Amendment proposed [this day]: No. 120, in schedule 1, page 120, line 28, after '9)', insert—

'(aa) such persons appointed by SOCA under this paragraph as police members of SOCA,'.—[Mr. Andrew Mitchell.]

Question again proposed, That the amendment be made.

I remind the Committee that with this it is convenient to discuss the following amendments:

No. 121, in schedule 1, page 120, line 36, after first 'SOCA', insert

'or police members of SOCA'.

No. 108, in schedule 1, page 122, line 33, at end insert

'Police members of staff of SOCA

13A A person shall be appointed as a police member of SOCA if—

(a) he is attested or sworn as a constable and

(i) he is a member a police force maintained under section 2 of the Police Act 1996;

(ii) he is a member of the Metropolitan Police Force or City of London Police Force;

(iii) he is a regular constable within the meaning of the Police (Scotland) Act 1967;

(iv) he is a member of the Police Service of Northern Ireland;

(v) he is a member of the Ministry of Defence Police appointed on the nomination of the Secretary of State under section 1 of the Ministry of Defence Police Act 1987;

(vi) he is a member of the British Transport Police Force;

(vii) he is a member of the States of Jersey Police Force;

(viii) he is a member of the salaried Police Force of the island of Guernsey; or

(ix) he is a member of the Isle of Man Constabulary;

(b) he is an officer of Revenue and Customs, or

(c) he is an immigration officer within the meaning of the Immigration Act 1971.

13B(1) Subject to the provisions of this paragraph, the Secretary of State may make regulations as to the government and administration of SOCA and conditions of service within SOCA.

(2) Without prejudice to the generality of sub-paragraph (1), regulations under this paragraph may make provision with respect to—

(a) the ranks to be held by police members of SOCA;

(b) the promotion of police members of SOCA;

(c) voluntary retirement of the police members of SOCA;

(d) the efficiency and effectiveness of police members of SOCA;

(e) the suspension of police members of SOCA from membership of it and from their office as constables; 

(f) the maintenance of personal records as members of SOCA;

(g) the duties which are or are not to be performed by the police members of SOCA;

(h) the treatment at occasions of police duty of attendance at meetings of the Police Federations and of anybody recognised by the Secretary of State for the purposes of section 64 of the Police Act 1996;

(i) the hours of duty, leave, pay and allowances of police members of SOCA; and

(j) the issue, use and return of—

(i) personal equipment and accoutrements; and

(ii) police clothing.

(3) Regulations under this paragraph for regulating pay and allowances may be made retrospective to any date specified in the Regulations, but nothing in this sub-paragraph shall be construed as authorising the pay or allowances payable to any person to be reduced retrospectively.

(4) SOCA may—

(a) pay, or make payments in respect of pensions or gratuities to or in respect of any persons who are or have been police members;

(b) provide and maintain schemes (whether contributory or not) for the payment of pensions or gratuities to or in respect of any such persons.

(5) Before exercising its powers under sub-paragraph (4), SOCA shall have regard to any provision made under the Pensions Act 1976.'.

No. 74, in clause 38, page 21, line 12, leave out 'Whether or not' and insert 'only if''.

No. 142, in clause 41, page 22, line 3, leave out from 'a' to end of line 4 and insert 'police member of SOCA'.

No. 143, in clause 41, page 22, line 5, leave out 'The designated person' and inset 'A police member'.

No. 144, in clause 41, page 22, line 6, leave out 'the designated person' and insert 'a police member'.

No. 122, in clause 41, page 22, line 13, leave out 'the designated person' and insert 'a police member'.

No. 123, in clause 41, page 22, line 16, leave out 'the designated person' and insert 'a police member'.

No. 124, in clause 41, page 22, line 17, leave out 'The designated person' and insert 'A police member'.

No. 125, in clause 41, page 22, line 21, leave out 'the designated person' and insert 'a police member'.

No. 126, in clause 41, page 22, line 23, leave out subsection (8).

No. 127, in clause 42, page 22, line 29, leave out 'persons designated' and insert 'police members'.

No. 131, in clause 46, page 24, line 41, leave out 'designated person' and insert 'police member'.

No. 132, in clause 46, page 25, line 1, leave out 'designated person' and insert 'police member'.

No. 133, in clause 46, page 25, line 4, leave out 'designated person' and insert 'police member'.

No. 109, in clause 46, page 25, line 5, leave out 'designated person' and insert 'police member'.

No. 110, in clause 46, page 25, line 8, leave out 'designated person' and insert 'police member'.

No. 111, in clause 46, page 25, line 10, leave out 'designated person' and insert 'police member'.

No. 112, in clause 46, page 25, line 12, leave out 'designated person' and insert 'police member'.

No. 113, in clause 46, page 25, line 24, leave out 'designated person' and insert 'police member'.

No. 114, in clause 46, page 25, line 25, leave out 'virtue of the designation' and insert 

'reason of holding the powers'.

No. 115, in clause 47, page 25, line 39, leave out 'designated persons' and insert 'police members'.

No. 116, in clause 47, page 26, line 6, leave out 'designated persons' and insert 'police members'.

No. 118, in clause 49, page 26, leave out lines 36 and 37.

No. 119, in clause 49, page 26, line 40, leave out subsection (2).

New clause 8—Police members of staff of SOCA to have powers of constable etc.—

'(1) The police members of staff of SOCA (''the police members'') shall—

(a) have the powers of a constable,

(b) have the customs powers of an officer of Revenue and Customs, and

(c) have the powers of an immigration officer.

(2) For the purposes of this Part ''police member'' means a person who falls within paragraph 13A of Schedule 1.'.

