Procurement Bill [HL]

Lord True Excerpts

Committee stage
Wednesday 6th July 2022 Grand Committee

Moved by

[Lord True]

10: Schedule 2, page 76, line 8, after “could” insert “reasonably”

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

My Lords, before I begin, I would like to make a brief personal statement. Do not get too excited; it is not what you might think—

[Noble Lords]

Oh!

[Lord True (Con)]

In answer to an interesting question in the Chamber yesterday, I implied that my noble friend Lady Wheatcroft had not been present in Committee. I had not noticed that she was here and I personally apologised to her afterwards. But, as my remark lies in Hansard, I thought it appropriate to correct the record. My noble friend Lady Wheatcroft graciously said that she did not expect me to do this, but I think that it is the proper thing to do.

In moving Amendment 10, I will speak to this group of government amendments. Monday was difficult and, on behalf of the Government, I candidly acknowledged the contrition and sympathy that we felt about the number of amendments that were put down. I think that we have arrived at a better place. As noble Lords know, we arranged a briefing for noble Lords on today’s amendments and I am grateful to the officials who gave this at short notice. I hope that noble Lords who were not able to be there have had the chance to consider the supplementary information on the government amendments that was circulated. Officials will be available again tomorrow to provide a technical briefing for your Lordships on the remaining government amendments.

The government amendments in this group refer only to Schedule 2, which lists what is an “exempted contract”. The exemptions are not mutually exclusive and a contract can be an exempted contract if it falls under multiple paragraphs of this schedule. If a contract is exempted, its award and management will not be subject to any of the legislation, unless it is an international organisation procurement, where some obligations apply.

Amendment 10 to Schedule 2 would ensure consistency with similar drafting elsewhere in the Bill. For any of the exemptions in this schedule to apply, the subject of a contract must represent the main purpose and cannot reasonably be supplied under a separate contract. The amendment would add “reasonably” to this description and is consistent with drafting elsewhere in the Bill—for example, on mixed procurements, the duty to consider lots and estimating the value of a contract.

Amendment 11 clarifies the exemptions for vertical arrangements, which arise where a contracting authority enters into an arrangement with an organisation that is connected vertically with it—in other words, with an entity under its control, or what is called a “controlled person” in the legislation. A typical example might be a trading company set up by a local authority to fulfil a specific task, such as carrying out waste treatment and collection for the authority. We briefly discussed this on our first day, when I said that the Government would bring forward further facilitating amendments; I know that the Liberal Democrat Front Bench expressed an interest in that.

Amendment 12 deals with a consequential update to clause formatting following Amendment 11. These amendments to the definition of vertical arrangements have been tabled following some helpful feedback from stakeholders, including the Local Government Association, of which I believe I still may be a vice-president, in which case I should declare an interest. The feedback showed that the drafting did not properly provide for the fact that such arrangements may involve control by more than just one contracting authority. The government amendments therefore ensure that this exemption will continue to apply where there is joint control of the controlled person, as it does now.

Amendment 13 has two parts. The first part—the inclusion of new sub-paragraph (5)—is a result of the amendment to provide for joint control. It ensures that joint control may still be achieved where one person is representing multiple contracting authorities on the board—or similar body—of the controlled body. This continues the existing position in Regulation 12(6) of the Public Contracts Regulations 2015. The second part—the inclusion of new sub-paragraph (6)—stems from the updated definition of “contracting authority”, which means that the vertical arrangements exemption would unintentionally have allowed a wider category of organisations to access the exemptions than intended. This amendment ensures that the vertical and horizontal arrangements are available only to the intended public sector contracting authorities and not to public undertakings and private utilities, which have arrangements that reflect their more commercial nature.

Amendment 14 is a mirror of Amendment 13, for the same reasons. In this case, the purpose is to limit the availability of the horizontal arrangement exemptions to the intended public sector contracting authority recipients.

Amendments 15 and 16 remove the term “legal activity”, which is currently defined by reference to the Legal Services Act 2007, and replaces it with the term “legal services”. This is necessary because the definition in the 2007 Act is not appropriately applicable in a Scots law context. Leaving the term undefined allows the exemption flexibility to adapt to different legal systems within the confines of the remainder of the exemption.

I turn now to the final government amendment in this group. Amendment 17 adds a reference to legislation that explains the meanings of “contract of employment” and “worker’s contract” in Northern Ireland. This is a result of the talks with the Northern Ireland authorities. Adding the Northern Ireland reference again allows the exemption flexibility to adapt to different legal systems, provided that the remainder of the exemption is met. I beg to move.

[Baroness Noakes (Con)]

My Lords, I shall speak to Amendment 11A, which is an amendment to government Amendment 11. Amendment 11A is really only a place- holder to discuss some broader concepts about this Bill and about paragraph 2 of Schedule 2 in particular.

I confess that I paid little attention to the government amendments ahead of our first day in Committee. Like other noble Lords, I was completely overwhelmed by the huge groupings and the lack of explanation that arrived before they were tabled—hence, I tabled Amendment 11A only yesterday. I am certainly grateful for the explainer that was circulated yesterday. I have not yet read all 60 pages, but a reasonable summary is something like this: “We are trying to keep the new UK procurement code as close as possible to EU rules.”

This is at the heart of one of my main problems with this Bill: we have not created a UK code at all. The Bill may well have simplified or reduced the number of different sets of rules, but that has not achieved a significant simplification of the rules to any meaningful degree. Furthermore, it uses terms and concepts that are comprehensible only to procurement practitioners and in a way that is often alien to the way in which we do things in other areas. It has few principles and a whole load of pernickety rules, of which this schedule is one. In short, this is the EU way of doing things and not the UK way of doing things. I believe that we have missed an opportunity to create something that would have worked better for UK businesses and, indeed, for the UK public authorities that have to comply with it.

I turn to the specifics of Amendment 11A. The amendment would delete new sub-paragraph (2A) in Schedule 2, which is contained in my noble friend’s Amendment 11. Sub-paragraph (2A) is not new, as it rewrites sub-paragraph (2)(c) of the existing Bill. The effect of sub-paragraph (2A) denies the vertical arrangements exemption that my noble friend has just described if the body concerned has even one share held by other than a public authority. I think that this is nonsense. Holding one share or any other kind of minority holding does not change the nature of control, which is what paragraph 2 purports to base the vertical exemption on. It would restrict the exemption to bodies that are wholly owned by the public sector, in effect, and I can see no economic rationale for that.

I also want to challenge two other aspects of paragraph 2, arising out of new sub-paragraph (2B), which is a rewrite of the existing sub-paragraph (2)(b). There is one material change from the existing sub-paragraph (2)(b). It is similar to the issue that I raised in the context of Amendment 4, which we debated on our first day in Committee. The existing sub-paragraph (2)(b) refers to a person who

“exerts, or can exert, a decisive influence”.

The new version merely talks about a person who “exerts a decisive influence”. I explained on Monday that the conventional UK approach when looking at things such as control is to use a test based on the capacity to control rather than actual control. Curiously, paragraph 2 uses that concept of capacity to control because it uses the basic definition of control via the parent undertaking definition in Section 1162 of the Companies Act 2006. Under that section, control exists if a parent undertaking holds a majority of voting rights or has the right to appoint or remove a majority of the board. That is, control exists for the basic purpose of this clause if there is the ability to control, whether or not the right is used. Can my noble friend explain why the Government are using one approach to control but another for decisive influence, deliberately caused by the amendment that he has just moved?

I now turn to the concept of decisive influence itself. If someone other than a controlling authority exercises decisive influence, the vertical arrangement exemption does not apply, so it is important to find out what it means. I expected to find a definition of the term “decisive influence” in the Bill, because it is not a term that is found in general use related to companies or the control of organisations, but I cannot find a definition.

Interestingly—I say “interestingly” as I find it interesting, but I am a bit of an anorak on these things—Section 1162 of the Companies Act contains the concept of dominant influence, which is an alternative way of establishing whether a parent undertaking exists. A dominant interest is defined in Schedule 7 to that Act and requires a right to give directions to a board of directors that the board of directors has to comply with. The Companies Act does not use “decisive influence”; it uses “dominant interest”.

How then do we establish whether decisive influence exits? Do we assume that because the Bill does not use the Section 1162 definition it means something different? That might imply that it is something below the level of control, but precisely what it is getting at seems unclear. As far as I can tell, decisive influence is not a term used in English law, which comes back to my point that we are still rooting ourselves in EU law. It is found in EU competition law and, in that context, it is used as part of a rebuttable presumption of control, so that if a majority of shares are held the parent undertaking is assumed to exercise decisive influence on the subsidiary undertaking.

If it means a variant of control, we end up saying that vertical arrangements will not be exempt even if a contracting authority can control a body. If another body in fact controls that body, it does not matter if the other body can control it but does not do so; it just looks at whether it exercises control. However, the exemption is denied if a tiny fraction of the shareholding of the undertaking is held outside the public sector. There is another leg, which is if less than 80% of the activity is carried out for the contracting authority. There is a confusing set of thresholds for denying the exemption. It is even more complicated if joint control is involved, but I will not go into that. I submit that logic and common sense have somehow gone missing in paragraph 2 and that it needs a rethink.

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[Lord Purvis of Tweed (LD)]

My Lords, I shall add some questions to those posed so far on this group. Before I do, I thank the Bill team for the technical briefing this morning that I took part in remotely and for the further information that the Minister promised and which was provided and circulated with the explanatory statements. They were helpful. Of course, they do not answer all the questions, but that is the purpose of Committee.

Overall, it begs the question as to where we stand on the overall proportion of procurement that would be under covered and non-covered areas, and what is now under exempted areas. The Minister rejected my call for an updated impact assessment. At the moment, we have no information as to what level of procurement we are dealing with in these new areas. It would be helpful if the Minister could say what proportion of the procurement is now likely to be within the covered, non-covered and exempted areas.

With regard to ownership and persons, I posed a question to the technical team this morning, so I hope they have had time to provide some information to the Minister. There seems to be an assumption in the drafting that contracting authorities are either public or private bodies, but it is less clear on the other areas within the broad public sector, where there are, effectively, trust models for the delivery of services. These do not fall neatly into the category of a public or private body. Indeed, I am aware of procuring bodies that delivered services in the Scottish Borders, my former constituency area, that were hybrids between purely public authority bodies, charitable bodies, pension funds and public interest vehicles. I would be grateful if the Minister could confirm whether Amendment 11 will cover all these areas. If it does not, there will still be gaps when it comes to some of the consortia which are both traditional centralised bodies, as we discussed on Monday, and those that are other trust models.

I turn now to my second question, which I also posed to the technical team—to be fair to them, I got some form of answer. It relates to contracting authorities acting jointly when one is English and one is Scottish. What legal framework will they be operating under? The Bill team—I hope I relate this correctly; they have no right of reply, so I hope I am fair in what I say —noted that, later in the Bill, there are regulation-making powers to cover these areas. However, my concern is that, presumably, we would not be expecting regulations to be brought forward to suit individual contracting authorities acting jointly where one is Scottish and one is English. This is a slightly different point from which the Minister said on Monday he would write to me, because it relates directly to this amendment. I did not receive a letter clarifying these cross-border issues. The Minister may say that he was rather busy—

[Lord True (Con)]

The noble Lord has generously acknowledged, as others have, that the officials have been extremely busy. There will be a response to the noble Lord’s question, as I undertook. With respect to the officials, it is unreasonable to complain that a letter has not been received, given all the other activities going on. I repeat the undertaking. The noble Lord will receive a letter, but I must defend my officials.

[Lord Purvis of Tweed (LD)]

My Lords, I hope the Minister will reflect on his comments. At no stage did I criticise officials for not receiving a letter. This is a ministerial responsibility. A Minister gives an undertaking to write to a Member in Committee. A Minister brings forward and moves amendments in Committee which are pertinent to the issue I raised when the Minister said that he would write to me. I was not criticising any officials. If any criticism to be laid, it is against the Minister. I simply said that, in the absence of the letter he promised to send me, I am asking these questions for clarification. That is reasonable.

On exemptions, there has been some reference to legal services. I understand the point that has been raised about making sure that there is a distinction from Scottish legal services as appropriate, and I certainly support the Government doing that. However, my understanding is that, for some of the treaty suppliers, there are obligations under some of the treaties on the mutual recognition of professional and legal qualifications. My understanding is that the exemption for legal services under this Bill will cover those other areas where the mutual recognition of professional qualifications in carrying out certain legal services will also be excluded. I understand that a body would be unable to procure legal services that are separate from those exempted, but they are then covered in other areas of professional qualifications. This will leave certain gaps in our treaty obligations.

I reviewed the Australia agreement on the carve-out on legal services. It is broadly the same, so I understand where the Government are coming from as far as these exemptions are concerned, but it is not exactly the same. Perhaps the Minister could give some further explanation as to what is likely to be allowed under the provision of legal services by certain providers of legal services that have mutual qualification recognition, because the position on legal services is still uncertain. If the Minister could respond to those points, I would be grateful.

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[Baroness McIntosh of Pickering (Con)]

I would like my noble friend to respond to a point that was raised by the noble Lord, Lord Purvis, on Monday, which is pertinent to the remarks from the noble Lord, Lord Coaker, just now. I am confused about whether paragraph 19 of Schedule 2 relates to military contracts only. I think that was the issue raised by the noble Lord, Lord Purvis, on Monday, and I do not know that we got a satisfactory answer. I am very confused about whether paragraphs 19 and 20 of Schedule 2 should be read together with paragraph 26. I think I am right that, on Monday, the noble Lord, Lord Purvis, raised whether the international agreements under paragraphs 19 and 20 relate to defence contracts only or whether they are more general.

[Lord True (Con)]

My Lords, I am grateful to those who have spoken. Of course, this is Committee in your Lordships’ House, the whole purpose of which is to probe, challenge, ask and seek greater definition. I make absolutely no complaint about that; indeed, I welcome it. The issue is how and when most effectively we can give the appropriate response. I and my officials will always try to do that in the best possible way and the best possible time to enable your Lordships to do your work. That is the aspiration. I have no doubt that I will fall short of that aspiration and that I will be caned for that.

I will speak to Amendment 11A, which was tabled by my noble friend Lady Noakes, in a moment. First, I have been asked questions on a number of matters, which I will try to address. I fear that the exemption list was drawn up before my time, but I am advised that it was drawn up in consultation with various stakeholders with the appropriate interests covered. Analysis of the exclusions in WTO-Government procurement agreements and responses that the Government received to the initial Green Paper were the leading informatives, as I understand from those who were involved at that stage. However, I will be happy to engage with the noble Lord outside the Committee between now and Report if there is a particular item in Schedule 2, or if he wishes to address it in an amendment on any of those exclusions. That is where we are coming from.

I will deal with a couple of other things because I want to get on to the matters that largely affect local authorities and the amendments. The noble Lord, Lord Purvis of Tweed, raised a question—this is also germane to the point made by my noble friend Lady McIntosh—about the nature of the relationship with, say, the Australia agreement, which he cited. I understand that he raised that in a briefing session this morning in relation to postal services. Indeed, that would not be a defence matter. My officials agreed to clarify this. Since it has been raised, this is the point where we are. By the way, no one should Pepper v Hart anything that I am saying at this stage because this is an exploratory Committee stage and it is important both in correspondence around Committee and in engagement that we get to the right point—I totally agree with the point that the noble Lord, Lord Fox, made about the importance of definition, which is absolutely fundamental.

This is a complicated, technical matter, which requires us to understand both the Bill and how the Australia agreement is structured. However, I am advised that we are satisfied that the Bill is not required to cover postal utility activities. To determine whether a utility is covered by the Bill, one has to look at both the entity and the activities that it is carrying out. Utilities are defined as public authorities, public undertakings and private utilities that carry out utility activities. Utility activities are defined as activities of the type set out in Schedule 4—gas and heat, as well as transport, which we discussed briefly on Monday. It is true that the Australia agreement does not define the terms “utilities” or “utility activities”. However, it works on a similar basis. The agreement covers only the utility activities covered in section C of our market access offer and only for the entities set out in section C.

In the Australia agreement, section C of our market access schedule provides that only certain transport services are utility activities and that the only entities that are covered are public utilities. Section C does not include the postal sector or private utilities. Postal services in the Australia agreement are included as services only in section E. This means that those entities only are covered by the Australia agreement in annexes A, B and C of our market access schedule, which does not include utilities in the postal sector that are covered for the postal services in section E that they procure—for example, a local authority procuring mailshot services. It does not mean that entities such as Royal Mail that operate a private postal service are covered. That is the current advice that I have on that matter; I am sure that my officials would be happy to explore it further with the noble Lord.

[Lord Purvis of Tweed (LD)]

I am grateful to the Minister for that and for answering at this stage a question that I have not yet asked about postal services. Our understanding is that that would be in the group with government Amendment 24 on the expansion of utilities. We will be raising some of these issues, but I take note of what the Minister said. The main thrust of my questions in this group were about the joint groups and the different types of ownership for them, but I am grateful for what the Minister has said so far.

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[Lord True (Con)]

I am sorry, I thought that I heard the noble Lord referring to the Australia trade agreement. It was my understanding that that would be coming later. I was not sure, given that certain things are cropping up in different places. I assure the noble Lord that the matter of the Delegated Powers Committee and the Schedule 2 recommendations will be discussed in group 2, to follow. I was not sure whether we were going to get the Australia agreement later, since the noble Lord had referred to it, so I thought that I had better get the answer in.

[Baroness McIntosh of Pickering (Con)]

I understand that Parcelforce is a trading name of Royal Mail, but is it a commercial or a public enterprise under the definition that my noble friend has just given?

[Lord True (Con)]

My Lords, I have given the answer that I have been advised to give at this stage. In answer to the further supplementary question that my noble friend has asked, I will ask officials to clarify what I said. I was advised to inform the Committee that it does not mean that entities such as Royal Mail that operate a private postal service are covered. If that needs further clarification, I am sure that we can provide it.

These joint bodies are extraordinarily important. Noble Lords have spoken, particularly of local authorities, with great experience, which I hugely respect. I am second to none in believing that Governments of all colours do not generally do enough to listen to the wisdom of local government. I have said that on the Back Benches and on the Front Bench and under Labour, coalition and Conservative Governments. In answer to the noble Lord, Lord Coaker, this Government are certainly keen to ensure that local authorities will be able to operate as they did before, which was one of the reasons why this amendment was tabled, as he divined. I pay tribute to the Local Government Association for its consistent engagement. The Bill maintains the position in the current procurement regime, albeit adjusted for the purpose of UK law, by using the terminology of bodies that undertake public functions, which is drawn from the test of average functions of a public nature derived from the Human Rights Act 1998 —a complicated but well-established test, I understand.

I was asked by my noble friend Lady Noakes about decisive influence and dominant influence. I have to be very careful speaking personally as a Minister from the Dispatch Box, but our position is that we believe that the amendments we have tabled are clear and sufficient. However, on my noble friend’s question, the reference to the Companies Act 2006 is used to describe the nature of relationships between those entities that can engage in the exemption. The reference to decisive influence is broad in affecting the decision-making of the contracting authority. I will take away my noble friend’s point and consider it further, because interest was displayed by other Members in the Committee.

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[Lord Coaker (Lab)]

I am sorry to do this, but may I pick up on the point the Minister was making to the noble Lord, Lord Moylan, about the letter he will write? The answer to the question that the noble Lord, Lord Moylan, posed is quite significant. It would be interesting for the whole Committee to know whether Regulation 12 of the Public Contracts Regulations 2015 applies in a way that would allow the noble Lord’s example organisation to continue as it is now, when the Procurement Bill becomes an Act. I apologise for intervening a bit late.

[Lord True (Con)]

Yes, indeed. I totally take that point. It is good practice, and I hope it will be our practice in this Committee, to circulate to all noble Lords who take part. I was not proposing to send a billet-doux to just the noble Lord, Lord Purvis of Tweed, or my noble friend Lord Moylan and not spread it round. I will address that, but I repeat that it is our expectation and hope that local authorities will be able to do as they did before. That is the fundamental point and I will pursue this in that spirit. In that light, I hope the noble Baroness will be prepared to not move her amendment.

Amendment 10 agreed.

