and that he was not taking the power to direct the SIA to do anything that it is empowered to do under the Bill. He intervened to make such an extraordinary statement. It can mean only that he is taking powers to direct the SIA to do things that it is not empowered to do under the Bill. When I said that to him, he floundered.

My question needs answering. The Home Secretary will have the power to direct the SIA either to take action that it is empowered to do under the Bill, or to do things that it is not empowered to do under the Bill. We can rule out the latter. It could not be possible for the Home Secretary to have powers to direct the SIA to do things that it is not able to do, but it is possible that the Bill grants the Home Secretary the power to direct the SIA to do things that it is empowered to do, and to tell it specifically which way to jump.

The Minister said that the Home Secretary could tell the SIA to carry out an investigation. It is not clear to me how he can read that into that lucid wording of clause 2(1), which states:

``In carrying out its functions the Authority shall comply with any general or specific directions given to it in writing by the Secretary of State.''

Why should the SIA respond to the Secretary of State if he asks it to undertake an inquiry, but not if he asks it to reach a particular conclusion at the end of that inquiry? I know of no legal maxims or case law that would justify the extraordinary assertion of the Minister that the clause does not mean what it appears to mean. He made that assertion off the top of his head.

John Bercow (Conservative, Buckingham)

I understand and entirely endorse my right hon. Friend's point. Does he not agree that if the Secretary of State had available to him, courtesy of the Security Service or others, damning information that the SIA did not possess, he would in those circumstances not even be directing that an investigation should take place? He would be directing that, in the light of that additional intelligence, someone who would otherwise have been granted a licence should not be granted a licence. Why does the Minister not own up to that fact? It is so obvious.

Peter Lilley (Conservative, Hitchin and Harpenden)

My hon. Friend is absolutely right. Does the wording of clause 2(1) empower the Secretary of State to tell the SIA what to do and what type of action it can take? A quick perusal of the Bill, which I had not previously committed to memory, shows that clause 9 refers to

``The power of the Secretary of State to prescribe the conditions on which a licence must be granted and the power of the Authority to impose additional conditions''.

The Secretary of State has a lot of power. Clause 13 states:

``The Secretary of State may by order make provision''.

The Minister attempted to argue that the Bill implies that the Secretary of State can only take certain action without curtailing the authority's power to make decisions. Yet clause 13 states that the Secretary of State can take away from the authority the power to make decisions and give it to other bodies. That shows that it is reasonable for us to interpret clause 2(1) as requiring the authority to exercise its functions in a specific way.

To reach such conclusions, the Minister of State must have lost touch with the use of the English language and be in an Alice in Wonderland-type world where words mean what he says they will mean. What wording would he have to insert into the Bill to give the Home Secretary the power to direct the authority to comply with a direction to refuse a licence to a particular company? In other words, how would he word a clause to mean the same as clause 2 seems to mean to every member of the Committee—except him—and those in another place who have discussed the matter, including his colleagues? If he is saying that it is impossible to find a form of words that would enable the Home Secretary to have such a power, he has just shot himself in both feet and he had better return to the Committee in a more reasonable frame of mind after lunch.

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 10.

Clause 3 - Conduct prohibited without a licence

John Bercow (Conservative, Buckingham)

I beg to move amendment No. 43, in page 2, line 31, at end insert—

`(1A) For the purposes of subsection (2), ``licensable conduct'' includes only conduct which is carried out in return for payment.'.

Joe Benton (Labour, Bootle)

With this it will be convenient to take amendment No. 44, in page 2, line 31, at end insert—

`(1A) For the purposes of subsection (2), ``licensable conduct'' includes only conduct which is carried out in return for payment in excess of such amount as may be specified by order made by the Secretary of State.'.

John Bercow (Conservative, Buckingham)

Amendment No. 43 is designed to clarify the clause and to demonstrate beyond doubt that licensable conduct is conduct that is carried out in return for payment. Amendment No. 44 is a little more explicit. Both amendments concern issues that were raised in another place on 30 January by my noble Friends at columns 604-609 of the Official Report. We are anxious to probe a legitimate issue. How far down the scale is it intended that the Bill should reach in terms of licensable conduct? Obviously, it will include firms that supply security guards on contract in return for payment. We come again to the issue of whether something is permissive but broad, or explicit and limited. As the unamended clause stands, we do not know how tightly drawn the proposal is, which is why the amendments are designed to establish beyond doubt that what is involved is conduct that is carried out in return for payment.

I think that the Government are inclined to argue that that is what they have in mind, but it is not clear from the Bill that that is what is permitted. Firms that provide security guards on contract in return for payment are covered, but how far will the clause extend into the grey areas of licensable conduct? Let us consider, for example, someone who is unpaid or someone who is paid a small sum to look after the door at a local event, perhaps in extremis; in circumstances that could not have been envisaged beforehand. The sum involved might be small—£5, for example—but would such a circumstance be covered? That is not entirely clear.

How will the Bill affect people who may perform security-related activities on a one-off basis and without payment. In another place, my noble Friend Lord Cope of Berkeley cited the example of someone acting as a door supervisor at a charity jumble sale. Would such a person be caught by the provisions of the Bill? I want to establish not Ministers' personal preference as to the interpretation of the clause, but what, on legal advice and justification, they are at liberty to say that the Bill allows.

How will churchwardens and other volunteers who might have a security role be affected? It may be that, at the event in question, their exclusive duty—not even their main one—is to act in a security capacity, even though their normal role is that of churchwarden or another similar, or dissimilar, function. In such circumstances, would the exemptions in schedule 2 be sufficient to stop them being affected?

How would the provisions of schedule 2—which, clearly, is inextricably bound up with the consideration of this clause and amendments thereto—relate to someone who held his or her neighbour's house keys and otherwise looked after his or her neighbour's house while that neighbour went on holiday? Would such a person be covered by the existing wording? The answer is probably that the Government would not want that, but how can we be sure beyond doubt that the provisions of the Bill could not be so extended, for example, if the house were especially large, and the burden of responsibility were considered especially great, not least if the property in question had been subject to professional criminal invasion on previous occasions? We need to be sure that such a person would not be caught by the provision, because that person might have a primary and even exclusive responsibility for guarding that property for the period in question. Would he or she be covered? If not, how can we be certain?

I am aware that Lord Bassam of Brighton went some way towards seeking to assuage those concerns on 13 January. Will the Minister not only assure us that the Bill is not intended to catch the sorts of activities that I have described, but, as Minister of State at the Home Office, assure us unequivocally that its scope could not, under any circumstances, be so extended? It is not yet clear that we have received an assurance of that kind.

The Minister, characteristically but equally unfairly, accused me earlier of making a mountain out of a molehill. I was doing nothing of the kind; as he knows, I will never be dissuaded from exploring legitimate issues on behalf of my hon. Friends simply because of such downmarket, low, music hall abuse. However, the point can be made, and has been made, simply. I hope that the Minister can provide the reassurance sought. On the strength of that explanation, I rest content that I have made the point that I wish to make.

Rosie Winterton (Labour, Doncaster Central)

I want to speak briefly on the matter, because I fear that my constituents, who have suffered at the hands of wheelclampers, would be distressed by the amendment. Indeed, they would be so distressed that I am not sure that they should be told about it, but I fear that I may have to inform them of the actions of the Conservative party. They would be distressed because the amendment would allow wheelclamping to continue as at present, as many wheelclampers are not paid by the landowners from whose property they operate.

On Second Reading, Opposition Members expressed concerns about the activities of wheelclampers and I thought that they understood why it was necessary to license them. I also thought that they were aware that, frequently, landowners allow wheelclampers to operate on their land but do not employ or pay them, and they make it clear that that is the case. I fear that wheelclampers give under-the-counter money to landowners in return for being allowed to operate on their land, which is why the amendment was tabled in the other place. Landowners must take responsibility for what happens on their land.

I fear that the amendment will give wheelclampers free rein to carry on as before. As they are not paid for the hours that they work, they must collect fees and fines from the drivers of the cars that they clamp.

Charles Clarke (Labour, Norwich South)

I hope that I will be able to give reassurances concerning wheelclamping that my hon. Friend will find useful with regard to the arguments in her constituency. She has long campaigned about the problem, and she is right to point out that the Opposition's amendment could inhibit our ability to deal with it.

The amendment would build into the definition of ``licensable conduct'' the condition that it must be undertaken in return for payment in excess of a sum that the Secretary of State would prescribe by secondary legislation. That is intended to protect volunteers and others from regulations, and to protect small businesses from disproportionately costly legislation. I applaud that aim. Such concerns were key reasons why so many consultations were held concerning the Bill and the preceding White Paper.

First, I will deal with people who might undertake relevant activities but are not remunerated, such as churchwardens—an example that the hon. Member for Buckingham mentioned—someone who is working unpaid for a school, or the neighbour who is a key holder. Such people will not be regulated. The Bill is directed at people who provide services under contract, or who are employed in-house, such as door supervisors and wheelclampers. Such matters are covered in clause 3 and schedule 2.

The licensing arrangements do not apply to the majority of people who undertake the activities of a security operative on a no-contract or reward-free basis: the main exception is wheelclampers, and I will deal with that issue later. I hope that the hon. Member for Buckingham will accept my assurance that the kinds of people about whom he was expressing concern are not covered by the Bill.

To refer to a previous discussion about an earlier clause, the Bill also does not apply to people who carry out security-related activities that are incidental to their main employment, such as people who work with schools, churches or registered charities. However, if a school, church or charity were to hire security operatives under contract, it is right that it should expect the company contracted to have been vetted to a national standard, and licensed. If the security operatives used were employed in-house, they would be exempted from the licensing requirement and it would be the organisation's responsibility to vet its own staff.

One may imagine a school fete, which would be a substantial event with many people attending during a weekend. The school may decide that the best way to police such an event would be to bring in a company under contract for the afternoon. We believe that such a company should be covered so that the school may know that the company is reputable. I recall a St. Trinian's film about a school fete in which the contractors brought in were criminals—the hon. Member for Buckingham will know of the St. Trinian's types—and worked with the girls at the school to engage in illicit activities. I think that St. Trinian's school would have been much happier if the security company had been properly regulated.

John Bercow (Conservative, Buckingham)

With respect to the Minister's slightly unnecessary aside, my experience of such matters is confined to Finchley Manorhill comprehensive school in Finchley. I cannot comment on his public school experiences.