I understand that the Minister has the floor, but she may wish to give way to the hon. Member for Beaconsfield (Mr. Grieve).

Mr. Dominic Grieve (Beaconsfield) (Con) indicated dissent.

I will not give way at this juncture, as I am sure that the hon. Gentleman will intervene in the next few minutes.

Welcome to the Committee, Mr. O'Brien. I look forward to working with you today and during future sittings. This morning, we had a strong and expansive discussion, particularly about the fundamental issue of whether, in creating the Serious and Organised Crime Agency, we would be creating another police organisation or something entirely different. The latter is the Government's vision for the organisation. As I said earlier, if we felt that we were already doing the most that we could do to tackle organised crime, we might be satisfied with the status quo.

That is not to say that the National Criminal Intelligence Service, the National Crime Squad, Customs and Excise drugs investigators and, for that matter, the immigration crime side of the immigration authorities are not doing very good work independently and in partnership. We are at this point because we are trying, as the consultation paper said, to be one step ahead of organised crime. I would like to pay tribute to the specialist staff who currently work in the NCS and NCIS. Alongside their police colleagues in those organisations, they often put themselves at risk in tackling dangerous criminals. We are trying to create a new organisation, one that can define its own culture in order to be one step ahead of serious and organised crime.

The Minister said a moment ago that SOCA was a new organisation, designed to achieve something different. Just before the break, she ran through a list of other organisations that currently have powers akin to those of the police, such as Customs and Excise. Is the difference in the new regime that, whereas those other organisations have very specific remits—Customs and Excise dealing with   revenue and importation, for example—SOCA is, by the nature of the Bill, going to deal with general policing matters? That is explicit in the powers that it has been given, including entering premises, interviewing people and seizing documents. Is there not a danger that, in creating a SOCA divorced from a police background, we are just adding something else to the existing organisations that have the powers of constables, creating a parallel police force? That is the matter that the Minister has not yet addressed.

I disagree with the hon. Gentleman about a parallel police force. That would suggest that we are trying to create an organisation to work in competition with the activities undertaken at force level. I hope that we shall discuss in detail the arrangements for mutual assistance, for sharing information and for calling on SOCA for support and assistance where that is appropriate. Earlier, I gave the example of a police force that might want the assistance of SOCA because it had certain expertise and technical ability in relation to kidnapping. This is not about creating an organisation that is in competition with the 43 police forces. It is about recognising that in the case of level 3 crime, different components come together. We will also look for opportunities to go after those individuals if they are involved in level 1 and level 2 criminal activity. The amendments would create a situation in which the agency had people of different status and on different sites, working under different terms and conditions. That is not good. Part of our problem in addressing organised crime is that we have too many different agencies with different cultures and histories.

The key issue is not the name of the person. The hon. Gentleman and his colleagues want to refer to people as police members. It is about equipping them with the necessary and proportionate powers to do the job that they need to do. If that involves, for example, powers of arrest and entry, then that is quite right. I have conceded today that we will come back with something in the Bill to reassure people that the appropriate training will take place before people are designated powers. However, the Bill should have the flexibility to ensure that people, from wherever they come, are able to be designated the necessary powers to do the job.

It seems that there is a partial assumption among Opposition Members that recruitment will come from the existing organisations working in this field, whether individuals come from the NCIS or the NCS, the police forces themselves, Customs and Excise or those dealing with immigration crime. However, we are looking to a future where individuals may come directly into SOCA as an organisation. They may not have come from a policing background, but building on the technical and specialist skills that they may bring with them to enable them to do their job, they will require the designation of powers that we feel the Bill provides.

I apologise for not being in my place for the latter part of this morning's sitting. I had a meeting elsewhere in the House of Commons. The Minister has been clear   and explicit that she does not want to set up a separate, parallel organisation. She wants an organisation to act in concert with the police in fighting serious and organised crime. If she is really serious about that, does she envisage regular exchanges of duties with, or secondments from, the various police forces? Does she then envisage that the organisation might form part of a senior police officer's career path, so he or she spends some time within SOCA and thereafter goes back to their own or a different police force?

I would not be as prescriptive as the hon. Gentleman suggests. I am not ruling out future opportunity or the need for secondments from police forces into SOCA. I would not suggest that in order for someone to have a good career in police forces throughout the country they would necessarily have to have worked within SOCA in order to reach the highest ranks within their force areas, whether in the South Yorkshire force, the Met, or wherever.

We have a flow of people who choose for a number of reasons to work within different agencies, and I think that that will continue. We are also looking to establish direct recruitment into SOCA, in much the same way that NCIS and NCS were going before the consultation on SOCA. They were looking to more direct recruitment instead of relying on secondment. I cannot be as prescriptive as the hon. Gentleman outlines on secondment. It is a matter of recognising the different forms of law enforcement in this country. There is a need for police officers at force level, and that is not second class to the role of SOCA. It is about trying to deal with different types of crime. The way that we have reformed community support officers, or the way that police reform consultation has focused on people's specialist skills when coming into the police at force level, means that we are asking ourselves whether we want to fossilise a structure that stems from the 20th century, or to move it forward into the 21st century. We are keeping an eye on what is ahead.

Does the Minister envisage a situation where, in future, the police force might recruit directly out of SOCA into their senior ranks people who had not previously gone through the police force, but had come through other career routes into SOCA?

That possibility would not necessarily be disadvantageous for the police force. Again, we need to consider the tasks that police forces require to be carried out. We are already, for example, providing funding for police forces throughout the country to have financial investigators. We recognise that in terms of asset recovery police forces should use to the full the powers provided by the Proceeds of Crime Act 2002. Whether we have community support officers, financial investigators or police officers who have a distinct and unique role, they are all part and parcel of trying to tackle crime at different levels. We should be open to different ideas of law enforcement, based on the outcomes that we want to achieve.

