Public Procurement (Amendment etc.) (EU Exit) Regulations 2020

Lord Wallace of Saltaire Excerpts

Monday 16th November 2020 Grand Committee

[Lord Wallace of Saltaire (LD) [V]]

My Lords, this is the third version of a public procurement EU transition SI since January 2019. Later this afternoon, we will be dealing with the third version of a parallel exit SI on data transparency. My colleagues tell me that they have also been responding to the third version of a whole succession of EU exit SIs in many other areas. This looks like indecision and incompetence across government, with Ministers failing to provide clear direction to their officials or to decide what the hard detail of our future relationship with the EU will be.

The impression of confusion and indecision is heightened by the references in the Explanatory Memorandum to the not yet enacted Trade Bill, which means, as has been explained, that there will be an unavoidable gap in the legislative framework from 1 January. As the Minister knows, the delays to the passage of the Trade Bill are due to government hesitation, not parliamentary obstruction. We are now well over four years since the EU referendum and two years since the passage of the withdrawal Act. I can easily imagine the scorn that Conservatives in opposition would be expressing about any other Government that had drifted like this.

We are also being asked to approve this SI without having certainty about the nature of the UK’s future relationship with the EU. Can the Minister explain what differences in the applicability of this SI will follow from the absence of any deal with the EU, rather than a continuing legal framework for our relationship? Will UK companies and service providers retain any rights to compete for public procurement contracts within the EU in the event of a breakdown in relations? Will they retain such rights if there is some sort of minimalist deal?

In this case, an instrument that refers repeatedly to previous amendments and to the further amendments now proposed is deeply obscure, and will no doubt provide good fees for lawyers as they struggle to interpret it. Worse, it includes repeated phrases such as, “The Minister for the Cabinet Office may make further regulations”—combining legislative complexity with excessive executive powers.

I note that the SI provides for

“the continued application of the general principles of Union law applicable to the award of public contracts”.

That is very sensible, since the principles of Union law on public procurement were negotiated by UK Ministers and officials under previous Conservative Governments, including when Margaret Thatcher was Prime Minister. But that of course does not fit in with the absolutist definition of sovereignty that the noble Lord, Lord Frost, now expounds every week. There are continuing international obligations, as the SI recognises, which cannot easily be ignored when the UK Government wish.

I also note that the intention in this SI

“is to treat non-UK economic operators on a level playing field.”

That is also an abrogation of UK sovereignty, of course. Are we refusing to accept the concept of a level playing field in our future relations with other European states but reasserting it in our relations with contractors from Turkey, the Middle East and China?

The SI also touches on delicate questions about the relevance of international agreements in environmental, social and labour law. The EU is moving ahead in developing policies on how to include calculation of the embedded carbon in imported goods and international contracts. Will this also be a factor in calculating the value of bids for UK public procurement from foreign contractors? And on “social value”, will the Government take into account the political, labour and social conditions that contractors tolerate in their own home countries?

Several noble Lords have mentioned recent concern about public procurement by this Government. That raises wider questions about the outsourcing of public services and the management of public procurement. On another occasion, we must debate the contracts awarded without open competition to contractors linked to the Conservative Party through personal links or donations, or to overseas companies without relevant expertise or experience.

I was particularly struck by the award of one of the first test and trace contracts—

[Baroness Sanderson of Welton (Con)]

I am sorry to interrupt the noble Lord, but we will have to move on. There is a three-minute time limit.

[Lord Wallace of Saltaire (LD) [V]]

I think that I have six minutes.

[Baroness Sanderson of Welton (Con)]

I apologise.

[Lord Wallace of Saltaire (LD) [V]]

I was particularly struck by the award of one of the first test and trace contracts to a multinational company with its headquarters in Miami to manage a service that self-evidently depended on detailed local knowledge within England. But there have been many other surprising awards, which demand further scrutiny.

I have one last question, on which the Minister may wish to write to me. These SIs frequently refer to the United Kingdom and Gibraltar but rarely, or never, to the UK and the Crown dependencies, which of course were not members of the EU. I note that companies headquartered in Jersey or Guernsey are frequently awarded UK government contracts. Are UK companies also guaranteed a level playing field in return? Do the Crown dependencies follow and observe UK practice in this field? If not, should the UK Government not take back control of that aspect of British sovereignty?