Moved by

[Lord True]

11: Schedule 2, page 76, line 11, leave out sub-paragraphs (1) and (2) and insert—
“(1) A contract between a contracting authority and a person that is controlled by—(a) the contracting authority,(b) the contracting authority acting jointly with one or more other contracting authorities,(c) another contracting authority, where that authority also controls the contracting authority referred to in paragraph (a), or(d) another contracting authority acting jointly with one or more other contracting authorities, where the authorities acting jointly also control the contracting authority referred to in paragraph (a).(2) A contracting authority, or a contracting authority acting jointly with one or more other contracting authorities, controls a person if—(a) the contracting authority is a parent undertaking, or the contracting authorities are parent undertakings, in relation to the person,(b) no person other than the authority, or authorities, exerts a decisive influence on the activities of the person (either directly or indirectly),(c) more than 80 per cent of the activities carried out by the person are carried out for or on behalf of—(i) the contracting authority or authorities, or (ii) another person that is, or other persons that are, controlled by the authority or the authorities acting jointly, and(d) in the case of joint control—(i) each of the contracting authorities is represented on the person’s board, or equivalent decision-making body, and(ii) the person does not carry out any activities that are contrary to the interests of one or more of the contracting authorities.(2A) A person is not to be regarded as controlled by a contracting authority, or a contracting authority acting jointly with other contracting authorities, if any person that is not a public authority holds shares in the person.(2B) In sub-paragraph (2)(a)—“parent undertaking” has the meaning given in section 1162 of the Companies Act 2006, save that an “undertaking” includes any person;“parent undertakings” means two or more contracting authorities acting jointly that would, if they were a single undertaking, be a parent undertaking.”

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Moved by

[Lord True]

12: Schedule 2, page 76, line 33, leave out “(2)(d)” and insert “(2)(c)”

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[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Lord, Lord Wallace of Saltaire, for tabling these amendments in the first place, and I thank those Members who put their names to them. It is important that we have had the opportunity to debate the report produced by the Delegated Powers and Regulatory Reform Committee, a report that the noble Lord, Lord Blencathra, described as a scorcher. I think we all agree that there is a lot in here of great concern, and it is very important that we have spent this time going through it. I also thank members of the committee for the work they did in going into such detail on this very complex Bill, to draw our attention to their serious concerns and the problems that we need to look at and resolve.

I will not go into a great amount of detail. Other noble Lords have talked about the detail of the report so there is no point in my repeating that. I will just draw the Committee’s attention to a few things. My noble friend Lord Berkeley started the debate by expressing his concerns about the broad range of powers—the Henry VIII powers, as they are described—and other noble Lords have talked about their concerns about them. The noble Baroness, Lady Neville-Rolfe, felt that some of them were potentially dangerous. If noble Lords’ concerns are that strong, it is really important that we look at how to address them. She drew attention to a number of particularly damning paragraphs. There was also talk about the fact that a large number of clauses should be subject to the affirmative procedure rather than the negative one, and of course we absolutely support that.

I draw the Grand Committee’s attention to paragraph 60 of the report, which was the one that struck me in the context of the way that a lot of Bills, legislation and policy development have been happening recently. If noble Lords will bear with me, I will read it out. Talking about Clause 109, it says:

“This is, in effect, a skeleton clause as the real operation of the exemption process is to be left to regulations. We are very concerned that the Government appears to have chosen this approach for no other reason than that it hasn’t yet developed the underlying policy.”


That gives me great concern because it seems almost to be becoming the norm, and it is not the right way to go about making regulations and legislation. The DPRRC then talks about its Democracy Denied? report, which the noble Lord, Lord Blencathra, mentioned, and says that

“we drew attention to the issue of the inclusion of powers in bills which were, in effect, ‘a tool to cover imperfect policy development’. We said this was unacceptable and that we looked to the Government to undertake the systemic reforms necessary to prevent its happening. It is disappointing to find evidence in this Bill that this issue has not been addressed.”

That was the only further concern that I wanted to draw the Committee’s attention to today. A number of us have worked on a lot of Bills now, and there is a worrying lean towards this lack of policy development before Bills are drawn together and published. That is often why the Bills then come into so many difficulties. It would be better if all this was sorted out much earlier, so that we all knew where we were and could understand and better support the Government in producing good legislation. Some very interesting questions have been asked, including a very specific one from the noble and learned Lord, Lord Hope of Craighead, and I look forward to the Minister’s response.

[Lord True (Con)]

My Lords, I thank all those who have spoken. I take seriously the gravity of the remarks made. I assure my noble friend Lord Blencathra, whose chairmanship of the committee was distinguished—he can speak even more freely now that he is no longer in that role—that while I did not catch the names of all the individuals that he asked me to refer his remarks to, I will make sure that that is done as he requested.

On the question raised by the noble and learned Lord, Lord Hope of Craighead, it is a matter of regret —we discussed this on the first day—but the Scottish Government have declined to be part of this legislation. They do not wish to be. They wish to pursue their own course and obviously that is why they are omitted from the definition of an appropriate authority under the legislation. It would be odd if they were an appropriate authority to alter legislation which they declined to take part in. That is the explanation.

[Lord Hope of Craighead (CB)]

Of course, it is possible that the Administration in Scotland will change. This Bill will become an Act which will perhaps last longer than the present regime in Scotland. Assuming one has an Administration who are favourable to participating in this system, the question then is why they should not be included, or at least mentioned, in the definition of appropriate authority. It is quite a serious issue, because appropriate authorities is referred to in many places in the Bill, as the noble Lord knows. If, as I think the noble Lord is indicating, this is simply a sort of penalty for not participating in the legislation, it seems unfortunate that that should be set in an Act which will last for, I imagine, many years into the future. Is it not worth rethinking this? Might it not be better to mention the Scottish Ministers and leave it to the future to see whether they actually exercise the power that has been given?

[Lord True (Con)]

My Lords, I hear what the noble and learned Lord says. Those remarks might also be addressed to the First Minister in Scotland. I expressed regret—I think it is shared across the Committee—that the Scottish Government have not wished to take part in the constructive way in which the Welsh Administration have. We have had good co-operation with the Welsh Administration, and that has had an impact on the Bill. Clearly, if the policy changes, then a Bill can be amended, but I am about to reply to a series of complaints about the Government taking all sorts of potential regulatory powers to change this, that or the other, and that would be quite a substantial secondary power to take. It is regrettable, but that is the position.

[Lord Purvis of Tweed (LD)]

Further to the point from the noble and learned Lord, I am less convinced at the response that this is discretionary as to the choice of Scottish Ministers. I understood that these provisions were for public passenger transport services that do not cross the border into Scotland. Therefore, these are for the provision of public transport services that begin and end in England.

If that is the case, they are within the scope of this legislation. If they are public passenger transport services which begin and end within Scotland, they would be under Scottish legislation. Therefore, this would not apply and the appropriate authority would not be Scottish Ministers. Would it not be better if the Bill simply stated where the public passenger transport services are? The area of concern for me is cross-border public passenger transport services, for which, under the 2016 legislation, there was further ministerial devolution to allow some form of regulations to be passed on cross-border public transport services. I declare an interest because I use them every week.

[Lord True (Con)]

I hear what the noble Lord says. I come to this House and I am asked to respect the position of the devolved Administrations. The position of the devolved Administration in Scotland is that they do not wish to be part of this legislation, so I am caught. If at a later stage, or even at this stage, the noble Lord wishes to put forward an amendment to change “appropriate authority” to include the Scottish Government, no doubt we can debate that matter, but the position now is the one I set out and I have given the explanation that is the policy decision of the Scottish Administration.

[Lord Purvis of Tweed (LD)]

We are making law so, for the record of the Committee, is the Minister saying that public passenger transport services under paragraph 17 of Schedule 2, for the exempted contracts, are public passenger transport services that begin and end in England? Is that correct?

[Lord True (Con)]

My Lords, the noble Lord is right to raise the issue of cross-border services. We will come to that later in the Bill. I am not excluding discussion of cross-border. It is an overall policy position that I am stating. We will come to the cross-border issue later in the legislation. I do not want the noble Lord to think that we are having a kind of Sicilian motorway approach, where the Mafia money ran out. I fully understand where he is coming from on that. I was really replying on the broader point.

Time runs on and I must get on to the specific and very important points made not only by the Delegated Powers Committee but by noble Lords who have tabled amendments. I will try to persuade the Committee that the amendments are unnecessary and that the strictures of the Delegated Powers Committee were strong. I heard the word “a scorcher”, but perhaps I do not necessarily need that. I heard the remarks from all sides on that. We will carefully consider them, notwithstanding what I say now. Obviously, it believes it is a reasonable position, but we will consider those remarks.

Amendment 18 would remove paragraph 17 of Schedule 2, which has been alluded to. The effect of this would be to remove an exemption for certain public passenger transport services that exists in our current procurement legislation. The exemption exists and it is necessary as procurement for such services is governed by a separate regime operated by the Department for Transport. It is important that the Bill does not impinge on that separate regime and that the exemptions under the Bill fully align to ensure that public passenger transport services are regulated by the correct regime. There is no intention to exempt public passenger transport services beyond those currently exempt and governed by the Department for Transport regime.

Amendment 21, tabled by the noble Lord, Lord Wallace of Saltaire, seeks to remove a provision that exempts concession contracts for air services provided by a qualifying air carrier. Removing this would bring those contracts within the scope of the Bill, which would be a fundamental change to the existing position.

Air services are separate markets driven and operated by the private commercial sector. The public sector does not generally procure or intervene in these services. Given the distinctive features of the air transport market, and the state’s historical limited intervention in it, it would not be appropriate to bring air transport within the scope of the mainstream procurement rules. However, I assure noble Lords that the power is limited to specifying the meaning of a “qualifying air carrier”, which is, in essence, someone licensed under the existing regime for air carriers. This power is not wide-ranging and is needed only to ensure that the definition refers to the correct regime. Therefore, I ask noble Lords not to press Amendments 18 and 21.

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[Lord Fox (LD)]

I appreciate the comment the Minister has just made. This is a straight question: under what circumstances would these thresholds be changing, other than the GPA change? This would either be with or without inflation—inflation has nothing to do with it; the GPA has so far determined what these thresholds are. I am a little confused about what power the Government were seeking in the first place with this.

[Lord True (Con)]

I believe that there may be potential, for example, for an evolution in the nature of the regime. However, I will come back to the noble Lord with further examples, if that is helpful. We can add that to the list of matters to take up.

Finally, the noble Baroness, Lady Hayman of Ullock, quite understandably expressed concerns about Clause 109. This is specifically related to private utilities; it provides a power for an appropriate authority to reduce the regulation of private utilities under the Bill to reduce regulation. As the Bill provides at Clauses 81 and 89, contracting authorities owe a duty to treaty state suppliers to comply with a substantial part of the Bill. The power can be exercised to make amendments only where those amendments do not put the UK in breach of its obligations to those suppliers, and this will inherently limit the scope of the amendments we are able to make. For example, private utilities will still be required to publish tender notices and contract award notices.

Private utilities are covered by the Bill where they have been granted a special or exclusive right to carry out a utility activity, where that right substantially limits other entities that have no such rights carrying out those activities. The clause requires the appropriate authority to consult persons representing the views of private utilities and other appropriate persons prior to making regulations. The Government, quite rightly, would have to seek the approval of Parliament under the affirmative procedure for any deregulation measures.

While those are the explanations, I have tried to give the Committee a detailed explanation on each of the amendments of the Government’s position and view. I return to the fundamental point I set out at the outset: we are giving, as I have indicated as we have been going along, proper consideration to the recommendations of the Delegated Powers and Regulatory Reform Committee. We intend to return to this on Report, in cognisance and consideration of what noble Lords on all sides have said.

[Baroness Neville-Rolfe (Con)]

I want to express a concern. Although the Minister’s argument seems to be that the powers are already rather limited and that there are natural limitations—for example, the GPA—I am not convinced that we actually need to put all this into delegated legislation. In some places, we could decide things and make it clear in the Bill. Then, if there is future evolution of the market or the development of technical regimes, as my noble friend suggests, we should come back to the House and look again at legislation in those areas.

Obviously, I come from a business background, and, as I said, the thought that officials can effectively make major changes that will affect the market in which you are operating is actually quite worrying. We had an example of this on Monday. The example we received from the noble Baroness, Lady Hayman of Ullock, about

“a tool to cover imperfect policy development”

was a quote from the report in relation to private utilities. Therefore, I did not repeat it, but it is a good example of where there might be a changing market, which might then generate quite substantial uncertainty in the procurement field and be a big problem for our companies.

I took four egregious examples out of a respected cross-party report to try to be constructive, but my noble friend has unfortunately tried to explain why the Bill is as it is, rather than to respond to these individual examples. I really need his response to these examples because I need to know how much to press on things such as notices and concessions when we get to those parts of the Bill. If it is clear that the delegated powers cannot be misused, it makes it a lot easier to agree to other parts of the Bill. I apologise to the Committee for speaking at length, but I feel very strongly about this.

[Lord True (Con)]

My Lords, it is Committee and my noble friend and all other noble Lords are entitled to intervene as much as they wish. She makes an important point, and I was just on that paragraph in my speech—it is slightly small compared to the rest of the speech—and was trying to set out the Government’s rationale for why the balance is probably right.

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[Lord Berkeley (Lab)]

I take the noble Lord back to his response on Amendment 18 in relation to public passenger transport services. He argued, probably rightly, that they are the responsibility of the Department for Transport and should therefore be exempt here. Paragraph 17 of Schedule 2 defines a “contract”, and paragraphs 33, 34 and 35 at the end of the schedule cover “Concession contracts”, which are all exempt. I assume—perhaps the Minister could confirm this—that the exemptions for “air services” and “a qualifying air carrier” come under the definition of “concession”, because the Bill says this, although it does not define what a concession is.

I am concerned that there are examples in this country of a third category: a franchise. I am not sure where that comes into this; I know of one air service that is a PSO and probably a franchise, and, certainly, some bus and train contracts are franchises. If the Minister does not have the answer to that today—it is a little detailed—perhaps he could write to us, because it is quite important. If the Bill is going to exempt all these things, the whole lot needs to be exempted and handed to the Department for Transport. It is no good having concessions exempted and franchises not. I look forward to the Minister’s comments.

[Lord True (Con)]

My Lords, I will have to take counsel and advice on that, and I will certainly come back. As I said, the fundamental position is to try to keep things as they are, exempting passenger transport services that are currently exempt and covered by the Department for Transport. Concession contracts are dealt with slightly differently under the regime—we will discuss that later—but I will come back to the Committee to clarify the points that the noble Lord asked about.

[Lord Wallace of Saltaire (LD)]

I thank the noble Lord for his explanations; if some of them had been available earlier, it might have been easier to accept some of the Government’s arguments. I find Clause 109 the most difficult: it gives the Minister the power to amend primary legislation without any reference to Parliament. But I note that he said that this will be looked at and perhaps discussed with others between Committee and Report, and I thank him for that constructive approach.

In turn, I am sure that he noted the strong views around the Committee about this particular Bill and the broader issues with skeleton Bills. We will return to this in a number of other areas in the Bill where we want to see spelled out things that we are at the moment expected to take for granted that the Minister will later say something about, provide a strategic policy statement on or whatever. That is simply not enough, so this will be a continuing issue.

In passing, as we keep stubbing our toes against the GPA, I am quite surprised that Jacob Rees-Mogg has not demanded that Britain withdraws from the GPA, because if we are to take back control we had better take it back properly of some of these international obligations, which clearly limit and constrain what we can do in a range of quite often important issues, but perhaps that is an over-partisan remark in Committee on a Bill. We will have to return to this, but I thank the Minister for the constructive way in which he has responded. I beg leave to withdraw the amendment.

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[Lord Coaker (Lab)]

Is it, my Lords? I am that excited and I have been speaking that long—is it still Wednesday?

[Lord True (Con)]

My Lords, if that is an offer to come back tomorrow and carry on, I do not know how popular that will be.

There are many things that I like about the noble Lord opposite. First, he is very likeable and fun to be with. Secondly, he has a long connection with the great city of Nottingham, which he will know is something that I share. Thirdly, there is what Mr Baldwin would call his awful frankness. However, there is something of a philosophical divide that will come through in this discussion. I will reply in detail to the amendments, but what we have heard from the noble Lord is that the Labour Government that he envisages would want to use the powers under this Bill to constrain individual private companies that sought to provide public services to conform to the will of whatever the Labour Party’s wishes in power might be.

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[Lord Wallace of Saltaire (LD)]

Flexibility, I think I understand, means a skeleton Bill. I think we all understand that. It will either be in the strategic policy statement, which we will come to, or it needs to be in the Bill. I think that around the Committee, everyone will feel that more ought to be in the Bill than is there now, so that we all know where we are going. If we are not allowed to have a draft of the strategic policy statement before the Bill finishes its passage, that is really not adequate.

[Lord True (Con)]

My Lords, I think the noble Lord makes a slightly different point. It is a point of concern, and we discussed it on the earlier group. I understand that how much is in secondary legislation and so on is a concern to noble Lords. When I talk about flexibility, I am talking about a structure that is simple and clear, and does not say, “Before you apply to procurement, you have to do a, b, c, d, e, f, g, h…”. We could probably use up the whole alphabet with the aspirations that we will hear in this Committee before anyone can get past the starting gate that we are discussing now. One needs to bear in mind the need for that sort of flexibility. That is the relative simplicity I am thinking about. However, time is late and I need to respond, not to the debate launched by the noble Lord opposite, but to the amendments.

My noble friend Lady Noakes came forward with a very thoughtful amendment, as always. There has been an outstanding debate, and I will want to study it in Hansard and reflect on everybody’s contributions. My noble friend had a very specific point in relation to estimation of cost and how services should be aggregated. Her probing amendment seeks to establish where the Government are coming from.

The proposed methodology in the Bill for estimating the value of contracts, which allows some flexibility, is very similar to the long-standing valuation rules in existing regulations and will therefore be helpful to procurers. Paragraph 4 of Schedule 3 contains an “anti-avoidance” provision that is designed to ensure that contracting authorities do not artificially subdivide procurements in order to evade the rules. This mirrors an analogous concept in the long-standing regulatory scheme but we think that it is presented in a simpler and more user-friendly way. It involves a general rule that contracting authorities should, where possible, seek to aggregate for the purposes of valuation but, as my noble friend said, it also permits exceptions where there are good reasons. Without the “good reasons” exception, the provision becomes something of a blunt instrument.

My noble friend asked for some examples so I will give one: an authority buying its printers from a particular supplier does not necessarily mean that it should buy all its toner, paper and servicing from the same supplier if it believes that it can get a better deal elsewhere. We believe that contracting authorities need to continue to have discretion not to aggregate where they have good reasons not to do so. I will look carefully at my noble friend’s point about the overall estimation of costs but we do not believe that it would be desirable to set out in legislation what constitutes a good reason because this will depend on the circumstances of each case. I request that this amendment be withdrawn.

Amendment 81, tabled by the noble Lord, Lord Wallace, seeks to add elements from the Government’s Sourcing Playbook as a new clause before Clause 14 to require contracting authorities to conduct a “delivery model assessment” when introducing “significant change” in their business model, helping to inform strategic decisions on insourcing and outsourcing. I agree with the noble Lord that rigorous assessment of contracting authorities’ plans is essential for good delivery. However, again, we have continuously sought throughout the development of the Bill to ensure that it remains flexible and does not unnecessarily stipulate blanket requirements, which tie contracting authorities down to a single process that adds unnecessary burdens or will not necessarily work in all cases. For example, “make or buy” decisions, which the noble Lord asked about, need to be considered carefully—indeed, our commercial guidance in playbooks includes comprehensive guidance on this—but, in our submission, it is not necessary for this to be mandated in legislation. Furthermore, large outsourcing contracts will obviously be scrutinised by departmental, Cabinet Office and Treasury controls to ensure value for money and successful delivery.

So we believe that these things should not be mandated by legislation and that this is already achieved through the development and implementation of the sourcing playbooks, which the noble Lord kindly drew our attention to and actually complimented very much with his desire to put them into primary legislation. I am grateful for his endorsement of those principles.

I turn to Amendment 82, tabled by the noble Lords, Lord Hunt of Kings Heath and Lord Aberdare. Some of the underlying arguments on this clause obviously touched on extremely important issues. The amendment proposes to amend Clause 14 to create a presumption that contracting authorities should publish a “planned procurement notice” unless there is good reason not to. Again, I agree that it is vital that the market—particularly certain aspects of it to which the noble Lord and others referred—is given sufficiently early warning of what contracting authorities intend to buy so that suppliers can gear up to deliver. This is particularly important for SMEs and charities, which were referred to by the noble Lord and others.

The Bill makes additional provision to this effect in Part 8. Contracting authorities with an annual procurement spend of more than £100 million will already be required to publish a “pipeline notice”, which will contain information about upcoming procurement with an estimated value of more than £2 million that the contracting authority plans to undertake in the reporting period. This will allow suppliers to see higher-value upcoming procurements and make a decision on whether they wish to bid.

However, contracting authorities should be left to determine where planned procurement notices are useful for lower-value contracts, owing to the potential burden. I will come back to charities. Contracting authorities are incentivised to make use of these notices through a reduction in the tendering period in circumstances in which they are properly issued. They will not necessarily be useful in all circumstances; as such, the Government are currently not of the view that it would be helpful to mandate their use, but I will reflect on what the noble Lord said.

Amendment 84, tabled and interestingly spoken to by my noble friend Lord Lansley, seeks to add to the purposes of “preliminary market engagement” in Clause 15(1). This includes,

“ascertaining how the tender notice may be expressed in terms of outcomes and”

KPIs

“for the purpose of minimising … processes”.

