Economic Activity of Public Bodies (Overseas Matters) Bill (Third sitting)

(Limited Text - Ministerial Extracts only)

Committee stage
Thursday 7th September 2023 Public Bill Committees

[The Chair]

You are clearly a very busy man.

Richard Hermer: That is very kind of you.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Felicity Buchan)]

Q116 As we know, the Bill does not in any way change the UK’s foreign policy approach to the middle east. Would you agree that the Bill is in line with the Government’s obligations under international law?

Jonathan Turner: Yes, I would. I would go further and say that it has the beneficial effect of securing the UK’s compliance with international law, particularly with World Trade Organisation agreements, which impose restrictions on the UK central Government and a very wide range of public bodies. The Bill and its enforcement will ensure that activities or decisions of subordinate public authorities will not put the UK in breach of, particularly, the Government procurement agreement, which is part of the World Trade Organisation collection of agreements.

[Felicity Buchan]

Steven?

Steven Barrett: Yes, although I hesitate to reply on that because complying with international law is a political position. What I would perhaps like to make clear and explain to the Committee is our constitution and how we work. It is really important that this is understood. It was clarified recently by the Supreme Court, so we are back to now understanding the constitution, and we have a unique relationship with international law. If you wanted, we could all go to the British Museum and look at some 2,500-year-old international law—in fact, it is older than that. There are great masses of it. Absolutely no legal jurisdiction in the world makes all of it binding on that jurisdiction.

If you take a European-style constitution after the war, it will use a constitutional court to choose which bits of international law it wants and does not want. It makes it the job of its judges and courts to do that. When we were in some constitutional confusion after coming out of the EU, I wondered whether that was the system that we would use, but what then happened was quite clear.

You may all remember the Northern Ireland case about the impacts of the protocol on the Acts of Union: it went to the courts, and the courts very clearly said, “No, this is not for us.” We are clear that we do not have a continental-style system in which a court can break international law or exit it for us. We have a system where you deal with it. This Parliament deals with international law, and we draw a line that we call incorporation.

Incorporated international law is binding upon us. You will all remember Miller 1 and the fuss that the Government had where they pretended that they could get out of the EU without passing an Act. No! The part of international law that made up the EU was incorporated international law. To get rid of incorporated international law, they had to use an Act of Parliament. If it were unincorporated, that would be entirely different.

That is the line that we draw. It is really important that people start remembering it. We have not really needed to know about it since the ’60s. In his speech clarifying this, Lord Reed, the President of the Supreme Court, was very forgiving: he just called it a misunderstanding that had arisen. I like to call it a confusion, because nobody should feel guilty about this: these are bits of the constitution that we have not had to wield for decades. How was anybody supposed to know instantaneously that when we left the EU, this was what would happen? But that is what happened.

It is the role of Parliament, not Government, to control the operation of international law, and you do that through Acts of Parliament. This Bill is lawful—of course it is—because it is simply a mechanism for doing that. In his most recent note, I note that Mr Hermer concedes that. The only relevant part to come out of a lawyer’s lips is whether you can or cannot do something; whether you should or should not is entirely for you. He says that you can, and I think that that is enough from any lawyer.

[The Chair]

Given the constraints on time, I will bring in other members of the Committee. If there is time at the end, I will bring the Minister back in.

[Felicity Buchan]

I just have a quick segue from that.

[The Chair]

A very quick one, then.

[Felicity Buchan]

Q Today we will be hearing from Richard Hermer KC, who has provided legal advice to the Labour party. Could you quickly give your views on that advice? I turn to Jonathan, since Steven has already addressed that.

Jonathan Turner: Most of his advice, I think, is wrong. I have set out detailed reasons why his opinion that was published and circulated at the time of Second Reading was wrong, but I would like to take the opportunity to address the note that he sent round last night, because I am afraid to say that it is still wrong.

