Monday 18th July 2022
(2 years, 3 months ago)
Grand CommitteeProcurement Act 2023 View all Procurement Act 2023 Debates Read Hansard Text Amendment Paper: HL Bill 4-V Fifth marshalled list for Grand Committee - (14 Jul 2022)
(a) treat the supplier as an excluded supplier for the purpose of—(i) assessing tenders under section 18 (competitive award), or(ii) awarding a contract under section 40 or 42 (direct award), and(b) exclude the supplier from participating in, or progressing as part of, any competitive tendering procedure.”
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, this group seeks to deal with amendments relating to the process for excluding suppliers and with the debarment list. I recognise that there is considerable interest in this topic. Amendments relating to the grounds for the exclusion of suppliers will be dealt with separately in a later group. I look forward with interest to submissions from noble Lords, but there are a number of government amendments in this group.
Amendment 89 ensures that suppliers which gained an unavoidable unfair advantage through involvement in preliminary market engagement are excluded from the procurement in question.
Amendment 148 is consequential on Amendment 93, which was debated last week. Amendment 93 clarifies that the authority’s requirements and award criteria are two separate concepts.
Amendment 154 broadens the concept of an entity associated with the supplier for the purpose of the exclusion grounds. This concept covers entities which are being relied on to meet the conditions of participation and is expanded by this amendment to also cover entities which may not be involved in the delivery of the contract. An example would be a consortium member providing financial backing to the supplier in order to meet conditions of participation relating to financial capacity. This aligns the concept of associated entities with the existing concept in Clause 21. An exception is made in respect of exclusions for guarantors such as banks, where it would be inappropriate to consider the exclusion grounds.
Amendment 150 is the lead of 21 amendments which all serve to change the term “associated supplier” to “associated person” for the purposes of the exclusions regime. This is consequential on Amendment 154 because the entities being relied upon to meet the conditions of participation may not be involved in the actual delivery of the contract. It is therefore accurate to refer to them as “persons” rather than “suppliers”.
Amendments 151, 159 and 166 require contracting authorities to notify suppliers when they are considered to be excluded or excludable by virtue of an exclusion ground applying to an associated person or subcontractor. These amendments are linked to Amendments 168 and 171, which require ministerial consideration before a supplier is notified and given the opportunity to replace an associated supplier or subcontractor when they are considered by the contracting authority to be a threat to national security.
Amendment 162 requires contracting authorities to ask for details of intended subcontractors and to check whether any intended subcontractors are on the debarment list, as part of determining whether the supplier is excluded or excludable. Amendments 163, 164, 165 and 398 are consequential.
Amendment 169 corrects a drafting error which incorrectly described suppliers subject to the exclusion ground on national security as being “excluded” when they are in fact “excludable”. Amendment 170 is also a technical amendment.
Amendments 175, 182, and 414 clarify what it means to treat a supplier as an excluded supplier in relation to the award of a public contract. They make it clear that contracting authorities are required to disregard tenders from such suppliers and prevent such suppliers from participating in, or progressing as part of, any competitive tendering procedure.
Amendments 176 and 178 provide for the list of improper behaviour at subsection (4) of Clause 30 to be an exhaustive list. It is important to be clear on the circumstances in which a supplier has acted improperly, given that the consequences are exclusion. Amendment 339 removes financial and other resources of suppliers from the list of the matters that contracting authorities may have regard to in setting proportionate requirements for suppliers to provide particular evidence or information as to whether exclusion grounds apply and whether the circumstances giving rise to any application are likely to occur again. Proportionality is sufficiently and more appropriately achieved by having regard to the nature and complexity of the matters being assessed, which is also listed. This amendment aligns with the matters that contracting authorities must have regard to in considering whether a condition of participation is proportionate, as specified in Clause 21.
Amendment 349 is made at the request of Northern Ireland and provides that transferred Northern Ireland authorities should make notification of exclusion to a department in the Northern Ireland Executive that the authority considers most appropriate, rather than a Minister of the Crown. This is necessary to provide information to the relevant department, for example to consider a potential investigation of suppliers under Clause 57. Amendment 352 requires that a Minister of the Crown must consult with the Northern Ireland department that the Minister considers most appropriate —rather than any Northern Ireland department—before entering a supplier’s name on the debarment list or removing an entry from the debarment list following an application for removal under Clause 60.
Amendment 399 extends the circumstances in which there is an implied right for a contracting authority to terminate a contract where a subcontractor—which the supplier did not rely on to meet the conditions of participation—is an excluded or excludable supplier. The amendment includes circumstances where the authority checked the debarment list or asked for information about the subcontractor but did not know that the subcontractor was excluded or excludable prior to award.
Finally, Amendment 402 requires contracting authorities to seek the approval of a Minister of the Crown before terminating a contract on the basis of the discretionary exclusion ground of national security. This is necessary to align with the other circumstances in which ministerial approval must be sought before relying on this particular ground. I beg to move.
Lord Coaker (Lab)
In keeping with the obvious mood of the Committee, I actually do not want to say very much either on this particular group. The interest I had was in the amendment from the noble Lords, Lord Wallace and Lord Fox, in this group, on how excluded suppliers demonstrate their reliability following the application of an exclusion order, and the process of self-cleansing. I was particularly interested in what this process of self-cleansing means. I am presuming—from the Minister’s helpful introduction—that the company is excluded for X reason, and is told that in the notice that goes to an excludable supplier, and then it goes back to the Government and says, “We’ve undertaken the process of self-cleansing and therefore the problems that you highlighted with us are no longer applicable”. So, I wondered whether the Minister could say a little bit more about the process of self-cleansing, which was the element that I found a little bit vague, if I am honest, and goes with many of the problems we have: the Minister talks about a “proportionate response” from the Government, and those sorts of phrases, and again we get into the problem of definition.
The other point I will make concerns what the Minister rightly pointed out: Schedules 6 and 7 outline the grounds rather than the process. There are the mandatory grounds in Schedule 6 and the discretionary grounds in Schedule 7, both of which a contracting authority might think applies to it. On the grounds in these schedules, can the Minister give us an example of what the process or timescale will be and an example of how it would work? Presumably the Minister sends this to the contracting authority and says, for example, “We think you should be excluded because of this in Schedule 6”, and if the company says, “No, this isn’t the case”, a discussion takes place. It would be helpful for the Committee to understand this process.
Finally, can the Minister confirm that, as I read it, there is also an appeals process? If the Government decided that a firm or supplier should be excluded, am I right in saying that this decision could be appealed? If it is appealed, who is it appealed to—presumably not the same person who made the decision to exclude them in the first place? I am querying the independence of that appeal process and the amount of time that this would take. A little more detail would be useful on the matter of an “excluded supplier” and an “excludable supplier”.
