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Lord Bassam of Brighton: I am grateful to the noble Lord for giving me the opportunity to explain lines of accountability. The SIA will be established as a self-financing non-departmental public body. The bulk of its income will be derived from fees charged for individual licence applications and inspections under the approved contractor scheme and will be used to fund these processes. However, we believe there is a case--I think the noble Lord accepts this--for the authority to have limited ability to borrow money. I emphasise the word "limited". This would allow it some flexibility in conducting its business. It is not an open-ended guarantee. Any wish to borrow money will require the consent of the Secretary of State. So there will be parliamentary accountability and he will expect to see a proper business case made out.

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The authority will also be subject to external controls. It will be required to keep proper accounts and to prepare a statement of those accounts annually. These will be laid before Parliament and will also be subject to audit by the auditor general. So although we understand the nature of the amendment, we think it would unnecessarily constrain the operation of the authority--a point which I believe the noble Lord accepts. I urge him to withdraw the amendment.

Lord Cope of Berkeley: Will any borrowing show up as government borrowing in the main government accounts?

Lord Bassam of Brighton: I am sure that this body, as a non-departmental public body, will operate like all other such bodies. Borrowing by the SIA will be reported within the accounts; it will be necessary for the Secretary of State to approve it, and he will consult with Cabinet colleagues as appropriate. This would allow an opportunity for the Treasury to give its view. Borrowings would therefore be clearly shown in Home Office accounts and properly fed through to Parliament and there would be all the other checks and balances which operate throughout Whitehall.

Lord Cope of Berkeley: I am grateful to the Minister for putting that on the record. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

Clause 2 [Directions etc. by the Secretary of State]:

Viscount Astor moved Amendment No. 6:

    Page 2, line 23, at end insert--

("( ) The Secretary of State shall lay a copy of any such direction before each House of Parliament.").

The noble Viscount said: This amendment relates to directions given by the Secretary of State. The Explanatory Notes say clearly that the authority must comply with directions given to it by the Secretary of State and must provide any information requested by him. Also, the Secretary of State must consult the authority before giving any directions.

My first question is a general one. I should like to ask the Minister what kind of directions the Secretary of State might give. What area might be covered that is not in the Bill and cannot be done by either an order under Schedule 2 or in some other way? Can it relate to costs, for example--either the annual running costs of the authority or indeed the costs or charges that the authority might impose on the industry? The Minister will realise that there are many order-making powers within the Bill, giving the Secretary of State the chance to do lots of things in Clause 2 and Clause 3(3) about designated activities. What kind of things have the Government in mind under these rather broad and sweeping powers?

Also, it is not guidance; it is a direction. The Bill says that the authority will comply with any general or specific directions. What is the difference between a general direction and a specific one? Presumably any

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direction would have to be specific if the authority was to comply with it. I do not understand the meaning of the phrase "general direction". Surely, the general directions are largely contained in Clauses 1 to 3. Indeed, if it is a specific direction, will it not be included in the general powers in Schedule 2?

My last question is: how will the Secretary of State give these directions? Will they be laid before Parliament, enabling Parliament to see the nature of the extraordinarily wide power that the Home Secretary is giving himself in relation to the authority? These are important questions and I beg to move.

5 p.m.

Lord Bassam of Brighton: There will probably be a wider variety of possibilities, from requesting special reports about incidents of concern to the addition of reports if need be. I believe that the standard arrangement is for the Secretary of State to be able to give directions to non-departmental public bodies. If necessary, that could include the placing of a cap on fees. Therefore, they are general reserve powers. I understand that they will be subject to the usual statutory instruments procedure.

I hope that that reply is helpful to the noble Viscount. I do not believe that the consideration is as sinister as he suggested. We believe that it is a helpful way of assisting the Secretary of State to conduct business flexibly.

Viscount Goschen: Before my noble friend responds, will the Minister explain the position a little further? He said that directions would comply with the normal statutory instrument procedure but I wonder whether he is sure about that. If so, would they be affirmative or negative instruments?

Viscount Astor: In giving the Minister time to consider his answer perhaps I may turn to Clause 22, which defines orders and regulations and their use. I have studied the clause with some care. I may have missed something, but I cannot find anything relating to the directions which may be given out by the Secretary of State under Clause 2. Therefore, I do not believe that the directions are given by any form of statutory instrument, whether negative or affirmative. It is important that we have a clear answer from the Minister on this.

Lord Bassam of Brighton: On this occasion, the noble Viscount is right and I am wrong. I apologise to the Committee for that. Directions are not statutory instruments; they are merely a mechanism for a more informal way of establishing priorities and registering concerns. I hope that that clarifies the matter and I apologise to the Committee for having misled it earlier.

Viscount Astor: I am grateful to the Minister for that correction. Will the directions be published?

Lord Bassam of Brighton: If the noble Viscount will bear with me, no doubt I shall be able to give him an

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answer. I would hope that such directions would be a matter of public record because they would be helpful to all concerned. It is important that we are clear about what we are trying to do with orders and directions.

Viscount Astor: I rise in anticipation of the Minister's reply. We should be extremely unhappy if the directions were not a matter of public record and all those licensed and involved in the industry were not clearly able to see directions made by the Secretary of State.

Lord Bassam of Brighton: There is no absolute obligation to make them public. However, having heard what the noble Viscount said, I am prepared to reflect on the matter. In some situations, there may be an advantage in clearer communication and there may be benefit in that communication being in the public domain. I shall reflect on the point and happily write to the noble Viscount.

Viscount Goschen: Will the Minister also agree that there could be circumstances in which the authority would want to see publication of the directions? It could then make clear to those being regulated why it had taken a certain action.

Lord Bassam of Brighton: As always, the noble Viscount makes a sensible and telling point and I shall reflect on it. He is probably right.

Viscount Astor: The Minister's final words in reply to my question went to the heart of my amendment. It is important that the Home Secretary cannot impose secret directions on the authority, leaving those licensed or affected by the authority unaware of them.

I am grateful to the Minister for saying that he will reflect on the matter because if he had not done so I should have been forced to take it further and test the opinion of the Committee. However, I am grateful for the Minister's constructive attitude and I shall return to the matter on Report. By then the Minister will have had an opportunity to reflect on what has been said. It is important, not only in safeguarding the industry but also the authority and the role of the Secretary of State in giving such directions. I am sure that the Minister believes in open government. We must try to make these provisions as open and clear as possible. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 [Conduct prohibited without a licence]:

Lord Cope of Berkeley had given notice of his intention to move Amendment No. 7:

    Page 2, line 29, leave out ("it shall be an offence for a person to") and insert ("a person shall not").

The noble Lord said: I do not propose to move Amendments Nos. 7 and 8 because of the most useful meeting that the Minister arranged for me with some of his officials.

[Amendment No. 7 not moved.]

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[Amendments Nos. 8 to 11 not moved.]

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