Procurement Bill [HL]
Baroness Neville-Rolfe ExcerptsMonday 28th November 2022
(1 year, 5 months ago)
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“Procurement and covered procurement
(1) In this Act—(a) “procurement” means the award, entry into and management of a contract;(b) “covered procurement” means the award, entry into and management of a public contract.(2) In this Act, a reference to a procurement or covered procurement includes a reference to—(a) any step taken for the purpose of awarding, entering into or managing the contract;(b) a part of the procurement;(c) termination of the procurement before award.(3) In this Act, a reference to a contracting authority carrying out a procurement or covered procurement is a reference to a contracting authority carrying out a procurement or covered procurement—(a) on its own behalf, including where it acts jointly with or through another person other than a centralised procurement authority, and(b) if the contracting authority is a centralised procurement authority—(i) for or on behalf of another contracting authority, or(ii) for the purpose of the supply of goods, services or works to another contracting authority.(4) In this Act, “centralised procurement authority” means a contracting authority that is in the business of carrying out procurement for or on behalf of, or for the purpose of the supply of goods, services or works to, other contracting authorities.”Member’s explanatory statement
This new Clause would distinguish between “procurements” and “covered procurements”, the latter relating specifically to public contracts, so that provision in the Bill can be more clearly applied to one or the other, and consolidate certain definitions previously found elsewhere.
The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)
My Lords, as we begin Report, I start by thanking noble Lords for their contributions in Committee, and for the lively debate there. For those in the House coming to it fresh today, I say that this is an important Bill which follows two years of hard work and preparation, which I have the honour of taking over from my noble friend Lord True, who now leads this House.
Each year, £300 billion is spent on public procurement and we seek to make it quicker, simpler, more transparent and better able to meet the UK’s needs than the current patchwork of former EU rules, while remaining compliant with our international obligations. There will be a central Cabinet Office online platform to bring in new players, to improve value for money and to accelerate spending with SMEs. There will also be a comprehensive training programme for those involved in all the new rules and conventions—for example, on managing conflicts of interest. It is, however, a very technical Bill, and I am sorry that we had to withdraw a number of government amendments tabled in Committee to allow further discussion. This was largely successful, so we will come first to a number of amendments in my name, most of which were withdrawn on day one in Committee. As we go through, there will be further technical amendments and other amendments to respond to points made in Committee, notably to stimulate economic growth and to reduce burdens on SMEs. I thank noble Lords for their patience with the sheer number of amendments.
Amendment 1 and the amendments consequential on it introduce new technical definitions of “procurement” and “covered procurement”. I know these concepts caused some concern in Committee, so I will try to clarify matters. “Covered procurement” means those procurements that are covered by the vast majority of the provisions in the Bill. They are mostly procurements by contracting authorities, above the relevant thresholds for goods, services and works, which are not exempted from the Bill. These are the procurements which most of us will have had in mind during our deliberations in Committee.
However, the Bill also covers some aspects of procurements which go beyond this, which is why we have a wider definition of “procurement”, meaning any procurement. That allows the Bill to make some limited provision in relation to matters such as below-threshold procurements—for example, in Part 6—and notably to comply with international rules or certain treaties. I understand that the term “covered procurement” may seem unusual, but it is one included in our international procurement agreements, including the GPA—the WTO agreement on government procurement—and familiar to the procurement community.
Amendment 1, and a number of other government amendments, streamline fundamental concepts that are relied on throughout the Bill and will improve the readability and consistency of the legislation. Amendments 2, 5 and 6 recast the definition of “contracting authorities” to ensure that the right bodies are covered. We are committed to a definition that is broadly consistent in effect with both the existing regulatory scheme and with our international commitments under free trade agreements. Feedback from our ongoing dialogue with stakeholders has indicated that the effect of certain wording differences could lead to some bodies being incorrectly brought within, or excluded from, the scope of the rules. I am grateful for these views, particularly those from the Local Government Association, as they will help to ensure correct application. I am also grateful for its constructive approach to the Bill, which represents a big change for its members, and we appreciated its input.
The amended definition removes the reference to
“functions of a public nature”,
as this does not align with the existing definition. It makes clear that the notion of contracting authority oversight can include oversight by more than one authority. Lastly, it ensures that certain bodies that are publicly owned but operate commercially can operate outside the procurement regime.
Amendment 187 ensures that educational establishments are fully and appropriately excluded from the rules on below-threshold contracts, as well as those relating to implied payment terms in public contracts, payment compliance notices and reporting on payments made under public contracts. This mirrors the approach taken in the current procurement rules and ensures that burdens on low-value contracts in the education area are applied in a proportionate fashion. Amendments 98 to 102, 117, 119, 191, 193, 197, 201 and 202 are consequential.
Amendments 24, 25, 26, 27 and 28 provide direction to contracting authorities when a mixed contract involves two or more different elements which could each classify it as a “special regime” contract. We expect that such situations will be rare, but could arise occasionally. Our amendments clarify which regime will apply to their mixed contracts in such circumstances by discouraging unrelated requirements being combined in one procurement. I hope that sentence is clear. More importantly, we must also ensure that the rules concerning mixed contracts are compliant with our international trade agreement obligations.
This group also includes other minor changes, including Amendment 7, which ensures that thresholds are applied properly to frameworks, and Amendment 8, which ensures that frameworks for the future award of exempted contracts only are also exempt. Frameworks involving a mixture of elements covered by both the Bill and the forthcoming healthcare procurement regulations will be subject to the same basic tests as set out in Clauses 4 and 9 on mixed contracts, which determine which rules will apply. This is important to prevent abuse of the exemption provisions; it also includes Amendment 185, which corrects a mistaken reference to a power for Northern Ireland departments, which unfortunately does not exist.
Amendment 170 is a technical adjustment to Clause 111 to make it clear that any regulations made to disapply the Bill to procurements in scope of the forthcoming healthcare procurement regulations can be made whether or not the procurement regulations are yet in force. Finally, Amendments 194, 195 and 196 amend the index of defined expressions in Clause 115.
I thank noble Lords for their patience, and will turn to the amendments tabled by other noble Lords when I have heard from them. I beg to move.
Baroness Brinton (LD)
My Lords, I shall speak to my Amendments 3 and 173. I thank the Minister and the noble Lord, Lord True, for responding to my questions, in private meetings but also at previous stages of the Bill, about why the NHS is treated differently from every other part of the public procurement sector covered by the Bill. The problem is that I have not yet heard a clear answer to that; nor, indeed, did those noble Lords who took part in the Health and Care Act during its time here get a clear answer from the Health Minister as to why this was proposed. More recently, in Committee, the Minister said that it was because only clinical services would be covered by these special arrangements for the NHS. I will come in a minute to the reasons for my concerns that that is not the case, but I start by saying very simply that Amendment 3 puts the NHS in the Bill, in the definition of a public body that has to observe the details of regulation under the Bill.
Moving on to the practical problems, the key issue is what is said in the National Health Service Act 2006 and the Health and Care Act 2022, which attempts to amend it. The specific amendment has not been enacted yet, but we can all assume, with the permission of the House, that it is this Bill that is holding that up. The Health and Care Act adds new Section 12ZB to the National Health Service Act, which says:
“Regulations may make provision in relation to the processes to be followed and objectives to be pursued … in the procurement of (a) health care services … and (b) other goods or services”.
The problem is that the new section goes on to say:
“Regulations under subsection (1) must, in relation to the procurement of all health care services … make provision for the purposes of ensuring transparency; ensuring fairness; ensuring that compliance can be verified; managing conflicts of interest”.
That is a very different bar of compliance than the Government want to see for every other part of the public sector covered by the Bill. At the strategic level, it will be enormously helpful to understand why the Government feel it is appropriate for the NHS not to be included, but my practical problem is that we have relied somewhat on the assurances of Ministers at the Dispatch Box that only clinical services would be caught by the new SIs under the Health and Care Act and the NHS Act 2006. I have just read out the parts that show that is absolutely not the case. In fact, there is a catch-all in “other goods or services”. So, while we spent a little time in Committee trying to discuss where the boundaries are, it seems to me that there are no such boundaries, and that leaves me very greatly concerned about how this will work in practice.
I have tabled Amendment 173 because if Amendment 3 is carried, Clause 111 is not needed. There is also an argument that if, for any reason, Amendment 3 is not carried, Amendment 173 will stand in its own right, but the two are inextricably linked. These two amendments are saying that the NHS should be covered in the Bill. I end by saying to the Minister that, despite the many amendments from noble Lords all around the House, I think everyone agrees that the Bill is better than the procurement arrangements we have had in the past, particularly in attempting to get transparency and accountability. The problem is that the arrangements for the NHS are not visible; they are SIs at the discretion of any Secretary of State for Health, and we have not even seen those in draft yet. I hope the Minister can give me some very clear reassurances or explanations, otherwise I may have to test the opinion of the House later.
Lord Coaker (Lab)
My Lords, I thank the Minister and her predecessor for their engagement with us and other noble Lords on this Bill as it made its progress through your Lordships’ House. I join with other noble Lords in saying to the Minister that we all believe, from where I am speaking, that this is a great improvement, and the Bill will make a big difference; we are generally very supportive of it. It is important, as other noble Lords have done, to start with those remarks to set the context for this discussion and those which will follow.
I do not want to speak for very long, but I will start with Amendment 3, in the name of the noble Baroness, Lady Brinton. I very much support the amendment, which seeks to put on the face of the Bill—for the avoidance of doubt, for the avoidance of the sort of discussion that we are having here this evening and for the avoidance of the sort of discussions that will go on, as to which set of regulations procurement for the NHS comes under—that procurement includes the NHS in Clause 1. The important point, following the excellent speech by the noble Baroness, Lady Brinton, was set out in my noble friend Lord Hunt’s question to the Minister, which encapsulated the problem that we are going to have under two sets of regulations.
I thought that my noble friend put the argument very well in his question—and I am going to repeat it—about the sort of thing that will happen without clarification of where we are with respect to procurement. What happens if a procurement contains both clinical and non-clinical parts and services? Which Act and which regulations regime would apply? That encapsulates the problem in one, because the answer is that it will not be clear at all if we carry on with the current two-system regulatory regimes that will operate for the NHS. I am always very practical about these things and, of course, noble Lords will have seen as well that there is actually a clause—Clause 111—that makes it perfectly clear that there is a power for Ministers to disapply, through regulations, this Act in relation to procurement by the NHS in England. Therefore, on the one hand we have the health Act of 2022; on the other hand, we have a Bill going through that, in some sense, is supposed to include the NHS but, in other senses, is not supposed to do so. We do not know where the boundary is going to come between clinical services and goods and services, so there is a whole realm of difficulty and problems.
I said at the beginning of my speech that all of us are supportive of the Bill, but we need to resolve these difficulties. We cannot just say, “Well, the regulations will sort it out”, or “Good sense or common sense will deal with it.” There is a real legislative problem that we should try to resolve before we pass the legislation. The noble Baroness, Lady Noakes, pointed this out in a couple of important technical amendments. As always, we are thankful to the noble Baroness for trying to improve the Bill and to make suggestions, one of which, I understand, the Government have accepted. That is the sort of spirit in which we take the Bill forward.
Therefore, I hope that the Minister is listening carefully to what the noble Baroness, Lady Brinton, my noble friend Lord Hunt, and the noble Lord, Lord Alton, have said. We all noticed that the noble Baroness, Lady Bennett, was not a supporter of Amendment 2. We say that loudly and clearly so that her future in the Green Party is assured, but Amendment 3 is what the noble Baroness put in, and for some reason it appeared under Amendment 2. We are all very clear which amendment the noble Baroness supports.
The comments made in the short speech by the noble Lord, Lord Lansley, on government Amendment 34, are extremely important, showing how one word here or there can fundamentally change the Bill. He is quite right to point out that Clause 11 refers not to thresholds but to objectives. What is procurement trying to achieve? As the noble Lord outlined, by inserting “covered”, the Government imply that it is only covered procurement that takes account of the various points that are listed in the Bill. The noble Lord read out four, but I choose just one, to show how important it is that the Government listen to what he has said and think again about moving their Amendment 34. It is acting and being seen to act with integrity. The one thing that you would expect any procurement process to act under, whatever the threshold, whatever the regulations, whatever law it comes under, whether it is for £10 or £10 million, is integrity. Yet as it reads now, the only procurement that this clause will relate to as an objective, if the government amendment is agreed to, is covered procurement. That was the crucial point that the noble Lord made—as an objective. It is not an objective. It is closer to being law, that you are supposed to act openly, honestly and transparently. However, leaving that aside, it is an extremely important point that the noble Lord has made. In full support of what he has said, I hope that the Government have listened to his very well-made points, particularly when he went on to relate them to Clause 12, which seems to be the opposite of that. That point was well made.
The government amendments before us in many ways improve the Bill. I thank the Minister for listening to what was said to her and for trying extremely hard to table amendments that have improved many parts of the Bill. There are important tweaks that the noble Baroness, Lady Noakes, has pointed out. There is a fundamental point that was raised by the noble Lord, Lord Lansley. However, the points raised by the noble Baroness, Lady Brinton, and supported by many noble Lords, point to a fundamental choice for us. We must resolve this issue about procurement and the NHS. The noble Lord, Lord Alton, pointed out some of the difficulties that have arisen, but for all of us, clarity, certainty and clearness in legislation is crucial, particularly when it comes to procurement. We have the opportunity to sort this out. I hope that noble Lords will support the amendment tabled by the noble Baroness, Lady Brinton, should she put it to the vote.
Baroness Neville-Rolfe (Con)
My Lords, Amendment 3, tabled by the noble Baroness, Lady Brinton, of Kenardington, and the noble Lord, Lord Scriven, of Hunters Bar, would, as the noble Baroness said, explicitly name the NHS in the definition of a contracting authority. We are also debating Amendment 173, to which the noble Baroness, Lady Bennett of Manor Castle, added her name, and Amendments 171 and 172, to which the noble Lord, Lord Hunt, spoke so eloquently.
There is a concern, which I understand after several meetings with those involved, about the interplay in health between this Bill and the arrangements across the NHS in the light of the Health and Social Care Act. I very much enjoyed the meetings that I had with the noble Baroness, Lady Brinton, and thank her and the noble Lord, Lord Alton, for their kind comments on the Bill more generally, as well as my noble friends Lady Noakes and Lord Lansley. It has been a pleasure to work on this Bill across the House. I thank the noble Lord, Lord Coaker, for his comments, although we are no longer working together from the Back Benches.
Lord Scriven (LD)
Like most noble Lords, probably, I have listened to what has just been said and am more confused now than when the Minister started. I ask a very simple question: if the Bill applied to NHS procurement, as it does to the rest of the public sector, would it not harmonise the procurement of NHS provision, whether clinical or non-clinical, including social care? That would make it simpler, not just for the procurement body but for organisations that might wish to tender for NHS clinical services.
Baroness Neville-Rolfe (Con)
That is a point, but I did try to explain in my introduction that there was concern during the passage of the Health and Care Act, to which I was not party, that the NHS arrangements—I see that the noble Baroness, Lady Brinton, is nodding her head. Perhaps she is nodding it negatively.
Baroness Brinton (LD)
The important thing the House needs to hear is that during the passage of the Health and Care Act, Members from all sides of your Lordships’ House asked repeatedly why special arrangements were being made for NHS procurement when we knew that there was a Procurement Bill coming down the line and had not seen any detail of it. That is the question we are all waiting to hear the answer to.
