Public Bodies Bill [HL]

Lord Foulkes of Cumnock Excerpts

Monday 28th February 2011 Lords Chamber

[Lord Empey]

My Lords, I have been listening to the debate, but the truth is that there is no single solution to economic development policy. There is no perfect model. There is a variety of models throughout the United Kingdom, some of which work better than others. However, the amendment is a fairly blunt instrument. The decision on the number of regional development agencies in England has to be taken in conjunction with the devolved regions. Until a few months ago, I had responsibility in Northern Ireland for certain aspects of economic development policy. Prior to that, I had responsibility for establishing Invest Northern Ireland, which at that time consisted of some 700 staff and had a budget of about £160 million.

However, the whole scene has changed. I listened carefully to the noble Lord, Lord Campbell-Savours, but what applies today is totally different from what applied in the 1980s. Europe has a big influence in this, because one of the big weapons that organisations in Scotland, Northern Ireland and elsewhere had was selective financial assistance. Since 1 January, that assistance has been largely reducing and by 2013 it will be virtually gone. Therefore, the model that we used for distributing it and the mechanism that we used for trying to bid for foreign direct investment are going to be denied us. All that will be left is soft assistance, with management plans and various other things, but the hardcore employment grants and capital grants that regions depended on to buy in business and investors will be denied us because of European regulations.

I can tell the Committee that a protocol exists within the United Kingdom to prevent all the different RDAs, the regional administrations and the national Government from bidding against each other. Foreign direct investors are not stupid. They knew that people in the regions were hungry and they went about their business going from one to the other. We had to establish protocols.

[Lord Foulkes of Cumnock]

Is it not the case that the noble Lord in Northern Ireland, we in Scotland and colleagues in Wales will continue to have development agencies, so why is he denying them to the regions of England?

[Lord Empey]

First, I have not denied anybody anything. I am just beginning to develop my argument. The fundamental point is that these organisations in the devolved regions are becoming systematically weaker. They have less ability to direct financial aid because the selective financial assistance, which was their principal weapon, is diminishing very rapidly and in a couple of years’ time will be gone altogether. The whole emphasis is shifting on to the development of skills. We had a fantastic conference in the United States last September and October hosted by the State Department at which we were given the opportunity to put Northern Ireland’s case. What was really interesting to potential investors was no longer grant aid; it was whether a region had a sufficient centre of gravity and critical mass of skilled people with the right skills in the right place to attract people. You can no longer buy in companies.

Sitting in the Chamber tonight is the noble Lord, Lord Ballyedmond, one of our premier entrepreneurs. I dealt with him and his colleagues on a number of occasions, and they were frustrated because the agencies and organisations could sometimes get in the way of business. Therefore, the question is: what is the right balance? Is it going to be possible to develop a national policy that will allow for the creation of the correct skill base? That will be far more important to foreign direct investment—and indeed, I believe, to indigenous investment—than financial aid in the future because the latter is going to be reduced and will be so small. I remember examples of £20,000 being offered per job created and perhaps even more. On average, it was £7,000, £8,000 or £10,000 per job created, but those days are gone and are not coming back. I certainly feel that this list of agencies is no longer sustainable but, at the same time, it is perfectly clear that you cannot create a complete vacuum.

--- Later in debate ---

[Lord Foulkes of Cumnock]

I add my congratulations and thanks to my noble friend Lady Henig for the work she does as the chair of the authority. I have had a number of discussions with her over the past year or so about the situation in Scotland, and she has been most helpful. She carries out her work in a modest but very effective way. I also echo what my noble friend Lord Whitty said earlier: before the SIA was established, the industry was characterised by cowboys and gangsters. I remember it well—not that I was part of it in any way, but I remember how it operated. I remember its links with organised crime. It was also characterised by low pay, which created particular problems with bribery in the running of operations.

That did not all change through self-regulation. It changed because we legislated and because the Government took clear and decisive action to ensure that the industry was properly regulated.

