I beg to move amendment No. 3, in page 2, line 23, leave out `must' and insert `may'.

Amendments Nos. 3 and 4 are not being taken together, but they have the same aim, and I wish to explain it. As drafted, the Bill says that the director must establish a system for the accreditation of financial investigators. That is entirely new. As we do not yet know the identity or background of this director, surely the Government should trust him to decide how he carries out his job. We felt that it would be far better if the legislation were permissive rather than compulsory. Once the Government have had their selection procedure and made their appointment, the director, presumably a person with some relevant expertise, might decide that setting up a system for accredited financial investigators was not the way to go.

A recent comparable case, which will be familiar to all members of the Committee, shows how the Government might find that someone whom they had appointed held rather different views from theirs. The Government's much vaunted drugs tsar, Mr. Keith Hellawell, was going to tackle the drugs problem, but now, as the Minister and I were debating only the other evening on the Floor of the House, Mr. Hellawell's policy has been completely torn up by the new Home Secretary. His position has been reduced. His public statements are completely at odds with the new Home Secretary's new policy. If the Government imposed the clause as currently drafted they might find that they had appointed a director who took a different view.

Order. This is a narrow clause. It concerns accreditation and training—nothing else.

I am grateful to you, Mr. McWilliam, but you will understand why we wish to draw a comparison with recent events. This is indeed a narrowly drawn clause but the distinction between what is compulsory and what is permissive is important. It is an issue that will crop up in other clauses. We will have quite a few debates about the use of ``must'' or ``may''. We will be interested to hear the Minister's justification for this being compulsory.

I wonder whether we are beginning to witness the first signs of an Opposition rift. Earlier, the hon. Member for Cities of London and Westminster urged the Minister to ensure that the person appointed director had the knowledge, training and experience to carry out the job. Then the hon. Member for Spelthorne expressed his concern that the canteen lady might be asked to perform duties beyond her capability. Now the hon. Member for Surrey Heath is arguing that any Tom, Dick or Harry could be the financial investigator and that it does not matter whether they have any training or accreditation. Does he feel any embarrassment about the different positions adopted by his colleagues?

That was a nice try, but the hon. Gentleman's point had a significant flaw. His description of my argument was incorrect. We are not saying—

Order. It had another significant flaw. It was not relevant to the amendment and should not be discussed further.

He nevertheless reached the end of his point. My point is not that any Tom, Dick or Harry could be a financial investigator. That is not what the amendment is about. We say that the director may establish a system for the accreditation of financial investigators if he so wishes, but that it would be wiser for the Government to leave it to the director to see whether that is how he wishes to conduct the affairs of the new agency. How widely has the Minister consulted? When I reminded him about it on the previous clause, he talked about consultations with the National Crime Squad and NCIS but he did not touch on the Serious Fraud Office, fraud squad and special branch.

Have the Minister and his officials talked to the Financial Services Authority? I have fairly extensive experience of the current and past regulatory structures in the City of London, which were at the core of my job when the regulatory system was much more complex and parts of the City of London had different regulatory bodies. The Government have created a new, super-regulator—the Financial Services Authority—and we want the Minister to tell us whether it is happy with the blanket powers that the Government propose.

Is it anticipated that one of the pools of recruitment for the new accredited financial investigators will be people who currently work for bodies such as the Serious Fraud Office and the FSA? Will the financial investigators have access to some of the existing databases? I was horrified to learn that a good financial database that was built up by an earlier regulatory body, known by the acronym FIMBRA, is being thrown away. That is relevant when the role of the new accredited financial investigators is being considered and we are deciding whether the power should be compulsory or permissive. FIMBRA built up a superb computer database with which to track the rogues: an independent financial adviser who had defrauded people in one part of the country could be tracked if he moved somewhere else and prevented from operating. Accredited financial investigators will need to have such skills, and we want the Minister to tell us whether the people's experience in the City in the past 10 or 15 years, when the current process of regulation was being developed, will be used.

Does my hon. Friend agree that a regrettable prejudice against the City can be detected in some contributions from Labour Members? My hon. Friend the Member for Cities of London and Westminster made an important point: if we do not listen to the City, which is the main financial centre in Britain, we will be enacting an measure that does not carry with it a large proportion of those who will have to work with it.