Baroness Neville-Rolfe (Con)
I think I have been clear on the background to why it is different. I have also promised that regulations and guidance are being put together and will make very clear the differences: where the NHS rules need to apply and where the Procurement Bill needs to apply. That is the way in which these Bills have been constructed together. There are reasons. Especially on small NHS contracts involving social care, clinical services and so on, it clearly makes a great deal of sense to have a separate regime.
I am sure we will come back to that at the end, but out of courtesy I turn to the other amendments. Amendment 4, tabled by my noble friend Lady Noakes, proposes to rework the notion of control in the definition of a contracting authority in amended Clause 1(3)(b), to be consistent with the notion of a controlled person in Schedule 2. We have looked at this again in dialogue with the concerned stakeholders, notably the Local Government Association.
The meaning of control in Clause 1 is different from that in Schedule 2, and they need to be kept separate. The use of “control” in Clause 1, which sets out the contracting authority definition, is intended to ensure that contracting authorities that have a board where public authorities appoint more than half the members are themselves considered to be contracting authorities. This might include, for example, some centralised procurement authorities.
By contrast, the “controlled person” for the purposes of Schedule 2 is much narrower and intentionally very limited as it is intended to capture only a narrow group of entities, closely owned and controlled by contracting authorities. It requires that the controlling contracting authority is a “parent”, within the meaning of the Companies Act 2006. Although this might cover some of the same ground as majority board appointments, the concept used in Clause 1, it is not the same thing, and the text of the amendment can be satisfied in other ways. There is also a secondary activity threshold, which means that 80% of the activities carried out by the controlled person must be on behalf of its controlling authority. I am afraid that neither factor is appropriate to the contracting authority definition and their inclusion would have the effect of taking many organisations outside the scope of the contracting authority definition.
I recognise that, as my noble friend said, consistency is often desirable, but these terms achieve different aims. It is important that the Procurement Bill covers, as closely as possible, the same scope of bodies as in the existing procurement regulations, both for certainty and continuity for our authorities and to ensure compliance with the definition of a contracting authority in our free trade agreements.
I should, in passing, thank my noble friend Lady Noakes for her Amendment 190, which reflects discussion in Committee and which the Government are glad to support.
Moving on, I come to some of the very wide points made by the noble Lord, Lord Alton, although it is possible that some of these will come up again later on Report. It may be disappointing to the noble Lord, but we cannot go into the detail of individual contracts. Where a contract has been found to have underperformed or the PPE provided was not up to standard, the Department of Health and Social Care is working to reach a successful outcome—this includes mediation—for the taxpayer.
Offers for the supply of PPE came from a wide range of people from within government and outside. No matter where they came from, offers went through a robust process of checks and controls led by officials. This included price and quality checks as well as due diligence and credibility. As for Medpro, this is a live issue; we are currently engaged in a mediation process with PPE Medpro and I am therefore unable to comment on the specifics of this contract.
More positively, however, the Covid inquiry will cover procurement and the distribution of key equipment and supplies, including PPE and ventilators. In my view, that is quite right. It will also identify the lessons to be learned from all this and inform preparation for future pandemics across the UK.
Lord Alton of Liverpool (CB)
I thank the Minister; that is a helpful reply and I am indebted to her. She has referred us to later amendments—I think she is referring to the amendment tabled by her noble friend Lady Stroud in the 10th group, on modern day slavery, which I am supporting—but a number of my questions go much wider than that. I would be appreciative if, between now and our discussion on Wednesday, she could give further consideration to what she can answer, some of which is not covered specifically by the point she has just made about confidentiality. Could she touch on what the noble Baroness, Lady Brinton, is saying now about how the NHS should be caught under the same terms as everything else that she has been arguing? Our failure to do this has been highlighted by the noble Lord, Lord Coaker, and others, and demonstrates an inconsistency in how we handle these things.
Baroness Neville-Rolfe (Con)
I understand. I have tried to answer, although I am obviously somewhat limited by confidentiality. I would also draw the noble Lord’s attention to the Boardman report, of which he is well aware. Nigel Boardman went through the Covid processes and his comments were, on the whole, accepted. As I said, I will look at what the noble Lord, Lord Alton, said and see whether there is anything useful to add before we meet again on Wednesday.
I turn to my Amendment 34 and the comments made by my noble friend Lord Lansley, of Orwell, with whom I have had useful meetings. He is concerned that the procurement objectives in Clause 11 should apply to all procurement, not just to covered procurement. I am afraid I do not agree, as he and I have discussed. This is too wide-ranging and the Clause 11 objectives will not be relevant to the award of all types of non-covered procurement. The concept of procurement is crafted very widely and captures all contracts. For example, it is difficult to see how a contracting authority would be able to apply principles such as having regard to the importance of transparency or the wider public benefit in relation to employment contracts or leasehold agreements exempted under Schedule 2 to the Bill. In addition, it is difficult to see how a contracting authority could have regard to the importance of transparency in a procurement exempted on national security grounds.
Lord Lansley (Con)
My noble friend used the important word “security” in relation to security contracts, but surely Clause 11 and the procurement objectives apply to security contracts that exceed the threshold set in Schedule 1. In what sense is it inappropriate for the objectives or principles set out in Clause 11 to be applied simply because those thresholds fall below about £5 million?
Baroness Neville-Rolfe (Con)
I should reflect further on this. Clearly, some parts of the Bill are carved out. We have discussed this in relation to the NHS and we will discuss it on Wednesday in relation to the Ministry of Defence. We have to be very careful about national security—there is agreement on that across the House. I have been advised that the sheer breadth of Clause 11 would have a damaging effect if we apply this right across the board on procurement, and I am disturbed about that. I am happy to look at that further and talk further to my noble friend Lord Lansley.
Lord Coaker (Lab)
We would all be grateful if the noble Baroness reflected further on Clause 11 and government Amendment 34, as she said.
Baroness Neville-Rolfe (Con)
I turn finally to my noble friend Lord Maude, who brought in the importance of social enterprises in the health area, which I was extremely keen to hear about and would like to discuss with him further. It seemed to me, when reflecting on what he said, that the greater flexibility to award contracts—which was behind the Health and Social Care Act and the PSR regulations that were being brought forward—was an argument in favour of the approach that we have set out and for some different arrangements in the NHS. I find myself in the slightly awkward position of trying to defend these different arrangements for the NHS because I am worried about the implications for things similar to those that my noble friend raised.
I think that I have dealt with all these comments. I will reflect further on Amendment 34. It is a bit difficult not to move it—
Lord Wallace of Saltaire (LD)
My Lords, it would be perfectly acceptable to come back to that at Third Reading. I think that the House would accept that.
Baroness Neville-Rolfe (Con)
I am a little rusty, so I was just trying to understand what the possibilities were. I thank noble Lords for clarifying that we have some time to reflect on this; it is extremely helpful. I respectfully ask noble Lords not to press their amendments. I will move the government amendments in my name when we reach them, other than Amendment 34.
(b) in the case of a utilities contract, a public authority, public undertaking or private utility,other than an excluded authority.(2) In this Act—“public authority” means a person that is—(a) wholly or mainly funded out of public funds, or(b) subject to public authority oversight,and does not operate on a commercial basis (but see subsection (8A));“public undertaking” means a person that—(a) is subject to public authority oversight, and(b) operates on a commercial basis;“private utility” means a person that—(a) is not a public authority or public undertaking, and(b) carries out a utility activity.(3) A person is subject to public authority oversight if the person is subject to the management or control of—(a) one or more public authorities, or(b) a board more than half of the members of which are appointed by one or more public authorities.(4) The following are examples of factors to be taken into account in determining whether a person operates on a commercial basis— (a) whether the person operates on the basis that its losses would be borne, or its continued operation secured, by a public authority (whether directly or indirectly);(b) whether the person contracts on terms more favourable than those that might reasonably have been available to it had it not been associated with a public authority;(c) whether the person operates on a market that is subject to fair and effective competition.(5) The following authorities are excluded authorities—(a) a devolved Scottish authority;(b) the Security Service, the Secret Intelligence Service and the Government Communications Headquarters;(c) the Advanced Research and Invention Agency;(d) any person that is subject to public authority oversight—(i) only by reference to a devolved Scottish authority, or(ii) by reference to an authority mentioned in paragraph (b) or (c).”Member’s explanatory statement
This amendment would change the definition of contracting authority to better deal with the difference between a public authority and public undertaking and to exclude certain bodies which, despite their relationship with public authorities, operate on a commercial basis.
“(8A) For the purposes of this Act, a person that operates on a commercial basis but is, as a controlled person, awarded an exempted contract by a public authority in reliance on paragraph 2 of Schedule 2 (vertical arrangements) is to be treated as a public authority in relation to any relevant sub-contract.”Member’s explanatory statement
This amendment would ensure that bodies that are awarded contracts by virtue of being controlled by public authorities are treated as public authorities (and therefore as contracting authorities) in relation to contracts awarded for the purpose of performing that contract.
“(2) In this Schedule—(a) a reference to a contract for the supply of goods, services or works to a particular kind of authority includes a reference to a framework for the future award of such contracts;(b) a reference to a works contract includes a reference to a framework for the future award of works contracts.”Member’s explanatory statement
This amendment would ensure that frameworks are properly taken into account in applying the thresholds in Schedule 1.
(b) a framework for the future award of contracts only of a kind listed in this Schedule.”Member’s explanatory statement
This amendment would ensure that frameworks only for exempted contracts are exempted contracts.
Baroness Hayman of Ullock (Lab)
My Lords, I thank the noble Baroness, Lady Noakes, for her introduction to her amendment which was very clearly laid out. Again, I would like to join with other noble Lords who talked about the number of government amendments, not just here but in Committee. People who were here on the first day will probably remember that I was a little bit cross about it. But in response, the Minister has really grappled with our concerns in the lead-up to Report and I appreciate the time that she has spent doing that.
I will be brief. I will just say that we strongly support the noble Baroness, Lady Noakes, with her amendment. She clearly laid out why this is important for local authorities and by including her amendment you increase the efficiency of the public sector when it is structuring the way it delivers its services, much of which do not need to include the procurement laws that we see before us. All I would say is that it is important that we can ensure that local authorities and other public sectors bodies within this area can continue to deliver better public services and make savings, as the noble Lord just mentioned, by collaboration, working together and sharing services. That makes eminent sense, and I would hope that the Minister will be able to reflect on that.
Baroness Neville-Rolfe (Con)
My Lords, Amendment 9 tabled by the noble friends Lady Noakes and Lord Moylan—whom I am very glad to see back in this place—seeks to preserve the rules which currently apply to public service collaborations at paragraph 2 and 3 of Schedule 2. It was also very good to hear from my noble friend Lord Greenhalgh with his extensive local government experience.
I agree that the Bill needs to preserve these rules but believe that we have already done so. Paragraph 1(2)—to which the noble Baroness referred—says that a contract is not exempted if the main purpose of the contract could reasonably be supplied under a different contract, and that contract would not itself be an exempted contract. This provision serves to close a loophole where contracts that are mixed—that is that they contain both exempted activities and not exempted activities—might be inappropriately exempted from the regime.
However, unlike the exemptions for specific activities, all types of goods, services and works contracts are capable of being exempted under the vertical and horizontal exemptions, so the second part of the test at Schedule 2(1)(2)(b) is not met. The contract would remain exempt.
While I believe that we have preserved the rules, the Bill needs to be better understood by users and stakeholders. My noble friend Lord Greenhalgh also made some good points about unnecessary tendering. I met the Local Government Association, as I was concerned about this provision, and my officials are engaging with it following its representations to reach a common understanding. They will come back to me with an amendment that could be put forward in the House of Commons to clarify this provision, should one prove necessary. It will take a bit of time. Accordingly, I ask my noble friend to withdraw the amendment.
Baroness Noakes (Con)
My Lords, I thank all noble Lords who have taken part in this short debate and those noble Lords who supported this amendment. I was delighted to hear what the Minister had to say, which was in the spirit of the quest for a good procurement system for this country that has permeated the way we have operated on this Bill to date. I am sure that the discussions with the Local Government Association will prove fruitful. On that basis, I beg leave to withdraw the amendment.
Lord Fox (LD)
My Lords, this is a very important group of amendments. We have had many speakers, so I will be concise. My noble friend Lady Parminter has already made some important points on our part. I will not repeat her comments, but we regard the issue of economic, social and environmental benefits to be paramount and we do not subscribe to the idea that it should not be in some way guided by the legislation or the operational part of the legislation.
I have listened carefully to the other speeches. I am minded to side with the approach of the noble Lord, Lord Lansley, of using the NPPS as the vehicle through which this aim and principle is achieved. I hope that we shall be able to support both him and the noble Baroness in His Majesty’s Opposition if they decide to press their amendments. Amendments 35 and 46 bear my name; clearly, I stand by them and the speeches that others have made.
There are two other areas on which I want to speak very briefly. Not least, the noble Lord, Lord Hunt, was unable to be here, but I know that he and my noble friend Lady Brinton have tabled Amendments 38 and 83, which reflect on accessibility. The previous legislation had prior regulations about accessibility and the fact that public procurement should ensure accessibility to all people. It has been lost in the drafting of this Bill. It is not clear to me whether that is a deliberate or accidental dropping of something, so it will be very useful to hear from the Minister what the Government’s thinking was on this. If it was deliberate, I would urge them to think again; if it was accidental, there is time to put it right.
Finally, I would like to make a pitch to support the noble Earl, Lord Lindsay, who has unearthed something that must be another unintended consequence of this legislation. I cannot believe that this was deliberately put in place by the Government. His Amendments 58 and 82 are an important way of righting that situation. I hope, again, that the Minister will think again.
In conclusion, we on these Benches absolutely believe that there should be a public purpose to procurement. We feel that the legislators have a role, as well as the very important role outlined by the noble Lord, Lord Maude, for the professionals, when it comes to implementing that policy. It is really important that we seek to achieve public good through the £300 billion of procurement that this country makes.
Baroness Neville-Rolfe (Con)
My Lords, we have had an extremely interesting debate—a shorter one than I was expecting—and I am grateful for all the contributions.
I will start by saying that, while I understand that noble Lords rightly wish to pursue their particular interests, many of which I agree with, we have to bear in mind that procurement is, above all, an economic activity. That does not mean that we cannot take other things into account, but no amount of environmental or social benefit could make a procurement satisfactory if it failed to deliver economically on its intended purpose. We need to avoid the Christmas tree that my noble friend Lord Maude referred to. Of course, the NPPS allows for the inclusion of these sorts of policies—including net zero, as the noble Baroness, Lady Parminter, said—but that does not mean to say that we want to put them on the face of the Bill.
In my view, value for money comes first, especially given the financial difficulties that we now face, but it is important to recognise that, as a result of Clause 18, contracting authorities will be working to a new definition, which nobody has mentioned, of “most advantageous tender” rather than “most economically advantageous tender”—that is, MAT not MEAT—so the days of focusing on price alone, not quality or wider matters such as generating UK employment opportunities, are over. Specific policies could also be put into bespoke tender documents, as my noble friend explained.
Secondly, my experience of many Bills is that it is unwise to attempt to define everything in detail at a particular point in time. As the years pass, relative priorities change. Who would have thought two years ago that inflation, the price of energy and the consequences of war would feature so highly on the national agenda? There will no doubt be other surprises—as, indeed, has been the scale of climate change; 20 or 30 years ago, most of us did not realise what would happen.
