Monday 9th January 2023
(1 year, 11 months ago)
Commons ChamberProcurement Act 2023 View all Procurement Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 75(a) Amendment for Third Reading - (8 Dec 2022)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
I beg to move, That the Bill be now read a Second time.
At some £300 billion, public procurement accounts for around a third of all public expenditure every year. By improving the way we procure, we can save the taxpayer money, drive innovation and resilience, and deliver benefits across every region of the country. We have an opportunity, post our departure from the European Union, to create our own regulations that can help to drive transparency, prosperity and growth. The Procurement Bill seizes that opportunity and reflects three years of policy development, public consultation and detailed intensive engagement. This has included local government, the education and health sectors, businesses of all sizes, and the social enterprise sector, among others.
To ensure that the new regime is truly world leading, the Bill will fundamentally improve the UK’s public procurement regime, driving a relentless focus on value for money. It will create a simpler, more flexible commercial system that better meets our country’s needs.
John Spellar
The Minister is starting out with the message that the Government are somehow able to do this because of Brexit, but it was nothing to do with European regulation that the Ministry of Defence decided to contract for naval vessels from other countries. In doing that, it was no way acting like any other European country. It was a Whitehall choice and a ministerial choice. The Government had the choice, and they should stop using this as a smokescreen.
Jeremy Quin
I referred to the right hon. Gentleman as my right hon. Friend because he is so familiar from my appearances at the Dispatch Box in my Ministry of Defence role, and it is lovely to hear the same lines being produced again. I am no longer in that role and I am not here to speak for the Ministry of Defence, but I think he must be referring to the fleet solid support ship programme—a prospect that will rejuvenate Harland & Wolff and really get Appledore working again. I believe that it will deliver 1,500 jobs to the UK shipbuilding industry, helping to recreate the skills that were so foolishly lost in the last round. The decisions that were made under the last Labour Government in 2005 left us with fewer yards than we would all like, and I think it was a positive decision from the Ministry of Defence to award the FSS contract as it did. I wish Harland & Wolff and the rest of the British designers the very best with it.
John Spellar
But is the Minister clear, now that he has left the Ministry of Defence, that the contract is not with Harland & Wolff, but with the Spanish shipbuilder Navantia and a British shell company set up only last June? There is no assurance that this work will go to British yards.
Jeremy Quin
The right hon. Member refers to Team Resolute, and I am delighted that it won the tender. The majority of that work will be undertaken in British yards—[Interruption.] We could continue to make this a discussion on defence procurement, but I think the rest of the House wants to discuss the Bill before us, as I certainly do.
Bill Esterson
The Minister says that he is here to talk about a modern procurement system for the UK, but The Guardian is saying today that a Conservative peer who advised the Government during the pandemic helped a company to secure a £50-million contract after being introduced to the firm by another peer with financial interests in that company. Can the Minister tell us exactly which clause in the Bill he is putting forward today would have prevented that extreme example of cronyism from happening?
Jeremy Quin
Alas, it is a great loss to me, but I have not read The Guardian today and I am not in a position to comment in detail on what the hon. Gentleman has said. If he goes through the Bill in detail, as I and other Members have, he will find the parts that refer to declarations of conflicts of interest. These are issues that we will be significantly improving through the Bill to ensure that there can be no doubt that integrity lies at the heart of our procurements. That has always been the case, but it will be even more entrenched as a result of the provisions of this Bill.
Jeremy Quin
I hope that the hon. Gentleman will allow me to make some progress. If I give two chances to every Member, we will be here for a much longer time.
There are currently hundreds of procurement regulations spread over four different regimes for different types of procurement. We will consolidate them into a single regime. This will remove duplication and create one rulebook that everyone can understand and use, with sectoral differences only where absolutely necessary, such as for reasons of defence or national security.
Mike Amesbury (Weaver Vale) (Lab)
Which line in the Bill will prevent, say, a future landlord who has a close relationship with a future Minister from securing a contract worth millions of pounds for personal protective equipment, or prevent someone who produces underwear, who happens to be in the other place, from securing a contract via a conversation via a VIP lane? Which line in this Bill will close that down?
Jeremy Quin
If the hon. Gentleman has not read the Bill, I recommend that he does so. There is a lot of it, but it is a good read and he will find it has a range of measures to ensure transparency at the heart of our procurement. I do not accept the premise of his question—if his question has a premise—that previous procurements were incorrectly awarded; far from it. If he wants to see a Bill that enhances transparency, that ensures there are always proper procedures in place to address conflicts of interest and that ensures the best propositions win tenders, he will support the Bill this evening, as I hope the rest of the House will.
Tim Loughton (East Worthing and Shoreham) (Con)
Perhaps I could mention something that is in the Bill, rather than not in the Bill.
I welcome the Bill, and particularly how it will benefit our small and medium-sized enterprises and the local sustainability of good-quality British products, but clause 65 was helpfully added by the noble Lord Alton and a cross-party alliance in the other House to make sure that we do not procure from countries found guilty of genocide or human rights abuses, particularly China. Can the Minister confirm that the Government not only support clause 65 but will extend it beyond just surveillance technology? We should not procure goods and services from countries found guilty of genocide or human rights abuses, such as China in Xinjiang, as verified by a vote in this House. We should just not deal with them.
Jeremy Quin
It is a pleasure to respond to a question about a clause in the Bill, for which I thank my hon. Friend. We are thinking through the Lords amendments, and there will be further time to discuss them in Committee. Anything that is added to the Bill must be deliverable and workable. I stress that the Bill already contains much-enhanced provisions to ensure we can prevent inappropriate suppliers from coming into our production chain, not just as primes at the top level but right through the supply chain. For example, we will be able to debar companies for misconduct or illegality. We are taking far more powers than we had under the old EU regime, which should be welcomed by all Members of this House.
Bob Seely
My right hon. Friend was making a point about ethics, so I will make a point about dependency. Do the Government accept that they have purchasing power to reduce our dependency on authoritarian states, and do they accept there are lessons to be learned from the Ukrainian war, our economic and energy dependence on Russia and our economic dependence on China? Will they accept an amendment, tabled by me or by others, so that, as well as having ethics at the heart of this Bill, we can discuss how to reduce our dependency on states that seek to harm us, be it Russia, China, North Korea or Iran, etc.?
Jeremy Quin
I would welcome the opportunity to speak to my hon. Friend about any amendment he might table, and we would, of course, look at it seriously. I recognise the general point that this country has realised, as have all our friends, through covid and subsequently that it is incredibly important to understand our supply chains and to understand where our procurement comes from. The Bill will help us do that by enabling us to look through the entire supply chain—not just the top level, but deep inside—to make certain that we are able to stop suppliers that are effectively in misconduct, and to make certain that resilience is part of our thought process in procurement. I believe all those valuable assets are incorporated in this Bill, but I am more than happy to have further discussions with my hon. Friend.
I hope the House will forgive me if I make a little progress. Running through this Bill is a theme of greater transparency. Through the Bill, we will deliver world-leading standards of transparency in public procurement. It covers contracts awarded across the public sector, including by central and local government, arm’s length bodies, education authorities and health authorities. It also covers contracts awarded by publicly funded housing associations and by companies in the water, energy and transport sectors.
Caroline Lucas (Brighton, Pavilion) (Green)
The Minister is being generous in giving way. Can he indicate whether the Government will accept the amendments made in the other place requiring contracting authorities to maximise environmental benefits when awarding contracts, and particularly to ensure compliance with the Climate Change Act 2008 and the Environment Acts? Does he accept that that should not be optional, as the climate emergency is so urgent that it ought to be required by this Bill?
Jeremy Quin
That urgency is why we have published procurement policy notes on our commitment to net zero, just as we have published them on social value. We are keen for the Bill’s wording not to be very prescriptive, because the Government will have to announce procurement policies from time to time. I totally accept that there is a case for ensuring that our net zero commitments are met, but putting them in the Bill, which would create a big, laborious process for SMEs and procurers, be they local councils or central Government, is not the right way forward.
This Bill sets out a strong framework that gives us far more powers, but it is then open to the Government to set out, through a national procurement policy statement, the focus on social value or environmental concerns. I hope the hon. Lady accepts that the procurement policy notes we have already published show our commitment to doing just that.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The Minister is being incredibly kind in giving way, and I recognise his generosity.
What measures in the Bill will protect the supply chain from collapse, as we saw with Carillion? Project bank accounts, which are already used across Government, would protect the supply chain. Thousands of small businesses went out of business or lost hundreds of thousands of pounds during Carillion’s collapse, so will the Minister introduce something like that? There is also a question about protections for retention money, so will that be included?
Jeremy Quin
That is a matter not so much for the Bill as for the operation of commercial practice. The outsourcing playbook has been used effectively since Carillion, and we have since seen other examples of public suppliers getting into difficulty. They are carefully monitored across Government. We will not always spot everything, but there is close working across Government to monitor our suppliers and to ensure that we can act, and act swiftly, where a supplier falls into problems.
Debbie Abrahams
National Highways, for example, uses project bank accounts to protect its supply chain as a matter of course, and it says that they are its preferred option. If the Department associated with National Highways is doing that, why cannot they be used across all Government Departments?
Jeremy Quin
I am not familiar with the specifics of project bank accounts, to be perfectly frank. We have put measures in place to protect supply chains in the event of the collapse of a prime supplier, but I will take this up with my officials and write back to the hon. Lady.
In recognition of the specific needs of defence and security procurement, and to help deliver the defence and security industrial strategy, a number of provisions specifically apply to defence and security contracts. These provisions will provide flexibility for contracts to be upgraded to refresh technology and avoid gaps in military capability. There will continue to be special rules for certain social, health and education services, to be identified in secondary legislation, that may be procured as so-called light touch contracts, recognising the particular domestic and social aspects that should be captured in such procurements.
The interaction with regulations being prepared under the Health and Care Act 2022 was the subject of particular attention when the Bill was considered in the other place, and it may well be of interest to this House. The Bill will apply to most areas of NHS procurement of goods and services to help drive efficiency and value for money. However, the Health and Care Act regime is intended to address the specific requirements of the health and care system and to fulfil the Government’s intention to deliver greater collaboration and integration in the arrangement of clinical healthcare services.
Let me be clear that the Bill strengthens the NHS’s ability to deliver. The reforms to healthcare commissioning in the Health and Care Act will give commissioners more flexibility in how they arrange services so that both procurement systems can work effectively and deliver care for patients.
The Bill sets out the key principles and objectives of public procurement. These place value for money, public benefit, transparency and integrity at the heart of our procurement system. As well as competition and efficiency, there must be good management to prevent misconduct.
Richard Burgon (Leeds East) (Lab)
Public procurement is one key way in which the Government can set a framework whereby employers’ standards can be driven up and a good example can be given to other employers. So will the Minister accept an amendment that gives priority when awarding Government contracts to the many thousands of companies that pay their staff the real living wage?
Jeremy Quin
I do not think this is the process whereby we tell employers what they should be paying their employees; that would be a big reach too far. The hon. Gentleman will be pleased that this Bill contains provisions that ensure that we can prevent companies that commit misconduct from taking part in procurements, and that can be in any range of areas. However, this is not the Bill by which we are going to be regulating employees’ pay.
John Penrose (Weston-super-Mare) (Con)
I welcome this Bill, particularly because, as the Minister rightly points out, it introduces far greater transparency and competition, precisely as I was calling for two years ago in the Government-commissioned report on competition policy. I am delighted to see the Bill coming forward with those measures. May I push him on value for money, which he mentions and which is clearly important? The evaluation task force, which exists jointly between his Department and the Treasury, is a tiny unit that covers a tiny fraction of Government procurement spending. Will he pledge, either today or later in the Bill’s progress, that its role will be expanded to cover far more of what we are buying, in order to make sure that we are buying things that genuinely work and it can say that things have been evaluated and either they have produced the goods or they have not, and therefore should or should not be renewed or rolled over in future?
Jeremy Quin
I thank my hon. Friend for the ideas he threw in our direction, which have been picked up. He is right to say that greater transparency is absolutely reflected in this Bill, and I thank him for the work he did. There has been a long lead-up to get to this Bill and we thank him very much for his support. I am proud of the evaluation task force and the work it does, not only on procurement, but on other areas of policy, looking into them to make certain that they are delivering what we intended when they were announced. That is an important tool for all Governments. I would love to see the evaluation task force grow. It is growing in experience and in the amount of projects it is taking on. It has covered a fair bit of the waterfront, but I appreciate that it is merely a small element at the moment and I would like to see it grow. However, he will forgive me if I do not start making commitments of that sort at the Dispatch Box—
Paul Howell (Sedgefield) (Con)
When we talk about NHS procurement and the challenges for small and medium-sized enterprises in dealing with the NHS, we are talking about small companies dealing with a vast organisation. PolyPhotonix, a company in my constituency, gave me an example of the frustration involved. It created a light therapy mask to help treat diabetic retinopathy, and I have been supporting the company. The NHS procurement process has been extremely complex, although the company got the mask approved. There was NHS investment in innovation to develop it, but it became used in the private sector before the NHS, because the NHS procurement could not get it right or could not make the approvals. Those were finally obtained and the mask is now active, fabulous and a great product. The other NHS trusts all want to approve it themselves, so surely there is an opportunity here. If something is approved by one NHS trust, surely it does not need to be approved by every other one before it can be used. Is there some opportunity in the Bill to facilitate that greater ease for SMEs?
