Public Bodies Bill [HL]

Lord Whitty Excerpts

Monday 28th February 2011 Lords Chamber

[Lord Empey]

The noble Lord was saying at one stage, if I recall, that part of his region felt that it belonged to the north-east. The point is that there is a large pool of people who feel passionately that the north-east in particular has a critical mass and should have representation. I know that the noble Lord, Lord Prescott, attempted to offer regional government to that region and it did not want it at that stage. Otherwise, I dare say, it would have, just as Scotland and London and other places have, its own economic development unit, probably with a Minister working full-time on that area.

The question for us is whether this is going to be solved simply by structures or by a combination of structures and a policy involving close linkages with higher and further education and training. I am not convinced, having established one of these bodies in the past, that the model that we need to go forward for the next 10 or 20 years is necessarily the model that we have adopted in the past. I am not saying that everything that is being proposed by the Secretary of State is the right solution. Local people in those areas would have a better grasp of that than I would have from a distance. But I no longer put my faith in the structures. When you talk to businesspeople, they are very dismissive of bureaucracy. Their real interest is not in any grants that you can offer them; it is whether you have the people on the ground who can do the job. That is the thing that matters most.

There seems to be a new dimension opening up. I do not have all the answers and it is not entirely clear that the Secretary of State for Business has them either. But things have changed dramatically in the past few years, not least because of Europe and what it is now deciding. We have signed up to that. The ability of local organisations to take strategic decisions and effectively to buy in the businesses that come to invest has diminished. We have to be aware of what is happening in the rest of Europe. We feel that people in other parts of Europe do not apply the rules as strictly and rigorously as we do. I am sure that noble Lords from Scotland and elsewhere have had that repeated to them time and again. We play by the rules while others ignore them. That is one source of considerable concern to people in the regions, who feel that we are not necessarily playing on a level pitch.

When one is next door to a region where there is 12.5 per cent corporation tax versus what we have, that is what I call real competition. It is something to which no individual organisation, whether regionally based or otherwise, has a solution on its own. I am for regional solutions but I am no longer putting my faith simply in the structures that we develop. Those structures themselves sometimes get in the way of business; they frustrate businesspeople and, of course, they are very expensive. Whether we have the balance right remains to be seen and I have no doubt that there will be further debate to establish that.

[Lord Whitty]

My aim is to speak to Amendment 56 which deals with the south-west region. It is not simply to convince the Committee that there are concerns on these Benches somewhat south of Watford, but as my noble friend Lord Knight spelt out before the break, the South-West Regional Development Agency has done a fantastic job in many respects, from projects such as the Eden project through to the Osprey Quay in his previous constituency where I was only a couple of weeks ago, through to the deals with the universities, science parks, and so forth. The majority of its interventions have been relatively small and, to respond to the noble Lord, Lord Empey, most of what the regional development agency has done has involved not large sums of money but soft policies, such as putting together patches of land, developing skills, getting people talking to each other who do not normally talk to each other, in the universities, professional associations, local government and small businesses.

The South-West Regional Development Agency may not have had the right geographical boundaries and it was probably not as universally loved as those in the north-east appear to be, but the prospect of its absence is causing deep and grave concern among small businesses and others within the region. Its replacement by the so-called LEPs is a shambles. It is a crazy situation. The Government who profess to want localism and to have industry-led alternatives to the agency have ended up with a situation where Whitehall is telling groups of business people and others who put their heads above the parapet what the basis to organise should be. On what basis is the man in Whitehall telling the putative LEPs in the M4 belt in Gloucester, Swindon and Wiltshire that that is not the appropriate sub-region? It seems a very appropriate sub-region to me and, more importantly, to them. Yet, they are being told that it is not the right region. People in Dorset—in Bournemouth and Poole—are being told to talk to Southampton and the Solent areas. Why? How is that allowing local businesses to decide on their own remits?

It is clear that the Government have set out on a process not on the basis of what is best for the regions or best individually for each of the English regions, but on the straightforward basis that they do not like RDAs and want to abolish them. What has happened in the south-west, which I suspect has happened in all regions, is that business men and women who some months ago were not particularly supportive of the RDA are now saying that with the abolition of the RDA in prospect, the government office for the region going and regional planning disappearing, they do not know who to talk to if they want to put together a deal, if they want to try to bring in public and private partnerships, if they want to make arrangements to develop the skills within the region that will achieve delivery of the ideas that they, as entrepreneurs, have. They are asking, “Who do we talk to?”.

