Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Hain Excerpts

Wednesday 17th April 2024 Lords Chamber

[Lord Hain (Lab)]

I am grateful to the noble Baroness. I did not advocate a boycott; that was not my purpose. I was talking about the destruction of the environment in Gaza and the West Bank, and that is not disputable.

[Baroness Deech (CB)]

The environment is bad in Gaza, but this Bill is about boycotts.

Now, no less a moral authority than Helen Suzman said that boycotts do not work. In 1987, she said:

“If there were any chance that sanctions would dismantle apartheid, I would be the first to support them. But reducing South Africa to a wasteland would lead not to a nonracial democracy but to more oppression and misery”.


A boycott, in particular a boycott of the so-called Occupied Territories, would not actually change the international scene as far as a two-state solution goes. The only people who would be hurt are the impoverished Palestinians working in the businesses in the Occupied Territories. This was proven by the SodaStream case. SodaStream closed down because it was thought unacceptable to deal with it because it worked in the Occupied Territories. Hundreds of Palestinians lost their jobs; SodaStream moved to Israel. We have to drop the illusion that a boycott of Israel, or indeed any other country, will achieve anything meaningful, let alone when it is carried out by a local authority as opposed to the Government. Environmental damage is indeed a problem, but I am not sure this Bill is the way to tackle it.

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[Lord Roborough (Con)]

I am grateful to the noble Lord for the intervention. I should declare an interest, as set out in the register, in various investments in companies around the world, including in Brazil and Indonesia. I am familiar with the points he raised. I think I answered as well as I can with reference to the Procurement Act and consistency with that, but I would like to write to the noble Lord, if that is helpful, to clarify further.

[Lord Hain (Lab)]

My Lords, in responding to the debate I invite everybody who heard what I said, and those who did not hear what I said, to read it in Hansard tomorrow. Did anybody hear me advocate the BDS cause? Did anybody hear me advocate a boycott of the State of Israel? I did not and I never have in any speech in this House or elsewhere. If there is criticism to be made of what I said, I invite noble Lords and Baronesses to focus on what I said rather than what they think I might have said, or what others have said. I think that is fair, frankly, in terms of debate in this House.

I say to the noble Baroness, Lady Deech—many in this House have considerable respect for the role that she plays—that I think she spoiled her argument by bringing in the South African comparison. She quoted Helen Suzman, who played a valiant role in the anti-apartheid struggle—a lone white role in many respects. At the time the noble Baroness quoted her, it was illegal to advocate a boycott or any kind of sanctions against the apartheid state. Indeed, she opposed boycott campaigns against all-white sports tours I organised, but if she had supported them and advocated sanctions, she could have been imprisoned under apartheid law. I would prefer to quote Nelson Mandela, who said that sanctions were very effective in bringing apartheid to its knees, along with other factors, so the noble Baroness spoiled her argument by quoting that.

[Baroness Deech (CB)]

I will be brief because the night is late, and I am provincial and have to get a train. I have done a lot of research into what allegedly changed South Africa, and the majority of the writings were that it was not sanctions. What changed life there was having two leaders of moral stature who were prepared to talk to each other, which we do not have in the Middle East. As far as the noble Lord’s advocacy of boycott goes, I cannot recall when—I think it was way back in March when we started to talk about this Bill—but the noble Lord himself raised the issue of South Africa, and how things had changed there because of a boycott. The inevitable conclusion to be drawn, though I resist the parallel, is that something like that would work in the case of Israel. I do not think it would, as they are not at all similar, but the night is late, and this Bill is not supposed to be about it.

[Lord Hain (Lab)]

I agree that they are not that similar, and I have never suggested that they are. The reason I brought in the South Africa comparison, and majored on it, is that legal opinion says that this Bill would have made the anti-apartheid campaigns of the late 1960s, 1970s and 1980s illegal. That is why I brought the argument into play. It is not to advocate a boycott, disinvestment or sanctions policy against Israel, which I have never done in this House or elsewhere. If noble Lords are going to disagree with me, as they are entitled to do, then they should make the case on the arguments as they stand.

Since the noble Baroness has intervened again on this, I am sure she has read widely on it, and I am not going to disagree with that, but Nelson Mandela did not agree with her. He said that sanctions were critical. They were not the only thing, and I did not say that they were. The internal contradictions of the system, the fact that the economy was almost on the point of collapse by the time that President de Klerk released Nelson Mandela, that the country was on the brink of civil war and facing the abyss in that respect, was why the people who had imprisoned him for 27 years and oppressed his people were forced to negotiate with him, both for his freedom and for that of his people. It was an accumulation of factors, but sanctions were certainly very effective. The noble Baroness spoils her case about Israel by seeking to deny that.

The noble Lord, Lord Pickles, made a strong point that there are others culpable for the environmental destruction, and I have never denied that. He made some important points about the culpability of Hamas as well.

[Lord Pickles (Con)]

Forgive me for interrupting, but I have just realised that when I made my speech, I did not declare my interests. I would like to do so now, particularly those relating to friendship for Israel.

[Lord Hain (Lab)]

I am happy to be interrupted on that point.

My point to the noble Lord, and to the whole House, is that this Bill is technically flawed. I refer to the explanatory statement that I put on the face of my amendment:

“This amendment seeks to ensure that the Secretary of State cannot remove environmental misconduct as an exception in the Schedule by regulations”—


in other words, by executive decision. This should not be possible, and it should remain in primary legislation. That was the purpose of my amendment.

That brings me on to what the noble Lord, Lord Wolfson, argued. He—and I commend him for this—technically disputed the basis for my amendment, which he is entitled to do. I disagree with his interpretation, and I do ask the noble Lord to reflect on this: what was factually erroneous about what I said in terms of the case I put on environmental destruction in Gaza and the West Bank?

The noble Baroness, Lady Altmann, for whom I have a great deal of respect and count as a friend, pointed out that Israel has planted a considerable number of trees, for which I commend Israel. My point is that there is terrible environmental destruction in Gaza and the West Bank now. Nobody can dispute that, and it has been going on for a long time, including the destruction and poisoning of the water supply for many Palestinian residents there.

[Lord Wolfson of Tredegar (Con)]

My Lords, I did not introduce a technical problem with his amendment. I sought to explain to the Committee, and to him, that the basis of his amendment—that is, that the Secretary of State could by regulation remove this exemption—was entirely flawed. Having mentioned this in passing as a technical response, he has now gone back to his favourite subject of attacking Israel. Is he going to provide a response to the fundamental problem that I raised with his amendment?

[Lord Hain (Lab)]

I have already done that. On what he calls my favourite hobby of attacking Israel, as it happens, as I said in the foreign affairs debate, the whole strategy for resolving this terrible dispute is fundamentally flawed. The lessons should be learned from the Northern Ireland experience. Hamas will not be defeated militarily, however much I would like it to be. I made it clear that I am a friend of Israelis as well as Palestinians, but we are not revisiting all of that. On the criticisms, apart from the noble Lord’s criticism of the case that I have made, I invite people to engage on the substance, rather than bringing in arguments that I have never made in order to adopt a kind of diversionary tactic on this.

To conclude, the Bill is flawed and the Minister, speaking for the Government, should look again at this matter. If there is an issue with the wording of my amendment, then we can discuss that. Unless that is done, people will interpret the Government’s stance as showing that environmental protection is not being given the priority under the Bill that it should. Having said that, I beg leave to withdraw the amendment.

Amendment 15 withdrawn.

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There are many reasons why the Bill should not pass, not least because it is an embarrassment to this Parliament. Any Bill that attempts to prevent people who hold different political or moral views from the Government expressing those views with the threat of legal redress belongs in a totalitarian regime, not in a constitutional democracy. That is particularly the case when the Government seek to silence other elected representatives. Demeaning their electoral mandate is totally unacceptable and should be opposed.

[Lord Hain (Lab)]

My Lords, I apologise to the Committee for speaking so soon after my previous contribution, but I will speak to my Amendment 20A. I associate myself with the amendments of the noble Baroness, Lady Bryan, which I have signed.

