Schedule 2 - Activities liable to control under the Act

Private Security Industry Bill [Lords] – in a Public Bill Committee at 6:00 pm on 1st May 2001.

Alert me about debates like this

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs) 6:00 pm, 1st May 2001

I beg to move amendment No. 40, in page 25, line 17, leave out ``Subject to sub-paragraph (2),''.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

With this it will be convenient to discuss the following amendments: No. 41, in page 25, line 20, leave out sub-paragraphs (2) and (3).

No. 42, in page 25, line 27, at end insert—

``(4) Before making an order under sub-paragraph (2), the Secretary of State shall consult:

(a) The Authority;

(b) Persons whom he considers to represent the interests of the private security industry in England and Wales;

(c) Persons whom he considers to represent the interests of the police in England and Wales.''.

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

The amendments relate to the Secretary of State's power to add or exclude activities from the proposed licensing regime by affirmative order. There is a distinction between amendments Nos. 40 and 41 on the one hand and amendment No. 42 on the other. Amendments Nos. 40 and 41 are essentially probing amendments. We recognise that the affirmative resolution procedure will apply, but would like some idea of what new activities it is envisaged could be included in the licensing regime. Is the provision to which the amendments relate a vehicle to allow alarm installers to be included at some future stage? Comments that have so far been made suggest that that might be the case, and I would welcome clarification from the Minister.

Amendment No. 42, as can readily be seen, would require specific consultation before such an order is made under the affirmative procedure. We contend that, before making an order under sub-paragraph (2), the Secretary of State should consult three categories of representative. Those three interests are the Security Industry Authority itself, persons whom the Secretary of State considers to represent the private security industry in England and Wales and representatives of the police. That seems reasonable, and we would like a better inkling of what the Government have in mind. I await disclosure, as I ordinarily do on such occasions, with eager anticipation, bated breath and beads of sweat upon my brow. I am sure that the Minister will speedily meet my need.

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

In the light of the interesting description of the physical symptoms that the hon. Gentleman displays, I am not sure that I want to fulfil his ambitions. I am, however, fascinated by his approach to such matters, and am keen to do whatever I can to help him with any pills and tablets that I have at my disposal.

On amendments Nos. 40 and 41, it is important that the legislative framework that underpins the regime is flexible enough to take account of future developments and decisions in the industry. That is why sub-paragraph (2) enables the Secretary of State to amend the list of activities that are designated for licensing purposes. One function of the SIA is to keep the framework under review. During its work it may identify sectors in the industry that are causing concern and recommend that they be brought within the licensing regime. Equally importantly, the SIA might recommend that an activity currently listed in schedule 2 be removed from the list as it is no longer a cause for concern. The legislation should be able to deal with both eventualities.

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

I shall give way when I have finished my remarks on amendments Nos. 40 and 41.

The amendments would delete the power to make orders in relation to schedule 2. That would fossilise the Bill in so far as it affects which sectors of the private security industry are regulated. If the amendment were passed, no sector—including in-house van guards, alarm installers and others that the hon. Gentleman might mention—could be added into the regulatory framework other than through new primary legislation. Similarly, no sector could be taken out of regulation, if that were thought desirable, except by a new Act of Parliament. We need to be able to respond flexibly to developments in the industry, and paragraph (1) allows us to do so. Of course, the power to make orders by statutory instrument is subject to affirmative resolution.

Amendment No. 42 would require the Secretary of State to consult the authority, the industry and the police. As I have said before, the authority could only work properly to discharge its remit if it acted sensibly after consulting widely. I have also made it clear that the industry, the police and others will be represented on the authority, and that a series of committees will provide additional vehicles for interested parties to feed their views into the authority. We are therefore entirely confident that when the Secretary of State lays any order before Parliament for consideration under the affirmative procedure, the interested parties will have been fully involved in the process.

I hope that the hon. Gentleman will consider withdrawing amendment No. 40 and will not press amendment No. 41, because they would unnecessarily restrict the ability of the organisation to deal with the changing world. The fundamental issue addressed by amendment No. 42 is already covered by the Bill, and by a wide range of shared commitments across the House.

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

As I said, amendments Nos. 40 and 41 were designed to probe, not to be interpreted as a literal requirement. The Minister has responded to the thrust of my argument broadly satisfactorily, and I understand his point about amendment No. 42. On the strength of his remarks, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Bruce George Bruce George Labour, Walsall South

I beg to move Amendment No. 7, in page 26, line 21, at end insert—

`In-house security operatives

2A Without prejudice to paragraph 2 this paragraph applies (subject to the following provisions of this paragraph) to the activities of an operative providing manned guarding activities where he provides those services exclusively for an employer who is not a private security employer.'.

