Procurement Bill [HL]

Debate between Baroness Noakes and Lord Wigley

Committee stage
Monday 11th July 2022 Grand Committee

[Baroness Noakes (Con)]

My Lords, I have added my name to Amendments 38, 50, 97 and 100 in the name of my noble friend Lady Neville-Rolfe and, as she has already said, she has added her name to Amendment 534.

I will come to that in a moment, but I start with Amendment 86 in the name of my noble friend Lord Lansley. This returns to the question of preliminary market engagement and fostering the involvement of SMEs about which my noble friend spoke on our last Committee day in relation to his Amendment 88. Clause 15(1)(f) makes building capacity among suppliers a permitted purpose for preliminary market engagement. My noble friend’s amendment adds some words of emphasis so that capacity building should be particularly for small and medium-sized enterprises.

I know that noble Lords need no reminding of the importance of SMEs to the UK economy. They account for around 60% of employment and over half of turnover in the UK. Not all small businesses achieve scale and not all want to, but most large and successful businesses were small businesses once. We have a responsibility to ensure that SMEs are given every opportunity to thrive and grow. That is why we should be looking at this Bill on the important area of public procurement and its role in the economy and considering the way that can be used to foster SMEs.

SMEs find engaging with public procurement daunting. They simply do not have the time and resources to get involved in complex tenders, let alone things like dynamic markets. It has to be in the interests of both the individual contracting authorities and the economy as a whole to foster as much competition as possible and to assist SMEs in growing their businesses. Building capacity among SMEs is a good thing to do and this Bill should recognise that. It may occasionally be important to build capacity among larger businesses and my noble friend’s amendment does not preclude this. But large businesses have the kind of resources that make participating in public procurements pretty straightforward. SMEs, not large businesses, should be the focus of policy in this area.

My noble friend Lady Neville-Rolfe’s Amendments 97 and 100 also recognise that getting involved in public sector procurement is hard for SMEs. The complexity of procurement processes makes it quite likely that an SME might not satisfy all the participation criteria and even more likely that they will mess up on an aspect of the procedural requirements. They need to be cut some slack, which is what my noble friend’s amendments would do.

I am, as my noble friend knows, less convinced by her Amendments 290 and 295 because there are some serious issues in Schedules 6 and 7 which rightly debar businesses from public tenders. On the other hand, Schedules 6 and 7 are very heavy-handed and there may well be a case for further discretion to allow some of the matters in those schedules to be disregarded in the case of SMEs.

I now come to Amendment 534 to which the noble Baroness, Lady Brinton, spoke so eloquently earlier. It is rather different from the other amendments in this group because it requires a report every year. It is relevant to SMEs because the first area of the report is about how procurement rules have impacted the award of contracts to SMEs. I think we are agreed that we want to see awards of contracts to SMEs growing, and that means making it easier to include SMEs in the process and helping them to win.

There have been some changes to the previous EU rules on which this Bill is largely based which could make it easier for SMEs, but I suspect that the overwhelming effect of the procurement rules as we have them in this complex Bill and the secondary legislation that will follow will continue to deter SMEs from participating fully in public procurement. We really ought to be keeping this matter under review. The noble Baroness, Lady Brinton, raised the issue of whether the health procurement rules are covered. I drafted the amendment with the intention that it should cover health, but I recognise that this is a very complex area and will need to be teased out later in Committee.

A second area covered by my suggested report is whether there is scope to simplify the rules while remaining consistent with the procurement objectives set out in Clause 11. This will also be relevant to SMEs because I believe the complexity of the public procurement code is a major barrier to entry for small and medium-sized businesses. I am sure that large businesses, large tenderers, are quite comfortable with having barriers to entry for small and medium-sized entities, but government and Parliament should not be comfortable with that, and we should at least be striving for greater simplicity and keeping it under regular review.

[Lord Wigley (PC)]

My Lords, I am delighted to follow the noble Baroness. I support Amendment 38 moved by the noble Baroness, Lady Neville-Rolfe, and support very strongly the points that she and, more recently, the noble Baroness, Lady Noakes, have made. They relate to the pressing need to ensure that the burden on small businesses tendering for public contracts is addressed. This issue has arisen under other amendments, and I have no doubt that we need to get this nailed one way or another on Report. It is an important question.

We all draw on our experience. My experience, immediately before coming to the House of Lords after I had left elected politics, was when I chaired the board of Bangor University’s Bangor Business School. It related to the small business sector. These issues arose time after time. Some colleagues may be aware that way back, before entering full-time politics, I was involved in the manufacturing industry. I had two incarnations, the first of which was with large supernational companies, Ford, Mars and Hoover, when I was financial controller. Although those three corporations were not generally involved in public sector contracting, their approach to any question of contractual relationships was highly professional with relevant legal advice in-house and with the resources to buy in specialist advice when needed.