One of the points that he made before claimed that this Bill would effect a profound change in the autonomy of local government. That is just not correct: there are existing, very substantial restraints on the autonomy of local government when it comes to procurement and investment. Some of those will be replaced by the Bill and some will continue, but it is simply not the case that this makes a sudden and enormous change. He has accepted that section 17 of the Local Government Act 1998 effected a substantial restriction on local government bodies, but he has ignored—even though I have sent him two emails pointing this out—the EU legislation, which effected a very substantial restriction.

He goes on to say that the Local Government Act applied only to local government bodies, not to other public authorities, but the EU legislation applies to a very broad range of public authorities. The regulations implementing the EU directives in England and Wales and Northern Ireland are to be repealed by the Procurement Bill, which is in its final stages. It does not affect the regulations implementing the EU directives in Scotland, which will apparently continue in force; the memorandum from the Scottish Government to the Scottish Parliament suggests that that will continue to be the case.

The position is that this Bill effectively replaces that EU legislation as far as England and Wales and Northern Ireland are concerned, within its terms, in relation to territorial matters. What the Bill really does—the most important aspect of the Bill—is transfer a matter that was regulated by EU law into a matter that is regulated by national law, and set out the national law governing this particular matter. It is part of the Brexit agenda of, if you like, taking back control: you may agree or disagree with the decision that the British people made, but it was made. A major part of the function of this Bill is to replace pre-existing EU-based legislation with UK- based legislation, together with the Procurement Bill.

--- Later in debate ---

[The Chair]

To the other two witnesses, it might be helpful in terms of our time constraint if you could initially confirm whether you are happy with the evidence already given, and if not, please say so. Secondly, could you raise any additional points that you do not think have come out in the first response? I hope that is clear.

Dave Timms: I agree entirely with Yasmine’s comments. Hopefully we will get to talk specifically about the environmental implications, but I would add to her answer the pernicious way clause 1 is constructed and the impact that will have on civil society organisations going about their reasonable activities to try to create environmental or social change. We have heard a lot of the witnesses say that it does not have gagging implications or free speech implications, but the actions of civil society organisations and members of those decision makers are drawn in by the nature of clause 1 and subsection (7), which talks about “any person seeking to persuade the decision-maker”.

This is the state impinging on the activities of civil society organisations that are trying to achieve meaningful social change and trying to ensure that their money, their local authority or university is not complicit in driving destructive human rights or environmental activity. In that sense, this is a direct attack on the ability of civil society to go about the activities we would consider to be legitimate.

Peter Frankental: I totally agree with Yasmine and David. Public procurement in the UK, according to the OECD, accounts for 14% of GDP. That is enormous potential leverage to incentivise ethical business. That leverage is largely being lost because of the disincentives that Yasmine referred to. Let me give you one example of why the disincentive is so great. If a public body—say, an NHS trust—were to decide not to tender with a company in Malaysia, or a contractor in the UK that sources from Malaysia, and source rubber gloves from a factory that had been linked to human rights abuses, that would implicate the state of Malaysia. Under international law, states have a duty to protect, and that means holding companies accountable. If a company is involved in human rights violations or labour rights violations, the state has to some extent failed in its duty to protect, so disapproval of foreign state conduct is invoked. I do not think that the public bodies will want to go anywhere near giving effect to their human rights due diligence findings, because the risk and cost to them would be too great.

[Felicity Buchan]

Q I have two questions, so perhaps you can be brief on the first one. The first is quite simple: are you supportive of the BDS movement?

Yasmine Ahmed: As a matter of principle and policy at Human Rights Watch, we do not take a position on BDS. What we do say very clearly is that individuals, and whoever wants to, have the right to engage in BDS. It is part of their right to freedom of expression, association and assembly.

Dave Timms: For us, the position is exactly the same.

Peter Frankental: We do not take a view on BDS either, but we support the right of people to advocate for BDS. Can I just expand on that a little bit? More widely, we see the situation where human rights advocates and human rights defenders all over the world are delegitimised and stigmatised because of their human rights advocacy. All kinds of pretexts are given for this, such as offending public morals, being disloyal to the state and—as in this particular case, with this legislation—racism and antisemitism.