Thirdly, productivity growth is worryingly low in this country. It is essential that this Bill and the £300 billion of public procurement each year provides a boost and that small businesses are able to secure a share of that, as my noble friend Lord Lindsay’s comments implied. Innovation and competition have an important part to play here—I know that my noble friend Lord Lansley feels that strongly; they are two very important objectives. Procurement should be an enabler of innovation rather than increasing barriers to entry for competition, as my noble friend Lord Maude said.
Against this background, I come to Amendment 33, moved by the noble Baroness, Lady Hayman. This seeks to restate the six principles consulted on in the Green Paper. In addition to the 619 responses we received, we have carried out extensive consultation with interested groups, as the noble Baroness will know. As a result, our principles were refined and then translated into the objectives and specific obligations that now exist in the Bill. The language of a Green Paper is not the language of legislation, and we have reflected the principles in a way designed to help contracting authorities understand how they will implement them. That goes for value for money, public good, transparency and integrity.
The public consultation indicated that “fair treatment” was too subjective for contracting authorities to determine by objective standards, so we introduced the concept of “treating suppliers the same” in Clause 11(2); and “non-discrimination” has been converted from an objective to a hard-edged obligation in Clauses 83 to 85. We believe that the combination of the objectives and specific legal obligations in the Bill deals with procurement principles in a more effective and practical way.
Amendment 35 in the name of the noble Baroness, Lady Hayman, changes the recognised concept of “value for money” in the procurement objectives into a more amorphous one, which includes the concepts of “social value” and “equity”. I have a number of concerns with what that amendment does. First, it moves contracting authorities away from the well-known concept of “value for money” and creates a new, and perhaps confusing, duty. Contracting authorities will not know this new duty and it will take time, resources and probably a number of costly legal challenges—a bugbear of procurement—to work that out. It is also an unfair burden to place on them in this new regime; we need to minimise legal doubt wherever we can.
It is also worth reminding noble Lords that the current national procurement policy statement already includes social value as one of its key themes. I am also concerned by the assumption that an obligation to have regard to some degree of social value must ensure some degree of equity in procurements. I do not think I am alone in being unclear on what “equity” is supposed to mean in this context, and doubtful that the simple existence of “social value” would deliver it.
Amendments 36 and 42, tabled by the noble Baronesses, Lady Worthington and Lady Hayman, and the noble Lord, Lord Coaker, seek to define “public benefit” to include various social and economic matters. The public benefit objective in Clause 11(1)(b) is deliberately undefined, so it is a flexible concept that gives contracting authorities a wide degree of discretion. These amendments seek to define “public benefit” in a much narrower way, limited only to economic, social and environmental benefits.
As I said at the beginning, we have lost sight of the need for our procurement spend also to be used to increase productivity, drive efficiency and stimulate growth. So let us keep the Bill as clear and simple as we can so that we do not swamp contractors and SMEs in paperwork. Let us instead ensure that we have an appropriate national procurement policy statement that can evolve as times change.
Amendments 38 and 83, tabled by the noble Lord, Lord Hunt, and the noble Baroness, Lady Brinton, but spoken to by the noble Lord, Lord Fox, require contracting authorities to have regard, when carrying out a procurement, to the accessibility of what is being procured for disabled people. I reassure noble Lords that we share the same intent. However, amendments to the Bill are not required: there is no need to change the Bill because, although disability accessibility is of great importance, it is already catered for in the public sector equality duty in the Equality Act 2010. It is appropriate that these matters are considered at the point that contracting authorities draw up technical specifications, and they must apply the requirements of existing law. My officials, however, would certainly welcome further engagement with bodies representing disabled people as the technical specifications and guidance are developed.
Lord Fox (LD)
The noble Baroness is right that the public sector equality duty is in the Equality Act, but the current system, which we will lose when the Bill comes into force, incorporates both the PSED and provisions under secondary legislation, such as the Public Contracts Regulations 2015. Therefore, when those regulations were laid, there was a tacit acceptance that the PSED alone was insufficient. If the Minister does not accept the amendments, will she bring forward other provisions in another way to backfill what is clearly being lost as we move from one set of rules to the other?
Baroness Neville-Rolfe (Con)
My attitude to this is clear, and I have offered to engage on the subsidiary detail of the transformation that we are planning with the Bill.
I turn to the important matter of the national procurement policy statement, which sets out strategic priorities for procurement. Amendment 43—I hope noble Lords will forgive me if I do not mention their names in relation to every amendment they have tabled—would require the Government to publish a national procurement policy statement, rather than just allowing them to do so. This is the so-called move from “may” to “must”. Amendment 44 then requires a statement to be published within 12 months of the relevant section coming into force.
I think the clause is right as it is. Think of how much more important issues such as supply chain resilience have become since the outbreak of Covid and the conflict in Ukraine. The current approach enables the Government to react nimbly to changes in priority, which my noble friend Lady Noakes thought was important, and they can issue a new statement as appropriate. However, importantly, I can assure noble Lords that this Government will publish such a statement when the Bill takes effect; indeed, they have already done so in draft. The Bill will put the new statement on a statutory footing. Importantly, the clause provides that, once the statement is published, contracting authorities must have regard to it when carrying out their procurement activity. The amendment as drafted requires a Minister to publish a statement. However, a Minister would be unable to fulfil this requirement were Parliament to vote against it, perversely meaning that the amendment would potentially prevent a Minister discharging the statutory duty. I would therefore prefer to avoid the formula proposed in Amendment 43.
Amendment 46 proposes that, prior to publishing a statement, the Minister must give due regard to a number of specified principles, most of which represent elements core to the procurement regime. This is evident from the drafting of the Bill overall: for example, value for money, integrity and maximising public benefit are set out clearly, and transparency is a specific requirement running throughout the Bill. There is a lot in common here with what I said at the beginning so I will not repeat that.
Amendment 47, tabled by my noble friend Lord Lansley, the noble Baroness, Lady Worthington, and the noble Earl, Lord Devon, would require the inclusion of specific priorities in the national procurement policy statement relating to the achievement of targets and requirements set under the Climate Change Act and other legislation, as well as promoting innovation and minimising the incidence of fraud. As discussed in Committee, the range of topics suggested by noble Lords during the process demonstrates that stakeholders have different priorities for procurement. These matters are already well covered in our statute book. It is important that policy priorities are addressed in a targeted way and that our regime does not contribute to a deterioration in productivity. That said, noble Lords will be reassured to know that many of these themes—net zero, social value and innovation—feature in the current non-statutory statement that we have already published.
Baroness Neville-Rolfe
Member’s explanatory statement
This amendment is consequential on the change in terminology in new clause before clause 1.
Baroness Neville-Rolfe (Con)
My Lords, earlier today, we discussed government Amendment 34 on covered procurement, and, as promised, I have reflected on the contributions made by noble Lords. They will have noted that I left the Bill to my noble friend Lady Bloomfield for a while for this very purpose. I have looked at the implications of not proceeding with this amendment with my experts, and I still intend to move it. It is the Government’s view that, if it is not agreed, the objectives will still have to be considered for all procurements, including exempted procurements under Schedule 2, which would create the perverse situation I mentioned of needing to consider transparency in those exempted security contracts or—to give another example—contracts with law firms, which would include legally privileged information, and that would not be appropriate. It will also extend to small, low-value contracts, including those let by small authorities such as parish councils.
For these reasons, and those I set out earlier, I move Amendment 34. Should your Lordships disagree, the House can make its view known.
Lord Lansley (Con)
If that is the argument, why will the national procurement policy statement be applied to all procurements and not just covered procurements?
Baroness Neville-Rolfe (Con)
As we have discussed, the national procurement policy statement is wide-ranging. In the Bill, we have tried to set up a framework and lots of rules for contracting authorities to try to ensure that they are adopting procedures that will improve and simplify procurement, which, as we all agree in this House, is not in the state it needs to be in. We believe that not moving Amendment 34—that is, not restricting procurement in certain respects—will lead to a great deal more difficulty for contracting authorities, particularly in these exempt areas. We have looked at the exemptions carefully and, contrary to what I think my noble friend thinks, individual procurements would have to be considered in a much more detailed way as a result of the perverse effect without this amendment.
As I said, should your Lordships disagree, the House can make its view known, should it wish. I beg to move Amendment 34.
Baroness Neville-Rolfe (Con)
My Lords, it may aid the House if I set out the government amendments in this group. I thank my noble friend Lady McIntosh of Pickering, and will respond to her when I have heard other contributions. I share her tribute to Lord Plumb, whom I dealt with in all the stages of my career—at Defra, in Europe and in this House—and I am only sorry that government business prevented me from celebrating with others his wonderful life and success today.
There are a number of amendments in my name relating to SMEs. They are important government amendments to help SMEs to win a bigger share of the £300 billion procurement pie. I know that this issue is close to the hearts of noble Lords from across the House. Throughout Committee, noble Lords questioned whether the Bill had gone far enough in removing barriers to SMEs accessing public procurement. It has certainly been a top priority for me since I was lucky enough to become a Cabinet Office Minister. It is right that we support this vital sector of our economy. At the start of 2022, there were 5.5 million small businesses, accounting for 99% of all businesses in the UK, with over 16 million employees and a turnover of over £2 trillion. We must do more to champion these entrepreneurs.
The new measures that I am announcing today complement the existing provisions in the Bill, which make it easier for businesses to enter public sector supply chains and benefit SMEs. They include greater visibility of upcoming public sector opportunities and preliminary market engagement; developing a supplier registration system, meaning that suppliers need to submit their credentials only once; improvements to commercial tools, such as the introduction of dynamic markets and open frameworks; and, crucially, requiring that 30-day payment terms will apply throughout the public sector supply chain.
I am glad to be moving amendments in three areas to add to this momentum. First, we have introduced a new duty for contracting authorities to have regard to the participation of SMEs. It sends a very clear signal that the Government are open for business to this sector. For the first time, SMEs will be on the face of the Bill, which means that authorities have a responsibility to consider them and the barriers they face. To put this in practical terms, contracting authorities will, for example, need to specifically consider through an SME lens whether the requirements they are asking for are proportionate to the contract. Are the bidding times realistic when some businesses do not have a dedicated bidding team? Have they provided clear pipelines of opportunity? Is there a diverse representation of businesses in pre-market engagement?
Secondly, we have further stripped out unnecessary barriers which SMEs face. I thank my noble friend Lady Noakes and the noble Lord, Lord Scriven, for highlighting ideas in Committee. I particularly appreciated the point that he raised, that we need to
“release some of the normal procedures and bureaucracy”.—[Official Report, 11/7/22; col. GC 385.]
As a result, we have banned authorities requiring the provision of audited accounts to test the financial standing of bidders to bid in procurements, to compete for contracts under frameworks and to join dynamic markets, except in so far as that is required under the Companies Act. This ensures that start-ups and SMEs which are not legally required to file audited accounts due to their size or age will not be shut out of procurements, provided that they can demonstrate their financial capacity by another reliable means.
Thirdly, we are going further to reduce unnecessary costs on businesses by preventing contracting authorities from requiring insurance relating to the performance of the contract, to be in place prior to the award. We know from feedback that this acts as an obstacle to participation.
Following Committee, I have reflected on the points raised by noble Lords during the debates and would like to thank many of them for follow-up discussions on this topic. I have also met trade associations such as the Federation of Small Businesses and the Business Services Association at a recent round table. We hope that the amendments will give SMEs a better chance of winning public sector contracts and allow the public sector wider access to the first-class skills, innovation and ideas that many agile, creative smaller firms offer. In turn, this will allow us to improve and enable the transformation of procurement services. These are all captured in Amendments 40, 122, 57, 70 and 74. Amendments 75, 76, 134, 140, 179, 183, 186, 188, 192 and 203 are consequential amendments, including splitting Clause 43 into two to avoid it becoming unwieldy.
I have also tabled Amendment 55, which requires a contracting authority to provide sufficient information in the tender notice or associated documents to enable suppliers to prepare tenders. It facilitates a clear trigger for the start of the tendering period identified in Clause 51. As the time available for bid preparation is so important, we consider that small suppliers will welcome this practical clarification. Amendments 40 and 122 in my name create new obligations on contracting authorities to consider the removal or reduction of barriers in procurement to small and medium-sized enterprises. We need to make sure that small and medium-sized companies do better in the procurement world.
Lord Wallace of Saltaire (LD)
I rise to speak to Amendments 41 and 123, which are amendments to government amendments. We welcome Amendment 40 but, as the noble Lords, Lord Maude and Lord Lansley, have said, we need in the Bill to make sure that, as well as SMEs, social enterprises, mutuals and non-profits are eased and get around some of the barriers otherwise placed in their way. I hope that the Minister will be able to give a sufficiently strong assurance that this is what is intended for it not to be necessary to divide the House on this issue, and perhaps even to come back at Third Reading with an adjustment to the current Amendment 40.
In the Green Paper that started this process, the importance of social enterprise, mutuals and non-profits was clearly marked; it has now disappeared altogether. Many of us are conscious that there are those on the libertarian right who think that every form of economic activity should be in the pursuit of profit and that the idea that you can do anything without wanting to make a profit is absurd and against free market principles. The libertarian right in the United States, which clings to such theological doctrines, has begun to infiltrate parts of the Conservative Party and, I am told, was a visible presence at the Conservative Party conference—but I am confident that real Conservatives do not share that absurd theological view. They recognise that there are many areas, particularly in personal services and care, where the different approach that comes from mutuals and non-profits makes a considerable amount of difference. There have been a number of scandals in care homes run for profit in recent years. I speak with passion on this subject because I have had a relative in a charitable care home who was wonderfully well treated in the last few years of her life.
I hope that the Minister will be prepared to recognise that the importance of social enterprise and non-profits needs to be here, and that she will give absolute assurance that this is what the Government intend, and that they do not intend to leave them with the barriers that the Government intend to remove for SMEs.
Lord Coaker (Lab)
My Lords, I have just a few brief remarks on this group. Before I come on to the main point that I want to make, I shall say that I think Amendment 37, tabled by the noble Baroness, Lady McIntosh, about local produce and the local procurement of foodstuffs is something that is growing in importance. All of us know in our own communities that people individually are doing that, as well as local businesses. I think that before long the 50% target she put in her amendment will grow. I think it is an important amendment. Given the other things being talked about, it should not be lost in the general debate.
I thank the Minister for government Amendment 40, which goes to the heart of the discussion in this group, which is about encouraging small and medium-sized enterprises in the procurement process to do better than they are present, and the responsibility of contracting authorities to achieve that. The real question for the Minister—and, frankly, if there are changes of Minister in future—is how we will ensure that that happens, because successive Governments have tried to encourage small and medium-sized enterprises, and it has not been as successful as we wanted. The question is about how we make this procurement system work in a way that benefits small and medium-sized businesses in the way that we would all want.
I am very supportive of Amendment 41, tabled by the noble Lord, Lord Wallace, which talks about the barriers faced by social enterprises and not-for-profit companies in competing for procurement. I think that is something that will become increasingly important.
I know my noble friend Lord Hendy will speak about his later amendment in more depth. His amendment in this group, Amendment 162A, allows procurement to take into account the terms and conditions of staff and the legal status of subcontractors. I think it is an extremely important area, and I thank my noble friend for raising it because all of us would wish to see that people are paid properly for the work they do and that nobody is undercut in the winning of various contracts.
The noble Baroness, Lady Noakes, pointed to Amendment 163 in the name of the noble Baroness, Lady Bennett, and her supportive Amendment 164, which she ably put forward. She made some important points which we can look at in due course and to which I hope the Minister will respond.