Focusing on the outcomes of the contract, as opposed to being too prescriptive on how these are achieved, is indeed a sensible reason for conducting preliminary engagement—I agree with my noble friend on that. Contracting authorities are encouraged to consider KPIs in their preliminary market engagement. For example, Clause 15(1)(c) includes

“preparing the tender notice and associated tender documents”.

I will look at the Bill against what my noble friend has said, but, as I have said, in some respects the Bill already provides for this and encourages the purpose that he has asked for in terms of Clause 15(1)(c) giving the purpose of preparing the tender notice and documents.

Amendments 85 and 87, tabled by the noble Baroness, Lady Worthington, and others, are important. They provide that, when undertaking “preliminary market engagement”, contracting authorities may engage with suppliers in relation to designing a procurement process that will maximise certain public goods and encourage innovation. I very much hear what noble Lords across the Committee have said about innovation, and I will certainly take that thought away. I think there would be a lot of understanding and support in government for that aspiration; innovative new entrant suppliers should be actively sought out.

We wish to promote and encourage contracting authorities to conduct preliminary market engagement. However, this engagement needs to be appropriate and related to the subsequent procurement. Imposing such an obligation on contracting authorities could have the counterproductive effect of disincentivising preliminary market engagement which, I am sure we all agree, would not be desirable.

[Baroness Worthington (CB)]

Just to clarify, Amendment 85 would not make a mandatory requirement; it simply places it under the “may” condition of Clause 15. Therefore, it does not materially change Clause 15 but just explicitly states that we are seeking this process to draw out innovation.

[Lord True (Con)]

I take the noble Baroness’s point and understand what she is saying. This takes me back to the opening remarks. We have doubts about the appropriateness of including wider policy objectives, such as those suggested in the noble Baroness’s amendment, in this piece of primary legislation. Each procurement is different, and what is appropriate, for example, for a large-scale infrastructure project, may not be appropriate for a smaller, price-driven transactional arrangement. The strategic priorities that a Government require contracting authorities to have regard to when carrying out their procurement functions are, therefore, better detailed in the national procurement policy statement—which we will debate later in Committee—than in primary legislation.

Amendment 88, tabled by my noble friend Lord Lansley, seeks to require contracting authorities to take into

“account … the size or experience of”

suppliers when determining whether the supplier’s involvement in preliminary market engagement has placed them at an unfair advantage and, therefore, whether they should be excluded from any subsequent procurement. Like other noble Lords who have spoken, my noble friend put forward a thought-provoking point. As I said earlier, I agree with the importance of building capacity among SMEs. We have seen an increase in spending on SMEs in recent years. Figures published last month show that government spending with small businesses rose to a record £19.3 billion in 2020-21—the highest since records began. We hope that the new procurement regime will make it simpler, quicker and cheaper for suppliers, including SMEs, charities and social enterprises, to bid for public sector contracts, and with lower barriers to entry to the market.

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[Lord Hunt of Kings Heath (Lab)]

I am grateful to the noble Lord for considering my amendment. Does he accept part of my premise, which is that some public authorities are really not doing the right thing at the moment, despite Treasury rules and guidelines? In fact, the qualification the PAC made to the DH report is some evidence of that in relation to the NHS.

[Lord True (Con)]

My Lords, I could not possibly be tempted, particularly at 8.04 pm when the Committee needs to finish shortly and I already have a very long response to a large number of amendments. The Bill does have pipeline notices, which I have discussed: I will engage with the noble Lord on that before Report and I welcome that.

Amendment 141 is about a hugely important issue to which so many noble Lords spoke. The noble Baroness seeks to amend Clause 24 to require contracting authorities to take account of accessibility and design for all principles when drawing up their terms of procurement, except in duly justified circumstances. This is an issue of fundamental importance. It is of concern for disabled people, and I know that your Lordships hold concerns about accessibility very close to their hearts; it comes up in every piece of legislation.

As part of our broader goal of a simpler regulatory framework and increased flexibility to design efficient, commercial and market-focused competitions, the Bill does not dictate how terms of procurement including technical specifications are to be drawn up, which is the issue around Clause 24. It simply contains what is prohibited by international agreements and applies to all “terms of a procurement” as defined in Clause 24(5). We believe that this approach is better than the existing approach, as buyers are forced to truly analyse and develop the content of their specifications to address the needs of all those the public contract should support.

The UK has legal obligations, which we readily own and which will dictate how terms of procurement are drawn up, with accessibility covered by Section 149 of the Equality Act 2010, as mentioned by the noble Lord opposite. We consider that helps deliver the intended outcomes of both the current duties in this area contained in Regulation 42 of the Public Contracts Regulations 2015 and of this amendment.

I have heard the very strong speeches made by noble Lords on all sides, and I have seen the submissions from the RNIB and others. It is very important that we should have constructive discussion to test whether the Bill delivers the accessibility that your Lordships hope for. The Government remain absolutely committed to ensuring that public procurement drives better outcomes for disabled people. In our contention, there is no dilution of the commitment to accessibility under the Bill. The Government are clear that accessibility criteria should always be taken into account in every procurement, and the existing legislation ensures that that is the case.

However, we will engage further on this and on the other themes and points put forward by so many noble Lords in this wide-ranging debate. In those circumstances, I respectfully request that the amendments are withdrawn and not pressed.

[Baroness Noakes (Con)]

My Lords, the only amendment that is going to be withdrawn is my rather small amendment in this group, Amendment 22. My noble friend said that we needed flexibility, and that good reasons were there to allow flexibility. I completely buy the need for flexibility in the procurement rules, but I still wonder whether good reasons without some other constraint around them are sufficient. I was pondering whether the good reasons need to be attached to value for money, or something similar. That may be covered by the interaction with Clause 11, which sets up procurement objectives, but I am probably too tired to work that out in my own mind at the moment. I will consider it further, and my noble friend the Minister, who also said he would consider it further, might like to reflect outside this Committee on how that works out. For this evening, I am sure that everyone will be mightily relieved if I beg leave to withdraw my amendment.

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Moved by

[Lord True]

24: Clause 5, page 3, line 41, after “works” insert “wholly or”

Standards in Public Life

Lord True Excerpts

Tuesday 5th July 2022 Lords Chamber

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

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given to an Urgent Question in the other place earlier today. The Statement is as follows:

“Thank you very much, Mr Speaker. It is a pleasure to appear before you and the House on this important matter. We are fortunate in this country to have a sophisticated and robust system for upholding public standards. That system is multi-faceted; it is made up of interlocking and complementary elements. It is of course founded on the seven principles of public life, which have been in place for a quarter of a century and which provide the overarching qualities and standards of behaviour that are expected. I have some time to run through the mechanisms that underpin the seven principles, but I will touch on something else first, which is this. It is something with regard to the potential victims in any case where there are allegations of impropriety of any sort. I was a barrister in criminal practice for 17 years before being elected to this House, and I know how difficult it is for individuals to come forward. It is very important that we do not prejudge any individual case. It is also right that the system that, after all, this House created relatively recently—namely the Independent Complaints and Grievance Scheme—is allowed to work its course.

There are additional rules and guidance to help ensure consistency of approach—for example, in relation to public appointments, corporate governance and business appointments—when individuals move to roles outside government, and there are independent bodies that provide a broad oversight of standards. The right honourable lady the deputy leader of the Labour Party has asked about the mechanisms for upholding those standards. They exist and they exist as a result of the decisions of this House. There are bodies and officeholders with a role in overseeing specific aspects of public life, such as the Parliamentary Commissioner for Standards, the Civil Service Commission and the Commissioner for Public Appointments. Alongside them are regimes for the publication of government transparency data and information on those who lobby government.

We have a Parliament, as you know, Mr Speaker, that upholds standards to cover all those in public life, but it is incumbent upon us not to prejudge these decisions. Ministers, public office holders and officials, in all their activities, must maintain the confidentiality of those who wish to make complaints across the lifetime of their involvement, but let me say that no system can replace the fundamental importance of personal responsibility. We all know this to be true. Codes, rules and oversight bodies are there to guide us, but all of us in public life must ultimately choose for ourselves how to act.”

[Baroness Smith of Basildon (Lab)]

I am grateful to the Minister. His heart was not in it, was it?

I think we have one point of agreement: that it is essential that we have integrity in the process for complaints being investigated and that those who come forward have the support they need. As to the rest of the Minister’s words, it is probably an appropriate response during Wimbledon to recall John McEnroe: “You cannot be serious”. It is extraordinary that Minister after Minister is wheeled out to defend the Prime Minister about what he knew, or now appears to have forgotten he knew, about his Deputy Chief Whip when he appointed him. That story changes each time. How humiliating it is for Ministers to have received Downing Street assurances only for it to keep changing as new information comes to light, including the letter from the noble Lord, Lord McDonald, as former Permanent Secretary at the FCO.

I have two questions for the Minister. On 21 June, the Paymaster-General promised that the Government

“will act swiftly to undertake a review of the arrangements in place to support the ministerial code and ensure high ministerial standards.”—[Official Report, Commons, 21/6/22; col. 781.]

Can the Minister update the House on that swift action? Secondly, given this Prime Minister’s rather idiosyncratic, shall we say, approach to standards, can it possibly be right that not only does he have a veto over what the commissioner can investigate—that is, when we finally get another new commissioner—but is also the final arbiter and has the final say over the outcome? The Minister knows that he has a good reputation in this House. How much longer is he prepared to defend this Prime Minister?

[Lord True (Con)]

My Lords, I am certainly prepared to uphold high standards in relation to the questions the noble Baroness opposite has asked. She asked about the review going forward and the independent adviser, and she is correct that a commitment is made that the function of the independent adviser should continue. As I told the House recently, the noble Lord, Lord Geidt, raised a number of issues in relation to the role, as did PACAC in another place. It is right to consider these carefully and take time to reflect on them before making a decision on how best to fulfil the commitment to oversight and scrutiny of ministerial interests, but such oversight and scrutiny there must be.

[Lord Newby (LD)]

My Lords, the Minister referred to the fundamental importance of personal responsibility and mentioned the Nolan principles. Can he tell us which of the seven Nolan principles the Prime Minister has not repeatedly broken? Secondly, to go back to the question asked by the noble Baroness, Lady Smith, can he explain how, as a constitutionalist and parliamentarian, he repeatedly brings himself to the Dispatch Box to support such a disingenuous Prime Minister?

[Lord True (Con)]

My Lords, I do not bring myself to the Dispatch Box; it is your Lordships who invite me to come. When invited by such an august body of people, it is difficult to refuse. There is a fundamental point here, which was in the Statement: we must be properly concerned about victims in these circumstances. It is therefore essential that these matters are investigated.

In relation to Mr Pincher, in 2017 a formal complaint relating to an incident in 2001 was made, and Mr Pincher was cleared following a party investigation. In 2019 a formal complaint was made in the FCDO, as noble Lords are aware. Due policy was followed, and Mr Pincher made an apology for the deeply regrettable discomfort caused. There is now a further incident, and Mr Pincher has resigned from his ministerial role as Deputy Chief Whip. A formal complaint has been made and is being investigated by the appropriate bodies. That investigation should continue.

[The Lord Bishop of Leeds]

My Lords, if standards in public life are being upheld, what could we expect to see if public ethics were being corrupted and standards were not being upheld?

[Lord True (Con)]

My Lords, I understand the tenor of the right reverend Prelate’s question. I repeat what was said in the Statement: it is for us all in public life to choose for ourselves how to respond. The context of this is not only the allegations that have been made; there is also a wider political process intended to denigrate the Prime Minister. Those are both aspects of this situation. In saying that, I do not underestimate the importance of any of the matters that people raise. They should all be properly investigated.

[Baroness Symons of Vernham Dean (Lab)]

My Lords, does the Minister really believe that the Prime Minister forgot a meeting with the noble Lord, Lord McDonald, the head of the Foreign Office? Does he really believe that the Prime Minister forgot such an important meeting over such a crucial matter when he denied that anybody had given him notice of the alleged activities going on?

[Lord True (Con)]

My Lords, I do not know the circumstances of the alleged meeting. I saw the press release from the noble Lord, Lord McDonald, but I do not think it referred to a personal meeting he had had with the Prime Minister. If the noble Baroness is aware of that, obviously I will stand corrected. She will know from her great experience in public affairs that in the course of life in No. 10—I had the privilege of working there for four years under Prime Minister Major—events crowd in on every individual in that place. That is the reality of the matter.

[Lord Cormack (Con)]

My Lords, has my noble friend read the devastating letter sent today by the noble Lord, Lord McDonald? Does he not appreciate that increasing numbers of people in this country, both in and outside Parliament, believe that the continuance in office of the present Prime Minister is incompatible with the maintenance of standards in public life?

[Lord True (Con)]

My Lords, others have their view. I have seen the press release from the noble Lord, Lord McDonald. I thought it unusual for him to release such a letter to an investigation process which will necessarily be confidential, but that was his decision. In relation to the events that took place, I quote from his press release in relation to Mr Pincher:

“An investigation upheld the complaint; Mr Pincher apologised and promised not to repeat the inappropriate behaviour. There was no repetition at the FCO before he left seven months later,”


to take up another appointment. That part of the track record also has to be taken into consideration.

[Lord Watts (Lab)]

My Lords, is it not the case that the Prime Minister hides behind this idea that there will be an investigation? He knows quite well that the longer it goes on, the less it will be in people’s minds and the more likely there will be another scandal to deal with, so people will forget about the first one. Is it not about time that Ministers stopped protecting this Prime Minister and asked him to go before the people do?

[Lord True (Con)]

No, those matters are, as the noble Lord quite rightly says, for the British people, who elected this Prime Minister. So far as investigations are concerned, we have processes. We all believe we should have those processes and, when investigations are launched on accusations—a formal complaint has been made to the grievances process—due process in this country is that the investigation should take its course confidentially, with all those involved being able to give evidence for and against and the truth being established. That is the tradition in our country, in our courts and in our Parliament. It is not hiding behind the matter; it is the appropriate process to achieve justice and truth.

[Baroness Wheatcroft (CB)]

My Lords, the issues over standards come so thick and fast that I wonder whether the Minister accepts that they are detracting from the business of government. I have a degree of sympathy with him; he may have some difficulty in accepting that. Yesterday, he found himself in the Moses Room, having to defend the Government for coming to the Procurement Bill with more than 300 government amendments at the start of Committee. This is not the way to run government. Will he accept that the issues over standards are failing the Government and the country in the way that we are governed?

[Lord True (Con)]

No, I do not accept that in the most general terms. I believe many people in this House and outside this House have very strong views about the individuals concerned in this, including my right honourable friend the Prime Minister, both for and against. The mechanisms for upholding standards in public life are important and we should allow them to run their course. I stand by the words put in the Statement earlier. However, with regard to the Procurement Bill yesterday, I did apologise. I do not think the noble Baroness was in Committee. I took what I thought was appropriate action to address the issue and I hope we have found a way to proceed to the convenience of all parties, although that is subject to proper negotiation in the usual channels.

Procurement Bill [HL]

Lord True Excerpts

Committee stage
Monday 4th July 2022 Grand Committee

Moved by

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

1: Before Clause 1, insert the following new Clause—
“Procurement and covered procurement
(1) In this Act—(a) “procurement” means the award, entry into and management of a contract;(b) “covered procurement” means the award, entry into and management of a public contract.(2) In this Act, a reference to a procurement or covered procurement includes a reference to—(a) any step taken for the purpose of awarding, entering into or managing the contract;(b) a part of the procurement;(c) termination of the procurement before award.(3) In this Act, a reference to a contracting authority carrying out a procurement is a reference to a contracting authority carrying out a procurement—(a) on its own behalf, including where it acts jointly with or through another person other than a centralised procurement authority, and(b) if the contracting authority is a centralised procurement authority—(i) for or on behalf of another contracting authority, or(ii) for the purpose of the supply of goods, services or works to another contracting authority.(4) In this Act, “centralised procurement authority” means a contracting authority that is in the business of carrying out procurement for or on behalf of, or for the purpose of the supply of goods, services or works to, other contracting authorities.”

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

My Lords, in moving Amendment 1 I will speak to the first group of amendments. Before so doing, I give notice to the Committee that Amendment 528—which I discovered only this morning had been grouped with this group, but which refers to matters relating to the health service—has been degrouped, because it is logical and to the benefit of the Committee that we discuss issues relating to the NHS part of the Bill together. I will address all the other amendments in this group.

I start by acknowledging and sincerely apologising for the number of government amendments. At Second Reading, in what I thought was all candour at the time, I said that I recognised there were areas of the Bill that would need refinement in Committee. However, the volume of amendments is still regrettable. I assure noble Lords that many of the amendments in this group and others are narrowly focused and technical in nature. We are putting them forward now only to ensure that the Bill functions properly and effectively.

We have issued a Keeling schedule setting out where the range of government amendments will fit in if your Lordships are pleased, eventually, to accept them. The bulk of the amendments in this group and others do not change the general policy intent of the Bill. Indeed, some of them serve to reflect more fully the original policy objectives as set out in the Government’s Green Paper and subsequent responses to it. I know from discussions at Second Reading and in the engagement I have already had with many of your Lordships—which I undertake to continue, not only between Committee and Report but, in the light of concerns that have been expressed, during Committee to clarify anything that is concerning noble Lords—that many noble Lords wish to get closer to the original policy objectives. That is evident from the number of non-government amendments that have been proposed, which we will be discussing. That is not an indication necessarily that we will have a meeting of minds on those, but some of them flow from that.

In many cases the need for amendments has been highlighted by external organisations. We are grateful for their scrutiny and input into improving the Bill. The interconnected nature of the Bill inevitably means that a single small amendment to a definition in one clause leads to multiple amendments to reflect the same definition where it features in later clauses to ensure coherence and consistency. Obviously, that frequently happens in the passage of legislation.

I repeat that I accept with all sincerity that the number of government amendments is not welcome and is undesirable. However, their end effect, when your Lordships have had the opportunity to reflect on them fully, of providing greater legal clarity will be beneficial to the Bill as a whole and to the large procurement community that will use it for many years to come.

The first group contains some of the Government’s amendments with the most general effect on provisions in the Bill, though these remain technical in focus. Amendments in this group relate to the introduction of the concept of “covered procurement” and to the devolved Administrations.

The proposed new clause before Clause 1 includes technical amendments to the definition of procurement and, as I just said, the introduction of the term “covered procurement” to distinguish between the categories of contract subject to different obligations under the Bill. “Covered procurement” refers to those contracts fully regulated by the Bill’s provisions; “procurement” refers to those contracts that are less regulated but none the less catered for to an extent, such as the below-threshold contracts and international organisation procurement. These changes recognise obligations under various trade agreements. The group also contains a number of consequential amendments to reflect this amended definition throughout the Bill.

Other amendments in this group did not originate from the Government but were requested by the devolved Administrations to amend how the legislation applies in Wales or Northern Ireland. As I said at Second Reading, we have been very grateful for discussions with and input from colleagues in Wales and Northern Ireland. These amendments include a small number of derogations from particular provisions in the Bill where they do not align with those Administrations’ policy goals. We have listened to the concerns of the devolved Administrations, and I hope noble Lords will agree that it is sensible to make these changes at an early stage to ensure that we have legislation that works for all contracting authorities in England, Wales and Northern Ireland.

[Lord Wigley (PC)]

I realise it is unusual to intervene on the opening speech, but it may be for the convenience of the Committee to understand the changes with regard to the devolved Administrations. Can the Minister confirm that these have all been agreed with the Welsh Government, in the case of Wales, and, where they relate to Northern Ireland, in Northern Ireland, or are there some here that, because of the time pressure, there has been no opportunity to discuss with the devolved Administrations?

[Lord True (Con)]

My Lords, I will have to be advised on that. I have been advised that they are the result of discussions. If that is not the case, I will set the position clearly and straightly when I come to wind up the debate. I have been led to believe, and know from my own involvement in the matter, that there has been a good deal of agreement between the United Kingdom Government and the Government of Wales. I will certainly confirm that in winding up.

The group also contains a number of technical amendments which are required to ensure that provisions relating to the Bill’s application in the devolved Administrations function properly.

To repeat what I said at Second Reading, I regret that the Scottish Government have opted not to join the Bill. They will retain their own procurement regulations in respect of devolved Scottish authorities. I am sure we would all welcome our Scottish friends if they wished to join the new system proposed by the Bill. Taxpayers and public services alike across the whole United Kingdom would benefit from that. However, at this juncture I am able to lay only those matters requested by the devolved Administrations in Wales and Northern Ireland. I beg to move.

[Lord Fox (LD)]

My Lords, I thank the Minister for his apology at the beginning, which I believe to be sincere and heartfelt. I also thank him, I think, for his introduction of the first of these 50 amendments; it was relatively short, given that they come with little explanation. It is said that there is a productivity crisis in this country—not so in the Cabinet Office amendment-generation department. The Minister can be proud of its performance.

