Procurement Bill [HL]

Lord Coaker Excerpts

Committee stage
Monday 18th July 2022 Grand Committee

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

My Lords, this group seeks to deal with amendments relating to the process for excluding suppliers and with the debarment list. I recognise that there is considerable interest in this topic. Amendments relating to the grounds for the exclusion of suppliers will be dealt with separately in a later group. I look forward with interest to submissions from noble Lords, but there are a number of government amendments in this group.

Amendment 89 ensures that suppliers which gained an unavoidable unfair advantage through involvement in preliminary market engagement are excluded from the procurement in question.

Amendment 148 is consequential on Amendment 93, which was debated last week. Amendment 93 clarifies that the authority’s requirements and award criteria are two separate concepts.

Amendment 154 broadens the concept of an entity associated with the supplier for the purpose of the exclusion grounds. This concept covers entities which are being relied on to meet the conditions of participation and is expanded by this amendment to also cover entities which may not be involved in the delivery of the contract. An example would be a consortium member providing financial backing to the supplier in order to meet conditions of participation relating to financial capacity. This aligns the concept of associated entities with the existing concept in Clause 21. An exception is made in respect of exclusions for guarantors such as banks, where it would be inappropriate to consider the exclusion grounds.

Amendment 150 is the lead of 21 amendments which all serve to change the term “associated supplier” to “associated person” for the purposes of the exclusions regime. This is consequential on Amendment 154 because the entities being relied upon to meet the conditions of participation may not be involved in the actual delivery of the contract. It is therefore accurate to refer to them as “persons” rather than “suppliers”.

Amendments 151, 159 and 166 require contracting authorities to notify suppliers when they are considered to be excluded or excludable by virtue of an exclusion ground applying to an associated person or subcontractor. These amendments are linked to Amendments 168 and 171, which require ministerial consideration before a supplier is notified and given the opportunity to replace an associated supplier or subcontractor when they are considered by the contracting authority to be a threat to national security.

Amendment 162 requires contracting authorities to ask for details of intended subcontractors and to check whether any intended subcontractors are on the debarment list, as part of determining whether the supplier is excluded or excludable. Amendments 163, 164, 165 and 398 are consequential.

Amendment 169 corrects a drafting error which incorrectly described suppliers subject to the exclusion ground on national security as being “excluded” when they are in fact “excludable”. Amendment 170 is also a technical amendment.

Amendments 175, 182, and 414 clarify what it means to treat a supplier as an excluded supplier in relation to the award of a public contract. They make it clear that contracting authorities are required to disregard tenders from such suppliers and prevent such suppliers from participating in, or progressing as part of, any competitive tendering procedure.

Amendments 176 and 178 provide for the list of improper behaviour at subsection (4) of Clause 30 to be an exhaustive list. It is important to be clear on the circumstances in which a supplier has acted improperly, given that the consequences are exclusion. Amendment 339 removes financial and other resources of suppliers from the list of the matters that contracting authorities may have regard to in setting proportionate requirements for suppliers to provide particular evidence or information as to whether exclusion grounds apply and whether the circumstances giving rise to any application are likely to occur again. Proportionality is sufficiently and more appropriately achieved by having regard to the nature and complexity of the matters being assessed, which is also listed. This amendment aligns with the matters that contracting authorities must have regard to in considering whether a condition of participation is proportionate, as specified in Clause 21.

Amendment 349 is made at the request of Northern Ireland and provides that transferred Northern Ireland authorities should make notification of exclusion to a department in the Northern Ireland Executive that the authority considers most appropriate, rather than a Minister of the Crown. This is necessary to provide information to the relevant department, for example to consider a potential investigation of suppliers under Clause 57. Amendment 352 requires that a Minister of the Crown must consult with the Northern Ireland department that the Minister considers most appropriate —rather than any Northern Ireland department—before entering a supplier’s name on the debarment list or removing an entry from the debarment list following an application for removal under Clause 60.

