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Lord Cope of Berkeley: My Lords, the position of accountants and their staff is a matter that I proposed to raise under Amendment No. 9. Of course, I have raised this issue previously in the course of discussing what happens with regard to professional accountants who carry out audit and other accountancy tasks.

Initially, I made the point that it seemed that an audit was, in effect, a contract to look into a firm's books and to produce an audit report on it, in the course of which part of the purpose was to investigate any possible fraud and, through the accounting system, to eliminate the possibility of fraud in the future. Therefore, it appeared that, as the Bill originally stood, every accountant undertaking ordinary audit work would require a licence, as would all his staff.

The Government were kind enough to agree that that was undesirable and, at an earlier stage, they moved an amendment which provided the accountancy exemption that now appears in the Bill. However, that does not provide for the exemption of any employees. I am aware that correspondence and contact has occurred between the Home Office and the accountancy institute. The noble Lord, Lord Thomas, referred to correspondence concerning the position of non-qualified staff employed by qualified accountants on work of that character.

The Government's position, as I understand it, is that because the staff are in-house, they will not require a licence, so there is no need to worry. However, from what I have seen, and according to the advice that has been given to the Institute of Chartered Accountants, to which I belong, when staff are employed on the premises of clients, as they often will be, they will require a licence if they are not members of the institute. If staff require a licence, their bosses will also require a licence under the earlier provisions. Every partner in every accountancy firm will therefore require a licence. That is why I am still concerned about the position of employees.

We need an amendment like Amendment No. 9--I am aware that I am informally grouping Amendment No. 9 with Amendment No.1, but that is for the convenience of discussing this point--if we are to avoid every accountancy firm engaged in audit requiring a licence. I understand that that is the agreed position of the Government and ourselves. It is easier if we raise that matter now.

With regard to the police core tasks, I sympathise with what the noble Lord, Lord Thomas, said and I look forward to hearing the Minister's reply. As the

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noble Lord, Lord Thomas, rightly said, we have been discussing this matter since the earlier stages of the Bill.

The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, I apologise to the House if the correspondence received by the noble Lord, Lord Thomas, is confusing. Obviously, I shall look at the text of the letter again to satisfy myself that it is not. Our policy is clear, and is pretty much as the noble Lord, Lord Cope, has described it.

With regard to in-house staff, we believe that the balance is about right, and I am more than happy with the way in which we are proceeding. I shall, of course, review the correspondence again to check the point made by the noble Lord, Lord Thomas.

On the second point raised by the noble Lord, the White Paper is trying to describe how to provide for the situation, which probably currently exists, when some activities, which could be described as core policing work, carried out by private security companies are carried out in a more public domain. We need to knit that work into local crime and disorder partnerships. That is where the White Paper is coming from. It would deliver to the public a wider measure of accountability. The measure has been widely praised and broadly welcomed because of the way in which voluntary organisations, the police, local authorities and so on, will be brought together to improve the performance of law enforcement. People are being made more aware of local crime issues, which is what the White Paper is trying to achieve. With the greatest respect to the noble Lord, Lord Thomas, his amendment would not cover private security firms in the way in which he describes.

I hope that I have given a measure of reassurance. The White Paper is trying to improve and strengthen accountability, rather than diminish it. When private security companies are involved in a more public domain, perhaps working on behalf of a private company in a public place, they should be seen as very much part of the aim to tackle crime in our communities, towns and city centres.

We have covered this subject frequently in previous debates, and I see no great purpose in rehearsing the arguments that we have heard before. We feel that we have offered sufficient reassurance. We have debated the matter and, at this stage, we do not believe that it is right to require in-house staff to have licences, except for special cases, such as door supervisors and wheelclampers. The security industry authorities will be keeping these matters under careful review, and will make recommendations to the Secretary of State from time to time if there are gaps in the licensing regime.

In those circumstances, perhaps some of the concerns that have been raised in the past can be readdressed. We shall consult on how best to achieve our goals, and potential loopholes will be identified. I hope that the noble Lord, Lord Thomas, will feel sufficiently reassured to withdraw his amendment.

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4.45 p.m.

Lord Cope of Berkeley: My Lords, before the Minister sits down, will he respond to the point made by the noble Lord, Lord Thomas, about the letter from Mr Goswell? It says that students who are employed by an accountancy firm would be in-house employees, and would therefore not require a licence. My understanding of the Bill is that they would be in-house employees only if they were working in the accountancy firm on its own matters. Is the Minister saying that "audit" is not regarded as doing work under contract for another firm? It seems clear to me that it is, albeit of a specialised character. If the Minister is saying that because such people are employed, they can work under contract without requiring a licence, presumably anyone could work under a contract for another firm of any character, other than wheelclamping or door supervision, without requiring a licence. That is surely not what the Bill means.

Is the Minister saying that "audit" is not regarded as doing work under contract to another firm; or is he saying that a licence is required if the auditor is working not on the accountancy firm's own accounts, but on a client's accounts in the client's premises? Inspiration may strike the Minister any minute.

Lord Bassam of Brighton: My Lords, I shall exercise the correspondence card on that one, as I do not want to spread confusion where there should be clarity. The interpretation of the noble Lord, Lord Cope, is probably right: when staff are working on matters internal to the accountancy firm, that would be considered to be in-house. Perhaps there could be circumstances when no licence is required. I refer, for example, to students or people on some sort of secondment carrying out audits. I want to clarify the matter in my own mind, so I shall happily correspond with the noble Lord, Lord Cope, on the matter.

Lord Cope of Berkeley: My Lords, the Minister is always willing to write to us, which we appreciate, but we are on Third Reading. Whatever happens today is the end of the debate in this House. In those circumstances, I should be grateful if the Minister would copy the correspondence to my right honourable friend Miss Widdecombe.

Lord Thomas of Gresford: My Lords, the letter from Mr Goswell seems to suggest that there is a misunderstanding. The easiest way of appreciating what is meant by "in-house" is to look at guarding. If a firm employs guards to look after its premises, they are clearly in-house employees. If, on the other hand, the firm sends those employees to guard someone else's premises, they are no longer in-house employees; and they clearly require a licence. If we translate that into the accountancy field, the only way in which we could say that the employees of an accountancy firm who are non-qualified are in-house is if they are working on their own firm's accounts. If they go off and work on somebody else's accounts under contract, they are no longer in-house. That is the fundamental problem.

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The other issue in relation to using security firm personnel on the street is this. Under the Bill, for a security firm to employ personnel to work on other people's premises they will have to be licensed; they will have to go through all the checks that are necessary; their backgrounds will have to be looked into and they will have to satisfy the authority that they are appropriate people. But if the security firm sends them out on the street, as at present, just because the security firm is employed by the Home Office to assist the police, they will not require a licence; they will not require those checks to be made upon their background.

Lord Bassam of Brighton: My Lords, in the circumstances that the noble Lord describes, they probably would require that licence.

Too much is being made of this point. I can see why the noble Lord, Lord Thomas, may consider that to be the case. But looking at practical examples--for instance where Group 4 may patrol regularly a shopping precinct which is in private ownership--one could describe the activity of the personnel as being not very different from that of a police officer, although they would not have the same powers, patrolling an area. However, the circumstances in which they patrol are different. They are doing important security work; they are employed by Group 4, and one would expect them to be properly regulated in those circumstances.


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