HL Deb 01 March 2001 vol 622 cc1354-70

7.49 p.m.

Report received.

Clause 1 [The Security Industry Authority]:

Lord Cope of Berkeley moved Amendment No. 1: Page 1, line 13, at end insert ("and to consult representatives of the security industry")

The noble Lord said: My Lords, I beg to move Amendment No. 1, with which it is suggested that we should discuss also Nos. 2, 2A and 12. These amendments seek in different ways to put into the Bill a requirement that the security industry authority, when set up, should have an obligation to consult the industry. They seek to insert the requirement into Clauses 1 and 6.

Amendments Nos. 1 and 2A make it a general requirement, as one of the functions of the new authority, that it should consult. Amendment No. 2 provides specially for consultation when the authority is using its power to make representations and proposals for the improvement of standards in the industry and so on. Amendment No. 12 contains a specific requirement that it should consult when dealing with and publishing the licensing criteria. This is a vital matter, about which we have not heard very much so far.

In fact, the specific question of consultation has been the one that has been most raised, to us at any rate, by representatives of the industry. That is not surprising. The Bill is very complex and it covers an extremely wide area: the licensing of guards, night watchmen, commissionaires, night club bouncers, private detectives, investigators, wheel dampers and so on. Many different sorts of people will be covered by the licensing regime, and it is difficult to see how the authority will be able to have among its members representatives of each of these sections of the security industry, as well as independents. I think this is fully recognised. There is also a general assumption that it should have representatives of the police, who are much involved in all this. Local government also wants to be represented regarding its own responsibilities, and many people want consumers also to be represented.

On St. David's day I think it is appropriate to say that the Welsh will surely want to have some representatives on the authority because Wales is included as well as England. Fortunately, Scotland is not involved and so it would not be included in this particular matter. It is right for the authority to have as members all these representatives, which is why the various bodies concerned are keen to be consulted and feel that there should be this obligation written into the Bill.

There is a second point, which is that the Bill leaves an awful lot fairly vague. There is nothing in the Bill about the criteria. There are some general remarks about "fit and proper persons" and that sort of thing, but there is nothing at all that is specific. Many things are being left to regulations and future decisions, either by the Secretary of State, with order-making powers and so on to bring before Parliament, or for the authority to bring forward itself. Of course we are assuming that no criminals need apply, but there is not much to go on beyond that. We do not know what sorts of directions the Secretary of State will make; but we will touch on that matter in later amendments.

We do not know who the Secretary of State will leave out of these licensing requirements under Clause 4. He has the power to leave out whole varieties of people from these and other arrangements. The terms of the licence are also left to future decision. We do not know what fees will be charged, except that the suggested amount has already been trebled by the Government and there is nervousness on that account. Some of these matters will be for decision by the Secretary of State and incorporated into regulations and orders that will come before Parliament under the negative procedure. However, others will not; and so consultation will be required.

The British Security Industry Association is concerned about the consultation. Indeed, it is more than keen to ensure that there is consultation on the matters to be decided by the Secretary of State because it hopes to be represented on the authority, I suppose. Of course there are numerous other bodies but they cannot all be represented on the authority. There is a Joint Security Industry Council and there has recently been set up, with the blessing of the Minister concerned, Charles Clarke, a National Security Inspectorate.

We all know that there are people in the Civil Service who are very secretive about what they are doing. The fear is that if there is no statutory requirement to consult such as would be inserted by these amendments, they might advise that there is no need for consultation and that it would best be avoided. There is also nervousness on the part of some people who wonder whether they will be allowed to contribute to the consultation. I have had a note from the Association of British Investigators, a professional body, and also from the Institute of Professional Investigators, which is essentially a standard-setting body. They had attempted to feed in their thoughts on these matters and Mr. Clarke said that he was not prepared to talk to two bodies in this field. He said that they really ought to come together. Certainly there are strong links between them but they have slightly separate roles. They are now nervous about not being consulted in the future if they are not consulted now.

