Procurement Bill [HL]

Baroness Hayman of Ullock Excerpts

Committee stage
Wednesday 13th July 2022 Grand Committee

Debate on Amendment 45 resumed.

[Baroness Hayman of Ullock (Lab)]

My Lords, I will just wind up the debate we had on Monday. In this group, I have Amendment 52, which is about adding the improvement of

“economic, social and environmental well-being”

to the procurement objectives. I also put my name to a similar amendment, Amendment 48 in the name of my noble friend Lord Hunt of Kings Heath. I completely support everything that he said in his introduction; it covered what I would have said in support of my amendment, so there is no point in going over all that again. In fact, we discussed a number of amendments in this group that looked at the economic, social, environmental and cultural benefit and value of the Bill and considered what we mean by “public benefit”. It was a useful debate to explore those potential objectives and what the definition of “public benefit” is. It will be interesting to hear the Minister’s response to those discussions.

I also supported the amendments laid by my noble friend Lady Thornton, Amendments 47A and 52A. As my noble friend said, we believe that maximising social value is something that contracting authorities should have regard to. This is in line with the social value Act and the national procurement policy strategy, so this should all be put in line together. We also know that the Government are committed to expanding the use of social value within procurement to maximise these areas. The noble Baroness, Lady Parminter, who is not in her place today—

[Baroness Parminter (LD)]

I am in my place.

[Baroness Hayman of Ullock (Lab)]

Oh, the noble Baroness is there; I was looking for her in the place in which she sat on Monday. She moved, just to confuse me. This is the trouble with picking things up later.

The noble Baroness rightly said that meeting net zero is a government-stated objective and we believe, as she does, that this should also be an objective within the Procurement Bill. It could make a genuine difference, should that be something that needs to be taken account of. We also support those noble Lords who said in the debate that this helps to meet the levelling-up agenda as well as achieving net zero.

We know that social value is included in the NPPS—the national procurement policy statement—so I ask the Minister: if it is in the policy statement, why is it not referenced in the Bill? It concerns me that the policy statement can be changed at any point, so not having it in the Bill and just having it in the statement means that it is not absolutely embedded within the legislation. I will briefly mention that, between 2012 and 2020, there was no statutory guidance on social value. This inhibits its development, so we need to ensure that this does not happen in future.

I express strong support for Amendments 49 and 58 in the name of the noble Baroness, Lady Worthington, which are about climate and environmental matters and the importance of having these based within the Bill. She also said that “public benefit” needs further clarity, so I must ask again: does “public benefit” include environmental outcomes? It would be helpful to have further information on this. The noble Baroness, Lady Parminter, spoke importantly about the fact that using procurement in this way is an opportunity to drive behaviour change, because we are not going to achieve the Government’s net-zero objectives without behaviour change.

Amendment 45 in the name of the noble Lord, Lord Wallace of Saltaire, specifies a number of overarching requirements that a contracting authority must take due regard of when carrying out procurement. We support the main points that he made—particularly, as well as the carbon account, the ethical and human rights record of the supplier, as he said. I know that we will talk about this in a later debate, but that is important.

Amendment 53 in the name of the noble Lord, Lord Lansley, which the noble Baroness, Lady Noakes, introduced, again talked about defining “public benefit”. I think that the Minister can see that this is not party political: right across the Committee there is concern about what “public benefit” means and what it is going to deliver as part of the Procurement Bill. The noble Lords, Lord Wallace of Saltaire and Lord Purvis, also tabled amendments on this issue.