Jeremy Quin
I recognise the frustration of the company in my hon. Friend’s constituency. He should take up the specifics of that with my right hon. Friend the Health Secretary, but more generally he raises an extremely valuable point, not just in the health sector, but more broadly, about the ease of doing business with Government for SMEs. The Bill contains a range of measures on this: it puts a duty on procurers to ensure that they are considering the specific needs of SMEs; it ensures there is a 30-day payment period; it ensures that pipelines are put out well in advance; it says, “You don’t need to be insured to do the job before you have won it”; and, above all, it provides for one entry point and allows companies to set out in one place what they are as a smaller company before they even start thinking about the tender they are applying for. All those are incredibly valuable components to make it easier for an SME to thrive.
Jeremy Quin
I will not give way at this stage. I thank the hon. Gentleman for the offer, but I think I should be making a little more progress.
In delivering value for money, the Bill will require procurement teams to take account of national priorities, as set out in a new national procurement policy statement. These are national priorities such as improving supply chain resilience, enhancing skills, driving innovation and, of course, protecting the environment. Procurers will be able to give greater weight to bids that support such priorities. I know that in the other place there is a strong desire to pursue particular interests and include a range of policies in the Bill. The Government instead believe that that is a purpose of the NPPS. We want to keep this legislation as clear and simple as possible; the intention is that we allow procurement to keep pace with evolving policy priorities and we do not swamp contractors and SMEs in paperwork.
The Bill will accelerate spending with small businesses. New duties will require contracting authorities to have regard to SME participation. Public sector buyers will have to look at how they can remove bureaucratic barriers and level the playing field for smaller businesses. Commercial frameworks will be made more flexible, with the new concept of an open framework, which will allow for longer-term frameworks that are reopened at set points, so that small and emergent businesses are not shut out for long periods. These measures build on existing policy, which allows procurers to reserve competitions for contracts below the thresholds for SMEs and social enterprises based in the UK, taking full advantage of the new freedoms following our exit from the EU.
We are determined to improve the prompt payment of small businesses in our supply chains. As I have mentioned, 30-day payment terms will apply contractually throughout the public sector supply chains and be implied into the contract, even when not specifically set out. The Bill provides for new improved procedures for the award of public contracts, supported by greater flexibility. Buyers will be able to design procurement processes that are fit for purpose and will create more opportunities to negotiate with suppliers so that the public sector can work in partnership with the private.
We will also take tougher action on underperforming suppliers.
Stephen Kinnock (Aberavon) (Lab)
On partnership between the public and private sectors, the steel industry is a crucial aspect of that. Does the Minister agree that the Government should be looking to set indicative targets for the amount of domestically produced steel that we are putting into Government-funded projects? That would enable us as a country to make, buy and sell more in this country, which should surely be a strategic objective of the Bill.
Jeremy Quin
The hon. Gentleman treads a well-trodden path. Through steel procurement, we are always keen to set out the pipeline and provide every assistance we can to the domestic steel industry. However, as he knows, there are also international obligations, of which we are mindful and I know he will also be mindful, in respect of how we conduct our public procurement. I am not certain whether what he suggests would be consistent with the Government procurement agreement. [Interruption.] On pipelines, we are doing everything we can to help the domestic steel industry see the opportunities ahead of it and engage with public procurement. This is something we definitely and warmly appreciate.
We will also take tougher action on underperforming suppliers or those who present risks through misconduct. The Bill puts in place a new exclusions framework that will make it easier to exclude suppliers that have underperformed on other contracts. Through the Bill, I am pleased to say that we are targeting those who benefit from the appalling practice of modern slavery and, in doing so, undermine our own industrial resilience. The Bill makes explicit provision to disregard bids from suppliers known to have used forced labour or to perpetuate modern slavery in their supply chain. Contracting authorities will now be able to exclude suppliers where there is appropriate evidence of wrongdoing, whether in the UK or overseas.
Debbie Abrahams
I wholeheartedly support the Minister on that. I want to take him back to a previous point about late payments and the 30-day term. How will the Government monitor those and ensure adherence? Will that be done through audited accounts? What will be the punishment if there is not adherence?
Jeremy Quin
Ultimately, this is contractual. On the prime, that is easy: we will be paying the prime contractor within the 30-day period. People in the supply chain will be aware of the contract under which they are supplying to the prime, and we expect that 30-day payment to trickle all the way down the chain. It is the first time that such a measure has been incorporated. It really will be for primes to be held to account. I say to hon. Members of this House that if partners to a contract are not being paid without good cause, it will call into doubt the contract with the prime supplier, so it will be very much in the interest of the prime supplier to deliver. Every effort the Government have made to improve the payment terms through the supply chains has so far been adhered to pretty well by industry. Across Government, we have seen a significant improvement in payments out to industry, and we are expecting a ripple-down effect as a result of the Bill.
We will also create a new debarment list, accessible to all public sector organisations, which will list suppliers who must or may be excluded from contracts. This approach will ensure the high standards that we expect in the conduct of suppliers who benefit from public money. Embedded in the Bill is our commitment to creating an open and transparent system. Everyone will have access to public procurement data: citizens will be able to scrutinise spend against contracts; suppliers will be able to see the pipeline of upcoming contracts so that they can identify new opportunities and develop innovative solutions; and buyers will be able to analyse the market and benchmark their performance against others on, for example, their spend with small and medium-sized enterprises.
The Bill contains key provisions to enable these new levels of transparency, along with the statutory obligation on the Government to deliver a single digital platform to host this data. The Bill will strengthen existing obligations on contracting authorities to identify and mitigate the conflicts of interest in procurement decision making. These new requirements will ensure that conflicts of interest are managed transparently and in such a way that maintains the integrity of the public procurement regime. Additional safeguards include mitigations that may be required of suppliers by contracting authorities and for procurement teams to record and maintain a written assessment of conflicts.
In common with all procurement regimes, provision is made in the Bill for direct awards in a limited number of special circumstances—for example where extreme urgency means that there is no time to run a competition. Ministers will now be able to make provision for contracts required in a rare emergency event when action is necessary to protect life or public safety. This must be kept under review, revoked when no longer necessary, and is subject to the necessary parliamentary scrutiny in both Houses through the affirmative procedure. The Bill also requires that, before a contracting authority directly awards a public contract using any such regulations, a transparency notice must be published. These are major safeguards that did not previously exist.
The Bill fully honours implementation of our international trade agreements, including the World Trade Organisation agreement on Government procurement, which provides UK businesses with access to procurement opportunities collectively worth an estimated £1.3 trillion per annum.
Sir James Duddridge (Rochford and Southend East) (Con)
The Minister mentions trade deals. Both the Australia and New Zealand trade deals have a large procurement element. That will fall away if the Bill becomes an Act. I note that the Trade (Australia and New Zealand) Bill has not yet received Second Reading in the other place. May I urge him to hold discussions with business managers with a view to manipulating things so that we get Royal Assent for this Bill rather than for the Trade (Australia and New Zealand) Bill to avoid the very small problem—a problem of just a few weeks—of trade deals being done within a new set of rules that will very quickly become obsolete?
Jeremy Quin
I thank my hon. Friend for a most ingenious comment. I had not considered the calendar of the two Bills. It is an interesting point. I will raise the matter with business managers.
We will continue to support UK businesses so that they can continue to be successful in competing for public contracts in other countries around the world by protecting reciprocal arrangements and guaranteeing market access, treating each other’s suppliers on an equal and fair footing.
Turning finally to territorial application, we have prepared the Bill in a spirit of co-operation between the nations of the United Kingdom. As part of the policy development process, we welcomed policy officials from Wales and Northern Ireland into our team so that they had a critical role in shaping this legislation from the very beginning. As a result, the general scope of the legislation applies to all contracting authorities in England, Wales and Northern Ireland. This will ensure that contracting authorities and suppliers can benefit from the efficiencies of having a broadly consistent regime operating across constituent parts of the UK.
I regret to say that the Scottish Government have opted not to join the UK Government Bill and will retain their own procurement regulations in respect of devolved Scottish authorities. Many in the House will regret that and would no doubt welcome our Scottish friends joining the new regime, which will benefit taxpayers and public services alike across Scotland and the whole of the UK.
There has never been a piece of UK procurement legislation as comprehensive as this. It is a large and technical Bill. I accept that there may be some areas that will merit further consideration, which we will debate in more detail in Committee, but I am confident that these significant reforms open up a new chapter for public procurement in this country and will boost business, spread opportunity and strengthen our Union. I urge all Members of this House to support the Bill.
Madam Deputy Speaker (Dame Rosie Winterton)
Before I call the Opposition Front-Bench spokesperson, I wish to draw colleagues’ attention to the fact that, while we are not desperately pushed for time, there is quite a lot of interest in this debate, so my recommendation for Back-Bench speeches is about eight minutes. We also have a maiden speech. If Members follow my recommendation, I will not need to impose a time limit. I call the Deputy Leader of the Opposition.
Angela Rayner (Ashton-under-Lyne) (Lab)
It is a pleasure to open this debate today on behalf of the Opposition. I pay tribute to the work that has already gone into the Bill in the other place. I know that constructive discussions led to positive amendments, and I hope that they will be accepted and improved as the Bill goes through this House. I was a little pessimistic about that following the Minister’s opening comments, but I hope that we can work constructively with what the other place has recommended. As the Minister says, the Bill is an extremely complicated and large piece of legislation, so I hope that we can do that.
We on the Labour Benches recognise the need for a procurement Bill to consolidate the patchwork of former EU rules and to bring the spaghetti of procurement regulations into one place—a single regime. The Procurement Bill is an opportunity to create a coherent rulebook, with one driving aim: to get value for every single penny of taxpayers’ money. We want to deliver better services that meet the demands of the British public and to unlock the world-leading innovation of the UK economy.
I thank all my hon. Friends and Members from all parts of the House who are here today. When most people hear the word “procurement”, they switch off, but I cannot get enough of it. It is absolutely critical to our economy and to our future national prosperity. It accounts for a third of all public spending—more than the NHS budget and double the education budget. When harnessed for good, the power of procurement can drive up standards, pump money back into the pockets of local communities and businesses, create jobs and skills in our towns and cities, and hand wealth back to the people who built Britain.
I fear that the Bill we have been presented with today could miss those opportunities; that the ambition of the proposals before us will not meet the moment, and will not provide answers to the challenges that we face or learn from the mistakes of the past. As it stands, the Bill is a sticking-plaster solution, allowing taxpayers’ money to line the pockets of the well-connected, those with the deepest pockets and the abundance of experts who know how to navigate the system. I want Britain to lead the world on procurement by driving every penny of taxpayers’ money into our local communities, promoting British businesses up and down the country.
There are, of course, some aspects of the Bill that we welcome—in particular the focus on reducing the burdens currently faced by small businesses. SMEs are the backbone of our economy and the current system just is not working for them. Reform is urgently needed. The British Chamber of Commerce found that SMEs are now receiving a smaller relative amount of direct Government procurement spending than they were five years ago. Small businesses across the country are being choked out of the bidding processes, which are complicated and time-consuming. SMEs are competing for contracts against big corporations that have more form-fillers than the SMEs have workers. I welcome the positive steps taken in this Bill, especially as this Government have repeatedly failed to reach their target for SMEs to benefit from 33% of procurement spend.
That being said, there is not enough in this legislation dealing with late payments for SMEs—a practice that, in the current economic crisis, is killing off too many small enterprises in this country. The Minister talks about the trickle-down effect of 30 days, but I do not believe that will work in this instance. I hope he will address that gap in his closing remarks and engage with us in the Committee to improve the Bill in that regard.
I welcome the changes made in the other place to include social value in the national procurement policy statement, but I was disappointed by the scant mention of social value in the original version of the Bill and in the Minister’s opening comments today. Social value is a tool that makes it easier to give money to local British enterprises creating jobs, skills and green opportunities in their communities. It rewards providers who want to build a better society and contribute to our nation’s prosperity in the long term.
This Bill is an opportunity to make, buy and sell more in Britain. It is a chance to give more public contracts to British companies, big and small, so that contracts do not always automatically go offshore, to the giant corporations with the lowest prices, but to businesses creating local jobs, skills and training, maintaining workers’ rights and trade union access. That is what is important and what the social value elements of this Bill need to promote.
Stephen Kinnock
My right hon. Friend is making an excellent speech. Returning to the issue of the three fleet solid support vessels, the MOD contract was awarded to a Spanish-led consortium. That in itself was a deeply disappointing decision, but what is even worse is that the Government are not insisting on legally enforceable guarantees from Navantia, the Spanish company that leads the consortium, that the ships will be built with British steel. Does she agree that it is outrageous that we have three key vessels being built without British steel?
Angela Rayner
I absolutely agree with my hon. Friend. As he says, using public money to make, buy and sell more in Britain can also be achieved through our defence spending and by spending on steel and vital infrastructure in the UK. As the party of working people and trade unions, we in Labour know that, when done well, defence procurement strengthens our UK economy and our UK sovereignty, but this Bill fails to direct British defence investment first to British business, with no higher bar set for any decision to buy abroad.
Labour wants to see our equipment designed and built here. That means our national assets, such as the steel industry, our shipyards and our aerospace. That is fundamental for Labour, and we will amend the legislation to secure it. My right hon. Friend the Member for Wentworth and Dearne (John Healey), the shadow Defence Secretary, made it clear that that is a priority for Labour, when he announced at our conference in September that Labour in government would build the navy’s new support ships in Britain.
As my right hon. Friend the Member for Warley (John Spellar) mentioned, the Conservatives announced that the £1.6 billion fleet solid support ship contract would be awarded to Spanish shipbuilders, meaning at least 40% of the value of the work will go abroad. Ministers have confirmed that there is no limit on how many jobs will be created in Spain and that there are no targets for UK steel in the contract. That is frankly a disgrace and a wasted opportunity, when the use of procurement could have been a force for strengthening our UK economy and our security at the same time.
