Trade Bill

Debate between Baroness Burt of Solihull and Lord Lennie

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 29th September 2020 Grand Committee

[Lord Lennie (Lab) [V]]

My Lords, like others, I regret that the Committee stage of the Trade Bill has to take place in a Covid-secure manner—our new normal—and I look forward to when we can all return to the Chamber. Until then, we must make the best of what we have. I am extremely grateful to all the staff who have worked so hard to make this all possible.

Trade is an essential component of the UK’s future economic recovery from Covid-19 and to our continuing future prosperity. Labour’s overarching concern is to ensure that the necessary protections and measures that have been developed over more than a century of rising standards are not put at risk by this or any other future Government. We cannot have a series of trade deals that open the door to reduced workers’ rights or living standards or to higher carbon emissions. To ensure that this is not the case, Labour supports acceding to the GPA after Brexit as an independent member, while safeguarding the capacity for public bodies to make procurement decisions in keeping with public policy objectives.

The Government have said that it is their objective to join the GPA as an independent member, with substantially the same arrangements that we currently have with the EU. If we are to have this, there is the significant matter of retained EU law. For that statement to hold true, surely the EU law must continue to apply beyond 31 December 2020. As an example, the public contract regulations will end at the end of next year. It remains essential that the UK maintains the strongest procurement systems for companies in the UK. Labour is about having the strongest possible procurement system. This would instruct the Government to pursue with GPA partners the inclusion of labour standards, environmental standards, support for small and medium-sized enterprises and the consideration of the public health consequences in our annexes to the GPA.

Amendment 1 refers to

“labour market interventions and compliance with ILO standards”.

We want to ensure that companies that fulfil their obligations to the workforce and meet their commitments to working with trade unions in a constructive manner are not undercut by companies that do not. This would reward businesses while supporting their workforce. ILO standards seek to support and protect workers in supply chains, especially those exposed to modern slavery, which are a vital component of procurement.

Amendment 2 refers to environmental exceptions with carbon considerations. Public procurement through the GPA must help in the fight against climate change. Current UK minimum standards take into consideration energy and water usage, carbon footprint, resource efficiency and life-cycle costs in order to set minimum standards of sustainability for government purchases. Our standards need to be protected, both to maintain these procurement standards and to ensure that our schedules at the GPA remain up to date, with action to meet the climate crisis.

Amendment 3 seeks to ensure that SMEs have access to procurement contracts, which can often be a real problem. Now, more than ever, this is essential if this recession is to turn into recovery. Amendment 4 seeks to improve the way in which public procurement operates by addressing public health. The public health value of a provider should be a factor in awarding contracts, not just price. Public health medicine is part of the greater enterprise of improving the public self and that is why procurement matters in this respect.

The TUC has a range of concerns about the provisions of the GPA being more limited than the current measures within the EU procurement directive of 2014, which were transposed into UK domestic law through the public contract regulations 2015. The TUC says that there is no condition in the GPA that obliges member states to ensure that, when performing public contracts, contractors comply fully with the applicable environmental law and with the social and labour standards set out in the EU and national laws in collective agreements. The TUC believes that provisions must be made in the Bill to enable contracting authorities in the UK to include wider definitions of social value and price-quality ratio as well as obligations set out in respect of social, environmental, labour law and collective agreements within their tender specification, contract evaluation and award criteria. These should be incorporated into the regulations that replace the public contract regulations when they expire in December 2020.

Amendments 100, 101 and 102 seek to ensure that any secondary legislation needed to implement commitments under the GPA following our accession should be affirmative. Labour believes that Parliament should have the right to scrutinise the all-important “coverage schedules” that the Government will lay before the WTO in respect of our accession to the GPA.

We are minded to support Amendment 5 in the name of the noble Lord, Lord Hendy, which would ensure that the UK could not implement the GPA if it would prevent public authorities from insisting that public procurement tenders and contracts conform to the UK’s ILO commitments.

I hope that the Minister considers the long-term economic, social, environmental and labour values to be gained from this approach. Unless we are prepared to use this moment, it is hard to see how we will maintain the standards of procurement that we currently have, let alone enhance them. I beg to move.

[Baroness Burt of Solihull (LD)]

My Lords, I shall speak to Amendment 3 on small businesses, to which I have added my name. As we enter the post-transition and post-Covid world of international trade, we must ensure that the role of SMEs in procurement is fully protected so that it can help strengthen the UK’s economic playing card as we navigate the current turbulence and beyond.

At Second Reading, I asked the Minister, the noble Lord, Lord Grimstone, whether, given our new freedom from the EU, we should adopt the policy of the US, Canada, South Korea and Japan to put an annexe in our GPA schedules to allow them to set aside and disapply regulations on behalf of small businesses and other organisations to help bring parity of support for small businesses in accessing markets against larger firms. After all, is that not why the UK decided to leave the EU in the first place? The noble Lord informed me that non-discrimination is the core principle of procurement in the UK and we do not have set-asides for SMEs in international agreements. Okay—I hear him. But whether or not it is intended, it can be more difficult for small businesses to compete against larger firms by virtue of their size and the complexity and requirements of the procurement process.



I will not detain the Committee by going through them all, but when pitching for public contracts, I suggest that few small businesses would feel that the playing field was equal. Take late payment, the scourge of small businesses, particularly because of the relative power of the organisation doing the procuring. The Federation of Small Businesses has long been calling for bad payers to be barred from applying for government contracts. I know that this is something that the Government acknowledge, and this amendment would effectively help the Government to defend themselves against late payers on the trading stage. Why does the Minister feel confident that, when we are competing against the likes of the US, South Korea and Japan, UK small businesses will get fair access to public contracts? Nobody wants to see poor payment practices on the trading stage; this is about fairness and parliamentary accountability, so I would appreciate some commitments from the Minister today.

That brings me to the point of the amendment. It lays a duty on the Government to ensure that small businesses can compete fairly to get greater access to procurement contracts in countries to which the GPA applies. It makes sure that the Government fulfil this obligation by laying a Statement before Parliament reporting that this has been done, and the outcome. If the Minister is committed to a level playing field for small businesses, why not agree to put it into law?