However, I go back to where I started: the key amendment in this group is government Amendment 40. We are grateful that it has been brought forward and hope that it will encourage greater success for small and medium-sized enterprises in the procurement business in this country. The key for us is to make sure that this time it works and that we do not have another government amendment in two years’ time trying to achieve the same.
Baroness Neville-Rolfe (Con)
My Lords, the noble Lord, Lord Coaker, is right that the challenge is to make the shift to SMEs a reality. I will take that away as my homework. I thank all noble Lords who have spoken, especially the noble Lord, Lord Aberdare, who progressed matters with me and saved me from a further group of amendments.
I was also very interested in the real-life experience of my noble friend Lord Maude as to the difficulties of getting potential small suppliers to apply for government contracts, because in my experience SMEs can represent very good value for money. They do not have the same costs and scale of central services that some of the bigger operators have, and that can feed through into great prices and great service.
Baroness Neville-Rolfe
Member’s explanatory statement
This amendment is consequential on the change in terminology in new clause before clause 1.
“(4) In carrying out a covered procurement, a contracting authority must—(a) have regard to the fact that small and medium-sized enterprises may face particular barriers to participation, and(b) consider whether such barriers can be removed or reduced.”Member’s explanatory statement
This amendment would require a contracting authority, in carrying out a covered procurement, to have regard to the particular barriers to participation in public procurement that small and medium-sized enterprises may have, and whether they can be removed or reduced.
Member’s explanatory statement
This amendment is consequential on the change in terminology in new clause before clause 1.
Member’s explanatory statement
This amendment is consequential on the change in terminology in new clause before clause 1.
(a) information sufficient to allow suppliers to prepare such a tender, and(b) in particular, details of”Member’s explanatory statement
This amendment would ensure that a contracting authority provides sufficient information to suppliers before the beginning of a tendering period.
“(2A) A condition set under subsection (1)(a) may not—(a) require the submission of audited annual accounts, except from suppliers who are, or were, required to have the accounts audited in accordance with Part 16 of the Companies Act 2006 or an overseas equivalent;(b) require insurance relating to the performance of the contract to be in place before the award of the contract.”Member’s explanatory statement
This amendment would prevent contracting authorities from requiring audited accounts from suppliers that do not otherwise prepare audited accounts (for example, small companies), or insurance to be in place before award.
Member’s explanatory statement
This amendment and the other Government amendment to this Clause would ensure that the House authorities are not required to seek the approval of a Minister of the Crown to exclude a supplier on the basis of national security.
Baroness Neville-Rolfe (Con)
My Lords, I rise to introduce a number of government amendments. These include several technical amendments, so I will be brief.
Amendments 59, 60, 108 and 109 exempt the corporate officers of Parliament from the requirement to seek agreement from a Minister of the Crown before excluding a supplier or terminating a contract under the national security exclusion ground. Amendment 85 ensures that the mandatory exclusion grounds capture all Scots law offences equivalent to the already specified English and Welsh offences.
Amendments 86 and 87 refer to the relevant sections in the Theft Act to align with other legislation on economic crimes. Amendment 88 amends the transitional regime for mandatory exclusions to ensure that the correct time period is applied for the mandatory exclusion ground for conspiracy to defraud. Amendment 90 simplifies the exclusion grounds for suppliers which are insolvent or bankrupt. Amendments 92 and 93 amend the rules on how far in the past events can be taken into account as discretionary exclusion grounds in relation to breach of contract and poor performance.
I will turn to the amendments tabled by other noble Lords when I close. I beg to move.
Lord Fox (LD)
My Lords, I rise to speak to Amendment 89 in my name. I feel that the time pressure has lifted, so perhaps I can make a nice long speech to your Lordships now. Amendment 89 is intended to allow Ministers and contracting authorities to exclude businesses from procurement where there is evidence of financial and economic criminal activity, such as fraud, money laundering, bribery or sanctions evasions, but there has not yet been a conviction by a court.
This follows the debate we had in Grand Committee on Amendment 320, when the Minister made some cogent points about the problems of excluding organisations that had not been convicted—that point was understood. However, given the length of time involved in carrying out investigations and then securing the resulting enforcement action, we remain concerned that there is a real possibility that unsuitable suppliers may be awarded procurement contracts while they are awaiting the full length of the process.
It was therefore with some interest that my attention was drawn to the Government’s Review into the Risks of Fraud and Corruption in Local Government Procurement. This review looked into the risks of fraud and corruption in local government procurement—not surprising; that is what it was supposed to do—and made the recommendation that the exclusions regime for public procurement should be examined to see
“if more could be done to allow procurers to exclude bidders from the process (with reasonable cause and without the requirement to disclose), for example when there are known concerns with law enforcement that have not yet resulted in a prosecution”.
We believe that the Bill provides an opportunity for the Government to fulfil this recommendation, and suggest that the process of studying how to do that, recommended in that report, could happen. I should be grateful if the Minister would bring forward some sort of government process to have that assessment. If this is not the Government’s intention, she needs to explain to your Lordships’ House why she is prepared to recommend one process for local authorities through a report that had ministerial backing while ignoring the actual issue in the appropriate legislation, which is the Bill. This was the subject of a letter that I wrote to the Minister many days ago and I am still waiting for the reply.
It is in everyone’s interest to ensure that the contracting authority can act when it has evidence of financial or economic offences, but formal conviction is outstanding. We understand the problems, but the Government themselves have identified this as an issue with local authorities. The exclusion regime is not just a deterrent for bad actors; it is also supposed to prevent them getting the contracts in the first place.
Baroness Hayman of Ullock (Lab)
My Lords, this has been a short debate, but this group contains some very important amendments that the Minister should consider carefully.
I turn first to the amendment in the name of the noble Lord, Lord Fox. He introduced it extremely clearly and explained why he considered it necessary. He made an important point: if you give a contract to somebody who, not a very long time afterwards, is found guilty of the offences outlined in the noble Lord’s amendment, what recourse is there for other people who have bid for that contract and behaved perfectly properly? We know that contracts are often given for a number of years, so this is likely not to be something that happens once in a blue moon; it could become a problem. If the Minister is not inclined to accept the noble Lord’s amendment, I ask her to take his concerns back to her department to see whether there is another way to have some kind of recourse or review if such a situation were to arise.
My noble friend Lord Hendy’s amendment is incredibly important because, as he rightly said in introducing it, we have Clause 29, which looks at excluding suppliers for improper behaviour—he listed many of the improper behaviours that are included in this—but what is not included is what happens if the rights of an employee or worker are breached. Surely the rights of those who work on contracts and work for people should be fully supported by the Government. We have laws on employment rights for a purpose. Surely, in looking at procurement and who to give what are often extremely lucrative contracts to, this Bill should consider employees’ rights and ensure that companies that have behaved improperly by breaching employment rights are excluded.
This seems a very straightforward amendment to add to the Bill. It would give employees more confidence and would give people who are looking to employ people confidence that they are treating their workforce in the way the law of our country dictates. I urge the Minister to support this amendment.
Baroness Neville-Rolfe (Con)
My Lords, I thank the noble Lord, Lord Fox, for Amendment 89 on financial and economic misconduct. The amendment would permit the exclusion of suppliers where there is evidence of certain economic and financial offences. Of course, suppliers who commit fraud, bribery and money laundering and have failed to self-clean have no place winning government contracts. There are already mandatory grounds for exclusion that cover the most serious offences of this nature, as set out in Schedule 6. It is worth noting that the scope of economic and financial offences covered is significantly wider than in the EU regime that it replaces, including a broader range of theft, fraud and money laundering offences.
However, the mandatory grounds in Schedule 6 rightly require the supplier or a connected person to have been convicted. By providing for exclusion without the requirement for a conviction, the amendment would require authorities to make a judgment as to whether there is sufficient evidence that offences have been committed in order to apply the ground. They would need to make this judgment at a point when the investigating authorities have not reached a view, which would be very difficult. The exclusions regime requires all grounds to be considered in respect of every bidder in a procurement, so authorities would have no choice about whether to consider these matters.
I thank the noble Lord for drawing our attention to the review of finance and corruption in local government. The recommendation in that review was that we consider whether this proposal is feasible. We have given it careful consideration but are not taking it forward, for the reasons I have already touched on. However, I would add that the very fact pointed out by the noble Lord—that investigations by the authorities into these matters, which can apply to many different areas of regulation, often take considerable time—speaks to the complexity of making these judgments within the contracting authorities. There is no reason to think that they would find this any easier than the relevant and proper authorities. In fact, they would find it harder, so it would be a new burden on those investigating suppliers—it could be a significant one—and on suppliers themselves, which I am unwilling to impose.
I turn now to Amendment 91A, tabled by the noble Lord, Lord Hendy, which introduces a discretionary exclusion for “significant” breaches of workers’ rights. I pay tribute to the noble Lord’s work in this area. In my view, the exclusion grounds already cover the most serious breaches of workers’ rights, so the mandatory grounds in Schedule 6 include slavery and human trafficking offences, offences relating to employment agencies and gangmasters, and refusal or wilful neglect to pay the national minimum wage. These are based on the serious labour offences within the purview of the director of labour market enforcement.
The amendment begs the question of what constitutes a “significant” breach. Unless there is a settled consensus on this point, which I am not aware of, it will be difficult for both suppliers and contracting authorities to interpret. We should remember that suppliers will need to self-declare whether they are subject to any of the grounds, and that contracting authorities will need to consider whether suppliers meet the grounds in each procurement that they run. That is quite wide-ranging in relation to employment rights. Questions of whether a breach is significant, and, indeed, whether it relates to rights derived from statute, common law or international obligations, will consume a disproportionate amount of time and resources. I do not doubt that there are a number of behaviours in different areas which the exclusion grounds we have set out might or might not cover; but the purpose of the exclusions regime is to protect against suppliers that may be fundamentally unfit to compete for public contracts. It is not a means to enforce employment rights, or a lever to incentivise certain behaviours.
What we have introduced in this Bill is a much tougher regime of debarment, with central resources devoted to assessing suppliers and deciding centrally on debarment. This is tough for direct and indirect suppliers, as one bad apple in a company can cause them to be debarred—a very strong incentive to ensure that bad behaviour does not occur in the first place, of course; or, where it does, to take remedial action. However, expanding the exclusion grounds, as proposed in this amendment, will have a chilling effect on engagement in procurement, as I explained from a business perspective before I became a Minister and turned into the gamekeeper. We must be fair and remember that we have an interest in more competitive markets that improve value for money, innovation and productivity. I am grateful to those who have spoken for raising these issues. However, I believe we have done enough in Schedule 6, and I respectfully ask the noble Lords, Lord Fox and Lord Hendy, not to press their amendments, given the lateness of the hour.
The noble Baroness, Lady Hayman, raised a new point about the carry-on consequences of the issues we have discussed in this group. I am not sure that we can do anything about that, but I will certainly have a look at that as the Bill progresses. I beg to move.
Baroness Neville-Rolfe
“(4) In this section, a “relevant contracting authority” means a contracting authority other than—(a) a Minister of the Crown or a government department,(b) the Corporate Officer of the House of Commons, or(c) the Corporate Officer of the House of Lords.”Member’s explanatory statement
This amendment and the other Government amendment to this Clause would ensure that the House authorities are not required to seek the approval of a Minister of the Crown to exclude a supplier on the basis of national security.
Member’s explanatory statement
This amendment and the Government amendment to subsection (1)(b) of this clause would clarify that it is improper behaviour relating to the award of a particular contract that is relevant in deciding whether to exclude someone from competing for that contract, and would reflect the change in terminology in new clause before clause 1.
Member’s explanatory statement
This amendment and the Government amendment to subsection (1)(a) of this clause would clarify that it is improper behaviour relating to the award of a particular contract that is relevant in deciding whether to exclude someone from competing for that contract, and would reflect the change in terminology in new clause before clause 1.
Member’s explanatory statement
This amendment is consequential on the change in terminology in new clause before clause 1.
Member’s explanatory statement
This amendment would ensure that documents establishing or modifying a dynamic market are not subject to any requirements applicable to contracts under the Bill.
“(1A) A condition set under subsection (1)(a) may not— (a) require the submission of audited annual accounts, except from suppliers who are, or were, required to have the accounts audited in accordance with Part 16 of the Companies Act 2006 or an overseas equivalent;(b) require insurance relating to the performance of a contract to be in place before the award of the contract.”Member’s explanatory statement
This amendment would prevent contracting authorities from requiring audited accounts from suppliers that do not otherwise prepare audited accounts (for example, small companies), or insurance to be in place before award.
“Qualifying utilities dynamic market notices: no duty to publish a tender notice
(1) The duty to publish a tender notice in section 20(1) does not apply in relation to the award of a contract by reference to suppliers’ membership of—(a) a utilities dynamic market established by reference to a qualifying utilities dynamic market notice, or(b) a part of such a market.(2) A contracting authority must instead provide a tender notice to members of the market, or part of the market, for the purposes set out in section 20(1). (3) A contracting authority may also provide a tender notice to suppliers that have applied for membership of the market, or part of the market, but have yet to be accepted or rejected.(4) The reference in section 20(5) to a tender notice or associated tender documents includes a reference to a qualifying utilities dynamic market notice.(5) Section 33(4) (duty to consider applications for membership) does not apply in relation to the award of a contract by reference to suppliers’ membership of—(a) a utilities dynamic market established by reference to a qualifying utilities dynamic market notice, or(b) a part of such a market.(6) In this section, “a qualifying utilities dynamic market notice” means a dynamic market notice under section 38(2) (dynamic market notices) that—(a) relates to the establishment of a utilities dynamic market, and(b) sets out—(i) that only members of the market will be notified of a future intention to award a contract by reference to suppliers’ membership of the market, and(ii) any other information specified in regulations under section 88.(7) In this Act, a reference to publication of a tender notice includes a reference to provision of a tender notice under subsection (2) or (3).”Member’s explanatory statement
This new Clause would relieve a utility that establishes a dynamic market by reference to a qualifying utilities dynamic market notice from the obligation to publish a tender notice.
Nuclear Test Veterans: Medals
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Lord Purvis of Tweed (LD)
My Lords, I associate myself with the remarks of the noble Lord, Lord Coaker, and the very valid questions he asked. I welcome this move. It was a change of heart from the Government, but nevertheless a welcome move for those military and civilian personnel who served their nation and now will, finally, be properly recognised. Notwithstanding views about the weapons system itself, these people served their country and recognition—unfortunately, as the noble Lord indicated—has come too late for many. However, it will provide some comfort to their families that an often-disregarded service is now being recognised.
How many civilians will be eligible for recognition and the medal? On support, which the noble Lord asked so clearly about, in replying to questions on the Statement in the Commons, the Veterans Minister, Mr Mercer, indicated that pensions were available. But, of those who are eligible for pensions, what is the Government’s estimate of the proportion who are receiving them? Often, this is, in effect, an opt-in. There is the very valid point about promoting material through the various networks. Some of these veterans will be part of veterans’ associations and others will not, so how will the Government disseminate and promote this information?
My final question is on the indigenous communities in the areas where these tests took place. The indigenous communities in Australia did not voluntarily offer their land for British nuclear tests, and they too have been impacted. The Minister in the Commons indicated that the UK Government provided £20 million then to clear this up, but the legacy is much longer. I met with the acting high commissioner of Australia this week, and she raised with me the good work now being done with the new Prime Minister of Australia in seeking to enhance recognition of the indigenous communities. We can play our part with our allies and friends in the Australian Government by increasing our recognition of the impact on their communities of something that has made our country safer, as the Government say, but which has unfortunately made many of those communities less safe. So, what do the Government plan to do for the indigenous communities in places where these tests took place?