The Minister is being slightly tricky with the Committee. She made it clear that there are no terms and conditions yet, so no one can actually sign up. We have an expression of interest from potential recruits to SOCA, none of whom will join until they are aware of the terms and conditions.

The hon. Gentleman is repeating what I have just said. My point was that the charge was made that 95 per cent. of NCS officers were unwilling to transfer without knowing what their terms and conditions were likely to be. I do not see that as something we should be concerned about; it is absolutely practical and straightforward, and I am surprised it is not 100 per cent. As someone who used to work for a trade union, I would not recommend that anybody agree to a transfer without knowing exactly what is in writing about how it will affect them at the end of the day.

I understand that the Police Federation is concerned about a number of issues. There are representatives of the federation in the Committee Room, and I am meeting them tomorrow. We are trying to ensure that we maintain our commitment to police officers at police force level while trying to deal, in a more vision-seeking way, with the way that organised crime manifests itself. We will need people with the necessary skills to deal with that.

The thinking behind these amendments is fundamentally misconceived. I hope that I have shown the Committee that these proposals are a step in the wrong direction and that they do not hang together. If agreed to, they would certainly drive a coach and horses through both the intention of the consultation paper on organised crime, and our intention to make Britain the least attractive place in the world for organised crime to flourish.

First, I join the Minister in welcoming you, Mr O'Brien, in your role as Chairman this afternoon. I have no doubt that you will jointly chair the remaining sittings of the Committee.

With one exception, I am distinctly underwhelmed by the Minister's response. That may not surprise her. An exception is her comments on training, but I am pretty underwhelmed by those as well. She excited and   tempted us with her comments on Second Reading, but there is nothing of substance in the amendment paper. There has been sufficient time, and it ought to have been possible for her officials to put some flesh on the bones of what she said on Second Reading. However, we have nothing. We will, of course, consider whatever she tables—I think that we have a commitment to this—on Report.

Training will not solve the fundamental problem that we have set out today, and there was nothing in the Minister's remarks that addressed our concerns. I sense that I am not alone in Committee in feeling that the fundamental points that are the heart of the Bill and the setting up of the new agency have not been adequately addressed.

We have had an interesting debate, however. The hon. and learned Member for Redcar (Vera Baird) slightly chided me on the suggestion that there might be unscrupulous defence lawyers around who would behave in the way that I set out in my example. There could be bureaucratic and other difficulties for the agency under the regime that is currently envisaged. In my work as shadow police Minister, I talk to many senior policemen and policewomen, and I am convinced that existing loopholes are exploited by very clever lawyers. I hasten to add that their approach is completely different from that adopted by the hon. and learned Lady. We must not introduce legislation that would increase the chance of unscrupulous defence lawyers behaving in that way.

I sense that the hon. and learned Lady had some sympathy with my remarks. When she spoke about the way in which the powers will be handed out, I was reminded of the sheriff in the wild west riding into town and dispensing badges—in the present case, to members of SOCA so that they can undertake tasks for which they have not been properly trained. We heard nothing in the Minister's response to quiet those anxieties. She will not have much trouble carrying the vote on the amendment, but she has to win the argument on Report, which might be a little more difficult, and she will still have to win the argument in the other place, where, I suspect, her real trouble will begin.

My hon. Friend the Member for Beaconsfield—he too is a lawyer, but none the worse for that—explained that the Government tend to dislike the present independence of the police. As my hon. Friend made clear, that dislike was embodied by the former Home Secretary. The Government seek greater control, and we are trying through this and other amendments to get a fair balance, one that reflects the rights and position of the Home Secretary to set strategic priorities but not to interfere unduly. The balance is not right at the moment. My hon. Friend the Member for Hertsmere (Mr. Clappison)—another lawyer, I fear, as well as member of the Home Affairs Committee—also made that point.

On a number of things of which the Minister spoke, there is an enormous gulf between us. For example, she said that the amendments acted against the setting up of SOCA. With respect, that is absolute nonsense.   They do not; they are designed to take forward the aims that the Minister set out on Second Reading and to make SOCA more effective. She said that the amendments would ensure that we did not have one organisation with one culture. That is a desirable result, but at the end of the day the people who work in the agency must do the job for which they are trained and they must be able to exercise those powers competently.

We do not agree on a range of issues. The best way to deal with that is probably for me to seek to divide the Committee. With permission, we will return to the subject on Report and in another place.

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 11.

Question accordingly negatived.

I beg to move,

That the Order of the Committee this day be amended in paragraph (1)(b) by leaving out ''9.25 am'' and inserting ''9.10 am''.

This is a slight amendment to the resolution of the Programming Sub-Committee. We had a request from Opposition parties. I consulted Opposition Members and they are happy with the proposal. The amendment would make the starting time of the morning sitting 9.10 am instead of 9.25 am.

Question put and agreed to.

I beg to move amendment No. 4, in schedule 1, page 120, line 28, leave out from '9)' to end of line 29 and insert—

'(1A) The Director General shall appoint such staff for SOCA as he considers necessary for the discharge of its functions.'.

With this it will be convenient to discuss the following amendments: No. 161, in clause 6, page 4, line 27, at end insert—

'(b) the financial resources expected to be available to SOCA for the financial year,

(c) SOCA's proposed allocation of those resources;'.

No. 162, in clause 6, page 4, line 39, after first 'to', insert

', and the financial resources required to,'.

No. 1, in clause 18, page 10, line 36, leave out from 'determine' to end of line 37 and insert

'but not later than one month after the beginning of the financial year.'.