I am grateful to the noble and learned Lord, Lord Thomas of Cwmgiedd, and the noble Baroness, Lady Randerson, for adding their names to my Amendment 20A. This iniquitous Bill challenges the very foundations of devolution in the United Kingdom—namely, that decisions should be taken at the local level, and that local leaders should be answerable for them, rather than decisions being taken at the centre by remote politicians and officials. I say that as a former Secretary of State for Wales who helped bring in the Government of Wales Act 2006, which strengthened the devolution possibilities for the now Welsh Parliament —the then Welsh Assembly. My amendments and those of my noble friends address one aspect of that: they seek to remove from the Bill matters for which the Governments of Scotland, Wales and Northern Ireland should properly be responsible.

I will speak about Wales in particular. The Explanatory Notes acknowledge that the Bill affects the decision-making of the devolved Administrations. The memorandum of 8 September 2023 from Rebecca Evans MS, the responsible Welsh Minister, set out in detail the way in which the Bill intruded into devolved competences in Wales and why it was right to withhold the legislative consent of the Senedd—which has occurred.

Deciding whether a particular purchase or contract should be made by the Welsh Government, or any other public authority in Wales, is patently a function exercisable in relation to Wales under the terms of Section 3 of the Wales Act 2017. The conduct of foreign affairs is reserved to the UK Government under that Act, but the making of moral or political judgments about the conduct of foreign states is not conducting foreign policy. That is a crucial distinction denied by this authoritarian Bill, which abrogates powers to Ministers so that they can act by executive diktat—in this case, by overriding the devolution settlement in respect of Wales, Scotland and Northern Ireland.

Moral and political judgments are made by every individual—and so they should be; they should not be dictated by the centre. That means that the decision-maker should be at the lowest accountable level. In the case of Wales, decisions should be taken by a county or county borough council, the Welsh Government or the Senedd. Those authorities would be answerable for the moral and political judgments they make at the local or all-Welsh level. Are the Government seriously saying that they have a monopoly on moral and political judgment? That is what the Bill saying, which is both arrogant and absurd. Council tax payers in Neath, Gower, Wrexham or the Vale of Glamorgan are best placed to decide whether their councils are making the right decisions, and electors in Wales can make the same decision about the Welsh Government’s and the Senedd’s choices.

I cannot agree more with the Welsh Government’s view that the Bill is disproportionate and unnecessary, and I support the Welsh Parliament’s decision to refuse to give it legislative consent.

There are also major constitutional issues. If the Bill is enacted, it will fly in the face of the fundamental constitutional principle articulated in Section 2 of the Wales Act 2017, with parallel provisions, of course, for Scotland and Northern Ireland, that the Parliament of the United Kingdom will not normally legislate with regard to devolved matters without the consent of—in this case—the Senedd in Wales, the Parliament of Scotland or the Assembly of Northern Ireland.

The Bill would also fly in the face of the principle of subsidiarity to which the Government ostensibly subscribe: namely, that decisions are made at the level closest to the citizen, consistent with effective delivery.

So far as our amendments are concerned, because there is a single jurisdiction of England and Wales—something that the noble and learned Lord, Lord Thomas of Cwmgiedd, has reported on compellingly—the amendment of Clause 17 to remove the word “Wales” would not work technically. For that reason, it is necessary to achieve the removal of Welsh devolved bodies from the Bill in a different way from the way that can be achieved for Scotland and Northern Ireland, because England and Wales have a common legal framework and that is not the case for Scotland and Northern Ireland. That is done by my amendment to the schedule. This would add the Welsh Government and public authorities that are responsible to that Government to those bodies excepted from the provisions of Clause 1. Effectively, it would mean that the Bill would not apply in devolved Welsh areas.

Our amendments are an opportunity for these issues of devolution to be canvassed, for the devolution settlement to be preserved and for the rights of the other Governments in United Kingdom and their legislatures to be asserted. I hope that the House, in some way, will manage to protect the devolution settlement, because otherwise the future of the United Kingdom is threatened.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Bryan, and the noble Lord, Lord Hain, and to essentially agree with everything they said. I rise to offer Green support; I am not going to engage in the technical details, which the noble Lord, Lord Hain, set out so clearly, but I will simply say that this Bill should not apply to Wales, Scotland or Northern Ireland.

I listened to the debate on an earlier group, when the noble Lord, Lord Boateng, talked about a small nursery, run by a charity, deciding to ban oranges from South Africa. That obviously is not right—it is the sort of thing that the Bill appears to be addressing—but how much more so when we are talking about an entire devolved Administration? If we think about the kinds of examples that might apply here, let us say that one of the nations’ devolved Administrations might choose to block a supplier of staff uniforms because the clothing is made under abusive conditions in an abusive regime. How can it not be right that the people of Wales can decide for themselves that they do not want to see people wearing uniforms from that kind of source?

In the earlier group, my noble friend Lady Jones of Moulsecoomb pointed out how the environmental derogations are utterly inadequate. How can it be that the Scottish Parliament could not decide to ban food sourced from deforested areas of the Amazon from being served in the Parliament? Those are the kinds of things that the Bill is currently providing.

It is worth looking over the history of this a little bit. I think it was two Prime Ministers back—it is rather hard to keep track, but I am referring to Boris Johnson. Under Boris Johnson, it seemed that there was a real desire to pick fights with the Scottish Parliament and the Welsh Senedd in particular. Since then, we have seen some improvement; we have seen the Review of Intergovernmental Regulations, which said that

“decisions will continue to work on the basis of agreement by consensus”.

I think that is an important phrase to look at, although I note we have seen some backsliding recently, and perhaps this Bill is a symbol of that.

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[Baroness Noakes (Con)]

My Lords, I think that noble Lords who have spoken have misrepresented the devolution settlement. It is clear that foreign policy is a reserved matter. When we come to this Bill, the question of the political or moral disapproval of the conduct of foreign states is a matter of foreign policy that can be determined only by the UK Government.

Noble Lords have been trying to describe devolution as they would like it to exist but the plain fact is that foreign policy is a reserved matter, and that is what is driving this. I do not think that the other matters that the noble Baroness, Lady Randerson, just referred to prevent action by the devolved authorities because of the quite extensive exemptions, which align with the procurement legislation, that are set out in the Schedule. We are talking about political or moral disapproval of state conduct, very specifically, and that is a matter reserved to the UK Government.

We have to remember that the devolved Administrations have form here in relation to Israel. To take the Scottish Government, back in 2014, they issued a Scottish procurement policy note which, in effect, encouraged Scottish bodies to boycott operations in the Occupied Territories. That note, which is quite difficult to find on the internet nowadays, because it seems to have disappeared into a black hole of an archive, was reconfirmed by current Scottish Ministers only a couple of years ago, so it remains the Scottish Government’s policy, which they cannot effectively implement because of the reserved nature of foreign policy.

To take the Welsh Government, in 2020 they informed the Welsh Parliament that they intended to issue advice to all Welsh authorities

“that they may exclude from tendering any company that conducts business with occupied territories either directly or via third parties”.

It was only after intervention from an organisation called UK Lawyers for Israel that the Welsh Government deferred their decision. So we have the Scottish Government and the Welsh Labour Government itching to boycott Israel, and to use that as a reason—

[Lord Hain (Lab)]

The noble Baroness accurately quoted the Welsh Government’s position as referring to occupied territories which are illegally occupied, including those determined by the British Government, not as boycotting Israel.

[Baroness Noakes (Con)]

Whether that is relevant is another matter, because the boycotting of the Occupied Territories would also cause a problem under this Bill if Wales and Scotland were allowed to, in effect, opt out of the Bill.

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So I say to the Government—this is where I come to my question—“You can get yourself into a tangle because now, if you concede to these amendments, it will be very difficult for you, because if you concede to them and then do nothing for England, you will put English authorities in an inferior position to the authorities in Scotland, Wales and Northern Ireland”. So the Government will get themselves into a tangle, if they concede to these well-argued amendments, over what they would do about England. I cannot see local government in England being terribly thrilled if the Government have given way to these three, rightly, devolved Administrations. What will they say to the local authorities in England about why they are put in an inferior position to local authorities in Scotland, Wales and Northern Ireland? That is where you would end up. So my question to the Minister—

[Lord Hain (Lab)]

I am very grateful. I agree with everything he has said. On his point about central government not always being correct, that would have been the case in the 1930s when a Conservative Government were appeasing Hitler and there was massive pressure from outside, from people in all walks of life who took a different view, that eventually forced a change of policy and Churchill took over with a different policy—thank goodness.