Amendment No. 2A is a slightly more elaborate formulation: it is really a variation of Amendment No. 1. It provides in the first place for regular consultation with the industry and its stakeholders: we are not thinking solely of the directors. The word "stakeholders" is not actually defined but we know what is meant. It includes others within the industry, and they believe this would help to achieve the maximum consensus in the work of the authority. That would include, of course, the matters covered by Amendment No. 2: that is to say, proposing amendments to the law and also conducting research within the industry.

Amendment No. 2A also provides that there should be a duty to promote the best practice within the industry. I believe everyone wants the authority to set the tone, as it were, for the industry and to work to improve standards within the industry as time goes on, particularly among the smaller and medium-sized enterprises.

Lastly, Amendment No. 12 is of particular importance because it refers to Clause 6, which lays upon the authority the duty to prepare and publish a document setting out the criteria it is going to use. The question of the criteria, after all, is fundamental to the standards, and it is also fundamental as to whether a business can continue to function. So it is very important to people, and that is why I am suggesting that consultation on the criteria to be used is of the first importance.

8 p.m.

Lord Gladwin of Clee

My Lords, I have a great deal of sympathy with the intent behind the amendments. It is right that the authority should consult on how it will carry out the functions set out in the Bill. However, I am not sure that such a requirement should be on the face of the Bill. I am not sure that consultation should be restricted to the functions set out in paragraphs (b), (f) and (g) of Clause 1(2). There should be a well understood and transparent mechanism for carrying out effective consultation.

There are three ways in which this could be achieved. First, the authority could consult itself by having as its members representatives of the industry. I do not think that that would be enough, or effective. This is a disparate industry. The second choice is to have a committee of the authority, under paragraph 8 of Schedule 1, to which representatives of the industry would be appointed. But it would be a committee of the authority. A third choice would be to set up a separate advisory committee which was representative of the industry but independent of the authority, and which would be seen as the mechanism through which the authority would consult the industry and the industry would make representations to the authority—a two-way traffic.

Will my noble friend the Minister agree to seek the views of the industry at an early stage as to what mechanism it would prefer? We can all make proposals, but at the end of the day it is for the industry to indicate to the Minister and to the authority the kind of mechanism that is needed. I should be against a loose, non-mechanistic way of consulting the industry. With this industry, it would mean that some people were left out. I believe that there should be a mechanism which is well understood and transparent so that people would know how to make their views felt to the authority; and there would be a requirement on the authority to consult the industry through an agreed mechanism.

Viscount Goschen

My Lords, I support my noble friend's amendments relating to consultation. It is probably fair to say that the advent of governments consulting widely and fully has been one of the better developments in terms of open government and better regulation. Casting our minds back to the passage of the Regulatory Reform Bill through this House recently, we recall that a great deal of the debate related to the detail of how consultation exercises should be taken forward. Questions arose as to how detailed the provision on the face of the Bill should be as regards the mechanics of the consultation exercise, or whether it should simply occur.

My noble friend's amendments are helpful in not being overly prescriptive. Amendment No. 12, for example, would provide that before issuing any licences the authority should consult with representatives of the security industry. That leaves considerable latitude as to how the consultation process should be taken forward. During the passage of the Regulatory Reform Bill, the Minister was concerned not to set the process in stone too early; he felt that circumstances could change, the Government's guidance on how the wider consultation processes should be taken forward might change and, therefore, one might be locking into the Bill what might become an outdated set of procedures. My noble friend has not followed that route.

By including a duty on the authority to consult before it issues the criteria for licences—probably one of the most important decisions that it will make—it should consult with the industry. That much should be written on to the face of the Bill. It would make for stronger decisions—ones that would be less likely to be challenged, for example, in a court of law. Producing a document to indicate exactly what the criteria will be is of fundamental importance.

Indeed, I would take the matter one step further. I suggest that if my noble friend receives a positive indication from the Minister, as I hope he will, he might also look at imposing a duty on the authority to consult before it issues revised criteria. If the amendment is good as regards the production of the original document, I am sure that the same arguments might well apply. There is often some resistance to consultation because of the effort and the burden that it places on those who have to perform the exercise. However, under these circumstances it is important that the authority gets the matter right.