I finish by briefly mentioning an interesting briefing that I had from UKCloud. I do not know if other noble Lords have received it, but it is about the importance of maximising social value through procurement in the world that UKCloud works in—the cloud providers—and how doing so would be consistent with wider net-zero policy aspirations. UKCloud feels that it is important to support businesses in this country that are providing those kinds of platforms and support and that the sector can lead in the provision of clean, green technologies, which can help to digitise and decarbonise users of its services. It also believes that, if the sector got that kind of support from government, UK businesses would have the opportunity to really innovate and become leaders in this field. I found that an interesting briefing. If the Minister has not seen it, I would be happy to share it with him, because it had some interesting thoughts in it. The briefing also said that UKCloud feels that weighting should be given to make sure that cloud providers for the UK Government are paying their taxes in full on all earned income in the UK—that is an important point—and that they should have a clear and measurable track record of investing in local jobs and skills. The briefing has some interesting points about how procurement could help its particular type of business. I finish there and I look forward to the Minister’s response.

[The Minister of State, Cabinet Office (Lord True) (Con)]

I thank the noble Baroness and all those who spoke on this group on our previous day in Committee. It was obviously unfortunate that we could not finish this group then, but I am grateful to all noble Lords, including those who were here on Monday who are not able to be here today. It has been an interesting debate and I think that we will wrestle with the philosophy of this as we go forward. I have been interested in the contributions made.

I am constantly asked to define “public benefit”. One of the reasons why we have different political parties in this country and why politics has evolved is that, at different times, different people define it in different ways. The search for a total, accurate, 100% agreed definition that covers every possible eventuality may be an illusion. However, I understand that noble Lords are saying that they feel that there needs to be more clarity. No doubt we will continue this conversation on other amendments to come.

I was interested in this debate. As he knows, I have very considerable affection and enormous respect for the noble Lord, Lord Hunt of Kings Heath—it is very easy to say in this House that you have very considerable affection for somebody, because we are such a nice lot; I think generally we do mean it—and his experience. He said something very interesting. Having argued for his amendment, he said that this Bill would finish with something akin to what he wanted in it and that it would do that because it was a Lords starter.

The only way to interpret that is that the noble Lord would advocate using the power of the House of Lords to force the elected Government to include something in a Bill that they did not wish to include, in their judgment and in the judgment of the House of Commons. That is a perfectly legitimate point of view, but I was interested to see that the noble Baroness from the Labour Front Bench had signed that, as she just reminded us, and expressed her support for what the noble Lord, Lord Hunt, had said. Perhaps I should take this away and tell my friends that if ever there is a Labour Government, it would be reasonable for the unelected House to hold up Labour legislation indefinitely on a Lords starter in order to force change.

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[Lord True (Con)]

The noble Lord always slightly loses me when he rides off in his speeches. I have a vision of him lying awake, trying to get to sleep, thinking of these terrible right-wing Conservatives whom he always cites and seeing the worst in everything. I thought that the great tradition of the Liberal party and liberal values, which I was brought up with and adhere to, is to give space to variety and not uniformity; there should be flexibility, with opportunities for local judgments and for contracting authorities to make them. The concept of public benefit is wide and flexible and should be so to give contracting authorities a degree of discretion to consider whether their specific contracts can deliver greater benefits than they otherwise would.

For example, contracting authorities are already able to make it clear in their technical specifications that fair trade options can be included in the products provided to meet the requirements of the contracts, provided that they do not discriminate against other products of other suppliers. The noble Lord objected to the mention of the terrible word “money”, but public procurement needs to have a focus on achieving value for money. The two things are not contradistinctions.

While I would expect contracting authorities to consider these matters where appropriate, it would not be helpful to elaborate them in the Bill, for the reasons that the Government have submitted, as they would not apply to all contracts. The course that the other side is proposing will lead to a uniformity imposed on a diversity, which is the antithesis of local values. I respectfully request that these amendments be withdrawn.

[Baroness Hayman of Ullock (Lab)]

Just before the Minister sits down, I really do not think that that is what we are trying to achieve. It is just to try to bring in a definition of something. If you have an objective laid out, without proper understanding of what the phrase is trying to achieve or what it means, it could be quite confusing. All we are trying to get is some clarity on what is meant by “public benefit” and what the Government are trying to achieve by having it as an objective. I have no problem with there being flexibility around this—that is important in procurement—but, as the noble Lord, Lord Wallace, said, we need some sort of guidance. If the Government do not want to put a definition in the Bill, some guidance underpinning it, on what this is looking at and what the Government are trying to achieve, would be extremely helpful.

