Clause 4 - Advice and assistance to business

Civil Contingencies Bill – in a Public Bill Committee at 2:30 pm on 29th January 2004.

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

Photo of Patrick Mercer Patrick Mercer Conservative, Newark

I would not seek to divide the Committee on this clause, but I will make one or two points to the Minister. The clause makes provisions for advice and assistance to business in an emergency such as those that we have discussed, whether caused by terrorism or a natural event. I ask

the Minister to clarify two points for me.

My first point concerns the Financial Services Authority. Depending on the circumstances, I should have thought that the FSA might already be empowered to take such actions as are specified in the clause. If there are good arguments that the existing FSA powers are inadequate, the FSA should be empowered to take such decisions and actions. That is why it was set up by Parliament. Does it make sense for the FSA to be ridden roughshod over from that point of view? Would it not be better qualified or experienced to deal with the particular problems occurring in that sort of emergency than any other authority or Minister?

My second point concerns the indication that we have been given by Project Unicorn. I will enlighten people about that, if I may. I am sure that the hon. Member for Ealing, North (Mr. Pound) will be fascinated to hear the background to it, if he does not know it already. There is no doubt that London business, in general, feels that it is not adequately prepared to deal with an emergency–an emergency caused by terrorism rather than a natural emergency. The criticisms that the Project Unicorn paper made of the Government go long and far. My concern is that the Metropolitan police feel sufficiently undermined and unsupported by Government assistance that they have, off their own bat and off their own budget, commissioned a report, which brings out several serious criticisms of the Government in their support for business, particularly in the London area. May I go over those, just to make sure that the Minster is quite clear?

The report identified five significant themes, which have emerged from the work of Project Unicorn. First, is a lack of a co-ordinated and structured Government counter-terrorist communications policy; second, the absence of an identifiable and publicised centre for counter-terrorism in London; third, the potential of the private security industry, as part of a wider police family; fourth, the need for a better understanding of the chemical, biological, radiological and nuclear threat; and, last, the application of corporate governance to counter-terrorism.

I could go on, but I will not, as we need to crack on. These are serious criticisms that are being made, not in a party political style, but simply because business, particularly in the Greater London area, feels desperately vulnerable. Despite the work of London Resilience, to which I pay tribute–in the spirit of non-party political points, I do believe that a lot of useful work has gone on inside the London area–this report makes the point that unless a number of fairly simple and pragmatic measures are taken, business will continue to feel extraordinarily vulnerable. There are a number of other points, but, essentially, business in the London area feels that Government must come to its assistance. I do not see how in this clause of the Bill any further assistance is really offered to them. That is all I have to say–Project Unicorn and the affair of the Financial Services Authority make my point quite clearly. What is the Minister's point of view?

Photo of Mr Richard Allan Mr Richard Allan Shadow Spokesperson for the Cabinet Office, Cabinet Office, Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Trade and Industry)

I am curious to get a clear understanding of how this clause will work. If the clause is taken together with the draft regulations that have been published in the regulatory impact assessment, one gets different pictures of what will happen under the clause.

The regulatory impact assessment suggests–certainly in terms of the costs that business will incur–that, for business, this clause is effectively all about an annual seminar on business continuity management run by the local authority. The local authority says that it will have a seminar, explain the kind of risks that might occur and give advice, and businesses will be expected to attend such a seminar.

The draft regulations are not entirely clear. It is mainly the local authorities that we are talking about, but also the emergency services. They have a responsibility whereby they

''must give advice and assistance to the local members of the public at large''


''may give advice and assistance to individual local members of the public''–

I am interested in the distinction between giving advice to local members of the public and individual members of the public–and they

''may refer local members of public or individual local members of the public to a business continuity consultant.''

There will be some concerns from business about the role of the responders in this clause, and what role they may have in directing people to business continuity consultants.

