Clause 8 - Licences to engage in licensable conduct

Private Security Industry Bill [Lords] – in a Public Bill Committee at 2:30 pm on 26th April 2001.

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Amendment proposed [this day]: No. 13, in page 7, line 33, leave out `applicant' and insert `relevant person'.—[Mr. Bruce George.]

Question again proposed, That the amendment be made.

Photo of Joe Benton Joe Benton Labour, Bootle

I remind the Committee that with this we are taking amendment No. 14, in page 7, line 34, at end insert—

`(7A) For the purposes of subsection (7) above a relevant person is—

(a) the employer, where an applicant is an individual who in the course of his employment with the employers carries out designated activities;

(b) the applicant, in all other cases.'.

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

I welcome your return to the Chair, Mr. Benton.

The amendments would require employers to pay the registration fee for their employees. As we adjourned this morning, if memory serves me correctly, I was summarising their purport, and saying that they would inevitably impose a cost on business. Equally, it was only fair to make the point, as the right hon. Member for Walsall, South (Mr. George) did, that if employers did not pay the employee would have to, which could be burdensome. An issue of principle is involved as well as the practical question of whether it is fair to impose a burden on people who are relatively poorly paid. On balance, it cannot be right for people who are poorly paid to be clobbered in such a way.

It would be helpful if the Minister would give the Committee the latest estimate of the level of the fee, if the Government have one. If the employer paid the fee and the employee then left his employment to start work with another employer, would that not be unfair to the original employer who paid the fee? Although on the face of it the case seems to be fairly open and shut, some questions remain. After all, the licence is for the individual, unless it is granted with the proviso that it would lapse on the occasion of someone transferring employment. I do not think that that is the intention of the Government or of the right hon. Gentleman.

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

This is an important amendment, and I am glad that my right hon. Friend tabled it. We debated the matter on Second Reading, but important issues have been raised that should be dealt with. In answer to the hon. Member for Buckingham (Mr. Bercow), we estimate the cost of the licence to be approximately £35 to £40, usually for a three-year licence. That is the scale of fee that we think is right, although it is a ball-park figure rather than an absolute commitment. We do not believe it to be an exorbitant fee. We believe it to be reasonable, and we do not believe that it will deter those already employed in the industry from obtaining a licence, nor those wishing to gain employment in the industry. I agree with the thrust of what my right hon. Friend said about the drive that is required to raise the working standards of the industry, including the levels of pay and training. That is a key part of the process. The measures that he mentioned such as the minimum wage—I also mention the working families tax credit—are designed to attack the core issue, which is relative low pay and its implications, rather than the various costs that are borne by various people.

In principle, it is right that if the primary responsibility is on the individual to obtain a personal licence, it is appropriate for employers to pay licence fees for their employees. However, I strongly agree with my right hon. Friend that it is more than a hope—it is an expectation—of the Government that reputable companies will wish to pay the fees for their employees. He was correct to say that a number of the serious companies involved believe that that is their obligation. As he said, however, they are worried that the playing field would not be level, because other employers would not be under the same legal obligation to pay the fees. Employers believe that it is right that they should be paying the fees, providing quality training and addressing other issues in respect of raising standards in the industry. We expect that reputable companies will wish to pay the fees for their employees, but we do not believe—and this is where I part company with my right hon. Friend—that we should impose on all employers the duty to pay.

Employers have, in general, welcomed the Bill, but we are trying to steer a course between good regulation and over-regulation. To force employers to pay a fee that targets employees who are often highly mobile—a point made by the hon. Member for Buckingham—would not necessarily be the right way forward. I regret that I cannot ask the Committee to support the amendment. I urge my right hon. Friend to withdraw it.

I can, however, take the second step that my right hon. Friend suggested, which is to place on record as strongly as I can the expectation of the Government that good and reputable employers will pay the fees for their employees, provide appropriate training, and commit themselves to the business standards that the Bill aims to achieve. I am sorry that I cannot go all the way with him, although his arguments have a great deal of force. To place such a requirement on all employers would be going beyond the balanced approach that we wish to take.

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

I will resist any temptation to lock horns on behalf of the right hon. Member for Walsall, South, because that would be presumptuous. He is well able to fight his own battles, and no doubt he will continue to do so at every opportunity.

Although there is some logic and wisdom in what the Minister is saying, he may wish to entertain the possibility that, for people at the start of their careers who are very low-paid or who have been through periods of not working at all, the level of the fee could be burdensome. Is he willing to consider a concessionary rate for such people and for those who will be engaged in such work on a part-time basis?

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

I am willing to give the hon. Gentleman that assurance. He has inadvertently reminded me of a point that I should have made more forcefully in response to my right hon. Friend.

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

I have noticed that the hon. Gentleman always has that aspiration. Some might call it spin without substance, but I would not say that.

Given how we have drafted the first part of the Bill setting out the obligations of the new authority to review the situation and its implications, it would be possible to reconsider matters after a processing period. If it were established that there was an unlevel playing field that would, in effect, weaken the competitive position of the reputable employer, the situation would be reconsidered.

The point made by the hon. Member for Buckingham about young people coming into the industry seeking concessions is another issue that could be reassessed.

I shall now give way to my hon. Friend the Member for Eccles (Mr. Stewart), who I believe, is a member of the Transport and General Workers Union, not the GMB.

Photo of Ian Stewart Ian Stewart Labour, Eccles

That can be confirmed with pride. There is a problem in trying to address the issues in the Bill that concerns an industry that has such a wide spectrum of expertise and facilities. I want to comment on what are commonly referred to now as door stewards or venue stewards.