One of the deficiencies of the Bill relates to in-house security. The amendment would include in the Bill a matter that was covered in the consultative paper but somehow disappeared when the Bill was introduced. Many companies providing man guarding have gone from contract to in-house security, then back to contract, and many have contract security working alongside in-house security on the same premises. When I visited Rolls-Royce in Derby, it had both in-house and contract security and the system was working well.

Contract security is subject to statutory controls, which can be costly and demanding--companies have to pay licence fees and are required to provide rigorous training—but in-house security does not carry those obligations. To be fair, in-house security is generally very good, because the workers have a loyalty to the premises and to the company. They tend to be rather older than contract security guards because they have stayed on in the factory, and will be on good wages as they have benefited from the rates negotiated by the trade unions. That makes it attractive for some companies to dump their in-house security and shift it to contract. I fear that there may a reverse move from contract to in-house security, for the simple reason that the costs of contract will be higher. I am not talking about good companies with good in-house security, but bad companies, both large and small, which will suddenly be enormously attracted to in-house security because it is cheaper.

It is illogical for in-house and contract security to be on a different basis. Unscrupulous operators will exploit the loophole. There will be confusion among the public, and other agencies will want to know who is in-house and who is contract, especially when both are working in close proximity within the same organisation. Some organisations might replace contract security officers with in-house officers, defeating the legislation's objectives.

Countries that have recently begun to regulate their industry have wanted to regulate contract and not in-house. Those that started earlier, however, have gone through a process of maturation and, realising that contract and in-house guarding cannot be separated, have belatedly included in-house security. One of the best regulatory systems is, perhaps surprisingly, in South Africa. It began with contract security and produced an enormous report. Ironically, I was quite helpful with that, not in explaining what regulation there was in this country—which would have taken only five minutes—but because of my interest in regulation around the world. South Africa has now realised that in-house must be included.

In Queensland, an evaluation of the Security Providers Act 1993 found significant concerns arising from the exclusion of in-house security. A survey of Australian legislation showed that both New South Wales and South Australia regulate in-house security.

In British Columbia, Canada, an extensive inquiry into the regulatory system recommended that

``the province amend the Private Investigators and Security Agencies Act to regulate the competence and accountability of both employers and employees within the in-house or proprietary sector.''

In Spain, which also has a superb regulatory system and does not want in-house security excluded, in-house security operations have to constitute themselves into private security companies so that they are subject to regulation. That is an unusual idea.

There are now neighbourhood wardens throughout our country, mostly funded by the Department of the Environment, Transport and the Regions or the Home Office. Is it not rather strange that, although those who are in-house usually have good standards, some may be contracted? I cannot imagine a contract security company wanting to do the duties that in-house neighbourhood wardens have to perform in my constituency with 20 days of training.

It is very important that in-house security is magically restored and put back on the screen. I hope that that will happen. Given its importance in the Government's strategy for combating crime, there must be high standards of competence and security personnel must be of good character. Statutory regulation is essential to achieve that. If the Government are not prepared to license all in-house employees, they should at least consider licensing those who regularly come into contact with the public.

Some 180 organisations have responded to the Government's consultative paper. They cover in-house security personnel, and include most of the major interests. Of those, five were opposed to regulating in-house security: the Theatrical Management Association and Society of London Theatre, the Museums and Galleries Commission, the National Trust, the Association of Leading Visitor Attractions and a member of the public.

Five out of the 180 wanted in-house excluded; so in our democracy, five outvoted 175. The sixth was the better regulation taskforce, whose voice counts for more than the other 175, so in-house security was somehow deleted. I hope that, when the legislation passes, the regulatory authority will have second thoughts and include in-house security. I hope that the time will come—and come soon—when all contract and in-house security guards are subject to the same regulatory regime.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Home Affairs) 6:15 pm, 1st May 2001

I am sympathetic to the amendment for the reasons that the right hon. Gentleman gave. As people in the security industry do a job that brings them into contact with the wider public—not just with their fellow employees—they should be subject to the same general approval. I can see the argument against that. When a company employs people directly, they have all the terms and conditions before them and are governed by the usual rules of company employment, which include the security of interresponsibility between employees. It does not seem to me, however, that the amendment would necessarily be more burdensome. It may be rejected on the ground that regulation exists, and no doubt the better regulation taskforce will point out any additional regulations. Although I accept that the amendment would produce a slight increase in administrative responsibility, the logic of the case has been made.

We shall shortly reach the group of amendments that relate to the companies that provide the security industry's range of services, even though that is not their main range. An increasing number of companies in the construction industry, such as large building and surveyors companies with international contracts, used to do building work and provide professional surveying advice, and are now facilities companies offering a package of services. They may take up a contract in the middle east and do everything from obtaining planning permission, if that is required, to the final signing over of the building. They will subcontract in everyone from lift contractors to the suppliers of public utilities. Likewise, in this country many people offer a service to take over an operation. They may take over a national health service building, or an office block across the river, and look after the whole operation, providing all services—catering, cleaning and so on. There is no guarantee that the employer is used to dealing with such work. It is therefore at risk if it is not well done, as it would be in other sectors.