Amendment 399 extends the circumstances in which there is an implied right for a contracting authority to terminate a contract where a subcontractor—which the supplier did not rely on to meet the conditions of participation—is an excluded or excludable supplier. The amendment includes circumstances where the authority checked the debarment list or asked for information about the subcontractor but did not know that the subcontractor was excluded or excludable prior to award.

Finally, Amendment 402 requires contracting authorities to seek the approval of a Minister of the Crown before terminating a contract on the basis of the discretionary exclusion ground of national security. This is necessary to align with the other circumstances in which ministerial approval must be sought before relying on this particular ground. I beg to move.

[Lord Coaker (Lab)]

In keeping with the obvious mood of the Committee, I actually do not want to say very much either on this particular group. The interest I had was in the amendment from the noble Lords, Lord Wallace and Lord Fox, in this group, on how excluded suppliers demonstrate their reliability following the application of an exclusion order, and the process of self-cleansing. I was particularly interested in what this process of self-cleansing means. I am presuming—from the Minister’s helpful introduction—that the company is excluded for X reason, and is told that in the notice that goes to an excludable supplier, and then it goes back to the Government and says, “We’ve undertaken the process of self-cleansing and therefore the problems that you highlighted with us are no longer applicable”. So, I wondered whether the Minister could say a little bit more about the process of self-cleansing, which was the element that I found a little bit vague, if I am honest, and goes with many of the problems we have: the Minister talks about a “proportionate response” from the Government, and those sorts of phrases, and again we get into the problem of definition.

The other point I will make concerns what the Minister rightly pointed out: Schedules 6 and 7 outline the grounds rather than the process. There are the mandatory grounds in Schedule 6 and the discretionary grounds in Schedule 7, both of which a contracting authority might think applies to it. On the grounds in these schedules, can the Minister give us an example of what the process or timescale will be and an example of how it would work? Presumably the Minister sends this to the contracting authority and says, for example, “We think you should be excluded because of this in Schedule 6”, and if the company says, “No, this isn’t the case”, a discussion takes place. It would be helpful for the Committee to understand this process.

Finally, can the Minister confirm that, as I read it, there is also an appeals process? If the Government decided that a firm or supplier should be excluded, am I right in saying that this decision could be appealed? If it is appealed, who is it appealed to—presumably not the same person who made the decision to exclude them in the first place? I am querying the independence of that appeal process and the amount of time that this would take. A little more detail would be useful on the matter of an “excluded supplier” and an “excludable supplier”.

I do not want to keep the Committee any longer on this group of amendments, because the Minister’s helpful outline clarified some of the points I would have made about why “person” changes to “supplier”. I look forward to the Minister’s response to my questions.

[Lord True (Con)]

My Lords, I think that in a test match that is called putting the spinner on early when the batsman is better at fending off fast bowling.

The noble Lord asked a number of questions, which I am not in a position to answer at this juncture. We believe that self-cleansing is an important process because exclusion is a risk-based measure as perceived; it is not a punishment. As such, suppliers should be encouraged to clean up their act and given the right to make the case that they addressed the risk of misconduct, or the other issues, occurring again. It is for contracting authorities to decide whether the evidence they have seen is sufficient to reassure themselves that the issues in question are unlikely to occur again. The noble Lord asked a further question about what happens should there be a difference of judgment. The formal position is that it is for the contracting authorities to decide whether self-cleansing has occurred.

It is not our intention to make the exclusion of suppliers more difficult for contracting authorities, because many noble Lords, on a number of subjects, have asked for the opportunity to exclude suppliers. The Bill seeks to ensure that all the relevant issues can be considered. We believe that suppliers will thereby be encouraged to take as much comprehensive action as possible to avoid recurrence if they seem to fall foul of these risks. I repeat: the decision must be made by the contracting authority, and the burden to present remedial evidence to avoid exclusion is on the supplier. The lack of remedial evidence—or if the remedial evidence is inadequate—may give the contracting authorities sufficient reason to conclude that the issues in question are likely to occur again. However, I will look very carefully at this flighted ball that the noble Lord has sent. We accept the need for guidance on self-cleansing to accompany the legislation, and can assure the noble Lord opposite that this will be published as part of the implementation package for the Bill.

