Clause 3 - Conduct prohibited without a licence

Private Security Industry Bill [Lords] – in a Public Bill Committee at 4:30 pm on 24th April 2001.

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Amendment moved [this day]: No. 20, in page 2, line 40, leave out from `activities' to end of line 42.— [Mr. Fearn.]

Photo of Nicholas Winterton 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.'.

Photo of Mr Ronnie Fearn Mr 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.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I congratulate the hon. Gentleman on his succinctness.

Photo of Charles Clarke Charles Clarke Minister of State, Home Office

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.

Photo of Mr Nick Hawkins Mr 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?

Photo of Charles Clarke Charles Clarke Minister of State, Home Office

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.

Photo of Charles Clarke Charles Clarke Minister of State, Home Office

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).

Photo of Mr Nick Hawkins Mr 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.

Photo of Charles Clarke Charles Clarke Minister of State, Home Office

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.

Photo of Bruce George 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.

Photo of Mr Ronnie Fearn Mr 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.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

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.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

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?

Photo of Charles Clarke Charles Clarke Minister of State, Home Office

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.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

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.

Photo of Charles Clarke Charles Clarke Minister of State, Home Office

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.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

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.

Photo of Ian Stewart 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.

Photo of Bruce George 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.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs) 5:00 pm, 24th April 2001

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.

Photo of Bruce George 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.

Photo of Mr Nick Hawkins Mr 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—

Photo of Mr Nick Hawkins Mr Nick Hawkins Conservative, Surrey Heath 5:26 pm, 24th April 2001

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.

Photo of Andrew Miller Andrew Miller Labour, Ellesmere Port and Neston 5:30 pm, 24th April 2001

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.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs)

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?

Photo of Andrew Miller 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.

Photo of Charles Clarke Charles Clarke Minister of State, Home Office

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.

Photo of Mr Nick Hawkins Mr 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.

Photo of Charles Clarke Charles Clarke Minister of State, Home Office

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.