I hope that the Minister understands the importance of this issue. Are the Government simply not yet persuaded of the case, do they think that it should not happen in the first wave, or have they a more fundamental objection to the amendment? If it is the latter, he might suggest how such an objection could be overcome by argument and persuasion.

As a post-script, if the Government resist the amendment and the Secretary of State later decides that there should be an alteration, is there an opportunity in the Bill to amend the future Act through secondary legislation and introduce the category identified in the amendment?

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

Before I call the Minister to reply, I want to make a plea to the Committee. We have five groups of amendments, and I would like to have them all moved and followed by a ministerial answer. That can only be achieved if self-discipline is exercised by Committee members.

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

I shall be brief because we have debated at some length the subject of the amendments on Second Reading and in previous Committee sittings. I shall not return to the arguments at great length. The reason why we decided not to include in-house security, following the publication of the White Paper, was because we thought that two vetting processes—by the employer and the authority—might be unduly burdensome. We regulate some in-house staff such as door supervisors and wheelclampers. However, we did not think that that argument extended any further.

I accept many of the points made by my right hon. Friend the Member for Walsall, South, as I did at Second Reading and in previous Committee debates. The SIA will have a duty to keep the industry and the operation of the legislation under review.

I emphasise the point that I made on Second Reading to the hon. Member for Southwark, North and Bermondsey--we are not closed to the arguments in favour of regulating in-house staff. However, that would not be right at this stage. The Bill is flexible, and paragraph 7(2) of schedule 2 allows that issue to be addressed by secondary legislation--it would not need further primary legislation. I have no doubt that the authority will receive arguments about in-house staff, and the Government will be happy to listen to its views in due course. The developmental method is a coherent and positive approach for us to take.

I shall make a final point about the better regulation task force before it becomes guilty for all sins of omission. To defend it—and I had to give evidence to it about the possible content of the Bill—it argues that before putting systems of regulation, which could be oppressive, on sections of industry, one must have a good case. That is important in terms both of initial functionality and ensuring that regulation does not destroy the efficiency of particular sectors of industry. That is the position of the taskforce. Indeed, it is a good position that allows further argument and development over time.

We have set up a process that allows us to say that criminality in a certain sector is of such concern that we want to tackle it in a different way. It also allows us to say that we have found a better way of regulating that does not involve both the authority and the employer in the process, which is the right way to address the issue. To avoid all doubt, I can tell the Committee that if such arguments were made to bring the sector within the Bill, it would not require further primary legislation. It could be done with secondary legislation on the recommendation of the authority with the proper consultation. With that in mind, I hope that my right hon. Friend will consider withdrawing his amendment.

Photo of Bruce George Bruce George Labour, Walsall South

I am experiencing deja vu. I profoundly disagree with the arguments made by the Minister and the better regulation task force. The Government perceive the Bill as legislation that will reduce crime. That is, of course, a major factor, but it also concerns the efficiency and accountability of the industry. Merely to say that there has been insufficient evidence of criminality to encourage us to do x, y and z is to put an argument similar to that in the Green paper in 1979. I hoped that we had moved on from that.

I hope that the regulatory authority will make a more mature assessment than the better regulation task force, and will do what everybody—well, almost everybody—in the industry wants. It is superfluous to argue further, so I reluctantly 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. 9, in page 27, line 1, after `(c. 41)', insert:

`or of an employee or volunteer working under his supervision.'.

The amendment is intended to exempt people working under the supervision of legal professionals. Specifically, and it can be stated succinctly, we are discussing provision for private investigations. Paragraph 4(4) states:

``This paragraph does not apply to any activities of a person with a general qualification within the meaning of section 71 of the Courts and Legal Services Act 1990''.

That is intended to exclude legal professionals such as solicitors and others from the provisions of the Bill.

The purpose of the amendment is simply to add the protection provided by the provision to employees or volunteers who are working under the supervision of legal professionals. That is what our amendment states and that it is what it is intended to achieve. I look forward to hearing comments from other members of the Committee, and especially to hearing the Minister's response.

Photo of Charles Clarke Charles Clarke Minister of State, Home Office 6:30 pm, 1st May 2001

We recognise the continuing interest of lawyers in the Bill as it relates to them. There was extensive discussion in the other place about the employees of firms of accountants. We took the view that it would not be right to extend a blanket exemption to those employees, because many accountancy firms have diversified to the extent that they provide services that are properly designated activities as defined in the Bill. However, we accept that firms of lawyers are generally somewhat less diversified than accountancy firms. We want to ensure that the provisions of the Bill are targeted on those specialist providers of security services whom we have stated that we wish to regulate and that they do not inadvertently catch groups that are not relevant to our policy aims, including solicitors and the employees of solicitors' firms.