[Lord True (Con)]

My Lords, in a sense, it depends where the straitjacket applies and where flexibility is enabled. We will come on shortly to debate the national procurement policy strategy and I gleefully anticipate that that will be another zone of contention in our Committee, to which many of your Lordships will want to add more and more things. The noble Lord, Lord Coaker, was enthusiastic about the national procurement strategy at the opening of our proceedings and it is something that an incoming Government would be able to change and mould. Maximising public benefit is an important objective of the Bill.

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The Government have failed to legislate to ensure that we do not move even further down the track towards a preponderantly gig economy. It is crucial that they use their procurement muscle to ensure, as in Good Work, that these measures are taken on every major public procurement involving AI and automated decision-making.

[Baroness Hayman of Ullock (Lab)]

My Lords, this is an important group of amendments, which focus on what we believe work in this country should look like. There are a number of amendments in the name of my noble friend Lord Knight of Weymouth, to which I was pleased to add my name. He introduced them in his usual way—eloquently, knowledgably and passionately. I thank him for that.

We believe that a commitment to good work standards in procurement, in response to the new challenges faced in the labour market that noble Lords have talked about, is an extremely important and appropriate part of what we need to be looking at. We know that Scotland introduced a commitment to fair work first and my noble friend Lord Hendy talked about its introduction by the Welsh Government, so this is not new or untried. Other parts of the United Kingdom are looking at how best to achieve this and we think that the Treasury should also be looking at it. It should be not just about procurement but much broader: how do you underpin good work?

My noble friend Lord Knight of Weymouth’s amendments clearly recognise that procurement can be a powerful tool to support public policy goals and targets, beyond just ensuring value for money. We have heard about the Institute for the Future of Work and its research that shows that creating and protecting good-quality jobs provides resilience and promotes well-being and prosperity at every level. Again, that supports the Government’s levelling-up agenda. My noble friend Lord Knight also mentioned how it would increase productivity in this country. Surely that is an ambition that the Government and the Minister share. We believe that promoting good work is a public good that advances national, economic, social and health interests and priorities.

The noble Baroness, Lady Bennett of Manor Castle, spoke in support of my noble friend Lord Knight’s amendments. She made a couple of important points about how work intensity has increased while, at the same time, work security has decreased in this country. I agree with her on the issue of outsourced contracts. That is something that we have to look at because, as the noble Baroness rightly said, quality of work is related to quality of life, because we spend so much time at work.

The noble Lord, Lord Clement-Jones, spoke to a number of amendments and focused particularly on AI, automation, the impact of new technologies and their potential disruption to jobs. There has been some good research on this, which we need to take account of as we develop legislation. It would be interesting to hear the Minister’s thoughts on how that could be managed in this Bill or perhaps through other means.

My noble friend Lord Hendy also had a number of amendments in this group and I thank him for his detailed and careful introduction. A lot of this is incredibly important. He spoke about previous and other legislation and how we need to bring it up to date in this Bill. That is incredibly important if we are to get the best legislation that we can. He was quite right when he said that we need to use procurement to improve the lot of Britain’s workforce and ensure that we have high standards.

We all need to pay attention to the point that my noble friend made about P&O Ferries because, as he explained on his Amendment 186, we need some buffer or means to manage bad employers—as you could simply call them—as opposed to good employers. The Government condemned the actions of P&O Ferries, as I am sure the Minister did. If there is anything that we can do with the Procurement Bill to stop that kind of behaviour happening again, we should take clear advantage of it. The noble Baroness, Lady Bennett of Manor Castle, also supported the amendment.

I am sure that the Minister would support the fact that we are trying to improve the quality and security of the British workforce. I will be interested to hear his thoughts on the debate.