I do not want to keep the Committee any longer on this group of amendments, because the Minister’s helpful outline clarified some of the points I would have made about why “person” changes to “supplier”. I look forward to the Minister’s response to my questions.
Lord True (Con)
My Lords, I think that in a test match that is called putting the spinner on early when the batsman is better at fending off fast bowling.
The noble Lord asked a number of questions, which I am not in a position to answer at this juncture. We believe that self-cleansing is an important process because exclusion is a risk-based measure as perceived; it is not a punishment. As such, suppliers should be encouraged to clean up their act and given the right to make the case that they addressed the risk of misconduct, or the other issues, occurring again. It is for contracting authorities to decide whether the evidence they have seen is sufficient to reassure themselves that the issues in question are unlikely to occur again. The noble Lord asked a further question about what happens should there be a difference of judgment. The formal position is that it is for the contracting authorities to decide whether self-cleansing has occurred.
It is not our intention to make the exclusion of suppliers more difficult for contracting authorities, because many noble Lords, on a number of subjects, have asked for the opportunity to exclude suppliers. The Bill seeks to ensure that all the relevant issues can be considered. We believe that suppliers will thereby be encouraged to take as much comprehensive action as possible to avoid recurrence if they seem to fall foul of these risks. I repeat: the decision must be made by the contracting authority, and the burden to present remedial evidence to avoid exclusion is on the supplier. The lack of remedial evidence—or if the remedial evidence is inadequate—may give the contracting authorities sufficient reason to conclude that the issues in question are likely to occur again. However, I will look very carefully at this flighted ball that the noble Lord has sent. We accept the need for guidance on self-cleansing to accompany the legislation, and can assure the noble Lord opposite that this will be published as part of the implementation package for the Bill.
I cannot ask the noble Lord, Lord Wallace, not to move his amendments, as he is not here, but I hope that is something of an answer to the noble Lord, who has amendments in this group.
Lord Coaker (Lab)
That is quite helpful. Further to that and to make sure I have understood, would an excluded or excludable supplier be put on a debarment list? I refer to Clause 61, which is titled “Debarment decisions: appeals”. Am I reading this right or have I got it wrong?
Lord True (Con)
We will come on to the details of debarment on a later group—on Clause 61, I believe. A supplier may certainly appeal against the decision of a Minister, who ultimately places the debarment list. On the process of self-cleansing, which we were talking about, the contracting authority, not the Government, undertakes exclusion. It will notify the supplier that a ground for exclusion applies; the supplier may then make representations and submit self-cleansing evidence, as I previously discussed. The contracting authority then weighs it up and decides on exclusion.
This is the further wrinkle that I had not answered in saying rather more words than the succinct selection I have been given, but it confirms what I was saying: the supplier may challenge, but through the courts under the remedies regime, if it disputes the contracting authority’s judgment on self-cleansing.
We will come on to debarment decisions and permanent exclusion on amendments after Clause 61, but certainly a supplier may appeal against a ministerial decision.
In moving government Amendment 89 in my name, I request that the other amendments are not moved.
“(1) If a contracting authority carries out preliminary market engagement, the authority must—(a) publish a preliminary market engagement notice before publishing a tender notice, or(b) provide reasons for not doing so in the tender notice.”
Lord True (Con)
My Lords, here I pay the penalty for the discussion we had before the Committee started: there are more government amendments that I must move in this group. I will beg to move a range of amendments today.
Government Amendments 90 and 91 make improvements to preliminary market engagement notices. Together they ensure that, where a contracting authority chooses not to publish a preliminary market engagement notice, a justification must be set out in any subsequent tender notice. I know this will be welcomed, particularly by small businesses, which often rely on early market engagement.
Government Amendment 277 makes provision for contract details notices. It removes a superfluous reference to contracts awarded under this part, which is unnecessary as the definition of a public contract in Clause 2 covers that which needs to be covered.
Government Amendments 278 to 281 correct a timing error in relation to the publication of a contract details notice for a light-touch contract. This will ensure that the contract details notice is published first, within 120 days of entering into the contract. The publication of the contract is required within 180 days of entering into it, allowing time for the contracting authority to make any necessary redactions before publication.
Government Amendments 282 to 286 are at the request of Northern Ireland and exclude transferred Northern Ireland authorities from the obligation to publish contracts above £2 million.
Government Amendment 287 is a minor drafting change, which better reflects the operation of the provisions.
Amendments 355, 356, 357 and 359 make changes to the requirements in Clauses 64 and 65 for contracting authorities to publish information about, respectively, compliance with the prompt payment obligation in Clause 63 and payments made under public contracts. Northern Ireland has chosen to derogate from both those requirements, so these amendments reflect that policy.
Government Amendment 358 makes it clear that the exemption for utilities in Clause 65(4)(a) applies to private utilities only. Government Amendment 403 clarifies that user-choice contracts which are directly awarded are not subject to the requirement to publish a contract termination notice.
Government Amendments 429 and 430 are technical amendments to Clause 79 to reflect consistent drafting practice and the fact that Northern Ireland has chosen to derogate from the below-threshold rules in Part 6 and so does not require the threshold-altering power in subsection (7).
Government Amendments 446 and 447 to Clause 84 also relate to Northern Ireland. Northern Ireland has chosen to derogate from the requirement for its contracting authorities to publish pipeline notices.
Government Amendment 457 inserts a new clause entitled “Data protection” after Clause 88. This is a now standard legislative provision that reiterates the need for those processing personal data under this Bill to comply with existing data protection legislation. As we discussed on an earlier group, I look forward to engagement with noble Lords opposite on issues of particular concern relating to processing and holding data. I beg to move.
Lord Hunt of Kings Heath (Lab)
My Lords, I have Amendment 445 in this group. This amendment is concerned with the challenge facing charities seeking to obtain contracts from public authorities. The Bill is ambitious in its aim to simplify procurement rules, which is very welcome, but it is important that it is done in a way which does not make it more difficult for small businesses and particularly charities successfully to bid for contracts.
We know from past experience with current contracting rules and law that charities experience some barriers here. I hope that in our discussions on the Procurement Bill it will be recognised that a large proportion of the voluntary sector is pretty fundamental to the delivery of public services—indeed, in some cases the voluntary sector is the leading provider of such services. For example, according to research commissioned by DCMS, voluntary and charitable organisations and social enterprises won 69% of the total value of contracts awarded for homeless services between April 2016 and March 2020, and 66% of the total value of contracts to support victims of domestic violence and sexual abuse.
