Private Security Industry Bill [Lords]

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Mr. Hughes: I am sorry, but it seems right to raise this final self-contained question, given the Minister's previous reply. Have the Government allowed for the administrative costs of the authority in their planning? I know that it will recoup its costs, but what running costs does the Minister imagine will fall to the authority, as opposed to other supplementary elements? Has a yearly figure been worked out?

Mr. Clarke: Paragraphs 72 and 73 of the explanatory notes state:

    ``The Security Industry Authority will be self-financing from fees''

as the hon. Gentleman indicated, and it continues:

    ``Funding estimated at £1m is required to establish the Authority and an additional £1.2m to £1.7 to cover a first year operating deficit. These monies will be recoverable through fees.

    There are also likely to be annually recurring and non-recoverable public expenditure costs of between £0.5m and £0.7m for court costs and possible legal aid involved in any prosecution arising from the new offences created.''

I have nothing to add to that at this juncture.

Question put and agreed to.

Schedule 1 agreed to.

Schedule 2

Activities liable to control under the Act

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

The Chairman: 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.''.

Mr. Bercow: 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.

Mr. Charles Clarke: 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.

Mr. Bercow: Will the Minister give way?

Mr. Clarke: 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.

Mr. Bercow: 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.

Mr. Bruce George: 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.

6.15 pm

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.

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