Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Stevens of Birmingham Excerpts

Committee stage
Wednesday 17th April 2024 Lords Chamber

[Baroness Neville-Rolfe (Con)]

The honest answer is that I do not know about the lottery, but I will find out for the noble Baroness and write to her. On universities, of course she is right: very substantial sums of money, rightly, are involved in the education of our children. What I was explaining was that, at the margin of this activity—involving procurement and investment—the sum is relatively small compared with all that is done by universities.

[Lord Stevens of Birmingham (CB)]

May I offer a constructive suggestion on the clarity that might be adduced between now and further stages? Picking up on the question of the noble Baroness, Lady Blackstone, as I understand it, in 2003 the first case before the court to answer the question was Poplar housing association, where it was deemed that Poplar was a functional public authority under the Human Rights Act. That takes us to the useful report that was referred to by the noble Baroness, Lady Noakes, from the Lords and Commons Joint Committee on Human Rights back in 2003-04, entitled The Meaning of Public Authority under the Human Rights Act, which gets to the very matter we have been discussing. Obviously, jurisprudence has developed substantially since then. If the Minister could set out in writing how the Government regard the situation as having evolved since this very clear statement of the answer to the question we are struggling with this afternoon, that would perhaps nail the matter.

[Lord Boateng (Lab)]

The Minister has been enormously forbearing and we are very grateful for that. I wonder whether she could help us in this regard in relation to cultural bodies—here I must declare an interest, as an independent non-executive director of the Royal Philharmonic Orchestra. What would be the position of an orchestra that received some funding—by no means the majority of its funding—from the Arts Council, and which determined that, in the aftermath of an invasion of a sovereign nation by another sovereign nation, it no longer wanted to perform supportively of, say, the Bolshoi Ballet? What would be the position of such an orchestra, or of a board, that made that decision because it saw a real reputational risk, in the aftermath of the invasion of a sovereign country, of appearing in support of the national ballet company of the invading nation?

--- Later in debate ---

[Baroness Blackstone (Lab)]

My Lords, could the Minister comment on the actual functions of some of these so-called public bodies? I assume that secondary schools will be regarded as public bodies. They have a wide range of functions focusing on educating the children who are pupils there, but they are also responsible for the development and improvement of their school buildings. Let us take the example of a school that has an extremely rich alumnus who wishes to reward it for the excellent job it did in educating him, and allocates to it a very large sum of money to put up a completely new building: will that be caught by the Bill’s scope, so that the school has to decide whether it will be found to be breaking the law because it takes into account moral and ethical considerations in its purchase of goods for providing a very large new school building? These are the sorts of questions that people will face, and I am not sure that the governors of most state secondary schools will be terribly familiar with Section 6 of the Human Rights Act; nor will they find it that easy to get advice about it. Perhaps the Minister could comment on that sort of situation.

[Lord Stevens of Birmingham (CB)]

I take the point that the noble Baroness, Lady Blackstone, just made in respect of schools, but I also agree with the point the noble Baroness, Lady Noakes, made about the jurisprudence that has arisen, which has clarified this for a number of institutions, including, I think the right reverend Prelate the Bishop of Manchester will find, the Church of England. In fact, I believe the first case to test whether a body in the Church was indeed a public authority was Aston Cantlow Parochial Church Council, which was trying to exact a chancel repair charge. In the Appellate Committee of the House of Lords at the time, the noble and learned Lord, Lord Hope, deemed that the parochial council was not a public authority. Many details have been laid out by the courts quite clearly over the years, but if the Government could adduce that on to a single sheet of paper in the way that has been described, it would be very helpful.

[Baroness Neville-Rolfe (Con)]

My Lords, as I set out in my response to the previous group, the Government chose to apply the ban to public authorities as defined by Section 6 of the Human Rights Act 1998. It is a great advantage that your Lordships, perhaps in contrast to the other place, scrutinise Bills in this way. I cannot accept that it is a sloppy Bill—it is a good Bill—but I think that concerns have been overstated. My noble friend Lady Noakes just explained why, very eloquently. We need clarity. Most bodies know whether or not they are covered.