I cannot ask the noble Lord, Lord Wallace, not to move his amendments, as he is not here, but I hope that is something of an answer to the noble Lord, who has amendments in this group.

[Lord Coaker (Lab)]

That is quite helpful. Further to that and to make sure I have understood, would an excluded or excludable supplier be put on a debarment list? I refer to Clause 61, which is titled “Debarment decisions: appeals”. Am I reading this right or have I got it wrong?

[Lord True (Con)]

We will come on to the details of debarment on a later group—on Clause 61, I believe. A supplier may certainly appeal against the decision of a Minister, who ultimately places the debarment list. On the process of self-cleansing, which we were talking about, the contracting authority, not the Government, undertakes exclusion. It will notify the supplier that a ground for exclusion applies; the supplier may then make representations and submit self-cleansing evidence, as I previously discussed. The contracting authority then weighs it up and decides on exclusion.

This is the further wrinkle that I had not answered in saying rather more words than the succinct selection I have been given, but it confirms what I was saying: the supplier may challenge, but through the courts under the remedies regime, if it disputes the contracting authority’s judgment on self-cleansing.

We will come on to debarment decisions and permanent exclusion on amendments after Clause 61, but certainly a supplier may appeal against a ministerial decision.

In moving government Amendment 89 in my name, I request that the other amendments are not moved.

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[Lord Coaker (Lab)]

Can I just say—because sometimes these things pass by and they should be noted—that we are very pleased with that commitment from the Minister and thank him for it?

[Lord True (Con)]

Right. Unfortunately, the noble Lord will be disappointed by my response to the second part of the amendment, because I have already explained that contracting authorities will not be required to publish all information to the central platform.

I turn finally to Amendments 519A and 519B from the noble Lord, Lord Clement-Jones. The Bill exempts contracts for public passenger transport services under paragraph 17 of Schedule 2, as their award is regulated by Department for Transport legislation. We believe that it is more appropriate that the transparency provisions governing these arrangements are kept within their existing legal regime, and local authorities are therefore not placed under an unnecessary burden of trying to comply with two separate regimes simultaneously when placing such contracts. I have, however, asked my officials to engage with the Department for Transport to better understand how we can ensure that both regimes are aligned—I think that was one of the points behind the noble Lord’s remarks.

I thank the noble Lord for his generous remarks. Having been a bit flinty on a number of the others, I will none the less, as ever, study carefully Hansard and your Lordships’ very well-informed submissions. Against that background, I commend the government amendments in my name and respectfully request that other amendments in the group not be pressed.

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Moved by

[Lord Coaker]

101: Clause 18, page 12, line 31, at end insert—
“(3A) In the case of a defence and security contract, unless it would leave no tenders that satisfy all other award criteria, a contracting authority must disregard any tender from a supplier that—(a) is not a United Kingdom supplier or treaty state supplier, or(b) intends to sub-contract the performance of all or part of the contract to a supplier that is not a United Kingdom supplier or treaty state supplier.”

[Lord Coaker (Lab)]

My Lords, I welcome the noble Baroness, Lady Goldie, to her place and I thank her for carrying on the tradition in this Committee of briefing me on some of the points that I may raise in the way that other Ministers in this Committee have done.

For the benefit of the Committee, I start by saying that nothing I am going to say—which in some respects will be quite critical of the Government’s equipment programme—in any way suggests that any Member of this Committee, or anybody making these decisions, is not absolutely concerned with the proper defence of our country. I just wanted to make that clear. I think it is really important to state that we may have a difference of opinion and we may disagree about some of the equipment programmes and some of the decisions that have been made, but I would never question the commitment of any Member of this Committee or any Minister of this Government to defend our country and do their best for the security of our nation—particularly in the current circumstances. I think it is important to start with that, and I am sure that will be met with agreement by all Members of the Committee.