I took on board the Minister's comments about charitable functions. Can I establish that he is not arguing—or, if he is, that he can justify it himself—that a contract always either implies or presupposes remuneration? Is he not prepared to admit that there are circumstances in which a contractual arrangement may not involve payment?

Charles Clarke (Labour, Norwich South)

I have not addressed that point before now. I have always assumed that a contract involves payment for services rendered, although it may be indirect. Would someone provide a service to another—in whatever form and whatever the nature of the contract—for love or whatever? I do not know, but I will consider the matter.

John Bercow (Conservative, Buckingham)

I am talking about the charitable context.

Charles Clarke (Labour, Norwich South)

I understand that. The only exception to the general principle that I have described relates to the special case of wheelclamping. In that case only, the clause extends regulatory controls to others, such as landowners and those acting on their behalf, where they do not use a licensed contractor, but do their own clamping and charge a release fee. In case what I said on Second Reading in column 1058 should lead to any misunderstanding, I wish to make it clear that volunteers who engage in wheelclamping that involves a release fee would need a licence.

I turn to the exemption of activities below a level at which the Secretary of State would prescribe; the small business issue. During our consultations, we were warned about the dangers of excess regulation and cost, and we do not intend to go down that road. Regulation must be consistent, and it would be confusing and difficult to administer the exemption of small businesses from licensing. However, most importantly, that would exempt some of the businesses that are the source of much of the public disquiet that the Bill seeks to address. It is generally not the big reputable firms that harass the public by employing violent or abusive door supervisors, or who demand money with menaces from innocent wheelclamped motorists, but small companies, organisations and individuals who are the furthest from a reputable and non-criminal practice and must be regulated.

Under the amendment, a small company could be exempt from licensing because it carried out small jobs below the envisaged reward threshold, but would need to be licensed for a bigger job above any threshold that we put forward. The confusion involved in that could be a genuine difficulty. I acknowledge the need to protect small businesses, but the Bill is balanced, targeted and, generally, welcomed by the industry. I hope that I have provided clarification, and that the amendments will be withdrawn.

John Bercow (Conservative, Buckingham)

I am rather more encouraged by the Minister's response to this set of amendments than I was by his response to amendment No. 19, and we do not intend the press the amendments. I should be grateful if he would consider seriously my point about contracts that do not require payment or other remuneration.

The Minister mentioned small-scale events, such as a person who undertakes to protect a house. His comments struck me on the whole as being reassuring, although I should like to examine them again in the Official Report. We may return to the matters at a later date if we are not fully satisfied, but the thrust of his comments was encouraging and satisfactory.

I point out, as I regularly do—I say this as a matter of pride to the hon. Member for Doncaster, Central—that I am not a lawyer. I cannot be absolutely certain that our amendments would not have the effect that she describes, but I do not believe that they would, and they are certainly not intended to do so. I do not believe that she is right. Her point about landowners permitting wheelclampers to operate on their land but not paying them is true, but it does not meet my point that they are nevertheless engaged in commercial activity and secure a return for it. Having considered the matter, I am not clear in my mind why the amendments would give them carte blanche. We certainly do not want or intend them to do so. As she knows from the effusive terms of my congratulation to her on Second Reading, I endorse and applaud her work on the subject. I do not believe that anything that we are suggesting would undermine it, but as we do not intend at this stage to press the amendments, the hon. Lady can rest assured.

Rosie Winterton (Labour, Doncaster Central)