There is another good reason for using the Human Rights Act definition—obviously, I am happy to look further at its implications, as I have said—which is that the Government intended to apply the Bill to a broad range of bodies when they are exercising public functions. This was to ensure a consistent approach to foreign policy across the UK’s public institutions, to stop public bodies legitimising divisive campaigns, which can undermine community cohesion, and to allow public bodies to focus on their core purpose when engaging in procurement and investment. That was the intention of the manifesto commitment that I mentioned in the previous group.

These amendments seek, rightly, to probe the scope of the Bill’s definition of public authorities, but they also probe the need for the power to make exceptions to the ban. I will try to address each in turn.

I am very glad that the right reverend Prelate the Bishop of Manchester has joined the debate. The Church of England would be in the Bill’s scope only to the extent that it exercises public functions. We have heard a little about the interpretation of that in the courts.

Before I address the specific amendments, I remind the Committee that the Bill will not create any new criminal offences. That is a very important point. I also take this opportunity to address the point raised by the noble Lord, Lord Boateng, and the noble Baroness, Lady Chapman, which was picked up by my noble friend Lord Deben, on orchestras. Orchestras are very unlikely to be regarded as public authorities. Moreover, withdrawing from an event is unlikely to be regarded as a procurement decision for the purposes of our Bill. The definition of a procurement decision does not include contracts where it is the public authority providing the service.

I can also reassure the noble Baroness who raised the issue that defence contracts are also exempt from the Bill. In addition, for contracts in scope, the Bill already contains an exception to the ban for national security considerations. In practice, if a case is reported to an enforcement authority it will look at whether the public authority had regard to any of the exemptions to the Bill—for example, the national security exemptions —during the decision-making process. Evidence of this might include if the public authority shows that it was following guidance from the UK Government, or became aware, for example, that a supplier was engaged in espionage.

Amendments 26 and 23 probe whether charitable organisations would come under the Bill’s scope. Charities would be captured by the ban only if they were performing public functions. It is the Government’s understanding that most charities will not be covered by the Bill. I hope that provides reassurance to noble Lords.

Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Stevens of Birmingham Excerpts

2nd reading
Tuesday 20th February 2024 Lords Chamber

[Lord Stevens of Birmingham (CB)]

My Lords, the right reverend Prelate the Bishop of Southwark’s mention of Hackney reminded me that, some years back, when you left Parliament and crossed the bridge, you came across a sign saying, “Welcome to Lambeth—a Nuclear-Free Zone”. It appeared that the London Borough of Lambeth felt that it could set its own nuclear deterrence policy and, presumably, any inbound Soviet nuclear weapons would contour round it to Wandsworth.

That points to the intrinsic fact that defence and foreign policy are, rightly, matters for our elected national Government. I was casting my mind back to, I think, two weeks ago, to an Oral Question about the Scottish Government. Contributions from all Benches across the House were strongly critical of the suggestion that the Scottish Government in Holyrood might be usurping the Westminster Government’s exclusive competence on foreign policy. It is not clear why that argument, made a fortnight ago, is not deemed to apply today to other governmental or public bodies, in addition to the devolved Administrations.

Furthermore, although there have been legitimate concerns about aspects of the Bill, it is worth reminding ourselves that it does not stop us as private individuals, businesses or civil society organisations choosing who to buy from, who to boycott and where to invest. It contains statutory safeguards so that governmental and public authorities can take account, for example, of environmental and labour standards, including the prevention of modern slavery.

The advantage of speaking this late in the debate is that you have a chance to reflect on where the balance of opinion is across the House. It strikes me that there are probably three major points of controversy that have so far arisen. The first concerns the breadth and ambiguity around the bodies captured by the definition of a “hybrid public authority”. I think the contributions that particularly concerned universities require further deliberation as this Bill progresses. More broadly, the use of Section 6 of the Human Rights Act 1998 as the litmus test for what is and is not in scope of the Bill requires further consideration to avoid the breadth and ambiguity that many previous speakers have spoken about.

The second point of controversy is the free speech concerns, particularly as they relate to academic freedom. As I read them, the Explanatory Notes provide significant reassurance on that point. The question that we will want to test is whether the reassurances in the Explanatory Notes are sufficiently reflected in the substance of the Bill. We heard a moment ago from the noble Baroness, Lady Bryan of Partick, about the Bill requiring double- think: local authorities could pass resolutions as long as they did not act on them. My question to the Minister is: is that not in fact already the status quo? It is not the Bill that creates the problem she described.