Photo of Mr Nick Hawkins Mr Nick Hawkins Conservative, Surrey Heath

Those in City firms of solicitors would challenge the Minister's assertion that they have not diversified to the same extent as accountants. I hope that the Minister will be prepared to consider the matter further if I tell him that today my hon. Friend the Member for Buckingham (Mr. Bercow) and I received a letter from the Institute of Chartered Accountants saying that it supports the amendment, as does the Law Society.

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

I will certainly consider the hon. Gentleman's point. I accept that, in a small number of large practices, there is much greater diversity than there was, say, 20 years ago. However, I would still maintain that some accountancy firms have moved more widely—although that is a pedantic point that I shall not pursue at great length.

The licensing requirement applies only to those whose main employment is concerned with the activities listed in the Bill. It does not apply to in-house staff except those in the door supervision and wheelclamping sectors. The amendment would extend the exemption to those employees or volunteers who work under the authority and supervision of a person qualified under the Courts and Legal Services Act 1990 but who are not themselves qualified under that Act. The exemption for those who are so qualified was included in the Bill for the avoidance of any doubt that those employed in the legal profession were excluded by virtue of the way in which the term ``designated activity'' is drafted. It was clear to us that qualified lawyers are thus excluded on the basis of the drafting of the Bill.

The amendment is unnecessary, as the employees whom it seeks to exclude do not in any case fall into the licensing category by virtue of the definitions that are used in the Bill. Any security-related activity as defined in the Bill that the employees of lawyers undertake will, under paragraph 4(9), be incidental to the main purpose of their employment. As we have said previously in Committee, where it is incidental it is not covered. There is a further exemption. Paragraph 4(8) excludes activities carried out with the knowledge or consent of the person about whom the information is sought or every person whose interest in any property has been affected by the loss or damage about which the information is sought.

We are therefore satisfied—I am happy again to place it on the record—that employees of solicitors' firms providing services to their employers are excluded by the exemptions, especially by the exemption based on the incidental nature of any security-related work that is undertaken. The incidental nature of the work is the key point. An employee of a solicitor would fall into the licensing category only if he or she had been supplied to another company under contract to supply any of the activities listed in schedule 2. In those circumstances, it would be anomalous for non-solicitors in law firms—or, in a parallel case, as we discussed on Second Reading, non-accountants in accountancy firms—to be exempt from the licensing requirement, as private investigators offering exactly the same services would be caught. Therefore, it would be right for individuals in such limited circumstances to need a licence.

The hon. Member for Surrey Heath mentioned the Law Society. I can tell him that Home Office officials have been in contact with the Law Society to discuss the matter, and I understand that it is content that, for the avoidance of any doubt, we ensure that employees of solicitors' firms supplying services to their employers will be excluded when the subordinate legislation commencing the licensing provisions is drafted. I am happy to give that undertaking and to place it on the record.

I hope that I have given the hon. Member for Buckingham the assurance that he seeks and that, on that basis, he will be prepared to withdraw the amendment.

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

As was to be expected, the Minister provided an answer, reading closely from his prepared script for the purpose. I am grateful to him for that. However, I am still a little puzzled about whether the work undertaken would be purely incidental to the conduct of the main employment of the individual whom my hon. Friends and I are seeking to protect. The Minister is tending to argue, as is often the case, by advocacy rather than evidence. We shall have to wait to see whether the situation is as he confidently predicts. Nevertheless, I am grateful to him for his reply and his undertaking to reflect on matters that we have highlighted, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

I beg to move amendment No. 53, in page 27, line 8, leave out

``purposes of any accountancy practice''

and insert

``sole purposes of accountancy activities''.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

With this it will be convenient to discuss amendment No. 54, in page 28, line 9, leave out

``purposes of any accountancy practice'' and insert

``sole purposes of accountancy activities''.

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

Amendments Nos. 53 and 54 deal with the same objective in two sequential paragraphs of the schedule. The first relates to investigations and the second to security consultants, and both are relevant to the debate to which the Minister referred. They concern a different character of activity in another profession—accountancy.

The Committee will not be surprised to discover that, like others, I have received representations from people involved in the investigation or security business. I met representatives of the group of leading corporate investigation companies and consultancies, which includes companies such as the Control Risks Group, the Armor Group, DSFX and Kroll Associates. As they rightly pointed out, there has been significant and increasing diversification in the accountancy world, as in many other sectors. Many accountancy companies provide not only accounting services but, for example, business consultation in general and consultancy work in the security industry.

On 10 April, the Financial Times—which should be lauded not only because it is based in my constituency, but because it is one of the world's pre-eminent newspapers—included a supplement on corporate security. Page 2 of the supplement lists the top players in the intelligence industry, and in doing so makes it clear that the big five accountants are included. The supplement states:

``Rivals question the large audit firms' long-term commitment to the corporate security market, but all five have built a large presence in this business. All have expanded from their historical base in financial due diligence to offer a broad range of products and services such as high-technology risk consultancy.