The amendment states that

```licensable conduct' includes only conduct which is carried out in return for payment.''

I do not understand how that would cover the problems of wheelclampers. I still feel that it would allow them to continue working as they have been and would not enable them to be licensed.

John Bercow (Conservative, Buckingham)

I do not believe that that is true, because such operators are ultimately rewarded. They would be prevented from continuing excessive, damaging and in some cases obnoxious and threatening activities.

I shall not press the amendments to a Division at this stage, in contrast to amendment No. 19, about which my hon. Friends and I feel especially strongly. I remind the Minister of the commitment that he made. I hope that he will feel able to reply to me in writing about the anxiety that I aired—to which he said that he had not previously given any thought—before we reach the next stage, or, if I may elliptically refer to it, before another event might intervene. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ronnie Fearn (Liberal Democrat, Southport)

I beg to move amendment No. 20, in page 2, line 40, leave out from `activities' to end of line 42.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss amendment No. 21, in page 2, line 42, at end insert

`or as required for the purpose of, or in connection with, any contract he has with his employer.'.

Ronnie Fearn (Liberal Democrat, Southport)

I am not sure whether we shall have time to debate the amendments before lunch or, indeed, whether we shall break for lunch.

We welcome the introduction of mandatory licensing for individuals, which involves all aspects of the private security industry. It goes to the heart of the Bill's intentions in ensuring that certain minimum standards are met. We also welcome the Government's clarification in the other place of who is subject to licensing and who is not. However, if the Bill is to ensure that the entire industry is subject to the same standards, why are licenses not required for in-house operatives? That is the basis for the amendment.

My noble Friend Lord Thomas of Gresford pressed the Government on the matter in the other place and has still not received a decent answer. Perhaps the Minister will answer me today. We support the need for licensing, but why are the Government allowing for a loophole by excluding in-house operatives? Under the amendment, clause 3(2)(b) would stop at the word ``activities''. The other words—

``for the purposes of, or in connection with, any contract for the supply of services under which his employer is or may be so required''—

would be removed. I am not sure what those words mean. Perhaps the Minister will explain.

On amendment No. 21, would it not be more appropriate to add at the end of line 42

``or as required for the purpose of, or in connection with, any contract he has with his employer''?

In other words, if paragraph (b) is to be retained in its entirety, the wording in amendment No. 21 should be added.

It being One o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Four o'clock.

Standing Committee B

Private Security Industry Bill [Lords]

Nicholas Winterton (Conservative, Macclesfield)

I understand from the Clerk that modest progress was made this morning, but I am sure that, under my expert Chairmanship, greater progress will be made this afternoon. Clause 3 Conduct prohibited without a licence

Clause 3 - Conduct prohibited without a licence

Nicholas Winterton (Conservative, Macclesfield)

I remind the Committee that with this we are taking amendment No. 21, in page 2, line 42, at end insert

`or as required for the purpose of, or in connection with, any contract he has with his employer.'.

Ronnie Fearn (Liberal Democrat, Southport)

You referred to modest progress, Mr. Winterton, but I was not guilty of contributing to that. Too many words were, perhaps, spoken before I rose to speak to my two amendments, but they were dealt with in four minutes, which is more than modest progress.

The amendments question the wording of lines 40 to 42 of page 2. I was asking for more information about the loophole created by excluding in-house operatives, and I look forward to the Minister's reply to that.

Nicholas Winterton (Conservative, Macclesfield)

I congratulate the hon. Gentleman on his succinctness.

Charles Clarke (Labour, Norwich South)

I welcome you to the Chair, Mr. Winterton. My only concern about what you said is whether ``modest'' is too mild a term to describe what happened this morning, although the hon. Member for Southport (Mr. Fearn) spoke to his amendment in an admirably succinct manner.

This is an important amendment. The point that it raises was debated at length on Second Reading, and in the other place. The hon. Gentleman has raised a series of serious points with regard to the judgments that are made about what to include in the Bill. Many Members of all parties have concerns about the matter. Some of my right hon. and hon. Friends spoke about it on Second Reading, and I am delighted to have an opportunity to return to it.

The White Paper envisaged that in-house manned guards would be included in the licensing regime but, after lengthy and detailed consideration, we decided not to do that at this stage. We concluded that to require all in-house manned guards to undergo two vetting processes—by the employer and by the authority—could add a further burden of bureaucracy on to businesses. It would also have the effect of adding enormously to the already large number of people whom the authority will need to licence when it is up and running—the estimates range from between 300,000 and 350,000 people—and we felt that it was important to establish the authority and to clarify its aims without giving it such an enormous amount to bite off that it might make its task more daunting.

The Bill regulates some in-house staff, particularly door supervisors and wheel clampers. We focused on those particular groups because they can exercise considerable influence and power over people who might be young or vulnerable, or both. However, the White Paper generated substantial representations that led us to conclude that it was reasonable, at least for the time being, for companies to continue to satisfy themselves about the probity of their employees and potential employees. A distinction must be drawn between such situations and those in which services are provided under contract and the person hiring the services must place a greater degree of trust in the probity of the hired staff.

The hon. Gentleman raised questions about lines 40 to 42 of page 2. They are intended to refer to people who have engaged in contracts in the way that I have indicated. We are aware of arguments for their inclusion in the regulatory regime established by the Bill. As I noted earlier, we shared those views at the time of our White Paper. We understand the argument that has been advanced to the effect that not licensing in-house manned guards could lead to companies switching from contract staff to in-house staff because it will be cheaper and that that will, in turn, lead to deteriorating standards in those companies. That is a serious argument for including in-house staff.

I have no doubt that the Security Industry Authority will be receiving such arguments and that it will pay close attention to them as part of its general duty to keep the industry and the operation of legislation under review. The Government will listen carefully to arguments from the authority, and that is one of the reasons why we have structured the first part of the Bill as we have. It will ensure that such issues are kept under review. That is the reason for our balanced judgment. I acknowledge directly that real arguments are being advanced by the hon. Gentleman. It is not a specious point. It is a serious issue, as we said on Second Reading. Our judgment is that we should start the authority's operation by biting off what we can chew most effectively and then examine the situation as it moves forward to see how the operation needs to be developed. That is the reason for such a formulation.

Nick Hawkins (Conservative, Surrey Heath)

The Minister is giving a serious response to the hon. Member for Southport. I agree that such issues are important. They took up some time both on Second Reading and in another place. The hon. Gentleman will be aware of the issue in relation to the Transfer of Undertakings (Protection of Employment) Regulations 1981, which was raised in another place by Lord Gladwin of Clee. As the Minister knows, whether in-house guards should be covered by the new authority has been very much a live issue because the Government changed their mind between the White Paper and the Bill. Is he willing to say a little about TUPE, so that we can have his comments on the record to assist those in the industry who are interested in such issues?

Charles Clarke (Labour, Norwich South)

I was not intending to say anything specific at this stage about TUPE, except that I know Lord Gladwin of Clee very well. As the hon. Gentleman may know, he was a distinguished trade union official for a long time and the regional organiser for the GMB. He also served under the Labour party before he became a Member of the other place. In that capacity, he worked closely with my hon. Friend the Member for Eccles (Mr. Stewart) and the Transport and General Workers Union. He spoke with great authority and we listened carefully to his views. He came to the judgment that we arrived at.

TUPE does apply. I do not think that I can add anything further at this stage. I had not intended to say anything about the matter and I am loth to go beyond that simple statement.

John Bercow (Conservative, Buckingham)

No brief.

Charles Clarke (Labour, Norwich South)

The hon. Gentleman is quite right. I do not have a brief on such matters. As I have said before in Committee, given the choice of answering in an informed way or an ill-informed way, I prefer to answer questions in an informed way. Indeed, I was criticised by the right hon. Member for Hitchin and Harpenden (Mr. Lilley) this morning for responding in an ill-informed way to some of the debate. I shall think about whether there is further information about TUPE that might help the hon. Member for Surrey Heath (Mr. Hawkins).

Nick Hawkins (Conservative, Surrey Heath)

The Minister has been forthright and open in saying that he does not have a brief on such matters. I am slightly surprised at that because when the matter was dealt with in another place, in response to Lord Gladwin of Clee, Lord Bassam said:

``If he has further questions, we shall try to deal with them during the Bill's passage through the House.'' —[Official Report, House of Lords, 5 March 2001; Vol. 623, c. 14.]

It seems odd that the Minister has not received that brief by now.

Charles Clarke (Labour, Norwich South)

I have a substantial brief. My noble Friend in the other place is quicker on his feet than I am in dealing with such matters. However, I had not prepared myself to respond in detail to such points that were raised in an intervention. If the hon. Gentleman, or other members of the Committee, wishes to raise further points on the matter, I shall be happy to deal with them.

I urge the hon. Member for Southport to withdraw his amendment on the basis of our assurance that such a process will move the operation of the authority into an effective regime.

Bruce George (Labour, Walsall South)

Despite what you might think, Mr. Winterton, I was not responsible for the delays this morning. I read my contributions, was profoundly embarrassed, and determined to be briefer. If the Minister is not able to make his speech, it provides me with the opportunity of making it for him.

We recognised, in the production of the consultative paper, that the inclusion of in-house security alongside contract security was correct, and in response to a written question from that brilliant Member of Parliament, the right hon. Member for Walsall, South (Mr. George), the Minister, stated:

``Around 180 responses were received to the White Paper `The Government's proposals for Regulation of the Private Security Industry in England and Wales' (CM 4254) published in March 1999. Those respondents opposed to the regulation of in-house employees were:

Theatrical management association and Society of London Theatre

Museums and Galleries Commission

The National Trust

Association of Leading Visitor Attractions

A member of the public.''—[Official Report, 28 March 2001; Vol. 365, c. 709W.]

In the light of the fact that 175 out of the 180 organisations and individuals said that they were in favour of in-house security being included, the arguments were so overwhelming that we were prepared to carry on with the proposals in the consultative paper for including in-house security. I thank hon. Members for persuading me likewise. The logic of hon. Members' arguments was so overwhelming that I am going to tell the better regulation task force to worry about aspects of regulation other than the private security industry.

If the Minister would accept my speech as his, it would save us from dealing with a more protracted speech later, when we consider in more detail the appalling omission of in-house security from this legislation.

Ronnie Fearn (Liberal Democrat, Southport)

I want to comment on a phrase used by the Minister. He said that he thought that between 300,000 and 350,000 personnel were involved. So far, during debates on the Bill, we have heard figures of 200,000, 250,000 and now 350,000. It seems impossible and amazing that we do not know how many people work within the business that we are about to regulate. Perhaps we will find out when the regulation comes about. In view of what the Minister said, I accept his explanation, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

John Bercow (Conservative, Buckingham)

I beg to move amendment No. 39, in page 4, line 13, leave out subsection (6) and insert—

`(6) A person guilty of an offence under this section shall be liable—

(a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum, or to both;

(b) on conviction on indictment, to imprisonment for a term not exceeding five years, or to a fine, or to both.'.

I endorse what has been said and welcome your return to the Chair, Mr. Winterton. That is in no sense an affront or discourtesy to your co-Chairman Mr. Benton, who chaired proceedings with alacrity, patience and humour this morning, but we knew that you would follow in similar vein this afternoon. We look forward to your continued Chairmanship.

I am pleased to speak in support of amendment No. 39, which would increase the penalty, under the clause, for a person who engages in licensable conduct without a licence. It is necessary—or desirable at any rate—to explain the background to, and purpose of, the amendment. As the Minister is aware, the maximum penalty under the clause for the offence of licensable conduct without a licence is six months' imprisonment and a £5,000 fine on summary conviction. However, there is what might be argued to be an inconsistency or disparity between that provision, on the one hand, and other provisions in relation to fines and other penalties, on the other.