We know that the voluntary sector can produce outstanding results; we know about its ability to build trusting and long-term relationships with communities that are often excluded, its focus on prevention, its versatility and its agility. So I welcome the requirement for contracting authorities to publish pipeline notices—the Minister referred to this in relation to one of his amendments today—but, given the utility of such notices for smaller providers and the market diversity and improved services that could be cultivated by giving smaller providers a chance to prepare the bid, we want transparency to be prioritised in the requirements to publish pipeline notices; hence my amendment.
My Amendment 449 is slightly different but it none the less raises issues in relation to the way in which public authorities engage with the private sector—or the independent sector, depending on how you look at it. This amendment arises from concerns that public bodies are failing to act within the spirit if not the letter of the freedom of information legislation in relation to procurement contracts.
I just want to refer the Minister to an openDemocracy report, published last year, which looked at the operation of the Freedom of Information Act in 2020. It found that
“2020 was the worst year on record for Freedom of Information Act transparency … Official statistics published by the Cabinet Office show that just 41% of FOI requests to central government departments and agencies were granted in full in 2020—the lowest proportion since records began in 2005 … The Cabinet Office is blocking requests from MPs about its use of public money to conduct political research … Stonewalling, a brutally effective tactic for evading FOI, is increasingly prevalent … Government departments are cynically exploiting a legal loophole to deny timely access to information in the name of the ‘public interest’ … Government departments are failing to comply with a legal requirement to work constructively with requesters”.
The FoI Act was meant to be a safety net for members of the public so that there would be as much openness as possible. However, there are two obstacles to that happening. The first is the operational aspect of policing the Act through the Information Commissioner. The commissioner has been seriously affected by huge cost-cutting. Last November, Elizabeth Denham, the former commissioner, told the House of Commons Public Administration and Constitutional Affairs Committee that the ICO’s resources were “40% less” than in 2010 while, at the same time, the number of requests had increased by one-third. In its most recent annual report, published in July 2021, the ICO noted that there had been a build-up of the caseload over the financial year.
The other obstacle to the public being able to find out what is going on is the subject of my amendment. One exemption in FoI legislation relates to commercial interests in Section 43(2). This is a qualified exemption subject to the public interest test. Its application ought to be straightforward but, unfortunately, it is used regularly to refuse information in often the most absurd situations. The outgoing commissioner said:
“The reality of the delivery of Government services involves so much of the private sector now. The scope of the Act does not … cover private sector businesses that are delivering public services. I think that is a huge challenge. I have seen statistics that say up to 30% of public services are delivered under private sector contracts, but those bodies are not subject to”
FoI legislation.
I am afraid that the NHS is a frequent offender when it comes to this. We know that, over the years, the Government and the NHS have looked to expand private sector involvement. There is a long-established trend of trying to outsource some NHS functions to private contractors and a recent trend to set up what I can only describe as tax-dodging subcos, as they are called, to avoid VAT payments and reduce staff’s terms and conditions. This is where public health bodies set up their own subsidiary companies and transfer staff over. Basically, they do it to get around VAT payments, but we have also seen them use it to reduce the terms and conditions of the staff who are so employed.
What is so objectionable is that trusts frequently refuse to disclose information about what they are doing. Decisions are made in secret. In one example, an FoI request went in for the business case. In the decision-making record, the request was turned down on the basis of commercial confidentiality. This happens up and down the country. Section 42(2) is also used to refuse to disclose information long after any commercial considerations have gone.
This is a serious issue. As members of the public, we have a right to know when the NHS outsources services. The FoI legislation was never envisaged as getting in the way of transparency in those cases. When you combine it with the enforcement problem that we have, in essence we are seeing the FoI legislation not being effective. I am not sure how hopeful I am, but I am ever hopeful that the Government will see the error of their ways in relation to FoI. It was set up with the best of intentions and its principles still stand today in terms of transparency, but the more we see the public sector using the private sector, the more FoI considerations ought to come into play.
Lord Clement-Jones (LD)
Thank you. My Lords, if noble Lords thought that my previous speech took a long time, they will not be happy with the second half of it, which concerns the technical parts. These relate to Amendments 452A, 452B, 519A and 519B, which are technical amendments from the Local Government Association designed to ensure that all notices come within the new digital platform.
Amendments 452A and 452B relate to Clause 86(1) of the Bill, which sets out that appropriate authorities may by regulations make provision about
“the form and content of notices, documents or other information to be published or provided under this Act”
and
“how such notices or documents are, or information is, to be published, provided or revised.”
The amendments would help ensure that future regulations do not contravene the purpose of the single digital platform wherever possible and support the move to progressively streamline the many different publication requirements for procurement information and contract-spend data placed on local government and the public sector as a whole through different pieces of legislation.
Amendment 519A would omit Section 89(4)(b) and 89(5) of the Transport Act 1985. This would remove the requirement for local authorities to issue notices of tender individually to all persons who have given to that authority a written notice indicating that they wish to receive invitations to tender for the provision of local services for that authority’s area. This would bring the requirements to advertise tenders for transport services into line with those set out in the Bill and facilitate the ambition to create a single digital platform where all public tenders are advertised in one place.
Finally, Amendment 519B would amend the Service Subsidy Agreements (Tendering) (England) Regulations 2002 by removing Regulations 4 and 5. Regulation 4 requires local authorities to publish information relating to tender invitations in accordance with Part 1 of Schedule 1 to the same regulations. Regulation 5 requires local authorities to publish tender information to the general public at times, in places and in a form which are convenient to the public, and to publish notices of tenders in local newspapers. Removing the two regulations would ensure that information about contract pipelines and contract awards for service subsidies will in future be published in the same place and format as information about any other public contract, to improve consistency and accessibility. A service subsidy in this context is where councils subsidise companies operating public passenger transport services to run services on routes which may not otherwise be economically viable, for example bus services in rural areas. I hope that has explained these rather technical amendments and very much hope that the Minister understands the motive behind them.
Lord True (Con)
My Lords, I apologise for not rising sooner; I never know how many spokesmen are going to rise from the various Benches. This has been another interesting and informative debate. It has also been extremely wide-ranging, as has become our custom in this Committee. I will try to answer as many points as possible, but there are things coming from various areas that we will look at carefully. This is your Lordships’ Committee and therefore it is perfectly reasonable for points to be made. My aspiration is to answer, but I may not be able to answer them all.
Before I get on to the main amendments, I will address various things I was asked about. The noble Baroness, Lady Boycott, asked about the Palantir contract. I am advised that this is a DHSC NHS contract. I am not informed in my department of the details she asked for, but I will ask my officials to follow up and respond to her later.
The noble Lord, Lord Berkeley, asked about a Written Ministerial Statement made last week. The timing of the publication of the participation in government commercial activity guidelines for Ministers referred to in that Statement is not connected to this Bill. The guidance sets out how Ministers can be appropriately involved in commercial activity, including procurements, under the current procurement rules.