More seriously, I commend the Bill team and the Government Whips’ Office, who have been wrestling with this leviathan of amendments, not least over the weekend. I thank them for their hard work. I will return to the process we are facing after making a few comments on the amendments, particularly around the covered procurement element.

Amendment 1 and several others seek to clarify things by defining covered procurement. I remain confused about where this phrase comes from and why it was necessary. There was no sense from the Minister’s introduction as to why it was necessary to come back after Second Reading with a new phrase. Can he say where this term comes from? Is it employed elsewhere in legislation? I think it is in contract law but it was difficult to find other manifestations of it. I should remind the Minister that, every time a new term like this arrives in legislation, it proliferates a great deal of other legislation because each new word or term will be tested to the limit in the law. If we start bringing in new terms such as this, the Bill will be a lawyers’ enrichment fund—I can see the lawyer opposite nodding in agreement—and that is not a good thing for the country or for government.

In his discussions, the Minister said that many of these new amendments came from consultation that was subsequent to Second Reading. Avoiding the obvious question as to why Her Majesty’s Government did not consult more beforehand, I would like to know which organisations and individuals put forward the need for this change. My guess is that it was not an external force but an internal one, and possibly that the Cabinet Office, having used one lawyer, decided to use a different one who had a whole set of different opinions on the legal nature of the Bill, and that is where the vast majority of these amendments have come from. Far be it from me to say what the benefits are of changing a horse half way across a stream, but we are, I suspect, reaping the consequences. If I am wrong, I am happy for the Minister to tell us so or to publish the consultation that happened subsequent to Second Reading. I will be happy to admit that that was not the truth.

As we noted at Second Reading this is an important Bill, dealing as it does with the technical process for managing a considerable amount of money spent on behalf of the British people by public institutions. We support this process. We noted that it needs to be in the public interest, as well as providing value for money. The objective of this Committee process should be, and should remain, to have a proper debate around how such issues are brought to the fore in this legislation. However, because of the sheer incompetence of the Cabinet Office—a Cabinet Office that, I note, recently published its guide to improving the quality of the legislative process—we are instead pulled into a debate around process.

During Second Reading, there seemed to be a measure of good will. My noble friend Lord Wallace spoke about the need for a co-operative process and the Minister seemed to agree. Subsequently, as the Minister has pointed out, with fewer than four days before the first day in Grand Committee, we were confronted with 350 government amendments. That could have been managed in a co-operative way, but that did not happen. Even if we had to have the amendments, to drop them with no warning so near to the process was an inappropriate way of being co-operative.

Then, at 8.56 am on Sunday, which I remind everybody was yesterday, we all received an updated grouping of amendments. In this, there were 77 changes from the document we had received on Friday—I repeat, 77 changes—with the shape of the groups radically changed. For Members to be presented with so many changes, and then for those changes to keep on moving, right up to the wire, is unacceptable. I stress again that this is not the fault of the Government Whips’ Office, which I suspect was kept at work all weekend thanks to this process and the Minister’s insistence that we plough on with the Bill in the way that was originally planned.

--- Later in debate ---

[Lord Hope of Craighead (CB)]

My Lords, I want to raise a question about the wording of the definition in Amendment 1. I am troubled by the word “covered”. It does not spring off the page as an explanation in itself as to why there is a distinction between procurement pure and simple and this other procurement, described as “covered”. Having looked at the language in paragraphs (a) and (b), I think the obvious word to choose in paragraph (b) is “public” procurement. However, having listened to the analysis of the noble Lord, Lord Lansley, I am doubtful as to whether that distinction is what the definition seeks to describe. But if it is not doing that, and the word “public” would be wrong, is it not possible to find a more obvious word than “covered”?

The choice of language is crucial in a definition clause. It ought to be possible for the reader to take from the definition an immediate explanation as to why there is a distinction between the types of procurement in paragraphs (a) and (b). If it is necessary to go through the hoops that the noble Lord, Lord Lansley, did, I wonder whether it is possible to achieve anything sensible by ordinary language—which is a reason to say it might be better not to have the definition at all. However, if the definition is thought to be necessary, please could a better word than “covered” be found, so that the definition helps us, at the beginning of this complex Bill, to truly understand the distinction between paragraphs (a) and (b)?

[Lord True (Con)]

My Lords, I am grateful to all those who have spoken, although I cannot say it always made for the easiest listening. I have been in opposition, and will be again one day, so I fully understand where those noble Lords who expressed concerns are coming from. I have also been on the Back Benches on my side, and will be again one day, so I fully understand where my colleagues are coming from as well.

It is unsatisfactory that so many amendments have been laid. I apologised for that. It is not, in any of your Lordships’ submission, sufficient. I could tell a few tales out of school, but I am a believer in the old concept that the Minister at the Dispatch Box takes full and personal responsibility for the criticisms that are made. I accept that. The amendments should have been brought forward in a more informative—to use the word from the very impressive speech by the noble Baroness opposite, whom I look forward to working with on the Bill—and timely manner.

--- Later in debate ---

[Lord Purvis of Tweed (LD)]

My understanding is that the only way this could be done better is for the Government to withdraw the amendments and bring them back with explanatory statements. Explanatory statement cannot be tabled separately, so if the Minister is sincere that the Committee will not face continuing lists of government amendments without explanatory statements, the sensible course of action would be for him to withdraw them and bring them back with explanatory statements so that we can consider them properly.

[Lord True (Con)]

That was, in a sense, the implication of what I was saying. We are debating only Amendment 1 at this stage, but for the avoidance of doubt, if it helps the noble Lord, at the end of these remarks I will beg leave to withdraw Amendment 1. Your Lordships could indeed obstruct these matters, but I will withdraw the amendment and see that we fulfil the undertaking that I have given.

More generally, important questions were asked about definitions. I must say to the noble and learned Lord that, until relatively recently—I use that word because I do not want to define it more narrowly—I was not familiar with the concept of “covered”. However, it has come forward after careful reflection by the Cabinet Office and the Bill and legal teams. It is intended to make the concepts in the Bill clearer to use and understand. I mentioned “covered procurement” in my opening remarks. “Covered” was intended to refer to those contracts that are fully regulated by the Bill’s provisions, whereas “procurement” refers to those contracts that are less regulated but none the less catered for, such as below-threshold contracts and, as the noble Lord, Lord Purvis of Tweed, said, international organisation procurement.

[Lord Hope of Craighead (CB)]

I think the problem may be in the language of paragraph (b), because it does not fulfil what the Minister has been saying is the intention of “covered”. You could keep “covered” but reword paragraph (b) so that it explains more fully what “covered” means, which is what I think the Minister is attempting to do. As it stands, it is very confusing. A confusing definition is a bad way to start a Bill.

[Lord True (Con)]

My Lords, I listened carefully to the noble and learned Lord’s remarks. We will take them away. I have said that I will withdraw the amendment.

My noble friend Lord Lansley was accurate in divining the Government’s intention with this. The intent is to distinguish between the fully regulated—I will not use the word “covered”—and the less regulated.

[Lord Lansley (Con)]

I am sorry to interrupt my noble friend, but I am glad that I was not misdirecting myself.

On the noble and learned Lord’s point, I understood what it meant only when I looked at what “public contract”, as defined by Clause 2, means. Once one looks at Clause 2, it becomes very straightforward to check it. I looked at Clause 1 and realised that it is not a national covered procurement policy statement but a national procurement policy statement. None of the amendments change that bit, which told me that what we are dealing with here is the Government proposing that there should be a mechanism for talking about procurement in its broadest sense, while intending to regulate procurement in a slightly narrower sense by regulating everything above the value threshold. This did not seem intrinsically confusing to me once I understood what it is we are trying to do here.

[Lord True (Con)]

I do not think that, in public remarks that will be recorded for all eternity in Hansard, Ministers should ever agree to the idea that anyone might be confused by the crystalline words that come before the Committee, but I must say that I did not, at first blush, understand these proposals when they were put forward and laid. I understand the objective, and think that both the noble and learned Lord and my noble friend have understood and divined it. We believe that it meets the requirement but, in the light of what your Lordships have said, I am sure that we can reflect on that. I will withdraw this amendment so that we can come back to it.

My advice from legal advisers is that this amendment adequately achieves the objective we sought. As to the elegance of it, I am not going to go into a disquisition of other circumstances in which “covered”—

[Lord Purvis of Tweed (LD)]

While the Minister is reflecting, might he be able to comment today on the legal advice that he has clearly received? He kindly referred to my reference to international obligations, including the TCA. In the legal text of the TCA, “covered procurement” is stated as the area where the TCA and the UK have an agreement. It is unclear whether the definition, and what the Government are seeking to do in this Bill, will have the same meaning as “covered procurement” in the TCA. Can the Minister clarify that point?

[Lord True (Con)]

My Lords, I was going to make a proposal. The legislation obviously reflects our existing international obligations, including the TCA, but this is not the only definitional point that has been raised. I cannot find the others in my notes but the noble Lord, Lord Berkeley, for example, asked about a centralised procurement authority. A centralised procurement authority is a body that sets up procurement or purchasing arrangements for use by other contracting authorities; examples would be the Yorkshire Purchasing Organisation or the Crown Commercial Service. That is one definitional issue. The noble Lord asked about the meaning of “state” in Amendment 440. That refers to a country with which we have an international agreement.

It is regrettable that this should happen after we have had this debate. Having heard the strength of feeling expressed by your Lordships on these amendments, especially the definitional ones such as the definition of “covered procurement”, I will ask my officials to hold a technical briefing on these matters for interested Peers. I will ask for invitations to be sent out by my office after the debate, in the hope that some of these points can be clarified. I know that is not to the greatest convenience of your Lordships because the Committee is due to come back on Wednesday, but it should help further to explain the rationale and necessity for some of these late amendments, which were advised on us by our legal advisers. I or my office will be in touch with noble Lords who are here with that offer, so that we can undertake that.

I was asked by the noble Lord, Lord Purvis of Tweed, about the impact assessment. Again, we will reflect on that point but my advice, even in the light of these amendments, is that as there has been no change to the general policy intent of the Bill, there is therefore no change to the costs and benefits of the impact assessment. I am therefore not advised that it is necessary to revise it, but I will second-guess that advice in the light of the noble Lord’s contribution. Although there are wording changes, to take up what my noble friend Lord Lansley said, the general intent of the Bill remains the same.

On the question of the devolved Administrations—obviously, there is a particular issue at the moment in the case of the Northern Ireland Executive, which is why some of these matters are ongoing—I am grateful for what the noble Baroness, Lady Humphreys, and the noble Lord, Lord Wigley, said about the sense of co-operation. I believe that is reflected in both directions. I was asked whether all these things had yet been formally agreed. As I understand it, most of these amendments have been; some have been agreed and discussed at official level but may not technically have been signed off by Ministers. It is certainly our intention and, I believe, the Welsh Government’s intention that we will reach full and constructive agreement, which will enable the proposals to be recommended to the Senedd. This has been an area of good and striking co-operation. I say publicly to the Committee again how much we appreciate that, as I did in my opening remarks.

I hope I have briefly dealt with the question of “covered”, “not covered” and some of the other definitional things. I hope that the further formal briefing I have offered can be arranged at a convenient time for most Peers tomorrow, and will go some way to answering this. I give a commitment that, when we go forward, I will not accept to lay before your Lordships and take to a vote something where there is no proper explanation of the individual amendments in the manner that the noble Baroness opposite quite rightly asked for. There should be a clear explanatory statement. I will ask for that to be done in respect of the amendments that are coming forward to explain the whys and whats in detail, and how the various groups interlock. Again, I will not tell tales out of school, but one of the issues is that there are interconnections between these different groups and how they have been sliced. I repeat that commitment.

[Lord Fox (LD)]

I thank the Minister for that. I do not think he answered the question my noble friend asked. Accepting that government Amendment 1 will now be withdrawn, will the government amendments in this group, from Amendment 47 to Amendment 543, be retabled for us to have a proper debate on each of them? As the noble Baroness set out, there are a lot of questions around each of them, none of which have currently been addressed. I am unclear on the mechanism by which those amendments will be retabled. Can the Minister confirm that that will happen so that we can have a proper debate on those amendments?

[Lord True (Con)]

I will have to take procedural advice on that. My understanding is that if I withdraw Amendment 1 it is not the case that the group has been negatived and therefore that the other amendments do not lie on the Order Paper. The Government would obviously have preferred, despite all the justified criticisms—

[The Deputy Chairman of Committees (Lord Geddes) (Con)]

I hate to interrupt the noble Lord in full flow, but a Division has been called in the Chamber.

--- Later in debate ---

[Lord True (Con)]

In order to finish, as I was just about say, we wish to facilitate proper discussion. Obviously, how to proceed is a matter to be discussed in the usual channels. There are matters in the amendments in this group which are technical and one or two raise definitional issues, and so on. We will work on the advice to your Lordships that I promised. In parallel—I cannot speak for usual channels—we will have discussion in the usual channels about how best to proceed in a way that does not lead to a recurrence of this undesirable situation, for which I repeat apologies. There are important, specific and thematic amendments—I like amendments to be thematic. The Government sometimes have good ideas and the Opposition have good ideas—sometimes—and the best way is if all these things are grouped thematically, which is why, when I saw that this health amendment had suddenly crept in, I said, “We should surely do that later.”

We will have usual channels discussions. I hope we can proceed, but we will find which way we can proceed that is best for your Lordships and does not result in a situation such as this. As I said, I shall not come back without explanations that are clear and timely—I cannot remember the phrase I used. We will see what we can do.

With that undertaking and that for usual channels discussions, in the light of the brief earlier discussion with the noble Lord, Lord Wallace, and the noble Baroness, Lady Hayman, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

--- Later in debate ---

This is very interesting and there is quite a lot to consider, so I am interested to hear the Minister’s response. I guess we all want to understand how the decisions around the utilities part of the Bill were reached.

[Lord True (Con)]

My Lords, it has been an interesting and important debate, which we will reflect on as we go forward in the normal way between Committee and Report. I was asked a couple of definitional questions again, including: what is a public undertaking? Clause 1(2) defines a public undertaking as

“an undertaking that is not a public authority but … is funded wholly or mainly from public funds, or … is subject to contracting authority oversight.”

Public undertakings differ from bodies that are also funded wholly or mainly from public funds, or are subject to public authority oversight but which are considered to be public authorities, in that public undertakings do not have functions of a public nature, which means their activities may be more economic and commercial in nature—these are some of the things we have been discussing. For example, although it is no longer a public undertaking, before the Government sold their share in 2015, Eurostar International was a public undertaking. I am sure that people will examine that definition in Hansard. I will come on to some other points shortly.

On the question of what a private utility is, utilities are public sector bodies—public authorities or public undertakings—that carry out utility activities, or certain private organisations carrying out utility activities, which are the private utilities. The Bill covers private utilities only where they have been granted a “special or exclusive right” to carry out a utility activity. Rights are “special or exclusive” where they have been granted by a statutory, regulatory or administrative provision, and the granting of that right in itself substantially limits other utilities from carrying out those activities—it is a competition issue. This effectively puts them in a position of a natural monopoly and therefore they could, however unlikely it may be, engage, for example, in preferential treatment that favours their own affiliates or strategic partners and discriminates against other suppliers bidding for contracts, which could negatively impact the market and customers. That would not be good for the industry or consumers.

Furthermore, though I listened with great interest to what the noble Baroness opposite said in relation to international agreements, the UK is required by various international agreements to ensure that private utilities do not discriminate against foreign suppliers with rights under international trade agreements, known in the Bill as “treaty state suppliers”, and that they adhere to the rules we have agreed for utilities procurements. This is why the Bill regulates private utilities but only to the extent required by those international agreements and where we consider it appropriate or necessary to make the regime work.

There has been a lot of debate in relation to the extent of coverage; I will come on to that. A philosophical question was posed by the noble Earl, Lord Lytton, and the noble Lord, Lord Fox: what is in and what is out? I am sure that we will debate and discuss this in our engagement as the Bill goes forward. There was a slight difference of opinion. Behind me, I have been hearing, “Everybody out”, whereas, on the other side, the noble Lord, Lord Fox, seemed at one time to stray towards a definition of private delivery of public service. That sounds like the kind of concept that might have led Mr Benn or Mr Corbyn to say, “Let’s have them all in. They provide food, the banks and all these things”. I do not think that one would want to go that far but obviously there is a question of how far; indeed, my noble friends behind me have posed the question of “if at all”.

I was alarmed by what my noble friend Lady Neville-Rolfe said, with her immense experience both in the public sector in Europe and in business. She said that, as it is drafted, she would find the Bill a deterrent to applying for public business. That is certainly not what the Government intend at all.

I will come back to the question of coverage shortly but we have included a number of measures that will reduce the regulatory burden for private utilities. For example, the Bill contains a number of provisions unique for all types of utilities, such as the higher financial thresholds and the utilities dynamic markets, which are available only to utilities. In framework agreements, public utilities can let closed frameworks for up to eight years and there is no maximum term for frameworks entered into by private utilities. In addition, with contract amendments, there is no 50% financial cap on the value of permitted modifications.

Obviously, the Bill seeks to reduce the regulatory burden on private utilities in terms of transparency. The transparency requirements for private utilities are the minimum required by international agreements—that is, the tender notice, the transparency notice in cases of direct award and the award notice. Regarding mandatory and discretionary exclusions, the Bill retains the flexibility under the current regime where the application of mandatory exclusions is discretionary for a private utility. Private utilities are not restricted in the duration of closed frameworks, which is generally four years for non-utilities. The terms of any closed framework are their commercial decision. Private utilities will also not be subject to oversight by the procurement review unit, which we will come to discuss later in the Bill.

I was asked about broadband and drainage. I am not sure that I have an answer on drainage except to say that I always evoke the great spirit of Bazalgette. Schedule 4 sets out that the Bill covers utilities operating in the water, energy and transport sectors that are regulated in our international trade agreements to minimise the burdens on utilities. Broadband is not covered by those trade agreements so we have not chosen to regulate public or private utilities in that area.

In relation to that, I was asked about private bus companies and Transport for London. Private utilities that run transport services, such as private bus companies, are regulated as they operate services where they have special or exclusive rights to do so. That limits competition and is reflected in international trade agreements; for example, the World Trade Organization government procurement agreement specifically lists Transport for London as being covered by that agreement. The Bill exempts it under paragraph 17 of Schedule 2 as it will be regulated by Department for Transport regulations.

The noble Lord, Lord Berkeley, asked about the reasons for excluding certain utilities. I will turn to his amendments now. Schedule 4(8) includes certain utility sectors that are exempt from the regulations. As they have proved to the European Commission, they are exposed to competitive forces. Schedule 4(8) provides an exemption determination for those decisions. If other sectors can do similarly, we will be able to exempt them from procurement regulations.

Regarding the amendments tabled by the noble Lord, Lord Berkeley, Schedule 4 sets out the scope of utilities activities, largely mirroring the coverage of the existing regime domestically. I repeat: this reflects our commitments in trade agreements such as the WTO’s GPA. Amendment 25 would extend the exclusion for the supply of gas and heat produced as a consequence of carrying out a non-utility activity to all contracting authorities where this is currently available only to private utilities and public undertakings. This would breach our commitments in the WTO government procurement agreement and other international agreements where this exemption applies only to private utilities and public undertakings. It does not apply to contracting authorities that are public authorities.

Amendments 26 and 27 seek to remove from the scope of the Bill utility contracts related to public transport services and contracts associated with activities for the provision of airports and ports, as was discussed by the noble Lord, Lord Berkeley, and my noble friend Lord Moylan. Both activities are covered under the existing regime, and are required by our international commitments under the WTO GPA and other international agreements that require access to utility contracts in the transport, ports and airports sectors. The Bill therefore regulates these utility activities to comply with our international obligations.

As my noble friend Lady Neville-Rolfe said, the Bill provides for a mechanism in Schedule 4(7); this was alluded to in a different context by the noble Lord, Lord Fox. This will be developed to permit an appropriate authority to exempt utilities operating in these sectors where they are exposed to competition. This would apply to all utilities and is permissible under our international obligations.

I will reflect carefully on—

[Lord Scriven (LD)]

Can the Minister clarify what an appropriate authority is? Who are the appropriate authorities and what is the process for that appropriate authority to amend the private utilities provision?

[Lord True (Con)]

I was asked that at Second Reading. An appropriate authority is a Minister of the Crown or a Welsh Minister. Indeed, the noble Lord’s colleague, the noble Baroness, Lady Humphreys, referred to this when we discussed the earlier group of amendments. We clarified it in some of the amendments that we tabled but were not brought forward earlier. Among them was an amendment to replace “appropriate authority”, although I cannot remember with what exact words—a Minister of the Crown or a Welsh Minister, I think.