The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)
My Lords, as the noble Lord said, Tuesday’s announcement was a huge victory for the nuclear test veterans. Since the very positive announcement by the Minister for Veterans on Tuesday was taken as read, I will make three points by way of introduction before I answer the noble Lords’ questions.
As the noble Lord said, the UK undertook its first nuclear test 70 years ago and, in so doing, confirmed our country’s status as the world’s third nuclear power, which has helped to keep peace since World War II. Critical to the success were those who took part in our national testing programme. There is a direct line between their service all those years ago and the safety and security of our nation today, which becomes ever more important.
Secondly, in recognition of their service and the 70th anniversary, the Government are undertaking a wide programme of recognition to pay tribute to all service personnel, and civilians—that is so important—who took part in the testing programme in Australia, New Zealand, Fiji and Kiribati. We owe them a great debt of gratitude. The programme of recognition began this week with the UK Government’s first commemorative event at the National Memorial Arboretum, with the Prime Minister himself announcing the creation of a new medal for military and civilian participants in the testing programme. It was wonderful that Ministers, veterans and their families gathered at the arboretum to thank all those who were present and the families of those whom we have lost.
Thirdly, this has been a cross-party matter, as the Veterans Minister said in the other place. It is not only people like the Secretary of State for Defence who have been involved in all of this; so have Rebecca Long Bailey, John Baron and Sir John Hayes. People from across the parties have been involved, which is unusual and well worth celebrating.
Clearly, I am new to this subject, but I will try to answer all of the questions and I will follow up on those I do not. We will of course need resources to find who should be given the medals, and it is clear that the process has to get under way. I do not think we have given an estimate of the numbers, but we are keen to make this a success and look generously at who should be awarded.
The noble Lord, Lord Purvis, talked about pensions. The question was raised in the other place and the Minister for Veterans indicated that he would be writing on this issue. What I can say is that I will ensure that a copy of that letter also gets sent to noble Lords engaged in this debate, and I will try to add to the request the percentage of those eligible, which I think is an additional one. We will do what we can. It was quite a long time ago and it is often quite difficult to find answers to these questions, but we can certainly look at the pensions. Of course, veterans who believe they have suffered ill health due to service can apply for no-fault compensation under the war pension scheme, and more information is on the Veterans UK pages on GOV.UK, including specific guidance for the nuclear test veterans.
I was asked about plans for reviewing medals more generally, and I have to say that there are currently no plans to review the assessment process; it is a well-established process. The Advisory Military Sub-Committee is an independent committee; it has robust processes in place to review historic military medals and claims against the military medals framework.
Finally, I will say how important it was to acknowledge the indigenous populations, whose traditional lands and territorial seas were used for nuclear testing. As the noble Lord said, this has already been the subject of a £20 million ex gratia payment to Australia to help rehabilitate former lands and seas. I was very interested to hear about the discussions he has been having with the Australians, and I look forward to catching up further on that.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise with great pleasure, as I always do in your Lordships’ House, to use the hashtag Campaigning Works, and I join the Front Bench spokespeople in commending the nuclear test veterans and their families who have campaigned so hard, and for so long, and can now finally celebrate the results. I do hope that the Government can ensure that these medals reach the veterans and their families.
My question follows on from that of the noble Lord, Lord Purvis of Tweed, and from what the Minister was just saying about the traditional owners of these lands. I note that in this rather long Statement there is one sentence that refers to
“an acknowledgement of the traditional owners of the lands that were used for nuclear testing”.
I wonder whether the Minister might be able to amplify a little what the word “acknowledgement” actually means? I particularly note in that context Maralinga, the most infamous site in Australia with the worst contamination, and the worst damage done to indigenous communities. Just last year a Monash University study revealed some new scientific understanding that in the desert environment, even small particles can break down in that environment to release plutonium—something that is happening right now at this moment and will happen for many decades, and perhaps centuries. So, would “acknowledgement” include more support, perhaps for more research and more action to deal with the continuing damage?
Baroness Neville-Rolfe (Con)
I agree with the noble Baroness that it is important to publicly acknowledge the use of lands belonging to traditional landowners for nuclear testing, both in Australia and the Pacific; I was going to volunteer that point which the noble Lord, Lord Purvis, made. We are acknowledging it publicly in Parliament, and we have to continue to do that; I am not aware of any particular research in the area that the noble Baroness mentioned, but I will certainly ask that question and come back to her if I can give her any more information. I suspect that she may know a great deal more about Australia and what is going on there.
Lord Berkeley of Knighton (CB)
My Lords, I very much echo the congratulations of other noble Lords on this matter finally being resolved. The points about the indigenous population and any kind of fallout are very important, because there could be nothing worse for the reputation of our country than the idea that we would conduct experiments of this sort, which are very important, and somehow poison other people’s land without compensating them and checking that it is now safe.
I, too, very respectfully suggest that there are lessons to be learned here. Bureaucracy, of course, takes a long time. Where compensation, medals and pensions are concerned, I am sure the Government would prefer not to be seen to have this matter resolved by people constantly having to campaign and drag it from them. I suggest to the Minister that we should try to be more proactive about looking ahead when these problems arise, and perhaps even come up with solutions before we need endless campaigns. It is more honourable and dignified, and it is clearly applicable to a question such as this. However, I repeat that I am very glad that this question has now been resolved.
Baroness Neville-Rolfe (Con)
I am glad that the noble Lord also mentioned the communities in Australia and elsewhere. Of course, as I said, there has been a government ex gratia payment, which I believe was very important. Although the 1950s and 1960s were a long time ago, it is not too late to honour the brave people involved. Those looking at these cases in the round have difficult judgments to make but, having said that, the noble Lord is right that we should learn from mistakes. That is one of the principles I have brought into government with me: learn as you go along, because you can improve in almost every area of government.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, the noble Lord, Lord Howarth of Newport, is taking part remotely and I invite him to speak.
Lord Howarth of Newport (Lab) [V]
My Lords, in 1992, I led a delegation of British parliamentarians to the Maralinga test site. While I very much welcome the award at long last—70 years on—of medals to British nuclear test veterans, I ask the Minister what the position is now on monetary compensation for them and their families. She will know that a study in 1999 found that an extraordinary 30% of these veterans had already died, mostly in their 50s, from cancers and other conditions. This is hardly surprising as air crew were required to fly through the mushroom cloud and servicemen were ordered to walk, run and crawl across the site to see how much nuclear fallout adhered to their uniform.
Moreover, as my noble friend Lord Coaker mentioned, a disproportionate incidence of birth deformities, cancers and infant mortalities has been found in the veterans’ children. Given the arguments that took place between the Governments of the UK and Australia about responsibility for compensation, and given the years of obfuscation by the MoD before it agreed in 1988 to compensate our own veterans, to what extent can the Minister assure the House that appropriate compensation has now been paid? Do the Government intend to take further steps to fulfil any legal and moral obligations to servicemen and their families, to civilian families and to the traditional owners of the lands where the tests took place?
Baroness Neville-Rolfe (Con)
I am glad to have the further experience of the noble Lord. Although I was not aware of his visit, he brings great emotion to this subject, which is very helpful on a day when we have made a great deal of progress in this area. He will know that there is an established process for all veterans, including nuclear test veterans, to be able to claim compensation where they believe they have a service-related condition. Veterans UK has worked with the British Nuclear Test Veterans Association—whom I take this opportunity to congratulate—to develop enhanced guidance to support claimants belonging to the nuclear test veterans community, which is available on GOV.UK.
In addition to the medals, a wider package was announced—the oral history project, which is important in remembering the victims involved. I have taken part in oral history projects and they are extremely valuable, as this one will be for the veterans, their families and everyone else involved. Charities will also be able to bid for a separate £200,000 fund to support activities.
Government Contracts: Bain & Company
Baroness Neville-Rolfe Excerpts(1 year, 5 months ago)
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Lord Hain
To ask His Majesty’s Government what discussions they have had with the government of the United States of America about the suspension of United Kingdom government contracts with Bain & Company.
The Minister of State, Cabinet Office (Baroness Neville- Rolfe) (Con)
Before I answer the Question, I should say that it was a privilege to hear the South African President addressing Parliament yesterday. I hope I speak for others when I say that I found the Lord Speaker’s vote of thanks very warm and well judged.
His Majesty’s Government have not suspended any contracts with Bain & Company; however, following careful consideration in the light of South Africa’s Zondo commission, Bain & Company and its affiliates have been excluded from bidding for procurements for the award of new Cabinet Office contracts for a period of three years. Other departments were advised that exclusion should also be considered for their procurements. I am not aware of any specific UK government engagement with the Government of the United States of America on this issue.
Lord Hain (Lab)
My Lords, first, I thank the noble Lord, Lord True, and Jacob Rees-Mogg—I never thought I would say that—for suspending Bain & Company from obtaining UK government contracts for three years. No company should act illegally abroad—as the South African judicial commission found Bain to have done in deliberately disabling the country’s tax-collecting agency, on the direct instruction of the corrupt former President to protect his cronies and his family—and get government contracts at home. The Government’s action sets an important precedent for other global corporates—that they must act legally and ethically abroad or be barred from taxpayer-funded public contracts at home. Bain is Boston-headquartered and I urge the Prime Minister to press President Biden to follow Britain’s lead.
Baroness Neville-Rolfe (Con)
My Lords, our understanding is that Bain & Company currently does no work for the US federal Government or US federal government agencies and has done no such work since early 2013, but the UK Government are confident that our key ally, the United States, will undertake the necessary due diligence to investigate such matters.
Lord Wallace of Saltaire (LD)
My Lords, it seems to be the settled policy of the Government to cut the size of the Civil Service and then compensate by spending more money on consultancies. Why is this done? Is it because civil servants provide evidence, whereas consultancies tell the Government what they want to hear? Some £60 million has been paid to Bain in the last six years. I understand that £40 million of that was paid for “advice on Brexit opportunities”. Was that value for money?
Baroness Neville-Rolfe (Con)
Bain is not being paid anything at the moment, and I think that in the last year the figure was £2 million. I share the noble Lord’s view that we have to look carefully when we employ consultants to do work that can sometimes be done well within the Civil Service. At the same time, extra expertise is sometimes needed, especially on subjects as difficult as Brexit.
Lord Collins of Highbury (Lab)
My Lords, I congratulate my noble friend on being persistent in raising this issue at every opportunity. Corruption at an international level needs international co-operation. While the Minister may say that there are no contracts with the federal Government of the United States, the company will certainly do contract work with states within the US. While she is not aware of any discussions with the US Government, can she reassure us that there will be such discussions so that we can tackle this cancer on the world, corruption?
Baroness Neville-Rolfe (Con)
I agree that the noble Lord, Lord Hain, has been a great campaigner on this issue and I thank the noble Lord, Lord Collins, for repeating that. It is very important that we fight corruption at every level, in every way we can. It erodes trust and undermines public confidence, and it does that internationally. I think we have a good record in recent years, under this Government, in raising corruption internationally. I come back to my point that individual countries have to take their own action on exclusion and debarment.
Lord Hain (Lab)
Since I have the opportunity to come back, I would like to say that I am very grateful to the Minister for her response. The US is a key ally of ours, as are other countries in the G7 and the G20; all of them do business with Bain. Surely Britain having provided a lead opens the door for the Government to lobby their colleagues and friends to follow the same policy. Companies which act illegally—in disabling a tax agency in this case—should surely pay the penalty.
Baroness Neville-Rolfe (Con)
On the subject of US relations, I can say that the Prime Minister met US President Biden at the G20 in Indonesia, and they agreed on the national and international importance of the UK-US relationship given the challenging economic times and all the difficulties we face together. The US Government have a suspension and debarment regime to which they devote a lot of resources, and contractors found not to be responsible are suspended or debarred, and the US will no doubt study very seriously the Zondo commission and the steps we have taken in the UK to lead the way on this matter.
Lord Watts (Lab)
My Lords, is it not about time that directors were held accountable for such actions, and that some of them went to jail?
Baroness Neville-Rolfe (Con)
There is corporate law which involves the suspension of directors, but I am not able to speak about it today; it is dealt with by another department. However, our new Procurement Bill improves the arrangements for debarment where exclusion is needed, perhaps because there has been insolvency, dishonesty, impropriety or a serious breach of ethical and professional standards. We will discuss that in this House on Report next week. I think we are moving forward in this area although we have to be fair and balanced, as the UK Government always try to be.
Lord Sikka (Lab)
My Lords, as the Minister knows, there is no central enforcer of corporate law in the UK and the whole scene is very disjointed. While the Minister is in the mood to tackle corruption, can I invite her to tell the House whether any of the big four accounting firms, whose tax avoidance schemes have been declared unlawful by the courts, have at any time during the last 12 years been investigated, prosecuted or fined, or have the Government even bothered to recover a penny of the legal costs?
Baroness Neville-Rolfe (Con)
I am grateful to the noble Lord for his comments, but it goes rather beyond today’s Question. However, I can say that the Cabinet Office conducted an in-depth review into KPMG following the finding against the firm of dishonesty in its role in the sale of the Silentnight group of companies. In fact, the review concluded that KPMG should not be excluded because it had carried out self-cleaning measures —that is where a company moves to demonstrate reliability and improve its compliance systems. It is very important that companies can do the right thing, particularly where mistakes have been made.
Public Duty Costs Allowance
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Lord Rennard
To ask His Majesty’s Government what plans they have to revise the Public Duty Costs Allowance for former Prime Ministers.
The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)
My Lords, the public duty costs allowance assists former Prime Ministers who remain active in public life. The allowance is not paid directly to former Prime Ministers; rather, claims may be made from the allowance to reimburse incurred expenses that arise from the fulfilment of public duties, such as office and secretarial costs. The allowance has been frozen at an annual limit of £115,000 since 2011. The Government keep these matters under review.
Lord Rennard (LD)
My Lords, we have a rapidly increasing number of ex-Prime Ministers. Three of them continue to sit as MPs. While Theresa May claims only a part of the ex-Prime Minister’s allowance, Boris Johnson and Liz Truss are entitled to claim up to £115,000 a year for as long as they say they are doing public duties, which may be for the rest of their lives. This is in addition to MPs’ office costs allowance, which is subject to some public scrutiny, unlike the ex-Prime Ministers’ allowance. They are also able to earn from speeches, books and newspaper articles. Is it not time that we had a proper review of these allowances? We have reduced it for sitting MPs and made it for a fixed period only.
Baroness Neville-Rolfe (Con)
My Lords, hitherto this allowance has been the subject of cross-party consensus. Of course, it was introduced by the Conservative Government to update the arrangements at the time of the late Baroness Thatcher’s retirement and has been claimed since 2013 by several former Prime Ministers. However, no claims have been received from Boris Johnson or Liz Truss in relation to the PDCA; nor has any indication been given that claims will be made.
Lord Butler of Brockwell (CB)
My Lords, I was Cabinet Secretary and Mr Major was Prime Minister when this allowance was introduced. Is not the noble Lord, Lord Rennard, being a little ungenerous? Former Prime Ministers do incur extra costs as a result of the public office that they have held. The allowance need be claimed only to the extent that they incur those extra costs.