I was anticipating in a later group—indeed, there are some relevant amendments—a debate about Hikvision. I am grateful for what the noble Lord, Lord Alton, said, as well as for the opportunity to speak to him about this matter, which, as he said, has some security considerations. So far as the actuality of what might or could happen is concerned—that is a potential rather than a loaded spin on it—it is ultimately up to contracting authorities to apply the grounds for exclusion under this Bill on a contract-by-contract basis. The national security ground is discretionary, meaning that authorities can take into account a range of factors, including the nature of the contract being tendered. However, the debarment regime will allow for the central consideration of suppliers on the grounds of national security. As the noble Lord knows, the Government’s security group is working with the National Technical Authority and the Government Commercial Function on the government security aspects of this issue.
I appreciate the noble Lord’s impatience, given the sensitivities of the issue. Policy options are being worked out for how to mitigate the security risks posed by this type of equipment; they range from primary legislation to ban certain companies from the government supply chain to issuing more advice and guidance for contracting authorities. The Cabinet Office has also published guidance setting out the steps that all government departments must take to identify and mitigate modern slavery and labour abuse risks throughout the commercial lifecycle, focusing on the areas of highest risk. We may well return to this issue in debate on a later group, but I can assure the noble Lord that the matters he raised are ones that the Government are not minimising but currently considering.
Lord Alton of Liverpool (CB)
I am grateful to the Minister. Without pre-empting our debate later in the Committee’s proceedings, is he in a position now to respond to the letter to the Cabinet Secretary from Professor Sampson, which I referred to in my remarks earlier? If not, could that correspondence be made available to your Lordships between now and Report?
Also, has the Minister had a chance to look at the Foreign Affairs Select Committee’s report, which called for a total prohibition of Hikvision, and the decision not just of the United States Administration but of the European Parliament to ban Hikvision from their public procurement policies? Given the national security implications, as he said—earlier, I referred specifically to the suggestion that HS2 might procure and use Hikvision cameras on the whole of its new network—does the noble Lord not agree that this is something on which we should shine more light rather more urgently?
Lord True (Con)
Perish the thought that I might comment on the shelf life of HS2, but I do take what the noble Lord says very seriously. The fact is that some of the factors he mentions are taken into consideration. This issue is live. I accept his chiding. I will look carefully at his words and at what he has asked to be published or not published, but I hope that we may get a resolution of this matter, because I understand the demand, the request and the desire for a clear and public solution to the points put forward by the noble Lord. We will see what we can do, if not before the next group then certainly before we come back to this issue on Report.
Lord Alton of Liverpool (CB)
My Lords, before the noble Lord continues, I hope he will go back to the original statement to reflect further on whether this information could be published. This was an open letter from Professor Sampson that was published—it appeared in the national newspapers that the letter had been sent to the Cabinet Secretary—and I would have thought that most of the issues raised in that letter are things to which Members of your Lordships’ House should certainly be privy.
Lord True (Con)
My Lords, I have given further information. The noble Lord referred to a whole range of factors which he asked to be considered and asked me to respond to the Foreign Affairs Select Committee report and so on. I said I would reflect on all he has said and come back, but I gather there has been some reflection on this aspect of his menu. We will no doubt maintain this dialogue.
The amendments we were talking about—Amendments 448, 449 and 449A—all relate to freedom of information and seek to bring external suppliers into the scope of the Act. In practice, the Government do not believe that the amendment would add much and could impose burdens on businesses that would make public contracts unattractive. The public authority will already hold all the details of the tendering process and the resulting contracts, and that information can already be requested under the FoI Act. The desire has been expressed in some quarters to reform the FoI Act, but we are looking at the proposals before us.
Furthermore, information held by a supplier or subcontractor on behalf of a contracting authority is already within scope of the Act. The amendments also introduce unhelpful limitations on the ability of contracting authorities to withhold commercially confidential information. This is a point of debate, but the FoI Act sets out the duties on public bodies when they receive requests for information under the Act. Restating the operation of that legislation is not necessary in this Bill. The Bill sets out in detail what information is required to be published and the triggers for publication, as well as requiring contracting authorities to explain why they are withholding any data.
Amendment 449A also seeks to extend the enforcement powers of the Information Commissioner to suppliers and subcontractors and open them up to criminal prosecution. The Information Commissioner already has enforcement powers in relation to public authorities and therefore in relation to the information held by others on their behalf. We believe that transparency is a sanction for authorities that fail to fulfil their obligations to publish as the failure will be obvious to the public. Failure to publish information required by the Act could be subject to judicial review, and there is also potential for a civil claim for breach of statutory duty pursuant to Clause 89 if the supplier can demonstrate that it suffered loss or damage arising from a breach of a publication obligation. Additionally, an appropriate authority has a power under Clauses 96 to 98 to investigate a contracting authority’s compliance with the Act, make recommendations and, if appropriate, provide statutory guidance to share lessons learned as a result of the investigation. Recommendations issued under Clause 97 come with a duty on the contracting authority to have regard to those recommendations when considering how to comply with the Act, and failure to do so would also leave the contracting authority open to judicial review.
Where a contracting authority is required to publish something that includes sensitive commercial information, it may withhold or redact that information only if there is an “overriding public interest” in doing so. Where the commercial confidentiality exemption is used to withhold or redact information, this must be publicly recorded. As such, there will be full transparency about what has been withheld and why, and interested parties can always challenge such decisions by requesting the withheld information under FoI law. This process is subject to the oversight of the Information Commissioner. Interested parties can also complain to the procurement review unit, which we discussed the other day.
Amendments 450 and 451 are from the noble Lords, Lord Wallace and Lord Fox. They are absent, and I send them best wishes for their respective aliments. Expertus dico: I have just had an aliment as noble Lords saw in the last Session, and I very much feel for all noble Lords. These amendments would make it harder for contracting authorities to withhold information in instances where there is sensitive commercial content. The overall result could be the inappropriate disclosure of sensitive information or fear of such disclosure, both of which are likely to have a chilling effect on suppliers bidding if they cannot be confident that their commercial secrets will be respected by contracting authorities. This could lead to a reduction in choice, quality and value.
Amendment 452, tabled by the noble Baronesses, Lady Worthington and Lady Boycott, and Amendment 455, tabled by the noble Baroness, Lady Hayman of Ullock—which I think is intended to address the central digital platform, not the data on the supplier registration system—propose to introduce various requirements about the accessibility of published information and how it is licensed. The Government have already committed to a publicly available digital platform which will allow citizens to understand authorities’ procurement decisions. This data will be freely available. It will remain subject to data protection law and redaction under the exemptions set out in Clause 85.