There is no reason in principle why any human rights advocate should not advocate for the human rights of Palestinians or criticise the human rights record of the state of Israel, and they should not be tarred with the brush of racism or antisemitism. That is a very dangerous road to be going by. If that approach is taken, will human rights advocates who draw attention to human rights violations of the Rohingya in Myanmar and the track record of the Government of Myanmar be accused of being anti-Buddhist? Will those who criticise the human rights record of the Indian Government with regard to the treatment of minorities be accused of being anti-Hindu? What of those who criticise human rights violations in the Gulf states? Anyone who advocates for BDS, which is a peaceful, non-violent means of achieving change and holding Israel accountable for human rights violations—Israel has enjoyed a considerable degree of impunity over the years—should be able to do that without being tarred with the brush of racism or antisemitism.

[The Chair]

Minister, do you have a quick follow-up?

[Felicity Buchan]

Q You have raised concerns that the Bill may prevent ethical procurement decisions, but would you not agree that there is nothing in the Bill that prevents, for instance, the divestment of fossil fuels, provided that it is not country-specific, and that there are numerous exceptions in the Bill such as on labour market misconduct and environmental misconduct? We are very much alive and dealing with ethical procurement decisions here.

[The Chair]

It is an agree/disagree question.

Dave Timms: I am afraid that I completely disagree with the assertion that there is any protection whatsoever for fossil-fuel divestment campaigns. We are extremely concerned about the chilling effect that the Bill could have on those. You have said that fossil fuels are not specifically mentioned, but I am afraid that the Minister does not have the ability to say what is excluded because of the construction of the first clause, which mentions

“a reasonable observer of the decision-making process”.

In fact, the Department’s own delegated powers memorandum, in terms of contracting with suppliers, talks about being “affiliated with certain countries” and divestments from “organisations” that are affiliated “with certain countries.” So if we are talking about divestment of fossil fuels from, say, Saudi Aramco, Equinor, Petrobras, Gazprom or other companies that are highly associated with a foreign Government, we think that will be brought very quickly into the remit of the legislation.

Also, as I said before, because it bites on the way people go about campaigning, and all the statements made during that, you will often see arguments for fossil fuel divestments being couched in terms of getting off fossil fuels because of the damage of climate change, but also because of the record of particular regimes. Those decisions could very quickly be blocked by this legislation. So I see no reassurance whatsoever that it would not have a significant impact on fossil-fuel divestment.

Nor do we take any reassurance at all from the exemption around environmental misconduct. It applies only to illegal environmental harm, yet so much environmentally destructive activity is conducted lawfully. We can look at something like the due diligence discussions that happened during the Environment Act, where the limitations on reporting on illegal deforestation were revealed because so much of the deforestation due to soy in somewhere like Brazil happens entirely lawfully. Or you can take something like Indonesian palm oil, where the legal status of land is extremely complicated and it becomes almost impossible to determine what land conversion has happened legally or illegally. How can a local authority or a public body possibly be expected to navigate that kind of complexity? What they will do is say that this legislation blocks them. So I am afraid that I do not accept your point.

--- Later in debate ---

[The Chair]

Q We will now hear oral evidence from Richard Hermer KC from Matrix Chambers. We have until 12.45 pm for this session. Could the witness introduce himself for the record please?

Richard Hermer: Good afternoon, Sir George, and members of the Committee. My name is Richard Hermer. I am a barrister, as you have said, at Matrix Chambers. My areas of expertise most relevant to this Committee are in public law and international law, including international humanitarian law. I advise and represent a wide range of individuals, companies and, indeed, Governments, and I lecture on those topics both here and abroad.

[Felicity Buchan]

Q In your advice, you argue that the Bill places unprecedented restrictions on public authorities, but would you not agree that there are already substantial restrictions on public authorities, for example, to ensure good value for money or to comply with the UK’s obligations under the Government procurement agreement?