At the same time, the big potential investors are asking precisely the same question. The areas that miss out are going to be the more peripheral ones in the north and the west of the country and maybe in parts of East Anglia and the Midlands as well. In London, there is always somebody to talk to. In Wales and Scotland you have government-backed organisations but in these other regions you have not. It is not just a question of the industrial heartlands; we are talking about rural counties in the south-west. Indeed, it is not a question of the Labour heartlands, in case Members opposite feel that we are parti pris to this—these are the heartlands of the Liberal Democrats and many Tories as well. As the consequences of the disappearance of the RDA and the regional offices of government become clear, I imagine that many of the MPs in their parties are going to have deputations from businesses and from local government asking how to deal with this.

What has happened in the south-west and what people now fear in the south-west is that there is no point at which small businesses can talk to Government about their problems and there is no point at which outside investors can talk on a regional or sub-regional basis with some authority behind those discussions. What will they do? They will go elsewhere. It is true, of course, as the noble Lord, Lord Empey, says, that the interventions will not be so much financial in the future, although there will be some money there and there will be money in things such as the European Regional Development Fund and money from the agricultural side of this dimension. However, they will say it is easier to do this in France or Germany or Spain. It may be slightly easier to do it in London or Scotland or Wales but with nobody to talk to in dispersed regions such as the south-west the absence of the RDA will come to be a dreadful brake on developments which were beginning to see fruition.

I do not think that is what the political representatives of the south-west would wish to see. I do not therefore think it is what the coalition Government would wish to see. But by their own universal decree that RDAs are bad, that is likely to be the consequence.

[Baroness Harris of Richmond]

My Lords, before we remove RDAs entirely from our lexicon, I would like to put on record the really excellent work done by Yorkshire Forward. I make no apology for being parochial. It has helped nearly 30,000 businesses a year to improve performance, which is one in 12 of the region’s business, with a typical turnover gain for each of those businesses of around £15,000 a year. About one in 30 people in the region’s workforce are in a job because of Yorkshire Forward’s work in the past five years. It has been one of the two most successful regional development agencies at turning investment into jobs.

Yorkshire Forward was created in 1999, and by 2000 it was already investing in business parks in small rural areas in my particular part of north Yorkshire, making a huge difference to those communities. Through its investment, it was to lever several millions of Objective 2 European funding into my local district, and transformational projects were initiated through the pilot Renaissance Market Towns programme. In my town of Richmond, money was granted to the award-winning Georgian Theatre Royal. One project that is dear to my heart and which we would have had great difficulty getting off the ground—I played a small fundraising role with our local MP—was the award-winning station development and the award-winning heritage partnership scheme. None of these would have taken place without the foresight and the funding of Yorkshire Forward.

Over the years, its investment helped to transform Richmond from an underperforming market town to Great Town of the Year in 2009. It is interesting to note that the Academy of Urbanism has awarded that national accolade to three Yorkshire towns—Richmond, Scarborough and Hebden Bridge—by a vote of its members over the five years for which it has been run. All those towns had strategic investment through Yorkshire Forward’s Renaissance Market Towns programme. Because of the speed at which Yorkshire Forward has been disbanded, funding contracted to complete the Richmond heritage partnership scheme had to be withdrawn. It would have brought redundant property back into economic use and, at the same time, restored the character of that beautiful Georgian market town. That is indeed a most terrible shame.

--- Later in debate ---

[Baroness Royall of Blaisdon]

My Lords, this amendment is on the abolition of the Security Industry Authority. I pay tribute to my noble friend Lady Henig, who has been its chair. My Government established the SIA in 2004 to reduce criminality in the security profession and to raise standards in the industry. This is exactly what the SIA has done and what I would like it to continue to do. The body has two main duties: the compulsory licensing of individuals undertaking designated activities within the private security industry, such as security guarding, door supervision, close protection, public space surveillance by CCTV, and protecting cash and valuables in transit; and to manage the voluntary approved-contractor scheme.

It is easy to understand why the police campaigned for the industry to be regulated, why they are content with the way in which the authority is working and why they do not want it to be abolished. Neither do I. It is not difficult to see why such an industry should have been regulated. You just have to think about how the actions of nightclub bouncers have, according to my children and their friends, improved exponentially over the past few years. You just have to think about the potential for people who wish to harm our society with acts of terrorism and how much easier it would be for them to find employment in an unregulated industry. You just have to think about the potential for employing people—perhaps illegal immigrants—at below the minimum wage. I realise that employers in the industry have a responsibility but I am sure that they are greatly assisted by the SIA.