[Lord Warner (CB)]

Absolutely—I thoroughly agree with the noble Lord, and this comes to my question as to whether the Government have thought this through. I do not know what the penalties will be for breaches of this law, but I can foresee that, on some issues, people will feel so strongly that they will be prepared to pay—you might say it is the cost of trade—the penalties so that they can demonstrate to the Government what they feel about a particular action in a particular country by a particular Government. Have the Minister and the Government thought through what happens if there is a willingness among groups of people to take a stand against this Bill, accepting that they may get some financial penalties and being prepared to pay those penalties because they feel so strongly about a particular issue?

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[Baroness Neville-Rolfe (Con)]

If I may, I will come back to that at the end of the speech, because I want first to try to explain what we are doing with the devolved Administrations. The noble Baroness, Lady Randerson, said that the WTO already places non-discrimination requirements on public authorities. Although this is the case, these obligations do not cover all countries and territories and apply only to procurement decisions, not investment decisions.

To return to the subject of legislative consent, I think it is fair to say that we are disappointed that the Senedd and the Scottish Parliament have refused to give their consent to apply the ban to their Ministers and the respective departments and agencies. It is always the Government’s intention to legislate with the support of the devolved Administrations and, where relevant, the consent of the devolved legislatures. We will therefore continue to ensure that the interests of the devolved Administrations, including the devolved assemblies, are fully taken into account. Contrary to the noble Baroness’s suggestion, we do engage with the devolved Governments. I was in Northern Ireland last week, I visited the Welsh Government relatively recently, and my office has contacted the offices of the relevant Ministers in the Scottish and Welsh Governments. I hope to meet with them in the coming weeks to discuss further how we can gain their support for the Bill.

[Lord Hain (Lab)]

I will be brief, given the hour. What advice would the Minister give to Welsh local authorities if they refuse to procure or encourage any local companies to do business with Xinjiang province in China because of its oppression of the Uighur Muslims? China, unlike Russia and Belarus, is not listed in the Bill in that way.

Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Hain Excerpts

Committee stage
Wednesday 17th April 2024 Lords Chamber

[Baroness Neville-Rolfe (Con)]

I understand the question. Of course, we now have government sanctions against Russia, so the question is wider. The suggestion made by the noble Lord, Lord Stevens, is a good one, which would perhaps help us to move forward. I have already said that I will look carefully at the questions raised by the noble Baroness, Lady Chapman. The example of the noble Lord, Lord Boateng, is of a slightly different kind, asking rather the same question. Perhaps I can come back on that at the same time.

[Lord Hain (Lab)]

May I also ask a question? I am very grateful to the Minister, who has indeed been generous in responding, even if she has been unable to offer the Committee further clarification. Virtually all training in this country is privately provided, by private organisations, but publicly funded. Where do they fit into all this? They receive public money—from the DWP, say. I remember, as the former Secretary of State, visiting a lot of private providers. Where do they fit in? Do they come under the contractual relationship to which the Minister referred, or are they caught by the Bill?

[Baroness Neville-Rolfe (Con)]

It depends, and it also depends on case law under the Human Rights Act, which I have undertaken to look at and come back to noble Lords.

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Moved by

[Lord Hain]

15: Clause 3, page 2, line 24, at end insert—
“(2A) Regulations under subsection (2) may not amend the Schedule to remove environmental misconduct as an exception from the application of section 1.” Member's explanatory statement
This amendment seeks to ensure that the Secretary of State cannot remove environmental misconduct as an exception in the Schedule by regulations.

[Lord Hain (Lab)]

My Lords, my Amendment 15 seeks to answer the question: what would happen if a public authority imposed a boycott campaign which related to Israel and arose as a result of environmental misconduct in the Occupied Palestinian Territories, illegal under international law?

Under the Bill’s Schedule, the Clause 1 prohibition on the consideration of moral or political disapproval is lifted, so far as that

“consideration … relates to environmental misconduct”.

This includes, according to the Schedule,

“consideration related to the possibility of environmental misconduct having taken place or taking place in the future”,

while the definition of environmental misconduct here

“means conduct that … amounts to an offence, whether under the law of a part of the United Kingdom or any other country or territory, and … caused, or had the potential to cause, significant harm to the environment, including the life and health of plants and animals”.

Surely such accusations of environmental misconduct should also apply to the State of Israel. There is credible evidence that Israel has engaged in such misconduct, particularly through the actions of the Israel Defense Forces, in its occupation and military actions.

In its military action in Gaza, there are serious questions to be raised about environmental misconduct. Dr Saeed Bagheri, scholar of international law at the University of Reading, stated of Israel in January this year that there may

“be evidence to suggest that they have acted contrary to the International Committee of the Red Cross … position that the prohibition on inflicting widespread, long-term and severe harm to the natural environment is a rule of customary international law”.

He added:

“The actions by the Israeli Defence Force in Gaza have left chemicals from white phosphorus weapons that could linger in the environment for years. This can have a long term impact on the soil, affecting the growth of crops, and in Gaza agriculture takes up about a quarter of land. For individual farmers and their communities, this pollution and its long-term impacts could be devastating”.


However, such questions far pre-date the current horror in Gaza. The Institute for Middle East Understanding has set out a long list of allegations of environmental misconduct. In its actions in the Occupied Territories, long-standing allegations against Israel have been made about the deliberate destruction of olive trees and olive orchards; at least 2.5 million trees have been destroyed since 1967, yet Palestinians depend on these trees as a primary source of food and income. The destruction of natural wildlife since October has been stark: a recent estimate states that around 4,300 acres of trees and plant life have been cleared around the Gaza Strip by Israeli forces, not to mention the complete devastation of the natural and built environment within the Gaza Strip.

What of Israel siphoning off water supplies from the Occupied Territories? This has caused a permanent drop in the West Bank’s water table and distorted water flows, damaging agriculture and increasing flood and drought vulnerability. In February this year, the IDF itself confirmed that it is dumping seawater into tunnels and waterways below Gaza, an act which the director-general of the Geneva Water Hub described as polluting and contaminating, and poisoning Gaza’s aquifer.

We also know that Israel discharges 52 million cubic yards of untreated sewage and other hazardous materials each year into the West Bank. The Israeli Information Center for Human Rights in the Occupied Territories reported:

“Israel’s environmental policy in the West Bank—including situating polluting waste treatment facilities there—is part and parcel of the policy of dispossession and annexation it has practiced in the West Bank for the past fifty years.”


In the West Bank, and in contravention of the Geneva convention, Israel has appropriated most water sources for itself and restricts Palestinian access to them. Of course, this is not Israeli state or Israel Defense Forces activity alone; the administration of this occupation relies on a vast number of agencies and companies. Is it not reasonable for any public authority doing due diligence on environmental matters to prefer to disengage with any companies or agencies which are involved in such acts?

Many of these instances could feasibly fall foul of international law, such as Rome statute prohibitions on inflicting damage to the natural environment, Hague regulations provisions on natural resource use, and customary international humanitarian law principles on hostilities to the natural environment, to name a few. But the matter goes beyond the practical application of these examples raised. The question is also: can we exempt Israel and the Occupied Territories from the Schedule’s considerations without denying the very real possibility, now or in the future, of Israeli state or corporate environmental misconduct?

Israel’s human destruction of Gaza is being compounded by an environmental crisis. In Rafah, large family groups have been living cramped together with no running water or fuel, while surrounded by running sewage and waste piling up. Like the rest of Gaza’s residents, the air they breathe is heavy with pollutants and the water carries disease. Beyond the city streets lie ruined orchards and olive groves, and farmland destroyed by bombs and bulldozers. Forensic Architecture, a London-based research group, has shown how family farms close to Gaza’s border with Israel, cultivated for generations, have been destroyed, their orchards uprooted and replaced by military roads. Israel has suggested it could make this sort of thing permanent to create buffer zones along the border, where a lot of Palestinian farms are sited.