[Lord Moylan (Con)]

I think that my noble friend is approaching his peroration. May I ask him for a little clarity? Take the example of the bus company. Bus companies operating under a franchise—for example, those in London—appear to be covered because they have a special and exclusive right. That appears to be what my noble friend is saying; if I am wrong, please correct me. Even though they have bid competitively for that special and exclusive right, and even though it generally lasts only for a number of years—this is to justify the balance of capital investment that might be required for them to allow—then comes back into competitive tender, they appear to be covered.

Bearing in mind that I am sticking with the text of the Bill as circulated, my noble friend says that Schedule 2(17) exempts them. However, that is not what it appears to do. It exempts a contract rather than a contractor, and says:

“A contract for the provision of public passenger transport services”.


In simple terms, is my noble friend saying that, when a bus company procures a building, a new piece of plant, some equipment or even some buses, it is or is not covered by the procurement regulations, even on the assumption that it falls into the special and exclusive category?

[Lord True (Con)]

My noble friend has very characteristically not only picked up an onion but begun to peel it into various levels of the commitment and nature of the activity. I will look into the particular issues in relation to buses referred to by the noble Lord, Lord Berkeley, and my noble friend Lord Moylan.

What I was going to say does not really amount to a peroration. Indeed, at this time, one does not really need a great peroration. What I am here to do is to listen. A range of very interesting and important points have been raised by noble Lords on all sides in relation to the operation of the legislation on private utilities. I will look carefully at Hansard and undertake to have discussions on these matters between now and Report. I am grateful to all noble Lords who have spoken—

[Lord Fox (LD)]

I sense that the Minister is winding. I have a quick question, which I think is best responded to by a letter. It is regarding international agreements and particularly telecoms, which were mentioned. The Australia agreement carves out specifically kit and hardware, but not telecom services, which appear to be left in. Will the Minister write to us about what the carve-out on broadband services is in, for example, the Australia trade deal and other trade deals?

[Lord True (Con)]

Yes, my Lords. I have committed to write in relation to that and I will pick up other questions that have been raised, including by the noble Lord. Obviously, there are existing international agreements that are, if you like, deposited, and which we have to work with, as well as issues of how we move forward case by case, but I will certainly address in a letter the point the noble Lord asks about. It is a legitimate question. The status of international agreements was also raised from the Front Bench opposite, and I will write to the noble Lord on that matter and copy it to colleagues in the Committee.

[Baroness Neville-Rolfe (Con)]

My Lords, this has been a workmanlike discussion, the unpeeling of the onion—the first of many unpeelings of onions, I think. I thank my noble friend Lord Moylan for his support, and the noble Lord, Lord Berkeley, the noble Earl, Lord Lytton, and the noble Lord, Lord Fox—the philosophy of scope is a good phrase. The noble Baroness, Lady Hayman of Ullock, made a strong point about the WTO, which leads me to ask the Minister whether in his follow-up letters he will be able to give us a little more feeling about what is in and what is out for each of the utilities.

I am concerned about that because when we come on to talk about what is covered, it makes a difference—for example, doing special things for small businesses, could we have rules that are not too bureaucratic? Schedules 6 and 7 look quite burdensome through the eyes of a small company. It seems that a lot is covered and then there are executive powers to decide what is taken out and excluded, so the power is with the Minister. I would like to come back to that when we debate the amendment tabled by the noble Lord, Lord Wallace of Saltaire, on delegated powers. It is an important issue.

Can we find a way of not making things too bureaucratic? The noble Baroness, Lady Hayman, made the same point from the other side. Can we improve productivity and growth, which we all desperately want to do in the current circumstances? Can this Bill be a vehicle for that and for improving our international competitiveness? I beg leave to withdraw the amendment.

--- Later in debate ---

At last, now that the process is starting to be sorted out, the Committee can start doing its job, whether that is in the amendment of the noble Baroness, Lady Noakes, or in any other amendment. We seek to scrutinise the detail of the Bill to understand what is going on. The purpose of the Committee is to improve the legislation and make it work, even if sometimes there is an ideological clash about some of it. Everybody wants this Procurement Bill to work because having a better system of purchasing that conforms to the standards we all want is in everybody’s interest. It is in Committee that we can examine the detail in order to do that.

[Lord True (Con)]

Again, my Lords, I am very grateful to all those who have spoken. There have been some interesting speeches. Indeed, I will certainly take the final speech by the noble Lord, Lord Coaker, in which he seemed to deplore the idea that the Government should have any regulatory powers, back to my right honourable friend. We will certainly watch for that as we go forward.

On his more general point in relation to the Delegated Powers Committee and so on, I do take what he said seriously. We will have a debate on that in the next session. I will look into his specific point about secondary and primary legislation. If there is an answer that is an advance on what is already in the public domain, I will certainly have that for the next session when we will look at delegated powers.

I am not really a fan of wide-ranging groups that cover a whole range of different subjects. They seem to have become the habit of our times. When I first had experience of your Lordships’ House, we had quite short debates on relatively narrow subjects, which enabled the Minister and the House generally to concentrate. So I will endeavour to answer all the various points that have been made but some of them may have to come in writing. We will look very carefully at Hansard because there was a very broad range of questions, which started with the questions on universities.

[Lord Fox (LD)]

Can I just point out that the grouping comes from the Government Whips’ Office? We could have extracted all our amendments, one by one, and created a larger number of groups but, probably in deference to the will of the Government, we did not. The future of how many amendments you have in a particular group lies very much in the hands of the Government, not Her Majesty’s loyal Opposition’s or ours.

[Lord True (Con)]

My Lords, they are negotiated in the usual channels. Sometimes it is a fatal thing in your Lordships’ House to express an opinion, in all respect to your Lordships, of how I think things may be done. We are all imperfect—I am sure the usual channels are not perfect—but having a large group does raise challenges in terms of accountability.

I will try to address the various points raised. I apologise if they were so broad that I may miss some of them, for whatever reason. We started on universities with Amendment 3 from my noble friend Lord Lansley. His amendment would exclude universities from a definition of public undertakings within the definition of a contracting authority, and consequently from the scope of the public procurement rules. He asked about public undertakings and public authorities. Public undertakings are relevant only in the context of the utilities that we were discussing. The universities will be public authorities if they meet the public authorities test, and not caught if they do not meet it.

Universities are included in the UK’s coverage commitments under the World Trade Organization’s Agreement on Government Procurement as contracting authorities that are subject to the rules, where they are publicly funded. The existing definition of a contracting authority in the Public Contracts Regulations 2015 contains tests of the extent to which a body is publicly funded or publicly controlled. These tests are then applied by the body in question to determine whether they are caught by the definition. The definition of a contracting authority in the Bill is intended to capture the same bodies. Universities are therefore in scope of the procurement rules, but only to the extent that they are mainly publicly funded or controlled. The position is likely to vary depending on universities’ funding streams, and those that derive the majority of their revenue from commercial activities would likely be out of scope.

Amendment 4 in the name of my noble friend Lady Noakes would adjust the definition of a contracting authority in such a way that bodies would be brought into scope where they are subject to control by a board if more than half the members are “capable of being” appointed by a contracting authority. I think there was some interest in that proposition on both sides of the Committee. Our initial feeling is that it would mean a more prescriptive and potentially wider scope than the proposed definition, which brings into scope only bodies controlled by a board that has been

“appointed by a … contracting authority.”

Again, the definition of contracting authority in the Bill is intended to capture the same bodies as in the existing Public Contracts Regulations. We are not seeking to change the scope of bodies covered in any way, though some adjustments have been necessary to replace references to European concepts such as bodies governed by public law with the more relevant UK analogous concept of bodies undertaking public functions. Ensuring consistency is necessary not only for practical continuity purposes but in respect of the United Kingdom’s international market access commitments in free trade agreements, which use the existing definition as the basis of the UK’s coverage offer.

The current definition brings into scope bodies that have a board more than half of whose members are appointed

“by the State, regional or local authorities, or by other bodies governed by public law”.

The definition in the Bill is consistent with this by bringing in bodies that are subject to the management or control of

“a board more than half … of which are appointed by a … contracting authority.”

The existing definition in the Public Contracts Regulations does not contain any reference, as per the proposed amendment, to the notion of board members “capable of being” appointed by a particular contracting authority. Whether or not an authority chooses to exercise its right to appoint members to a board is not addressed, and was not intended to be addressed, within the definition. For that reason, we do not currently consider that it would be appropriate to adjust the definition in the way the amendment suggests.

However, I have listened carefully to what my noble friend has suggested. We will consider further whether it is possible to exercise control without making appointments by the threat of control. For the moment I ask my noble friend not to move the amendment, which we cannot support as it stands.

--- Later in debate ---

[Lord True (Con)]

I was actually coming on to the rest of that but, with respect, the noble Lord asked me a specific question about government communications in his utterance; therefore I was responding to it.

Going further, in line with the existing exemption under the current regime, as provided for in the GPA, partner nations will typically agree to the rules for the award of contracts in a joint project by one or more of the partners in an international agreement. We cannot expect our international contracting partners, each with different national procurement procedures in some cases, to follow the specific procedural rules in this Bill. The ability to switch off the procedural rules in the legislation where there is a clash with what was agreed with the parties to the international agreement is essential to facilitate arrangements; however, I will clarify that further for the noble Lord. Again, I ask that this amendment be withdrawn.

I turn to Amendment 42, which relates to local authorities. I apologise for the length of my speech but a number of different themes came out here. Given my life and my having been involved in setting up joint arrangements with other authorities, I understand where the noble Lord, Lord Wallace, is coming from in seeking to add to and amend Clause 10 to make it explicit that a group of local authorities forming a consortium may constitute a centralised procurement authority. As an old local government hand, I do not particularly like that phrase; on the other hand, earlier, I cited the Yorkshire procurement arrangements as the type of thing that would be permitted and would be a centralised procurement authority.

[Lord Wallace of Saltaire (LD)]

My Lords, I suggest looking at the definitions in Clause 112. I note that the terms “central government authority”, which clearly does not apply, and “centralised procurement authority” occur together. I suggest that, in introducing an amendment on Report, the Government may care to consider something that replaces “centralised” with “combined”? That would not have the implication of being run from Whitehall and would express much more explicitly what is intended.

[Lord True (Con)]

I will certainly reflect on anything that is said in Committee. “Combined authority” has a particular meaning and understanding. Local authorities can procure things together without being a combined authority; perhaps the noble Lord, being a good Liberal Democrat, might like to propose a federalised approach. I will take away the point he made. I was going to say that I agree with him and the noble Lord, Lord Scriven, that it is correct that local authorities can band together to form consortia to undertake procurements; that is something we wish to encourage. I will look into the particular case of border lands that the noble Lord—

[Lord Purvis of Tweed (LD)]

It is a federal question that I am asking, about states that border combined authorities.

[Lord True (Con)]

I am not sure that the First Minister is looking for a federation.

Where a procurement is being undertaken by one or more local authorities that are in the business of carrying out procurement for others, as when they form a consortium to undertake several procurements over a period of time, those authorities would constitute whatever we call it—a centralised procurement authority, for the purpose of the Bill—without the need for the amendment. Conversely, where a group of local authorities come together to undertake joint procurement on a one-off or ad hoc basis, they are entitled to do that as joint procurement under Clause 10(4)(a).

There are other aspects in relation to local authorities. The Government have a clarifying amendment in the megagroup that comes up next, which I hope will also give some reassurance to noble Lords opposite that we want freedom for local authorities—although they will have to have regard to the priorities and national procurement strategy, as any other body will. Ultimately, they will remain accountable to their electorates for their own procurement decisions.

I was asked about how integrated care boards fit into the Bill. I understand that we are still in discussion with the Department of Health to agree what matters are within the health and care procurement rules. This will be debated later on in the Bill; I hope to come forward with more clarification on that.

Finally, a lot of general matters were raised relating to Clause 2, not only by my noble friend but by the noble Lord, Lord Coaker, opposite. My note-taking was running out a bit but I will obviously pick up as much as I can of the remarks and write further.

[Baroness McIntosh of Pickering (Con)]

I was delighted that the noble Lord, Lord Coaker, was able to pursue some of things that I touched on. What concerns me most, particularly given what my noble friend the Minister said about the earlier amendments in this group, is that I am at a loss to understand why we need this Bill if so much of it is already set out in the GPA or in existing law. Can my noble friend explain the role of the thresholds, particularly in the provision of food to public authorities?

[Lord True (Con)]

My Lords, we need the Bill because we need a national procurement structure. I hear what my noble friend says but there has been agreement across the Front Benches and from the Liberal Democrats that we need to establish a framework that will last. People may have different views on whether it diverges enough or not at all from the arrangements we have—doubtless that will be explored—but we need to have such a framework and a body.

Clause 2, which is probed, classifies three types of contracts that are public contracts. The first category covers contracts for the supply of goods, services and works, provided that they are not subject to an exemption. I was asked about how each of those exemptions was arrived at. I cannot answer on all of them here but I can certainly provide information to the noble Lord. The second category covers frameworks—that is, contracts providing for the future award of other contracts. The third is concession contracts, which we will discuss.

I turn to the concerns around what Schedule 2 is about. It sets out the types of contracts where the contracting authority does not need to apply the rules for the contract award procedure; they are exempted from the procurement rules. The Bill needs to ensure that contracting authorities have the freedom to carry out the most appropriate procurement where the rules in the Bill might otherwise be unsuitable, for example where it is necessary to protect national security interests and the procurement is too sensitive to advertise; where the contract award procedures are governed by other legislation, as in rail services, which are currently awarded under a separate regime operated by the Department for Transport; or where it is necessary to protect the Government’s ability to make public policy interventions, such as on broadcasting content.

Standards of Behaviour and Honesty in Political Life

Lord True Excerpts

Thursday 23rd June 2022 Lords Chamber

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

My Lords, I am very grateful for the opportunity to hear this important debate. At one point in what I thought was a very interesting and wide-ranging speech from the noble Viscount, Lord Colville of Culross, he referred to politicians being infuriated by things that they hear and by each other. I am never infuriated by your Lordships—certainly never at the Dispatch Box. One is always improved by hearing debates in your Lordships’ House, and I thank noble Lords for their contributions. They will not be surprised that I have not agreed wholeheartedly with all of them, but I thank all those who have spoken. Indeed, I thank the noble Lord, Lord Morse, for moving the Motion on this important topic, which I believe should be a topic of universal agreement. Who does not want to see the highest standards of behaviour and honesty in public life?

It would not be unreasonable to note that it was one minute and 15 seconds into the speech of the noble Lord, Lord Morse, when he moved from the general to the particular and launched an attack on my right honourable friend the Prime Minister. This remained a theme in his speech, and it seemed to be a theme that is quite congenial to many noble Lords who spoke. Noble Lords will not, with all respect, expect me to agree with that. I understand some of the criticisms, which the Prime Minister has acknowledged, which allude to faults and mistakes. Some ventured into hyperbole. The noble and learned Lord, Lord Brown of Eaton-under-Heywood, and the noble Lord, Lord Desai, in a characteristically fresh and interesting contribution, added some useful correctives.

I feel there was a sense behind some of the speeches that if one could somehow remove, without election, an elected Prime Minister with the confidence of the House of Commons, then we would all emerge as chevaliers sans peur et sans reproche, and public life would be wonderful. The noble Lord, Lord Mann, in the opening of a powerful speech, had a strong response on this: issues of trust are very wide, and I think the House was silent when he made what some might have felt was a shocking reference to this House’s performance in regard to the referendum result.

The standards for public servants in the United Kingdom, including those who serve in public life, are expected to be high, and I agree with my noble friend Lord Balfe and others, that we bear a particular responsibility, and that is the focus of today’s debate. Although we beat each other up, those standards are rightly regarded as among the world’s strongest still.

In relation to my right honourable friend the Prime Minister, there is, as noble Lords know, an upcoming Procedure Committee inquiry into subjects which some have alluded to, and I am not going to pre-empt the conclusions of another place. I acknowledge that the Government asked the country to make extraordinary sacrifices in the Covid pandemic, into which there will be a full and, I hope, searching inquiry which will reflect the principle of transparency—which, I agree with the noble Lord, Lord Mann, is very important. The Prime Minister has acknowledged, in the other place, people’s anger and hurt, and offered a full and unreserved apology for the mistakes made. I do not propose to repeat the Prime Minister’s words, but I reiterate that he has been clear he is committed to making changes to address the issues raised, and learn from those mistakes, which is one of the points that the noble Lord, Lord Collins, raised.

The Government have already been taking steps since the Second Permanent Secretary’s interim update to address some of the specific shortcomings identified in the report and ensure that there is stronger and more professional leadership. This includes appointing a new Permanent Secretary to lead the new leadership team in No. 10, charged with applying the highest standards of governance, as well as ensuring that every government department has a clear policy on the consumption of alcohol in the workplace.

I acknowledge your Lordships’ impatience to hear a response to all the very important reports that have been put to the Government. My erstwhile noble friend Lady Wheatcroft asked about the Boardman review. The Government are carefully considering both the Boardman review report and the other reports that have been referred to, such as the CSPL report on upholding public standards. They are wide-ranging reports.

Some of the recommendations from the CSPL report have already been responded to, as has been alluded to, in terms of the Ministerial Code. On the Boardman report, some changes have been implemented and made public. For example, the Treasury has issued revised guidance on the use of supply chain finance and the Government have recently made changes to the independent adviser role and the Ministerial Code, which are also alluded to in that report, in response. The Government will respond to those reports. Again, I have to disappoint your Lordships by saying that this will be in due course, but these are important matters. Your Lordships have rightly underlined their importance, and I will take that message back.

The seven principles of public life are woven into the codes of conduct for Members of this House and those of another place. The noble Lord, Lord Collins, complains that the seven principles are not in the foreword. They were put in the foreword of the previous version by the current Prime Minister, and I believe they are in section 1 of the Ministerial Code. The principles are central to the code, which sets the standards of behaviour expected of those of us who have served, do serve and will serve in Her Majesty’s Government, which I hope Her Majesty will oversee for many more years to come. The seven principles of course apply much more widely too. They apply to all civil servants, to those in local government and across public life.

There were some interesting references and thoughts in the debate on honour and a moral framework. The noble Lord, Lord Mann, said with a touch of regret that the time when honour was enough has passed. The right reverend Prelate spoke of the need for a moral framework, as did my noble friend Lord Cormack. It is certainly true that, long before the seven principles, there was a good and simple principle that reigned in your Lordships’ House which did not, in those days, have an army of institutions to police: that every Peer should stand on his or her honour. That may not be the whole answer, but I believe it is for each of us. The noble Lord, Lord Wallace of Saltaire, talked about conscience. Each of us must stand on what we believe is our honour and I will certainly always try to be truthful at this Dispatch Box.

I reject the assertion that standards of behaviour and honesty across public life or in other areas have declined to the degree that some of your Lordships have asserted. I would argue that there are some areas of public life where standards are higher and enforced more firmly, by both colleagues and opponents, than they ever were. All of us have the overriding duty not to betray the trust of the people, returning to the point made by the noble Lord, Lord Mann. There are big issues. The noble Lord, Lord Desai, reminded us that policies and politics are also things we are all judged on. We are not complacent about matters of ethics and conduct, or about upholding the principles of public life. We should all remain vigilant about the need to hold ourselves to the high standards the public expect of us, and to account for our behaviour.

There is another side to that. I have been guilty in the past and doubtless will be again of lashing out with criticism of people in other political parties who strive in all honour to do their best for the public and the public polity. I challenge the remark of the noble Lord, Lord Wallace of Saltaire, when he perhaps impishly said that the Church could not be Conservative because of a concern for the poor. Does he not believe that Conservatives strive to elevate the condition of the people and have ever done so since the days when Disraeli spoke of the two nations in our country? We should not throw so many stones at each other so furiously that perceptions, which many noble Lords have alluded to, that standards of behaviour have deteriorated become self-fulfilling prophecies.

We must be held to account. The noble Viscount, Lord Stansgate, made some interesting remarks on that, saying that we perhaps place ourselves at the mercy of powerful interests outside the House if we criticise each other when it is not justified. I do not challenge justified criticism. He also made some interesting remarks about resignation, which is of course the ultimate weapon—the ultimate resort—and he gave some very good examples.

Turning to some of the specifics in the debate before I run out of time, many noble Lords addressed the role of the independent adviser on Ministers’ interests and the Ministerial Code. The noble Lord, Lord Butler of Brockwell, in a thoughtful and in some places challenging speech, said that there is a balance here. There are difficult issues which must be reflected on. The reforms recently made represent the most substantial strengthening of the role of the independent adviser since its creation in 2006. I will not go through all the changes that were made but I will touch on a couple of the most important, which some of your Lordships alluded to. The independent adviser’s role has been expanded to include a new ability to initiate investigations in relation to allegations where there has been a breach of the code. That is a significant change. Some say that the long-stop demur of the Prime Minister is unacceptable. I have given instances where that might be necessary. The noble Lord, Lord Butler of Brockwell, added his own insights on that. However, it is a move forward.