No. 3, in clause 19, page 11, line 2, after 'must', insert

'make an assessment of the funding SOCA requires in order to fulfil its annual plan and, in the light of that assessment, must'.

No. 160, in clause 19, page 11, line 4, leave out subsection (2) and insert—

'(2) A determination under sub-section (1) must specify a single amount in respect of three financial years.'.

I thank the usual channels for, as ever, looking after the interests of the Committee.

The amendments form the third part of the principal point that we wish to make about this part of the Bill. Amendment No. 1 would make it clear that the Serious Organised Crime Agency will receive funding at a specified and certain time, amendment No. 2 would remove the power of the Home Secretary to ring-fence funding, and amendment No. 3 would make it clear that SOCA will be adequately funded and that the funding decision will be based on requirements set out by the director general of SOCA. Clause 19 sets out how the financial position of SOCA will be determined, but we are concerned that there is no reference to how the financial requirements of SOCA will be assessed. The amendments would ensure an assessment of the costs and objectives of the annual plan. I reassure the Minister that the Opposition are trying to probe whether there are adequate safeguards to ensure that the financing of the agency cannot be used in a political manner.

We would like the Minister to comment on six key issues. First, the Government have not been clear about the exact sums of money that will be needed to set up SOCA and run the agency: there are key variables that have not been focused upon and costs that have not been clearly determined. Secondly, we want to remove from clause 18 the power of the Secretary of State to ring-fence funds. Thirdly, we would amend clause 19 to ensure that there is an assessment of the costs of the objectives of the annual plan. Fourthly, we want the action plan written by SOCA to contain references to the financial resources that will be required to fulfil the objectives outlined in the action plan. Fifthly, a three-year financial cycle would give SOCA the financial stability to plan ahead and to ensure that investigations do not have to be cut short—or at least to ensure that there is no risk that investigations might be cut short because of funding shortfalls. Sixthly, and finally, we want to amend the Bill to ensure that the director general of SOCA is able to appoint the number of staff necessary for the discharge of his functions. SOCA needs to have enough staff to operate efficiently. The history of staff shortages that affected the NCS must not be repeated.

First, SOCA is to be allocated no new money on its formation apart from an initial grant in the first year of £27 million. The Government have still not pinned down exact numbers for key variables, such as staff and technology costs, but they have clearly stated that SOCA will have the same running costs as its   component agencies. The Government have not stated that there will be any increase in real-terms funding in 2007-08—indeed, in theory SOCA might, under the terms of the Gershon recommendations affecting non-departmental public bodies, have to cut staff. We seek an assurance from the Minister that that will not be the case. No extra money has been allocated for 2007-08 to accommodate year-on-year increases such as the cost of living allowance and staff pay increases. No extra money has been allocated for additional capital expenditure. By its very nature—the Minister has made this point—SOCA will deal with sophisticated criminals using technologically advanced equipment and techniques. If SOCA does not have the capital to invest in new technology to stay ahead of the criminal networks, the agency will clearly not be able to succeed.

Given the inconsistency and lack of exact figures, it is not surprising that one of the concerns about the establishment of SOCA is that it could lead to the top-slicing of police force budgets. Funding for SOCA will come from the central Home Office allocation, so it is not surprising that police forces fear that money could be taken from their budgets to fund SOCA. We seek an undertaking that there will be no plundering of police force budgets and hope that the Minister will reassure us on that point.

Secondly, if one thing is likely to ensure that SOCA's operations comply with a political agenda, it is the ring-fencing of its grant. We have seen that in other areas of policing. How will SOCA be able to avoid politicisation if the spending of its grant is subject to and determined by a set of terms and conditions from the Home Secretary? The Opposition are absolutely opposed to the Government's obsession with ring-fencing funds to public services, because it has an entirely negative impact by stifling organisations and removing the flexibility that they must have to achieve operational independence. It would be quite feasible for the Secretary of State to set SOCA's entire agenda by compartmentalising its funding and specifying the types of operations and resources to which funding can be allocated. We are opposed to that. The Secretary of State could ring-fence the entire grant to placate and ingratiate himself with certain sections of the electorate, without paying any attention to actual serious organised criminal activity within the UK, on which SOCA's board will advise him. In fact, clause 18(3) states:

''The Secretary of State may, if he thinks fit, make any payment of grant under this section subject to conditions.''

That is an extreme example of micro-management and removes any guise of operational independence that the director general of SOCA may have been given in clause 22. We seek assurances in that respect.

Thirdly, we seek to amend the Bill to give SOCA further financial stability by ensuring that the grant is made to SOCA on a three-year financial cycle. The Government have been sympathetic to that proposition in other areas. Financial stability and clear financial planning are vital to SOCA's effective operation. SOCA would not be able to complete investigations if funding ceased owing to shortfalls and budget cuts. Giving SOCA its grant every three years   would also appease police forces' fears that their budgets would be top-sliced in the manner that I described. In clause 19(2), the Government merely offer the possibility that the Secretary of State may, if he thinks fit,

''specify a single amount in respect of two or more financial years.''

However, clause 19 offers no reassurance to SOCA. Do the Government envisage the Secretary of State using that provision as negotiating tool? Will SOCA be offered a variety of budgetary packages for different time scales? Will the Secretary of State offer the longer-term financial grant but only with strings attached, or will he make the sensible decision to set SOCA's grants over a longer period of time, to allow for financial stability?

Clause 19 is a welcome step in the right direction from the Government, as it has long been felt that grants should be made in financial cycles of longer than one year in order to assist financial planning. However, clause 19 as it stands merely flirts with the necessary commitment. In the case of SOCA, that commitment is an operational must. With a clear financial position SOCA will be able to take on more cases with the confidence that it will be able to complete them more quickly and more effectively.