An analysis of satellite imagery, reported by the Guardian newspaper recently, showed the destruction of nearly half of Gaza’s tree cover and farmland—mainly because of the military onslaught by the Israel Defense Forces but also because, starved of fuel, desperate Gaza residents have cut down trees to burn for cooking or heating. Not only have olive groves and farms been reduced to rubble but soil and groundwater have been contaminated by munitions and toxins. The sea is full of sewage and waste. The air is polluted by smoke and particulates. The impact on Gaza’s ecosystems and biodiversity is colossal, leading to calls for it to be recognised as ecocide and investigated as a possible war crime.

United Nations environmental experts report massive amounts of debris and hazardous material in Gaza, with harmful substances such as asbestos, heavy metals, fire contaminants, unexploded ordnance and hazardous chemicals. When Israel cut off fuel to Gaza after the 7 October terrorist pogrom, power cuts meant that wastewater could not be pumped to treatment plants, leading to 100,000 cubic metres of sewage a day spewing into the sea. The sheer scale and long-term impact of all this environmental destruction has led to calls for it to be investigated as a potential war crime, and to be classed as ecocide, which covers damage done to the environment by deliberate or negligent actions.

Under the Rome statute, which governs the International Criminal Court, it is a war crime to intentionally launch an excessive attack knowing that it will cause widespread, long-term and severe damage to the natural environment. The Geneva conventions require that warring parties do not use methods of warfare that cause

“widespread, long-term and severe damage to the natural environment”.

Forensic Architecture argues that:

“The destruction of agricultural land and infrastructure in Gaza is a deliberate act of ecocide”.


I put Amendment 15 to your Lordships’ Committee with the intention of asking: how should a public authority act if it wishes to disengage with a company or enterprise which may be involved in acts such as these, which could amount to environmental misconduct under UK or international law, if that company is Israeli or if it engages in alleged misconduct overseen by the State of Israel?

The Bill is clear that the Schedule considerations override Clause 1 prohibitions on boycotts. However, it is not clear whether the Schedule also applies to Clause 3, which likewise overrules Clause 1. This could present a glaring contradiction in the current formulation of this Bill, and one which I very much hope the Government and the Minister will respond to. It needs to be resolved through this amendment. I hope the Minister will come back on Report having accepted the amendment to deal with this matter.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I will speak to my Amendments 32A and 32B. Amendment 32A would expand the environmental grounds on which a public body is allowed to make certain economic decisions. Amendment 32B would extend the definition of environmental misconduct to include damage, regardless of whether it is legal or illegal, and to include species, habitats and the natural world.

It is quite positive that this Bill at least recognises that public authorities should be able to consider environmental issues when deciding whether to spend taxpayers’ money on goods and services purchased from outside the UK, or when deciding how to invest the pensions of public sector workers and retirees. However, this environmental carve-out is far too narrow. I do not understand how public authorities can be forced to ignore environmental destruction as long as that destruction is not a criminal offence. I have worked closely with Friends of the Earth on these amendments, and they were also tabled in the Commons by my honourable friend Caroline Lucas.

We are all deeply concerned about this fundamentally flawed Bill and the impact it will have on public bodies’ legitimate procurement or investment decisions about companies or products that are destroying the natural environment, including pollution overseas and climate breakdown. All public bodies must be free to avoid investment in fossil fuels, which are contributing to climate breakdown.

This Bill sets out an uneven treatment between local or UK-based businesses and foreign enterprises, particularly where they are owned or controlled by a foreign state. A local council will remain entitled to refuse to purchase timber from a business that is clear-cutting the local woodland, but if it is in a foreign country linked to a foreign Government then the council will be prohibited from even considering the impact of clear-cutting woodlands and rainforests around the world. These types of considerations—so-called ESG criteria—are now quite routine, even mundane, among both the public and private sector. Public authorities should be entitled to consider the same types of environmental issues that they would consider if interacting with a UK-based business. There is no justification for it to be any other way, other than a totally misguided belief that the nature, land, air and water in the United Kingdom is inherently more valuable or deserving of protection than that outside the United Kingdom. That sounds slightly colonial to me.

Why have the Government chosen to draft this so tightly, so that the only environmental considerations are whether or not the environmental damage constitutes a criminal offence? I hope the Minister can see the glaring flaws in this approach and the obvious harms it will lead to. I ask noble Lords across the Committee, including the Minister, to work with us on this issue so that we can bring something that we can all support to Report. Environmental crime must not be set as a bar beyond which anything goes in public procurement and the investment of public pensions.

Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Hain Excerpts

2nd reading
Tuesday 20th February 2024 Lords Chamber

[Lord Hain (Lab)]

My Lords, this is another pernicious piece of legislation attacking the freedom to protest against injustice and oppression except when the Government approve. It is therefore a Bill of which Vladimir Putin would be proud as it prevents public authorities, such as local councils, local government pension funds or universities, making their own ethical choices about their spending or investment. I am sorry that this Conservative Party is on the wrong side of history, as indeed it was over the fight against the most institutionalised system of racism the world has ever seen, namely apartheid.

It is also abolishing the right of British citizens to make their own choices. Tory Ministers support boycotts against Putin’s Russia over his barbaric attacks on Ukraine but want to ban even those advocating boycotts of Israeli products from settlers in the West Bank who have stolen Palestinian land in flagrant breach of international law. Ministers have said that Russia and Belarus would be exempt, but what about public bodies wishing to take boycott action over China’s oppressive treatment of Uighur Muslims or the Myanmar junta’s genocidal banishment of Rohingya Muslims?

The Bill violates UN Security Council Resolution 2334, which the UK voted for and which declares Israeli settlements in the Palestinian territory occupied since 1967, including east Jerusalem, as legally invalid and a clear violation of international law. The Bill explicitly designates Israel for special protection and seems to encompass the illegally occupied territories within its definition of Israel. Surely local authorities should have the discretion to make ethical decisions in line with the preferences of their constituents and the freedom to align with international law and exercise due diligence in procurement.

The Conservatives, I am afraid, have previous form on authoritarian repression of such ethical boycotts. In 1988 Prime Minister Margaret Thatcher, having denounced him as a terrorist, imposed restrictions on political action by local councils in support of Nelson Mandela, by then into his 25th year in prison.

This Bill echoes a part of her Local Government Act 1988 preventing local authorities boycotting goods from apartheid South Africa as she attempted to shore up its economy. Local authorities such as Glasgow, Sheffield, Camden, Islwyn and a host of others decided not to buy apartheid goods. In 1981 Sheffield became the first to pledge to end all links to apartheid South Africa by withdrawing pension fund investments from companies with South African subsidiaries and barring its whites-only sports teams from playing on Sheffield’s sports fields. Others followed, including Cambridge, Newcastle, Glasgow and most inner London boroughs.

By 1985 more than 120 local councils had taken some form of action, from banning South African produce in their schools to granting the freedom of their city to Nelson Mandela, Glasgow City Council being the first. In London, Camden Council renamed the street where the Anti-Apartheid Movement had its office Mandela Street. Other cities, such as Leeds with its Mandela Gardens, bestowed honours on Nelson Mandela. The 1988 legislation did not work. By the time the Act came into effect, the apartheid regime was collapsing and the release of Nelson Mandela was looming.

The right to boycott is a principle that has had a massive impact for good. International pressure to cut links with the apartheid regime included disinvesting, not buying goods produced by it and not providing sporting or cultural cover for a regime that the United Nations had deemed a crime against humanity. Democratically elected local authorities should be able to use their resources in ways that do not sustain oppressive regimes where human rights are violated.

For 35 years a consumer boycott was at the heart of anti-apartheid campaigns in Britain. Hundreds of thousands of British people who never attended a meeting or demonstration showed their opposition to apartheid by refusing to buy goods from South Africa. I took part in action to plaster “Danger: Product of Apartheid” stickers on South African products in supermarkets.

The objective of local councils, joined by student unions, was to create apartheid-free zones. From the early 1970s, almost every university and college in Britain joined in. At more than half, students called on the university authorities to sell their shareholdings in British companies with South African interests and pressed for total disinvestment. Many student unions also banned South African goods from their bars and canteens, and their protests drove Barclays Bank off campuses, forcing it to close down its South African operations.