This is not entirely uncharted territory. As the Minister knows, similar issues were intelligently explored during the Standing Committee on the Vehicles (Crime) Bill in January of this year. On those occasions, the Minister offered us some reassurance, and I hope that he might be able to do so in this case.

I mentioned the maximum penalty of six months' imprisonment and a £5,000 fine and emphasised that it is out of kilter with other provisions. That has caused my brow to furrow and beads of sweat to descend on it and me to agitate for the Minister adequately to explain the apparent inconsistency.

Nicholas Winterton (Conservative, Macclesfield)

Appear.

John Bercow (Conservative, Buckingham)

Perhaps the beads appear rather than descend.

Stiffer penalties apply for the offences under clause 5, which relates to the use of an unlicensed operative, and clause 6, which relates to the use of an unlicensed wheelclamper, a matter of considerable import, not least to the hon. Member for Doncaster, Central (Ms Winterton). The offences attract a maximum of five years' imprisonment and an unlimited fine—not the £5,000 maximum provided for in the clause, but an unlimited fine after conviction on indictment.

I emphasise, not even evaluatively but simply as a statement of fact, that it is a sign of the importance attached to some of the offences that they will carry penalties, if the Bill is unamended or as long as it is not amended in what might be called a liberal fashion, that will preclude consideration of individuals so convicted and punished for release under the Government's home detention curfew scheme.

I realise that, within the Home Office ministerial team, the Minister does not directly deal with the matter, but he will know that, under that scheme, the people who are eligible for early release are those who have been convicted of offences that would attract a custodial sentence of more than three months but less than four years. People sentenced to a custodial sentence of five years' imprisonment would obviously not be eligible for early release. That shows how important the offences are considered to be.

Will the Minister consider whether the Bill might be stiffened further? That is the objective of amendment No. 39. To take an obvious example, let us suppose for the sake of argument that a shopkeeper employs an unlicensed wheelclamper—I am delighted in referring to this important subject to see the return of the hon. Member for Doncaster, Central, whose efforts on these important matters have been tireless and effective in equal measure.

Let us suppose that a shopkeeper employs an unlicensed wheelclamper but does not have the defences available under clause 6(2). As the occupier of the premises in question, he would therefore be guilty of an offence under clause 6 and could be sent to prison for up to five years and fined an unlimited amount to boot. I am not cavilling at that or saying that it is a bad idea. It gives teeth and potency to the Bill. However, I am unclear why the Government do not follow a similar logic throughout, although there may be a good reason.

Although it is tempting to do so, I shall not dilate on the defences available under clause 6(2). Suffice it to say that a pithy summary is that they are along the lines that the person did not know or have any reasonable grounds for suspecting at the time that the activities were carried out that the person in question did not hold a licence. In other words, the defence is, ``I might have done it, guv, but I wasn't aware that I was in breach.''

The unlicensed wheelclamper himself would be guilty only of an offence under clause 3—engaging in conduct that is prohibited unless a licence is held. He would therefore be liable only to a fine of £5,000, rather than vulnerable to an unlimited fine. Therefore, the cowboy clamper would be subject to a lower penalty than would apply to a person who had used the individual's services. Does the Minister think that the maximum fine of £5,000 that is set out in clause 3 is adequate in such a case? There is a difference between the two penalties, and I wish to explore whether that is deliberate or accidental. If the difference is deliberate—I suspect that it is—will the Minister explain the rationale behind the differential treatment and, in the unlikely event that the difference is accidental, will he consider correcting the error?

Charles Clarke (Labour, Norwich South)

As the hon. Member for Buckingham says, this is a deliberate question, and, because we have discussed the matter in other Committees, I shall immediately concede that. This is a legitimate subject for debate, and the amendment is appropriate.

We decided that it was important to distinguish between the offence of being an unlicensed security operative, and the offence of being an employer who uses an unlicensed security operative. I agree that there is a question of proportionality and balance of judgments, and the matter is a question of judgment. Therefore, I accept that the hon. Gentleman's case is legitimate—one can make the judgment in a different manner. However, we have used the wording in the Bill because we consider that it is important to recognise that an individual who had not obtained a licence was in a different position from an employer who was using people who were not licensed, when they should be aware of the situation. The danger to public security is an employer, such as a nightclub chain, that deliberately does not use people who are appropriately licensed. A heavier penalty should apply in such a case than should apply to an individual who should be licensed and is not.

I accept the hon. Gentleman's point that that is a balance of judgment. He asked for the reasons for that judgment, and that is the distinction between the effect of an unlicensed individual, compared with the decision of a user of a security service to use people who are not licensed. The latter is a more serious offence than the former, and therefore a different penalty is applied. That is the basis of our judgment, and I hope that the hon. Gentleman will withdraw his amendment.

John Bercow (Conservative, Buckingham)

I am not entirely persuaded. The Minister has a case, which can be knocked back and forth, and an argument can be made either way. I wondered whether he would develop his argument on the basis of the significance of deterrents or, in the absence of sufficiently stringent penalties, the risk of copycat or imitative behaviour. He did not do so.

Charles Clarke (Labour, Norwich South)

Those are both powerful arguments for tougher targeting of the user of security, compared with the individual. There are other arguments concerning the general regulation of the industry, which are why we consider that to be the case, but the hon. Gentleman gave good examples of why we are trying to make that distinction.

John Bercow (Conservative, Buckingham)

My generosity of spirit, which is almost always on display, got the better of me, and I aided and abetted the Minister by volunteering an argument that he had chosen not to deploy. I accept that there is an argument in that respect, although I am not sure how powerful it is. We would have to examine the evidence over a period of time to know whether the differential penalties applied. There may be a utilitarian benefit in taking such an approach, which would yield evidence over a period to examine whether that prognosis was vindicated. However, there is a danger, in the interim, that some people may be disadvantaged relative to others. Equality of treatment, which we may take as a reasonable principle of public policy and of the penalty for the breach of statute, will not be applied.

If individuals who are entirely knowingly in breach of the law are treated less severely than proprietors of businesses, is there any reason to believe that there will not be copycat behaviour and the commission of the sort of offences of which those individuals are guilty? My fear is that there could be.

I still think that there is something to be said for equality or equivalent treatment, but I accept that the Minister has made a fair point. I genuinely tabled the amendment in the spirit of opening up the argument and probing the case either way; I do not intend to press it at this stage. In response to what he has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Ian Stewart (Labour, Eccles)

It is good to see you in the Chair, Mr. Winterton. This morning, while Mr. Benton was in the Chair, I declared an interest on the basis of my lifelong trade union membership and activity. I went further by declaring the activities of my union—the Transport and General Workers Union—in recruiting and servicing as trade union members employees in the security industry at all levels, from the most sophisticated companies down to what are colloquially known as bouncers. I dislike that name and much prefer the modern description of door stewards.

Having declared those interests, I think that it is only right that, from time to time, Labour Members also consider in a balanced way the interests of employers in the industry. Clause 3 deals with

``Conduct prohibited without a licence''.

Subsection (5) states:

``Schedule 2 (which defines the activities that are to be treated as the activities of a security operative for the purposes of this Act and those which, so far as they are designated, are subject to additional controls) shall have effect.''

The CBI's concerns about the Bill's impact on the information technology industry have been conveyed to me and other Committee members in the past day or two. It is worried that the Bill's wording makes no distinction between physical and information security. I ask the Minister to clarify the Government's position on that.

Bruce George (Labour, Walsall South)

I am a little concerned about aspects of the clause. I speak as a consultant for no one. I have an antipathy towards sections of the private security industry—although not because my principal opponent at the election is having his campaign run from a private security firm; God forbid that I should be so hostile and vengeful towards the industry simply on that basis. We are all in a learning process.

On licensable conduct, one of my concerns—to which I hope that the Minister will be prepared to respond later, if not now—relates to a section of the private security industry that did not want to be seen as part of it and hoped for separate legislation: private investigators. The private investigator is seen as a gumshoe character, the kind of guy who would be seen in a Humphrey Bogart movie. That perception still exists but, in the past few years, the process of investigation has gone upmarket and there are now many large investigation companies, so much so that there was a supplement in the Financial Times on 10 April about corporate security. There are some real giants in the industry, both British and American.

I have one concern to which I am not certain that the Home Office has given specific consideration. As I have not declared my hand on this, I am prepared to wait for a response. Investigators such as Control Risks, which is a British firm, Kroll and Pinkerton are in a different market from the gumshoe character. They are engaged in investigating mega company fraud and issues such as due diligence. I know of a British defence company, which was a big household name, that collapsed because it bought an American company that turned out to be crooked. Big security companies, particularly in investigation, deal with white-collar fraud, international asset tracing, due diligence investigation, litigation support, and insurance and reinsurance investigations.

John Bercow (Conservative, Buckingham)

The right hon. Gentleman referred to Control Risks. In addition to the activities that he mentioned, I am sure that he would want to place on record the fact that substantial numbers of people—during the recess, I met someone who works for Control Risks—are engaged in risk assessment on inward investment. That is an increasing sphere for them.

Bruce George (Labour, Walsall South)

I could add the Control Risks Group, Armor Holdings, Decisions Strategies Fairfax International, Investigative Group International, Bishop International, Pinkerton, Hakluyt, and Smith Brandon International. They are big businesses, both domestically and internationally. The strong pressure on merger and acquisitions in the UK and the country's leading role in banking have encouraged the creation of sophisticated investigations companies that have not really emerged in any other European country. The value of the industry to the UK economy is probably between £100 million and £200 million per annum and depends largely on the confidence placed in it by corporate clients in the discreet management of investigations.

I do not speak from any direct experience, although I recall visiting several legal firms that brought together investigators of all types to pursue, successfully, those who had evaded police detection after the Brinks Mat robbery. There was a celebration party of 250 people, which shows how the private sector is engaged in the investigation of corporate affairs almost as much as is the Serious Fraud Office. Frankly, the private sector can often do it better than the police, because it has access to highly qualified people, more numerate lawyers and better business specialists—I mean no disrespect to the police force.

The problem is that clause 3 requires the licensing of anyone employed for purposes of assisting with an investigation. That does not take into account two important factors. Naturally, most investigations of corporate crime attempt to uncover information that is hidden either because it would imply or prove a crime or cause for civil action, or because the discovery of that information could injure the party that is attempting to keep it secret. That is obvious. An example of the first case is suspected fraud; an example of the second would be misinformation supplied by a company to secure competitive advantage. In now come Kroll or Control Risks to do a major investigation of what could amount to millions of pounds. To obtain relevant information in the course of that investigation, it is often essential that the individual seeking it is not identified as an investigator. Indeed, the information might probably be obtained only because he can claim to be a consultant of some kind, an academic, an industry expert or a financial analyst.

Much of the work undertaken by corporate investigation teams depends upon the ability of those companies to employ on a temporary basis people who do not normally work as investigators. If they were required to have their names on a register as having been licensed because they were undertaking licensable activities, quite a number would not wish to be involved in any investigation.Furthermore, it would be possible for the subject of an investigation to identify those making inquiries as investigators, thereby nullifying the activity.

If everyone engaged in investigation—I can use this argument in another part of the Bill—had their name disclosed because they had gone through a licensing process, someone committing a major fraud in the City of London could gain access to all that information on all the corporate investigators and private security companies and therefore could identify someone who suddenly came into the company to undertake a survey of some kind. That would give the serious fraudster an enormous advantage.