The hon. Member for Birmingham, Hall Green (Mr. McCabe) suggested that there were rifts among Opposition Members, but there are divisions among Labour Members, and not just in the Lobbies. Before he fires his arrows at the Opposition, he should ponder some of the statements made by his hon. Friends.

Order. That intervention was rather wide of the mark. I remind hon. Members that interventions are supposed to be brief. Hon. Members who want to catch my eye can do so.

I am grateful for my hon. Friend's intervention. He is right. He shares my interest in financial services regulation and in that respect it is fair to say that one of the most active—

Order. The hon. Gentleman should not pursue the matter. Let us stick to the amendment, which is strictly on the subject of accreditation and training.

Yes, Mr. McWilliam.

I have raised the Opposition's concerns on the matter and I shall be interested to hear what the Minister has to say. Unless he can satisfy us, we may have to return to this important point on Report and in another place. I hope that if he cannot accept the amendment he will at least undertake to reflect with his officials on whether we may have a serious point. We are happy for the director to have some powers, but they should be permissive, not compulsory.

If the Minister undertakes to reflect on that and says that if he decides on reflection with his officials that we may have a good point and that he might table a Government amendment, that would be helpful. However, if he does not, we may have to return to the matter. I suspect that such issues will be regarded with considerable anxiety by people involved in the City of London, who follow our proceedings with care.

I urge my hon. Friend the Minister to reject the amendment. The director must satisfy himself that the financial investigator is able to do the job. That will also ward off what I would categorise as attacks from people in the City. If financial investigators were not accredited, their work would be more open to attack from those in the City. With respect, I suspect that that is precisely the point that Opposition Members are making.

I am much more comfortable saying that, on this occasion, Liberal Democrat Members disagree not merely with the rhetoric but with the amendment. In moving it, the hon. Member for Surrey Heath referred to the construction of the Financial Services Authority, and he makes a valid point inasmuch as that was a chequered, difficult and involved procedure. In my experience of such matters, if something is difficult, reasons can be found for not doing it unless it absolutely has to be done, and for that reason the inclusion of ``must'' instead of ``may'' is important. I return to the point that I made earlier about the importance of Parliament making a clear statement on the direction of what will be an arm's-length agency.

The Bill states that the director must establish a system. Could he establish two systems? Will there be a Scottish equivalent of ``accredited financial investigator'', or will the one category cover both? Legal and financial measures are sometimes different in Scotland, and I should be grateful for the Minister's clarification.

I hope that if we find that we must have one system, two methods—

To coin a phrase.

Thank you. I hope that in such circumstances we would ensure that as far as possible we avoid producer domination. In the event of differences in nuance between the Scottish and English systems, enormous scope will exist for separate courses, lecturers and accreditation, and enormous costs will be built up by the producer interest. I hope that we would ensure that any differences are minimal.

I take it that this will be our only argument over the question of ``must'' and ``may'' and that if the matter is resolved in this case it will not arise as a matter of principle at later stages in the debate. This seems to be the first attack by the Conservatives, who are trying, have tried and will continue to try to emasculate the Bill by inches—or rather, centimetres.

I do not believe that everyone in the City is a crook, but I do not believe that they are all not crooks, either, and the fact that the City and some professions such as lawyers, bankers and accountants have failed to put their own house in order means that the Government have to take action. Simply saying that the City creates some wealth for the country as a whole does not mean that any practices that take place there must be allowed to continue willy-nilly. It would be far better for the country as a whole if the Conservatives showed some anxiety about the lawyers, bankers and accountants in the City and elsewhere who help distribute the proceeds of crime.

Let me tell the hon. Gentleman that the meanings of ``must'' and ``may'' vary enormously, and make the difference between a probing amendment and a matter of extreme principle. Amendments will be selected according to whether they are in order.

I, too, urge the Minister to reject the amendment. The creation of a system of accredited financial investigators will form an important check and balance on the director of the agency. That will make the agency more effective, because any complaints about a person's conduct can be measured against that system. There is no reason why the director cannot be closely involved in setting up the accreditation system of financial investigators. It is important that the system is put in place, and that the director helps to set it up.