In 1964, the University of London Union made Nelson Mandela its honorary president. In the 1980s, many student unions named buildings in honour of Mandela and initiated moves to grant him an honorary degree. The British Anti-Apartheid Movement’s boycott campaign was hugely successful, lifted only in September 1993 after South Africa was irrevocably set on the path to democratic elections. Yet, and this is my key point, as Richard Hermer KC of Matrix Chambers stated clearly in paragraph 13 of his legal opinion on the Bill:

“Had legislation of this nature been in effect in the 1980s it would have rendered it unlawful to refuse to source goods from apartheid South Africa”.


Shame on this Government for introducing this shameless Bill. I trust that your Lordships’ House will dismember it through amendments and stand up for human rights worldwide.

--- Later in debate ---

[Lord Hain (Lab)]

I am sorry to detain the House. Not only do I endorse everything that my noble friend Boateng said, but the American Government under President Reagan also opposed boycott action. It was only the Black Caucus in Congress forcing through the loan sanctions in the late 1980s that accelerated the decline of apartheid. Virtually every Government in Europe and right across the world, including white Commonwealth countries, opposed boycott action in every respect. If the Minister’s officials are feeding her this nonsense, she should not simply repeat it.

[Baroness Neville-Rolfe (Con)]

I am grateful for the comments of the noble Lord, Lord Hain. I will certainly look into this further and perhaps we can come back to it on another occasion.

Perhaps me could move on, in the interests of time, to climate change. I would like to clarify that the Bill will ban only considerations that are country-specific. It will therefore not prevent public local authorities divesting from fossil fuels or other campaigns that are not country-specific.

The Bill will not prevent public authorities accounting for social value in their procurement decisions, the reform mentioned by the noble Lord, Lord Collins— of course, we worked together on moving to most advantageous tenders; that is a change that has come about. For example, authorities might structure their procurement so as to give more weight to bids that create jobs or promote animal welfare. Moreover, the Bill contains an exception to the ban for considerations that relate to environmental misconduct, as I think the noble Baroness, Lady Bennett, mentioned.

To answer the question from the noble Lord, Lord Collins, there was official-level engagement with the devolved Administrations on the Bill’s provisions before it was introduced to the other place through the common frameworks working groups process. Senior official engagement on the Bill dates back to April 2022. The Minister for this Bill in the other place, who I saw witnessing our proceedings earlier this evening, has also engaged with responsible Ministers in Scotland and Wales. We intend to engage with Ministers in Northern Ireland now that power has been restored.

The Government have never set out to legislate without consent. We formally sought consent from all the devolved legislatures. Where the legislative consent process is engaged, we always tend to legislate with the support of the devolved Administrations and the consent of the devolved Parliaments. However, as the noble Lord, Lord Stevens of Birmingham, highlighted, boycotts and divestments against foreign countries or territories are a matter of foreign policy. This Bill relates to foreign affairs and international relations, which are reserved matters, but I am sure we will come back to this point in Committee.

I turn to the Bill’s enforcement powers. I start by clarifying that the Bill does not create any new criminal offences, as suggested by the noble Baroness, Lady Janke. They are not criminal offences. Moreover, these enforcement powers are not unprecedented: the regime is based on existing enforcement regimes, such as the powers given to the Office for Students in the Higher Education and Research Act 2017. Clause 7 is a necessary addition to the Bill to ensure that enforcement authorities have the necessary information to assess whether there has been a breach of the ban. It would not make sense to implement a ban with a toothless enforcement regime but, again, I am sure that we will discuss enforcement further in Committee.

The noble Baroness, Lady Chapman of Darlington, and the noble Lords, Lord Wallace of Saltaire, Lord Willetts, Lord Hannay of Chiswick and Lord Johnson of Marylebone, questioned why the ban needs to apply to universities. This ban will ensure that any public authority, including universities in scope of the Bill performing public functions, can maintain their focus on their core purpose rather than taking partisan stances that undermine community cohesion.

It is not appropriate for those institutions to have a corporate view on a matter of foreign policy in the context of their public investment and procurement functions. That risks stifling the academic freedom of individual members of staff to take positions on foreign policy. However, I note the comments made by the noble Lords, Lord Johnson, Lord Willetts, Lord Shipley, and others on the ONS reclassification of universities. I will come back to noble Lords on this issue in Committee, once I have consulted other Ministers.

Devolved Authorities: Expenditure outwith Competences

Lord Hain Excerpts

Monday 5th February 2024 Lords Chamber

[Baroness Neville-Rolfe (Con)]

I am not sure what sort of competence the noble Lord is talking about. Devolved competence is, of course, clearly set out in various bits of legislation. I note what he says about the investigation, which I was not aware of.

[Lord Hain (Lab)]

My Lords, does the Minister understand that in Wales the problem is the reverse? The Government sought to indulge in a power grab, particularly following Brexit, of competences that were already devolved, and in addition threatened to spend on road projects, for example, that the Welsh Government had specifically rejected. This works both ways.

[Baroness Neville-Rolfe (Con)]

I do not entirely agree with the noble Lord, but he may be pleased to hear that I am going to Wales to give evidence on the new border arrangements this week.

Protocol on Ireland/Northern Ireland: Follow-up Report (European Affairs Committee)

Lord Hain Excerpts

Monday 11th September 2023 Grand Committee

[Lord Hain (Lab)]

My Lords, I too thank the noble Lord, Lord Jay, for his exceptional chairing of a group of us that is, to say the least, politically diverse, if not a right handful. My thanks also to our brilliant clerk, Stuart Stoner, who has done a superhuman job since our inception, together with his colleagues.

The Windsor Framework is welcome as an effort by both the Government and the EU Commission to address very serious concerns around the protocol. However, as the report makes clear, a lot is still unresolved. Indeed, the sense of uncertainty risks being compounded by the fact that the Government remain open to doing the bidding of only one party when it comes to further adjustments and legislation with respect to Northern Ireland’s post-Brexit position.

How can the Secretary of State consider it appropriate to tell the leader of one party that he, the Minister,

“can bring forward legislation … that does exactly what he needs it to do for his party”,—[Official Report, Commons, 21/6/23; col. 780]

namely the DUP? Yet after all that, the DUP does not trust the Government, and I do not blame it, because the Conservatives have betrayed the unionist cause that they purport to extol in a deal that the noble Lord, Lord Frost, negotiated but now condemns. When will the Government understand that finding stability in Northern Ireland is not, and never will be, about appeasing one party over others, but is rather about holding firm to the legal obligations and commitments that they have made—and, above all, that it is about being an honest broker? I say that as a former Secretary of State who brought the DUP and Sinn Féin to share power together from May 2007. That could have been achieved only by mutual respect between myself and the DUP—not necessarily agreeing with each other but building mutual trust.

That leads me back to our sub-committee’s report. There are three things worth underlining as a means of shoring up the stability and democratic governance of post-Brexit Northern Ireland, which all are agreed must be a priority. First, the Windsor deal is not merely a diplomatic “win” but a very significant framework for Northern Ireland’s future economic and trading relationships. The Government recognise that Northern Ireland enjoys potential advantages as a result of these arrangements, but those can be secured only by adequate resourcing from London, which is palpably not the case currently. It will be necessary to work in a new way with Northern Ireland officials, stakeholders, experts and—before long, let us hope—the Northern Ireland Assembly and Executive to make sure that the extensive capacity needed is there to make the Windsor Framework a success. It is a very complex animal.

Secondly, the report clearly sets out the need for information and clarity about the details of the Windsor Framework in practice. It is welcome that the Government are issuing more guidance on the details of the implementation of the schemes underpinning the green lanes, for example, but there is need for clarity and detail on a wider range of issues, from the so-called Stormont brake—which does not seem much of a brake at all—to the movement of parcels. The evidence gathered by the sub-committee is a helpful indication of not only what is needed now but what will be needed in the near future.

Finally, as our report concludes, it is vital that the UK and the EU ensure that they remain in close and productive dialogue, rebuilding the trust that is so vital but was squandered so recklessly by bellicose posturing under the Johnson and Truss regimes—trust both with each other and with Northern Ireland stakeholders and its citizens, and with the Irish Government, who are a guarantor for and signatory to the 1998 Good Friday agreement and the 2007 power-sharing self-government. Unless that trust is built with Dublin, nothing will work. It must also be built with Brussels. That is a huge challenge for this Government, which, sadly, they have so far failed to meet, except in respect of the Windsor Framework, which I welcome. I hope they rebuild that trust in future.