Their audit arms' client lists and respected names give them easy access to chief executives, but rivals claim such relationships are fraught with potential conflicts.

Among the prominent members of this group, much speculation has surrounded PricewaterhouseCoopers' intentions. Under Craig Jacobsen, it has built an investigative staff of about 700, but it is said to have sounded out several other corporate security firms about joint ventures or acquisitions . . . Deloitte & Touche took the unusual step of adding a political risk business last November, hiring Martin Stone from Control Risks. It is known for having a strong IT fraud detection service, and has tried to position itself at the top end of the market.''

Certainly, those to whom I spoke said that many of their employees have been poached by accountancy companies, although they were not arguing that to do so is illegal.

To allow those employed by accountancy firms to remain exempt would drive a coach and horses through the Bill. My amendments would change the broad definition that permits exemption irrespective of the activity in question, so that exemption would apply to firms that carry out accountancy activities alone. It behoves the Minister to take seriously this matter, which was debated at length in the House of Lords. He should also say whether the Government are willing to consider accepting an amendment such as mine, be it today or on Report, or a slightly different one if mine is technically defective. It would be as big a nonsense as that referred to by the right hon. Gentleman to allow a sector, which is clearly now a private security business sector, not to be included.

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

We are discussing difficult professional questions for lawyers, accountants and the IT industry. The task is how to ensure a level playing field, as my right hon. Friend the Member for Walsall, South argued earlier, while not penalising companies marginally involved in those activities. It is not easy to get that right and that is why we wish to target the Bill at those specialist providers of security services that we have said that we want to regulate.

As the hon. Member for Southwark, North and Bermondsey said, the exemption for accountants was discussed at length in the other place, and we accepted Opposition concerns that the wording of the schedule—as originally drafted—did not make it adequately clear that we did not want to take accountants into the Bill's regulatory framework. We tabled amendments in the other place to provide a clear exemption for accountants from the definitions of private investigators and security consultants. Those amendments were limited to exemptions for members of relevant accountancy bodies—defined in clause 25—as mentioned by my right hon. Friend earlier. The amendments before us try to refine the exemptions and limit them to activities carried out by accountants for the sole purposes of accountancy.

The amendments tabled in the other place in response to concerns were drafted following discussions with a variety of specialist bodies, such as the Institute of Chartered Accountants in England and Wales and private companies, the Serious Fraud Office and the Financial Services Authority. Those discussions echoed the concerns expressed by Opposition Members in the other place and we received some helpful advice on how to deal with concerns raised. We decided to exclude accountants who were members of accountancy bodies, by virtue of the high level of qualifications that are required to become a member. We accepted that, in the modern, highly complex accountancy world, some accountants may carry out activities that are designated by the provisions of the Bill. However, the problems that would arise from trying to differentiate between an accountant who undertook accountancy work solely and one who diversified into other activities would create significant definitional difficulties for the authority. We therefore decided that, to keep the regulation simple and effective, we should exempt all qualified accountants who are members of a relevant accountancy body. That builds on the existing regulation and ensures that only those with formal qualifications would be excluded from the licensing requirement of the Bill. Employees of accountancy firms who are not members of the relevant accountancy bodies would of course, if hired out under contract, require a licence.

I see that the hon. Gentleman does not accept the force of that argument. I am prepared to examine the situation again. However, when he decides whether to press the amendment, I ask him to take into account the fact that the definitional issues are not easy to resolve. We feel that we reached a good position in the other place and I hope that the hon. Gentleman will reflect that in his response. I give him the reassurance, however, that we will look at the situation again and see whether we can achieve further clarification.

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

I am grateful for the politeness of the Minister's reply. I am absolutely not persuaded that one cannot define companies that carry out accountancy, as opposed to those that carry out accountancy as well as other things. I do not accept that point. The reality is that accountants have the definition. The fact that a person may be qualified, validated and recognised by a professional body does not mean that that person or the firm that he works for are not able do other things. I do not know a huge number of accountancy firms, but those with which I have dealt have expanded and perform a whole range of jobs. Some are included in the list that I have just given.

I am not persuaded, although I am prepared to be reasonable and to discuss the matter. I ask formally, after the Committee has finished its proceedings, to have an opportunity to go through the matter with the Minister, and possibly to meet him with those people most affected, before Report. I am aware of the time pressure that we are potentially under, but I will definitely want to come back to the matter on Report if assurances are not satisfactory. I should be grateful if the Minister would give an assurance—on the record—that he will meet me, with those affected, even if the time scale is short between now and Report stage.

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

I am happy to give that assurance.