Whether, and to what extent, there is industry representation on the board of the authority is an interesting and important issue. Whatever degree of representation the industry has, the board will never, and should never, consist entirely of members from the industry. The authority must perform its proper statutory duty as a regulator. Therefore, it needs to obtain information from those who are at the cutting edge of what is going on in the industry on a day-to-day basis. Yes, it will include the industry's interests, and the authority's job will be to weigh those against the duties that are imposed on it by the Bill and by the Secretary of State. I support my noble friend's amendments.

The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton)

My Lords, I am grateful to the three noble Lords who have contributed to this discussion. It has been useful and will help us later on. The noble Lord, Lord Gladwin of Clee has set out three ways in which he thinks consultation could take place. The noble Lord urges us to consult about consultation. That is helpful, as are the proposals of the noble Lord, Lord Cope, which in a sense indicate the areas about which we should consult.

Perhaps I may move through the constituent parts of the amendments. In Amendments Nos. 1, 2 and 12 and the first part of Amendment No. 2A, the establishment of the security industry authority as the central and authoritative regulatory authority for the industry means that it will need to consult in any event probably with all sectors of the industry to enable it to do all of the things referred to in the amendments.

In preparing to introduce the licensing regime and the approved contractor scheme in an efficient and effective manner, it will be essential for the authority to pay due regard to what is both practicable and achievable; and the industry will, as ever, be one of the prime sources of the information, as it has been during the generation of this piece of legislation. We have arrived at where we are through consensus.

Similarly, the authority will be required to keep the work of the industry under review so that the Secretary of State can be advised on the effectiveness of regulation and make recommendations for improvements if and when they are necessary. Again, that would be absolutely impossible without an open line of dialogue with all parties of the industry. It has t o be said that the Secretary of State will also work very closely with the authority and consider any recommendations that it makes. We should certainly expect such recommendations to take appropriate account of the views of the industry.

It may be helpful if I also take this opportunity of reassuring your Lordships' House that the Secretary of State will not be making any regulations without considering the views of both the authority and the security industry as a whole. Indeed, to attempt to do so would run the risk of introducing unworkable proposals. I do not believe that any of us would wish to do so.

We have made clear on many occasions that we see it as important for the board of the security industry authority to have one representative—perhaps more—of the security industry sitting on it. That will allow the industry a direct input into the workings of the authority, and will also have the benefit of ensuring that appropriate consultations take place. I believe that that deals with one limb of the suggestions made by my noble friend Lord Gladwin of Clee.

The authority may also create committees in order to help it in its work. The committee structure is another way in which the voice of the industry will, and can, be heard. It may also be through that channel that it is most appropriate for the authority to hear the voice of employees in the industry—an issue, which, again, my noble friend raised directly with myself and officials. As the noble Viscount, Lord Goschen, observed, it will be important for the authority to ensure that it receives a balance of views now that its independence is not comprised or measured in any way.

In order to achieve all of its aims the security industry authority will naturally need to work closely with all sectors of industry and listen. The second part of Amendment No. 2A places a duty on the authority to promote best practice. The authority has already been given a duty under the provisions of Clause 1(2) to set and approve standards and to make recommendations for their improvement. As part of those functions, it is inevitable that the authority will be promoting best practice. I am afraid that I am not convinced that this part of Amendment No. 2A adds anything to what is already a significant function for the authority; in other words, we believe that it is already there.

The Government believe that adequate assurance already exists in the Bill as regards the points made in these amendments, in the way that I described. For those reasons, we do not consider it necessary to have such specific requirements spelt out on the face of the Bill, as suggested in the amendments.

One or two further points were raised during the debate in respect of which I should like to offer some reassurance. The noble Lord, Lord Cope, suggested that the licence fee had trebled during our considerations on the Bill. I do not believe that it has. We made it clear during the consultations on the White Paper that the estimate would be £23 for a licence. The current estimate is somewhere between £35 and £40, so the figure has not trebled—

Lord Cope of Berkeley

It has doubled!