I wish to move my own Amendment 101—I am grateful for my noble friend Lord Hunt’s support for that—and Amendment 485, where, again, I am grateful for the support of my noble friend but also for that of the noble Baroness, Lady Smith. I will deal quickly with Amendment 101, which I think can be summed up by saying that it is just trying to encourage the Government to look at how we might use more of our defence procurement spending to support British industry and British suppliers. That is the extent of it.

I am sure the Minister will say that the Ministry of Defence does everything it can, that it works according to various international agreements, that it is not always possible to source certain contracts within the UK, et cetera, but many of us looking at contracts wonder why it appears so difficult for us to support British industry, when many countries do not seem to face the same difficulties. Given the freedoms we are now supposed to have, one would perhaps expect that to be easier than it was before.

I will give just one example to make this point. In 2018, the Government announced a £1.5 billion programme for fleet support ships to be built. They said they were going to build them in British yards but, as far as I am aware, not a single screw or bolt has been fastened. It is that sort of thing. When is that going to happen? When are the fleet support ships going to be built in British yards, as they were supposed to be? The Government said they were looking at a high proportion of this being done in the UK, but what does that mean? Some clarity would be helpful for the Committee and for those who read these deliberations on whether it is the Government’s intention to increase the amount of procurement that takes place in UK industry, so we can use our procurement to support that.

Before I move on to Amendment 485, this goes to the heart of what I am saying. Before us is a procurement Bill. It is an important government Bill that seeks to make a difference and use the hundreds of billions of pounds that are spent to deliver certain objectives for the Government. Why will this Bill, as it is drafted, make a difference to the defence equipment budget and programme? We could sit down now. How will this make a practical difference? What is in here? Some of this needs to be put on the record, so I am going to quote the Public Accounts Committee of the other place. It was not clear from the Government’s letter in response to that committee’s report, which said that the Procurement Bill was going to make a great difference, how it is going to do that. That is what I think is really important.

Noble Lords will recognise that Amendment 485 is a proposed new clause to be inserted after Clause 98, so it does not relate specifically to the defence clauses, as such. It relates to Clauses 96, 97 and 98. In other words, the Bill itself allows for procurement investigations, and the recommendations and guidance that follow them. My Amendment 485, supported by my noble friend Lord Hunt and the noble Baroness, Lady Smith, goes after that clause because it seeks to insert an audit of the equipment plans, and therefore investigate them and make recommendations. That is the whole point of doing the annual audit.

Why is this so important? I am not going to read all sorts of things, but I will use one or two examples, because this is really serious. The Public Accounts Committee of the other place, in October 2021, produced the report Improving the Performance of Major Defence Equipment Contracts. It said:

“There have been numerous reviews of defence procurement”—


this is why I am saying we all have an interest in this—

“over the past 35 years”.

I am making a defence-equipment point, not a party-political point. The reviews have

“provided the Department with opportunities to take stock and learn from experience. We are therefore extremely disappointed and frustrated by the continued poor track record of the Department and its suppliers—including significant net delays of 21 years across the programmes most recently examined by the National Audit Office—and by wastage of taxpayers’ money running into the billions.”

If you go through this report, you see that it logs detail after detail of problems that the committee believes the Government need to urgently address. The Government’s response is that they are dealing with this, but I think the Committee would want to know how. What are they doing on all of those points?

Using the work of the Defence Select Committee again, it talks about problems in aviation and an inquiry it has just launched. We read in the Sunday Telegraph at the weekend about procurement problems with the type of aircraft purchased for aircraft carriers and whether the F-35B will actually be suitable. It will be suitable in terms of being launched off the aircraft carrier, but will all that have to be changed and will there be another procurement difficulty with that?

The report on the Army’s armoured vehicle capability published a few months ago says:

“This report reveals a woeful story of bureaucratic procrastination, military indecision, financial mismanagement and general ineptitude, which have … bedevilled attempts to properly re-equip the British Army”.