I hope the Minister is listening and will openly work constructively with me to amend the Bill and ensure that British defence investment is directed first to British industry, as well as carrying out a review of the contract for fleet solid support ships.
Jeremy Quin
I hope the right hon. Lady will welcome the fact that, as a result of the FFS award, we will see revitalisation of Harland & Wolff, we will have additional shipyard capacity and we will be rebuilding the British shipyards left in a dreadful state after the last Labour Government. We are seizing opportunities. It is unfortunate that we have to reskill some of our workers and that we have to use opportunities coming from abroad to ensure that we recreate another yard in the UK as well as supporting Appledore, but it is important that we have the right equipment for our armed forces and that defence can seize those opportunities.
Angela Rayner
I thank the Minister for that contribution, but he should put it in the Bill. He should work with us to ensure that we build in Britain and support British industry and the steel industry. We discussed earlier today the difficulties that UK industries face, and I believe this Bill does not go far enough to support our industries. I want to see that support and I will happily work with the Minister on that.
The Minister has also pledged to use this Bill to make procurement quicker, simpler and more transparent. We need look no further than the pandemic for the clearest example of why we desperately need a more agile and transparent procurement system. The Tory VIP lane exposed the true weakness in the system, enabling the shameful waste of taxpayers’ money and profiteering by unfit and unqualified providers.
As a result, the Government have written off £10 billion of public funds spent on unusable, overpriced and undelivered personal protective equipment. More than £700,000 a day of taxpayers’ cash is currently being used to store unused gloves, goggles and gowns—enough to pay for 75,000 spaces in after-school clubs or 19,000 places in full-time nursery care.
I am still waiting to see whether the Government will respond to our Humble Address and come clean about the murky case of PPE Medpro, which saw £203 million handed to a company with links to a Tory politician. Will the Minister use this opportunity to confirm whether his Government are still procuring PPE or other goods using the emergency rules enacted during the pandemic?
There is no doubt the pandemic presented a unique situation, placing huge strains on our procurement processes but, while all countries faced similar pressures and shortages, many countries conducted their emergency procurement in a far more open, effective and cost-efficient manner. The Government must learn the lessons of those mistakes, and what better opportunity than within this Procurement Bill?
I wait with anticipation to see how the Government might go about shutting down the VIP lanes, tightening the leash on Ministers’ freedom to award contracts directly and hard-wiring transparency into the system. Instead of straining every sinew to root out waste and cronyism, the Minister is pushing a Procurement Bill that would allow the same mess to happen all over again—handing more power over direct awards to Ministers, not less. I am sure the Tory party’s cronies watching these proceedings will be rubbing their hands with glee at a Bill that puts their VIP fast lane on to the British statute book. I am also sure that former Ministers from previous Conservative Governments, who grasped the opportunity to do the right thing and clean up politics after years of sleaze, will be disappointed by this Bill.
Anthony Mangnall (Totnes) (Con)
The right hon. Lady is making a point of saying that we are putting in a VIP lane. Where in the Bill does it say that? In fact, it does not. The Bill puts more oversight on the procurement rules to stop anything like what we have seen in the past ever happening again. If she could just point me to the clause, I would be very grateful.
Angela Rayner
Yes. Clause 41 allows Ministers to use urgency as a new justification for granting direct awards—directly allowing the VIP lane yet again. I ask the hon. Gentleman to look at the Bill and at exactly what that would mean for the future of our procurement. I am sure Government Members, including Ministers, will be disgusted at the billions of pounds that we have seen wasted through that process. I am willing to work with the Government to identify and close those loopholes.
Jeremy Quin
If life and public safety are at risk, does the right hon. Lady really think that there should not be an urgent procurement procedure—particularly one approved by this House—in that situation?
Angela Rayner
As I said to the Minister earlier, Wales and other countries had emergency powers to do things. It is our situation here that has seen the cronyism and the VIP lane in particular allowing the mates of Tories to get contracts without oversight. I do not believe that we need a system that allows billions of pounds of taxpayers’ money to be awarded to friends of the Conservative party. At the time, many businesses in the UK that had experience of working in that field were shunted out for people who had absolutely zero experience but who—guess what—knew the WhatsApp of a Tory Minister. That is completely unacceptable and the Bill does nothing to prevent it.
Anthony Mangnall
The right hon. Lady has taken one point and cherry-picked to emphasise it without looking at the rest of the Bill’s contents. That is why there is a transparency notice and procurement oversight of how we issue it. We are not giving anyone an advantage in our procurement opportunities; we are making sure that there is transparency and that mechanisms are there to hold people to account. Does she not see that?
Angela Rayner
I will come to chapter 3, which addresses transparency—although, again, I think it is unambitious. Look at what Ukraine does in terms of transparency; it is streets ahead. These are baby steps and are nowhere near enough. The hon. Member needs to look at the situation and at the Bill. It is not ambitious enough for the UK and does not prevent situations in which billions of pounds of taxpayers’ money is wasted, as we have seen under this Conservative Government. The only fast-track lane that Labour would allow would be one for local businesses and enterprises that create wealth in our communities and contribute to a fairer society. The VIP lanes under a Labour Government would be for local businesses bringing innovation and wealth to their neighbourhoods, so social value would be a mandatory part of procurement. I hope that the Minister will look at that.
The Bill also misses a crucial opportunity to introduce real and workable non-performance claw-back clauses to contract design. There are ways of baking such clauses into contracts so that failing providers must return taxpayers’ money above a certain threshold. The current system just is not working; eye-watering waste continues without consequence. Being granted taxpayers’ money is a privilege. When suppliers do not deliver—just as we saw with PPE Medpro—we want our money back, but under the current proposals there is no way of even checking a provider’s past performance. Again and again, local authorities fall foul of the same failed providers as their neighbours.
Can the Minister explain why he is not using the Bill to make past performance a central pillar of our procurement? When I go to a restaurant, I can see past customers’ reviews of the food. Should the same not apply to multimillion-pound Government contracts? The Green Paper mentioned a procurement unit, but that has since been removed and replaced with a vague concept of “procurement investigations”. That toothless proposal will do nothing to crack down on waste or protect taxpayers’ money. By contrast, Labour’s office for value for money, which would be advised by a social value council, would have real teeth to ensure that taxpayers’ money is spent responsibly with regular checks. I hope that the Minister will work with me to strengthen that aspect of the Bill.
I have mentioned chapter 3 of the Bill, which I think is another sticking-plaster solution that misses the opportunity to create real transparency in public procurement. Although I welcome the limited measures the Bill takes to move towards transparency—by obligating authorities to issue a transparency notice before awarding a contract, for example, which the Minister mentioned—those are baby steps that barely scratch the surface of what is required. We must see end-to-end transparency, which means the creation of a public dashboard for Government contracts.
Clause 95 gives an unnamed authority the power to make rules about what procurement information can be shared and through which channels. That is symbolic of the poverty of ambition on display from the Government. The Minister could have used this opportunity to announce a system inspired by Ukraine’s anti-corruption blueprint, a dashboard that guarantees transparency in how taxpayers’ money is spent and bakes trust and integrity into the system. Even under attack from Russia, Ukraine is honest about how it spends public money. What is this Government’s excuse?
Mr Mark Francois (Rayleigh and Wickford) (Con)
The right hon. Lady may not be aware, but the Infrastructure and Projects Authority audits all major infrastructure projects across the whole of Government every year and grades them on a dashboard system, so we already have one.
Angela Rayner
I say to the right hon. Member that we do not have a system that works. That is pretty clear to me because we can see the disastrous waste that currently happens in the system, and because companies that should be rewarded with contracts are not, while others get around the system.
I think we should go further still by finally shedding light on the amount of taxpayers’ money being shelled out to tax havens. Labour will push for the Bill to introduce full transparency about whether suppliers pay UK taxes, as well as public country-by-country reporting by multinational corporations. A Labour Government would go further by using public procurement to drive up standards of responsible tax, including by asking big corporations and businesses publicly to shun avoidance and artificial presence in tax havens.
Transparency is not just a nice thing to have; it actually saves money. A lack of transparency in the procurement system reduces competition and increases costs, leaving the taxpayer to shoulder the burden, so the adoption of open transparent contracting makes good financial sense. It leads to a more competitive procurement process and, ultimately, to cost savings.
As I said earlier, being granted public money is a privilege, and suppliers should in turn uphold the highest standards in the workplace. The Bill is an opportunity to drive up standards across the economy and ensure that public procurement is used as a means to promote decent work throughout supply chains and to reward businesses that treat their workers right. We must back the workers and the employers who create Britain’s wealth by using procurement to raise the floor on working conditions for all. I hope that the Minister will engage openly in Committee with proposals to include good work and the promotion of quality employment as strategic priorities.
That brings me to outsourcing. This Government have become too dependent on handing away our public services on the cheap, and we are all paying the price. It is ideological and not based on sound service delivery. The Bill presents an opportunity to introduce measures to end the knee-jerk outsourcing trend and to ensure that, before any service is contracted out, public bodies consider whether work could not be better done in house. When I worked in local government, we coined the phrase “not outsourcing but rightsourcing”. That is what a Procurement Bill should facilitate.
The pandemic showed us that a decade of Tory Government had shattered the resilience of British businesses and services and of our local economies. Instead of handing out billions to British firms to deliver services, jobs and a better future, big contracts were given to Tory cronies and unqualified providers. The Tories eroded standards at work, encouraging a race to the bottom.
But it does not have to be this way. From the Welsh Government and London’s Labour Mayor to local governments in Manchester, Southwark and Preston, Labour in power is showing that things can be done better. What we need is a public procurement policy that the public can trust and that will make winning contracts a force for our country’s good. Not more sticking-plaster solutions but a Bill that will restore trust in the way public money is spent.
Caroline Lucas
I was trying to time my intervention for just as the right hon. Lady was finishing her remarks. Before she finishes, does she agree that one of the reasons why procurement is so brilliant is that it has a vital role to play in greening our economy? Again, the Bill does not go far enough on that. In particular, it does not include scope 3 emissions in supply chains, and the Government will not meet their own net zero targets unless they start accounting for those emissions. Does she agree that that is a big hole in the Bill?
Angela Rayner
Absolutely. I listened to the Minister’s response to the hon. Member’s question earlier, and it showed a lack of ambition. Those of us concerned about environmental factors, as we all should be, are also concerned that the Minister is not putting the necessary gusto into the Bill to ensure that those issues, including meeting the net zero targets, are really factored in. I hear a lot of words, but when it comes to the legislation that will enable us to do that, I do not see the practice being delivered. The next generation will hold the Government to account for the disaster they will be given if we do not act now. We know what the science says and what needs to be done, but this Bill does not do enough to ensure that it happens.
I want a Bill that will restore trust in how public money is spent, will have social and environmental factors in it, and will make British industry the best it can be so that workers in this country get the best they can get. I urge the Minister to use this opportunity to plough taxpayers’ money back into local communities so that we can make, buy and sell more in Britain, claw back our money when it is wasted, and outlaw VIP lanes once and for all.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I give a gentle reminder of my advice that speeches should last no longer than eight minutes.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
Thank you, Madam Deputy Speaker; how tactfully you remind us about the eight-minute limit. What a pleasure it is to follow the right hon. Member for Ashton-under-Lyne (Angela Rayner), from whom we had a lather of indignation —it could have been an advert for Pear’s soap, so great was the lather. I might remind the right hon. Lady that there was a similar lather of indignation from Opposition Members when we were trying to order PPE at the beginning of the pandemic. They really ought to watch the replays on the Parliament Channel to see how furious they were and how hopeless they thought it was that the Government were not spending even more money and ordering even more PPE. We should bear that in mind when we consider all their criticisms of this excellent Bill, brought forward with such distinction by my right hon. Friend the Paymaster General.
What is the fundamental point of procurement legislation? It is a burden for industry and a cost for taxpayers and it makes it harder for small and medium-sized enterprises to get into the supply chain. The fundamental point of such legislation is to keep Government honest: there has to be procurement law to ensure that contracts are awarded properly and fairly. That is why the openness of the Bill is so welcome; there will be more detail not only in the pipelines but in the whole process of procurement.
However, there has to be a balance. Large firms can employ departments to fill out tenders. They can afford the cost of tendering and of putting forward the necessary documents, and they can afford the executive time because they have more executives. Small firms, on the other hand, find procurement extremely burdensome and complicated and it uses a great deal of executive time. A large firm will have a team that does it; the SME will be using the chief executive’s time. That is why the light-touch regime is one of the most important things about the Bill. It is not set out in the greatest detail in the legislation, but there will be the ability to enhance it and make it more available for SMEs.
The more SMEs are brought in, the better it is for taxpayers. SMEs will be lower cost. In a lot of procurement, the Government go to a large company that then employs the SMEs while taking a margin for doing so. That is a cost to the SME, which charges a lesser price, and to the taxpayer, who pays a higher price. The ability to go directly to the SME is a saving for the taxpayer and a better profit margin for the SME. That is fundamentally important.
Jim Shannon (Strangford) (DUP)
When covid-19 came in and the Government had to make big decisions, a number of SMEs in my constituency had the ingenuity, ability and process but were unable to get any Government contracts. Does the right hon. Gentleman feel that they would be able to do so with this legislation?