Lord Bassam of Brighton

No, my Lords; I do not believe that it has doubled. Even at the upper limit it has not quite doubled. It has perhaps been increased by one-third. It will depend very much on how expensive the SIA becomes. I should like to correct one other misimpression that I do not believe the noble Lord intentionally created. He referred to discussions that Charles Clarke had with the Association of British Investigators and the Institute of Professional Investigators. The suggestion was that he had only talked to them together. He certainly met them so that they could discuss these matters together, and thereby submit any views that they wished to express. He was not seeking to make them merge or bring their views together in one view. I am sure that that was just a slip, metaphorically, on the part of the noble Lord.

Again, I should like to reassure my noble friend Lord Gladwin. He asked whether the views of industry would be sought at an early stage on the form of mechanism that it would prefer to see. The answer is yes. I believe that that is obvious from everything that I have said this evening. We should want to consult about the nature of future consultation. Although we cannot fix these matters in primary legislation—indeed, the noble Viscount, Lord Goschen, made the point that that is, perhaps, less wise—Nye want to hear from the industry very plainly as to how it best sees consultation being established—

Viscount Goschen

My Lords, I am obliged. The Minister is correct. I said that we should not put overly-detailed descriptions of exactly how this should work into the legislation. However, as my noble friend Lord Cope said, I still believe that it should be written on the face of the Bill that the authority "shall" have a duty to consult before, for example, producing the document containing the criteria.

Lord Bassam of Brighton

My Lords, I am grateful for the noble Viscount's clarification. However, the point remains that we do need to consult and discuss on how the various mechanisms might work, regardless of what that mechanism might then cover and the quality of its consultation.

I hope that I have answered the various points that were raised, and that I have given noble Lords sufficient reassurance. I trust that your Lordships' House will provide for the Bill to retain its current level of flexibility.

8.15 p.m.

Lord Cope of Berkeley

My Lords, we have had a useful short debate. I should tell the noble Lord, Lord Gladwin, that I certainly value his experience, and the suggestions that he put forward as to how the consultation might be achieved. I do not seek in the amendments to lay down how it should be done. Indeed, for exactly the reasons that the noble Lord set out, I do not believe that the Bill should lay that down. However, I do suggest that there should be a duty to consult in some form. Such a form would obviously evolve as the authority got going. As my noble friend Lord Goschen said, it might change over time in the future, and should not, therefore, be nailed down absolutely in the Bill.

My noble friend said that he would go further and require consultation on revised criteria. I did not actually put that requirement in the amendments because I assumed that the criteria would be published, consulted upon and then revised criteria that took the consultation into account would be issued. If we make the industry consult on the revised criteria, it would become a circular process in which it would go on and on doing the same thing.

Viscount Goschen

My Lords, my noble friend is entirely correct. We would not want an endless circle of consultation. However, if in due course it was decided that the criteria were not working very well and that new ones should be considered, the authority could then consult on them. I did not mean that we should have further consultation immediately after the first criteria were introduced.

Lord Cope of Berkeley

My Lords, I believe that we are at one in that respect.

The Minister said that the authority will need to consult, and that it was essential that it should do so—with all of which I agree. However, he admitted that there was likely to be only one representative of the industry, or thereabouts, on the authority itself. It is an extremely diverse industry. It is not one industry: it is a whole series of different and smaller industries. The Minister also referred to the committee system that might solve the problem.

I should point out to the Minister that what I said about the Association of British Investigators and the Institute of Professional Investigators was not a slip; it was almost a direct quotation from the letter that I received from senior representatives of those two bodies. However, I take it from what the noble Lord said that it is not the intention to cut them out of consultations, which is a good thing. They are not the only bodies of that character. There are also other bodies involved; for example—EPIC (ex-police in industry and commerce), and so on. It is necessary to talk to all the bodies.

The Minister made clear that he regards it as essential for the authority to consult, and that is the main point. I am sorry that he is not prepared to put such a provision in the Bill. However, I shall not press the amendment, which I beg leave to withdraw.