Baroness Neville-Rolfe (Con)
I very much agree with the noble Lord, Ex-Prime Ministers still have a special position in public life and need to pay office and staff costs in support of that. Sometimes, things change. The arrangements referred to were extended to a colleague of the noble Lord, Lord Rennard, Sir Nick Clegg, who was Deputy Prime Minister from 2010 to 2015, a unique status at that time. He claimed £444,000 before he left to become a highly paid Silicon Valley executive and lobbyist.
Lord Collins of Highbury (Lab)
My Lords, the Minister is right that there was a consensus on the introduction of this allowance, and no one disputes the need for it. However, she is also right that the Government should keep this under review, because after the retirements of the late Baroness Thatcher and Tony Blair, both long-serving Prime Ministers, we now have a situation where a Prime Minister has served the shortest period in history. Does that not indicate the need for a review and perhaps the introduction of a pro rata allowance?
Baroness Neville-Rolfe (Con)
I assure the noble Lord that the Government keep these matters under review and that the level of the limit is reviewed by the Prime Minister, at the start of a Parliament and annually. However, as I said, we have no plans to revise the limit at this time.
Baroness Jones of Moulsecoomb (GP)
My Lords, I deeply regret that there has not been a Green Prime Minister at whom the Minister can take pot-shots. It is ludicrous and inappropriate, if the Conservative Party is going to change its Prime Minister every seven weeks, to give them that sort of allowance. What about having a limit on the amount of time that they have served as Prime Minister; for example, two and a half years?
Baroness Neville-Rolfe (Con)
It is very much my hope that the current Prime Minister serves for a long time and that this problem passes.
Lord Wallace of Saltaire (LD)
My Lords, when we have Ministers cracking jokes about how many people have occupied their post in the last six months, we recognise that the rate of ministerial and prime ministerial turnover needs to decrease. When she was Prime Minister, Prime Minister Truss made it very clear that she was in favour of a smaller state, with fewer subsidies to individuals. May we therefore take it as given that she is highly unlikely to claim what would be, in effect, a state subsidy now that she has resigned?
Baroness Neville-Rolfe (Con)
Whether to waive such payments is entirely a matter for the ex-Prime Minister involved, as the noble Lord knows only too well. But I applaud Prime Minister Truss for some of the points she made about efficiency. These are important issues and we should not decry her for making such points.
Lord Porter of Spalding (Con)
Does my noble friend agree that, given the performance of some sitting Prime Ministers over the last 25 years, paying ex-Prime Ministers could sometimes be seen as better value for the taxpayer than paying serving Prime Ministers?
Baroness Neville-Rolfe (Con)
My Lords, I do not know how to answer that question. I return to the point I made at the beginning: ex-Prime Ministers have a special position in public life. This is not as it is in other countries, where ex-Prime Ministers often have substantial salaries, houses and things. I have been around the world and noticed that. We have a public duty costs allowance, which is incurred only when the former Prime Minister fulfils public duties linked to their former office. That is carefully reimbursed by the Cabinet Office, when it has evidence that the money has been properly spent.
Lord Bird (CB)
Is it possible that we could get back some of the cost of running a Prime Minister when we realise that they can make millions of pounds after they leave office? Mr Blair and Mr Cameron are worth a few bob, and I know Mr Johnson will be. We could try to get 10% or 20% of that money back in the public coffers.
Baroness Neville-Rolfe (Con)
I do not agree with that, although I am a big reader of the Big Issue.
Lord Forsyth of Drumlean (Con)
My Lords, could my noble friend assure me that none of the money from the allowance will be used by Mr Gordon Brown and Sir Keir Starmer to plot the abolition of this House?
Baroness Neville-Rolfe (Con)
It is up to past Prime Ministers, including Gordon Brown, to submit invoices in accordance with the rules of this scheme. I am sure they will continue to do that.
Baroness Prosser (Lab)
My Lords, noble Lords should bear in mind that questions and answers should be about the principles being posed. Finger-pointing at individuals, from whichever side of the Chamber, is deeply unhelpful and does nothing to enhance the status of this House.
Baroness Neville-Rolfe (Con)
I agree with the noble Baroness. That was exactly what I have been saying, in slightly different language. This allowance has been the subject of cross-party consensus. It is important to maintain the special position of former Prime Ministers in public life. I started with my mentor, Baroness Thatcher, who certainly needed this allowance in her latter days.
House of Lords (Peerage Nominations) Bill [HL]
Baroness Neville-Rolfe ExcerptsFriday 18th November 2022
(1 year, 5 months ago)
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The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)
My Lords, I congratulate my noble friend Lord Norton of Louth on securing the Second Reading of his Bill. I commend him on the clarity of his opening speech today, which I think helped us all.
I am grateful for today’s interesting, generally good-hearted and wide-ranging debate, on which the Government, under our new Prime Minister, will of course reflect. I will look at the specific question asked by the noble Baroness, Lady Falkner, and the noble Lord, Lord Wallace of Saltaire, but there is no shift in position of which I am aware. In any event, his comments went rather beyond the purport of the Bill, to which I will now return.
My noble friend’s Bill would make provision for a commission to advise the Prime Minister on recommendations to the Crown for the creation of life peerages. In effect, HOLAC’s remit would be expanded, and there would de facto be limits on the number of Peers that could be created. Having listened carefully to noble Lords’ speeches today, I am afraid I have to conclude that this is an example of the wish to substitute the opinions of the great and the good for those of their elected representatives. Whatever current preoccupations there are, which I understand, I do not accept that that would be desirable.
The changes proposed by my noble friend would present significant constitutional issues, some of which have been left hanging. Constitutionally, the Prime Minister has the sole power of patronage in nominating to the sovereign those to be appointed to life peerages. As someone said, the Prime Minister is the sovereign’s principal adviser and of course is democratically elected. This arrangement has stood the test of time. Prime Ministers are accountable to Parliament for the nominations they make and, ultimately, to the electorate. The Government do not accept that the power of the Prime Minister should be constrained in the way that my noble friend proposes in the Bill.
I turn to the House of Lords Appointments Commission, which, as currently constituted, is an independent advisory non-departmental body. It offers the Prime Minister advice on the probity of those nominated for life peerages alone and makes recommendations to the Prime Minister in respect of Cross-Bench Peers. That is a valuable function, as many have said. Although the commission’s role is advisory, the Prime Minister places great weight on the commission’s careful and considered advice. However, I emphasise the word “advice”. The role of the commission is to advise the Prime Minister on those nominated for a life peerage and make recommendations in respect of Cross-Bench Peers. He in turn has constitutional responsibilities in relation to recommendations made to the sovereign—in particular, to ensure that the sovereign is not himself drawn into controversy, a point emphasised by my noble friend Lord Cormack—and in relation to the electorate, as already mentioned.
I turn to the detail of the Bill. It would place HOLAC on a statutory basis and strengthen the commission’s role in the appointments process in two key respects. First, it would require the Prime Minister to refer the name of an individual to the commission before recommending them for a life peerage. Secondly, it would require the Prime Minister to wait until the commission had advised on whether a nominated individual met specified criteria before recommending them to the Crown. I believe that seeking to substitute the Prime Minister’s judgment for its own could prevent a recommendation contrary to the commission’s opinion. That could be the effect of the changes.
The principal criteria for appointing new Peers in Clause 7 of the Bill are described as “conspicuous merit” and
“a willingness and capacity to contribute to the work of the House of Lords.”
The average attendance for the 2019 to 2021 Session was 352, as has been referred to. Many distinguished figures—many are here today—come to the House but do not contribute every day. They contribute in their areas of expertise and bring experience and knowledge from a wide range of occupations. It is unclear how “conspicuous merit” would be interpreted: how would the commission identify individuals who meet this standard? The value of this place is that Members who are not full-time legislators have a range of experiences, and to set a high and arbitrary bar could see a loss of this expertise.
I would add that the quality of contribution, not just the quantity, is important, and that is what we should focus on in thinking about these matters.
The Bill represents a constitutional change, vesting more power in an unelected and ultimately unaccountable body to restrict the ability of the Prime Minister to make recommendations to the sovereign, and indeed allowing it to come up with its own additional criteria for appointing new Peers. This is a wide power, albeit one that is subject to annulment by a resolution of either House. In other words, the Prime Minister, although still responsible constitutionally for making recommendations to the sovereign, would be restricted to an unacceptable extent by the commission in giving that advice. Accountability for decisions to nominate individuals for peerages rightly rests with the Prime Minister, who is accountable to Parliament and, ultimately, the electorate.
Clause 3 would require the Prime Minister to have regard to three principles when determining whether to make recommendations for new life Peers. First,
“not less than twenty per cent of the membership of the House of Lords shall consist of members who are independent of any registered political party”.
Secondly,
“no one party may have an absolute majority of members in the House of Lords”.
Thirdly,
“the membership of the House of Lords must be no larger than that of the House of Commons.”
I do not believe that such a significant change in the constitution can be the subject of a Private Member’s Bill. It ought rather to reflect political discussion, and preferably consensus among the political parties.
I also observe that my noble friend seems to be proposing some sort of cap on the number of political appointees to this House. For centuries, our democracy and politics have been based on a party-political system—that is a fact of life. With the greatest respect, even those who sit on the Cross Benches are still political to some degree—they may not be party political, but they bring a different perspective.
On the size of this House and the idea that it should be no larger than the House of Commons, is the Prime Minister to wait for 100 Peers to retire or die to be able to make new nominations? I think that everybody agrees that new appointments are essential to keep the expertise and outlook of the House fresh. How to achieve a reduction in size is not straightforward; indeed, transition would be “troublesome”, in the words of the noble Lord, Lord Burns.
To conclude, the constitutional position—
Lord Cormack (Con)
Before my noble friend concludes—she is concluding rather early—there are ways that could be employed. The first is my suggestion about a percentage attendance. Secondly, some Members of your Lordships’ House Are on leave of absence for years. One is on a leave of absence in California and has not been here for five or six years. Anybody who takes a leave of absence for other than health reasons, and who is away for more than one Session, should be told to go. Would my noble friend respond to those constructive suggestions?
Baroness Neville-Rolfe (Con)
I thank my noble friend. Clearly, the process of encouraging appropriate resignations, making use of the leave of absence provisions and the various changes that have been made to the way that we run this House in recent years, can indeed be useful. I am sure that, in further discussion of the Bill, some of these possibilities will be considered.
I come to the final point. The Prime Minister is ultimately responsible to Parliament and the people for any nominations that he, or she in the past, makes to this House, and the Government do not see the case for changing this. However, the Government consider that the House of Lords Appointments Commission performs its role well, as it is currently constituted, and is extremely grateful for the work that it does. The fact that Members of this House are appointed from a wide range of backgrounds is testament to its success. It will, and should, continue to advise on appointments in the same way that it does now. However, as will be apparent, the Government have reservations about the Bill we have debated today, and I look forward to hearing further from my noble friend.
Baroness Hayman (CB)
I apologise for intervening, but I cannot understand this point about accountability. Could the Minister explain how the last but one Prime Minister, Boris Johnson, against whom many of the criticisms about appointments have been made, is in any way now accountable to the British public or to Parliament for what he did? We do not have, as a noble Lord said, a presidential system; the Prime Minister is not personally accountable for this. All the Bill is trying to do is to ensure a degree of probity and appropriate scrutiny—a check and a balance, for which our constitution is so well respected—in the process of appointments to your Lordships’ House.
Baroness Neville-Rolfe (Con)
I thank the noble Baroness for making that point. Of course, as she says, the new Prime Minister becomes accountable to the monarch for putting forward the names of Peers in the future, taking into account the advice of HOLAC. The same is true of any further Dissolution List that may come from the other former Prime Minister.
Viscount Waverley (CB)
I thank the Minister, to whom I apologise for intervening. Is she able to say with any greater degree of certainty that the Prime Minister has been consulted on the measures put forward today?
Baroness Neville-Rolfe (Con)
No. 10 and the Prime Minister are aware that we have had three days of useful discussion on these subjects: we have had two Questions and we now have this Bill. As I said at the very beginning, the new Government will be looking at the proceedings today, and they will reflect on what the House has to say.
Peerages: Letters Patent
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Lord Blunkett (Lab)
I beg leave to ask the Question that has stood in my name for four weeks on the Order Paper.
The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)
The Government are aware that there is some precedent for individuals deferring taking up their seats in the House of Lords—for example, by agreeing a delay in the issue of Letters Patent. However, that is limited and largely reflective of personal circumstances. As the noble Lord will know, advice between the Prime Minister and the sovereign is confidential.
Lord Blunkett (Lab)
My Lords, perversely, the topical Question granted for yesterday helps us to clarify the Government’s position, not least on the difference between an MSP and a Member of the House of Commons, and the constitutional position and implications, not least for the monarch. Let me ask a very simple question: will the Government support tomorrow the Private Member’s Bill, which will be proposed by the noble Lord, Lord Norton of Louth, to strengthen the House of Lords Appointments Commission?
Baroness Neville-Rolfe (Con)
I very much sympathise with the noble Lord, in that his Question is being answered today rather than yesterday, and I very much look forward to participating in the debate tomorrow on the Private Member’s Bill proposed by the noble Lord, Lord Norton. The Government have no plans to change the status of the House of Lords Appointments Commission. It is an independent non-departmental public body, as noble Lords will know, and the Prime Minister is democratically accountable. As I said yesterday, we do not believe that appointments should be determined by an unelected body—but, of course, we will be listening and participating in the debate secured by the noble Lord, Lord Norton.
Lord Wallace of Saltaire (LD)
My Lords, the Minister yesterday asserted the principle that the Government are entitled to have a similar majority in the Lords to the Commons, but that is not a principle that was understood in the last partial reform of the Lords in 1999. Indeed, the then Labour Government survived with fewer Peers in the Lords than the Conservatives for many years afterwards, and the noble Lord, Lord Strathclyde, as Leader of the Conservative Opposition, carried a great many votes against the then Government.
Could the Minister take us a little further on that principle? Does she assume that, in the event of a change of Government, it would be appropriate for the Conservatives to retire enough Peers to enable the new Government to gain an alternative majority, or does she think that the House will then have to go towards 1,000 Peers?
Baroness Neville-Rolfe (Con)
As I said yesterday, I am not willing to speculate on what might or might not happen after a future general election. However, I repeat that the Conservative Party, despite winning a succession of elections, has still only 34% of the seats in the House of Lords. It is interesting that 408 Members were appointed over the 13 years from 2010, and 404 Members have been appointed over the 12 years between 2011 and 2022.
Lord Sherbourne of Didsbury (Con)
My Lords, can my noble friend the Minister confirm that, when the Prime Minister of the day is considering honours, one of his responsibilities is to maintain the integrity of the honours system?
Baroness Neville-Rolfe (Con)
My noble friend makes a very good point, which I am happy to endorse.
Lord Morris of Aberavon (Lab)
My Lords, the late noble and learned Lord Mayhew and I, as ex-Attorney-Generals, gave evidence to this House’s Constitution Committee that the Government could not rely on the royal prerogative to go to war as it was outdated, and the committee agreed. The committee chaired by the noble Lord, Lord Burns, did not make any suggestions on how to stop a Prime Minister proposing increases in membership of this House. Will the Government consider referring to the Constitution Committee the use of the royal prerogative to recommend peerages, as its unlimited use is similarly outdated?
Baroness Neville-Rolfe (Con)
I do not see it quite that way. We have retirements and departures, and we support the continuation of encouraging more retirements. I think that the Liberal Democrats in particular have not as many retirements as some other parties. As we have said, we look more broadly at the role of the Lords, but it is an important point that significant measures—which I think could stem from the noble and learned Lord’s question—on the size and composition of the House of Lords are a matter for the democratically elected Government. Of course, the House and committees have a role in offering advice, but significant changes have to be for the Government of the day.