The Ministerial Code now also includes new detail on proportionate sanctions for a breach of the code. I agree with what the noble Lord, Lord Butler of Brockwell, said on that. That was a recommendation, which we supported, of the Committee on Standards in Public Life. The Government have agreed that the independent adviser will also be consulted about revisions to the code, again as recommended by the Committee on Standards in Public Life. It was the opinion of the former independent adviser that this new regime was workable but now, in light of the recent resignation of the noble Lord, Lord Geidt, the Government have further committed to considering the adviser’s role and to reviewing how best this important function can be delivered.

Last week, the noble Lord, Lord Geidt, raised a number of issues in relation to the role of the independent adviser, as did the PACAC, to which he gave evidence just prior to his resignation. It is right that these comments be carefully considered, which means that time will be taken to reflect on them before a decision is taken on how best to fulfil the Prime Minister’s commitment to ensuring rigorous oversight and scrutiny of ministerial interests. I know that some concern has been expressed about the timing and potential outcome of this review. Let me echo the commitment made by my right honourable friend the Minister for the Cabinet Office earlier this week in the other place. The Government will undertake this work in good time. The independent adviser’s role is an important one and our commitment is that it should continue.

Be in no doubt that we remain fully committed to making sure that all Ministers maintain high standards of behaviour and behave in a way that upholds the highest standards of propriety, as the public rightly expects—and, frankly, carefully watches. Woe betide those whom the public conclude are irredeemable. We want to ensure that whatever arrangements are made, they are workable and can be trusted by Parliament and Ministers alike.

I reassure noble Lords that during this period of review, the process of managing ministerial interests will continue, in line with the Ministerial Code. I heard what the noble Lord, Lord Butler of Brockwell, said about Permanent Secretaries. In the interim, the code sets out that Permanent Secretaries in each department and in the Cabinet Office can provide advice to Ministers and play a role. We published transparency information just two weeks ago, in the form of the latest list of ministerial interests. I assure the noble Lord, Lord Mann, that transparency information is a key part of accountability. Accountability is one of the issues that one must reflect on in talking about creating statutory bodies which have oversight of elected officials or Ministers. To whom are such bodies ultimately accountable, in the way that the Prime Minister is accountable for the conduct of matters?

I agreed with what the right reverend Prelate the Bishop of Blackburn said about the need to adhere to a moral framework and with his remarks about a growing illiberalism in our society. That is not a comment about the Liberal party but about how a sense that one has to think one way appears to be emerging—he referred to the so-called cancel culture. That is a form of intolerance which is unattractive.

I was asked about the Northern Ireland protocol, and some noble Lords referred to breaking international law. We will have opportunity to debate the Northern Ireland protocol and indeed, shortly, matters relating to retained European law and the Bill of Rights proposals. The Government’s position as to the Northern Ireland protocol legislation is that it is lawful under international law, and the Government’s legal position is set out in the policy paper that the Foreign Office published online on the Government’s website on 13 June.

On secondary legislation, I accept that there is a widespread feeling in your Lordships’ House that this is a thorny topic. It is the position constitutionally that delegated powers are granted only by Acts of Parliament, each one of which will have been thoroughly scrutinised in both Houses of Parliament. Your Lordships’ Delegated Powers Committee rightly challenges the Government, and the Government will seek to make sure that there is an appropriate balance between measures that are put in a Bill and those which, for various reasons, will need to be delegated. Ultimately, however, it is for Parliament and your Lordships’ House in the passage of legislation to consider these matters. For example, the Schools Bill was referred to as being currently scrutinised in Committee in the Lords; the Government are listening carefully and engaging closely with Peers on these important debates.

My noble friend Lord Wolfson, in an opening speech which one could not forget although it was quite early in the debate, made a powerful contribution on the rule of law. He recalled the events of 2005, which I think were a great sadness to many of us who were either working here or Members of the House at that time, when, I believe, ill-considered reform led to the changes in the office of Lord Chancellor which have taken place. He made no criticism of successor Lord Chancellors, and I endorse what he said about my right honourable friends Sir Robert Buckland and Mr Raab—I assure the House that their intent and desire to uphold the rule of law is absolutely clear. I will reflect carefully on my noble friend’s speech, but it is not a current priority for the Government to assess whether further legislative changes to the office might be necessary. The Ministry of Justice submitted evidence to this effect to your Lordships’ Constitution Committee inquiry into the role of the Lord Chancellor, which is published on the committee website.

I finish by saying that the Government continue to regard standards in public life as of paramount importance and the seven principles of public life as the bedrock of ethical conduct and integrity. The whole Government, from the Prime Minister down, are committed to making sure that all Ministers are held to account for maintaining high standards of behaviour and behaving in a way that upholds the highest standards of propriety, as the public rightly expect. As part of that commitment, we continue to consider carefully the recommendations of the Committee on Standards in Public Life and the other committees that have been referred to, and will update your Lordships’ House on this work in due course.

EU Retained Law

Lord True Excerpts

Thursday 23rd June 2022 Lords Chamber

[Lord Wallace of Saltaire (LD)]

My Lords, I was not sure whether to laugh or cry when I read the Statement. It takes us into a surreal world of fantastical Government, in which, as the Minister for Brexit Opportunities declares,

“our country will achieve great things.”—[Official Report, Commons, 22/6/22; col. 866.]

That is like Donald Trump promising he will make America great again—just as windy and as empty of content.

There is no evidence behind this Statement. I challenge the Minister to find any. A great deal of evidence was gathered and analysed on exactly this issue between 2012 and 2015 in what was labelled the balance of competences exercise. Eurosceptic Conservatives in the coalition Government believed that an extensive survey of business, sector by sector, would produce a long list of unnecessary Euro regulations that the UK Government could then demand to be renegotiated.

Three Ministers oversaw this exercise: David Lidington, Greg Clark and myself—two Conservatives and a Liberal Democrat. Sector by sector the responses came in, saying that companies were happy with the current balance between domestic and European regulation. Several transport companies argued for greater emphasis on common European regulation rather than less of it. The Scotch Whisky Association, whose then chief executive was David Frost, now the noble Lord, Lord Frost, was particularly enthusiastic about the advantages of common regulation with the European single market. Of course, that was before the noble Lord’s damascene conversion from evidence-based argument to embittered opposition to everything European.

Can the Minister tell us what consultations the Government have conducted in the past year with large and small companies before committing themselves to diverge from EU regulations in the way Mr Rees-Mogg plans? My understanding is that UK exporters, both large and small companies, would much prefer the Government to maintain close alignment between UK regulations and those in our largest overseas market. Does the Minister have any recent evidence to the contrary? Does he understand that the Government have any recent evidence to the contrary?

The chimera of making a bonfire of regulations has appealed to the ideological right ever since Friedrich von Hayek and Milton Friedman. Belief in the superiority of unregulated markets has survived through stark evidence to the contrary, as in the loose regulations that led to the Grenfell fire. Margaret Thatcher understood that a well-regulated market is fundamental to a thriving economy, which is why she pushed for the common regulatory structures of the European single market. British Ministers and officials played a major role in creating that common single market. Many of the regulations that Mr Rees-Mogg is now denouncing were shaped by UK efforts, not imposed by foreign Governments on a powerless UK, as he is now suggesting—but Mr Rees-Mogg’s career has been entirely in finance rather than the real economy of production, marketing and exporting, and much of it offshore in Hong Kong, Singapore and other low-tax financial jurisdictions.

Mr Rees-Mogg is also the Minister for Government Efficiency. He notes in his Statement the extra work that Whitehall officials have undertaken to grasp these “Brexit freedoms”, as he puts it. He does not note that leaving the EU and setting up a range of national regulatory agencies to replace those we shared with our European partners has required a substantial increase in both the number of officials and the costs involved. Part of our contribution to the EU budget went towards funding those common agencies; some of them, such as Europol, were led by British officials. Yet at the same time as being Minister for Efficiency—that wonderfully odd phrase—Mr Rees-Mogg is pushing for a sharp reduction in Civil Service numbers, without regard to the additional tasks that it is taking on. Can the Minister explain how the Government propose to manage this additional effort while slashing the number of staff?

There are more windy comments in the Statement about restoring the sovereignty of Parliament, followed by the declaration that most of this will be pushed through under secondary, even tertiary, legislation, without effective parliamentary scrutiny. The illusion that we now stand imperially sovereign in the world, freed of the European yoke, is punctured by the letter that the noble Lord, Lord Grimstone, circulated yesterday, announcing that we are opening trade negotiations with the Gulf Cooperation Council—in which we will not mention civil or political rights so as to avoid offence. This Government are willing to negotiate and compromise with the GCC but not with our democratic neighbours. Can the Minister explain how giving concessions to the Gulf autocracies avoids limiting UK sovereignty while Mr Rees-Mogg insists that any compromise with the EU infringes on UK sovereignty?

Last night, I wondered whether the Minister might revolt as he attempted to justify this irrational ideological waffle and follow the example of the noble Lord, Lord Agnew, by walking out of the Chamber and the Government mid-Statement. However, I fear that he has not yet reached that point, despite the nonsensical Statement that he is forced to defend.

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

My Lords, there has been a rather obsessive theme from the noble Lord, Lord Wallace, today, who seems excited at the prospect that I might walk out of the Government. I can absolutely disabuse him of his expectation of that prospect. Unless the Prime Minister decides otherwise, I shall be extremely content to remain here and take the Brexit freedoms Bill through your Lordships’ House.

Having listened to the noble Lord, on the sixth anniversary of the Brexit referendum, I am inclined to say that the Liberal Democrat Party does not know whether to laugh or cry. His sneering response tells me that the Liberal Democrats, like the Bourbons of Naples, have learned nothing and forgotten nothing in their desperation to keep the United Kingdom in line with the European Union’s orders.

[Lord Wallace of Saltaire (LD)]

My Lords, I talked about what companies are saying to the Government, and that is about evidence. We are six years down the line from the Brexit referendum; by now we ought to be talking about what sort of relationship we have with the European Union.

[Lord True (Con)]

My Lords, the noble Lord has had one go, and I think I characterised his party’s position perfectly accurately. The party opposite gave a much more measured response and asked me some specific questions. He asked me one which I shall answer. Again, I am disappointed that, on this sixth anniversary, the Labour Party is still saying that it is not important, in effect, to examine these 2,400 elements of retained EU law, which have a status equal to United Kingdom Acts of Parliament. It is perfectly reasonable that those matters should be examined. My right honourable friend Mr Rees-Mogg made it very clear that it is not necessarily the expectation that all these will be swept away, as the noble Lord said. These matters will be looked at on their merits. Frankly, one of the examples that my right honourable friend gave in the other place was the power of vacuum cleaners. Perhaps if we had more powerful vacuum cleaners in this place, we would not have mice running around the place, gorging themselves on all the bits and pieces of crumbs that are left.

There is a serious issue here, despite what was said opposite. It is perfectly reasonable that departments examine the case for the continuation of this mass of regulations. This is the expectation of departments, in concert with interested parties. The noble Lord asked whether we had done consultation. We have engaged with a range of organisations with interest in retained EU law. We have worked closely with all departments, and their stakeholder groups through them across Whitehall. That engagement has included lawyers, academics, universities and other non-governmental organisations. More recently, it is well known that the Minister for Brexit Opportunities also issued a call to the British public, not I think through an organ widely read on the Benches opposite, on the regulations that they might wish to abolish—particularly focusing, as I think we should, on those that make life harder for small businesses, which shut out competition or simply increase the cost of operating. Through a large number of small changes, we can enact real economic change.

The noble Baroness asked about sunsetting, as she called it, and reports on that matter. The issue to which she referred is still subject to consideration of how the reforms will be carried forward in that respect. So far as the cost is concerned, I assure her that the dashboard was built by Cabinet Office officials using the Tableau software, and was created with no additional cost to Her Majesty’s Government.

As for the benefits, I give an undertaking to the noble Baroness on her perfectly reasonable and proper question that there will be an impact assessment published with the Brexit freedoms Bill when we bring it forward, and that will obviously be laid before your Lordships’ House.

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend for taking questions on the Statement. Of the 2,400 items of retained EU legislation, 570 come from the Department for the Environment, Food and Rural Affairs. I imagine that most of those of relate to phytosanitary, plant health, animal health, hygiene and welfare. If that is the case, does he not agree that most of those will in fact be retained as UK law after this exercise is completed?

[Lord True (Con)]

My Lords, I am not anticipating either way but as I said in my opening response, in reviewing retained EU law, Defra will obviously, as my noble friend asks, ensure that environmental law is fit for purpose and able to drive improved environmental outcomes while ensuring that regulators can deliver efficiently. It is an important piece of work that will make sure that the UK regulatory framework is appropriate and tailored to the United Kingdom. We have been very clear about our environmental goals and we do not resile from them. They are set out in the 25-year environment plan, the Environment Act 2021 and the net-zero commitment in the recently published Nature Recovery Green Paper. Any changes to environmental regulation in this context or any other will need to support those goals.

[Lord Bellingham (Con)]

My Lords, is it the intention of HMG to reform the EU Solvency II rules, which restrict investment by insurance companies to fixed-interest instruments, such as bonds? If we really do want to unlock further wealth and job creation, surely we need to allow insurance companies to invest in, for example, projects such as social housing and wind farms.

[Lord True (Con)]

My Lords, my colleagues in another department will have to answer on the specifics, but my noble friend is absolutely right to highlight that the area of financial services broadly is something of fundamental importance to the national economy, and indeed the Scottish economy. I assure him that my colleagues will continue to examine the areas of regulation to which he has referred, with a view to keeping our financial services sector dynamic and effective and a place where people from all over the world would wish to come and work.

[Viscount Stansgate (Lab)]

My Lords, I thank the Minister for the Statement. In the light of the remarks he has just made about consultation, and in advance of the Bill, can he tell the House what proportion of the measures that the Government hope to introduce will be promulgated by secondary, or indeed tertiary, legislation?

--- Later in debate ---

[Lord True (Con)]

My Lords, we are at the stage now where the dashboard has been published; submissions and comments will be made on it, and it will be refreshed quarterly. We will then have to consider the mechanisms. If it is decided that the regulation needs to be either repealed or substantially altered, we will have to consider the legislative mechanism, which would have to be case by case. When we publish the Brexit freedoms Bill, it will include elements that allow for the Government to implement their policies. At that stage, noble Lords will obviously be able to debate the appropriateness of the proposals that we put before them.

[Baroness Neville-Rolfe (Con)]

It is agreed by everyone that we have a productivity problem in the UK. As we have seen from history, one way of dealing with that is to sweep away anti-competitive legislation, including some that has been referred to in the debate. Does my noble friend the Minister agree that some operators benefit preferentially from their very existence and that it is essential to have the toughness needed to face them down? That can help small businesses, as my noble friend has said, and growth, and can, I hope, reduce bureaucracy. I am in danger of speaking for too long, but I mention that I have worked for most of my career in business and particularly welcome the promise to the noble Baroness, Lady Chapman, of an impact assessment on the Bill.

[Lord True (Con)]

My Lords, I am very grateful to my noble friend. It seems quite a long time ago that we were working in Downing Street on the aspiration of reducing regulation. She makes interesting points which one does have to bear in mind in consulting on and considering the way forward.

It is important that we make it easier for small businesses, and it is also true—I am not criticising anybody or any organisation in particular—that familiar regulatory environments, particularly complex ones, are not necessarily as perturbing to very large organisations which have large departments to deal with them as they are to small businesses and would-be innovators and entrants. That is a balance one has to consider across the regulatory environment, including in this exercise before us today.

[Lord Lilley (Con)]

My Lords, I recall that when I went to Brussels as a Treasury Minister or as Secretary of State for Trade and Industry, my brief to discuss forthcoming legislation and regulations invariably said, “Minister, we don’t really want this, but we can’t stop it. Could you try to seek at least one or two of the following half dozen amendments to it?” If we did achieve one or two, that was counted as a great triumph. Will my noble friend insist that departments go back to the briefs that were given to Ministers at the time the regulations went through and look for the changes that we wanted to secure but did not at the time? Will he also reflect on the irony of the Liberal Democrats complaining that secondary legislation will be used to change some of the regulations we inherited, given that they were all introduced under secondary legislation, which gave no option for Parliament to reject them at all?

Finally, since there is time for me to go on, will my noble friend reflect on the fact that the one thing we could do in the past was to gold-plate regulations, which we did? I pay tribute to my noble friend Lord Hailsham, on the privy counsellors’ Bench, who introduced a system to try to limit gold-plating of regulations when we implemented those of the EU. Will my noble friend the Minister make sure that when we modify these regulations, we do not succumb again to the temptation to gold-plate them and that we go back to the Hailsham dashboard—it was called something like that—to make sure that we do not make them more regulatory, rather than less?

[Lord True (Con)]

My Lords, a lot was wrapped up in there. I agree with what my noble friend said at the end and with his tribute to my noble friend Lord Hailsham. There is an eternal tendency, partly because of some of the factors I referred to in my previous answer, to gold-plate and overregulate, and it constantly has to be held in check. Perhaps one of the many benefits of this exercise is that it is departments that will have to make the responses, take the work forward under the supervision of the Brexit Opportunities Unit and consider the kind of points that my noble friend makes.

Finding the papers from the past is an interesting challenge. I am sure that most of those have now been publicly released. I read today that the papers of the Blair Government were being released by the National Archives, so I am sure that the briefs to my noble friend are available to all and sundry. Perhaps we should all go and have a look at them.

House adjourned at 5.33 pm.

Public Procurement (International Trade Agreements) (Amendment) Regulations 2022

Lord True Excerpts

Tuesday 21st June 2022 Lords Chamber

Moved by

[Lord True]

That the draft Regulations laid before the House on 25 April be approved.

Considered in Grand Committee on 15 June.

Motion agreed.

Covid-19 and the Use and Scrutiny of Emergency Powers (Constitution Committee Report)

Lord True Excerpts

Tuesday 21st June 2022 Grand Committee

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

My Lords, I thought that the way the noble Lord, Lord Collins, opened and closed his speech was totally appropriate. Some of the finest moments in these terrible times—which, to agree with my noble friend Lady Foster, none of us wishes to see again—involved the sense of solidarity, togetherness and defiance which is a great part of human character. All those things were there, along with the great dedication of the public servants and the responders who served in every part of these islands, whatever the nature of their Government of the time. That part of this experience was a great good, and one that we should carry with us; perhaps we forget it rather too often. I am grateful to the noble Lord for reminding us of that.

I begin by thanking the noble Baroness, Lady Drake, and the Lords Constitution Committee for the comprehensive reports—not just this one, but the three reports—published during its inquiry into the constitutional implications of Covid-19. It is absolutely right that regulations made by Governments—every Government—are thoroughly scrutinised. Such scrutiny improves the legitimacy of, and respect for, legislation in wider society. It is a fundamental part of the principles of our historic democratic polity. I acknowledge and own the duty on behalf of the Government.

Although the most recent report from your Lordships’ committee was published in June last year and responded to in writing by the Government in October—not in every respect satisfactorily, I hear; if I fail to respond satisfactorily I will take away and reflect on what I have heard in the debate—I very much welcome the report and the fact that the Committee has taken the opportunity to debate this important issue today. I am grateful to all noble Lords for their contributions. I candidly acknowledge the importance of the points made by so many in the debate.

The coronavirus pandemic had an unprecedented global impact that severely affected public health, the economy and society in sometimes devastating and disorienting ways, as the noble Baroness, Lady Fox, described. The Government, faced with an unprecedented and unknown enemy, took early and decisive action by introducing a range of measures to combat the virus, increase testing, support detection, reduce transmission and engage in research to improve our understanding of the virus.

Legislation was needed to make this work possible, and that legislation had to be addressed swiftly. When the virus started, I was not even a member of the Government; I was in retirement, living happily in Italy, rather bemusedly reading reports in the Italian newspapers of towns in the north of Italy being eccentrically cut off by the Italian Government because this virus had arrived. Some time later, I found myself being presented with comprehensive legislation to deal with a virus that, we then knew, represented a profound threat of loss of life.

Having moved from being a private citizen to being a Minister who was partly responsible, I was struck by the enormity of some of the measures put forward. My reaction was that they would be severely contested and challenged in Parliament, because of their enormity and gravity, only to find that there was swift and general agreement across the parties to take these pieces of legislation through. It is important to remember that context: legislation had to be developed very rapidly.

I will provide a brief summary of these pieces of legislation. Although they are well known to your Lordships present, they are worth placing on the record in Hansard. The Public Health (Control of Disease) Act 1984 was designed to give the Government appropriate powers in the event of a serious public health situation. These powers, set out in Part 2A of the Act, were added following the global SARS outbreak in 2008. As many noble Lords have said, this was the main legislation used to deliver the Government’s response to Covid-19. It enabled the public health response to the pandemic and the rapid implementation of restrictions, including local and national lockdowns. I will come on to the variations later. This public health Act was the legal basis for many of the measures essential to limiting social contact, including the “stay at home” order in March 2020, which has been referred to, subsequent national and local lockdowns, measures requiring face coverings and isolation, and those on international travel.