Photo of Joe Benton Joe Benton Labour, Bootle

Order. I remind the hon. Gentleman that he is making an intervention. If he wishes to make a speech, I suggest that he waits until the Minister has finished his remarks.

Photo of Ian Stewart Ian Stewart Labour, Eccles

Having identified the end of the spectrum, I want to say only that the virtuous circles that the Government are attempting, I hope successfully, to achieve will be compounded by the industrial relations factor to which my right hon. Friend the Member for Walsall, South referred. The Bill will not be jeopardised, but compounded in a positive sense. The Government can do so much, but other aspects of the industry cannot assist that process.

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

I am grateful for my hon. Friend's intervention. It recalls to mind the important debates that we had in the Labour movement some 10 or 15 years ago about whether a minimum wage was appropriate or whether it was up to trade union negotiation to resolve the matter. I am glad, as I know he is, that we resolved the issue in favour of the minimum wage. The balance between the role of the state and that of the industrial relations process is delicate and not easy to resolve, particularly when regulating such a complicated business.

Before urging my right hon. Friend to withdraw the amendment, I must say that his worry about the impact of the Bill on parts of the industry in different ways and the danger to competition that could arise if there were distortions is one that would lead the Security Investment Authority, when established, to reconsider the issue. If my expectation that reputable big companies will pay the fees for their employees is not met, that would also need to be dealt with. I hope that he will withdraw the amendment, although I acknowledge that he has raised a serious matter.

Photo of Bruce George Bruce George Labour, Walsall South

I shall withdraw the amendment reluctantly, not necessarily because of the logic of my hon. Friend's argument, which has a degree of plausibility—I say, a degree—but because what comes out of our discussions in Committee and in the House might be different from what we are debating at present. I am looking to the regulatory process to remedy the short-term failure of the Home Office to draft a Bill that meets my demands.

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

I do not want to tempt the right hon. Gentleman to dilation, but it might be instructive to members of the Committee if he were to offer us a brief synopsis of the liability arrangements for fees that appertain in some of the countries with regulatory regimes that he has recommended to the Committee.

Photo of Bruce George Bruce George Labour, Walsall South

I do not need any prodding to filibuster. It is you, Mr. Benton, who intimidate me into not responding to such matters. One of my great fears is that the good companies will be penalised. Not all big companies are good companies. I shall not name names.

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

And not all small companies are bad.

Photo of Bruce George Bruce George Labour, Walsall South 2:45 pm, 26th April 2001

Absolutely. At present, the good company will be saddled with the cost of a licence fee, not the bad company. Good ones will receive the voluntary registration approval bill, but bad ones will not. All sorts of aspects of the Bill will give poor companies a competitive advantage. In-house security will not be subject to control, as it will be voluntary. Lawyers representing the shady or poor companies will find ways, unless the Home Office can devise watertight legislation, in which a contract security company can hire itself out to become an in-house security company. The hirer will therefore avoid having to pay for a private security company, which of necessity will be saddled with higher bills because of the minimum wage and the additional burdens of voluntarily submitting itself to higher standards than other sections of the industry, which will not do anything unless they are legally compelled and an inspector calls. The smaller good company and the bigger good company will be discriminated against in favour of the less good big company and the appallingly bad medium-sized and small company.

When companies are all competing for the same job—and a personnel manager, for instance, is choosing between competing bids—the moment that one company obtains a contract, the other side will know the terms and will write to the personnel manager offering to charge less. That puts companies under pressure. Security is a grudge purchase anyway—companies are not interested in it, their insurance company insists that they hire security, so why spend more money than necessary? They can always claim from the insurance company if there is a robbery. All those factors conspire to give unfair advantage to the duff company, and the proposed legislation will help in that process. I am partly reassured by the fact that the SIA will have to think about the matter. It will be one hell of an organisation to be a member of, because we will have bestowed on it an enormous amount of work.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Home Affairs)

I just want to remind the right hon. Gentleman of the speech that he made on Second Reading. Before he asks the Committee's permission to withdraw the amendment, which raises an important issue on which we have all agreed, will he say what are the minimum additional improvements on which he will insist? What changes does he require before the test that he set—that this is an adequate Bill—is fulfilled? It was not adequate on Second Reading, and we must make changes to make it adequate. If such amendments are to be withdrawn, what will those changes be?

Photo of Bruce George Bruce George Labour, Walsall South

One is to subject companies to compulsory registration and approval, with standards laid down to which they must adhere. Others are that in-house security should be included along with contract security, and that the inspectorate should be independent. Those provisions are not in the Bill. There is an option in relation to the regulatory authority for inclusion in the Bill eventually, but the next Parliament will be overloaded with considering statutory instruments that are 15 ft wide. I hope that secondary legislation can achieve the purpose properly.

I am not prepared to wage the battle any longer. I note the irony of the Conservative party joining me in promoting the cause of the low-paid in the industry against a Government who are preoccupied with raising living standards. Life is filled with irony. I hope that when the Minister goes to sleep tonight, he will recall that irony. When we consider the Bill at a later stage, I hope that he will have had a Pauline conversion. Reluctantly, and without the slightest enthusiasm, I am convinced that I am right and that, as usual, the Home Office is wrong. The amendment would have been sufficient because it would have provided an option whereby the relevant authority could be the company or the individual.

Rejecting the amendment is a clear statement that the company pays, and the Minister's exhortation can be read in Hansard. I suspect that not all the rogue companies or poor companies read more than The Sun. They certainly will not read Hansard or the record of this Committee's deliberations. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 ordered to stand part of the Bill.