I take on board the points made by the hon. Members for Glasgow, Pollok and for Wrexham (Ian Lucas), but we must be flexible. Opposition Members would rather use the word ``may'' than ``must'', given the great demands that will be placed on the director of the agency to involve many people—not just those who are regulators already, or those who are compliance officers in the Financial Services Authority, but professionals in law firms, accountancy firms and banks.

I do not wish to stray from the subject, but I would like to address the matters raised by the hon. Member for Glasgow, Pollok. There is no risk of Opposition Members going easy on the City. My constituency includes the City of London and its financial and commercial interests. It does the country no great favours if financial services have an easy regime. I share his concerns about the bad apples in the barrel. We must do all that we can to ensure that they are rooted out and exposed, but as I mentioned on Second Reading, we are concerned about loading more and more regulations on large City institutions, particularly at this end of the economic cycle.

An army of compliance officers will have to be employed as a result of much of what we will discuss in the weeks and months ahead. As a result, business will be gridlocked, and I am concerned that the majority of legitimate business may go elsewhere, out of the City of London. That would damage the interests not only of the City, but of Europe's fifth largest financial centre, Edinburgh.

That is a helpful point, but such arguments for flexibility and light regulation serve indirectly as arguments for the creation of loopholes. It would be better if the hon. Gentleman and his colleagues produced workable alternatives that satisfied his and our objectives for the Bill.

There will be plenty of opportunity in considering the remaining 441 clauses to draft workable alternatives. I take on board the hon. Gentleman's point. We want to be constructive in the early stages of the Bill, and on the subject of light regulation. That is why we tabled the amendment. I have listened carefully, as we all have, for the past 20 minutes. I am not going to guess what my hon. Friend the Member for Surrey Heath will do with the amendment, but if we divide on it, we will know where we stand on the subject.

It will be interesting to see how independently minded the hon. Gentleman will be when the hon. Member for Surrey Heath calls for Divisions in future. It is often alleged that the Government do not permit independent judgment, but some has already been displayed in the Committee, so we shall see whether there is any independence among the Opposition. For reasons that have been exposed by my hon. Friends and the hon. Member for Orkney and Shetland, I shall not reflect on the issue. I say, in particular, to the hon. Member for Surrey Heath that there are two main motivations for accreditation, one of which is to lift standards and to ensure that we have a cadre of decent people with the necessary skills to use the powers under the Bill. The performance and innovation unit study exposed the fact that we were short of such skills in this country, which was part of the reason why the confiscation of proceeds of crime was not effective here. That is only one of the motivations for the giving the director—or, rather, directing the director of the agency to provide an accreditation system. Unless we have such an accreditation system as a gateway to the powers under the Bill, we will have no control over the quality of the people who are using the powers—unless it is the Opposition's intention that those powers not be used. Such powers are at the heart of the Bill.

The purpose of an accreditation system is to provide people who are necessary to carry out the functions and to raise the capacity and quality in such an area and to provide necessary safeguards, so I cannot accept the amendment. My hon. Friend the Member for Glasgow, Pollok asked whether there will be two systems. We are not dictating to the director that there must a simple system of accreditation. It will be for him to decide what level of training is necessary for the different people in the agency and whether there should be different levels of accreditation. To use the powers under the Bill, people will need to attain a level of accreditation.

Under the Bill, there will not be accredited financial investigators in Scotland. However, we do not envisage barring Scottish people from becoming accredited or from being trained in the centre of excellence. When we come to the parts of the Bill that apply to Scotland, the Committee will see that the necessary provision for quality control of people north of the border needs to exist as it does within the agency itself.

I raised the point because of what my hon. Friend said earlier about cross-border traffic. I want Scottish investigators to continue to be able to pursue cases in England and Wales with co-operation, and vice versa. We do not want to have courts or lawyers in the respective countries demanding that certain matters be ruled out on the basis that accreditation gained elsewhere is not recognised. I hope that he recognises that and will ensure that the Bill takes account of that potential difficulty, which will be exploited by bad people.