However, not all information should be published on the central digital platform. For example, some associated tender documents produced under Clause 20 in certain procurement exercises may need to be circulated to only a limited group of suppliers, for instance, where that information is sensitive. As set out in the Green Paper, we will apply the open contracting data standard, and specify this in more detail in secondary legislation. Published data will be covered by open government licence where possible; personal data contained on the platform will be available without any licence.
Amendments 452A and 452B, tabled by the noble Lord, Lord Clement-Jones, would amend Clause 86 to ensure that regulations require publication on a single digital platform. These amendments are unnecessary as the Government have already committed to providing this platform.
The noble Lord, Lord Clement-Jones, has tabled Amendment 456, which imposes obligations on an appropriate authority in relation to standards and quality of data on the platform. Clause 86(1)(a) already makes specific provision for regulations to set out both the form and the content of information to be published under the various notices required by the Bill. This power is there to ensure that regulations can establish the very standards and formats that I believe the noble Lord is seeking.
On the noble Lord’s proposed new paragraph (b), a notice is usually a snapshot of a moment in time. Most notices should not be updated after the initial publication and it is the legal responsibility of the contracting authority publishing the information to ensure that it is timely, accurate and complete. The appropriate authority—a Minister of the Crown, a Welsh Minister or a Northern Ireland department—will not be in a position to verify all that information, which is why it is the responsibility of the contracting authority.
Lord Clement-Jones (LD)
My Lords, I apologise for interrupting, but can the Minister therefore explain why these time limits are so regularly and hugely overridden? The research shows, as I mentioned, that the Cabinet Office itself has a delay of 2.7 months compared with its legal obligation of 30 days. How does the Minister explain that, and why is no further action needed in terms of compliance?
Lord True (Con)
My Lords, if the Cabinet Office is sinning, I will take the matter away and look into it. I heard what the noble Lord said about time limits, but I do not have a specific response in this area at the moment, and nor can I either confirm or deny the figure he gave. We have undertaken to engage on these issues, and we will find the answers and will look very carefully at what the noble Lord said in his speech—or rather, his two speeches.
Amendment 458, tabled by the noble Baroness, Lady Hayman of Ullock, relates to the creation of a digital registration system for suppliers. The register of suppliers described in the Green Paper remains a priority, and provision for this register is set out in Clause 88.
Amendment 459, tabled by the noble Baroness, the noble Lord, Lord Coaker, and others seeks to introduce a requirement for government departments to produce reports on carbon emissions relating to procured goods, services and works. I made the Government’s position clear previously that such matters should not be included in the Bill and that remains our position.
I thank the noble Baroness and the noble Lords, Lord Coaker and Lord Clement-Jones, for their Amendment 459A. However, the Government are opposed to this amendment as well. It would create an obligation to have the central digital platform operational within six months of passing the Act. Just to be clear, Clause 86 creates the powers that the Government will use to require publication on the single digital platform. Clause 88 is the basis of the supplier registration system, which is the “tell us once” system through which suppliers will communicate information about themselves to contracting authorities.
I understand from his helpful explanatory statement that the noble Lord, Lord Coaker, was referring to the former—the single digital platform. We do not wish to commit to such a timetable now, as it might not be necessary or possible to deliver the whole functionality of that platform to that timetable. As the noble Lord knows, there is already a six-month period of pre-implementation built in, but I hear what he says and I think there is broad agreement in the Committee that this development is desirable. I welcome the positive response from the Liberal Democrats and Her Majesty’s Opposition, having had discussions about it, and I will take away what they say.
Lord Coaker (Lab)
Can I just say—because sometimes these things pass by and they should be noted—that we are very pleased with that commitment from the Minister and thank him for it?
Lord True (Con)
Right. Unfortunately, the noble Lord will be disappointed by my response to the second part of the amendment, because I have already explained that contracting authorities will not be required to publish all information to the central platform.
I turn finally to Amendments 519A and 519B from the noble Lord, Lord Clement-Jones. The Bill exempts contracts for public passenger transport services under paragraph 17 of Schedule 2, as their award is regulated by Department for Transport legislation. We believe that it is more appropriate that the transparency provisions governing these arrangements are kept within their existing legal regime, and local authorities are therefore not placed under an unnecessary burden of trying to comply with two separate regimes simultaneously when placing such contracts. I have, however, asked my officials to engage with the Department for Transport to better understand how we can ensure that both regimes are aligned—I think that was one of the points behind the noble Lord’s remarks.
I thank the noble Lord for his generous remarks. Having been a bit flinty on a number of the others, I will none the less, as ever, study carefully Hansard and your Lordships’ very well-informed submissions. Against that background, I commend the government amendments in my name and respectfully request that other amendments in the group not be pressed.
“(a) satisfies the contracting authority’s requirements, and(b) ”
The Minister of State, Ministry of Defence (Baroness Goldie) (Con)
I am endeavouring, my Lords, not to tip my water down the back of my noble friend’s neck, although he might welcome that refreshment.
First, I thank all noble Lords for their contributions. I am in no doubt about the genuine interest which your Lordships have in defence. The noble Lord, Lord Coaker, articulately expressed that, and I respect that. I thank him for the way in which he expressed his sentiments. I know that he speaks for the other contributors to the debate.
I shall try to address the principal points which have come up, so I want in the first instance to address Amendments 101 and 485 and then proceed to speak to the government amendments in the group, Amendments 520 to 526 inclusive. As I have said, I shall endeavour to address the issues which have been raised.
I turn to Amendments 101 and 485, tabled by the noble Lords, Lord Coaker and Lord Hunt of Kings Heath, and, in relation to Amendment 485, also by the noble Baroness, Lady Smith of Newnham. They relate specifically to defence and security contracts and Ministry of Defence procurement.
Amendment 101 would require a contracting authority to disregard any tender from a supplier which is not a supplier from the United Kingdom or a treaty state or which intends to subcontract the performance of all or part of a contract to such a supplier unless there is no other tender that satisfies all the award criteria. I understand the sentiment behind the amendment from the noble Lord, Lord Coaker, which is laudable, but I will explain why I think this amendment is neither necessary nor indeed desirable.
The Bill already provides a discretion for the contracting authority to exclude from procurements suppliers that are not treaty state suppliers and extends this to the subcontracting of all or part of the performance of the contract to such suppliers. This includes defence and security procurements. It is important to note that, for the majority of defence and security procurement, market access is guaranteed only to suppliers from the United Kingdom, Crown dependencies and British Overseas Territories. For those procurements, a supplier established in another country would not be a “treaty state supplier”.
However, due to the nature of defence procurement and the defence market, a discretion to go outside of UK suppliers or treaty state suppliers is required where doing so would best meet the requirement that the contract is to serve—there may be an immediacy about that—and would offer best value for money. Further, to exclude non-treaty state subcontractors would probably make some defence and security procurement much less effective and, in some cases inoperable, as it would exclude, for example, suppliers from the United States, Australia, France, Sweden or Canada from the supply chain.