Turning to points four and five, clause 19 sets out how the financial provisions of SOCA will be determined, but no reference is made to how its financial requirements will be assessed. The Secretary of State can make an entirely arbitrary decision. Under clause 19(7) the Secretary of State ''may require SOCA'' to provide him with information upon which he will base the financial grant. That places the onus solely on the Home Secretary and does not require him to gather any information from SOCA upon which he will base such a decision. We would amend the Bill to ensure that there is a clear assessment of the costs and objectives of the annual plan. We also want SOCA to be able to include in its annual plan the financial resources that would be required to fulfil the objectives of that plan.

The drafting of the Bill is unusual in that the amount of the financial grant is to be determined wholly at the Secretary of State's discretion. There is no precedent for that in the Acts that established the funding mechanisms of the NCS or NCIS. Sections 110 to 114 of the Criminal Justice and Police Act 2001 specified that NCIS and the NCS service authorities were to prepare annual budget statements that set down the required funding for the next financial year, and the Secretary of State would allocate the financial grant to those organisations based on that information. The NCS and NCIS therefore had the opportunity to make their financial requirements clear to the Secretary of State. A similar mechanism is in place for the director general of the Assets Recovery Agency to outline the agency's financial requirements based upon the objectives outlined in its annual plan. Schedule 1 to the Proceeds of Crime Act 2002 specifies that the director of the agency must, before the beginning of each financial year apart from the first prepare a plan setting out how he intends to exercise his functions during the financial year. That is an annual plan   similar to the one that SOCA is required to prepare. The schedule goes on to state that the annual plan must include his priorities for the financial year, the financial resources expected to be available to him for the financial year and his proposed allocation of those resources. There is no such specification in clause 6 in relation to SOCA's annual plan. Our amendment is designed to redress the balance by ensuring that the Secretary of State bases his assessment for SOCA's financial grant on the annual plan, which will contain references to SOCA's financial requirements for the coming financial year.

Finally, we want to ensure that the director general of SOCA is able to appoint the number of staff necessary for the discharge of the agency's functions. We also hope that our amendment requiring that SOCA outline its forthcoming financial needs will ensure that the resources required to start SOCA effectively are spelled out clearly to the Secretary of State. SOCA must have enough staff to operate efficiently and to put the fear of God into the perpetrators of serious organised crime in the UK. It is currently speculated that SOCA will be staffed by 4,500 to 5,000 officers taken from the various component bodies. It is vital that resources be provided to resource the agency properly to deal with organised crime. Historically, NCS has been understaffed. In the 2003-04 annual report of the NCS, Bill Hughes, then its director general, said,

''We have been under strength this year. This in itself is a critical weakness.''

He added,

''Last year, fewer people bore more strain as a result of a shortfall in staff.''

We do not want to see the maximum effort being put into establishing SOCA, only to find that the Government are unwilling to provide the financial support necessary and the director general is unable to recruit the number of officers and staff required to run the agency effectively.

This is a sensible and moderate set of probing amendments. We hope that the Minister will either accept them in whole or in part, or reassure the Committee and, more important, those outside who have raised these important points, that they are unnecessary.

I, too, welcome you to the Chair, Mr. O'Brien.

This is an important group of amendments, because we need greater clarity about the budget of the new organisation. To an extent, we have been at this point before in the genesis of the predecessor organisations. NCIS was set up on the basis of recharging from the constabularies and police authorities—an arrangement that did not work well, as we ended up with some unfortunate spats between the various police authorities and forces and NCIS about the appropriate level of funding for what was described as a service to them rather than a national agency. Clearly, that is not the case with the establishment of SOCA, but there are still some imponderables about exactly where the funding will come from and the extent to which it will be a top slice from the police   grant. Is there a view in the Home Office about whether there are any savings in the operational requirements of police authorities as a result of the establishment of SOCA? Will that be factored in to the distribution of police grant at a later stage?

We are also not clear—this is tangential to the comments of the hon. Member for Sutton Coldfield (Mr. Mitchell)—about the extent to which SOCA will have to buy in services either from other parts of the Home Office or from outside. Will it have to buy in IT requirements in order to make them compatible with those of police forces around the country? The privatisation of the Forensic Science Service was announced today—something about which many of us have serious questions. We do not know what the implications of that privatisation will be for SOCA, but clearly there is a high-level requirement for forensic science support to enable SOCA to do its job properly. The privatisation proposals may have an impact on that, and we must consider those implications seriously.

The hon. Gentleman makes another, crucial, point about the prospect of compartmentalisation and earmarking of resources within the SOCA budget to establish priorities laid down by the Home Secretary. That is not an idle threat; we know that it will happen. Yesterday's very illuminating interview with Sir Stephen Lander revealed the extraordinary ''policing by focus group'' that is being foisted on the organisation even before its creation, so that priorities

''will be partly based upon on the number of column inches newspapers give to different types of organised criminality''.

When the Daily Mail gets into one of its periodic spates of excitement about a particular aspect of crime, SOCA will be expected to apply its resources there. Presumably, if the Home Secretary of the day has anything to do with it, that is how the Home Office budget will be allocated. The interview reports Sir Stephen as saying, helpfully:

''The brainboxes in the Home Office have been putting together a sort of harm model.

The model basically articulates the harm that is caused to the UK under a number of headings''— some of which he lists—

''and tries to put a cost [on them].

It also brings into play judgements about the degree of public concern and they have a proxy for this, which is the amount of column inches in the press. Which is not quite right''.