The leading case in this area is the judicial review against Leicester City Council, initiated in 2014 and heard by the Court of Appeal in 2018. The reason Leicester City Council was successful in its appeal is precisely that it attested that, although the council had passed a resolution, it would not have, in the words of the Court of Appeal,

“any direct practical effect upon the procurement and purchasing policies actually adopted by the Council”.

So Leicester’s defence was a hypocrisy defence. The executive mayor of the council said that responsibilities for procurement rested with him rather than with the council and, on that basis and due to other associated reasons to do with the public sector equality duty, the council won its appeal. So this is a legitimate question to raise, but that is actually just a characteristic of the status quo. All of this points to the fact that the free speech protections described in the Explanatory Notes need to be a lot clearer for most of us, I suspect, to feel comfortable with what the Bill requires.

The third of the controversies that has arisen so far obviously relates specifically to the fact that we are being asked to take a substantive view on the use by public bodies of BDS tactics against Israel and the Occupied Territories. In our Second Reading debates, the Government are usually criticised for commandeering powers to decide, but today the criticism seems to be that the Government are forcing us to decide this question in the Bill.

As someone who supports both Palestinian and Israeli rights of national self-determination, the policy test I apply is whether these BDS tactics will help or hinder a just and sustainable peace. The answer becomes obvious when you discover that leading global BDS founders’ clearly expressed goal is to prevent a two-state solution and destroy the world’s only majority-Jewish state, which is why they single out Israel alone among the nations and why they remain strangely mute when it comes to Iranian terror, Syrian gulags or Houthi slavery.

Instead, notwithstanding the pessimistic view of the noble Lord, Lord Grocott, we should be working for a better future: peace restored, Hamas removed, Gaza reconstructed, Israel secure, Palestinian statehood in prospect and the Abraham accords proceeding. Progress on all these fronts will be underpinned, not undermined, by vibrant and successful Palestinian and Israeli economies, something that BDS aims to destroy.

Just as the Cold War was not ended by Lambeth Council, BDS will not end conflict in the Middle East. In fact, careful scrutiny reveals its problematic aims and its destructive consequences. It seems to me that, within our governmental and public bodies, it is not illegitimate for Parliament to circumscribe the reach of this toxic campaign.

Procurement Bill [HL]

Lord Stevens of Birmingham Excerpts

2nd reading
Wednesday 25th May 2022 Lords Chamber

[Lord Stevens of Birmingham (CB)]

My Lords, I may be a relatively new Member of your Lordships’ House, but I suspect that the Second Reading of the Procurement Bill may not capture the public’s imagination today in quite the way that certain other events and reports taking place in Westminster will. But that should not in any way detract from the importance of the measures before us, because the Bill represents an important advance on a number of the predecessor EU procurement regimes that we have been subject to and generally moves us in the right direction. As the Minister said, it has the potential to simplify and accelerate public procurement and to deal with some of the lessons, both positive and negative, that have arisen during the coronavirus pandemic.

I will briefly mention three avenues that may be worth considering further as the Bill progresses through your Lordships’ House. The first is the connection between the procurement regime and supply chain resilience for the UK. No doubt we will discuss multiple times this afternoon the experience that arose as the UK Government and the Department of Health and Social Care sought to procure PPE and testing for the National Health Service during the pandemic and, as was the case with many other European countries, faced a supply crunch as Chinese factories closed down. The problem has been sustained as China pursues its zero Covid policy, now overlaid with Ukrainian disruptions as a result of the war.

The question is not simply: what are the procurement mechanisms that the Government use in spot markets at times of crisis? It is: what strategic assessment have the Government made of which aspects of our supply chains need onshoring? The orthodoxy for many years has been that just-in-time logistics are the most efficient way—until you get a shock such as the pandemic, in which case it becomes blatantly obvious that they are not. At that point you wish you had stockpiles or onshore capability. In the same way that, for example, Sir John Parker’s national shipbuilding review looked at what the supply chain might look like for naval vessel procurement, I wonder whether the Minister can tell us how he thinks a similar approach will be taken to supply chain resilience for other aspects of what the public service will need in the future.

