Public Contracts (Amendment) Regulations 2022

Debate between Baroness Chapman of Darlington and Lord Scriven

Tuesday 13th December 2022 Grand Committee

[Lord Scriven (LD)]

My Lords, I thank the Minister for presenting this set of regulations in such a clear, concise and understandable way to try to make sense of the existing situation post the situation that she talked about.

These Benches support the thrust of and details in the statutory instrument but I want to ask a couple of questions. First, I am somebody who is not an expert in statutory instruments, but the dates on which the SI is to be made and come into force have three asterisks next to them. Is that normal? When is this statutory instrument intended to come into force?

The second issue is to do with the thresholds and the use of VAT. Some goods are exempt from VAT while some have a VAT level of 5%. The effect of putting in the statutory instrument the figures of £12,000 and £30,000 will be that some contracts, for example in printing, will by default have a slightly different total value than those with a 20% rate of VAT because they are exempt from VAT. Would it not be more sensible to use the figures of £10,000 and £25,000 and include a provision that the threshold for the contract will be at the rate of VAT for the goods and services being procured, rather than having a blanket rule when some goods and services do not have a VAT rate of 20%?

With those questions, as I say, these Benches support the thrust of and reasoning for this statutory instrument.

[Baroness Chapman of Darlington (Lab)]

This is really just about making a change in order to keep things the same. We certainly agree with the decision about NHS trusts and foundation trusts but I have a question about services or goods that are VAT-exempt and the Government’s thinking on them. There also seems to be a delay in this issue coming about and it being rectified. I wonder whether that may has disadvantaged some businesses, particularly small businesses, over that period.

I notice that, when consideration of this instrument was raised in another place, my colleague, Flo Eshalomi, asked specifically why it has taken the Government nearly a year between introducing the new regulatory scheme on 1 January 2021 and attempting to fix this inconsistency. When the Minister responded, he did not answer that at all. I am concerned, as it is troubling that something so straightforward and uncontentious was allowed to drift for so long. What does the Minister make of that? Does she have an assessment of what the impact of that might have been?