My second incarnation, which I undertook as a serving MP in the 1980s, was to chair a small company from its creation to when, after 11 years, it merged with a larger American-owned company to form a significant new entity employing 200 people at Llanberis in my constituency. We built—the hard way—the acorn from which that grew, raising our own capital locally and starting up by employing just one person full-time, an engineer to build automated diagnostic equipment for the medical sector.

In competing for contracts, we had to beat competitors that were much larger and with far greater resources and in-house expertise. A small company such as ours had a serious uphill struggle to compete on anything like a level playing field. We did so by being fleet of foot, resilient and flexible and by engaging proactively with potential customers. But it is unrealistic to expect SMEs to be in a position to compete on a level playing field with suppliers which have professional resources in depth. The danger is that such SMEs will be scared away from tendering for public sector contracts where the bureaucratic imposition is totally unreasonable for such small-scale operators.

In this context, the amendment is particularly relevant. If our company had not succeeded with the early contracts, we would not have grown to employ some 50 people, as we did at the point when the merger took place. Had we fallen by the wayside in that highly competitive situation, we would not now have the Siemens company that took over our successful company now employing more than 400 people at Llanberis, and with a further expansion a real possibility soon.

I support these amendments because I feel that there needs to be some mechanism written into the Bill to counterbalance the inevitable bureaucratic safety net which public sector bodies build with their procurement procedures. Providing some lower level of bureaucratic imposition on SMEs could make the difference between those companies, on the one hand, being suffocated out of the competitive arena by impositions that they cannot handle and, on the other hand, securing contracts which enable them, in the fullness of time, to grow, given the impact that that might have on our economy.

Trade Bill

Debate between Baroness Noakes and Lord Wigley

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Thursday 1st October 2020 Grand Committee

[Lord Wigley (PC) [V]]

My Lords, I will not follow the noble Lord, Lord Beith, in the thrust of his comments, although I agree very much with them. The overuse of Henry VIII powers is certainly a matter that we need to give considerable attention to.

I apologise if the signal is breaking up. I have a download speed of 1.45 and an upload speed of 0.57, which makes the signal unstable. That is obviously a problem when working remotely, as I am doing.

I strongly support the thrust of Amendment 12 and all the rest of the group. There can be no doubt that the EU has rightly placed considerable emphasis on environmental and climate change matters. If—sadly, to my mind—we are moving away from having a significant proportion of our trade with the EU to a position whereby our trade is likely to be much more with third-world countries, valid concerns arise. That is not to say that changes in trade patterns are necessarily a retrograde move; they are not. Clearly, there are opportunities as well, provided that we are not trying to secure imported goods that are cheaper because they have been manufactured or extracted in a manner that ignores the need to safeguard our planet with regard to the impact of manufacturing on global warming or biodiversity.

It is not acceptable, in this day and age, for the UK to duck its international obligations in these matters to get cheap goods or, particularly, cheap raw materials. When one considers the way in which the environment is being despoiled in many countries, particularly in South America, we must flag up these concerns from day one of our new international trading era. We must establish a firm understanding that we shall not trade away our duties to the planet to make a quick buck.

How we in this Committee can flag up our firm commitments in these matters is to write such safeguards as provided by these amendments into the Bill. Indeed, I find it incomprehensible that Members in the other place should not have done that already. In the absence of political will in another place to make such obviously desirable and necessary steps, we, if not in this Committee then certainly at Report, should insist without hesitation that we have such provision in the Bill that we eventually return to another place.

[Baroness Noakes (Con)]

My Lords, my noble friend Lord Lansley has eloquently made one of the points that I was going to make, which is that most of the amendments in this group relate in practice to continuity agreements only, because they relate to regulations made under Clause (2)(1) of the Bill, and Clause 2 relates only to continuity agreements. I accept, however, that noble Lords are trying to frame their arguments in a broader context of any trade agreement. If that is the case, their amendments will not do that—although some of them do—so they are not achieving their desired effect.

It is important to recognise that the Government have been clear in their policy towards the environment and the Paris accord. In rollover agreements that have been agreed to date, there has not been a single issue of concern to those who seek to reinforce those agreements to which we have committed in relation to environmental protections and other matters. As a general principle, we do not clutter up every single bit of legislation with general policy positions unless they are absolutely necessary, which clearly they are not in this case, or you would end up with an impossibly long list of items that you are trying to remind the Government is their policy.