I understand that the noble Lord, Lord Alton, was at a committee meeting in your Lordships’ House last week where this was discussed in the context of the Ajax contract. The Public Accounts Committee published a report on 3 June 2022 which pointed to a £5.5 billion contract with General Dynamics, with an initial order for 589 Ajax armoured fighting vehicles that were supposed to be in service in 2017. But by December 2021, at a cost of £3.2 billion, the department had received 26 vehicles, none of which can be used. Maybe now the Government will have to scrap that and move to a Warrior replacement.

So, all these different things are going on, and, again, the Government say that they have sorted these issues. However, I had a quick look and found The Treatment of Contracted Staff for the MoD’s Ancillary Services, another recent report by the Defence Committee from May of this year, which said:

“Outsourcing ancillary services has become commonplace in the Ministry of Defence … If an activity is not a core part of the MoD it is liable to be outsourced. For example, catering, vehicle maintenance and firefighting are liable to be outsourced. However, despite the billions of pounds spent on outsourcing, this is a relatively unscrutinised area. The MoD’s outsourcing practice is not exemplary. Outsourcing appears to be the default position, with little consideration given to providing services in-house. Contractors drop standards and squeeze employees to raise their profit margin, but the MoD is not always willing to step in and enforce the expected standards. It is an absurd state of affairs that the MoD is not allowed to look at a contractor’s previous performance when assessing their bid—a state of affairs that needs to be rectified immediately.”


Yet when we have asked Ministers about excluded contracts, excluded suppliers and what is going to be looked at, we have been reassured that the Procurement Bill will mean that a contractor’s previous performance will be looked at, and that if its bid is not up to scratch or not what you would expect, that supplier can be excluded. However, we read in a May 2022 report from the Defence Select Committee that the MoD is not allowed to look at a contractor’s previous performance when assessing its bid. So, is the Defence Select Committee wrong, or is the Bill wrong? It would be useful for us to hear from the Minister whether the MoD is allowed to look at a contractor’s previous performance, and whether it has or has not.

I have been speaking for a few minutes and I do not want to speak for any longer than that. I have tried to use contracts run by the Ministry of Defence to give some examples of appalling contract management. I have seen the response that the Government sent back to the committee, which says, “We’re dealing with all of these. We don’t agree with the committee; essentially, it is wrong on some aspects of this, but we agree with it on others. We are doing all sorts to tackle this”.

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[Lord Coaker (Lab)]

Will the Minister address the point about the treatment of contracted staff for the MoD’s ancillary services? I will just remind her that the Defence Select Committee report published recently says in its summary:

“It is an absurd state of affairs that the MoD is not allowed to look at a contractor’s previous performance when assessing their bid—a state of affairs that needs to be rectified immediately.”


Will the Procurement Bill rectify what the Defence Select Committee says is an appalling state of affairs that the supplier’s previous performance cannot be looked at?

[Baroness Goldie (Con)]

My understanding is that the Government’s response has been framed to that report and is currently under review. I have no more up to date information, but I will write to the noble Lord. The department is under an obligation to respond to that proposal.

[Lord Coaker (Lab)]

The Government cannot answer the point about whether the Procurement Bill will allow the MoD to look at a contractor’s previous performance when assessing its bid—a state of affairs that needs to be rectified immediately. Every time we have talked about what is an excluded supplier or an excludable supplier, we have been told that previous performance is one of the criteria that can be looked at, yet from what the Defence Select Committee said, and the Minister just said, is that it is not clear whether the MoD can do that.

[Baroness Goldie (Con)]

Well, yes, within the law the MoD can, and this Bill provides more flexibility for past performance to be taken into account. However, there are legal constraints which govern how any party entering into a contract can responsibly consider previous conduct. The Bill allows the MoD to exclude a supplier, and there are various grounds in the Bill to clarify when the MoD can make such a decision. Our view is that there is the necessary flexibility within the Bill. The Government will be looking at the observations of the Committee.