Mr Rees-Mogg
That is the main point of the Bill, along with moving away from the European approach that essentially favours big business. Also involved is an attitude of Government, for which we can praise the Cabinet Office—particularly Gareth Rhys Williams, who has been absolutely brilliant in running the Government’s procurement and saving billions of pounds for taxpayers. The issue is about not just law but attitude of mind. To answer the point made by the hon. Member for Strangford (Jim Shannon), the Bill will also make it easier for SMEs to be used by local authorities, which will know the local businesses and may know their reputations. That is an important easing.
I would like to see one easing more, although it may be difficult because of some of our international agreements, which may need to be changed. To my mind, it is quite unnecessary to include private utilities in this legislation. Private utilities’ motivation and risk appetite are completely different from the Government’s. Private utilities have shareholders who want value for money and they will award contracts to get the best value for money. They do not need bureaucratic procurement regulations to hang over them. There is scope within the Bill to remove more private utilities from the regime. I hope the Government will use that, both to extract them in future and ensure that the regime is as light touch as possible for private utilities. This is essentially another of the hangovers from the European Union that turned up in some of our international trade agreements because most European utilities are state owned. It is inappropriate and unnecessary for this country.
It may not surprise the House that I disagree with the right hon. Member for Ashton-under-Lyne on social value. Social value is in the eye of the beholder. The right hon. Lady may think that there is social value in trade union rights when it comes to procurement.
Mr Rees-Mogg
I got a cheer from the Opposition Front Bench! I rarely get those, but on this occasion I have. I think giving trade union rights is straightforward cronyism: it is giving money to your mates and ensuring that your mates, who then fund the Labour party, do better out of it. The Opposition like it, and I think it dangerous. No doubt they could think of examples of things I might be in favour of—say, putting into a contract free speech as a social value—that they think are not necessary.
Value for money is fundamental, and I am glad of clause 12(1)(a)—that heroic clause in this great Bill. The right hon. Lady called the Bill a sticking plaster—quite some sticking plaster, running to so many clauses over 120 pages. Elastoplast does not produce sticking plasters of that size, I do not think. The key to procurement must be value for money—it must always be that, because taxpayers’ money is being spent. It is not about “nice to do” things, worthy things or virtue signalling; it is spending other people’s money, which must be spent as well as it possibly can be.
Within that, there may be a case for supporting innovation. Perhaps the commercial decision will be to spend money to innovate and get future savings, so that may be an exception. But that is the only one I can think of, other than where the Bill is absolutely excellent: in excluding those who have behaved badly. They may be foreign actors—there are powers to exclude on national security grounds—or companies that have behaved badly. The issue is of fundamental importance.
I might touch on Bain, which has been excluded from Government contracts for its involvement in the most extraordinary state capture of the South African Revenue Service. Many of us will know about the scandals, fraud and corruption that there have been in South Africa. The Zondo commission looked carefully at what Bain had been doing and discovered that it had been instrumental in state capture. A company with a fine veneer of respectability was involved in facilitating corruption of the worst kind in South Africa. As the Zondo commission reports, more than 2,000 experienced people in the South African Revenue Service, including inspectors, were removed. The Zondo commission said that that facilitated organised crime.
It is only right that this country should be able to stop companies involved in bad behaviour abroad from applying for contracts here. That is made easier under the Bill. The response of Bain, when challenged on this, was particularly poor. It simply attacked the whistleblower, a brave man called Athol Williams, who had the courage to point out what was going wrong. That important benefit will help with national security as well as with probity in our system.
I am at your time limit, Madam Deputy Speaker. I even had an intervention, for which I probably got a bonus minute.
Mr Rees-Mogg
Madam Deputy Speaker is a hard lady; she shakes her head.
Let me conclude by saying that this is a good Bill. It is a major step forward, it ensures value for money, it helps SMEs and it will make procurement better, more efficient and better for taxpayers. It is a Brexit bonus.
Kirsty Blackman (Aberdeen North) (SNP)
Happy new year to you, Madam Deputy Speaker, and to everyone in the Chamber. Thank you for calling me to speak on Second Reading of the Procurement Bill.
I will take the tiniest bit of leeway at the beginning of my speech to thank my predecessor as the SNP Cabinet Office spokesperson, my hon. Friend the Member for Argyll and Bute (Brendan O’Hara), for his hard work in this role. He does not leave an easy gap to fill as he moves on to lead for us on international development, but I will do my best to learn as quickly as possible, and what better way than with the Second Reading of the Procurement Bill and the subsequent Bill Committee. That is not a joke—the Minister will be totally fed up with me by the time the Bill Committee has ended.
Both the SNP Westminster group and the Scottish Government have significant concerns about the content of the Bill as currently written. I am disappointed by how the Paymaster General put forward his views on the Scottish Government’s action, given that constructive discussion is going on about how best to amend the Bill. I hope he is going into those discussions in a more constructive manner than it sounded like from his tone at the Dispatch Box when he spoke about the views of the Scottish Government. Corrections need to be made before the legislation can be considered acceptable, because the Bill undermines the devolution settlement.
We have not tabled a reasoned amendment to the Bill on the basis that the Scottish Government hope they can resolve the issues with the UK Government. However, should the UK Government fail to fix the Bill, we absolutely will oppose the legislation at future stages. The Bill seeks to confer a power exercisable concurrently by UK and Scottish Ministers to implement the Government procurement chapters of the agreements with Australia and New Zealand by secondary legislation. Although the negotiation of international agreements might be a reserved matter, their implementation in devolved areas, such as Government procurement, is a devolved matter.
The correct constitutional solution would be to amend the Bill to grant the implementation powers solely to Scottish Ministers in Scotland—obviously not in the rest of the UK. If the UK Government refuse to make that concession, at the very least the Bill must be amended to require the consent of Scottish Ministers when UK Ministers act in devolved areas to implement international agreements. It is a vital issue of principle. Devolution must not be undermined every time a sitting Westminster Government fancy doing so.
The Scottish Government are working to resolve these issues with the UK Government, and that is why we have not tabled a reasoned amendment to reject the Bill, but I and my colleagues urge the UK Government to continue that work. They often claim that they want to work with the Scottish Government, and we want to ensure that this Bill is not added to the litany of devolution-undermining legislation that has been put through since Brexit.
We have further concerns about the Bill, and I hope the Minister will accept them in the constructive spirit in which they are meant. We believe that the UK Government must ensure that supporting environmental objectives is clearly and explicitly included in the Bill’s objectives. Those objectives should be compatible with the Scottish Government’s more ambitious climate change reduction targets. If the UK Government are to act in such a way on reserved matters, they need to take account of the fact that the devolved legislatures have different and more ambitious climate change targets.
Robin Millar (Aberconwy) (Con)
The hon. Lady referenced the devolution agreement, and she has just mentioned reserved matters. Can she clarify whether she is referring to the Scotland Act 1998 and devolution as set out within its terms?
Kirsty Blackman
Yes, I am referring to the devolution settlement and how devolution works. Within the Scotland Act, there are matters that are the competence of the Scottish Government and ones that are the competence of the UK Government. In that regard, the implementation of international agreements in relation to how public procurement works is a matter for the devolved legislature, and we would prefer that the UK Government recognised that, rather than giving a power in this Bill that could overrule that.
The Bill includes a discretionary exclusion group for environmental misconduct, but I am not clear why that exclusion should be discretionary. The UK Government are failing time after time to embed environmental objectives in legislation. They refused to do so with the Subsidy Control Act 2022 or with the creation of the Advanced Research and Invention Agency, despite the Opposition pushing them to include it. It is as if they are keen to have big headlines on climate change targets, but not actually to embed them and do the actual work, and not to put those targets where it matters, which is explicitly in legislation that this place is putting forward, without exclusions and without discretionary rules. It should be embedded in every single thing we are doing, because it is the most important issue for this generation and for future generations. The Bill must explicitly commit to taking environmental considerations into account when awarding contracts, and that should be a core consideration, not a pointless box-ticking exercise.
We welcome the retention in the Bill of the principles that underpin EU procurement rules: transparency, equal treatment, non-discrimination and proportionality. However, having the principles included in the Bill is utterly meaningless if they are not upheld. It is vital that the principles are practised. As was mentioned by the right hon. Member for Ashton-under-Lyne (Angela Rayner), the UK Government’s shambolic handling of the covid contracts is a stark reminder of the danger of not upholding these principles. Transparency International’s report on the public contracts awarded during the pandemic noted that critical safeguards to prevent corruption were suspended “without adequate justification” during the pandemic procurement processes. It also found “systemic bias” towards those with connections to the UK Government. The rush to try to get more PPE has already been mentioned. It was vital that PPE was procured; the issue is how that was done, which explicitly favoured those who had close links to the UK Government. That is not how it should have been taken forward.
We need measures in the Bill to ensure that the UK Government cannot unilaterally decide to suspend the safeguards and principles that are in place. The horrendous nepotistic waste of taxpayers’ money should not have happened once, and we absolutely cannot allow it to happen again. The opportunity should have been taken to include the measures put forward by my hon. Friend the Member for Midlothian (Owen Thompson) in his Ministerial Interests (Emergency Powers) Bill.
Lastly, but no less importantly, the UK Government should take this opportunity to ban malicious actors and organisations involved in human rights abuses from the supply chain. During the Bill’s passage in the other place, several peers tabled amendments that sought to cut companies responsible for or complicit in slavery, genocide and crimes against humanity out of the supply chain. That is a noble principle and it should be adopted regardless of circumstances. It is unfortunately necessary that this needs to be explicitly included, as products from companies with horrific records are widespread through UK procurement chains.
The UK Government have shown that they can, after delaying, dithering and being publicly shamed, remove Huawei from the UK’s telecommunications infrastructure, and there is no reason why they cannot do the same with other companies, such as Hikvision, which is directly involved in the Chinese Government’s detention of Uyghur Muslims. More than a million cameras from Hikvision are present in the UK and they are used by as many as 61% of public bodies. The US Government blacklisted it in 2019; the UK Government have not yet taken comprehensive action against this company, despite making clear that they are aware of the issue. The SNP would like to commit to working with others across the House who seek to protect the supply chain from harmful actors and ensure that public procurement does not work to enrich those who profit from crimes against humanity.
I look forward to the Public Bill Committee—I really do—and I hope we can hear evidence from those who are expert in public procurement. I have no doubt that we will table amendments to ensure that the Bill respects devolution, that human rights are protected and that environmental priorities are actually prioritised.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. My guidance is creeping down more towards seven minutes.
Alicia Kearns (Rutland and Melton) (Con)
I welcome much of this Bill, in particular its support for small and medium-sized enterprises, but I wish to focus my comments on national security concerns. Geopolitical and geo-economic competition has upended our traditional supply chains, while the actions of hostile states who are industrialising path dependency require us to think more strategically about public procurement. Equipment used by our police forces, hospitals, Departments and local councils are providing hostile states with a back door into our security and forcing dependency on these malign actors and the states who produce them.
As the Minister rightly pointed out from the Dispatch Box, this Bill gives us the opportunity to meaningfully put resilience at the heart of this Government’s effort. We cannot risk insufficient action now because it will hurt us in the long term, as exfiltration is far more costly and complicated than putting in place the right measures now.
For too long, we have allowed the public sector to outsource basic components that make up our everyday security to companies and countries with malign intent. All of us will recall the debates about stripping Huawei from our 5G telecoms network, which took too long but was the right thing to do. The problem is, we face Huawei-level decisions on a range of security measures and it relies on MPs becoming aware of these companies and this risk for there to be a meaningful debate about it, which cannot be the right way to deal with it.
There are tens of examples that could be raised, whether it is DJI drones, which are used by our police forces across Britain, or Hytera body cameras, which film what police officers can see. The likelihood is that what is seen by every police officer entering the home of a constituent in Rutland and Melton could be sent back to China. The risk is so strong that Motorola has created technology to intercept that technology and prevent the data from being sent back. My priority is protecting the data of British nationals—our faces, our gaits, our walks, how we use our mouths and how we communicate—because China wants this data. That is why it is buying up gay dating apps and why it owns TikTok. It is our data that will allow it to have supremacy over us as we go forward and make us vulnerable. The Chinese Communist party is seeking to build a tech totalitarian state, and that requires the data of those around the world. At the moment, British taxpayers’ data and money is enabling that.
We have to update the rules. Over the weekend, there was a story about tracking devices found hidden within Government cars. Our data is important because it reveals not just the locations we go to in our cars, but our friends and networks, our vulnerabilities, habits and activities, which allows us to be threatened, blackmailed, undermined or tracked. If these cellular IoT nodes—called SIM cards in the media—were duplicitously installed, then that is CCP espionage. It is more likely that these are standard technologies that are installed in all cars. That shows why this Bill is so important, and why we need national security considerations. At the moment, we all have constituents driving around with these cellular IoT modules in their cars; any of those individuals could be pinpointed if they drove near a secure site and were then tracked by the Chinese Government. The Chinese Communist party would then know where they live, how they live their lives and what they do, and they would become vulnerable.
The Chinese Government could quite easily work out who the Prime Minister’s security team is by looking at the cars that travel out of No. 10 and then go back to the Prime Minister’s house all the time. They could then track those security officers to where they are doing recces for future visits, and then they will know where our Prime Minister is travelling to. They could do that to any of us if they wanted to make us vulnerable.
The problem is that 50% of all cellular IoT modules are made by three companies: Quectel, Fibocom and China Mobile. These are three Chinese companies that cannot be trusted. There are alternatives, but businesses are choosing to save pennies on the pound in order to protect their businesses rather than do what is right, which is making sure that small tools such as these modules are removed, thereby protecting the data of British nationals.