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

On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of John Bercow John Bercow Shadow Spokesperson (Home Affairs) 6:45 pm, 1st May 2001

I beg to move amendment No. 33, in page 28, line 1, after second `to', insert `physical'.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

With this it will be convenient to take amendment No. 32, in page 28, line 5, after `financial', insert `or information security'.

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

These amendments might be described as the IT security industry amendments. The principle arguments on behalf of the IT security industry have been aired before most eloquently by my hon. Friend the Member for Surrey Heath. They do not need to be rehearsed in great detail. However, there is no doubt at all that there is a continuing concern, not least on the part of the Confederation of British Industry, that the IT security industry might ultimately be incorporated within the terms of the Bill, even if that was not originally intended, and despite the fact that no earnest of any such intention was given to the sector. The two amendments would more satisfactorily protect the sector than has been done so far. I hope that the Minister will seriously consider the position.

It is commonplace for members of all parties to invoke the support of large trade associations and representative bodies when it suits them. That is entirely legitimate, and you will know, Mr. Winterton, from your 30 years' service in the House, that the Confederation of British Industry is a prized body to invoke in support of one's argument. We have done it, and the Minister has done it.

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

It is only prized by those who support the corporate state.

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

I am certainly not an enthusiast for the corporate state, but that does not in any way preclude me from recognising the significant expertise as well as the representative character of the Confederation of British Industry. It is concerned, as I think the Minister will acknowledge, that the Bill could have a damaging impact upon the IT industry, and could hinder the Government's aim to make the United Kingdom the best place in the world in which to conduct e-business.

The argument is simple. The current wording of the Bill necessitates the amendment, as it is unclear whether the Bill covers people working in information technology such as systems administrators and IT support staff, whose duties range from the building of firewalls to the protection of a network from attack to educating employees on what sort of passwords to use. Given the difficulty that some businesses already have in recruiting specialised and experienced IT professionals, any proposal that endangers that species and makes their recruitment more difficult would exacerbate the present problem and should, if at all possible, be avoided by the Government.

We all know that there was extensive consultation in advance of the introduction of the Bill. We do not dispute that, and we have debated the Bill on many occasions. However, that consultation—quite properly—was with the organisations that it was envisaged would be affected by the Bill. The IT security sector did not originally expect to be affected and had no reason to think that the Government wanted it to be. However, it is now anxious that it might be.

That is a problem. The drafting of the Bill has seemingly inadvertently drawn in the IT security industry, as my hon. Friend the Member for Surrey Heath explained during our deliberations last week. Paragraph 5 defines the activities of security consultants as falling under the designated activities of clause 3, the conduct of which without a licence will be against the law. Security consultants are defined as those who give advice about taking security precautions or engaging security operatives. The wording makes no distinctions between physical and information security, or between tangible and intangible assets.

It therefore appears possible—I put the point no more strongly than that—that information security consultants, as no specific distinction is made between them and others, and they are not consciously excluded, could fall within the scope of the Bill, as bouncers and wheelclampers do. IT security consultants are not mentioned—the Minister will not dispute that, as it is an incontrovertible fact—in the exemptions to paragraph 5, which, as we know from debate, include exemptions for those giving legal and financial advice and for the activities of an accountancy body.

The inclusion of the IT sector is undesirable if it is deliberate, but in a sense is even more so if it is not deliberate. If it happens by default, that is deeply regrettable, as it would mean that no protection of the sector would have been provided alongside the regulatory mechanisms that the Government have decided are appropriate. We want inclusion by inadvertence even less than we want deliberate inclusion. IT security consultants could be licensed under a Bill that has been drafted without their being consulted.

The Minister will not be surprised by the fact that I want to refer to remarks that he made on Second Reading. He said that the Government had no current intention of bringing

``the information security industry within the scope of the new licensing regime established by the Bill''.—[Official Report, 28 March 2001; Vol. 366, c. 974.]

He went on to insert a significant and—from our point of view, and especially from the industry's—worrying caveat. It was that the Department of Trade and Industry would consult on whether that should be done in future. If it decided so to do, all that would then be required would be to impose a licensing requirement on the information security industry via secondary legislation. An unconsulted sector that did not expect to be threatened would find that it was, and would have precious little, if any, opportunity to do anything about it. The sledgehammer of secondary legislation would bring in regulation, direction and control that the industry never expected to be on the receiving end of.

As the Minister knows, the Confederation of British Industry believes, according to its parliamentary brief, that

``the information security industry . . . Should not be included in a Bill on which it was not consulted . . . Should not be the subject of secondary legislation when it hasn't been consulted on the relevant primary legislation . . . Should not have to show that regulation of this sector isn't needed when those proposing'' legislation, or allowing for it,

``have not had to make the case that it is''.

It further states that the sector

``Should not be potentially subject to a licensing regime that has come about through oversight rather than a considered and intentional government policy''.