Lord Cromwell (CB)
If the Minister is unable to answer this question, could she at least reflect on it? Should a peerage be allocated to somebody who is a sitting MP and they subsequently blot their copybook, will the Government rescind their peerage, or ask the monarch to do so? Have we also completely now abandoned the process of two out, one in?
Baroness Neville-Rolfe (Con)
On the point of sitting MPs, as I said yesterday, the sort of reports that have led to this debate are rumour and speculation. However, we will of course reflect on the debates we have and have had here—yesterday, today and tomorrow.
Lord Collins of Highbury (Lab)
I would like the Minister to remind me when it was that Prime Minister Boris Johnson resigned. When was it? Then, we know that the speculation that has been talked about is about a resignation list, not an honours list and not nominations—we had nominations recently. That is the speculation. She keeps saying that the Prime Minister takes responsibility. Will Prime Minister Sunak admit responsibility for this list, and will he stop and make sure that he does not put His Majesty in this invidious position, because it will bring disgrace on the Government and disgrace on His Majesty?
Baroness Neville-Rolfe (Con)
It is a convention that has been observed by successive Governments that a resignation honours list can be put forward by a departing Prime Minister. It can take a bit of time: I think that Theresa May and John Major took a few months to put their resignation lists together. They are then forwarded to the Prime Minister of the day. The practice now is that the House of Lords Appointments Commission looks at proposals and makes recommendations, which are taken into account by the Prime Minister in the confidential advice that he offers the sovereign.
Lord Butler of Brockwell (CB)
My Lords, I am sure that before tomorrow’s debate the Minister will study the Bill proposed by the noble Lord, Lord Norton, and I think she will see that it does not propose that the Appointments Commission should determine membership of this House but that that responsibility should remain with the Prime Minister.
Baroness Neville-Rolfe (Con)
I am so grateful to my former boss for that excellent point of clarification. I shall listen very carefully throughout the Norton debate, and bear in mind the need to look at the detail and be very careful.
Lord Foulkes of Cumnock (Lab Co-op)
May I suggest that the Minister visit the Members’ Cloakroom downstairs, where she will see eight red boxes containing seals that have not been collected by a number of Peers, including the noble Lord, Lord Lebedev? Would one way of achieving the excellent proposal from the noble Lord, Lord Burns, for reducing the size of this House be to find a way to get rid of the Peers who fail to turn up regularly without reasonable excuse?
Baroness Neville-Rolfe (Con)
I cannot agree with that. Like others, the noble Lord, Lord Lebedev, was nominated on his contributions to society and that included his understanding, obviously, of Russia; but also, he has been extremely critical of the murderous Putin regime. He—
Baroness Neville-Rolfe (Con)
Let me finish. He, like other Members who turn up less than the rest of us, brings a difference perspective. I was present for his maiden speech. The point about the House of Lords is that it is a part-time House and some people bring other aspects and contributions which are not on the Floor of the House.
Lord Baker of Dorking (Con)
In answering the Question yesterday and today, the Minister mentioned that when, in the past, Members of the House of Commons have been nominated for a peerage, it has in a very few cases been postponed “for particular reasons”, I think her phrase was. Who determines the particular reasons? Would it be a Minister of the Crown, in which case it would be subject to judicial review, would it not?
Baroness Neville-Rolfe (Con)
I think I was trying to make the point that it is down to the particular circumstances of the individual. In the cases in question—I think there were three or four, and I will not go into them—the particular circumstances and needs of those involved, for example, being a Member of the Scottish Parliament, meant that a deferment was possible and appropriate.
Parliament: Deferred Peerages
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The Minister of State, Cabinet Office (Baroness Neville- Rolfe) (Con)
My Lords, it is a common-law principle that Members of the House of Lords cannot sit as MPs and, as such, would need to stand down from the House of Commons. The Government are aware that there is some precedent for individuals delaying taking up their seats, but this is limited and largely related to their personal circumstances.
Lord Cormack (Con)
Well, my Lords, we are all grateful for that Answer as far as it goes, but perhaps I might suggest to my noble friend that these rumours and stories in the press—which have the real sniff of authenticity—could, to mix my metaphors, be nipped in the bud. Does my noble friend agree that it would be very wrong for the Government to place the monarchy in an invidious position, and that it would be very wrong to create what would, in effect, be a precedent: to have a list consisting of a number of Members of the other place? Would my noble friend come forward later with a much more emphatic Answer that does indeed put an end to all the speculation?
Baroness Neville-Rolfe (Con)
I will start by saying that we do not comment on leaks and rumours—but I agree that it is a core constitutional principle that the monarch is never drawn into party politics. I think we all very much agree on that. As far as individual proposals and speculations are concerned, no list has been confirmed and I will not go any further in adding to the speculation.
Baroness Smith of Basildon (Lab)
My Lords, it is one thing, as the Minister says, when someone, for personal reasons, genuinely cannot take up a seat in the House of Lords that they have been awarded, but will she recognise that it is completely unacceptable, if the rumours are true, to create a situation where four Members of Parliament hang onto their seats in the other place but can jump into this House at a time of their choosing, or at a time that is more convenient for their political party? The Prime Minister could stop this in its tracks: will he?
Baroness Neville-Rolfe (Con)
I do not think I can add to what I have said already. It is very important not to believe what you read in the newspapers; sometimes they are right and sometimes they are wrong. A list has not been confirmed, and it is not appropriate or fair for the Government to speculate—or encourage speculation—on names that may or may not have been nominated or vetted. We need to be fair to those being considered.
Lord Wallace of Saltaire (LD)
My Lords, in the last manifesto that the Conservatives came up with, there was a commitment for a commission on the constitution to consider questions such as the future of the House of Lords and the next stage of reform. By the time of the coming election, there will be room for another 20 to 30 net Conservatives being nominated, so clearly the House would become unbalanced again.
Lord Wallace of Saltaire
I mean unbalanced in favour of the Conservatives, of course. What does the Minister think might be in the next Conservative manifesto about the next stage of necessary reform of the House of Lords?
Baroness Neville-Rolfe (Con)
I cannot even speculate on the next Conservative manifesto, but I can of course point out that, in spite of winning elections since 2010, the Conservative voice is still underrepresented in the Lords.
Baroness Neville-Rolfe (Con)
As of November 2022, the Conservative party still has only 34% of the seats and recent appointments have not moved the dial. Indeed, I should point out that, when lists are brought forward, potential Peers from other parties are also considered, as was the case when they were included on the recent list, and I am very happy to welcome some of these fresh faces to our Chamber to help with our debates.
Lord Judge (CB)
My Lords, I have nothing whatever to do with whether there are too many of which party in the House. If the Minister cannot comment on the future, perhaps I can go back over the history of, say, the last 25 years. Has the time perhaps come when the exercise of the royal prerogative by the Prime Minister should be subject to some sort of legislation? If it is not subject to some sort of legislation, who on earth is ever going to control him or her?
Baroness Neville-Rolfe (Con)
The way this works is that the Prime Minister, of any colour, is democratically accountable and appointments to the House of Lords are a matter on which he or she advises His Majesty the King. In my view, and this is the Government’s view, appointments should not be decided by, for example, an unelected body.
Lord Forsyth of Drumlean (Con)
My Lords, when Caligula appointed his horse as a consul, it was in order to discredit the institution. Is there not a danger that this is happening here?
Baroness Neville-Rolfe (Con)
My noble friend always comes to my rescue in the most extraordinary way. Of course, we are grateful for the views and exchanges being expressed today, but I come back to my first point: it is important not to speculate on what is put forward in newspapers and so on. I always remember when I was in the newspapers because I was going to be appointed director-general of the Confederation of British Industry, when I had not even put my name forward. There is a matter of fairness and appropriateness that we need to take into account—despite the fun we are obviously having in debating this today.
Baroness Hayter of Kentish Town (Lab)
My Lords, this is a serious legislature; this is not a playground for former friends of former Prime Ministers to come here at a moment of their convenience. We have had the Burns report and know that we should be smaller to do our job properly. Will the Minister ask the Prime Minister to meet the Burns committee—I have not asked committee members whether they would be willing—to concentrate on the important thing, which is enabling us as a serious legislature to do our job properly, with fewer Members, rather than having people waiting to come in after the next election?
Baroness Neville-Rolfe (Con)
The Burns committee did of course report and the Prime Minister of the day, Theresa May, decided not to sign up to its recommendations—although, as has been said, there was a manifesto commitment to look at the role of the Lords, with any reform needing careful consideration and not being piecemeal. We obviously also have the very important House of Lords Appointments Commission. Upon taking office, it is the normal thing for the Prime Minister of the day to meet the chairman of HOLAC, as he or she values the advice of the commission, which obviously includes Members of this House.
Lord Grocott (Lab)
My Lords, can the Minister explain this concept of “deferred peerages”, which is completely baffling to me? The position is surely that you become a life Peer only when Letters Patent are issued. If you are a sitting MP, Erskine May declares quite clearly that you have to give up and cease to be an MP from the moment that Letters Patent are issued. Is it simply the case that this furore is because a Prime Minister has said to various colleagues, “You’ll become a Peer at the next general election, whenever that might be”? If that is the case, surely there is no obligation whatever on any incoming Prime Minister to abide by a decision a previous Prime Minister has made?
Baroness Neville-Rolfe (Con)
It is for the Prime Minister of the day to advise the sovereign on proposals for peerages, as the noble Lord has said. If the House will bear with me, I could mention two obvious precedents if that would be helpful. One was my noble friend Lady Davidson of Lundin Links—
Baroness Neville-Rolfe (Con)
She was an MSP—but the point is that she was nominated in Boris Johnson’s Dissolution List of 31 July 2020 and her Letters Patent, to respond to the noble Lord, were issued on 16 July 2021. She was introduced to the House later that month.
Baroness Neville-Rolfe (Con)
The point I was making right at the beginning, which I will reiterate, is that the Government are aware that there are some precedents for individuals delaying taking up their seats. However, this is limited and related, as in this case, to particular circumstances.
Greenhouse Gas Emissions: Developed Countries
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Baroness Sheehan
To ask His Majesty’s Government, further to the recent flooding in Pakistan, what steps they are taking as president of COP26 (1) to acknowledge, and (2) to address, the effects of greenhouse gas emissions by developed countries.
The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)
First, I express my heartfelt sadness at the horrifying events resulting from the flooding in Pakistan. The UK has committed £26.5 million in humanitarian funding to help support the people of Pakistan as they rebuild from this terrible event. At COP 26, parties recognised that loss and damage are already impacting lives and livelihoods and agreed to scale up support to address this issue. An agenda has now been agreed for COP 27 this week and next, with a specific item on loss and damage. New news today is that the UK Government will commit to triple funding for climate adaptation, up from £500 million in 2019 to £1.5 billion in 2025, which will of course help countries such as Pakistan and Somalia.
Baroness Sheehan (LD)
I thank the Minister for her Answer. The World Meteorological Organization reports that greenhouse gas emissions are at historic highs, with a worrying, unexplained spike in methane—a greenhouse gas which is 20 times more potent than carbon dioxide. Countries such as Pakistan, those of east Africa and low-lying island states are responsible for a minuscule amount of current emissions and practically none of the historical emissions, yet they are in the front line of the extreme weather events that are a direct consequence of those emissions. First, now that the Prime Minister is going to COP 27, will the Minister urge him personally to intervene and make sure that the loss and damage agenda sees some progress there? Secondly, does she regret that we have missed our own target for the Green Climate Fund this year by $288 million?
Baroness Neville-Rolfe (Con)
The good news is that the Prime Minister is at COP 27 today. He has been speaking and will make announcements, one of which I have just mentioned. While I cannot go into the detail of what kind of negotiations will go on on loss and damage, we have announced funding of £5 million for the Santiago network as a demonstration of our commitment to this issue. The points the noble Baroness makes about the particular circumstances of Pakistan are interesting ones which I will take away.
Lord Howell of Guildford (Con)
The Pakistan situation is clearly appalling. However, would my noble friend agree that at COP 27, rather than concentrating solely on reaffirming targets, which, frankly, may never be met, or loss and damage grants, which may never be decided, let alone paid, and while emissions worldwide continue to rise very rapidly, there is a much stronger case for focusing on innovative new world schemes for extracting carbon out of the atmosphere and absorbing it directly? Will she reassure us that the UK Government will look at these new schemes and take the lead where they can in a full and constructive way?
Baroness Neville-Rolfe (Con)
I thank my noble friend for his constructive suggestion. I believe in the power of technology. The point he makes about carbon capture and storage is absolutely on the money. We have seen leaps forward which have helped us with tackling climate change on everything from electric vehicles to wind turbines, solar power, LED lighting, hydrogen and new nuclear. Carbon capture and storage are in the same category. Areas like these are where businesses can come together with Governments to innovate, drive things forward and then get them copied in lots of different countries around the world. Climate change is an international phenomenon; sadly, carbon and greenhouse gas emissions have no borders.
Baroness Boycott (CB)
My Lords, last week we had a briefing from the President of the Maldives. He pointed out that, of the 100% of GDP, they spend 30% on adaptation due to the fact that the islands are being trashed by hurricanes and sea-level rises, and they are spending a further 25% on debt relief—the debt that they incurred in building infrastructure, roads and hospitals, which are now being washed away by the climate crisis. Do the Government think that there is any value in trying to work towards debt relief for nations such as this, given that the international community cannot yet come up with the £100 billion that we agreed last year in Glasgow for situations just like this?
Baroness Neville-Rolfe (Con)
We are open to innovative solutions. This is another one that has come forward from the Maldives, which I have only just heard about. It is obviously right that hurricanes and monsoons and things make it difficult for countries such as the Maldives and other small islands to deal with their debts; in any financing, we would need to make sure that the result helped with climate change alleviation, but I am very happy to learn more.
Lord Anderson of Swansea (Lab)
My Lords, the Question points the finger of blame solely at developed countries. Does the Minister agree that it is not just developed countries, but also countries such as China and India, whose leaders have failed to attend the conference at Sharm el-Sheikh? Does the fact of their non-attendance suggest a lack of commitment and engagement on their part?
Baroness Neville-Rolfe (Con)
The attendance of the UK delegation—which includes the Prime Minister, the Foreign Secretary, the Environment Secretary, my noble friend Lord Goldsmith from our House, Graham Stuart MP, and, indeed, a former Prime Minister, Boris Johnson—shows the seriousness of this matter. To be fair, we have these big COPs, as we had in 2015 and as we were honoured to chair last year, and not all world leaders go to every COP every year. Of course, if action on climate change is going to work—for exactly the reasons that I have already articulated, in terms of there being no borders for greenhouse gas emissions—it is absolutely essential that China, India and other big emitters step up to the plate and deliver on what they have promised and, indeed, even more.
Lord Collins of Highbury (Lab)
My Lords, the Minister mentioned Boris Johnson. What has happened to Britain’s global leadership since Glasgow? Boris Johnson said today that he is there in a purely supportive role, but he also said that Britain should not pay reparations for climate change. This was in complete contradiction to the Prime Minister’s announcement today that we should enter into discussions about this question. Can the Minister tell us what the Prime Minister needs to do to make sure that his words are credible?