The draft regulations then go on to offer some transitional provisions, which, effectively, mean that for the first two years local authorities would have no duty to offer advice to small businesses–those defined as having fewer than 250 employees or a balance sheet of less than {**ed**}6 million. In passing, it is interesting to see how much legislation we are now putting forward where we define monetary sums in euros rather than in pounds sterling. It seems as though we are future-proofing legislation–which is not unwelcome to me, but I find curious–with a certain assumption in mind.

It is an exemption for the local authority rather than for businesses. We are used to exempting small businesses from regulatory burdens, but my understanding of clause 4 is that it would be entirely voluntary anyway. It is for local businesses to come forward, but the duty is on the local authority rather than the businesses. It is a curious exemption. It is not an exemption to favour local businesses by not giving them a regulatory burden, but to make life a little easier for the responders–the local authorities–in that they can say no to smaller businesses when they would have to say yes to larger businesses. That is my understanding, so I should be grateful if the Minister would confirm that.

There is also the question of charging in the regulations produced under the clause. The regulations state:

''Relevant responders may charge for any advice or assistance provided on request''

and then limit how charges can be made. Will the Minister confirm that charging will be voluntary and that the duty will be on the local authorities and other responders, not on businesses? As I understand it, businesses are being told not that they must pay for the advice, only that they may be asked for it, and that the local authorities and others will have a duty to provide advice, certainly for larger businesses, and may make a relevant charge.

Will the Minister give us a clear understanding of the extent to which he thinks that the provision will be used in practice? We said earlier that we were worried that some part 1 provisions would not be used enough, because they were too complex or insufficiently funded for local authorities and others to get a hold on them. However, on this clause, we are saying that although the aim is laudable–people planning for contingencies should offer business continuity advice–the complexity of how the regulations and clause work together and the fact that the service will be chargeable may mean that the clause's provisions will not be well used in practice.

Photo of Douglas Alexander Douglas Alexander Minister of State (Cabinet Office) and Chancellor of the Duchy of Lancaster

I shall first endeavour to place in context the remarks of the hon. Members for Newark (Patrick Mercer) and for Sheffield, Hallam (Mr. Allan) before turning to the latter's specific questions.

For context, it is important to put on record that many local authorities already undertake such preparation and work. The merit of local authorities making preparations was made evident not least by the work of local authorities in Manchester following the IRA bomb several years ago. Kirklees metropolitan council is another example of an authority undertaking such work.

I should emphasise that the burden is not necessarily onerous. The regulations are likely to require light-touch awareness raising, for example by the circulation of leaflets and giving of seminars. The more burdensome assistance–effective business continuity consultancy–will not be undertaken by all local authorities, and those that do will be able to charge for it. That will be on the basis of a judgment made by businesses on the merits and demerits of the consultancy available.

Local authorities will be able to draw on centrally provided material, which will help avoid the duplication of effort. As we have previously discussed at some length, we are committed to ensuring that local responders are properly funded. Any additional funding pressures will be dealt with via the established procedures in the 2004 spending review.

The hon. Member for Sheffield, Hallam asked for guidance on the distinction between ''must'' and ''may''. The regulations provide that each local authority must provide advice and assistance to the public at large. As I suggested, that advice could be in the form of leaflets, poster or mailshots. The regulations provide also that local authorities may in addition give advice and assistance to individual businesses and may refer businesses to a qualified business continuity consultant–someone with qualifications and expertise in business continuity

management, for example. Local authorities may provide those additional services, and many already do, but the Government do not propose to impose an obligation. Such advice would be tailored more to the needs of particular businesses in particular circumstances.

It was suggested that this part of the Bill might trample on the authority of the Financial Services Agency, but that is not the case. The primary responsibility for civil contingency planning in the financial service sector rests with the private sector, and outstanding examples of business continuity management are already manifested by the private sector. Authorities such as the FSA, the Bank of England and the Treasury have also put in place several measures to promote order in the event of a major operational disruption to the financial system. I am confident that we are striking the right balance between not undermining the FSA, the Bank of England, the Treasury and the particular circumstances of the City of London, and ensuring that we build on the best practice from elsewhere.