Can the Minister look at who those people applying for licences are and whether they are carrying out their business in a professional manner? Perhaps it might be possible to assist the process of corporate investigation by some form of amendment to the Bill. This also comes up in another clause. We are talking not about a seedy guy in a mackintosh who is snooping around to see whether someone is engaged in extramarital activities, but about the phenomenal growth in corporate crime, both domestic and international. Expertise of the highest order is required to match the expertise of those who are defrauding companies and the nation as a whole of vast amounts of cash and resources.

We are all involved in a learning process on the whole question of private investigators. We are trying to understand that it is not just the guy outside the nightclub or a security guard. It is pretty easy to work out how they operate. It is vital that we do not disadvantage those legitimate companies, which I believe should be licensed as companies and not simply as an amalgam of individuals. I hope that it might be possible at a later stage for the Minister to invite his officials to have some discussions with that top level of the market to see whether the Bill might not advance the cause of investigating and successfully bringing to prosecution major criminals, not a drunk who tries to get into a nightclub.

I hope that the Minister will be satisfied and will eventually be able to convince us that corporate investigation will not be disadvantaged in any way as a result of the Bill, particularly under this clause, as some of the big companies suspect that it may impair the ability of their qualified people to go under cover. It is not possible for someone to tell an office that he works for Control Risks and to ask whether any employees have their hands in the till. It has to be done surreptitiously. I hope that the Minister can convince the Committee that the Bill will enhance rather than retard the requisite process. Despite the negative image of investigators, the security industry is important: it brings a great deal of money into the country and it solves many crimes.

Nick Hawkins (Conservative, Surrey Heath)

Important points have been made by the right hon. Member for Walsall, South and the hon. Member for Eccles. In both cases, we are talking about the interests of industry and it will not surprise any member of the Committee to hear that Conservative Members have been contacted by organisations and companies, and that meetings have been arranged with a group of leading corporate investigation consultancies—including the companies, such as Control Risks, Armor Holdings and Kroll Associates, mentioned by the right hon. Gentleman. Conservative Members have also talked to CBI experts on these matters.

Both Labour Members who have spoken would concede that we shall return to this matter when we debate schedule 2. The hon. Member for Eccles will note our amendment No. 32, and I hope that he will be minded to support it.

Sitting suspended for a Division in the House.

On resuming—

Nick Hawkins (Conservative, Surrey Heath)

I was saying to the right hon. Member for Walsall, South and the hon. Member for Eccles that, as they are aware, we share several of the concerns that they have raised on behalf of employers and the major security groups. In tune with their remarks, we stress the hope that the Minister will keep such issues under consideration.

As I was saying when the Division bell rang, we will return to those matters when discussing amendment No. 32 to schedule 2. Parts of that schedule—to which the right hon. Member for Walsall, South has also tabled amendments—are linked to clause 3. Whether the issues are more thoroughly debated at this stage or when we discuss schedule 2 is something of a toss-up. I suspect that we will have a longer debate on some of the CBI-related and Control Risks-type issues when we debate the amendments to schedule 2.

While I encourage the Minister and his officials to keep the matters in mind, I otherwise restrict myself to echoing what the right hon. Gentleman and the hon. Gentleman said. They were right to point out that the issues are important, crucial especially to companies of the size that are represented by the association of corporate investigation consultancies. We will undoubtedly return to what the Confederation of British Industry believes that the Government have inadvertently done by including aspects that could apply to catch IT security consultants within the Bill's ambit. I do not want to detain the Committee further at this stage, but I will listen to the Minister's response with interest. I think that we will spend some time on the issues later.

Andrew Miller (Labour, Ellesmere Port and Neston)

My hon. Friend the Member for Eccles raised an important point, which my right hon. Friend the Member for Walsall, South and the hon. Member for Surrey Heath reinforced. I find myself in the unusual position of agreeing with the latter. The issue is important. When we debate schedule 2, it will be important for the Government to have made clear their position about the merits and demerits of separating the physical from the virtual world, and whether it is technically possible to do that for the kind of businesses that we are discussing. Some businesses that provide physical security on premises might also, by the terms of their contractual obligations, be responsible for electronic security, to which the IT provisions relate.

That field is becoming immensely complicated. I do not know whether my colleagues have read the exciting description of a British first in the newspapers this morning. This might be an impossibility for Hansard, but the product is called ``: : mail''. It is a new virus tool being produced by the Defence Evaluation and Research Agency. Such developments will be immensely important to industry. One would not want to curtail the development and application of such tools because of the corporate criminality to which my right hon. Friend the Member for Walsall, South alluded. However, we need to ensure that we do not exclude parts of businesses that may be properly included in the Bill in the context of their provision of physical security.

John Bercow (Conservative, Buckingham)

I understand the point that the hon. Gentleman makes about the difficulty of distinguishing between the two types of work when referring to employees. The job definition of someone responsible for physical security might also embrace some responsibility for electronic security. However, I should like to be clear about exactly where the hon. Gentleman is coming from. Does he think that, in so far as the two fields can be distinguished—which they often can—that of electronic security should not fall within the Bill's rubric?

Andrew Miller (Labour, Ellesmere Port and Neston)

My whole point in rising was to say that I am not convinced one way or the other. I think that there are merits in both cases. It is a technical area, and we must not end up with a Bill that is proscriptive and damages the security aspects of businesses' IT provision. At the same time, when my hon. Friend the Minister introduced the Bill, it was made clear that it was targeted at scams that are at the other end of the spectrum: cowboy wheelclampers and the small-time security companies that have failed to meet the standards recognised by my friends in Geneva, the international union Uni, which has negotiated many international agreements about the provision of physical security.

Such distinctions get more and more blurred as time goes on. It will be an interesting challenge for those folk who are not actually here to come up with the right balance. My instinct is that the CBI has an important point but, equally, there are merits in the alternative argument. The Committee should take the issue seriously, and take time over it. Any decision that we take will have important ramifications.

Charles Clarke (Labour, Norwich South)

This has been a helpful little tour d'horizon. As hon. Members have indicated, when we debate schedule 2—paragraph 4 deals with private investigations and paragraph 5 with security consultants—we will pursue such matters in greater detail. However, I must make a couple of remarks about what has been said.

I first pick up on the IT point that was made by my right hon. Friend the Member for Walsall, South and then by other hon. Members. I agree that it is a substantive point, but I repeat what I said on Second Reading:

``The Department of Trade and Industry will therefore consult the information security industry on the extent and effectiveness of existing precautions—protected measures—and whether further action is required. In the light of that, I am happy to make it clear that we do not currently intend to bring the information security industry within the scope of the new licensing regime established by the Bill.''—[Official Report, 28 March 2001; Vol. 365, c. 974.]

I am happy to tell my right hon. Friend that the regime that applies to the major companies that he described does need to take account of the commercial situation of the companies and how it operates on the work that they carry out. I am ready to look at his specific points. Officials from my Department have already discussed those concerns with companies such as Kroll Associates and Control Risks. I give him the assurance that I will ask them to pursue that discussion further in the light of today's debate.

Nick Hawkins (Conservative, Surrey Heath)

I am grateful for the Minister's helpful indications and am taking careful note of what he says. However, will the Minister say that he would be happy for his officials to have a specific meeting with those in the CBI who have concerns about the matter? It would be helpful if he could confirm that.

Charles Clarke (Labour, Norwich South)

I am able to confirm that. Indeed, I had a meeting with the CBI, at an earlier stage, to discuss those issues. We had a full discussion about what we should do.

Before we have a detailed discussion of schedule 2, I want to make a general point about the major dilemma referred to by my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller). Ten or 15 years in the future, if one were to want to subvert organisations by selling security services in a criminal way, it will no longer be a matter of sorting out door stewards in respect of dealing with drugs, but a matter of security systems installed in major corporations. We must bear in mind that the evolution of such systems will be important. A difficult balance of judgment will have to be made about how we decide between competing issues. For that reason, in the case of IT security, we have asked the Department of Trade and Industry to discuss with the industry how it might move forward.

We have also given a specific responsibility to the authority to keep such matters under review and to come back with proposals that ensure that we have a flexible process. We have taken the right approach in the Bill, as my hon. Friend was generous enough to say during the debate on clause 1. In the light of my remarks and assurances, and the further assurances that I will give during debate on schedule 2, I hope that the Committee will agree that clause 3 should stand part of the Bill.

Question put and agreed to.

Clause 3 ordered to stand part of the Bill.

Clause 4 - Exemptions from licensing requirement

Ronnie Fearn (Liberal Democrat, Southport)

I beg to move amendment No. 22, in page 4, line 34, leave out

``or, as the case may be,''

and insert ``and''.

The provision for exemption from licensing requirements seems reasonable; we all agree on that. However, we are concerned about the wide discretion given to the Secretary of State. Should not the authority, as the standard-setting body, agree whether an exemption is suitable? It would also be helpful to know when the Government envisage granting exemptions. Would they consider specifying in the Bill grounds on which exemptions might be allowed? As things stand, the Secretary of State can grant exemptions when suitable alternative arrangements exist, so in theory everyone is eligible for an exemption. Should there not be additional reasons for allowing exemptions, such as public interest grounds, which seem already to be established in the Bill? Perhaps the Minister will comment on that.

Given those concerns, we have tabled an amendment that would limit the Secretary of State's discretion. The amendment would require that both the authority ``and'' the Secretary of State be satisfied. It makes sense to require the authority to be consulted, as it will set the standards. It is a small and sensible amendment, so perhaps the Minister will accept it.

Charles Clarke (Labour, Norwich South)

There might be some misunderstanding. My understanding is that amendment No. 22 would require both the Secretary of State and the authority to be satisfied that suitable alternative arrangements to licensing apply before a person may be exempt from licensing by virtue of subsections (1) or (2) of clause 4—that is, it requires a double approach. Our fundamental concern is about establishing parallel systems that will overload two different bodies—the Secretary of State and the authority—both of which will have to examine the same problem in any particular case. I urge the hon. Gentleman to withdraw the amendment.

Clause 4 provides for limited circumstances in which a person may engage in licensable conduct without possessing an appropriate licence from the authority. Subsection (1) permits the Secretary of State to make regulations establishing exemptions where he or she is satisfied that valid alternative vetting arrangements exist. If such valid alternatives are already applied in some circumstances, it would be superfluous and an unnecessary burden to require a licence also from the SIA. However, to do that, the Secretary of State must be sure that the arrangements provide adequate public protection.

Subsection (2) enables the regulations to delegate to the authority the power to determine whether an employer will ensure that suitable alternative arrangements apply. The authority may permit unlicensed persons temporarily to undertake licensable activities if they or their employers have received approved contractor status under clause 15 or have been given specific dispensation under clause 4, and if the security operatives already have a licence application pending and have not had a previous application rejected. Those are very narrow and precise circumstances. The public would, rightly, expect the general circumstances that are to be regarded as validly alternative to the authority's licensing procedures to be defined only after careful scrutiny.

Subsection (3) therefore requires that the proposed arrangements should satisfy the Secretary of State or the authority

``as the case may be''—

the words that amendment No. 22 would delete—in relation to the protection of the public. To require the Secretary of State to give his or her agreement each time the authority judges that an employer meets the criteria laid down in the regulations would lead to a bureaucratic system in which two separate but parallel agencies had to approve certain decisions. That would be regarded as over-regulation.