I agree; it is not quite right. I hope that the Home Office will think again about setting its priorities in that way. The proposed amendments would at least correct that potential mischief by ensuring that there would be a single allocation. That would be based, one would hope, on a costed approach to the annual plan derived from the work of SOCA itself, which would make proposals. That approach would have the further advantage of making the budgetary arrangements more accessible to audit.

That brings me to the last point on which I should like the Minister to comment in the context of the amendments. What will the process of audit be for SOCA? I am very keen to ensure that the Home Affairs   Committee has the greatest possible access to the budgetary requirements set out by the organisation and to information about the degree to which those are met. Presumably, SOCA, because it is not a police force, as we have been told repeatedly, will not fall under the remit of the Audit Commission, but will come within the remit of the National Audit Office and the Public Accounts Committee. If those bodies are to do a satisfactory job, they must be able to assess what the organisation itself assesses it needs to meet the demands put on it by the policing plan, which will in part derive from the Home Secretary's priorities. We are told that those priorities are to be led by an obscure voting system—a sort of ''Big Brother'' that gives people the police they want.

The question of funding is full of complexities that are not clear at the moment. The Minister must, during the passage of the Bill, make much clearer how SOCA is to be funded, the level at which it will be funded, and where the funding will come from.

I declare that I am not a member of a barristers', solicitors' or lawyers' trade union, but I shall not be pressing, as I have in other Standing Committees, for hon. Members who are members of such unions to make an appropriate declaration of interest as trade unionists are sometimes requested to do, for, in my view, rather spurious reasons.

I rise to seek guidance from the Minister on whether there is any conceivable scenario under any Government whereby SOCA could be used and involved in any industrial dispute. Remembering the miners' strike, I ask whether an alleged shifting of assets to avoid the sequestration of union funds, which a Government, Home Secretary or head of SOCA might unwisely, wrongly and unjustly deem to be an attempt at money laundering, would entice SOCA to take an active interest in pursuing anything to do with an industrial dispute.

The financial stability of the new organisation would be paramount to giving it a solid start, so I wholly support the amendments, not least the proposal for a three-year funding cycle, which seems to be eminently sensible, not least so that the organisation can have the funding necessary for proper strategic planning.

I have two questions for the Minister. What is the cost of setting up SOCA and are the running costs likely to be more or less than those of NCIS, the NCS and their service authorities? In other words, what will be the incremental additional cost of having SOCA in place?

I shall go through the amendments in numerical order and try to deal with all the points raised by members of the Committee.

As the hon. Member for Sutton Coldfield explained, amendments Nos. 1 to 3 relate to the payment of a grant to SOCA. Amendment No. 1 would require the annual grant to SOCA to be paid by the end of April each year. I fail to understand the argument in support of that. It is a fundamental aspect of Government accounting that grants to NDPBs are not paid in advance of need. As the hon. Gentleman said—this   may answer the point made by the hon. Member for Huntingdon (Mr. Djanogly)—SOCA will have a budget of some £340 million, which is the combined budgets of the organisations that will form SOCA, and a £27 million start-up fund. Having said that, a lot of work is being done to see how the four constituent parts come together and what their assets and their current human resource contracts are.

Finding where the work of those constituent organisations comes together is in the interests of efficiency and value for money. Doing so will ensure that we do not duplicate spending and that we get better value for money, but it will not necessarily be a way of reducing the amount of money that SOCA will have. That is why a lot of work is being done with the different organisations, particularly with NCIS and the NCS, to see where the overheads of each organisation lie. Those overheads will be unified as the organisations become one organisation. Hopefully that will result in our obtaining better value for money, particularly in contracts, since we might have one contract rather than two, three or four, depending on the arrangements for drug investigations by Customs and Excise and all the issues affecting the immigration crime department.

We do not believe that it is necessary to pay the whole sum in the first month of the financial year. As I said, the usual practice is to pay grants in monthly instalments. That will ensure that SOCA has sufficient cash in the bank at any time to meet its day-to-day commitments.

To pick up on a point raised about the financing of SOCA having a detrimental effect on the financing of police forces, I remind Committee members about a Government announcement made within the last month, of an extra £750 million being put into the fight against crime. That means central Government funding direct to police forces will increase by 5.1 per cent., including an increase of 4.8 per cent. in total formula grant, and more than £760 million in specific grants to police authorities. Taken together with the increase in central funding for police communication, IT and support services it provides an increase of 6.7 per cent. in Government spending on policing.

We believe it is important to act rather than just speak. There is no doubt that in real terms police forces have had increased allocations since 1997. That is demonstrated by the number of police officers and also by the equipment and technology they are able to use, whether that is ANPR, or Airwave and so on, in tackling modern policing today. This is not about setting up SOCA against police forces but, as we said in the previous debate, about recognising that there are different forms of criminality that have to be tackled in different ways. Different organisations have to be equipped and resourced to meet that task.

This is in a context, of course, about spending in all these areas. Based on our track record, people should have confidence in this Government. They should compare it with the Conservative proposals to remove   substantial moneys from the Home Office budget, which would eventually lead into discussions about where that money might go.

I am distressed by the party political tone that the Minister is adopting in dealing with my perfectly reasonable amendment. But in a spirit of good will, I assure her that the Conservative party's pledge for 40,000 more police officers starting on day one of a Conservative Government is costed and guaranteed.

Forty thousand, starting on day one?

From day one.

Ah, from day one. The hon. Gentleman corrects either me or himself to say ''from'' day one. We will all wait with bated breath to see whether that ever comes to fruition.

The provision is about recognising that, in tackling issues around law enforcement, the Home Office has to engage with other Departments; we engage with the Treasury on a whole number of issues. I believe that the track record of the Home Office in the years since 1997 shows that we have put our money where our mouth is, and that policing and tackling criminality in its various forms are things we have supported in a real and proper way. So we do not agree on amendment No. 1.