Can the Minister confirm that the Home Secretary has decided that there will be no significant changes to the SIA until after the Olympics in 2012? If that is the case, it is certainly very telling. I suggest that our citizens should be able to enjoy a properly regulated security industry at any time, not just in the period leading up to and during the Olympics. I ask the Minister whether there are plans for a smooth transition to a self-regulated industry and whether the police are content with the transition. Finally, what reviews do the Government intend to carry out following the proposed changes to ensure that the public can continue to have confidence in the system? I simply do not understand why the Government wish to abolish this body and I look forward to hearing from the Minister.

[Lord Whitty]

My Lords, I rise briefly to support this amendment. I do so partly because I was in on the beginning of the campaign to regulate the security industry when I still worked for my trade union, which organised the more respectable end of the security industry. However, 20 years ago, and indeed more recently, it was an industry with some very dodgy people in it. There was an element of criminality; there were occasional outbursts of violence; there was fraud; and there was a straightforward dereliction of duty to the businesses and individuals that employed so-called security companies. There was much in the industry that, to put it at its mildest, was short of customer service.

It was not a pleasant industry but in many respects it was one on which, because of the nature of our society and the value of the goods in which we trade, more and more businesses came to rely. They needed to be assured that the people they brought in to protect their premises, their transit arrangements, their valuables and, in many respects, their staff and customers knew what they were doing and did not have any record of transgression. That is what, after a long campaign, led to the setting up of the Security Industry Authority.

The Home Office has ummed and ahed about this for many years and has done absolutely nothing about it. The first time the authority’s abolition was proposed, it was suggested that its responsibilities went back to the Home Office, but that would have been absolutely disastrous. Now, a degree of self-regulation for the industry is proposed. However, the problem with that is that the more respectable end of the industry will undoubtedly attempt very effectively to ensure a degree of quality of service and vetting of staff and individuals but the less respectable end will re-emerge and so-called security firms will spring up all over the place employing people who have not been through the vetting procedure. Therefore, any self-regulation is dependent on the majority of the industry participating in it and being able to exclude others.

There may have been criticisms of the SIA but most of those have probably been invalid. I feel that there should have been a mandatory system of approving companies, as well as individuals, but the authority, together with the police, undoubtedly helped to clean up the industry. Taking away this protection from businesses and individuals is a big risk for the Government to take. I hope that the Home Office will think again, because it cannot do this job itself. Those at the respectable end of the industry do not really want to be reduced to self-regulation. They will operate such a system if the Government insist on it but it will not be as effective as the development of the SIA. For that reason, and in the interests of protecting a lot of small and large businesses and public premises, I ask the Government to think again.

[Baroness Henig]

My Lords, I declare an interest as the current chair of the Security Industry Authority and president of the Association of Police Authorities. In the speech I made at Second Reading I told the House about the enormous concern with which the Government’s proposal to abolish the organisation and return to self-regulation of the industry was greeted, particularly by people in the industry and also by Scotland and Northern Ireland. Last week the chairman of Security Alliance said how the inclusion of the SIA on the list for abolition came as a great surprise to the industry. He said that since regulation was introduced, there had been a general acceptance in the industry that licensing had been a force for good. So that is clearly understood and agreed across the industry.

We know there has been a lot of criticism recently in the other place by the Public Administration Committee about the handling of the bonfire of the quangos. The committee said it was a rushed, botched job with no clear evidence of savings or concern for value for money or efficiency. More important for the SIA was the lack of consistency in applying the three questions and the issue of whether they were even the right questions to ask. I asked at Second Reading why the SIA was being abolished when the Gangmasters Licensing Authority was being spared—a question which has not yet been satisfactorily answered. The Public Administration Committee’s report asked exactly the same question. The silence in response is deafening.

I asked another question to which there has been no response: why is it that the Government believe the industry is mature enough at this moment in time to regulate itself when the Scottish Government, the Northern Ireland Administration and even large parts of the industry disagree very strongly. Yet the Minister told us at Second Reading that there had been no major disagreements on the legislation between the Government and the Scottish Government. I do not think that is entirely an accurate description but obviously I defer to others on that.

The most serious issue I had with the Government on this matter was their lack of consultation with the industry. After all it was the BSIA and other bodies and individuals within the private security industry which consistently pressed for regulation of the industry in the 1980s and 1990s and they have supported it and for the most part paid for it. Surely, therefore, the views of the industry should have been sought before the policies were drawn up, not to mention the uncertainty caused to 350,000 individuals working in the industry_, many of whom funded their own licence fee and invested in their training. Surely there should have been consultation with all these people. Certainly the view of the Public Administration Committee was that there should be consultation with all the bodies listed in this Bill, even at this late hour, and who can say that it is wrong?