I hope that that explanation is clear. There may have been some misunderstanding between us, in which case I hope that the hon. Gentleman will withdraw the amendment. If not, I ask him to consider the fact that the effect of the amendment would be to establish two parallel bureaucracies, which we believe would be unnecessarily burdensome. I hope that the hon. Gentleman will now change his course of action.

Ronnie Fearn (Liberal Democrat, Southport)

I can see that it might be overbearing if the Secretary of State and the authority both had to consider the same cases. Some cases being considered by the authority might eventually require the approval of the Secretary of State, but those cases would not be seen by him. Is that right?

Charles Clarke (Labour, Norwich South)

In the Bill, the use of the phrase

``as the case may be'',

means that either the Secretary of State or the authority will make a judgment in relation to the protection of the public. That judgment is the key that will determine the situation. In the overwhelming majority of cases, the authority would take the decision and the Secretary of State would not go through it in great detail. Our concern is that to require both, rather than either, to act ould be unnecessarily burdensome both upon the industry and upon the two organisations, the Home Office and the authorities.

Ronnie Fearn (Liberal Democrat, Southport)

With that explanation, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

John Bercow (Conservative, Buckingham)

I beg to move amendment No. 45, in page 5, line 8, at end insert—

``(6) A person may apply, on notice to the Authority, to the magistrates' court having jurisdiction over the area affected by the designated activities, for an exemption from the requirement to apply for a licence; and the Lord Chancellor may make an order as to the procedure to be followed on such an application, including on urgent applications; and the test to be applied by the court is the same as that which would have been applied had an application been made to the authority.

(7) An exemption granted under subsection (6) shall not be granted for a period exceeding one month and shall not be renewable.''.

The amendment is similar, as Committee members will be aware, to one that was moved in another place on 30 January 2001, at columns 604-610 of Hansard. The significance of the amendment, like the one moved in another place, is that it would cover cases in which a one-off exemption from the requirement to have a licence might be needed in connection with a one-off local event or an urgent case in which it would not be practicable to apply to the Security Industry Authority in time for a licence to be granted. That is to say that by the time the decision had been made on the application, the moment would have passed—the date for the intended event, gathering or meeting would have been overshot.

There is some concern about that matter. When it was raised in the other place, Lord Bassam indicated that he could not see good reason why exceptions might arise. However, at other points in our proceedings, the Minister of State, Home Office, argued—despite the voluminous briefing available to him—that although he could not envisage circumstances in which provision X or Y of the Bill might take effect, such circumstances might arise. It was in the nature of the case that it was not possible to anticipate what they might be, but the measure was by way of being—no pun intended—a security device or precaution to ensure that the power in the Bill was sufficiently wide.

I cannot say in this instance—I do not intend to dilate the point—exactly what events might be involved. However, in the context of a debate that necessarily raises the issue of parties and large-scale social activities at which security operatives or bouncers might be present, it is important to recognise that there can be many other circumstances in which one might require the services of doorkeepers or bouncers. I know that the hon. Member for Eccles does not like the term, but at least we know what we have in mind when we use it.

There can be many other events at which such people might be required. It is imaginable—indeed, eminently likely—that at some stage and probably more than once in the last 30 years, large-scale, highly important and indisputably urgent meetings have had to be convened in the constituency of Macclesfield to discuss matters of local controversy. It is very unlikely that the controversy resulted from the behaviour or malfeasance of the hon. Member for that constituency. It is more likely that he, being the peacemaker that he is, and the industrious and assiduous representative of the masses that he has always aspired to be, was seeking to quell the flames.

Charles Clarke (Labour, Norwich South)

On a point of order, Mr. Winterton, is it appropriate for the hon. Gentleman to say that it is ``very unlikely'' that the Chairman of this Committee would be engaged in this kind of activity? Surely it would be impossible.

Nicholas Winterton (Conservative, Macclesfield)

Although I agree with the Minister's assessment of the remarks, I have to say that they are not out of order, as yet.

John Bercow (Conservative, Buckingham)

I do not want to be unkind to the Minister, but I was going to say that under any sycophant's charter, he would always do better than I would. I am happy to accept that alteration to my comment: it is impossible and unimaginable that our Chairman would be guilty of such actions.

However, while trying to make the point in a light-hearted way, I do not want to detract from its seriousness. An important gathering or event might be organised at short notice. If it were a public meeting, for example, and if the subject were highly controversial and passions had been aroused, the organisers might feel that they needed to appoint people to perform a security function—not in exchange for remuneration, but simply out of a sense of community spirit and a desire to maintain good order.

That meeting could not take place two, three or four weeks later because the issue would no longer be live then. It would not be unreasonable for the Minister at least to consider whether there should be some flexibility in such circumstances, so that if it could be clearly demonstrated that there were a good case for exemption—I emphasise that I this should apply only where it could be demonstrated that there were a good case for an exemption—such an exemption might be provided. We are asking the Government to reconsider the issue—notwithstanding the observations of Lord Bassam in the other place—and recognise the need for flexibility, so that the Bill is not so rigid as to be unable to meet the needs of urgent local cases that might arise. That is what we are about. I suspect that the Minister will say that he has not reconsidered Lord Bassam's remarks in the other place. If he has not, or if he thinks that, on the whole, the Government have got the balance right, will he at least address directly the sort of scenario that I have just described?

I hope that the Minister accepts that such a scenario could perfectly well arise. If so, does he not also accept that the greater danger would be if such an event had to be cancelled or prevented from taking place simply because the procedure was too cumbersome and long-winded to allow a successful application for a licence to be made in the time scale that that public, local and urgent issue required. On the strength of those opening remarks—I do not rule out the possibility of making further remarks; it depends on the response that I receive—I rest the case for the amendment and wait to hear what other hon. and right hon. Members, not least the Minister, have to say.

Charles Clarke (Labour, Norwich South)

The hon. Member for Buckingham raises the question of what procedure should be used in a case of urgency. That is a reasonable question. Although it is hard to see what kind of event we are talking about, I accept in principle that there could be a need for such procedures in such circumstances.

Nick Hawkins (Conservative, Surrey Heath)

I want to help the Minister to envisage the sort of event we have in mind—it is one that could easily crop up in of any our constituencies, so I hope that he will find the following example valid. Sometimes a planning issue arises in a constituency and a report on it suddenly appears in the local paper. All of us, from whichever political party we come, will be familiar with such cases. There is often an outpouring of public feeling, sometimes on both sides of an issue, and sometimes an immediate public meeting is convened to which local councillors are invited and for which a hall is booked. That is the kind of thing that my hon. Friend the Member for Buckingham and I had in mind. It could happen in any of our constituencies, and frequently does.

Charles Clarke (Labour, Norwich South)

I accept that. I acknowledged in principle the possibility of urgent cases arising, and I agree that the hon. Gentleman's hypothesis could be a practical example of such a case.

However, I have some qualifications to add. In most circumstances, the sort of security activities that would be undertaken to deal with such a situation would involve the taking on of approved contractors that were already covered by the process to deal with such circumstances. The natural response would be to call in a security company and deal with the situation in that way. Volunteers of the type described by the hon. Member for Buckingham are not covered by the Bill. That said, I concede that one can imagine urgent circumstances in which volunteers were not being used and an approved contractor who was already fully able to deal with the matter was not called in. I think that that is unlikely, but I accept in principle that it could happen.

To establish a parallel process through the magistrates court to address the issue would complicate and confuse the situation by having a court consider such circumstances when the SIA was looking at the whole industry in another way. There is a danger of establishing confusing parallel procedures. It might be costly and give rise to uncertainty and doubt about the best way to proceed. Under the Bill, we envisage—I think that, in general, the Opposition agree—the SIA being a one-stop shop. The danger of establishing a separate exemption scheme is that it might weaken the licensing regime.

I concede to the hon. Member for Buckingham—perhaps we should have conceded the point in the other place—that it may be necessary for us to look at an urgency procedure for the SIA that is consistent with the rest of the way in which it operates, to deal with the circumstances to which he referred. There is no explicit power in the Bill as it stands to do that. While I resist the proposal to set up a parallel path through the magistrates court to deal with such matters, I accept the proposition, at least in principle, that the SIA ought to have some process whereby it can make rapid decisions in such cases.

If it will assist the hon. Gentleman to withdraw the amendment, I am willing to make a commitment to look carefully at what urgent procedure we might be able to take on board and what amendment, if any, would be needed, to the Bill to achieve that. It may be that no amendment on Report would be needed; however, there might be such a need and I shall come back to the matter. I accept in principle that there could be a need for urgency procedures, but will the hon. Gentleman accept that it would be better if that were carried out through an SIA process, rather than a parallel process? I shall look carefully at the matter.

Nick Hawkins (Conservative, Surrey Heath)

I am grateful to the Minister not only for giving way, but for the helpful and constructive spirit in which he is approaching the issue. I ask him to bear in mind one matter as he considers a possible route for an emergency procedure. It would not be appropriate to incorporate in such procedure powers delegated from the SIA to local authorities. That is why I mentioned local planning issues: they can cause emergency meetings and we would not want the SIA's delegated powers to be used because, in another guise, the local authority's actions might be controversial.

Charles Clarke (Labour, Norwich South)

I take the point that the role of local authorities is that of regulator of issues in their areas combined with their own interests as an institution. [Interruption.] I see from the pagers that a vote is coming in which I am interested. Given that I shall take an overall look at the policy, will the hon. Member for Buckingham withdraw the amendment?

John Bercow (Conservative, Buckingham)

My hon. Friend the Member for Surrey Heath and I generally think alike. I, too, welcome the spirit in which the Minister has responded. It should be put on the record that, first, I am happy to concede that there is not likely to be a large number of cases in which differential treatment might be desired or required. Secondly, I can go further and say that it is important that, when considering any back-up or protective treatment that might be available, we should ensure that we do not end up providing an incentive for people needlessly to seek a way out. In other words, I emphasise that applicants should be able to demonstrate good cause for seeking an exemption or fast-track procedure through the SIA of the sort that the Minister describes. It is not good enough for people to fail to prepare properly and prudently for an event and then to claim that they want to stage it now, that it did not occur to them to make proper preparations before and that they were unaware of the constraints of the law.

I am not being argumentative: I am talking about the few genuine cases in which an important local or other issue springs up without advance notice, an opportunity that had not previously existed arises to stage an important gathering, and the problem is how to hold the meeting without breaking the law. In that respect, I am encouraged by the Minister's comments. I am not hung up about the form, but I am concerned that the needs of the individuals or organisations concerned should be accommodated. I understand why he might be worried that introducing a separate layer will produce duplication or confusion, but there must be a fast-track procedure that works. He went on to say that he was unsure whether it would be necessary to table an amendment or a new clause at a later stage in the Bill. I presume that he was implying that the matter might be accommodated through regulations.

Charles Clarke (Labour, Norwich South)

All I was trying to say was that I was unsure whether there was any inhibition in the present legislation on establishing an emergency procedure, or whether it would be necessary to facilitate matters by primary or secondary legislation. It is also possible that the practice of the authority could resolve the situation without the need for any such further measures. I did not want to state any firm conclusions, but merely to say that it is a matter that I need to examine.

John Bercow (Conservative, Buckingham)