My main point relates to Scotland. I see the noble and learned Lord, Lord Wallace, here. I think that he will confirm that there is no doubt what is the view of the Scottish Executive in relation to the future of the SIA. On 8 September, the Home Secretary wrote to the Scottish Government seeking their views on the UK Government’s intention for the future of the Security Industry Authority. Kenny MacAskill, the Justice Minister in Scotland, in a reply to my colleague in the Scottish Parliament—he is not my noble friend yet—Richard Baker, stated on 11 November:

“I responded on behalf of the Scottish Government on 13 September 2010, setting out my concerns about the UK Government's proposals and strongly emphasising the need for continued regulation of the private security industry in Scotland. These views were also set out in a letter that I wrote to the Deputy Prime Minister on 24 September 2010 and in a further letter to the Home Secretary following my meeting with the Scottish security industry representatives on 13 October 2010”.

There is no doubt about their view, which was made very clear to the Home Office and the Deputy Prime Minister. In another reply, also on 11 November, Kenny MacAskill stated:

“The Scottish Government does not support the decision of the UK Government. The Security Industry Authority has been working very well in Scotland, and the Scottish Government made a very strong case to the UK Government for its continuation as the independent body responsible for regulating the private security industry”.

There is no doubt about the view of the Scottish Government. As my noble friend Lady Henig has heard directly, I can confirm that the shadow Justice Secretary, Richard Baker, who asked the Question, agrees. It is not often that he agrees with Kenny MacAskill, but on this occasion, he agrees 100 per cent with him.

So we have the two largest parties in the Scottish Parliament at one in wanting to keep the Security Industry Authority in operation. One might say, “It can continue to operate in Scotland”, but it would be ridiculous for a United Kingdom industry—which it is, because Securicor and G4 security operate north and south of the border—to have completely different regulation, a completely different kind of supervision.

The issues for the industry are the same in Scotland as they are in England. There are other areas where things are different in Scotland, where we are proud of the differences, but in this area, there are no differences in the operation of the industry and there should not be any difference in the regulation of the industry.

As my noble friend Lord Whitty said in a robust way and as my noble friend Lady Henig said in her usual gentle way, I say to the Minister: think again about this. Have further discussions with the Scottish Executive to find out more about their concerns, have discussions with the Welsh Assembly Government and with Northern Ireland about their concerns to try to find something which is acceptable to all parts of the United Kingdom, and come back to this House and the other place with alternatives. The very co-operative way in which the Minister, the noble Lord, Lord Taylor of Holbeach, started off the discussion on the Bill at about 3 o’clock—all those hours ago—was very refreshing. I hope that, on this particular issue, the Minister will act similarly to the noble Lord, Lord Taylor, look at it positively, take account of the views that have been expressed and take the matter away, think again and come back with revised proposals.

[Lord Ramsbotham]

My Lords, I add just one concern to what has already been said. That is in relation to the criminal justice system and the use of private security companies in it, coupled with my increasing concern about their involvement in the activities of the UK Border Agency. The Green Paper published by the Ministry of Justice, Breaking the Cycle, envisages increased use of private sector companies, for example in providing probation services. At present they are conducting a number of private sector prisons. Those are under supervision of the Inspectorate of Prisons but the training and the selection of staff has always caused concern.

As far as the UK Border Agency is concerned, the activities of the private sector in such activities as the deportation of people was drawn into high relief the other day with the death of someone who was put under restraint while being deported in an airplane from Heathrow. As a result, the activities of private sector guards have come under greater scrutiny rather than less. Therefore, with this increased activity, I have to admit that I am nervous at the thought of the SIA being removed from a role that it could have if raised to the stature of that work, in favour of self-regulation, which I do not believe is right in this particular area.

--- Later in debate ---

[Baroness Neville-Jones]

I accept that this industry—I do not know what other term I can use: perhaps “this occupation”—has a wide spectrum of activities and individuals in it. I will come to that in a moment. I want to encourage your Lordships to have more confidence that those in this industry can be relied on and are willing to take further responsibility and be more accountable for their own actions in future. I understand that there is some concern that if the SIA is abolished there will be no effective regulation of the private security industry. I want to offer reassurance on that point. We are not going to do anything immediate. We have been convinced by those who have argued that that would be unwise and that it would not be sensible to do that. The regulation of the private security industry will continue in its present form. The SIA will not be abolished until the new regulatory regime has been fully established and is properly functioning.