There is, without question, a balance to be struck within British procurement. We have to get value for money for taxpayers. However, the purchasing of cheaper equipment—quite often state-subsidised by hostile powers—is a dangerous false economy because it produces that path dependency that I have set out.
When the Cabinet Office last year rightly advised public bodies to sever contracts with Russian and Belarusian suppliers, the lack of legal provisions to do so meant that any meaningful attempt would actually result in a serious breach of UK law. I ask Ministers to rectify that when they look at the Bill.
The flaws in our procurement system severely undermine not only our security at home, but our ability to stand up for human rights around the globe. The Foreign Affairs Committee has found that the same Hikvision cameras that guard our council buildings monitor and enable Uyghur internment camps where we know that genocide is being industrialised. It is morally unacceptable that we choose to use a surveillance system that actively racially profiles Uyghurs within our own systems. It is tantamount to facilitating genocide, because we are funding the Chinese Government and enabling them to continue to do what they do. We know that they are guilty, yet we are saying that we will remove those cameras only from sensitive sites. It should be from all sites, particularly when there are alternatives.
My asks of the Government are as follows. I met with Cabinet Office officials last year, and again this morning with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Brentwood and Ongar (Alex Burghart)—I am grateful for his time—and we need clarification. First, on the debarment list that is created to exclude suppliers from procurement contracts, with a procurement review unit to lead investigations, who will have ministerial discretion over who appears on the list? Will we have proactive powers to hunt down these companies to ensure they are on the list, or are we going to wait for MPs to have the information handed to them so that they can stand up and raise it?
Secondly, we must ensure we do not end up in a relentless whack-a-mole trying to hunt down the companies responsible for such things. We need to focus on the components within sensitive industries or sensitive items, and to ensure that any public body procuring such components or companies within relevant industries must come to someone for a second review. That means we are not attacking a specific country and saying China’s products are bad or saying that certain companies are awful; we are doing due diligence in sensitive areas. That is why we need a SAGE-style committee on public procurement specifically looking at national security.
Thirdly, has the Secretary of State drawn up a list of priority sectors that we can deal with when the Bill passes into law? Finally, what assurances can the Secretary of State provide for how local authorities will be able to check with the Government whether a provider is on the debarment list? At the moment I have local authorities from around the countries writing to me saying, “Alicia Kearns, can you please give me advice on whether or not we as the local council should procure from this company?” That cannot be the way we do this. We must ensure local government is not the entry point for hostile states.
Finally, on supply chains, public authorities need to be able to investigate, and we must ensure that this goes high enough up the chain. Canadian Solar is looking to build a solar plant in my constituency. It sounds lovely—“Canadian Solar? What a great company”—but when we actually look into it, it is GCL-Poly, a Chinese-owned, Chinese-run company that is complicit in Uyghur genocide. We must ensure that the burden to investigate is properly addressed.
On that point about human rights and genocide, I recommend to the Minister that we look at the International Criminal Court’s Rome statute so that, again, we have explicit, grounded-in-law ways in which to determine whether certain countries should not be allowed to provide things to us, so that we are not looking to make complicated determinations of genocide. Again, that is where a SAGE-style committee could come in use.
All in all, I urge the Government to seize the initiative. There is so much we could do on national security that I cannot fit into seven minutes, but my door is open for further discussions. I hope that my speech sets out in brief just some of the asks. This Bill could be transformational for protecting our people and their data in the long term and for protecting our children’s futures.
Nick Smith (Blaenau Gwent) (Lab)
I welcome this Bill’s aims of openness, effectiveness and transparency. A third of public expenditure—£300 billion—goes on public procurement, so we must get this right. Unfortunately, though, the Government’s record here has been undermined by the PPE scandal. I do understand that exposure to fraud was a risk during the panic of the pandemic and that the global PPE market was highly competitive. However, big mistakes were made, and billions have been wasted.
The National Audit Office has done brilliant work on tracking the Government’s covid spending. Its investigation into the management of covid contracts in March 2022 found that 46 of the 115 contracts awarded to the Government’s VIP lane did not go through the Government’s due diligence process. That meant that the Department for Health and Social Care could not fully understand the contract management risks it was exposing itself to. Therefore, the sheer scale of Government waste is not just explained by global markets pressures; the UK Government’s failures must also be acknowledged. After all, the PPE scandal has seen £4 billion of taxpayers’ money wasted on unusable equipment and now £2.6 billion-worth of disputed contracts.
I am specifically concerned about contracts awarded to Unispace Global Ltd, which won more than £600 million of PPE contracts during the pandemic. It is extremely difficult to follow the financial paper trail: a look at its manoeuvres, and the chopping and changing of its directors, raises big questions. For example, payments from the Department of Health and Social Care were made to Unispace Global Ltd, but in 2021, it transferred its contracts to a new company, Unispace Health Products LLP, which now trades as Sante Global LLP. Private Eye says, however, that the companies’ accounts do not feature anywhere near the £600 million paid to them, which begs the question: why this chicanery? Will the Bill deal with such shenanigans?
I welcome the introduction of a single central Cabinet Office online platform—that is quite a mouthful—but it should go further and include a publicly accessible dashboard for Government contracts. In that way, we can track delivery and performance, make contractors truly accountable to the people, and close the loopholes that profiteers enjoyed. The British people also deserve to know the profits, commissions, dividends and big bosses’ bonuses being made on the back of public money.
We need measures that financially penalise those who benefited from the public contractors’ PPE super-profits, but when a company changes its identity multiple times, that is made much harder, and the other route—recovering money through the courts—is very expensive and hugely time consuming. What measures will the Government bring forward to deal with those PPE profiteers and their like? We need a Bill that mandates open accounting of public contracts and shines a light on the vultures that prey on the public purse. We need a Bill that allows us to properly follow the money.
Mr Mark Francois (Rayleigh and Wickford) (Con)
As a former Defence Minister, I will confine my remarks to the Defence-related aspects of procurement, which feature multiple times in the Bill, particularly in parts 1, 2 and 4. The United Kingdom’s system of Defence procurement is broken. That is the considered opinion of the all-party Public Accounts Committee, on which I now serve, which concluded in its 2021 report, “Improving the performance of major defence equipment contracts”, that,
“The Department’s system for delivering major equipment capabilities is broken and is repeatedly wasting taxpayers’ money.”
The Government’s auditor, the Infrastructure and Projects Authority, audits all major infrastructure programmes from HS2 downwards. It produces its findings each summer, in which it grades each project on a traffic light or dashboard system. The definition of a red project is that,
“Successful delivery of the project appears to be unachievable.”
Amber projects are those where,
“Successful delivery appears feasible but significant issues already exist”.
In its latest report of July 2022, the IPA audited 52 of the largest MOD procurement programmes from Dreadnought downwards, which total more than £80 billion of British taxpayers’ money. Of those, nine projects were rated red or unachievable, 33 were amber where significant issues already exist, seven were classified on national security grounds, and only three were rated green, whereby,
“Successful delivery of the project on time, budget and quality appears highly likely”.
I submit to the House that a system where barely 6% of our new major Defence programmes are judged to be confidently on track is indeed a truly abysmal record and fully in keeping with the PAC’s verdict of a “broken” system.
In a similar vein, in March 2021, the Defence Committee published a hard-hitting report, “Obsolescent and outgunned”, which highlighted that in two decades, the British Army has not successfully introduced a single new major armoured fighting vehicle into service. As it powerfully concluded:
“This report reveals a woeful story of bureaucratic procrastination, military indecision, financial mismanagement and general ineptitude, which have continually bedevilled attempts to properly re-equip the British Army over the last two decades.”
The biggest scandal in this sorry tale is that of the General Dynamics Ajax armoured reconnaissance vehicle which, after 10 years and the expenditure of over £4 billion of UK taxpayers’ money, has still not resulted in a single new vehicle entering frontline service, for which the MOD is even now unable to provide a definitive date. Even if it could, the future communication system on which the highly digitised Ajax would rely, called Morpheus, is still many more years from entering service. The lead contractor on the Morpheus evolve to open project is General Dynamics, the same prime contractor as for Ajax. Last year, the Defence Secretary commissioned Clive Sheldon KC to conduct an independent inquiry into the flow of information surrounding Ajax, including to Ministers, which is due to report very shortly. I suspect it may well prove uncomfortable reading for some of those who were working on the Ajax programme.
To take another example of a red programme, it has taken nearly seven years to integrate an airborne early warning radar into a Merlin helicopter to provide air defence coverage for our aircraft carriers—a project called Crowsnest. In stark contrast, during the 1982 Falklands war, we integrated an earlier version of the same radar into a Sea King helicopter in just over three months. This is just one more example of how ponderous, bureaucratic and inefficient our procurement system has now become.
One associated area that is also desperately in need of reform is the procurement of the maintenance of accommodation for service personnel and their families. The future defence infrastructure services—FDIS—contract, which went live earlier this year, is an utter shambles. Complaints about mould, lack of heating and multiple contractor visits, which still failed to carry out basic repairs, such as fixing broken boilers, have appeared in numerous media outlets in recent months. We cannot carry on like this. Our service personnel and their families deserve better. I understand that Defence Ministers may now genuinely be considering terminating the FDIS contract and seeking alternative arrangements. I co-authored a report for a previous Prime Minister on military retention—entitled “Stick or Twist?”—three years ago, in which we suggested establishing a bespoke housing association instead. Whatever solution Ministers now finally adopt, I earnestly hope they will stop reinforcing failure via FDIS and opt for something successful instead.
In summary, the Public Accounts Committee was right: our system of defence procurement is broken, and it is going to take much more than this Bill to fix it. With a war under way in Ukraine and the Government’s integrated review being updated as a result, there is now an opportunity to put right these weaknesses in our defence procurement process, which are deep-seated and have taken place, it must be said, under Governments of both colours for many years. We certainly need to increase our defence spending, but we also need to spend what we allocate for defence much more efficiently as well. This system is crying out for an extremely thorough analysis to be subsequently followed by dynamic reform. We cannot let this go on much longer. Our national security depends on it, and if hon. Members do not believe me, then perhaps ask a Ukrainian instead.
Samantha Dixon (City of Chester) (Lab)
Thank you, Mr Speaker. I am genuinely delighted to be speaking in this important debate.
As a former leader of Cheshire West and Chester Council, I am proud to have a strong record of putting the principles of social value at the heart of public spending. These values look for benefits to society, the economy and the environment. When they are aligned with good fiscal management, local people get more for their money.
The Northgate development in Chester is a central regeneration project in the heart of Chester city centre. The council on which I have served since 2011 was the main driver for this exciting project. Indeed, I was proud to see the new public market open in November, with nearly half a million customers already through the door. In delivering this project, we have squeezed every last penny of value from every pound spent not just to deliver the project itself, but to deliver 435 weeks of apprenticeship opportunities, 13 education events, 12 work placements, 43 training weeks, 64 employment activities and more than £22 million-worth of expenditure in the local economy.
On top of that, construction workers raised money for local homelessness charities; there were donations to the local food banks; Chester football club—a fan-owned, community club—had its car park upgraded; and many students from local schools and colleges gained valuable industry insight from being involved in a live and local construction project. Even the sandstone excavated from the drainage tunnel ended up being recycled in the rhinoceros enclosure at Chester zoo. This is how we do business in Chester. Social value is highly important and an opportunity to make, buy and sell more in Britain. Chester has shown that that makes a difference to local communities and can be done in the right way. These communities are at the heart of Chester’s identity and I am now honoured to represent them as their Member of Parliament.
Chester has a long and complex history that attracts visitors and businesses to the city and makes it a fascinating and beautiful place to live. Chester was founded by the Romans in AD79, due to its strategic advantage given our geographic location on the border with Wales and on the banks of the River Dee. An integral historical feature which Cestrians use to this day is the city’s walls. Many places in Britain are walled but only Chester has a complete circuit. They are about 2 miles long and have over millennia been constantly altered, repaired and sometimes attacked. Indeed, as my hon. Friend the Member for Weaver Vale (Mike Amesbury) mentioned recently, “The only red wall in Chester is the Roman wall.”
As an aside, a breach of the walls by parliamentarians during the siege of Chester in 1645 has been commemorated in Lego by our local blogger and champion of all things Cestrian, Tony Chester. His magnificent Lego display of Chester through the ages will soon be a key feature in the previously mentioned newly opened market.
These days, our city is a thriving and vibrant place characterised by excellent hard-working retailers, traders, restaurateurs, publicans, and visitor attractions such as Chester zoo and the Deva Roman Experience, who are all committed to the future of our city. I am determined to help Chester to weather the current economic storm and make our city a top retail and tourism destination. This commitment is one of five I have made to the people of Chester that I intend to keep now I am here as their elected representative.
I want to restore frequent, reliable buses and trains to keep our city connected to the wider country, and I want to return to neighbourhood policing with more officers on the beat in our communities. Most of all, I want to stand up for our city and end the cost living crisis which is badly hitting many people living in Chester.
The River Dee, the reason why our city is where it is, has been well used over centuries, whether for industry, recreation or sport. Indeed, the river hosts the oldest rowing regatta in the world, celebrating its 290th anniversary this year. It is a busy and important part of our city and the reason I will be working so hard to end the practice of dumping raw sewage into it, as is currently permitted.
In other sporting news, Chester has had a football club since 1885. Currently playing in the national league north, the club has always fulfilled an important role in our community. Since 2010, the club has been a supporter-owned co-operative with elected directors, hundreds of volunteers and thousands of members. Chester FC is currently enjoying some success under a talented young manager, Calum McIntyre. The club motto is “Our city. Our community. Our club”, and that is being realised through a set of principles and values based on a mission to create a successful team and bring wellbeing and cohesion to our city, and to do it without ever going into debt. The club reflects and is a prime example of the importance of social value; I wish the club continued success.