I think that we all need to examine it. I do not know whether the required changes are proscribed or prescribed under the terms of the clause unamended. Parliamentary counsel's views would be required to determine whether a change in the legislation is necessary. However, we should work on the assumption that a change is required, which will be effected by an amendment or a new clause on Report or through regulations.

I am glad that the Minister's comments this afternoon have been fairly explicit. My anxiety is that a general election—or ``another event'', as I elliptically referred to it earlier—might intercede. If that were the case, we would have to wait and see what happened to the Bill. That is a matter for discussion at the appropriate time and through the usual channels, but I want to be confident that the Minister had given us a definite answer about how our needs will be accommodated.

The Minister will not therefore be surprised that I now return to my usual hobby-horse: regulations. I assume that he will concede that there is at least a 50:50 chance that whatever amendment or clarification is required would be provided through regulations. If that were the case, it would be helpful if a draft of those regulations were made available before the next stage of the Bill, or if the Minister could write to me and my right hon. and hon. Friends to explain how he envisages meeting our concerns through the regulations. He appears to be quivering, although it is possible that he is nodding.

Charles Clarke (Labour, Norwich South)

I know that my bodily movements are always fascinating to the hon. Member for Buckingham. I was trying to indicate that I was thinking about what he had said. I am prepared to give the assurance that I will communicate with him and other Committee members, either in writing or by speaking in the Chamber, when I have further considered the matter in the manner that I have described.

John Bercow (Conservative, Buckingham)

There is a limit to what one can expect in this life and I suppose that half a piece of cake is better than no cake at all. In keeping with the happy spirit that has characterised this exchange—although it has not, perhaps, characterised all our exchanges—I am prepared to accept the Minister's assurance. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 ordered to stand part of the Bill.

Sitting suspended for a Division in the House.

On resuming—

Clause 5 - Offence of using unlicensed security operative

Nicholas Winterton (Conservative, Macclesfield)

The hon. Member for Surrey Heath caught my eye in the nick of time. I ask him to address the Committee briefly.

Nick Hawkins (Conservative, Surrey Heath)

I have no doubt that during your long and distinguished parliamentary career, Mr. Winterton, somebody has used the same pun about your Christian name, which I share. I hope that both of us will always be in the nick of time.

There was no debate at all on the clause during the Committee stage in another place, and there was only a brief explanation, without debate, of a minor Government amendment to clause 5. That amendment introduced the word ``conduct'' to clause 5(3), whereas in the first draft of the Bill the word ``activities'' appeared. That was the only matter raised in relation to clause 5 in another place, and not debated, because Lord Bassam moved the amendment on Report. We are in the unusual position whereby the Minister will no doubt have a detailed briefing from his officials that has not hitherto been used. I hope that it will now see the light of day. There are one or two issues in relation to clause 5 on which the Opposition want to probe the Minister.

The clause creates a new criminal offence of using an unlicensed security operative. The Opposition are concerned about how the new offence will be enforced. When the Minister responds to the debate, I hope that he will be able to tell us whether the Government envisage that the new Security Industry Authority will take on an enforcement role in relation to the provision. Do the Government anticipate that the new authority will undertake its own investigations? Will it bring its own prosecutions, or will it delegate those matters to the police? That would concern us, because the Government have already overburdened the police. Despite the bogus figures trumpeted by the Government yesterday, Opposition Members are aware that there have been greater and greater strains on the police, and that they have found it more and more difficult to recruit.

What discussions have the Minister or his officials had with senior police officers? It would be helpful if he would write to members of the Committee, if he cannot tell us today, to set out what meetings he has had, with whom in the police, at what level and on which occasions. It would also be helpful if the Government were to say whether their officials have yet made an estimate of the number of prosecutions in a calendar year that might be brought under the provision.

I also want to probe the Minister briefly on the question of defences. In considering this new offence—unusually, in a Committee, I am probably the only lawyer here—

Charles Clarke (Labour, Norwich South)

Shame.

Nick Hawkins (Conservative, Surrey Heath)

I am glad to hear the Minister say that. He tends to approve thoroughly of there being fewer lawyers. In other Committees, I have used the fact that he is usually anti-lawyer in his prognostications. My hon. Friend the Member for Buckingham said earlier how proud he was that he was not a lawyer. Nevertheless, any legislation that emanates from the House must be scrutinised carefully in respect of the rights of the defendant. All hon. Members—whether lawyers or non-lawyers—will be rightly anxious to ensure that there is proper provision to ensure that anyone accused of any new criminal offence can be properly defended, and that the issues in a criminal case can be properly tested.

Subsection (2) introduces a new statutory defence. Two different sets of wording are often used in statutory defences. One is that used by the Government in this instance—``no reasonable grounds for suspecting''. The alternative set of words, with a slightly different meaning—different in an important way—is ``no reasonable grounds for believing''. It would be helpful to know whether the Minister believes that the words that the Government have chosen give an adequate level of protection to someone who unwittingly employs an operative who does not hold a licence.

We would be grateful if the Minister would explain how, in conducting an investigation for an offence under the clause, either the police or an investigator from the authority—the Minister says that the authority itself will carry out investigations—will have access to the register of licensed operatives that the Government propose should be established under clause 12. Will either the police or other prosecuting authorities have a greater level of access to that register than an ordinary member of the public? It is important to know exactly what special privileges the prosecuting authorities or the police will have.

Most important, perhaps, is how the clause links with the proposed register, which we will discuss under clause 12. Will the register be integrated with the police databases used for the purposes of investigation?

The right hon. Member for Walsall, South appears to be pregnant with possibilities in respect of the debate. He is nodding, so I will conclude my remarks and bow to his greater expertise, if he can catch your eye, Mr. Winterton.

Nicholas Winterton (Conservative, Macclesfield)

From where I am sitting, the right hon. Gentleman is in the shadow of the Minister, but I am happy to call him next.

Bruce George (Labour, Walsall South)

A very large figure is on either side.

In the consultative documents, the Government went into some detail about the licence itself and how it was to be obtained. In the past, it was not only feasible but common practice that in the lower end of the market, the guarding side, one could simply turn up at a company, ask for a job and be on site at the factory as soon as a uniform could be fitted—no questions asked. The guards were left to work through the weekend, they would pick up their money, and perhaps come back again a week later. There were miserable standards at the poor end of the market, and in some cases those purporting to be higher up the ladder of respectability adhered to them. The personnel department of a good company without access to criminal records would hire an ex-copper from the local station who would find out whether an applicant had form. For the most part, those days are gone, because the fines for police officers who illegally gain access to criminal records is severe. Several coppers have been sent down for transmitting such information.

Good companies, of which there are many, have an elaborate procedure for evaluating applicants. Those companies no longer simply take a guy off the street. Applicants must fill in forms and provide information, such as driving licences, passports and references. A good company then telephones the referees. It would try to validate the person applying for the job. Is he who he purports to be? A wonderful case in my locality involved a man who had all the evidence necessary to prove who he was. Before he started work, it was discovered that all the data that he presented belonged to his deceased brother-in-law. People who wanted to get a job would duck and dive and trick, often with the collusion of the company, which knew full well that they were on unemployment benefit. It was clear collusion between hirer and jobseeker.

The position may be magically transformed because it is no longer necessary to find a corrupt copper to provide the information, or to have a nudge, nudge, wink, wink from someone living nearby who is peddling innuendo or malicious lies. If a company suddenly thinks that access to criminal records will remove the responsibility for doing patient searching earlier, it deserves all it gets—and, by God, it will get it.

What has to happen when a company wants to employ someone? The person sees an advertisement, applies for the post and then has to fill in a form in detail. Any good employer would carry out a check. At the end of the process, the documentation—hopefully with fingerprints to prove that the person is who he says he is—should pass to the police and the regulating authority should then confirm the choice of the particular person for the job. If this relatively costly process is short-circuited by removing some stages and relying on the police and the regulatory authority to the job, tough luck—the lads will suffer and might either end up in jail or pay a significant fine.

My serious point is that if people use ``I didn't know, guv'' as a defence, the consequences that follow will serve them right. I hope that that will not be regarded as much of a defence and that any company foolish enough to claim that it was unaware that someone did not have a licence will suffer accordingly. In assessing defences, we should recognise that only a very poor personnel or resources department or a poor employer will be caught—and caught they certainly will be. Many people with forged documentation will purport to be licensed. Perhaps with the aid of this legislation, such people will be able to duck and dive and operate without a licence. The Bill may provide a defence for working as a security guard without a licence on the grounds that an application is pending. The scope for abuse is considerable.

The Minister should pay careful heed to the clause. No one should be foolish enough to have failed to secure the requisite information—proof of identity, eligibility for a job and an appropriate licence—before hiring. Sometimes licences can be transferred, but licensing for Securicor means going through the whole process again. Employers who fall for this one will, as I said, suffer. I hope that the courts will punish them severely.

When I introduced my previous Bill on the subject in 1994, I was rather more ruthless than the Home Secretary, who I suspect is a bit of a softie. He is being too nice to people who do not deserve any charity. Under my Bill,

``Any person not registered under this Act who . . . offers private security services or . . . falsely implies that he is so registered, shall be liable on summary conviction to a fine not exceeding £100,000 or to twelve months imprisonment, or to both, or on conviction on indictment to a fine, or to imprisonment for a period of twelve months, or to both.

Any firm which offers the services for security purposes of an employee not registered under this Act as a private security agent shall be liable on summary conviction to a fine not exceeding £100,000 or to twelve months imprisonment, or to both, or on conviction on indictment to a fine or to imprisonment for a period of twelve months, or to both.

Any person who knowingly furnishes false information in any application made, or proceedings instigated, under this Act, shall be liable on summary conviction to a fine not exceeding £5,000 or to twelve months imprisonment, or to both, or on conviction on indictment to a fine, or to imprisonment for a period of twelve months, or to both.

Nicholas Winterton (Conservative, Macclesfield)

Order. The right hon. Gentleman is quoting at great length from his own Bill rather than from the Bill that we are debating. I would be grateful if he would shorten or paraphrase his Bill rather than quoting in extenso from it.

Bruce George (Labour, Walsall South)

I am so pleased that you interrupted me then, Mr. Winterton, as I had exhausted that clause. I am glad that two good performers like us can feed off one another, and I thank you for giving me further inspiration. Although I was too modest to say so, I feel that my Bill had a far better clause. I am deeply grateful to you for that intervention and will be pleased to accept any other that you care to make.

We are not talking now about Group 4, Securicor, or Reliant Security, those companies that have good departments and reputations to sustain. They will look at the Bill eagerly to see how their existing practices can be adapted. They will apply on behalf of their employees, or their employees will apply themselves, and they will probably pay the fee for them. If one is dealing with people at the bottom end of the employment market £40, £60 or £80 can be pretty hefty. A good firm would pay and it would be fireproof in terms of any failure.

The people at whom the clause should be aimed are the endless fly-by-nights who will duck and dive and use anything they can to slip through any loophole in the Bill. They will forge documents. They will present documents purporting to be a licence. They will perhaps be working in in-house security companies where there is no compulsion and then will try to convince people that their voluntary licence is a proper licence. They will wear uniforms that will confuse the public with more reputable companies and possibly the police. We must be careful that no quarter is given to those who deliberately deceive the person trying to hire them or deliberately deceive the regulatory authority about the persons whom they are hiring.

