Aamer Sarfraz: Security guards aren’t getting the recognition or rights they deserve. It’s time politicians changed that.

20 Jul

Lord Sarfraz is a Conservative member of the House of Lords and a Member of the Science and Technology Committee.

There are 370,000 licensed security professionals in this country, more than double the combined manpower of the British Army, Royal Navy, Royal Marines and Royal Air Force. They include security guards, door supervisors, and CCTV operators.

These men and women are at the front line in our banks, supermarkets, nightclubs and sporting events. Sadly, little attention is paid to their welfare.

The job of a security guard is very challenging.  A study by the University of Portsmouth found that 50 per cent of security guards face abuse once a week, and 40 per cent show symptoms of PTSD. Security guards work long hours, usually standing, with little opportunity for career progression. It is unsurprising the sector has high staff turnover.

Security guards are not employees of the establishments at which they are deployed. As contractors, they do not share in employee benefits, such as insurance or health care. Many are hired by small security firms, who offer no benefits at all. 

Critically, security guards don’t usually receive the hourly wages billed by security firms on their behalf. As an example, a security firm may charge a client £15 per hour, but most security guards earn close to the £8.91 minimum wage, with the difference kept by contractors and sub-contractors. The top five security firms in the UK have combined revenues in excess of £1.5 billion.

During the pandemic, security guards served diligently, like many frontline workers. The ONS published data in March 2020, stating that security guards faced the highest risk of death from Covid-19, more than any other occupation. We rightly clapped for carers, but security guards get virtually zero recognition.

The UK security sector is growing at six per cent annually, and given work conditions, there will no doubt be a shortage of staff in this sector. Unlike Uber drivers, security guards don’t benefit from “surge pricing” when demand is high.

Security guards invest in their own training and licensing – none of this is paid for by their employers. Training covers criminal and civil law, report writing, maintaining evidence, crime scene investigation, drugs, first aid and CPR, communication skills, firefighting, managing vulnerable people, conflict management, and use of force. All of this content, akin to a mini MBA, is delivered in less than one week.  

Once a prospective security guard completes their training, they have three years to apply for a security license, which is in turn valid for another three years. As such, a security guard could go six years with no refresher training.

A select group of security professionals, door supervisors, participate in a “physical training” module, in which they learn how to restrain people and manage rowdy crowds. This training is delivered in one day, with no simulations or exercises thereafter. The vast majority of security guards are offered no physical training whatsoever. Yet we expect them to manage a football mob better suited for riot police.

The Security Industry Association (SIA), established under the Private Security Industry Act 2001, is responsible for regulating the security industry in the UK. Today, I am tabling a written question in the House of Lords asking the Home Office what their strategy is to protect the mental and physical wellbeing of security guards. Security guards keep our families safe every day, and we owe it to them to recognise their work.

Aamer Sarfraz: Other countries have started work on digital currencies. It’s time the UK got going too.

13 Apr

Lord Sarfraz is a Conservative member of the House of Lords and a Member of the Science and Technology Committee.

Today in the House of Lords, I will be speaking about a digital pound. Specifically, on this occasion, I will be asking the Government what assessment it has made of a UK Central Bank Digital Currency (CBDC).

There is already much thinking that has already gone into this. The Bank of England’s CBDC discussion paper, published last year, started the ball rolling for a digital pound.

A digital pound, backed by the Bank of England, could be a major win for individuals and businesses. With a digital pound, held in an electronic wallet, many bank fees could be eliminated, and foreign currency exchange risks substantially reduced. Importantly, such a currency could compete with Bitcoin’s market share, which currently stands at approximately US$1 trillion. It is estimated by the FCA that 1.9 million adults in the UK already own cryptocurrencies, and this number is growing.

A successful digital pound will need to be built with the right technology. The Bank of England has several options, including using a decentralised distributed ledger, like other cryptocurrencies. However, the very principle of “decentralisation” will not come naturally to any “central” bank. Most importantly, central banks will need to work with each to ensure their various CBDC’s operate on the same technology standards. Otherwise, we will have the same problem we have with fiat – a pound note doesn’t fit in a US vending machine.

Other countries are already forging ahead with plans for a digital currency. Japan’s Central Bank has launched a one-year digital currency trial this year. Furthermore, this week the Chinese government has officially started to issue digital yuan to 750,000 recipients. Other central banks around the world are also experimenting with digital currencies of their own. There are already several GBP-pegged stablecoins in the market. We now need to pick up the pace on a Bank of England issued digital currency.

Alongside issues of supply, there is clear demand for stable digital currencies. Tether, a stablecoin pegged to the US dollar, already has a US$45 billion market cap. However, CBDC’s will not mark the end of Bitcoin, nor should that be our objective. Bitcoin will still be the “people’s digital currency”, uninfluenced by central banks or governments. Without the success of Bitcoin, we would never have been thinking about a digital pound in the first place.

The rationale for the emergence of a digital pound is that the current banking system has several drawbacks. Over the past few decades, commercial banks have diversified their revenue sources.  As a result, “non-interest income”, mostly in the form of bank fees, have become an important source of income. Bank fees are charged on all sorts of things – account maintenance, overdrafts, cashier checks, reference letters, returned cheques, and wire transfers to name a few. There are entire online comparison sites helping consumers navigate bank fees.

Individuals making or receiving overseas payments, and those travelling overseas for both business and pleasure, get hit especially hard. They are faced with foreign currency losses (often twice during a trip – on departure and return), foreign ATM fees, traveller’s cheques issuance fees, fees for sending or receiving money, and fees for overseas transactions. Similarly, businesses that are buying and selling overseas, have to manage foreign currency risks and pay substantial transaction fees.

While some challenger banks are doing a good job reducing transaction fees, many still earn considerable non-interest income. They would say, quite rightly, that regulatory and compliance costs have skyrocketed, which result in the need to find additional sources of revenue.

A digital pound could be even more powerful when combined with smart contracts. Take the example of trade finance. In today’s archaic system, international trade is entirely dependent on banks, without whom costly letters of credit – the principal instrument in import and export – cannot be opened. Letters of credit were used by the Medici Bank in the 14th century, and are still in use today.  A smart contract, programmed into a digital wallet, could mean importers and exporters could use their digital pounds to conduct trade without banks.

Any solution afforded by the emergency of a digital currency would be part of the UK’s burgeoning fintech sector. The UK has already established a strong fintech sector and it could become even stronger. It has built on the UK’s historic strengths in financial services, which contributes an estimated £132 billion to the UK economy, corresponding to 6.9 per cent of the economy. The UK’s fintech market generates over £11 billion in annual revenues, and claims 10 per cent of market share globally. It is no surprise that 71 per cent of all British people interact with at least one fintech, which is higher than the global average of 64 per cent.

The Kalifa review reported in late February proposed five key recommendations. One of those was focused on creating a new regulatory framework for emerging technology, and this would include virtual currencies. The report’s author explained: “Fintech is not a niche within financial services. Nor is it a sub-sector. It is a permanent, technological revolution, that is changing the way we do finance.”

Fintech has already brought benefits for people in everyday life, and the UK has become a particularly strong hub for its development. Looking ahead, a digital pound could bring benefits for both consumers and businesses and the UK must move faster in exploring the mechanics and regulatory system of such an innovation.