Government Contracts: Bain & Company

Lord Hain Excerpts

Wednesday 23rd November 2022 Lords Chamber

Asked by

[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.

--- Later in debate ---

[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.

Procurement Bill [HL]

Lord Hain Excerpts

Committee stage
Monday 18th July 2022 Grand Committee

[Baroness Stroud (Con)]

My Lords, I rise to introduce Amendment 353, tabled in my name and in the name of the noble Lords, Lord Alton and Lord Coaker, and the noble Baroness, Lady Smith, demonstrating cross-party support for this amendment. I also want to underline my gratitude to the Government for seriously engaging with this amendment to the Bill; I know that we share a desire to mitigate the two key risk areas in public procurement which this amendment covers, and I am grateful for their engagement.

Amendment 353 seeks to give the Government two things: first, it seeks to provide the tools to monitor and control the UK’s dependency on authoritarian states; and, secondly, it seeks to ensure a consistent approach to modern slavery across all government procurement. So let us look at how it seeks to monitor and control the UK’s dependency on authoritarian states first. Clause 1 places a burden on the Secretary of State to create regulations that reduce the dependency of public bodies on authoritarian states. There is no agreed definition of what constitutes an authoritarian state in UK law or regulation, therefore Clause 2 adopts the categorisations contained within the Integrated Review of Security, Defence, Development and Foreign Policy, allowing for the legislation to adapt to contemporary geopolitical developments in line with the latest iteration of the review. The countries this amendment would currently apply to as threats are Iran, Russia, North Korea, and, as a systemic competitor, China.

It should be noted that Clause 1 applies to all goods and services which originate in whole or in part in one of the named countries. The amendment is constructed to apply not solely to entire products but also to their constituent parts. So, for example, where a solar panel has been constructed in the UK but relies on polysilicon from another region of the world categorised as a threat or a systemic competitor, that solar panel would, therefore, be within scope of these regulations.

Clause 3 sets out what must be included in the regulations. So, proposed subsection (3)(a) provides for an annual review of dependency to be published by the Government, while proposed subsection (3)(b) requires the Government to define “dependency” and to establish acceptable levels of dependency across industries. Proposed subsection (3)(b) also seeks to appreciate that the risks associated with dependency vary across products and industries. For example, reliance on one region for semiconductors presents very different challenges for resilience from reliance on another region for PPE. So proposed subsection (3)(b) allows the Government the flexibility to take these nuances into account.

Yet the risks of economic dependency are not the only relevant matter here. The second part of this amendment, proposed new subsections (4) and (5), addresses a separate issue: the question of modern slavery in the supply chains of publicly procured goods. The presence of modern slavery in supply chains is clearly unacceptable. This has rightly been acknowledged by the Department of Health and Social Care, which has already taken steps in the Health and Care Act to eradicate from its supply chains goods which have been “tainted”—its word—by slavery. Proposed new subsection (4) adopts substantially the same language as Section 81 of the Health and Care Act, passed earlier this year. The requirement to bring regulations to, in the Department of Health and Social Care’s words, “eradicate” from public contracts goods and services “tainted” by slavery now stands as part of that Act.

When the Health and Care Act regulations are drawn up and passed, those procuring health equipment will have to apply different human rights standards from those procuring goods and services on behalf of other departments, as things currently stand. The main intention of this amendment is to ensure that the UK Government speak with one voice and apply these standards across government. It seems odd for us to be unwilling to procure goods from Xinjiang for the NHS but comfortable doing so for Defra. This is about correcting a loophole in the law and seems to be a matter of simple common sense.

In addition, paragraphs (d), (e) and (f) of proposed new subsection (5) provide improvements on the current modern slavery framework. I particularly commend to the Minister (5)(d), which will improve standards of disclosure and transparency by requiring firms to provide evidence and trace their full supply chain if necessary. Requiring public disclosure of supply chains will considerably improve compliance when compared with the current audit measurements. This is because it is difficult to conduct a credible audit in an authoritarian state. In this context, it is better to know where companies are sourcing from, rather than have an auditor who has no ability to get accurate information.

In conclusion, the two risk areas of economic dependency and modern-day slavery cut to the heart of our character as a nation. We want to stand as a beacon for liberal, democratic values around the world. To do this, we need to ensure we retain the autonomy to act in line with our values by reducing dependency on authoritarian states. We need to ensure that we are living consistently within our values by ensuring there is no modern slavery in our supply chains. The Department of Health and Social Care has shown the way; this amendment enables the rest of government to come into line.

[Lord Hain (Lab)]

My Lords, I commend the speech from the noble Baroness. It was compelling and I hope the Minister will find it so too. I wish to speak to Amendments 184 and 187 in my name and those of my noble friends Lord Hendy, Lady Wheatcroft and Lord Kerslake, to whom I am most grateful. These amendments grant Ministers the power to bar companies which have acted unlawfully or unethically from tendering for public contracts. It is hard to understand why that will not be acceptable to the Government.

The two amendments have the same objective but use different means. Amendment 184 requires a statutory instrument for Ministers to act to bar companies in that way, whereas Amendment 187 enables a quicker route but one that is capable of being challenged if any party considered that the Government had acted unjustifiably. As I say, it is hard to see why the noble Lord, Lord True, would not accept both amendments with acclamation.

It will come as no surprise to either him or many of your Lordships that the particular target I have in mind and which I am angry Ministers have been so shamefully slow and negligent about—despite the generous remarks about me from the noble Lord, Lord True, in the Chamber following a Question I asked, for which I am grateful and thank him—is Bain & Company. I first raised this scandal in your Lordships’ House nearly six months ago and have tried to get the Government to act on it by barring Bain from accessing public contracts.

It is a global brand and presents itself as reputable global consultancy operating right across the world. Bain has its second-largest office here in London, which has been awarded multimillion recent UK government contracts and has influence across our economy, so this company is particular to us. We should take account of the fact that in South Africa Bain purposefully assisted former President Jacob Zuma to organise his decade of barefaced looting and corruption, the company earning fees estimated at £l00 million or 2 billion rand from state institutions.

South Africa’s state capture commission, a judicial inquiry headed by Chief Justice Zondo, which recently concluded its work, and to which I gave written and oral evidence in November 2019, condemned Bain’s deliberate immobilising of the South African Revenue Service—SARS—as “unlawful”. So concerned is the commission with Bain’s illegal behaviour in the South African public sector that it has recommended that law enforcement authorities examine every public sector contract Bain has had, not just the SARS one, with a view to prosecution.

The Zondo report was devastating about Bain’s behaviour. The evidence,

“bears out the pattern of procurement corruption which has dominated the evidence heard by this Commission. These include … the collusion in the award of the contract between Bain and Mr Moyane”—

he was President Zuma’s crony put in to head SARS and effectively dismember it—

“the irregular use of confinement and condonation to avoid open competition, transparency and scrutiny … and the use of consultants to justify changes that were necessary to advance the capture of SARS.”

As expected there has been an upswell of civil society opposition to Bain’s continued presence in that country. Such public pressure recently forced Bain to withdraw from South Africa’s largest business association in disgrace.

These findings and events are devastating indictments of a company which operates at and influences the highest level of civil service and business around the world, including profitably from our own Government’s contracts for many years, and relies on the trust of its clients to deliver social and economic value.

Yet in South Africa, Bain used its expertise not to enhance the functioning of a world-renowned tax authority, as SARS was acknowledged to be, but to disable its ability to collect taxes and pursue tax evaders, some of them former President Zuma’s mates, all in the service of its corrupt paymasters. The very company which possessed the expertise to bolster South Africa’s defences against the ravages of state capture in fact weakened these defences and profited from it, yet this is the very company that works across our government and economy in the UK, influencing our public institutions and impacting millions of British lives.