[Baroness Scott of Bybrook (Con)]

My Lords, I am sorry to disappoint. The following amendments are concerned with placing additional requirements on contracting authorities so that their procurements create good jobs and opportunities in local areas. I will address the issues in turn.

Amendment 54, tabled by the noble Lord, Lord Knight, whom I thank for his extremely interesting opening remarks, the noble Baronesses, Lady Hayman and Lady Bennett, and the noble Lord, Lord Hendy, seeks to include a new procurement objective in Clause 11, requiring contacting authorities to have regard to the importance of local “good work” when carrying out a procurement. We believe this is unnecessary. Under the Bill, contracting authorities will already be able to give more weight to bids that create good-quality jobs and opportunities for our communities, where this is relevant to the contract being procured and is not discriminatory. This is absolutely in line with the Government’s levelling-up objectives and means better value for money.

Additionally, the concept of “good work” includes a wide range of matters, such as union representation and access to facilities for career guidance and training. Including this provision would have the effect of slanting public procurement away from SMEs and VCSEs, which this Government have worked hard to champion in the Bill, and in favour of large employers with significant resources and a highly unionised workforce. That is very much the opposite direction of travel to the policy behind the Bill.

Amendment 67 was tabled by the noble Lords, Lord Knight, Lord Hendy and Lord Clement-Jones, and the noble Baroness, Lady Hayman. I thank the noble Lord, Lord Cement-Jones, for not only taking us into the future but looking at what is starting now and what has been going on for quite a few years to create a different workforce from the one we have now. He talked about something that we will have to discuss further in both Houses—both the opportunities and the challenges to the workforce that we see today. That is probably not for this Bill, but I can see much further work being done on the issue.

The amendment seeks to include in the national procurement policy statement the creation and protection of “good work”. We have already set out in previous debates the rationale for not including policy priorities in the Bill and why instead the national procurement policy statement is a more appropriate vehicle for this.

Amendment 104, tabled by the noble Lords, Lord Knight and Lord Hendy, and the noble Baroness, Lady Hayman, seeks to lay out a new rule in the Bill which would allow contracting authorities to request information from a supplier submitting a tender about good work standards and practices. This amendment is not necessary: the Bill already allows contracting authorities to set the criteria against which they wish to assess tenders and it is open to them to include these matters within those criteria. Any bidder will therefore have to submit information setting out how they meet the chosen criteria. Including a specific power for contracting authorities to require such information could call into question the ability of contracting authorities to request other information relevant to the assessment of tenders.

Amendment 116, tabled by the noble Lords, Lord Knight, Lord Hendy and Lord Clement-Jones, and the noble Baroness, Lady Hayman, requires extensive quantities of information about contracting authorities’ good work policies and measures to be included in the tender notice. I have set out already the Government’s objections to including significant requirements on contracting authorities in relation to this and other similar matters. Public procurement needs to be focused on achieving value for money. We do not consider that it would be appropriate to embed obligations on policy objectives such as “good work” in the tender notice or indeed elsewhere throughout primary legislation for public procurement.

Amendments 186, tabled by the noble Lords, Lord Hendy, Lord Hain and Lord Monks, and the noble Baroness, Lady Bennett, and Amendments 315 and 319, tabled by the noble Lords, Lord Hendy, Lord Hain, Lord Monks and Lord Woodley, seek to introduce new exclusion grounds in relation to breaches of labour rights. Employers who seriously violate the rights of their workforce are not fit to compete for public contracts. The Bill expands the range of serious labour violations to be considered as part of the mandatory grounds for exclusion, for example the failure to pay the national minimum wage and offences relating to employment agencies.

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[Lord Wallace of Saltaire (LD)]

My Lords, with apologies for missing some of this debate, I will speak briefly to my Amendment 129, which relates to Clause 22 and the incompatibility of subsections (2) and (5). Clause 22(2) states:

“In setting award criteria, a contracting authority must be satisfied that they … are sufficiently clear, measurable and specific”.