The hon. Member for Newark made some points about a leaked document on Project Unicorn. He will understand that the Government would prefer to comment on documents when they are published rather than in leaked form–I say that with assurance in the light of this week's events. However, I am certainly aware from my experience of travelling to see Operation Osiris that there is a high level of co-operation between my right hon. Friend the Minister for Local Government, Regional Governance and Fire, the elected Mayor of London and the City of London authorities. I understand that the hon. Gentleman accompanied Ministers on that occasion. I can assure the Committee that a great deal of work takes place to ensure that there are adequate preparations for any civil contingency likely to affect the City of London.

Several hon. Members rose–

Photo of Douglas Alexander Douglas Alexander Minister of State (Cabinet Office) and Chancellor of the Duchy of Lancaster 2:45 pm, 29th January 2004

I was about to say that I hoped that I had covered the points raised, but clearly I have not done so.

Photo of Patrick Mercer Patrick Mercer Conservative, Newark

The Minister mentioned the Osiris exercise, which I was lucky enough to be able to observe. My understanding is that it was more than two years after 11 September before a practical exercise of any sort took place to see what the reaction of the Government and, indeed, London would be to such an incident. That is in addition to the criticisms that I have already made. Does he seriously believe that one single exercise of that type is sufficient to suggest that London's business community is prepared for such an event?

Photo of Douglas Alexander Douglas Alexander Minister of State (Cabinet Office) and Chancellor of the Duchy of Lancaster

Operation Osiris, which I recollect took place in September, was only the latest in a number of exercises that the Government have undertaken. It is important at this stage in the Committee's deliberations to address a misperception that may be creeping into some of the analysis being offered on the Bill. It is important to recognise that the Bill is designed to update the framework of civil

protection in this country. I can assure the Committee that, quite apart from the need to modernise the legislative framework, a whole strain of work has been taken forward to strengthen the resilience capabilities not only of the Government, but of the emergency services in the wider sense. That is why, in the previous Budget, there was an allocation of, if I recollect correctly, about £300 million across a range of Departments to fight terrorism. That was for local responders and to fund counter-terrorism work.

It would be wholly wrong to suggest that the time scale for legislative change was not preceded by a range of other work. That work has been taken forward principally by my right hon. Friend the Home Secretary, but also by a range of other Departments. Operation Osiris formed only one part of a wide range of work that has been taken forward in relation not only to London, but to civil contingency planning across the UK more generally. If the hon. Gentleman would care to look back at the record of our previous deliberations, he will see that I referred to some of the exercises that the Government have undertaken since 11 September.

Photo of Mr Richard Allan Mr Richard Allan Shadow Spokesperson for the Cabinet Office, Cabinet Office, Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Trade and Industry)

Before the Minister finishes speaking, could he deal with the transitional arrangements as set out in the regulations, particularly in respect of small businesses, and the clause 4(1) duty that will be laid on local authorities? I should like to be assured that I have understood precisely how the exemption is intended to work.

Photo of Douglas Alexander Douglas Alexander Minister of State (Cabinet Office) and Chancellor of the Duchy of Lancaster

I hope that the hon. Gentleman will forgive my oversight in not addressing that point. The Government are considering whether it is appropriate to make transitional provision in relation to the business continuity management promotion duty. That would allow local authorities more time to build up their expertise in that area. There are some examples–Manchester and Kirklees come to mind–of authorities that do an outstanding job at the moment, but in some other authorities, capacity will need to be developed, and we are giving thought to that.

The draft regulations include a provision that would limit the business continuity promotion duty to businesses of a certain size. More thought is being given to how we ensure that we get the fit right between the need to ensure that that work is undertaken more widely by local authorities than is currently the case, and recognising where those local authorities are starting from. I am sure that we will be able to do that in the course of the discussions.

Question put and agreed to.

Clause 4 ordered to stand part of the Bill.