Since the outcome of the public bodies review was announced by the Cabinet Office on 14 October, Home Office Ministers and officials have been in close contact with the SIA to discuss how to take this forward. The Parliamentary Under-Secretary of State for Equalities and Criminal Information, who is the lead Home Office Minister for the SIA, has met the SIA representatives. The Home Secretary herself has been in correspondence with the noble Baroness, Lady Henig, about the future.

Ministers have asked the SIA to work with the private security industry and key stakeholders to put together a detailed plan to achieve a phased transition to a new regulatory regime. We do not intend to do this in anything but careful detail. To inform the plan, the SIA started targeted consultations with stakeholders, including industry and law enforcement partners. The police were mentioned, and they are involved in the consultation process. A detail of the phased introduction of the new regulatory regime that will replace regulation by the SIA will be the product. The SIA started this work by hosting an initial meeting with a number of industry stakeholders on 28 October. I understand that this work is progressing well.

In the Second Reading debate on this Bill on 9 November, the noble Baroness, Lady Henig, stated that the SIA had already agreed with the industry,

“a blueprint for the next few years to move to greater industry involvement in the regulatory regime”.—[Official Report, 9/11/10; col. 133]

She also quoted from a letter that she had had from the Home Secretary in which she very kindly said that she was happy to accede to the Home Secretary’s wish to ensure that,

“any transition to a new regulatory regime is phased in smoothly and takes into account the needs of the industry as well as the priorities of the Government including the devolved Administrations”.

To confirm the point made by the noble Baroness, Lady Royall, the Home Secretary has agreed that there should be no significant change prior to the Olympic Games in 2012. That is in line with a number of measures in other areas in which we are staying any kind of change until after the Olympic Games.

My point in all this is that the SIA itself is involved in the work to move towards something that is described as self-regulation by the private security industry but which is a pretty tough form of self-regulation. I will come back to some of the details in a moment. The SIA plan was presented to Home Office Ministers earlier this month for consideration, and on 16 February there was another meeting with Lynne Featherstone to discuss the plan further. We have now considered and agreed that this will form the basis for moving forward on phased transition. I hope I am reassuring the Committee that this process is being done in careful consultation with the SIA and the industry on the basis of trying to ensure, therefore, that we come out with a regime that offers the same degree of assurance of high standards that has already been established.

As a result of the consultation, we are now in a position to give a few more details of the shape of the new regulatory regime, although the Committee will understand that as we are still in discussion—the whole point of the discussions is to get an agreed format between the parties—not all the details have been decided. So far, the agreed proposals will ensure that responsibility for the private security industry is transferred to a new body for self-regulation as soon as that is sensible after 2012—not before it is sensible and not before the Olympics in 2012. No significant change will happen before that.

Primary legislation will then be needed to set up the new regulatory body that will succeed the SIA. We will ensure that provision is included in a future Home Office Bill. Full transition to the new regime should, we hope, be completed by the end of 2013. Again, this is not a rushed process.

[Lord Foulkes of Cumnock]

Would that be a new regulatory body for England or for the United Kingdom? If only for England, what will the situation be in other parts of United Kingdom?

[Baroness Neville-Jones]

I will come to the noble Lord’s point about the relationship with the devolved Administrations. I have it in mind.

The new regime will also see a significant shift of responsibility from individual workers to businesses. That is one of the changes in structure. We believe that that will be efficient and that it will also reduce regulatory costs and burdens. Instead of every single employee having to be registered separately at a cost of something like £250 each, it will be a business paying for the registration. In getting that registration, businesses will be required to show that they meet a comprehensive set of conditions set by the new body.

The industry itself has a strong interest in ensuring that the standards it sets are maintained and that they are high. Clearly, that has to be one of the really important parts of the new regime. Businesses that fail to meet these comprehensive conditions will have their rights to trade in private security removed. There is no reason to suppose that somehow a transition to another regime will by definition, and automatically, result in a lowering of standards. On the contrary, the industry will have a strong self-interest in ensuring that the cowboys are not allowed in and are not permitted to sully the reputation of an industry that is responsible for its regulation. There is a strong incentive actually to take this regime and make it work well.