[Lord Coaker (Lab)]

It would be really helpful if the Minister, as she suggested, wrote to me and copied it to noble Lords in the Committee, because she said it was not allowed and then she said it was allowed, but the Defence Select Committee report, which was published just a few weeks ago, said the MoD was not allowed to look at a contractor’s previous performance when assessing its bid. So either the Defence Select Committee is wrong, or the MoD has changed the regulations or the Bill changes the regulations. All I am trying to seek is what the situation actually is.

[Baroness Goldie (Con)]

What I said to the noble Lord was that, as happens with any committee report, the department is preparing a response to the committee, and that is currently being done. I do not want to pre-empt that, but, when the response has been submitted to the committee, it will for the committee to determine whether it wants to make that response public.

On the issue that is perplexing the noble Lord and causing him anxiety, we believe that the Bill as drafted gives the MoD the power to exclude suppliers if we have reservations.

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[Baroness Goldie (Con)]

There is a part of the Bill that allows the Secretary of State to exclude a supplier; that is a specific provision in the Bill. Where defence and security contracts are concerned, I think these are powerful provisions. I am very happy to take the advice of my officials and see if I can clarify the position further for your Lordships’ Committee.

Moving on, government Amendments 520 to 526, to which I referred earlier, are what I would describe roughly as Schedule 10 amendments. Schedule 10 amends the Defence Reform Act 2014 principally to enable reforms to the Single Source Contract Regulations 2014. The regulations are working well to deliver their objectives of ensuring value for money for the taxpayer and a fair price for industry. That is the balance against which we always have to work. Delivering the Defence and Security Industrial Strategy and building on experience since 2014 means that some reforms are needed. This will ensure that the regulations continue to deliver in traditional defence contracts and can be applied across the breadth of single-source defence work in the future, providing value for money for the taxpayer while ensuring that the UK defence sector remains an attractive place in which to invest.

We are making two government amendments to Schedule 10 which will clarify the wording and deliver the full policy intent. The first relates to paragraphs 3(2) and 3(8) of Schedule 10, where we are increasing the flexibility of the regime by taking a power to enable contracts to be considered in distinct components—this is an important development—allowing different profit rates to be applied to different parts of a contract where that makes sense. Secondly, we are simplifying the contract negotiation process by an amendment to paragraph 8(3)(a) of Schedule 10, which ensures that the contract better reflects the financial risks involved, and in paragraph 8(3)(c) of Schedule 10, taking a power that will clarify how the incentive adjustments should be applied. We are clarifying the wording currently in paragraph 8(3)(c), which will become paragraph 8(3)(ea)—I am sorry that is a little complicated; it is just to achieve accuracy of reference—by government amendment in Committee to ensure that the schedule fully delivers the policy intent.

In short, these government amendments provide improved clarity and greater flexibility in the defence procurement process, and I hope your Lordships will be minded to support them.

[Lord Coaker (Lab)]

My Lords, I thank the noble Baroness for that informative reply, and I look forward to the letter to clarify the point that we had some discussion on. I apologise to the noble Lord, Lord Alton; I knew that he had signed the amendment and forgot to mention it. It is in my notes: “Don’t forget Lord Alton”—and I did. I apologise for that but thank him for his support.

For reasons of allowing us to move on to the next group, which I know a number of noble Lords are waiting to discuss, I would just say that Amendment 101 is almost like an encouraging amendment; it is trying to encourage the Government to do more. I accept what the noble Baroness said with respect to contracts and some of the difficulties that there are—to be fair, the noble Baroness, Lady Smith, raised that as well. The amendment is just an attempt to ask whether we can do a bit more to support our own industry and small and medium-sized enterprises. I know that the noble Baroness agrees with that and will take it on board.

As far as Amendment 485 is concerned, we need to look at what the noble Baroness has said, look again at the Bill and reflect on it. The important part of Amendment 485, as usual, is tucked away. Proposed new subsection (4) says:

“The Secretary of State must commission the National Audit Office to conduct a similar review annually.”


It is that continual microscope that is needed. I accept the point that the National Audit Office can conduct the reports and that it is independent. I accept all those sorts of things; the noble Baroness is right about that. I just think that all of us want to get this right. Therefore, that point about an annual review is particularly important. With that, I beg leave to withdraw.