I first visited the Houses of Parliament when I was a sixth-former at Christleton High School. The visit was hosted by Peter Morrison, the first member of Parliament for the City of Chester I can remember. His successor was Gyles Brandreth, whose candidacy, I recall, was announced on red nose day prior to the 1992 general election. His spell as the city’s MP was characterised by his good humour, something which continues today as he serves as chancellor of the University of Chester.
In 1997, the people of Chester elected the city’s first ever woman Member of Parliament, Christine Russell. She served our city well for 13 years and continues to do so in many roles across the constituency. She remains a good friend and mentor to me. Her successor, Stephen Mosley, served the city for five years and contributed much to parliamentary life through his role on the Science and Technology Committee. My predecessor, Christian Matheson, was also widely acknowledged throughout the constituency for his hard work on behalf of many residents and stakeholders. I am honoured to follow in all of their footsteps.
Chester, as beautiful, unique and historic as it is, has always masked significant levels of inequality. A commitment to improve the lives of others has been a thread throughout the years and the work of my predecessors.
Our city has a popular and thriving university that sees students from across the globe choosing to come to study in Chester. Our university trains many of the nurses, midwives and healthcare professionals who serve our community so well in association with our local health trusts. Along with our excellent schools and their hard-working teachers, and our superb police officers and firefighters, as well as the first-rate officers of the council, Chester is served by many fine public servants.
As we reach the tail end of winter, the struggles that our communities are facing are not easing. The current economic climate makes it more important than ever to create a transparent procurement system; one with social value and public interest at its heart and which will support suppliers who act ethically and create high-quality jobs.
Chester was a pioneer for social value in that, 21 years ago, our city became the very first Fairtrade city in the country. I am proud that in our city we live and breathe the principles of social value. Most importantly, I am honoured to have been elected to serve the people of Chester, and I will work hard for them every day. I have lived in Chester for nearly all of my life. It is where my home is and where my heart is. I want the very best for my city, and I promise that this Chester woman will be a determined and dedicated public servant for those who voted for me and for those who did not. I will be an MP for all the people of Chester. I look forward to serving them here in this place.
Harriett Baldwin (West Worcestershire) (Con)
It is an absolute honour to follow such an assured maiden speech from the hon. Member for City of Chester (Samantha Dixon). She spoke with great confidence and great experience of the subject at hand. She painted a beautiful picture of her city, and I am sure that that was the first of many excellent contributions that she will make to our debates.
I put my name down to speak in the debate because it struck me that procurement is so tied to what is our biggest economic problem: the cost of living and the rate of inflation. The questions that I want the Minister to respond to in his closing remarks are about that rate of inflation and how the transparency and openness of the new procurement system can help by bringing down the price that the Government pay at all levels for the contracts they award.
I draw the Minister’s attention to the situation in Ukraine—no, not the one that occupies the headlines, but a little-noticed development in 2016 that was very much supported at the time by the UK, along with Transparency International: the development of its procurement system, known as ProZorro. It is quite a remarkable platform. It is open source and shows every opportunity that exists in Ukraine to bid on contracts. It is completely open to citizens and civil society to look at all of the data on what is being tendered for and at what price companies are successful in bidding for those contracts. It is an extraordinary example of how public procurement can be transformed by openness and technology. If he has not done so already, I urge him to ask his officials if they could give him the opportunity to look through the ProZorro system used in Ukraine. It has done an enormous amount to reduce the cost of procurement over the years and to increase transparency for citizens.
The second public economic priority that the Bill helps to support so much is innovation. The openness and transparency of the procurement system will give small businesses—this has been mentioned a few times in today’s debate—much more of an opportunity to see what there is in the pipeline of public procurement. Again, I wonder whether I can ask the Minister to reply on this point in his closing remarks. In terms of innovation, one of the factors that small businesses often cite to me—and to other colleagues, I am sure—is that when they put their tender in for a public procurement, very often they are required to provide at least three full years of financial records. That can act as a very insidious way of reducing the ability of newer businesses and more innovative businesses, and perhaps nimbler and less expensive businesses, to participate in public procurement. I urge him to think about how the qualification process might enable some of the start-ups we really want to succeed to get into the pipeline of public procurement as easily as possible.
My finally question echoes some of the excellent points made by my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) on the importance of defence. I want to ask about the single-source procurement regulations, with which I know the Minister will be intimately familiar, and recognise the fact that in those procurements the Government are, obviously, dealing with one supplier. What thought has he given to then requiring the single-source supplier to procure more in a more innovative way from down the supply chain, and in a way that would not compromise national security, which of course has to be paramount?
With those short remarks, may I say once again what an honour it has been to be in the Chamber for the maiden speech of the hon. Member for City of Chester?
Mick Whitley (Birkenhead) (Lab)
I commend my hon. Friend the Member for City of Chester (Samantha Dixon). I hope her nerves have settled after an excellent speech. I thank all my hon. Friends for their eloquent contributions to today’s debate. I hope the Minister recognises there is a real appetite on the Labour Benches to work constructively with the Government on this issue.
Colleagues have rightly drawn attention to the ways in which the Bill risks enshrining in law the kind of cronyism we saw run wild during the pandemic. In the short time available to me, however, I want to speak specifically to the issue of social value and how recent developments in my constituency illustrate the urgent need for reform of our broken procurement regime.
When metro Mayor Steve Rotheram announced that the Liverpool city region combined authority would be commissioning the first new Mersey ferry in over 60 years, there was a widespread belief that it could only be built at Cammell Laird shipyards in my constituency of Birkenhead. What could be more fitting than for such an iconic Merseyside institution to be built on the banks of the Mersey itself? And what a difference the multimillion -pound contract would have made to the lives of my constituents, securing high-skilled work for years to come and guaranteeing additional investment in skills and training.
But soon enough those hopes were sunk by the cold reality of today’s procurement landscape. Cammell Laird could not compete on price against the likes of multinational giants like Damen. No matter how much the metro Mayor might have wanted to see the Ferry built in its entirety on Merseyside, he found his hands tied by onerous procurement rules enforced by central Government. As a result, the construction of the ferry is now set to be split between Cammell Laird and a Damen shipyard in the Balkans, with much of the most high-value labour likely to be offshored abroad.
My constituents were badly let down by a failed procurement regime that failed to take wider social, economic and environmental considerations properly into account. The news, only a week later, that the Ministry of Defence had awarded the contract for the new fleet solid support ships to a Spanish-led consortium made the blow even harder to bear.
Ministers have stated time and again that they intend to reaffirm value for money as the foundational principle of their procurement strategy. No one in this House is arguing for anything other than delivering the highest value for taxpayers, but that must also mean recognising the extraordinary potential for public procurement—which accounts for £1 in every £3 that the Government spend—to promote British businesses, boost job creation and drive investment in communities such as Birkenhead. For too long, communities across the country have missed out on the benefits of billions of pounds of public spending: one in six procurement contracts are now awarded to companies with links to tax havens, while the number of SMEs winning Government contracts is falling year on year.
This Bill was an opportunity to put right the mistakes of the past. Ministers had the chance to strengthen the Public Services (Social Value) Act 2012, give contracting authorities the flexibility they need to do their best by the communities they serve, and enshrine social value at the very heart of a new, progressive procurement regime. But there is not a single mention of social value in the Bill. Instead, Ministers are promising to expand on their plans to maximise social value in a national procurement policy statement with no statutory footing. If the Government are as committed as they claim to be to supporting critical industries such as shipbuilding, why does the Bill not contain a social value strategy?
The simple truth is that when it comes to supporting British businesses, the Bill is desperately lacking in ambition. For all the talk from Government Members about seizing post-Brexit opportunities, all the Bill really has to offer is more of the same—more of the giant multinationals treating this country as a cash cow while forcing home-grown British businesses out of the competition, and more public money piling up in tax havens while domestic industry struggles to survive one of the bleakest economic outlooks in recent history.
I recognise the need for a major overhaul of our national procurement regime. In the hope of achieving meaningful improvements to the Bill, I will not vote against it this evening, but if the version that returns on Third Reading does as little for the communities and businesses that I represent, I will be forced to think again.
Anthony Mangnall (Totnes) (Con)
I congratulate the hon. Member for City of Chester (Samantha Dixon) on her fantastic maiden speech. I wish I could have delivered mine with the same level of confidence. She gave us a rapid tour through the history of her city and expressed her desire for it to be a hotspot for tourists from across the country; she will certainly find many colleagues across the House to support her in that endeavour. I wish her luck in this place.
It is an absolute pleasure to follow my friend the hon. Member for Birkenhead (Mick Whitley), a fellow member of the International Trade Committee. I would like to make a few remarks about trade and ask for some clarity. I agree with him about the necessity of harnessing the power of public procurement and using it to the advantage of businesses of all sizes across the country. I might also point out that it has huge value in the free trade agreements that this country is signing. Global Britain is about signing new trade agreements. The Trade (Australia and New Zealand) Bill, which is working its way through the other place, deals with the very issue of procurement. It offers new opportunities not only for other countries to bid into our system, where we wish them to do so, but for our own businesses, large and small, to bid into procurement programmes around the world. Importantly, the more practised they are with our systems, the more accustomed they will be to foreign programmes and procurement processes.
A lot of Opposition Members have made comments about national security and asked why bigger companies are not doing more in the UK to build our defence systems. Helpfully, I hope, I might just point out that if we include SMEs—there is a very large contingent of small and medium-sized enterprises in the defence sector, and the Bill is about helping SMEs—we are thereby helping small businesses in the defence sector to build the systems that we need in this country to keep us safe and protected.
It is essential to be aware that the Bill, in its entirety, also creates a platform to exclude businesses that have previously performed badly. It gives authorities the opportunity, when looking at future contracts, to say, “These businesses have not performed—we are therefore able to exclude them.”
Much has been made of the social value point, and I think we have to be careful in this regard. If we are too precise, we will block out businesses; we will encourage bigger businesses that can throw more money at the issue, and exclude the very small businesses that we want to be able to help through the Bill.
I welcome the Bill because it is trying to achieve something that needs to be achieved: reducing bureaucracy. It seeks to repeal the Utilities Contracts Regulations 2016, the Public Contracts Regulations 2015, the Concession Contracts Regulations 2016, and the Defence and Security Public Contracts Regulations 2011. It is truly a wonderful day when we see a Government actually taking away pieces of legislation and trying to introduce new, streamlined laws that will help small businesses. Indeed, the Government are going even further: 350 individual regulations from EU directives are to be repealed. The Bill will make it simpler and easier for businesses of all sizes throughout the United Kingdom to bid in through a single, uniform framework for public procurement. That is its core and essence.
However, I have a few questions for the Minister. Are we making the public bidding process understandable to small and medium-sized businesses while also protecting the taxpayer, and will we be providing the national and local services that will ensure that procurement projects and processes are delivered? With that in mind, may I ask—in the context of clause 27 and the other clauses relating to exclusions, including clause 29, which concerns national security—what impact the Modern Slavery Act 2015 would have on the Bill, in respect of clause 65? Would Huawei, which has already been mentioned, be placed immediately on the debarment list? My hon. Friend the Member for Rutland and Melton (Alicia Kearns) referred to Hikvision. Would it be on the list as well, given the evidence that has been presented across the western world about its engagement in relation to the Uyghurs? What is the timeline for the exclusion of businesses that are put on the debarment list?
I would also like some clarification on clause 63. We talk about the speed of appeal and how we might put a business on the debarment list, but what happens if there is an ongoing investigation of a business while a local authority tender is out there, and the local authority decides to choose a business that is under investigation by the Government, by a Minister or by an authority, and has yet to preside over that issue? Would the local authority be made aware of the ongoing investigation, and would there be an impact on the tendering process if the business could not be given access to what was going on?
I think that clarification of those issues would provide a small amount of extra reassurance. Introducing a centralised system of information about businesses that have performed well, making local and other authorities aware that businesses have been debarred, is clearly sensible, but what provisions are there to prevent companies from renaming themselves and coming back for a second bite at the cherry, perhaps with a different local authority or a different individual at the head of the company? That is another small point that I think requires clarification.
I have already mentioned our signing of the landmark Australia and New Zealand trade deals, which open new markets for businesses around the world. Following the point made by my hon. Friend the Member for Isle of Wight (Bob Seely) about China, may I ask whether any consideration has been given to excluding non-signatories to the World Trade Organisation’s agreement on Government procurement? Given that that may shake the Government a little and cause them a bit of fear because it may exclude some more friendly countries—other than China—perhaps we should consider excluding countries that have not signed the agreement, perhaps those with whom we have not signed free trade agreements. That would allow us a way through without our offending any countries with which we have signed, or wish to sign, free trade agreements.
The Bill presents us with a huge opportunity to sign new trade deals and use them to advance British businesses at home and abroad, but also to consider how we can get locally produced food into our schools and hospitals, and how we can provide smaller, tailored contracts to help people boost their businesses and ensure that there is value for money. I welcome the centralisation, I welcome the structure, I welcome the repeals, I welcome the opportunity for SMEs, and I welcome the transparency that the Bill provides. If we can get this right, we can cut the Gordian knot that has been procurement in this country and, once and for all, create a streamlined system that will deliver value for money and opportunity for businesses of all sizes.
