Serious Organised Crime and Police Bill

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Mr. Heath: I have some sympathy with the position outlined by the hon. Member for Sutton Coldfield. We are dealing with the SOCA board. I find the opening wording of schedule 1 a little confusing, saying that ''SOCA shall consist of'' rather than ''the board of SOCA shall consist of'', because that may be open to manifold confusion further down the line. I invite the Minister to look at that. There may, of course, be a technical reason for that wording, because of the corporate nature of SOCA.
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Almost every Home Secretary I can remember has wanted to subvert the tripartite arrangement as far as he feels he can get away with it, and to instil a degree of making police services accountable—I shall use the term ''police services'', whatever the Minister says—to the Home Secretary of the day. That is testimony to how times have changed. I was chair of a police authority when we had reforms back in the 1990s. The then Home Secretary, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), wanted to appoint all the members of all the police authorities for the whole of England and Wales. He felt it entirely appropriate that the Home Secretary should have control of the membership of the so-called independent police authorities. Happily, there was a degree of resistance to that, and we ended up with the most Byzantine structure ever formulated for the appointment of police authorities, which involved at least some outside involvement in the working of police authorities. Times have changed. The Conservatives now put forward a proposal that would wrest some control from the Home Secretary, while still accepting the principle that the new body is a national one in which it is quite proper for the Home Secretary to have an involvement. I support them in that contention.

Caroline Flint: I hope that we can continue as we did on the first clause with constructive debate and discussion and that some of the points that I will make will reassure the hon. Member for Sutton Coldfield that we believe it important for SOCA to have operational independence. A number of areas in the Bill ensure that that independence is enshrined and supported. As the hon. Gentleman explained, the amendments relate to the composition of the SOCA board. In some respects, as he rightly points out, they do not represent a great departure from the existing provisions in schedule 1. Unfortunately, however, I am afraid that I cannot commend them to the Committee.

We indicated in the White Paper ''One Step Ahead'' that responsibility for developing the strategy to deliver the priorities set for the agency would fall to a small board, in which non-executives would be in a clear majority. Schedule 1 achieves that by providing for a board that comprises a chairman, other non-executives, or ordinary members, appointed by the Home Secretary, and executive, or ex officio, members, one of whom will be the director general. The Bill provides that the number of ordinary members must not be less than the number of ex officio members.

In providing for the inclusion of the director general and other executive directors on the SOCA board, we have already moved much further than is normally the case for an NDPB. If hon. Members look at other NDPBs, they will find that the overwhelming majority of boards consist largely or exclusively of non-executives. It is quite exceptional for the chief executive of an NDPB to be a member of the board, so we feel that we have moved a considerable way.

Mr. Dominic Grieve (Beaconsfield) (Con): The Minister goes on about SOCA being an NDPB, but
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the powers that it will be given in the Bill are not those of an NDPB: they are of a hybrid structure and more akin to those of a police authority. That is why I think the Minister is missing the point. I am all in favour of SOCA, but I am in favour of it being an independent body. The Minister is confusing the two concepts, which is why there is justifiable cause for concern.

Caroline Flint: I welcome contributions to the debate, but the hon. Gentleman's explains why we have not gone for the format used for the majority of NDPB boards. The role played by the director general and the non-executive directors will be crucial in ensuring that people recognise the work done by the organisation. Different levels of accountability will be required, and we need the sort of people who will contribute to successful oversight of the organisation.

I simply wanted to make it clear that we are creating something new, but it looks as if I will have to keep reiterating that we are not creating a police organisation. We are combining several different skills and talents in a law enforcement organisation that will bring together people from policing backgrounds, Customs and Excise backgrounds and perhaps financial investigations backgrounds. It is important that the structures should reflect that and that it can be held to account.

Mr. Grieve: I appreciate the Minister's point, and we shall have an opportunity later to consider some of the powers that SOCA is being given. However, I hope that she is not suggesting that those are the ordinary powers of an average NDPB, because I can assure her that they are not.