Bain would have us believe that what happened in South Africa was the work of one rotten apple, but its South African office’s work was endorsed by leaders in London at the time and in its US headquarters in Boston, and many senior people currently working for Bain in London were in the South African business during the corrupt President Zuma era. Some of the very people who broke public procurement rules, colluded with Zuma and committed a “premeditated offensive” against SARS, as an earlier judicial commission described Bain’s actions, are now working in Bain’s London office through which it consults to our public institutions and businesses, including government departments.

We are not only dealing with the matter of to whom we pay taxpayers’ money, although that is a major issue; what should make us shudder is that we allow these people into the inner workings of our public institutions, including government departments. A company has demonstrated a propensity to act selfishly in its own commercial interest at the expense of public good. This is what Bain South Africa did, and it led to the devastation that followed. This is a warning to us all.

Given the scandalous collusion of Bain UK and Bain USA, I am asking that the UK Government and the US Government immediately suspend all public sector contracts with Bain and bar it from entering any new contracts. I wrote to the Prime Minister in February of this year requesting this, which resulted in Cabinet Office officials meeting with Bain. Subsequent to this meeting, the right honourable Jacob Rees-Mogg wrote to me in March this year and was clearly swayed by Bain’s superficial internal changes and repayment of only a tiny fraction of the fees that it had earned from South African public sector contracts in the corrupt Zuma era. Using weasel words, he assured me:

“The Cabinet Office continues to monitor the situation and will engage with Bain & Co again … to determine the most appropriate set of actions.”


To date, I have not heard anything about what has resulted from this monitoring or what set of actions has been determined. It sounds to me like Ministers are shelving any action, which is disgraceful if true, although I am encouraged that Mr Rees-Mogg has now invited me to meet him this Wednesday to discuss these matters.

--- Later in debate ---

[Lord True (Con)]

My noble friend makes an important point. There are elements in here which are looking back and there are elements which are about the present. Legal issues are raised here, and it is important that I come to my noble friend and the Committee with a very specific definition and response to her question in relation to tax and finances.

Amendments 174 and 317 proposed by the noble Lord, Lord Mendelsohn, and Amendment 179 from the noble Baroness, Lady Hayman, seek to bring matters related to prompt payment performance into scope of the supplier exclusion regime. Prompt payment is important; it is lifeblood, in many cases, to small enterprises. The Government are committed to ensuring prompt payment of suppliers, and there are a number of ways in which the Bill does this. For example, 30-day payment terms will apply throughout the public sector supply chain, regardless of whether they are expressly written into the contract. In addition, payment performance can be assessed as part of the award criteria, providing it is proportionate and relevant to the contract.

The Government encourage suppliers to sign up to the Prompt Payment Code. However, we submit that requiring every potential bidder to become a signatory to the Prompt Payment Code is too onerous on some suppliers and would discourage them from bidding, undermining the ability of contracting authorities to achieve value for money.

The noble Lord, Lord Hain, with support from others, proposed Amendments 184 and 187, which seek powers for Ministers to exclude suppliers which have acted in any way unlawfully or unethically. The noble Lord was abundantly clear about what he had in mind when he spoke to his amendments, although he did not stop there; he made broader points about multinational behaviour which I also listened to and took in. We believe that, in the way the proposal is drafted, the threshold is too low for such a serious measure of acting in any way unlawfully or unethically. Exclusion should be reserved for suppliers which pose a serious risk to contracting authorities or the public. We believe that it is also appropriate that the decision to exclude suppliers falls in general to the contracting authority running a procurement.

However, the exclusion grounds cover unethical conduct. Any serious breach of ethical or professional standards applicable to a supplier is deemed to be professional misconduct, whether or not those standards are mandatory. The noble Lord will be pleased to know that professional misconduct is a ground where a debarment case could be made, as drafted in Schedule 7, paragraph 12(1), although I make it clear that I am not commenting on any individual case. As the noble Lord, Lord Hain, told the Committee, I understand that he is meeting my right honourable friend the Minister to discuss this issue. The review led by Cabinet Office officials into the case that he asked for—and indeed the Prime Minister instructed to be done—is now complete and is currently being considered by the Minister. Unfortunately, I cannot say any more at this stage.

[Lord Hain (Lab)]

I am grateful to the Minister. I will not detain the Committee, except to say that I find it hard to understand that a company that has clearly acted unlawfully, let alone unethically, in another country simply lines up with the rest for government tenders. I do not understand how that is consistent with honest business practice, let alone honest government practice.

[Lord True (Con)]

My Lords, the noble Lord made a strong case on this before. He has repeated it in a shorter version. I have told the Committee that the review has been conducted, as he—and the Prime Minister—asked. That is now complete, so let us see what happens. I cannot give any more detail because I simply do not know it as I stand here. The new debarment list will allow Ministers to debar suppliers in the most serious cases and therefore there is no need to make the additional provision.

Amendments 310, 318 and 322 tabled by the noble Baronesses, Lady Boycott and Lady Young, seek to add conviction of any environmental offence as a ground for mandatory exclusion. The mandatory grounds for exclusion are by nature a blunt instrument. They require the supplier to face exclusion from every public contract for five years, as my noble friend Lady Neville-Rolfe pointed out, unless and until the risk of the issues reoccurring has been addressed. For this reason, they are reserved for the most serious forms of misconduct.

The inclusion of environmental offences in the discretionary ground reflects the fact that, for offences where a range of misconduct may be involved, it may be appropriate to take into account factors such as the nature of the contract being tendered or the level of environmental harm caused, before deciding to exclude a supplier. There is guidance from the Environment Agency on what constitutes environmental harm.

The noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Coaker, proposed Amendment 329, which seeks to introduce a discretionary exclusion ground where a supplier’s tender violates applicable obligations in the fields of environmental, social and labour law. I have already explained why we elected to narrow the exclusion ground relating to breaches of such law.

Bain & Company: Public Sector Contracts

Lord Hain Excerpts

Monday 13th June 2022 Lords Chamber

Asked by

[Lord Hain]

To ask Her Majesty’s Government what steps they will take to ban Bain & Co from securing further public sector contracts.

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

My Lords, individual departments and other public sector bodies are responsible for their own decisions in these matters but, at the Prime Minister’s request and against the background of Judge Zondo’s report, officials at the Cabinet Office are actively reviewing this matter. The review process is nearing completion and the final report and recommendations are expected to go to Ministers within weeks.

[Lord Hain (Lab)]

I thank the Minister for that response but is it not utterly shameful that Ministers are still permitting Bain & Company to bid for multi-million pound government contracts, like those it has won in recent years, when the company has recently been found by a South African judicial inquiry to be guilty of unlawful complicity in corruption under former President Zuma? Surely Ministers must accept an amendment to the Procurement Bill, excluding any company with a record of such illegal behaviour from being awarded British taxpayers’ money, or am I going to get another weaselly response like the one in a letter from Jacob Rees-Mogg?

[Lord True (Con)]

My Lords, I pay tribute to the noble Lord for his pursuit of this matter and accept that it is important. The company concerned is not a strategic supplier to the Government and is not currently undertaking any substantial work for them. As I have said, the final report and recommendations in relation to this will come and these matters can obviously be discussed on the Procurement Bill, which covers the grounds for exclusion of bidders from public procurement.

--- Later in debate ---

[Lord True (Con)]

My Lords, I am advised that there is not a current contract with central government. If I am incorrect, I will correct that. I am aware of one live contract that Bain has with an NHS trust, which has a contract value of approximately £2 million.

[Lord Hain (Lab)]

My Lords, I am sorry to pursue this again after the noble Lord’s replies to me and to others, but I remind him that this company, under former President Zuma’s direct instructions, effectively denuded the South African Revenue Service of its capacity to raise taxes, especially from President Zuma’s friends and cronies. This was a complicity in corruption which is inexcusable. It is not good enough to say that a review awaits the final report of the Zondo commission. The Zondo commission’s report earlier this year specifically indicted Bain—I doubt it will have anything more to say about it—and referred the company for prosecution. Surely the Government should not have anything to do with it, otherwise all our words about money laundering and anti-corruption abroad and so on, and our legislation here to try to combat it, will mean nothing, when we are paying taxpayers’ money to companies like this one, as we did only a couple of years ago.