I assure noble Lords that industrial consequences and commercial strategies will be given case-by-case consideration—that is already how we conduct business—taking into account various factors, including the markets concerned, the technology we are seeking, our national security requirements and the opportunities to work with international partners, before we decide the correct approach to through-life acquisition of any given capability. Where, for national security reasons, we need industrial capability to be provided onshore or where we need to exclude a particular supplier on national security grounds, we will not hesitate to make that a requirement.
The noble Lord, Lord Coaker, raised the specific matter of fleet solid support ships. He will be aware that in the refreshed National Shipbuilding Strategy there is specific reference to the fleet solid support ships. The procurement is in train; the first ship is scheduled to enter into service in 2028 and the last in 2032. I hope that reassures the noble Lord that the matter is under active consideration.
I turn now to Amendment 485. In a sense, this amendment was preceded by a general observation made by the noble Lord, Lord Coaker, and echoed by the noble Lord, Lord Alton, and the noble Baroness, Lady Smith. In essence it was: what difference does this make? That is a fair question and one that deserves an answer. I would say that the Bill provides greater flexibility to the MoD and includes the use of a single system to encourage participation by small and medium-sized enterprises. That is an area not just of significance to the economy but of particular significance to such smaller entrepreneurial organisations. They have sometimes felt out in the cold when major contracts were being awarded by the MoD, principally because, traditionally, the structure was to have a very large primary contractor, with the primary contractor subcontracting various aspects. This is designed to encourage greater participation by small and medium-sized enterprises, which I think is to be applauded.
MoD derogations, and the Bill itself, provide more flexibility to deliver the defence industrial strategy—I will not rehearse that; your Lordships are familiar with it, but I think it is a very positive strategy and one which I think received support from across the Chamber. That strategy replaces the previous defence procurement policy of defaulting to international competition. I know that was of concern to many of your Lordships and, as I say, the strategy has altered that, and I think that is important reassurance on where we are in defence and the greater flexibility we now have. That is why I said earlier that industrial consequences and commercial strategies will be given much more case-by-case consideration, taking into account the various factors which I previously mentioned.
Amendment 485 would require the Ministry of Defence to commission a report from the National Audit Office setting out instances of procurement overspend, withdrawal or scrapping of assets, termination of pre-paid services, cancellation or extensions of contracts, or administrative errors with negative financial impacts. I would suggest the amendment is unnecessary, as what it seeks to achieve is already being delivered through existing processes or initiatives; let me explain what these are.
The National Audit Office already conducts regular audits across defence, which we know to our discomfort because the National Audit Office is an independent entity in that it does not spare its comments when it comes to the MoD, and that is right—that is exactly what it is there to do. In these audits, it regularly includes recommendations for improvement to which we pay very close attention. These include value-for-money studies, such as the yearly audit on the defence equipment plan, regular audits on defence programmes such as Ajax—which the noble Lord, Lord Alton, mentioned—and carrier strike, as well as financial audits. As I say, MoD pays close attention to what the NAO says.
The Infrastructure and Projects Authority also publishes an annual report. That tracks progress of projects currently in the Government Major Projects Portfolio and it provides an analysis of how they are performing. The MoD has successfully introduced several initiatives following on from such recommendations to improve capability and deliver and obtain better value for money, including the defence and security industrial strategy, the defence and security 2025 strategy and the introduction of the Single Source Contracts Regulations 2014.
Lord Alton of Liverpool (CB)
My Lords, I am sorry to interrupt the noble Baroness. On the question of the National Audit Office, I was wondering whether the Minister could tell us whether there had been any formal discussions between her department and the NAO about whether something more formalised—as anticipated in the amendment before your Lordships—would be beneficial. If not, might she consider having such a discussion before we return to this issue on Report?
Baroness Goldie (Con)
What I think is important is that we accord the National Audit Office the absolutely critical character of independence, which is necessary for it to do the job it does. I think that part of that independence is that it is quite separate from government departments, and, with the greatest respect, I think that is what the MoD should not be doing. The National Audit Office should be saying, “If we think you’ve got dirt lying under the carpet, we’re going to rip the carpet up and have a look at the dirt”, and I think that is the freedom we expect the National Audit Office to have and that is the freedom it has got. As I say, everyone, I think, will understand that the Ministry of Defence knows well the feeling of being on the receiving end of a National Audit Office report which makes uncomfortable reading.
Baroness Smith of Newnham (LD)
My Lords, the Minister has spoken about the legislation giving the MoD greater flexibility, but following up from her response to the noble Lord, Lord Alton, to what extent does it enhance accountability, which is at the crux of what we have all been asking about?
Baroness Goldie (Con)
As the noble Baroness will be aware, the National Audit Office reports not to the MoD; it reports to Parliament. It is a very powerful line of accountability that introduces the legitimacy in any democratic society for elected parliamentarians—or Members of this House—to ask on the basis of a report what the department has been doing. It has never inhibited Members of the other place or Members of this House from doing just that, as your Lordships are very well aware.
The noble Lords, Lord Alton and Lord Coaker, raised particularly the very legitimate question of what we are doing within the MoD to try to improve our procurement performance. I think your Lordships will understand that, probably more than any other department, the Ministry of Defence carries out massive procurement contracts. Then again, that is a very justifiable reason for asking us to demonstrate that we are doing that effectively and efficiently, being fair to the taxpayer and to our industry partners.
Lord Coaker (Lab)
Will the Minister address the point about the treatment of contracted staff for the MoD’s ancillary services? I will just remind her that the Defence Select Committee report published recently says in its summary:
“It is an absurd state of affairs that the MoD is not allowed to look at a contractor’s previous performance when assessing their bid—a state of affairs that needs to be rectified immediately.”
Will the Procurement Bill rectify what the Defence Select Committee says is an appalling state of affairs that the supplier’s previous performance cannot be looked at?
Baroness Goldie (Con)
My understanding is that the Government’s response has been framed to that report and is currently under review. I have no more up to date information, but I will write to the noble Lord. The department is under an obligation to respond to that proposal.
Lord Coaker (Lab)
The Government cannot answer the point about whether the Procurement Bill will allow the MoD to look at a contractor’s previous performance when assessing its bid—a state of affairs that needs to be rectified immediately. Every time we have talked about what is an excluded supplier or an excludable supplier, we have been told that previous performance is one of the criteria that can be looked at, yet from what the Defence Select Committee said, and the Minister just said, is that it is not clear whether the MoD can do that.
Baroness Goldie (Con)
Well, yes, within the law the MoD can, and this Bill provides more flexibility for past performance to be taken into account. However, there are legal constraints which govern how any party entering into a contract can responsibly consider previous conduct. The Bill allows the MoD to exclude a supplier, and there are various grounds in the Bill to clarify when the MoD can make such a decision. Our view is that there is the necessary flexibility within the Bill. The Government will be looking at the observations of the Committee.