It was felt that the fast-moving, urgent and often unpredictable nature of the pandemic—that was how it was seen—necessitated the use of the emergency procedure under Section 45R of the 1984 Act in a number of instances. Regulations made using the emergency powers in Section 45R were not always debated before they came into force, but they required debate and approval within 28 days or they would lapse. Parliament specifically approved the Secretary of State’s ability to use Section 45R to cover an emergency such as the pandemic. The decision to use it was deemed necessary based on the urgency of the situation with the rapid progress of the virus at the time and the transmission risk that the statutory instrument was designed to tackle.

The “made negative” procedure, which allows a measure to become law without debate, under Section 45Q of the 1984 Act, was also used in a number of instances. For example, travel regulations made under Section 45Q were made under the negative procedure, so were not debated before they came into force. That has been the subject of complaint and comment in your Lordships’ debate and is noted in the report.

For nationally significant Covid-19 legislation made under the public health Act, including that implementing national lockdowns, the Government have sought to provide a vote in Parliament ahead of any regulations coming into force, but this was always subject to the urgency of the situation, to parliamentary timetabling and to the sitting of Parliament. Parliamentary approval is needed to approve any regulations made using the emergency procedure within 28 sitting days, otherwise they would cease to have effect. Inevitably, the fast-moving and urgent nature of the pandemic led Ministers, at the time, to use the “made affirmative” procedure in a number of instances and the “made negative” procedure for travel-related regulations.

The other instrument that is the subject of this distinguished report, the Coronavirus Act 2020, came into force on 25 March 2020—a month after I returned to join the Government—and has played a critical role in the Government’s Covid-19 response. That Act was introduced during a period of extreme uncertainty, when the future course and potential impacts of the pandemic were unknown. It was designed to be a facilitative and supportive piece of legislation, creating a framework to supplement the public health measures enacted via the public health Act.

The Coronavirus Act did not introduce lockdowns or restrictions. Some have commented that, in their belief, it might have, but it did not. It enabled action in five key areas: increasing the available health and social care workforce; easing and reacting to the burden on front-line staff; supporting people, including through setting up the Coronavirus Job Retention Scheme, which supported 11.7 million jobs, and the Self-employment Income Support Scheme, which protected the livelihoods of nearly 3 million individuals; containing and slowing the virus; and managing the deceased with respect and dignity.

Sunsetting is an interesting and important concept in legislation. The temporary provisions within the Act had a two-year lifespan from when the Act was passed by Parliament. These sunset provisions ensured that the Government had the necessary powers to respond to the pandemic for a proportionate amount of time. The Government removed powers throughout the pandemic as and when they were no longer needed. Thanks to the progress made in the fight against the virus, the Government were able to expire 20 non-devolved temporary provisions in the Act early and suspended a total of four provisions which have since expired. The majority of the remaining temporary non-devolved provisions expired at the end of 24 March 2022. The Government have extended just five temporary provisions within the Act for up to six months beyond 24 March.

I was asked about co-ordination across the United Kingdom. This was a theme of the debate; many noble Lords—the noble Baronesses, Lady Drake and Lady Bryan, the noble and learned Lord, Lord Hope of Craighead, and others—raised this question. The noble and learned Lord referred to what he thought was a failure to respond to chapter 3 of your Lordships’ report. The noble Baroness, Lady Fox, came at this from a slightly different direction from other noble Lords.

The UK Government determined the lockdown rules that applied in England, while the Scottish Government, the Welsh Government and the Northern Ireland Executive were responsible for introducing and lifting restrictions in their respective parts of the United Kingdom. This is the result of devolution arrangements that have been in place for more than 20 years. Yes, they became particularly visible during the Covid-19 pandemic, but the way to proceed in each of the jurisdictions was a matter for the Administration there.

I slightly took issue with the noble and learned Lord, Lord Hope. I understand the point he was making when he was complaining about a union flag being displayed behind the Prime Minister. The union flag is the flag of our United Kingdom. There are many people in Scotland and every part of this kingdom who have been proud to go out to serve and, indeed, shed their blood under the union flag. I do not believe that one needs to apologise for the display of that flag by the Prime Minister of the United Kingdom.

That said, the Government have been determined to work collaboratively with the devolved Governments. Working together on health and social care is ingrained in the values of our National Health Service and our social care sector, and your Lordships’ committee is right to ask and press about this. The Secretary of State for Health and Social Care continues to have regular engagement with the devolved Governments’ Health Ministers to deliver responses that benefit people across the whole of the United Kingdom.

Between March 2020 and May 2022, 65 United Kingdom Health Minister forums were held, and there was further engagement at junior ministerial level. This engagement included sharing information, resolving issues and progressing areas of mutual concern in responding to and recovering from the pandemic. Key issues of discussion in these meetings have included: vaccine development; the national testing programme, including testing resilience; social care; review of the Coronavirus Act; Covid certification; and winter planning and recovery. On Covid certification and the app, again, it is a matter for the Scottish Government if they wish to design an app. Of course one would wish that there were joined-up relations; this is what the United Kingdom wishes to see.

Ministerial engagement and intergovernmental communication are ongoing. That has been underpinned by ongoing engagement between civil servants across numerous policy areas. It has also included conversations between the Chief Medical Officers, as well as joint devolved government representation on key programme boards within the UK Health Security Agency to co-ordinate various programmes.

People ask why, therefore, there have been such different approaches to Covid across the United Kingdom. Ministers and officials from the United Kingdom Government have worked closely with the devolved Governments to ensure a co-ordinated approach to the response to Covid-19 across the United Kingdom. Although many, and perhaps even I may regret the differences in public health approaches in reflecting and responding to different local circumstances, this diversity is a strength of our devolved systems. This has always been asserted by many in your Lordships’ House and many in our nation, and has been delivered by successive Governments.

In July 2020, the United Kingdom Government reaffirmed their commitment to frequent engagement with the devolved Governments on areas of shared interest. To take up a point directly asked by the noble Baroness, Lady Drake, following the review of intergovernmental relations the Secretary of State for the Department of Health and Social Care will continue to engage regularly with counterparts through the interministerial group on health and social care. The group will continue to consider and discuss matters relating to health and adult social care policy and strategic policy developments between the portfolio Ministers leading on these issues within the United Kingdom Governments.

I was also asked about the Covid inquiry. The Government are very grateful to the noble and learned Baroness, Lady Hallett, for leading such a full and extensive consultation on her terms of reference and producing a detailed set of proposed refinements to the draft terms of reference. She has published a set of proposals. Under the Inquiries Act, the Prime Minister must also consult the devolved Administrations before finalising the inquiry’s terms of reference. That will be done and, once these steps have been taken, he will publish the final terms of reference and the formal work can begin. The Prime Minister is considering fully the noble and learned Baroness’s proposals, is consulting the devolved Administrations and will publish the terms of reference.

I was asked when the inquiry will start and finish. It would be presumptuous of a mere Minister of the Crown to dictate to the chair of such an important inquiry. It will begin its formal work once the terms of reference are finalised. From that point, the process, procedure and timing of the inquiry stages will be for the independent chair to determine. The noble and learned Baroness, Lady Hallett, has set out that her investigations will begin once these terms of reference are finalised. She said that she intends to gather evidence throughout this year, with public hearings beginning in 2023. She has made it clear that she will do everything in her power to deliver recommendations as soon as possible.

I acknowledge that lessons must and will be learned for us all. The Covid inquiry has two key aims: to understand the facts and to learn lessons from the pandemic. Although the timing is up to the chair of the inquiry, those are the fundamental things we must all address. It is expected that government departments also conduct post-legislative scrutiny on government legislation within three to five years of the Act obtaining Royal Assent. This will be another opportunity for further lessons to be learned.

Nothing is perfect, and certainly Governments are not perfect. In this extraordinary situation throughout the pandemic, to aid parliamentary scrutiny, the Government maintained a constant dialogue with parliamentarians, making regular Statements in both Houses. Since March 2020, in both Houses, the Department of Health and Social Care has led on 56 Oral Statements, 14 general debates, five Lords debates, 113 SIs, 53 Oral Questions, 28 Lords Topical Questions and so on. This engagement with the House was supplemented by regular No. 10 press briefings—about which some have complained—including direct questions from members of the public.

I agree that here too there are lessons to be learned, and your Lordships’ report will be a document of lasting relevance. The Government will always endeavour to provide opportunities for pre-legislative scrutiny. We firmly believe that decisions are made stronger through scrutiny and debate. Any changes to the public health Act or other emergency legislation, such as the Civil Contingencies Act, will be subject to parliamentary scrutiny.

In conclusion, I thank your Lordships again for your valuable contributions in this debate. As we move forward from the response to Covid-19 it is crucial that we learn lessons wherever possible and ensure that our democratic values and our love of liberty are upheld. I reiterate my thanks to the Constitution Committee, which produced these reports, and those who have continued to uphold the values of this House in scrutinising the work of the Government. Any Government is stronger for facing your Lordships’ House.

The Government remain fully committed to ensuring that Parliament has ample opportunities to scrutinise the actions taken during the pandemic and our continuing approach to emergency legislation. Emergency powers and temporary legislation must always be used with the utmost discretion. They should be effective but proportionate to the circumstances that present themselves. That is the challenge that your Lordships’ Constitution Committee has added to; that is the affirmation I make from the Dispatch Box.

The Government will continue work to ensure that the correct legislative vehicles are in place to deal with any emergency scenario that presents itself. This includes retaining the Part 2 powers in the Civil Contingencies Act as an option of last resort while keeping other options with which to react to specific issues. Any changes to legislation, powers or the processes by which we use them will always be subject to parliamentary scrutiny, and the Government, whatever their past failings and whatever the difficulties of the situation we went through, achieved many things for this country in responding to this unprecedented pandemic and led us through difficult circumstances into what we hope are better times. We will always endeavour to provide opportunities for pre and post-legislative scrutiny.

Houses of Parliament: Co-location

Lord True Excerpts

Thursday 16th June 2022 Lords Chamber

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

My Lords, my father said that the greatest cricket innings he ever saw was played by Sir Jack Hobbs on a sticky wicket. I am afraid I am no Sir Jack Hobbs, but I will try to answer the debate. I start by thanking my noble friend Lord Norton of Louth, who opened with a characteristically informed and thoughtful contribution whose spirit has been echoed with unanimity throughout the debate. I always wait for the radical moment with the contribution from the noble Lord, Lord Desai. He wanted to build a new central Parliament with more space for everybody and more desks, but even he, in his radicalism, was clear that collocation was desirable.

Let me try to respond. I take up what the noble Lord, Lord Butler of Brockwell, said: it may be the Colosseum—I confess that I am a Christian—but I do not particularly feel in the face of lions. I hope your Lordships will hear that I am a lamb that is ready to lie down with some of the things roared out by the lions today.

I have, as usual, enjoyed the great depth of constitutional understanding and deep knowledge of history demonstrated today. I will start by making a fundamental point on the constitutional position and functioning of the House of Lords, which underpins many of the questions in the debate today. It is a point I have made before at this Dispatch Box and it is this: by the principle of exclusive cognisance, any decision of its location is a matter for this House itself to decide on. The Government—I speak at this Dispatch Box as a government Minister—recognise and respect that position. I have made this point in previous debates, but I welcome the opportunity to put it on record again.

Let me turn to the core topic of the debate: the case for the collocation of both Houses of Parliament. As many noble Lords have stressed, there are important conventions that have governed the collocation of both Houses and, in turn, these conventions have shaped how this Parliament does its business. There are ceremonial practices predicated on collocation—I agree that the noble Lord, Lord Blunkett, made a brilliantly amusing speech on this topic—and these are an important aspect of the tradition and inspiration that marks our parliamentary democracy. Her Majesty the Queen opens Parliament and she is not allowed into the House of Commons. She does it from this place but with Members of the House of Commons present at the Bar to hear that statement.

The right reverend Prelate the Bishop of Southwark referred to the action of Charles II taking Parliament to Oxford in 1681. That was to try to frustrate what was probably the second or third Exclusion Bill, to stop his brother acceding to the Crown. It did not work. Removing people from the centre is not necessarily effective, as Charles II found. Per contra, he found that coming and sitting at the fireplace in the House and watching proceedings in person allowed him to exercise more influence, because everything was in the same place at once—but I stray into historical matters.

Let me come to the practical day-to-day arrangements. I further agree with what so many have said that proper accountability and scrutiny requires that Ministers are close to Parliament. Many noble Lords have made the very pertinent point that close engagement and regular interaction with the other place facilitates better working relationships. In fact, as we have heard from many in today’s debate, one of the clear lessons of the pandemic was that although virtual working is possible, there is real value in having personal, face-to-face engagement. I have greatly benefitted, both as a Minister and as a Member of the House, from being physically present in the House, and, as a Minister, from hearing the views of noble Lords in the margins of proper debates, in the kind of daily engagement that takes place. My worst experience since I have had the honour of being a Member of your Lordships’ House was sitting at my kitchen table during the lockdown, trying to answer questions from your Lordships, with somebody screaming in my ear that there was too much light coming in from the right. I pay tribute to the work done to make the hybrid and remote House work, but a Minister’s first duty is to be here at this Dispatch Box.

Furthermore, if we consider elements of the legislative process, particularly perhaps when there is disagreement between the Houses in ping-pong, it facilitates effective working and communication if the two Houses are in close proximity. I well remember when I was private secretary to the Leader of the Opposition, in the days of the Labour Governments of Mr Blair and Mr Brown, that when there was a difference, Cabinet Ministers, including the noble Lord, Lord Blunkett, would come in person and talk to colleagues in the Opposition about difficult issues between the two Houses. I cannot speak for the quality of the language that was always used, but the physically present conversations helped progress business.

In summary, this House is part of a legislature, and in any consideration of its future, the exigencies of parliamentary practice and procedure will always have to be considered. Those are the points that your Lordships have made and I agree with all of them.

A number of noble Lords referred to restoration and renewal, opened by my noble friend Lord Fowler. Obviously, this is really a matter for Parliament and not for a government Minister to respond to, but let me address some of the points made. As noble Lords will be aware, the joint commission has now published its report and it is currently planned—and this is a matter for your Lordships—to seek a revised mandate from both Houses before the Summer Recess. Parliament is now reflecting on the future of the R&R programme. As noble Lords have noted, the question of decant will now have to be reviewed, but such broader questions are for consideration at a later date and are not part of the decisions of the joint commission that will be put to the House before recess. My noble friend Lord Hayward asked whether staff in this House would be consulted. The joint commission recognises the need for staff consultation, and its report sets out its intention to consult staff on the next stages of the R&R programme.

My noble friend Lord Balfe asked specific questions relating to the QEII Centre contract. I will come back to the question about consultation on this, but in relation to the contract I recommend that the noble Lord raises this with the House authorities, as they would be more properly able to answer it. The £11 million mentioned in the Times is from the R&R budget, which is managed by Parliament.

Both commissions on R&R were concerned, as my noble friend Lord Fowler and the noble Lord, Lord Best, referred to, by the proposals brought forward by the sponsor body, which deviated substantially from the initial estimates relating to cost and schedule. The independent assurance panel made it clear that the current model is unlikely to be viable.

On bringing the scheme in-house, the commission’s proposals are intended to ensure that necessary work can be started sooner and better meet the needs of the parliamentary community. There is the prospect of bringing certain projects forward more quickly than current projections. My right honourable friend the former leader of the House, when on the Commons commission, helped encourage the House authorities to conduct more work in the House ahead of timetable, including the northern estates project.

On restoration and renewal, let me be clear and repeat that this is a parliamentary programme and decisions on how to proceed are for Parliament. However, I hope we can agree that it is in the interests of the Palace of Westminster and the British taxpayer if both government and Parliament work together.

Behind the debate has been the question of Parliament moving outside London. I am not advocating that Parliament should move outside London; I have responded on the importance of collocation. My noble friends Lord Cormack and Lord Balfe both referred to the fact that the Companion to the Standing Orders allows for Select Committees to be given the power to

“adjourn from place to place.”

Certainly, we wish the proceedings and activities of Parliament to be more open to people around the country. However, it is already possible for a Select Committee which ordinarily meets in Westminster to sit and hear evidence outside the precincts of the House, and this happens. When I had the privilege to chair a Select Committee of your Lordships we met in what will soon be, I am pleased to say, the city of Doncaster, and we were very well informed by that. Arrangements are possible, though practical arrangements and questions of benefit and economic cost have to be weighed. These are considerations for your Lordships to weigh. These are decisions for the House.

Reference has of course been made to the letter which was written by my right honourable friend the Secretary of State. Having read it, I understand that he said that he would welcome the House of Lords playing a role in the levelling-up agenda and suggested a number of cities as illustrative options. I have said how in one respect, through Select Committees, the House of Lords and the other place can be more open to other parts of the country, and we are already. As the debate today has shown—I welcomed the remarks of the noble Lord, Lord Butler, on this—your Lordships’ House is carefully considering in this context the Government’s priority of levelling up, and balancing that with other priorities, which must include how best to further an effective and efficient Parliament, holding the Government to account, and the interests of the Palace of Westminster. I repeat that the questions of decant and location are decisions for a sovereign Parliament.

[Lord Cormack (Con)]

I asked my noble friend specifically, as did other noble Lords, whether the letter of Friday 13 May was consulted on with the Prime Minister and the Leader of this House, and also whether, following the answers of my noble friend Lord Greenhalgh, it is government policy that we ought to move. My noble friend is giving an excellent reply that seems to indicate a lot of sympathy with what has been said across this House today, but it would be helpful to have on the record what consultation there was before that letter was sent and before those answers were given.

[Lord True (Con)]

My Lords, I am coming on to consultation, as I indicated I would. I will make every effort to get to that and I will get there, because I acknowledge that I was asked that.

I was asked about York specifically. As your Lordships will be aware, there are already civil servants based there through the Places for Growth programme. This is part of levelling up. The Cabinet Office continues to support the relocation of civil servants, including senior grades, out of London, which includes to York—indeed, I have been there on ministerial visits. In this context, the Government had previously engaged with the York Central partnership and, as part of that, explored whether the space would allow for parliamentary activity should it be required, but this is not a current activity.

On consultation, my noble friend Lord Cormack again asked directly, in relation to the letter that was published, whether I, as responsible Minister in the Cabinet Office or otherwise, was consulted. The answer is that I was not. The Secretary of State for Levelling Up, Housing and Communities, is considering all options for levelling up, which is a key government policy. I have the utmost respect for this House. I recognise the strength of feeling on this matter; I will refer that feeling to the appropriate quarter. I am committed to keeping your Lordships updated on this, and I know that the Leader of the House will play a full and important role here. Let me reassure my noble friends and others that if I can be of any further service to your Lordships on this question, I will be happy to do so.

[Lord Stoneham of Droxford (LD)]

The Minister confirmed he was not consulted. What about the Leader of the House: was she consulted before the letter was sent?

[Lord True (Con)]

I have not asked the Leader of the House personally, but if the noble Lord looks at the record, he will find that it is not my habit either to brief newspapers or, frankly, to read them. I sound a bit like the judge who did not know who the Beatles were, but I have slightly better things to do. The day after this report appeared, I was before your Lordships’ House and I think I made the position very clear for the Government. I have made the position clear again for the Government—the whole Government. Who said what to whom at any time I cannot answer but, as the responsible Minister, I have given the House a very clear response.

[Baroness Smith of Basildon (Lab)]

That is a no, then.

[Lord True (Con)]

I am sure Hansard will record that intervention.

The commercial organisation of the QEII Centre is, as my noble friends Lord Young of Cookham and Lord Cormack referred to, a matter for the Department for Levelling Up, Housing and Communities, but the question of where the Lords should decant to if and when it decants is a matter for your Lordships’ House. I note the questions that your Lordships asked about potential wasted expenditure on the QEII Centre, but of course no final decisions on decant and location have as yet been taken by this House in relation to R&R. I echo the point made by the noble Lord, Lord Best: the question of decant has indeed receded and the programme itself is being reshaped. Again, it is for your Lordships’ House to manage spending relating to this House and to consider factors to ensure value for money for the taxpayer. On the other hand, the Department for Levelling Up considers the commercial value of the QEII Centre and the benefits of its revenue to the Exchequer. Any decision by any authority should take into account the interests of the taxpayer.

I conclude by once more setting out very clearly the Government’s position on the questions raised on collocation. The Government recognise that the House of Lords has a key role in scrutinising the Executive and as a revising Chamber. One of the most valued aspects of the House is the expertise and experience that Members are able to bring to the role of scrutinising and reviewing legislation, and the question of where your Lordships’ House is based is important, as noble Lords have said today, in the way it impacts on how we can do our job. We have heard a number of considerations to weigh in the balance, and this is a central consideration in maintaining the effectiveness of Parliament. Indeed, the interests of the Government in this question are the same as those of so many of your Lordships who have spoken: that any approaches to the location or operational changes to the House should not impact on its capacity to undertake its work as a scrutinising Parliament and hold Her Majesty’s Government to account and, further, that any decisions carefully weigh the best interests of the taxpayer, the economic interests of the country and, of course, the demands of the renewal of the Palace.