Secondly, I suspect that your Lordships will be looking for greater clarity, as this Bill proceeds, on aspects of these proposals which at the moment are remitted to regulation or guidance. Only a few short weeks ago, Royal Assent was given to the Health and Care Act 2022. Many noble Lords participated in the extensive discussions around what the procurement regime that was set out in that Act should be as it applies to the National Health Service. On the Health and Care Act 2022, the Cabinet Office memo of 11 May to the Delegated Powers and Regulatory Reform Committee says:

“It has not been possible to set out on the face of that Act the scope of procurement Regulations made under it, so this Bill”—


the Procurement Bill—

“needs to be able to make provision to manage the overlap.”

Therefore, Clause 108 would grant Ministers the power to “disapply” provisions in relation to

“services or goods to which health procurement rules apply”.

I suspect that your Lordships will want much greater clarity on the circumstances under which those will or will not be disapplied.

Frankly, that will go in both directions: there will be some services where, having had the debate as part of the Health and Care Act, we will be clear that they should not be subject to competitive market principles; and there will be other areas where they must be, even where industry partners will sometimes try to exclude them from that scope. An example of this is the importance of using competitive procurement mechanisms for the purchase of medicines, where in some cases, I am afraid, some of our life sciences partners would rather that market mechanisms were not used to drive value for taxpayers and for patients. Indeed, when the National Health Service was seeking to procure medicines for hepatitis C so that we could eliminate that virus and save hundreds of millions of pounds in the process, it was sued for daring to use procurement mechanisms in those circumstances.

So we must be quite precise as to the circumstances under which we will and will not do this. Simply leaving it to regulatory guidance is not good enough, because some of us—I say this gently—have buyer’s remorse about some aspects of the Health and Care Act, including aspects which were left to regulation or ministerial discretion. I am thinking particularly of the debate we had around childhood obesity just a few short weeks ago, where we were promised that we would indeed be cutting out junk food advertising on TV aimed at kids. Days later, however, that commitment was ditched—actually, the noble Lord, Lord Kamall, said that it was not a backtrack but a delay. I read elsewhere that this is part of scraping the barnacles off the boat. Most of us do not regard children’s health as a barnacle to be scraped off the broadcasting boat. Therefore, we will want more clarity on some of these distinctions, rather than leaving them purely to regulation and future ministerial fiat.

Thirdly and finally, as we think about the application of these new procurement rules to infrastructure and big capital projects, we should have the humility to recognise that, by themselves, the rules will not speed up delivery. To will the end is to will the means. Frankly, the root cause of stalled and delayed infra- structure—be it energy, defence or health—is more often not the procurement rulebook per se but the absence of multiyear capital allocations funded at the correct level, the result of delayed business case approval and the result of a lack of constancy in political direction on the results we seek to achieve.

We have seen that in the defence sector: the House of Commons Defence Committee made the point in respect of naval procurement in its memorably named report published before Christmas, We’re Going to Need a Bigger Navy. I am afraid that we are seeing that right now in connection with the proposed building of 40 new hospitals. This is going to be a major piece of procurement for the Government and the National Health Service. It was a very welcome commitment that the Prime Minister made in the run-up to the 2019 general election on a visit to North Manchester General Hospital. As I pointed out at the time, that hospital was opened in 1876 when the then Prime Minister was Benjamin Disraeli. So there is a need to get on with it, but the fact is that we have only a three- year capital allocation—£3.7 billion—and that does not buy you 40 hospitals. Matt Hancock, the then Secretary of State, said back in 2019 that the first eight of them hospitals were “ready to go”, but we now see in the latest Department of Health and Social Care publication that their planned start date is “TBC”.

So the fact is that the procurement processes will help but by themselves they will not get us the result. We need greater clarity on how the totality of the Government’s effort can help advance these important goals, we need greater clarity on the circumstances under which these rules will or will not apply in the health sector and elsewhere, and—that is not my phone, by the way—we need greater clarity in respect of the way in which other social goals will be advanced.

Finally, no doubt we will hear a certain amount this afternoon about the net-zero agenda and how that could be incorporated. A friendly suggestion would be that the Government could follow their own precedent in very wisely incorporating a set of amendments in the Health and Care Act. All we really need is for the amendments the Government accepted there to be incorporated in this Bill and perhaps we will be 9/10ths of the way home and dry.