In the case of the security industry, its leaders sensibly were not prepared to wait that long. Indeed, they made their opposition to the ending of regulation and the abolition of the SIA very clear. They wrote to the Home Secretary, the Prime Minister and the Deputy Prime Minister. They organised and they highlighted the tremendous risks inherent in the Government’s proposals, forcing the Government to change their mind. Instead of abolition the Government agreed that there should be a phased transition to a new regulatory regime and that the SIA should no longer be an NDPB.

So there has been a change and therefore this Bill is already out of date in terms of regulation of the private security industry. In the exchange of views that took place between the Government and the industry, industry leaders made it clear that they were already discussing with the Security Industry Authority a blueprint for the evolution of regulation whereby the regulator and the industry would work together to produce smarter, more cost-effective regulation and would press the Government to introduce business registration alongside individual licensing so that we could move to a more efficient, effective and lighter-touch regulatory regime—“better for less”, to use the Government’s own phrase. That was certainly what the industry was working towards with the SIA. As the Public Administration Committee so rightly observed, the major issue at stake in relation to quangos should not be about their status or structure but about effectiveness and delivering value for money. Since last summer the SIA has been in discussion with the industry about precisely these matters.

The issue before us in this discussion on the Security Industry Authority is not a simple should it or should it not be abolished, but how best to facilitate a phased transition from the current regulatory regime to lighter touch, smarter regulation in which industry bodies and leaders play an increasingly active and important role alongside the SIA. There is no disagreement about that. The issue is that it is a process which will take time. It cannot be rushed. It has to include all sections of the industry that are currently regulated. While the recent emergence of the Security Alliance as a unified voice for the industry is to be welcomed as a very positive development, it is by no means fully established across the industry. So there is a lot of work to be done, and along the way the decisions made by the Home Office and the Government in relation to the extent of regulation—for example, that it should not include in-house security, or for the time being private investigators or security consultants—will undoubtedly be queried and challenged by many in the industry. If we are discussing the industry’s future, people working in it want to raise many things.

Then there are the views of Scotland and Northern Ireland. I cannot speak with enormous knowledge about these areas but the licensing of private security has been a huge success both in Scotland and Northern Ireland. It has been in Scotland since 2007 but licensing in Northern Ireland is just a year old. The Northern Ireland Administration are in no rush to change it and we can understand why. They think that it has made a big difference. Both those areas have elections in the spring and we will have to wait to find out the views of the new Administrations and Governments that result. A lot is standing in the way of progress at the moment. As part of the phased transition process, the industry is strongly of the view that the Government should play their part by showing a willingness to bring in business registration in the industry, alongside the licensing of individuals. I hope that the Minister will be able to commit the Government to action in relation to business registration when she replies, as the industry is keen to see that.

We are working to move forward. We in the SIA are consulting a whole range of bodies, including the strategic consultation group, a Security Alliance industry panel, and so on, because it is important to have agreement with the industry and major stakeholders on key principles and milestones for the future, while being conscious, as was said, of the need to proceed cautiously before the Olympics in 2012. There are also the Commonwealth Games in Scotland in 2014 and we must not forget that. It is important to put on the record that many senior figures in the industry are urging caution. They do not believe that the industry is yet ready for self-regulation. I strongly support giving the industry more responsibility in terms of licensing and training, but I share its view that there is no evidence at present that it is sufficiently mature at this point for self-regulation. We have to move very gradually towards that goal. Substantial progress will have been made towards establishing a new regulatory regime by 2014 but there is the big issue of effective intelligence and enforcement operations. It is important that they continue and that the state continues to maintain a strong regulatory regime in respect of criminality; in respect of criminals and their associates; and in respect of those who continue to seek to undermine and weaken the regime. Everyone who works in the industry wants the regime to be effective in driving out and keeping out criminality and in upholding robust standards. That is extremely important because the credibility of the industry requires strong intelligence and enforcement activity, which has to continue in any new regime.

There is a considerable way to travel. Listing the SIA in Schedule 1 to the Bill was a misguided and inappropriate step for the Government to take. We are talking about Schedule 3 and changing the nature of the organisation and moving it to something different. The important thing is that we all want to build on and improve the regulation that has been introduced. It has been a great success and we want to continue it both with the industry and the devolved Administrations. We have to work with them at their pace, which I hope the Government will be supporting so that we can move forward together.

--- Later in debate ---

[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.

[Lord Whitty]

My Lords, before my noble friend decides what to do with this amendment, I should like to ask a question. I understood the noble Baroness to say that, at the final stage of this, we will need further primary legislation. If that is the case, I do not understand her last point. Why do we need to include the SIA in this Bill if we are going to deal with it later in primary legislation?

[Baroness Neville-Jones]

Having removed the basis for the present regime, we obviously need to have a basis for the new regime.