When your Lordships come to take a decision on restoration and renewal—as I say, it is not an executive decision—and any potential decision on decant, I know that they will carefully weigh and balance a number of priorities such as I have described. The Government stand ready to support your Lordships’ decision-making and will always welcome constructive discussion. I have heard the points made by your Lordships in today’s debate very clearly. As a proud parliamentarian, I understand the significance of easy access between the two Houses. I am at the service of your Lordships’ House to answer any further questions that noble Lords may have on this issue in future.

Independent Adviser on Ministers’ Interests

Lord True Excerpts

Thursday 16th June 2022 Lords Chamber

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

My Lords, with permission, I shall now repeat in the form of a Statement the Answer given to an Urgent Question in another place by my right honourable friend the Minister for the Cabinet Office and Her Majesty’s Paymaster-General. The Statement is as follows:

“Mr Speaker, I would like to start by thanking Lord Geidt for his work as Independent Adviser on Ministers’ Interests and, indeed, for his years of public service before he took up this role. I hold him in the highest regard. He has been honoured multiple times and he is an example, of course, of excellence and service in public life. I thank all Members of this House for their work in regard to this matter, but I think all the Members of this House will recognise that Lord Geidt has demonstrated diligence and thoughtfulness in the way he has discharged the role over the past year. We have benefited hugely from this service.

The Prime Minister will be issuing a letter in relation to Lord Geidt’s announcement. Both Lord Geidt’s letter and the Prime Minister’s reply will be deposited in the House shortly. As soon as I have those letters, or my office has them, they will be placed in the Library.

The Government are of course particularly disappointed that Lord Geidt has taken this decision, because only very recently—as the House knows from the debate last week—significant changes were made to the role and status of Independent Adviser on Ministers’ Interests. As I set out to the House last week, these changes represent the most substantial strengthening of the role, office and remit of independent adviser since the post was created in 2006.

Let me set out briefly the reforms to the role that the Prime Minister has introduced. First, the independent adviser has a new ability, which Lord Geidt and his predecessors did not previously have, to initiate investigations in relation to allegations where there has been a breach of the Ministerial Code. This is a significant change. Previously, as the House knows, as an adviser, he and his predecessors were not permitted to do this. The adviser will still need the consent of the Prime Minister of the day to start an investigation but, as I made very clear last week, this consent will normally be given.

The Ministerial Code now includes new detail on proportionate sanctions for a breach of the code. Previously, there was no proportionality in those sanctions, and even the smallest of technical breaches by a Minister in place might have resulted in an enforced resignation. Now there is a proportionate range of options, and that was exactly as recommended by the Committee on Standards in Public Life.

In future, the independent adviser will be consulted about the revisions to the code, as recommended by the Committee on Standards in Public Life. The Ministerial Code now includes more specific references to the role of the independent adviser and more specific references to the duty on Ministers to provide the independent adviser with all information reasonably necessary for the discharge of the role.

In conclusion, as Lord Geidt himself has made clear, the new arrangements are workable and he noted the increased transparency that they bring. The Government will of course now move to make new arrangements and we look forward to working within the strengthened system that I have described.”

My Lords, of course, since that Statement was made in the other place, the letters concerned have been published and laid in your Lordships’ House.

[Baroness Smith of Basildon (Lab)]

My Lords, I thank the Minister for repeating that Answer. He is right: the letters have now been published, but is there not a sense of déjà vu here? The resignation letter to the Prime Minister from the noble Lord, Lord Geidt, is just excoriating in its criticism. The loss of another—yet another—ethics adviser, is further evidence, if it were required, of Mr Johnson’s approach to office. The rules are for other people, not for him. They are there as a personal whim.

May I ask questions on two areas? The press briefings today indicate that the Prime Minister is in no hurry to appoint a new adviser and is even considering abolishing the role. I hope the Minister can kick that into touch and assure us that is not the case under any circumstances. Further, can he say something about how any inquiries—we know that there are inquiries—currently in play will be taken forward as a matter of urgency?

Can the Minister also say something on what Michael Ellis said in the other place, about the new arrangements in place to strengthen the code? The comment of the noble Lord, Lord Geidt, that these are not workable, is hardly a ringing endorsement.

There seems to remain a major flaw in this: the Prime Minister, who has a rather careless approach to rules, remains the final arbiter. One point made today was that it is important that, while the adviser can initiate investigations, they still need the consent of the Prime Minister. Does anybody really trust the Prime Minister with that consent?

[Lord True (Con)]

My Lords, on the ongoing investigations, I understand that appropriate steps will be taken to ensure that any work being undertaken by the independent adviser continues and is completed. Obviously, one regrets the resignation of anybody who has given such distinguished public service as the noble Lord, Lord Geidt, but I do not agree with the noble Baroness’s interpretation of it.

On her question about what will happen now, the noble Lord, Lord Geidt, raised a number of issues about the role of the independent adviser, as indeed did PACAC in its session earlier this week. As was said this morning, it is right to consider those carefully and take time to reflect on them before moving forward. However, this role has been important in public life.

[Lord Stoneham of Droxford (LD)]

If a friend of the Minister’s approached him for advice on applying for the job of the noble Lord, Lord Geidt, what advice would he give him or her?

[Lord True (Con)]

My Lords, it would depend on who the person was and whether they were qualified to perform the important role of an independent adviser.

[Viscount Hailsham (Con)]

My Lords, the Prime Minister will find it very difficult to recruit an independent adviser unless he agrees to at least three conditions. First, the independent adviser should have a wholly unfettered right to instigate investigations. Secondly, the report should be laid before Parliament in an unredacted form unless the independent adviser has previously agreed otherwise. Lastly, if the independent adviser recommends, the matter should be debated on the Floor of the House.

[Lord True (Con)]

My Lords, my noble friend makes interesting suggestions, as he always does. The recent changes have potentially very much strengthened the role of the independent adviser. On the role of the Prime Minister, it was made very clear again this morning by my right honourable friend the Minister for the Cabinet Office and, as I said, in the House previously, that normally the Prime Minister would accede. The exception referred to in the House is national security, which would be in certain cases a reasonable exception.

[The Lord Bishop of St Albans]

My Lords, at a time when public trust in the integrity of the Government and public life is being deeply damaged, would it not make sense for the successor of the noble Lord, Lord Geidt, to be appointed by an independent body rather than by the Prime Minister?

[Lord True (Con)]

My Lords, the role has a particular relationship to the Prime Minister in the conduct of a unique constitutional responsibility, which is the appointment of Ministers. I agree with the right reverend Prelate that standards in public life are essential—that is always my undertaking. As the Prime Minister set out in his letter to the noble Lord, Lord Geidt, only a few weeks ago, the seven principles of public life continue to be, as the Prime Minister put it,

“the bedrock of standards in our country and in”

this Government.

[Lord Young of Cookham (Con)]

My Lords, I join noble Lords in paying tribute to the work of the noble Lord, Lord Geidt, and I welcome the changes that my noble friend referred to in his answer to my question last week. Reverting to the question posed by the noble Baroness, Lady Smith, and my noble friend Lord Hailsham, can my noble friend confirm that the only reason the Prime Minister would exercise a veto on a forthcoming investigation would be reasons of national security and no other reason?

[Lord True (Con)]

My Lords, I cannot be drawn on that. I gave an example. I also stated—the Government have stated it repeatedly—that the normal expectation would be the course that the noble Lord favours. This role has been strengthened very recently and those changes were discussed with the noble Lord, Lord Geidt. They have been agreed and found to be workable and, as I said, in the light of the events and the PACAC meeting, further careful consideration of how best to proceed will be undertaken.

[The Lord Bishop of Leeds]

My Lords, we know that the Prime Minister deems the Nolan principles vital. Why has he not really responded to Sue Gray’s report, where the question of leadership was raised?

[Lord True (Con)]

My Lords, this is straying into a political remark, but the Prime Minister has given clear leadership to this country, and he was elected to be Prime Minister of this country—in view of the way he was pointing the country—by one of the largest mandates ever given to a Prime Minister.

[Lord Judge (CB)]

My Lords, I came running along the Corridor but I did not quite get into the Chamber before the noble Lord, Lord True, stood up, so perhaps I may be forgiven for asking this question.

Normally speaking, it is not a good idea for any individual to be judge in his own cause, whether because as a matter of fact it is a bad idea, or because of the public perception that it is, or may be, or may lead to an inappropriate result. Why is the situation of the Prime Minister different?

[Lord True (Con)]

My Lords, first, the Prime Minister has set out the reasons in the specific case to which the noble and learned Lord may be alluding: the fixed-term penalty notice and why he did not think that was a breach of the Ministerial Code. That has perhaps been the focus of most of the criticism. The fundamental position is that the constitutional position in this country is that the Prime Minister is responsible for the appointment of Ministers and the holding of office, and that is where accountability of the Prime Minister lies: first, to Parliament and secondly to the people. There is accountability, my Lords.

[Baroness Tyler of Enfield (LD)]

We read in the press today that it was indeed a trade issue that finally pushed the noble Lord, Lord Geidt, over the edge rather than partygate. Indeed, it was said at one point this morning that it was to do with commercially sensitive measures that would lead to a

“purposeful breach of the Ministerial Code”.

Is the Minister able to cast any light on this?

[Lord True (Con)]

The letter from the Prime Minister alluded to this. Noble Lords will see from the details in the letters themselves that they allude to commercially sensitive matters, so, clearly, I cannot get into further detail beyond what is set out in the letters: you have the Prime Minister’s words. But I draw your Lordships’ attention to the fact that the Prime Minister was seeking guidance on the Ministerial Code in this particular instance.

[Baroness Bennett of Manor Castle (GP)]

Can the Minister tell me why the noble Lord, Lord Geidt, as an ethics adviser, was asked to give advice on compliance with international law over steel tariffs, but Sir James Eadie, First Treasury Counsel, was not asked about the legality of plans for the Northern Ireland protocol?

[Lord True (Con)]

My Lords, I have already said that I am not going into speculative comments on what may or may not have been the subject of a commercially confidential matter under consideration.

[Viscount Chandos (Lab)]

Can the Minister name one other role, in public life or any other area, where the ultimate decision as to continuing in that role is left to the person in that position?

[Lord True (Con)]

My Lords, the decision on whether the Prime Minister continues in office will rest with the British people when the time comes.

Public Procurement (International Trade Agreements) (Amendment) Regulations 2022

Lord True Excerpts

Wednesday 15th June 2022 Grand Committee

Moved by

[Lord True]

That the Grand Committee do consider the Public Procurement (International Trade Agreements) (Amendment) Regulations 2022.

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

My Lords, the instrument brought forward today will give legal effect in domestic regulations to the United Kingdom’s procurement obligations under the free trade agreement between the UK and EEA EFTA states of Iceland, Liechtenstein and Norway. The EFTA agreement sought to reflect many of the provisions of the EU-EFTA agreement by which the UK was bound when an EU member state. This is part of the Government’s wider approach to provide continuity, as far as possible, in existing trade and investment relationships with third countries that had an agreement with the EU before we left.

The UK-EFTA agreement was signed on 8 July 2021 and completed its scrutiny period prescribed under the Constitutional Reform and Governance Act in October 2021. This instrument is concerned with implementing the procurement obligations contained in that agreement. The procurement provisions will ensure that UK businesses will continue to be able to access procurement opportunities in these three countries. This coverage is reciprocated by the UK giving businesses from those EFTA states no less favourable treatment when conducting its procurements covered by the agreement.

The UK has an open procurement market underpinned by principles of non-discrimination and equal treatment. However, without this instrument, there is a risk that, in respect of procurements covered by the agreement, relevant EFTA businesses will not be entitled to the legal remedies that the UK has committed to in the agreement. This instrument therefore ensures that we fulfil our obligations.

In terms of the coverage in the agreement, the UK is an independent party to the World Trade Organization’s Agreement on Government Procurement—or GPA, as it is known—along with Iceland, Liechtenstein, Norway and other major world economies. The GPA aims to mutually open global public procurement markets and is worth some £1.3 trillion in guaranteed access to global procurement opportunities for UK firms.

The UK-EFTA agreement incorporates the relevant GPA provisions, and goes further. The procurement coverage is similar to the UK’s coverage under the EU’s agreement with the EEA EFTA states, with some exceptions including in respect of health services.

This instrument is being made using powers set out in Section 2 of the Trade Act 2021. It will add the UK-EFTA agreement to the existing schedules of international trade agreements contained in the various UK and Scottish procurement regulations to ensure that no less favourable treatment is accorded to businesses of Iceland, Liechtenstein and Norway, where the procurement is covered by the terms of the agreement. It will also make explicit in those procurement regulations that contracting authorities can make inquiries as to whether subsidies form part of an abnormally low tender, as provided for in the agreement.

Importantly, these amendments do not add any burdens to the UK’s procurement process, nor do they reduce any of the UK’s procurement standards.

The provisions will be implemented across the United Kingdom. We have consulted officials from the devolved Administrations throughout the process. We have also formally notified each Administration, via ministerial letters, of our intention to lay this instrument. The Scottish and Welsh Governments have formally agreed to our approach and the Northern Ireland Executive Minister responsible for procurement has confirmed that he did not have any objections. I therefore thank each Administration for their engagement and collaboration.

Any amendments to the procurement coverage in the UK-EFTA agreement, or other international trade agreements, will require further legislation to give them legal effect. Any future trade agreements which the UK signs or has signed—for example, with Australia and New Zealand—will be implemented by separate legislation.

I hope that noble Lords will join me in supporting these draft regulations. I commend them to the Committee and beg to move.

[Lord Lansley (Con)]

My Lords, I am very glad to have the opportunity to say a few words about these regulations and I thank my noble friend for introducing them so clearly. As somebody who laboured long and hard on the Trade Act 2021, it is always a pleasure to see the powers being used. There may not be many such further events but it is interesting to see it being used in this case.

I must confess that the reason I looked at these regulations was that, as my noble friend will recall, at Second Reading of the Procurement Bill I raised the interaction between that legislation and the Trade (Australia and New Zealand) Bill, which had, of course, been introduced at the same time in the other place. I looked at this instrument and thought, “How does this relate to the Procurement Bill?” Like the Australia and New Zealand Bill, as far as I can see, the Procurement Bill will supersede these regulations when it becomes law. Schedule 9 to the Procurement Bill incorporates the UK-EFTA agreement into the list of treaty state suppliers. So far, so fairly straightforward: we need these regulations to give effect to the agreement in the intervening period.

However, there is an issue about what these regulations do, because they also amend public contract, concession contract and utilities contract regulations to include the further provision relating to abnormally low tenders. It is a question of whether the price or costs take into account the grant of subsidies. First, I ask: does the preceding EU-EFTA economic area agreement have the same language? It seemed surprising if it did, on the face of it, because existing regulations, which are part of the structure of EU regulation, already take account of whether—to cite Regulation 69 of the Public Contracts Regulations, for example—the abnormally low tender price is because of the possibility of the tenderer obtaining state aid.

I should have thought that, in the EU context, the question of state aid and grant of subsidy were regarded as effectively the same thing. I suspect, therefore, that EFTA countries are saying that the words “state aid” do not necessarily have the same meaning in United Kingdom in future as “state aid” did in the EU in the past. I may be wrong about that, but I should be interested to know whether that is the case.

Anyway, this additional provision in the regulations changes, for example, Regulation 69 of the Public Contracts Regulations, which relates to abnormally low tenders. I thought, “Let’s see how this is incorporated into the Procurement Bill”, but I cannot find it. So, my other question is: how will that Bill incorporate the provisions of, for example, Regulation 69 relating to abnormally low tenders into the structure of our regulation in future? I am happy to be guided by my noble friend on that, not least because it will no doubt give us an opportunity to learn a bit more about how the Procurement Bill itself will work in future. Subject to those questions, I am glad to take the opportunity to welcome the regulations and support my noble friend.

--- Later in debate ---

[Lord Collins of Highbury (Lab)]

My Lords, I am grateful to the Minister for introducing these regulations. As he and others have stated, they are basically a continuity agreement while we process the much bigger piece of legislation to which the noble Lord, Lord Lansley, referred, the Procurement Bill. One of the things I open with is to repeat the mantra that the Minister often does about how this House conducts its role in scrutiny of legislation. When I read Hansard from the other end, I thought I would get some useful questions from the Opposition—and of course there was none, so I am grateful for noble Lords here today who have prompted an interesting debate. I suspect that most of the questions will be answered on the general legislation on procurement—the Procurement Bill—including some of the issues that we will address in amendments, not least defence and security, which are critical issues.

I do not want to repeat the points made by the noble Lord, Lord Lansley. I will be interested to hear the Minister’s response, but the Opposition support the instrument and are happy that it provides the continuity necessary before other legislation takes over. I should add that I am not formally becoming a shadow Cabinet Office Minister; I am simply standing in for my leader, who covers these issues—and as deputy leader I of course do as I am told. I have at least been able to speak for a short time in support of the instrument. I echo some of the comments already made and I look forward to the Minister’s response.

[Lord True (Con)]

My Lords, I thank those who have spoken, including the noble Lord opposite; I nearly always say “my noble friend opposite”. I also looked at the proceedings in another place, but I will tread no closer to that than he did.

I am grateful for the general welcome for these provisions. I was asked a couple of points. I am not sure I can answer every one, but if I do not I am sure we will pick them up. On the question of whether state subsidy is defined in the regulations, it is not defined in this SI. It was also not defined in the UK-EFTA agreement procurement chapter from which this follows.

I was asked about abnormally low tenders and subsidies going more widely than the definitional point. Article 6.9 of the UK-EFTA agreement provides that, where a tender appears to be abnormally low, the contracting authority may ask a supplier whether the price in a tender takes subsidies into account. That was the point to which my noble friend acutely referred. The instrument makes this explicit—it is on the face of the procurement regulations. Prior to the UK leaving the EU, contracting authorities and utilities receiving an abnormally low tender could investigate whether the supplier had obtained state aid and, if that was not compatible with Article 107 of the Treaty on the Functioning of the European Union, it could reject the tender. These provisions were removed from the public procurement regulations through EU exit legislation.

The current procurement regulations are largely transposed from the EU directives, which include a number of permissive provisions. For this reason, it makes sense to make explicit mention of the fact that, when investigating abnormally low tenders, contracting authorities are able to make inquiries as to whether the bid includes subsidies. However, overall the Procurement Bill will aim to deliver a simpler regulatory framework and increased flexibility and does not include every possible action that a contracting authority might take. Therefore, there has not been such an impetus to make explicit this provision in the new Bill.

So far as the relationship is concerned between the Bill and where we are now—and both my noble friends referred to the period between now and the coming into being of the Procurement Act, if your Lordships so please; I am never daring enough to take that for granted—we need to bring forward this statutory instrument now to amend existing procurement regulations to enable the procurement provisions of the UK-EFTA agreement to come into force as soon as possible. When the Procurement Bill has received Royal Assent, during its implementation period it will repeal certain UK procurement regulations, including the UK public contracts regulations; the UK utilities contracts regulations; and the UK concession contracts regulations, to which the UK-EFTA agreement is being added. However, this is not expected until at least six months after Royal Assent.

The UK-EFTA agreement is included in Schedule 9 to the Procurement Bill, along with all other relevant international trade agreements, which ensures that the procurement obligations regarding EFTA suppliers will be carried forward seamlessly into the new regime. The amendments made by these regulations also add, as I said in my opening remarks, the UK-EFTA agreement to the corresponding Scottish procurement regulations, which will not be affected by the Procurement Bill.

I assure my noble friend Lady McIntosh, as again I said in my opening remarks, that nothing in this SI or, indeed, in the UK-EFTA arrangements overall, reduces any standards. We remain committed to holding up high environmental product and labour standards, and I can certainly give that assurance.

On the question of the lower thresholds in legislation, there are provisions—and I am happy to correspond or at least send advice to my noble friend before we reach the Procurement Bill. As she will see, there is a whole section relating to the level below which there are exemptions. We must abide by our international obligations in relation to trade under the GPA; that is, to give fair access to both sides of the agreement, which is reflected in these regulations.

We have enjoyed a strong trading relationship with Iceland, Liechtenstein and Norway for many years, as some noble Lords were kind enough to refer to. Indeed, I think that Norway is in the top 10—perhaps our 10th most important trading partner. By implementing UK-EFTA procurement commitments, this instrument will, we hope, help to continue and build on this prosperous and friendly relationship between our four countries.

I hope that colleagues will join me in supporting these regulations. I am grateful for the general tenor of the debate. I commend the regulations to the Committee.

Motion agreed.