Those reasons are cogent. The brief says:

``The CBI urges the Standing Committee to amend Schedule 2(5) to include an explicit exemption of IT security consultants. Although the secondary legislation can be drafted to exclude IT security consultants, the fact that the primary legislation was never intended to include IT security in the first place makes it preferable to amend the Bill itself.''

That way, we would have an assurance. The sector would have the greater peace of mind that it should enjoy. We ought to be conscious that we have significant power to affect the sector in this place. That power should be used for good and not for ill. I hope that the Committee will act immediately to end the confusion and uncertainty and remove a potential barrier to e-business.

At an earlier stage, there was some publicity about the CBI's concerns about the Bill. I hope that the Minister will take careful note of what the head of e-business of that organisation, Mr. Hickson, was quoted as saying, which was that he fears that the Government have

``gone from never having even dreamed of licensing IT security professionals, to proposing it by accident, to essentially challenging the industry to say why the profession shouldn't be licensed''.

That seems to be an inversion of responsibility.

I have tried to make important arguments as briefly as I can. I look forward to the Minister's reply. I am conscious of the fact that—I expect a cheer—this will be my last contribution in the Committee, so I thank you, Mr. Winterton, warmly and genuinely, for your fair, firm, tolerant and robust chairmanship. I say that to someone who I hope is now widely acknowledged in the House of Commons as one of the finest parliamentarians of our time.

Photo of Andrew Miller Andrew Miller Labour, Ellesmere Port and Neston

When I referred to this clause earlier, the hon. Member for Buckingham intervened on me and I undertook to think about his point and to respond. I have a lot of sympathy for his argument, as have several organisations including the British Computer Society, but I think that his solution is wrong for the problem. We must always keep in mind the word ``proportionate'' when considering our responsibilities in legislation, particularly human rights legislation. If we were to accept his solution, we could end up in the ridiculous position of dealing with the security of a cheap piece of plastic, such as a CD, floppy disk or tape, but not with the extremely valuable data it contained. That would create a problem of proportionality.

The solution lies somewhere in secondary legislation. It would be extremely helpful for the Minister to say unequivocally that at this stage there is no intention to incorporate the IT

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I am afraid that I must now ask the Minister to respond.

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

These amendments seek to limit the definition of security consultants to those offering advice about the taking of security precautions in relation to physical property. That would exclude those who advise on the security of information, and I interpret that to mean the IT sector. There has been concern in parts of that sector about how, if at all, the Bill applies to them. They are keen to establish whether the Government includes them in the definition of security consultant that is used in paragraph 5 of schedule 2. I had hoped to lay their fears to rest in a statement I made on Second Reading, but I am happy to restate the position. The definition used in the schedule is deliberately broad. We want it to remain useable in the face of changing security systems, in particular those using technology—and I acknowledge the point made by my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller). We also wish, as a fundamental principle, to ensure that the Bill targets the specialist providers of security services whom we want to regulate, but does not inadvertently catch groups who are not relevant to the aims of our policy.

The term security consultant, as used in paragraph 5 of schedule 2, means those who give advice about

``the taking of security precautions in relation to any risk to property or to the person''.

The licensing requirements under that definition will be brought into effect in due course by regulations, which will specify exactly which activities of security consultants are licensable. Activities not specified will not be licensable. However, as I said on Second Reading, I should like it to be clear to the industry and the Committee that the information security consultancy industry is not under threat of licensing at a future date under the Bill. I hope that that reassures my hon. Friend the Member for Ellesmere Port and Neston.

As I said on Second Reading, the Government believe that issues need to be explored with regard to confidence in the information security consultancy industry. That industry has a vital role to play in protecting the new economy from vandalism and other crimes. Our consideration of the Bill has started a valuable debate about how information security consultants can match or exceed the levels of confidence that the Bill will create for other security contractors. For that reason, the Department of Trade and Industry will consult the IT industry about the extent and effectiveness of existing precautions and about whether further action is required.

I look forward, as I hope the Committee does, to seeing the result of that consultation. I am certain that that is the best way forward, rather than the solution suggested in the amendments. I hope that I have convinced the hon. Member for Buckingham and that he will withdraw his amendment. We want to work with the industry, rather than against it, to solve these problems.

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

I have listened carefully, but I am not persuaded by what the hon. Member for Ellesmere Port and Neston said, although I shall reflect on it, or by the observations of the Minister. I should therefore like to press the amendment.

Question put, That the amendment be made:-

The Committee divided: Ayes 4, Noes 13.

Division number 8 Adults Abused in Childhood — Schedule 2 - Activities liable to control under the Act

Aye: 4 MPs

No: 13 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

It being after Seven o'clock, The Chairman proceeded, pursuant to Sessional Order D [28 March] and the Order of the Committee [10 April], to put forthwith the Question necessary to dispose of the business to be concluded at that time.

Schedule 2 agreed to.