I know that you will not allow me to go back to a previous clause, Mr. Winterton, but if a good company suddenly requires 50 or 100 operators for a surge job, it will, for example, move people from Yorkshire down to the west midlands. Securicor might take people off one service and move them into another or do a deal with another security company to have those operatives working with them. Therefore, a special licence would be superfluous in most cases. It is crucial that the Home Office establishes with the police and the regulatory authority a sufficiently speedy process. A good company, that is prepared to work according to the rules should be able identify a potential employee, who will fill out the application form, be approved by the company, receive authorisation from the regulatory authority and be able to start work. It will be a disgrace if the guy applying for a job has to sit on his hands for two months before the regulatory authority comes back with the authorisation.

Nick Hawkins (Conservative, Surrey Heath)

I have been listening carefully to the right hon. Gentleman. A thought occurs to me and it comes back to the issue that I raised about the perfectly law-abiding person who is trying to use someone reputable and the point about the two different defences. When I was first studying law at the end of the 1970s, one of the leading cases that we considered in relation to corporate responsibility involved one of the major national names. It would be unfair to name the company, because it was unusual for it to employ a rogue, but on this occasion it had been engaged by a photo-processing laboratory to provide guards and one of the guards turned out to be an arsonist who set fire to the lab and burned it down.

Bruce George (Labour, Walsall South)

Securicor.

Nick Hawkins (Conservative, Surrey Heath)

The hon. Gentleman is ahead of me. He remembers the case.

Bruce George (Labour, Walsall South)

The company got away with it.

Nicholas Winterton (Conservative, Macclesfield)

Order.

Nick Hawkins (Conservative, Surrey Heath)

I did not want my intervention to be too long, Mr. Winterton, but as the right hon. Gentleman knows the case and has referred to the company's name—

Nicholas Winterton (Conservative, Macclesfield)

Order. There must be a specific question, not another speech.

Nick Hawkins (Conservative, Surrey Heath)

I was simply going to ask the right hon. Gentleman whether, in the light of such cases, he agrees that the difference between reasonable grounds for suspicion and reasonable grounds for belief is important.

Bruce George (Labour, Walsall South)

If a company hires a potential arsonist, its inspection process and psychological profiling—about which the hon. Gentleman can speak with far more authority than I can—will have failed. A wonderful young woman firefighter in Bristol died four or five years ago when a company, ironically named Burns, hired a security guard who then set fire to the supermarket that he was supposed to be guarding. It is up to the companies: now that they are becoming more respectable, they must put in place the processes to prove that they are respectable. The clause relates to the licence application process, in which the companies will have to follow best practice. They might slip up—those who do not go through the proper procedures will definitely slip up—and have to go to the hon. Gentleman for legal advice to keep them out of jail, because the penalties, even under the softly, softly approach of the Home Office, are severe.

Charles Clarke (Labour, Norwich South)

I admire and respect my right hon. Friend's blood-curdling sentiments on this topic. They provide a useful introduction to the case in favour of the clause. As he said, it sets out a deterrence mechanism to show that there is a real offence that hurts the organisation that commits it. As the hon. Member for Surrey Heath said, there are three lines of defence. First, the accused may show that he neither knew, nor had reasonable grounds to suspect, that the operative did not have a licence. Secondly, it is a defence to show that he took all reasonable steps to ensure that the operative would not engage in activities for which he did not hold a licence. Finally, the accused may show that the security services that were provided were supplied by a person exempted from the need for a licence under clause 4.

We believe that those are reasonable defences, and no Committee members have disagreed. The proof of the pudding will be in the eating—the way in which the clause is enforced to ensure that we deter such illegal activity. For that reason, we cannot answer the question asked by the hon. Member for Surrey Heath about the anticipated number of prosecutions. I hope that there will be no prosecutions, because I hope that everyone will comply with the law. However, if people seek to bypass it, I agree with the blood-curdling sentiments of my right hon. Friend, and we will have to enforce the law rigorously.

The hon. Member for Surrey Heath also asked about the reasoning behind the Lords amendment. I have reams and reams of briefing on such matters, not all of which I share with the Committee at all times, but I am happy to do so on this occasion. The amendment was purely technical: the word ``conduct'' in subsection (3), line 26, was previously ``activities'', but was changed to tie in with the concept of licensable conduct, as mentioned in clause 3(1) for example. The original phrasing was simply a drafting slip, no doubt influenced by the different concept of activities of a security representative.

More substantially, the hon. Gentleman asked how the clause would be enforced. Clause 19 will give the Security Industry Authority entry and inspection powers to check compliance. Those are important powers that can be applied in particular circumstances. The police have the responsibility of upholding the law and were fully consulted at both the White Paper and publication of Bill stages. It might interest the Committee to know that the Association of Chief Police Officers lead was taken by Richard Childs, the chief constable of Lincolnshire. He is an outstanding chief officer, who is driving forward a modern version of active policing in a number of different areas to deal with such issues. The police have been fully involved with the processes.

I do not accept for a moment the ridiculous suggestion that the hon. Gentleman made about so-called bogus recruitment statistics that were published yesterday. I was rather disappointed to hear a partisan political remark in this debate, but I am sure that that will not be repeated under your chairmanship, Mr. Winterton.

We do not have plans to provide special access to the register's contents for law enforcement. It is a public document, with clear information. No one has requested special access to the register, and I do not expect such a request to be made. It is simply a source of basic information on names, addresses and the licensed functions that a person may undertake. It is a public register, as we shall discuss when we reach the relevant clause.

I accept the hon. Gentleman's point about the need to integrate the database with the general range of other police databases. As I have said in other Committees, we are engaged in a major project. We are seeking to integrate important databases such as those for DNA and firearms with the police national computer. The Government have invested in that to try to rectify the underinvestment that we inherited from our predecessors. We shall address that issue explicitly in this context, but the hon. Gentleman will know that upgrading the PNC is a major national investment that must be taken forward in the right way. It has procedural and other implications, which we are considering. His point will be taken into account in that context. I urge the Committee to accept the clause.

Question put and agreed to.

Clause 5 ordered to stand part of the Bill.

Clause 6 - Offence of using unlicensed wheel-clampers

Nick Hawkins (Conservative, Surrey Heath)

The points that Conservative Members want to raise start with the fact that this clause was not part of the Bill when it was introduced in another place. It was inserted on Report in another place, creating a further criminal offence of using an unlicensed wheelclamper. It would help if the Minister explained exactly why the clause, which seems to be a logical follow-on from clause 5, was not originally in the Bill. It is more far-reaching than clause 5, which introduces a criminal sanction that applies to those who supply security services using unlicensed operatives. Clause 6 makes the service's end user subject to the criminal law.

The Minister and other Committee members may recall my saying on Second Reading that Conservative Members would seek assurances from the Government that the provisions criminalising those employing unlicensed operatives would be well publicised. Perfectly respectable businesses and individuals may wish to employ wheelclampers to stop the persistent unauthorised use of their parking spaces. There are, however, two sides to the coin. Respectable companies may employ apparently respectable wheelclamping companies that in fact operate in far too draconian a manner.

In contributing to debates on the issue, the hon. Member for Doncaster, Central has had very much to the forefront of her mind the fact that a company may look fine superficially and have nothing untoward about it, but the activities of its operatives at the sharp end may cause enormous distress. I am thinking particularly of the sort of companies that rail operators sometimes use. I mentioned in my speech on Second Reading concerns raised by the editor of one of my local newspapers. Those concerns have continued. The editor of The Surrey-Hants Star, Mr. Alan Franklin, has been following the issue with great care. His coverage of the incidents involving a company called Security International Group, used as an operator by South West Trains, has led to further correspondence.

The other day, I received another example: a letter from Mrs. Wendy McLean of Church Crookham, a constituent of my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot). She has been one of the many people apparently victimised by the employees of Security International Group, even when she has had a perfectly valid ticket to use the train. It is single ladies travelling, perhaps using station car parks late at night, who are especially vulnerable to the tactics that can be used even by employees of apparently respectable companies.

The position is much worse because of charlatan companies—the so-called cowboy clampers. As someone said on Second Reading, they could even give cowboys a bad name. The hon. Member for Doncaster, Central and other hon. Members, from both sides of the House, have been concerned about the activities of cowboy clampers for many years.

Rosie Winterton (Labour, Doncaster Central)

The hon. Gentleman mentions the coverage that his local newspaper has given to the activities of cowboy clampers. I wonder whether the newspaper is also aware that the RAC made very strong representations to the Government for a clause such as this to be included in the Bill, to make landowners responsible for activities carried out on their land. It is otherwise extremely difficult to pin down companies that are there one day and gone the next. The land remains, and that is why the RAC wanted the clause to be included.

Nick Hawkins (Conservative, Surrey Heath)

The hon. Lady is quite right. I was aware of the point that she made, and the RAC was not the only organisation to raise those concerns. It is understandable for us to look at such provisions in the Bill. I simply wanted to alert the Minister to the fact that it would be helpful to hear some background from him, although perhaps he will repeat what she has just said.

I would like the Minister to comment, when he winds up, on the apparent anomaly in the Bill on which my hon. Friend the Member for Buckingham touched in his remarks on clause 3. There appears to be a difference in the penalties. The two clauses are not absolutely alike. Although the Minister referred to that in passing, it would be helpful to understand a little more about the thinking of the Government, or that of his officials, about the different penalties.

The Minister will be familiar with my next point because it was raised on Second Reading here, and in another place by my noble Friend Lord Cope of Berkeley. It concerns the dentist who wishes to protect his surgery car park from unauthorised use by visitors to nearby shops. If the dentist were to employ an unlicensed clamper, he would be caught by the provisions of clause 6 and potentially liable to a prison term of up to five years. If that same dentist applied the clamp himself, or instructed one of his staff to do so, he would be liable under clause 3, and the maximum penalty would be six months. There is an anomaly there. Both methods could lead to criminal penalties, but there is a potential inconsistency.

Charles Clarke (Labour, Norwich South)

I welcome the debate. The hon. Member for Surrey Heath rightly said that the clause is a result of a Government amendment in another place. It makes it an offence for an occupier of premises to permit the unlicensed clamping of vehicles on premises where such activities require a licence. Clause 3 makes it an offence to clamp vehicles, without having a licence, for the purposes of one's business or employment, or for any other reason that has a view to the motorist being charged a release fee. We do not consider it appropriate to go further than that and require a landowner to obtain a licence from the authority for the purpose of using a licensed wheelclamper under a contract for services. That would be duplicating bureaucratic controls, without any real gain for the public.

However, we do accept the need for the Bill to deter unscrupulous landowners who would be tempted tacitly to allow unlicensed wheelclampers to operate on their property. Such a temptation would be particularly strong for the owners of prime sites where the lack of clear warning signs would be likely to lead to a rich harvest of release fees from unwary motorists. The clause closes off that potential loophole, and the reason for that was described by my hon. Friend the Member for Doncaster, Central. As well as her general campaigning efforts in respect of wheelclampers, she was studious in pressing that particular point with the support of the RAC and other organisations.

With regard to the offence under clause 5, there are three lines of defence. First, the accused may show that he neither knew, nor had reasonable grounds to suspect, that the operative was not the holder of a licence. Secondly, he may show that he took all reasonable steps to ensure that the operative would not engage in activities for which he did not hold a licence. Finally, he may show that the security services provided were supplied by a person exempted from the need for a licence under the provisions of clause 4.

As far as penalties are concerned, I can do no more than repeat what I said during discussion on clause 3. There is no new argument. It is a question of judgment, as I acknowledged, and the judgment that we have made is set out in the Bill. I urge the Committee to agree that clause 6 stand part of the Bill.

Question put and agreed to.

Clause 6 ordered to stand part of the Bill.

Further consideration adjourned.—[Mr. Mike Hall.]

Adjourned accordingly at three minutes to Seven o'clock till Thursday 26 April at five minutes to Ten o'clock.