Sarah Olney (Richmond Park) (LD)
The Liberal Democrats support the Government’s stated ambition in the Bill of speeding up and simplifying the procurement process and creating greater opportunities for small business to access public contracts. However, the Bill could be improved on a number of points. It is important that we get this right, especially at a time of straitened public spending and a cost of living crisis. It is fundamental that Government and Parliament are seen to be taking every care possible with taxpayers’ pounds. We have seen the recent shambolic procurement of PPE and the resulting scandals. I do not think the public currently have confidence in the Government’s ability not to waste money or to create value for local communities. As it stands, the Bill does not align procurement to our environmental and climate goals.
The Bill as originally drafted by the Government included a huge carve-out for the NHS. It was originally proposed that instead of following the procurement regime provided for in the Bill, the Secretary of State for Health would be able to make up their own rules for huge swathes of NHS procurement by secondary legislation. I am pleased that Liberal Democrats in the Lords amended the Bill to ensure that the NHS would be brought into scope. It is important that we maintain that amendment because NHS spending accounts for such a large amount of public procurement. It would be absurd for it to be excluded. I would like the Minister’s assurance that they will maintain that Liberal Democrat amendment in the Bill.
NHS procurement is the most recent example of the most egregious failures of public procurement. The bypassing of the usual procurement rules via VIP lanes saw £3.8 billion of taxpayers’ money handed over to 51 suppliers of PPE, many of whom were closely tied to Conservative Ministers and their friends. We have had months of allegations about PPE Medpro, and today we have heard that SG Recruitment was handed a £50 million contract after being referred by a former Conservative party chair.
The Government will be resistant to some of the rhetoric around VIP lanes, but I urge them to look at the work of the Public Accounts Committee, of which I am a member. We have done extensive inquiries into PPE procurement over the last few years and have found a number of failings that cannot be excused by the urgency that we all accept was a key factor of that procurement. The Public Accounts Committee found that at no stage was any consideration given to
“potential conflicts between individuals making referrals through the VIP lane and the companies they were referring.”
It was therefore not surprising to see reports emerge of excessive profits from PPE contracts and confirmation of such conflicts of interest. The Government really must address that; the public will expect it if the Government are to live up to their stated ideals of transparency. The Prime Minister was apparently “absolutely shocked” to read of the allegations against Baroness Mone. We should attempt to save him from future such alarm. The Liberal Democrats tabled an amendment in the Lords to ban VIP lanes, which was voted down by the Conservatives, but I urge the Minister to reconsider.
I want to talk a little about social value, which gives me an opportunity to welcome the hon. Member for City of Chester (Samantha Dixon) to her place and to congratulate her on an excellent maiden speech. She summed up what social value is, in an excellent description of what it means in the city of Chester. I very much disagree with what the right hon. Member for North East Somerset (Mr Rees-Mogg) said about social value being in the eye of the beholder. I do not think that is true.
The hon. Member for City of Chester described extremely well what can be done when public procurement is used to attain a number of different social outcomes. The danger of not providing specific examples or definitions of social value in the Bill is that procurers will default to a definition of purely financial value. That would be a huge mistake and lead to a huge number of missed opportunities. I urge the Government to look again at the drafting of the Bill to enable it to unleash opportunities for charities and social enterprises to innovate in public service delivery, and to ensure that local communities are the key beneficiaries of an improved procurement regime.
The National Audit Office and the Environmental Audit Committee have found that departmental public procurement lacks consideration of net zero and environmental goals. We need a procurement system that encourages businesses to move their supply chains to a more sustainable model, but the Bill is just another piece of legislation introduced by the Conservative Government that fails to show the ambition that is needed. It is essential to have objectives that commit the Government to sustainable procurement as part of the net zero goal, and those should be included in the Bill. I hope the Government will look again at that.
The Liberal Democrats support efforts to reform to our procurement regime. We want to increase transparency and create opportunities for small businesses, but as it is currently written, the Bill will not achieve that. It fails to put an end to VIP lanes, it fails to grasp the opportunities for a system to create social value and it fails to support the Government’s own stated net zero goals. However, I am glad that the Government seem already to have acknowledged that there is much room for improvement in the Bill. They tabled almost 350 amendments to their own legislation during its passage through the Lords, and I will be interested to see how it proceeds through the Commons. I hope the Government will continue to engage constructively and look to address some of the concerns that have been outlined today.
Robin Millar (Aberconwy) (Con)
It is a privilege to follow the new hon. Member for City of Chester (Samantha Dixon). I congratulate her on her maiden speech and particularly on managing to introduce a reference to Lego. It is one of the great joys of speaking in this place to listen out for the new and innovative in a speech, and I commend her for that. I look forward to hearing more contributions from her in due course.
I rise to speak in favour of the Bill, which I believe will do much to improve value for money for public authorities, access for small and medium-sized businesses, and transparency for taxpayers. It will also deliver some of the ambition that my hon. Friend the Member for Totnes (Anthony Mangnall) alluded to in his speech. However, it is in considering a global Britain—an outward-looking, forward-leaning trading nation—that I will make some suggestions on how the Bill can be used to strengthen the Union of the United Kingdom. Like the right hon. Member for Ashton-under-Lyne (Angela Rayner), I must confess to feeling a frisson of excitement at the mention of procurement, having nearly two decades ago seen the introduction of the national procurement strategy for local government and the genuine impact it had on local government.
There is much to commend in the Bill. Having spent some time in local government as a councillor, I welcome the enhanced freedoms it offers to authorities, which will now have greater flexibility to devise tendering processes to fit their specific requirements. That will save time and money and allow councils to select contracts that best fit the needs of those they serve. Arguably, no one has a better picture of what is needed for a job than those who are responsible for delivery. No amount of checklists imposed by Brussels or Westminster can replace this local knowledge and hands-on experience.
As a former businessman, I welcome the Bill’s provisions on easy access to contracts for SMEs and guarantees of prompt payment. The creation of a single repository for business identification will prevent the duplication of paperwork, and the creation of a centralised procurement hub listing all tenders, frameworks and dynamic markets will improve access for small and medium-sized businesses across the public sector. Sadly, too often a labyrinth of paperwork and an anarchic landscape of procurement systems freeze SMEs out of public contracts and under-mine competition, adding costs to businesses and the taxpayer. This Bill makes strides towards eliminating those hurdles.
If I can commend the Bill as a former councillor and businessman, it is as an advocate for our Union that I see potential for strengthening the Bill. On the one hand, the Bill has positives in this regard. It contains a mechanism to ensure that procurement bodies throughout the UK have access to one another’s frameworks and dynamic markets—a move that may encourage co-operation. Likewise, the decision of the Welsh and Northern Ireland devolved authorities to opt in will ensure that businesses have improved access to contracts in the majority of the UK.
However, the devolution of the national policy statement power allows local authorities the autonomy, for example, to give regard to, but not necessarily conform to, the guidance of those centralising devolved authorities. The same applies to the devolution of the power to make regulations determining the form and location of the publication of procurement notices and other documents by authorities and suppliers. That raises the worrying prospect of further barriers to businesses attempting to access different parts of the UK, and of separate procurement hubs. Why? Because the devolved Administrations have on occasion pursued a strategy of non-co-operation. After all, on 1 June 2022 the Welsh Labour Economy Minister, Vaughan Gething, wrote to every council leader in Wales to state explicitly that his Administration will not assist local authorities that implement projects funded by the UK Government’s shared prosperity fund if they do not align with Welsh Government priorities.
Finally, as the majority of devolved Administration spending is funded by the UK taxpayer, the absence of a central, accessible and standardised repository of procurement information raises important questions about transparency. Is it not fair that UK taxpayers should have easy access to details about how their money is spent, wherever it is spent in the UK? Or must the spending of UK funds sent behind a devolved curtain remain unaccountable to their provider, the UK taxpayer?
That brings me to the subject of accountability. The Bill delivers powers to investigate authorities that may have breached procurement rules, and recent events suggest that this should be a particular cause for concern. A combination of journalistic investigation and leaks has revealed that the Scottish Government’s recent award of the contract for two island ferries to a political supporter was not in accordance with the terms of the advertised tender. We have also discovered that the state ferry procurement authority and civil servants advised against the award to Ferguson Marine, which had no history of such projects and would not provide industry-standard refund guarantees. Indeed, leaked documents revealed that civil servants had advised that the award may be unlawful, but this became apparent only when it was realised that the redactions in the documents could be reversed.
Subsequent investigation has revealed that Ferguson Marine was unique in receiving an in-person meeting and a 424-page briefing pack, much of which appears to have been copied and pasted into its official bid. The outcome is that the ships are now nearly four times over budget and over five years late, which is a significant cost to the UK taxpayer. It is particularly costly to the islands that the ferries were meant to serve, which have at times been cut off from the British mainland and from essential supplies. To top it all off, Audit Scotland recently revealed that a further £130 million used to bail out Ferguson Marine has gone missing due to sloppy accounting.
I cite this case study not to score points but to ask a very simple question: who watches the watchers? Unless the UK enjoys standardised reporting rules and a transparent, easy-access hub for public procurement information, its taxpayers have no guarantee that their money is being spent with integrity. This Bill offers high levels of flexibility, enough to account for the divergent needs of local and devolved authorities across our country. What it may benefit from, however, is a mechanism to ensure that the right to accountable public spending is shared across the United Kingdom.
I conclude with three requests to the Minister. The first is that a reserved right to commission an independent investigation into procurement by devolved Administrations, where there is good reason to believe that rules may have been broken, be included in the Bill. The second is that provision be made to ensure the comparability of data and UK-wide standards for recording and publishing tenders and procurement information. My final request is that he considers extending the Bill to Scotland to help secure value for money for taxpayers and to secure the benefits of competition across the UK for UK residents in Scotland. We have a duty to secure their interests and should expect at least a demonstration of how these standards will be met by the Scottish Government through an alternative route, if they persist in seeking to be excluded from the Bill.
Hywel Williams (Arfon) (PC)
Procurement in Wales is very much a devolved matter. I would have preferred to see our Senedd introduce its own legislation on the matter, but in this case there is a great deal of co-operation. The Welsh Government have opted to allow the UK Government to legislate on their behalf when it comes to developing post-EU procurement frameworks. Despite this, the Welsh Government are yet to recommend that the Senedd grants consent to the Bill. That is due to outstanding issues with the Bill passed by the House of Lords.
In particular, the Bill provides for concurrent powers in relation to devolved areas; the Welsh Government would much prefer these powers to be amended to be concurrent-plus powers, which would put in place an important constitutional protection by requiring the UK Government to receive consent before exercising powers in devolved areas. The Welsh Government are also concerned about the Bill’s commencement powers. I understand that there was an initial commitment from the UK Government that Welsh Ministers would have commencement powers in the Bill, but, as it is, the Bill provides for Ministers of the Crown to have those powers. I would be grateful if the Minister updated the House as to what progress has been made on those matters.
Given the creeping devolution power grab, I should note that there seems to be a significant degree of co-operation between both Governments on the Bill. I also welcome the fact that some amendments have already been made in the Lords at the request of the Welsh Government. I place on record my support for other amendments made in the Lords, particularly those setting out that requirements on climate change and the environment will be strategic priorities in the national procurement policy statement. I also welcome the amendments that will allow contracting authorities to exclude suppliers from contract awards for their involvement in activities linked to forced organ harvesting or unethical activities relating to human tissue. Those are non-Government amendments, but I hope that the UK Government will commit to retaining these changes. It would be good to hear from the Minister on that as well.
As I said, procurement is devolved and although much of the Bill is relevant to Wales, the Welsh Government will develop its own Welsh procurement policy statement, which will be underpinned by legislation recently passed in the Senedd: the Social Partnership and Public Procurement (Wales) Bill. The aim of that legislation, with its emphasis on outcomes rather than regulation and inputs, is to ensure that the new Welsh procurement regime delivers social, environmental, economic and cultural results, including fair work.
Many years ago, I co-delivered a long sequence of training for charity workers and trustees on the then new Charities Act. As a freelance trainer, living on my wits in the private sector, I needed no persuasion to see the value of that training. In respect of this legislation, the training and development of procurement professionals to ensure that they have the necessary knowledge and understanding of the new regime will be key to successful delivery. Both Governments intend to produce materials to support the delivery of the new regimes. There may well be significant differences between England and Wales in respect of procurement, so I ask the Minister to ensure now that the UK Government are mindful of potential divergence when commissioning future training and information, not least in respect of Wales securing materials and the actual delivery of training in both Welsh and English when intended for use in Wales.
Returning to the Social Partnership and Public Procurement (Wales) Bill, my Plaid Cymru colleagues in the Senedd are pushing the Welsh Government to set out clear targets for the proportion of procurement spend spent in Wales and spent with specific types of suppliers, such as small and medium-sized enterprises or social enterprises—that point has been mentioned by hon. Members on both sides of the House.
In conclusion, I am pleased to report that this is already a priority for my Plaid Cymru-run local authority Cyngor Gwynedd, which spent 61% of its procurement budget last year locally.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
It is a pleasure to be closing this debate on behalf of the Opposition. I thank right hon and hon. Members for their contributions this evening. My hon. Friend the Member for Blaenau Gwent (Nick Smith) highlighted the serious lack of transparency within our system, which led to huge waste during the pandemic, with millions handed out to many personal protective equipment companies. It was great to welcome my newly elected hon. Friend the Member for City of Chester (Samantha Dixon), who painted such a beautiful picture of her city that I am keen to visit it. She also highlighted the real benefits of social value and why it is a missed opportunity for this Government. My hon. Friend the Member for Birkenhead (Mick Whitley) also mentioned the support for social value.