Amendment 101 withdrawn.

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These are value-based issues. I can see what the Government will say on some of them when the Minister speaks from the Dispatch Box, but others are significant exclusions on which the Government need to reflect before Report.

[Lord Coaker (Lab)]

My Lords, I will try to be reasonably brief in summing up some of the points made. I start by welcoming my noble friend’s Amendment 174 about late payment. It is a point he has made continually and this important amendment should not get lost in these great debates about serious international issues. His point about trying to support small and medium-sized businesses through dealing with late payments deals with the point that my noble friend Lady Hayman and I are also trying to deal with in Amendment 179. I would not want that to get lost.

In speaking to Amendment 329, in my name and that of my noble friend Lady Hayman, and Amendment 331, in my name and those of my noble friend Lady Hayman, and the noble Lords, Lord Bethell and Lord Fox, I want to wrestle with whether the group is too big or not. At its heart it has the discussion and debate we have had through the Committee—and no doubt will have again on Report, when there will be votes on it—which is on what the Government are trying to achieve through their procurement policy. We are saying that, as well as being efficient, effective, value for money and all those things, there are certain social, economic and other objectives that the Government should also pursue. When we look at this group of amendments, which is about exclusion grounds, a whole range of different issues can be raised to say that, if a firm or supplier does this, it should be excluded from consideration when the contracting authority comes to make its procurement decisions.

Maybe the Government will say that these amendments are not necessary and that they do not want to add them to the Bill. A question then arises for the Minister—I do not believe he believes in accepting serious human rights abuses. If that is not going to be put in the Procurement Bill, how will the Government pursue their objective of trying to do something about serious human rights abuses through the Bill or will they not? Will they just leave it to the market to do?

That is the point of Amendment 331, which my noble friend Lady Hayman, the noble Lords, Lord Bethell and Lord Fox, and I have put down. We have listed just some of the grounds, and we think that, if a supplier is guilty of those human rights abuses as listed in the amendment, and others, the contracting authority should not procure from them. If that is not the right way of going about it, how will the Government ensure that contracting authorities do not purchase from those who have been guilty of serious human rights abuses such as war crimes, crimes against humanity, genocide, forced sterilisation and so on? I take the point made by the noble Lord, Lord Alton, that perhaps genocide needs taking from that; that may be helpful and is obviously something that can be looked at.

It is not just us in this Committee; the Foreign Affairs Committee has also said that the Government and the contracting authority need to take these things into account when it comes to purchasing. The Government’s response to the Foreign Affairs Committee’s report, published in November, says:

“The forthcoming Public Procurement Bill will further strengthen the ability of public sector bodies to disqualify suppliers from bidding for contracts where they have a history of misconduct, including forced labour or modern slavery.”


There is a lot of pressure from lots of different bodies to do something about this.

I thought my noble friend Lord Hain made a brilliant speech on his Amendments 184 and 187. He talked about Bain with respect to South Africa. If his amendments are not the right way of going about things, what will the Government do about it? These are the Committee’s questions.

The noble Baroness, Lady Boycott, made a very important point about environmental considerations in Amendment 310 and so on. The Government will say, “We are very concerned about the environment; we agree with the thrust of the amendment.” If that is true, and the amendment is not going to be accepted and go into the Bill, how will that aim be achieved? That is certainly the frustration that I feel, and I want the Minister to answer on how it will be achieved if this is not in the Bill.

I come to Amendment 353 in the name of the noble Baroness, Lady Stroud, supported by the noble Lord, Lord Alton of Liverpool, the noble Baroness, Lady Smith of Newnham, and me. The noble Earl, Lord Dundee, also came in on that. I thank him for his kind remarks about my report at the Council of Europe; I appreciated that. That amendment is, again, about supply chains and how we ensure that contracting authorities do not contract with those who have modern slavery, exploitation and all those things that we would object to within their supply chains. If the Government do not agree with Amendment 353 and think it is unnecessary, how are they going to achieve what that amendment seeks to achieve? That is an important question for the Government to answer.