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

On a point of order, Mr. Winterton. Although there is no motion to report the Bill, as it is the subject of a programme resolution, I would like to take this opportunity to thank you and your co-Chairman Mr. Benton, for the way in which you have conducted our proceedings. I think that all members of the Committee feel that we have had a good, orderly, positive and constructive debate. That is attributable not to the way in which we have conducted ourselves but to the way in which you have conducted us.

I also thank the Doorkeepers and the police, who have ensured that we have been in good order throughout our proceedings—perhaps that is particularly appropriate, given that we were discussing private security—and the Hansard staff, who have had to put up with the Latin definitions and other matters that have been raised by you, Mr. Winterton, and others. We very much appreciate their work.

I want to express my particular appreciation of the work of the Clerks, because these matters are not straightforward and their guidance has been crucial. I also give especial thanks to my officials at the Home Office and in my private office, who have worked so hard and so effectively on these matters. I want to place that on the record. In that context, it is appropriate to pay tribute to those who have worked with other members of the Committee and to those organisations that have engaged with us and helped our dialogues and discussions.

I also pay tribute to my right hon. Friend the Member for Walsall, South and other hon. Members, who have helped and worked tremendously hard to keep us informed.

Finally, I would like to thank everybody who has participated in the Committee. Throughout our proceedings the Opposition spokespeople, the Government Members and the Opposition Back Benchers tried to ensure that we were scrutinising the Bill as fully and completely as possible. As I said, Mr. Winterton, particular thanks are due to you and your colleague, Mr. Benton, for your conduct of our affairs.

Photo of Mr Nick Hawkins Mr Nick Hawkins Conservative, Surrey Heath

Further to that point of order, Mr. Winterton. I echo the Minister's thanks to you and your co-Chairman Mr. Benton, which I am sure you will pass on. I would also like to thank the Clerks, Doorkeepers and police, and all those who have contributed to the debate. I agree with the Minister that this has been a sensible and constructive Committee in which a variety of members have made useful contributions. The House will better informed on Report. The Minister and his officials have given helpful indications and they will no doubt burn the midnight oil between now and Report to comply with all the undertakings that have been made.

This Committee has been a good example of how Standing Committees should operate. We nearly made it without programming, although my party is opposed to routine programming. The Minister and the Opposition thought that the number of sittings was about right, and only two groups of amendments were left to the end of this afternoon's sitting, with what Whips Offices often refer to as fingertip control—guided by you, Mr. Winterton. That shows what a constructive effort we have made to scrutinise this important Bill thoroughly. I should like to thank all members of the Committee for their assistance.

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

Further to that point of order, Mr. Winterton. I shall be brief. [Laughter.] I thank you and your co-Chairman, Mr. Benton. I thank also the civil servants, who are always there to provide answers to questions for which the Minister's brief did not prepare him. I thank the Minister for his usual courtesy. An important Bill, long in gestation, has been dealt with in one of the least confrontational ways of any Home Office Bill that I can remember. I am glad that there was such consensus, and I am grateful for the Committee's expedition. Within limits, there is some merit in programming motions. We should never commit ourselves to doing too much—it could be a straightjacket—although a little pressure from time to time does nobody any harm.

Photo of Bruce George Bruce George Labour, Walsall South

Further to that point of order, Mr. Winterton. Having been forcibly denied those two groups of superb amendments, which I was desperate to move, I should like to apologise to my colleagues for detaining them for longer than Back Benchers usually detain Chairmen and Committee members. They have been very tolerant.

I should like to thank the private security industry, without whose obstructionism and opposition the Bill could have been on the statute book 15 years ago. It has finally moved with the times, and I congratulate it. I had forgotten the difference between Select Committees and Standing Committees. I only wish that Select Committee members were accorded the same deference, bordering on sycophancy, that you have received over the past few days, Mr. Winterton. It is quite disgusting. I will not join in, other than to say that what Robert Peel was to the police force in 1829, the names of Clarke, Straw and Winterton will be to the private security industry in 2001. It was an important Committee—too rushed, but at least the legislation will be on the statute book. It is now up to others to make the good legislation that the security industry and the public deserve.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I thank all Committee members for their kind and generous words. I have found it fun, and I know that my co-Chairman Mr. Benton enjoyed the sittings that he chaired. I am pleased that you believe, as I do, that it has been a constructive and positive Committee. I congratulate all who have participated in the debates. The Minister, the Opposition spokesmen and the hon. Member for Southwark, North and Bermondsey have all put in a great deal of work. The House will benefit from our debates.

I thank the Hansard staff, the Doorkeepers and the police. I shall not thank the officials—I left that to the Minister and he has done it very well. I thank hon. Members for their generous comments, and I look forward to the next occasion.

Bill, as amended, to be reported, pursuant to the Order of the House [28 March].

The Committee rose at nine minutes past Seven o'clock.