It is obviously too early to give full details on costs, but we know that instead of more than 350,000 individuals paying £245 each for licences, much of which is currently paid for by the companies that employ them, the new regime will involve fewer than 5,000 companies having to register, giving considerable saving to the industry.

One of the other things that we are doing, however, is to ensure that the impact on smaller businesses is minimised by reflecting business size in the registration fees in the new regime, so that we do not get a situation in which small companies are paying a flat fee which is the same size as very large ones. They will be gradated. There will also be a sensibly phased transition to the new regime, the details of which are still to be worked out. We do not expect all businesses to move to the regime at the same time. Some of the big boys are clearly going to be ready to move at an early stage. Some of the smaller companies will not necessarily be so ready, and they will be given time to achieve the necessary transition. The big ones that have already met the high standards of the approved contractor scheme will be able and willing to move immediately, but we will maintain mechanisms to ensure that smaller companies, which may not be in the position immediately to transition to the new regime, can continue to trade.

--- Later in debate ---

[Baroness Neville-Jones]

I understand entirely the point that the noble Lord makes. I would say two things about that. Clearly, it is desirable if the regulatory regime that operates throughout the United Kingdom makes it easy for companies to operate across all three Administrations. It does not follow from that that these regimes have to be identical. Certainly, the Home Office takes the view that if, for regional and local needs, variation is needed, we would want to accommodate that. The object is to get an effective regulatory regime that does not put obstacles in the way of companies operating across the country but permits local variation, if it is necessary.

[Lord Foulkes of Cumnock]

I know that there are other topics that we need to discuss and I apologise for intervening, but it looks as if we are moving inevitably towards a separate regime, with a Scottish and a Northern Ireland Security Industry Authority operating as the Security Industry Authority in the UK does at present and a move to a completely different regulatory regime in England. Is that not absolutely daft? It will create huge problems for the security industry. Why are we doing it? Would it not be better to accept what the noble Baroness, Lady Henig, the Security Industry Authority, all the people in the security industry and the Scottish and Northern Irish Parliaments have said, and stick to the present arrangement? Why are the Government so determined to change, when no money is going to be saved and no advantage will be given? Also, I hope that at some point the Minister will answer the question asked by my noble friend Lord Kennedy. If it is so important to keep the authority going for the Olympics, does not that undermine the whole argument for changing at all?

[Baroness Neville-Jones]

To take the noble Lord’s last point, I do not think that it follows that, because one decides not to make a change before a big event, there is no case for change at all. It does not follow at all. It is a sensible thing not to institute change immediately before a big event. However, it does not follow that no change is possible or desirable.

On the noble Lord’s other point, I think that he is jumping to conclusions. It is not our impression that the attitude of the Scottish Government is as negative as he fears it may be. We are in consultation and I do not think that what I said indicated that we were suddenly leaping to entirely different regimes. We are going to have consultation; we believe that it will be possible to have a national regime. We may need, and it may be fitting, to have a certain amount of local variation. However, as I say, that is an area that is still being consulted about. We will work for a sensible outcome and we want one that fits the needs of all UK Administrations.

Some noble Lords raised the issue of wheel clamping. I should mention it briefly. As was rightly mentioned, the Government are taking measures to regulate this area, which include the abolition of the right to clamp and tow away on private land. This legislation will be put into effect through the Protection of Freedoms Bill. The ban will end the abuse by devious firms and their employees who prey on motorists with signage, excessive fees and unscrupulous towing. That regime is going to come to an end, which obviously means that the power does not need to be included in the new regulatory regime.

The noble Baroness asked whether we were also going to cover parking tickets. That is not an SIA issue. It is regulated by the Department for Transport and the DVLA, so it lies outside the scope of this piece of legislation.

The SIA had already proposed the move to a more self-regulatory model before the Government took this issue on. It is in the spirit of building on that that we want to proceed. If the amendment were accepted, it would create an administrative anomaly that would deliver, in our view, no benefits to the public, even after the SIA had successfully implemented its plans to transition to the new regulatory regime. We are endeavouring to work in close co-operation with the existing authority on a transition to a regime that we hope the authority itself will feel fulfils the job, so I hope that, on that basis, the noble Baroness will feel able to withdraw her amendment.