Lord Coaker (Lab)
It would be really helpful if the Minister, as she suggested, wrote to me and copied it to noble Lords in the Committee, because she said it was not allowed and then she said it was allowed, but the Defence Select Committee report, which was published just a few weeks ago, said the MoD was not allowed to look at a contractor’s previous performance when assessing its bid. So either the Defence Select Committee is wrong, or the MoD has changed the regulations or the Bill changes the regulations. All I am trying to seek is what the situation actually is.
Baroness Goldie (Con)
What I said to the noble Lord was that, as happens with any committee report, the department is preparing a response to the committee, and that is currently being done. I do not want to pre-empt that, but, when the response has been submitted to the committee, it will for the committee to determine whether it wants to make that response public.
On the issue that is perplexing the noble Lord and causing him anxiety, we believe that the Bill as drafted gives the MoD the power to exclude suppliers if we have reservations.
Baroness Smith of Newnham (LD)
My Lords, when the noble Baroness is writing to the noble Lord, Lord Coaker, could she undertake to clarify which point of this Bill deals with the issue, so that Members can look and assess whether we believe it is adequate, or whether a further set of amendments might need to be brought forward on Report?
Baroness Goldie (Con)
There is a part of the Bill that allows the Secretary of State to exclude a supplier; that is a specific provision in the Bill. Where defence and security contracts are concerned, I think these are powerful provisions. I am very happy to take the advice of my officials and see if I can clarify the position further for your Lordships’ Committee.
Moving on, government Amendments 520 to 526, to which I referred earlier, are what I would describe roughly as Schedule 10 amendments. Schedule 10 amends the Defence Reform Act 2014 principally to enable reforms to the Single Source Contract Regulations 2014. The regulations are working well to deliver their objectives of ensuring value for money for the taxpayer and a fair price for industry. That is the balance against which we always have to work. Delivering the Defence and Security Industrial Strategy and building on experience since 2014 means that some reforms are needed. This will ensure that the regulations continue to deliver in traditional defence contracts and can be applied across the breadth of single-source defence work in the future, providing value for money for the taxpayer while ensuring that the UK defence sector remains an attractive place in which to invest.
We are making two government amendments to Schedule 10 which will clarify the wording and deliver the full policy intent. The first relates to paragraphs 3(2) and 3(8) of Schedule 10, where we are increasing the flexibility of the regime by taking a power to enable contracts to be considered in distinct components—this is an important development—allowing different profit rates to be applied to different parts of a contract where that makes sense. Secondly, we are simplifying the contract negotiation process by an amendment to paragraph 8(3)(a) of Schedule 10, which ensures that the contract better reflects the financial risks involved, and in paragraph 8(3)(c) of Schedule 10, taking a power that will clarify how the incentive adjustments should be applied. We are clarifying the wording currently in paragraph 8(3)(c), which will become paragraph 8(3)(ea)—I am sorry that is a little complicated; it is just to achieve accuracy of reference—by government amendment in Committee to ensure that the schedule fully delivers the policy intent.
In short, these government amendments provide improved clarity and greater flexibility in the defence procurement process, and I hope your Lordships will be minded to support them.
Lord Coaker (Lab)
My Lords, I thank the noble Baroness for that informative reply, and I look forward to the letter to clarify the point that we had some discussion on. I apologise to the noble Lord, Lord Alton; I knew that he had signed the amendment and forgot to mention it. It is in my notes: “Don’t forget Lord Alton”—and I did. I apologise for that but thank him for his support.
For reasons of allowing us to move on to the next group, which I know a number of noble Lords are waiting to discuss, I would just say that Amendment 101 is almost like an encouraging amendment; it is trying to encourage the Government to do more. I accept what the noble Baroness said with respect to contracts and some of the difficulties that there are—to be fair, the noble Baroness, Lady Smith, raised that as well. The amendment is just an attempt to ask whether we can do a bit more to support our own industry and small and medium-sized enterprises. I know that the noble Baroness agrees with that and will take it on board.
As far as Amendment 485 is concerned, we need to look at what the noble Baroness has said, look again at the Bill and reflect on it. The important part of Amendment 485, as usual, is tucked away. Proposed new subsection (4) says:
“The Secretary of State must commission the National Audit Office to conduct a similar review annually.”
It is that continual microscope that is needed. I accept the point that the National Audit Office can conduct the reports and that it is independent. I accept all those sorts of things; the noble Baroness is right about that. I just think that all of us want to get this right. Therefore, that point about an annual review is particularly important. With that, I beg leave to withdraw.
“(4A) In this Act, a reference to a contracting authority’s requirements is a reference to requirements described in the tender notice or associated tender documents (see section 20(5) and (6)).”
“(5) A tender notice or associated tender document must detail the goods, services or works required by the contracting authority.(6) In detailing its requirements, a contracting authority must be satisfied that they—(a) are sufficiently clear and specific, and(b) do not break the rules on technical specifications in section 24.”
“(A1) This section applies in relation to—(a) a competitive tendering procedure;(b) an award of a public contract in accordance with a framework;(c) a process to become a member of a dynamic market.”
“(A1) A contracting authority must as part of a competitive tendering procedure—(a) request information about whether a supplier intends to sub-contract the performance of all or part of the public contract, and(b) seek to determine whether any intended sub-contractor is on the debarment list.”
Lord Coaker (Lab)
That is a point well made. Indeed, the whole issue of the increase in the use of regulations by the Government is something that various Select Committees and other committees have commented on. It is a real difficulty because you do not know what the regulations will be. The legislation just gives the power to the Secretary of State to make regulations; you then wonder what they will be.
If I understood her amendment right, the noble Baroness, Lady Noakes, asked why some provisions in the schedules, perhaps really important ones, do not apply if a supplier contravenes them before the Bill becomes an Act. It strikes me that the self-cleansing we talked about earlier would have to be pretty dramatic if, on 26 February 2023, a firm was found guilty of breaking some of the mandatory conditions laid out in Schedule 6 then, on 3 March, it said it had dealt with those but you could not take into account the five days before when it had broken a lot of the conditions because it was before the Bill become an Act. Is that really what the Government intend? I am not sure because, when I read it, I could not quite make this out. I think that the point of the amendment from the noble Baroness, Lady Noakes, is to try to understand exactly what the Government are getting at. What does “before” mean? There are a range of things in that.
The central point I want to make in speaking to our various amendments is that, if all these things are unnecessary around all these things that are really important, how are the Government going to achieve these objectives, many of which are part of their own policies? Many of us wish to see the Procurement Bill used as the vehicle to achieve that but the Government are resisting, and will resist, that. How will they be achieved if not through this Bill?