Amendment, by leave, withdrawn.

[Amendments Nos. 2 and 2A not moved.]

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

Viscount Astor moved Amendment No. 3: Page 2, line 23, at end insert— ("( ) The Secretary of State shall lay a copy of any such directions before each House of Parliament.").

The noble Viscount said: My Lords, it will be remembered that I moved this amendment in Committee. At that time, the Minister gave a reasonably helpful answer; but, unfortunately, he has had time to reconsider the thoughts that he expressed in Committee and has come forward with what I can only describe as an extremely unhelpful and rather retrograde step with regard to this clause and my amendments. I shall explain to your Lordships how and why.

Your Lordships are aware that Clause 2 gives the power to the Secretary of State to give general or specific directions in writing to the authority. It also gives him the power to request information about activities that he may require.

In Committee I asked the Minister why directions were required and whether they would be a matter of public record. He replied, 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 … Directions are not statutory instruments; they are merely a mechanism for a more informal way of establishing priorities and registering concerns".—[Official Report, 30/1/01; col. 591.]

In Committee the Minister was helpful. He further stated at col. 592: 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".

At that stage the Minister was kind enough to say that he would reflect on the matter. Unfortunately when the Minister went back to the Home Office all his natural inclinations for open and reasonable government and all his years of saying that the Labour Party wanted more openness in government deserted him. I am afraid that he was totally subverted by the system. He was kind enough to write to me, as he said he would. However, his letter was extraordinary as it seemed to be a total denial of what I thought he ever stood for. He reminded me that he had acknowledged the arguments in favour of a general presumption of openness. However, he further stated: I remain of the view that there may be very limited circumstances in which the use of a confidential direction may be necessary, for example, directions naming individuals or particular companies and consequently we should not place a requirement on the face of the Bill for all directions under Clause 2 to be published".

That is the most extraordinary statement, as the Minister said in Committee that the directions could include such matters as the placing of a cap on fees, how the authority should conduct itself, or what issues it should take into account. He said that those were the kind of matters on which the Home Secretary could give directions. But now we see that the Home Secretary has no confidence in the authority that he is creating, even before he has created it. He can say to the authority, "You are the authority. You will decide who gets a licence and who does not. But in certain circumstances I will direct you not to give someone a licence because I do not think that you should". Therefore, the Home Secretary and the Home Office will pre-empt the role of the authority even before it is created.

What is even worse, the directions will be secret. Apart from the Home Secretary and the authority, no one will know what the directions state or the names contained in them. We have a situation where the Home Secretary will by-pass the very authority he is creating. However, the position is worse than that because if one is denied a licence because the Home Secretary or someone in the Home Office considers that you should not have one, how do you appeal? There is a detailed appeal mechanism in Clause 10. Indeed, the Minister will move Amendment No. 19 to Clause 10 to make the appeal process clearer. If someone has been turned down for a licence not because the new authority says that he cannot have one, but because the authority has received a secret direction from the Home Secretary to that effect, how does that affect that person's rights of appeal? I am not a lawyer and I very much hope that the noble Lord, Lord Thomas of Gresford, will come to my aid and tell me whether an appellant's rights will be affected in such circumstances. How will the authority explain that that person cannot be given a licence when it has been given some secret direction from the Home Secretary to that effect? How does such a person appeal against that decision? It seems to me that there is a denial of basic rights here.

However, the position is yet worse. The Home Secretary may discover reasons why someone should not be given a licence, for example, because that person has a criminal record. Under the Bill the authority will have the right to acquire that information. It will be able to hold informal discussions with the Home Office and agree with the Home Secretary not to issue a licence. Central government have reserved the power to issue these directions.

The Minister tried to move an inch, but, I am afraid, only an inch. He stated: In the overwhelming majority of circumstances it would be right for directions to be a matter of public record. I am happy to place this on the record again at Report stage if you would find it helpful".