Richard Hermer: Good afternoon, Minister. Of course, law imposes on all decision makers—be it local authorities or public bodies—a range of restrictions through law on their decisions, whether it is a purchasing decision or any other type of decision. That is what the legal framework does. I have identified in the two written opinions why aspects of this Bill are unprecedented in respect of its impact on human rights and international law. I agree with you as a matter of generality, but I disagree with you, Minister, as to this particular Bill.

[The Chair]

I am not going to bring the Minister back in. We have only 15 minutes for this session.

--- Later in debate ---

[The Chair]

Q Finally, we will hear oral evidence from Melanie Phillips, a columnist for The Times. For this session we have until 1 pm. For the purposes of the record, could the witness briefly introduce herself?

Melanie Phillips: I am Melanie Phillips. I am a British journalist and I spend much of my time these days living in Israel.

[Felicity Buchan]

Q The BDS movement almost exclusively targets Israel. Can you talk about the effect of the BDS movement on the Jewish community and on community cohesion?

Melanie Phillips: Many people, pretty understandably, draw a distinction between criticism of Israel and antisemitism. However, my view is that what we are all talking about when we talk about concerns over the way Israel is treated in public discourse is not criticism but a unique campaign of delegitimisation and demonisation.

Now, it should not follow that, even if you demonise the state of Israel, British Jews get it in the neck. But it is a fact—it is on record—that every time the public prints are full of not just criticism of Israel’s behaviour but a presentation of Israel in which it is a unique human rights abuser in the region, attacks on British Jews, both verbal and physical, go up. So there is in practice—whatever the reasons you may adduce—a complete connection between the two. In my view, that is not really surprising. For many people in this country and elsewhere, their understanding of Judaism, the Jewish people, Jewish history and the connections between all those things and the land of Israel is extremely limited. Many people do not understand how intimately Jewish identity—Jewish religious identity—is wrapped up with the land of Israel.

For all those reasons, a boycott movement that stigmatises Israel, singles it out for treatment afforded to no other country and identifies it, therefore, inescapably as a unique evil in the world must have an impact on the Jewish community.

[Felicity Buchan]

Q I have one quick follow-up question. There has been a lot of talk about clause 4, which prohibits statements of intent to boycott. Would you agree that we need clause 4, because a statement of intent sows community division without achieving anything?

Melanie Phillips: Yes. A statement of intent is clearly no more or less than that, but the evil of a statement of intent is that it is a statement of delegitimisation—a statement that Israel is uniquely evil, that it uniquely requires this kind of approach. Therefore, any Jewish person in Britain who supports Israel is deemed to be fair game, and any Jew is deemed to be fair game because people assume, rightly or wrongly, that they identify with Israel.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Q I understood the Bill to be largely about the Conservative party meeting its manifesto promise to address BDS—in fact, the Prime Minister restated that recently. If that is the main purpose of the Bill—and I have to say I am in favour of that—do you think we need the exemption that means that Israel and the Palestinian territories are the only places that the Secretary of State cannot regulate for? Does it add anything extra to the Bill?

Melanie Phillips: I think there is no contradiction between the two. As you say, the Bill is the fulfilment of a manifesto commitment. The manifesto commitment is a broad one, and the Bill is a broad one, as you heard from your previous witnesses. There are exemptions of different kinds, and the particular exemption you are talking about, which singles out Israel, is done for a particular reason: in a Bill that deals generally with boycotts, there is one boycott that stands out as unique, which is the boycott movement against Israel. It has characteristics that do not apply to any other action taken against any other country, group or cause. In the view of the Government, and I agree with this view, it is a uniquely evil impulse, designed uniquely to destroy Israel as the Jewish state—as the Jewish homeland—and with malign potential repercussions on the Jewish community. Consequently, because it is a unique situation, it requires a specific exemption, as it is so bad that it cannot be ever thought that it could ever happen.