Lord True (Con)
My Lords, there is a wide gamut of public policy that enables a Government to achieve the objectives on which they stood for office; that is a broader philosophical argument. I am not certain whether the noble Lord opposite wishes to have more in Schedules 6 and 7—he has certainly mentioned one aspect—or whether he makes a plea that something should be taken out. If the Labour Party wants to make a submission to change things and excise individual aspects of Schedules 6 and 7, no doubt we will look at that as our discussion advances in Committee.
Baroness Neville-Rolfe (Con)
As it is still Committee, can I just ask a question about tax and competition offences? I am not clear whether those are forward-looking or backward-looking, so if you are a company that, for example, has had a competition or a cartel offence—a minor offence in a subsidiary—are you saying that those groups will be on a debarment list and can no longer be engaged? Similarly, if somebody has had a tax argument, which people have had in the past, and that has been settled—I think there have been some big brands in the past, not that I have been involved, that have had such settlements—are we somehow now saying that those are pariahs, and they are not allowed to engage in procurement for the future? I would just like to be clear about this because my worry is about the perverse effects of this debarment list you are going to have.
Lord True (Con)
My noble friend makes an important point. There are elements in here which are looking back and there are elements which are about the present. Legal issues are raised here, and it is important that I come to my noble friend and the Committee with a very specific definition and response to her question in relation to tax and finances.
Amendments 174 and 317 proposed by the noble Lord, Lord Mendelsohn, and Amendment 179 from the noble Baroness, Lady Hayman, seek to bring matters related to prompt payment performance into scope of the supplier exclusion regime. Prompt payment is important; it is lifeblood, in many cases, to small enterprises. The Government are committed to ensuring prompt payment of suppliers, and there are a number of ways in which the Bill does this. For example, 30-day payment terms will apply throughout the public sector supply chain, regardless of whether they are expressly written into the contract. In addition, payment performance can be assessed as part of the award criteria, providing it is proportionate and relevant to the contract.
The Government encourage suppliers to sign up to the Prompt Payment Code. However, we submit that requiring every potential bidder to become a signatory to the Prompt Payment Code is too onerous on some suppliers and would discourage them from bidding, undermining the ability of contracting authorities to achieve value for money.
The noble Lord, Lord Hain, with support from others, proposed Amendments 184 and 187, which seek powers for Ministers to exclude suppliers which have acted in any way unlawfully or unethically. The noble Lord was abundantly clear about what he had in mind when he spoke to his amendments, although he did not stop there; he made broader points about multinational behaviour which I also listened to and took in. We believe that, in the way the proposal is drafted, the threshold is too low for such a serious measure of acting in any way unlawfully or unethically. Exclusion should be reserved for suppliers which pose a serious risk to contracting authorities or the public. We believe that it is also appropriate that the decision to exclude suppliers falls in general to the contracting authority running a procurement.
However, the exclusion grounds cover unethical conduct. Any serious breach of ethical or professional standards applicable to a supplier is deemed to be professional misconduct, whether or not those standards are mandatory. The noble Lord will be pleased to know that professional misconduct is a ground where a debarment case could be made, as drafted in Schedule 7, paragraph 12(1), although I make it clear that I am not commenting on any individual case. As the noble Lord, Lord Hain, told the Committee, I understand that he is meeting my right honourable friend the Minister to discuss this issue. The review led by Cabinet Office officials into the case that he asked for—and indeed the Prime Minister instructed to be done—is now complete and is currently being considered by the Minister. Unfortunately, I cannot say any more at this stage.
Lord Hain (Lab)
I am grateful to the Minister. I will not detain the Committee, except to say that I find it hard to understand that a company that has clearly acted unlawfully, let alone unethically, in another country simply lines up with the rest for government tenders. I do not understand how that is consistent with honest business practice, let alone honest government practice.
Lord True (Con)
My Lords, the noble Lord made a strong case on this before. He has repeated it in a shorter version. I have told the Committee that the review has been conducted, as he—and the Prime Minister—asked. That is now complete, so let us see what happens. I cannot give any more detail because I simply do not know it as I stand here. The new debarment list will allow Ministers to debar suppliers in the most serious cases and therefore there is no need to make the additional provision.
Amendments 310, 318 and 322 tabled by the noble Baronesses, Lady Boycott and Lady Young, seek to add conviction of any environmental offence as a ground for mandatory exclusion. The mandatory grounds for exclusion are by nature a blunt instrument. They require the supplier to face exclusion from every public contract for five years, as my noble friend Lady Neville-Rolfe pointed out, unless and until the risk of the issues reoccurring has been addressed. For this reason, they are reserved for the most serious forms of misconduct.
The inclusion of environmental offences in the discretionary ground reflects the fact that, for offences where a range of misconduct may be involved, it may be appropriate to take into account factors such as the nature of the contract being tendered or the level of environmental harm caused, before deciding to exclude a supplier. There is guidance from the Environment Agency on what constitutes environmental harm.
The noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Coaker, proposed Amendment 329, which seeks to introduce a discretionary exclusion ground where a supplier’s tender violates applicable obligations in the fields of environmental, social and labour law. I have already explained why we elected to narrow the exclusion ground relating to breaches of such law.
Lord Scriven (LD)
I have listened very carefully to the description the noble Lord has given. Exactly the same kind of provisions exist in states which do torture, where there are no laws or treaties that those states uphold. So, what is the difference between modern slavery and torture when they take place in a state where the laws and the regime that rules that state do not protect its citizens from either?
Lord True (Con)
My Lords, I referred to the position where there may be no relevant national laws. The Government’s submission is that this Bill greatly strengthens the defences we have against modern slavery and the vile abuse of individuals in these circumstances. As I said, this will apply whether or not there has been a conviction or a breach of an international treaty.
Baroness Neville-Rolfe (Con)
On modern slavery, the Minister is surely saying that there has to have been a conviction for somebody to be on the debarred list. The first person prosecuted under the Modern Slavery Act—I almost hesitate to say this—was Sainsbury, so they had a case against them. Sorry, I am just trying to understand this; is the Minister saying that they would therefore be on the debarment list? I do not think that is the intention.
Lord True (Con)
No: I said that the current rules are too weak. They do require the supplier to have been convicted. I am saying that we are moving beyond that to a different evidential base and test. I recognise the strength of feeling among noble Lords on this issue. I commit to engaging further with my noble friend and other Members of the Committee on this prior to Report. On that basis, I respectfully request that these amendments are not pursued.
(a) treat the supplier as an excluded supplier for the purpose of assessing tenders under section 18, and(b) exclude the supplier from participating in, or progressing as part of, any competitive tendering procedure.”