Baroness Neville-Rolfe (Con)
I do not like the direction of that question. However, we have encouraged discussion on loss and damage. Obviously, the Labour Party has come out with a big initiative on reparations—which is not funded—and it is very important that we join in the discussion of loss and damage to try to find a joined-up way forward, with support from around the world. The whole problem about climate change, as I have said in the House so often, is that it is an international challenge as well as a domestic challenge.
Baroness Bennett of Manor Castle (GP)
My Lords, following on from the question on loss and damage, the Minister said that it was really important that there is discussion. Have we not utterly arrived at the time when we need action, given that loss and damage was kicked into the long grass, taken out of the Glasgow climate pact and put into the Glasgow dialogue instead? Denmark has promised loss and damage money; Scotland has promised loss and damage money; and the Belgian region of Wallonia has promised loss and damage money. If the Government want to be world-leading, when are we going from discussion to actual action and a promise of money? It is not the same thing as adaptation finance.
Baroness Neville-Rolfe (Con)
In my experience, you can only get action, especially in an international context, if you have constructive discussion. In terms of our contribution, the UK spent £2.4 billion on our international climate finance between 2016 and 2020 on adaptation and investment in areas that needed to address loss and damage. The Scottish Government fund is £2 million.
Lord Purvis of Tweed (LD)
My Lords, there is no point in offering the least-developed countries support for loss and damage if our Government are removing funding from other areas of that community. For all the figures that the Minister has stated today from the Dispatch Box, how much is new money and how much of it is simply reallocated from the arbitrary cap of 0.5%?
Baroness Neville-Rolfe (Con)
We made very generous commitments to funding on climate change last year. We are sticking to those; the Prime Minister made it clear on the steps of Downing Street that he regarded protecting the environment as very important. Sometimes you change the priority which you give to different aspects of the climate change matter, but that is the way to move forward and do things better, and the announcements that have been made today are directed exactly at that. I am delighted at the progress that is being made today, but the question is whether the discussions will deliver what we want over the next two weeks. We look forward to reporting on that when COP 27 ends.
Ministers: Government Business
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Baroness Jones of Moulsecoomb
To ask His Majesty’s Government what further steps they will take to ensure that ministers do not use private (1) mobile telephones, and (2) email accounts, for conducting government business.
The Minister of State, Cabinet Office (Baroness Neville- Rolfe) (Con)
The Government have robust systems in place to protect against cyber threats and we are vigilant in ensuring that these are up to date and meet the challenges of the modern world. Just yesterday, the Security Minister announced that he was establishing a new task force from across departments, the security and intelligence agencies, the private sector and civil society to meet these big challenges. All new Ministers receive a general security briefing in their first weeks in government. The National Cyber Security Centre and government security officials then regularly provide Ministers with specific advice on protecting personal data and managing online profiles, as well as on best-practice guidance.
Baroness Jones of Moulsecoomb (GP)
But the system is not robust, as the Minister claims. The previous Prime Minister had her phone hacked. The Home Secretary leaked classified information and, during the early days of Covid, Johnson, the Prime Minister, used a phone that then was lost with all messages unobtainable. At this rate, we are going to have to ask the Russian secret services for all the details about where and when ministerial decisions were made. [Laughter.]
Baroness Neville-Rolfe (Con)
Good. The Government take matters of security very seriously. Of course, I am not going to comment on individual cases—that would not be appropriate—but I draw attention to the fact that the Home Secretary has provided a very detailed account, step by step, in a very full letter to the Home Affairs Select Committee and, of course, she apologised for her error and resigned. The Prime Minister has now appointed her to do a very important job.
Baroness Smith of Basildon (Lab)
My Lords, the noble Baroness will be aware that the former Prime Minister, Boris Johnson, and his entire Cabinet at that time, many of whom are now back in the Cabinet, were warned in 2019 not to use their personal phones for business but it appears that some continued to do so. Can the Minister confirm what guidance was given to Cabinet Ministers at that time? Is it still being given to Cabinet Ministers? How is that guidance being enforced and is not obeying those rules a breach of the Ministerial Code?
Baroness Neville-Rolfe (Con)
I will not, of course, comment on the particular; however, it is the case that government systems should be used, as far as practicable, for government business. The guidance issued and kept under review does not rule out the use of different forms of electronic communications in some circumstances. There has to be a place for a variety of digital channels. Ministers have informal conversations from time to time and they have to use a variety of digital communications for personal, political and parliamentary matters.
Lord Scriven (LD)
My Lords, Ministers have said that they are conducting government business on Signal, a messaging app that deletes messages after five seconds and can block screen grabs. How is this compatible with official rules on the use of private devices for such business, particularly when having to send copies of messages to civil servants?
Baroness Neville-Rolfe (Con)
As I said, government systems should be used as far as practicable. In some cases it is not possible to do that, and in some cases it is not appropriate—for example, changing the time of a meeting can be done perfectly well in this digital world. Having said that, the Cabinet Office has previously published guidance on how information is held; it is always being looked at and updated to reflect modern forms of working and technology—and, of course, the changing threat. Cyber and technology are changing all the time, which is why this work is so important and why I mentioned the task force set up under Minister Tugendhat.
The Lord Bishop of Leeds
My Lords, I sympathise over the complexity of this matter, particularly given the technological developments, but there is the question of principle, which does not particularly relate to the recent cases cited. Several decades ago, when I was at GCHQ, the slightest security misdemeanour meant that you lost your job. Does that principle—that making a serious security error has consequences and a simple apology will not do—still apply? I cannot think of another circumstance in which an apology would have sufficed.
Baroness Neville-Rolfe (Con)
I am glad that we have the advice of somebody who used to work at GCHQ; it shows the breadth of this House and what we are able to do on security. I have explained that the Home Secretary apologised and that she resigned. We have discussed before that she has come back—you can have redemption in this life. You need to have respect for security and make sure that you are ahead of the game but, occasionally, you also need to be able to say, “I did the wrong thing”, and you need to be forgiven.
Lord Cormack (Con)
My Lords, some of us think that government was rather more efficient before the advent of social media. Would not it be a good idea to make twittering an offence?
Baroness Neville-Rolfe (Con)
I think you might not be the most popular person in the world, if you made twittering an offence.
Baroness Neville-Rolfe (Con)
Tweeting has a place in modern news communication. The point that we all need to understand—and I assure noble Lords that, as a new Minister, I have taken the briefing that I have had very seriously—is about when you can use social media and non-government communications and when you need to be very careful. Of course, in some cases you cannot even use official digital communication for secret stuff; it has to be looked at in a particular location and on paper.
Lord Forsyth of Drumlean (Con)
Is Halloween not over and is it not time that this witch hunt ended?
Baroness Neville-Rolfe (Con)
I agree. Since I came to the Dispatch Box—I am sorry that I have lost my voice—I have been trying to move the debate forward. That is why I was emphasising the role of the UK on cybersecurity, which is an impressive one. I know, because I had to attend three days of a cybersecurity conference in Singapore while Secretaries of State were busy on other matters. I found that the UK’s work was highly respected and took a great deal of comfort from that. It is very important that we invest in the future and support the task force that has been set up and is going to draw on expertise from across the House.
Baroness Smith of Newnham (LD)
My Lords, it is good to know that the Minister has had training on security but yesterday’s i suggested that some of the UK’s closest allies are so concerned about the Government’s use of repeated use of personal devices for government business that they are beginning to consider what security briefings they should make available to the United Kingdom. Is that not a reason why her colleagues in government should think again about using personal devices for government business?
Baroness Neville-Rolfe (Con)
I am always careful to question individual reports, but I repeat that we take a leading role on the global stage in countering state threats, and we will continue to work closely on this with like-minded allies and partners to defend UK interests, and the international rules-based system, from hostile activity.
Lord Griffiths of Burry Port (Lab)
My Lords, the Minister has told us that she is unwilling to talk about case histories and so on, although she has given us a pretty fulsome step-by-step report on the Home Secretary’s resignation and reappointment. In view of the fact that she began by telling us from the Dispatch Box today that this is not a laughing matter—that it is very serious—and the sober words from the right reverend Prelate about his experience of GCHQ and the seriousness of these lapses, can she confirm from the Dispatch Box that to describe what we are going through as a witch hunt is inappropriate?
Baroness Neville-Rolfe (Con)
I note what the noble Lord says, but I must say that I have some sympathy with my noble friend Lord Forsyth: we really need to move forward. I went into detail on the Home Secretary only because she wrote a letter in great detail, which I think is of interest to people who take an interest in these matters. We need to move forward and to support those in the security services and others trying to defend national security and, even more importantly, anticipate the new threats coming at us all the time. The digital world is changing, as I know from my recent trip, and we have to work to strengthen defences, but in a reasonable, sensible way.
COP 27
Baroness Neville-Rolfe Excerpts(1 year, 6 months ago)
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Lord Dubs
To ask His Majesty’s Government who will represent the United Kingdom at the COP 27 conference in Egypt.
The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)
My Lords, the UK will have a strong delegation at COP 27, including the Foreign Secretary and several other Ministers, who will engage with international counterparts on the transition to net zero and climate resilience. Alok Sharma MP was reappointed COP president on 25 October, leading the UK’s contribution to the successful implementation of the historic Glasgow climate pact. We also expect a significant presence on the part of civil society and business, building on their participation in Glasgow last year.
Lord Dubs (Lab)
My Lords, I welcome the Answer from the Minister that the Foreign Secretary and other senior Ministers will be attending, particularly in the light of the comments made yesterday by the Secretary-General of the United Nations about how important it is that we keep climate change in our sights. Can the Minister comment on one further thing? Apparently, according to the media, the previous Government said that they did not want His Majesty King Charles to attend COP. Can she make it clear that if the King wants to attend, he will be welcome to do so?
Baroness Neville-Rolfe (Con)
My Lords, I should start by saying that His Majesty is globally recognised for his foresight and leadership on climate and sustainability over five decades—in fact, well before these issues became mainstream. However, the Government do not comment on communications and advice between our Prime Minister and the monarch.
Lord Cormack (Con)
My Lords, that is entirely understandable, and one would not expect my noble friend to say anything else. Nevertheless, I think it is a widely held view in this country that His Majesty would give great extra prestige to this conference merely by his presence. If that message could be taken on board and communicated to the right quarters, I am sure a service would be done, not just to the nation but to the world.
Baroness Neville-Rolfe (Con)
I thank my noble friend for his message. I know that His Majesty is also looking to arrange a global event in advance of COP to talk to some of the key people involved. However, as I said, I cannot comment on communication and advice between him and the Prime Minister or the Government—that remains confidential.
Baroness Sheehan (LD)
My Lords, the ban on King Charles attending the conference imposed by the previous incumbent of No. 10 is, quite frankly, churlish and rather unseemly. The US climate envoy, John Kerry, Alok Sharma himself—the outgoing COP 26 president—and even the Daily Telegraph believe he should go. The Egyptian Government have renewed their invitation to the King. Will the Minister urge the Prime Minister to lift the ban?
Baroness Neville-Rolfe (Con)
Noble Lords will know that this is a matter for His Majesty.
Baroness Boycott (CB)
My Lords, I add my voice to agreeing that the King should be going, but to build on what the noble Lord, Lord Dubs, said, yesterday, António Guterres said that this was the catastrophe and that all other catastrophes we are living through will only get worse. Why have the Government downgraded Alok Sharma’s post from the Cabinet, and can the Minister assure the House that a new Cabinet post will be created specifically to look at the climate crisis?
Baroness Neville-Rolfe (Con)
It is the case that Alok Sharma is no longer a Minister nor in the Cabinet. However, the Prime Minister has appointed him as COP president, and that provides continuity and retains his expertise in this important role. I have been struck by his tireless work over the past year, and he is always particularly focused on implementation and the international perspective, as well as other issues. The thing is to get COP 27 done in a brilliant way in Sharm el-Sheikh from 6 to 18 November 2022. I cannot comment on appointments by the Prime Minister.
Baroness Jones of Whitchurch (Lab)
My Lords, should we not get our own house in order to earn the respect of all the other countries that will be at COP 27? Just as an example, we already have a commitment to have 30% of land for nature by 2030. So far, the statistics are that we have only 3%, so we have a long way to go before we can hold our heads up at COP 27 and earn the respect globally that we deserve.
Baroness Neville-Rolfe (Con)
I understand from my noble friend that we lead the campaign for 30/30.
Baroness Verma (Con)
My Lords, I welcome my noble friend’s response to the question of the noble Baroness, Lady Boycott, but I encourage her to have discussions between our Ministers and other Ministers at COP 27 on getting businesses to help the less developed countries be able to respond better by investing in them, and countries helping to support that through business. Will my noble friend comment on that?
Baroness Neville-Rolfe (Con)
I am very glad my noble friend raised that, because the Glasgow climate pact emphasised the importance of collaboration across sectors in all parts of society to deliver on climate change, and business plays an important part. I remember from my experience of net-zero plans when I was in business, many years ago. Business can contribute in some of the poorest countries in the world by helping the transition, reducing carbon and being more efficient. There is a real win-win there, and what has been encouraging both at Glasgow and in the prospective agendas for Sharm el-Sheikh is how businesses are stepping up to the plate in this important area.
Baroness Ludford (LD)
My Lords, a few answers ago the Minister said that the attendance of the King at COP 27 was a matter for the King. Was that an answer to my noble friend Lady Sheehan, who asked whether the new Government have lifted the ban on King Charles III attending the conference in Egypt? A quick yes or no would suffice.
Baroness Neville-Rolfe (Con)
There is no ban. This is a matter for the palace, and I really cannot be drawn on communication between the Government and the monarch. This is a matter for them, but I reiterate that we are very fortunate that our King is so globally identified with nature and tackling climate change.
Lord Deben (Con)
Can my noble friend help me? Can we now expect that the Cabinet committee chaired by the Prime Minister will continue, that the Prime Minister will chair it and that it will be regular in dealing with climate change, which, after all, is the biggest material threat to ourselves and the world that exists?
Baroness Neville-Rolfe (Con)
I know all that my noble friend has done to help on climate change and his great work chairing the Climate Change Committee. As for the Cabinet committees for the new Government, we will have to wait to find our exactly what they look like.
Baroness Smith of Basildon (Lab)
My Lords, I bring the Minister back to her answer to my noble friend, who asked about the 30/30 campaign. The Minister said that we lead the campaign on this; it is all very well leading campaigns, but after 12 years in government, we have not had actually made much progress. We are talking about 3% of land rather than 30%. With COP 27 pending, could she not say a little more about the implementation? Having led the campaign with such vigour—but obviously not great response—when will we get to the 30% required by the campaign?
Baroness Neville-Rolfe (Con)
On the 30%, there is obviously lots to do. I believe that 100 countries have now signed up. We have been very good at leading other countries and trying to get them involved in these matters. Obviously, it is work in progress. The UK is recognised as a global leader on many aspects of climate change. Our emissions reduced by 47% since 1990, and we have a stretching NDC, but, perhaps most of all, we are the first nation to legislate for net zero by 2050.
Lord Hamilton of Epsom (Con)
Does my noble friend accept that COP 27 is unlikely to be a success as long as India and China go on building coal-fired power stations and increasing the amount of CO2 in the atmosphere, whatever we do in this country?
Baroness Neville-Rolfe (Con)
My noble friend is right that carbon and weather do not respect borders, so it is very important that all countries across the world look at these things. I remember doing work with the Indians on climate change in my business days and, in some areas, they do a lot of very good things, but the energy transition is one of the challenges that all countries face and is something that can be discussed constructively at COP 27.