Amendment No. 2 would remove the ability to attach conditions to SOCA's grant. An inference has been drawn that there are somehow sinister motives in the provision, but it is standard in many statutes establishing non-departmental public bodies, including in the Police Act 1997, to allow some flexibility in attaching conditions to grants. The provision would enable, for example, an element of the grant to be ring-fenced for a specific purpose. One example might be funding from the Treasury's invest to save fund, which must be applied to the purpose for which the successful bid was submitted.

I understand another example already exists regarding NCIS and the NCS, which together cover a number of smaller functions. There is a discussion at present about where those functions might sit in the future, which hon. Members might want to discuss at a later date. Some of the smaller NCIS functions are being met by separate funding streams—for example, tackling wildlife crime is funded by the Department for Environment, Food and Rural Affairs. I understand there is a precedent for the Secretary of State to determine resources. I refer hon. Members to sections 17 and 62 of the 1997 Act in terms of grants to NCIS and the National Crime Squad respectively. I do not think anyone should read sinister motives into this, but occasionally there are points at which ring-fencing funding has an appropriate part to play in tackling certain types of crime.

I ask for clarification of how the provision would work in terms of wildlife crime. The evidence from international wildlife organisations is that wildlife crime—particularly high-value wildlife crime such as the smuggling of rare and valuable   species or parts of species—is run by the same organised criminals who smuggle drugs, arms and people. How would that link in if DEFRA was funding wildlife crime separately rather than having the whole area properly integrated into one, effective national system? That precise problem—missing out on linkages—is what I had thought SOCA was meant to be addressing.

We are not ignoring linkages. My hon. Friend is quite right. At the end of the day, organised criminals are entrepreneurs. At any given time, they will look at the area where they feel they can make some profit. That might be wildlife crime, or it might be drugs. We do not ignore those issues, but there are specific specialisms, such as wildlife crime, animal right extremism and paedophilia on the internet, for which there may be some common intelligence sharing, surveillance and operations issues that cross the organisation of SOCA. There might also, however, be the need for specialist expertise in those particular crimes. In those situations, such as in the case of DEFRA, it was felt that that the Department would put some money into the pot to ensure that that sort of expertise is supported. I do not want to deflect from what my hon. Friend has said, but—perhaps to pre-empt a further question—there are a number of areas that are not necessarily directly to do with drug smuggling, people trafficking and gun crime, although there may be linkages, as my hon. Friend points out, that are currently being looked at in relation to how they might fit into SOCA. A final decision has not yet been made as to where they would finally sit.

I am not trying to fob off my hon. Friend. We are very conscious of the problem, and, as the Minister responsible for dealing with animal rights extremism, I am acutely aware of how we need to look at particular areas. That is not to say that the criminals in specific areas will not be involved in drugs, human traffic or gun crime, or that there will not be issues of intelligence that would be appropriate to them. It is, however, about recognising that we do need some specialist skills in dealing with particular areas.

The Minister is right. I am not trying to deflect her from the main thesis in answering these amendments, but there is clearly work presently done by NCIS and the NCS, collating intelligence on matters that would not necessarily fall into the category of serious and organised crime, but which nevertheless cannot be done at local force level. That was the point I was trying to make earlier, and it is clearly one we need to return to. There are lacunae in the arrangements, and it is not clear how they are going to be met by the arrangements that the Minister is putting in place.

I have listened to what the hon. Gentleman has said, and that will form part of our debate on these particular areas of crime and the future role of the agency.

Amendment No. 4 seeks to remove responsibility for deciding the level of staffing for SOCA from the agency's board to the director general. That would be inconsistent with the Government's arrangements for SOCA as set out in the Bill. Under clause 6, it is the responsibility of the SOCA board as a whole to prepare an annual plan. The level of resources, including the numbers of staff required, must be a central part of any such plan. Clearly, the director general will play a central role in preparing the annual plan and will need to consider the level of staffing necessary to enable him to give effect to it. Ultimately, the plan must be agreed and owned by the board.

I have no doubt that the board will wish to delegate to the director general responsibility for the recruitment of individual staff, although the board might wish to have a say in certain appointments. It is entirely proper for the board of SOCA to retain those responsibilities. That crystallises the concept that the director general discharges SOCA's functions on behalf of the board. On the other hand, the amendment would give too much independent control of SOCA's human resources to the director general.

Accordingly, rather than follow the example of NCS and NCIS under the Police Act 1997, we have adopted the approach of corresponding paragraphs in schedule 1 to the Private Security Industry Act 2001 and in schedule 2 to the Police Reform Act 2002. Those relate to the Security Industry Authority and the Independent Police Complaints Commission respectively, both of which are NDPBs like SOCA. I hope that what I have said about the respective roles of the director general and of resources and staffing in relation to the annual plan will reassure the hon. Member for Sutton Coldfield that the director general will not be involved in advising on and influencing the shape of the organisation.

Even the NCS and NCIS model ensures that the director general does not have responsibility for appointing staff but, rather, that their respective service authorities do. In that sense, it is the board that is analogous to those service authorities. I hope that that clarifies our intention, and I invite the hon. Gentleman not to press the amendment.

In taking decisions on the level of grant, we must consider the bigger picture. I assure the hon. Gentleman and other Committee members that, before determining its grant, there will be full discussion with SOCA about its needs. That should be taken as read; it is not necessary to put it in the Bill.

I welcome what the Minister has just said. Will she take into account the fact that the Deputy Prime Minister has taken great credit for the fact that local authorities are to move towards a three-year budget? Is that not a good precedent for this organisation?

