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Lord Bassam of Brighton: My Lords, I am intrigued by this savaging of the Minister: the strange death of liberal Bassam! I shall attempt to dispel the idea. I am also much amused by the notion that my honourable friend the Home Secretary is not liberal. I understand that he has some concerns about liberals living in Hampstead. However, we put that to one side and I shall seek to reassure noble Lords who raise concerns about the matter. I thought that I had dealt with them in Committee.

The points raised in Committee revealed concerns to ensure that directions from the Secretary of State to the authority should always be made public. I remind the House that I indicated that there was no absolute obligation to make them public. I acknowledged the arguments in favour of a general presumption of openness. I abide by that. I remain of the view that there will be very limited circumstances in which these confidential directions might be necessary. Yes, they might relate to directions naming individuals or companies. For that reason, it would not be wise for us to place a requirement on the face of the Bill for all directions under Clause 2 to be laid before Parliament.

I do not think that that makes the Government illiberal. I do not think that it makes the legislation illiberal. It is not a back-door attempt to become more secretive. That is not the intention. This must be remembered. The licensing function belongs to the SIA. The Secretary of State cannot subvert that function by taking the decision himself that an individual may or may not have a licence and, therefore, directing the authority on what decision to take.

For those reasons, the directions will always be ancillary to the SIA's functions. They will not, and cannot, be used to take over the authority's functions. I hope that that clarifies the point. The noble Viscount seeks further clarification.

Viscount Astor: My Lords, can the Minister give an example of when the Home Secretary would give a direction relating to an individual? The circumstances pertaining to that individual could not be taken into account by the licensing authority in deciding whether the licence should be granted.

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Lord Bassam of Brighton: My Lords that is the point to which I hope that I am moving inexorably. The direction would not be: "Thou"--the SIA--"shalt not give a licence to". In very limited circumstances the Secretary of State may ask for investigations to be made on sensitive issues with regard to companies about which there is concern. The Secretary of State may use that power to direct the SIA to carry out an investigation into a specific company where there is concern--perhaps a PSI equivalent of BCCI.

Lord Thomas of Gresford: My Lords, is that not a black spot?

Lord Bassam of Brighton: No, my Lords, I do not think that it is. The noble Viscount, Lord Goschen, has raised concerns about rogue companies. Concerns about a particular company may well come to the attention of the Secretary of State. It does not seem wrong that the Secretary of State may direct, if he thinks that it is appropriate.

Viscount Goschen: My Lords, I am trying to help the Minister on this argument rather than to interfere with his train of thought. He is correct that I have concerns about rogue firms, but I cannot get my mind round why the Secretary of State would have to issue a direction. Surely he could simply tell the authority that there was a problem with a particular firm. Not every communication between the Secretary of State and the authority has to take the form of a direction. Can the Minister explain why I am wrong in saying that a direction can mean only that there is a conflict or disagreement between the Secretary of State and the authority because the authority is refusing to investigate or to do whatever the Secretary of State wants?

Lord Bassam of Brighton: My Lords, that raises another interesting question. I had the impression that the Conservatives wanted things to be plainly set out and understood and for there to be little confusion about the role of the Secretary of State or the ability of the SIA to consult. Everything that the Secretary of State can do should be set out in legislation. That is what the issue comes down to. There should be no confusion about whether the Secretary of State may issue a direction. In the majority of cases--probably 99 per cent--there will be transparency, but on some occasions, if a highly sensitive investigation is needed, the Secretary of State may have to give a direction.

Viscount Astor: My Lords, if the authority is a responsible authority, why would a direction be needed? Surely the Home Secretary could just write a letter setting out his concerns about a particular company and asking the SIA to investigate.

Lord Bassam of Brighton: My Lords, I suspect that that may well happen in most cases, but there may be one or two cases--it is difficult to estimate the effect of the legislation at this distance--in which the Secretary of State needs to give a direction because he has a particular concern. We are talking about those limited circumstances.

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I am convinced by the arguments put forward in Committee that in the majority of circumstances the directions should be a matter of public record. I am happy to make that plain on the record. We plan to establish the authority on the basis of a presumption of openness on the issue except in the limited and very sensitive circumstances that I have described.

Amendments Nos. 11 and 13 would require the authority to lay before Parliament the criteria that it draws up under Clause 6 before deciding on applications for individual licences and any draft revisions to those criteria. However, Clause 6(5) makes it clear that the authority's criteria and revised criteria shall not have effect unless the Secretary of State has approved them. The Bill already requires significant further parliamentary input to get the authority and its regimes up and running. The Government will need to ask Parliament to approve a number of regulations to give practical effect to the main provisions of the Bill. However, I am not persuaded that we need to ask Parliament to approve the level of detail that these two amendments would require.

The main purpose of the Bill is to establish the SIA and vest in it appropriate discretion to regulate the industry, backed up by specific parliamentary sanction in its most important aspects. I am confident that we should be able to rely on the sound sense of the authority's proposals and the Secretary of State's approval of detailed but necessary and important matters such as the precise licensing criteria to apply in each type of licence. To require the laying of draft criteria--and perhaps more importantly revised criteria--before Parliament would detract from the flexibility of approach in an evolving situation, which we believe is very important for the successful operation of the Bill. I am also not persuaded that Parliament would welcome a requirement to receive documents of the detail that may be suggested on a regular basis.

I understand the concerns that lie behind the amendments. We do not want to bring a large element of secrecy into the relationship between the Secretary of State and the SIA on the particular matter in the amendment. I remain a liberal--as it were--on these matters. We intend to have openness and transparency at the heart of that relationship and the way in which the legislation works.

8.45 p.m.

Viscount Astor: My Lords, the extraordinary thing about the directions is that not only do they give the Secretary of State the power to direct that someone should not be given a licence, but they give him the power to give a secret direction to the authority to give someone a licence. Someone could get a licence because, on a whim, the Secretary of State feels that it is necessary. We will never know. The authority might be against the decision, but there will be nothing that it can do about it. It will have to comply.

If the Labour Party were in opposition and we attempted to introduce such a measure, there would be the most unholy row. My noble friend Lord Goschen

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said that the noble Lord, Lord Bassam, was mugged. I am afraid that he was and he is still suffering dizzy spells. That is the only way to explain his attitude on the issue. He tried to be helpful. I asked why the Home Secretary could not just write a letter if he had concerns about a particular company. The authority would have to take account of such a letter. It could not just chuck it into the waste paper basket. It has to take account of all the evidence put to it. That is why it is there. It would have a duty to take account of the letter and could not dismiss it. The Minister said that there might be certain circumstances in which the Government wanted to make a direction. I have asked him to suggest such circumstances, but he cannot suggest anything beyond saying that the Government need the reserve power just in case.

Lord Thomas of Gresford: My Lords, does the noble Viscount agree that a direction implies that the Secretary of State disagrees with the decision that the authority wishes to make?

Viscount Astor: My Lords, the noble Lord is entirely right.

Lord Bassam of Brighton: My Lords, I must correct that point. The Secretary of State cannot interfere in the judgment of the SIA. That is not the point. The noble Viscount is assuming that the Secretary of State will simply tell the SIA not to give a licence. That is not what I am saying. I was very careful not to say that. That is the authority's judgment alone.

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