My hon. Friend is absolutely right and I am sure that one of the reasons why he wanted to be a member of the Committee was to make certain that there is the cross-border co-operation that is required to make the Bill effective. Such discussions are on-going and many of them have already taken place. There must be cross-border co-operation. If we provide a loophole, we can rest assured that it will be exploited to the full to circumvent the measures that we are taking to recover proceeds of crime. I fully accept my hon. Friend's point.

For the reasons that I have stated, I cannot accept the amendment. I ask the hon. Member for Surrey Heath to withdraw. If he does not, I shall have to ask my hon. Friends to vote against it.

I am disappointed by the Minister's response. I had hoped that he would register our concern that the director, once appointed, should have the discretion to decide whether that was the way forward. The Minister was didactic and said that he was certain that he wants the Government to direct the director. He almost gave the game away, however, when he nearly made a slip of the tongue. He was about to say that that is why the Government want the director to have those powers, which our amendment suggested, but he stopped himself just in time and said that that is why the Government want to direct the director. We all heard that, and it will be recorded in Hansard. The Government want to direct: that is instinctively part of their approach. As I mentioned in the case of Mr. Hellawell, the drugs tsar, it is a problem only when the Government reverse their policy by 180 deg, and direct in the other direction. Precisely because of that recent U-turn, and other recent policy U-turns, especially in the Home Office, we felt that it would be wiser for the Bill to be permissive, as the amendment suggests.

Despite what the Minister says, perhaps he will reflect on that with his officials. I want to reassure the hon. Member for Glasgow, Pollok that we are not engaged in a bid to emasculate the underlying intention of the Bill. As we said on Second Reading, and as my hon. Friend the Member for Cities of London and Westminster pointed out, we support the underlying intention. However, the purpose of parliamentary scrutiny is to try to get a Bill that works. We want to differentiate between reputable financial institutions, on which the economy of our country and the whole of Europe is based, and rogue ones. We want the Government's regime to be effective, but it is not sensible to be didactic and to impose a straitjacket on the director.

I was interested by what the hon. Member for Orkney and Shetland said, which strongly supported the Government's original drafting. All of us who have been involved in this field have become accustomed to the hon. Member for Southwark, North and Bermondsey (Simon Hughes)—who normally leads for the Liberal Democrats on such issues—constantly asking for measures that are not didactic but permissive. Those are the normal libertarian instincts of his party. We may now be hearing a new authoritarian Liberal Democrat voice.

The hon. Gentleman is trying to impose a straitjacketed view, whereas our approach is to assess each amendment and proposal on its merits. It would be odd if Members of Parliament did not do that, as otherwise we could reach our positions before legislation is published, irrespective of the arguments that we encounter. It is, of course, disgraceful that my hon. Friend the Member for Southwark, North and Bermondsey should be so insulted in his absence. He will be deeply wounded when he learns of the hon. Gentleman's attack on him. I shall communicate it to him immediately after the sitting finishes.

This is the question that the hon. Gentleman must answer: does he not want investigators to be efficient, to be properly trained, to inspire confidence and to be resistant to any improper and unnecessary challenge to the work that they undertake? If he does want that, he should withdraw the amendment.

I hear what the hon. Gentleman is saying. His explanation is no doubt consistent with the way in which Liberal Democrats argue for one policy in one constituency, and the opposite policy in the neighbouring one. We are all familiar with that. He has simply not understood what the amendment would do. We are not seeking to say that there should not be any financial investigators. The amendment does not say that the director should not have power to set up the system. We have not undermined every aspect, or sought to remove the whole clause. We have merely said that the director should have the freedom to decide on which direction he should take once appointed. The hon. Gentleman does his argument no service by consciously and deliberately seeking to misrepresent the effect of our amendment.

Does not the hon. Gentleman accept my point that the Bill requires accreditation to access the investigatory powers under part 8 and other measures elsewhere in the Bill? By potentially removing accreditation he goes attacks some of the capacity in the Bill.