In other words, why are all the amendments in this group unnecessary? Why do they not matter? Why are they irrelevant? Why do we not need them in the Bill? How will the Government achieve all these objectives if they are going to say that all these amendments are not acceptable?

On the point that the noble Baroness, Lady Neville-Rolfe, made—she also picked up one or two of the points that the noble Baroness, Lady Noakes, made—Schedules 6 and 7 are massive. To be frank about it, whatever the rights and wrongs of those schedules, they have huge implications. All I want to ask the Minister is: how have the lists in Schedules 6 and 7 both been arrived at?

You could pick up a number of examples. Why, for example, does Schedule 7(15) set out a discretionary ground for exclusion for threats to national security? I find that quite difficult to understand. No doubt there is a good reason for it but you would have thought that a national security threat would be a mandatory ground for exclusion. The reason is probably in there somewhere but I could not find it. If you look at Schedule 7, there is a whole list of slavery and trafficking offences that are discretionary. It might be that they should be so but you would have to do a lot to convince the noble Earl, Lord Dundee, and me—let alone the noble Baroness, Lady Stroud—that they should be discretionary.

As the noble Baroness, Lady Neville-Rolfe, noted, whatever the rights and wrongs of these schedules and whether they should be there or not, how have the lists been arrived at? The purpose of Committee is to try to understand what the Government are doing so that, on Report, we can make our minds up on whether amendments that can be voted on should be taken forward.

[Baroness Neville-Rolfe (Con)]

I thank the noble Lord for taking up the point about the extent of the schedules and the shared detail that people who are procuring—they are sometimes quite small organisations —will have to comply with. We have also heard that there will be guidance, so not only do you have the nightmare of a complicated Bill with rules that are different from the EU ones that, with great difficulty, people have become used to; you also have extra guidance that I do not suppose will be scrutinised by Parliament. That creates further difficulties for the people on the receiving end who are trying to do a good job. I emphasise that I am as keen as anybody to have companies doing the right thing but we have to find a way of getting this through, in not too complex a fashion, so that this can go forward smoothly.

[Lord Coaker (Lab)]

That is a point well made. Indeed, the whole issue of the increase in the use of regulations by the Government is something that various Select Committees and other committees have commented on. It is a real difficulty because you do not know what the regulations will be. The legislation just gives the power to the Secretary of State to make regulations; you then wonder what they will be.

If I understood her amendment right, the noble Baroness, Lady Noakes, asked why some provisions in the schedules, perhaps really important ones, do not apply if a supplier contravenes them before the Bill becomes an Act. It strikes me that the self-cleansing we talked about earlier would have to be pretty dramatic if, on 26 February 2023, a firm was found guilty of breaking some of the mandatory conditions laid out in Schedule 6 then, on 3 March, it said it had dealt with those but you could not take into account the five days before when it had broken a lot of the conditions because it was before the Bill become an Act. Is that really what the Government intend? I am not sure because, when I read it, I could not quite make this out. I think that the point of the amendment from the noble Baroness, Lady Noakes, is to try to understand exactly what the Government are getting at. What does “before” mean? There are a range of things in that.

The central point I want to make in speaking to our various amendments is that, if all these things are unnecessary around all these things that are really important, how are the Government going to achieve these objectives, many of which are part of their own policies? Many of us wish to see the Procurement Bill used as the vehicle to achieve that but the Government are resisting, and will resist, that. How will they be achieved if not through this Bill?

[Lord True (Con)]

My Lords, there is a wide gamut of public policy that enables a Government to achieve the objectives on which they stood for office; that is a broader philosophical argument. I am not certain whether the noble Lord opposite wishes to have more in Schedules 6 and 7—he has certainly mentioned one aspect—or whether he makes a plea that something should be taken out. If the Labour Party wants to make a submission to change things and excise individual aspects of Schedules 6 and 7, no doubt we will look at that as our discussion advances in Committee.