I do give credit to my right hon. Friend the Deputy Prime Minister for his role in relation to local authorities. We try to look across Government to give surety of funding. However, we have to consider the situation that we are in and the wider picture in terms of the Home Office and of defining what we need when putting our case to the Treasury. I hope that my comments have assured the hon. Gentleman that here, as in other areas, we will aim to give people certainty about the grants that will be allocated to them in order for them to undertake mid-term planning for their organisations. Amendment No. 160 goes somewhat too far and would place too many restrictions on the Government.

The principle of including financial information in SOCA's annual plan, as proposed in amendments Nos. 161 and 162, is sound. It would formalise what is already likely to happen in practice. For example, the NCS provides a detailed financial analysis in its annual plan. However, I cannot invite the Committee to accept those amendments, as they are too restrictive. Linking the financial resources that SOCA would require to each priority would limit in-year flexibility of resource allocation in response to changing operational demands. If the Opposition agree not to press those amendments, I shall move an appropriate amendment on Report, which I hope will meet the requirements and intent by placing the relevant provisions in the annual plan.

My hon. Friend the Member for Bassetlaw (John Mann) raised a point about trade unions and how those involved in industrial action might be affected. Clearly we do not see trade unions as serious organised crime groups—my hon. Friend may be pleased to hear that. For matters falling under the civil recovery of assets, investigation and proceedings would be for the Assets Recovery Agency rather than SOCA. SOCA   may have an interest in information arising from that process, but takes no direct lead. I would be happy to write to my hon. Friend on that if he wishes.

I hope that I have covered the points raised and assure the Committee that we seek to ensure that SOCA has the resources. Money will be important to SOCA, just as it is to the 43 police forces in England and Wales. However, the issue is not just about money, but the sort of organisation we want and its ability to deliver, based on resources. The organisation's biggest resource is the people within it—their skills and expertise, and how they come together to work to defeat organised crime.

I am most grateful to the hon. Member for Somerton and Frome (Mr. Heath) for his support of the probing nature of the amendments, on which we have had an interesting and helpful debate.

The hon. Member for Bassetlaw intervened to assure the Committee that he is not a lawyer. Similarly, I would like assure the Committee that I am not a lawyer and neither, I think, is my hon. Friend the Whip. The hon. Gentleman sought an answer about trade unions. I know that new Labour has moved a long way under the Prime Minister, but I find it surprising that the Minister needed to say, ''We do not see trade unions as serious organised crime groups.'' The fact that she was required to give the hon. Gentleman that assurance shows how much the political landscape has changed over the last few years—I have to say that he did not look that reassured when he heard it, but at least it is on record.

The hon. Gentleman also made a point about money laundering. Even now, my hon. Friend the Member for Beaconsfield is toiling away at some simply magnificent amendments on money laundering that.

He's behind you.

I must correct myself: my hon. Friend the Member for Beaconsfield has just returned from drafting some absolutely magnificent amendments on money laundering that will, I hope, captivate the hon. Member for Bassetlaw and tempt his support next week, or even on Thursday. My hon. Friend the Member for Huntingdon asked a number of questions, which I think the Minister also answered.

When the Minister rose to speak, notes were flying backwards and forwards and I had to suppress a feeling of immense excitement: I thought that some of my amendments might have found favour with the Minister. It must be said that she teased me with amendments Nos. 161 and 162, saying that if I did not press them she would return later with something similar. Accordingly, I am happy not to press those amendments.

The Minister made a few rather regrettable political points, but I am prepared to conceded that this year's settlement for my police force, West Midlands, which I have discussed with her colleagues in the Home Office, was better. It recognised the particular difficulties that face those who police Britain's second city. I am certain that that has nothing to do with likely   events on 5 May, but we are nevertheless grateful that our needs have been recognised. The Minister made a number of points on that subject.

The Minister also spoke about ring-fencing. The Opposition are extremely suspicious about the way in which the Government use ring-fencing. We think it is a form of micro-management, and we do not like the way in which what should be locally determined priorities are distorted by its ever-increasing use by the Home Office. We do not agree with her on that.

The Minister came precious close to satisfying me on amendment No. 3. However, not least because I want to help by placing it on the record that the hon. Member for Newcastle-under-Lyme (Paul Farrelly) was unable to vote on the first amendment when he was in fact in his place, but principally because of its declaratory nature, I would like to put amendment No. 4 to the vote.

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 11.

Question accordingly negatived.

Question proposed, That this schedule be the first schedule to the Bill.

I am grateful for the opportunity to discuss schedule 1, which in effect is taken with clause 1. We have discussed the mechanics of SOCA. We have discussed its operations. We have discussed its funding. We have discussed the governance of SOCA. However, we have not yet discussed the purpose of SOCA. The Government may assume that because the Opposition support the concept of SOCA—we do—its purpose can be ignored. That would be incorrect, and I believe that a few things need to be mentioned. The Minister said earlier that we are suggesting through our amendments that we want to keep things the way they are.

Order. I draw the hon. Gentleman's attention to the fact that there is nothing in schedule 1 about the purpose of SOCA. That was the subject of clause 1, which we debated this morning; the subject should have been raised then.  

With respect, Mr. O'Brien, I would suggest that the purpose is intrinsic to the schedule. I could address my comments to any part of the schedule.

Order. The hon. Gentleman started by saying that there is no record of SOCA's purpose. I am saying that schedule 1 makes no reference to that point, and therefore that the matter being raised by the hon. Gentleman is not included in this part of our business. I am advised that that part of the hon. Gentleman's contribution should have been made this morning when clause 1 was being debated.

Thank you, Mr. O'Brien. The subject on which I was going to speak is equally applicable to clause 2.

Question put and agreed to.

Schedule 1 agreed to.