Caroline Flint: Perhaps the hon. Gentleman is not listening; I just made that point quite clearly. We feel that we need something beyond the service authority that existed for NCIS and the NCS. We are trying to establish a structure that best reflects the organisation we are creating and the powers that it will have, while recognising that it needs accountability and operational independence. I think that I made that quite clear in my first answer to the hon. Gentleman.

The Bill provides that the number of ordinary members must not be less than the number of ex officio members. Amendment No. 65 would require there to be an equal number of ordinary and ex officio members. The hon. Member for Sutton Coldfield may argue that that will still place non-executives in a majority of one when the chairman is added to the equation, and so it will. Furthermore, we intend that SOCA's first board will indeed have an equal number of ordinary and ex officio members. However, on some occasions, it may be necessary to consider how we can allow specific skills to be added to the board, possibly to provide input in relation to a new manifestation of organised crime, without necessarily automatically adding to the executive directors and the management structure under the director general. For that reason, although we agree in principle with what has been said about balance, we want the agency to have some flexibility.

10.15 am

The Committee will be aware that we have already appointed Sir Stephen Lander as chairman-designate
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and Bill Hughes as director general-designate. Last month, we initiated the recruitment of the four executive directors—one each for corporate services, intelligence, intervention and enforcement—and next spring we will recruit five non-executives to produce a board of 11. While we envisage that in the first instance there will be parity between ordinary and ex officio members, with the non-executives in a majority of one, I advise the Committee to stick with the formula in the Bill. We accept that, in the interests of effective corporate governance, the non-executives must be in a majority. The Bill makes the point strongly, and it is worth adding that some NDPB boards are composed entirely of non-executives. While I accept the point made by the hon. Member for Beaconsfield about the nature of the organisation, that is why we feel that the formula is appropriate.

The hon. Member for Sutton Coldfield made a number of points about politicisation of SOCA through the appointments process. I do not intend to respond to all of them. All non-executive appointments will be subject to the Nolan rules and to audit by the Commissioner for Public Appointments, and appointments will be determined on merit, not on the basis of a candidate's political persuasion. As a result, the non-executives will be no less independent of Ministers than the executive members of the board. It is important that, as part of the appointments process, people should acknowledge any political affiliation that they have. I recall a case in Doncaster, in a different context, in which a person was appointed to a local trust. He declared that he had no political affiliation, and we later found that he had been a Conservative candidate—perhaps he did not feel that that was a political affiliation. While it might sound odd when we say it out loud, it is important that people in public life acknowledge their political affiliation, and we should not see such an affiliation as being bad in itself. All the non-executive appointments will be subject to the Nolan rules and to audit by the Commissioner for Public Appointments, and I am sure that if anybody had any concerns about this part of the Bill, they would have been made known to us.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): Given the constitution set out in schedule 1, it is likely that the Chairman will, on some occasions, need to exercise a casting vote. Will the Minister deal with that? She will know that sometimes people are sick or do not attend for other good reasons, which could be important, given the narrowness of the majority of the Secretary of State's appointees.

Caroline Flint: The hon. Gentleman makes an interesting point. In a roundabout way, he seems to be arguing against the amendments in saying that the majority on the board—six to five in favour of the non-executives—is too narrow, and that we should make it larger.

Mr. Clifton-Brown: No, I am not.

Caroline Flint: Well, given what he just said, he is arguing that if somebody is sick, there might not be a majority of non-executives. That seems to contradict the hon. Member for Sutton Coldfield. I shall read the report of our proceedings to check that I heard him
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correctly. We will ensure that the schedule covers how the standing orders are to be developed by the SOCA board. Matters concerning its quorum will be for it to decide. I suggest that the hon. Member for Cotswold (Mr. Clifton-Brown) looks at his own words, because I think that he is making an argument for an increase in the number of non-executive members.

Amendment No. 66 would restrict the voting rights of the chairman, so that he could exercise a casting vote only in the event of a tie between the other board members. In practice, few decisions of NDPB boards are taken by formal vote. Nevertheless, I see no reason why we should limit the chairman's freedom to have a full say in any decision. We are asking the chairman of the organisation not merely to turn up to chair meetings but to take full responsibility for the organisation and to be accountable for the annual plan.

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