[Lord True (Con)]

My Lords, we are not paying taxpayers’ money to this specific company. I have said to the noble Lord that I greatly respect the way in which he has been pursuing this; it has been dogged. I am not here to defend actions that took place under the Zuma Government. We are obviously concerned; and we respect the great nation of South Africa. As I said earlier, we will work with it and draw conclusions in our relations both with South Africa and in the UK on this matter.

House of Lords (Hereditary Peers) (Abolition of By-Elections) Bill [HL]

Lord Hain Excerpts

2nd reading
Friday 3rd December 2021 Lords Chamber

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

My Lords, it is a great pleasure to be here on a Friday again on this subject. This is a House of Peers; that is what makes us so special. All of us are here for different reasons, with most of us appointed on the recommendation of one man or woman. It is sad when, directly or indirectly, anyone disparages any part of our membership, when all of us are here legitimately and by statute. One of the attractive features of this debate was that, almost all the time, we managed to stay on the right side of that and not to stereotype individuals but to argue about principles.

I of course congratulate the noble Lord, Lord Grocott, who knows of my personal respect and affection for him, on securing the debate. I was unkind enough in a debate earlier this week when he advanced a rather dubious argument to say that I would not want to play the three-card trick against him, but I would want to give him some money to put on the National for me in a betting shop, because his success in the ballot is remarkable. I am not a betting person, but if I see him at Grand National time, I will be coming his way.

This is the fourth Private Member’s Bill seeking to abolish the by-elections that are held when a hereditary Peer vacates their seat in this House, as established under statute in 1999. I regret to say that the Government’s position on the noble Lord’s proposals remains unchanged, however commendable the resolve.

The intention of this Bill, in common with the earlier Bills, is to stop by-elections taking place when a hereditary Peer—

[Lord Hain (Lab)]

Since there is overwhelming support for this Bill right across the House and since the Government are committed to reducing the size of the House, why do the Government not give time for the Bill to complete its stages in this House so that a final decision can be made, rather than our going through this whole thing year by year?

[Lord True (Con)]

Well, my Lords, not everything that your Lordships are in favour of necessarily becomes law, and some things become law that your Lordships are not in favour of. I am not going to go back to the debates of 1999, and I am certainly not going to go back to the debates of 2019, unless provoked further.

The Bill would stop by-elections taking place when a hereditary Peer vacates their seat through retirement, expulsion or death. Over time, that would remove the presence of 90 of the 92 hereditary Peers. As the noble Lord, Lord Cormack, has pointed out, the noble Lord, Lord Grocott, wishes to keep the Lord Chamberlain and the Earl Marshall, but 90 of the hereditary Peers who sit in this House by statute, under the terms of the House of Lords Act 1999, would go.

It has been a very wide-ranging debate. There is nothing that your Lordships like more—and I like it myself, actually—than talking about your Lordships’ House. A lot of wider issues were brought in—even robes, although I do not see many of them here today. I do not propose either to reiterate the Government’s reservations about this Bill in full, because they have been detailed by successive Ministers, very frequently, as my noble friend Lord Young of Cookham reminded us, during the several debates on previous iterations of the Bill, one of which reached Report. However, I shall draw a few brief points to the attention of your Lordships.

First, the House of Lords, as we all agree, has a key role in scrutinising the Executive and as a revising Chamber. It is important that how it is constituted reflects that role and the primacy of the House of Commons as the elected Chamber. My noble friend Lord Attlee early in the debate was followed by the noble Viscount, Lord Waverley, and the noble Lord, Lord Collins, opposite, stressing the importance of considering the overall role of the House of Lords going forward. The Government respectfully disagree with the noble Lord, Lord Grocott, that his Bill represents an incremental or piecemeal—whichever word is to your Lordships’ taste—reform to this House. Indeed, it is the opposite. The proposed removal of hereditary Peers through this Bill, albeit gradually, would constitute a significant reform to the composition of this House. It would become, as my noble friend Lord Mancroft observed, a de facto appointed Chamber—saving the presence of the right reverend Prelates. I must say to the noble Lord, Lord Anderson of Swansea, that that would be a significant change. It was certainly considered when the first Bill was conceived that there would be a stage two; that was the assurance very firmly given. Recollections may vary of the negotiations, but I was also involved, and a very firm commitment was given at that time by the party opposite to move to stage two.

An all-appointed House is certainly the preferred model of the noble Lord, Lord Grocott, my noble friend Lord Cormack, and others who have spoken, and they are entitled to that entirely reasonable view. But others across this House hold different and, as we have heard today, equally reasonable views as to how we should be constituted. The point is that the Bill should not seek to address that matter through the back door. As the Government set out in our manifesto, we are committed to looking at the role of the Lords, but any reform needs careful consideration and should not be brought forward piecemeal, and certainly not reform of this kind, which would clearly change the composition of this House in a significant way, even if gradually.

Removing the excepted hereditary Peers would have further consequences, as Members on Benches opposite said, on party balance within the House. Presently within this House there are 47 Conservative hereditary Peers, 33 Cross-Benchers, four Labour hereditary Peers and three Liberal Democrats. I am not quite sure where the other two Liberal Democrats went to, but the numbers were not quite the same originally. There are also two non-affiliated hereditary Peers. That means that, if this scheme had not operated since 2003, there would now be 18 fewer Conservative Peers, 18 fewer Cross-Bench Peers and a far smaller reduction in the numbers on the Benches opposite. That is the flipside to the argument put by the noble Baroness, Lady Hayter, and the noble Lord, Lord Collins, in that obviously the passage of this legislation would be a great Labour Party gain, relatively, in party strength.

While some feel strongly that by-elections to replace hereditary Peers should end, others have disagreed, as we have heard in what has been a measured debate—and I welcome that. I hear no sign of some of the things that the noble Lords opposite may fear. We have heard from my noble friends Lord Trenchard, Lord Mancroft, Lord Northbrook, Lord Hannan of Kingsclere, Lord Moylan and others who believe that, while the issue of comprehensive reform remains unsettled, the excepted hereditary Peers should remain, as was the explicit undertaking and agreement in 1999, underpinned in statute. No one would deny, and actually no one has denied—and to go back to my opening remarks, I welcome that—the great contribution of excepted hereditary Peers to the work of your Lordships’ House through their committee memberships and during debates in the Chamber. We all of us, wherever we sit in the House, feel that to be true.

While focusing on the issue—and I agreed with some elements of what my noble friend Lord Moylan, said, as a new Member, about how we are perceived—I certainly do not believe that we should be driven by elements of the media on this issue. As I have always said, we should concentrate not on knocking ourselves but on doing our work well, in playing a crucial role in scrutinising the Executive as a revising Chamber, while recognising the primacy of the elected House of Commons. While we have listened to debates on this topic, and will listen attentively and respectfully, if the noble Lord, Lord Grocott, moves that the Bill should be committed to a Committee, the Government’s reservations on his proposals remain.

Protocol on Ireland/Northern Ireland: EU Negotiations

Lord Hain Excerpts

Thursday 18th November 2021 Lords Chamber

[Lord Frost (Con)]

My Lords, the noble Lord is obviously much more deeply expert in the Belfast/Good Friday agreement than I am, given his background. He is, of course, absolutely right in what he says about the article to which he referred. As regards the protocol, I point out that it was approved by this Parliament, but nevertheless it has created significant difficulties in its implementation. We seek to find a way forward from that and come to a better balance.

[Lord Hain (Lab)]

Is George Peretz QC’s opinion correct when he says that,

“it is not at all clear that the government has a solid legal basis for invoking Article 16, at least in relation to the large majority of concerns set out in the July Command Paper. Therefore, if the UK government chooses to implement measures that are otherwise in breach of the Protocol but which are justified solely on the basis of Article 16, it is at real risk of having those measures struck down in the domestic courts, especially if the measures exceed a limited duration or scope.”?

[Lord Frost (Con)]

My Lords, we will, of course, set out our justification for using Article 16 and the legal basis and so on, if we get to that point. As regards to the legal opinion quoted by the noble Lord, to be fair, there is quite a lot of debate among learned lawyers on this subject. I imagine that, if we were to use Article 16, that would be subject to a degree of legal testing. We will see where that gets to, if and when Article 16 is used.