We always find the Minister helpful when he wants to be helpful. He further stated: I plan to establish an authority on the assumption that openness in this area would be a presumption unless sensitive circumstances (which I would expect to be extremely rare) suggest otherwise".

Those are helpful words but, as your Lordships know, they are only useful if some lawyer in court is able to quote Pepper v. Hart on some specific point of law with regard to how one interprets the Bill. A lawyer may be able to say, "We know what the Minister meant on Report and therefore this is how the measure should be interpreted". However, that does not help the person when the authority turns down his application for a licence. In those circumstances he can appeal only on the basis of his own perceived or actual personal circumstances. Pepper v. Hart concerns how someone defines the Bill and how the authority should act under the terms of the Bill.

I am extremely concerned by the directions. They seem to go against natural justice. The noble Lord referred to, directions naming individuals or particular companies".

This is not a case of stating that one person should have a licence but not another or stating the terms on which a licence should be given. It is a case of telling the authority whom not to give a licence to. Why would the Home Secretary ever use that power? There is only one reason; namely, to allow the Home Secretary to override the authority's decision to give someone a licence. He would only give a direction if he disputed a licence decision of the authority.

That seems to me an even more extraordinary state of affairs. This is an extremely important issue and one that is extremely worrying. It contravenes all the Government's pledges on openness and the Minister's comments on Second Reading and in Committee that the new authority would operate in an open and fair way. I hope that the Minister will think carefully about the matter and give a more helpful answer than he did in his letter. I beg to move.

Lord Thomas of Gresford

My Lords, we have to sympathise with the Minister that his natural liberal instincts are swallowed up in the Home Office by the Secretary of State who is proud not to be liberal but to be reactionary, as he demonstrates week in week out in the policies that he announces.

The Minister wrote to all noble Lords concerned with the Bill. However, I did not understand what was meant by the expression—the noble Viscount quoted it—that the Minister remains of the view that there may be very limited circumstances in which the use of a confidential direction may be necessary—for example, directions naming individuals or particular companies—and that consequently the Government should not place a requirement on the face of the Bill for all directions under Clause 2 to be published.

I could not understand what was meant by, directions naming individuals or particular companies". Having listened to the noble Viscount, I begin to have some idea of the concept underlying it. It can mean only that the Secretary of State gives a direction to the authority not to grant a licence for a particular activity to a named individual or to a particular company. If that should happen without the named individual or particular company knowing that it has happened—if it is done "under the carpet", as it were—and reasons were not given, there would undoubtedly be a breach of natural justice. The first principle of natural justice is that a person against whom an adverse decision is made should know the reasons for it. If he does not know what the reasons are he cannot properly appeal.

I support fully the noble Viscount's argument. I look forward to hearing whether the Minister can resurrect those instincts which he so clearly displayed in Committee.

8.30 p.m.

Viscount Goschen

My Lords, I, too, regret that the Minister was mugged on his way through the portals of the Home Office. He must be more careful next time.

I agree with all the points made by my noble friend Lord Astor. The most interesting relates to appeals and how the appeals process can work if a secret order has been given that someone should not receive a licence. Clause 10(1) states: The Secretary of State may by order make provision for the bringing of appeals. I was not clear whether that meant that only the Secretary of State was able to do so. If he had made the original secret direction, presumably he would not bring such an appeal.

Clause 2(2) states: Before giving directions under subsection (1), the Secretary of State shall consult the Authority". The authority is trusted to consult without a duty on the face of the Bill to do so. However, the Secretary of State has to have his duty written on the face of the Bill. Does that imply that Parliament trusts the authority but not the Secretary of State? Some clarification from the Minister would be helpful.

I understand the natural desire of Home Office officials to issue the Minister with a "get out of gaol free card" to sew into the lining of the back pocket of his coat for some eventuality that may arise in the future which had not been considered. There seems a conflict between the Secretary of State and the authority; otherwise the Secretary of State, the Home Office, would be able to have informal discussions with the authority, saying, "It has come to our notice through our various agencies that intelligence (or whatever) has been gathered and such a person is an unfit person according to the criteria to hold a licence. Here is a summary of the information". The authority could act on that through its own investigative powers. If an appeal were brought it could rely on its own judgment. But for the Secretary of State to give a direction about a specific case can mean only that the authority has rejected informal advice and is now being told what to do.