Clause 22(5) then sets out those “clear, measurable and specific” elements. In paragraphs (a), (b) and (c), it is indeed specific: they deal with

“the qualifications, experience, ability, management or organisation of staff”

et cetera. However, over the page, Clause 22(5)(d) sounds as if the drafter was late, tired, exhausted and gave up. It refers to

“price, other costs or value for money in all the circumstances.”

I am sorry that the noble and learned Lord, Lord Hope, is not here to tell us how one might legally interpret “in all the circumstances”.

What we have drafted as an amendment is one that is as specific as paragraphs (a), (b) and (c) on what those circumstances might be. It sets out the standard phrases that have been used in the Government’s previous documents and draft statement. I merely suggest to the Minister and those behind him that paragraph (d) simply is not fit for purpose as it stands. The phrase “in all the circumstances” should not be in a Bill of this sort. It either needs to be cut or to be expanded to the sort of specificity that (a), (b) and (c) include. My amendment suggests what that might be.

[Baroness Hayman of Ullock (Lab)]

My Lords—oh, I have just thrown all my papers on the ground. Actually, I do not need them. I am holding my list of government amendments, which I used to follow the Minister carefully as he went through them all so that I did not miss anything he said.

I sincerely thank the officials, who have spent a long time bearing with me and my noble friend Lord Coaker, going through the government amendments carefully so that we properly understood the implications and which ones were tied together, if you like. Many of the amendments provide helpful clarification, so I put on record my sincere thanks for the officials’ time and patience. It has been very important.

I have a few amendments in this group. The first, Amendment 101A, looks to ensure that contracting authorities consider potential health contractors’ records of ensuring

“affordable access to their products in low and middle-income countries and to the NHS”.

Of course, this is in the light of the pandemic, because it covers consideration being taken in public health emergencies of the international concern around this and the impact on countries that are less well off than us. With these amendments, we want to increase access to vaccines, medicines and diagnostics by attaching conditions to health products and research and development contracts in order to facilitate global manufacturing, because that was clearly a problem recently during the Covid pandemic.

It is also about having assurances that taxpayers’ money is being spent according to socially responsible principles in circumstances like that. If you can attach conditions to public spending on health procurement and R&D to have greater access to health technologies globally, this can help to bring the health crisis to an end sooner. We know that many of the Covid variants came about in countries that have very low vaccination rates. So it is about looking out and upwards for the future.

There is already some precedent for attaching conditions to pandemic tools to improve access. Paragraph 84 of the Government’s 100 Days Mission report says:

“We recommend that governments should build in conditions into their DTV funding arrangements to ensure … access to DTVs at not for profit and scale, which is to be enacted if a PHEIC is declared.”


So we can do this if we want to. The pricing and timing of delivery are important for gaining more equitable distribution.

Many low-income and middle-income countries have been calling for more meaningful control over their pandemic responses. Of course, they cannot really do that if they do not have access and are not then able to manufacture their own vaccines, which is what many of them were calling for. Again, if you remove intellectual property barriers, you can do this, but we need to look carefully at how we would manage that. Perhaps the Procurement Bill is not the right place for this, but it is certainly the right place to have a discussion and debate about it and to look at how we can move things forward.

My other amendments are Amendments 528A and 528B. I am slightly confused about why we are debating these and Amendment 528C of the noble Baroness, Lady Brinton, at this stage, when the government Amendment 528, to which they relate, does not come up for debate until group 14. It strikes me that we are likely to end up having exactly the same debate all over again. The Minister may not have an explanation for that, but I apologise in advance that we will revisit this.

I will be brief because we will come back to this. As I say, Amendment 528A is again about affordable access for middle-income and low-income countries, and Amendment 528B is about requiring contracting authorities to consider a potential health contractor’s record of ensuring affordable access to its products. I thank the noble Baroness, Lady Brinton, and the noble Lord, Lord Scriven, for supporting our amendments. We support Amendment 528C of the noble Baroness, Lady Brinton, but I am sure that we will have another debate on group 14, as I said.