I do not accept the Minister's point. If one simply inserts ``may'' and gives the director that power, the rest of the powers are still there for him to use. It is probable that a director would wish to do something along those lines. As this is a totally new system we are philosophically disinclined to impose the straitjacket on a director when we do not know what his views will be in relation to the Government's overall scheme and strategy. The Minister came so near to setting out what we were hoping he would set out and, despite what he has said, he may reflect on it. I do not intend to press the matter to a vote but we may need to return to this on Report or in another place. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment No. 4, in page 2, line 35, leave out `must' and insert `may'.

Because so much of the debate on ``must'' and ``may'' has already taken place I can be extremely brief. We simply wished to make the two parts of clause 3 fit if amendment No. 3 was accepted. The Government did not accept it. We wanted to put the amendment on the amendment paper so that were the Government at a later stage and on more mature consideration to accept our general thinking, they could make subsection (5) fit with it as well. It is purely consequential on our amendment No. 3.

I am sure that the Minister will not accept this amendment, having rejected the earlier one. Again, it comes to the same point: we do not want to impose a straitjacket on the director. We simply wish that the clause gave the director powers. The Bill is extremely didactic and dogmatic. If that is the way that the Government want to go, so be it. I simply offer the amendment by way of consistency with amendment No. 3.

Is the hon. Gentleman not moving the amendment?

I am moving it, as it important that it be on the record.

Let me take this opportunity to set out some of our thinking. The amendment would mean that the director would not be required to provide training in financial investigation or in the operation of the Bill. Under the Bill as currently drafted the director must provide for training in financial investigation. That will be delivered by means of a centre of excellence that will be established within the agency to carry out training and accreditation. A development manager for financial investigation has been appointed to the Home Office to oversee improvements in the delivery of training in advance of the legislation and to undertake planning for the centre of excellence.

It would be helpful if we could be given some details of the person whom the Minister has just mentioned and his background. That would provide a helpful indication of the way in which the Government are moving in relation to future appointments.

The issue is already in the public domain. The person who has been appointed as the development manager is Mr. Charlie Dickin, formerly a detective inspector of Avon and Somerset constabulary fraud squad. He has taken up his post on secondment. We are not trying with that appointment to circumvent the decisions that will subsequently be taken about the direction of the agency but I hope that the hon. Gentleman realises or would accept that there are certain things that can be done by administration to lift our game on the recovery of the proceeds of crime. We do not want the measures that are provided in the Bill simply to come into a totally flat situation. We want to see agencies applying themselves and thinking about how the proceeds of crime can be better pursued in advance of the legislative framework that will enable them to go much further.

The director must also provide training to investigators and others on the operation of the legislation, in addition to other training on the provisions that will be given in advance of the implications for Crown Prosecution Service staff, for example. He will fund training activities from his general budget but will also have the power to charge for accreditation and monitoring, for example, where they are provided to the private sector. The purpose of the training will be to improve the standards and effectiveness of financial investigation and to ensure that people are aware of their powers under the legislation. Training will have a significant impact on the recovery of the proceeds of crime and should lead to the recovery of more criminal assets.

Financial investigation requires specialist skills. The PIU report concluded that among the reasons why financial investigation was under-used was a shortage of people with the right skills and the wide variety in the extent of training provided by agencies. That is why the director will be required to provide training in financial investigation. Training will have to be delivered in a consistent and co-ordinated way, which will increase the effectiveness of financial investigation. Although the director cannot be the only person providing training on the operation of the legislation, it makes sense for him to provide such training under the other limb of the training remit. The training is likely to be particularly relevant to financial investigators but could be opened up to other sectors if there were sufficient interest.

The Bill will help to ensure that financial investigators are trained to a consistently high standard and that the powers in the Bill are widely understood. Only if they are understood will they be as widely used as we hope. Training is an essential part of delivering the Bill's aims. In our view, the importance of the director's training function, in terms of financial training and training in the operation of the Bill, justifies requiring him to provide training. I hope that the hon. Gentleman will withdraw the amendment.

The Minister's guidance was helpful. I am grateful to him for answering on the hoof, as it were, and giving details of the development director on secondment. I shall not repeat the points that I made on amendment No. 3. The two amendments stand or fall together. We will probably have to return to the issues, but in the light of the Minister's comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Further consideration adjourned.—[Mrs. McGuire.]

Adjourned accordingly at two minutes to One o'clock till this day at half-past Four o'clock.