There are circumstances in which non-departmental public bodies are given directions. For example, the Rail Regulator is given directions on how he should exercise the powers of his office. They refer to general matters about the carrying out of his duty rather than specifics.

We need more information from the Minister. I, too, welcomed his 42-paragraph letter. From my experience, it is the all-time record for a communication from a Minister. Clearly he was saving on stamps. We need further explanation of the type of circumstances beyond those discussed by the noble Lord, Lord Thomas, and my noble friend Lord Astor which warrant this somewhat nuclear power.

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.

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.

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 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.

Viscount Astor

My Lords, that is a very helpful comment from the Minister, but the Bill does not say that. Clause 2 says: In carrying out its functions the Authority shall comply with any general or specific directions given to it in writing by the Secretary of State". Perhaps the Minister would rather that the Bill did not say that, but that is what it says.

The noble Lord, Lord Thomas of Gresford, is entirely right. The only circumstances in which the Secretary of State would be forced to give a direction would be if there was a dispute with the authority. If there is a dispute, Parliament ought to know, because otherwise the Secretary of State will be able to give secret directions that nobody knows about. The public will not know about them, Parliament will not know about them and presumably the authority will not be allowed to publicise the situation.

That is an extraordinary state of affairs. The Minister has tried his best to defend the reserve powers, but he has failed to come up with any convincing reason why they are necessary or any convincing scenario in which they would be used. He has not proved his case. Unfortunately, the Minister has not even been able to say that he will take away the matter and reconsider it. In those circumstances, I must seek the opinion of the House.

8.50 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 28; Not-Contents, 53.

Division No. 3
CONTENTS
Addington, L. Hanham, B.
Alexander of Weedon, L. Hayhoe, L.
Astor, V. Henley, L. [Teller]
Blatch, B. Kingsland, L.
Bridgeman, V. [Teller] Lyell, L.
Brougham and Vaux, L. Mar and Kellie, E.
Byford, B. Monson, L.
Carnegy of Lour, B. Phillips of Sudbury, L.
Cope of Berkeley, L. Renton, L.
Craigavon, V. Russell-Johnston, L.
Cumberlege, B. Sharp of Guildford, B.
Ezra, L. Strathclyde, L.
Goschen, V. Thomas of Gresford, L.
Hamwee, B. Tordoff, L.
NOT-CONTENTS
Acton, L. Harris of Haringey, L.
Alli, L. Haskel, L.
Amos, B. Hilton of Eggardon, B.
Andrews, B. Howells of St. Davids, B.
Archer of Sandwell, L. Hunt of Chesterton, L.
Bach, L. Hunt of Kings Heath, L
Bassam of Brighton, L. Jay of Paddington, B. (Lord Privy Seal)
Bernstein of Craigweil, L. Layard, L.
Billingham, B. Lea of Crondall, L.
Borrie, L. Macdonald of Tradeston, L.
Brooke of Alverthorpe, L. McIntosh of Haringey, L. [Teller]
Brookman, L.
Burlison, L. McIntosh of Hudnall, B.
Carter, L. [Teller] Parekh, L.
Chandos, V. Ramsay of Cartvale, B.
Clarke of Hampstead, L. Rendell of Babergh, B.
Cocks of Hartcliffe, L. Rogers of Riverside, L
Crawley, B. Sawyer, L.
Davies of Oldham, L. Shepherd, L.
Dubs, L. Simon, V.
Elder, L. Symons of Vernham Dean, B.
Farrington of Ribbleton, B. Thornton, B.
Faulkner of Worcester, L. Warner, L.
Filkin, L. Whitaker, B.
Gibson of Market Rasen, B. Whitty, L.
Gould of Potternewton, B. Wilkins, B.
Grenfell, L. Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

Lord Carter

My Lords, I beg to move that consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.