As many Members have mentioned this evening, procurement is such an exciting and interesting topic! Let me be honest: if I went back and told that girl from Brixton that one day she would be closing a debate for the Opposition on this subject, she would probably have said, “What the hell is procurement?”
Having come to this place via local government and the London Assembly, I know how important procurement is to our communities. I know how local businesses, which are rooted in our communities, feel when they are sidelined for public contracts that they are more than capable of delivering. I know how important it is to make sure that we get value for every single penny of public money, and to make sure that we get the right framework for procurement to deliver the best services for our country.
Procurement accounts for a third of all public spending and most people involved with the sector will recognise the need for a simplified regime to replace the current daunting list of former EU regulations when approaching a contract. I want to work constructively with the Minister to make the new regime deliver for the British people as best it can, but unless the Government make the crucial amendments to the Bill that can deliver the value for money that our country deserves, it will be a missed opportunity. The Bill is also a missed opportunity to restore trust in our procurement process. We must recognise that trust in the procurement system has sadly been damaged by the mess of the personal protective equipment contracts on the Government’s watch.
I know the Government are keen to get maths on the agenda, so perhaps the Minister will not mind me doing a bit of “quick maths”— in the words of Big Shaq—in the House today. What do we get if we add a lack of due diligence over billions of pounds-worth of PPE, plus £18 million recouped from potentially fraudulent PPE contracts, plus an unfair VIP lane, giving access to lucrative contracts to those with connections to the Government? Let me tell the Minister: he will get £10 billion of PPE written off, with the public picking up a bill of more than £777,000 a day for PPE stored in China. As my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) said, that could cover 75,000 spaces in after-school clubs desperately needed by parents up and down the country. The Government do not need a report card to know that they have got an F in delivering value for money for the taxpayer.
No one is denying that covid caused incredible stresses in our procurement processes, but we on the Labour Benches were expecting the Government to learn the lessons from the PPE scandal. We expected the Bill to offer a system that gives the public confidence that it is fair and transparent, but what we have is a direct contract scheme that hands more, not fewer, powers to Ministers. It would give them a free rein to bypass crucial elements of whatever scrutiny they felt was needed. If the Minister wants an example of why scrutiny is important, I invite him to look at the Public Accounts Committee’s damning report on the awarding of contracts to Randox Laboratories. As the hon. Member for Richmond Park (Sarah Olney) said, there were a number of failings that cannot be excused. The report found that
“basic civil service practices to document contract decision making were not followed.”
It also said:
“The role of the Department’s ministers in approving the contract was also confused and unclear.”
It gets worse. Despite struggling to deliver on its first contract, the company was then awarded another contract extension worth £328 million, just seven months later. In this time, Randox saw a four-hundredfold increase in its profits in the year to June 2021. That is disgraceful.
Anthony Mangnall
Does the hon. Lady not take confidence from the platform the Bill creates whereby a business or organisation that has performed badly will not be able to bid into a contract? The whole point of the transparency measures is to stop that from happening. We have addressed those concerns and placed them in the very Bill that we are debating this evening.
Florence Eshalomi
I thank the hon. Gentleman for that point. What we in the Opposition are trying to say is that the transparency clauses the Government are talking about do not go far enough. We have a system that does not claw back the money that is wasted; at a time when we are telling members of the public to look at the cost of living, we are seeing money wasted and not clawed back.
Public transparency is not just a nice thing to say, but a vital tool to ensure that every single penny of public money is spent efficiently. I welcome some of the moves towards transparency in this Bill, but we can and must go further. We must look at Ukraine, which has created a transparency system that is open to the public and inspires trust. The Ukrainians have managed to do that while under attack by Russia. If they can do it, so can we.
Labour would follow in Ukraine’s footsteps and publish an accessible dashboard of Government contracts that is available to anyone as part of our public works pledge. We say that not only because transparency inspires public trust, but because it helps us to track the value created by public procurement in the UK. That matters, because value for public money and spending is ultimately about value to our communities. It is about creating well-paid jobs, ensuring environmental standards are fit for the next generation and preventing a race to the bottom on workers’ rights.
To that end, this Bill is a perfect chance to guarantee a strong commitment to social value and legislation. While I welcome some of the significant progress made on social value in the Lords with the national procurement policy statement, the Bill sadly does little to further the promise of social value or to build on the promise of the Public Services (Social Value) Act 2012.
Labour would go further. Our public works pledge would make social value mandatory in public contract design, but that is not all we would do. We would get tough on suppliers who fail to deliver for the taxpayer. We would guarantee transparency on how taxpayers’ money is spent. We would cut the red tape to give our SMEs a fair chance at winning contracts. We would oversee the biggest wave of insourcing in a generation to deliver public services that we can all be proud of.
The Bill is large and technical and there are many things I look forward to working constructively on with the Minister during line-by-line scrutiny. In that spirit, I end my remarks by praising the progress made on the Bill in the other place. Important amendments on the national procurement policy statement and protecting human rights are now included in the Bill as a result. I close by urging the Minister to commit today that the Government will not roll back on those key victories—that is vital. I hope he will work with me to ensure that our procurement system delivers for people up and down this country.
The Parliamentary Secretary, Cabinet Office (Alex Burghart)
I warmly welcome the new hon. Member for City of Chester (Samantha Dixon). I could not help but notice that the Chamber filled up slightly when she was speaking—almost as though she was more popular than the subject under debate today. I genuinely enjoyed her speech; as a former history teacher, the only thing I was disappointed not to hear mentioned was a beautiful silver penny from the early 10th century, which seems to show the walls of Chester. It was issued, we think, by Alfred the Great’s daughter—another great woman who represented her city.
The Bill before us is a major and exciting piece of post-Brexit legislation. It is an opportunity for this country to take back control of its procurement regime to the advantage of our businesses, our authorities, our public services and our country. I must at the outset say some words of thanks to Lord Agnew, who was instrumental in seeing this legislation drafted in the first place, to my right hon. Friend the Member for North East Somerset (Mr Rees-Mogg), who played a fundamental role in ensuring it was prepared for the statute books, and to Baroness Neville-Rolfe and Lord True, who took the Bill through in the other place.
Despite some of the remarks made by Opposition Members, I also thank the Opposition for their constructive stance towards this legislation. It is important that we get this right. Enormous opportunities are there to be taken from this £300 billion-worth of public procurement. We on the Government side of the House can very much see how those advantages will be made.
As I have said, the Bill will replace the current bureaucratic and process-driven EU regime for public procurement by creating a simpler and more flexible commercial system that better meets our country’s needs while remaining compliant with our international obligations.
John Spellar
I know that the Minister has to talk about Brexit and all the rest of it to please those on his Back Benches, but surely the real problem is not in Brussels but in Whitehall, with Ministers who will not get a grip of Whitehall and behave like every other European country by backing our own industry.
Alex Burghart
If the right hon. Gentleman had witnessed the consultation that was held on the legislation, he would see that the problem very much was in Brussels. For a very long time now, authorities and businesses of all sizes in this country have been aware of the enormous limitations in the way in which EU procurement rules are set out. The Bill cuts through that.
Alex Burghart
The right hon. Gentleman says that it does not, but the shadow spokeswoman, the right hon. Member for Ashton-under-Lyne (Angela Rayner), said at the start that it did and praised the fact that it was creating a single rulebook. This will make it easier for our authorities to procure decent services from people who will be able to provide better value for money and will be held to account better. I am very pleased that it is this Government who are bringing it forward.
Opening up public procurement to new entrants such as small businesses and social enterprises so that they can compete for public contracts is a major part of this work, as is embedding transparency throughout the commercial lifecycle so that the spending of taxpayers’ money can be properly scrutinised. The main benefits of the Bill have been reflected by hon. Members on both sides of the House, including my hon. Friend the Member for West Worcestershire (Harriett Baldwin). By delivering better value for money, supported by greater transparency and a bespoke approach to procurement, the Bill will provide greater flexibility for buyers to design their procurement process and create more opportunities to negotiate with suppliers. As my right hon. Friend the Member for North East Somerset said, that will drive better value for money.
As we slash red tape and drive innovation, more than 350 complicated and bureaucratic rules governing public spending in the EU will be removed. We are creating better and more sensible rules that will not only reduce costs for businesses in the public sector, but drive innovation. That will be at the heart of our work as we encourage authorities to publish pipelines that allow businesses of all sizes to prepare for contracts in new and interesting ways.
We will make it easier for people to do business with the public sector. The Bill will accelerate spending with small businesses. A new duty will require contracting authorities to consider SMEs, and will ensure that 30-day payment terms are made on a broader range of contracts.
We also intend to take tough action on underperforming suppliers. The Bill will put in place a new exclusions framework that will make it easier to exclude suppliers who have underperformed on other contracts. As has been mentioned a number of times, it will also create a new debarment register—accessible to all public sector organisations—that will list suppliers who must or may be excluded from contracts.
A number of hon. Members on both sides of the House have referred to the excellent work that has been done on the ProZorro service in Ukraine. I am pleased to be able to let the House know that Ukraine was on our advisory panel and has actually informed our work, and our single digital platform takes a lot from what Ukraine has done with ProZorro. The platform will enable everyone to have better access to public procurement data. Citizens will be able to scrutinise spending decisions, suppliers will be able to identify new opportunities to bid and collaborate, and buyers will be able to analyse the market and benchmark their performance against others on spending with SMEs, for example—better transparency; better for taxpayers.
Nick Smith
Will the Minister please tell us when his single digital platform will be ready for use by industry across our country?
Alex Burghart
The platform is based on a system that we already have. We are confident that we will be able to introduce it in line with bringing this Bill into force. Obviously, we have to pass the legislation and get Royal Assent, and then there will be a settling-in period. But it is going to be functional very soon.
We are also strengthening exclusion grounds. The Bill toughens the rules to combat modern slavery by allowing suppliers to be excluded when there is evidence of that, accepting that in some jurisdictions it is unlikely that a supplier would ever face conviction. My hon. Friend the Member for Totnes (Anthony Mangnall) made some important points on that score. It is absolutely right that we should be able to debar suppliers who have engaged in such dastardly crimes. It is too soon, however, to say exactly which suppliers are going to be debarred, but he has read the legislation and can see what the potential is. We will consider suppliers according to a prioritisation policy. Once on the list, suppliers will stay on it for up to five years unless they can show that they no longer pose a risk—these are the self-cleaning clauses. Any contracts awarded during an investigation can be terminated if the supplier is debarred. Safeguards are built into the grounds to stop suppliers from renaming themselves. I am happy to talk about those.
Alicia Kearns
I thank my hon. Friend for meeting me earlier today. It was enormously appreciated and I thank him for his time. How does he plan to overcome the risk of playing whack-a-mole—business after business being involved and MPs and others being relied on to flag them up? Will the procurement unit be proactive or will we instead focus on components and vulnerable sectors to ensure that we have the protections we need?
Alex Burghart
My hon. Friend raises an excellent point, which I was happy to discuss with her earlier. Obviously, the issue is under active consideration. In her speech, she also referenced debarment. I reassure her that the debarment provisions allow for proactive investigations into any supplier or subcontractor and that cases will be selected by the Minister for the Cabinet Office. Selections of cases will be governed by a robust prioritisation policy, which we will set out in due course. The debarment list will be publicly available for all contracting authorities to consult, demonstrating how transparency is at the heart of the Bill.
Value for money is a core component of what we are seeking to achieve. I assure the hon. Member for Birkenhead (Mick Whitley) that buyers will be able to give weight to bids that create jobs and opportunities for communities in the delivery of a contract, supporting and levelling up our objectives. Now that we have left the EU, central Government buyers can reserve competitions for contracts below certain thresholds for suppliers in the UK and/or SMEs and social enterprises only.
I am pushed for time, Madam Deputy Speaker, so allow me to draw my remarks to a close. This key legislation has been made possible only through our having left the European Union. It comes at a time when we have a need for a new procurement policy in this country. I say to the right hon. Member for Ashton-under-Lyne, who made a number of claims about PPE and VIP lanes, that the Bill provides strong safeguards to preserve the integrity of procurement. Equal treatment obligations require that all suppliers participating in the procurement must be treated the same. Additionally, any conflicts of interest should be identified for anyone acting for, or who has an influence on a decision made by or on behalf of, the contracting authority in relation to the procurement. If a conflict of interest puts a supplier at an unfair advantage and if steps to mitigate that cannot prevent that advantage, the supplier must be excluded. Furthermore, the direct award provisions have clear and narrow parameters for use. They include a new obligation to publish a transparency notice before making a direct award and maintain obligations to publish contract details once awarded.
This Government are absolutely committed to integrity, transparency, value for money and delivering for the British people. This Bill will make a difference to our procuring authorities, to our public services and to our taxpayers. It is good for our authorities, our taxpayers and our local communities, and it is good for our country. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
PROCUREMENT BILL [LORDS] (PROGRAMME)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Procurement Bill [Lords]:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 23 February 2023.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming Committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(Andrew Stephenson.)
Question agreed to.
PROCUREMENT BILL [LORDS] (MONEY)
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Procurement Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of:
(a) any expenditure incurred under or by virtue of the Act by a person holding office under His Majesty or by a government department; and
(b) any increase attributable to the Act in the sums payable under or by virtue of any other Act out of money so provided.—(Andrew Stephenson.)
Question agreed to.
SUPPORTED HOUSING (REGULATORY OVERSIGHT) BILL (MONEY)
King’s recommendation signified.
Resolved,
That, for the purposes of any Act resulting from the Supported Housing (Regulatory Oversight) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Andrew Stephenson.)